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of satisfaction, and his representation was a fraud
"Of a similar character was the case of Hobbs vs. Norton (1 Ver., 136), where one entered into an agreement for the purchase of an annuity, charged on the lands of a third person, and was encouraged in the course of the transaction by the latter, who suggested his own title, and it afterwards appeared that such title was of a nature to have enabled the owner to avoid the annuity; yet he was, as to the purchaser, held under an obligation to confirm it.
"Cases of this class present the principle in its strongest aspect; because in these cases, the parties making the representation were bound by it to prevent a loss to others, although they themselves derived no advantage from it; whereas, in those instances in which the parties to the contract made the representation, they would receive benefit to the amount of the loss which the misrepresentation would produce to the other party, who acted on the faith of it; if the court did not relieve against it.
“This principle has been adopted in the courts of our own country. In Fulton's Executors vs. Roosevelt (5 Johns Ch. Rep., 174), the case was this: Fulton was induced by the representations of Roosevelt that he had discovered a valuable coal mine on the bank of the Ohio River, to contract for the purchase of a tract of land, stated by Roosevelt to embrace the mine; and besides giving to Roosevelt $4,400, Fulton covenanted to pay him $1,000 annually, for twenty years; but the annuity was to cease, if, after the mine was faithfully worked by Fulton, it should not produce at least $12,000, etc.
“And the land was accordingly conveyed to Fulton. It appeared that there was no coal within the boundaries of the land conveyed although there was coal adjoining it, in the bed of the river, which was navigable, deep and rapid; but the working of the mine, if practicable, would be very hazardous, expensive and unprofitable. The contract on the part of Fulton was held to be founded in mistake and misrepresentation, and Roosevelt was perpetually enjoined from bringing any suit against Fulton, 'to recover the annuity agreed to be paid him.
"In that case, the Chancellor says: Whether the defendant made the statement in his letter to Fulton through mistake, or under the delusions of his own imagination, or by design, I am not able to say. It is sufficient for the decision of this case, that the representations are not supported, but are contradicted by proof, and that the claim of the annuity, upon such a state of the case, is unconscientious and unjust. And this decree was affirmed in the Court of Errors (2 Cowen, 129).
"In the case of McFerran vs. Taylor & Massie, in this court in 3 Cranch, 281, the court, after remarking that there was a material misrepresentation, and that the defendant had contended that it originated in mistake, not in fraud, say: from the situation of the parties, and of the country, and from the form of the entry, it was unreasonable to presume that this apology is true in point of fact; but the court does not conceive that the fact will amount to a legal justification of the person who has made the representation. He who sells property on a description given by himself, is bound to make good that description; and if it be untrue in a material point, although the variance be occasioned by a mistake, must still remain liable for that variance. "The principles of these cases we consider founded in sound morals and law. They rest upon the ground that the party selling property must be presumed to know whether the representation which he makes of it is true or false. If he knows it to be false, that is fraud of the most positive kind; but if he does not know it, then it can only be from gross negligence; and in contemplation of a court of equity, representations founded on mistake, resulting from such negligence, is fraud. (6 Ves., 180, 189; Jeremy, 385, 386.) The purchaser confides in it, upon the assumption that the owner knows his own property, and truly represents it; and, as was well argued in the case in Cranch, it is immaterial to the purchaser whether the misrepresentations proceeded from mistake or fraud. The injury to him is the same, whatever may have been the motives of the seller."
The rule that a person may be held liable in an action of deceit for the false statements which he may make recklessly is based upon the principle that the speaker is conscious either that he knows, or that he does not know, the truth of what he states, and that when, conscious of his ignorance, he assumes to have knowledge, he acts in bad faith and must he held to warrant the truth of his assertion, and so is liable in an action for deceit.21
In Stimson vs. Helps,22 the Court said: "The law holds a contracting party liable as for a fraud on his express representations concerning facts material to the treaty, the truth of which he assumes to know, and the truth of which is not known to the other contracting party, where the representations were 120 Cyc., 27; Hanger vs. Emms, * 10 Pac., 290.
38 Ark., 334; Trimble vs. Reid, 97 Ky., 713.
false, and the other party, relying upon them, has been misled to his injury. Upon such representations so made the contracting party to whom they are made has a right to rely, nor is there any duty of investigation cast upon him. In such a case the law holds a party bound to know the truth of his representations. Bigelow, Fraud, 57, 60, 63, 67, 68, 87; Kerr, Fraud and M., 54, et seq.; 3 Wait, Act. and Def., 436. This is the law of this case, and, on the evidence, warranted the judgment of the court below.
"The objection was made below, and is renewed here, that the complaint does not state sufficient facts to constitute a cause of action. Two points are made: (1) That the complaint does not allege that the defendant knew the representations to be false; (2) That it does not allege intent to defraud.
“It is necessary, in order to constitute a fraud, that the party who makes a false representation should know it to be false. He who makes a representation as of his own knowledge, not knowing whether it be true or false, and it is in fact untrue, is guilty of fraud as much as if he know it to be untrue. In such a case he acts to his own knowledge falsely, and the law imputes a fraudulent intent. Kerr, Fraud and M., 54, et seq.,
, and cases cited; Bigelow, Fraud, 63, 84, 453; 3 Wait, Act. and Def., 438 et seq.; 2 Estee Pr., 394 et seq. 'Fraud' is a term which the law applies to certain facts, and where, upon the facts, the law adjudges fraud, it is not essential that the complaint should, in terms, allege it. It is sufficient if the facts stated amount to a case of fraud. Kerr, Fraud and M., 366 et seq., and cases cited; 2 Estee, Pl., 423. The complaint in this case states a substantial cause of action, and is fully supported by the evidence.
"The action of the county court in refusing to allow the appellant to appeal to the district court after he had given notice of an appeal to this court, and time had been given in which to perfect it, cannot be assigned as error on this record. If it was an error, it was error not before, but after, the final judgment from which this appeal is taken.”
A person is not at libetry to make positive assertions about the facts material to a transaction unless he knows them to be true; and if a statement so made is in fact false, the assertor cannot relieve himself from the imputation of fraud by pleading ignorance, but must respond in damages to any one who has sustained loss by acting in reasonable reliance upon such assertion.23
Where the vendor honestly expresses an incorrect opinion as to the amount, quality, and value of thegoods he disposes of in a sale of his business and good-will thereof, and the purchaser sees or knows the property, or has an opportunity to know it, no action for false representations will lie. 24
Mere "dealing talk” in the sale of goods, unless accompanied by some artifice to deceive the purchaser or throw him off his guard, or some concealment of intrinsic defects not easily detected by ordinary care and diligence, does not amount to misrepresentation.25
It is not necessary in an action of deceit to show that the defendant had any interest in the subject matter or that he received any benefit from the fraud. 26 The defendant is liable, in such cases, not upon any idea of benefit to himself, but because on account of his
23 Lynch vs. Mercantile Trust Co.,
18 Fed. Rep., 486. ** Collins vs. Jackson, 19 N. W.
Rep., 947. 33 Reynolds vs. Palmer, 19 Fed.
38 Leonard vs. Springer, 197 Ill.,
532, citing Weatherford Vs. Fishback, 3 Scan., 170; Eames vs. Morgan, 37 III., 260; Endo ley vs. Johns, 120 IlI., 469.