Shrives v. Talbot ( 1966 )

McFADDEN, Chief Justice

(dissenting).

On retrial of this cause following re-mittitur from this court, the only issue involving any misrepresentation was the following allegation by the Talbots in their counterclaim:

“That Plaintiffs had raised, and Defendants could raise, fall wheat on 120 acres of that land on the hillside then owned by Plaintiffs or that the 120 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.”

All other allegations of false and fraudulent statements were disposed of on the first appeal adversely to the Talbots.

On the second trial, the parties stipulated that the record of the first trial was adopted by the parties, and that the proceedings on the second trial were to be for the purpose of supplementing the previous record to the extent required under the remittitur from the supreme court. Thus, on the second trial, the trial court considered the evidence submitted initially, and also that produced at the second trial.

It is to be pointed out that the only evidence presented on the first trial pertaining to the issue of false and fraudulent statements allegedly made by Mr. Shrives, and considered by the court on the second trial, consisted of the following statements: Direct examination of Mrs. Talbot:

“Q. Then, tell us what occurred with respect to the dry farm then?

“A. Well, we drove up past the dry farm and he was showing us the acreage there, and there’s a spring there and there’s a drain there.

“Q. On the dry farm ?

“A. On the dry farm. And he said the spring was his and that it would— he said, ‘We put the drain in ourselves. That’s ours.’ And then we went up on top of the hill and looked at the dry part up there. And it was early in the Spring, too wet to get out onto the ground, and I said to Mr. Shrives, ‘What has been or what can be raised on this land ?’

“Q. That’s on this dry farm.

“A. On the dry farm. Up on top of the hill.

“Q. Yes.

“A. Mr. Shrives said, ‘You can raise good Fall wheat here.’ Then he went on to say that if we would put a sprinkling system into that—

“Q. Spring?

“A. —spring and the drain that all of the land could be watered and we could raise any kind of crops we wanted.

“Q. Now, did you look over the spring during this trip up to this part of the land?

“A. My husband and Mr. Shrives walked up along the canal bank to see it.

“Q. And you remained in the car.

“A. I remained in the car.

4* ‡

“Q. Then have you told us everything you can recall as having occurred up there on the so-called dry farm land at this time?

“A. I think so.”

On cross-examination, Mrs. Talbot testified:

“Q. You went itp on top of the hill first. Is that right ?

“A. Well, we drove along the road just slowly, talked of the property as we went.

“Q. Did you get out on the top of the hill?

“A. I don’t recall that we did.

“Q. You could have done if you’d wanted to?

“A. Yes, we could have done, but it was muddy.

“Q. Now, what kind of vegetation was there on that property on top of the hill?

“A. I couldn’t tell. There was stocks [sic: stalks] of something coming up and I couldn’t tell just what they were; and that’s why I asked Mr. Shrives, ‘What has been or what could be raised here ?’

“Q. Now was your question that way, Mrs. Talbot, ‘What has been or what could be raised here’ ?

“A. Yes, that’s the words I asked him.

“Q. And you did see some stocks [sic] actually coming through?

“A. There was stocks [sic] of something, but I couldn’t tell just what it was.

“Q. In other words, there was no snow on the ground? There was nothing to obscure your seeing what was there ?

“A. As I recall, I don’t think there was any snow.

“Q. Did you look across the road, Mrs. Talbot to west?

“A. I don’t remember.

“Q. You don’t know what kind of crops were being grown immediately across the road?

“A. I think there was hay across the other side.

“Q. And it’s on the same level with this, isn’t it?

“A. Yes, sir.

“Q. It’s the same kind of ground, and the only thing that’s different is that the road runs between them. Isn’t that so?

“A. Yes sir.

* * * * * *

“Q. And he told you that his father and Mr. Thompson had put the drain in, did he not ?

“A. He never mentioned Mr. Thompson. He says, ‘We put the drain in.’ ”

On cross-examination under the rule, Mr. Shrives testified:

“Q. Now as you drove up to this property [i. e., the 300 acre tract] did you show Mr. Talbot a spring?.

“A. Well, as we drove up on top of the sand hill you can’t help but see the drain and the spring off to the right.

“Q. Was there a conversation concerning the spring and drain—

“A. I think the only—

“Q. —at this time.

“A. I think the only conversation, as I recall, was that the drain drained through and emptied down into the West Cache Canal.

“Q. Did you at any time during this particular day and your conversations with Mr. Talbot on this day tell Mr. Talbot that the spring was available for a sprinkler system to irrigate the three hundred acres on top of the bench.

“A. Well, in the first place there isn’t no three hundred acres on top of the bench.

“Q. Well, what is there?

“A. There’s a hundred and twenty acres on top of the bench.

“O. And then the other hundred and twenty — the other hundred and eighty is below that?

“A. The other hundred and eighty is level with the spring or below it.

* * * * * *

“Q. Now, did you tell Mr. Talbot anything with reference to the irrigation of any of this land, the hundred and eighty or the hundred and twenty from this spring ?

“A. In regard to the spring, no.

* * * * * *

“Q. Now, Mr. Talbot, [sic] I’ll ask you if you know of your knowledge whether or not any part of the three hundred acres could be irrigated or watered from the spring or other source?

* * * * * *

“A. To the best of my knowledge, it never has been. Now, whether it can be, that is something I am not — I’m not able to say. I do not know.”

Mr. Shrives, testifying on his own behalf, on direct examination stated:

“Q. Did you ever make any statements to Mr. or Mrs. Talbot to the effect that they could raise good Fall wheat on the hundred and twenty acres up on the bench ?

“A. Yes, I recall the question was asked to me when we were up there, had we — had we ever raised wheat up on top of that bench, to which the answer was yes.”

After Mr. Shrives testified in his own behalf, on cross-examination he stated:

“Q. — Well now, Mr. Shrives, on the property on the bench, the hundred and twenty acres, which I understood under your direct testimony you did say to the Talbots had raised wheat?

“A. That is right.

“Q. You deny saying that it could raise good Fall wheat or did raise good Fall wheat. You simply say that you said it did raise wheat or had raised wheat.

“A. I was asked if it had ever raised wheat, to which I replied yes.

“Q. And that’s all that was said?

“A. To the best of my knowledge— no, I will take it back. They asked if we’d ever done any grazing up there, and I said, ‘We had grazed in the Spring because of the wet moisture and we get quite a lot of June grass.’

“Q. Now, to your knowledge has there been any wheat raised there in the last five or six years during the occupancy of the land by Mr. Benson?

“A. Well, I’m not — I don’t think I’m qualified to answer because I’m not sure.

“Q. I see. Did you make any statements concerning the use of the spring and the drain for a sprinkler system to the Talbots ?

“A. Did you say spring and drain?

“Q. Well, either one or both.

“A. To the spring, no.

“Q. To the drain, what?

“A. To the drain, Mr. Talbot asked me if it was feasible that a person could take water out of the drain and use a sprinkling system; to which I answered, ‘To the best of my knowledge, it could be done.’

* * * * * *

“Q. And I take it then at no time did you tell Mr. Talbot that the place upon the bench or the upper area could raise good crops, the whole three hundred acres, if you put in a sprinkling system in the drain — or if he put in a sprinkling system in the drain.

“A. Would you repeat that?

“Q. Well, I say, I take it then that at no time did you tell Mr. Talbot insofar as the place up there above, the three hundred acres up there, did you tell Mr. Talbot that if a sprinkler system was placed in the drain that the acreage up there would raise good crops, the whole of it?

“A. Not the whole three hundred, no, sir.

“Q. Well, did you tell him that any part of it would raise good crops if this were done?

“A. No sir, I did not, because I would not be aware of what the sprinkler would do.”

Mr. Talbot testified on direct examination:

“A. My wife asked him what could be raised upon that hundred and twenty acres, and he said ‘Good Fall Wheat.’ And as we went down over the bench like he says, ‘That drain is his and it can be—

“Q. Now, just what drain are you talking about?

“A. I’m talking about the drain that goes from Thompsons through his — my field — or his field.

* * * * * *

“Q. Mr. Talbot, at the time that these two matters, that is, the spring and drain were pointed out by Mr. Shrives, was there any conversation at all?

“A. Yes, he said it could be stopped and a sprinkling system—

“Q. Now wait just a minute. He says - — Mr. Shrives

“A. Yes.

“Q. —says-—

“A. Yes.

“Q. What could be stopped?

“A. The drain could be stopped off and a sprinkling system be put in there and you could sprinkle the whole thing.

“Q. What whole thing?

“A. The whole farm.

“Q. Well, not the forty acres down below.

“A. No, up above.”

On the basis of this testimony, following the first trial, the trial court found:

“That the plaintiffs did not make any misrepresentations as to the condition o-f the home, the premises, the history of the crops, the water or rights of way; that defendants were aware that plaintiff had not occupied or operated the premises for several years prior to the sale.”

And on the basis of such findings, the trial court concluded:

“Defendants have failed to establish the allegations of their Counter Claim and are not entitled to any recovery or relief thereon.”

At the subsequent trial, the only additional testimony submitted on the issue then before the court is as follows:

Mr. Talbot on cross-examination admitted that he had never had a study made as to the feasibility of irrigating the upper 120 acres from the drain ditch. He also testified that he knew that the upper 120 acres had not been irrigated. He stated that at the time of his inspection of the property before execution of the agreements he knew the actual number of acres irrigated on the entire farm was only forty acres. He stated:

“Q. So that the discussions about irrigating the plateau, the bench land, and the other lands were future possibilities?

“A. He says it could be.

“Q. There were future possibilities, weren’t they, sir?

“A. Well, he says that’s what could be. He says that you could do it. If he said you could do it, I guess that would be up to the future.”

On redirect examination Mr. Talbot testified :

“Q. Mr. Talbot, you were asked by counsel whether or not you ever put a dam in the drain, and whether or not you ever sprinkled from the drain; and you answered no to each of those questions. Would you explain to the court and counsel what if anything you did after you were on this place with respect to investigating and determining the fact as to damming the drain and as to sprinkling or irrigating from the water created by a dam in the drain?

* * * * * *

“A. Well, most of that land — a lot of that.land is alkali and it’s wet, and I couldn’t see any use of putting a dam in there, and then up on that hill it’s so sandy that what’s the use of putting it up there. It would just dry out.”

Mr. Shrives on cross-examination was asked:

“Q. Now you do admit at this time, do you, Mr. Shrives that when you had these conversations with Lavon Talbot in March of 1961 that you did consider this question about the drain and sprinkler system, how it could be installed, and you thought it could be feasibly sprinkled on the upper hundred and twenty acres?

“A. I did not consider the possibility of how it could be installed or anything else.

“Q. But you thought it would be a feasible arrangement?

“A. I was only asked the question if I thought it was feasible to sprinkle out of the drain; to which I answered to the best of my knowledge yes. How it would be done or what he was going to do or where he was going to use it, I had no idea, or did he say so.

“Q. And at that time you had no background in sprinkling systems had you?

“A. No.

“Q. And you weren’t aware of the amount of water it would take or to water certain crops of that whole hundred and twenty acres? Were you aware of that?

“A. There was no discussion of the hundred and twenty acres. There was no discussion as to any acreage.”

After the second trial, the trial court found that Mr. Shrives made the following representation to the Talbots:

“XII.

* * * * * *

“ * * * 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 * * *

"(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.”

The trial court further found:

“XIII.

“That the above representations by Plaintiff 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 drain.

“(b) That the drain if dammed up near the boundary of the Thompson-Shrives’ property will make the Thompson and adjoining property too wet for farming purposes and would defeat the purpose of the drain. The soil type of the Shrives property and the Thompson property in the vicinity of the drain are generally the same and the damming of the drain for the purpose of installment of a sprinkler system would adversely affect the adjacent property.

“(c) That the flow of the water in the drain fluctuates between 25 to 50 inches, depending upon the time of year and the effect of irrigation on the lands adjacent thereto comprising the water table which feeds the drain.

“(d) That the optimum use of this size stream and on the sandy loam on the 120 acres of bench land would not be over 40 acres.

“(e) That to place water on the bench land from the drain would require a lift from a pump of at least ninety feet because of the difference in elevations between the land and the drain, plus a piping of 500 to 600 or more feet to get to the boundary of the sandy loam, plus an additional main line in the land to be irrigated.

“(f) That to install such a sprinkler system, considering the expense involved and the supply of water, would at the very best produce only a marginal result, and would, in fact, not be a feasible operation for that area.

“(g) That no crop has been successfully raised on the bench land since at least 1955.

"XIV.

“That the said plaintiff was ignorant of the truth of said representations and intended that Defendants should act upon the same.

“XV.

“That the Defendant relied upon the misrepresentations made by the Plaintiff and acted thereon by purchasing said property in ignorance of their falsity.” Among the conclusions of law, the trial court stated:

“The waters in the drain were not available for use by Defendants as represented to them by Plaintiff, Frank Shrives, Jr.

* * * * * *

“A single material false representation is sufficient to warrant relief on the theory of fraud, and the misrepresentations by Plaintiff Frank Shrives, Jr., concerning his ownership of the drain, the use thereof and the raising of crops on the north 300 acres, and the consequences of these misrepresentations meet all of the essential elements of actionable fraud by clear and convincing evidence.”

The trial court found five separate representations were made, and then in the next finding found these representations were material and untrue or half true. It cannot be determined which of the representations, if any, were wholly untrue and which of them, if any, were only half true. With such uncertainty, in view of the specific findings of fact initially made following the first trial by the court, how can it be said the elements of fraud were proven by clear and convincing evidence. See: Mountain Electric Company v. Swartz, 87 Idaho 403, 393 P.2d 724; Janinda v. Lanning, 87 Idaho 91, 390 P.2d 826; Thomson v. Marks, 86 Idaho 166, 384 P.2d 69; Walker v. Nunnenkamp, 84 Idaho 485, 373 P.2d 559.

The trial court’s Finding XIII, subparagraph (a) to the effect there was a written recorded agreement concerning the drain, must have reference to Finding XII (b) that the drain was Shrives’. Assuming that the record would sustain the Finding XII (b), the Talbots examined this drain, and could see that it was an extension of a drain coming from the adjoining landowner’s property. To base a judgment of rescission in this case on such a state of facts is unrealistic in view of the issues presented for resolution on the second trial. See: Suchan v. Rutherford, 90 Idaho 288, 410 P.2d 434.

The trial court’s Finding XIII, subparagraph (b), supra, is not responsive to the issue before the court on the second trial. No one testified that Shrives claimed the water in the drain should be dammed near the boundary of the Thompson-Shrives property. The record and exhibits admitted into evidence reflect there had been several dams previously placed in the ditch. The dam referred to by the trial court in this finding was near the west boundary of the property, near the county road, and would only have collected water discharging from the adjoining property to the west. The flow in the drain was to the east. Further down the drain and on Shrives’ property there were two separate springs discharging their waters into the drain. Testimony of several witnesses was to the effect that the proper place for any dam for irrigating purposes would be some 2500 feet to the east of the dam referred to by the trial court.

Findings of Fact XIII, subparagraphs (c), (d), (e), and (f), supra, deal with the availability of water for irrigation, the use of this water, and the costs of irrigating by pumping and sprinkler system, and must be considered as dealing with whether the trial court’s Finding XII (b), (c) and (d), supra, were true or half true.- Considering the testimony adduced at both trials, it is safe to state that the statements attributed to Mr. Shrives dealt only with his opinion as to what could be done. Mr. Talbot on cross-examination admitted that the discussions he had with Mr. Shrives were future possibilities only. In order to establish misrepresentation of a fact as a basis for actionable fraud generally it is essential that the fact claimed to be misrepresented have reference to an existing fact, and not future prediction, possibility or opinion. Am. Law.Inst., Restatement, Torts, Vol. 3 § 525, comment d; 23 Am.Jur. p. 781, Fraud and Deceit, §§ 27, 28. This court in Weitzel v. Jukich, 73 Idaho 301, 251 P.2d 542, stated:

“Elements of fraud generally consist of a representation or statement of a past or existing fact which is material, which is untrue; the speaker’s knowledge of its falsity or ignorance of its truth; his intention that it should be acted on by the person to whom it is made; ignorance of its falsity on the part of the person to whom it is made and reliance on the representation; his right to rely upon it; his damage occasioned thereby. * * (Emphasis added) 73 Idaho 304, 251 P.2d 543

See also Walker v. Nunnenkamp, 84 Idaho 485, 373 P.2d 559. The statements attributed to Mr. Shrives did not have reference to promises made without intention of performing, as was the case of Cooper v. Wesco Builders, Inc., 73 Idaho 383, 253 P.2d 226. In Barron v. Koenig, 80 Idaho 28, 39, 324 P.2d 388, it is stated:

“A representation which is an honest expression of opinion, based upon reasonable ground, and which is expressed and understood as nothing more than an opinion, cannot be made the basis of actionable fraud. Johnson v. Holderman, 30 Idaho 691, 167 P. 1030; Smith v. Johnson, 47 Idaho 468, 276 P. 320; Nelson v. Hoff, 70 Idaho 354, 218 P.2d 345; 37 C.J.S. Fraud § 57, p. 334. Misrepresentations as to future income and profits are usually held to be non-actionable expressions of opinion. 37 C.J.S. Fraud § 54, p. 320.”

It is my conclusion that these findings ignore the statement of Mr. Talbot himself, who recognized Mr. Shrives’ statement as being future possibilities. Again this claim of fraudulent misrepresentation is not sustained by clear and convincing evidence.

Finding of Fact XIII subparagraph (g) states, “That no crop has been successfully raised on the bench land since at least 1955.” On the basis of that the trial court determined that its previous Finding XII(e), that Mr. Shrives had represented, “That fall wheat had been grown on the bench land and that they could raise fall wheat on that ground,” was either untrue or only half true. The record reflects without dispute that even though no crop had been grown since 1955, crops had been grown and raised on the property prior to that time. The court’s statement is a paralogism, or a pseudosyllogism, in which the conclusion does not follow from the premises, i. e., that because no crops had been grown since 1955 Mr. Shrives’ statement was untrue or half true.

It is my conclusion that the judgment or rescission entered by the trial court should be reversed and judgment entered in favor of Mr. and Mrs. Shrives.

SMITH, J., concurs in this dissent.