Opinion
40925.
DECIDED FEBRUARY 9, 1965.
Fraud and deceit. Fulton Civil Court. Before Judge Parker.
Bullock, Yancey Mitchell, Harris Bullock, for plaintiff in error.
Powell, Goldstein, Frazer Murphy, Edward E. Dorsey, Gregg Loomis, contra.
The petition failed to state a cause of action for fraud and deceit because the action was based upon a misrepresentation of mere opinion, and the trial court properly dismissed the petition on general demurrer.
DECIDED FEBRUARY 9, 1965.
Herman Brown brought this action to recover damages against Mack Trucks, Inc., and Mack Financial Corporation. The amended petition alleges: In 1958 the plaintiff purchased by conditional-sale contract a truck tractor from defendant Mack Trucks, Inc., which subsequently assigned its interest in the contract to its subsidiary, defendant Mack Financial Corporation. The contract required that plaintiff keep the truck insured against loss by fire, theft, and collision ($250 deductible) for the full insurable value of the property, with loss payable to the vendor, or its assigns, as its interest might appear. On August 24, 1962, at the request of J. R. Wright, an employee of defendant Mack Trucks, Inc., Aetna Casualty Surety Company issued a vendor's single-interest insurance policy covering the plaintiff's truck tractor. W. E. Aenchbacher, Credit Supervisor of defendant Mack Financial Corporation, was advised of the latter transaction, and Aenchbacher "informed the plaintiff that Mack Trucks, Inc., had procured a $250.00 deductible collision insurance policy from Aetna Casualty Surety Company for him"; that the insurance "would be charged to his open account"; and "that it would not be necessary for him to procure additional insurance, inasmuch as his interest in the truck was protected under said policy." On December 25, 1962, the truck was wrecked. Employees of both defendants informed plaintiff that the insurance procured for plaintiff "would take care of the balance due on his contract or repair the truck, whichever was the lesser." However, the insurance policy did not cover plaintiff's interest, and he lost his equity in the truck. "Defendants knew that the representations they made were false"; "they were made for the purpose of deceiving and defrauding" plaintiff; and "plaintiff relied on said representations and has been damaged thereby." The petition prays for actual and exemplary damages.
Plaintiff excepts to the judgment of the trial court sustaining defendants' general demurrers and dismissing the petition.
The plaintiff's petition sounds in tort for fraud and deceit, based upon alleged misrepresentations as to insurance coverage.
A cause of action will lie for breach of contract to procure insurance on behalf of another. See Home Bldg. c. Assn. v. Hester, 213 Ga. 393, 395 ( 99 S.E.2d 87); Bell v. Fitz, 84 Ga. App. 220, 223 (1) ( 66 S.E.2d 108); Farmers Merchants Bank v. Winfrey, 89 Ga. App. 122 ( 78 S.E.2d 818). And irrespective of contractual duty, an action in tort may be based upon a misrepresentation that insurance coverage has been effected when no policy or binder has been issued. Seabrook v. Underwriters Agency, 43 Ga. 583; Clark v. Kelly, 217 Ga. 449, 452 ( 122 S.E.2d 731). Those cases in which the representations were considered to be representations of fact, are distinguishable from this case. Here the alleged representations as to insurance coverage were made after an insurance policy had been issued. The alleged misrepresentations were as to whose interests in the property were covered by the policy. Thus, in this case the truth of the representations would depend upon the legal effect of the policy provisions. Consequently the alleged misrepresentations were misrepresentations of law. Misrepresentations of the mere fact of existence or non-existence of a policy in issue in the Seabrook and Clark cases are not involved here.
In actions for fraud the misrepresentations relied on must relate to past or existing facts. Code § 105-302; Rogers v. Sinclair Refining Co., 49 Ga. App. 72 ( 174 S.E. 207); Thigpen v. Harbison-Walker c. Co., 55 Ga. App. 397, 405 ( 190 S.E. 378); Monroe v. Goldberg, 80 Ga. App. 770, 775 ( 57 S.E.2d 448). Misrepresentations as to a question of law cannot constitute remediable fraud, as such representations are ordinarily regarded as mere expressions of opinion. Dixon v. Dixon, 211 Ga. 557, 563 (2) ( 87 S.E.2d 369); Claxton Bank v. Smith, 34 Ga. App. 265 (1) ( 129 S.E. 142); Salter v. Brown, 56 Ga. App. 792 (1) ( 193 S.E. 903); Bernstein v. Peters, 69 Ga. App. 525, 534 ( 26 S.E.2d 192); 23 Am. Jur. 809, Fraud and Deceit, § 45; 37 CJS 323, Fraud, § 55. This is especially true where there is no confidential relationship between the parties. Swofford v. Glaze, 207 Ga. 532, 535 ( 63 S.E.2d 342); Beckman v. Atlantic Refining Co., 53 Ga. App. 671 (2) ( 187 S.E. 158); Williams v. Dougherty County, 101 Ga. App. 193, 196 ( 113 S.E.2d 168); Thomas v. Byrd, 107 Ga. App. 234, 236 ( 129 S.E.2d 566). These principles are applicable in cases involving a misrepresentation of the legal effect of an insurance policy. See Howard v. Georgia Home Ins. Co., 102 Ga. 137, 139 (1) ( 29 S.E. 143); National Life c. Ins. Co. v. Parker, 67 Ga. App. 1, 7-8 ( 19 S.E.2d 409); Sherwin-Williams Co. v. St. Paul-Mercury Indem. Co., 97 Ga. App. 298, 299 (2) ( 102 S.E.2d 919); Fields v. Fire Cas. Ins. Co. of Conn., 101 Ga. App. 561 ( 114 S.E.2d 540); Bryant v. Motors Ins. Corp., 109 Ga. App. 47, 52 (3b) ( 134 S.E.2d 905).
It does not appear in the petition whether the plaintiff ever had possession of the policy that he alleged protected his interest in his truck. However, this makes no difference, as the plaintiff alleged the existence of the policy and is chargeable with knowledge of its contents regardless of who had possession of it. In this connection see Justice Candler's concurring opinion in Hart v. Waldo, 117 Ga. 590, 594-598 ( 43 S.E. 998). See also Security Life Ins. c. Co. v. Gober, 50 Ga. 404, 412 (2); Thomson v. Southern Mutual Ins. Co., 90 Ga. 78 (1) ( 15 S.E. 652). This is in harmony with the general rule applicable in cases charging fraud where the representation is merely one of opinion: "Misrepresentations are not actionable unless the complaining party was justified in relying thereon in the exercise of common prudence and diligence. And where the representation consists of general commendations or mere expressions of opinion, hope, expectation and the like . . . the party to whom it is made is not justified in relying upon it and assuming it to be true; he is bound to make inquiry and examination for himself so as to ascertain the truth." Rogers v. Sinclair Refining Co., 49 Ga. App. 72, 75, supra. Sound business practice would have demanded that the plaintiff investigate for himself and form his own independent conclusions as to the legal effect of the policy provisions, and the petition alleges no reasons why he could not or need not have done so.
Judgment affirmed. Jordan and Eberhardt, JJ., concur.