Lawson v. Schuchardt

• Decision Date: 27 June 1961
• Docket Number: No. 2991,2991
• Parties: Albert L. LAWSON and Frances W. Lawson, husband and wife, Appellants (Plaintiffs below), v. Herbert O. SCHUCHARDT and June A. Schuchardt, husband and wife, Appellees (Defendants below).
• Court: Wyoming Supreme Court

Page 90

363 P.2d 90

Albert L. LAWSON and Frances W. Lawson, husband and wife, Appellants (Plaintiffs below), v. Herbert O. SCHUCHARDT and June A. Schuchardt, husband and wife, Appellees (Defendants below).

No. 2991.

Supreme Court of Wyoming.

June 27, 1961.

Murane, Bostwick & McDaniel, R. R. Bostwick, Casper, for appellants.

Spence, Hill, Oeland & Tschirgi, G. L. Spence, Riverton, for appellees.

Before BLUME, C. J., and PARKER, HARNSBERGER and McINTYRE, JJ.

Mr. Justice PARKER delivered the opinion of the court.

Albert L. and Frances W. Lawson, husband and wife, sold the Hi-Neighbor Motel Resort, situated on State land south of the Boyson Reservoir, to Herbert O. and June A. Schuchardt, husband and wife, for $58,000-$20,000 down and the balance of $38,000 secured by a first mortgage. The plaintiffs brought suit for the foreclosure of the mortgage and defendants filed a 'cross-complaint,' alleging that plaintiffs made false and fraudulent representations concerning the property for the purpose of inducing defendants to purchase it and asking cancellation of the contract and return of the down payment together with other damages. ¹ Defendants admitted having made no installment payments, and the case therefore turns solely upon the question of rescission by reason of the alleged fraud. The court after hearing evidence and argument entered judgment rescinding and cancelling the contract of sale, the note, and mortgage and giving judgment to defendants for the $20,000 down payment plus $1,450 expended on the property, from which judgment this appeal is prosecuted.

The Lawsons had employed Squire of the Moon Realty as agent for the sale, and the Schuchardts first learned of the property by his January 4, 1959, advertisement in the Denver Post, Denver, Colorado:

'5-Unit Motel

'Truck Stop, Cafe, Service Station. Nice home for owner. All this on large lake with boating, fishing and good hunting area. 17 acres land to expand on. Modern bldgs. and new equipment. Main highway. (Clear $20,000 year in this operation). Sell for $58,000. $15,000 down and $4,800 year on balance. See Mr. Squire Sr. 800 E. Calfax

"Moon'

MA. 3-0289

"Rush To The 'Moon' in '59"

The defendants contacted Squire, later inspected the property, and on January 14, 1959, signed the papers relating to the purchase.

Although there were a number of charges of fraud against the plaintiffs, the issues were narrowed by the trial court's conclusions of fact and law wherein it found in favor of plaintiffs on all allegations of fraud except:

'b. That said property would earn a net of $20,000.00 yearly.

'c. That said property was located on the lake, known as 'Boysen Lake,' and that at the site of said property there is year around fishing, that as soon as the ice leaves the lake in the early springtime there is boating every year at the site thereof, and that the water in said lake is such as to permit fishing and boating and other water sports at all times after the ice leaves said lake in the springtime.'

Accordingly, it becomes unnecessary to examine the record regarding any testimony except that which would tend to support the court's findings on these points.

Schuchardt testified that:

'He [Squire] told me [the property was located] on a big lake in the northern part of Wyoming. * * * In the summertime people are coming from all over the state, mostly from Casper, with their boats, stay overnight and put their boats on the ramp, which we have there, into the water. Plenty of water skiing, plenty fishing going on during the summertime, and even he [Lawson] has three boats that fishing parties are being taken on.'

Schuchardt also stated that Lawson had 'repeated the same things' to him and that during his visit to the site, prior to the final arrangements for purchase, the water was frozen and 'at that particular time we couldn't tell anything.'

According to Squire, he had told the Schuchardts during their initial conversation:

'That the property would clear $20,000, that by adding the service station facilities which Mr. Lawson was not operating to the full extent at that time, by the handling of the boats on the lake which Mr. Lawson had not handled for two years, and getting additional motor boats for the lake he could increase that income easily up to the $20,000 figure.'

Asked where he got that information, he replied:

'Those were made from past experience from handling resort property and the lake shore cabins at Grand View Reservoir and basing it on approximately half or less of what they do in that area, what is the potential in this area.'

Defendants entered in evidence without objection color photographs shown by Squire to Schuchardt at the time of their first conversation. One is of hunters and game near the Hi-Neighbor, another of the buildings, and a third of three fishermen with their catch. Each photograph showed a substantial body of water in the immediate background. However, Schuchardt's testimony indicated that after the ice melted following their purchase of the property there was no lake, just the Wind River. Defendants also introduced in evidence without objection photographs of the boat-ramp area at the Hi-Neighbor taken from June 21, 1959, to July 28, 1959, showing the water line a considerable distance below the boat ramp and going further down as the season progressed. A photograph of the area taken on July 2, 1959, showed a dust storm over a portion of what had been the lake bed. A photograph taken on October 10, 1959, indicated the water line had continued to recede. Lawson testified that to the best of his recollection the lake level was lower in 1955 than it was in 1958 or 1959.

On cross-examination Squire was asked:

'* * * isn't it true, Mr. Squire, that it would be completely and totally impossible to conduct a boating operation at the Hi-Neighbor resort by reason of the fact that, first, the lake recedes in the wintertime and often times never comes back even up to the boat docks; and, secondly, that there is a wind which makes the establishment of a harbor a complete impossibility at the Hi-Neighbor resort? Did you investigate that?'

He answered:

'I didn't.'

Squire then stated that he did not ask Lawson about the matter but that Lawson said they had a lot of boating and that he, Squire, had seen boating.

In their argument that the judgment was erroneous, the plaintiffs press several points:

They complain that the court indulged in conjecture in stating that the property was 'located on the hot prairies of central Wyoming.' While no testimony was adduced which directly...