CHAPTER XVIII. OF FRAUDULENT MISREPRESENTATION AND DECEIT, FRAUDULENT CONCEALMENT, BREACH OF WARRANTY AND FALSE PRETENCES. SECTION I.-Of fraudulent misrepresentation and deceit, fraudulent concealment, breach of warranty, and false pretences.-Wilful or unintentional deceit-Representations by a person of a particular fact when he knows that he has no knowledge at all about it-Statements and representations which must be authenticated by a signed writing-False representations concerning the conduct, credit, ability, trade, or dealings of co-partnerships and joint-stock companies-Misrepresentation by directors-Publication of deceitful prospectuses and reports-Fraudulent breach of warranty-Proof of warranty -Private representations-False representations amounting to a warrantyRepresentations concerning matters which lie as much within the knowledge of one party as the other-Representations amounting merely to expressions of opinion and belief-Statements in answer to inquiries-Warranties by vendors-False representations of title-False representations by vendors and manufacturers of the character and quality of the articles they manufacture and sell-Sale of goods by sample-False representations by railway companies-Deceit by agents-False assumption of authority-Counterfeiting trade-marks-Warranty of articles sold with trade-marks upon themFraudulent assumption of the name of a bank-Deceit by provision-dealers -False and fraudulent representations by married women and infantsFraudulent concealment on sales of chattels-Fraudulent concealment of the dangerous nature of articles delivered to a bailes to be warehoused or carried -Fraudulent sales with all faults and without allowance for any defect, error, or mis-statement. SECTION II.-Of actions for fraud and deceit-Remedy by indictment and injunction--Parties, pleadings, defences, and evidence-Proof of fraudulent warranties on sales of horses-Proof of unsoundness-Damages recoverableIndictments for obtaining money or goods by false pretences, and for the fraudulent use of trade-marks-Injunction to prevent fraud, and the fraudulent use of trade-marks, names, etc. SECTION I. OF FRAUDULENT MISREPRESENTATION AND DECEIT; FRAUDULENT CON- 1174 Of wilful deceit.-An action cannot be supported for the telling a bare, naked lie, i.e., saying a thing which is false, knowing or not Knowing it to be so, and without any design to impose upon or cheat another, and without any intention that another should rely upon the false statement, and act upon it(a); but if a falshood be knowingly told, with an intention that another person should believe it to be true, and act upon it, and that person does act upon it, and thereby suffers damage, the party telling the falsehood is responsible in damages in an action for deceit, there being a conjunction of wrong and loss, entitling the injured person to compensation(b). Where a gun had been delivered by the defendant to the plaintiff for the purpose of being used by him, with an accompanying representation that he might safely use it, and that representation was false to the defendant's knowledge, and the plaintiff, acting upon the faith of its being true, used the gun, and received damage thereby, it was held that he was entitled to recover compensation for the injury from the defendant(c). If a defendant has made a false representation knowing it to be false, with intent to induce, and has thereby induced, the plaintiff to enter into a contract into which, but for that misrepresentation, he would not have entered, and the plaintiff has been damnified by the falsehood, a case of fraud is made out, and an action for damages is maintainable(d). But if it be a contract made with the defendant, the plaintiff, on discovering the fraud, should at once repudiate the contract; for, where the plaintiff engaged to convey away certain rubbish for a certain price under a false representation by the defendant as to the amount of rubbish to be moved, it was held, that, having (a) Behn v. Kemble, 7 C. B., N. S. 260. (b) Com. Dig. Action upon the case. DECEIPT. A. 9, A. 10. Parke, B., Watson v. Poulson, 15 Jur. 1112. Eames v. Morgan, 37 Ill. 260. Hubbard v. Briggs, 31 N. Y. 518. Howard v. Gould, 28 Vt. 524. Chester v. Comstock, 40 N. Y. 575. Fraud is not actionable unless it causes damage. Nye v. Merriam, 35 Vt. 438. Castleman v. Griffin, 13 Wis. 537. "Dolus malus est omnis machinatio, calliditas, fallacia, ad circum veniendum, fallendum, decipiendum aliquem adhibita ”-Dig. lib. 4, tit. 3, lex. 1, s. 2. (c) Langridge v. Levy, 2 M. & W. 530; 4 M. & W. 337. Farrant v. Barnes, 11 C. B., N. S. 553; 31 Law J., C. P. 139. Barry v. Croskey, 2 Johns. & H. 21. (d) Canham v. Barry, 15 C. B. 620. Holmes v. Clark, 10 Iowa, 423. Courteney v. Carr, 11 Iowa, 295. knowledge of the fraud before the work was finished, he was not at liberty to finish the work and then sue for more than the stipulated price. He ought to have repudiated the contract at once(e). It is not necessary in all cases to show that the defendant knew the representation to be untrue; for if he made the statement for a fraudulent purpose, and without believing it to be true, and with the intention of inducing the plaintiff to do an act, and the plaintiff does the act to his own prejudice, an action for damages is maintainable(ƒ). 1175 Unintentional deception.-But a person who has reason to believe, and actually believes, a particular fact to be true, and accordingly represents what he believes, is not liable to an action merely because it turns out that he was mistaken, and that his representation was unintentionally false(g); for, if every untrue statement which produces damage to another would found an action at law, a man might sue his neighbor for any mode of communicating erroneous information, such (for example) as having a conspicuous clock to slow, whereby the plaintiff was induced to neglect some important duty; but if it be shown that the defendant was under any legal obligation to state the truth correctly to the plaintiff, there would be a legal grievance in misleading him, for which an action would lie; still more so, if he made the false representation with a view to some unfair advantage to himself(h). In order to maintain an action for deceit, or for a false and fraudulent representation, it is not necessary to prove that the false representation was made from a corrupt motive of gain to the defendant, or a wicked motive of injury to the plaintiff; it is enough if a representation is made which the person making it knows to be untrue, and which is intended or calculated to induce another to act on the faith of it in such a way as that he may incur damage, and that damage is actually incurred. A wilful falsehood of such a nature is, in the legal (e) Selway v. Fogg, 5 M. & W. 86. (f) Taylor v. Ashton, 11 M. & W. 415. See Foster v. Kennedy's Adm'r, 38 Ala. 359. (g) Collins v. Evans, 5 Q. B. 826. Ormrod v. Huth, 14 M. & W. 664. Childers v. Wooler, 29 Law J., Q. B 129. Where a statement is made in the honest belief of its truth, and such belief has resulted from a mistake fallen into without fault, fraud cannot be imputed, although injury has thereby resulted to another person. Neither damage or fraud singly gives a right of action. Both must concur; and a party cannot be held liable for damages for making fraudulent representations while entirely free from any intention to deceive in any respect. Marsh v. Falker, 40 N. Y. 562. Weed v. Case, 55 Barb. 534. But see Bankhead v. Alloway, 6 Coldw. (Tenn.), 56. Misrepresentation of a material fact, whether intentionally or by mistake, is a legal fraud if it actually deceives. Terhune v. Dever, 36 Ga. 648. Frenzel v. Miller, 37 Ind. 1. Elder v. Allison, 45 Ga. 13. sense of the word, a fraud(i). Whether the defendant has any interest in the assertion he makes, or in the matter respecting which it is made, is perfectly immaterial(k). And whether the representation be made to the plaintiff, or a third party, is immaterial, if it is false to the knowledge of the defendant, and has been made for the purpose of being communicated to the plaintiff, in order that he might act upon it, and has sustained damage from the deceit(). The general rule appears to be, that if any man makes a fraudulent representation for another to act upon, either directly or indirectly, and such representation is calculated to induce that other person to act on it, and he does act on it, the person who makes the representation is responsible in damages. Thus, where a director of a company puts forth transferable shares into the market, and publishes and circulates false statements and representations for the purpose of selling the shares, the false representation is deemed in law to be made to all persons who read the public announcements, and become purchasers of shares on the faith of the statements contained in them(m). But it must be shown that the damage of which the plaintiff complains was brought about by the wrongful act of the defendant(n). 1176 False representations under pretence of a claim of right-False claim of lien.-An action is maintainable for a false and malicious representation, though made under the pretence of a claim of right, if it was made without reasonable and probable cause, and must have been known to be false by the person making it, and special damage has resulted to the plaintiff from the wrongful act. Thus, where a defendant, knowing that there had been no agreement between him and the plaintiff for a lien on the plaintiff's goods, falsely pretended that he was entitled to a lien on them, and made the representation without any reasonable foundation for it, and from improper and malicious motives, and damage resulted therefrom to the plaintiff, it was held that the defendant was bound to make compensation to the plaintiff for the wrong done to him(o). 1177 Representations by a person of his knowledge of a particular fact, when (i) Ld. Tenterden, C.J., Polhill v. Walter, 8 B. & Ad. 123. Milne v. Marwood, 15 C. B., 778; 24 Law J., C. P. 36. (k) Pasley v. Freeman, 3 T. R. 60, 62. See Hubbard v. Briggs, 31 N. Y. 518; White v. Merritt, 7 N. Y. 352; Weed v. Case, 55 Barb. 531. (1) Langridge v. Levy, ante, p. 1004. (m) Scott v. Dixon, 29 Law J., Exch. 62, n. Bedford v. Bagshaw, ib. 65. Ld. Campbell, Wilde v. Gibson, 1 H. L. C. 623. Barry v. Croskey, 'ante, p. 1004. See Cazeaux v. Mali, 25 Barb. 578; Chester v. Dickerson, 52 Barb. 349. (n) Collins v. Cave, 4 H. & N. 234; 28 Law J., Exch. 204. (0) Green v. Button, 2 C. M. & R. 716. |