                                    NO. 79-92
                        IN THE SUPREME COURT OF THE STATE OF MONTANA
                                         1981


THE DOLSEN COMPANY,
                              Plaintiff and Appellant,
         VS.

THE IMPERIAL CATTLE CO.,
A Montana Corporation, JAMES
EDMISTON and PHILLIS EDMISTON, et al.,
                              Defendants and Respondents.


Appeal from:        District Court of the Eleventh Judicial District,
                    In and for the County of Flathead.
                    Honorable James Salansky, Judge presiding.
Counsel of Record:
    For Appellant:
          Moare and Doran, Kalispell, Montana
    For Respondents:
          Christopher B.Swartley, Missoula, Montana
          George Harris, Missoula, Montana

                                         -      -   -   -




                                    Submitted on briefs: December 17, 1980
                                                        Decided :MAR   4 - 1981
Filed:    MflP 4   --




                                         Clerk
Mr. J u s t i c e J o h n Conway H a r r i s o n d e l i v e r e d            t h e Opinion of
the Court.

             This        is     an    appeal      by    Dolson,     plaintiff,             after     an

a d v e r s e judgment o f t h e F l a t h e a d County D i s t r i c t C o u r t .

             In    1973         the     Imperial         Cattle        Company          (Imperial)

e n t e r e d i n t o s e v e n l e a s e a g r e e m e n t s w i t h t h e D o l s o n Company

( D o l s o n ) , a Washington c o r p o r a t i o n ,           f o r t h e l e a s e of d a i r y

cattle.           Approximately               520 d a i r y cows w e r e t r a n s f e r r e d       to

Imperial.              Two o f t h e s e v e n l e a s e s w e r e c o n c l u d e d p r i o r       to

t h e s e t t l e m e n t n e g o t i a t i o n s which u n d e r l i e t h i s a c t i o n .       All

but     one       of      the        remaining         five    leases      were         personally

g u a r a n t e e d by d e f e n d a n t s L i l l i t h u n and E d m i s t o n , p r i n c i p a l s

i n t h e I m p e r i a l C a t t l e Company.

           During             1974      Imperial         suffered         major           financial

r e v e r s e s and n o t i f i e d D o l s o n i n O c t o b e r o f t h a t y e a r t h a t i t

would be u n a b l e t o f u r t h e r p e r f o r m on a n y o f t h e r e m a i n i n g

five      leases.               The     parties         proceeded        to    negotiations,
a g r e e i n g t o a " P o s s e s s i o n Agreement."             By t h e t e r m s o f         that

agreement          Dolson            would     reassume       possession           of     the     dairy

cattle       and        then     sell    them.          It    was   agreed         that     Imperial

would be l i a b l e f o r any d e f i c i e n c y owing a f t e r i t s a c c o u n t

was c r e d i t e d w i t h t h e p r o c e e d s o f t h e s a l e .              The a g r e e m e n t

was s i g n e d by t h e p a r t i e s a t a m e e t i n g i n M i s s o u l a , Montana,

on    October           18,      1974.         All     parties      were      represented            by

counsel.

           P u r s u a n t t o t h e a g r e e m e n t , D o l s o n s o l d t h e d a i r y cows

t o t h e h i g h e s t f i n a n c i a l a d v a n t a g e of I m p e r i a l .        Dolson t h e n
t e n d e r e d a n a c c o u n t i n g and r e q u e s t e d from I m p e r i a l payment
of     the        deficiency.                  A l l   parties       cooperated              in    the
l i q u i d a t i o n of t h e d a i r y h e r d .

           In      March         1975        Dolson's        general    manager           met     with
defendant          Lillithun           in    Ronan,           Montana.         A t    that    meeting

Lillithun did not dispute                           t h e e x i s t e n c e of       the deficiency

but     did       take     issue         with          the     amount        owing.        Lillithun

f u r t h e r i n d i c a t e d t h a t d e f e n d a n t E d m i s t o n was s o l e l y l i a b l e

for the deficiency.

            A f t e r t h e Ronan m e e t i n g D o l s o n p r e p a r e d and f o r w a r d e d

t h e n o t i c e of d e f i c i e n c y .             A n o t h e r m e e t i n g was a r r a n g e d i n

which a l l p a r t i e s would be p r e s e n t .                     With t h e e x c e p t i o n o f

defendant L i l l i t h u n ,           a l l p a r t i e s were p r e s e n t w i t h c o u n s e l

a t a May 2 3 , 1 9 7 5 , m e e t i n g i n S p o k a n e , W a s h i n g t o n .             At    this

m e e t i n g D o l s o n was a d v i s e d t h a t I m p e r i a l , and a l l p r i n c i p a l s

of    Imperial       ,    were     insolvent.                  Dolson        was     informed       that

d e f e n d a n t L i l l i t h u n was n e a r b a n k r u p t c y and t h a t d e f e n d a n t

E d m i s t o n was d e f e n d i n g an a c t i o n on c e r t a i n l o a n s from t h e

Production            Credit           Association                involving           hundreds           of

t h o u s a n d s of d o l l a r s .     S e t t l e m e n t d i s c u s s i o n s a t t h e Spokane

meeting           began    at     $100,000,               substantially             less     than    the

$142,000          deficiency           computed           by    Dolson.            Defendants       were

c l e a r l y i n no p o s i t i o n t o n e g o t i a t e a t t h e $ 1 0 0 , 0 0 0 f i g u r e ,

and t h e number was r e d u c e d t o $ 6 5 , 0 0 0 and t h e n t o $ 5 5 , 0 0 0 .

            A t    the     Spokane meeting                     defendant           Edmiston        first

mentioned           that     he        owned       a      parcel       of     real     property          in

K a l i s p e l l , Montana, which m i g h t be u s e d t o p a r t i a l l y s a t i s f y

the     deficiency.               Dolson's              attorneys           testified      that      the

property           was     referred            to        by    defendant           Edmiston         as    a

"commercial,             downtown         piece          of    property."            Edmiston       also

represented           t o Dolson            that       t h e p r o p e r t y was w o r t h $ 4 5 , 0 0 0

and t h a t       t h e p r o p e r t y had         r e c e n t l y been a p p r a i s e d a t t h a t

f i g u r e by James C h r i s t i a n , f a t h e r o f a t t o r n e y C a l C h r i s t i a n ,

who r e p r e s e n t e d d e f e n d a n t L i l l i t h u n .         Counsel f o r Edmiston
informed        Dolson          that          he        was    acquainted            with        the        elder

Christian,         knew o f h i s e x p e r i e n c e i n t h e r e a l e s t a t e f i e l d ,

knew      that       he      was         a    competent              appraiser            and       that,      if

a n y t h i n g , t h e a p p r a i s a l would be c o n s e r v a t i v e .

           At     the        conclusion             of        the     Spokane        meeting,           Dolson

advised defendants t h a t                        i t would          agree t o a s e t t l e m e n t of

$ 5 5 , 0 0 0 c a s h and a d v i s e d d e f e n d a n t E d m i s t o n t h a t h e s h o u l d

use     the     Kalispell            property            as     collateral           in    securing           the

necessary financing                  .
           On J u l y 2 3 , 1 9 7 5 , a m e e t i n g t o o k p l a c e i n K a l i s p e l l ,

Montana.         P r e s e n t a t t h i s m e e t i n g were R o b e r t D o l s o n and h i s

attorney,         James          Gillespie;                   defendant           Edmiston           and     his

attorney,        Milton Datsopoulos;                           and       a t t o r n e y Cal     Christian,

representing                 Imperial              Cattle            Company          and        defendant

Lillithun,         who was a g a i n a b s e n t .                       Once more t h e K a l i s p e l l

property        was       discussed                as     possible           satisfaction              of     the

deficiency debt.                I t was a g a i n r e p r e s e n t e d a s h a v i n g a v a l u e

of    $45,000,        a s c o n f i r m e d by t h e r e c e n t a p p r a i s a l .                    Robert

D o l s o n e x p r e s s e d h i s d e s i r e t h a t any s e t t l e m e n t c o n s i s t o f

cash.

           The p a r t i e s d i s c u s s e d a t o t a l m o n e t a r y s e t t l e m e n t o f

$55,000,        a f i g u r e which was r e d u c e d t o $ 5 2 , 5 0 0 w i t h $ 7 , 5 0 0

i n i t i a l l y w i t h q u a r t e r l y p a y m e n t s t o be made t h e r e a f t e r                    of

$2,500        until       the    debt         was        extinguished.               The o u t s t a n d i n g

balance        was      to      be       secured          with       the       Kalispell            property.

Finally,        Dolson          was          to    receive           a     copy     of     the       property

d e s c r i p t i o n , t i t l e insurance ( o r o t h e r proof of c l e a r t i t l e )

and a copy o f               the C h r i s t i a n appraisal confirming t h a t                               the

t r a c t was w o r t h $ 4 5 , 0 0 0 .            T h i s was D o l s o n ' s o n l y p r e s e n c e i n

Kalispell         until         the          settlement          was        signed.            He    and     his
attorney flew into Kalispell on the morning of July 23 and
left that afternoon.             The Kalispell property was not
identified to them, nor did Dolson request to see it.
         After    the   Kalispell     meeting,       negotiations were
continued by telephone and correspondence.                On October 13,
1975, Dolson agreed to accept the Kalispell property.                   From
defendants Lillithun and Imperial, Dolson was to receive
$7,500    in    cash.      On   October   31 Robert       Dolson went      to
Missoula and to Kalispell to execute the settlement.                       He
accepted from Imperial a $7,500 promissory note, payable at
8 percent per annum, and guaranteed by defendant Lillithun.
Defendant       Edmiston    tendered      a   warranty     deed   for     the
Kalispell property.
         Dolson traveled         from Missoula       to Kalispell         and
obtained the signature of defendant Edmiston.                     While    in
Kalispell, Dolson contacted a local realtor, John Ming, for
the purpose of listing his newly acquired property.                He     met
Ming at the property site.            Dolson's brief describes the
Edmiston property, which was represented as being conserva-
tively valued at $45,000, as follows:
         ". . .  consist[ing] of slightly over one acre
         of undeveloped ground situated directly
         between a Pacific Power & Light substation
         and the railroad tracks in Kalispell,
         Montana.    While there was a narrow corridor
         leading from Center Street along and behind
         the substation to the property, the property
         itself had no frontage upon any Kalispell
         street.    At its closest point to 'downtown
         Kalispell', the property was five blocks
         distant. "
         Ming    informed Dolson      that he       had   no   interest    in
accepting a listing on the property and that he could not
imagine who would be interested in the property with the
possible exception of Pacific Power             &   Light, the adjacent
 landowner.              Ming     testified           that      when        he    examined           the

property         i n O c t o b e r 1 9 7 5 , t h e v a l u e o f t h e t r a c t was a b o u t

$7,500.

             Upon r e t u r n i n g t o Yakima, W a s h i n g t o n ,             Dolson engaged

MIA     appraiser,          Wayne N e i l .          Neil     appraised           the parcel          at

between $1,250             t o $8,900,         d e p e n d e n t upon t h e r e s o l u t i o n o f

uncertainties            regarding         access.           Neil       agreed w i t h r e a l t o r

J o h n Ming t h a t a c c e s s was s o l i m i t e d , a p p r o x i m a t e l y s i x t e e n

f e e t of     passageway,             t h a t a commerical             use of        the property

was    virtually          precluded.              Neil's      conclusion              was    that    the

land       would         have      a     use      classification                 of        "low-level

industrial."                That       classification               is     one        of    the     most

untenable          and     unmarketable             classifications               existing          with

r e s p e c t t o commercial p r o p e r t y .

              A t trial       i t was r e v e a l e d t h a t R o b e r t D o l s o n had n o t

seen t h e property p r i o r               t o the execution of the settlement

agreement.           I t was a l s o e s t a b l i s h e d t h a t a l t h o u g h D o l s o n had

an e x t e n s i v e b u s i n e s s b a c k g r o u n d ,   h e was n o t e x p e r i e n c e d i n

real estate.              Defendants           introduced          a S t a t e Department             of

Revenue        a p p r a i s a l which      established            that     for       property       tax

purposes,         t h e t r a c t was w o r t h $ 3 3 , 4 5 0 ,          only about           $11,500

less     than      Edmiston's            representations.                 Neither           defendant

Lillithun         nor     attorneys Christian                 or    D a t s o p o u l o s had       ever

seen the property,                 and a l l d e n i e d h a v i n g        any knowledge o f

i t s v a l u e beyond         t h e r e p r e s e n t a t i o n s of     d e f e n d a n t Edmiston

and t h e C h r i s t i a n a p p r a i s a l .

           The f o l l o w i n g i s s u e s a r e r a i s e d on a p p e a l :

            1.     Whether D o l s o n i s e n t i t l e d t o r e s c i s s i o n b e c a u s e

o f d e f e n d a n t s ' m i s r e p r e s e n t a t i o n s a s t o t h e n a t u r e and v a l u e

of t h e property?
        2.     Whether there was substantial credible evidence
to support the District Court judgment; whether the District
Court   properly      disposed      of    the     issues; and           whether    the
District Court's conclusions of law were supported by its
findings of fact?
        Appellant        maintains       that    the   settlement agreement
should be rescinded because of respondents' misrepresenta-
tions as to the value and nature of the Kalispell property.
We do not agree.
        This       Court    has    long    adhered          to    the    rule     that
statements of opinion are preeminently subject to the
common-law doctrine of caveat emptor.                       See Ray v. Divers
(1925), 72 Pllont. 513, 234 P. 246.                    Statements as to the
value of property are generally considered declarations of
opinion      and    will    not     constitute         a    proper       basis     for
rescission.        37 Am.Jur.2d      Fraud and Deceit, S 119 at 164.
Courts are continually confronted with the dilemma of
determining to what lengths a vendor of property may go in
"talking up"       his merchandise--where does "traders talk" end
and   actionable      fraud      begin?         Clearly,     the       line between
opinion and fact is an especially fine line for the District
Courts to draw when representations are made regarding the
value of property.
        The    common      law provides          reasonable           protection    to
purchasers against fraud and deceit.                       However, it does not
go to the romantic length of offering indemnity against the
adverse consequences of folly and indolence or a careless
indifference to information which would                               enlighten the
purchaser     as    to     the    truth    or    falsity         of    the   seller's
assertions as to value.             In such an instance, every person
r e p o s e s a t h i s own p e r i l          in the       f a c e of      another's        opinion

when he h a s ample o p p o r t u n i t y t o e x e r c i s e i n f o r m e d j u d g m e n t .

" S i m p l e x commendatio non o b l i q a t . "              2 K e n t s Comm. 485.

           W emphasize,
            e                        however,         t h a t i t is s i n g u l a r l y w i t h i n

the    province           of   the       District       Court         to    determine        whether

f r a u d h a s been p e r p e t r a t e d        on a n     innocent purchaser.                    The

D i s t r i c t C o u r t i s i n t h e b e s t p o s i t i o n t o weigh t h e f a c t o r s

involved,          assess the c r e d i b i l i t y of witnesses,                    and c o n c l u d e

whether       the        statements        regarding        value          constitute       fact     or

opinion.

            I n r u l i n g t h a t t h e D i s t r i c t C o u r t ' s d e c i s i o n must be

g i v e n g r e a t c r e d e n c e i n t h i s c a s e , we r e a f f i r m o u r d e c i s i o n

i n Lumby v .        Doetch ( 1 9 7 9 ) ,                Mont.               ,    600 P.2d         200,

36 S t . R e p .    1 6 8 4 , w h e r e i n we f o u n d t h a t t h i s C o u r t m u s t v i e w

the    evidence           in   a   l i g h t most      favorable           to     the     prevailing

party      and presume             the    c o r r e c t n e s s of    the District Court's

judgment.           Findings of           f a c t s h a l l n o t be s e t a s i d e u n l e s s

clearly        erroneous.                 Rule     52(a),         M.R.Civ.P.               Although

c o n f l i c t s may e x i s t ,     such t h a t t h e evidence                  t e n d s t o show

t h a t r e p r e s e n t a t i o n s a s t o v a l u e c o n s t i t u t e b o t h o p i n i o n and

f a c t , i t is t h e d u t y and f u n c t i o n o f t h e t r i a l c o u r t t o make

a r e s o l u t i o n of t h e c a s e one way o r t h e o t h e r .                 That c o u r t ' s

reasoned           and    thoughtful          determination                that     the     vendor's

s t a t e m e n t s a s t o t h e v a l u e of t h e p r o p e r t y were o p i n i o n , n o t

declarations             of    fact,       will      not     be       disturbed           where     its
d e c i s i o n was b a s e d on s u b s t a n t i a l e v i d e n c e .         See Kostbade v.

Buckingham           (1979),                  Mont.               ,    595        P.2d     1149,     36

St.Rep.      129.         It   is n o t a p r o p e r       f u n c t i o n of     t h i s Court t o

e x c h a n g e o u r o p i n i o n f o r t h a t of t h e D i s t r i c t C o u r t , e v e n i f

we m i g h t h a v e r e a c h e d       a d i f f e r e n t conclusion.                 I n accord,
P o r t e r v. P o r t e r ( 1 9 7 0 ) , 1 5 5 Mont. 4 5 1 , 473 P.2d 538.

            Our r e v i e w m u s t now examine t h e e v i d e n c e t o d e t e r m i n e

whether       t h e D i s t r i c t Court           exceeded       its discretion             in     the

r e s o l u t i o n of t h i s case.             Reviewing t h e e v i d e n c e i n a l i g h t

most f a v o r a b l e t o t h e p r e v a i l i n g p a r t i e s ,          w e conclude t h a t

there       is     substantial               credible         evidence         supporting            the

court's       judgment,           that      the court         properly disposed               of     the

issues,          and    that          the     court's        conclusions            of    law      were

s u p p o r t e d by i t s f i n d i n g s o f f a c t .

           Robert        Dolson          is      not    financially           naive.          To     the

contrary,         he    i s an a b l e and s u c c e s s f u l            businessman.               His

relationship               to         defendants           can      only       be        considered

adversarial             to      the     extent          their      respective            positions

r e p r e s e n t competing i n t e r e s t s .            T h e s e two f a c t o r s , D o l s o n ' s

business         acumen         and    his       relationship          t o defendants,             weigh

h e a v i l y a g a i n s t t h e p r o p o s i t i o n t h a t d e f e n d a n t s ' took u n f a i r

advantage          of      Dolson           when       declaring         the    value         of     the

property.          If    i n d e e d D o l s o n r e l i e d upon t h e r e p r e s e n t a t i o n s

of   defendants            as    to     the      value     of    the     parcel,         we   see     no

reason      why      the     D i s t r i c t C o u r t would           have    been      obliged      to

condone          such      imprudence             by    allowing         rescission           of     the

agreement.              Helena         Adjustment          Co.    v.     Claffin         (1926),      75

Mont. 317, 243 P. 1 0 6 3 ; s e e a l s o , W i l l i a m s v . J o s l i n ( 1 9 6 5 ) ,

65 Wash.2d          696,        399 P.2d         308 ( r e l i a n c e m u s t be r e a s o n a b l e ;

purchaser         may n o t r e l y on r e p r e s e n t a t i o n s when t h e i r                truth

c a n be r e a d i l y d e t e r m i n e d ) .

            Even a t t h i s p o i n t i n t h e c a s e , t h e r e c a n be no r e a d y

and a c c u r a t e d e t e r m i n a t i o n o f t h e v a l u e o f t h e p r o p e r t y amid

t h e c o n f l i c t i n g o p i n i o n s found i n t h e r e c o r d .           R e a l t o r Ming

alleges        the      property            is     worth      $7,500.          Appraiser           Neil
b e l i e v e s t h e p a r c e l i s w o r t h a.s much a s $ 8 , 9 0 0 .              The S t a t e

o f Montana D e p a r t m e n t o f Revenue d e t e r m i n e d t h e v a l u e o f t h e

property        to    be    $33,450       with        a   taxable      value       of     $22,000.

Finally,        we    have     t h e opinion of             James C h r i s t i a n       that    the

p r o p e r t y is worth $45,000.

           S u r e l y t h e f a c t s of t h i s c a s e exemplify t h e reasoning

behind t h e r u l e t h a t s t a t e m e n t s a s t o t h e v a l u e of p r o p e r t y

a r e n o t grounds f o r r e s c i s s i o n .           I t is reasonable t o expect

that     in a     s i t u a t i o n s u c h a s t h i s v e n d o r s would a t t a c h t h e

highest possible value t o the property.                              I n d e e d , i t would b e

u n r e a s o n a b l e t o assume o t h e r w i s e , and p u r c h a s e r s who r e l y on

s u c h r e p r e s e n t a t i o n s p r o c e e d a t t h e i r own r i s k .

           On O c t o b e r 3 1 ,      1 9 7 5 , R o b e r t D o l s o n was i n K a l i s p e l l

t o o b t a i n t h e s i g n a t u r e s of       t h e E d m i s t o n s and c o n c l u d e t h e

p r o v i s i o n s of t h e s e t t l e m e n t agreement.           Only a f t e r c o m p l e t e

execution of           t h e a g r e e m e n t d i d D o l s o n e x a m i n e what h e had

accepted.         The r e c o r d d i s c l o s e s no r e a s o n why D o l s o n d i d n o t

view t h e p r o p e r t y b e f o r e he f o r m a l i z e d t h e agreement.                 Since

he chos e t o a c c e p t t h e p r o p e r t y             s i g h t unseen,      when h e had

ample     opportunity           to    examine         the    s u b j e c t of     his     bargain,

D o l s o n c a n n o t now be h e a r d t o c o m p l a i n t h a t h e was u n f a i r l y

misled.

           We     concur       with       the      District        Court          finding        that

Dolson's        f o l l y was h i s own.              The D i s t r i c t C o u r t ' s    finding

t h a t r e s c i s s i o n would be i m p r o p e r i n t h i s c a s e i s s u p p o r t e d

by   substantial           evidence,         and      the court's         f i n d i n g s of     fact

a r e amply s u p p o r t i v e o f i t s l e g a l c o n c l u s i o n s .

           A c c o r d i n g l y , we a f f i r m .
                                                 n
We c o n c u r ;




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