Waller v. Heid , 170 Mont. 501 ( 1976 )

No. 12907
I N THE SUPREME COURT O THE STATE OF M N A A
F OTN
1976
ARNOLD J . WALLER and
VERNICE V. WALLER,
P l a i n t i f f s and A p p e l l a n t s ,
-vs -
GEORGIA P. H E I D ,
Defendant and Respondent.
Appeal from: D i s t r i c t Court o f t h e E i g h t e e n t h J u d i c i a l D i s t r i c t ,
Honorable W. W. L e s s l e y , J u d g e p r e s i d i n g .
Counsel o f Record:
For Appellants :
Thomas I. Sabo, Bozeman, Montana
W i l l i a m A. S c h r e i b e r a r g u e d , B e l g r a d e , Montana
F o r Respondent:
Landoe and Gary, Bozeman, Montana
S t e p h e n B a r r e t t a r g u e d , Bozeman, Montana
Submitted: September 3 , 1976
Decided: - 5 15%
Filed: -,.I[: , = 15-%
Mr. Justice Wesley Castles delivered the Opinion of the Court.
This is an appeal from a judgment of the district court,
Gallatin County, denying rescission of a contract on the ground
of fraudulent inducement. The issue presented is whether the
district court erred in finding from the evidence that plaintiffs
failed to prove a case of fraud sufficient to warrant rescission
of the contract. We affirm the judgment of the district court.
Plaintiffs Arnold J. and Vernice V. Waller were residents
of Rapid City, South Dakota, when they visited West Yellowstone
on a vacation in the winter of 1969. They liked the area and
when they learned that Georgia P. Heid Hoffman, defendant, owned
a motel that was for sale they exchanged several letters with her
concerning the transaction. As Wallers lacked expertise in the
motel business, they hired Gary Teaney, a real estate salesman
in Rapid City, to accompany them to West Yellowstone to investi-
gate and evaluate the motel and several other businesses. Wallers
and Gary Teaney made two trips to West Yellowstone and were taken
on a tour of the property by defendant. On May 13, 1969, the
parties executed a contract for the sale and purchase of the
Holiday Motel, a vacant lot, and a residence in West Yellowstone.
Wallers took possession of the motel on June 15, 1969, and oper-
ated it until October 15, 1970.
On August 31, 1970, Wallers filed a complaint seeking
rescission of the contract. The complaint alleged defendant
had made fraudulent representations to induce Wallers to enter
into the contract. A non-jury trial was held in November 1973,
before Hon. W. W. Lessley, district court judge in Gallatin County.
Judgment in favor of defendant was filed on January 24, 1974.
Wallers filed notice of appeal.
Wallers contend defendant made these misrepresentations
to induce them to enter into the contract: (1) that the motel
and residence were winterized and could be operated the entire
year; (2) that the highway to Yellowstone Park would be moved
and pass directly in front of the motel; (3) that the plumbing
and wiring to a second bathroom in the residence was roughed in
and could be completed merely by hooking up the utilities;
and (4) that the motel's washer and dryer worked. Wallers argue
they would not have entered into the contract if these misrep-
resentations had not been made.
It has long been the rule in Montana that a prima facie
case of fraud is not established unless the plaintiff proves
he relied on the truth of the respresentations made to him.
Dunlap v. Nelson, 165 Mont. 291, 296, 529 P.2d 1394; Clough v.
Jackson, 156 Mont. 272, 279, 479 P.2d 266; Young v. Handrow, 151
Mont. 310, 315, 443 P.2d 9. The district court found that Wallers
relied on their own investigations of the property and those of
Gary Teaney, rather than representations made by defendant. In
Cowan v. Westland Realty Co., 162 Mont. 379, 383, 512 P.2d 714,
this Court said:
"This Court has stated many times that its
function on appeal is to determine whether
there is substantial evidence to support
the findings of the district court. This
Court will not reverse the findings of the
trial court unless there is a clear preponderance
of the evidence against such findings. [Citing
cases. ] "
It is undisputed that Wallers visited West Yellowstone twice and
personally examined the motel and residence, including the bath-
room and laundry room. Of particular significance is the fact
they hired an agent with substantial real estate experience to
investigate the property and make recommendations on the purchase.
Wallers paid Gary Teaney $5,000 for his services. The district
court could properly find from this evidence that no reliance was
placed on any representations made by defendant. Without reliance
there was no cause of action for fraud.
The judgment is affirmed.
We concur:
&:
f
Chief Justice
./ JU 'ces
-
. Jack Shanstrom, district
Pdgel sitting in
ustice Gene B. Daly.
of Mr.