Elmer F. Shepard and Kathryn M. Shepard, His Wife v. Cal-Nine Farms, a Corporation

This appeal is from a judgment awarding damages for false representations found to have been made by appellant Elmer Shepard, which induced the purchase by appellee corporation of a farm or ranch in Arizona belonging to Shepard.

One Otto, a resident of California, became interested in the farm, which he learned was for sale at a price of $80,000. Not having himself sufficient money to finance the acquisition, Otto returned to California where, with the help of one Haas, his brother-in-law, he interested seven other persons in the Fresno area in the venture. These individuals agreed to put up part of the money for the purchase if the ranch, after further investigation by Otto and Haas, met with their approval. The group consulted a lawyer, and were advised that the best way to handle such a transaction was to incorporate. Otto, accompanied by Haas, returned to Arizona with $2,000 “earnest money” contributed pro rata by the nine interested parties. They met with Shepard at the farm, and during the course of discussions with him the representations alleged in the complaint in this case were made concerning the history, quality, and output of a well on the farm which provided water…

I concur. The only problem that appears difficult to me is whether the trial court in assessing the damages was in, error in not applying literally the standard set forth in Lutfy v. R. D. Roper & Sons Motor Co., 57 Ariz. 495 , 115 P.2d 161, 165 . 1 Instead of taking testimony as to the value of the ranch as it actually was, and the value it would have had had the representations been true, the trial court took a short cut by fixing this part of the damages as the cost of a new well.

It seems to me that the trial court was warranted in concluding that this would be the very minimum difference between the value of an irrigated ranch which the-purchasers thought they were buying,, and a dry ranch, or one nearly so, which the place turned out to be. I do not think that appellants have demonstrated any prejudice resulting to them from the-court’s method of calculation; that method finds support in Nunn v. Howard, 216 Ky. 685 , 288 S.W. 678 , and in McCormick on Damages, 1935 Ed., § 122.

Furthermore there is respectable authority which the Arizona courts would probably recognize that a person defrauded may recover as one of the-proximate results of misrepresentation expenses to which…

252 F.2d 884 Elmer F. SHEPARD and Kathryn M. Shepard, his wife, Appellants, v. CAL-NINE FARMS, a corporation, Appellee. No. 15599. United States Court of Appeals Ninth Circuit. January 31, 1958. Rehearing Denied March 10, 1958. Kramer, Roche & Perry, F. Haze Burch, Phoenix, Ariz., for appellants. Cunningham, Carson & Messenger, William H. Rehnquist, Phoenix, Ariz., for appellee. Before HEALY, POPE and LEMMON, Circuit Judges. HEALY, Circuit Judge. 1 This appeal is from a judgment awarding damages for false representations found to have been made by appellant Elmer Shepard, which induced the purchase by appellee corporation of a farm or ranch in Arizona belonging to Shepard. 2 One Otto, a resident of California, became interested in the farm, which he learned was for sale at a price of $80,000. Not having himself sufficient money to finance the acquisition, Otto returned to California where, with the help of one Haas, his brother-in-law, he interested seven other persons in the Fresno area in the venture. These individuals agreed to put up part of the money for the purchase if the ranch, after further investigation by Otto and Haas, met with their approval. The group…