Opinion ID: 1924343
Heading Depth: 1
Heading Rank: 1

Heading: jury instruction on strict responsibility

Text: Frost argues that the theory of strict responsibility should not have been submitted to the jury, because that theory is only applicable where the defendant could normally be expected to know the facts represented to be true without investigation. In the alternative, Frost contends that the words without investigation should have been added to the standard jury instruction, Wis. J. I.Civil No. 2402, so that the pertinent section read as follows: Thirdly, that the defendant made the representation as a fact based on his own personal knowledge, or in circumstances in which he necessarily ought to have known the truth or untruth of the statement without an investigation.  In support of its position, Frost cites Whipp v. Iverson, 43 Wis. 2d 166, which post-dated the 1969 standard jury instruction on this particular element of strict responsibility. In describing the tort of strict responsibility for misrepresentation, this court in Whipp stated that the misrepresentation must be made on the defendant's personal knowledge or under circumstances in which he necessarily ought to have known the truth or untruth of the statement. . . . Id. at 170. However, the court cited a 1938 Minnesota Law Review article [4] for the further explanation that, under strict responsibility, the speaker is supposed to possess complete knowledge of the facts or could normally be expected to know them without investigation. Id. The Law Notes for Trial Judges in the standard jury instructions use the Whipp language. Frost then goes on to argue that the doctrine of strict responsibility is not applicable in this case, because its agent, Schulz, could not have known the dimensions of the property without an investigation. While we agree with Frost that there is a discrepancy between the language of the standard jury instruction and Whipp v. Iverson , we cannot accept Frost's contention that a defendant is only strictly responsible for misrepresentations made concerning facts which he would normally be expected to know without investigation. [5] First, we think that the Minnesota Law Review article, which was referred to in Whipp, does not clearly explain the significance of the investigation factor. [6] Even more compelling, we believe, is the rationale behind the doctrine of strict responsibility for misrepresentation. The policy behind strict responsibility for misrepresentation is stated in the Law Notes for Trial Judges in Wis. J.I.No. 2400, Misrepresentation: Bases for Liability and Damages: Strict responsibility for misrepresentation, the second basis, applies to those situations where public opinion calls for placing the loss on the innocent defendant rather than on the innocent plaintiff. In Stevenson [ v. Barniweck, 8 Wis. 2d 557, 99 N.W.2d 690 (1959)], the court (citing Prosser) required the presence of two factors before liability would be found: (1) a representation made as of defendant's own knowledge, concerning a matter about which he purports to have knowledge, so that he may be taken to have assumed responsibility as in the case of warranty, and (2) a defendant with an economic interest in the transaction into which the plaintiff enters so that defendant expects to gain some economic benefit. In other words, strict responsibility applies in those circumstances which `indicate that the speaker either had particular means of ascertaining the pertinent facts, or his position made possible complete knowledge and the statements fairly implied that he had it.' Therefore, the speaker ought to have known or else ought not to have spoken. [1] We agree with the court of appeals that the applicability of the doctrine of strict responsibility does not depend upon the actual source of the speaker's knowledge; rather, this element is satisfied if the speaker professes or implies personal knowledge. The other key element is the buyer's justifiable reliance on the statement. If the fact represented is something that one would not expect the speaker to know without an investigation, this might be a factor in determining whether there was justifiable reliance on the part of the buyer. Accordingly, since the without investigation factor is not an element of strict responsibility for misrepresentation, we hold that the trial court was correct in not adding such language to the standard jury instruction.