*1 charges against respondent, supplementing filed more were original charges three additional counts for violations DR 1-102(A)(1) (6), 6-101(A)(3), DR and DR 7-101(A)(2).
Respondent has failed to file an answer to either the initial charges formal or the charges. additional formal Pursuant Discipline Neb. Ct. 10(1) (rev. R. of 1989), we enter our judgment pleadings. on the
Accordingly, respondent hereby disbarred from practice Nebraska, immediately. of law in the State of effective JUDGMENT OF DISBARMENT. J., not participating.
White, David M. Hayes, appellee, Equine Equities, appellee.
appellant, P. John 480 N.W.2d178 14, 1992. February Filed No. 89-705. Cassman, Abrahams, Cassman, of Kaslow & S.
Frederick *2 appellant. for Mullen, Gaines, Hogan, Pansing & Grandgenett, of
Reed A. Hayes. appellee for C.J., Shanahan, Caporale,
Hastings, Boslaugh, White, JJ. and Fahrnbruch, J.
Boslaugh, controversy concerning the sale of action out of a This arose gelding named registered quarter in horse an interest a by Equine Marquis” Equities, “Chocolate the defendant Hayes. sought plaintiff, plaintiff M. The to rescind David $22,000, together and his cash of purchase payment recover equity quarter “Smokeys with his in a “trade-in” horse named Gray The P. Too.” trial court found that the defendant John Chudy representations Hayes made fraudulent and Hayes was entitled to a rescission of his of Chocolate $22,000 $7,500 payment, and cash Marquis, areturn ofhis cash judgment against Gray for Too. The court entered $29,500 Equities Equine in the total sum of and dismissed against Chudy. action as contending the appealed, has district delay Hayes’ failing in find as a matter of law (1)
erred
and
rescission constituted a waiver
months before
rescission,
Hayes’
(2)
failing to discredit
barred his
in
testimony,
representations
in
as to
or value
(3)
finding that
cost
the basis for
or that there was an interested
afforded
$7,500,
rescission,
awarding Hayes
and
the sum of
Gray
equity Smokeys
Too.
representing
and is
equitable
An action for rescission is
nature
Haumont
court de novo on the record.
reviewable
Bank,
809,
appellant, Equine Equities, quarter breeding a business Elkhorn, operated by Clow According near Nebraska. suggested they corporation, Clow form the Chudy contributing contributing the stallion and Clow some capital. broodmares as plaintiff, Hayes, Chudy first met when he
purchased office Chudy. During an condominium from discussions, Hayes horses, expressed an in showing interest Hayes referred Clow. also introduced employee, Kathy to a former January Jondle. On - Hayes and H Partnership Jondle formed J purpose owning, acquiring, maintaining Smokeys Gray Too. The partnership purchased Smokeys Gray Too from Equities $12,500 downpayment with cash $7,500 provided balance carried on note. paid downpayment. Jondle *3 Early negotiated purchase by Equine Clow Equities Marquis, registered quarter of Chocolate horse Bismarck, gelding, from Wachter Ranch in North Dakota. $1,300 corporation paid Marquis, for Chocolate and Clow Chudy purchased Marquis told he for Chocolate that amount. that he Marquis Clow testified did not believe Chocolate was a good racing prospect Marquis and that the value of Chocolate purchased by Equine Equities when was matter “a of extreme Clow, speculation.” According Chudy to he and planned to Marquis train Chocolate as a then show and sell him for a $5,000. profit hand, of about on the other testified that he Clow sell Marquis and intended to Chocolate for much as $52,000.
Hayes Marquis testified that he first heard about Chocolate According Hayes, in the first or of March 1986. week two Chudy Equine Equities purchased told him that Chocolate $50,000 Marquis equipment and some for from a ranch Dakota, Chudy buy South that he and could Chocolate Marquis $50,000, Chudy Equities from for and that $75,000. To Marquis for buyer ready Chocolate deal, Hayes his interest in was to trade finance the $22,000 purchase of toward the pay and cash Too $22,000 Chudy to contribute Marquis. going was Chocolate Marquis. Hayes testified purchase of Chocolate toward the he Chudy, that buying together with thought he he was for Chudy’s 2 weeks later Chudy would sell it to and $75,000, Chudy split profits, he and would and that profits Hayes Chudy percent getting percent after their investment. purchaser. Hayes reality, there was such testified no Chudy selling Marquis “[constantly
he about Chocolate asked get money back.” for the two weeks so could [he] [his] except a According Hayes, no one came to look at the horse Chudy’s, a Leece from Grand Island. former associate of Mr. buy did offer to Chocolate claims that Leece not Leece, however, early April Marquis. testified that in 1986 he pay Marquis. offered to Chocolate July Marquis foundered in June or Chocolate began limping. Foundering ais condition from which a horse recover, may may but record shows that Chocolate July person was after A second not showable 1986. buy Marquis, in the summer offered time, Hayes after the horse had foundered. At that fifty “realized that the thousand dollar horse that Mr. ” dollars, fifty I purchased and had was not worth thousand money Chudy. demanded back from At the end of their conversation, Hayes impression was under the was going get potential buyers. Employees some more defendant continued to treat Chocolate condition, Marquis’ Hayes pursued the matter of sale with Chudy. However, inquiries, there were no further filed this lawsuit in December 1987. Equine Equities’
We first consider contention that delay of 21 before constituted a months rescission *4 right general, waiver his of rescission. In and barred who the purchaser the of a chattel desires rescind promptly, must act and while contract of sale for fraud... require part on his after the rule does not immediate action [968] rescission,
discovery
grounds warranting
it
the
does
time,
require
taking
him to act within a reasonable
all of
the
into
circumstances
consideration.
Neb. 28, 36-37,
McGuire v. 152 also, Williams, See, 564, (1949). Neb. 71 N.W.2d Russo 160 (1955). Hayes’ delay bringing 131 The trial court found by “1) the action was excused the continued reassurances Chudy (not [;] 2) discovery disputed) the later of the horse’s true horse, Equine; and 3) foundering cost the presented uncertainty, new pending possible recovery.” his Taking consideration, all of the circumstances into we conclude did not waive his to rescind the contract.
Equine Equities
in failing
also contends the trial court erred
testimony
Hayes “materially
discredit
trial
because
changed
testimony
points
his
on vital
in order to meet the
See,
necessities of the trial.”
Momsen v. Nebraska Methodist
Hospital,
45,
(1981); Sikyta
210 Neb.
Despite inconsistencies, the demonstrated judge the trial specifically stating, filed memorandum difficulty “I have no finding positive at all misstatements of fact as to the cost to and the waiting wings____” in the We said have questions the evidence on material of fact
[w]hen is in conflict, will, irreconcilable determining this court weight evidence, consider the fact trial court observed the witnesses and manner of testifying adopted one version of the facts rather than opposite. Bank, Security 809, 810, Haumont v. State See, also, Loseke, N.W.2d 4 Kracl v. (1990). Having novo, N.W.2d 67 reviewed the record de
being Hayes’ deposition unable review entirety, in its we determine that complained inconsistencies of are not Hayes’ testimony sufficient to discredit as a matter of law. Equine Equities next contends district erred
969 finding Ghudy’s representations as to cost or value or the basis for rescission. there was an interested afforded because it was induced general, a contract which is voidable may 17A Am. 2d 567 fraud be rescinded. Jur. Contracts § 418(1) (1963). party (1991); 17A C.J.S. Contracts § (1) the allege prove a contract must rescind made, was representation (2) of fact that was that it material false, (3) aggrieved party representation that the believed the true, it, upon (5) be that he relied and acted that he was 898, thereby injured. Perry Rogers, N.W. 1063 v. 62 Neb. 87 Williams, Hart, (1901); supra; Russo v. Fricke v. person justified relying A on a (1980).
[pjrior represented March John P. . . . (a) to Plaintiff that just been purchased by Chudy Equine Equities,Inc. for the sum (b) that if Plaintiff would such horse with him ready, willing . . . had a and able $75,000____ purchaser for the horse in the amount of representations ... The were false and untrue fact at made, they the time by [Chudy were and were known Equine Equities] to be upon false. Plaintiff relied such statements to his detriment.
Although Chudy making statements, denied these that issue has alternative, against appellant. been resolved In the Equities contends that the complained statements of were not fact, talk, representations merely but puffing, were sales Chudy’s opinion Marquis, as to the value of Chocolate regard, do not constitute a fraud. In that we basis for have said: may predicated upon While actionable fraud not be talk, puffing, expression opinion sales or the of a mere honestly to value made that do not under circumstances thereon, rely give representations another positive pertaining quality thing facts to the of the sold upon by purchaser, and relied which are calculated to deceive, false, proved if mislead and constitute actionable fraud.
(Syllabus
court.)
Co.,
Vavricka Mid-Continent
Chudy’s positive representations statements were of fact upon rely, could and the statements did not constitute talk puffing sales or in the sense which the law implies.
Finally, Equine Equities contends that the district court erred awarding Hayes in the sum of representing equity Smokeys Gray in Too. The Smokeys record shows that - Gray property Too was the of H J Partnership and did not belong Hayes individually. to See Neb. Rev. 67-308(1) Stat. § (Reissue 1990). Neither partnership the nor Hayes’ partner, Jondle, lawsuit, party was a to this and there is no evidence partnership formally has been Although dissolved. the trial judgment equitably court’s would parties tend to restore the positions, Hayes former was not entitled receive compensation Smokeys Gray proof Too absent that the belonged him.
That part judgment of the trial granting court’s rescission of awarding the contract is affirmed. The $7,500 Hayes, award of representing in equity Too, reversed, and the cause is remanded with directions to the trial judgment conformity enter with this opinion. part part,
Affirmed reversed AND REMANDED WITH DIRECTIONS. J., participating. Grant, Shanahan, J., dissenting. with the conclusion necessarily disagree
Although I do not simplistic approach object to the appeal, I do reached in this appeal. by majority disposing taken of a for the sale subject out of a contract action arises and, therefore, sale out of a contract arises Commercial Uniform goods, governed by the Nebraska 1980 & Code-Sales, seq. (Reissue et U.C.C. 2-101 §§ any However, majority fails to make Supp. 1988). Cum. rather, but, issues on resolves all to the U.C.C. reference remedy, equitable action and basis of a common-law availability legal aof notwithstanding apparent U.C.C. and analysis disposition A correct remedy under the code. on, and is depends of review appropriate under the standard reviewed, the action and decision by, determined the nature of is, reviewing equity an action whether this court is to a law action remedy the review relates equitable or whether remedy remedies. legal or the U.C.C. with its based on actions, this court should Consequently, guidance in future the U.C.C. inapplicability of applicability have discussed See, 2-608; appeal. in this § relation to the result reached Husker Dodge, 302 N.W.2d Koperski v. to an equity in reference (distinction between law and U.C.C.; vs. revocation rescission
action based on the remedy before statutory legal acceptance; exhaustion of Summers, Uniform R. equity); 1 J. White & invocation *7 (3ded. 1988). 8-1 Commercial Code § U.C.C. does majority ignored the
The fact that the remedy in a law action U.C.C. and a negate existence of the the code. under