Burnett v. Taylor

• Citation: 252 P. 790,36 Wyo. 12
• Decision Date: 31 January 1927
• Docket Number: 1202
• Parties: BURNETT v. TAYLOR [*]
• Court: United States State Supreme Court of Wyoming

252 P. 790

36 Wyo. 12

BURNETT v. TAYLOR ^[*]

No. 1202

Supreme Court of Wyoming

January 31, 1927

ERROR to District Court, Fremont County; CYRUS O. BROWN, Judge.

Action by Fred Taylor against Isaac N. Burnett. Judgment for plaintiff, and defendant brings error.

Affirmed.

John J Spriggs, for plaintiff in error.

The defense of fraud and misrepresentation was good against the plaintiff, he not being a bona fide holder in due course Taylor admitted that he assured Burnett that there would be plenty of water; one need not know of the falsity of his representations to bind him in damages; Hubbard v Oliver, 139 N.W. 78. The comments of the court were prejudicial to defendant; 26 R. C. L. 1026; Hunter v. Baker Co., 225 F. 1006. The abstraction of corporate entity should never be allowed to exclude obvious truth; Securities Co. v. Spiro, 221 P. 856. Oral negotiations are merged in written contracts; Smith v. Fergerson, 221 P. 447; Purdy v. Hunter Co., 221 P. 491; but the rule is not applicable to cases of fraud; Griesa v. Thomas, 161 P. 671; Smith v. Pfluger, (Wis.) 105 N.W. 476; 10 R. C. L. 1019. An instrument containing but part of the agreement, authorizes parol evidence to prove the entire contract; 10 R. C. L. 1035; or to show partial failure of consideration; Id; 3 R. C. L. 942. Parol evidence is admissible to show fraud or duress; 10 R. C. L. 1058. The stock of the company is personal property; 5055 C. S.; Mining Co. v. Conroy, 221 P. 425. Defendant pursued a proper remedy; Crouch v. Huber, 209 P. 766; Healy v. Ginoff, 220 P. 539. It was improper for plaintiff's counsel to take the stand as a witness; instruction number one is erroneous; Bank v. Duncan, 209 P. 149; Glendo Bank v. Abbott, 216 P. 701. It is no defense of misrepresentations to say that they should not have been believed; Chamberlain v. Fuller, (Vt.) 9 A. 832; Warder v. Whitish, (Wis.) 46 N.W. 540; Graham v. Thompson, (Ark.) 18 S.W. 58; Becker v. Clark, 145 P. 65; Stelter v. Fowler, 113 P. 1096; Werling v. Aldred, 157 P. 305. A defrauded vendee is entitled to damages; Stanton v. Zercher, 172 P. 559. Instructions numbered four and five were highly prejudicial to Burnett.

W. E. Hardin, for defendant in error.

There was no error in striking defendant's amended defense or denying leave to file an amended answer; Bransford v. Ins. Co., 39 P. 419; Wells v. McCarthy, 90 P. 203; Ass'n. v. Coleman, 44 P. 793. It was within the discretion of the court; 5707 C. S. A Government patent relates back to the original entry and validates intermediate transfers; Roberts v. Hudson, 25 Wyo. 508; Stark v. Devall, 54 P. 454; Washington v. Northrop, 70 P. 284. Demurrer to interrogatories was properly sustained; Horton v. Driskel, 13 Wyo. 73. Allegations of written contract are not supported by proof of oral contract; defendant in error sold plaintiff stock, which is personal property; a water right is realty; Travelers Ins. Co. v. Childs, 25 Colo. 360; Davis v. Randall, 44 Colo. 488; Paddock v. Clark, 22 Idaho 498. Agreements with reference to water rights must be in writing; Hays v. Fine, 91 Cal. 391; Blakenship v. Whaley, 124 Cal. 304. The case of Healey v. Ginoff, 220 P. 539, is not in point here as it involved a sale of land; there were no averments of fraud sufficient to state a cause of action; the action is barred by limitation; 5569 C. S.; Combs v. Watson, 32 O. S. 228; 26 C. J. 1142. To arrest the running of the statute of limitations, fraud must be secret and not apparent or known; Wood v. Carpenter, 101 U.S. 135. The jury passed upon all the evidence, and their verdict should not be disturbed. Amendments to pleadings should not be allowed which change the nature of the action; 22 Cyc. 935; or a different cause of action; 13 Ency. of Proc. 101; 21 C. J. 523-525; or to change the whole character of the litigation; Lloyd v. Brewster, 27 Am. Dec. 88. A patent transfers title from inception of the entry; Roberts v. Hudson, 25 Wyo. 508. Plaintiff did not act with diligence in discovering alleged fraud; Burling v. Newlands, (Calif.) 39 P. 49; Weckerly v. Taylor, 103 N.W. 1065. One will be presumed to have known whatever, with reasonable diligence, he might have ascertained concerning fraud complained of; Wood v. Carpenter, 101 U.S. 808; Simon v. Dalsiel, 67 P. 1180; Swift v. Smith, 79 F. 709; Black v. Black, (Kan.) 68 P. 662. The company held a permit granting only the waste water; a verdict, on conflicting evidence, will not be disturbed; O'Brien v. Foglesong, 3 Wyo. 57; Edwards v. Murray, 5 Wyo. 153. When error is apparent upon the record, it will be reviewed without objection or exception; 2 Stan. Enc. of Proc. 248.

KIMBALL, Justice. BLUME, Ch. J., and POTTER, J., concur.

OPINION

KIMBALL, Justice.

The action is for recovery of the amount due on ten promissory notes and for foreclosure of a real estate mortgage given to secure them. The issue as to the amount due on the notes was tried to a jury, and the verdict was in favor of the plaintiff for the full amount claimed. From the judgment on the verdict, and foreclosing the mortgage, the defendant comes here on error.

The notes are for $ 320 each, dated December 30, 1913, made by defendant, payable to Jesse A. Taylor, the first note due January 1, 1914, and the others successively a year apart thereafter. The mortgage to secure the notes bears the same date, and was executed by defendant and his wife. In the year 1919, after several of the notes were past due, the notes and mortgage were transferred by Jesse A. Taylor to his brother, Fred Taylor, who later brought this action.

The property covered by the mortgage is 160 acres of land which, to be productive, must be irrigated. The land was entered by defendant in March, 1907, as a homestead under the public land laws, and has since been the home of the defendant and his family. Patent issued in August, 1914. In March, 1907, the same month that defendant made his homestead entry, an application was made to the state engineer for a permit to appropriate waters for the irrigation of a tract of land, including the land so entered by defendant, by means of enlargement and extension of an old ditch. This application for a permit was on behalf of the Little Popo Agie Reclamation Company, a Corporation, which we hereinafter will call the "Reclamation Company." The permit was granted April 25, 1907. The order granting it recites:

"The records of the State Engineer's Office show the waters of Popo Agie R. & Tribs. to be largely appropriated. The appropriator under the permit is hereby notified of this fact and the issuance of this permit grants only the right to divert and use the surplus or waste water of the stream and confers no rights which will interfere with or impair the use of water by prior appropriators."

Construction work under the permit was commenced in 1907 and some water was available through the enlarged ditch in 1912 or 1913. The construction work was done for the Reclamation Company by Jesse A. Taylor who, as president of the company, in August, 1918, made proof of appropriation under the permit. Certificate of appropriation was issued by the Board of Control in 1920 to the owners of lands irrigable through the enlarged ditch. The defendant is one of the land owners designated in the certificate of appropriation, and the appropriation to him covers 159 of the 160 acres of the mortgaged land. The date of priority of appropriation is March 9, 1907, the day the application for permit was filed.

For his work in constructing the ditch, Jesse A. Taylor received shares of stock in the Reclamation Company. From the beginning it was understood, or taken for granted, that defendant, as an owner of land irrigable from the enlarged ditch, would obtain water for irrigation by means of said ditch. He never has had any other means of irrigating his land. Until 1912 or 1913 he had made no move toward acquiring an interest in, or right to use, the ditch of the Reclamation Company. Whatever arrangement was then made for that purpose was between defendant and Jesse A. Taylor. Taylor testified that the first "business talk" about the matter was had in the spring of 1913, when defendant was wanting to use water through the ditch, and Taylor told defendant he would have to get stock in the Reclamation Company. Following this preliminary talk, the defendant bought the stock from Taylor, at the agreed price of $ 3200, and on December 30, 1913, defendant and his wife executed the notes and mortgage to secure the payment of the purchase price in ten instalments. When the notes and mortgage were signed, the certificate to show defendant's ownership of the stock was not ready for delivery. Accordingly, the notes and mortgage were left in the hands of the attorneys who had prepared them, and the defendant was given a writing, signed by the attorneys, reciting that the notes and mortgage were to be delivered to Jesse A. Taylor upon his delivery of stock for defendant "in the Taylor ditch sufficient to furnish water for the land, 160 acres, described in said mortgage." By the "Taylor" ditch was meant the ditch of the Reclamation Company. The certificate showing defendant's ownership of the stock was delivered to him in January, 1915, and the notes and mortgage delivered to Jesse A. Taylor. The defendant accepted the stock, became active in the affairs of the Reclamation Company, serving one or two years as director, and used water from the company's ditch for irrigation of his lands. His right to use water through the ditch depended, as we understand, on his ownership of the shares of stock in the Reclamation Company, though he began to exercise the right in 1913 or 1914, before he received his stock certificate.

Defendant pleaded that patent to the mortgaged lands did not issue until...