– Kannavos bought an 8 unit family housing development hoping to make money off of the rentals even though the unit was not legit in terms of zoning, Kannavos did not know this because he did not have a lawyer to figure this out…However, Annino advertised the property as if it were legit to have rentable unites therein.
- It was worth substantially less if it was not a rental unit.
- Soon after the sale, the city brought legal proceedings to abate the non-conforming use of the building –
- Kannavos brought a bill of equity against Annino to rescind the offer
– Lower court ruled in favor of Kannavos and it was affirmed in the SJC.
– Was there bare-non-disclosure here?
– NO – since the party did advertise and tell half-truths, it is more than merely bare-nondisclosure, it shows reliance as well.
– (a) – Although there is NO duty imposed upon one party to a transaction to speak for the information of the other…if he does speak with reference to a given point of information, voluntarily or at the other’s request, he is bound to speak honestly and to divulge all the material facts bearing upon the point that lie within his knowledge.
– (b) – The character of the defect was not disclosed.
– This case was identical to Swinton in terms of arm’s length dealings but differed in two major ways:
- (a) – Conduct, advertising and statements pertaining to bare non-disclosure
- Action in furnishing income and expense figures
- Original advertisements
- Sale included fridges, stoves and other furnishings for multi use
- ***the vendors knew that the vendee was going to use the apartment for leasing and did not notify them of the zoning issue***
- Intentionally deceptive and fraudulent
- (b) – In this case it was a matter of public regulation and would be easy to find out the zoning laws – but in Swinton it was disclosed and would have required experts to figure out the termite problem.
- Just cause the Plaintiff did not act with prudence, should not be held against him when he was purposefully deceived and tricked by advertising and talking that it was indeed a rental unit.
- Because the vendors did as much as they did, they were legally bound to do more.
- Much more than bare – non-disclosure.
– Affirmed the decree.
– But, might be further consideration of the relief, in view of fire at no. 11.