Monday, January 6, 2014

DiDonato v. Reliance Standard Life Ins. Co. case brief

DiDonato v. Reliance Standard Life Ins. Co. case brief summary
249 A.2d 327 (1969)

Appellant buyers challenged the decree of the Court of Common Pleas of Philadelphia County (Pennsylvania), which, pursuant to an action brought by appellants against appellee seller in equity, found in favor of appellee. Appellants argued that their agreement for the sale of real estate should have been rescinded due to appellee's unknowing misrepresentation of the zoning status of the property sold.

Appellee entered into an agreement of sale with appellants. Under the terms of the contract, appellee agreed to sell appellants a property for $ 16,000. Appellee executed a certification of compliance with 21 P.S. § 613.1 (1955), stating that the premises were zoned industrial. This certification was correct and was appended to the agreement of sale. Soon thereafter, an ordinance was enacted that changed the zoning of the premises industrial to residential. Two months later the public records noted this change. The transaction was settled, but neither party was aware of the change in zoning classification. Later, appellants contracted to sell the premises and learned of the zoning change. Appellants filed an action in equity to rescind the agreement of sale.

The chancellor entered an adjudication in favor of appellee. The lower court, en banc, affirmed, entering a final decree against appellants.


  • The court affirmed the lower court's action. 
  • Appellants argued for rescission based on appellee's misrepresentation. 
  • The court rejected the argument, holding that the risk of the zoning change was born by appellants between the time of the agreement of sale's execution and the settlement.
The court affirmed the lower court's decree, holding that between the time of the sales agreement's execution and the settlement, appellant buyers assumed the risk that the zoning ordinance could have been changed from industrial to residential. Although appellee seller did misrepresent the zoning status of the subject premises at settlement, because of the passage of the risk at the sales agreement's execution, the lower court did not err.

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