inquiries, which, for his own security and advantage, he would otherwise have made. (b)

The rule in equity is more rigid on this subject than it is at law. Lord Hardwicke held, (e) that where the seller had falsely affirmed a farm to have been valued by two persons at a certain price, and that assertion had induced the purchaser to contract, it was such a misrepresentation as would induce a court of equity to withhold a decree for a specific performance. But there is a settled distinction in equity between enforcing specifically and rescinding a contract; and an agreement may not be entitled to be enforced, and yet not be so objectionable as to call for the exercise of equity jurisdiction to rescind it. It does not follow that a contract of sale is void in law merely because equity will not decree a specific performance. (d) 2

(b) It is settled, that a material misrepresentation of a fact by mistake, and upon which the other party is induced to act, is a ground for relief in equity, equally as if it had been a wilful and false assertion, for it operates with equal injury. Pearson v. Morgan, 2 Bro. C. C. 388. M'Ferran v. Taylor, 3 Cranch, 270. Rosevelt v. Fulton, 2 Cowen, 133. Lewis v. M'Lemore, 10 Yerger, 206.

(c) Buxton v. Lister, 3 Atk. 386.

(d) Seymour v. Delancey, 6 Johns. Ch. 222. The cases on this point are there collected and reviewed. Though the decision in that case was afterwards reversed in the Court of Errors, the general doctrines in it were not affected but admitted. Inadequacy of price is of itself a sufficient ground of defence to a bill in equity by a purchaser for a specific performance, when the party contracting to sell was an expectant heir. Peacock v. Evans, 16 Vesey, 512. Ryle v. Brown, 13 Price Exch. 758. On the other hand, a court of equity will rescind a contract for the sale of land when the intrinsic nature and subject of the bargain itself, or the attending circumstances, are clearly indicative of fraud. King v. Cohorn, 6 Yerger (Tenn.) 75. So a bill for the recission of a contract for the purchase of land will be sustained, if the defendant fails at the hearing to show that he is then able to give a good title, or to give possession, and there be no adequate remedy at law for the breach of the contract. Hepburn v. Dunlop, 1 Wheaton, 179. Williams v. Carter, 3 Dana (Ken.) 199. Seamore v. Harlan, Ibid. 412. In the case of King v. Hamilton, 4 Peters U. S. 311, it was adjudged, that the equity power of decreeing a specific performance of contracts was to be exercised in sound discretion, and with an eye to the substantial justice of the case, and never when the exercise of it would be inequitable and unjust. If damages would be an inadequate compensation for non-performance of a contract, equity will grant relief. Storer v. Great W. R. Road Co, 2 Y. & Coll. Ch. 48.

2 There is a distinction, too, between enforcing specific covenants and restraining acts in breach of covenants. In a class of cases, as the engagements of opera singers, &c., courts cannot enforce specifically the performance, but they will restrain the breach of negative covenants. Lumley v. Wagner, 13 Eng. L. & Eq. 252. Bradley v. Bradley, 1 Barb. Ch. 125. Dupre v. Thompson, 4 Barb. (N. Y.) 279.

*488

148.

*An action will lie against a person not interested in the property, for making a false and fraudulent representa

The general rule is, that a court of chancery will not decree a specific performance of an agreement for the sale and purchase of stock or of chattels. But there are so many exceptions and qualifications attending the rule, that its force is greatly impaired; and more recent and better authority would seem to be, that when justice requires it, chancery will, in such cases, decree a specific performance. For the general rule, see Cud v. Rutter, 1 P. Wms. 570. S. C. 5 Viner, Abr. 538. Cappur v. Harris, Bunb. 135. Dorison v. Westbrook, 5 Viner Abr. 540. Nutbrown v. Thornton, 10 Vesey, 159. For exceptions to it, and in favor of specific performance, see Colt v. Nuttervill, 2 P. Wms. 304. Duke of Somerset v. Cookson, 3 Idem, 390. Buxton v. Lister, 3 Atk. 383. Taylor v. Neville, cited, Ibid. 384. Lord Eldon, in Lady Arundel v. Phipps, 10 Vesey, Wright v. Bell, 5 Price Exch. 325. Adderley v. Dixon, 1 Sim. & Stu. 607. Lynn v. Chaters, 2 Keen, 521. Withy v. Cottle, 1 Sim. & Stu. 174. Clark v. Flint, 22 Pick. 231. The true principle in equity is, that specific performance of an agreement relating to chattels ought to be decreed, when equity and conscience require it, as in the case of pictures and other things of peculiar value and attachment, and when the remedy by action at law for damages would be inadequate, and no competent or just relief could be otherwise afforded. Mitford Pl. Chan. 168, edit. N. Y. 1833. Story's Com. on Eq. Jurisprudence, vol. ii. 18, 26-48, where the English chancery cases on the subject are critically examined. In Sarter v. Gordon, and Young v. Burton, domestic slaves brought up in the family are declared to come within the reason of the exception. 2 Hill Ch. (S. C.) 126, 127. 1 McMullan Eq. (S. C.) 255. As to the specific performance of contracts for the sale of lands, see supra, pp. 470-476, and more particularly, infra, vol. iv. p. 451. With respect to contracts entered into for fraudulent or illegal purposes, the law refuses its aid to enable either party to disturb such parts of it as have been executed; and as to such parts as remain executory, it leaves the parties where it finds them. Nellis v. Clark, 20 Wendell, 24. S. C. 4 Hill (N. Y.) 429. Mellen C. J., in Smith v. Hubbs, 1 Fairfield, 71. M'Kinnell v. Robinson, 3 Mees. & W. 434.

The case of marine insurance is different from the ordinary contract of sale, and rests on a different principle. The parties do not deal in that instance on the presumption of equal knowledge and vigilance as to the subject-matter of the contract, and hence a different rule of law prevails. The insurer is essentially passive, and is known to act, and professes to act, upon the information of the assured. In an insurance contract, the special facts, as Lord Mansfield has observed, (Carter v. Boehm, 3 Burr. 1905,) upon which the contingent chance is to be computed, lie most commonly in the knowledge of the insured only. "The underwriter trusts to his representation," and proceeds upon confidence that he does not keep back any circumstance in his knowledge. Lindenau v. Desborough, 8 Barn. & Cress. 586. Though the suppression should happen through mistake, without any fraudulent intention, the policy is void. The contract of insurance is formed upon principles peculiar to itself; and the common law maxim of caveat emptor has no application, and professes to have none. So, in the case of work done, and articles made by a mechanic, the buyer professes to repose upon the superior knowledge and skill of the mechanic in his trade, and to know nothing of the mystery of the art; and if the latter does not furnish his work done in a workmanlike manner, he is guilty of a breach of an implied contract; spondet peritiam artis. Jones v. Bright, Danson & Lloyd, 304. Leflore v. Justice, 1 Smedes & Marsh. 381. See, also, infra, p. 558. The reason of the distinction between these cases and the ordinary contract of sale is very

tion to the seller, whereby he sustained damage by trust- * 489 ing the purchaser on credit of such misrepresentation. (a) This principle was first established in England after great discussion and opposition in the case of Pasley v. Freeman, (b) and though that case met with powerful resistance, it has been repeatedly recognized, and the doctrine of it is now well settled, both in the English and American jurisprudence. (e) The principle is that fraud, accompanied with damage, is a good cause of action; (d) and the solidity of the principle was felt and * 490

*

apparent; and the common law has carried the doctrine of disclosures by each party in the formation of the contract of sale, to every reasonable and practicable extent that is consistent with the interests of society. The maxim of caveat emptor, and that other maxim, vigilantibus et non dormientibus jura subveniunt, when discreetly applied, as in the English law, are replete with sound and practical wisdom.

(a) Upton v. Vail, 6 Johns. 181. Bean v. Herrick, 3 Fairfield, 262. In the case in 6 Johns. the doctrine in the case of Pasley v. Freeman was recognized, discussed, and settled, in the Supreme Court of New York. It was again recognized, discussed, and settled, in Gallager v. Brunel, 6 Cowen, 346; and once more recognized, discussed, and settled, in Benton v. Pratt, 2 Wendell, 385; and again, and very elaborately and powerfully enforced, in Allen v. Addington, 7 Wendell, 1. S. C. 11 Idem, 374. This is a striking sample of what are termed the homonymic of the civil law. But the statute of 6 Geo. IV. ch. 14, commonly called Lord Tenterden's Act, has done away the application of the doctrine of Pasley v. Freeman to English cases. That Act extends the statute of frauds, by requiring a memorandum in writing, signed by the party to be charged, of representations of another's character and ability, with a view to credit to be given him. It equally applies to cases of verbal acknowledgments of debts barred by the statutes of limitations; and it wonderfully relieves the courts, the profession, and the country, from the evils of fluctuating and contradictory decisions.2 These provisions of the English statutes were adopted in the Massachusetts Revised Statutes for 1836, and in the Revised Statutes of Vermont, 1839, p. 317. See Lyde v. Barnard, 1 Mees. & W. 101, on the doubtful construction of Lord Tenterden's Act.

(b) 3 Term Rep. 51.

(c) Eyre v. Dunsford, 1 East, 318. Haycraft v. Creasy, 2 Idem, 92. Carr, ex parte, 3 Ves. & Bea. 110. Hamar v. Alexander, 5 Bos. & Pull. 241. Wise v. Wilcox, 1 Day, 22. Russell v. Clark, 7 Cranch, 92. Munroe v. Gardner, 1 Mills (S. C.) 328. Hart v. Tallmadge, 2 Day, 381. Patten v. Gurney, 17 Mass. 182.

67, 79.

See, also, 7 Vermont,

(d) Fraud without damage, or damage without fraud, says Coke J., in 3 Bulst. 95, gives no case of action; but where these two do concur and meet together, there an action lieth. By fraud, LeBlanc J., said in 2 East, 108, he understood an intention to deceive, whether from an expectation of advantage to the party himself, or from ill-will towards the other. Both of these propositions contain true doctrine on the point. If the false representation be made, knowing it to be false, and injury follows, the law infers

1 The doctrine was ably enforced in Zabriskie v. Smith, 3 Kernan, 322.

2 The Code of Procedure of New York, requires debts barred by the statute of limitations to be acknowledged by writing.

Misrep

acknowledged by the writers on the civil law. (a)1 resentation, without a design, is not sufficient for an action. But if recommendation of a purchaser, as of good credit, to the seller, be made in bad faith, and with knowledge that he was not of good credit, and the seller sustains damage thereby, the person who made the representation is bound to indemnify the seller. (b) 2 It is a very old head of equity, said Lord Eldon, (c) that if a representation be made to another person, going to deal in a matter of interest upon the faith of that representation, the former must make the representation good if he knew it to be false.

2

Lord Thurlow, in Fox v. Mackreth, (d) allowed of much latitude of concealment on the part of the purchaser. The latter, according to his opinion, would not be bound, in negotiating for the purchase of an estate, to disclose to the seller his knowledge of the existence of a mine on the land, of which he knew the seller was ignorant. If the estate was purchased for a price of which the mine formed no ingredient, he held, that a court of equity could not set aside the sale, because there was no fraud in the case, and the rule of nice honor must not be drawn so strictly as to affect the general transactions of mankind. From this and

a fraudulent intent, and the person who makes it is responsible for the consequences. Tindall C. J., in Foster v. Charles, 6 Bing. 396. 7 Idem, 105. But it is not requisite to show that the defendant knew the representation to be untrue. It is sufficient if the representation be untrue, and made for a fraudulent purpose, and to induce the plaintiff to do what he does do to his prejudice. Taylor v. Ashton, 11 Mees. & W. 401. Malice and want of reasonable cause is a ground for damages. De Medina v. Grove, 10 Ad. & El. N. S. 152. This appears to be the sound doctrine and the wholesome discipline of the law on the point.

(a) Dig. 50, 17, 47.

(b) Pothier, Traité du Contrat de Mandat, No. 21.

(c) Evans v. Bicknell, 6 Vesey, 182.

(d)

Bro. 420. Lord Eldon, to the same point, in Turner v. Harvey, Jacob, 178.

1 If a man tells an untruth to induce another to alter his situation, who thereby suffers damage, an action lies, though no fraud nor injury was intended. Watson v. Poulston, 7 Eng. L. & Eq. 585. Turnbull v. Gadsden, 2 Strobh. Eq. 14. Smith v. Mitchell, 6 Geo. 458. 2 Where a person procures the sale and delivery of articles by fraudulent and false representations, he acquires no property in them, or right of possession, and the vendor may pursue him and retake the property, with such reasonable force as may be necessary. Hodgeden v. Hubbard, 18 Vermont, 504.

3 Butler's Appeal, 26 Penn. 63. But where a chattel was sold which in fact contained valuable articles, not belonging to its structure, they were not held to pass. Huthmacher v. Harris, 38 Penn. 491.

other cases it would appear, that human laws are not so perfect as the dictates of conscience; and the sphere of morality is more enlarged than the limits of civil jurisdiction. There are many duties that belong to the class of imperfect obligations which are binding on conscience, but which human laws do not, and cannot undertake directly to enforce. But when the aid of a court of equity is sought to carry into execution such a contract, then the principles of ethics have a more extensive sway; and a purchase made with such a reservation of superior knowledge, would be of too sharp a character to be aided and forwarded in its execution by the powers of the Court of Chancery. (e) In Turner v. Harvey, (f) relief was given in equity against a contract, where the purchaser knew that the vendors (who were assignees of a bankrupt) were ignorant of a circumstance considerably increasing the value of the property. And while it was admitted to be the general rule that the purchaser was not bound to give the vendor information, as to the value of the property, yet it was said that very little was sufficient to affect the application of the principle, as if a single word be dropped tending to mislead the vendor. And though there be cases in which a contract improvidently entered into by a trustee will not be cancelled by the court, yet they will not lend the aid of the court to excuse it. But if a person stands in the relation of trustee, or quasi trustee to another, as agent, factor, steward, attorney, or the like, if he would purchase of his principal or employer, any property committed to his care, he must deal with the utmost fairness, and conceal nothing within his own knowledge which may affect the price or value; and if he does, the bargain may be set aside. (g) Bargains between trus

tee and cestui que trust are viewed with great jealousy, and they will not be sustained, unless under very unexceptionable circumstances. (h) It is a rule in equity, (¿) that all the material

(e) Parker v. Grant, 1 Johns. Ch. 630.

(g) Farnam v. Brooks, 9 Pick. 212.

(f) Jacob, 169.

(h) Fox v. Macreth, 2 Bro. C. C. 400. Coles v. Thecothick, 9 Vesey, 246. Dunbar v. Tredennick, 2 Ball & Beat. 314. Boyd v. Hawkins, 2 Dev. Eq. 207-211, 215. See, also, infra, vol. iv. p. 438.

(i) Ellard v. Lord Llandaff, 9 Ball & Beat. 251. Buxton v. Lister, 3 Atk. 383.

• Voluntary conveyances from a child to the parent are regarded with suspicion by a court of equity, and must be sustained by clear proof of their fairness. Wright v. Vanderplank, 8 De G., M. & G. 133.