Court Opinion

ID: 9547251
Source: CourtListenerOpinion
Date Created: 2023-08-07 17:44:15.662388+00
Date Added: 2024-06-11T15:17:31.868138
License: Public Domain

SHEPARD, Chief Justice
(dissenting) :
I respectfully dissent from the decision of the majority. It is my belief that the record in this case simply does not sustain the decision of the majority.
Plaintiffs brought the present action seeking rescission of the contract on the basis of alleged misrepresentations by the vendors which induced the vendees to enter into the contract. Those alleged misrepresentations concerned the average net income of the business, the acreage contained in the real property, the good working condition of the lodge equipment, and that there were good and adequate water rights for irrigation and domestic use.
Following trial to the court, findings of fact were entered and the court concluded therefrom that judgment should be entered for the defendants on the basis that there had been a failure to prove all of the elements of fraud by clear and convincing evidence.
It is a long-standing principle of contract law that a purchaser of real property may rescind a contract because of the vendor’s fraudulent misrepresentation of material facts. This court has repeatedly held and most recently in Schoenick v. Smalley, 93 Idaho 786, 473 P.2d 928 (1970) :
“The essential elements of fraud are (1) a misrepresentation of a material past or existing fact; (2) the untruth or falsity of such representation; (3) the speaker’s knowledge of its falsity or ignorance of its truth; (4) his intention that it should be acted upon by the person to whom it is made; (5) ignorance of its falsity on the part of the person to whom it was made; (6) reliance on a representation; (7) his right to rely upon it; and (8) his damage'occasioned thereby.”
In Shrives v. Talbot, 91 Idaho 338, 421 P.2d 133, this court held that the question of whether alleged fraud had been proved by clear and convincing evidence is solely for the determination of the trier of the fact, and that such determination should not be disturbed on appeal when it is supported by competent and substantial, although conflicting, evidence.
The trial court determined on the basis of substantial, although conflicting evidence, that the Russes had failed to sustain their burden of proving by clear and convincing evidence the essential elements of: 1) misrepresentation of a material fact; 2) misrepresentation of a material past or existing fact; and 3) the intention that it should be acted upon by the person to whom it was made. It may further be questioned on the record before us whether any evidence was before the court upon which the trial court could have found that the vendees sustained any damage.
It is completely unclear whether the attempted rescission by the Russes resulted from a belief that they were overcharged in price for the property, whether they believed that the property was represented to be larger than it actually was, whether the profit gained from the operation of the business was not as large as they had been led to believe, all of which embraced their contentions at trial, or whether as they claim on appeal the rescission was due to other problems. That determination was made adversely to the vendees by the trial court and I believe the record sustains that determination.
*375Much has been said of the question of “water rights” in the majority opinion but the record nevertheless reveals that the only question presented in the record regarding water was the right to “transport water” to the subject property through a ditch running across the property of the adjoining landholder.
The record only reveals that a long-established right existed in the subject property to take water from Grouse Creek. The record further reveals that only once in 1966 was that right interfered with. At that time the predecessors of Carrie diverted the water of Grouse Creek to a hot water swimming pool for the purpose of cooling the waters therein. The record is absolutely devoid of any indication that such diversion resulted in damage to the then occupants of the subject property (the vendors) or that any other interference ever took place.
Turning now to the question of the right to “transport water,” the record discloses that only once was there any interference therewith. During December 1969, the then adjoining landowner, one Carrie, constructed a new road across his adjoining property and cut the ditch transporting water from Grouse Creek to the subject property. Such action took place during the wintertime when irrigation water was unnecessary. The damage, if any, which resulted from that action was highly controverted. The record shows that the vendors were called upon by the vendees to assist in remedying the situation. The ditch was reopened and the vendors made an offer to split the cost of any litigation or whatever else might be necessary to remedy that ditch transportation problem. Although the vendees contended that the well on the property went dry because the ditch furnished the source of water for the well, such was highly controverted and resulted in the finding against the vendees.
In my opinion the trial court was presented with a mass of hotly controverted and highly conflicting evidence concerning the fraudulent misrepresentation on the part of the vendors regarding the sale of a going business. The trial court as the finder of the facts concluded that the plaintiffs had not sustained their burden of proof of clear and convincing evidence as to certain elements laid down as necessary by the law of Idaho. I would affirm the judgment of the trial court.
McFADDEN, J., concurs.