Hagadorn Inv. Co. v. Rieke

• Decision Date: 03 January 1916
• Docket Number: 8274.
• Citation: 60 Colo. 555,155 P. 381
• Parties: HAGADORN INV. CO. v. RIEKE.
• Court: Colorado Supreme Court

155 P. 381

60 Colo. 555

HAGADORN INV. CO. v. RIEKE.

No. 8274.

Supreme Court of Colorado

January 3, 1916

Rehearing Denied March 6, 1916.

Error to District Court, Conejos County; Charles C. Holbrook Judge.

Action by Henry J. Rieke against the Hagadorn Investment Company. Judgment for plaintiff, and defendant brings error. Affirmed.

Roy E Dickerson and John R. Smith, both of Denver, for plaintiff in error.

Barnett & Campbell, of Denver, and N.M. Campbell, of Colorado Springs, for defendant in error.

BAILEY J.

In the fall of 1909 the Hagadorn Investment Company, plaintiff in error here, defendant below, solicited and induced five farmers to come to Colorado from their respective homes in Iowa, at the expense of the company, and purchase from it land for farming purposes, located in the same general vicinity in San Luis Valley, Conejos County, together with water shares for its irrigation.

Plaintiff below, defendant in error here, Henry J. Rieke, is one of the five, all of whom were unsuspecting and unwary ruralists, new to this country, with no knowledge of irrigated lands, sub-irrigation, alkali, seepage, or seeped land. Plaintiff purchased approximately 600 acres, at the total contract price of $36,050, of which he paid $18,000 in cash, the balance being represented by mortgages on the land assumed by him and promissory notes executed and secured by further incumbrances. The contracts were of absolute and unconditional sale, made direct to the plaintiff by the Hagadorn Company, in its name and for its use and benefit.

This action was brought to rescind and cancel all contracts deeds, mortgages, notes, etc., growing out of the transaction, because of alleged fraud, misrepresentation and deceit in their procurement. The case was tried to the court without a jury, resulting in a general finding for plaintiff, and special findings, judgment and decree as follows:

'I.--That the plaintiff reposed trust and confidence in the defendant's agents and representatives, and in their statements and representations as to the land purchased by him, to-wit: (description of land and water stock) in Conejos County, Colorado, as to the value and price thereof, and as to the condition, productivity, quality, fertility thereof, and as to the sufficiency of the water rights appurtenant thereto; that representations were made by the defendant and its officers and representatives as to said matters to plaintiff which were false; that plaintiff had the right to regard said representations of defendant as to said matters as statements of facts, and that plaintiff did so regard them and rely upon them to his great injury, damage and loss; that material representations were made by defendant to plaintiff which were false and misleading and produced an impression upon the mind of the plaintiff which was false and misleading, and which induced plaintiff to make said purchases, and that the result thereof was a fraud upon plaintiff entitling plaintiff to a decree of rescission of said contracts of purchase, and to other relief hereinafter specified.

'II.--That said lands sold by defendant to plaintiff were not worth one-half of the amount for which they were sold to plaintiff, and which they were represented to be worth by defendant; and that the great disproportion of the actual value of said lands sold to plaintiff, and its cost price to plaintiff, is sufficient to shock the conscience of the Court.

'III.--That plaintiff was inexperienced and wholly ignorant as to the lands purchased, and as to their condition, history, quality, productivity, and with water rights and irrigation, and had a right to rely upon the representations of defendant in regard to the same, and that plaintiff acted in sole reliance upon said representations, which said representations were false; that defendant knew of plaintiff's inexperience and lack of knowledge as to such matters, and that plaintiff was over-reached by defendant, and that said parties were not upon equal footing.

'IV.--That the officers of defendant, and, more particularly, J. D. Hagadorn, Vice-President of defendant, were cognizant of the misrepresentations and fraud practiced, as aforesaid, upon plaintiff, and willfully deceived plaintiff.

'V.--That defendant, its officers and agents, or some of them, in their representations to plaintiff concerning the lands purchased, stated that they had extensive and expert knowledge of lands in the San Luis Valley, including the lands purchased by plaintiff; and the Court finds that plaintiff had the right to take and regard defendant's representations as to said lands as statements of fact, and not of opinion, and that plaintiff did so take them and rely upon them.

'VI.--The Court also finds that the lands sold by defendant to plaintiff, and represented by defendant to be very fertile and productive, were, in fact, lands of very low fertility and productivity, that they had been thoroughly tested and had practically little or no value for agricultural purposes; that such facts were matters of common knowledge in said San Luis Valley, and that defendant must be charged with knowledge of said facts at the

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