No* 12112 INTHE 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

## 11972

### 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 actionwas originally tried in the eleventhjudicial 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, 154Mont. 451, 452, 459, 465 P.2d 326 (hereinafter referred toas the first case). The retrialresulted injudgment for plaintiffs and an award of $9,000 by verdict of a jury. Following denial of a motion forjudgment notwithstanding the verdict and motion for a new trial, defendants now appeal from that judgment

# . Plaintiffs Tom and Phoebe Goggans about March 1, 1967, purchased a two acre tract of land with frontage on theLibbyJennings highway inLincoln County from defendants Clarence H. and Dorothy I. WinKley, through the third defendant M. M. Mansfield, a real estate agent inLibby. 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 estateagent which contained the following provisions: "'All representations made by Broker or its agents toBuyer concerning said real or personal property arebelieved by it and them to be true and correct and aremade in good faithbut 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 ispersonally familiar with the loca tion, size, and condition thereof and isrelying solely upon ~uyer's own information about andinvestigation of the same and alsoas toany financing

### d this salecontemplated by Buyer.

## ' "The salewas completed by a written contract for deed signed by plaintiff-purchasers and defendant-sellers which contained 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 intopossession and made certain improvements on the property, generally cons

### isting of

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

### 40 feet. This action followed. "According toplaintiff-purchasers, the real estate agent made falserepresentations 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 itsboundaries, 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

rea1estate 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 firstcase for retrial, this Court said:"Here purchasers have alleged and offered to prove fraud in the form of false representations which induced them toenter into the contract in the first place. Fraud in the inducement has always been held tobe provable by parol, notwithstanding the parol evidence rule: Advance-Rumely Thresher Co.

## , Inc. 

### v. Wenholz, 80 Mont. 

### 82, 258 P. 1085; Sathre v. Rolfe, 

### 31Mont. 

### 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 tothe 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 toenhance the stature of thewitness and emphasize his official connectionwith the statehighway depa

### rtment

# . 2. Defendants object tothe limitation ot cross-examina

### - tion of plaintiff Phoebe Goggans with respect toa possible actual or prospective resale of the property in dispute. 3. Defendants object to the exclusion of evidence that

a federal dam isbeing constructed in the area. They contend such evidence has a decisive bearing upon the issueand amount of damages. 

### 4. Defendants object to the limitation of thenumber of character witnesses to three instead of the trialcourt rule of five, contending that since the casewas 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 tothe court's refusal of a number of defendants

## ' offered instructions. 

### 6. Defendants object tothe sufficiency of the evidence tojustify the verdict and amount of damages. Issue 1. Vernon Borden is a statehighway 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 tothose measurements therewas an encroachment upon the 80 foot right-of-way of 1.5 feet atthe southerly end and 

### 2.2 feet atthe northerly end of plaintiffs

## ' storebuilding. Other encroachments were noted, according tothe measurements, but they arenot a part of this proceeding. Defendants object tothe limitation of recross-examination of Mr. Borden. From the transcript, it is evident that prior questioning of Borden thoroughly established themeasurements and encroachments, which arethe basis of this action. The direct and cross-examination of Borden examined thewidth of the right-of-way and the surveying. Redirect-examination of Borden again treated the matters already developed in the record. The questioning pertained to thewidth of the right-of-way, the length of time for leases, and surveying to establisha centerline in the highway. On recrossexamination the trialcourt limited examination to the scope of the redirect-examination. We find it tobe a proper ruling. Garrison v. Trowbridge, 119Mont. 505, 177 P.2d 

### 464. As to defendants

## ' contention regarding the credibilityand reliability of the witness Borden based upon his status, no record attrial presented any issue regarding his authority, competence, or status. Matters of technica1expertisewere sufficientlyexamined 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 toa possible actual or progpective resale of the property. Defendants sought to explore this area inan effort torefute plaintiffs' contention that the property isworthless inview of the rightof-way encroachment. The trialcourt ruled defendants could not inquire into plaintiffs' future plans regarding the property on the grounds that cross-examination must be limited tothose 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 speculativeand conjectural regarding damages, in view of the location of plaintiffs' property

on the siteof a United States government dam. Defendants maintain their casewas prejudiced when the court refused to takejudicial notice of the factswhich form part of the common knowledge and experience. The fact that the property may be on a government dam site is irrelevant tothe issues and 

### is conjectural concerning possible futureand collateralmatters. Atissuehere 

### is the right of recovery from defendants. Injection of collatera1matters 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 oiland gas lessee for damages to surface of land by salt water and oilpollution. Attrial, the court excluded lessee's evidence that the landowners had a contract with the federalgovernment 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 saltwater and oilover 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 toplaintiffs from a sourcewholly independent of and not in behalf of thewrongdoer cannot inure to the benefit of thewrongdoer 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,

along with the speculative transactions defendants seek to inject into the case, areconjectural matters not in issueand not relevant here. Issue 4. Defendants object tothe limitation of their character witnesses tothree, instead of the trialcourt rule of five suchwitnesses. They contend plaintiffs

## ' allegations 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 trialcourt. Counsel must preserve the record toperfect appellatereview of an issue. Clarkv. 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 trialjudge setting forth the lack of objection by defendants' counsel. Thetrialjudge alsonoted the attempt to conduct a reasonable and expeditious trial. Of prime importance is the explanation of the trialjudge that although plaintiffs objected tothe submission of any character witnesses nevertheless, since the

casewas 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 issueand was not impeached attrial. ~ontana's statuteon 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 civilaction, 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.'' Atthe very least, character testimony was not germane to this

case and, advancing defendants' argument to

### its fullest extent, certainly the threewitnesses

## ' testimony established the good character of detendants sufficiently for thejury. We findno

error. Issue 

### 5. Defendants object to the trialcourt'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. Asheretofore discussed, the injection of collateral matters, independent in nature, 

### is irrelevant and properly excludable both inthe taking of evidence and in summation. Kappes v. Jaap, 141Mont. 471, 

### 378WIG No. 1.05 relates tooral admissions and 

### ismandatory, that however,we noteithe trialcourt's Instruction No. 2was adequate to inform thejury on the weight tobe 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 instructionsNo. 1.06 and No. 5.01 test the strength of the evidence produced attrial, questioning the inability of plaintitfs to produce a plat which the plaintiffs claimed was furnished to them and the failure of plaintiff Tom Goggans toappear, testify and be cross-examined. These instructions are inapplicable to the evidence since the testimony of the highway department engineer, Borden, sufficientlyprovided authoritative expertise regarding the alleged encroachment. Further, the deposition of plaintiff Tom Goggans was read into the record pursuant toRule 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 toreplace Tom Goggans as a witness. Defendants' instructionNo. 2was properly refused since the court's given Instruction No. 13.was a clear statement of the law applicable tothe two theories of actual and constructive fraud. Refused instructionNo. 2 represented a limited instruction restricting itself tothe elements of actual fraud and deleted the theory of constructive fraud. ~efendants 

## ' proposed instructionNo. 3was adequately covered by the trialcourt's given Instruction No. 10, whichinstructed thejury that transactions arepresumed tohave been fair and regular. Similarly, defendants' proposed instructionNo. 5 on the presumption of good faithwas contained in the court's given Instructions No. 2 and No. 10, which stated that witnesses

arepresumed tospeakthe truth and transactions arepresumed 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 tobe without merit as this Court said inthe first

case: "We hold that, inany event, the survey provision in the contract does not bar inquiry into the question of whether purchasers gotwhat they bargained for. If certain representations were made topurchasers by the sellers' agent relative toa 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 tobuy without a survey, allas comprehended inpurchasers' offer of proof, and it later turns out that the representations are incorrect and the property 

### is in fact ina different location and encroaches on the state's rightof-way, then the purchasers arenot foreclosed from attempting toprove these facts by the contract provision inquestion. The district courtwas in error atthis point." ~efendants 

## ' proposed instruction No. 11 

### is an instruction on damages and we find no error in the court's refusal togrant such instruction, since itwas in substance adequately contained in the court's given Instructions No. 

### 7 and No. 11. We findno merit indefendants

## ' issueNo. 

### 5. Issue No. 6. Defendants contend that insufficient evidence

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

### (3) damages, to support thejury verdict. Defendants have framed the firstpoint of this issue in terms of fraud, when in fact the casewas tried on misrepresentation in the description of the boundaries 02 the property. Evidenceproduced attria1demonstrated the property was surveyed and represented to the buyers as containing a 40 foot stripwhich in factwas part of a highway right-of-way. The testimony regarding stakes visible on the property atthe time of sale is further evidence of the representation. That there was an encroachment contained in the descriptionwas 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 atany time predicate their suit upon a claim of fraud on the part of defendants. We find defendants' argument on this point isnot germane to the facts. Substantial evidence of misrepresentation was adequately shown and if believed by the jury, served as the basis for its verdict. a1 leged The second point in issue No. 6 goes to the/insufficiency of the evidence to show encroachment. As we have noted, evidence taken attrialregarding 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 issueNo. 

### 6 tests the sufficiency of the evidence as to damages to support thejury verdict. Weare directed again to the body of evidence presented attrialoutlining 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 stripof land was brought out 

### attrialand we find no reasonable basis todisturb thejury's assessment. This Court has repeatedly held that even though the evidence 

### is in conflict, itwillonly review the evidence to determine if there 

### is sufficient credible evidence to support the verdict. Breen v. Ind. Acc. Board, 150Mont. 463, 436 P.2d 701; Davis v. Davis, Mont

# . 

# - P.2d -3 

# - , 29 St.Rep. 

### 65. We find no merit in defendants

## ' issueNo. 

### 6. The judgment of the district

sitting for Justice i Wesley Castles

# .