Stuck v. Delta Land & Water Co

• Decision Date: 11 March 1924
• Docket Number: 3914
• Citation: 63 Utah 495,227 P. 791
• Court: Utah Supreme Court
• Parties: STUCK et al. v. DELTA LAND & WATER CO

227 P. 791

63 Utah 495

STUCK et al. v. DELTA LAND & WATER CO

No. 3914

Supreme Court of Utah

March 11, 1924

On Rehearing July 9, 1924.

Appeal from District Court, Fifth District, Millard County; Wm. F Knox, Judge.

Action by William H. Stuck and Henry Stuck against the Delta Land & Water Company. Judgment for plaintiffs, and defendant appeals.

AFFIRMED.

William Story and T. Marioneaux, both of Salt Lake City, for appellant.

Frank Evans, Dey, Hoppaugh & Mark and Walton & Walton, all of Salt Lake City, for respondents.

THURMAN J. WEBER, C. J., and GIDEON, FRICK, and CHERRY, JJ., concur.

OPINION

THURMAN, J.

The pleadings in this case are voluminous, but it is not necessary to state them in detail. The transcript of the evidence having been misplaced and not available, we are compelled to rely upon appellant's abstract on appeal.

At all times mentioned in the pleadings the defendant company was engaged under the laws of Utah in the operation of a "Carey Act" project in what is known as the Pahvant Valley in Millard county, Utah. The plan was to permit each person to enter not exceeding 160 acres of land with the state board of land commissioners, and in connection there with to purchase from the defendant company 160 shares of the capital stock of the Delta Canal Company at the rate of $ 70 per share, which shares of stock would represent a water right for the land so entered equivalent to one and one-half acre feet of water for each acre of land. In addition to this the purchaser was to pay annual dues for maintenance of the water supply.

In 1915 the Western Securities Company, a corporation, was sales agent for the defendant both in Millard county, Utah and in the state of California, and by way of advertising the business published and circulated in both states circulars intended to induce purchasers to become interested in the said project. These circulars came into the hands of the plaintiffs, father and son, who resided at Garden Grove. Orange county, Cal., and who were owners of land at that place part of which had been planted to oranges. They became interested in the contents of the circulars so published by defendant and statements made by persons purporting to be agents of the defendant in California, and concluded to come to Utah with the view of investing in said project, if their further investigations should prove satisfactory. They came to Utah in the fall of 1915 in company with one of said purported agents, a Mr. Murphy, employed by the said Western Securities Company in selecting, lands for entry and in promoting sales of the said capital stock. Murphy, Dunn, and one McClain, also in the same employment, conducted the plaintiffs to numerous cultivated farms in the district, and introduced them to many of the farmers, all of whom spoke in terms of laudation concerning the project, and enumerated instances of abundant crops raised on the land. After exhibiting the productivity of the cultivated lands and learning from the settlers its capability for farming purposes, the aforesaid agents conducted plaintiffs to a tract of unoccupied land in the northern part of the district where there were two pieces of land open for entry. It is claimed, by plaintiffs that Murphy before leaving California had assured them that the lands open for entry were just as good as any of the lands referred to in the circulars published by defendant, and would grow the best crops of the kind mentioned in said circulars, and would continue to grow better from year to year; that the only thing required for any of said lands was water, and that the quantity to be furnished by defendant would be sufficient for any kind of crop; that there was no injurious substance in the soil; and that every 40 acres of the land had been examined. It is also claimed by plaintiffs that while examining the unoccupied lands afterwards entered by them they discovered in some places thereon a white substance which they thought was alkali and called the same to the attention of Murphy and McClain, with inquiry concerning the same. Plaintiffs allege they were assured by them that it was not alkali but gypsum and was not injurious to the land, and that the soil had been duly tested. Relying upon the representations made in the circulars and by the individuals purporting to represent the company aforesaid, it is alleged by the plaintiffs and testified to by them that they each entered 160 acres of land and purchased 150 shares of the aforesaid capital stock representing water rights therefor. They each paid to the Utah state board of land commissioners the initial fee of 25 cents per acre for the land so entered, and paid the defendant for the capital stock at the rate of $ 70 per share by exchanging therefor 20 acres of their land at Garden Grove, Cal., at the agreed price of $ 21,000. Plaintiffs immediately thereafter moved from California to and upon the land they had entered made improvements thereon, and in the year 1916 cultivated a portion thereof and attempted to raise crops thereon. It is alleged and testified to by them that their crops were almost, if not an entire, failure on account of excessive quantities of alkalki in the land; that the substance represented by Murphy and McClain to be gypsum and not injurious to the soil proved to be alkalki in such quantities as to render the land unfit for the production of any kind of agricultural crops. It is further alleged and testified to by plaintiffs that the water rights purchased by them were wholly worthless, not only because of the character of the soil, but also because said water rights are limited to and appurtenant to the particular land entered by them as shown by the certificates of stock issued to plaintiffs which contain the following clause: "This water is dedicated to and appurtenant to and shall be used only upon the land above described" (meaning the lands entered by plaintiffs). Plaintiffs discontinued their efforts to crop the land after their failure in 1916, and since that time have not used the land for any purpose or the water rights represented by their certificates of stock.

Plaintiffs sue in this action to recover damages both actual and exemplary in the sum of $ 65,700, basing their right of action upon the alleged false representations of the defendant as to the quality of the land as appears in the circulars referred to and statements made by defendant's agents by which they were induced to enter the land and purchase the stock. The contents of the circulars referred to in the foregoing statement were set out in part in the complaint. For the sake of brevity we have omitted them in this connection, but will state them hereinafter as they appear in the complaint.

The answer of defendant, briefly stated, admits the existence of the Carey Act Project and defendant's relation thereto. It admits that the Western Securities Company was its agents, and that plaintiffs entered the land in question and purchased water stock by exchanging therefor their California land as alleged in the complaint. It denies the agency of Murphy, Dunn, and McClain, and denies specifically every allegation of the complaint tending to show defendant's liability for the alleged wrongs of which plaintiffs complain. Defendant also filed a counterclaim for damages alleging false and fraudulent representations concerning the California land. At the close of plaintiffs' evidence the counterclaim was dismissed on motion of the defendant.

Prior to the filing of its answer defendant moved to strike from the complaint certain allegations thereof, particularly such as may have indicated mere expressions of opinion as to the quality of the land and predictions as to its productivity. The motion to strike was denied, and defendant's demurrer filed therewith was overruled.

The trial of the case to a jury resulted in a verdict for plaintiffs in the sum of $ 14,845. Motion for a new trial was denied, and final judgment entered from which judgment defendant appeals.

Appellant in its brief defines the paramount issues to be:

"(a) As to whether the plaintiffs in the selection and entry of their land relied upon and were deceived by the statements in the pamphlets, which admittedly referred to no particular tract of land, but merely to the Pahvant Valley as a whole;

"(b) As to whether Murphy, Dunn, or McClain made the statements attributed to them by plaintiffs in respect to the productivity of the lands or the absence of alkali in the soil; and, if so, their authority to bind the defendant by such representations as well as to whether the plaintiffs relied upon and were deceived by their statements;

"(c) As to whether the land entered by the plaintiffs was in fact worthless for agricultural purposes, and, assuming it to be so, was the water right represented by the shares of stock so irrevocably attached to and a part of the land as to be wholly useless and of no value for that reason;

"(d) As to the measure of the plaintiffs' damages, assuming their right to recover in the action."

The pamphlets referred to in subdivision (a), supra, are the circulars to which reference has been made in the foregoing statement. They are designated in the record as Plaintiffs' Exhibits 1 and 2. Appellant objected to their admission in evidence and afterwards moved that they be withdrawn from consideration by the jury. The objection was overruled, the motion denied, and exception reserved. We quote in this connection such portions of the pamphlets as are set forth in plaintiffs' complaint:

"An Introduction by C. R. Stuart.

"In December, 1914, I was commissioned to go to Pahvant Valley Utah, and interview the first 20 to 30 farmers I saw. I was instructed to secure from them, if possible, written...