Gillingham v. Stadler

• Decision Date: 30 November 1970
• Docket Number: No. 10324,10324
• Citation: 93 Idaho 874,477 P.2d 497
• Parties: Larry GILLINGHAM, Plaintiff-Respondent, v. Ben F. STADLER, Defendant-Appellant.
• Court: Idaho Supreme Court

Page 497

477 P.2d 497

93 Idaho 874

Larry GILLINGHAM, Plaintiff-Respondent, v. Ben F. STADLER, Defendant-Appellant.

No. 10324.

Supreme Court of Idaho.

Nov. 30, 1970.

Robert E. Bakes, of Bakes & Ward, Boise, for defendant-appellant.

Gigray, Downen & Morgan, Caldwell, for plaintiff-respondent.

SPEAR, Justice.

This action arises out of an alleged breach by Ben F. Stadler, appellant herein, of a written contract to sell his entire 1966 hay crop to Larry Gillingham, respondent. Although he admitted execution of the contract, appellant asserted several affirmative defendses and also filed a counterclaim against respondent based on other grounds. From a judgment upholding the written contract, granting damages to the respondent for appellant's breach thereof, and allowing appellant a set-off for the amount of his counterclaim, this appeal was taken.

In September 1965, the parties in this action entered into a written agreement which provided:

'I, Larry Gillingham buyer, and Ben Stadler, seller, od hereby agree to:

'The purchase by Larry Gillingham of all of Ben Stadler's 1966 hay crops, providing that the hay is of good quality. Gillingham further retaining the option to refuse any hay not of good quality. Both parties further agree to the amount of $20.00 per ton for the hay. Hay is to be stacked at the Stadler Ranch at Dry Creek. Stadler also agrees to assist with the loading with his Farmhand loader, if Gillingham decides to load from the field. Down payment of Stadler's hay crops to be one Case Crawler 1010 Terri-Trac Crawler Tractor. Tractor valued and received at the price of $3750.00 as the down payment on seller's 1966 hay crops from buyer Gillingham. Buyer further agrees to pay for all hay removed from Stadler's Ranch upon request from Seller Stadler.

'Dated October 11, 1965.

Buyer

Signed Larry Gillingham

Seller

Signed Ben F. Stadler'

Two or three weeks prior to the signing of the contract, respondent delivered the tractor to the appellant at his farm for the purpose of allowing appellant to inspect and try out the tractor. Although by his own admissions appellant was not a stranger to written contracts, in the two or three weeks he had possession of the tractor before signing the written contract, he did not try out the tractor. In October, appellant's neighbor used the tractor with appellant's permission, and then informed appellant of mechanical troubles he had experienced in using the machine. Appellant, however, did not try out the tractor nor make any complaint to respondent.

In June of 1966, respondent received 100 tons of appellant's first cutting of hay. In the next few weeks the price of hay rose sharply, to over $20.00 per ton. Appellant then tried out the tractor and allegedly found that it was defective. Appellant then demanded that respondent take the tractor back, and that he pay cash at the rate of $20.00 per ton for the hay that he had purchased. He also informed respondent that the latter could purchase no more of his hay crop unless he first took back the tractor. Respondent refused this demand and brought suit on the written contract. Appellant answered, admitting the execution of the agreement, but asserting as affirmative defenses that there was a failure of consideration in that the tractor did not perform as warranted, that the agreement was unenforceable because it was entered into as the result of mutual mistake or as the result of fraudulent misrepresentations by respondent, and that the acceptance of the tractor as part payment was conditioned upon a tru-out of the tractor. Appellant also filed a counterclaim against respondent for 20 tons of hay allegedly sold and delivered to respondent in 1965, and for five used truck tires and 100 tons of hay deliverded to respondent in 1966.

Based upon the conflicting evidence presented, the court found that respondent had made no material misrepresentations, that the contract was not ambiguous or uncertain and that appellant had not rejected the tractor within a reasonable time. The court entered judgment in favor of the respondent for damages, but allowed the appellant a set-off in the amount sought in his counterclaim.

In computing the damages, the court found that appellant had 404 tons of good quality hay in 1966; that the market price of the 100 tons delivered to respondent was $20.00 per ton as agreed in the contract; that the market price of the remaining 304 tons was $25.00 per ton (after refusing to sell to respondent the 304 tons, appellant sold the same to his neighbors at $25.00 per ton); and that the respondent was indebted to appellant for the purchase price of truck tires in the amount of $37.50 and for 20 tons of 1965 hay at $21.00 per ton. The court then awarded respondent damages of $1,520.00 for the loss of the bargain on the 1966 hay crop ($25.00 market price minus $20.00 contract price equals $5.00 profit on the 304 tons of $1,520.00), and $3,750.00 for the purchase price of the tractor. Against that sum, the court allowed appellant a set-off of $2,457.50 to cover the truck tires, 20 tons of 1965 hay, and 100 tons of 1966 hay. From that judgment, appellant brought this appeal.

Appellant charges error on the part of the lower court in failing to find as a matter of law that the respondent had made material misrepresentations regarding the condition of the tractor and its value. However, frand is never presumed, but must be established by clear and convincing evidence, especially where the integrity of a written instrument is assailed. Thomson v. Marks, 86 Idaho 166, 384 P.2d 69 (1963); C. I. T. Corporation v. Hess, 88 Idaho 1, 395 P.2d 471 (1964). For the appellant to have carried his burden of proof in establishing fraud, he must have proven (1) a representation; (2) its falsity; (3) its materialty; (4) the speaker's knowledge of its falsity or ignorance of its truth; (5) his intend that it should be acted on by the person and in the manner reasonably contemplated; (6) the hearer's ignorance of its falsity; (7) his reliance on its truth; (8) his right to rely thereon; and (9) his consequent and proximate injury. Walker v. Nunnenkamp, 84 Idaho 485, 373 P.2d 559 (1962); Andrus v. Irick, 87 Idaho 471, 394 P.2d 304 (1964); Nab v. Hills, 92 Idaho 877, 452 P.2d 981 (1969).

Appellant alleges the following misrepresentations were made by the respondent: (1) that the tractor was a 1962 model, when in fact it was a 1958 model; (2) that the tractor had been used only 1400 hours, when in fact it had been used in excess of 1400 hours; (3) that the tractor would cost in excess of $5,000.00 from a dealer, when in fact it was worth only $1,750.00; and (4) that the tractor was 'like new,' when it in fact had serious defects. Appellant did not prove the nine elements of fraud as to any of the alleged misrepresentations.

First of all, regarding the model year of the tractor, the appellant offered no proof that the respondent knew the...