fraudulent representations upon material matters, calculated and intended to mislead and prevent examination and inquiry as to the character and quality of the stock of goods, to induce the plaintiff to make the trade, and the plaintiff, in the exercise of ordinary prudence, relying upon such representations as true, was induced to enter into the contract and was thereby defrauded, he is entitled to damages.

Upon competent evidence the referee has found that the defendant, knowing that the plaintiff was unacquainted with such goods as made up the stock in his store, both before the making of the written agreement and during the taking of the inventory, represented and stated to the plaintiff, in substance, that his stock was clean and desirable, and that the goods were of good styles and salable; that the plaintiff, relying upon the defendant's representations, did not make a careful examination of the goods, and did not avail himself of the means provided in the written agreement for fixing the prices of the goods; that the stock contained remnants of carpets, and both carpets and papers of old patterns and styles, which were not salable at the prices put upon them in the inventory, and nothing was said by the defendant to the plaintiff about this; and that the plaintiff relied upon the representations made by the defendant, and was deceived by them and by the suppression of facts relating to the stock. It is also to be assumed, from the finding of the referee for the plaintiff, that the defendant knew the representations were false, that they were made as statements of material facts to deceive the plaintiff and were not mere expressions of opinion, and that the plaintiff was justified in relying upon them. These questions of fact are included in the general finding. (Noyes v. Patrick, 58 N. H. 618.) If the representations were false, the defendant knew them to be so, and the conclusion is almost irresistible that they were made with intent to deceive and defraud. (Benj. Sales, sec. 460.)

It is objected that the plaintiff was not justified in relying upon the representations of the defendant, and that the referee erred in holding that the rule caveat emptor did not apply to this case. If the rule was of universal application, an action of deceit for false representations in a sale could never be maintained by the purchaser. It may be difficult to draw the line

which separates cases within the rule from those to which it does not apply, as each case depends to some extent upon its peculiar circumstances; but it applies generally to cases free from actual fraud, where the parties deal upon an equal footing and with equal means of knowledge; and it is not applicable, as a general rule, where false and fraudulent representations of material facts are made by the vendor, and the parties have not equal facilities for ascertaining the truth. In such cases the purchaser has the right to rely upon the statements of the vendor; and when the purchaser is justified in relying upon the representations of the vendor, the rule caveat emptor does not apply.

Where the statements are of material facts, essentially connected with the substance of the transaction, and not mere general commendations or expressions of opinion, and are concerning matters which from their nature or situation are peculiarly within the knowledge of the vendor, the purchaser is justified in relying on them; and in the absence of any knowledge of his own, or of any facts which should excite suspicion, he is not bound to make inquiries and examine for himself. Under such circumstances it does not lie in the mouth of the vendor to complain that the vendee took him at his word. On the other hand, where the representations consist of general commendations or mere expressions of opinion, or where they relate to matters not peculiarly within the knowledge of the vendor, the purchaser is not justified in relying upon them, but is bound to examine for himself so as to ascertain the truth. (2 Pom. Eq. Juris, secs. 891, 892.) In this case the parties were not on an equal footing, and had not equal means of knowledge. The defendant had an experience of fifteen years in trade, and knew the exact condition of his stock. The plaintiff had no acquaintance with such goods, and could learn nothing of their style and quality from an examination. The defects in the goods were to him undiscoverable defects. The representations made by the defendant related to material matters of fact, and the plaintiff was justified in relying on them. He was not guilty of negligence in assuming them to be true, nor was it his duty to employ a competent person to examine the goods.

In Poland v. Brownell, 131 Mass. 138, cited by the defend

ant in argument as a case strongly resembling the case at bar, it is stated in the opinion of the court "that the evidence showed that the plaintiff relied on his own examination and the advice of a friend, and for all that appeared both buyer and seller had equal means of information, and were equally well qualified to judge of the value of the property."

For the plaintiff, Bedle, Muirheid & McGee.

For the defendants, Charles H. Voorhis and W. M. Johnson.

VAN SYCKEL, J. It is clear that no contract was entered into between these parties, and that no recovery can be had on the ground of a contract liability. But the statement that directors and stockholders were responsible for all debts and engagements of the bank was false, to the knowledge of defendants, and therefore fraudulent. It appearing as one of the findings of fact in the case that the plaintiff made his deposits relying on the truth of this statement, he would be entitled to recover the loss he sustained by acting upon it, in an action for deceit. It also appears from the pass-book that entries to the credit of plaintiff were made in it by the bank

1 (Cf. Holbrook v. Connor, 60 Me. 578; 11 Am. R. 212.) In Bishop v. Small, 63 Me. 12, the court held that representations as to what a patent right cost the vendor, or was sold for by him, or as to profits that could be derived from it, were statements of opinions. (Contra Van Epps v. Harrison, 5 Hill. 63.)

Purchaser is entitled to rely on representation that vendor's price is the same as that of A and B in the same business. (Conlan v. Roemer, 52 N. J. L. 53.) So vendor may rely on purchaser's assertion that he has bought a neighbor's hops at a certain price. (Smith v. Countryman, 30 N. Y. 655.)

officers on the 1st day of May and 1st day of November, in each year, from 1873 to 1879 inclusive. The return of this pass-book to the plaintiff on each of these occasions, with the aforesaid printed statement upon it, was a reiteration of the false representation, and it is manifest that thereby the plaintiff was induced to permit his deposits to remain and accumulate in the bank.

This deceit having been practised by the defendants within six years, they could not avail themselves of the statute of limitations as a defence. Although recovery in this case cannot be maintained upon the basis of a contract, it is obvious that the granting of a new trial would be of no avail to the defendants, for the pleadings would be amended by the trial court, and upon the incontrovertible facts a verdict must necessarily pass in favor of the plaintiff for the loss the false representation has occasioned.

That loss was the sum deposited, with interest, being the same amount for which the verdict has been found in this case. The plaintiff being clearly entitled to recover the sum found, the necessary amendment may be made.

The rule to show cause should be discharged.1

RECKLESS IGNORANCE.

CHATHAM FURNACE Co. v. MOFFATT.

(147 Mass. 403.1888.)

TORT for false and fraudulent representations made by the defendant, whereby the plaintiff was induced to take a lease of a mine, and to purchase certain mining machinery.

Trial in the Superior Court, without a jury, before Barker, J., who refused to give certain rulings requested by the defendant, and found for the plaintiff. The defendant alleged exceptions, the substance of which appears in the opinion.

1 Cf. Fish v. Cleland, 33 Ill. 238; Cook v. Nathan, 16 Barb. 342; Davis v. Betz, 66 Ala. 206; Hirshfield v. London Ry. Co., 2 Q. B. D. 1.

M. Wilcox and E. M. Wood for the defendant.

H. L. Dawes and T. P. Pingree for the plaintiff.

C. ALLEN, J. It is well settled in this Commonwealth that the charge of fraudulent intent, in an action for deceit, may be maintained by proof of a statement made, as of the party's own knowledge, which is false, provided the thing stated is not merely a matter of opinion, estimate or judgment, but is susceptible of actual knowledge; and in such case it is not necessary to make any further proof of an actual intent to deceive. The fraud consists in stating that the party knows the thing to exist, when he does not know it to exist; and if he does not know it to exist, he must ordinarily be deemed to know that he does not. Forgetfulness of its existence after a former knowledge, or a mere belief of its existence, will not warrant or excuse a statement of actual knowledge. This rule has been steadily adhered to in this Commonwealth, and rests alike on sound policy and on sound legal principles. (Cole v. Cassidy, 138 Mass. 437; Savage v. Stevens, 126 Mass. 207; Tucker v. White, 125 Mass. 344; Litchfield v. Hutchinson, 117 Mass. 195; Milliken v. Thorndike, 103 Mass. 382; Fisher v. Mellen, 103 Mass. 503; Stone v. Denny, 4 Met. 151; Page v. Bent, 2 Met. 371; Hazard v. Irwin, 18 Pick. 95.) And though this doctrine has not always been fully maintained elsewhere, it is supported by the following authorities, among others: Cooper v. Schlesinger, 111 U. S. 148; Bower v. Fenn, 90 Penn. St. 359; Brownlie v. Campbell, 5 App. Cas. 925, 953, by Lord Blackburn; Reese River Mining Co. v. Smith, L. R. 4 H. L. 64, 79, 80, by Lord Cairns; Slim v. Croucher, 1 DeG. F. & J. 518, by Lord Campbell. See, also, Peek v. Derry, 59 L. T. (N. S.) 78, which has been published since this decision was announced.

In the present case the defendant held a lease of land, in which there was iron ore. The mine had formerly been worked, but operations had ceased, and the mine had become filled with water and debris. The defendant sought to sell this lease to the plaintiff, and represented to the plaintiff, as of his own knowledge, that there was a large quantity of iron