                                No. 87-192
                IN THE SUPREME COURT OF THE STATE OF MONTANA




WILLIAM A. SELVIDGE and VIRGIE
M. FENNER,
                 Plaintiffs and Appellants,
         -vs-
MARCUS McBEEN and NANCY L. McBEEN;
ROBERT PAYNE; and PAYNE REALTY and
HOUSING, INC.,
                 Defendants and Respondents.



APPEAL FROM:     District Court of the Sixth Judicial District,
                 In and for the County of Park,
                 The Honorable Byron Robb, Judge presiding.
COUNSEL OF RECORD:
         For Appellant:
                 Lloyd E. Hartford, Billings, Montana
         For Respondent:
                 Richard J. Carstensen, Billings, Montana
                 Richard W. Anderson; Anderson, Edwards & Molloy,
                 Billings, Montana


                                    Submitted on Briefs:   Dec. 17, 1987
                                     Decided: February 8, 1988

Filed:   'rm8

                                   Clerk
Mr. Justice William E. Hunt, Sr. , delivered the Opinion of
the Court.


     This claim of fraud comes to this Court from the Sixth
Judicial District, Park County.     Following a bench trial,
defendants, Nancy McBeen, Robert Payne and Payne Realty and
Housing, Inc. were dismissed from the suit. The trial court
found that defendant, Marcus McBeen had           fraudulently
misrepresented the income of the property and business that
he sold to plaintiffs.     Plaintiffs/appellants Selvidge and
Renner were awarded $62,238 in actual and $10,000 in punitive
damages. They appeal the amount awarded and the dismissal of
defendants Nancy McBeen, Robert Payne and Payne Realty and
Housing, Inc.    In addition, they appeal the failure of the
court to award them attorney fees. Defendant Marcus McBeen
cross-appeals the judgment against him.
     We affirm the District Court.
     The issues presented for our review are as follows:
     1. Whether the District Court erred in dismissing
Robert Payne and Payne Realty and Housing, Inc. from this
lawsuit.
     2. Whether the District Court erred in dismissing Nancy
McBeen from this lawsuit.
     3. Whether the District Court erred in the amount of
damages awarded.
     4. Whether the District Court erred by failing to award
reasonable attorney fees to appellants.
     McBeen cross-appeals with issues 5-7:
     5. Whether the legal requirements to prove fraud were
supported by the facts.
     6. Whether appellants alleged losses were proximately
caused by Marcus McBeen's alleged misrepresentations.
     7. Whether punitive damages were properly awarded.
     In 1982, defendants Marcus and Nancy McBeen purchased
the Johnson-Gardner Saloon in Gardiner, Montana.    They paid
$6,000 plus an exchange of property for the saloon.      They
operated the saloon from February 2 to November 25, 1982,
then closed for the winter due to slow business. Since 1977,
the saloon had changed hands three times. The sales prices
were $57,500 in 1977, $70,000 in 1978, and $60,128 in 1980.
     The McBeen's hired managers for the saloon and had very
little to do with the operation of it except that Nancy
McBeen wrote some payroll checks and did some bookkeeping.
     McBeens made $10,000 to $20,000 of building improvements
during the time they owned the saloon.
     In January, 1983, Marcus McBeen contacted Robert Payne
and Payne Realty and Housing, Inc. about listing the business
for sale.   The purchase price was listed at $120,000 plus
cash for saleable inventory, with interest at 11%. At the
time of the listing, Marcus McBeen told Payne that the saloon
grossed $71,233 in a little less than a 10 month period. The
purchase price included the saloon building, a rental house,
the land, bar equipment and fixtures and a Montana all
beverage license.
     After personally viewing the property, Payne ran an add
in the Billings Gazette as follows:
                         Liquor Bar
     Located in Gardiner, MT.     Recently remodeled,
     living quarters, priced to sell at $120,000 with
     good terms.
     Appellants, William Selvidge and Virgie Renner saw the
ad, drove to Gardiner and met with Marcus McBeen.      They
discussed the sale of the business with McBeen and saw the
property although the bar was not operating at that time.
     Appellants were originally from California, where
Selvidge owned and managed a bar/restaurant and Renner worked
as a waitress for many years. Appellants investigated other
business prospects in Gardiner and continued to show an
interest in the Johnson-Gardner Saloon.
     After meeting with McBeen, appellants and Marcus McBeen
met with Robert Payne. Payne relayed to appellants the gross
sales figure for 1982 of $71,233. Marcus McBeen told them
that sales had actually been significantly higher, eventually
stating that $83,779 was the correct amount.
     On February 24, 1983, after numerous (12-14) visits to
Gardiner, appellants offered McBeens $110,000 with 10%
interest for the saloon. McBeens and appellants reached an
agreement on the purchase price for $115,000 with lo+%
interest. Prior to the sale, Payne cautioned the appellants
that he could not vouch for the business figures as all
anyone had to rely on was Marcus McBeents statements. The
records from the previous owners were not available and
McBeenst records were allegedly at their tax accountants,
being used to prepare their 1982 taxes.        Payne advised
appellants to seek their own legal counsel and went so far as
to attach the following special provisions to the final sales
contract.
     This sale is subject to the following items:
    1. Buyers being able to inspect and be satisfied
    with the books (income and expenses) for the year
    1982.
    2. Buyers being able to have legal counsil [sic]
    review all previous contracts that are still in
    effect and a preliminary title policy on the
    property and being fully satisfied with them.
     Appellants demanded that McBeens decide within three
days after their offer.  On February 26, 1983, the McBeens
accepted and a "Buy/Sell Agreement" was executed containing
the following standard clause:
     9. Purchaser enters into this agreement in full
     reliance upon his independent investigation and
     judgment and there are no verbal or other
     agreements which modify or affect this agreement.
     On March 14, 1983, prior to the execution of the final
contract for deed, Marcus McBeen met with appellants at
Payne's office to review the records of the bar. The man who
supplies poker and game machines to all Gardiner bars stopped
by and talked briefly with appellants, presumably about the
machines which were in the Johnson-Gardner Saloon at the date
of the sale.     At this meeting, appellants were given a
typewritten sheet titled "Johnson-Gardner 1982 operating
Statement." Payne again informed appellants that the figures
were unsubstantiated by anyone except Marcus McBeen.
     Following this meeting on March 31, 1983, an attorney
for both parties drew up a formal contract for deed.
Paragraph VII of the contract contained the following
provisions:
     Examination of Property.    The purchasers declare
     they are purchasing this property on their own
     examination and judgment and not through any
     representations to them made by the sellers or
     their agents as to location, value, future value,
     income therefrom or as to its production.
     After about four months of operating the saloon,
appellants advertised it for sale. They asked ~ o b e r tPayne
to list it for $225,000. He refused to list it at such an
exorbitant price, even though appellants told him they
thought it was a fair price. Appellants ended up listing it
for $225,000 themselves. They could not sell the saloon for
the desired amount, so appellants continued to own and
operate it until the time of trial.
      When the saloon failed to make as much as appellants
anticipated,     they   filed    suit   alleging    fraud   and
misrepresentation by Marcus and Nancy McBeen, Robert Payne
and Payne Realty and Housing, Inc.
      In the course of discovery, appellants became aware that
McBeen's "1982 Operating Statement" was, as described by a
CPA who reviewed the business records, "grossly inaccurate."
The District Court made very thorough and elaborate findings
with    regard   to   Marcus   McBeen's   alleged    fraud  and
misrepresentations and appellant's damages.      These will be
enumerated and discussed further in the following opinion.
                          Issue No. 1
      The appellant's first issue alleges error by the
District Court for disn~issing Robert Payne and Payne Realty
and Housing, Inc. from this lawsuit.
      After hearing a nonjury trial, the District Court made
63 findings of fact.       Included in the findings of fact
were :
      29. Payne had no knowledge of and made no
      representation   to    plaintiffs   concerning    the
      profitability of the bar. Neither did he conceal
      anything he knew of from plaintiffs.


     31. Plaintiffs knew that Payne himself had not
     audited the books and that all figures presented
     came exclusively from Marcus McBeen.   Plaintiffs
     had the right to demand even further records had
     they wanted them, and they were aware of that
     right.   Plaintiffs by their own testimony admit
     that they entered into and closed the transaction
     with fewer records than they had hoped to see.
     32. Plaintiffs did not rely on Robert Payne for
     any representations, assurances or confirmation as
     to the profitability of said business, and
     understood that Payne Realty and Housing Inc.,
     acting through Robert Payne, was McBeens' real
     estate agent in the transaction, whose function it
    was to bring the parties together, show the
    property, and arrange for the preparation of the
    closing documents.
    33. Payne at no point prior to the closing of the
    transaction had any access to McBeens' 1982 tax
    returns.   In fact, the returns had not yet been
    prepared, and plaintiffs knew it.       Plaintiffs
    voluntarily completed the transaction, signed the
    contract for deed, and thereby waived any reliance
    upon tax returns.
     34. The property which plaintiffs purchased was
     exactly what they intended to buy. All buildings,
     lands, fixtures, licenses and appurtenances were
     substantially as represented by McBeens, there were
     no hidden or undisclosed defects, and Virgie Renner
     expressly testified plaintiffs had no complaint as
     to the physical assets.
     As a consequence of these findings of fact, the District
Court concluded. that "Plaintiffs failed to prove any claim
for damages against Robert Payne individually or against
Payne Realty and Housing, Inc., the complaint against them
should be dismissed with prejudice, and defendants Payne
should have judgment against plaintiffs for their allowable
costs of $944.05."
     In a nonjury trial, the District Court judge makes the
findings of fact and conclusions of law. Tolson v. Tolson
(1965), 145 Mont. 87, 399 P.2d 754. Findings of fact will
not be overturned unless there is a clear preponderance of
evidence against them. Round v. Reikofski (Mont. 1985), 699
P.2d 72, 42 St.Rep. 634. Also, we view the findings in a
light most favorable to the prevailing party. General Mills,
Inc. v. Zerbe Bros, Inc. (Mont. 1983), 672 P.2d 1109, 40
St.Rep. 1830. The appellants have the burden of showing by a
clear preponderance of the evidence that the findings of fact
are incorrect before this Court will disturb those findings.
Cameron v. Cameron (1978), 179 Mont. 219, 587 P.2d 939.
    The court's dismissal of defendants Payne fell within
the District Court's powers under Rule 41(b), M.R.Civ.P.:
     ...   After the plaintiff, in an action tried by
    the court without a jury, has completed the
    presentation of his evidence, the defendant,
    without waiving his right to offer evidence in the
    event the motion is not granted, may move for a
    dismissal on the ground that upon the facts and the
    law the plaintiff has shown no right to relief.
    The court as trier of the facts may then determine
    them and render judgment against the plaintiff
     ...
     In the present case, Payne recommended that the
appellants hire their own attorney, as he could not verify
the amounts which Marcus McBeen alleged to be the true and
accurate accountings of the bar's business.            Section
37-51-321, MCA, prohibits real estate brokers from conmitting
various acts. The key to these acts is knowledge and intent.
The evidence presented in this case supports the finding that
Payne had no knowledge of the accurate accounting figures
relating to the saloon's business, did not intentionally
misrepresent any information to appellants, nor did he
advertise in a misleading or untruthful manner. Payne acted
in good faith as realtor and was properly dismissed from this
action.
                         Issue No. 2
     Appellants contend that it was also error for the
District Court to dismiss Nancy McBeen from this suit.
     The District Court found as fact that "[tlhere was no
evidence presented to establish that Nancy McBeen knew of any
of said misrepresentations, communicated the inaccurate
information to anyone, or participated in any way in any
fraud or deceit. She should therefor be and was dismissed as
defendant at the end of plaintiffs case."
      When reviewing a Rule 41(b) dismissal of a defendant,
the reviewing court must view the evidence in a light most
favorable to the plaintiff. However, this does not relieve
the plaintiff of the burden of producing evidence in support
of each element essential to recovery.    Nixon v. Huttinga
 (1974), 163 Mont. 499, 501, 518 P.2d 263, 265. Appellants
showed only that Nancy McBeen (1) was co-owner of the
Johnson-Gardner Saloon before the sale to appellants;
(2) had some responsibilities for bookkeeping for the
saloon; and, (3) was present at a few of the meetings of
McBeens and appellants concerning the sale of the saloon.
      Nancy McBeen, along with her husband, was accused of
fraud and misrepresentation.    The elements of fraud are:
 (1) a    representation; (2) its    falsity; (3) its
materiality; (4) the speakers knowledge of the truth;
 (5) the intent that it should be acted upon in the manner
contemplated; (6) the hearer's ignorance of its falsity;
 (7) the hearer's reliance on its truth; (8) the right of
the hearer to rely thereon; and (9) the hearer's consequent
and proximate injury or damage. Hutton v. Ming (1970), 155
Mont. 149, 153, 467 P.2d 688, 690.
     The circumstances constituting fraud must be stated with
particularity.   Kinjerski v. Lamery (1979), 185 Mont. 111,
117, 604 P.2d 782, 785. Appellants presented only a general
assertion of fraud. They presented no evidence establishing
the presence of any one of the elements of fraud. As such,
we hold that Nancy McBeen was properly dismissed as a
defendant at the close of appellant's argument in the lower
court proceeding.
                         Issue No. 3
     Appellants' next contention is that the District Court
erred in its award of damages.
     Appellants were awarded $62,238 in compensatory damages
and $10,000 in punitive damages.     The applicable statutes
which allow for these awards are S 27-1-317 and S 27-1-220,
MCA, respectively. We do not agree with appellants' argument
that the compensatory damages award was too low.          The
District Court found that appellants suffered annual losses
of $31,338 and reasonable wage loss of $30,900 based on their
income tax returns. The court found further that appellants
did not suffer any loss of opportunity to earn income on
their investment, nor did they pay an excessive amount for
the saloon property and business.        These findings are
supported by the evidence of past and present business
records for the Johnson-Gardner Saloon and by evidence of the
value of other comparable businesses in Gardiner.
     We also disagree with the allegation that the punitive
damages awarded were too low.    The court found that Marcus
McBeen's acts of misrepresentation to appellants were
fraudulent. To deter future similar behavior, an award of
$10,000 in punitives was awarded to appellants.       Section
27-1-221 (7)(b), MCA, outlines the findings necessary for an
award of punitive damages:
     (b) When an award of punitive damages is made by
     the judge, he shall clearly state his reasons for
     making the award in findings of fact and
     conclusions of law, demonstrating consideration of
     each of the following matters:
     (i) the nature and        reprehensibility   of   the
     defendant's wrongdoing;
     (ii) the extent of    the defendant's wrongdoing;
     (iii) the intent of the defendant in conmitting
     the wrong;
    (iv) the    profitability     of   the   defendant's
    wrongdoing, if applicable;
    (v) the amount of actual damages awarded by the
    jury;
     (vi) the defendant's net worth;
    (vii) previous awards of punitive or exemplary
    damages against the defendant based upon the same
    wrongful act;
    (viii) potential or prior criminal sanctions
    against the defendant based upon the same wrongful
    act; and
    (ix) any other circumstances which may operate to
    increase or reduce, without wholly defeating,
    punitive damages.
     In its findings of fact and conclusions of law, the
District Court concluded that:
     I. The actions of defendant Marcus McBeen in
     representing and warranting that the operating
     statement of the Johnson-Gardner Saloon for 1982 as
     a true and accurate statement of the gross income
     and expenses were false, deceitful of material
     facts, and constitute fraud.
    J. Defendant    Marcus   McBeen   intended   that
    plaintiffs should rely upon said representations.
    Plaintiffs were ignorant of the falsity of the
    representations, did in fact rely on them as they
    had a right to do, and thereby suffered injury.
    K. Plaintiffs William Selvidge and Virgie Renner
    are entitled to damages of $31,338 for net business
    loss on said business for the years 1983 through
    1985, plus $30,900 for lost wages during said time,
    making a total of $62,238.00, which amount will
    compensate them for all the detriment proximately
    caused by Marcus McBeen's actions.
    L. Plaintiffs have not established that they are
    entitled to have said contract reformed or the
    price paid for the property and business reduced.
    M. Plaintiffs are not entitled to an award for
    loss of opportunity to earn a return on their
    investment and capital as that would be a
    duplication of the damages referred to      in
     conclusion K above, and because the value of the
     real and personal property and business was not
     excessive or grossly disproportionate to the price
     paid by plaintiffs.
     N. Plaintiffs are entitled, however, to punitive
     damages against Marcus McBeen in the sum of
     $10,000.00 to deter similar future conduct by him.


     P. Plaintiffs were not contributorily negligent
     herein, and their damages should not be reduced.
     Because of some seemingly contradictory findings of fact
with these conclusions of law, the District Court followed up
the conclusions with an explanatory comment.
                     EXPLANATORY COMMENT
         In case the foregoing findings or conclusions
    seem somewhat inconsistent, the court finds that
    while plaintiffs did make a thorough investigation
    of their own prior to purchasing the saloon and
    agree in the contract of sale they were relying on
    that and not on any representations of the sellers,
    and while the court also finds plaintiffs did not
    pay a grossly disproportionate or unreasonable
    price for the premises and business, and that they
    did have opportunity to examine McBeens records, I
    still find McBeen materially misrepresented the
    gross sales he reported in the operating statement
    he prepared, and because plaintiffs were entitled
    to and did rely on this, they are entitled to the
    damages proximately caused thereby, plus moderate
    punitive damages.       However, plaintiffs seek
    duplicative, speculative and unjustified amounts of
    damages, both actual and punitive, and I have
    awarded only those that are reasonably certain.
    Ms. Renner's inconsistent and exaggerated testimony
    has caused me to reduce somewhat the punitive
    damages I might have otherwise awarded.
     The conclusions of law considered in light of the facts
of this case and the judges explanatory comment satisfies the
statutory requirements for punitive damages.     We will not
disturb the punitive award, nor the award for compensatory
damages.
                         Issue No. 4
     Lastly, appellants allege that the District Court erred
in failing to award attorney fees.
     In the absence of a contractual agreement or specific
statutory authority, attorney fees are not recoverable as
costs by the prevailing party.      State ex rel. Wilson v.
Department of Natural Resources and Conservation (1982), 199
Mont. 189, 648 P.2d 766, 769; § 25-10-301, MCA.
     In this case, appellants recovered on their allegation
of fraud and misrepresentation--a tort.      Their testimony
indicates that they are satisfied with all the buildings and
fixtures which they purchased under contract.      The court
found the purchase price to be reasonable.      Because they
recovered under tort law, appellants were awarded $10,000
punitives. There is no statutory authority nor contractual
agreement which gives rise to an award of attorney fees in
this case. We affirm the District Court's refusal to award
attorney fees to Selvidge and Renner.
                         Issue No. 5
     McBeens' first issues raised on counter-claim alleges
that the finding of fraud was not supported by the facts.
     The elements of fraud were outlined under issue no. 2
above. The District Court's relevant findings of fact, which
were supported by the evidence include:
     45. Defendant Marcus McBeen knew that the saloon
     business in question did not have gross sales in
     1982 of $83,779 or gross rental income of $2,100.
    46. McBeens said operating statement (EX. ll),
    financial statement (Ex. 14) , and 1982 income tax
    return (Ex. 15), were all prepared by Marcus
    McBeen .  He is an experienced businessman, and
    engaged in and familiar with the management and
    running of several different and diverse businesses
while in Gardiner, namely, a lumber yard, real
estate business, home construction, solar heating,
and a saloon.
47.  The documents referred to in finding 4 6 were
prepared by McBeen to purportedly accurately
reflect his total business income and financial
status, and were prepared for use of lending
institutions and Internal Revenue Service, and only
gratuitously given plaintiffs according to Marcus.
The court finds, however, that the operating
statement is not only inaccurate and vague, but
misleading to anyone to whom he submitted it.


49.  Plaintiffs had the right to rely upon the
representation   of    defendant   Marcus   McBeen
concerning the financial condition of business in
question, and in fact plaintiffs did rely thereon,
as well as on their own experience, observations
and investigation, purchasing the business.
50. The representations made by Marcus McBeen to
Selvidge and Renner were false and were material,
and he intended plaintiffs to rely thereon to
induce them to purchase said saloon business.
51. Plaintiffs were ignorant of the falsity of
defendant McBeen's representations at the time of
the purchase, and as a result of his false
representations and plaintiffs reliance thereon,
plaintiffs suffered injury.
52. That once plaintiffs purchased the business
and. took possession, they operated it on a sound
basis and increased their business some each year.
However, they claim to have suffered annual losses
as indicated by their partnership income tax
returns    (Ex.   2)   including  deductions   for
depreciation, as follows:




    Total   ........       $31,338
     53. That    plaintiffs  have   suffered  loss of
     reasonable wages since purchasing the business of
     $30,900.
    54. That plaintiffs losses mentioned in findings
    52 and 53 are directly attributable to the
    misrepresentations and deceitful statements of
    Marcus McBeen.


    57. That the court does find, however, that Marcus
    McBeen's omissions and representations in the sale
    were fraudulent and oppressive toward plaintiffs,
    and they should be awarded punitive damages of
    $10,000 to deter similar future conduct.


    60. The only damages plaintiffs have established
    are from Marcus McBeen's tort of fraud, so that no
    attorneys fees are awardable on the contract to
    either side.
     Appellants offer no evidence to contradict or show that
these findings are clearly erroneous. We affirm the District
Court on the issue of fraud.
     McBeens' last two contentions alleging that appellants'
damages were not caused by McBeens' misrepresentations and
that punitive damages were improperly awarded have been
adequately addressed in the previous discussion.
                                    /
     Affirmed on all issues.
