No. 12907 INTHE 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 theEighteenth JudicialDistrict, HonorableW. W. Lessley, Judgepresiding. Counsel of Record: ForAppellants: Thomas I. Sabo, Bozeman, Montana WilliamA. Schreiber argued, Belgrade, Montana For Respondent: Landoe and Gary, Bozeman, Montana StephenBarrett argued, Bozeman, Montana

Submitted: September 3, 1976 Decided: 

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### 15-%Mr. JusticeWesley 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. PlaintiffsArnold J. and Vernice 

### V. Waller were residents of Rapid City, South Dakota,when they visited West Yellowstone
on a vacation in thewinter of 1969. They liked the area and when they learned that Georgia P. Heid Hoffman, defendant, owned
amotel 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 Teaneymade 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 inWest 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 rescissionof the contract. The complaint alleged defendant had made fraudulent representationsto induce Wallers to enter into the contract. A non-jury trial was held inNovember 1973, before Hon. W. W. Lessley, district court judge in Gallatin County. Judgment in favor of defendantwas filed on January 24, 1974. Wallers filed notice of appeal. Wallers contend defendant made thesemisrepresentations to induce them to enter into the contract: (1)that themoteland residence were winterized and could be operated the entire year; (2)that the highway to Yellowstone Parkwould be moved and pass directly in frontof themotel; (3) that the plumbing and wiring to a second bathroom in the residence was roughed in and could be completedmerely 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 misrepresentationshad not been made. Ithas long been the rule inMontana 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, 165Mont. 291, 296, 529 P.2d 1394; Cloughv. Jackson, 156Mont. 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 representationsmade by defendant. In Cowan v. Westland Realty Co., 162Mont. 379, 383, 512 P.2d 714, this Court said: "ThisCourt 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 isundisputed that Wallers visited West Yellowstone twice and personally examined themotel 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 recommendationson 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 therewas no cause of action for fraud.The judgment is affirmed.

We concur: &f:
Chief Justice

./ JU 'ces



# -. Jack Shanstrom, district sitting in of Mr. ustice Gene B. Daly. 

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