Ganley Bros., Inc. v. Butler Bros. Bldg. Co.

• Decision Date: 04 March 1927
• Docket Number: No. 25761.,25761.
• Parties: GANLEY BROS., Inc., v. BUTLER BROS. BLDG. CO.
• Court: Minnesota Supreme Court

170 Minn. 373
212 N.W. 602

GANLEY BROS., Inc.,
v.
BUTLER BROS. BLDG. CO.

No. 25761.

Supreme Court of Minnesota.

March 4, 1927.

Appeal from District Court, Ramsey County; Charles Bechhoefer, Judge.

Action by Ganley Bros., Inc., against the Butler Bros. Building Company. Findings for defendant on its counterclaim. From an order denying its motion for a new trial, plaintiff appeals. Reversed.

Syllabus by the Court

A provision in a written contract reciting that a party thereto has not relied upon any statement of the other party in respect to the subject-matter will not prevent him from later prosecuting a claim for damages arising out of alleged fraudulent representations which induced the making of the contract.

Oral proof of such fraud does not violate the parole evidence rule.

Such a restriction is unenforceable, where there is actual fraud, because of public policy.

[212 N.W. 602]

Morphy, Bradford, Cummins, Jackson, Cummins & Lipschultz and Cowern & Jesmer, all of St. Paul, for appellant.

Doherty, Rumble, Bunn & Butler, of St. Paul, for respondent.

WILSON, C. J.

Defendant had three separate contracts for the construction of several sections of hard surface highway in St. Louis county. It sublet all the work, in one contract, to plaintiff. The complaint states three causes of action. The first alleges that the contract involved was induced by false and fraudulent representation, the details of which are therein fully stated and which contains the necessary averment of reliance and untruthfulness. The contract, which is attached to defendant's answer in support of the counterclaim therein alleged, contains this language:

‘The contractor has examined the said contracts of December 7, 1922, and the specifications and plans forming a part thereof, and is familiar with the location of said work and the conditions under which the same must be performed, and knows all the requirements, and is not relying upon any statement made by the company in respect thereto. The contractor further represents that it is familiar with the kind and character of the work to be done, as called for by said plans, specifications, and contract, and that it is experienced in road building.’

On the trial of the case defendant moved for judgment on the pleadings as to the first cause of action. This motion was based upon the theory that the action could not be prosecuted because of the provision of the contract, above quoted, negativing fraud. The court allowed an amendment to the complaint alleging an oral agreement of the parties limiting the operation of the language quoted and attempting to give to it a practical construction. After the amendment the motion was again made and was granted. Thereupon the plaintiff dismissed the second and third causes of action without prejudice. The issue in the counterclaim was submitted to the court. Findings were made directing judgment thereon in favor of defendant for $68,309.92. Plaintiff has appealed from an order denying its motion for a new trial. Its grievance relates solely to the disposition of the first cause of action.

Parol evidence is admissible to show that the making of the contract was...