CHAPTER IV

DECEIT

PASLEY _v._ FREEMAN

IN THE KING’S BENCH, HILARY TERM, 1789.

_Reported in 3 Term Reports (Durnford & East), 51._

This was an action in the nature of a writ of deceit, to which the

defendant pleaded the general issue. And after a verdict for the

plaintiffs on the third count, a motion was made in arrest of judgment.

The third count was as follows: “And whereas, also, the said Joseph

Freeman afterwards, to wit, on the twenty-first day of February, in the

year of our Lord 1787, at London aforesaid, in the parish and ward

aforesaid, further intending to deceive and defraud the said John Pasley

and Edward, did wrongfully and deceitfully encourage and persuade the

said John Pasley and Edward to sell and deliver to the said John

Christopher Falch divers other goods, wares, and merchandises, to wit,

sixteen other bags of cochineal of great value, to wit, of the value of

£2,634 16_s._ 1_d._ upon trust and credit; and did for that purpose then

and there falsely, deceitfully, and fraudulently assert and affirm to

the said John Pasley and Edward that the said John Christopher then and

there was a person safely to be trusted and given credit to in that

respect, and did thereby falsely, fraudulently, and deceitfully cause

and procure the said John Pasley and Edward to sell and deliver the said

last-mentioned goods, wares, and merchandises upon trust and credit to

the said John Christopher; and, in fact, they the said John Pasley and

Edward, confiding in, and giving credit to, the said last-mentioned

assertion and affirmation of the said Joseph, and believing the same to

be true, and not knowing the contrary thereof, did afterwards, to wit,

on the twenty-eighth day of February, in the year of our Lord 1787, at

London aforesaid, in the parish and ward aforesaid, sell and deliver the

said last-mentioned goods, wares, and merchandises upon trust and credit

to the said John Christopher; whereas in truth and fact, at the time of

the said Joseph’s making his said last-mentioned assertion and

affirmation, the said John Christopher was not then and there a person

safely to be trusted and given credit to in that respect, and the said

Joseph well knew the same, to wit, at London aforesaid, in the parish

and ward aforesaid. And the said John Pasley and Edward further say,

that the said John Christopher hath not, nor hath any other person on

his behalf, paid to the said John Pasley and Edward, or either of them,

the said sum of £2,634 16_s._ 1_d._ last mentioned, or any part thereof,

for the said last-mentioned goods, wares, and merchandises; but, on the

contrary, the said John Christopher then was and still is wholly unable

to pay the said sum of money last mentioned, or any part thereof, to the

said John and Edward, to wit, at London aforesaid, in the parish and

ward aforesaid; and the said John Pasley and Edward aver that the said

Joseph falsely and fraudulently deceived them in this, that at the time

of his making his said last-mentioned assertion and affirmation the said

John Christopher was not a person safely to be trusted or given credit

to in that respect, as aforesaid, and the said Joseph then well knew the

same, to wit, at London aforesaid, in the parish and ward aforesaid; by

reason of which said last-mentioned false, fraudulent, and deceitful

assertion and affirmation of the said Joseph, the said John Pasley and

Edward have been deceived and imposed upon, and have wholly lost the

said last-mentioned goods, wares, and merchandises, and the value

thereof, to wit, at London aforesaid, in the parish and ward aforesaid,

to the damage,” &c.

Application was first made for a new trial, which after argument was

refused, and then this motion in arrest of judgment. _Wood_ argued for

the plaintiffs, and _Russell_ for the defendant, in the last term; but

as the Court went so fully into this subject in giving their opinions,

it is unnecessary to give the arguments at the bar.

The Court took time to consider of this matter, and now delivered their

opinions _seriatim_.

GROSE, J. Upon the face of this count in the declaration no privity of

contract is stated between the parties. No consideration arises to the

defendant; and he is in no situation in which the law considers him in

any trust, or in which it demands from him any account of the credit of

Falch. He appears not to be interested in any transaction between the

plaintiffs and Falch, nor to have colluded with them; but he knowingly

asserted a falsehood, by saying that Falch might be safely intrusted

with the goods, and given credit to, for the purpose of inducing the

plaintiffs to trust him with them, by which the plaintiffs lost the

value of the goods. Then this is an action against the defendant for

making a false affirmation, or telling a lie, respecting the credit of a

third person, with intent to deceive, by which the third person was

damnified; and for the damages suffered, the plaintiffs contend that the

defendant is answerable in an action upon the case. It is admitted that

the action is new in point of precedent; but it is insisted that the law

recognizes principles on which it may be supported. The principle upon

which it is contended to lie is that, wherever deceit or falsehood is

practised to the detriment of another, the law will give redress. This

proposition I controvert, and shall endeavor to show that, in every case

where deceit or falsehood is practised to the detriment of another, the

law will not give redress; and I say that by the law, as it now stands,

no action lies against any person standing in the predicament of this

defendant for the false affirmation stated in the declaration. If the

action can be supported, it must be upon the ground that there exists in

this case what the law deems _damnum cum injuria_. If it does, I admit

that the action lies; and I admit that upon the verdict found the

plaintiffs appear to have been damnified. But whether there has been

_injuria_, a wrong, a tort, for which an action lies, is a matter of

law. The tort complained of is the false affirmation made with intent to

deceive; and it is said to be an action upon the case analogous to the

old writ of deceit. When this was first argued at the bar, on the motion

for a new trial, I confess I thought it reasonable that the action

should lie; but, on looking into the old books for cases in which the

old action of deceit has been maintained upon the false affirmation of

the defendant, I have changed my opinion. The cases on this head are

brought together in Bro. tit. Deceit, pl. 29, and in Fitz. Abr. I have

likewise looked into Danvers, Kitchins, and Comyns, and I have not met

with any case of an action upon a false affirmation, except against a

party to a contract, and where there is a promise, either express or

implied, that the fact is true, which is misrepresented; and no other

case has been cited at the bar. Then if no such case has ever existed,

it furnishes a strong objection against the action, which is brought for

the first time for a supposed injury, which has been daily committed for

centuries past. For I believe there has been no time when men have not

been constantly damnified by the fraudulent misrepresentations of

others; and if such an action would have lain, there certainly has been,

and will be, a plentiful source of litigation, of which the public are

not hitherto aware. A variety of cases may be put. Suppose a man

recommends an estate to another, as knowing it to be of greater value

than it is; when the purchaser has bought it he discovers the defect,

and sells the estate for less than he gave; why may not an action be

brought for the loss upon any principle that will support this action?

And yet such an action has never been attempted. Or suppose a person

present at the sale of a horse asserts that he was his horse, and that

he knows him to be sound and sure-footed, when in fact the horse is

neither the one nor the other; according to the principle contended for

by the plaintiffs, an action lies against the person present as well as

the seller, and the purchaser has two securities. And even in this very

case, if the action lies, the plaintiffs will stand in a peculiarly

fortunate predicament, for they will then have the responsibility both

of Falch and the defendant. And they will be in a better situation than

they would have been if, in the conversation that passed between them

and the defendant, instead of asserting that Falch might safely be

trusted, the defendant had said, “If he do not pay for the goods, I

will;” for then undoubtedly an action would not have lain against the

defendant. Other and stronger cases may be put of actions that must

necessarily spring out of any principle upon which this can be

supported, and yet which were never thought of till the present action

was brought. Upon what principle is this act said to be an injury? The

plaintiffs say, on the ground that, when the question was asked, the

defendant was bound to tell the truth. There are cases, I admit, where a

man is bound not to misrepresent, but to tell the truth; but no such

case has been cited, except in the case of contracts; and all the cases

of deceit for misinformation may, it seems to me, be turned into actions

of assumpsit. And so far from a person being bound in a case like the

present to tell the truth, the books supply me with a variety of cases,

in which even the contracting party is not liable for a

misrepresentation. There are cases of two sorts in which, though a man

is deceived, he can maintain no action. The first class of cases (though

not analogous to the present) is where the affirmation is that the thing

sold has not a defect which is a visible one; there the imposition, the

fraudulent intent, is admitted, but it is no tort. The second head of

cases is where the affirmation is (what is called in some of the books)

a nude assertion, such as the party deceived may exercise his own

judgment upon; as where it is matter of opinion, where he may make

inquiries into the truth of the assertion, and it becomes his own fault

from laches that he is deceived. 1 Roll. Abr. 101; Yelv. 20; 1 Sid. 146;

Cro. Jac. 386; Bayly _v._ Merrel. In Harvey _v._ Young, Yelv. 20, J. S.,

who had a term for years, affirmed to J. D. that the term was worth £150

to be sold, upon which J. D. gave £150, and afterwards could not get

more than £100 for it, and then brought his action; and it was alleged

that this matter did not prove any fraud, for it was only a naked

assertion that the term was worth so much, and it was the plaintiff’s

folly to give credit to such assertion. But if the defendant had

warranted the term to be of such a value to be sold, and upon that the

plaintiff had bought it, it would have been otherwise; for the warranty

given by the defendant is a matter to induce confidence and trust in the

plaintiff. This case, and the passage in 1 Roll. Abr. 101, are

recognized in 1 Sid. 146. How, then, are the cases? None exist in which

such an action as the present has been brought; none, in which any

principle applicable to the present case has been laid down to prove

that it will lie; not even a _dictum_. But from the cases cited some

principles may be extracted to show that it cannot be sustained: 1st.

That what is fraud, which will support an action, is matter of law. 2d.

That in every case of a fraudulent misrepresentation, attended with

damage, an action will not lie even between contracting parties. 3d.

That if the assertion be a nude assertion, it is that sort of

misrepresentation the truth of which does not lie merely in the

knowledge of the defendant, but may be inquired into, and the plaintiff

is bound so to do; and he cannot recover a damage which he has suffered

by his laches. Then let us consider how far the facts of the case come

within the last of these principles. The misrepresentation stated in the

declaration is respecting the credit of Falch; the defendant asserted

that the plaintiffs might safely give him credit; but credit to which a

man is entitled is matter of judgment and opinion, on which different

men might form different opinions, and upon which the plaintiffs might

form their own, to mislead which no fact to prove the good credit of

Falch is falsely asserted. It seems to me, therefore, that any assertion

relative to credit, especially where the party making it has no

interest, nor is in any collusion with the person respecting whose

credit the assertion is made, is like the case in Yelverton respecting

the value of the term. But at any rate, it is not an assertion of a fact

peculiarly in the knowledge of the defendant. Whether Falch deserved

credit depended on the opinion of many; for credit exists on the good

opinion of many. Respecting this the plaintiffs might have inquired of

others who knew as much as the defendant; it was their fault that they

did not, and they have suffered damage by their own laches. It was owing

to their own gross negligence that they gave credence to the assertion

of the defendant, without taking pains to satisfy themselves that that

assertion was founded in fact, as in the case of Bayly _v._ Merrel. I

am, therefore, of opinion that this action is as novel in principle as

it is in precedent, that it is against the principles to be collected

from analogous cases, and consequently that it cannot be maintained.

BULLER, J. The foundation of this action is fraud and deceit in the

defendant, and damage to the plaintiffs. And a question is, whether an

action thus founded can be sustained in a court of law. Fraud without

damage, or damage without fraud, gives no cause of action; but where

these two concur, an action lies. Per Croke, J., 3 Bulst. 95. But it is

contended that this was a bare, naked lie; that, as no collusion with

Falch is charged, it does not amount to a fraud; and, if there were any

fraud, the nature of it is not stated. And it was supposed by the

counsel, who originally made the motion, that no action could be

maintained unless the defendant, who made this false assertion, had an

interest in so doing. I agree that an action cannot be supported for

telling a bare, naked lie; but that I define to be, saying a thing which

is false, knowing or not knowing it to be so, and without any design to

injure, cheat, or deceive another person. Every deceit comprehends a

lie; but a deceit is more than a lie, on account of the view with which

it is practised, its being coupled with some dealing, and the injury

which it is calculated to occasion, and does occasion, to another

person. Deceit is a very extensive head in the law; and it will be

proper to take a short view of some of the cases which have existed on

the subject, to see how far the Courts have gone, and what are the

principles upon which they have decided. I lay out of the question the

case in 2 Cro. 196, and all other cases which relate to freehold

interests in lands; for they go on the special reason that the seller

cannot have them without title, and the buyer is at his peril to see it.

But the cases cited on the part of the defendant deserving notice are

Yelv. 20, Carth. 90, Salk. 210. The first of these has been fully stated

by my brother Grose; but it is to be observed that the book does not

affect to give the reasons on which the Court delivered their judgment;

but it is a case quoted by counsel at the bar, who mentions what was

alleged by counsel in the other case. If the Court went on a distinction

between the words “warranty” and “affirmation,” the case is not law; for

it was rightly held by Holt, C. J., in the subsequent cases, and has

been uniformly adopted ever since, that an affirmation at the time of a

sale is a warranty, provided it appear on evidence to have been so

intended. But the true ground of that determination was that the

assertion was of mere matter of judgment and opinion; of a matter of

which the defendant had no particular knowledge, but of which many men

will be of many minds, and which is often governed by whim and caprice.

Judgment, or opinion, in such case implies no knowledge. And here this

case differs materially from that in Yelverton; my brother Grose

considers this assertion as mere matter of opinion only, but I differ

from him in that respect. For it is stated on this record that the

defendant knew that the fact was false. The case in Yelverton admits

that, if there had been fraud, it would have been otherwise. The case of

Crosse _v._ Gardner, Carth. 90, was upon an affirmation that oxen which

the defendant had in his possession and sold to the plaintiff were his,

when in truth they belonged to another person. The objection against the

action was that the declaration neither stated that the defendant

deceitfully sold them, or that he knew them to be the property of

another person; and a man may be mistaken in his property and right to a

thing without any fraud or ill intent. _Ex concessis_ therefore if there

were fraud or deceit, the action would lie; and knowledge of the

falsehood of the thing asserted is fraud and deceit. But,

notwithstanding these objections, the Court held that the action lay,

because the plaintiff had no means of knowing to whom the property

belonged but only by the possession. And in Cro. Jac. 474, it was held

that affirming them to be his, knowing them to be a stranger’s, is the

offence and cause of action. The case of Medina _v._ Stoughton, Salk.

210, in the point of decision, is the same as Crosse _v._ Gardner; but

there is an _obiter dictum_ of Holt, C. J., that where the seller of a

personal thing is out of possession, it is otherwise; for there may be

room to question the seller’s title, and _caveat emptor_ in such case to

have an express warranty or a good title. This distinction by Holt is

not mentioned by Lord Raym. 593, who reports the same case; and if an

affirmation at the time of sale be a warranty, I cannot feel a

distinction between the vendor’s being in or out of possession. The

thing is bought of him, and in consequence of his assertion; and if

there be any difference, it seems to me that the case is strongest

against the vendor when he is out of possession, because then the vendee

has nothing but the warranty to rely on. These cases, then, are so far

from being authorities against the present action, that they show that

if there be fraud or deceit, the action will lie; and that knowledge of

the falsehood of the thing asserted is fraud and deceit. Collusion,

then, is not necessary to constitute fraud. In the case of a conspiracy,

there must be a collusion between two or more to support an indictment;

but if one man alone be guilty of an offence which, if practised by two,

would be the subject of an indictment for a conspiracy, he is civilly

liable in an action for reparation of damages at the suit of the person

injured. That knowledge of the falsehood of the thing asserted

constitutes fraud, though there be no collusion, is further proved by

the case of Risney _v._ Selby, Salk. 211, where, upon a treaty for the

purchase of a house, the defendant fraudulently affirmed that the rent

was £30 per annum, when it was only £20 per annum, and the plaintiff had

his judgment; for the value of the rent is a matter which lies in the

private knowledge of the landlord and tenant; and if they affirm the

rent to be more than it is, the purchaser is cheated, and ought to have

a remedy for it. No collusion was there stated; nor does it appear that

the tenant was ever asked a question about the rent, and yet the

purchaser might have applied to him for information; but the judgment

proceeded wholly upon the ground that the defendant knew that what he

asserted was false. And, by the words of the book, it seems that if the

tenant had said the same thing he also would have been liable to an

action. If so, that would be an answer to the objection that the

defendant in this case had no interest in the assertion which he made.

But I shall not leave this point on the _dictum_ or inference which may

be collected from that case. If A., by fraud and deceit, cheat B. out of

£1,000, it makes no difference to B. whether A. or any other person

pockets that £1,000. He has lost his money; and if he can fix fraud upon

A., reason seems to say that he has a right to seek satisfaction against

him. Authorities are not wanting on this point. 1 Roll. Abr. 91, pl. 7.

If the vendor affirm that the goods are the goods of a stranger, his

friend, and that he had authority from him to sell them, and upon that

B. buys them, when in truth they are the goods of another, yet, if he

sell them fraudulently and falsely on this pretence of authority, though

he do not warrant them, and though it be not averred that he sold them

knowing them to be the goods of the stranger, yet B. shall have an

action for this deceit. It is not clear from this case whether the fraud

consisted in having no authority from his friend, or in knowing that the

goods belonged to another person; what is said at the end of the case

only proves that “falsely” and “fraudulently” are equivalent to

“knowingly.” If the first were the fact in the case, namely, that he had

no authority, the case does not apply to this point; but if he had an

authority from his friend, whatever the goods were sold for his friend

was entitled to, and he had no interest in them. But, however that might

be, the next case admits of no doubt. For in 1 Roll. Abr. 100, pl. 1, it

was held that if a man acknowledge a fine in my name, or acknowledge a

judgment in an action in my name of my land, this shall bind me forever;

and therefore I may have a writ of deceit against him who acknowledged

it. So if a man acknowledge a recognizance, statute-merchant or staple,

there is no foundation for supposing that in that case the person

acknowledging the fine or judgment was the same person to whom it was so

acknowledged. If that had been necessary it would have been so stated;

but if it were not so, he who acknowledged the fine had no interest in

it. Again, in 1 Roll. Abr. 95, l. 25, it is said, “If my servant lease

my land to another for years, reserving a rent for me, and, to persuade

the lessee to accept it, he promise that he shall enjoy the land without

incumbrances, if the land be incumbered, &c., the lessee may have an

action on the case against my servant, because he made an express

warranty.” Here, then, is a case in which the party had no interest

whatever. The same case is reported in Cro. Jac. 425; but no notice is

taken of this point, probably because the reporter thought it immaterial

whether the warranty be by the master or servant. And if the warranty be

made at the time of the sale, or before the sale, and the sale is upon

the faith of the warranty, I can see no distinction between the cases.

The gist of the action is fraud and deceit; and if that fraud and deceit

can be fixed by evidence on one who had no interest in his iniquity, it

proves his malice to be the greater. But it was objected to this

declaration that if there were any fraud, the nature of it is not

stated. To this the declaration itself is so direct an answer that the

case admits of no other. The fraud is that the defendant procured the

plaintiffs to sell goods on credit to one whom they would not otherwise

have trusted, by asserting that which he knew to be false. Here, then,

is the fraud and the means by which it was committed; and it was done

with a view to enrich Falch by impoverishing the plaintiffs, or, in

other words, by cheating the plaintiffs out of their goods. The cases

which I have stated, and Sid. 146, and 1 Keb. 522, prove that the

declaration states more than is necessary; for _fraudulenter_ without

sciens, or sciens without _fraudulenter_, would be sufficient to support

the action. But, as Mr. J. Twisden said in that case, the fraud must be

proved. The assertion alone will not maintain the action; but the

plaintiff must go on to prove that it was false, and that the defendant

knew it to be so; by what means that proof is to be made out in evidence

need not be stated in the declaration. Some general arguments were urged

at the bar to show that mischiefs and inconveniences would arise if this

action were sustained; for if a man who is asked a question respecting

another’s responsibility hesitate or is silent, he blasts the character

of the tradesman; and if he say that he is insolvent, he may not be able

to prove it. But let us see what is contended for: it is nothing less

than that a man may assert that which he knows to be false, and thereby

do an everlasting injury to his neighbor, and yet not be answerable for

it. This is as repugnant to law as it is to morality. Then it is said

that the plaintiffs had no right to ask the question of the defendant.

But I do not agree in that; for the plaintiffs had an interest in

knowing what the credit of Falch was. It was not the inquiry of idle

curiosity, but it was to govern a very extensive concern. The defendant

undoubtedly had his option to give an answer to the question or not; but

if he gave none, or said he did not know, it is impossible for any court

of justice to adopt the possible inferences of a suspicious mind as a

ground for grave judgment. All that is required of a person in the

defendant’s situation is that he shall give no answer, or that, if he

do, he shall answer according to the truth as far as he knows. The

reasoning in the case of Coggs _v._ Barnard, which was cited by the

plaintiff’s counsel, is, I think, very applicable to this part of the

case. If the answer import insolvency, it is not necessary that the

defendant should be able to prove that insolvency to a jury; for the law

protects a man in giving that answer, if he does it in confidence and

without malice. No action can be maintained against him for giving such

an answer, unless express malice can be proved. From the circumstance of

the law giving that protection, it seems to follow, as a necessary

consequence, that the law not only gives sanction to the question, but

requires that, if it be answered at all, it shall be answered honestly.

There is a case in the books which, though not much to be relied on, yet

serves to show that this kind of conduct has never been thought innocent

in Westminster Hall. In R. _v._ Gunston, 1 Str. 589, the defendant was

indicted for pretending that a person of no reputation was Sir J.

Thornycraft, whereby the prosecutor was induced to trust him; and the

Court refused to grant a _certiorari_, unless a special ground were laid

for it. If the assertion in that case had been wholly innocent the Court

would not have hesitated a moment. How, indeed, an indictment could be

maintained for that I do not well understand; nor have I learnt what

became of it. The objection to the indictment is that it was merely a

private injury: but that is no answer to an action. And if a man will

wickedly assert that which he knows to be false, and thereby draws his

neighbor into a heavy loss, even though it be under the specious

pretence of serving his friend, I say _ausis talibus istis non jura

subserviunt_.

ASHHURST, J. The objection in this case, which is to the third count in

the declaration, is that it contains only a bare assertion, and does not

state that the defendant had any interest, or that he colluded with the

other party who had. But I am of opinion that the action lies

notwithstanding this objection. It seems to me that the rule laid down

by Croke, J., in Bayly _v._ Merrel, 3 Bulstr. 95, is a sound and solid

principle, namely, that fraud without damage, or damage without fraud,

will not found an action; but where both concur an action will lie. The

principle is not denied by the other judges, but only the application of

it, because the party injured there, who was the carrier, had the means

of attaining certain knowledge in his own power, namely, by weighing the

goods; and therefore it was a foolish credulity, against which the law

will not relieve. But that is not the case here, for it is expressly

charged that the defendant knew the falsity of the allegation, and which

the jury have found to be true; but _non constat_ that the plaintiffs

knew it, or had any means of knowing it, but trusted to the veracity of

the defendant. And many reasons may occur why the defendant might know

that fact better than the plaintiffs; as if there had before this event

subsisted a partnership between him and Falch which had been dissolved;

but at any rate it is stated as a fact that he knew it. It is admitted

that a fraudulent affirmation, when the party making it has an interest,

is a ground of action, as in Risney _v._ Selby, which was a false

affirmation made to a purchaser as to the rent of a farm which the

defendant was in treaty to sell to him. But it was argued that the

action lies not unless where the party making it has an interest, or

colludes with one who has. I do not recollect that any case was cited

which proves such a position; but if there were any such to be found, I

should not hesitate to say that it could not be law, for I have so great

a veneration for the law as to suppose that nothing can be law which is

not founded in common sense or common honesty. For the gist of the

action is the injury done to the plaintiff, and not whether the

defendant meant to be a gainer by it; what is it to the plaintiff

whether the defendant was or was not to gain by it? the injury to him is

the same. And it should seem that it ought more emphatically to lie

against him, as the malice is more diabolical if he had not the

temptation of gain. For the same reason, it cannot be necessary that the

defendant should collude with one who has an interest. But if collusion

were necessary, there seems all the reason in the world to suppose both

interest and collusion from the nature of the act; for it is to be hoped

that there is not to be found a disposition so diabolical as to prompt

any man to injure another without benefiting himself. But it is said

that if this be determined to be law, any man may have an action brought

against him for telling a lie, by the crediting of which another happens

eventually to be injured. But this consequence by no means follows; for

in order to make it actionable it must be accompanied with the

circumstances averred in this count, namely, that the defendant,

“intending to deceive and defraud the plaintiffs, did deceitfully

encourage and persuade them to do the act, and for that purpose made the

false affirmation, in consequence of which they did the act.” Any lie

accompanied with those circumstances I should clearly hold to be the

subject of an action; but not a mere lie thrown out at random without

any intention of hurting anybody, but which some person was foolish

enough to act upon; for the _quo animo_ is a great part of the gist of

the action. Another argument which has been made use of is, that this is

a new case, and that there is no precedent of such an action. Where

cases are new in their principle, there I admit that it is necessary to

have recourse to legislative interposition in order to remedy the

grievance; but where the case is only new in the instance, and the only

question is upon the application of a principle recognized in the law to

such new case, it will be just as competent to courts of justice to

apply the principle to any case which may arise two centuries hence, as

it was two centuries ago; if it were not, we ought to blot out of our

law-books one fourth part of the cases that are to be found in them. The

same objection might, in my opinion, have been made with much greater

reason in the case of Coggs _v._ Barnard; for there the defendant, so

far from meaning an injury, meant a kindness, though he was not so

careful as he should have been in the execution of what he undertook.

And indeed the principle of the case does not, in my opinion, seem so

clear as that of the case now before us, and yet that case has always

been received as law. Indeed, one great reason, perhaps, why this action

has never occurred may be that it is not likely that such a species of

fraud should be practised unless the party is in some way interested.

Therefore I think the rule for arresting the judgment ought to be

discharged.

LORD KENYON, C. J. I am not desirous of entering very fully into the

discussion of this subject, as the argument comes to me quite exhausted

by what has been said by my brothers. But still I will say a few words

as to the grounds upon which my opinion is formed. All laws stand on the

best and broadest basis which go to enforce moral and social duties.

Though, indeed, it is not every moral and social duty the neglect of

which is the ground of an action. For there are, which are called in the

civil law, duties of imperfect obligation, for the enforcing of which no

action lies. There are many cases where the pure effusion of a good mind

may induce the performance of particular duties, which yet cannot be

enforced by municipal laws. But there are certain duties, the

non-performance of which the jurisprudence of this country has made the

subject of a civil action. And I find it laid down by the Lord Ch. B.

Comyns (Com. Dig. tit. Action upon the Case for a Deceit, A. 1), that

“an action upon the case for a deceit lies when a man does any deceit to

the damage of another.” He has not, indeed, cited any authority for his

opinion; but his opinion alone is of great authority, since he was

considered by his contemporaries as the most able lawyer in Westminster

Hall. Let us, however, consider whether that proposition is not

supported by the invariable principle in all the cases on this subject.

In 3 Bulstr. 95, it was held by Croke, J., that “fraud without damage,

or damage without fraud, gives no cause of action; but where these two

do concur, there an action lieth.” It is true, as has been already

observed, that the judges were of opinion in that case that the action

did not lie on other grounds. But consider what those grounds were.

Dodderidge, J., said: “If we shall give way to this, then every carrier

would have an action upon the case; but he shall not have any action for

this, because it is merely his own default that he did not weigh it.”

Undoubtedly, where the common prudence and caution of man are sufficient

to guard him, the law will not protect him in his negligence. And in

that case, as reported in Cro. Jac. 386, the negligence of the plaintiff

himself was the cause for which the Court held that the action was not

maintainable. Then, how does the principle of that case apply to the

present? There are many situations in life, and particularly in the

commercial world, where a man cannot by any diligence inform himself of

the degree of credit which ought to be given to the persons with whom he

deals; in which cases he must apply to those whose sources of

intelligence enable them to give that information. The law of prudence

leads him to apply to them; and the law of morality ought to induce them

to give the information required. In the case of Bulstrode, the carrier

might have weighed the goods himself; but in this case the plaintiffs

had no means of knowing the state of Falch’s credit but by an

application to his neighbors. The same observation may be made to the

cases cited by the defendant’s counsel respecting titles to real

property. For a person does not have recourse to common conversation to

know the title of an estate which he is about to purchase; but he may

inspect the title-deeds; and he does not use common prudence if he rely

on any other security. In the case of Bulstrode, the Court seemed to

consider that _damnum_ and _injuria_ are the grounds of this action; and

they all admitted that, if they had existed in that case, the action

would have lain there; for the rest of the judges did not controvert the

opinion of Croke, J., but denied the application of it to that

particular case. Then it was contended here that the action cannot be

maintained for telling a naked lie; but that proposition is to be taken

_sub modo_. If, indeed, no injury is occasioned by the lie it is not

actionable; but if it be attended with a damage, it then becomes the

subject of an action. As calling a woman a whore, if she sustain no

damage by it, is not actionable; but if she lose her marriage by it,

then she may recover satisfaction in damages. But in this case the two

grounds of the action concur; here are both the _damnum et injuria_. The

plaintiffs applied to the defendant, telling him that they were going to

deal with Falch, and desiring to be informed of his credit, when the

defendant fraudulently, and knowing it to be otherwise, and with a

design to deceive the plaintiffs, made the false assertion which is

stated on the record, by which they sustained a considerable damage.

Then, can a doubt be entertained for a moment but that this is injurious

to the plaintiffs? If this be not an injury, I do not know how to define

the word. Then, as to the loss; this is stated in the declaration, and

found by the verdict. Several of the words stated in this declaration,

and particularly _fraudulenter_, did not occur in several of the cases

cited. It is admitted that the defendant’s conduct was highly immoral

and detrimental to society. And I am of opinion that the action is

maintainable on the grounds of deceit in the defendant, and injury and

loss to the plaintiffs.

_Rule for arresting the judgment discharged._[314]

WORK _v._ CAMPBELL

SUPREME COURT, CALIFORNIA, DECEMBER 13, 1912.

_Reported in 164 California Reports, 343._

ANGELLOTTI, J.[315] The action is one to recover of defendant fifteen

thousand dollars’ damages alleged to have been caused plaintiff by

reason of the fact that she has become finally separated from her

husband, L. B. Work, and has thereby suffered and will continue to

suffer great distress of mind and mental anguish, and has lost and

will continue to lose forever his society, comfort, love, and

affection, as well as the support and maintenance which he would give

her. On or about February 15, 1910, the husband “separated from

plaintiff, and from their said children, and departed from the said

county of Kings, and has gone to parts unknown to plaintiff with

intent to desert and abandon plaintiff.” It is not alleged that

defendant, who is the husband of an aunt of plaintiff, ever said or

did anything to influence the husband to leave plaintiff, or to cause

any change of feeling on his part toward her. It is frankly alleged

that his departure was caused solely by the fact that she became very

angry with him, refused to see him, refused to speak or talk with him,

sent him a letter in which she told him that she would hold no further

communication with him, but would sue him for a divorce and that she

hoped she might never see or speak to him again. Her complaint

characterizes her conduct toward her husband, alleged to be the sole

inducement for his departure, as “harsh and cruel treatment” of him.

The claim of any liability on the part of defendant to her on account

of the separation is based on allegations to the effect that her

attitude and conduct toward her husband, which caused the separation,

were wholly induced by certain false statements knowingly made to her

by defendant concerning her husband, which, owing to her confidence

and trust in defendant, she fully believed and relied upon, and

certain advice and counsel given to her by defendant in the matter,

all of which statements and advice were wilfully made and given by

defendant with the intent and design on his part to cause a separation

between plaintiff and her husband. The complaint alleges in detail the

alleged statements and advice of defendant in this behalf, and also

the object sought to be obtained by him in causing a separation of the

husband and wife, but no useful purpose can be subserved by stating

these things here. It further alleges that when she discovered the

falsity of the representations and the intent and purpose of defendant

in making them, she at once instituted diligent search for her

husband, but has been unable to ascertain his whereabouts. It is

further alleged “that by reason of the premises hereinabove stated,

defendant has unlawfully, fraudulently and wrongfully abducted and

enticed from the plaintiff her said husband, and that by reason of the

said abduction, this plaintiff has suffered,” &c., to her great damage

in the sum of fifteen thousand dollars.

Under our statutes, a wife may maintain an action for damages suffered

by her by reason of the abduction or enticement from her of her

husband, as may a husband for the damages suffered by him for the

abduction or enticement from him of his wife, and in such an action by

the wife her husband is not a necessary party plaintiff. (See Civ.

Code, sec. 49, subds. 1 and 2; Humphrey _v._ Pope, 122 Cal. 253 [54

Pac. 847].) It may be assumed, purely for the purposes of this

decision, that no cause of action for the abduction or enticement of

her husband from her is stated by the wife in her complaint....

We can see no reason why, regardless of the question we have just

referred to, the matters alleged in the complaint do not show a cause

of action in behalf of plaintiff against defendant. According to the

complaint, the sole cause of the conduct of plaintiff causing the

separation of the husband and wife, with the same injurious

consequences to her that would have followed the abduction or

enticement of her husband from her, was the action of defendant in

making to her the wilfully false representations concerning her

husband, for the very purpose and with the design on his part to so

influence her as to bring about such a separation. His deception in

the matter was the sole cause of such conduct on her part, and such

conduct on her part was tantamount to a refusal by her to continue the

relation between her husband and herself of husband and wife. It is

declared in section 1708 of the Civil Code that “every person is

bound, without contract, to abstain from injuring the person or

property of another, or infringing upon any of his rights,” and in

section 1709, “one who wilfully deceives another with intent to induce

him to alter his position to his injury or risk, is liable for any

damage which he thereby suffers.” These are but statements of the well

settled law independent of statute. It is substantially said in 20

Cyc. at page 10, and the statement is well supported by the

authorities, that as a general rule, an action for damages for deceit

will lie wherever a party has made a false representation of a

material fact susceptible of knowledge knowing it to be false or not

having sufficient knowledge on the subject to warrant the

representation, with the intent to induce the person to whom it is

made, in reliance upon it, to do or refrain from doing something to

his pecuniary hurt, when such person, acting with reasonable prudence,

is thereby deceived and induced to so do or refrain, to his damage. No

reason is apparent to us why the alleged facts set forth in the

complaint should not be held to bring the case within the operation of

this rule.

It is no answer to such an action that the action or conduct of the

plaintiff is the direct cause of the result occasioning damages. Such

is the situation wherever such an action is allowed. The whole basis

of the action is that such act or conduct is fraudulently induced by

the defendant. A is wilfully deceived by B into selling goods to C

upon credit, by false representations as to C’s solvency wilfully and

knowingly made by B to A for the very purpose of inducing him to so do

and thereby suffers a pecuniary injury. The direct and immediate cause

of the injury is, of course, the sale by A to C on credit. But B is

held liable to A for the damage thereby suffered because by fraud he

induced A to make such sale on credit.

It may be urged that a person fraudulently misled cannot found his

claim on conduct violative of sound morals or public policy, or of a

criminal statute. Here the conduct and attitude of the wife causing

the separation was her harsh and cruel conduct toward her husband, her

refusal to live with him or to see him, her refusal to further

continue the relationship of husband and wife, &c. Of course, all her

conduct would have been fully justified if the representations made to

her by defendant had been true in point of fact, as the complaint

sufficiently alleges that plaintiff believed to be the situation. It

has been held that where the fraudulent representation is intended to

create and actually does create in the mind of the party a belief that

under the circumstances represented the act which he is induced to do

is neither illegal nor immoral, he may recover the damages he has

sustained even though a statute makes the act a criminal offence. (See

20 Cyc. 80; Burrows _v._ Rhodes, [1899] 1 Q. B. 816; Prescott _v._

Norris, 32 N. H. 101; Morrill _v._ Palmer, 68 Vt. 1 [33 L. R. A. 411,

33 Atl. 829].) We are not called upon to go as far as this in this

case. The complaint indicates no criminal offence on plaintiff’s part.

Certainly, however, under the circumstances stated, it cannot fairly

be said that plaintiff did not believe her conduct toward her husband

to be in full accord with good morals and public policy, or was not

justified in so believing. It is not claimed that the complaint does

not sufficiently show that plaintiff acted with reasonable prudence in

accepting as true and relying on defendant’s statements. In view of

the circumstances alleged as to her relationship to defendant, and her

confidence and trust in him, we think the complaint is not fatally

defective in this regard, although it must be conceded to be somewhat

remarkable that a wife having any affection for or confidence in her

husband should be willing to accept as true such statements as are

here alleged to have been made to her, without making some further

inquiry.

We have not found any case in which the remedy of action for damages

for deceit has been invoked under such circumstances as appear here.

The fact that the case presented is unique in its circumstances is

not, however, any warrant for a refusal to apply a rule that appears,

on principle, to be applicable. We think the facts confessed by the

demurrer show a liability on the part of defendant to plaintiff for

any damage caused her by the loss of her husband.[316]

STATE _v._ GORDON

SUPREME COURT, KANSAS, JULY TERM, 1895.

_Reported in 56 Kansas Reports, 64._

Gordon was convicted and sentenced in the District Court upon a charge

of obtaining money from Trenier on false pretences. He appealed from the

judgment.

The facts alleged and proved were, in brief, as follows:—

Gordon represented to Trenier that Gordon and a certain Indian owned and

possessed a gold brick of the value of $10,000; that they were about to

take the brick to the United States Mint at Philadelphia to be coined

into money; that the Indian would not allow the brick to be taken to the

mint unless he received a certain sum of money on his interest in the

brick. Gordon told Trenier that, if Trenier would give Gordon money to

pay the Indian on his share in the brick, he (Gordon) would deliver said

brick to Trenier to be by Trenier taken to the mint, and that Trenier

should have a third interest in the money coined from the brick. Relying

on these statements, Trenier gave Gordon money to pay the Indian.

It appeared that Gordon and the Indian did not own or possess a gold

brick; that the representations were all known by Gordon to be false;

and that they were made for the purpose of defrauding Trenier.[317]

JOHNSTON, J.... The substantial features of the charge were

representations and assurances of present existing facts, viz., that

Gordon and the Indian were then the owners and possessors of a valuable

gold brick, which they then had in Shawnee County, and that they were

then on their road to take the gold brick to the United States Mint at

Philadelphia to be coined. It is alleged that on the faith of these

representations and the assurance of those facts the money was obtained

from Trenier. The mere fact that a false pretence of an existing or past

fact is accompanied by a future promise will not relieve the defendant

or take the case out of the operation of the statute. Besides,

“It is not necessary, to constitute the offence of obtaining goods by

false pretences, that the owner has been induced to part with his

property solely and entirely by pretences which are false; nor need the

pretences be the paramount cause of the delivery to the prisoner. It is

sufficient if they are a part of the moving cause, and without them the

defrauded party would not have parted with the property.” (In re Snyder,

17 Kan. 542.)

[Remainder of opinion omitted.]

_Judgment affirmed._[318]

EDGINGTON _v._ FITZMAURICE

IN THE COURT OF APPEAL, MARCH 7, 1885.

_Reported in Law Reports, 29 Chancery Division, 459._

Action against Fitzmaurice _et als._, directors of the Army and Navy

Provision Market (Limited), and against Hunt, the secretary, and Hanley,

the manager, asking for the repayment by them of a sum of £1500 advanced

by the plaintiff on debentures of the company, on the ground that he was

induced to advance the money by the fraudulent misrepresentations of the

defendants.

Plaintiff, who was a shareholder in the company, received a prospectus

issued by order of the directors, inviting subscription for debenture

bonds. This prospectus contained the following statement as to the

objects for which the issue of debentures was made:—

“1. To enable the society to complete the present alterations and

additions to the buildings, and to purchase their own horses and vans,

whereby a large saving will be effected in the cost of transport.

“2. To further develop the arrangements at present existing for the

direct supply of cheap fish from the coast, which are still in their

infancy.”

Plaintiff took debenture bonds to the amount of £1500; and testified

that he relied, as one inducement, on the fact that the company wanted

the money for the objects stated in the prospectus.

At the hearing before Denman, J., the plaintiff contended and offered

evidence tending to show that the real object of the directors in

issuing the debentures was to pay off pressing liabilities of the

company, and not to complete the buildings or to purchase horses and

vans, or to develop the business of the company.[319]

_Davey_, Q. C., _W. W. Karslake_, Q. C., and _J. Kaye_, for Fitzmaurice.

There was no misrepresentation of any fact, and the directors merely

stated their intention as to the money, which of course they might

alter. There is every difference between the two: Maddison _v._

Alderson, 8 App. Cases, 467. Unless it amounts to a contract, a mere

statement that you will do something is of no effect: Jordan _v._ Money,

5 H. L. C. 185; and if it was a contract then it was with the company,

and the directors cannot be sued: Ferguson _v._ Wilson, L. R. 2 Chan.

77.

_Sir F. Herschell_, in reply. An allegation of intention may be

fraudulent: Ex parte Whittaker, L. R. 10 Chan. 446.

[Denman, J., delivered an elaborate opinion, substantially sustaining

the plaintiff’s contention. He gave judgment against the directors.]

From this judgment, Fitzmaurice and the four other directors appealed.

BOWEN, L. J. [After stating the requisites of an action for deceit, and

commenting upon other alleged misrepresentations.] But when we come to

the third alleged misstatement I feel that the plaintiff’s case is made

out. I mean the statement of the objects for which the money was to be

raised. These were stated to be to complete the alterations and

additions to the buildings, to purchase horses and vans, and to develop

the supply of fish. A mere suggestion of possible purposes to which a

portion of the money might be applied would not have formed a basis for

an action of deceit. There must be a misstatement of an existing fact;

but the state of a man’s mind is as much a fact as the state of his

digestion. It is true that it is very difficult to prove what the state

of a man’s mind at a particular time is, but if it can be ascertained it

is as much a fact as anything else. A misrepresentation as to the state

of a man’s mind is, therefore, a misstatement of fact. Having applied as

careful consideration to the evidence as I could, I have reluctantly

come to the conclusion that the true objects of the defendants in

raising the money were not those stated in the circular. I will not go

through the evidence, but looking only to the cross-examination of the

defendants, I am satisfied that the objects for which the loan was

wanted were misstated by the defendants, I will not say knowingly, but

so recklessly as to be fraudulent in the eye of the law.

Then the question remains: Did this misstatement contribute to induce

the plaintiff to advance his money. Mr. Davey’s argument has not

convinced me that they did not. He contended that the plaintiff admits

that he would not have taken the debentures unless he had thought they

would give him a charge on the property, and therefore he was induced to

take them by his own mistake, and the misstatement in the circular was

not material. But such misstatement was material if it was actively

present to his mind when he decided to advance his money. The real

question is, what was the state of the plaintiff’s mind, and if his mind

was disturbed by the misstatement of the defendants, and such

disturbance was in part the cause of what he did, the mere fact of his

also making a mistake himself could make no difference. It resolves

itself into a mere question of fact. I have felt some difficulty about

the pleadings, because in the statement of claim this point is not

clearly put forward, and I had some doubt whether this contention as to

the third misstatement was not an afterthought. But the balance of my

judgment is weighed down by the probability of the case. What is the

first question which a man asks when he advances money? It is, what is

it wanted for? Therefore I think that the statement is material, and

that the plaintiff would be unlike the rest of his race if he was not

influenced by the statement of the objects for which the loan was

required. The learned judge in the Court below came to the conclusion

that the misstatement did influence him, and I think he came to a right

conclusion.

_Appeal dismissed._[320]

GALLAGHER _v._ BRUNEL

SUPREME COURT, NEW YORK, AUGUST, 1826.

_Reported in 6 Cowen, 347._

On demurrer to the declaration. The first count stated, that on the 9th

of April, 1823, Castro & Henriques proposed to purchase of the

plaintiffs a quantity of cotton, at a certain price; part to be paid in

cash, and part to be secured by the promissory note of the purchasers

endorsed by the defendant, at four months; that C. & H. were then unable

to pay for the cotton; and the plaintiffs therefore unwilling to sell

all, or any part, on their sole credit; and the defendant knew this.

Yet, contriving and intending to injure and defraud the plaintiffs; and

to induce them to sell and deliver the cotton to C. & H.; and thereby

subject the plaintiffs to the loss of the balance due after the cash

payment, the defendant falsely and deceitfully represented and held out

to the plaintiffs, that he, the defendant, was willing to endorse the

proposed note; and with the like intent, &c., falsely, fraudulently, and

deceitfully encouraged and induced the plaintiffs to sell and deliver

the cotton. That they did sell and deliver it, in confidence of such

false, fraudulent and deceitful representation, &c., when, in truth, the

defendant was then not willing, and did not mean or intend to endorse

the note, or make himself responsible; nor did he then, nor had he at

any time since endorsed, or made himself legally responsible. By means

whereof the plaintiffs lost the cotton and the price.

The second count averred, that C. & H. were in bad credit and unfit to

be trusted, at the time of the sale. But the defendant, well knowing

this; and contriving and intending to defraud and injure the plaintiffs,

and wrongfully and deceitfully to enable C. & H. to obtain the

possession of the cotton, and convert it to their own use, without

paying the plaintiffs for it; falsely, fraudulently and deceitfully

represented to the plaintiffs, and gave them to understand and believe,

that, in case they would sell the cotton to C. & H., the defendant would

become answerable to the plaintiffs, for so much as should be unpaid, by

endorsing the note or notes of C. & H., &c.; that without such

representation, they would not have sold the cotton, &c. (_In other

respects, this count was substantially the same as the first._)

General demurrer and joinder.[321]

WOODWORTH, J.... The attempt here is, to sustain the action, not on a

contract, which, if in writing, might perhaps be obligatory; but on a

deceitful representation. If the promise was in writing, I perceive no

objection to its validity, inasmuch as a good consideration is stated,

viz., that if the plaintiffs would sell and deliver, the defendant would

endorse. If, then, there is a binding contract existing between the

parties, and on which the defendant is liable, I apprehend it is not

competent for the plaintiffs to say they have an election to turn this

into an action for deceit, and recover in that form, unless the case is

such as to render the party liable, not only on the contract; but in

addition, contains facts sufficient to sustain an action for deceit. For

example, suppose A represents B to be solvent, knowing it to be false,

whereby B obtains credit; but notwithstanding this representation, the

seller takes from A his written stipulation to guaranty the payment. In

this case, I perceive no objection to a creditor’s election of the

remedy. The fraudulent representation of solvency would sustain the

action for deceit. The written guaranty would support an action on the

contract. It seems, therefore, immaterial here, whether the plaintiffs

have or have not a demand which may be enforced in a different form. The

question is, will the facts stated sustain an action for deceit?

After attentive consideration, I am inclined to think the plaintiffs are

not entitled to recover. However reprehensible the conduct of the

defendant may appear in a moral point of view, we cannot deny to him the

protection of the common law; which does not reach cases of imperfect

obligation. If this be an attempt on the part of the plaintiffs to get

rid of the statute of frauds, I can only say, the occasion justified the

experiment, and calls for a patient and critical examination.

If this case is stripped of the general allegations in the declaration,

of fraud and deceit, it appears to me that the gravamen is nothing more

than that the defendant encouraged the plaintiffs to sell to Castro and

Henriques; and, as surety, promised to endorse their notes. The

intention of the party not to fulfil, has not, I believe, ever been

considered among the fraudulent acts, which, in judgment of law, render

a party liable. The maker of a promissory note may not, at the time,

intend to make payment. On this note, the plaintiff may declare that the

defendant intended to deceive and defraud; but it is mere matter of

form, sanctioned by precedent in pleading. The maker may go farther, and

on the strength of assurances to pay punctually, never intended to be

performed, induce the lender to part with his money, and accept the

borrower’s note. All this is immoral. Still the remedy is on the

contract. The law has not recognized it as the substantive ground of

fraud. That no cases are to be met with in the books going the length

contended for, is good evidence that the doctrine is novel, and has

never been acted upon.

* * * * *

It is evident what must be the species of fraud, for which the law gives

redress; falsehood as to an existing fact. If, as Buller, J., observes,

every deceit includes a lie, it follows, that the representation, and

promise of the defendant are not comprised within the legal acceptation

of that term. The test of a lie is, that the fact asserted is not true

at the time; which cannot be predicated of the facts in this case; for,

although the defendant promised with the intent not to perform, it was

not then false, nor could it be. It referred to an act to be done _in

futuro_. Until the defendant had refused to endorse, it could not be

said he had violated his promise.

* * * * *

_Judgment for defendant._[322]

SWIFT _v._ ROUNDS

SUPREME COURT, RHODE ISLAND, JULY 6, 1896.

_Reported in 19 Rhode Island Reports, 527._

Trespass on the Case for deceit. Certified from the Common Pleas

Division on demurrer to the declaration.

TILLINGHAST, J. This is trespass on the case for deceit. The first count

in the declaration alleges that the defendant, intending to deceive and

defraud the plaintiffs, did buy of them on credit certain goods and

chattels of the value of $400, the said defendant not then and there

intending to pay for the same, but intending wickedly and fraudulently

to cheat the plaintiffs out of the value of said goods and chattels,

which said sum of $400 the defendant refuses to pay, to the plaintiffs’

damage, &c. The second count, after setting out the fraudulent conduct

aforesaid, alleges that the defendant thereby then and there represented

that he intended to pay for said goods, but that he did not then and

there intend to pay for the same, but wickedly and fraudulently intended

to cheat the plaintiffs out of the value of said goods and chattels, &c.

To this declaration the defendant has demurred, and for grounds of

demurrer to the first count thereof, he says, (1) that the plaintiffs do

not allege any false representation by the defendant; (2) that the

plaintiffs do not allege that they have acted upon any false

representation of the defendant; and (3) that the plaintiffs do not

allege any damage suffered by them in acting upon any false

representation of the defendant.

The grounds of demurrer to the second count are, (1) that the plaintiffs

do not allege any false representation by the defendant as to any fact

present or past, but only as to something that would happen in the

future, which, if in the future it proved not to be true, would not be

the subject matter of a false representation, but simply a promise

broken, and therefore not a ground of an action of deceit; (2) that the

plaintiffs do not allege that they acted upon any false representation

made by the defendant; and (3) that the plaintiffs do not allege that

they suffered any damage by acting upon any false representation made by

the defendant to the plaintiffs.

We are inclined to the opinion, after some hesitation, that the

declaration states a case of deceit. Any fraudulent misrepresentation or

device whereby one person deceives another, who has no means of

detecting the fraud, to his injury and damage, is a sufficient ground

for an action of deceit. Deceit is a species of fraud, and consists of

any false representation or contrivance whereby one person overreaches

and misleads another, to his hurt. And, while the fraudulent

misrepresentation relied upon usually consists of statements made as to

material facts, either verbally or in writing, yet it may be made by

conduct as well. Grinnell on Law of Deceit, p. 35. A man may not only

deceive another, to his hurt, by deliberately asserting a falsehood, as,

for instance, by stating that A. is an honest man when he knows him to

be a rogue, or that a horse is sound and kind when he knows him to be

unsound and vicious, but also by any act or demeanor which would

naturally impress the mind of a careful man with a mistaken belief, and

form the basis of some change of position by him. 1 Story, Eq. Jur. §

192. In Ex parte Whittaker, In re Shackleton, L. R. 10 Ch. 449, Mellish,

L. J., says: “It is true, indeed, that a party must not make any

misrepresentation, express or _implied_, and as at present advised I

think Shackleton when he went for the goods must be taken to have made

an implied representation that he intended to pay for them, and if it

were clearly made out that at that time he did not intend to pay for

them, I should consider that a case of fraudulent misrepresentation was

shown.” See also Lobdell _v._ Baker, 1 Met. 201; 1 Benjamin on Sales,

ed. of 1888, § 524.

In the case at bar, the declaration alleges that the defendant bought

the goods in question upon credit, fraudulently intending not to pay for

them but to cheat the plaintiffs out of the value thereof. By the act of

buying the goods of the plaintiffs the defendant impliedly promised to

pay for the same, which promise was equally as strong and binding as

though it had been made in words, or even in writing. The plaintiffs had

the right to rely on this promise, and to presume that it was made in

good faith. It turns out, however, according to the allegations

aforesaid, that it was not made in good faith, but, on the contrary, was

made for the purpose of deceiving the plaintiffs into the act of parting

with their goods, the defendant intending by the transaction to cheat

them out of the value thereof. The fraud, then, consisted in the making

of the promise, in the manner aforesaid, with intent not to perform it.

By the act of purchasing the goods on credit, the defendant impliedly

represented that he intended to pay for them. The plaintiffs relied on

this representation, which was material and fraudulent, and were damaged

thereby. All the necessary elements of fraud or deceit therefore were

present in the transaction. See Upton _v._ Vail, 6 Johns. 181;

Bartholomew _v._ Bentley, 15 Ohio, 666; Bishop, Non-Contract Law, §§

314–318; Burrill _v._ Stevens, 73 Me. 400; Barney _v._ Dewey, 13 Johns.

226; Hubbel _v._ Meigs, 50 N. Y. 491. The general doctrine which

controls this action is fully reviewed by Mr. Wallace in a note to

Pasley _v._ Freeman, 2 Smith’s Lead. Cas. 101. As said by Bigelow on

Fraud, page 484, “to profess an intent to do or not to do when a party

intends the contrary, is as clear a case of misrepresentation and of

fraud as could be made.” See also p. 466 as to what constitutes a

representation. In Goodwin _v._ Horne, 60 N. H. 486, the court say:

“Ordinarily false promises are not fraudulent, nor evidence of fraud,

and only false representations of past or existing facts are actionable

or can be made the ground of defence.... But when a promise is made with

no intention of performance, and for the very purpose of accomplishing a

fraud, it is a most apt and effectual means to that end, and the victim

has a remedy by action or defence. Such are cases of concealed

insolvency and purchases of goods with no intention to pay for them.” In

Byrd _v._ Hall, 1 Abb. A. D. 286, it was held that, although a purchase

of goods on credit by one who knows himself to be insolvent is not

fraudulent, yet where it is made with a preconceived design not to pay,

it is fraudulent. See also Milliken _v._ Miller, 12 R. I. 296; Thompson

_v._ Rose, 16 Conn. 81; Hennequin _v._ Naylor, 24 N. Y. 129; Devoe _v._

Brandt, 53 N. Y. 465; Story on Sales, 2d ed. § 176, and cases in note 2;

Douthitt _v._ Applegate, 33 Kans. 395; Morrill _v._ Blackman, 42 Conn.

324; Skinner _v._ Flint, 105 Mass. 528; Earl of Bristol _v._ Wilsmore, 2

Dow. & Ry. 760; Lobdell _v._ Baker, 1 Met. 193; Cooley on Torts, 2d ed.

559; Load _v._ Green, 15 M. & W. 215. In short, the making of one state

of things to appear, to those with whom you deal, to be the true state

of things, while you are acting on the knowledge of a different state of

things—among the oldest definitions of fraud in contracts—is exemplified

in this case. See Lee _v._ Jones, 17 C. B. N. S. 494. The defendant made

it to appear, by the act of buying on credit, that he intended to pay

for the goods in question, while in fact he intended to cheat the

plaintiffs out of them. And to hold that such a transaction does not

amount to fraud, would be to make it easy for cheats and swindlers to

escape the just consequence of their unrighteous acts.

We have hesitated somewhat in arriving at the conclusion that an action

of deceit will lie, upon the facts set out in the declaration, for the

reason that, amongst the numerous cases of fraud and deceit to be found

in the books, we have not been referred to any, nor have we been able to

find any, where the action of deceit was based simply on the act of

buying goods on credit, intending not to pay for them. In Lyons _v._

Briggs, 14 R. I. 224, which was an action of deceit, Durfee, C. J.,

intimates, however, that deceit would lie in a case like the one before

us, by the use of the following language: “It is not alleged that the

buyer did not intend to pay when he bought, but only that he falsely and

fraudulently asserted that he could be safely trusted.” But the

authorities are overwhelming to the effect that it is fraud to purchase

goods intending not to pay for them, and that the vendor, upon

discovering the fraud, may repudiate the sale and reclaim the property,

or may sue in trover, or in some other action of tort, for the damages

sustained by the fraud. And this being so, we fail to see why an action

of deceit, which is an action of tort, based on fraud, may not lie as

well. For to obtain goods on credit, intending not to pay for them, is

as much a trick or device as it would be falsely to represent in words

any material fact whereby the vendor should be induced to part

therewith.

But defendant’s counsel contends that the alleged representation was not

as to any fact present or past, but merely as to what the defendant

would do in the future with reference to paying for the goods, and that

to say what one intends to do is identical to saying what one will do in

the future, which amounts simply to a promise; and, furthermore, that a

representation of what will happen in the future, even if not realized,

is not such a representation as will support this action. We do not

assent to this method of reasoning. The state of a man’s mind at a given

time is as much a fact as is the state of his digestion. Intention is a

fact; Clift _v._ White, 12 N. Y. 538; hence a witness may be asked with

what intent he did a given act. Seymour _v._ Wilson, 14 N. Y. 567. A man

who buys and obtains possession of goods on credit, intending not to pay

for them, is then and there guilty of fraud. The wrong is fully

completed and no longer exists in intention merely, and a cause of

action instantly accrues thereon in favor of the vendor to recover for

the wrong and injury sustained. It is true the purchaser may afterwards

repent of the wrong and pay for the goods, and the vendor may never know

of the wrongful intent. But this does not alter the case at all as to

the original wrong and the liability incurred thereby. Of course a mere

intention to commit a crime or to do a wrong is no offence. But when the

intention is coupled with the doing or accomplishment of the act

intended, that moment the wrong is perpetrated and the corresponding

liability incurred. See Oswego Starch Factory _v._ Lendrum, 57 Iowa,

573.

In Stewart _v._ Emerson, 52 N. H. 301, where it was alleged, in reply to

the defendant’s plea of discharge in bankruptcy, that the debt in

question was created by the fraud of the defendant, Doe, J., in the

course of a long and vigorous opinion, used the following language,

which is so apt and pertinent that we quote it. He said: “When the

intent not to pay is concealed, the intent to defraud is acted out. The

mere omission of A. to disclose his insolvency might not be satisfactory

proof of a fraudulent intent in all cases. He might expect to become

solvent. He might intend to pay all his creditors. He might intend to

pay B. though unable to pay others. His fixed purpose _never_ to pay B.

is a very different thing from his present inability to pay all or any

of his creditors. A man may buy goods, with time for trying to pay for

them, on the strength of his known or inferred disposition to pay his

debts, his habits, character, business capacity, and financial

prospects, without his present solvency being thought of, and even when

his present insolvency is known to the vendor. But who could obtain

goods on credit, with an unconcealed determination that they should

never be paid for? The concealment of such a determination is conduct

which reasonably involves a false representation of an existing fact, is

not less material than a misrepresentation of ability to pay (Bradley

_v._ Obear, 10 N. H. 477), and is an actual artifice, intended and

fitted to deceive.”

“An application for or acceptance of credit, by a purchaser, is a

representation of the existence of an intent to pay at a future time,

and a representation of the non-existence of an intent not to pay. What

principle of law requires a false and fraudulent representation to be

express, or forbids it to be fairly inferred from the act of purchase? A

representation of a material fact, implied from the act of purchase, and

inducing the owner of goods to sell them, is as effective for the

vendee’s purpose as if it had been previously and expressly made. If it

is false, and known to the pretended purchaser to be false, and is

intended and used by him as a means of converting another’s goods to his

own use without compensation, under the false pretence of a purchase,

why does it not render such a purchase fraudulent? When the intent is to

pay, it is necessarily understood by both parties, and need not be

expressly represented as existing. When the intent is not to pay, it is

of course concealed. Whether the deceit is called a false and fraudulent

representation of the existence of an intent to pay, or a fraudulent

concealment of the existence of an intent not to pay, the fraud

described is, in fact, one and the same fraud.”

Demurrer overruled, and case remitted to the Common Pleas Division for

further proceedings.[323]

PETERS, J., IN BURRILL _v._ STEVENS

(1882) _73 Maine, 395, 398–400._

The instructions to the jury upon that point present the question,

whether getting property by a purchase upon credit, with an intention

of the purchaser never to pay for the same, constitutes such a fraud

as will entitle the seller to avoid the sale, although there are no

fraudulent misrepresentations or false pretences.

The question has never been fairly before this Court before this time,

so as to require a deliberate decision. The plaintiff contends that

the question was settled in the negative in the case of Long _v._

Woodman, 58 Maine, 49. But that case falls short of meeting the

question presented in the present case. The gist of the charge against

the purchaser in that case seems to have been that he fraudulently

refused to do after the contract what he agreed to do at the time of

the contract, the alleged fraud being an intention formed after the

contract rather than contemporaneously with it; and that was an action

of deceit based upon a broken promise to convey real estate. Of late

years, _nisi prius_ rulings in our own Courts have frequently been in

accordance with the law as delivered to the jury by the presiding

judge in the case at bar, and we think the doctrine may safely be

accepted and approved, both upon authority and principle.

It is the admitted doctrine of the English cases, and is sustained by

most of the courts in the United States. In Benj. on Sales (2d Amer.

ed.), § 440, note e, very numerous cases are cited to the proposition.

Stewart _v._ Emerson, 52 N. H. 301, discusses the question at length,

and reviews many authorities.

The plaintiff relies upon the objection that it is not an indictable

fraud, an argument which seems to have inclined the Pennsylvania Court

against admitting the principle into the jurisprudence of that State.

Smith _v._ Smith, 21 Pa. St. 367; Backentoss _v._ Speicher, 31 Pa. St.

324. It has been held by some Courts to be an indictable cheat, the

false pretence being in the vendee’s pretendingly making a purchase,

while his only purpose is to cheat the vendor out of his goods. It is

more often considered, however, as not a matter for indictment. Bish.

Crim. Law, § 419. But the objection taken by the plaintiff has

generally been considered as insufficient to override the rule.

But the doctrine governing the case before us should not be

misunderstood. To constitute the fraud, there must be a preconceived

design never to pay for the goods. A mere intent not to pay for the

goods when the debt becomes due, is not enough; that falls short of

the idea. A design not to pay according to the contract is not

equivalent to an intention never to pay for the goods, and does not

amount to an intention to defraud the seller outright, although it may

be evidence of such a contemplated fraud.

Nor is it enough to constitute the fraud that the buyer is insolvent,

and knows himself to be so, at the time of the purchase, and conceals

the fact from the seller, and has not reasonable expectations that he

can ever pay the debt.[324] Some Courts have gone so far as to

denominate that a fraud which will avoid the sale. And it may have

been so held in bankruptcy Courts, in some instances, as between a

vendor and the assignee of the vendee. But it would not, generally, be

enough to prove the fraud. The inquiry is not whether the vendee had

reasonable grounds to believe he could pay the debt at some time and

in some way, but whether he intended in point of fact not to pay it.

Nor is it enough that after the purchase the vendee conceives a design

and forms a purpose not to pay for the goods, and successfully avoids

paying for them. The only intent that renders the sale fraudulent is a

positive and predetermined intention, entertained and acted upon at

the time of going through the forms of an apparent sale, never to pay

for the goods. Cross _v._ Peters, 1 Greenl. 378; Biggs _v._ Barry, 2

Curtis, (C. C. R.) 259; Parker _v._ Byrnes, 1 Low. 539; Rowley _v._

Bigelow, 12 Pick. 306.

RIDDICK, J., IN BUGG _v._ WERTHEIMER-SCHWARTZ SHOE COMPANY

(1897) _64 Arkansas, 12, 17, 18._

Nor can we sustain the contention of appellant that to entitle the

vendor to avoid a sale after delivery it must in all cases be shown

that the vendee did not intend to pay for the goods. That is, as above

stated, one ground on which the sale may be avoided, but not the only

one. If the vendee knowingly makes false representations concerning

material facts, and thus induces the seller to part with his goods,

the seller may elect to avoid the sale, and this without regard to

whether the buyer intended to pay for the goods or not. The fraud in

such a case consists in inducing the vendor to part with his goods by

false statements of the buyer, known to be false when made, or made by

him when he has no reasonable ground to believe that they are true. If

a vendor parts with his goods on the faith of such false statements

made by the buyer, it would be strange if the law permitted the buyer

to reap the fruits of such conduct, and retain the goods against the

will of the vendor. To illustrate, let us suppose a case. A man with

no property, but with great faith in his ability as a merchant, goes

to a city and calls on a wholesale merchant for the purpose of buying

a stock of goods. He believes that if he can obtain a stock of goods,

his experience and ability will soon enable him to pay off the

purchase price, but, fearing that the merchant may refuse to sell if

he learns that he has no property, he thereupon, for the purpose of

obtaining the goods, states to the merchant that he has money in the

bank, and owns a large amount of both real and personal property. The

merchant, ignorant of the facts, and relying on the truth of these

statements, parts with his goods. He afterwards discovers the fraud,

and brings an action to recover the goods. In such a case would it be

a valid defence for the buyer to say that, although he had secured the

goods by misrepresentation, yet he did honestly intend to pay for

them? Clearly it would not. The courts would answer such a question

substantially as it was answered by the Supreme Court of Connecticut

when it said that the intent of the buyer to pay “may have lessened

the moral turpitude of his act, but it will not suffice to antidote

and neutralize an intentionally false statement which had accomplished

its object of benefiting himself and of misleading the plaintiffs to

their injury.” Judd _v._ Weber, 55 Conn. 267; Reid _v._ Cowduroy, 79

Iowa, 169; S. C. 18 Am. St. Rep. 359, and note; Strayhorn _v._ Giles,

22 Ark. 517.

McCOMB _v._ BREWER LUMBER COMPANY

SUPREME JUDICIAL COURT, MASSACHUSETTS, OCTOBER 21, 1903.

_Reported in 184 Massachusetts Reports, 276._

The third count in the declaration is tort for deceit in the sale of

certain stock by the defendant to the plaintiff.

The allegations, so far as material here, are in substance as follows:—

Plaintiff says that the defendant, by its agent, with intent to deceive

and defraud the plaintiff, falsely and fraudulently represented to him

[here specifying certain representations], and that, if the plaintiff

would purchase a certain number of shares of stock in the defendant

corporation and pay therefor the sum of $9000, ... the $9000 paid by the

plaintiff should be put in the treasury of said corporation to be used

as a working capital. And plaintiff says that, relying upon the

representations, he bought the shares and paid therefor $9000; and

plaintiff says that said representations were false and untrue to the

knowledge of the defendant in this: [specifying certain particulars],

and the $9000 paid by plaintiff was not put in its treasury and used as

working capital, but was, with the approval of the defendant, its

directors and manager, used for other purposes than the business of the

defendant.

Verdict for plaintiff for $1.00 damages. Plaintiff alleged exceptions as

to the ruling at the trial in reference to this count.[325]

HAMMOND, J.... The exceptions relate only to the third count, and since

the verdict was for the plaintiff on this, they are material only so far

as they respect the question of damages. The principal difference

between the instructions given by the judge and those requested by the

plaintiff is that the judge declined to permit the jury to consider the

allegation with reference to the promised use of the $9000 paid by the

plaintiff for the stock. As to this it is contended by the plaintiff

that at the time the defendant promised to use the money as working

capital it did not intend to keep the promise, and that a representation

of a present intention is a representation of an existing fact and

therefore may be false and fraudulent. But, without implying that the

plaintiff’s contention would be true under any circumstances, the

difficulty with his case is that the question is not raised upon the

record. The ruling that the jury should not consider the allegation with

reference to the promised use of the money appears to have been made

with reference to the third count, and, as applied to that, it was

correct. An examination of the count will show that it does not contain

any allegation that at the time the defendant said that the money should

be used for working capital it had not the intention to perform that

promise. It first sets out the representations which induced the

plaintiff to purchase the stock, then proceeds to state in what respects

they were false and fraudulent and the defendant’s knowledge of the

falsity, and then follows the only allegation respecting the

representation as to the promised use of the money: “And the nine

thousand dollars paid by the plaintiff to the defendant was not put in

its treasury and used as working capital, but was, with the approval of

the defendant, its directors and manager, used for other purposes than

the business of the defendant.” This is an allegation that the defendant

failed to carry out its promise, and falls far short of an allegation

that the defendant at the time it was made did not intend to carry it

out. There is no allegation whatever as to the intent of the defendant

at the time the promise was made. Indeed it is difficult to read that

count, either by itself or in connection with the other counts, without

feeling that the pleader studiously avoided alleging anything as to that

intent. While the evidence as to the promised use and the actual use of

this money may have been admissible upon the second count, the object of

which was to recover damages for breach of the promise, it was not

material upon the third count, even upon the question of damages, for

the reasons above stated.

* * * * *

_Exceptions overruled._[326]

DORR _v._ CORY

SUPREME COURT, IOWA, APRIL 5, 1899.

_Reported in 108 Iowa Reports, 725._

Appeal from Polk District Court.

Action at law on contracts in writing for the purchase of interests in

real estate. Answer alleges (_inter alia_) that the contracts were

obtained by fraud.

Verdict for plaintiff, and judgment.

ROBINSON, C. J.[327] ... The only statement purporting to be of fact

which is shown to have been false is that relating to the cost of the

land. Would that statement have authorized the jury to find for the

defendant? It was said in Hemmer _v._ Cooper, 8 Allen, 334, that “the

representations of a vendor of real estate, to the vendee, as to the

price he paid for it, are to be regarded in the same light as

representations respecting its value. A purchaser ought not to rely upon

them; for it is settled that even when they are false, and uttered with

a view to deceive, they furnish no ground of action.” That rule was

followed in Cooper _v._ Lovering, 106 Mass. 77, and it is the rule of

Tuck _v._ Downing, 76 Ill. 71, and Banta _v._ Palmer, 47 Ill. 99. In

Holbrook _v._ Connor, 60 Me. 578, it was said: “The statement of the

vendor that he paid a certain price for the land, if true, can be no

more than an indication of his opinion of its value; and when we

consider the various motives which may, and often do, actuate men in

making their purchases, and especially when it is done for speculation,

it is but the slightest proof of such opinion.” As a general rule, a

vendee has no right to rely upon the statements of the vendor respecting

the value of the property sold, but must act upon his own judgment, or

seek information for himself. But to that rule there are exceptions. It

was said in Simar _v._ Canaday, 53 N. Y. 306, that where statements as

to the value are mere matter of opinion and belief, no liability is

created by uttering them, but that such statements “may be, under

certain circumstances, affirmations of fact. When known to the utterer

to be untrue, if made with the intention of misleading the vendee, if he

does rely upon them, and is misled to his injury, they void the

contract.” The fraud which vitiates a contract must be material,

affecting the very essence of the contract; but ordinarily, “if the

fraud be such that, had it not been practiced, the contract would not

have been made, then it is material to it.” 2 Parsons, Contract, 770.

See, also, 2 Pomeroy Equity Jurisprudence, section 878, and notes. That

rule was applied in Smith _v._ Countryman, 30 N. Y. 656, which was an

action upon a contract for the sale of hops. It was held that a false

representation made by the vendee as to the price at which he had

purchased hops of another person, which was relied upon by the vendor,

and induced him to enter into the contract of sale, was material, and

constituted a defence to an action on the contract. This rule appears to

us to be in harmony with reason and the principles of justice. The price

at which property actually sells in the open market is very satisfactory

evidence of its value at the time of the sale. We cannot assent to the

proposition that the statement of a vendor that he paid a specified

price for the property he sells is a mere expression of opinion, upon

which the purchaser has no right to rely. On the contrary, we think it

is a statement of fact; and if the purchaser, without knowing or having

reason to know what price was paid, relies upon the false statement, to

his injury, he is entitled to relief. The cases of Teachout _v._ Van

Hoesen, 76 Iowa, 113; Iler _v._ Griswold, 83 Iowa, 442, and Coles _v._

Kennedy, 81 Iowa, 360, although not precisely in point, tend to sustain

our conclusion. See French _v._ Ryan, 104 Mich. 625 (62 N. W. Rep.

1016); Moon _v._ McKinstry, 107 Mich. 668 (65 N. W. Rep. 546), and

Woolen Co. _v._ Smalley, 111 Mich. 321 (69 N. W. Rep. 722).

* * * * *

_Judgment reversed._[328]

DEMING _v._ DARLING

SUPREME JUDICIAL COURT, MASSACHUSETTS, FEBRUARY 27, 1889.

_Reported in 148 Massachusetts Reports, 504._

HOLMES, J. This is an action for fraudulent representations alleged to

have been made to one Dr. Jordan, the plaintiff’s agent, for the purpose

of inducing the plaintiff to purchase a railroad bond from the

defendant....[329]

Among the representations relied on, one was that the railroad

mortgaged, which was situated in Ohio, was good security for the bonds;

and another was that the bond was of the very best and safest, and was

an A No. 1 bond. With regard to these and the like, the defendant asked

the Court to instruct the jury “that no representations which the

defendant might have made or did make to Dr. Jordan in relation to the

value of the bond in question, or of the railroad, its terminals, and

other property which were mortgaged to secure it, with other bonds, even

though false, were representations upon which Dr. Jordan ought to have

relied, and are not sufficient to furnish any grounds for this action;”

and also, “that each of the expressions ‘and that the same’ (meaning

said railroad and all the property covered by the mortgage) ‘was good

security for said bonds,’ ‘that said bond was of the very best and

safest, and was an A No. 1 bond,’ are expressions of opinion of value,

and even though false, are not such representations as Dr. Jordan had a

right to rely upon, and are not enough to furnish any grounds for this

action.”

The Court declined to give these instructions, and instead instructed

the jury that “an expression of opinion, judgment, or estimate, or a

statement of a promissory nature relating to what would be in the

future, so far as they were expressions of opinion, if made in good

faith, however strong as expressions of belief, would not support an

action of deceit.”

It will be seen that the fundamental difference between the instructions

given and those asked is that the former require good faith. The

language of some cases certainly seems to suggest that bad faith might

make a seller liable for what are known as seller’s statements, apart

from any other conduct by which the buyer is fraudulently induced to

forbear inquiries. Pike _v._ Fay, 101 Mass. 134. But this is a mistake.

It is settled that the law does not exact good faith from a seller in

those vague commendations of his wares which manifestly are open to

difference of opinion, which do not imply untrue assertions concerning

matters of direct observation (Teague _v._ Irwin, 127 Mass. 217), and as

to which it always has been “understood, the world over, that such

statements are to be distrusted.” Brown _v._ Castles, 11 Cush. 348, 350;

Gordon _v._ Parmelee, 2 Allen, 212; Parker _v._ Moulton, 114 Mass. 99;

Poland _v._ Brownell, 131 Mass. 138, 142; Burns _v._ Lane, 138 Mass.

350, 356. Parker _v._ Moulton also shows that the rule is not changed by

the mere fact that the property is at a distance, and is not seen by the

buyer. Moreover, in this case, market prices at least were easily

accessible to the plaintiff.

The defendant was known by the plaintiff’s agent to stand in the

position of a seller. If he went no further than to say that the bond

was an A No. 1 bond, which we understand to mean simply that it was a

first rate bond, or that the railroad was good security for the bonds,

we are constrained to hold that he is not liable under the circumstances

of this case, even if he made the statement in bad faith. See, further,

Veasey _v._ Doton, 3 Allen, 380; Belcher _v._ Costello, 122 Mass. 189.

The rule of law is hardly to be regretted, when it is considered how

easily and insensibly words of hope or expectation are converted by an

interested memory into statements of quality and value when the

expectation has been disappointed.

* * * * *

_Exceptions sustained._[330]