Petition for ReHearing — Baldridge v. Hadley

A

{ JUL 1 13%

WICHAEL RODAK, JR., CLERK

SUPREME COURT OF THE UNITED BEREES™

OCTOBER TERM, 1973 |

NO. 73-1361

FRED BALDRIDGE, TRAVIS W. TAYLOR

and HERMAN D. TERRY,

Petitioners,

vs.

JOHN R. HADLEY, J. D. MONTOYA and

ED GARY, individually and as

members of THE NEW MEXICO STATE

AGRICULTURAL STABILIZATION and

CONSERVATION COMMITTEE; and

CLIFFORD M. HARDIN as Secretary

of Agriculture of the United

States, COMMODITY CREDIT

CORPORATION ,

Respondents,

and

UNITED STATES OF AMERICA,

Respondent.

ON PETITION FOR WRIT OF CERTIORARI

TO THE UNITED STATES COURT OF

APPEALS FOR THE TENTH CIRCUIT

PETITION FOR REHEARING

LYNELL G. SKARDA, ESQ.

Counsel for Petitioners

P. O. Box 400

Clovis, New Mexico, 88101

GARRETT, HARTLEY, & TATUM

Of Counsel

P. 0. Box 520

Clovis, New Mexico, 88101

GROUNDS FOR REHEARING

1. REPLY TO THE MEMORANDUM 2

FOR THE RESPONDENTS IN

OPPOSITION.

2. THE TENTH CIRCUIT CANNOT 7

CONVERT THIS CASE INTO AN

ACTION TO REFORM WRITTEN

DOCUMENTS .

3. THERE IS NEITHER STATUTORY 15

_ NOR CASE LAW CREATING A

LEGAL LIABILITY ON FRED

BALDRIDGE TO RETURN MONIES

WHICH HE NEVER RECEIVED.

A. USE OF SOIL BANK ACT 15

PAYMENTS TO PURCHASE

DRAPER'S LAND WAS

LEGAL AND APPROVED

BY THE DEPARTMENT OF

AGRICULTURE AND

CONGRESS.

B. ACQUISITION OF THE LANDS 18

BY FRED. BALDRIDGE.

CONCLUS ION 24

CERTIFICATE OF COUNSEL 27

CERTIFICATE OF SERVICE

ii

CITATIONS

Cases:

ew v. Landers

59 N.M. 54, 278 P.2d 970 (1955)

48 A.L.R. 405

54 A.L.R. 1246

117 A.L.R. 69

Aragon v. Boyd

80 N.M. 14, 450 P.2d 614 (1969)

Carpenter v. The Providence

Washington Insurance ny

45 U.S. 185, 4 How. 185,

42-45 S.Ct. 931, 11 L.Ed.

931 (1846)

C.I.R. v. Estate Bosch

387 U.S. 456, 87 S.Ct. 1776,

18 L.Ed.2d 886 (1967)

Clearfield Trust Co. v.

United States

318 U.S. 363, 63 S.Ct.

573, 87 L.Ed. 838

(1943)

iii

CITATIONS (Continued)

Cases: Page

Columbia Broadcasting System, Inc. 17,25

y. Democratic National Committee

412 U.S. 94, 93 S.Ct. 2080

(1973)

Gavinzel v. Crump

89 U.S. 308, 22 Wall. 308,

86-89 S.Ct. 783, 22 L.Ed. 783

(1875)

Gregory v. Lloyd 13

284 F.Supp. 264 (D.C. Fla.,

N.D., 1968)

er v. Reynolds 20

1N.M. 255, 466 P.2d 101 (1970)

Howland v. Blake 11,12

97 U.S. 624, 94-97 S.Ct. 1027,

24 L.Ed. 1027 (1878)

20

y v. Jones 20

9 U.S. 1, 2 Wall. 1, 66-69 S.Ct.

762, 17 L.Ed. 762 (1864)

Kempner v. Churchill 12

75 U.S. 362, 8 Wall. 362, 74-77

S.Ct. 461, 19 L.Ed. 461 (1869)

Lawber v. Bangs 20

69 U.S. 728, 2 Wall. 728, 66-69

S.Ct. 768, i7 L.Ed. 768 (1864)

“ier v. Bis 20

F.2d 1277 (Cir. 10, 1972)

iv

CITATIONS (Continued)

Cases; Page

Mitchell v. Sheppard Mall 4

State Bank

458 F.2d 700 (Cir. 10, 1972)

Moran v. Prather 20

90 U.S. 492, 23 Wall. 492,

90-93 S.Ct. 121, 23 L.Ed.

121 (1874)

Mosley v. Magnolia Petroleum Co. 3

45 N.M. 230, 114 P.2d 740 (1941)

Northwestern Mutual Life Insurance 12

Company v. Nelson

103 U.S. 544, 102-105 S.Ct. 437,

26 L.Ed. 436 (1880)

Oriel v. Russell 13

278,U.S. 358, 49 S.Ct. 173,

73 L.Ed. 419 (1929)

Pacific Royalty Co. v. Williams 22,25

227 F.2d 49 (Cir. 10, 1956),

c.d., 39. U.S. 951, 76 8.Ct.

847, 100 L.Ed. 1474

mags iw: Broadcasting Co., Inc. 17,25

Vv. . * e

395 U.S. 367, 89 S.Ct. 1794,

23 L.Ed.2d 371 (1969)

Reimann v. United States 4

315 F.2d 746 (Cir. 9, 1963)

Rowdon v. Stanley 13

455 F.2d 482 (Cir. 10, 1972)

CITATIONS (Continued)

Cases:

Sauter v. St. Michael's College

70 N.M. 380, 374 P.2d 134

(1962)

Sharpe v. Smith

68 N.M. 253, 360 P.2d 917 (1961)

State Farm Mutual Automobile

Insurance Company v. Petsch

261 F.2d 331 (Cir. 10, 1958)

State of Maryland v. Baltimore &

Ohio Rr. Co.

89 U.S. 105, 22 Wall. 105, 86-89

S.Ct. 713, 22 L.Ed. 713 (1874)

U.S. v. Burnison

399 U.S. 87, 70 S.Ct. 503,

94 L.Ed. 675 (1950)

U.S. v. Lazy F C Ranch

481 F.2d 985 (Cir. 9, 1973)

U.S. v. Little Lake Misere

Land Company, Inc.

412 U.S. 580, 93 S.Ct. 2389

(1973)

U.S. v. Sommerville

324 F.2d 712 (Cir. 3, 1967)

U.S. v. Standard Oil Co.

of California .

332 U.S. 301, 67 S.Ct. 1604,

91 L.Ed. 2067 (1947)

Page

22,26

19

22

20

6,7,23

3,4

15

vi

CITATIONS (Continued)

Cases:

Westover v. Harris

47 N.M. 112, 137 P.2d 771 (1943)

Woodson v. Lee

73 N.M. 425, 389 P.2d 196 (1963)

Treatises:

28 Am. Jur.2d, Escrow, §10, p.15

37 Am.Jur.2d, Fraud and Deceit,

§19, p.44

26 C.J.S., Deeds, §40, p.670

30A C.J.S., Escrow, §9, p.993

37 C.J.S., Fraud, §123, p.450

Restatement Law of Property,

§9, Comment c., Id. 153,

Comment on Subsection (1l)c.

Regulations:

7 C.F.R. §750.150

7 C.F.R. §750.150(q)

7 C.F.R. §750.164(b) (5)

7 C.F.R. §750.170

Page

16

16

vii

CITATIONS (Continued)

Miscellaneous:

H.R. Hearings Before the

Subcomm. of the Comm. on

Appropriations, 86th Cong.,

Ist Sess. (1960), and 85th

Cong., 2nd Sess. (1959)

Page

16,21,25

SUPREME COURT OF THE UNITED STATES

OCTOBER TERM, 1973

NO. 73-1361

FRED BALDRIDGE, TRAVIS W. TAYLOR

and HERMAN D. TERRY,

Petitioners,

vs.

JOHN R. HADLEY, J. D. MONTOYA and

ED GARY, individually and as

members of THE NEW MEXICO STATE

AGRICULTURAL STABILIZATION and

CONSERVATION COMMITTEE; and

CLIFFORD M. HARDIN as Secretary

of Agriculture of the United

States, COMMODITY CREDIT

CORPORATION ,

Respondents,

and

UNITED STATES OF AMERICA,

Respondent.

ON PETITION FOR WRIT OF CERTIORARI

TO THE UNITED STATES COURT OF

APPEALS FOR THE TENTH CIRCUIT

PETITION FOR REHEARING

Petitioners present their petition for

a rehearing of this Court's order dated

May 28, 1974, denying the petition for a

writ of certiorari to the United States

Court of Appeals for the Tenth Circuit,

a suspension of the effect of the denial

and leave until July 1, 1974, to file

this petition having been granted by Mr.

Justice Byron R. White on June 4, 1974.

GROUNDS FOR REHEARING

1. REPLY TO THE MEMORANDUM FOR THE

RESPONDENTS IN OPPOSITION. The govern-

ment characterizes the issues here as

being "factual". - Nothing could be

farther removed from the truth than

that. There has never been any sub-

stantial dispute about the facts. The

deeds from Draper, the seller, to the

purchasers, their notes and mortgages to

Draper, the respective escrow contracts

with Fred Baldridge, the escrowed deeds,

the subsequent releases by Draper, and

delivery of the deeds when the C.R.P.

contracts were wrongfully terminated,

have not been attacked by the government.

These careful steps taken by the par-

eee to stay rere within the

regulations, 7 C.F.R. §750.150, et seq.,

stand completely unimpeached and, in

truth, not controverted. The issues here

are strictly those of law. When the facts

are undisputed, a determination of fraud

is a question of law. 37 Am.Jur.2d,

Fraud and Deceit, §19, p.44; 37 C.J.S.,

Fraud, §123, p.450. The government

States that there was no purpose for the

"complicated scheme" other than to evade

the maximum payment Limitation. The con-

veyancing had here was not complicated,

but rather elementary, and the purpose

was to insure that there were no viola-

tions either of the regulations or of

the purpose of the Soil Bank Act. Fred

Baldridge never received more than $5,000

in any one year from the Department of

Agriculture. To state otherwise is to

foster on this Court a deliberate untruth,

The government next takes the position

that New Mexico law of real property is

ats factor. pe rely at

Mosley v. Magno Petroleum Co., N.M,

» 114 P74 740 > which is a

famous case in New Mexico jurisprudence

holding that a deed placed in escrow to

be delivered upon a condition subsequent

will be given effect as of the date of

the final or effective delivery. This

is the law everywhere, and were there a

federal common law as to real property,

petitioners believe that such would be

the decision of this Court. 48 A.L.R.

405; 54 A.L.R. 1246; 117 A.L.R. 69;

28 Am.Jur.2d, Escrow, §10, p.15; 30A

C.J.S., Escrow, §9, p.993; 26 C.J.S.

Deeds, §40, p.670; Restatement Law of

Property, §9, Comment c., Id. §153,

Comment on Subsection (1)c. In support

of its statement that actions under the

Soil Bank Act are governed strictly by

federal law, whatever that may be, the

government cites three (3) cases, to-

wit: Clearfield Trust Co. v. United

States, 318 U.S. ; 6s $.Ce. 3735,

87 L.Ed. 838 (1943); United States v.

Sommerville, 324 F.2d 712 (Cir. 3, 1967);

—

4

and Reimann v. United States, 315 F.2d

746 (Cir. 9, 1963). None of these even

remotely support the statement for which

cited.

Clearfield Trust Co., supra, confined

itselt to the law merchant, i.e., could

there be recovery a year and a half

after negotiation on an indorsement

forged on a government check contrary

to Pennsylvania law. This case on its

own facts is of dubious validity now in

view of the fact that 49 of the 50 states

have adopted the Uniform Commercial Code

which effectively resolves the issue

uniformly. But at the least Clearfield

has nothing to do with real property.

Sommerville, supra, similarly falls

into the commercial law category as it

concerned cattle sold by an auctioneer

which were subject to a security agree-

ment in favor of the Farmers Home

Administration. The Tenth Circuit from

which the case at bar originates, re-

versed itself, or at the least retracted,

in Mitchell v. Sheppard Mall State Bank,

458 F.2d 700 (Cir. OF 1972) , which held

that the Uniform Commercial Code pro-

visions of state law are the appropriate

sources of federal law. Sommerville

cannot possibly be authority for any

principle involved in the case at bar.

Reimann v. United States, supra,

stands for precisely the opposite of

what the government contends. It con-

cerned the validity of a Soil Bank

Contract executed by a husband as to

lands in Idaho which is a community

property state. The wife did not join

in executing the contract, which failure

the husband contended made the contract

void. The Ninth Circuit stated:

"But we need not, and do not,

decide whether we should

adopt, for the purpose of this

decision, the law of Idaho as

being the federal law in re-

lation to what authority a

husband has, and to what

constitutes an encumbrance

- « « « We assume, for the

purposes of this case, that

Idaho law should be the

standard we adop pt, since

this is appellant's position."

The court then went on to decide that the

husband under Idaho law could validly

enter into a Soil Bank Contract without

the wife joining. In all fairness,

Reimann supports petitioners.

The government should not be permitted

to cite authority that is so wide of its

mark. Of course, the excuse for so doing

is that there is not a single case from

this Court which holds that long standing

principles of state real property law can

be ignored notwithstanding a federal

interest. U.S. v. Little Lake Misere Land

C Ys Inc., 412 U.S. 580, 93°S5.Ct. 2385

U.S. v. Burnison, 399 U. s. 87; 70

S.Ct. 503 34~ L.Ed. 675 (1950); I.R. Vv.

Estate Bosch, 387 U.S. 456, 87 oe 1776,

86 (1967). Petitioners are

unable to find in the instant case moral

grounds necessitating so drastic a de-

parture from what has so long been

settled law.

ee

The decision in United States v. Laz

FC Ranch, 481 F.2d 985 (Cir. 9, 1973),

Is brushed off by the goveriment as not

being in conflict with the opinion of

the Tenth Circuit in the case at bar on

the ground that the partners had relied

on the advice of the county A.S.& C.S.

manager in making the leases which quad-

rupled their collective income from the

Acrease Reserve Contracts. Amazingly,

the government there stipulated that

there was no "scheme or device". This

got the A.S.& C.S. manager off the hook,

so to speak, despite the fact that the

partners were trying to maximize their

income from the contracts. Notwith-

standing, the partners admittedly

received monies in excess of the

maximum payment limitations. The

Ninth Circuit simply held that the

sear | had received full benefits

rom the land taken out of production

and the partners had lost their profits

from farming, so that there was no good

reason for requiring them to return the

monies received just because those monies

exceeded the maximum payment limitation.

The prohibition is against receiving more

than $5,000 from the contracts in any one

year. Whether received as the result of

a "scheme or device" is immaterial.

It is shocking to note that Fred

Baldridge never did receive payments ex-

ceeding the maximum limitation, but is

being required to return payments

aeeceeny eatenves by others anyhow.

Further, ed Baldridge never even

tried to maximize the annual payments

to himself. Every effort was exerted,

and petitioners think successfully, to

a,

do just the opposite. If there was no

“scheme or device" in Idaho, there can

be none in New Mexico. There is no

rationale that can equate ownership of

the land after the Soil Bank Contracts

are terminated as being the same thing

as receiving more than $5,000 per year.

It was not the parties intent for any to

receive more than the regulations

allowed. Further, they didn't. Finally,

the government has not been damaged just

as it was not damaged in Lazy F C Ranch,

supra.

The disposition of this a after

the conclusion of the Soil Bank Contracts

cannot in any sense be a concern of the

government. For Baldridge to be treated

as others have not, would require review

of every Soil Bank Contract thet was made

which is an administrative impossibility.

The results in this case and Lazy FC

Ranch, supra, are irreconcilable.

Government application of what it thinks

is the law mocks every "American ideal of

fairness".

2. THE TENTH CIRCUIT CANNOT CONVERT THIS

CASE INTO AN ACTION TO REFORM WRITTEN

DOCUMENTS. The government approach has

been that notwithstanding the documents

that were executed, they are meaningless,

ineffective, worthless, void, and the

government, with or without documents,

will determine what the parties meant and

simultaneously determine the legal effect

of this implied a Not argued in

this Court was the evidentiary side of

the issues from the standpoint of both

federal and state law. In order to

achieve the result had by the Tenth

Circuit it is necessary to set aside

or else hold void or otherwise rewrite

the following written instruments be-

tween the parties:

(1) Warranty Deeds:

(a) Draper to Taylor.

(Ex. 27).

(b) Draper to Henderson.

(Ex. 29).

(c) Draper to Adams.

(Ex. 31).

(d) Draper to Henry E.

7 st Jr.

(Ex. 3

(e) Draper to Terry.

(Ex. 35).

(f) Draper to Fred

Baldridge. (Ex. 37).

(2) Mortgages:

(a) Taylor to Draper.

(Ex. 40).

(b) Henderson to Draper.

(Ex. 41).

(c) Adams to Draper.

(Ex. 42).

(d) Henry E. Baldridge, Jr.

to Draper. (Ex. 43).

(e) Terry to Draper.

(Ex. 44).

(f) Fred Baldridge to

Draper. (Ex. 45).

(3) Promissory Notes:

(a) Taylor to Draper.

(Ex. 13).

(b) Henderson to Draper.

(Ex. 14).

(c) Adams to Draper.

(Ex. 15).

(d) Henry E. Baldridge, Jr.

to Draper. (Ex. 16).

(e) Terry to Draper.

(Ex. 17).

(f) Fred Baldridge to

Draper. (Ex. 18).

(g) Draper to Fred

Baldridge. (Ex. 20).

(4) Contracts With Escrowed Deeds:

(a) Taylor and Fred

Baldridge. (Ex. 21).

(b) Henderson and Fred

Baldridge. (Ex. 22).

(c) Adams and Fred

Baldridge. (Ex. 23).

(d) Henry E. Baldridge, Jr.

and Fred Baldridge.

(Ex. 24).

(e) Terry and Fred

Baldridge. (Ex. 25).

(f) Draper and Fred

Baldriage. (Ex. 26).

(5) Conservation Reserve Contracts

otee Department of Agriculture

and:

(a) Taylor. (Ex. 142).

(b) Henderson. (Ex. 3).

(c) Adams. (Ex. 5).

—_—

10

(d) Henry E. Baldridge, Jr.

(Ex. 6 & 7).

(e) Terry. (Ex. 8).

es Fred Baldridge. (Ex. 9).

g) Draper. (Ex. 10 & 11).

This requires reformation of 26 instru-

ments, i.e., 5 warranty deeds, 5

mortgages, 5 notes, 6 contracts, between

the parties, and 5 Conservation Reserve

Program contracts by substituting the

name of Fred Baldridge wherever the names

of Taylor, Henderson, Adams, Henry E.

Baldridge, Jr., and Terry appear. The

magnitude of the lower courts' broad

brush cover-up of 26 instruments, all

of which were stipulated into evidence,

is unbelievable.

The Tenth Circuit in most ungentle-

manly words, and petitioners think in

gross violation of the language and the

~ oe of the Code of Judicial Conduct,

stated:

"We are of the opinion that

the trial court was eminently

correct in ignoring the forms

which were erected and recog-

nizing the true facts. Counsel

for Baldridge argues that this

was all legal and therefore

non-fraudulent. We disagree.

The arrangement has the

evidences of a devious sham

which was designed to deceive.

Its elaborate legal structure,

while giving it the look of

legality, does not bear scrutiny."

(Emphasis writer's). Petition For

aa of Certiorari, Attachment 2, |.

p.1l. .

11

The implications of this quotation are

startling and fearsome. It projects a

Pepper tyranny which is not only

ncomprehensible but intolerable in

American jurisprudence. No court,

federal or state, should be permitted

to let such outrageous theories stand

as law in this nation. Authority from

this Court is not lacking on the meaning

and effect to be given written instru-

ments.

In Howland v. Blake, 97 U.S. 624,

94-97 S.Ct. 1027, 24 L.Ed. 1027 (1878),

in , suit to reform a deed, this Court

said:

"where a written instrument is

sought to be reformed... ."

"the burden rests upon the moving

party of overcoming the stron

Presumption arising from the terms

of a written instrument. If the

proofs are doubtful and unsatis-

factory, if there is a failure to

overeome this presumption by

testimony entirely plain and con-

vincing Léon reasonable

controversy, the writing will

be held to express correctly the

intention of the parties. A

judgment of the court, a delib-

erate deed or writing, are of

too much solemnity to be brushed

away by loose and inconclusive

evidence." (Emphasis writer's).

Singularly, there is no testimony or

evidence at all that the written instru-

ments were intended by the parties to

mean anything other than what they said.

12

On the contrary, the parties meticulously

followed the text of the instruments.

The language of Howland v. Blake, supra,

was adopted in toto in Northwestern

Mutual Life Insurance Company v. Nelson,

4 Ff » L02-105 5.Ct. 437, 26 L.Ed.

436 (1880), which stated:

"Where a deed or mortgage,

regular in appearance, and

bearing the genuine signature

and duly certified acknowledg-

ment of the grantor or mortgagor

is attached, the evidence to

impeach it should be clear and

convincing."' (Emphasis writer's).

Not only did the Tenth Circuit deliber-

ately ignore the deeds, mortgages, notes,

contracts, and releases, all contrary to

established precedent, but by doing so it

elevates a lawful and simple transaction

into fraud. This is to say that the

lower court presumed fraud. This cannot

be done. Kempner v. Churchill, 75 U.S.

362, 8 Wall. 362, 74-77 S.Ct. 461, 19

L.Ed. 461 (1869).

In Carpenter v. The Providence

Washington Insurance Company, 45 U.S.

185, 4 185, 42-45 S.Ct. 931,

> Ow.

11 L.Ed. 931 (1846), where an insured

alleged fraud in his insurer not

endorsing on his set get the fact of

procurement of other insurance, this

Court said as to proof required of

fraud:

13

“and so grave a charge as fraud,

by very satisfactory auxiliaries

. - . that is by evidence which

is 'irrefragable,' and not open

‘to opposing presumption. '"

The evidence to prove fraud is consid-

erably more than that required by a

mere preponderance of the evidence.

Proof of fraud must be made by "clear

evidence". Oriel v. Russell, 278 U.S.

358, 49 S.Ct. 173, 73 L.Ed. 419 (1929).

It is noted that the trial court,

without reason, refused to give credence

to Fred Baldridge's unimpeached and un-

contradicted testimony that he offered

all of the documentation to Mr. Joe

Peterson, the Lea County, New Mexico,

A.S.& C.S. Manager, who refused to

look at them. This was improper under

both state and federal law. Rowdon v.

Stanley, 455 F.2d 482 (Cir. 10, 1972);

agon v. Boyd, 80 N.M. 14, 450 P.2d

614 (1969):

Petitioners have looked long and hard

to try to find some precedent that sup-

ports the lower courts' determination

that the deeds, mortgages, notes,

contracts, and releases are a "sham".

The only case surfacing in this regard

is one where a group of decedent's

children brought suit to set aside a

parent's deed to another child where in

Gregory v. Lloyd, 284 F.Supp. 264 (D.C.

Fla., ND. “1568S, that court said:

"The deed in this case was

challenged also on the ground

14

that it was a sham deed. It

is clear that the deed was,

in fact delivered, so that it

could not under any circun-

Stances, be a sham deed. For

the deed to be a sham there

would have to be evidence that

the parties did not intend for

it to be effective as a duly

delivered deed conveying title,

and no testimony or evidence

indicates that such was the

case."" (Emphasis writer's).

It is not arguable but that the parties

performed fully in all respects accord-

ing to the requirements of their deeds,

mortgages, notes, and contracts. It is

equally obvious that each intended these

instruments to be effective according to

their texts. Where, then, is there any

basis for the Tenth Circuit to messiah-

like abrogate the parties' plain

agreements under which each had fully

performed? More especially where is

there any basis for the Tenth Circuit

to attach the stigma of fraud and deceit

as if the documents had never existed?

There <s in the Tenth Circuit's opinion

a lack of competence in judgment that

provokes a justifiable cynicism. There

has not been one single element of fraud

proven as it is known to the law. Peti-

tioners have discussed this at length

in their Point V of the Petition For

Certiorari, p.30. For the Tenth Circuit's

decision to stand in the face of and con-

trary to not only its own precedent but

also the precedent of this Court, would

be a tragedy to the law as it is known

and practiced in this country.

15

3. THERE IS NEITHER STATUTORY,

REGULATORY, NOR CASE LAW CREATING

A LEGAL LIABILITY ON FRED BALDRIDGE

TO RETURN MONIES WHICH HE NEVER

RECEIVEL, Petitioners in their Point

III, at page 23 of the Petition For

Certiorari, dealt with one aspect of

this issue, that is, to permit recovery

of monies not received by Fred Baldridge

is to create a new substantive legal

liability without legislative aid con-

trary to U.S. v. Standard Oil Co. of

California, 332 U.S. 301, 67 S.Ct. 1604,

Ol L.Ed. 2067 (1947). But aside from

this, the administrative interpretations

forestall any such liability.

A. USE OF SOIL BANK ACT PAYMENTS

TO PURCHASE DRAPER'S LAND WAS LEGAL AND

APPROVED BY THE DEPARTMENT OF AGRICULTURE

AND CONGRESS.

The basis of the government's con-

tention is that the C.R.P. paid for the

land. Fred Baldridge only bought one

section of land with C.R.P. monies.

Taylor, Henderson, Adams, nenky E.

Baldridge, Jr., and Terry bought their

own land. There is no question but that

the C.R.P. payments paid for the land

purchased by the six. The C.R.P. pay-

ments bought practically all the farm

land that was sold in New Mexico during

this period. One has to be extremely

naive to think that the Department of

pobre pede thought otherwise. It is

this lingering naivete which apparently

directed the lower courts to disregard 26

written instruments and presume fraud.

This erroneous conclusion is wholly dis-

pelled by what the Department of

16

Agriculture and the Congress actually

approved. There simply is no moral issue

involved as the lower courts would have

one believe.

The H.R. Hearings Before the Subcomn.

of the Comm. on 35 ps, feaghome e t 86th

Cong., lst Sess. (1960), and 85th Cong.,

dnd Sess. (1959), specifically approved

those sales to even family members with

vendor liens or mortgages back to the

seller, usually a close relative. The

regulations, 7 C.F.R. §750.170, shown in

Appendix to Petition For Certiorari at

page B-65, specifically provided for the

assignment of C.R.P. payments without

limitation as to purpose. Petitioners

see no moral violation in this approved

practice. If the Department of Agri-

culture approves such and the Congress

impresses its approval on it also, how

re op courts arbitrarily label it

rau

Further, the H.R. Hearings, supra, are

replete with examples that you did not

have to be a career farmer to qualify as

a "producer" under the regulations. In

order to be a "producer" all you had to

be was an “owner or landlord" under

7 C.F.R. §750.150(q). Equally, the

regulations provided that individuals

having family relationships could be

considered as "separate producers" under

7 C.F.R. §750.164(b)(5). In fact this

situation of family relationship was one

of the main thrusts of the H.R. Hearings,

supra. Any lawyer who practiced in New

Mexico's rural area drafted deeds, notes,

and mortgages by the score between

parents and their children and grand-

17

children. Petitioners are certain that

not one lawyer had the remotest idea that

he was committing a moral sin by so doing,

But if morality is an issue, as the Tenth

Circuit would have you believe, then the

respective County Agricultural Stabili-

zation and Conservation Service Offices

of the Department of Agriculture were

accessories to the fact because they

knew of all these family relationstips

and the circumstances of each purchaser

or donee, i.e., whether career farmers

or not, and approved every single C.R.P.

contract so presented. So did the Lea

Co. A.S. & C.S. office in the instant

case. The massive scale upon which this

was done can best be illustrated by what

occurred in Fred Baldridge's home county,

Curry County, New Mexico, where 677

C.R.P. contracts were executed out of

1,100 farms, constituting 35% of the

county's total cropland. Petition For

Certiorari, Attachment 10, page 361. If

the Department of Agriculture was wrong

in promulgating its regulations so as to

permit rene 7 buy land with fro

ts, then it was wr on litera

thousands of C.R.P. canteness. Further-

more, if it was wrong, Congress clearl

acquiesced in it. That one today t s

it not a wise policy, does not make it

immoral or illegal at a time some fifteen

years earlier when the economic condition

of the farmer was so vastly different.

Petitioners cannot reconcile the Tenth

Circuit's determination with this Court's

decision in Columbia Broadcasting Systen,

Inc. v. Democratic National Comat ttoe G12

U.S. 94, 93 S.Ct. 2080 (1973), and Red Lion

Broadcasting Co., Inc. v. F.C.C., 395 US.

367, 89 S-Ce. 1794, 23 LEC 2a 371 (1969),

18

which held that the administering =, eg

execution of a statute should be followed

especially where Congress has refused to

alter the administrative construction.

Petitioners submit that the purchase of

the land by Fred Baldridge and the five

others was perfectly legal and without

moral stigma of any sort whether or not

the land was paid for with C.R.P. pay-

ments. To hold otherwise is to labe

thousands of American farmers as thieves,

defrauders and swindlers. They were none

of these, and it is shameful and deroga-

tory for the Tenth Circuit to so imply.

B. ACQUISITION OF THE LANDS BY FRED

BALDRIDGE.

Petitioners assert that the trans-

action between the five other purchasers

and Fred Baldridge is entirely and

necessarily separate and distinct from

their hee ae tebe acquisitions of the

lands with C.R.P. payments. It is at

this point that the logic, if any, of

the lower courts falls apart. This was

the most simple of transactions. After

it was ascertained that the C.R.P. con-

tracts would receive approval about one

year after the delivery of the deeds,

notes, and mortgages with Draper, the

five entered into a contract with Fred

Baldridge whereby he would make the land

comply with the C.R.P. contracts, and

when those C.R.P. contracts were com-

pleted, the land would become his by

delivery to him of a warranty deed which

was escrowed with the contract. It

should be remembered that at this time

these lands were heavily encumbered with

a first mortgage of some $40,000 to

19

Connecticut Mutual Life Insurance Co., a

second mortgage of $61,058.99 to Farmers

Home Administration, a third mortgage to

Amos Harper for $56,372.00, and a fourth

lien to Commodity Credit Corporation for

between $4,000 and $5,000, all of which

totalled $161,430.99. All of these

mortgages were prior to the purchasers’

mortgages to Draper which is why the

urchasers' mortgages to him provided

or no deficiency Toldnaat.. ther,

at this time the C.R.P. contracts were

not approved and payments on them were

dependent on appropriated money, and

there was great question in the farmers’

mage: FS ase the C.R.P. payments would

e made.

In order for the trial court to arrive

at a result of liability on Fred Baldridge

for all payments received and spent by

five different people, it took some

extraordinary maneuvering. The trial

court did this by calling the five pur-

chasers "agents" of Fred Baldridge.

There is not one word concerning agency

in the evidence. Not a single witness

testified that in the purchase of these

lands that Fred Baldridge was their agent,

and there is no documentary evidence to

support any such conclusion. Each of the

purchasers received a warranty deed from

Draper, and executed his note and mort-

gage to Draper and performed thereunder.

Even had there been a secret or unex-

pressed intention that the others were

agents of Fred Baldridge, the words used

in the deed control and cannot be orally

shown to mean otherwise. Sharpe v. Smith

68 N.M. 253, 360 P.2d 917 $

Westover v. Harris, 47 N.M. 112, 137 P.2d

20

771 (1943). These deeds, notes, and

mortgages mean exactly what they say,

so that each purchaser became the owner.

About a year later they executed a con-

tract with Fred Baldridge and escrowed

a deed to be delivered at a date after

the respective C.R.P. contracts termi-

nated, none of which contracts can

possibly be subject to construction as

eee is no 93 fell. Moran v. Prather,

ss Os ate tlintye tar Sten

121, L. or v. sho

462 F.2d 1277 (Cir. 10, 1 Tt was

not within the province of the lower

courts to interpolate what the parties

to these unambiguous instruments have not

themselves stipulated or ober eee? Ingle

v. Jones, 69 U.S. 1, 2 Wall. 1, 66-

3.Cct. 762, 17 L.Ed. 762 (1864); State of

Ma land v. Baltimore & Ohio Rr.

105, 22 Wall. 105, 86-89 3.ct.

713, ‘22 L.Ed. 713 (1874); Woodson v. Lee,

73 NLM. tae’ by P, se tS 4200 Hopper

v. Reynolds N.M P

Ti970¥-— What the lower courts are doing

is to make a new contract for the parties

which is different in all vital particu-

lars from that which they sr ota made

and intended. Gavinzel x 5 es 89 ¥ Ss.

in. fet (hind yabee os hanes 6

; Lawber v. Bangs,

U.S. 728, 2 Wail: Lavber v! ange, 768,

17 L.Ed. 768 (1864).

The only conclusion to all of this is

that there is no basis in law-or fact,

first, that the original purchasers from

Draper were in any way tainted with fraud

because the land was paid for with C.R.P.

payments, second, that the acquisition of

these lands by Fred Baldridge from the ~

purchasers was according to their

21

respective contracts, all of which were

perfectly open and aboveboard and in

accordance with the law of New Mexico

real property, and third, that the

lower courts cannot disregard 26 simple

written instruments to determine fraud.

The absurdity of the lower courts'

holding is seen in the result. They are

Saying that if predecessors in ownership

purchase land with C.R.P. pa ts, as

they could legally do, nonetheless those

yments will be treated as if received

y the predecessors’ grantee under

another C.R.P. contract at the same

time as received by the predecessor in

ownership, so as to make the grantee

exceed the $5,000 maximum annual payment

limitation. This reasoning is ridicu-

lous because there is no end to it. It

would make anyone who at one time had a

C.R.P. contract in violation of the

maximum payment limitation if he had

acquired land that someone else had

bought with C.R.P. payments. In con-

trast, we know that parts of farms were

sold and C.R.P. payments were assigned

to the seller to pay the note and mort-

ga e, while at the same time the seller

a C.R.P. contract on land retained

yielding him the maximum $5,000 per year,

yet this is held not to violate the max-

imum payment limitation. (H.R. Hearings,

prom 3 In truth, the latter situation

is definitive of the purpose of the

$5,000 maximum annual payment limitation

in that such limitation must apply only

to C.R.P. contracts executed by a single

owner, otherwise the seller with a C.R.P.

contract on lands retained in the note

and mortgage situation would be exceeding

<a

22

the maximum payment limitation. Under

the weak theory applied in the instant

case, if one owner had a C.R.P. contract

yielding $5,000 per year, and he received

from any source money or anything that

was the result of another C.R.P. contract,

he would have exceeded the $5,000 maximum

annual payment limitation. This was not

and cannot be.

You cannot predicate fraud on supposi-

tion or presumption. Fraud is a specific

- eoncept and not nebulous or fanciful or

imagined. in this case it is defined by

Pacific Royalty Co. v. Williams, 227 F.2¢

r. 10. Tasty, c.d., JoL U.S. 951,

76 S.Ct. 847, 100 L.Ed. 1474, which was

adopted in Sauter v. St. Michael's Col-

lege, 70 N.M. P P. 9 J

by the New Mexico Supreme Court. There

must be a false representation of a

material fact which at the very most

could not be more than an unknowin

opinion expressed as to a matter oO

ownership in the instant case, which

ression is wholly insufficient under

both federal and state law. State Farm

Mutual Automobile Insurance compa Vv.

Petsch, 201 F.2d 351 (cir. 10, :

ew v. Landers, 59 N.M. 54, 278 P.2d

1955). There must be knowledge of

the false fact when made which is lack-

ing both as to its characterization as

fact when it was legal opinion based upon

counsel's advice and obviously lacking as

to knowledge. There must be an intent to

deceive which could not possibly exist

when none of the parties knew, or believe

today, that a false representation was

made. The lower courts apparently think

that because the C.R.P. payments paid for

—

23

the land of the six purchasers that this

created an evil motive. That it does not

and cannot is quite apparent from the

H.R. Hearings, supra. As to the last

required element, reliance and damage,

the A.S. & C.S. was perfectly justified

in relying on the recorded deeds and

mortgages securing the notes because

such were true in fact and law. As to

damage, there was none here just as there

was none in U.S. v. Lazy F C Ranch, 481

F.2d 985 (Cir. 9, 1 » because the land

was taken out of production and the

government received its quid pro quo.

There is no rationale whereby fraud can

be made out of these transactions.

A fortiori, if there is no fraud, how

can Fred Baldridge be held liable for

some $300,000 which he never received?

There was nothing illegal or immoral in

Taylor, Henderson, Adams, Henry E.

Baldridge, Jr., and Terry purchasing

these lands with C.R.P. yments. Does

it become a fraud when t desire to

give this land to Fred Baldridge after

termination of the C.R.P. contracts some

ten years later? If so, where and upon

what basis do you find the elements

required to rae fraud? Is it the fact

that Fred Baldridge ends ten years

later the beneficiary of largess of

his relatives? Where is there anyt

that even distantly smacks of the idea

that there was any restriction on his

relatives gifting the land for which

they no longer had use or desired to

retain to Fred Baldridge? There could

be no fraud unless it was fraudulent for

them to make the original chase with

C.R.P. payments. That such original

=

24

purchases were legal and valid cannot be

disputed. One can only conclude that

there can be no liability on Fred

Baldridge for monies not received by

him which in part went into the —.

of these lands by the others. is is

fair in all respects to the government

because all it wanted was to have the

land removed from production as it was.

The fact that his relatives wanted him

to have the land after termination of

the C.R.P. contracts cannot be a factor

because he has not misused the purpose

of the Soil Bank Act in any respect.

That the lower courts do not like that

statute or the regulations pursuant to

it, still is no basis for a finding of

fraud. Surely counsel in drawing these

instruments should not have to speculate

on whether this court or that court will

or will not like it. Such instruments

are drawn in accordance with accepted

legal principles of the state where the

land is located. It cannot be done in

any other way, and no one with any

experience in legal practice would

think of doing it any other way. This

is a clear case of mistaken law and poor

judgment by the lower courts. The mag-

nitude of the matter alone deserves the

attention of this Court.

CONCLUSION

Petitioners recognize that they are

but a few small fish in a pond without

limit. They further rege gee that this

Court has before it at all times issues

of the law and the Constitution that in

many instances admit of no complete

solution. It is perhaps true that this

25

Court is just too occupied with wholly

national issues that it cannot give any

substantial time to insure that there

will not be an economic crucifixion of

an upright and decent man like Fred

Baldridge. But the fact is, as all old

lawyers know, that the various Circuit

Courts are not nearly as careful and

much less infallible than they would

have you believe. Sometimes their errors

are harmless but the result is close to

right. Other times, as here, their

errors are gross and the result so

enormously awry, that there is a respon-

sibility on this Court, despite its huge

workload, to do something affirmative to

get the case back on the track.

It is petitioners suggestion to this

Honorable Court that this case, with or

without grant of the certiorari, be

remanded to the Tenth Circuit for re-

consideration on the principles discussed

in Columbia Broadcasting System, Inc. v.

Democratic National Committee, 417 U.S.

9%, 93 S.Ct. 2080 (1973), and Red Lion

Brosdeeeting Co., Inc. v. F.C.C., 395

° e >. B.ct. 1794, 23 L.Ed.2d 371

(1969), in the light of H.R. Hearings

Before the Subcomm. of the Comm. on

nic riations, 85th Cong., 2nd Sess.

(1 59), and 86th Cong., Ist Sess. (1960),

that the Tenth Circuit be directed to

determine all issues of real property

law in accordance with that had in New

Mexico, and that the issues of fraud, if

such remain after decision on the afore-

going, be determined in accordance with

existing law of the Tenth Circuit as

shown in Pacific Royalty Co. v. Williams,

227 F.2d 49 (Cir. " 56), ¢.d., JL

26

U.S. 951, 76 S.Ct. 847, 100 L.Ed. 1474,

which was adopted in New Mexico in Sauter .

y. St. Michael's College, 70 N.M. 380

374° P.2 a ° ;

By this Court assuming a limited

jurisdiction, not involving a measurable

expenditure of time, there should be a

good chance that the Tenth Circuit would

get back on the track without its usual

stubbornness and decide this case based

upon proper legal direction without

emotional involvement. The huge amount

of money, in excess of $300,000, is

significant and not a usual thing even

in this Court. But the stigma attaching

to Fred Baldridge and his family of an

adjudication of fraud is simply unbear-

able. There is no better hardworking

farmer and stockman in this county than

he. Counsel for petitioners believe that

the opinion of the Tenth Circuit reflects

adversely on their ethics and without any

justification whatsoever. Adding it all

up, the decisions of the lower courts are

unconscionable from any direction. Peti-

tion for certiorari or remand for

reconsideration is merited.

Respectfully submitted,

LYNELL G. SKARDA, ESQ.

Counsel for Petitioners

P. O. Box 400

Clovis, New Mexico, 88101

GARRETT, HARTLEY, & TATUM

Of Counsel

P. O. Box 520

ico, 88101

27

CERTIFICATE OF COUNSEL

I, Lynell G. Skarda, counsel for the

above-named petitioners, do hereby

certify that the foregoing Petition

For Rehearing on Petition For Writ of

Certiorari is presented in good faith

and not for delay, and that it is re-

stricted to the grounds specified in

Rule 58, subd the Rules

of this Court.

CERTIFICATE OF SERVICE

I, Lynell G. Skarda, one of the

attorneys for the Petitioners herein,

and a member of the Bar of the Supreme

Court of the United States, hereby

certify that, on the 2b day of June,

1974, I served copies 0 e Petition

For Rehearing on Petition For Writ of

Certiorari on the several parties

thereto, as follows:

1. On The Solicitor General,

Department of Justice, Washington,

D.C., 20530, by mailing three (3)

copies in a duly addressed envelope,

with airmail postage prepaid.

2. On Robert E. Kopp and Michael

H. Stein, Appellate Section, Civil

Division, U. S. Department of Justice,

Washington, D.C., 20530, by mailing

three (3) copies in a duly addressed

envelope, with il -¥ e prepaid.