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The yearling sheep that the Barnes family annually entered
in national shows were often sold at auction following completion
of the particular competition.
The Barnes family owned only a limited amount of pasture in
the Sacramento Valley. Hence they would enter into rental
arrangements to secure the additional pasture needed for Barnes
Ranches sheep operations.
In April 1981, as a result of Mr. Hoyt's and Mr. Barnes'
earlier discussions and negotiations, RCR #1 (the first sheep
breeding partnership that Mr. Hoyt organized and promoted)
entered into certain agreements with Barnes Ranches. Pursuant to
these agreements, Barnes Ranches sold to RCR #1 a specified
number of registered purebred Rambouillet and Suffolk breeding
ewes7 for no money down and the partnership's promissory note
(the sheep sale agreement).8 In general, the promissory note
7See infra note 10.
8The parties disagree whether RCR #4, RCR #6, OGT 90 and the
other partnerships obtained actual ownership of specific sheep
and whether the promissory notes the partnerships issued were
valid indebtedness. The terms "sale", "sold", "purchase",
"partnership's sheep", and similar terms are used herein for
convenience and are not intended as ultimate findings or
conclusions concerning the partnerships' acquisition of sheep.
Similarly, the use herein of such terms indicating that interest
or principal payments were due should not be construed as our
conveying any legal conclusion concerning the validity of the
partnerships' promissory notes.
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