NO. 79-92 

IN THE SUPREME COURT OF THE STATE OF MONTANA 

1981 

THE DOLSEN COMPANY, 

Plaintiff and Appellant, 

VS. 

THE IMPERIAL CATTLE CO., 

A Montana Corporation, JAMES 

EDMISTON and PHILLIS EDMISTON, et al., 

Defendants and Respondents. 

Appeal from: District Court of the Eleventh Judicial District, 

In and for the County of Flathead. 

Honorable James Salansky, Judge presiding. 

Counsel of Record: 

For Appellant: 

Moare and Doran, Kalispell, Montana 

For Respondents: 

Christopher B.Swartley, Missoula, Montana 

George Harris, Missoula, Montana 

Filed: MflP 4 -- 

- - - - 

Submitted on briefs: December 17, 1980 

Decided :MAR 4 - 1981 

Clerk 
Mr. Justice John Conway Harrison delivered the Opinion of 

the Court. 

This is an appeal by Dolson, plaintiff, after an 

adverse judgment of the Flathead County District Court. 

In 1973 the Imperial Cattle Company (Imperial) 

entered into seven lease agreements with the Dolson Company 

(Dolson), a Washington corporation, for the lease of dairy 

cattle. Approximately 520 dairy cows were transferred to 

Imperial. Two of the seven leases were concluded prior to 

the settlement negotiations which underlie this action. All 

but one of the remaining five leases were personally 

guaranteed by defendants Lillithun and Edmiston, principals 

in the Imperial Cattle Company. 

During 1974 Imperial suffered major financial 

reverses and notified Dolson in October of that year that it 

would be unable to further perform on any of the remaining 

five leases. The parties proceeded to negotiations, 

agreeing to a "Possession Agreement." By the terms of that 

agreement Dolson would reassume possession of the dairy 

cattle and then sell them. It was agreed that Imperial 

would be liable for any deficiency owing after its account 

was credited with the proceeds of the sale. The agreement 

was signed by the parties at a meeting in Missoula, Montana, 

on October 18, 1974. All parties were represented by 

counsel. 

Pursuant to the agreement, Dolson sold the dairy cows 

to the highest financial advantage of Imperial. Dolson then 

tendered an accounting and requested from Imperial payment 

of the deficiency. All parties cooperated in the 

liquidation of the dairy herd. 

In March 1975 Dolson's general manager met with 
defendant Lillithun in Ronan, Montana. At that meeting 

Lillithun did not dispute the existence of the deficiency 

but did take issue with the amount owing. Lillithun 

further indicated that defendant Edmiston was solely liable 

for the deficiency. 

After the Ronan meeting Dolson prepared and forwarded 

the notice of deficiency. Another meeting was arranged in 

which all parties would be present. With the exception of 

defendant Lillithun, all par ties were present with counsel 

at a May 23, 1975, meeting in Spokane, Washington. At this 

meeting Dolson was advised that Imperial, and all principals 

of Imperial , were insolvent. Dolson was informed that 

defendant Lillithun was near bankruptcy and that defendant 

Edmiston was defending an action on certain loans from the 

Production Credit Association involving hundreds of 

thousands of dollars. Settlement discussions at the Spokane 

meeting began at $100,000, substantially less than the 

$142,000 deficiency computed by Dolson. Defendants were 

clearly in no position to negotiate at the $100,000 figure, 

and the number was reduced to $65,000 and then to $55,000. 

At the Spokane meeting defendant Edmiston first 

mentioned that he owned a parcel of real property in 

Kalispell, Montana, which might be used to partially satisfy 

the deficiency. Dolson's attorneys testified that the 

property was referred to by defendant Edmiston as a 

"commercial, downtown piece of property." Edmiston also 

represented to Dolson that the property was worth $45,000 

and that the property had recently been appraised at that 

figure by James Christian, father of attorney Cal Christian, 

who represented defendant Lillithun. Counsel for Edmiston 
informed Dolson that he was acquainted with the elder 

Christian, knew of his experience in the real estate field, 

knew that he was a competent appraiser and that, if 

anything, the appraisal would be conservative. 

At the conclusion of the Spokane meeting, Dolson 

advised defendants that it would agree to a settlement of 

$55,000 cash and advised defendant Edmiston that he should 

use the Kalispell property as collateral in securing the 

necessary financing . 

On July 23, 1975, a meeting took place in Kalispell, 

Montana. Present at this meeting were Robert Dolson and his 

attorney, James Gillespie; defendant Edmiston and his 

attorney, Milton Datsopoulos; and attorney Cal Christian, 

representing Imperial Cattle Company and defendant 

Lillithun, who was again absent. Once more the Kalispell 

property was discussed as possible satisfaction of the 

deficiency debt. It was again represented as having a value 

of $45,000, as confirmed by the recent appraisal. Robert 

Dolson expressed his desire that any settlement consist of 

cash. 

The parties discussed a total monetary settlement of 

$55,000, a figure which was reduced to $52,500 with $7,500 

initially with quarterly payments to be made thereafter of 

$2,500 until the debt was extinguished. The outstanding 

balance was to be secured with the Kalispell property. 

Finally, Dolson was to receive a copy of the property 

description, title insurance (or other proof of clear title) 

and a copy of the Christian appraisal confirming that the 

tract was worth $45,000. This was Dolson's only presence in 

Kalispell until the settlement was signed. He and his 
attorney flew into Kalispell on the morning of July 23 and 

left that afternoon. The Kalispell property was not 

identified to them, nor did Dolson request to see it. 

After the Kalispell meeting, negotiations were 

continued by telephone and correspondence. On October 13, 

1975, Dolson agreed to accept the Kalispell property. From 

defendants Lillithun and Imperial, Dolson was to receive 

$7,500 in cash. On October 31 Robert Dolson went to 

Missoula and to Kalispell to execute the settlement. He 

accepted from Imperial a $7,500 promissory note, payable at 

8 percent per annum, and guaranteed by defendant Lillithun. 

Defendant Edmiston tendered a warranty deed for the 

Kalispell property. 

Dolson traveled from Missoula to Kalispell and 

obtained the signature of defendant Edmiston. While in 

Kalispell, Dolson contacted a local realtor, John Ming, for 

the purpose of listing his newly acquired property. He met 

Ming at the property site. Dolson's brief describes the 

Edmiston property, which was represented as being conservatively valued at $45,000, as follows: 

". . . consist[ing] of slightly over one acre 

of undeveloped ground situated directly 

between a Pacific Power & Light substation 

and the railroad tracks in Kalispell, 

Montana. While there was a narrow corridor 

leading from Center Street along and behind 

the substation to the property, the property 

itself had no frontage upon any Kalispell 

street. At its closest point to 'downtown 

Kalispell', the property was five blocks 

distant. " 

Ming informed Dolson that he had no interest in 

accepting a listing on the property and that he could not 

imagine who would be interested in the property with the 

possible exception of Pacific Power & Light, the adjacent 
landowner. Ming testified that when he examined the 

property in October 1975, the value of the tract was about 

$7,500. 

Upon returning to Yakima, Washington, Dolson engaged 

MIA appraiser, Wayne Neil. Neil appraised the parcel at 

between $1,250 to $8,900, dependent upon the resolution of 

uncertainties regarding access. Neil agreed with realtor 

John Ming that access was so limited, approximately sixteen 

feet of passageway, that a commerical use of the property 

was virtually precluded. Neil's conclusion was that the 

land would have a use classification of "low-level 

industrial." That classification is one of the most 

untenable and unmarketable classifications existing with 

respect to commercial property. 

At trial it was revealed that Robert Dolson had not 

seen the property prior to the execution of the settlement 

agreement. It was also established that although Dolson had 

an extensive business background, he was not experienced in 

real estate. Defendants introduced a State Department of 

Revenue appraisal which established that for property tax 

purposes, the tract was worth $33,450, only about $11,500 

less than Edmiston's representations. Neither defendant 

Lillithun nor attorneys Christian or Datsopoulos had ever 

seen the property, and all denied having any knowledge of 

its value beyond the representations of defendant Edmiston 

and the Christian appraisal. 

The following issues are raised on appeal: 

1. Whether Dolson is entitled to rescission because 

of defendants' misrepresentations as to the nature and value 

of the property? 
2. Whether there was substantial credible evidence 

to support the District Court judgment; whether the District 

Court properly disposed of the issues; and whether the 

District Court's conclusions of law were supported by its 

findings of fact? 

Appellant maintains that the settlement agreement 

should be rescinded because of respondents' misrepresentations as to the value and nature of the Kalispell property. 

We do not agree. 

This Court has long adhered to the rule that 

statements of opinion are preeminently subject to the 

common-law doctrine of caveat emptor. See Ray v. Divers 

(1925), 72 Pllont. 513, 234 P. 246. Statements as to the 

value of property are generally considered declarations of 

opinion and will not constitute a proper basis for 

rescission. 37 Am.Jur.2d Fraud and Deceit, S 119 at 164. 

Courts are continually confronted with the dilemma of 

determining to what lengths a vendor of property may go in 

"talking up" his merchandise--where does "traders talk" end 

and actionable fraud begin? Clearly, the line between 

opinion and fact is an especially fine line for the District 

Courts to draw when representations are made regarding the 

value of property. 

The common law provides reasonable protection to 

purchasers against fraud and deceit. However, it does not 

go to the romantic length of offering indemnity against the 

adverse consequences of folly and indolence or a careless 

indifference to information which would enlighten the 

purchaser as to the truth or falsity of the seller's 

assertions as to value. In such an instance, every person 
reposes at his own peril in the face of another's opinion 

when he has ample opportunity to exercise informed judgment. 

"Simplex commendatio non obliqat." 2 Kents Comm. 485. 

We emphasize, however, that it is singularly within 

the province of the District Court to determine whether 

fraud has been perpetrated on an innocent purchaser. The 

District Court is in the best position to weigh the factors 

involved, assess the credibility of witnesses, and conclude 

whether the statements regarding value constitute fact or 

opinion. 

In ruling that the District Court's decision must be 

given great credence in this case, we reaffirm our decision 

in Lumby v. Doetch (1979), Mont. , 600 P.2d 200, 

36 St.Rep. 1684, wherein we found that this Court must view 

the evidence in a light most favorable to the prevailing 

party and presume the correctness of the District Court's 

judgment. Findings of fact shall not be set aside unless 

clearly erroneous. Rule 52(a), M.R.Civ.P. Although 

conflicts may exist, such that the evidence tends to show 

that representations as to value constitute both opinion and 

fact, it is the duty and function of the trial court to make 

a resolution of the case one way or the other. That court's 

reasoned and thoughtful determination that the vendor's 

statements as to the value of the property were opinion, not 

declarations of fact, will not be disturbed where its 

decision was based on substantial evidence. See Kostbade v. 

Buckingham (1979), Mont. , 595 P.2d 1149, 36 

St.Rep. 129. It is not a proper function of this Court to 

exchange our opinion for that of the District Court, even if 

we might have reached a different conclusion. In accord, 
Porter v. Porter (1970), 155 Mont. 451, 473 P.2d 538. 

Our review must now examine the evidence to determine 

whether the District Court exceeded its discretion in the 

resolution of this case. Reviewing the evidence in a light 

most favorable to the prevailing parties, we conclude that 

there is substantial credible evidence supporting the 

court's judgment, that the court properly disposed of the 

issues, and that the court's conclusions of law were 

supported by its findings of fact. 

Robert Dolson is not financially naive. To the 

contrary, he is an able and successful businessman. His 

relationship to defendants can only be considered 

adversarial to the extent their respective positions 

represent competing interests. These two factors, Dolson's 

business acumen and his relationship to defendants, weigh 

heavily against the proposition that defendants' took unfair 

advantage of Dolson when declaring the value of the 

property. If indeed Dolson relied upon the representations 

of defendants as to the value of the parcel, we see no 

reason why the District Court would have been obliged to 

condone such imprudence by allowing rescission of the 

agreement. Helena Adjustment Co. v. Claffin (1926), 75 

Mont. 317, 243 P. 1063; see also, Williams v. Joslin (1965), 

65 Wash.2d 696, 399 P.2d 308 (reliance must be reasonable; 

purchaser may not rely on representations when their truth 

can be readily determined). 

Even at this point in the case, there can be no ready 

and accurate determination of the value of the property amid 

the conflicting opinions found in the record. Realtor Ming 

alleges the property is worth $7,500. Appraiser Neil 
believes the parcel is worth a.s much as $8,900. The State 

of Montana Department of Revenue determined the value of the 

property to be $33,450 with a taxable value of $22,000. 

Finally, we have the opinion of James Christian that the 

property is worth $45,000. 

Surely the facts of this case exemplify the reasoning 

behind the rule that statements as to the value of property 

are not grounds for rescission. It is reasonable to expect 

that in a situation such as this vendors would attach the 

highest possible value to the property. Indeed, it would be 

unreasonable to assume otherwise, and purchasers who rely on 

such representations proceed at their own risk. 

On October 31, 1975, Robert Dolson was in Kalispell 

to obtain the signatures of the Edmistons and conclude the 

provisions of the settlement agreement. Only after complete 

execution of the agreement did Dolson examine what he had 

accepted. The record discloses no reason why Dolson did not 

view the property before he formalized the agreement. Since 

he chose to accept the property sight unseen, when he had 

ample opportunity to examine the subject of his bargain, 

Dolson cannot now be heard to complain that he was unfairly 

misled. 

We concur with the District Court finding that 

Dolson's folly was his own. The District Court's finding 

that rescission would be improper in this case is supported 

by substantial evidence, and the court's findings of fact 

are amply supportive of its legal conclusions. 

Accordingly, we affirm. 

n 
We concur; 

Justices