Cooke v. Iverson

• Decision Date: 17 July 1972
• Docket Number: No. 10860,10860
• Citation: 500 P.2d 830,94 Idaho 929
• Parties: Frank B. COOKE and Doris E. Cooke, husband and wife, Plaintiffs-Respondents, v. Harvey C. IVERSON et al., Defendants-Appellants.
• Court: Idaho Supreme Court

Page 830

500 P.2d 830

94 Idaho 929

Frank B. COOKE and Doris E. Cooke, husband and wife, Plaintiffs-Respondents, v. Harvey C. IVERSON et al., Defendants-Appellants.

No. 10860.

Supreme Court of Idaho.

July 17, 1972.

Rehearing Denied Sept. 15, 1972.

Randall C. Fredricks, of Clemons, Cosho, Humphrey & Samuelsen, Boise, for defendants-appellants.

Bert L. Poole, of Roberts, Poole & Robson, Boise, for plaintiffs-respondents.

SHEPARD, Justice.

Plaintiffs-Respondents Cooke entered into an agreement for the sale of their Camas Prairie ranch property with defendants-appellants Mull as purchasers and defendant-appellant Iverson as real estate agent. The Cookes brought an action against defendants-appellants alleging misrepresentation in the consideration to be received by the Cookes. The District Court found in favor of the Cookes and entered judgment awarding damages. The Mulls also claimed misrepresentation on the part of the Cookes and sought damages therefor. The District Court found in favor of the Cookes and entered judgment denying relief to the Mulls. Defendants Mulls and Iverson have appealed from both portions of that judgment. We affirm the judgment of the trial court in all parts.

We consider first the less complicated portion of this appeal which involves the claim of Defendants Mull that Plaintiffs Cooke had misrepresented the Cookes' ranch property which resulted in pecuniary damage to the Mulls. The Mulls claimed that the Cookes had misrepresented the amount of water on the ranch and the amount of water on the ranch and also the extent of infestation of weeds on against the Mulls in both regards and discussed at length the various reasons why such contentions were not supported by the evidence. We find it necessary only to point out that the Mulls failed to introduce any proof of damages resulting from the alleged misrepresentations, assuming that they were in fact made by the Cookes. In an action or claim for monetary damages occasioned by fraud a showing of actual pecuniary damage must be made. Nab v. Hills, 92 Idaho 877, 452 P.2d 981 (1969). Defendants Mull principally claimed that they had sustained damages resulting from an over abundance of weeds such as morning-glory, upon the ranch in question. The evidence indicated that weeds such as morning-glory are prevalent in the Camas Prairie area wherein the ranch is located. No evidence indicated that the amount of weeds on the ranch in question was more than normal for a ranch in the Camas Prairie area. It was further shown the Defendants Mull had knowledge of farming in the Camas Prairie region and were experienced farmers. Defendants attempted to introduce an exhibit purporting to show certain damages from such weeds. That exhibit was, however, only partially admitted and such portion as was admitted showed only that a certain amount of weed killer was administered on the property during certain years. There was no showing that such weeds as did exist caused any damage to the defendants, nor was there any showing on the part of the defendants that they had the right to rely on such statements as plaintiffs may have made. Walker v. Nunnenkamp, 84 Idaho 485, 373 P.2d 559 (1962); King v. H. J. McNeel Inc., 94 Idaho 444, 489 P.2d 1324 (1971). In any event such showing as was made by the defendants Mull was not 'clear and convincing' proof as is required for the establishment of fraud. Gillingham v. Stadler, 93 Idaho 874, 477 P.2d 497 (1970); C. I. T. Corporation v. Hess, 88 Idaho 1, 395 P.2d 471 (1964).

We now turn to the more complex portion of this appeal wherein it is contended that the District Court erred in finding that there was clear and convincing evidence of material misrepresentations by the defendants Mull. This portion of the appeal involves consideration of four parcels of land above and beyond the Camas Prairie property heretofore discussed. Those additional properties are denominated as:

1. 'Lots 5, 6, 7' located in Lincoln County.

2. The 'Dry 80' also located in Lincoln County and being contiguous to 'Lots 5, 6, 7.'

3. 'The 220' also located in Lincoln County.

4. The 'Twin Falls lot' being lot 21 of the Yeatman Addition to Twin Falls County.

In 1963 plaintiffs Cooke contacted the defendant Iverson, a real estate agent broker, and listed their Camas Prairie ranch for sale through him. The Cookes agreed to pay Iverson a commission of $2,500 for the sale of their ranch. Subsequently a contract was entered into by the Cookes and the Mulls for the sale of the Camas Prairie Ranch for $50,000. The Cookes agreed that if the Mulls sold 'Lots 5, 6, 7' and 'The Dry 80' and received at least one-fifth of the sale price of those properties in cash, the plaintiffs Cooke would accept up to $10,000 of the paper received by the Mulls on those sales and apply said paper against amounts remaining due on the Cookes' Camas Prairie ranch.

It is now necessary to review the method by which the Mulls had acquired 'Lots 5, 6, 7' and the 'Dry 80.' In 1962 one Albert Smith had purchased 'The 220' and 'Lots 5, 6 and 7' from one Molly Nab. He also purchased the 'Dry 80' from one Preston Page. Nab retained a contract interest in the '220' and 'Lots 5, 6, 7' and Page retained a contract interest in the 'Dry 80.'

In 1963 Albert Smith contracted to sell 'Lots 5, 6, 7' and the 'Dry 80' to the defendants Mull and as a part of the payment therefor the Mulls were to pay off Smith's remaining obligation on 'The 220' to the end that Smith would gain clear title to 'The 220.' Defendant Iverson was the real estate broker for that transaction.

Following the execution of the principal agreement in question herein for the purchase and sale of plaintiffs' Camas Prairie ranch, the defendants Mulls, again with Iverson as real estate broker, executed a sales agreement for the sale of 'Lots 5, 6, 7' and the 'Dry 80' to one Helen Garrison. Helen Garrison was the sister of Mrs. Mull and had been previously married to Mr. Mull's brother. As consideration for that sale Helen Garrison purportedly paid the Mulls $2,035 in cash, a note for $3,000 and certain 'pasturage' credits of the value of $1,400 on a total purchase price of $25,000. Helen Garrison was in fact a married woman during all the time in question but signed all papers and deeds during the time in question as a single woman.

Within a short period of time after the sale between the Mulls and Mrs. Garrison, Mrs. Garrison in turn sold the same property to one Duwayne Helsley for his personal $10,000 note and an equity of the value of $2,700 in the 'Twin Falls lot.' Mrs. Garrison, in turn then quitclaimed the 'Twin Falls lot' to the Mulls in return for the personal note that she had executed to the Mulls.

The Mulls thereafter contacted the plaintiffs Cookes and represented to them that they had received more than one-fifth of the purchase price of 'Lots 5, 6, 7' and the 'Dry 80,' in cash. The Cookes thereafter reduced the Mull sale obligation on the Camas Prairie ranch by $10,000 in exchange for paper resulting from the Mull-Garrison sale. In July of 1964 the negotiations and agreements became even more complex and circuitous. Defendant Iverson contacted Cookes and secured from them authority to change the security right of the Cookes in the Mull-Garrison contract to a mortgage arrangement. Apparently the Cookes understood that the mortgage would secure a personal note executed by Mrs. Garrison. However, in the execution of that agreement Iverson substituted instead the note from Helsley. Iverson also contends that he secured similar authority to change from a contract of sale agreement to a mortgage situation on the other properties. He thereupon secured execution of a mortgage upon the 'Dry 80' in exchange for release of the vendor's interest in the sale agreement of 'The 220.' Page's vendor's interest the 'Dry 80' was paid off. Albert Smith thereby obtained and secured a clear deed to 'The 220.' As a result of these transactions the plaintiffs-respondents herein, Cookes, found themselves with only the Helsley note as security backed by a third mortgage on these properties, such third mortgage being junior to the mortgages held by Molly Nab and the Federal Land Bank.

Helsley, the then purchaser of 'Lots 5, 6, 7' and the 'Dry 80,' defaulted without ever having made a payment and Molly Nab foreclosed her mortgage on 'Lots 5, 6, 7' and the 'Dry 80.' Such properties were sold at sheriff's sale. In its findings the trial court found the value of that land to be between $12,000 and $14,000. The trial court further found that Helsley's $10,000 promissory note was valueless.

Defendants-appellants contend that the trial court erred in finding that there was clear and convincing evidence that the following misrepresentations were made by defendants-appellants to-wit:

A. That 'Lots 5, 6, 7' and the 'Dry 80' were 'owned' by the Mulls;

B. That an assignment of the contract of sale on 'Lots 5, 6, 7' and the 'Dry 80' would be 'good security' for the Cookes;

C. That 'Lots 5, 6, 7' and the 'Dry 80' had sold three times recently for $25,000;

D. That the only indebtedness or encumbrances against 'Lots 5, 6, 7' and the 'Dry 80' was the Federal Land Bank mortgage in the approximate amount of $1,000.

We note initially:

'It has long been the rule of this Court that where there is sufficient substantial and competent evidence to support the findings of the trial court and such findings are not clearly against the weight of the evidence, the findings are binding on the Supreme Court and will not be disturbed on appeal. (Citations) The trial judge is the arbiter of conflicting evidence and his determination of the weight, credibility, inferences and implications thereof is not to be supplanted by this Court's impressions or conclusions from the written record. (Citations) This is so because the trial court has a better opportunity to judge this matter because of seeing and noting the demeanor of the witnesses.' Brammer v....