Statement of the Case.

The original complaint and answer contained other allegations, but it is not necessary in the view taken of the case, to set them out.

The plaintiff amended his complaint, adding all the allegations which are essential, under any system of pleading, to support an action for deceit. These allegations were traversed by the defendant, and, upon a trial before a jury, there was a verdict and judgment in his favor.

The bill of exceptions stated that the plaintiff, to sustain the issues on his part, introduced evidence tending to show that at the date mentioned in the complaint defendant sold to him, for eight thousand dollars, ninety-one sheets of paper purporting to be Clark County, Arkansas, funding bonds; that said sheets of paper were forgeries, and not genuine bonds, as they purported on their face to be; that defendant, at the time of sale, expressly affirmed their regularity and validity, although he knew, or had reason to suspect, at the time, that they were not genuine and valid; that plaintiff believed and supposed that they were genuine and valid, and relied upon defendant's representations to that effect; and that plaintiff had no notice or knowledge that defendant was acting in said sale as agent for another person.

The defendant introduced evidence tending to show that said papers were genuine and valid Clark County, Arkansas, funding bonds; that at the time of the sale he made no statement, representation, or warranty as to their genuineness or validity, but, on the contrary, stated that he knew nothing of the circumstances under which they were issued; that he had neither notice nor knowledge of any want of validity or of any defects in said bonds, nor notice of any facts which would have aroused suspicion in reference to them; that, in the sale of said bonds to plaintiff, he was acting as the agent of Charles W. Tankersley, from whom he had received the bonds shortly before their sale, but did not at the time disclose to plaintiff his agency.

The court charged the jury that, upon the facts conceded before them, the bonds, by reason of certain unauthorized alterations of the coupons, were not valid and genuine obliga.

VOL. CXXII-37

Statement of the Case.

tions of the county of Clark. The jury were also instructed, that whoever sells such instruments as those delivered to the plaintiff, "if nothing whatever be said in respect to their character, by the act of selling warrants them to be the genuine obligations of the county; that is, that they are not forged or counterfeited, but are the true and proper obligations of the county, such as they purported to be on their face; and upon an action for breach of warranty, or an action upon the contract, the defendant would undoubtedly, beyond all question, be liable for the amount which he received for the bonds; but this action is not of that character, that is, it is not an action upon the contract alone. As I said to you in the outset, it is an action for a false representation, or for a misrepresentation of fact, and there must be something more to maintain this action than the implied warranty which arises from the act of selling, and which is an inference of law coming from the act of selling." The court said further upon the subject of warranty: "It is not claimed that there were any direct representations in respect to the genuineness of those bonds made at the time of the sale thereof, except in this way: I think Mr. Shippen states that the defendant said he would warrant the title to the bonds. I will not undertake to repeat what the witnesses said in respect to that matter; the only witnesses were the parties to the suit, I believe, as to what was stated at the time." Without giving more of the charge, it is sufficient to say that its scope is indicated by the circuit judge in the opinion delivered by him when denying the plaintiff's motion for a new trial. He said: "The complainant charges that, to induce plaintiff to purchase certain bonds, the defendant represented that they were genuine and valid bonds, whereas, in truth and in fact, they were worthless forgeries. The court charged the jury that it was necessary for plaintiff to show that the defendant, at the time of the sale of the bonds to the plaintiff, misrepresented the facts concerning their genuineness. In other words, the court was of the opinion, and so charged the jury, that plaintiff could not recover in this action by merely proving a sale of the bonds to him by defendants and that the

Argument for Defendant in Error.

bonds were forgeries. It was held to be necessary to prove knowledge on the part of the defendant of the forged character of the bonds, or an express misrepresentation concerning the fact of their genuineness. The counsel for plaintiff insists that in such a case as this no scienter need be alleged, nor if alleged need be proved. I am unable to concur in the soundness of this proposition."

Mr. George E. Adams for plaintiff in error.

Mr. G. G. Symes for defendant in error.

The court charged the jury in substance that on the evidence the bonds were invalid; that if the action had been brought on the contract of sale for the value of the bonds the defendant would have been liable; that the action is not one of contract, but an action for false representations and deceit, and to maintain such action there must be proof of false representations or of the scienter or knowledge of the fraud.

Fraud in all cases implies a wilful act on the part of any one whereby another is sought to be deprived by illegal or inequitable means of what he is entitled to. Kerr on Fraud and Mistake; Green v. Nixon, 23 Beav. 530, 535.

In the case of the sale of goods and chattels the rule of caveat emptor applies to the title unless the seller knows he has no title and conceals the fact. Kerr on Fraud and Mistake, 105, 106, 108, and cases there cited.

The vendor is not bound to disclose to the vendee the ownership of the property he is engaged in selling, but he is bound to abstain from making any misrepresentations respecting the ownership. Kerr on Fraud and Mistake, 86, and the cases there cited. In Young v. Coville, 8 Johns. 23, 24 [S. C. 5 Am. Dec. 316], which was an action of deceit, the court says: "It is well settled that this action cannot be sustained without proving actual fraud in the defendant and an intention to deceive the plaintiff by false representations."

In Mahurin v. Harding, 28 N. H. 128 [S. C. 59 Am. Dec. 401], the averments and proof required both in assumpsit on warranty

Argument for Defendant in Error.

of title, and in an action of trespass on the case for deceit, and the distinctions are clearly set forth and many cases cited.

The learned judge in this case has classified many authorities covering all the questions that arise in the case at bar and reference to the learned opinion is all-sufficient in this controversy.

Did the court charge the jury in accordance with these rules of law? The judge charged the jury "that the plaintiff could recover if the defendant had actual knowledge of the way in which the bonds were issued; that is, of the facts which made them illegal, or made any representations whatsoever regarding them." It seems to us this was extending the rule too far against the defendant. But it cannot certainly be maintained that the charge was not very favorable to the plaintiff.

Judge McCrary, in his opinion overruling the motion for a new trial, says, "it is an action ex delicto in the usual form of a declaration for deceit. The complaint charges that to induce plaintiff to purchase certain bonds, the defendant represented them as genuine and valid bonds, whereas in truth and in fact they were worthless forgeries. The court charged the jury that it was necessary for the plaintiff to show that defendant at the time of the sale of the bonds to plaintiff, misrepresented the facts concerning their genuineness. In other words, the court was of the opinion, and so charged the jury, that plaintiff could not recover in this action by merely proving a sale of the bonds to him by the defendant and that the bonds. were forgeries. It was held to be necessary to prove knowledge on the part of the defendant of the forged character of the bonds, or an express misrepresentation concerning the fact of their genuineness. The counsel for the plaintiff insists that in such a case as this no scienter need be alleged, nor if alleged need be proved. I am unable to concur in the soundness of this proposition." This presents the whole case very precisely.

It is unnecessary to pursue the argument. Everything we contend for consists of undeniable, elementary propositions. That the scienter is the very gist of a tort; that a recovery cannot be had in an action of tort without averring and prov

Opinion of the Court.

ing the scienter, and that this is an action ex delicto, to wit: an action of trespass on the case for deceit, cannot be controverted.

The charge of the district judge and the opinion of the circuit judge in overruling the motion for new trial make the case so plain, elaboration in the argument is unnecessary.

MR. JUSTICE HARLAN, after stating the case as above reported, delivered the opinion of the court.

We are of opinion that it was error to instruct the jury that the plaintiff could not recover, in the present action, unless he established the scienter upon the part of the defendant. The original complaint - though, perhaps, not in the most concise language - made a case in tort for the breach of an express warranty in the sale of the bonds. The bill of exceptions states that the evidence in behalf of the plaintiff tended to show that, although the defendant knew or had reason to suspect, when the bonds were sold, that they were not genuine and valid, he "expressly affirmed their regularity and validity." These words may not necessarily import an express warranty. But no particular phraseology or form of words is necessary to create a warranty of that character. As was held by the Court of Appeals of Maryland, in Osgood v. Lewis, 2 H. &. G. 495, 518, "any affirmation of the quality or condition of the thing sold, (not uttered as matter of opinion or belief,) made by the seller at the time of sale, for the purpose of assuring the buyer of the truth of the fact affirmed, and inducing him to make the purchase; if so received and relied on by the purchaser, is an express warranty. And in cases of oral contracts, on the existence of these necessary ingredients to such a warranty, it is the province of the jury to decide, upon considering all the circumstances attending the transaction." To the same effect are Henshaw v. Robins, 9 Met. 83, 88; Oneida Mfg Society v. Lawrence, 4 Cowen, 440, 442; Cook v. Moseley, 13 Wend. 277; Chapman v. Murch, 19 Johns. 290; Hawkins v. Berry, 5 Gilman (Ill.) 36; McGregor v. Penn, 9 Yerger, 74, 77; Otts v. Alderson, 10 Sm. & Marsh. 476. The