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make the agreement to lease the respondent's hall and sell liquors,
tobacco, and cigars therein without a license to do so, by reason of
which he suffered damages in the manner stated in the complaint.

As an action of tort it seems to us very clear the complaint is
insufficient. The substance of the charges of fraud and deceit are
that the respondent said he had the right and privilege of a retail
liquor dealer, etc., to sell such liquors, etc., at the bar in said hall,
and that if appellant leased the hall he would have the right to retail
such liquors, etc., at the bar in the said hall during his occupancy
thereof, without himself procuring a license from the government
of the United States, or of this state. The false charge is simply
that the respondent said, "If you lease the hall you can retail liquors,

tiff should thereby be induced to purchase stock, showed a good cause of
action, though on. its face, the object of the prospectus appeared to be to pro-
cure subscriptions to the bonds of the company, it being suggested that these
allegations might be satisfied by proof that the defendants had a large block
of stock, the disposal of which they designed to accomplish by the unduly
favorable statements in the prospectus, accord, Gerhard v. Bates, 2 El. & Bl.
476 (1853).

A false statement in a bond or deed is a representation to all persons who
may have occasion to examine the bond or deed in order to ascertain its
validity: Baker v. llaUam, 103 Iowa 43 (1897); plaintiff loaned money upon
the bond as collateral; Leonard v. Springer, 197 111. 532 (1902) ; plaintiff pur-
chased bonds secured by a deed containing false recitals of consideration, so
a forged or unauthorized acceptance of a bill of exchange, Polhill v. ]l'alter,
ante, or a forged endorsement of a promissory note, Lobdell v. Baker, 1 Mete.
193 (Mass. 1840), is a representation to all to whom it may be oft'ered in the
course of circulation, but the defendant must put it in circulation, Costcio v.
Barnard. 190 Mass. 260 (1906). one who forged the maker's name to a cer-
tificate of indebtedness not liable for keeping it so negligently that a third
person was enabled to negotiate it.

Even though the false statement is, like a forged acceptance, endorsernent
or signature of the maker of a bill of exchange promissory note, on its face
intended to be made to all whom the bill or note mav be offered in the course
of circulation— Po//;(7/ v. Jl'alter. ante: and LohdcU v. Baker. 1 Mete. 193
(Mass. 1840) — the forger is not liable unless he himself puts or suffers it to
Ibe put in circulation, even though he keeps it negligently so that a third per-
son is enabled to put it in circulation, Costelo v. Barnard ,_J^ Mass. -60


etc., at the bar,"" under and by virtue of a license or licenses which

the respondent held from the United States and from the city of

Milwaukee. The fact, therefore, whether the respondent had a

license from the United States, or from the city of Milwaukee, or

from both, was entirely immaterial, as such fact would not have

given the appellant a right to retail liquor, etc., at the bar of the

hall in case he leased the same. See R^S. of U. S., ^ 3232. The

appellant was just as much bound to know that the licehse^Trf-tirc

"^ - c spundrh t wbiTtd not protect him in the sale of liquors, etc., as the

— rcsp oi i^ent was. It was a question of law whether such licenses

would protect the appellant, and a false or mistaken representation

as to what the law is upon an admitted state of facts is no basis of

' an~acTlon7^ espectan}^wtiere there are no confidential relations be-

^tween the parties. This rule of law is too well settled to need dis-

'Irussion. Cooley on Torts, 485, 486, and cases cited in note; 3

Wait's Act. & Def., 434, § 5, and cases cited.

The allegation that the representation as a representation of fact
was false because the respondent did not in fact have a license to
retail liquors, etc., is, as we have seen, wholly immaterial, for the
reason, that if it had been true it would not have protected the appel-
lant from the consequence which followed.

By the Court. — The order of the circuit court is affirmed, and
the cause remanded for further proceedings according to law.^

^Accord: Thompson v. Phoenix Insurance Co., 75 Maine 55 (1883) ; mis-
statements by an insurance agent that the insured's removal from his house
vitiated his insurance thereon, held not actionable; Fry v. Day. 97 Ind. 348
(1884), p. 350, "misrepresentations of the legal effect of a written instru-
ment do not constitute fraud;" Fish v. Cleland, 2>Z 111. 238 (1864), statements
that land could not be sold even by order of the court without the consent
of all parties interested, not actionable though false; Dillman v. Nadlehoffer,
119 111. 567 (1886), p. 577, false statements as to the validity of a patent:
Unckles V. Hents, 43 N. Y. S. 749 (1896), statements that the "National Lead
Trust" was a legal organization, no allegation or proof that the defendants
knew it to be illegal; Bilafsky v. Conveyancers Title Co., 192 Mass. 5D4
(1906). But the misstatement of the legal effect of a written instrument
made to an ignorant and illiterate man, known to be relying upon such asser-
tions as true, is actionable, Decker v . Hardin, 5 N. J. L. (2 Southa rd) 579

\ . —0^9). ;

"Certain words such as ownership, marriage, settlement, etc., irnport both
a conclusion of law and facts justifying it, so that, when asserted without ex-
planation of what the facts relied on are, they assert the existence of facts
sufficient to justify the conclusion," Holmes. J.. Alton v. First National Bank.
157 :SIass. 341 (1892), u. 343; and see the adm.irable statement of Jessel, M.
R.. in Eagles field v. Londonderry, L. R. 4 Ch. D. 693 (1876), p. 703, in which
he concludes: "It is not thej.ess a statement of facts, that in order to arrive
at it vou must know more or less of the law."

In IVhitehurst v. Life Insurance Co. of Va., 62 S. E. 1067 (N. Car. Dec.
2. 1908). it was held that statements by an insurance agent that a certain
stipulation in the policy, read by the agent to the insured, a blind man, rneant
that the premium would be paid back at the expiration of ten years with 4
ner cent, interest, was actionable, if found by the jury to have been intended
to be understood as a statement of fact and not as a mere expression of
opinion : See as to recovery of money paid because of fraudulent misstate-
ment of law, British, etc.. Insurance Co. v. Ctmleppe. 16 T. L. R. 502 (C. A. 1902), contra. Thomson v. Phoeni.v Ins. Co.. 75 Maine 55 (1883). In
Whitehurst v. Insurance Co., 62 S. E. 1067 (N. Car. 1908), it is held that even


(c) Statements of opinion.


28 L. R. Ch. D. (1884) 14.


BowEN, L. J. : —

*'The action i.s by vendors for specific performance, and the
purciiasers allege that there is in the particulars a misrepresentation
which disentitles the plaintiffs to specific performance. To sustain
this defence the defendants must prove that there was a material
misrepresentation, and that they entered into the contract on the
faith of the representation.

Was there then a misrepresentation of a specific fact? This
partly depends on the question, whether on the construction of the
particulars, wdiat they say as to Fleck is a representation of a spe-
cific fact, a question which the Court of Appeal has the same means
of deciding as the Judge in the Court below.

In considering whether there w-as a misrepresentation, I will
first deal with the argument that the particulars only contain a state-
ment of opinion about the tenant.^ It is material to observe that it
is often fallaciously a ssumed that a statement of opinion cannot
JfTvolve t he statement of a lact. In a case where the facts are
equally well known to both parties, what one of them says to the
other is frequently nothing but an expression of opinion. The state-
ment of such opinion is in a sense a statement of a fact, about the
condition of a man's own mind, but only of an irrelevant fact,
for it is of no consequence what the opinion is. But if the facts
are not equally known to both sides, then a statement of opinion by
the one who knows the facts best involves very often a statement
of a material fact, for he impliedly states that he knows facts which
justify his opinion. Now a landlord knows the relations between
himself and his tenant, other persons either do not know them at
all or do not know them equally well, and if the landlord says that
he considers that the relations between himself and his tenant are
satisfactory, he really avers that the facts peculiarly within his

an innocent misstatement of this sort is fraudulent, if the defendant from his

position has better means of knowing the law than the plaintiff, but see

contra, Harse v. Pearl Life Assn. Co., L. R. 1904 1 K. B. 558. Jj o^Morek vii

J^ ^^ ^ ^ff c jiison, 19 Tex. 303 (1857). it was held that the misstatement of the""

of a foreign country or of another state was a misstatement of fact, and this
applied when a Texan misstated the Texas law to a person who had just
come to Texas frgm another state.
^ See also, the extraordinary case of Sears v. Wegncr, 150 Mich. 388

«f . (1907), where it was held that a plaintiff, who was induced to enter into a
secret marriage with defendant by his representation that his prior marriage
with another woman was void and by his promise to have a public ceremony
as soon as the prior marriage was set aside, might maintain an action for
fraud and deceit.


knowledge are such as to render that opinion reasonable. Xow are
the statements here statements which involve such a representation
of material facts? They are statements on a subject as to which
prima facie the vendors know everything and the purchasers noth-
ing. The vendors state that the property is let to a most desirable
tenant, what does that mean ? I agree that it is not a guarantee that
the tenant will go on paying his rent, but it is to my mind a guar-
antee of a different sort, and amounts at least to an assertion that
nothing has occurred in the relations between the landlords and the
tenant which can be considered to make the tenant an unsatisfactory
one. That is an assertion of a specific fact. Was it a true asser-
tion? Having regard to what took place between Lady Day and
Midsummer, I think that it was not. On the 2_5th of March a quar-
ter's rent became due. On the first of May, it was wholly unpaid
and a distress was threatened. The tenant wrote to ask for time.
The plaintiffs replied that the rent could not be allowed to remain
over Whitsuntide. The tenant paid on the 6th of May £30, and on
the 13th of June £40, and the remaining £40 shortly before the
auction. Now could it at the time of the auction, be said that noth-
ing had occurred to make Fleck an undesirable tenant? In my
opinion a tenant who had paid his last quarter's rent by driblets
under pressure must be regarded as an undesirable tenant.

Fry, L. J. : —

It seems to me that the vendors by describing him as such stated
in substance that they knew no fact which shewed him not to be a
desirable tenant. The Judge in the Court below has found that
they did know facts which shewed him not to be a desirable tenant,
and I see no reason to dissent from that conclusion.^

"■Accord: Bunts v. Dockray, 156 Mass. 135 (1892): "No^ doubt, even a
positive statement that a title is good may involve somewhat matter_ of
opinion; but it also imports that there are no facts that affect its validity, just
as statements that goods are attached, or that stock is non-assessable, are
representations that facts exist which justify the statements; Burns v. Lane,
138 Mass. 350 (1885) ; Windram v. French, 151 Mass. 547 (1890),'.' Morton, J.,
p. 137 ; Hickey v. Morrell, 102 N. Y. 454 ( 1886) , statements that storage build-
ing was fireproof, to say of an article that it is fireproof conveys no other idea
than that the material out of which it is constructed is fireproof," Danforth.
J., p. 459; OJsion v. Oregon Water Power & Ry Co., 52 Ore. 343 (1908),
defendants obtained a release from plaintiff by statements that it was use-
less expense for plaintiff to get legal advice from a lawyer, that defend-
ants' lawyer authorized it. to tell plaintiff that there was no legal respon-
sibility to him and that if an action was brought the defendant would
keep the case in court for ten years and would prevent him or his heirs
from recovering any damages whatever : "Sometimes a statement of an
opinion is necessarily based on a fact or carries with it such an inference
of fact that it can be interpreted as a statement of facts," Eakin, J., p. 355 ;
Nezi' V Jackson. 95 N. E. 328 (App. Ct. of Indiana 1911) : Martin v. Veana
Food Co., 153 Mich. 282 (1908) ; Andrews v. Jackson, 168 Mass. 266 (1897).
a statement that notes are as good as gold includes a statement that the
maker is solvent and of high financial reputation.


(d) Statements of value or of price paid.


39 Elizabelh, Yelverton 21a.

J. S. had a term for years, and there being a discourse between
him and J. D. about buying that term, J. S. said and affirmed to
J. D. that the term was worth 150 lbs. to be sold upon which J. D.
gave J. S. 150 lbs. for the term; and afterwards J. D. offered and
endeavored to sell the term again, and could not obtain, nor get for
the term 100 lbs., whereupon he brought an action on the case in
nature of a deceit against J. S. and declared ut supra, and that J. S.
asseruit to him that'the term was worth so much, to which assertion
J. D., fidem adhibens, did buy the term for so much money, but could
not sell it again for so much money as was given at first, in fraud
and deceit of the plainlifif to his damages, &c. ; and upon not guilty
pleaded it was found for the plaintiff, and alleged in arrest of judg-
ment that the matter precedent did not prove any fraud ; for it was
but the defendant's bare 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 value to be
sold, and the plaintiff had thereupon given and disbursed his money,
there it is otherwise ; for the warranty given by the defendant is a
matter to induce confidence and trust in the plaintiff. Between
Harvey and Young, ^lich. 39 Eliz., as Towes of the Inner Temple
said at the bar, and that he was of counsel with the defendant.
Quod nota.^


Supreme Judicia! Court of Massachusetts, 1887. 141 Mass. 321.

Morton, C. J. We are of the opinion that all the representa-
tions alleged in the declaration, which are material, fall within what
is known as "dealer's talk," and are not sufficient foundation for an
action of deceit. The law recognizes the fact that men will naturally
overstate the value and qualities of the article which they have to

"■Accord- ]'an Epfs v. Harrison. 5 Hill 63 (N. Y. 1843); Bradbury v.
Haines. 60 N. H. 123 (1880). semble; Shade v. Creznston, 93 Ind. 591 (1883) ;
Ellis V. Aiidrczi-s. 56 N. Y. 83 (1874) : Gordon v. Butler, 105 U. S. 553 (1881),
one who had lent money held not entitled to recover in an action of con-
spiracy against the borrower and two others who had falsely stated the prop-
erty mortgaged to be worth 150 per cent, more than the amount of the loan.


sell. All men know this, and a buyer has no right to rely upon such

The representations that the apparatus or invention was of great
value, that in its use there was no dirt, smell or smoke, that it burned
a long time and could be run for a small expense, are all in their
nature statements of opinion as to the value and utility of the in-

The representation that "experiments had been made therewith
which had proved successful" is really of the same character,
though put in the form of a statement of a past fact. The only ma-
terial part of the statement is that the apparatus upon experiment
worked well, which is in its nature mere opinion, and not a state-
ment of any definite fact.

All these are representations as to the operation and utility oi
an invention. Such representations must in most cases be matter'
of opinion, expectation, and probability, upon which a purchaser
cannot safely rely, and they will not sustain an action of tort, unless
he has been fraudulently induced to omit an examination for him-
self, which is not sufficiently averred in this declaration. Parker v.
Moulton, 1 14 Mass. 99.

The representations that the defendant was treasurer of the
National Heat and Light Company, and that said company owned
the apparatus, are statements of fact but they are not material. The
declaration alleges that the plaintiff purchased the exclusive right
to sell the apparatus of the National Heat and Light Company,
thereby implying that they were the owners. The gist of his com-
plaint is, not that he did not procure a valid transfer of the right,
but that it was of no value. The statements we are considering have
no bearing upon this matter, and, whether true or false, are imma-
terial upon any issue in the case.

We have thus far considered the first count of the declaration.
The same objections apply to the second count, and we are of opinion
that the demurrer was well taken to both of them.

Judgment for the Defendant affirmed.^

:^ ^ PICARD V. Mccormick.

Supreme Court of Michigan, 1862. 11 Michigan 68.

Campbell, J. :

McCormick sued Picard to recover damages on account of false
representations whereby the former was induced to purchase of the
latter watches and other jewelry to a large amount.

^Accord: Bishop v. Small, 63 Maine 12 (1874) ; Deming v. Darling, 148
Mass. 504 (1889), statement that a railroad bond was an A No. 1 bond; Rock-
afellow V. Baker, 41 Pa. St. 319 (1861), Woodward, J., p. 321, "But there is
neither fraud nor mistake in the legal sense of these terms, when a buyer of
an article which he finds in a market has a full opportunity to examine it, and
when the means of information relative to facts and circumstances affecting
the value of the commodity are equally accessible to both parties. There is
no confidence between buyer and seller, unless a warranty be demanded and


The declaration contains several different counts, and, inasmuch
as it is claimed that all or some of them are fatally defective, it be-
comes necessary to refer to them.

The first count avers the ignorance of plaintiff concerning the
value and quality of the articles sold, the defendant's knowledge of
such ignorance, he himself being a skilful dealer in such goods, the
application by defendant to McCormick to induce him to purchase,
the refusal of McCormick to do so except in reliance upon Picard's
representations, and a sale based on fraudulent representations of .
the value of the property, whereby the purchaser was damnified. |

The second count is for a breach of warjianty of value, by
which Picard knowingly, falsely and fraudulently deceived^Mc-

The third count is for false representations concerning the value

and quantity of gold in a necklace which Picard, knowing McCor-

mick's ignorance, induced him to purchase by such representations.

The fourth and fifth counts are framed like the first, but upon

different representations.

The principal objection alleged against these several counts
(which is taken on assignment of error and not by demurrer) goes
to the materiality of the frauds charged. It is claimed that an alle-
gation of value, although false, cannot be made the ground of an

It is undoubtedly true that value is usually a mere matter of
opinion ; and that a purchaser must expect that a vendor will seek
to enhance his wares, and must disregard his statements of their
value. But, while this is generally the case, yet we are aware of no
rule which determines arbitrarily that any class of fraudulent mis-
representations can be exempted from the consequences attached to
others. Where a purchaser, without negligence, has been induced
by the arts of a cheating seller to rely upon materiaL statement s^
which are knowingly false, and is thereby damnified, it can make no
difference in what respect he has been deceived, if the deceit was
material and relied on. It is only because statements of value can
rarely be supposed to have induced a purchase without negligence,
that the authorities have laid down the principle that they cannot
usually avoid a bargain. But value may be frequently made by the
parties themselves the principal element in a contract; and there
are many cases where articles possess a standard commercial value,
in which it is a chief criterion of quality among those who are not
experts. It is a matter of every day occurrence to find various grades
of manufactured articles known more generally by their prices than
by any test of their quality which can be furnished by ordinary in-
spection. Frauds are easily committed by dishonest dealers, by con-
founding these grades, and cannot be detected in many cases except
by persons of experience. In the case before us the alleged fraud
consisted of false statements of a jeweler to an unskilled purchaser
of the value of articles which none but an expert could be reasonably

given. Thev deal at arms' lencrth. They use not each other's eyes, but each
iiis own. The seller is allowed to express freely his opinions of the value of
his wares— the buyer is at equal liberty to answer that it is naught."^


supposed to understand. The dealer knew of the purchaser's igno-
rance, and dehberately and designedly availed himself of it to de-
^ fraud him. We think that it cannot be laid down as a matter of
'' law that value is never a material fact ; and we think the circum-
stances of this case illustrate the impropriety of any such rule.
They show a plain and aggravated case of cheating. And it would
be a deserved reproach to the law if it exempted any specific fraud
from its remedial action, where a fact is stated and relied upon,
whatever may be the general difficulty of defrauding by means of it.
The same reasoning will dispose of the objection that in the second
' count the representations are not set out as having been relied upon,
or as having been made in deliberate breach of confidence. If value
can be regarded in any case as a material fact, then it may be made
the subject of a warranty. This count is in the usual form for
breach of a fraudulent warranty, and is therefore good.

There is no error in the proceedings, and the judgment must be
affirmed, with costs.

The other Justices concurred.^


New York Supreme Court, 1893. 139 .Y. Y. 290 (1893).

O'Brien, J. The plaintiff sought to foreclose a mortgage as^
signed to her, before the commencement of the action, executed and
delivered by the defendant, upon certain real estate of which she
7was the owner, subject to other mortgage liens, and bearing date
April 30th, 1890, for $1,500, payable one year from date, with semi-
annual interest. The mortgage was given to one Joseph H. Cain,
with whom the negotiations and transactions which resulted in its

^Andrews v. Jackson, 168 Mass. 266 (1897), statement that a promissory
note was "as good as gold" held actionable, where the defendant professed to
know the maker, a resident of Boston, and the plaintiff, who lived in a sub-
urban town, knew nothing about him; Manley v. Felty, 146 Ind. 194 (1896),
in which, however, it was held that a fiduciary relation existed between the
parties, the defendant, an attorney, having grossly overstated the value of
land to which the plaintiff was heir, in order to induce him to agree to pay an
exorbitant fee; Stover's Adm. v. Wood, 26 N. J. Eq. 417 (1875) ; Cruess v.
Fessler, 39 Cal. 336 (1870) ; Simar v. Canadav, 53 N. Y. 298 (1873) ; Leonard
V. Springer, 197 111. 532 (1902); contra, Bradbury v. Haines, 60 N. H. 123
(1880), semble.

So while mere laudatory statements of the quality of an article sold is not
generally actionable, "the purchaser may maintain an action of deceit if the
seller fraudulently misrepresents the quality of the property sold, in particu-
lars of which the purchas£r'3T3" not have equal means of knowledge with him-
self, or, having such means, is induced to forego further inquiry which he

Online LibraryFrancis H. (Francis Hermann) BohlenCases on the law of torts (Volume 1) → online text (page 104 of 124)