Title: MOBLEY v HALL
Citation: N/A
Docket Number: 82-257
State: Montana
Issuer: Montana Supreme Court
Date: January 20, 1983

No. 8 2 - 2 5 7 I N THE SUPREME COURT OF THE STATE OF MONTANA 1 9 8 3 JOHN R. MOBLEY, DELORES W. MOBLEX, and MOBLEY LAND, I N C . , a corporation, P l a i n t i f f and A p p e l l a n t , NEWMAN R. HALL, MARJORIE A. HALL, EASTERN BROKERAGE SERVICE, AL "BUCK" MURI and ED KIMBALL, D e f e n d a n t s and R e s p o n d e n i s . A p p e a l f r o m : D i s t r i c t C o u r t of t h e Sixteenth J u d i c i a l D i s t r i c t , I n and for the C o u n t y of C u s t e r H o n o r a b l e A. B . M a r t i n , Judge presiding. C o u n s e l of R e c o r d : For A p p e l l a n t : G e n e H u n t l e y , B a k e r , M o n t a n a For R e s p o n d e n t s : L u c a s and M o n a g h a n , M i l e s C i t y , M o n t a n a T h o m a s M o n a g h a n , M i l e s C i t y , M o n t a n a S u b m i t t e d on briefs: N o v e m b e r 5 , 1 9 8 2 Decided: January 2 0 , 1 9 8 3 F i l e d : JAN 2 o 1983 Mr. Justice John C. Sheehy delivered the Opinion o f t h e Court. This is an appeal from an order of the District Court of the Sixteenth Judicial District, Custer County, granting defendants' motion for sunranary judgment on the ground that plaintiffs' claim was barred by the statute of limitations. W e affirm the order of the District Court and remand the case for further consideration. On Novemkr 3, 1975, defendants, N e w m a n and Marjorie Hall, entered into a listing agreement with defendants Eastern Brokerage Service (Eastern) and F A Kimball, Eastern's agent. The Halls told Kimba.11 that the cattle ranch they wished t o sell included approximately 470 acres of winter wheat and s m r fallowed cropland, 700 acres of intemdiate wheat grass and 360 acres of diked alfalfa with a total of 400 acres of developed dikes. In his deposition M r . Hall stated that these figures were based on crop yield and information he received from his seller when he purchased the land in 1956. Based on these representations, Eastern printed and distributed a brochure that detailed the crop acreage. Mr. Hall told both Mr. Mobley, plaintiff, and Eastern that the figures were approximate but the brochure did not indicate that they were. Mr. Wbley contacted Eastern and was advised by defendant Al Muri, Eastern's agent, that the Hall property w a s for sale. Hall received a brochure and requested official naps of the property. H e did not receive complete maps of the property a t the time of the sale because no such maps existed. Halls l e f t partial maps of the alfalfa crop only, i.n the residence sold t o the Mobleys. These maps shmed that M r . Hall had miscalculated the alfalfa crop and had overstated the crop acreage by a t least 115.6 acres. M r . Hall testified that these maps were delivered t o Mr. Mobley before the sale. On March 29, 1976, the Mnbleys signed a contract for deed for the purchase of the ranch lands. The contract provided that there were "4,179.19 acres, more or less," but did not expressly set forth +he exact acreage for each type of land. M r . Mobley began planting grain i n April of 1976. A t this t i n e his d r i l l acreage measuremnt device did not correspond w i t h the acreage shown on Eastern's brochure but M r . Hall assured him that the acreage specified w a s correct. In the f a l l of 1976, M r . Mobley sumner fallowed, this time he used a borrmed drill. Again the d r i l l masur~ment did not correspond with the acreage listed on the brochure. In June of 1977, Mr. Mobley asked the Agriculture Soil Conservation Service (ASC) to take acreage masurements. On June 28, 1977, the A C S responded: "Enclosed find a copy of the fields you drew in yesterday. W e only came up with 336.8 acres of wheat--164.5 acres of barley plus 405.4 acres of s u m m e r fallow. Do you think samething is wrong? It is short of your estimate. Dot Nalley" On August 29, 1977, 1W. Mobley paid the ASC $46.81 for acreage measurements. H e received a masurement service record detailing the costs. The record indicated that there were 438.9 acres of wheat, 188.3 acres of barley and 393.0 acres of s u m m e r fallow. W i t h another check dated November 29, 1977, Mrs. Mobley paid the ASC $15.00 for additional field measuring. The ASC aerial survey was ccgnpleted November 1, 1977. This survey showed that there were 386.1 acres of w i n t e r wheat and sunmer fallowed cropland not 470; 434.4 acres of i n t e m i a t e wheat grass not 700 acres; 244 acres of diked alfalfa not 360 and 364.9 acres of developed dikes not 400 acres as represemted on Eastern's brochure. After the survey was completed M r . Mobley called Eastern and discussed. the discrepancy w i t h Ed Kimball. Kimball told Mr. Mobley to wait until spring when the snow was off the ground, and that i f there were any shortages they could be determined at that time and that Hall would "make it right. " In the spring of 1978, Kimball and Hall did go to the Mobley ranch. They looked at the ASC maps a n d inspected the property. In May of 1978, Kimball a n d Hall met with Mr. Mobley and refused to make any adjustments i n the purchase price because they felt the land was sold in gross as a cattle ranch. On October 18, 1979, the Mobleys filed a complaint in the District Court seeking $100,000 i n actual damages and $150,000 i n punitive damages for fraud based on the overstatemnt of cropland. On Julv 17, 1981, the Mobleys suhnitted to the District Court a mtion for partial s u r m n a r y judgment on the issue of liability against the Halls. On March 31, 1982, the defendants moved for sumnary judgment claiming that the Mobleys' action was barred b y the two year statute of limitations for actions based on fraud. Section 27-2-203, MCA, provides: "Actions for relief on ground of fraud or mistake. The period prescribed for the commencement of an action for relief on the ground of fraud or mistake is within 2 years, the cause of action i n such case not to be deemed to have accrued until the discovery b y the aggrieved party of the facts constituting the fraud or mistake. " Mobleys contend that they fall within the discovery exception a n d that the alleged fraud was not discovered b y them until the survey was completed on November 1, 1977, within two Years of the filing of the action. The defendants' mtion was argued orally and the District Court entered its memorandum a n d order granting defendants' motion on May 24, 1982. The summary judgment was entered on May 26, 1982. The clerk of court served notice of entry of judgment on May 26, 1982. The Mobleys served their motion for new trial a n d affidavit in support of motion for new trial on June 9, 1982. The Mobleys did not notice their motion for new txial at the tine it was served but secured an order from another District Court judge continuing the hearing. Mobleys' counsel filed notice of appeal on June 24, 1982. In its memorandum and order, the District Court outlined the circumstances pertaining to the Halls' suspicion, knowledge or discovery of acreage shortages. 1 . Plaintiffs (Mobleys) discovered a n acreage shortage when they drilled the fields i n the spring of 1976. 2 . Plaintiffs discovered or suspected shortage of intermediate wheat grass in 1976. 3. Plaintiffs discussed with Hall i n 1976 his concern about an acreage shortage in t h r e e fields comprising more than one-half of the acreage of cropland. 4 . Plaintiffs found ASC maps i n the ranch house shortly after taking possession i n 1976 showing acreage of cropland. 5. In the spring of 1977, plaintiff requested an acreage measurement which was furnished a n d paid for b y the ASC on or before August 29, 1977, showing an acreage shortage. Plaintiff then requested measurement of intermediate wheat grass which was furnished on November 1, 1977. In response, Mobleys assert that circumstances nuhers 1 and 2 cannot be called discovery, within the meaning of the statute, because for at least one of the masuremnts, Mobley used a borrowed drill acre device and that Mr. Hall reassured Mr. Mobley that Hall's drill device had s h m the fields as represented. Mobleys state that circumstance n & r 3 is not supported b y the record and is not determinative of whether discovery had been made; that it was M r . Mobley who contacted Mr. Hall a n d not the " p l a i n t j . f f s ; " that Mr. Hall reassured M r . Mobley and allayed his fears and that the acreage shortage is nowhere near one-half but is 5 p e r c e n t - of the acres purchased or 18 percent of the improved acreage. With regard to circumstance n o . 4, Mobleys assert that the ASC maps were outdated, incomplete and unreliable rendering them virtually useless in calculating the acreage of tillable cropland. Furthermore, with regard t o ciramtance no. 5, Mobleys argue that i n order for them to determine where there was an acreage shortage, justifying an action against the defendants, it was necessary to have a l l of the crop acreage measured. Finally, the court's order did not include Delores Mobley or Mobley, Inc. and is therefore invalid. Moblevs raise only one issue for review, whether they discovered facts sufficient t o constitute knowledge of fraud more than two years prior t o the filing of the canplaint. Mobleys contend that discovery occurred November 1, 1977, when the ASC aerial survey w a s completed. The defendants contend that discovery occurred sometime before October 18, 1977, two years prior t o the filing of the complaint. This C o u r t has held that: " I t is not enough for the plaintiff merely t o say that he was ignorant of the facts a t the time of their occurrence, and has not come into knowledge of them until within t w o years. 'He ~ m s t shm that the acts of fraud were comnitted under such circumstances that he would not be presumd t o have knowledge of them, it being the rule that i f he has "notice or information of circumstances which would put him on inquiry which i f followed would lead t o knowledge, or that the facts were p r e s q t i v e l y within his knowledge, he w i l l be deemed t o have had actual knowledge of the facts."' Davis v. Hibernia S. & Society, 2 1 Cal. App. -- --- 444, 132 Pac. 462; Lady Washington C. Co. v. Wood, 113 Cal. 482, 45 Pac. 809; Truett v ~ h d e r d o n ~ k 120 Cal. 581, 53 Pac. 26.)" erri is v. OIMeara (1924), 71Mont. 1, 8, 227 P. 819, 822; Lasbv v. Burgess (1930) , 88 Writ. 49, 65-66, 289 P. lb28, 1033. On June 28, 1977, Mobley received a letter from the A S C office stating that the acreage was not as he had thought. O n August 29, 1977, Ylbley received the requested acre m e a s u r m t showing a discrepancy. M~bleys do not deny the knowledge of such information but assert that they did not have knowledge of such a nature as t o foreclose them from pursuing this matter by suit filed October 18, 1979. Flhile M r . Mobley was diligent in his efforts t o ascertain the exact acreage, he had sufficient notice of information of ciramstances that put him on inquiry and therefore had actual knowledge of the facts. While mere suspicion may not constitute disco~~ery there is ample evidence in the record t o support the District Court's determination of discovery within the meaning of the statute. "The law does not contemplate such discovery as would give positive knowledge of the fraud, but such discoverv as would lead a prudent man t o inquiry or action. To hold that discovery must amount t o absolute knowledge of the fact of fraud would be t o render the statute practically inoperative, since such knowledge is rarely had before the facts are established by adjudication." 37 Am.Jur. -- Fraud & Deceit S 410, a t 556. In Montana: "'Discovery' and 'knowledge' are not convertible terms, and whether there has been a discovery of the facts constituting the fraud within the meaning of the statute is a question of law t o be determined from the facts proved." Kerrigan, 71 Mont. 1, 8, 227 P. 819, 822; Pay v. Divers (1928), 81 Jbnt. 552, 558, 264 P. 673; Lasby, 88 Monk. 49, 65, 289 P. 1028. Therefore where the facts established point t o discovery as defined under the statute, surnnary judgment is appropriate. The case is remanded and the D i s t r i c t Court is ordered t o dismiss the cause on the ground of fraud. The parties should not be precluded fram amending the complaint t o include a cause of action for breach of contract. Liability and the facts of the case are not deemed proved by this opinion. The only issue decided herein is whether the Mobleys are precluded from proceeding on the theory of fraud based on the expiration of the statute of 1-imitations. ' i Justice U W e Concur: M r . Justice Frank B. Pbrrison, Jr., dissenting: I respectfully dissent. The complaint in this action was filed October 18, 1979. For plaintiff t o be barred by the statute of limitations, discovery would have had t o occur more than t w o years prior to the date of filing. The ASC aerial survey was completed November 1, 1977. This survey indicated an acreage shortage. After completion of the survey Mobley called t o discuss the discrepancy w i t h Ed Khball w h o asked Mobley to wait until spring when the snow was off the ground. Kinhall stated that i f there were any shortages they could be determined a t that time and that Hall would "make it right". In m y opinion there is a jury question wj-th reference to both date of discovery of the fraud and the question of whether Ximball's s t a t m t t o Mohley created an estoppel. If plaintiff w a s induced t o refrain from filing based upon an assurance that any shortages would be taken care of, then defendant could well be estopped from asserting the statute of 1-imitations as a bar. I would reverse the order of the District Court granting summary judgment and remand for trial..