the sale of a ship, as to the timber of which she was built, whereby she was classed lower in Lloyd's books than she would have been, had she been built of such materials; held, although the sale took place under a written contract, minutely setting forth the build and dimensions of the vessel, (but omitting all mention of the materials,) the plaintiff might give in evidence prior verbal statements and declarations amounting to a warranty upon the point last mentioned.1 (a) So, where the vendor of a public house made, pending the treaty, certain deceitful representations respecting the amount of business done in the house, and the rent received for a part of the premises, whereby the plaintiff was induced to give a large sum for them; held, the latter might maintain an action on the case for the deceitful representations, although they were not noticed in the conveyance, or in a written memorandum of the bargain, drawn up after the representations were made.2 6. The fraud complained of may consist in acts rather than express deceit or misrepresentation; as in case of fraudulent concealment. Thus, the owner of a horse, which had the heaves and was worthless, in the course of a negotiation for an exchange concealed the defect, and affirmed that the horse was worth $100, and the other party, not knowing of the defect, was thereby induced to make the exchange. Held, that this was sufficient to sustain an action on the case for deceit. So, it being usual, in the sale by auction of drugs, if they are sea-damaged, to express it in the broker's cata 1 Wright v. Crookes, 1 Scott, N. 685. 2 Dobell v. Stevens, 3 Barn. & Cress. 623. 8 Nickley v. Thomas, 22 Barb. 652; McAdams v. Cates, 24 Mis. 223; Ros- (a) Such representations having been made by an agent without express authority; held, it was rightly left to the jury to infer from the subsequent conduct of the defendant, ex. gr. from his not having repudiated the warranty when apprised of it, that he was privy, or impliedly assented, to the misrepresentations. Wright v. Crookes, 1 Scott, N. 685. logue, and drugs which are repacked, or the packages of which are discolored by sea-water, bearing an inferior price, although not damaged; the defendants, who had purchased some sea-damaged pimento, repacked it, and advertised it in catalogues which did not notice that it was sea-damaged or repacked, but referred it to be viewed, with little facility, however, of viewing it. They also exhibited impartial samples of the quality, and sold it by auction. Held, this was equivalent to a sale of the goods, as and for goods that were not sea-damaged, and that an action lay for the fraud.'. So, though the declaration stated, also, that it was sold as and for pimento of good quality and condition, whereas the samples showed that it was dusty and of inferior quality.2 So, if a broker sell property, knowing it to be subject to the lien of a fieri facias, and conceal the fact, and send the buyer to investigate respecting incumbrances in a direction whence he knows correct information cannot be obtained; although done by actions rather than words, he is liable to an action for deceit. So, where one has given a deed of trust of his property, to be sold for the benefit of his creditors, and they have neither released their claim on him, nor assented to the deed; he has such an interest in a sale made by his trustee, that, if he stands by and sees property sold in which he knows that there is a latent defect, and does not disclose it; he makes himself liable to the purchaser in an action for deceit. (a) 1 Jones v. Bowden, 4 Taunt. 847. 2 Ibid. 3 Chisholm v. Gadsden, 1 Strobh. 220. Case v. Edney, 4 Ired. 93. (a) In relation to mere concealment, as affecting the validity of a contract, or furnishing a ground of action, a late writer remarks as follows: "If the seller knows of a defect in his goods which the buyer does not know, and if he had known would not have bought the goods, and the seller is silent, and only silent, his silence is nevertheless a moral fraud, and ought perhaps on moral grounds to avoid the transaction. But this moral fraud has not yet grown into a legal fraud. In cases of this kind there may be circumstances which cause this moral fraud to be a legal fraud, and give the buyer his 7. An action on the case as for a tort may sometimes be maintained, where another remedy would lie for or against a third party who is connected with the transaction in question. (a) As where one who represents the credit and char action on the implied warranty, or on the deceit. And if the seller be not silent, but produce the sale by means of false representations, there the rule of caveat emptor does not apply, and the seller is answerable for his fraud. But the weight of authority requires that this should be active fraud. The common law does not oblige a seller to disclose all that he knows, which lessens the value of the property he would sell. He may be silent, leaving the purchaser to inquire and examine for himself, or to require a warranty. He may be silent, and be safe; but if he be more than silent-if by acts, and certainly if by words, he leads the buyer astray, inducing him to suppose that he buys with warranty, or otherwise preventing his examination or inquiry, this becomes a fraud of which the law will take cognizance. The distinction seems to be-and it is grounded upon the apparent necessity of leaving men to take some care of themselves in their business transactions— the seller may let the buyer cheat himself ad libitum, but must not actively assist him in cheating himself." 1 Pars. on Contr. 461. (a) And in this connection it may be remarked, as one of the leading points of distinction between actions of tort and of contract, that no privity is necessary, to sustain an action for tort. Gerhard v. Bates, 2 E. & B. 476; Langridge v. Tenny, 2 M. & W. 519. But where a person, with a design to deceive and defraud another, makes a false representation of a matter, by which the party to whom the representation is made enters into a contract, and sustains an injury thereby; an action on the case, in the nature of deceit, will lie at the suit of the latter against the former, although a stranger to the contract. Weatherford v. Fishback, 3 Scam. 170. And, in such action, it is not necessary that the defendant should be benefited by the deceit, or that he should collude with the person who is. Pasley v. Freeman, 3 T. R. 51. Declaration, that the defendant and others had formed a company, upon a principle known as a societé anonyme, in the Kingdom of Spain, the capital of which was 96,000 shares of £1 each, out of which 12,000 were to be appropriated to the public, at 12s. 6d. per share, free from all further calls, and the said 12,000 shares were actually offered to the public; that the defendant, as such promoter and managing director, intending to deceive the public and to cause it to be publicly represented and advertised that the said company was likely to be a safe and profitable undertaking, and also to deceive the public who might become purchasers of the said 12,000 shares, and to induce them to become such purchasers, falsely, fraudulently, acter of a merchant, alleges that to be true which he knows to be false, or fraudulently conceals what he ought to have and deceitfully caused it to be publicly advertised and made known in and by a prospectus issued by the defendant as such director, (inter alia,) that the promoters of the said company, in proposing to issue to the public the said 12,000 shares at 12s. 6d. per share, free from all further calls, did not hesitate to guarantee to the bearers of the said 12,000 shares a minimum annual dividend of £33 per cent., payable in half-yearly dividends of £16 10s. per cent. each, and that the said guaranty should remain in force until the said 12s. 6d. per share should be thus repaid to the shareholder; that the defendant, by means of the said false, fraudulent, and deceitful representation, fraudulently induced the plaintiff to become, and the plaintiff by reason thereof became, the purchaser and bearer of 2500 of the said 12,000 shares at 12s. 6d. per share, and by means of the premises the plaintiff was induced to pay, and did pay 12s. 6d. for each of the said shares; whereas, in truth and in fact, at the time of making the said statement, the same was false and fraudulent to the knowledge of the defendant, and the defendant had no ground whatever for offering such guaranty to the public, as the defendant well knew; by means whereof the plaintiff had lost the money so paid by him as aforesaid. Held, that the count contained a sufficient allegation of a false representation by the defendant, and that the plaintiff was entitled to judgment upon it, as there was no necessity for any privity between the parties to support an action of tort for a false representation. Gerhard v. Bates, 20 Eng. L. & Eq. 129. If A. makes inquiry of B. as to the circumstances of C., with respect to opening an account with him as a general customer, and B. fraudulently misrepresents him, in consequence of which A. sells C. goods from time to time, and is afterwards a loser by him; an action lies for the deceit; although the buyer paid for the first parcels of goods, on the purchase of which the reference is made. But only within a reasonable time and to a reasonable amount. Hutchinson v. Bell, 1 Taunt. 558. The defendant, having had a credit lodged with him by a foreign house in favor of one W. T., to a certain amount, upon an express stipulation that W. T. should previously lodge in his hands goods to treble the amount; and being applied to by the plaintiffs for information respecting the responsibility of W. T.; answered that he knew nothing of W. T. himself, but what he had learned from his correspondent; but that he had a credit lodged with him for so much by a respectable house at H., which he held at W. T.'s disposal (omitting the condition); and that, upon a view of all the circumstances which had come to his (the defendant's) knowledge, the plaintiff's might execute W. T.'s order with safety, viz: an order for the sale and revealed.1 (a) So without showing an intent to defraud.2 So the plaintiffs, being about to furnish the defendant's son 2 Boyd v. Browne, 6 Barr, 310. 1 Rumsey v. Lovell, Anthon, 17. delivery of goods on credit. In an action on this representation, held, that there was a material suppression of the truth, and evidence sufficient for the jury to find fraud, which is the gist of the action; although the defendant had no immediate interest in making the false representation; and though, at the time when it was made, he added, that he gave the advice without prejudice to himself. Eyre v. Dunsford, 1 East, 318. In an action on the case for giving a false character to a tradesman, whereby he was induced to trust an insolvent person, the Court held, that fraud was necessary to support the action; but set aside a verdict for the plaintiff, on payment of costs, though there were some circumstances in the case from which fraud might be inferred, on a suspicion that the inquiry was made of the defendant with a view to entrap him, and thereby obtain his guaranty for payment of the debt contracted by the insolvent. Tapp v. Lee, 3 Bos. & Pul. 367. To an inquiry concerning the credit of another, who was recommended to deal with the plaintiff, a false representation by the defendant that the party might safely be credited, and that he spoke this from his own knowledge, and not from hearsay, will not sustain an action, if made bonâ fide, and with a belief of its truth. In such case, the word knowledge is to be construed secundum subjectam materiam, viz: the credit of another, and means only a strong belief, founded on what appeared to the defendant to be reasonable and certain grounds. Haycraft v. Creasy, 2 East, 92. Declaration, that the defendant, employed as architect by A. and others, to superintend the building of a church, falsely and fraudulently represented and pretended, that he was authorized by A. to order, and did order, stone of the plaintiffs for the building of said church, for and on account of, and to be charged to A.; and that the plaintiffs, relying on that representation, and believing that the defendant had authority from A. to order the stone (a) And other similar representations to other persons may be given in evidence. In such action, it is not necessary to attempt a literal recital, but only the substance of the representation. And the same amount of evidence is not necessary as in a criminal prosecution. But a declaration, that the defendant represented, in substance, that a purchaser of goods was a fit person to be trusted, and that goods might be safely sold him on credit, is not supported by proof that the defendant said he was doing a fair business. Cutter v. Adams, 15 Verm. 237. |