corroboration of documents or other material facts; and it would seem that in every case of this kind where the Court of Chancery had concurrent jurisdiction with the courts of common law (and it is difficult to assign any where it had not), Lord Tenterden's Act is now superseded by this rule of evidence or judicial prudence.

Misrepresentations made by agents. There still remain the questions which arise in the case of a false representation made by an agent on account of his principal. Bear

Misrepresentations made by agents. In America the rule is established that a principal is liable civilly for the neglect, fraud, deceit, or other wrongful act of his general agent, although personally innocent of the fraud. Wright v. Calhoun, 19 Tex. 420; Robinson v. Walton, 58 Mo. 380; Kennedy v. McKay, 14 Vroom (N. J.), 288; Bank v. Campbell, 4 Humph. 394. Johnson v. Barber, 5 Gilm. 425; Morton v. Scull, 23 Ark. 289; Jewett v. Carter, 132 Mass. 335; Fitzsimmons v. Joslin, 21 Vt. 129; Thompson v. Brush Co., 31 Fed. Rep. 535; Witherwax v. Riddle, 121 Ill. 140; 13 N. E. Rep. 545; Upton v. Tribilcock, 91 U. S. 45; Chester v. Dickerson, 52 Barb. 349; Bank v. Gray, 14 N. H. 331; The Mad. and Ind. R. Co. v. The Norwich Sav. Society, 24 Md. 457; DeVosse v. City of Richmond, 18 Gratt. 338; Reed v. Peterson, 91 Ill. 288; Busch v. Wilcox, 82 Mich. 315; 46 N. W. Rep. 940.

But this rule does not apply to the acts of a special agent where such agent did not have and was not held out as having full authority to do that which he undertook to do, and where one dealing with him was informed or should have informed himself, of the limitations of his authority. See Haskell v. Starbird, 152 Mass. 112; Locke v. Stearns, 1 Metc. 560; White v. Sawyer, 16 Gray, 586; 589. A special agent's acts bind his principal, unless the manner of doing the particular business be specified. If he makes false representations on the subject of dealing to influence the other party to close the transaction, the principal is responsible for the deceit. Sanford v. Handy, 23 Wend. 260; Putman v. Sullivan, 4 Mass. 45.

"Although the representation might be false in fact, if innocently made by the agent, believing in the truth of what he asserted, it would afford no ground of action. To constitute the fraud and deceit, the representation must be false and knowingly made." Lamm v. Port, Deposit Homestead Assoc. etc., 49 Md. 240. But "the existence of knowledge in the agent, however acquired, when acting for the principal is knowledge to the principal and the fraudulent representation or concealment of material facts by the agent when engaged in the principal

ing in mind that reckless ignorance is equivalent to guilty knowledge, we may state the alternatives to be considered as follows:

The principal knows the representation to be false and authorizes the making of it. Here the principal is clearly liable; the agent is or is not liable according as he does not or does himself believe the representation to be true.

The principal knows the contrary of the representation

constructively through the agent." Tagg v. The Tenn. Nat. Bank, 65 Tenn. 479.

It is not only a rule of law that the acts of an agent within the scope of his authority bind the principal, but it is also true that where one makes an unauthorized false representation for another and that the other knowingly accepts the benefit thereof he becomes liable therefor. "No one can hold an interest obtained through the fraud of another, any more than if the fraud were committed by himself. By receiving and retaining the benefit he incurs the obligation." Bowers v. Johnson, 10 Sneed & M. 173. See Mundorff v. Wickersham, 63 Pa. St. 87; Lane v. Black, 21 W. Va. 617; Nat. Ins. Co. v. Minch, 53 N. Y. 144; Smith v. Tracy, 36 N. Y. 79. "If a vendor of land knows when he effects the sale, that the purchaser has been induced to buy by the false and fraudulent representations of a third person, he is responsible for the fraud, though such third person was not his agent." Law v. Grant, 37 Wis. 448. There are times when an agent may become personally liable in an action of deceit, as where he assumes to act in respect to a transaction over which he has no authority and with false representations mislead a person to his or her damages. Johnson v. Smith, 21 Conn. 627; White v. Madison, 26 N. Y. 117; Moise v. Dearborn, 109 Mass. 593. But see Newman v. Sylvester, 42 Ind. 112. So for an independent fraud by an agent, not within the scope of his agency, the principal is not responsible. Fellows v. Oneida, 36 Barb. 655; Kelly v. Insurance Co., 3 Wis. 254; Kennedy v. Parke, 2 C. E. Green, 415.

The fraud of an authorized agent will invalidate a contract, entered into by him on behalf of his principal, though in perpetrating the fraud. the agent acted without the knowledge or consent of the principal, Henderson v. Railroad Co., 17 Tex. 575. See American Insurance Co. v. Kuhlman, 6 Mo. App. 523; Ogilvie v. Insurance Co., 22 How. 380; Veagie v. Williams, 8 Id. 134.

One partner is liable for the deceit of another partner in the firm business. Lark v. Stearns, 1 Metc. 560; Durant v. Rogers, 87 Ill. 508; Linton v. Harley, 14 Gray, 191; Castle v. Ballard, 23 How. 172. See, ante, pp. 84, 103, 112.

t

to be true, and it is made by the agent in the general course of his employment but without specific authority.

Here, if the agent does not believe his representation to be true, he commits a fraud in the course of his employment and for the principal's purposes, and, according to the general rule of liability for the acts and defaults of an agent, the principal is liable (s).

If the agent does believe the representation to be true, there is a difficulty; for the agent has not done any wrong and the principal has not authorized any. Yet the other party's damage is the same. That he may rescind the contract, if he has been misled into a contract, may now be taken as settled law (t). But what if there was not any contract, or rescission has become impossible? Has he a distinct ground of action, and if so, how? Shall we say that the agent had apparent authority to pledge the belief of his principal, and therefore the principal is liable? in other words, that the principal holds out the agent as having not only authority but sufficient information to enable third persons to deal with the agent as they would with the principal? Or shall we say, less artificially, that it is gross negligence to withhold from the agent information so material that for want of it he is likely to mislead third persons dealing with the principal through him, and such negligence is justly deemed equivalent to fraud? Such a thing may certainly be done with fraudulent purpose, in the hope that the agent will, by a statement imperfect or erroneous in that very particular, though not so to his knowledge, deceive the other party. Now this would beyond question be actual fraud in the principal, with the ordinary consequences (u). If the same thing

(s) Parke B., 6 M. & W. 373.

(t) See Principles of Contract, 552. In Cornfoot v. Fowke, 6 M. & W. 358, it is difficult to suppose that as a matter of fact the agent's assertion can have been otherwise than reckless; what was actually decided was that it was di

rection to tell the jury without qualification "that the representation made by the agent must have the same effect as if made by the plaintiff himself;" the defendant's plea averring fraud without qualification.

(u) Admitted by all the Barons in

happens by inadvertence, it seems inconvenient to treat such inadvertence as venial, or exempt it from the like consequences. We think, therefore, that an action lies against the principal; whether properly to be described, under common law forms of pleading, as an action for deceit, or as an analogous but special action on the case, there is no occasion to consider (x).

On the other hand an honest and prudent agent may say, "To the best of my own belief such and such is the case," adding in express terms or by other clear indication" but I have no information from my principal." Here there is no ground for complaint, the other party being fairly put on inquiry.

Liability of corporations herein. If the principal does not expressly authorize the representation, and does not know the contrary to be true, but the agent does, the representation being in a matter within the general scope of his authority, the principal is liable as he would be for any other wrongful act of an agent about his business. And as this liability is not founded on any personal default in the principal, it equally holds when the principal is a corpora

Cornfoot v. Fowke; Parke, 6 M. & W. at pp. 362, 374, Rolfe at p. 370, Alderson at p. 372. The broader view of Lord Abinger's dissenting judgment of course includes this.

(x) The decision of the House of Lords in Derry v. Peek (1889), 14 App. Ca. 337, 58 L. J. Ch. 864, tends however to make this opinion less probable.

Liability of corporations. "Natural persons are liable for the wrongful acts and neglect of their servants or agents, done in the course of their employment, and private corporations upon the same grounds of public policy are amenable to the same extent." Lamm v. Port, Deposit Homestead Ass'n, 49 Md. 241. In England the rule is that if the person has been induced to purchase shares of a corporation by the misrepresentations of its Directors and is damaged thereby he must bring an action of deceit against such directors individually; while in the United States it seems to be the rule that a corporation may be sued in such cases. Fogg v. Griffin, 2 Allen, 1; Foster v. Essex Bank, 17 Mass. 479; Peebles v. Pataps Co., 77 N. C. 233; Railroad Co. v. Schuyler, 34 N. Y. See, ante, pp. 66, 67, 68.

tion (y). It has been suggested, but never decided, that it is limited to the amount by which the principal has profited through the agent's fraud. The Judicial Committee have held a principal liable who got no profit at all (z).

But it seems to be still arguable that the proposed limitation holds in the case of the defendant being a corporation (a), though it has been disregarded in at least one comparatively early decision of an English superior court the bearing of which on this point has apparently been overlooked (b). Ulpian, on the other hand, may be cited in its favour (c).

Reason of apparently hard law. The hardest case that can be put for the principal, and by no means an impossible one, is that the principal authorizes a specific statement which he believes to be true, and which at the time of giving the authority is true; before the agent has executed his authority the facts are materially changed to the knowledge of the agent, but unknown to the principal; the agent conceals this from the principal, and makes the statement as originally authorized. But the case is no harder than that of a manufacturer or carrier who finds himself exposed to heavy damages at the suit of an utter

(y) Barwick v. English Joint Stock Bank (1867), Ex. Ch. L. R. 2 Ex. 259, 36 L. J. Ex. 147; Mackay v. Commercial Bank of New Brunswick (1874), L. R. 5 P. C. 394, 43 L. J. P. C. 31; Swire v. Francis (1877), 3 App. Ca. 106, 47 L. J. P. C. 18 (J. C.); Houldsworth v. City of Glasgow Bank (1880), Sc. 5 App. Ca. 317. See pp. 85, 86, above.

(z) Swire v. Francis, last note.

(a) Lord Cranworth in Western Bank of Scotland v. Addie (1867), L. R. 1 Sc. & D. at pp. 166, 167. Lord Chelmsford's language is more guarded.

(b) Denton v. G. N. R. Co. (1856), p. 269 above. No case could be stronger, for (1) the defendant was a corporation; (2) there was no active or intentional falsehood, but the mere negligent continu.

ance of an announcement no longer true; (3) the corporation derived no profit. The point, however, was not discussed.

(c) D. 4. 3, de dolo malo, 15 § 1. Sed an in municipes de dolo detur actio, dubitatur. Et puto ex suo quidem dolo non posse dari, quid enim municipes dolo facere possunt? Sed si quid ad eos pervenit ex dolo eorum qui res eorum administrant, puto dandam. The Roman lawyers adhered more closely to the original conception of moral fraud as the ground of action than our courts have done. The actio de dolo was famosa, and was never an alternative remedy, but lay only when there was no other (si de his rebus alia actio non erit), D. h. t. 1.