Hilburn v. Brodhead

• Decision Date: 30 August 1968
• Docket Number: No. 8585,8585
• Citation: 444 P.2d 971,79 N.M. 460,1968 NMSC 142
• Parties: C. E. HILBURN and Bill R. Hilburn, Plaintiffs-Appellees and Cross- Appellants, v. John BRODHEAD, A. C. Donell, Joe B. Bain, Anderson Clayton & Co., Defendants-Appellants and Cross-Appellees, George Dewey Hon and Melba L. Hon, his wife, and Lone Star Producing Co., Defendants-Appellees, Kenneth Bozeman, Intervenor-Appellee and Cross-Appellant.
• Court: New Mexico Supreme Court

Page 971

444 P.2d 971

79 N.M. 460

C. E. HILBURN and Bill R. Hilburn, Plaintiffs-Appellees and Cross- Appellants, v. John BRODHEAD, A. C. Donell, Joe B. Bain, Anderson Clayton &amp Co., Defendants-Appellants and Cross-Appellees George Dewey Hon and Melba L. Hon, his wife, and Lone Star Producing Co., Defendants-Appellees Kenneth Bozeman, Intervenor-Appellee and Cross-Appellant.

No. 8585.

Supreme Court of New Mexico.

Aug. 30, 1968.

Heidel, Swarthout & Samberson, Lovington, for appellees Hilburns & bozeman.

Benjamin M. Sherman, Deming, for appellees Hons and Lone Star Producing Co.

I. M. Smalley, Deming, for appellant Joe B. Bain.

Edwards, Belk, Hunter & Kerr, El Paso, Tex., William W. Bivins, Las Cruces, for appellants A. C. Donell and John Brodhead.

William J. Mounce, El Paso, Tex., for Anderson Clayton & Co.

OPINION

MOISE, Justice.

The dealings out of which this litigation arose had their inception in 1961. In that year, defendants-appellees George Dewey and Melba L. Hon, hereinafter referred to as 'Hon,' entered into a contract with defendant-appellant Joe B. Bain, hereinafter referred to as 'Bain,' by the terms of which Hon agreed to sell and Bain to buy 290 acres of land and certain water rights located in Luna County, New Mexico, for a total purchase price of $87,000.00, payable $4,800.00 upon execution of the contract to be followed by 17 annual payments of $4,800.00 on January 10 of each year, and a final payment of $600.00.

The court found, and it is not disputed, that Bain was not interested in either the land or water rights contracted to be purchased by him, but bought them in order to acquire 96 acres of cotton allotment appurtenant to the land, this being the method required by the local government office handling cotton allotments for accomplishing a transfer or sale. After entering into the contract Bain utilized the allotments, together with other allotments on his Columbus farm and did not do any farming on the land purchased from Hom. The annual payments called for by the contract were made in 1961 and in 1962. Thereafter, in 1963, a payment of $12,500.00 was made, but no payments were made in 1964 and 1965.

In November 1964 plaintiffs-appellees, hereinafter referred to as 'Hilburns,' pursuant to a bid at an auction sale, entered into a contract to purchase the farm of Columbus Farm & Cattle Company, Inc. (successors in interest to Bain), hereinafter referred to as 'Columbus,' including water rights and cotton and grain allotments, but not including the Hon land, for a total purchase price of $216,000.00. It thereafter came to Hilburn's attention that 96 acres (sometimes referred to in the record as 94 acres) of cotton allotment which they had understood they were buying, could not be delivered because appurtenant to lands not included in the sale to them, and Hons, the owners of the land to which they were appurtenant, made claim for the payment of $64,925.00, being an amount equal to unpaid balance on the defaulted contract with Bain. Also, the other defendants-appellants, hereinafter referred to collectively as 'appellants,' as well as additional claimants, had come forward with claims against Bain or Columbus which they sought by court action to have paid out of the proceeds of the sale to Hilburns.

Because of the problems of closing the transaction resulting from these claims, Hilburns filed this interpleader action, setting forth their contract of purchase together with the fact they had paid $61,987.92 thereunder and are obligated for an additional $75,000.00 on account of the balance on a mortgage on the property, leaving only $79,012.08 unpaid. They are seeking to have the validity of the various claims determined, and directions given concerning payment of the balance of the purchase price to those entitled thereto. In a second count, partial rescission of the contract and reduction of the purchase price in the amount of $87,000.00 is sought because of the seller's inability to deliver the 96 acres of cotton allotment appurtenant to the Hon land. In a third count, Hilburns ask $87,000.00 as damages from Bain and Columbus because of alleged false representations concerning the 96 acres of Hon cotton allotment. Hons and the appellants appeared and answered and, after trial, the court determined that because of the failure to receive the Hon cotton allotment Hilburns were entitled to an abatement from the price agreed to be paid of $64,925.00, determined to be the value of the allotment, which amount was ordered paid to Hons pursuant to an agreement between Hilburns and Hons for the purchase and sale of the allotment and the lands to which it is appurtenant. The court then entered judgments in favor of appellants against Bain and Columbus, and specified the order for payment of each. Inasmuch as the balance of money remaining in court after the purchase price is reduced by $64,925.00, determined to be due the Hons, would be insufficient to satisfy the judgments of appellants, they have appealed.

We are here called upon to determine if there is substantial evidence to support the court's findings that in may 1963, when Hons conveyed the 290 acres to Bain and received a payment of $12,500.00, it was not intended by them that this should be all that Bain was to pay for the cotton allotment less the land, which was to be reconveyed to Hons. Further, we must determine whether there is substantial support for the court's finding that the conveyance was made with the understanding that the contract price should be paid in full by Bain, after which Hons could repurchase the land at a mutually agreeable price, and that, on November 16, 1964, there was an unpaid balance of $64,925.00 on the contract which resulted in a forfeiture thereof by Hons on February 3, 1965.

We have carefully considered the proof on these questions to which our attention is called by the briefs. Although it is possible that if the court had made a determination that when the $12,500.00 was paid the parties intended a new contract or novation to replace the original one executed by them, and such a finding would have found substantial support in the proof, we are certain, without setting forth the facts in detail, that the finding as made has equal, if not greater, support in the evidence. A finding of fact supported by substantial evidence will not be disturbed by us. Armijo v. World Insurance Co., 78 N.M. 204, 429 P.2d 904 (1967); Ash v. H. G. Reiter Co., 78 N.M. 194, 429 P.2d 653 (1967). Accordingly, the facts in this regard as found by the trial court are the facts upon which the case will be determined here.

Appellants assert with great conviction that Hon was not a creditor of Bain under the facts found and, accordingly, was not entitled to assert any claim against the proceeds from the sale to Hilburns. Hon admits that he is not a creditor, but together with Hilburns maintains, and we think correctly, that he was properly jointed because of his interest in the cotton allotment, and his right to recover in the event the purchase price was reduced, as determined by the trial court. The court found, and there is no proof to the contrary, that on April 23, 1965, Hilburns agreed to pay Hon $64,925.00 for his land and appurtenant cotton allotment provided the $216,000.00 purchase price contracted to be paid by them for the Columbus property was reduced by this amount.

It would thus appear that we must determine if the court erred when it reduced the purchase price by $64,925.00, and when it ordered the amount paid to Hon. Relief was accorded to Hilburns by an abatement of the purchase price, pursuant to Count II of their complaint wherein partial rescission of their contract was sought, because the 96 acres of cotton allotment which it was represented they were buying could not be delivered.

That the sale was one in gross would seem to be clear since the entire property consisting of land, water rights, cotton and grain allotments, as well as farm machinery, implements and tools, was included for a single price without any attempt to place a price on any particular item. See Branch v. Walker, 56 N.M. 594, 247 P.2d 172 (1952). That case held that where the sale is in gross, a purchaser is not entitled to diminution or abatement of the purchase price, absent fraud or gross mistake. That equity will ordinarily grant relief for fraud or gross mistake where there is a material deficiency in the acreage from that contracted to be sold, even when the transaction is in gross, is held by a majority of courts. See Hardin v. Hill, 149 Mont. 68, 423 P.2d 309 (1967); Lichtenthaler v. Clow, 109 Or. 381, 220 P. 567 (1923); Annot., 1 A.L.R.2d 9, 64, 130 (1948). The problem here is not one of a deficiency of acreage of land, but rather of acreage of cotton allotment. However, we do not perceive that a different rule should be applied. In Logwood v. Holland, 131 Va. 186, 108 S.E. 571 (1921), the rule was held applicable where an orchard which had been sold was found to contain fewer trees than had been represented. The court there held that the rule applicable to sales of land where there is a material discrepancy in the acreage was controlling. We quote the following from that case:

'* * * It is probably true, as contended by counsel for appellants, that bills in equity seeking a purely pecuniary recovery on account of mutual mistake (or mistake of one party caused by fraud or culpable negligence of the other) have heretofore in this state been confined to cases involving a shortage of acreage, or loss of part of the acreage contracted for by title paramount. Some of the cases, however, have expressly recognized the propriety of considering improvements or other items of special value in fixing the abatement, and we are unable to see any reason why this principle, so sound and just in itself, and so well established as to shortage of acreage, should not be extended in a proper case to mistakes resulting in loss...