1. J.D Caradine owned real property in Idaho, a community property state. Caradine had lived in Idaho for several years, separated from his, wife who lived in California. In 1964, Caradine borrowed $4,300 from the Farmers Home Administration, a Federal agency, to improve his real estate. As security for the loan, Caradine gave the Farmers Home Administration a mortgage on the property. At the time he executed the mortgage, Cardine completed an affidavit swearing that he was single. Cardine defaulted on the mortgage, and the government attempted to foreclose. Caradine defened upon the grounds that the mortgage was invalid because his wife was not a party. Discuss the validity of this defense.
2. In February, Gardner, a schoolteacher with no experience in running a tavern, entered into a contract to purchase for $40,000 the Punjab Tavern from Meiling. The contract was contingent upon Gardner’s obtaining a five-year lease for the tavern’s premises and liquor license from the state. Prior to the formation of the contract, Meiling had made no representations to Gardner concerning the gross income of the tavern. Approximately three months after the contract was signed, Gardner and Meiling met with an inspector from the Oregon Liquor Control Commission (OLCC) to discuss transfer of the liquor license. Meiling reported to the agent, in Gardner’s presence, that the tavern’s gross income figures for February, March, and April were $5,710. $4,918, and $5,009 respectively. The OLCC granted the required license, the transaction was closed, and Gardner took possession on June 10. After discovering that the tavern’s income was very low and that the tavern had very few female patrons, Gardner contacted Meiling’s bookkeeping service and learned that the actual gross income for those three months had been $1,400 to $2,000. Gardner then sued foe rescission of the contract. Decision?