Cassia Creek Reservoir Co. v. Harper

• Citation: 91 Idaho 488,426 P.2d 209
• Decision Date: 11 April 1967
• Docket Number: No. 9844,9844
• Parties: CASSIA CREEK RESERVOIR CO., Inc., an Idaho Corporation, Plaintiff-Respondent, v. R. J. HARPER, Defendant-Appellant.
• Court: United States State Supreme Court of Idaho

Page 209

426 P.2d 209

91 Idaho 488

CASSIA CREEK RESERVOIR CO., Inc., an Idaho Corporation, Plaintiff-Respondent, v. R. J. HARPER, Defendant-Appellant.

No. 9844.

Supreme Court of Idaho.

April 11, 1967.

Duffin & Duff, Rupert, for appellant.

Herman E. Bedke, Burley, for respondent.

SMITH, Justice.

The issues presented on this appeal are, first, whether the district court properly granted a new trial upon motion by respondent, hereinafter sometimes referred to as the corporation; and second, whether the trial court correctly ruled on appellant's motion that one-half of the recovery (1/2 of $833.33) sought by the corporation was barred by the statute of limitations. Following is a recitation of the pertinent facts.

Respondent is an Idaho corporation formed for the purpose of constructing and operating dams and water reservoirs in Cassia Creek Valley. The articles of incorporation name appellant Harper as an incorporator and a member of the corporation's board of directors.

Respondent brought this action against Harper seeking to collect $816.33 owing under a capital stock subscription contract which he executed September 18, 1956. Under such agreement Harper contracted to purchase 250 shares of the corporation's capital stock at $5.00 a share, totaling $1,250.00. He paid $416.67 in cash upon execution of the subscription contract, and agreed to pay the balance of $833.33, by payment of not less than one-half thereof together with interest, within one year, and the remainder together with interest, within two years.

At the trial Harper contended that the subscription contract could not be enforced for the reason that the corporation's activities, subsequent to the execution of the contract, constituted a failure of consideration.

The first alleged failure of consideration, Harper contended, occurred when the corporation revised its plans for reservoir construction so as to enlarge its water storage capacity, which effected substantial increases in costs of construction. The evidence adduced at the trial shows that, in 1957, the corporation envisioned a project with 7,000 acre-feet capacity, at an estimated cost of $604,000. By 1961, the project had grown to 12,200 acre-feet in storage capacity, at an estimated cost of $2,829,000.

The second alleged failure of consideration concerned the corporation's alleged interference with its stockholders' water rights. Harper testified that the corporation, through its attorney, represented to prospective stockholders that the reservoir project would in no way restrict decreed water rights in Cassia Creek. Those rights, under a federal court decree, provided for an irrigation season extending from April 1 to November 1 each year. Harper further testified that he would not have subscribed for stock without this assurance from the corporation. To establish the corporation's alleged interference with existing water rights, Harper introduced in evidence a blank form entitled 'Water Distribution Agreement'; under the terms thereof, the owners of decreed water rights contracted with the corporation 'to limit the use of water under the decreed rights * * * to the amount which can be beneficially used.' An accompanying guide to determine beneficial use provided for a restricted May to September irrigation season. This clause concludes: '* * * in no way does this schedule or agreement impair such existing decreed natural flow rights.'

After the parties concluded their presentation of evidence the district court submitted the cause to the jury upon forms of special verdicts. Since the forms of verdicts given the jury involved mixed questions of law and fact, the court gave general instructions, 'concerning the matter thus submitted, * * * necessary to enable the jury to make its findings upon each issue.' I.R.C.P. 49(a). The special forms of verdicts requested the jury to find in essence: (1) whether there was a failure of consideration on the part of the corporation by departure from corporate purpose regarding size, scope, and cost of the project; (2) whether there was a failure of consideration by reason of a change affecting the shareholders' water rights; and (3) whether the corporation failed to perform any condition precedent regarding subscriptions of capital stock in the corporation.

The jury retired to consider these verdicts, met with some difficulty in understanding the questions posed, and returned to the courtroom for advice. The foreman informed the district judge that the jurors could not determine how their answers would affect the parties. The judge responded:

'You have two alternatives. You either find that there was a failure of consideration which has not been waived, and if you find that, then the contract can't be enforced against Mr. Harper, or you find that there is no failure of consideration or if there is a failure it has been waived, then the contract can be enforced against Mr. Harper. Now, the order is the same on the other verdict concerning failure of consideration. The order is reversed on the one verdict concerning subscription of the capital stock.'

The jury again retired and answered the three special verdicts. The first two, relating to failure of consideration, by departure from purpose and interference with water rights, the jury decided in favor of Harper, and the third, regarding subscription for shares, in favor of the corporation.

The district court entered judgment for Harper under these verdicts, whereupon the corporation moved the court for a new trial. The district court granted the motion on the grounds: (1) the court's informing the jury of the effect on the parties of their answers to the special verdicts deprived the corporation of a fair trial; (2) the verdict on water rights should not have been submitted to the jury; and (3) the jury's answer to the water rights verdict was not supported by the evidence. On this appeal, Harper contends that the trial court's order granting a new trial should be reversed.

The trial court is vested with broad discretion in the granting of a new trial; on appeal the trial court's determination will not be disturbed unless there has been a manifest abuse of such discretion. Kuhn v. Dell, 89 Idaho 250, 404 P.2d 357 (1965); Sanchotena v. Tower Co., 74 Idaho 541, 264 P.2d 1021 (1953); Poston v. Hollar, 64 Idaho 322, 132 P.2d 142 (1942); Say v. Hodgin, 20 Idaho 64, 116 Pac. 410 (1911). Moreover, where the trial court enumerates various grounds for the granting of a motion for new trial, the order will be sustained if any one of the various grounds justified the granting of the motion. Poston v. Hollar, supra; MacDonald v. Ogan, 61 Idaho 553, 104 P.2d 1106 (1940); Egbert v. Twin Falls Canal Co., 52 Idaho 39, 11 P.2d 360 (1932).

The trial court properly exercised its judicial discretion in granting a new trial on the ground of improper instructions to the jury regarding the effect on the parties of their answers to the special verdicts. The purpose of submitting special verdicts rather than requesting a general verdict is to direct the jury to make their findings without regard to the effect of the answers upon the parties to the action. The brevity and clearness of the direct question focuses the jury's attention upon the essential issues and away from prejudice or favor. Informing the jury, either directly or indirectly, concerning whom their answers will favor, negates those advantages of the special verdict. See McCormick, Jury Verdicts Upon Special Questions, 2 F.R.D 176 (1941); Nordbye, Use of Special Verdicts, 2 F.R.D. 138 (1941); Special Verdicts, 74 Yale L.J. 483 (1965). The district court in its discretion could therefore conclude that its instruction...