Miller v. Osterlund

• Decision Date: 09 February 1923
• Docket Number: No. 23023.,23023.
• Citation: 191 N.W. 919,154 Minn. 495
• Parties: MILLER et al. v. OSTERLUND.
• Court: Minnesota Supreme Court

154 Minn. 495

191 N.W. 919

MILLER et al.

v.OSTERLUND.

No. 23023.

Supreme Court of Minnesota.

Feb. 9, 1923.

Appeal from District Court, Crow Wing County; W. S. McClenahan, Judge.

Action by G. L. Miller and another against Charles G. Osterlund. From judgment for plaintiffs, defendant appeals. Reversed.

Syllabus by the Court

A representation that an insurance company has authority and right to do business in Minnesota is an implied representation that it has complied with the laws of this state and has procured official permission therefor, and if the representation is false it is actionable. H. E. Peterson, of Minneapolis, for appellant.

H. B. Sherwood, of Long Prairie, for respondents.

HALLAM, J.

This is an action on a promissory note executed and delivered by defendant to the Guardian Food Company and indorsed by the Guardian Food Company to plaintiff. Defendant answered, alleging that the note was procured by fraud, and that plaintiff had knowledged of the fraud at the time of the indorsement of the note. On the trial, the court sustained an objection to the introduction of any evidence under the answer on the ground that it failed to state a defense, and directed a verdict for plaintiff. From the judgment entered, defendant appeals.

The answer alleged, among other things, that the Guardian Food Company solicited defendant to buy some of its stock food and to sell the same to his customers; that, as an inducement to the purchase, the Guardian Food Company agreed to insure the stock of the purchaser, provided he used the food in accordance with prescribed directions, and ‘that said Guardian Food Company falsely represented to defendant that it had authority and right to do business in the state of Minnesota and the authority and right to execute the insurance above described in the state of Minnesota, notwithstanding that it was foreign company with its offices in the city of Indianapolis in the state of Indiana.’

The contention of plaintiff is that this alleges a representation of law and not of fact, and for that reason is not actionable. With this we do not agree.

A misrepresentation of a matter of law, in the absence of a relation of trust or confidence between the parties, or of some fact showing imposition, is not a representation on which the party to whom it has been made has a right to rely, for the law is presumed to be equally within the the knowledge of both parties. 23 Corpus Juris, 1207, 1208, § 106; Beall v. McGehee, 57 Ala. 438.

This rule is applied with propriety in cases where a party makes representations as to the legal effect of language in a contract, Thompson v. Phoenix Insurance Co., 75 Me. 55, 46 Am. Rep. 357; or as to rights given by a contract, Prince v. Overholser, 75 Wis. 646, 44 N. W. 775; or as to liability on a certificate of stock in a corporation, Upton v. Tribilcock, 91 U. S. 45, 23 L. Ed. 203; or as to the legal effect of an indorsement, First National Bank of Hibbing v. Schirmer, 134 Minn. 387, 159 N. W. 800.

But it is not always easy to classify representations as of law or fact, often they are of mixed law and fact, and courts should not be too indulgent of d...