Hill v. Wilkinson

• Decision Date: 10 May 1939
• Docket Number: 6668
• Citation: 60 Idaho 243,90 P.2d 696
• Parties: RONALD HILL, Respondent, v. STEPHEN R. WILKINSON and JAMES WATSON, Appellants
• Court: Idaho Supreme Court

90 P.2d 696

60 Idaho 243

RONALD HILL, Respondent, v. STEPHEN R. WILKINSON and JAMES WATSON, Appellants

No. 6668

Supreme Court of Idaho

May 10, 1939

VENDOR AND PURCHASER-FRAUD-BURDEN OF PROOF-ACTION TO RECOVER INITIAL PAYMENT-WAIVER OF RIGHTS-APPEAL-FINDINGS NOT DISTURBED, WHEN.

1. In action to recover initial cash payment under executory contract to purchase land on ground of fraud inducing purchase, burden was on plaintiff to prove such fraud by clear and convincing evidence.

2. The trial court's fact findings, supported by sufficient substantial evidence, though conflicting, will not be disturbed on appeal.

3. A landowner's agreement with realtor's employee to pay commission for services in bringing about sale of land constituted realtor such owner's agent, authorized to sell property at price fixed, though price was raised by amount of commission.

4. A landowner's agreement with realtor's employee to add amount of commission for services rendered in bringing about sale of land to price thereof and pay commission out of such price amounted to offer by owner to pay such commission which became part of purchase price, and acceptance thereof by realtor, thus constituting agency contract.

5. In action to recover initial cash payment under executory contract to purchase land, court did not err in failing to find value of use and occupation of land for year in which plaintiff farmed it, in absence of showing of rental value thereof.

6. Vendee's rescission of contract to purchase land within three months after discovering vendor's fraud in falsely representing that land was practically free from noxious weeds was sufficiently prompt, so that vendee's recovery of initial cash payment under contract on ground of such fraud was not barred by laches.

7. Vendor, demanding payment of delinquent taxes and water assessments by vendee, as required by contract for sale of land, recognized and treated contract as still in force thereby waiving vendee's default, so that vendee was not precluded thereby from maintaining action to recover initial cash payment on ground of fraud.

8. A vendor waives right to rescind contract for sale of land by demanding payment of amount due thereunder by vendee.

APPEAL from the District Court of the Ninth Judicial District, for Bonneville County. Hon. C. J. Taylor, Judge.

Action to recover initial cash payment on an executory contract to purchase land. Affirmed.

Judgment affirmed, with costs to respondent.

O. A Johannesen, for Appellants.

Fraud is never presumed, but must be shown by clear and satisfactory evidence by the party asserting it; and if the facts and circumstances from which the alleged fraud is supposed to arise may reasonably consist with honest intentions, it will not be imputed. (Crumpacker v. Bank of Washington Co., 38 Idaho 534, 223 P. 229; Cole v. Town of Miami, (Ariz.) 83 P.2d 997; Nelson v. Krigbaum, 38 Idaho 716, 721, 226 P. 169; Nelson v. Hudgel, 23 Idaho 327, 130 P. 85; Black on Rescission and Cancellation, secs. 682, 683.)

A contract being in default and providing that it should become void on such default, the seller was not required by law to give notice of intention to declare forfeiture, and has the right to retain any payments made where time is of the essence of the contract. (Papesh v. Wagnon, 29 Idaho 93, 157 P. 775; Prairie Dev. Co. v. Leiberg, 15 Idaho 379, 98 P. 616; Minsch v. Mothorn, 44 Idaho 539, 258 P. 540; Armstrong v. Irwin, 26 Ariz. 1, 221 P. 222, 32 A. L. R. 609.)

Alvin Denman, for Respondent.

Representation by the vendor that the farm is in good condition for cropping amounts to a representation that there are not foul weeds in such amounts as to prevent practical and successful cropping, and is a representation of a material fact, and not mere opinion, trade talk or puff. (Woodward v. Western Canada Colonization Co., 134 Minn. 8, 158 N.W. 706, L. R. A. 1917C, 270.)

Where land is sold by a broker, who makes false representations to the purchaser to induce him to buy, and were relied upon by the purchaser to his injury, the seller availing himself of the benefits of the transaction is bound by the representations, whether the broker was his real agent or not. (The Law of Real Estate Agency, 216; Williamson v. Tyson, 105 Ala. 644, 17 So. 336.)

HOLDEN, J. Budge, Givens, Morgan, JJ., concur. Ailshie, C. J., sat at the hearing but did not participate in the decision of the case.

OPINION

HOLDEN, J.

--On the ground he was induced by fraud to purchase certain farm lands, respondent brought this action to recover the initial cash payment. Feb. 19, 1937, appellant Wilkinson agreed, in writing, to sell and appellant Watson agreed to purchase an 80 acre tract of land located in Jefferson county, Idaho. The contract, executory in form, together with a deed to the property was placed in escrow. March 26, 1937, appellant Wilkinson and wife agreed, in writing, to sell and respondent Hill and wife agreed to purchase the same tract for the sum of $ 5,462.50. Respondent assumed and agreed to pay $ 1,433 on a first mortgage theretofore given for a larger amount to the Federal Land Bank, which amount was to be applied on the purchase price. Respondent also paid $ 1,800 in cash on the purchase price, the balance, by the terms of the contract, was to be paid in stated installments, with interest. In order to effect the sale from Wilkinson to Hill, Watson assigned his contract to Wilkinson, receiving $ 912.50 out of the initial cash payment made by Hill at the time of the execution and delivery of the Wilkinson-Hill contract. The latter contract, together with a deed to the property, was placed in escrow with the Eastern Idaho Loan and Trust Co. at Idaho Falls. Thereafter, during the cropping season of the year 1937, respondent farmed, or attempted to farm the land.

Jan. 3, 1938, appellant Wilkinson demanded payment of certain delinquent taxes and water assessments. Jan. 18, 1938, respondent Hill gave appellants Wilkinson and Watson written notice of his intention to rescind the Wilkinson-Hill contract upon the ground of certain allegedly false and fraudulent representations concerning the presence and extent of noxious weeds, demanding return of the initial payment, to wit, $ 1,800. Feb. 10, 1938, appellants having failed to return the cash payment so demanded, this action was commenced to recover the amount with interest. May 19, 1938, the case was tried. July 16, 1938, findings of fact and conclusions of law were filed, and on the same day judgment was entered thereon against appellants for the sum of $ 1,800, with interest at the rate of 6% per annum from Jan. 18, 1938. July 18, 1938, notice of intention to move for a new trial was given and filed. August 5, 1938, supplemental notice of intention to move for a new trial was filed. Sept. 8, 1938, appellants' motion for a new trial was denied. October 8, 1938, Wilkinson and Watson jointly appealed from both the judgment and the order denying a new trial.

The trial court found, in substance: That at the time respondent agreed to purchase the land it was entirely covered with several inches of snow and respondent was thereby prevented from inspecting the same; that respondent had never before seen the land and appellants knew respondent could not examine the land because it was covered with snow; that appellants well knowing respondent wanted the land for the purpose of growing agricultural crops, and well knowing the land was foul with noxious weeds, falsely and fraudulently represented the land was entirely free from noxious weeds excepting a few small patches containing less than five acres; that respondent relied upon such false representations and relying thereon agreed to purchase the land, and made an initial payment of $ 1,800 on the purchase price; that between 50 and 60 acres were foul and infested with noxious weeds, namely: morning glory, Russian knap weed, Canadian thistle, and white top; that the land was practically useless for the purpose of raising agricultural crops; that respondent did not discover the wide-spread extent and distribution of the noxious weeds until he attempted in October and November, 1937, to harvest a crop of potatoes planted thereon; that respondent had never lived on the land and was not in possession after Dec. 1, 1937; that respondent offered to give appellants possession of the land and to execute and deliver to them a quit-claim deed to the property; that at some time prior to the trial of the cause appellants took possession of the tract and sold it; that the property was not worth over $ 800; that respondent "did not pay the mortgage interest which became due according to the terms" of the Wilkinson-Hill contract because appellants failed to procure a segregation of the mortgage indebtedness; that respondent did not pay the taxes and water assessments because he had, at the time they became due and payable, "discovered the fraudulent representations" made by appellants; that appellant Wilkinson waived his right to a forfeiture of the Wilkinson-Hill contract by demanding respondent pay the delinquent taxes and water assessments. 9

It is contended by appellants, and correctly so, that the burden was upon respondent to prove his charge of fraud by clear and convincing evidence (Nelson v. Hudgel, 23...