No. 14212
IN THE SUP- COUIiT OF THE STATE OF MONTANA
1978
ARNOLD H. SCHULZ MINNIE B. SCHULZ ,
husband and wife, and FXlBDV L. SCHULZ,
Plaintiffs and Appellants,
FRED J. PEAKE and ANNA MAE PEAKE,
husband and wife,
Defendants and Respondents.
+peal frm: District Court of the Sixth Judicial District,
Honorable Jack Shanstram, Judge presiding.
Counsel of Record:
For Appellants:
Landoe, Gary and Planalp, Bozes~n,
bbntana
For Respondents:
-
, S k i r a T f i r \ l u r p n y , e ~ ,?&mtam
Suhnitted on briefs: August 2, 1978
Decided: PUG 2 1378
--f
Mr. J u s t i c e John Conway H a r r i s o n d e l i v e r e d t h e Opinion of
t h e Court.
T h i s i s a n a p p e a l i n a damage a c t i o n f o r a l l e g e d
f r a u d u l e n t r e p r e s e n t a t i o n s i n t h e s a l e of a m o t e l . In a
n o n j u r y c a s e , t h e c o u r t found f o r d e f e n d a n t s and p l a i n t i f f s
appeal.
P l a i n t i f f s - a p p e l l a n t s a r e Arnold and Minnie S c h u l z ,
husband and w i f e , and t h e i r son R o b e r t S c h u l z . The f a m i l y
had o p e r a t e d a d r i v e - i n r e s t a u r a n t i n E l k t o n , Oregon, b e f o r e
coming t o G a r d i n e r , Montana. While l i v i n g a t E l k t o n , t h e y
formed a f r i e n d s h i p w i t h L u i s Dohnalek who l a t e r moved t o
Gardiner. Through Dohnalek t h e y became i n t e r e s t e d i n and
l a t e r bought t h e N o r t h g a t e Motel i n G a r d i n e r .
While l i v i n g i n G a r d i n e r , Dohnalek became a c q u a i n t e d
with defendants-respondents, Fred and Annamae Peake. He
l e a r n e d t h e y were i n t e r e s t e d i n s e l l i n g t h e m o t e l and
Annamae Peake o f f e r e d him $500 f i n d e r s f e e i f h e c o u l d f i n d
a buyer. A t that time, he wrote a p p e l l a n t s t o f i n d o u t i f
t h e y were i n t e r e s t e d . They c o n t a c t e d Dohnalek and r e s p o n -
d e n t s , who confirmed t h e i r i n t e r e s t i n s e l l i n g . Minnie
S c h u l z t e s t i f i e d t h a t Peake t o l d them t h a t i n a d d i t i o n t o
t h e motel, t h e r e w e r e 13 a c r e s a t t h e s i t e . That f i g u r e w a s
d e n i e d by t h e Peakes.
I n May, 1973, Arnold and R o b e r t S c h u l z went t o G a r d i n e r ,
s t a y e d a t t h e m o t e l and s p e n t t h r e e d a y s i n s p e c t i n g t h e
motel and t h e surrounding premises. They walked the grounds
and i n s p e c t e d most, i f n o t a l l , o f t h e m o t e l u n i t s . During
t h i s v i s i t , t h e y were informed by r e s p o n d e n t s t h a t c e r t a i n
of t h e u n i t s w e r e n o t h a b i t a b l e d u r i n g t h e w i n t e r w h i l e
o t h e r s c o u l d be o c c u p i e d a l l y e a r . On May 1 0 , 1973, a p p e l -
l a n t s a g r e e d t o p u r c h a s e t h e m o t e l and made a $1,000 e a r n e s t
payment. A p p e l l a n t R o b e r t S c h u l z p r e p a r e d t h e memorandum of
t h e agreement which was s i g n e d by R o b e r t and Arnold, and
Arnold a l s o s i g n e d h i s w i f e ' s name. They t h e n r e t u r n e d t o
Oregon t o t r y and s e l l t h e i r b u s i n e s s a t E l k t o n .
On J u l y 1 3 , 1973, Dohnalek w r o t e t o a p p e l l a n t s con-
cerning c e r t a i n d e t a i l s about t h e motel. A t t h a t t i m e he
t o l d them i f t h e y d i d n o t d e c i d e t o buy t h e m o t e l t h a t h e ,
Dohnalek, was i n t e r e s t e d i n buying i t . H e a l s o t o l d appel-
l a n t s t h a t r e s p o n d e n t s would r e f u n d t h e e a r n e s t money pay-
ment i f t h e y d i d n o t p u r c h a s e t h e m o t e l . Either i n the July
1 3 l e t t e r o r a n e a r l i e r l e t t e r , Dohnalek a t t a c h e d a s k e t c h
of t h e motel area.
E a r l y i n September, 1973, Arnold and R o b e r t r e t u r n e d t o
G a r d i n e r , moved i n t o t h e m o t e l and s p e n t some 20 d a y s t h e r e
p r i o r t o e x e c u t i n g a c o n t r a c t f o r t h e p u r c h a s e of t h e m o t e l .
During t h i s p e r i o d t h e y a g a i n i n s p e c t e d t h e u n i t s , t a l k e d t o
l o c a l p e o p l e and g e n e r a l l y e d u c a t e d t h e m s e l v e s a b o u t t h e
b u s i n e s s and i t s problems. Three d a y s b e f o r e t h e c o n t r a c t
w a s s i g n e d Minnie S c h u l z came from Oregon t o l o o k a t t h e
p r o p e r t y . The p a r t i e s s i g n e d a c o n t r a c t f o r deed which
a c c u r a t e l y d e s c r i b e d t h e p r o p e r t y p u r c h a s e d and s a i d con-
t r a c t was p l a c e d i n escrow.
Approximately a y e a r a f t e r t h e p u r c h a s e , a p p e l l a n t s had
a c o n t r o v e r s y w i t h a n e i g h b o r o v e r a boundary l i n e . They
had t h e i r a r e a s u r v e y e d and it r e s u l t e d w i t h t h e f a c t t h e y
owned a p p r o x i m a t e l y 1 . 3 a c r e s of u s e a b l e l a n d i n s t e a d of 1 3
acres. They t h e n b r o u g h t t h i s a c t i o n f o r damages a l l e g i n g
f o u r s p e c i f i c m i s r e p r e s e n t a t i o n s . The D i s t r i c t C o u r t found
no m i s r e p r e s e n t a t i o n s and no f r a u d .
Four i s s u e s a r e p r e s e n t e d on a p p e a l :
1. W a s L u i s Dohnalek a n a g e n t f o r F r e d Peake?
2. Did t h e c o u r t e r r i n i t s f i n d i n g s and c o n c l u s i o n s
h o l d i n g t h a t t h e "Complete I n v e s t i g a t i o n " c l a u s e i n s u l a t e s
s e l l e r s from f r a u d ?
3. Did t h e c o u r t err i n i t s f a i l u r e t o f i n d t h a t s e l -
l e r s misrepresented t h e acreage t o t h e buyers?
4 . Did t h e c o u r t e r r i n f a i l i n g t o f i n d s e l l e r s m i s -
r e p r e s e n t e d t h e h e a t i n g system?
A p p e l l a n t s a r g u e t h e c o u r t r u l e d Dohnalek was n o t a n
a g e n t b e c a u s e o f t h e f r i e n d s h i p between Dohnalek and t h e
parties. The r e c o r d d o e s n o t s u s t a i n t h a t argument. The
c o u r t found t h a t p r i o r t o May, 1973, Minnie S c h u l z had
c o n t a c t e d Dohnalek a s k i n g him t o l o c a t e a b u s i n e s s i n
Gardiner. Dohnalek f i r s t s u g g e s t e d t h e y p u r c h a s e a g r o c e r y
s t o r e i n Gardiner, b u t a p p e l l a n t s w e r e n o t i n t e r e s t e d . It
was l a t e r h e l e a r n e d r e s p o n d e n t s were i n t e r e s t e d i n s e l l i n g
and w r o t e t o a p p e l l a n t s a b o u t t h e m o t e l .
To have found Dohnalek a n a g e n t of r e s p o n d e n t s , t h e
t r i a l c o u r t would have t o have found h e came w i t h i n t h e
f o l l o w i n g two s t a t u t e s and o u r c a s e s i n t e r p r e t i n g t h o s e
statutes.
S e c t i o n 2-101, R.C.M. 1947, d e f i n e s agency:
"Agency d e f i n e d . An a g e n t i s o n e who r e p r e s e n t s
another, c a l l e d t h e principal, i n dealings with
t h i r d persons. such-representation is called
agency. "
S e c t i o n 2-103, R.C.M. 1947, d i s t i n g u i s h e s between
s p e c i a l and g e n e r a l a g e n t s :
"Agents, g e n e r a l o r s p e c i a l . An a g e n t f o r a
p a r t i c u l a r a c t o r t r a n s a c t i o n i s c a l l e d a spe-
c i a l agent. A l l other a r e general agents."
A p e r s o n d e a l i n g w i t h a s p e c i a l a g e n t i s bound a t h i s
p e r i l t o a s c e r t a i n t h e s c o p e of t h e a g e n t ' s a u t h o r i t y .
Moore v . S k y l e s ( 1 9 0 5 ) , 33 Mont. 135, 1 3 8 , 82 P . 799; S c h a e f f e r
v . Mutual B e n e f i t L i f e I n s . Co. ( 1 9 0 9 ) , 38 Mont. 459, 465,
100 P. 225; Northwestern E l e c t r i c Equipment Co. v . L e i g h t o n
et al. ( 1 9 2 3 ) , 66 Mont. 529, 213 P . 1094; Benema v . Union
C e n t r a l L i f e I n s . Co. ( 1 9 3 3 ) , 94 Mont. 1 3 8 , 1 4 7 , 21 P.2d 69.
S e c t i o n s 2-104, 2-105, and 2-106, R.C.M. 1947, d e f i n e
a c t u a l and o s t e n s i b l e a g e n c i e s :
"2-104. Agency, a c t u a l o r o s t e n s i b l e . An
agency i s e i t h e r a c t u a l or
ostensible.
"2-105. A c t u a l agency. A agency i s a c t u a l
n
when t h e a g e n t i s r e a l l y employed by t h e
principal.
"2-106. O s t e n s i b l e agency. An agency i s
o s t e n s i b l e when t h e p r i n c i p a l i n t e n t i o n a l l y ,
o r by want o f o r d i n a r y c a r e , c a u s e s a t h i r d
p e r s o n t o b e l i e v e a n o t h e r t o b e h i s a g e n t who
i s n o t r e a l l y employed by him."
I t i s s i g n i f i c a n t t o n o t e t h e r e i s n o t o n e s h r e d of
t e s t i m o n y , n o r any a l l e g a t i o n t h a t L u i s Dohnalek o r Fred
Peake e v e r r e p r e s e n t e d t h a t Dohnalek was P e a k e ' s a g e n t . All
n e g o t i a t i o n s were a d m i t t e d l y conducted between a p p e l l a n t s
and r e s p o n d e n t s . Dohnalek was merely t h e c o n d u i t t h r o u g h
which i n f o r m a t i o n was t r a n s m i t t e d t o a p p e l l a n t s . Some of
t h i s i n f o r m a t i o n was p r o v i d e d by Peake, o t h e r i n f o r m a t i o n
g a t h e r e d by Dohnalek h i m s e l f , and some by t h i r d p a r t i e s
t h r o u g h Dohnalek. But a l l of such i n f o r m a t i o n was g a t h e r e d
by Dohnalek a s a f r i e n d o f a p p e l l a n t s , a t t h e i r s p e c i a l
i n s t a n c e and r e q u e s t , and n o t a s t h e a g e n t of Peake.
I n t h e o l d c a s e of H a r t t v. Jahn e t a l . ( 1 9 2 1 ) , 59
Mont. 173, 1 8 1 , 196 P. 1 5 3 , t h e C o u r t , i n i n t e r p r e t i n g
s e c t i o n 2-216, R.C.M. 1947 ( t h e n S e c t i o n 5424 Revised Codes
1907), said:
" * * * I t must be remembered t h a t t h e s u b j e c t
m a t t e r i s r e a l e s t a t e , and t h a t any c o n t r a c t
c o n f e r r i n g upon a n a g e n t o r b r o k e r t h e a u t h o r i t y
t o make a s a l e o r t o c o n t r a c t t o make s a l e of
r e a l e s t a t e must b e i n w r i t i n g . * * * A s t h e
s t a t u t e s now r e a d , any b i n d i n g a u t h o r i t y g i v e n
t o a n a g e n t t o c o n t r a c t t o s e l l l a n d must be i n
writing. Inasmuch a s t h e a u t h o r i t y of t h e
a g e n t must b e i n w r i t i n g , h e c a n have no more
a u t h o r i t y t h a n i s v e s t e d i n him by t h e w r i t i n g . "
The burden of proof was on a p p e l l a n t s t o p r o v e t h e i r
c l a i m . C e r t a i n l y , i f t h e agency r e l a t i o n s h i p i s contended t o
be m a t e r i a l , a p p e l l a n t s f a i l e d t o s u s t a i n t h e burden of
proof i n e s t a b l i s h i n g a n agency. S e e F e d e r a l Land Bank of
Spokane v . Myhre ( 1 9 4 0 ) , 1 1 0 Mont. 416, 1 0 1 P.2d 1017.
Under t h e law o f t h e s e c a s e s , t h e c o u r t found, a s w e
must, t h a t t h e e v i d e n c e w a s i n s u f f i c i e n t t o make o u t a prima
f a c i e c a s e o f agency.
A s t o any o r a l a u t h o r i z a t i o n s a l l e g e d , s e c t i o n 2-116,
R.c.M. 1947, p r o v i d e s :
"Form of a u t h o r i t y . An o r a l a u t h o r i z a t i o n i s
s u f f i c i e n t f o r any p u r p o s e , e x c e p t t h a t a n
authority t o enter i n t o a contract required
by law t o be i n w r i t i n g c a n o n l y b e g i v e n an
instrument i n writing."
T h i s s e c t i o n was i n t e r p r e t e d ( a s S e c t i o n 7939, Revised
Codes of Montana 1921) i n H a r t t v . J a h n , s u p r a , a s h e r e t o -
f o r e quoted. I n E l e c t r i c a l P r o d u c t s C o n s o l i d a t e d v . E l Camp
Inc. ( 1 9 3 7 ) , 105 Mont. 386, 395, 73 P.2d 1 9 9 , t h e C o u r t
said:
"The d e c i s i v e q u e s t i o n p r e s e n t e d f o r r e v i e w by
t h i s c o u r t i s whether t h e p l a i n t i f f made a
c a s e upon t h e l a w and t h e f a c t s s u f f i c i e n t t o
s u s t a i n t h e judgment. * * * I t i s o u r o p i n i o n
t h a t s u c h a case was n o t made; t h i s b e c a u s e
t h e r e was no s u f f i c i e n t showing of t h e a u t h o r i t y
of Day t o a v o i d t h e e f f e c t of t h e s t a t u t e r e -
q u i r i n g a n a g e n t ' s a u t h o r i t y t o be i n w r i t i n g
i n c o n f o r m i t y w i t h s e c t i o n 7939 * * *."
Nor c a n i t b e s a i d t h a t r e s p o n d e n t s r a t i f i e d any a c t i o n
of Dohnalek, b e c a u s e Dohnalek t o o k no a c t i o n . H e never
claimed t o b e t h e a g e n t of r e s p o n d e n t s nor d i d h e e v e r
e x e r c i s e any such a u t h o r i t y . This i s a unique e f f o r t t o
make r e s p o n d e n t s r e s p o n s i b l e f o r a l l e g e d m i s r e p r e s e n t a t i o n s
of Dohnalek, who a d m i t t e d l y n e v e r c l a i m e d t o b e t h e a g e n t of
r e s p o n d e n t s , n o r d i d r e s p o n d e n t s e v e r r e p r e s e n t t o anyone h e
was t h e i r a g e n t . N e i t h e r c a n s e c t i o n 2-117, R.C.M. 1947,
c o n c e r n i n g r a t i f i c a t i o n add any s t r e n g t h t o a p p e l l a n t s '
a l r e a d y weak p o s i t i o n . This s e c t i o n provides:
" R a t i f i c a t i o n of a g e n t ' s - A r a t i f i c a t i o n
act.
c a n b e made o n 5 i n t h e manner t h a t would have
been n e c e s s a r y t o c o n f e r a n o r i g i n a l a u t h o r i t y
f o r t h e a c t r a t i f i e d , o r where a n o r a l a u t h o r i -
z a t i o n would s u f f i c e , by a c c e p t i n g o r r e s t r a i n i n g
t h e b e n e f i t of t h e a c t , w i t h n o t i c e t h e r e o f . "
W e f i n d no e r r o r a s t o t h e f i r s t i s s u e .
The second i s s u e c o n c e r n s t h e c o u r t ' s f i n d i n g and
c o n c l u s i o n t h a t a p p e l l a n t s r e l i e d on t h e i r own i n s p e c t i o n of
t h e m o t e l and t h e r e f o r e r e s p o n d e n t s were n o t l i a b l e .
P a r a g r a p h 1 4 of t h e c o n t r a c t r e a d s :
"Examination of P r o p e r t y . The p u r c h a s e r s d e c l a r e
t h e y a r e p u r c h a s i n g s a i d p r o p e r t y on t h e i r own
e x a m i n a t i o n and judgment and n o t t h r o u g h any
r e p r e s e n t a t i o n s t o them made by t h e s e l l e r s , o r
t h e i r agents, a s t o i t s location, value, future
v a l u e , income t h e r e f r o m o r a s t o i t s p r o d u c t i o n . "
I n i n t e r p r e t i n g t h e c o n t r a c t , w e look t o t h e s t a t u t o r y
g u i d e l i n e s p r o v i d e d i n s e c t i o n 13-702, R.C.M. 1947:
"Contracts--how t o b e i n t e r p r e t e d . A c o n t r a c t
must be s o i n t e r p r e t e d a s t o g i v e e f f e c t t o t h e
mutual i n t e n t i o n of t h e p a r t i e s as i t e x i s t e d
a t t h e t i m e of c o n t r a c t i n g , s o f a r as t h e same
i s a s c e r t a i n a b l e and l a w f u l . "
H e r e , t h e l a n g u a g e i s c l e a r and unambiguous. So b e i n g ,
i t needs no c o n s t r u c t i o n and i t i s t h e c o u r t ' s d u t y t o
e n f o r c e i t a s made by t h e p a r t i e s . B u l l a r d v . Smith ( 1 9 0 3 ) ,
28 Mont. 387, 72 P . 761; Frank e t a l . v . B u t t e & Boulder
Mining & Lumber Co. ( 1 9 1 3 ) , 48 Mont. 83, 1 3 5 P . 904; Thompson
v . Thompson ( 1 9 7 6 ) , 1 7 0 Mont. 447, 554 P.2d 1 1 ; D a n i e l s o n
1 1
v . D a n i e l s o n (19771, Mont . , 560 P.2d 893, 34
S t - R e p . 76.
I s s u e s t h r e e and f o u r w i l l be c o n s i d e r e d t o g e t h e r f o r
t h e y c o n c e r n t h e a l l e g a t i o n s of m i s r e p r e s e n t a t i o n of a c r e a g e
and t h e h e a t i n g system by r e s p o n d e n t s .
We must observe at this level of review of such allega-
tions that the trial court has the unique position of ob-
serving the witnesses, their demeanor, and then finally
passing on the credibility and weight to be given such
testimony. We are confined to the cold record of that
testimony and recognize that it is the trial court's province
to judge the credibility of the witnesses. Davidson v.
Lewis (1978), Mont. , 579 P.2d 762, 35 St.Rep. 662.
Here the complaint originally set forth four alleged
fraudulent misrepresentations as to:
(1) Acreage;
( 2 ) Concealment of a previous highway take;
(3) Lack of insulation in cabins; and
(4) Possible leakage in the gas line.
Two of appellants exhibits, one a description of the
property showing the highway take as being 1,961 feet, and
the other a letter from Dohnalek telling appellants of said
take, necessitated an abandonment by appellants of this
allegation. The trial testimony and the depositions of
appellants fell far short of supporting the complaint, a
factor no doubt in the trial judge's acceptance of the
credibility of appellants' testimony. All three appellants
had contradicting testimony as to the insulation of the
various cabins. At trial Robert testified, contra to his
deposition, that Peake told him the riverside cabins, seven
in number, could not be used in cold weather, but that there
were eleven units that could be used.
The same contradictory type of testimony was given both
by deposition and at trial about the alleged gas leakage.
The local propane dealer, Harold Rediske, who had serviced
the cabins for years, testified there had never been a gas
l e a k a t t h e motel. Over t h e y e a r s t h e y had t r o u b l e k e e p i n g
t h e p i l o t l i g h t s c l e a n and o n , a problem common t o t h a t t y p e
o f h e a t i n g , b u t no m a j o r l e a k . Rediske t e s t i f i e d t h a t t h e
m a j o r problem o f h e a t i n g t h e u n i t s was t h a t t h e r e w a s o n l y
o n e t a n k t o s e r v i c e a l l u n i t s , c r e a t i n g a p r e s s u r e problem.
his was s o l v e d by t h e i n s t a l l a t i o n o f a n o t h e r t a n k a t a
c o s t o f o n l y $50 p e r y e a r .
On a p p e a l a p p e l l a n t s a l l e g e a m i s r e p r e s e n t a t i o n a s t o
t h e h e a t i n g s y s t e m , a c h a n g e from t h e o r i g i n a l c o m p l a i n t ,
b u t nowhere i n t h e i r t e s t i m o n y d o t h e y p r o d u c e c r e d i t a b l e
testimony t o s u s t a i n t h e i r a l l e g a t i o n s . The t r i a l j u d g e
q u i t e p r o p e r l y f o u n d no m i s r e p r e s e n t a t i o n s .
F i n a l l y , w e c o n s i d e r t h e q u e s t i o n o f whether o r n o t
t h e r e was a m i s r e p r e s e n t a t i o n a s t o t h e a c r e a g e .
Reviewing t h e f a c t s a s t o t h e a c r e a g e i n v o l v e d i n t h e
p u r c h a s e , w e c a n n o t see t h a t t h e t r i a l j u d g e a b u s e d h i s
d i s c r e t i o n i n f i n d i n g f o r r e s p o n d e n t s on t h e e v i d e n c e p r o -
duced f o r h i s c o n s i d e r a t i o n .
A p p e l l a n t s t w i c e v i s i t e d t h e m o t e l s i t e b e f o r e making
t h e purchase. A r n o l d and R o b e r t i n s p e c t e d i t numerous t i m e s
a n d had t h e boundary l i n e s p o i n t e d o u t t o them. Most
c e r t a i n l y t h e y must h a v e r e c o g n i z e d t h a t t h e d i f f e r e n c e
between 1 . 3 a c r e s and t h e a l l e g e d 1 3 a c r e s was g r e a t and
should have asked q u e s t i o n s b e f o r e t h e purchase.
A p p e l l a n t R o b e r t drew up t h e e a r n e s t money a g r e e m e n t
and made no m e n t i o n o f t h e a c r e a g e n o r d i d t h e c o n t r a c t
s i g n e d by t h e p a r t i e s l a t e r i n t h e f a l l o f 1973.
I n a very s i m i l a r c a s e , involving t h e purchase of a
m o t e l , W a l l e r v . Heid ( 1 9 7 6 ) , 170 Mont. 501, 554 ~ . 2 d 3 3 1 ,
1
t h i s Court held:
" W a l l e r s c o n t e n d d e f e n d a n t made t h e s e m i s -
r e p r e s e n t a t i o n s t o i n d u c e them t o e n t e r t h e
contract: (1) t h a t t h e m o t e l and r e s i d e n c e
were w i n t e r i z e d and c o u l d be o p e r a t e d t h e en-
t i r e y e a r ; ( 2 ) t h a t t h e highway t o Yellowstone
Park would b e moved and p a s s d i r e c t l y i n f r o n t
of t h e m o t e l ; ( 3 ) t h a t t h e plumbing and w i r i n g
t o a second bathroom i n t h e r e s i d e n c e was roughed
i n and c o u l d b e completed merely by hooking up
t h e u t i l i t i e s ; and ( 4 ) t h a t t h e m o t e l ' s washer
and d r y e r worked. W a l l e r s a r g u e t h e y would not
have e n t e r e d -- c o n t r a c t - t h e s e m i s r e p r e -
into the if
s e n t a t i o n s - - - made.
had n o t been
" I t h a s l o n g been t h e r u l e i n Montana t h a t a
prima f a c i e c a s e o f f r a u d i s n o t e s t a b l i s h e d
u n l e s s t h e p l a i n t i f f p r o v e s h e r e l i e d on t h e
t r u t h of t h e r e p r e s e n t a t i o n s made t o him. Dun-
l a p v. Nelson, 165 Mont. 291, 296, 529 P.2d
1394; Clough v . J a c k s o n , 156 Mont. 272, 279,
479 P.2d 266; Young v . Handrow, 1 5 1 Mont. 310,
315, 443 P.2d 9. The d i s t r i c t c o u r t found t h a t
W a l l e r s r e l i e d on t h e i r own i n v e s t i g a t i o n s of
t h e p r o p e r t y and t h o s e of Gary Teaney, r a t h e r
t h a n r e p r e s e n t a t i o n s made by d e f e n d a n t . In
Cowan v . Westland R e a l t y Co., 162 Mont. 379,
383, 512 P.2d 714, t h i s C o u r t s a i d :
" ' T h i s C o u r t h a s s t a t e d many t i m e s
t h a t i t s f u n c t i o n on a p p e a l i s t o
d e t e r m i n e whether t h e r e i s s u b s t a n t i a l
e v i d e n c e t o s u p p o r t t h e f i n d i n g s of
t h e d i s t r i c t c o u r t . This Court w i l l
n o t r e v e r s e t h e f i n d i n g s of t h e t r i a l
c o u r t unless t h e r e i s a c l e a r pre-
ponderance of t h e e v i d e n c e a g a i n s t
such findings. [Citing c a s e s . ] '
" I t i s undisputed t h a t Wallers v i s i t e d W e s t
Yellowstone t w i c e and p e r s o n a l l y examined t h e
m o t e l and r e s i d e n c e , i n c l u d i n g t h e bathroom and
l a u n d r y room. Of p a r t i c u l a r s i g n i f i c a n c e i s t h e
f a c t they hired an agent with s u b s t a n t i a l r e a l
estate experience t o i n v e s t i g a t e t h e property
and make recommendations on t h e p u r c h a s e . W a l -
l e r s p a i d Gary Teaney $5,000 f o r h i s s e r v i c e s .
The d i s t r i c t c o u r t c o u l d p r o p e r l y f i n d from t h i s
e v i d e n c e t h a t no r e l i a n c e was p l a c e d on any r e p -
r e s e n t a t i o n s made by d e f e n d a n t . Without r e l i a n c e
t h e r e was no c a u s e o f a c t i o n f o r f r a u d . "
170 Mont. at 502-03. (Emphasis added.)
A t no t i m e d u r i n g t r i a l d i d a p p e l l a n t s s a y t h e y would
n o t have purchased t h e m o t e l had t h e y been aware of t h e f a c t
t h e r e was l e s s t h a n 1 3 a c r e s . They s a i d t h e y would have
t h o u g h t more a b o u t i t . Then, o v e r a y e a r l a t e r , a f t e r
making t h e payments and c o n t i n u i n g t o make payments, t h e y
brought this action for $25,000 damages--not for recission
of the contract.
We held in Anderson v. Applebury (1977), - Mont .- I
567 P.2d 951, 954, 34 St.Rep. 842:
"It is well settled that a prima facie case of
fraud is not established unless plaintiff
proves the making of a material misrepresenta-
tion, and reliance -- truth ---mis-
upon the of such
re~resentation. (Citincr cases.)" (Emphasis
adhed. )
Applying our holding to this case, we note appellants
had at least three opportunities to avoid this sale after
inspecting it. Under these facts we cannot find the makings
of material representations nor the reliance upon same by
appellants.
The District Court judgment is affirmed.
We Concur: Cj
%A$Justice
CMef
%'P&Q*