CHAPTER I.

DECEIT.

§ 1. INTRODUCTORY.

Statement of the duty. A owes to B the duty to forbear to mislead him to his damage by false and fraudulent representations.

1. Deceit is a ground of defence to the enforcement of a contract, and is also ground for proceedings by the injured party to rescind á contract. In such cases the same facts, apart from the wrongdoer's knowledge of the actual state of things, are necessary for establishing the deceit as are necessary to an action of or for deceit.1 Hence, with the exception mentioned, authorities concerning the proof of deceit in cases of contract are authorities in regard to actions for damages by reason of deceit.

2. The action at law for damages by reason of deceit is called indifferently an action of deceit or an action for deceit.

In order to establish a breach of the duty above stated, and to entitle B to civil redress therefor, B, unless he come within one of the qualifications to the rule, must make it appear to the court (1) that A has made a false representation of material facts; (2) that A made the same with knowledge of its falsity; (3) that B was ignorant of its falsity, and believed it to be true; (4) that it

1 King v. Eagle Mills, 10 Allen, 548; Wilder v. De Cou, 18 Minn. 470.

was made with intent that it should be acted upon; (5) that it was acted upon by B to his damage.1 But each of these general elements of the right of redress must be separately examined and explained, and any qualifications to the same presented. The designation of the parties as A and B may now be dropped, and B will be spoken of as the plaintiff, and A as the defendant.

§ 2. OF THE REPRESENTATION.

It is proper first to consider the meaning, in the law, of the term representation,' and thus to ascertain the real foundation of the action under consideration. Accordingly, a representation may be defined to be a statement or an act, creating a clear impression of fact upon the mind of another, sufficient to influence the conduct of a man of ordinary intelligence.

As a matter of language there may be no difference whatever between a representation and a warranty. The statement, This horse is sound' may be the one or the other. The following external distinctions, however, will suggest certain tests for deciding cases to which they are applicable: A warranty is always annexed to some contract and is part of that contract; the warranty is indeed a contract itself, though a subsidiary one, dependent upon the main agreement. A representation, however, is in no case more than inducement to a contract; it is never part of one. To carry it into a contract would be to make it a warranty. And again, there may be a representation, such as the law will take cognizance of, though no contract was made or attempted between the one who

1 Pasley v. Freeman, 3 T. R. 51; s. c. L. C. Torts, 1.

2 Brownlie v. Campbell, 5 App. Cas. 925, 953, Lord Blackburn. An affirmative warranty is ordinarily an artificial contract of the law. Ante, p. 17, note.

made the representation and the one to whom it was made.

This would be sufficient to distinguish the two terms, if it were necessary to a warranty that it should be expressly annexed to the contract-in-chief; but that is not necessary, and that fact sometimes creates difficulty. In written contracts there can seldom be difficulty in determining whether a particular statement is a warranty or a representation (when it is either), for the warranty must be part of the writing, since a warranty must be part of the contract-in-chief, and it will either be directly incorporated into the general writing or be so connected with it by apt language 2 that there can be no doubt of the intention of the parties.

The difficulty is with oral contracts, and then in most cases only in regard to sales of personalty. Whether the statement in question is a representation or a warranty is, however, a question of intention; and an intention to create a warranty is shown, it seems, by evidence of mate. rial statements of fact made as an inducement to the sale, at the time the bargain was effected, or during negotiations therefor which have been completed in proper reliance upon the statements; provided nothing at variance with the inference of intention is shown. If the state

1 Kain v. Old, 2 B. & C. 627.

2 A warranty may indeed be implied, i. e. arise without language or intention, but such cases are aside from the present purpose. The difficulty under consideration concerns the effect of language used.

3 See Hopkins v. Tanqueray, 15 C. B. 130. This will explain many cases in which it is held that a vendor of personalty is liable for his false representations though he believed them to be true. See Sledge v. Scott, 56 Ala. 202; post, p. 64. In such cases there is in reality a warranty, and hence the vendor's knowledge is immaterial, though the case is not always put on the ground of warranty.

4 Such appears to be the effect of the cases. See Benjamin, Sales, § 613.

ment was not so made, it is a representation if it is anything. What difficulty remains is in the application of the rule; and that is a matter for works treating of contracts or torts in detail.

1

A warranty of fact, however, when broken, may be treated, it seems, as a case of misrepresentation, giving rise to an action for deceit, if the elements necessary to liability in a proper case of misrepresentation are present; and this, it is believed, is true whether the warranty was express or implied. Indeed, in case of implied warranty the breach appears to be enough to make the case one of deceit.2 This reduces the matter to a question of the form of action. But it is very doubtful whether an action based on deceit could be maintained where the evidence showed nothing but a breach of warranty. That would, in the language of pleading, be a variance; the action should be on the warranty as such.

3

Consider now the definition above given of the term representation.' A representation must consist in a statement or an act.' There are, it is true, cases in which legal consequences may attend absolute silence; but there are very few cases 4 in which an action for damages on account of silence alone can be maintained. There must ordinarily be some additional element to make silence actionable. If the silence consist in withholding part of the truth of a statement, it may be actionable, as will be

1 See Indianapolis R. Co. v. Tyng, 63 N. Y. 653.

2 White v. Madison, 26 N. Y. 117, 124; Jefts v. York, 10 Cush. 392; Johnson v. Smith, 21 Conn. 627; Collen v. Wright, 8 El. & B. 647; Randell v. Trimen, 18 C. B. 786; Seton v. Lafone, 18 Q. B. D. 139, affirmed on appeal, 19 Q. B. Div. 68; post, p. 65.

3 Mahurin v. Harding, 28 N. H. 128; Cooper v. Landon, 102 Mass. 58; Larey v. Taliafferro, 57 Ga. 443.

4 Silence might be ground for an action in deceit by a cestui que trust against his trustee, it seems, in a transaction between the two in regard to the trust property to the damage of the former.

seen later; but in such a case silence is, properly speaking, only part of the representation. The silence amounts to saying that what has been stated is all. There is a duty to speak in such a case, and it is only when there is such a duty that silence has any legal significance.

Indeed, even passive concealment, that is, intentional withholding of information, when not attended with any active conduct tending to mislead, is insufficient, according to the general current of common-law authority, to create a cause of action. For example: The defendant, knowing of the existence of facts tending to enhance the price of tobacco, of which facts the plaintiff is ignorant to the defendant's knowledge, buys a quantity of tobacco of the plaintiff at current prices, withholding information of the facts referred to (no question being asked to bring them out). This is no breach of duty to the plaintiff.1 Again: The defendant buys of the plaintiff land in which there is a mine, the defendant knowing the fact, and knowing that the plaintiff is ignorant of it. The defendant does not disclose the fact in the negotiations for the purchase. This is no breach of duty.2

1 Laidlaw v. Organ, 2 Wheat. 178. See Prescott v. Wright, 4 Gray, 461, 464; Kintzing v. McElrath, 5 Barr, 467; Smith ». Countryman, 30 N. Y. 655, 670, 671; People's Bank v. Bogart, 81 N. Y. 101; Hanson v. Edgerley, 29 N. H. 343; Fisher v. Budlong, 10 R. I. 525, 527; Hadley v. Clinton Importing Co., 13 Ohio St. 502; Williams v. Spurr, 24 Mich. 335; Law v. Grant, 37 Wis. 548; Cogel v. Kinseley, 89 Ill. 598; Frenzel v. Miller, 37 Ind. 1; Smith v. Hughes, L. R. 6 Q. B. 597; Evans v. Carrington, 2 De G. F. & J. 481; Peek v. Gurney, L. R. 9 H. L. 377, Lord Cairns; Coaks v. Boswell, 11 App. Cas. 232, Lord Selborne. Whatever may be the case in a court of morals, there is no legal obligation on the vendor to inform the purchaser that he is under a mistake, not induced by the act of the vendor.' Blackburn, J. in Smith v. Hughes, supra. Contra in some of the States. Patterson

v. Kirkland, 34 Miss. 423; Cecil v. Spurgur, 32 Mo. 462; Lunn v. Shermer, 93 N. Car. 164; Merritt v. Robinson, 35 Ark. 483.

2 Fox v. Mackreth, 2 Bro. C. C. 400, 420, a leading case in equity. See Turner v. Harvey, Jacobs, 169, 178, Lord Eldon.