Court Opinion

ID: 9731734
Source: CourtListenerOpinion
Date Created: 2023-08-26 15:56:41.685305+00
Date Added: 2024-06-11T18:26:20.916430
License: Public Domain

*492Mackenzie, J.
(concurring in part, dissenting in part). I agree with the majority that the trial judge’s finding of no cause of action as to the former land contract vendees, Mr. and Mrs. Barnes, should be affirmed. As to appellees, Mr. and Mrs. Pickleses’ land contract vendees, I would also affirm the trial judge in refusal to grant rescission of the land contract.
Rescission is not a matter of right but a matter of grace, to be granted or denied within the sound discretion of the trial court. Harris v Axline, 323 Mich 585; 36 NW2d 154 (1949). I am not convinced from a de novo review of the record that the trial judge’s refusal to grant the appellants’ claim for rescission was an abuse of discretion.
The real issue presented by appellants is whether the asserted mutual mistake went to an intrinsic element of the contract or to a collateral matter. This was the position presented in A & M Land Development Co v Miller, 354 Mich 681; 94 NW2d 197 (1959), a case involving an action for damages, partial rescission, an accounting and other equitable relief, alleging fraud, misrepresentation, failure of consideration and mistake. The defendant in A & M, engaged in the business of buying and selling land, listed for sale certain subdivision lots, indicating that the lots were ready to build on. The plaintiff, a residential construction company, purchased some of the lots after having inspected the property. The defendant furnished to the plaintiff’s officers an engineering report showing that percolation tests on the property had been performed and that the soils were constituted of sand, gravel, and yellow clay. The lots turned out to be unsuitable for building purposes as a result of inadequate conditions for the installation of sewage disposal facilities. The Su*493preme Court discerned no fraud or misrepresentation and denied rescission, stating that there was no failure of consideration just because the lots became unsuitable for construction. Having received the same property for which he contracted, the plaintiff was not permitted to complain of his poor investment. The Court’s position in A & M is that the value of real property acquired in a business transaction is a collateral matter which will not provide a basis for avoidance of a contract should the investment fail.
In Diedrich v Northern Illinois Publishing Co, 39 Ill App 3d 851; 350 NW2d 857 (1976), rescission was disallowed where the action to rescind was brought two and one-half years after possession under the contract was taken; the structure used as income property was more than 70 years old; one of the purchasers had expertise in real estate matters and the other purchaser was an attorney; the property was purchased "as is”; there were no representations as to the condition of the plumbing and no prior problems with the plumbing had been experienced; and the seller had no idea that the existence of a septic tank (as opposed to a sewer) would be important to the plaintiffs. The Appellate Court of Illinois noted that the existence of the septic tank related only to the value of the house and to the profit that the plaintiffs had hoped to obtain from it. The Court cited A & M as persuasive, reasoning that the need for stability in contracts requires the result obtained and emphasizing that the doctrine of mutual mistake is not to be employed as a substitute for the doctrine of misrepresentation.
In the instant case the land contract makes no mention of the intended use of the property. There is no indication that a sewage problem even ex*494isted either before the land contract was executed or at the time of execution. Tenants had apparently lived on the property for seven or eight years while the septic system functioned properly. The vendee could have requested that the contract contain guarantees or representations by the vendors with regard to the legality or adequacy of the sanitation system on the property. Had such representations been sought and refused, the vendee had the option of conducting an investigation to determine whether the property would serve the purpose for which the vendee was making the purchase. The contract did not contain such representations. The only pertinent provision in the contract was a disavowal of an intention to guarantee: "Purchaser has examined this property and agrees to accept same in its present condition. There are no other written or additional oral understandings”.
I would find that the trial court correctly denied rescission to Mr. and Mrs. Pickles, who received essentially the same property they bargained for and failed to prove that any mistake or failure of consideration existed at the time the parties entered into the contract.