INDEX

334. See also Nevada Bank v. Portland Nat. Bank, 59 Fed. 338.

In Aaron’s Reefs v. Twiss, [1896] A. C. 273, Lord Halsbury, L. C., said (pp. 283–284): “I do not think any particular form of words is necessary to convey a false impression. Supposing a person goes to a bank where the people are foolish enough to believe his words, and says, ‘I want a mortgage upon my house, and my house is not completed, but in the course of next week I expect to have it fully completed.’ Suppose there was not a house upon his land at all, and no possibility, therefore, that it could be fully completed next week, can anybody say that that was not an affirmative representation that there was a house which was so near to completion that it only required another week’s work upon it to complete it? Could anybody defend himself if he was charged upon an indictment for obtaining money under false pretences, the allegation in the indictment being that he pretended that there was a house so near completion that it only required a week’s work upon it, by saying that he never represented that there was a house there at all? So here, when I look at the language in which this prospectus is couched, and see that it speaks of a property which requires only the erection of machinery to be either at once or shortly in a condition to do work so as to obtain all this valuable metal from the mine, it seems to me that, although it is put in ambidextrous language, it means as plainly as can be that this is now the condition of the mine, that such and such additions to it will enable it shortly to produce all those great results, and that that is a representation of an actually existing fact. I should quite agree with the proposition that the Lord Chancellor of Ireland and the Master of the Rolls put forward—if you are looking to the language as only the language of hope, expectation, and confident belief, that is one thing; but it does not seem to have been in the minds of the learned judges that you may use language in such a way as, although in the form of hope and expectation, it may become a representation as to existing facts; and if so, and if it is brought to your knowledge that these facts are false, it is a fraud.”

335. The statement has been abridged.

336. Loewer v. Harris, (C. C. A.) 57 Fed. 368; King v. White, 119 Ala. 429; Christy v. Campbell, 36 Col. 261; Kronfeld v. Missal, 87 Conn. 491; James v. Crosthwait, 97 Ga. 673; Gordon v. Irvine, 105 Ga. 144; Aortson v. Ridgway, 18 Ill. 23; Dayton v. Kidder. 105 Ill. App. 107; Craig v. Hamilton, 118 Ind. 565; Firestone v. Werner, 1 Ind. App. 293; Coles v. Kennedy, 81 Ia. 360; Howerton v. Augustine, 130 Ia. 389; Nairn v. Ewalt, 51 Kan. 355; Faris v. Lewis, 2 B. Mon. 375; Weikel v. Sterns, 142 Ky. 513; Prentiss v. Russ, 16 Me. 30; Barrett v. Lewiston R. Co., 110 Me. 24; Johnston v. Cope, 3 Har. & J. 89; Burns v. Dockray, 156 Mass. 135; Batty v. Greene, 206 Mass. 561; Kenyon v. Woodruff, 33 Mich. 310; Tompkins v. Hollister, 60 Mich. 470; Busch v. Wilcox, 82 Mich. 315; Marsh v. Webber, 13 Minn. 109; Thomas v. Murphy, 87 Minn. 358; McAdams v. Cates, 24 Mo. 223; Morley v. Harrah, 167 Mo. 74; Manter v. Truesdale, 57 Mo. App. 435; Stevens v. Fuller, 8 N. H. 463; Fleming v. Slocum, 18 Johns. 403; Allen v. Addington, 7 Wend. 9; March v. First National Bank, 4 Hun, 466; Brown v. Gray, 6 Jones Law, 103; Lunn v. Shermer, 93 N. C. 164; Gidney v. Chappell, 26 Okl. 737; Fitzhugh v. Nirschl, 77 Or. 514; Rheen v. Naugatuck Wheel Co., 33 Pa. St. 356; Cardwell v. McClelland, 3 Sneed, 150; Allison v. Tyson, 5 Humph. 449; Graham v. Stiles, 38 Vt. 578; Maynard v. Maynard, 49 Vt. 297; Crompton v. Beedle, 83 Vt. 287; Jarrett v. Goodnow, 39 W. Va. 602; Morgan v. Hodge, 145 Wis. 143 Accord. Compare: Randolph v. Allen, (C. C. A.) 73 Fed. 23; Ball v. Farley, 81 Ala. 288; Cherry v. Brizzolara, 89 Ark. 309; Roper v. Sangamon Lodge, 91 Ill. 518; Potts v. Chapin, 133 Mass. 276; Cochrane v. Halsey, 25 Minn. 52; Crowell v. Jackson, 53 N. J. Law, 656; Babcock v. Libbey, 82 N. Y. 144; Jones v. Stewart, 62 Neb. 207; Wicker v. Worthy, 51 N. C. 500; Harris v. Tyson, 24 Pa. St. 347; Iron Bank v. Anderson, 194 Pa. St. 205; Bishop v. Buckley, 33 Pa. Super. Ct. 123; Campbell v. Kinlock, 9 Rich. Law, 300.

In Wiser v. Lawler, 189 U. S. 260, Brown, J., said (pp. 264–65): “Attached to these prospectuses was a map entitled ‘Map of the group of mines belonging to the Seven Stars Gold Mining Company.’ It is true that there is neither in the prospectuses nor in the map a distinct assertion that the legal title to the properties mentioned was vested in the Seven Stars Company; but we think that no one can read them without inferring and believing that the Seven Stars was the owner of these properties, and that the net proceeds of their operation would be distributed in dividends to stockholders. As they were circulated as an inducement to take stock in the enterprises, we are bound to interpret them by the effect they would produce upon an ordinary mind. Andrews v. Mockford, (1896) 1 Q. B. D. 372. They were, however, even more damaging in their omissions than in their statements. No mention was made of the fact that the title to these properties stood in the names of Lawler and Wells; no allusion to the Cowland agreement, with its provisions for forfeiture, nor to the fact that the only interest of the company was an equitable right to the properties after the sum of $450,000 had been realized from the profits and paid to defendants. In estimating the probability of subscribers being misled by these prospectuses we may take into consideration not only the facts stated, but the facts suppressed. New Brunswick Co. v. Muggeridge, 1 Drewey & Smale, 363. They are entitled to know the cons as well as the pros. Gluckstein v. Barnes, (1900) App. Cas. 240; Hubbard v. Weare, 79 Iowa, 678; Hayward v. Leeson, 175 Mass. 310; In re Leeds and Hanley Theatres, (1902) 2 Ch. Div. 809.”

In Peek v. Gurney, L. R. 6 H. L. 377, Lord Cairns said (p. 403): “Mere non-disclosure of material facts, however morally censurable, however that non-disclosure might be a ground in a proper proceeding at a proper time for setting aside an allotment or a purchase of shares, would in my opinion form no ground for an action in the nature of an action for misrepresentation. There must, in my opinion, be some active misstatement of fact, or, at all events, such a partial and fragmentary statement of fact, as that the withholding of that which is not stated makes that which is stated absolutely false.”

Compare Mitchell, J., in Newell v. Randall, 32 Minn. 171, 172–73: “It is doubtless the general rule that a purchaser, when buying on credit, is not bound to disclose the facts of his financial condition. If he makes no actual misrepresentations, if he is not asked any questions, and does not give any untrue, evasive, or partial answers, his mere silence as to his general bad pecuniary condition, or his indebtedness, will not constitute a fraudulent concealment. 2 Pom. Eq. Jur. §906; Bigelow on Fraud, 36, 37. But this was not a case of mere passive non-disclosure. The object of De Laittre’s inquiry clearly was to ascertain Bauman’s financial condition and ability to pay. Bauman’s statement was in response to that inquiry, and, when he undertook to answer, he was bound to tell the whole truth, and was not at liberty to give an evasive or misleading answer, which, although literally true, was partial, containing only half the truth, and calculated to convey a false impression. The natural construction which would, under the circumstances, be put on this statement is that he had $3,300 capital in his business. It was couched in language calculated to negative the idea that this was merely the gross amount of his assets, and that he owed debts to the extent of two-thirds or the whole of that amount. Such a statement, made under the circumstances it was, might fairly and reasonably be understood as amounting to a representation that he had that amount of capital which was and would remain available, out of which to collect any debt which he might contract with plaintiff. We think this is the way in which men would ordinarily have understood it. It is immaterial that more explicit inquiries by plaintiff would have disclosed the fact of his indebtedness. It does not lie in Bauman’s mouth to say that plaintiff relied too implicitly on this general statement. To tell half a truth only is to conceal the other half. Concealment of this kind, under the circumstances, amounts to a false representation.”

337. The statement is taken from 37 Ch. D. 541, omitting the last part. Arguments are omitted. None of the opinions are given except portions of Lord Herschell’s.

338. The opinion of Stirling, J., is reported in 37 Ch. D. 550. See especially 556–558.

339. “Want of honest belief in the truth of what one asserts, not positive knowledge that it is false, is the essence of the wrong. A man who knows that he is making a reckless assertion about things of which he really knows nothing may not be speaking against his own belief, but he is not speaking according to it, and therefore his conduct is dishonest, and is esteemed fraud by the law.” Pollock, Law of Fraud in British India, 43.

340. For a criticism of the view that the directors all believed the statement, see 6 Law Quarterly Rev. 73; 5 Law Quarterly Rev. 420–422.

341. Schuchardt v. Allens, 1 Wall. 359; Union R. Co. v. Barnes, (C. C. A.) 64 Fed. 80; Pittsburgh Life & Trust Co. v. Northern Life Ins. Co., (C. C. A.) 148 Fed. 674; Foster v. Kennedy, 38 Ala. 359; Morton v. Scull, 23 Ark. 289; Hutchinson v. Gorman, 71 Ark. 305; Davidson v. Jordan, 47 Cal. 351; Bartholomew v. Bushnell, 20 Conn. 271; Fooks v. Waples, 1 Har. (Del.) 131; Manes v. Kenyon, 18 Ga. 291; Cooley v. King, 113 Ga. 1163; Wheeler v. Randall, 48 Ill. 182; Holdom v. Ayer, 110 Ill. 448; Herman v. Foster, 185 Ill. App. 97; Holmes v. Clark, 10 Ia. 423; Scroggin v. Wood, 87 Ia. 497; Boddy v. Henry, 113 Ia. 462; Farmers’ Stock Breeding Ass’n v. Scott, 53 Kan. 534; Campbell v. Hillman, 15 B. Mon. 508; Haynes v. Gould, 83 Me. 344; Cahill v. Applegarth, 98 Md. 493; Emerson v. Brigham, 10 Mass. 197; Pike v. Fay, 101 Mass. 134; Cole v. Cassidy, 138 Mass. 437; Holst v. Stewart, 154 Mass. 445; Lillegren v. Burns, 135 Minn. 60; Taylor v. Frost, 39 Miss. 328; Utley v. Hill, 155 Mo. 232; Allen v. Wanamaker, 31 N. J. Law, 370; Williams v. Wood, 14 Wend. 126; Marsh v. Folker, 40 N. Y. 562; Wakeman v. Dalley, 51 N. Y. 27; Kountze v. Kennedy, 147 N. Y. 124; Hamrick v. Hogg, 1 Dev. 350; Taylor v. Leith, 26 Ohio St. 428; Staines v. Shore, 16 Pa. St. 200; Erie Iron Works v. Barber, 106 Pa. St. 125; Lamberton v. Dunham, 165 Pa. St. 129; Deppen v. Light, 228 Pa. St. 79; Gibbs v. Odell, 2 Cold. 132; Weeks v. Burton, 7 Vt. 67 Accord.

In Heilbut v. Buckleton, [1913] A. C. 30, Lord Moulton said (p. 48): “In the history of English law we find many attempts to make persons responsible in damages by reason of innocent misrepresentations, and at times it has seemed as though the attempts would succeed. On the Chancery side of the Court the decisions favoring this view usually took the form of extending the scope of the action for deceit. There was a tendency to recognize the existence of what was sometimes called ‘legal fraud,’ i. e., that the making of an incorrect statement of fact without reasonable grounds, or of one which was inconsistent with information which the person had received or had the means of obtaining, entailed the same legal consequences as making it fraudulently. Such a doctrine would make a man liable for forgetfulness or mistake or even for honestly interpreting the facts known to him or drawing conclusions from them in a way which the Court did not think to be legally warranted. The high-water mark of these decisions is to be found in the judgment pronounced by the Court of Appeal in the case of Peek v. Derry, (1887) 37 Ch. D. 541; (1889) 14 App. Cas. 337, when they laid down that where a defendant has made a misstatement of fact and the Court is of opinion that he had no reasonable grounds for believing that it was true he may be made liable in an action of deceit if it has materially tended to induce the plaintiff to do an act by which he has incurred damage. But on appeal to your Lordships’ House this decision was unanimously reversed, and it was definitely laid down that, in order to establish a cause of action sounding in damages for misrepresentation, the statement must be fraudulent or, what is equivalent thereto, must be made recklessly, not caring whether it be true or not. The opinions pronounced in your Lordships’ House in that case show that both in substance and in form the decision was, and was intended to be, a reaffirmation of the old common law doctrine that actual fraud was essential to an action for deceit, and it finally settled the law that an innocent misrepresentation gives no right of action sounding in damages.

“On the Common Law side of the Court the attempts to make a person liable for an innocent misrepresentation have usually taken the form of attempts to extend the doctrine of warranty beyond its just limits and to find that a warranty existed in cases where there was nothing more than an innocent misrepresentation. The present case is, in my opinion, an instance of this. But in respect of the question of the existence of a warranty the Courts have had the advantage of an admirable enunciation of the true principle of law which was made in very early days by Holt, C. J., with respect to the contract of sale. He says: ‘An affirmation at the time of the sale is a warranty, provided it appear on evidence to be so intended.’ So far as decisions are concerned, this has, on the whole, been consistently followed in the Courts of Common Law. But from time to time there have been dicta inconsistent with it which have, unfortunately, found their way into text-books and have given rise to confusion and uncertainty in this branch of the law. For example, one often sees quoted the dictum of Bayley, J., in Cave v. Coleman, 3 Man. & Ry. 2, where, in respect of a representation made verbally during the sale of a horse, he says that ‘being made in the course of a dealing, and before the bargain was complete, it amounted to a warranty’—a proposition that is far too sweeping and cannot be supported. A still more serious deviation from the correct principle is to be found in a passage in the judgment of the Court of Appeal in DeLassalle v. Guildford, [1901] 2 K. B. 215, at p. 221, which was cited to us in the argument in the present case. In discussing the question whether a representation amounts to a warranty or not the judgment says: ‘In determining whether it was so intended, a decisive test is whether the vendor assumes to assert a fact of which the buyer is ignorant, or merely states an opinion or judgment upon a matter of which the vendor has no special knowledge, and on which the buyer may be expected also to have an opinion and to exercise his judgment.’

“With all deference to the authority of the Court that decided that case, the proposition which it thus formulates cannot be supported. It is clear that the Court did not intend to depart from the law laid down by Holt, C. J., and cited above, for in the same judgment that dictum is referred to and accepted as a correct statement of the law. It is, therefore, evident that the use of the phrase ‘decisive test’ cannot be defended. Otherwise it would be the duty of a judge to direct a jury that if a vendor states a fact of which the buyer is ignorant, they must, as a matter of law, find the existence of a warranty, whether or not the totality of the evidence shows that the parties intended the affirmation to form part of the contract; and this would be inconsistent with the law as laid down by Holt, C. J. It may well be that the features thus referred to in the judgment of the Court of Appeal in that case may be criteria of value in guiding a jury in coming to a decision whether or not a warranty was intended; but they cannot be said to furnish decisive tests, because it cannot be said as a matter of law that the presence or absence of those features is conclusive of the intention of the parties. The intention of the parties can only be deduced from the totality of the evidence, and no secondary principles of such a kind can be universally true.

“It is, my Lords, of the greatest importance, in my opinion, that this House should maintain in its full integrity the principle that a person is not liable in damages for an innocent misrepresentation, no matter in what way or under what form the attack is made. In the present case the statement was made in answer to an inquiry for information. There is nothing which can by any possibility be taken as evidence of an intention on the part of either or both of the parties that there should be a contractual liability in respect of the accuracy of the statement. It is a representation as to a specific thing and nothing more. The judge, therefore, ought not to have left the question of warranty to the jury, and if, as a matter of prudence, he did so in order to obtain their opinion in case of appeal he ought then to have entered judgment for the defendants notwithstanding the verdict.”

But compare Kirkpatrick v. Reeves, 121 Ind. 280; Mendenhall v. Stewart, 18 Ind. App. 262; McLeod v. Tutt, 2 Miss. 288; Searing v. Lum, 2 South, 683; Indianapolis R. Co. v. Tyng, 63 N. Y. 653; Cobb v. Fogalman, 1 Ired. 440; Mason v. Moore, 73 Ohio St. 275; Loper v. Robinson, 54 Tex. 510; Magill v. Coffmann, (Tex. Civ. App.) 129 S. W. 1146; Smith v. Columbus Buggy Co., 40 Utah, 580; Ogden Resort Co. v. Lewis, 41 Utah, 183; Cameron v. Mount, 86 Wis. 477; Palmer v. Goldberg, 128 Wis. 103; Knudson v. George, 157 Wis. 520.

As to whether an action ought not to be allowed for negligence in the use of language, see Smith, Liability for Negligent Language, 14 Harvard Law Rev. 184; Cunningham v. Pease, 74 N. H. 435; Conway National Bank v. Pease, 76 N. H. 319. The English Directors’ Liability Act (1890), 53 & 54 Vict. c. 64, makes directors and others who issue prospectuses liable in certain cases to compensate persons sustaining loss by reason of any untrue statement in the prospectus, unless it is proved that the persons issuing the prospectus had reasonable ground to believe and did believe that the prospectus was true. See also the statute of Oklahoma, Howe v. Martin, 23 Okl. 561, 567.

Liability for statement made recklessly not knowing whether true or not, see: Cooper v. Schlesinger, 111 U. S. 148; Hindman v. First National Bank, (C. C. A.) 112 Fed. 931; Mueller Furnace Co. v. Cascade Foundry Co., 145 Fed. 596; Einstein v. Marshall, 58 Ala. 153; McCoy v. Prince, 11 Ala. App. 388; Stimson v. Helps, 9 Col. 33; Scholfield Gear Co. v. Scholfield, 71 Conn. 1; Upchurch v. Mizell, 50 Fla. 456; Corbett v. Gilbert, 24 Ga. 454; Miller v. John, 208 Ill. 173; Snively v. Meixsell, 97 Ill. App. 365; West v. Wright, 98 Ind. 335; Graves v. Lebanon Bank, 10 Bush, 23; Stone v. Denny, 4 Met. 151; Fisher v. Mellen, 103 Mass. 503; Beebe v. Knapp, 28 Mich. 53; Stone v. Covell, 29 Mich. 359; Bullitt v. Farrar, 42 Minn. 8; Hamlin v. Abell, 120 Mo. 188; Chase v. Rusk, 90 Mo. App. 25; Ruddy v. Gunby, (Mo.) 180 S. W. 1043; Rowell v. Chase, 61 N. H. 135; Shackett v. Bickford, 74 N. H. 57; Zabriskie v. Smith, 13 N. Y. 322; Bennett v. Judson, 21 N. Y. 238; Taylor v. Commercial Bank, 174 N. Y. 181; Bell v. James, 128 App. Div. 241; Whitehurst v. Life Ins. Co., 149 N. C. 273; Cawston v. Sturgis, 29 Or. 331; Robertson v. Frey, 72 Or. 599; Thompson v. Chambers, 13 Pa. Super. Ct. 213; Mitchell v. Zimmerman, 4 Tex. 75; Katzenstein v. Reid, Murdock & Co., 41 Tex. Civ. App. 106; Benton v. Kuykendall, (Tex. Civ. App.) 160 S. W. 438; Wheeler v. Wheelock, 34 Vt. 553; Agnew v. Hackett, 80 Wash. 236; Cotzhausen v. Simon, 47 Wis. 103.

Compare Ray County Bank v. Hutton, 224 Mo. 42; Ramsey v. Wallace, 100 N. C. 75.

342. “The doctrine seems to be well established by authority that the conduct and admissions of a party operate against him in the nature of an estoppel, wherever, in good conscience and honest dealing, he ought not to be permitted to gainsay them. Thus, negligence becomes constructive fraud,—although, strictly speaking, the actual intention to mislead or deceive may be wanting, and the party may be innocent, if innocence and gross negligence may be deemed compatible; and in such cases the maxim is justly applied to him, that where one of two innocent persons must suffer, he shall suffer who by his own acts occasioned the confidence and loss. The application of the maxim to the case before us is obvious. The principle involved in it is kindred to that of an equitable estoppel, the difference being that the application of the estoppel, instead of the maxim, avoids the loss to the innocent party who has been misled by the conduct of another. See 1 Story’s Eq. Jur., secs. 387, 389; Lucas v. Hart, 5 Iowa, 415; Commonwealth v. Moltz, 10 Pa. St. 527, 531; Smith v. McNeal, 68 Pa. St. 164.” Foster, J., in Stevens v. Dennett, 51 N. H. 324, 335.

“The usual form of expressing the situation which founds an estoppel in pais has been that followed in the rulings given, in which, as in many of the older decisions, it is said that an intent to deceive is a necessary element. But under this formula the jury were not prohibited from finding the intention and the estoppel, if, without more, the plaintiff spoke or acted falsely, knowing or having cause to believe that his words or conduct reasonably might influence the defendant’s action. The more modern statement, that one is responsible for the word or act which he knows, or ought to know, will be acted upon by another, includes the older statement that the estoppel comes from an intention to mislead. White v. Duggan, 140 Mass. 18, 20. Tracy v. Lincoln, 145 Mass. 357, 359. O’Donnell v. Clinton, 145 Mass. 461, 463. Washburn v. Hammond, 151 Mass. 132, 141.” Barker. J., in Stiff v. Ashton, 155 Mass. 130, 133.

343. Milson v. Gerstenberg, 43 App. D. C. 165; Ballard v. Thibodeau, 109 Me. 559; Kiefer v. Rogers, 19 Minn. 32; Hedin v. Minneapolis Medical Institute, 62 Minn. 146; Flaherty v. Till, 119 Minn. 191; Devero v. Sparks, 189 Mo. App. 500; Craig v. Ward, 1 Abb. Dec. 454; Garvin v. Harrell, 27 Okl. 373; Wells v. Driskell, (Tex. Civ. App.) 149 S. W. 205 Accord.

See Water Com’rs v. Robbins, 82 Conn. 623; Auman v. McKibben, 179 Ill. App. 425; Huntress v. Blodgett, 206 Mass. 318; Bank v. Wood, 189 Mo. App. 62.

As to the fiction of “presumption of knowledge,” see: Hicks v. Stevens, 121 Ill. 186; Ward v. Trimble, 103 Ky. 153; Reynolds v. Evans, 123 Md. 365; Unitype Co. v. Ashcraft, 155 N. C. 63; Collins v. Chipman, 41 Tex. Civ. App. 563. Compare Brooks v. Hamilton, 15 Minn. 26.

344. O’Neill v. Conway, 88 Conn. 651; Bethell v. Bethell, 92 Ind. 318; Riley v. Bell, 120 Ia. 618; Gund Brewing Co. v. Peterson, 130 Ia. 301; Davis v. Central Land Co., 162 Ia. 269; Altoona State Bank v. Hart, 82 Kan. 398; Braley v. Powers, 92 Me. 203; Litchfield v. Hutchinson, 117 Mass. 195; Savage v. Stevens, 126 Mass. 207; Teague v. Irwin, 127 Mass. 217; Adams v. Collins, 196 Mass. 422; Huntress v. Blodgett, 206 Mass. 318; Chatham Furnace Co. v. Moffatt, 147 Mass. 403; Riggs v. Thorpe, 67 Minn. 217; Vincent v. Corbitt, 94 Miss. 46; Western Cattle Co. v. Gates, 190 Mo. 391; Paretti v. Rebenack, 81 Mo. App. 494; Leicher v. Keeney, 98 Mo. App. 394, 110 Mo. App. 292; Leach v. Bond, 129 Mo. App. 315; Crosby v. Wells, 73 N. J. Law, 790; Thompson v. Koewing, 79 N. J. Law, 246; Hadcock v. Osmer, 153 N. Y. 604; Modlin v. Roanoke Navigation Co., 145 N. C. 218; Pate v. Blades, 163 N. C. 267; Joines v. Combs, 38 Okl. 380; Gibbens v. Bourland, (Tex. Civ. App.) 145 S. W. 274; Grant v. Huschke, 74 Wash. 257; Tolly v. Poteet, 62 W. Va. 231; Rogers v. Rosenfeld, 158 Wis. 285 Accord. See Roberts v. Anheuser Busch Ass’n, 211 Mass. 449.

In Brownlie v. Campbell, 5 App. Cas. 925, Lord Blackburn said (pp. 952—53): “The Courts of Law had to refer fraud, in which knowledge was an essential ingredient, to a jury. A Court of Equity had to find it for itself, and consequently the judges in Courts of Equity were not driven to be so precisely accurate in stating exactly whether they were going upon the ground that there was a contract or warranty that the thing was so, or whether they were going upon the ground that the party, knowing it was not, and representing that it was, had committed a fraud in doing that. Most of the cases (the leading one is Burrowes v. Loch, 10 Ves. 470, and it is sufficient to mention that, though there were others) when looked at, if they do not absolutely amount to contract, come uncommonly near it. In Burrowes v. Loch a man proposing to lend money on the security of an equitable assignment of a share of what remained due on account of the residue of a testator’s estate, went to the trustee who held the fund and asked him, telling him the facts, ‘I am going to lend money upon the security of this share, has any prior loan upon this been communicated to you so as to make you have prior notice, so as to make that other loan come in before me and cut me out, tell me that, in order that I may know whether I will lend the money or not.’ The party on the other side answered, ‘There has been none such.’ To say that that is not warranty or contract that he has received no such notice is, I think, going very near the wind; if it was not that it was so uncommonly like it, that I cannot make the distinction myself. That would have been sufficient for the Master of the Rolls to say, ‘You have warranted this.’ He also had considerable ground for doubting whether the man had really bona fide forgotten. The man, he seems to have thought, had thought this, ‘I will not take the trouble of a search,’ the fact being that he really knew nothing about this and would not take the trouble of looking, but he boldly made the assertion, ‘I know there is none,’ saying as a fact, ‘I know there is none,’ when the real truth could not be more than ‘I am pretty sure there is none.’ If, when a man thinks it is highly probable that a thing exists, he chooses to say he knows the thing exists, that is really asserting what is false—it is positive fraud. That has been repeatedly laid down, and I think the more it is considered the more clear it becomes. If you choose to say, and say without inquiry, ‘I warrant that,’ that is a contract. If you say, ‘I know it,’ and if you say that in order to save the trouble of inquiring, that is a false representation—you are saying what is false to induce them to act upon it. I think all the cases which have been cited come round to pointing to that, but none of them, as far as I am aware, are in contradiction with that which I have cited from Chief Justice Tindal, and I think there are a good many other authorities to the same effect.”

As to liability where defendant had no reasonable ground to believe what he stated, see Mayer v. Salazar, 84 Cal. 646; McCabe v. Desnoyers, 20 S. D. 581.

Statement as to matter of which obviously defendant could not have personal knowledge, see: Krause v. Cook, 144 Mich. 365; Spead v. Tomlinson, 73 N. H. 46.

345. Part of the statement is an abridgment of the report in 6 Bingham, 396.

346. Hindman v. First Nat. Bank, (C. C. A.) 112 Fed. 931; Hart v. Tallmadge, 2 Day, 381; Young v. Hall, 4 Ga. 95; Endsley v. Johns, 120 Ill. 469; Leonard v. Springer, 197 Ill. 532; Skeels v. Porter, 165 Ia. 255; Carpenter v. Wright, 52 Kan. 221; Bean v. Herrick, 12 Me. 262; Page v. Bent, 2 Met. 371; Stoney Creek Woolen Co. v. Smalley, 111 Mich. 321; Busterud v. Farrington, 36 Minn. 320; Brownlee v. Hewitt, 1 Mo. App. 360; Bingham v. Fish, 86 N. J. Law, 316; White v. Merritt, 7 N. Y. 352; Hubbard v. Briggs, 31 N. Y. 518; Carpenter v. Lee, 5 Yerg. 265; Paddock v. Fletcher, 42 Vt. 389 Accord.

347. Statement of facts and arguments of counsel omitted.

348. See West London Bank v. Kitson, 13 Q. B. D. 360; National Bank v. Kershaw Oil Mill, (C. C. A.) 202 Fed. 90. Compare Tackey v. McBain, [1912] A. C. 186.

349. Iasigi v. Brown, 17 How. 183; Bank of Montreal v. Thayer, 7 Fed. 622; Merchants Nat. Bank v. Armstrong, 65 Fed. 932; Hindman v. First Nat. Bank, (C. C. A.) 98 Fed. 562, 112 Fed. 931; Western Tel. Co. v. Schriver, 141 Fed. 538; Harrison v. Savage, 19 Ga. 310; Slade v. Little, 20 Ga. 371; Hunnewell v. Duxbury, 154 Mass. 286; Nash v. Minnesota Title & Trust Co., 159 Mass. 437; Rawlings v. Bean, 80 Mo. 614; Lembeck v. Gerken, 88 N. J. Law, 329; McCracken v. West, 17 Ohio, 16; Wells v. Cook, 16 Ohio St. 67 Accord. But see Merchants Nat. Bank v. Robison, 8 Utah, 256.

Person or member of a class to whom defendant expected the representation to be passed on, see Shrewsbury v. Blount, 2 Man. & Gr. 475; Gerhard v. Bates, 2 E. & B. 476; Bedford v. Bagshaw, 4 H. & N. 538; Scott v. Brown, [1892] 2 Q. B. 724; Andrews v. Mockford, [1896] 1 Q. B. 372; Warfield v. Clark, 118 Ia. 69; Wells v. Western Tel. Co., 144 Ia. 605; Henry v. Dennis, 95 Me. 24; Chubbuck v. Cleveland, 37 Minn. 466; Baker v. Crandall, 78 Mo. 584; Stuart v. Bank of Staplehurst, 57 Neb. 569; Addington v. Allen, 11 Wend. 374; Hadcock v. Osmer, 153 N. Y. 604; Cazeaux v. Mali, 25 Barb. 578; Converse v. Sickles, 16 App. Div. 49.

350. Statement abridged. Part of opinion omitted.

351. In Allaire v. Whitney, 1 Hill, 484, 487, Cowen, J., says that actual damage is not necessary to an action for fraud; and see also Ingraham, J., in Isman v. Loring, 130 App. Div. 845. The same doctrine is stated in Northrop v. Hill, 57 N. Y. 351; and in Van Velsor v. Seaberger, 35 Ill. App. 598; but neither case was one of merely nominal damages. Leadbetter v. Morris, 3 Jones, Law, 543, sustains the view of Cowen, J. The doctrine of Cowen, J., in Allaire v. Whitney is also cited approvingly in 1 Sedgwick on Damages, 8th ed., § 101, and in 1 Sutherland on Damages, 3d ed., § 10.

But the great weight of authority is against this doctrine, and accords with the view taken by the Minnesota court in the above case of Alden v. Wright: viz., that an action of deceit cannot be maintained in the absence of actual damage. See Pollock, Torts, 9 ed., 190, 291; Pollock, Law of Fraud in British India, 22, 23; 1 Jaggard, Torts, 600, 601; Pigott, Torts, 270, 271; McCarrel v. Hayes, 186 Ala. 323; Winkler v. Jerrue, 20 Cal. App. 555; Morrison v. Martin, 84 Conn. 628; Wesselhoeft v. Schanze, 153 Ill. App. 443; Bailey v. Oatis, 85 Kan. 339; Barnard v. Napier, 167 Ky. 824; Reynolds v. Evans, 123 Md. 365; Brackett v. Perry, 201 Mass. 502; Tregner v. Hazen, 116 App. Div. 829; Badger v. Pond, 120 App. Div. 619.

Compare Skowhegan Bank v. Maxfield, 83 Me. 576 (fraudulently inducing plaintiff to pay debts); Garry v. Garry, 187 Mass. 62 (inducing release of inchoate right of dower); Urtz v. New York R. Co., 202 N. Y. 170 (release of disputed claim).

352. Statement abridged. Part of opinion omitted.

353. In re Pennewell, 119 Fed. 139; Kimmans v. Chandler, 13 Ia. 327; Dunn v. Bishop, (R. I.) 90 Atl. 1073 Accord. Compare Van Vliet Automobile Co. v. Crowell, (Ia.) 149 N. W. 861.

354. A new statement has been made covering but one point and only the portion of the opinion relating to that point is given.

355. Ely v. Stannard, 46 Conn. 124; Goring v. Fitzgerald, 105 Ia. 507; Briggs v. Brushaber, 43 Mich. 330; Currier v. Poor, 155 N. Y. 344; Hoffman v. Toft, 70 Or. 488 Accord.

See Conway Bank v. Pease, 76 N. H. 319.

356. Statement abridged.

357. See Graham v. Peale, (C. C. A.) 173 Fed. 9 (delay in asserting claim); Spreckels v. Gorrill, 152 Cal. 383; Barron Estate Co. v. Woodruff Co., 163 Cal. 561 (preparations for building); Williams Crusher & Pulverizer Co. v. Lyth Tile Co., 150 N. Y. Suppl. 6 (expensive investigation preliminary to contract not made).

358. “But there is one thing which intervenes between the injuria and the damnum and that is the plaintiff’s action which results in damage. It is clear that a misrepresentation cannot of itself directly produce damage. It requires a means of conveyance, and that is the action which it produces, and which results in damage.”

“... It is the action of the plaintiff, and not the damage, which must be materially induced by the misrepresentation.”

“The fallacy is in regarding the damage, and the action resulting in damage, as the same thing.” Moncrieff, Law of Fraud and Misrepresentation, 187.

359. Statement abridged and arguments omitted.

360. Reaffirmed in Sigafus v. Porter, 179 U. S. 116. The authorities on each side of this controverted question are collected in a note to George v. Hesse, (100 Tex. 44) 8 L. R. A. N. S. 804. For later cases, see: Harris v. Neil, 144 Ga. 519 (accord); Trayne v. Boardman, 207 Mass. 581; Crawford v. Armacost, 85 Wash. 622 (contra).

361. Statement abridged; arguments omitted; also part of opinion.

362. Henderson v. Henshall, (C. C. A.) 54 Fed. 320; Tooker v. Alston, 159 Fed. 599; Jordan v. Pickett, 78 Ala. 331; Dingle v. Trask, 7 Col. App. 16; Carondelet Iron Works v. Moore, 78 Ill. 65; Jones v. Foster, 175 Ill. 459; Press v. Hair, 133 Ill. App. 528; Anderson Foundry v. Myers, 15 Ind. App. 385; Moore v. Turbeville, 2 Bibb, 602; Weaver v. Shriver, 79 Md. 530; Silver v. Frazier, 3 All. 382; Parker v. Moulton, 114 Mass. 99; Poland v. Brownell, 131 Mass. 138; Thompson v. Pentecost, 206 Mass. 505; Anderson v. McPike, 86 Mo. 293; Brown v. Kansas City R. Co., 187 Mo. App. 104; Morrill v. Madden, 35 Minn. 493; Grindrod v. Anglo-American Bond Co., 34 Mont. 169; Power v. Turner, 37 Mont. 521; Osborne v. Missouri R. Co., 71 Neb. 180; Saunders v. Hatterman, 2 Ired. 32; Mulholland v. Washington Match Co., 35 Wash. 315; Mosher v. Post, 89 Wis. 602; Farr v. Peterson, 91 Wis. 182; Kaiser v. Nummerdor, 120 Wis. 234; Jacobsen v. Whitely, 138 Wis. 434 Accord.

But see Wilson v. Higbee, 62 Fed. 723; King v. Livingston Mfg. Co., 180 Ala. 118; Mason v. Thornton, 74 Ark. 46; Linington v. Strong, 107 Ill. 295; Robinson v. Reinhart, 137 Ind. 674; Hanks v. McKee, 2 Litt. 227; Bowen v. Carter, 124 Mass. 426; Arnold v. Teele, 182 Mass. 1; Light v. Jacobs, 183 Mass. 206; Bachman v. Travelers Ins. Co., (N. H.) 97 Atl. 223; Fox v. Duffy, 95 App. Div. 202.

“The doctrine ... is not to be extended. It relates merely to seller’s talk.” Sheldon, J., in Townsend v. Niles, 210 Mass. 524, 531.

Equal means of knowledge, see Hill v. Bush, 19 Ark. 522; Strong v. Peters, 2 Root, 93; McDaniell v. Strohecker, 19 Ga. 432; Knight v. Gaultney, 23 Ill. App. 376; Foley v. Cowgill, 5 Blackf. 18; Boddy v. Henry, 113 Ia. 462; Hinchman v. Weeks, 85 Mich. 535; Bradford v. Wright, 145 Mo. App. 623; Conway Nat. Bank v. Pease, 76 N. H. 319; Long v. Warren, 68 N. Y. 426; Crislip v. Cain, 19 W. Va. 438.

Execution of instrument without reading it, see Dunham Lumber Co. v. Holt, 123 Ala. 336; Robinson v. Glass, 94 Ind. 211; Porter v. United Railways, 165 Mo. App. 619; Muller v. Rosenblath, 157 App. Div. 513; Griffin v. Roanoke Lumber Co., 140 N. C. 514.

Reliance on friendship, see Gray v. Reeves, 69 Wash. 374.

363. Arguments omitted; also part of opinion.

364. Martin v. Burford, (C. C. A.) 181 Fed. 922; Hutchinson v. Gorman, 71 Ark. 305; Scott v. Moore, 89 Ark. 321; Montgomery v. McLaury, 143 Cal. 83; Teague v. Hall, 171 Cal. 668; Eames v. Morgan, 37 Ill. 260; Ladd v. Pigott, 114 Ill. 647; Kehl v. Abram, 210 Ill. 218 (public records); Backer v. Pyne, 130 Ind. 288 (records); McGibbons v. Wilder, 78 Ia. 531; Faust v. Hosford, 119 Ia. 97 (records); Scott v. Burnight, 131 Ia. 507; McKee v. Eaton, 26 Kan. 226 (records of patent office); Davis v. Jenkins, 46 Kan. 19 (records of land office); Carpenter v. Wright, 52 Kan. 221 (deed records); Trimble v. Ward, 97 Ky. 748; Martin v. Jordan, 60 Me. 531; Braley v. Powers, 92 Me. 203; Harlow v. Perry, 113 Me. 239; David v. Park, 103 Mass. 501 (records of patent office); Holst v. Stewart, 161 Mass. 516; Rollins v. Quimby, 200 Mass. 162 (mortgage records); Jackson v. Armstrong, 50 Mich. 65; Smith v. Werkheiser, 152 Mich. 177; Faribault v. Sater, 13 Minn. 223; Redding v. Wright, 49 Minn. 322; Union Bank v. Hunt, 76 Mo. 439; Cottrill v. Krum, 100 Mo. 397; Stonemets v. Head, 248 Mo. 243; Shearer v. Hill, 125 Mo. App. 375; Gerner v. Mosher, 58 Neb. 135 (books of corporation); Perry v. Rogers, 62 Neb. 898; Martin v. Hutton, 90 Neb. 34; Bradbury v. Haines, 60 N. H. 123; Blossom v. Barrett, 37 N. Y. 434 (records of court); Gage v. Peetsch, 16 Misc. 291 (mortgage records); Blumenfield v. Stine, 42 Misc. 411 (records); Blacknall v. Rowland, 108 N. C. 554; Bank of North America v. Sturdy, 7 R. I. 109; Handy v. Waldron, 19 R. I. 618 (failure to inquire of references); Hunt v. Barker, 22 R. I. 18 (deed records); Wright v. United States Mfg. Co., (Tex. Civ. App.) 42 S. W. 789 (tax records); Chamberlain v. Rankin, 49 Vt. 133; Morrill v. Palmer, 68 Vt. 1; Jordan v. Walker, 115 Va. 109; City v. Tacoma Light Co., 17 Wash. 458; Simons v. Cissna, 52 Wash. 115; Borde v. Kingsley, 76 Wash. 613; Hall v. Bank, 143 Wis. 303 (records); Woteshek v. Neuman, 151 Wis. 365; Rogers v. Rosenfeld, 158 Wis. 285 Accord.

See Henry v. Allen, 93 Ala. 197; Hanger v. Evins, 38 Ark. 334; Wheeler v. Baars, 33 Fla. 696 (records); Forbes v. Thorpe, 209 Mass. 570. Compare Campbell v. Frankem, 65 Ind. 591.

Assertion of title, see: Crandall v. Parks, 152 Cal. 772; Hale v. Philbrick, 42 Ia. 81; Young v. Hopkins, 6 T. B. Mon. 18; Cobb v. Wright, 43 Minn. 83; Manley v. Johnson, 85 Vt. 262.

Statements as to boundaries, see: Roberts v. Plaisted, 63 Me. 335; Olson v. Orton, 28 Minn. 36; Clark v. Baird, Seld. Notes, 187; Schwenk v. Naylor, 102 N. Y. 683; Roberts v. Holliday, 10 S. D. 576.

Plaintiff informed of truth by third person, see: Moncrief v. Wilkinson, 93 Ala. 373; Haight v. Hayt, 19 N. Y. 464; Grosjean v. Galloway, 82 App. Div. 380.

Refusal of defendant to put representation in writing, Ettlinger v. Weil, 184 N. Y. 179.