Oregon Mortg. Co. v. Renner
| Decision Date | 05 January 1937 |
| Docket Number | No. 1928.,1928. |
| Citation | 17 F. Supp. 727 |
| Parties | OREGON MORTG. CO., Limited, v. RENNER et ux. |
| Court | U.S. District Court — District of Idaho |
W. G. Bissell, of Gooding, Idaho, for plaintiff.
S. T. Lowe, of Burley, Idaho, for defendants.
On August 1, 1927, the plaintiff and defendants entered into a written contract of sale for 180 acres of land with any and all water rights decreed or otherwise appurtenant, to the defendants, for the purchase price of $8,200, to be paid in installments of $800 on the delivery of the contract and the balance in accordance with the terms of certain promissory notes payable $700 on the first of December 1927, and $1,000 on December 1, each year thereafter until December 1, 1933, when $700 is to be paid together with interest at 7 per cent. per annum. Under the contract, defendants entered into the possession of the land and paid the cash payment of $800 and $1,700 on the principal $1,543.92 as interest, and $475.47 as taxes, but failed to pay the subsequent installments and taxes.
The suit is brought to terminate and forfeit the rights of the defendants under the contract and in the land, and to determine the amount due the plaintiff from the defendants, such as the amounts claimed by it to have been paid out in order to protect its security as premiums on the insurance, taxes, and the balance of the principal and interest and in case the defendants fail to make payments of such amounts within a reasonable time, all right, title, and interest of the defendants in the contract and land be terminated, canceled, and foreclosed and title to the land be quieted in plaintiff, and that it be restored to full possession and to retain all sums paid by the defendants as liquidated damages.
The defendants by answer and cross-complaint deny that they have breached the contract or that the plaintiff has elected to or declared it forfeited or that after crediting all payments made by them upon the contract, the amount claimed by the plaintiff is due it. And by affirmative answer and cross-complaint they allege that they were strangers to the land, were not acquainted with it and had no knowledge of the water rights appurtenant thereto from Howell creek and Marsh creek, or the nature and character of the creeks, or the amount of water that flows in Howell creek. That in order to induce them to enter into the contract the plaintiff falsely, fraudulently, knowingly, and intentionally represented to them that the land had a second water right of 35 inches of the water of Howell creek with date of priority of 1876, 50 inches of water with date of priority of 1880, and 130 inches of water of date of priority of 1892, and that the water rights appurtenant to the land were ample and sufficient to properly irrigate it. They further allege that in order to prevent them from making any inquiry of the nature of the water rights appurtenant to the land the plaintiff directed and advised them not to make any inquiry regarding the land or the water rights from the then tenant for the reason that the tenant wanted to purchase it and could not do so, as he had no money, and that if he knew they were purchasing it and going to receive the landlord's share of the crop thereon he would neglect the crops that were then growing. They further allege that the land has a right to the water of Howell creek of 35 inches with date of priority of 1876 but does not have a second water right in the creek, that there is not appurtenant to the land a decreed water right of 50 inches of the water of Howell creek with date of priority of 1880 or any other number of inches in excess of 30 inches, and that the water rights appurtenant to the land are not sufficient or ample to irrigate it or produce profitable agricultural crops. Further, they allege that at the time the contract was entered into the water rights that were appurtenant to the land had been decreed to it and certain other land that was held by Daniel Baird, and that it had not been segregated and it was impossible to determine from an examination of the records of the county, the amount of water that was appurtenant to the land; that the creek is a stream of short duration as its maximum flow is reached from the 1st to the 15th of May and thereafter the water recedes to a small stream not sufficient to furnish water for the land. Then it is alleged that the representations made were false, fraudulent, and material, and known to the plaintiff at the time they were made to be false and made with intent of inducing and persuading them to enter into the contract and that they relied upon them and entered into the contract and paid them the sum of $2,705.39, and on improvements on the land $248.71; that they did not discover the falsity of the representations until May 21, 1934, and after that was done plaintiff agreed that it would make adjustment on the contract and procure for them a water right sufficient to properly irrigate the land, by forcing the tributaries of the creek to be turned down sufficient water to supply the decreed rights being of earlier priority than the persons using the tributaries, but that it failed to do so. That on January 13, 1936, they notified plaintiff that they had elected to and did rescind the contract and to return to the plaintiff what they had received thereunder and executed and delivered to it a quitclaim deed to the land, which they said was accepted by the plaintiff, and offered to quit and surrender the premises upon the plaintiff paying to them the money they had paid upon the purchase price and for the improvements, and demanded repayment to them of the money they had so paid. They pray that the sum of $3,754.10 the amount they claim to have been paid out under the contract be paid to them by the plaintiff.
Under the issues thus stated, considerable testimony was taken which presents the principal questions (a) did the plaintiff knowingly and recklessly make false representations of material facts with intent to induce defendants to purchase the land and are they of such a nature that a person of ordinary prudence might and did rely upon them without knowledge of their falsity, and (b) if so, was the contract rescinded and acquiesced in by the plaintiff?
If either of these questions are answered in the affirmative, then the defendants would be entitled to recover the amounts paid on the principal and interest of the purchase price and amounts expended in improvements on the premises unless they have undertaken to make investigation of their own and the plaintiffs have done nothing to prevent their investigation from being as full as they choose to make it, or they must if they desire to rescind upon the ground of misrepresentation or fraud, upon discovery of the fraud or misrepresentation act promptly and announce their purpose and adhere to it and tender the profits received by them for the use thereof, if any, or account for the rental value of the land during the period of occupation, if it had any, and place or offer to place the vendor in statu quo.
The nature of the representation claimed by the defendants to be false and made by the plaintiff relate to the kind of water rights appurtenant to the land and whether the water was ample and sufficient to properly irrigate it. The written contract of sale provides for the conveyance of 180 acres of land, "together with any and all the water rights decreed or otherwise appurtenant thereto." No specific amount of water is therein provided, but the defendants claim that at the time of the execution of the contract, plaintiff's agent represented to them that the land had a second water right of 35 inches of the water of Howell creek with date of priority of 1876, 50 inches of water with date of priority of 1880, and 130 inches of date of priority of 1892, and that the water rights appurtenant to the land was ample and sufficient to properly irrigate it, when in truth the 35 inches of 1876 is not a second right in the creek and the 50 inches of decreed water of 1880 did not exceed 30 inches and the 130 inches of date of 1892 were not ample and sufficient to properly irrigate the land.
It is evident from the evidence that the defendants could not and did not receive sufficient water to irrigate the land, nor was the 35 inches a second right of 1876, nor was there 50 inches of 1880 water, and that they soon after going upon the land made that fact known to the agent of the plaintiff, who insisted that there was sufficient water. They broke up approximately 80 acres and seeded it to crop and constructed a ditch with which to irrigate it and were unable to irrigate the land as the water master refused to turn water in the ditch as he said that there was no water for the land. As a result of that experience, the crop which they seeded, burned and died. They continued to complain to the plaintiff's agent that they were not receiving water to which they claimed that they were entitled to, and after some correspondence between them the plaintiff employed an attorney to procure the water, who did in April, 1933, institute an action in the state court and a decree thereafter entered, entitled John Renner v. Dewey et al., in which a decree was entered decreeing 35 inches of water of Howell creek a tributary of Marsh creek to the north half of the south half of section 4, township 12 south, range 25 E. B. M. with date of priority of March 31, 1876, 30 inches of the water of Howell creek with date of priority December 1, 1880, appurtenant to the northeast quarter of the southwest quarter and the north half of the southeast quarter of the south-west quarter of section 4, township 12 south, range 25 E. B. M. and 130 inches of the water of Howell creek with date of priority April 12, 1892. The defendant Renner, at the trial in May, 1934, was informed by counsel that from the abstract he had, the plaintiffs had not procured the water right for the land and it was then that ...
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Bruun v. Katz Drug Co.
...involved. Where there is deception and the deception is repeated or continued, Statute of Limitation does not run. Oregon Mortgage Co., Ltd. v. Renner, 17 F.Supp. 727; 54 C.J.S., p. 198, sec. 192. (5) The trial court erred finding that plaintiff's supplemental petition fails to state a caus......