No. 12907 

IN THE SUPREME COURT OF THE STATE OF MONTANA 

1976 

ARNOLD J. WALLER and 

VERNICE V. WALLER, 

Plaintiffs and Appellants, 

-vs - 

GEORGIA P. HEID, 

Defendant and Respondent. 

Appeal from: District Court of the Eighteenth Judicial District, 

Honorable W. W. Lessley, Judge presiding. 

Counsel of Record: 

For Appellants : 

Thomas I. Sabo, Bozeman, Montana 

William A. Schreiber argued, Belgrade, Montana 

For Respondent: 

Landoe and Gary, Bozeman, Montana 

Stephen Barrett argued, 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 investigate 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 operated 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 misrepresentations 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 bathroom 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 

sitting in of Mr. Pdgel ustice Gene B. Daly.