Shrives v. Talbot

• Decision Date: 08 December 1966
• Docket Number: No. 9922,9922
• Citation: 91 Idaho 338,421 P.2d 133
• Parties: Frank L. SHRIVES and Avis E. Shrives, His wife, Cross-Defendants-Appellants, v. Thomas Lavon TALBOT and Nellie R. Talbot, His wife, Cross-Plaintiffs-Respondents.
• Court: Idaho Supreme Court

Page 133

421 P.2d 133

91 Idaho 338

Frank L. SHRIVES and Avis E. Shrives, His wife, Cross-Defendants-Appellants, v. Thomas Lavon TALBOT and Nellie R. Talbot, His wife, Cross-Plaintiffs-Respondents.

No. 9922.

Supreme Court of Idaho.

Dec. 8, 1966.

Gee, Hargraves & Armstrong, Pocatello, for appellant.

Racine, Huntley & Olson, Pocatello, for respondent.

SPEAR, Justice.

Shriveses (appellants) brought this action as vendors against the Talbots respondents) to recover on a promissory note and to foreclose a mortgage. Talbots answered and counterclaimed for damages and for rescission, because of allegedly fraudulent representations made by Mr. Shrives.

This is the second appeal in this matter, the opinion of this court on the first appeal being reported in Shrives v. Talbot, 88 Idaho 209, 398 P.2d 448.

Frank Shrives and his wife, on March 17, 1961, sold certain farm property (hereinafter designated as the Weston property) situate in Franklin County to the Talbots for $40,000.00. For a down payment the Talbots transferred to Shriveses a smaller farm also located in Franklin County (hereinafter designated as the Clifton property) in which Talbots owned an equity of $11,278.97 over and above an encumbrance which Shriveses agreed to assume. The balance of the purchase price, i. e., $28,721.03, was represented by Talbots' promissory note secured by their mortgage on the Weston property, i. e., the property transferred to them by Shriveses. At the time Shriveses filed the foreclosure action on the purchase mortgage in April, 1962, Talbots were unquestionably in default on the note, for with the exception of one samll water assessment Talbots had paid no principal, interest, taxes or insurance as required under the terms of the promissory note and mortgage. However Talbots plead as a defense and as a counterclaim that they had been fraudulently induced to purchase the Weston property and to execute and deliver the note and mortgage by certain false and fraudulent statements purportedly made by Frank Shrives, the husband appellant. In the amended answer and counterclaim Talbots allege four different fraudulent misrepresentations. In the first trial the trial court held against Talbots on all these representations and the supreme court affirmed such judgment on all but one, i. e.:

'That plaintiffs had raised, and defendants could raise, fall wheat on one hundred and twenty acres of land on the hillside then owned by plaintiffs or that the one hundred and twenty acres could be watered by means of a sprinkling system which could be put in the spring and drain under the hill, and any crop could be raised thereon.'

The Weston property was divided into two parcels. The larger tract of some 300 acres was traversed by a drain which led from a spring on an adjoining farm and which fed into the West Cache Canal which cut across the far end of the property in a direction approximately at right angles to that of the drain. Some crops had been grown on the lower 180 acres of this larger tract, but its principal use was for pasturage. There were 120 acres on a bench above the drain at an additional elevation of about 90 feet. The land on the bench is sandy loam soil, unlike the heavier soil found below. No crop had been successfully raised on the bench property since at least 1955. Two springs located some distance apart along the path of the drain at the bottom of the hill fed into the drain. The flow of water along the drain fluctuated between 25 to 50 inches, dependent upon the time of year and the amount of irrigation on the properties comprising the water table which feeds the drain. The smaller parcel consisted of 40 acres upon which the house and outbuildings are located. These 40 acres are irrigated, but from a source other than the drain. The 120 acres on the bench are classified as dry farm land.

Shrives is a design draftsman and resides in Portland, Oregon. He had inherited the Weston property upon the death of his father. Through correspondence, resulting from an advertisement placed in the Preston, Idaho, newspaper, Talbots arranged to meet with Frank Shrives at the Weston property and look over the farm. The agreement previously mentioned herein was reached and the property sold. Shrives had not lived upon nor farmed that property for many years and was without intimate or first-hand knowledge of the farm. This fact was known to the Talbots. Talbots had farmed in the Franklin County area for many years and presumably were somewhat more familiar than Shrives with the problem of farm operation in that area. They inspected the property and also were introduced to the preceding tenant, from whom they might have elicited information concerning the Weston property.

The conflicting evidence introduced by the respective parties relative to the alleged misrepresentation by Shrives that the 120 acres of bench dry land could be watered by means of a sprinkler system drawing water from the drainage ditch under the hill and that thereafter any crop could be raised thereon, is set forth in detail in the opinion of the court in the first appeal (Shrives v. Talbot, 88 Idaho 209, 398 P.2d 448) and repetition here is unnecessary. Suffice it to point out, the trial court found against Talbots' contention in this respect but this was reversed by this court and remanded for a new trial. The law of this case was thus set by this court in the following portion of that decision to be found in 88 Idaho at page 215, 398 P.2d at page 451:

'The findings made indicate that the trial court relied quite heavily upon the fact that plaintiffs had not resided upon the property for a number of years and did not have firsthand knowledge of the crops raised and conditions affecting the premises, and that this was known to defendants. Such findings infer that defendants should not have relied upon statements made by the plaintiffs. However, the rule is otherwise. Plaintiff Shrives may not have been required to speak, but when he did speak it was his duty to state the facts fully and correctly, or to advise defendants that he did not know the facts. As to matters concerning which Shrives did make representations, defendants were under no obligation to make an independent investigation or to inquire of plaintiffs' prior tenants.'

On the retrial, January 1966, the evidence, both oral and documentary, adduced at the previous trial, as set forth in the reporter's transcript or record thereof, was by stipulation adopted and made a part of the record of the second or retrial. In other words, the second trial was merely supplementary of the first. Evidence relevant to the alleged misrepresentations made by Shrives was primarily a reiteration by both parties of the evidence submitted in the first trial. Examination principally was directed to establishing whether in fact the Talbots could draw water from the drain in sufficient amounts to economically irrigate the 120 acres of dry land on the bench. Talbots further sought to show the irrigation of the bench property was not a feasible operation, economically speaking, even had water in the drain been available as a source for the sprinkler system. One of Shriveses' own expert witnesses testified that at best this would be a marginal operation. Also on the retrial there was introduced a written recorded agreement between the adjoining landowners (Washington Thompson et ux and Frank Shrives, Sr., the father of appellant husband herein) which provided for the joint construction, use, maintenance and cost of maintenance of the drain and for a right of way of 20 feet on each side of the center of the drain across the Thompson property as well as the Shrives or Weston property as referred to herein. Other evidence adduced proved that damming or obstructing the drain ditch for the purpose of securing sufficient water for a sprinkler system upon the bench land would defeat the entire purpose of the drain ditch and result in sub-irrigating, not only the 180 acre parcel of the Weston property adjoining the drain but also the property of neighboring landowner (McKay) to the extent of destroying crops growing thereupon.

On the basis of the evidence contained in the record of the first trial as supplemented by that adduced in the second trial, the trial court made the following pertinent findings of fact:

'XII.

'That prior to the execution of the aforementioned deeds, promissory note and mortgage and while the parties were negotiating upon the north 300 acres of the Weston property owned by Plaintiffs, Plaintiff, Frank Shrives, Jr., referring to the upper 120 acres of bench land located on said tract and the spring and drain located below said bench land on the remaining 180 acres, made the following representations to Defendants:

'(a) That water could be removed from the drain extending from the original Thompson property and extending through the Shrives' property and emptying into the West Cache Canal;

'(b) That the drain was his;

'(c) That this water in the drain could be pumped upon the bench land and crops could be grown thereon;

'(d) That it would be feasible to install a sprinkler system in said drain and pump water to the bench lands for crops, and that any crops could be raised thereon;

'(e) That fall wheat had been grown on the bench land and that they could raise fall wheat on that ground.

'XIII.

'That the above representations by Plaintiffs were material and untrue or half true because:

'(a) That at the time of making said misrepresentations there was an agreement on record between Washington J. Thompson and his wife and Frank Shrives, Sr., and his wife, the owners of the property when the drain was dug and placed into effect, a copy of which at trial was marked as a joint exhibit and incorporated herein by reference thereto; this agreement provides for the joint construction, use, maintenance and costs of maintenance of the drain and for a right of way of 20 feet on each side of the center of the...