No* 12112 

IN THE SUPREME COURT OF THE STATE OF MONTANA 

1972 

TOM GOGGANS and PHOEBE GOGGANS, 

husband and wife, 

Plaintiffs and Respondents, 

CLARENCE H. WINKLEY and DOROTHY I. 

WINKLEY, Husband and wife, and M, M. 

14ANSFIELD , 

Defendants and Appellants. 

Appeal from: District Court of the Eleventh Judicial District, 

Honorable Robert C. Sykes, Judge presiding. 

Counsel of Record: 

For Appellants : 

L. Lloyd Evans argued, Libby, Montana. 

For Respondents: 

Douglas and Kaufman, Libby, ~ontana. 

William Douglas and Leonard Kaufman argued, Libby, 

Montana. 

submitted: February 17, 1972 

Decided : MR 2 1 1972 
Mr. Justice Gene B. Daly delivered the Opinion of the Court. 

This is an appeal from a judgment for plaintiffs in an 

action for damages by purchasers of land against sellers and 

their real estate agent. The action was originally tried in 

the eleventh judicial district, county of Lincoln and resulted 

in a directed verdict for defendants. Plaintiffs appealed, the 

judgment was vacated, and the cause remanded for retrial. Goggans 

v. Winkley, 154 Mont. 451, 452, 459, 465 P.2d 326 (hereinafter 

referred to as the first case). The retrial resulted in judgment 

for plaintiffs and an award of $9,000 by verdict of a jury. 

Following denial of a motion for judgment notwithstanding the 

verdict and motion for a new trial, defendants now appeal from 

t ha t j udgmen t . 

Plaintiffs Tom and Phoebe Goggans about March 1, 1967, 

purchased a two acre tract of land with frontage on the LibbyJennings highway in Lincoln County from defendants Clarence H. 

and Dorothy I. WinKley, through the third defendant M. M. Mansfield, a real estate agent in Libby. 

Here, the factsas ~mtheland purchase are the same as 

those set out in the first case, to-wit: 

"Plaintiff-purchasers made an earnest money payment and 

signed a written purchase offer on a form prepared by the real 

estate agent which contained the following provisions: 

"'All representations made by Broker or its 

agents to Buyer concerning said real or personal 

property are believed by it and them to be true 

and correct and are made in good faith but neither 

Broker nor any of its salesmen or agents represents 

or warrants any thereof to be true. Buyer has 

personally inspected said premises and personal 

property and is personally familiar with the loca 

tion, size, and condition thereof and is relying 

solely upon ~uyer's own information about and 
investigation of the same and also as to any 

financing d this sa le contemplated by Buyer. ' 

"The sale was completed by a written contract for deed 

signed by plaintiff-purchasers and defendant-sellers which conta ined the following provision: 

"'It is agreed and understood between the 

parties hereto that the expense of surveying 

the premises herein described shall be borne 

by second parties, t 

"Plaintiff -purchasers entered into possession and made 

certain improvements on the property, generally cons is ting of 

a gas station, store, and trailer park. Thereafter plaintiffpurchasers were informed by agents of the Montana highway department that their property encroached upon the highway rightof-way approximately 40 feet. This action followed. 

"According to plaintiff-purchasers, the real estate 

agent made false representations which induced them to enter 

into the contract for deed under which they purchased the property. 

These generally consisted of statements to the effect that certain 

stakes on the property marked its boundaries, that such survey 

was accurate and the stakes marked the true boundaries, and that 

any additional survey by the purchasers would be a waste of time 

and money. According to plaintiff-purchasers, they relied on 

these statements, obtained a drawing of the property from the 

rea 1 estate agent with dimensions of the property marked thereon, 

went to the property and measured the distances between the stakes 

which checked with the dimensions on the drawing, and accordingly 

did not have a survey made." 

In reversing and remanding the first case for retrial, 

this Court sa id : 
"Here purchasers have alleged and offered to prove 

fraud in the form of false representations which induced them to enter into the contract in the first 

place. Fraud in the inducement has always been held 

to be provable by parol, notwithstanding the parol 

evidence rule: Advance-Rumely Thresher Co. , Inc. v. 

Wenholz, 80 Mont. 82, 258 P. 1085; Sathre v. Rolfe, 

31 Mont. 85, 77 P. 431." 

This appeal is from a judgment for plaintiffs, following 

a jury verdict. Defendants enumerate a lengthy list of issues 

for review which we summarize to reach the thrust of defendants' 

appeal. 

1. Defendants object to the limitation of cross-examination of the plaintiffs' witness Vernon Borden, as to the details 

of his redirect testimony. Defendants contend the redirect 

examination of Borden sought to enhance the stature of the witness 

and emphasize his official connection with the state highway depa r tmen t . 

2. Defendants object to the limitation ot cross-examina - 

tion of plaintiff Phoebe Goggans with respect to a possible actual 

or prospective resale of the property in dispute. 

3. Defendants object to the exclusion of evidence that 

a federal dam is being constructed in the area. They contend 

such evidence has a decisive bearing upon the issue and amount of 

damages. 

4. Defendants object to the limitation of the number of 

character witnesses to three instead of the trial court rule of 

five, contending that since the case was in the nature of fraud 

the character of defendants was in issue and defendants were unduly and unfairly limited in the number of their character witnesses. 
5. Defendants object to the court's refusal of a number 

of defendants ' offered instructions. 

6. Defendants object to the sufficiency of the evidence 

to justify the verdict and amount of damages. 

Issue 1. Vernon Borden is a state highway department 

engineer whose survey crew undertook to establish the right-ofway adjoining plaintiffs ' property. Measurements were made from 

the center of the existing roadway. According to those measurements there was an encroachment upon the 80 foot right-of-way 

of 1.5 feet at the southerly end and 2.2 feet at the northerly 

end of plaintiffs ' store building. Other encroachments were noted, 

according to the measurements, but they are not a part of this 

proceeding. 

Defendants object to the limitation of recross-examination of Mr. Borden. From the transcript, it is evident that prior 

questioning of Borden thoroughly established the measurements and 

encroachments, which are the basis of this action. The direct and 

cross-examination of Borden examined the width of the right-of -way 

and the surveying. 

Redirect-examina tion of Borden again treated the matters 

already developed in the record. The questioning pertained to 

the width of the right-of-way, the length of time for leases, and 

surveying to establish a centerline in the highway. On recrossexamination the trial court limited examination to the scope of 

the redirect-examination. We find it to be a proper ruling. 

Garrison v. Trowbridge, 119 Mont. 505, 177 P.2d 464. As to 

defendants ' contention regarding the credibility and reliability 

of the witness Borden based upon his status, no record at trial 

presented any issue regarding his authority, competence, or status. 

Matters of technica 1 expertise were sufficiently examined and defendants' argument on any alleged unreliability is without merit. 
Issue 2. Defendants ' object to the limitation of crossexamination of the plaintiff Phoebe Goggans, with respect to a 

possible actual or progpective resale of the property. Defendants 

sought to explore this area in an effort to refute plaintiffs' 

contention that the property is worthless in view of the rightof-way encroachment. The trial court ruled defendants could not 

inquire into plaintiffs' future plans regarding the property on 

the grounds that cross-examination must be limited to those matters 

brought out in direct examination; and, that the area of questioning 

had no relevance in that it raised a collateral issue, involving 

third parties, not germane to this case. 

Issue 3. Defendants contend that without unlimited crossexamination plaintiffs ' testimony was speculative and conjectural 

regarding damages, in view of the location of plaintiffs' property 

on the site of a United States government dam. Defendants maintain 

their case was prejudiced when the court refused to take judicial 

notice of the facts which form part of the common knowledge and 

experience. 

The fact that the property may be on a government dam site 

is irrelevant to the issues and is conjectural concerning possible 

future and collateral matters. At issue here is the right of 

recovery from defendants. Injection of colla tera 1 matters involving 

transactions between others, which are in this case conjectural, 

is collateral inadmissible evidence under the collateral source 

doctrine. In the Oklahoma case, Burk Royalty Company v. Jacobs, 

(~kla. 1963), 387 P.2d 638, 640, the landowners brought action 

against oil and gas lessee for damages to surface of land by salt 

water and oil pollution. At trial, the court excluded lessee's 

evidence that the landowners had a contract with the federal 
government placing part of their land under the provisions of 

the Soil Bank Act. In affirming, the Supreme Court of Oklahoma 

held: 

"The above allegations constitute no defense to 

plaintiffs' action for damages caused by flowage 

of salt water and oil over their land. plaintiffs' 

compensation by the federal government under the 

contract is merely compensation from a collateral 

source. We have many times held that a payment 

to plaintiffs from a source wholly independent of 

and not in behalf of the wrongdoer cannot inure 

to the benefit of the wrongdoer to lessen the damages 

recoverable from him, and the evidence of such payment is inadmissible." 

Here, defendants seek to rely upon the common knowledge 

of the community that the property involved is situated on the 

government dam site. The future disposition of the property, 

a long with the speculative transactions defendants seek to 

inject into the case, are conjectural matters not in issue and 

not relevant here. 

Issue 4. Defendants object to the limitation of their 

character witnesses to three, instead of the trial court rule of 

five such witnesses. They contend plaintiffs ' a llegations put 

the character of the defendants in issue and defendants were 

unduly and unfairly limited as to the number of their character 

witnesses. 

This issue is without merit. The record reveals no objecttion by defendants' counsel to the limitation of the number of 

character witnesses by the trial court. Counsel must preserve 

the record to perfect appellate review of an issue. Clark v. 

Worrall, 146 Mont. 374, 406 P.2d 822; Spencer v. Robertson, 151 

Mont. 507, 445 P.2d 48. Notice is taken of the affidavits of 

counsel for plaintiffs and the affidavit of the trial judge 

setting forth the lack of objection by defendants' counsel. The 
trial judge also noted the attempt to conduct a reasonable 

and expeditious trial. Of prime importance is the explanation 

of the trial judge that although plaintiffs objected to the 

submission of any character witnesses nevertheless, since the 

case was based on a theory of constructive fraud, the court 

permitted defendants to place their witnesses upon the stand, 

subject :_\to.- the court's limitation which was not objected to 

by defendants ' counsel. 

Here, we note that from the record the character of 

the defendants was not in issue and was not impeached at trial. 

~ontana's statute on character testimony, section 93-1901-13, 

R.C.M. 1947, provides: 

"Evidence of good character--when allowed. Evidence 

of the good character of a party is not admissible 

in a civil action, nor of a witness in any action, 

until the character of such party or witness has been 

impeached, or unless the issue involves his character.'' 

At the very least, character testimony was not germane to this 

case and, advancing defendants' argument to its fullest extent, 

certainly the three witnesses ' testimony established the good 

character of detendants sufficiently for the jury. We find no 

error. 

Issue 5. Defendants object to the trial court's refusal 

of eleven instructions proposed by defendants. 

Defendants' proposed Montana Jury Instruction Guide, (WIG), 

No. 1.04 offers the common knowledge of dam construction as the 

basis of mitigation of damages against defendants. As heretofore 

discussed, the injection of collateral matters, independent in 

nature, is irrelevant and properly excludable both in the taking 

of evidence and in summation. Kappes v. Jaap, 141 Mont. 471, 378 
WIG No. 1.05 relates to oral admissions and is mandatory, 

that 

however, we noteithe trial court's Instruction No. 2 was adequate 

to inform the jury on the weight to be given testimony presented 

during trial. The jury was properly apprised of its role in 

weighing the testimony as it related to the facts and circumstances as shown by the evidence. The general precautionary 

instruction given by the court was adequate. 

Detendants' proposed WIG instructions No. 1.06 and No. 

5.01 test the strength of the evidence produced at trial, questioning 

the inability of plaintitfs to produce a plat which the plaintiffs 

claimed was furnished to them and the failure of plaintiff Tom 

Goggans to appear, testify and be cross-examined. These instructions are inapplicable to the evidence since the testimony of 

the highway department engineer, Borden, sufficiently provided 

authoritative expertise regarding the alleged encroachment. 

Further, the deposition of plaintiff Tom Goggans was read into 

the record pursuant to Rule 26(d) (3), M.R.Civ.P., absent objection by defendants and without a motion to suppress such deposition. The evidence thus presented by way of deposition was 

sufficient to replace Tom Goggans as a witness. 

Defendants' instruction No. 2 was properly refused since 

the court's given Instruction No. 13. was a clear statement of the 

law applicable to the two theories of actual and constructive 

fraud. Refused instruction No. 2 represented a limited instruction restricting itself to the elements of actual fraud and 

deleted the theory of constructive fraud. 

~efendants ' proposed instruction No. 3 was adequately 

covered by the trial court's given Instruction No. 10, which 
instructed the jury that transactions are presumed to have been 

fair and regular. Similarly, defendants' proposed instruction No. 

5 on the presumption of good faith was contained in the court's 

given Instructions No. 2 and No. 10, which stated that witnesses 

are presumed to speak the truth and transactions are presumed to 

have been fair and regular. 

~efendants' proposed instructions No. 6, 7, and 8 pertain 

to the interpretation of the written contract regarding surveying. 

We find them to be without merit as this Court said in the first 

case: 

"We hold that, in any event, the survey provision 

in the contract does not bar inquiry into the question 

of whether purchasers got what they bargained for. 

If certain representations were made to purchasers 

by the sellers' agent relative to a previous survey, 

the marking of the boundaries thereof with stakes, 

and the measurements of the perimeter of the property 

and that these representations were properly relied 

upon thereby inducing purchasers to buy without a 

survey, all as comprehended in purchasers' offer of 

proof, and it later turns out that the representations 

are incorrect and the property is in fact in a different location and encroaches on the state's rightof-way, then the purchasers are not foreclosed from 

attempting to prove these facts by the contract provision in question. The district court was in error 

at this point." 

~efendants ' proposed instruction No. 11 is an instruction 

on damages and we find no error in the court's refusal to grant 

such instruction, since it was in substance adequately contained 

in the court's given Instructions No. 7 and No. 11. 

We find no merit in defendants ' issue No. 5. 

Issue No. 6. Defendants contend tha t insufficient evidence 

was presented to show (1) fraud, (2) encroachment, and (3) damages, 

to support the jury verdict. 

Defendants have framed the first point of this issue in 

terms of fraud, when in fact the case was tried on misrepresentation in the description of the boundaries 02 the property. Evidence 
produced at tria 1 demonstrated the property was surveyed and 

represented to the buyers as containing a 40 foot strip which 

in fact was part of a highway right-of-way. The testimony 

regarding stakes visible on the property at the time of sale 

is further evidence of the representation. That there was an 

encroachment contained in the description was adequately laid 

to rest by the testimony describing the highway right-of-way. 

Plaintikfs from the outset maintained that their claim rested 

on the misrepresentation which they were given. Plaintiffs did 

not at any time predicate their suit upon a claim of fraud on 

the part of defendants. We find defendants' argument on this 

point is not germane to the facts. Substantial evidence of 

misrepresentation was adequately shown and if believed by the 

jury, served as the basis for its verdict. 

a 1 leged 

The second point in issue No. 6 goes to the/insufficiency 

of the evidence to show encroachment. As we have noted, evidence 

taken at trial regarding surveying was directly in point to show 

that plaintiffs were in fact not entitled to a 40 foot rightof-way which belonged to the highway and which extended the full 

length of the abutting property they had purchased. This was 

a reduction and an injury of the purchase, flowing out of the 

misrepresentation in the description. Again, we find the jury 

was presented with sufficient credible evidence to so find. 

The third point in issue No. 6 tests the sufficiency of 

the evidence as to damages to support the jury verdict. We are 

directed again to the body of evidence presented at trial outlining 

and 

the nature of plaintiffs' business/as it was affected by the 

encroachment. Testimony as to the relative value of the property 

both with and without that strip of land was brought out at trial 
and we find no reasonable basis to disturb the jury's assessment. This Court has repeatedly held that even though the 

evidence is in conflict, it will only review the evidence to 

determine if there is sufficient credible evidence to support 

the verdict. Breen v. Ind. Acc. Board, 150 Mont. 463, 436 P.2d 

701; Davis v. Davis, - Mon t . P.2d -3 - , 29 St.Rep. 65. 

We find no merit in defendants ' issue No. 6. 

The judgment of the district 

sitting for Justice 

i Wesley Castles .