Lasby v. Burgess
| Decision Date | 16 July 1930 |
| Docket Number | 6589. |
| Citation | 289 P. 1028,88 Mont. 49 |
| Parties | LASBY et al. v. BURGESS. |
| Court | Montana Supreme Court |
Appeal from District Court, Broadwater County; Edgar J. Baker Judge.
Suit by William D. Lasby and another against Charles N. Burgess. Judgment for plaintiffs, and defendant appeals.
Reversed and remanded, with directions.
E. H Goodman, of Townsend, and Henry C. Smith, of Helena, for appellant.
William Scallon and J. R. Wine, both of Helena, Frank T. Hooks of Townsend, and William T. Pigott, of Helena, for respondents.
This is a suit in equity to rescind and set aside a contract for the sale of real property, and a deed and purchase-price mortgage executed as a sequel to said contract, on the ground of fraud. This is the second time this case has been before this court. See Lasby v. Burgess, 76 Mont. 452, 248 P 190.
The original complaint was filed January 16, 1924. The amended complaint was filed November 22, 1926, which, in substance sets forth that on the 18th day of August, 1919, the defendant, by contract in writing, agreed to sell and the plaintiffs agreed to buy the south-west quarter of section 16 and lot 8 of section 17, township 6 north, range 2 east, in Broadwater county, Montana, containing 200 acres; also the south half of the northeast quarter of section 17, township 6 north, range 2 east, for the sum of $30,000, of which $1,000 was paid at the time of executing the contract, $9,000 to be paid March 1, 1920, and the remainder to be paid on or before five years from March 1, 1930, secured by a mortgage upon said real estate; that, during the negotiations leading up to the execution of the contract, the defendant fraudulently represented to the plaintiffs that the tract of land contained 280 acres; that the tillable portion of the lands and the wild hay land in different fields totaled 199 acres; that no part of the land was covered by the Missouri river which formed the southwest boundary of a portion of the lands; that said representations were false and were known to the defendant to be false at the time he made them were material, were made by the defendant with the intention that the plaintiffs should act upon them; that the plaintiffs believed the representations to be true and, so believing, acted upon them to their damage; that they did not discover the truth until the latter part of November, 1923, and did not become fully informed as to the true conditions of the lands until January, 1924.
They further alleged that the Northern Pacific Railway runs across the land, and at all times the width of the right of way fenced through the land was 75 to 100 feet, but that in truth the right of way was 400 feet in width, which was unknown to the plaintiffs; that the land in the right of way and not fenced was 30.86 acres; that the defendant represented he owned the land up to the fence of the right of way; that in truth there were only 138.2 acres of tillable land and 17.8 acres of wild hay land; that by the terms of the contract defendant agreed to furnish the plaintiffs with an abstract of title to the land and, prior to February 28, 1920, the defendant did furnish the plaintiffs with an abstract of title to the land, which disclosed that lot 8 of section 17 contained 30.86 acres of land and made no reference to the right of way of the Northern Pacific Railway Company through the land; that pursuant to the contract and on February 28, 1920, the plaintiffs paid the defendant $9,000, $8,000 thereof in cash and $1,000 by conveying to defendant certain lots in Townsend, and executed to the defendant their note for $20,000, secured by a mortgage on the land; that both the plaintiffs were interested as purchasers of the land, and both advanced money toward the payment of the purchase price; that the plaintiffs have offered to convey the lands back to the defendant and restore to the defendant all that they received from him, and in turn they have demanded that the defendant return to the plaintiffs the amount of money paid to him on the purchase price, and interest, and that the defendant reconvey to the plaintiffs the lots in Townsend.
The defendant's answer admits the execution of the contract, deeds, mortgage, and the plaintiffs' offer to rescind, and in other respects is a general denial of the complaint, and sets up five affirmative defenses:
First: That from August, 1919, to February 28, 1920, plaintiffs knew or, in the exercise of ordinary care, should have known of the alleged defects in the land; that they relied on their own inspection of the land and not on the defendant's representations, and are now estopped from claiming any defects in the land.
Second: That plaintiffs are estopped for the reason that for more than four years prior to the commencement of this action plaintiffs were in possession and control of the lands, and have had every means at their command to discover the defects complained of, and have delayed the assertion of any defects in the land for an unreasonable length of time and until the market value of the lands has substantially depreciated and until the defendant cannot be made whole.
Third: That on the first trial of this action substantially the same issues were presented and were decided by Judge Law, who tried the case, against the plaintiffs, and plaintiffs are estopped to again demand the trial of such issues.
Fourth: The fourth affirmative defense has been abandoned.
Fifth: That the plaintiffs' alleged cause of action is barred by section 9027 and paragraph 4 of section 9033, Revised Codes of Montana, 1921.
The reply puts in issue all of the affirmative defenses.
The trial court made all findings of fact and conclusions of law in favor of the plaintiffs; judgment was entered in favor of the plaintiffs, effecting a complete rescission of the entire transaction. The defendant appeals from the judgment.
We think the evidence fairly establishes the following facts: That the defendant represented to the plaintiffs that the land in question contained 280 acres and a price of $30,000 for the entire farm was agreed upon; that on August 14, 1919, William D. Lasby, one of the plaintiffs, and one John A. Klein, a witness for the plaintiffs, visited the land and, in company with the defendant, examined the entire property, and at this time the defendant told William D. Lasby, in response to questions, the areas of the various fields, saying that he never had the fields surveyed and that the areas of the various fields were estimates derived from drill measurements; the acres of the various fields totaled 170 acres of tillable land; that the defendant told the plaintiff he estimated there were about 29 acres of wild hay land; that defendant gave plaintiffs to understand that his west line was about a rod from the river. At the time of the United States survey of the land, as shown by the maps in evidence, lot 8 of section 17, which if not designated as a lot, would be the northeast quarter of the southeast quarter of section 17, according to such survey, contained 30.86 acres. The west line of said lot, which would be an extension south of the west line of the northeast quarter of the northeast quarter of section 17, extended from the south line of the north half of the northeast quarter of section 17, a distance of about 900 feet to the bank of the Missouri river, and thence in a curve arching northeast, southeasterly to a point about 300 feet from the west line of the southwest quarter of section 16; that between the time of the making of the aforesaid survey and the 14th day of August, 1919, the river had washed the greater portion of lot 8 away, extending its north bank in the form of an arch into lot 8 and washing away a portion of the south half of the northeast quarter of section 17 at a point directly north of lot 8; that on the 14th day of August, 1919, the plaintiff William D. Lasby visited this portion of the lands and observed that a part of the fence marking the boundary of the south half of the northeast quarter of section 17 had been washed away; that in November, 1923, only nine or ten acres of land remained in lot 8, assuming the survey made by the witness Charles W. Helmick to be correct; that prior to February 28, 1920, the defendant furnished the plaintiffs with an abstract of title and on the first page thereof was a plat showing lot 8 of section 17 as it was when surveyed by the United States government, showing the course of rivers and showing the area to be 30.86 acres.
That the right of way of the Northern Pacific Railway runs across the land entering the southwest quarter of section 16 at an angle of approximately north 25 degrees west, through the whole of the last-mentioned quarter section and across the northeast corner of the north half of the northeast quarter of section 17, and the right of way is fenced, varying in places as to width, but generally fifty feet on each side of the center line; that the full width of the Northern Pacific right of way is 400 feet through the land. The plaintiff William D. Lasby, while inspecting the lands, saw the railroad running through the farm and observed the right of way as fenced. The defendants made no representations as to the width of the right of way of the Northern Pacific Railway Company to either of the plaintiffs, except stating that he farmed the lands in certain places up to the right of way fence. The railway right of way at 400 feet width contained 35.5 acres of land, the actual shortage in lot 8 washed away by the river was 21.36 acres and an additional shortage of 1.34 acres in the entire tract, making a total shortage of 58.2 acres. There were 138.2 acres of cultivated land, a small part of this being within the 400-foot right of way and there were 17.8...
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