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DIDONATO ET UX. v. RELIANCE STANDARD LIFE INSURANCE COMPANY (01/15/69)

decided: January 15, 1969.

DIDONATO ET UX., APPELLANTS,
v.
RELIANCE STANDARD LIFE INSURANCE COMPANY



Appeal from decree of Court of Common Pleas of Philadelphia County, June T., 1967, No. 354, in case of Anthony DiDonato, Jr. et ux. v. Reliance Standard Life Insurance Company.

COUNSEL

Lawrence J. Richette, for appellants.

Marvin Comisky, with him Harry O. Boreth, and Blank, Rudenko, Klaus & Rome, for appellee.

Bell, C. J., Jones, Cohen, Eagen, O'Brien and Roberts, JJ. Opinion by Mr. Justice Eagen.

Author: Eagen

[ 433 Pa. Page 222]

The legal question presented in this appeal arises in the context of a somewhat cumbersome fact situation. On August 4, 1965, the Reliance Standard Life Insurance Company (hereinafter Reliance) entered into an Agreement of Sale with Anthony and Viola DiDonato (hereinafter appellants). Under the terms of the contract, Reliance agreed to sell to the appellants for $16,000 the premises located at 1015-23 South 3rd Street, Philadelphia. Reliance executed a certification in compliance with the Act of July 27, 1955, P. L. 288, as amended, 21 P.S. 613.1, stating that the premises were zoned industrial. This certification was correct and was appended to the Agreement of Sale.

On September 22, 1965, an ordinance*fn1 was enacted which changed the zoning of the premises from G-2 Industrial to R-10 Residential. Not until November 9, 1965, however, did the public records note this change.

On October 7, 1965, the transaction was settled. At that time, Reliance's representative delivered to the appellants a certification which was procured from the

[ 433 Pa. Page 223]

Department of Licenses and Inspections of the City of Philadelphia on September 28, 1965. The certification statement erroneously indicated that the subject premises were still zoned G-2 Industrial. As of this date neither Reliance nor the appellants were aware of the change in the zoning classification.

In 1967, the appellants contracted to sell the subject premises, and then learned for the first time of the zoning change. After unsuccessfully seeking a variance, the appellants brought an equity action against Reliance to rescind the Agreement of Sale of August 4, 1965. The Chancellor entered an adjudication in favor of Reliance, and his findings of fact and conclusions of law were subsequently affirmed by the court en banc; from its final decree this appeal followed.

In their brief to this Court, the appellants seek to find ground for a rescission upon the misrepresentation contained in the certification delivered to them at the settlement proceeding. The argument seems to be that the erroneous certification that the premises were industrial constituted a material misrepresentation, a breach of warranty, justifying rescission.

There can be no doubt that at the settlement, there was a misrepresentation as to the zoning status of the subject premises. But that fact is not determinative in resolving this controversy. It only helps us to focus upon the terminal issue in the case. For even if the certification had recited that the subject premises were zoned residential, the appellants would have a right to rescind only if the risk of a zoning change remained with Reliance until settlement. In other words, the fact that the appellants were deceived as to the correct zoning status of the premises is ...


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