William M. Lacy James Kent.

Commentaries on American law, Volume 2 online

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assist persons to avoid a contract, though made for an inadequate
price, provided it was made under a fair opportunity of informa-
tion as to all the circumstances, and when there was no fraud,
concealment, or latent defect {h).^

{a) Thornton ». Wyne, 12 IVhealon, 183.

{b) Hunt V. Sylk, 5 EaM'a Rep, 449.

(e) Sands & Crump v, Taylor, 5 Johis. Rep, 395. Maclean v. Dann, 4 Bing.
Rep, 7.22.

{d) Thornton r. Wynn, 12 Wheaton, 183,

(e) Timrod t. Rhoolbred, 1 Ray'n Rep, 324. Whitefield v, M'I.eod, 2 Ibid.
360. Lester r. Graham, 1 Cowd. Rep. 8. C, 182. Crawford p. Wilson, 2 Ibid,
353. Dewees r. Morgan, 1 3fartin*a Louie, Rep. 1.

(ff) 4 Conn. Rep. 428.

(A) Whitefield r. M'Leod, 2 Bnp*n Rep. 384. The law in fionth Carolina
seems at last to be conformable to the old general rule. It was held, in Car-

• As to the vendee's rights in ease of the breach of the vendor's warranty.
If there is a bn^ach of warranty as to title the vendee may either bring hia
action for the return of the price on the groand of failure of the <v>nsideratioii
or may sue for damages. Eichholz v. Banister, 17 C. B. N. S. 70H; 'M L. J.
C. P. 105. If there is a breach of warranty as to quality, the buyer has his


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If the article be sold bv the sample, and it be a fair specimeii
of the article, and there be no deception or warranty on the part
of the vendor, the vendee cannot rescind the sale. Such a sale
amounts to a warranty that the article is in bulk of the same kind,
and eqnal in quality with the sample (a). If the article should
turn out not to be merchantable, from some latent principle of in-
firmity in the sample, as well as in the bulk of the commodity, the

nochnn r. Gould, in the conrt of appeals, 1 BaOey^a Rep. 179, that a vendor
of cotton was not liable for a defect in the quality of the cotton of an unusual
character, which extended equally throughout the bulk, and was fully ex-
hibited in samples. The law in that case would not raise an implied war-
ranty, lor there was no fraud, and the buyer was possessed of all the infor-
mation necessary to enable him to make a correct estimate of the value of
the article. In Osgood v. I^ wis, 2 iTarr. <fe G///, 495, implied warranties upon
the sale of chattels, and arising by operation of law, were held to be of two
kinds. 1 . In cases where there was no fraud, as that the provisions purchased
for domestic use were wholesome, or that the article contracted for in an ex-
ecutory contract, and which the purchaser had no opportunity to inspect,
shouhl be saleable as such in the market. 2. Where the fraud existed, as if
the seller, knowing the article to be unsound, disguises it, or represents it as

(a) Parkinson r. Lee. 2 Basils Rep. 314. Sands & Crump r. Taylor, 5 Johna.
Rep. 395. Bradford r. Wanly, 13 Mass. Rep. 139. Woodworth, J., in 20 Johns.
Rep, 204. The Oneida Manufacturing Society v. Lawrence, 4 Oncen^n Rep.
440. Andrews r. Kneeland, 6 Ibid. a54. Gallaghar v. Waring, 9 WendelVs
Rep. 20. Boorman v. Johnston, 12 Ibid. 566. Waring v. Mason, 18 Ibid.
425. In the sale of an article, as hemp, in bales, it is held, that there is no
implied warranty that the interior shall correspond in quality with the ex-
terioi of the bales, and if the purchaser is at liberty to open the bales and
examine, there is no sale by sample, though the interior does not correspond
with the external part. Salisbury t;. Stainer, 19 Wendell, 159.

choice of three remedies. 1st. He may refuse to accept and return the goods,
except where the property in the specific chattel has passed to him. 2nd.
He may accept the goods and bring a cross action for the breach of warranty.
3rd. He may, if he has not paid the price, plead the breach in reduction of
damages in the action brought by the vendor for the price. Morrill r. Night-
ingale, 39 Wis. 247; Carey v. Guillow, 105 Mas.s. 18; Odom r. Harrison, 1
Jones (N. C), 402. If the article delivered does not answer the description
of that which was sold, if it differs in kind and not quality only, he is not
bound to receive it, and if he has paid for it he may recover the money as
upon a failure of consideration. Azemar v. Casella, L. R. 2 C. P. 431 ; 36 L.
J. C. P. 124. He may bring his action of warranty without returning the
goods. See 1 Parsons Coutt, 591; Cary r. Gruman, 4 Hill (N. Y.), 625; Voor-
bees V. Earl, 2 Id. 288; Comstock v. Hutchinson, 10 Barb. 211; Hitchcock v.
Hunt, 28 Conn. .343; Krabton v. Kile, 21 111. 180. If before discovering
the breach he sells part of the goods, he is not debarred from rescinding, but
he is liable for their market value. Shields v. Pette, 4 Const. 122. The ven-
dee may, when the vendor refuses to receive the goods back, resell and re-
cover the loss from the vendor together with the expense of keeping and of
resale. Buffington v. Quaintain, 17 Pa. St. 310; Woodward v. Thatcher, 21
Vt. 580, and see 1 Pai-sons on Cont. 593.

See, fVirther, hereon Kase v. John, 10 Waits (Pa.), 107; Allen v. Anderson,
3 Humph. (Tenn.) 561; Lightburn v. Cooper, 1 Dana, 273; Carter v. Walker,
2 Bich. L. 40; Corronev. Henderson, 15 Mass. 183; Hunt v. Sill, 5 East 449.


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seller is not answerable. The only warranty is, that the whole
quantity answers the sample.*^

[ * 482 ] * VI 0/ the duty of mviual disclosure.

If there be an intentional concealment or suppression
of material facts in the making of a contract, in cases in which
both parties have not equal access to the means of information,
it will be deemed unfair dealing, and will vitiate and avoid the
contract There may be some difference in the facility with
which the rale applies between facts and circumstances that are
intrinsic, and form material ingredients of the contracts, and
those that are extrinsic, and form no component part of it, though
they create inducements to enter into the contract, or affect the
price of the article. As a general rule, each party is bound to
communicate to the other, his knowledge of material facts, pro-
vided he knows the other to be ignorant of them, and they be
not open and naked, or equally within the reach of his observa-
tion (a). In the sale of a ship, which had a latent defect known
to the seller, and which the buyer could not by any attention
possibly discover, the seller was held to be bound to disclose it,
and the concealment was justly considered to be a breach of hon-
esty and good faith (6). So, if one party suffers the other to

{a) The rule here laid down, thoagh one undoubtedly of moral obliga-
tion, is perhaps too broadly stated, to be snstained by the practical doctrine
of the conrts. The qualification of the mle is, that the party in possession
of the facts must be under some special obligation, by confidence reposed, or
otherwise, to communicate them truly and fairly. Videinfra^ p. 484, 490.

(6) Mellish ». Motteaux, Peake's CaseSy 115. This case was afterwards
overruled by Lord Ellenborough, in Baglehole v. Walters, 3 Camp. Rep. 154,
and the latter decision confirmed in Pickering v. Dowson, 4 Taunt Rep. 779,
but it was upon another point, respecting the effect of a sale with all faults;
and the principle of the decision, as stated in the text, remains unmoved.

** An affirmation made by the vendor, if not merely an expression of judg-
ment or opinion, at the sale, upon which he intended the purchaser should
rely, is a warranty. Rogers v, Akerman, 22 Barb. 134; Morrill v. Wallace,
9 N. H. Ill; Claghorn u. Lingo, 62 Ala. 230; Pennocks v. Stygles, 54 Vt
226; Henshaw i'. Robbins, 9 Mete. 83; Smithers v, Bircher, 2 Mo. App. 499;
McClure v. Williams, 65 111, 390; Chapman v, Murch, 19 Johns. 290. As to
whether the description of the articles sold contained in a bill of sale or else-
where is or is not a warranty, see Carley v, Wilkins, 8 Barb. 557; Whit-
man V. Treese, 23 Me. 213; Daily v. Green, 15 Pa. St 118; Carson v. Baillie,
19 Pa. St. 375; Wetherill r. Neilson, Id. 448; Sweet v. Colgate, 20 Johns. 196;
Gosser v. Eagle, Ac, Refinery Co. 103, Mass. 331; Ender v. Scott, 11 111.
35. In which it was held it* was not. Bradford r. Manly, 13 Mass. 137;
Morrill v. Wallace, 9 N. H. 114; Winsor r. Lombard, 18 Pick 60; Woloott
t:. Mount, 7 Vroom. 262; Lamb v. Crafts, 12 Met 355. Which bold the
contrary and uphold the English rule as stated in Schneider r. Heath, 3
Campb. 508; Pawson v. Watson, 2 Cowp.'788; Adamson v, Jarvis, 4 Bing.
73; Chandler v. Lopus, 1 Smith, L. C. 5tb ed. 161, and note.



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buy an article under a delusion created bj bis own condtict, it
will be deemed fraudulent, and fatal to the contract ; as if the
seller produces an impression upon the mind of the buyer, by his
acts, that he is purchasing a picture belpngingtoa person of great
skill in painting, and which the seller knows not to be the
fact, and yet sufiTers the impression to remain, though *^he [ * 48S ]
knows it materially enchances the value of the picture in
the mind of the buyer(a). One party must not practice any artifice to
conceal defects, or make any representations for the purpose of
throwing the buyer ofiT his guard. The same principle had been long
ago declared by Lord Hardwicke,when be stated (6), that if a vendor,
knowing of an incumbrance upon an estate, sells without disclos-
ing the fact, and with knowledge that the purchaser is a stranger
to it, and under representations inducing him to buy, he acts
fraudulently, and violates integrity and fair dealing. Tlie infer-
ence of fraud is easily and almost inevitably drawn, when there
is a suppression or concealment 'of material circumstances, and
one of the contracting parties is knowingly suffered to deal un-
der a delusion* It was upon this ground that Lord Mansfield
must have considered (e), that selling an unsound article, know-
ing it to be unsound, for a sound price, was actionable. It is
equivalent to the concealment of a latent defect; and the ground
of action is, the deceit practised upon the buyer (d). The same
rule applies to the case where a party pays money in ignorance
of circumstances with which the receiver is acquainted, and does
not disclose, and which, if disclosed, would have prevented the
payment In that case, the parties do not deal on equal terms,
and the money is held to be unfairly obtained, and may be re-

The same principle wasnrged in Southern r. Howe, 2 Rol. Rep. 5, nnd it wns
stated, that if a man sells wine, knowing it to be corrupt, an action of de-
ceit lies against him, though there be no warranty.

{(t) Hill V, Gray, 1 Starkie's Rep. 352. Pilmore v. Hood, 5 Bingham, N. C.

[h) 1 Ve^ey, 96.

(c) Stuart V. Wilson, Doufj. Rep. 18.

id) Hough r. Evans, 4 ^fCorfVs Rep. 169. If a person having the legal
title to property, stands by and acquiesces in the sale of it by another per-
son claiming, or having colour of title, he will be estopped afterwards in assert-
ing his title against the purchaser. Qui (acet^ consentire videtur. Qui potent ef
d^et vetare jubei. Wendell n Van Rensselaer, 1 Jb/tn^on'j^ C%. i?. 354. Stori-8
r. Barker, 6 lb. 166. Hobbs v. Norton, 1 Vern. 136. 2 Ch. Ca. 128. See
also, to S. P. 6 Conn. Rep. 21i~214. 12 Serg. & R. 23. 12 Veseg,^. Irwin
V. Morell, Dudley^ r Geo. R. 72. Skinner v. Stouse, 4 Missouri R, 93. Pick-
ard p. Sears, 6 Adolpkus <& Ellita, 469. Gregg v. Wells, Theobald dt Ebden R.
East. Term, ia39.

40 VOL. II. KBKT. 625


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covered hack (a). It applies, also, to the case where a person
takes a guaranty &om a surety, and conceals from him facts
which go to increase his risk, and suffers him to enter into the
contract nnder false impressions. Snch concealment is held to
be frand, and vitiates the contract (6)."

{ft) Martin v. MoT^gan, l.Bnd, ^ Bing. 289.

(*) Pidcock r. Bishop, 3 Bamw, d' Crew. «)5. Maltby's case, cited bv
Ixjrd EldoD. in 1 Dow'h P. C. 294. Smith r. Bank of Scotland, I Ibid. 27"i.
In the .sense of a conrt of equity fraad includes all acts omissions and con-
cealments, which inrolTe a breach of either legal or equitable duty, trust or
e m (id ence justly reposed, and are injurious to another. See infrtu p. 561.
The law requires the utmost degree of good faith {uberrima fiden^) in tracs-
a(*tions between parties standing in a peculiar relation, or fiduciary character,
iietween each other; as, for instance, in the relation, of client and attorney,
physician and patient, principal and agent, principal and surety, guardian
and ward, trustee and cettui que tnutL, partners and part-owners. Any mis*
representation or concealment of any material fact, or any just suspicion of
artitice or undue influence, will be fatal to the validity of the tran.saction
between them, especially in the view of a court of equity. The principle on
which courts of equity act in regard co cases arising under such a confiden-
tial or fiduf*iary relation stands (independent of any ingredient of deceit or
imposition which is usually mixed with such cases,) upon a motive of geoe-
ral public policy. It is when confidence is reposed and confidence abu.sed
by some advantage gained by means of the relation. Storfs Comm. on Eq.
Jariapt ndt iitr, 224, "SM — o23. In Dent v. Bennett, 7 Simontt^ 535). the vice-
c-liaucelior declared an agreement between a medical adviser and his patient
for a large .sum to be paid by the latter after his death, for post and future
Fervices, null and void. It was held, to be a glaring abuse of confidence,
and the vice-chancellor enforced with spirit and energy the doctrine, that
wherever we find the relation of employer and agent existing in situations
in which, of necessity, much confidence mustl>e placed by the employer in
the agent, then the case arises for watchfulness on the part of the court, that
the it>ntideoce shall not be abused.

*' The representation must be snch as to induce the contract. Lord
Brougham in Attwood r. Small. 6 CI. & F. 444; l^rd Wensleydale in Smith
r. Kay, 7 H. L. C. 775 — 6, Relief cannot be given on the ground of fraud
or niisiepreseutatioD to a party who has in fact not acted on the statement
of the other, but b:ts taken steps of his own to verify them and has acted on
the judgment thus formed by himself. De Camp r. Hamma, 29 Ohio, 467;
Weaver r. Carpenter, 42 Iowa, 343; Anderson v, Wame, 71 111. 20; Pratt r.
Philbrwik. :W Me. 17; Glasscock v. Minor, 11 Mo. 655; Clark r. Evcrhart,
13 P. F. Smith, 347; Tinddll r. Harkinson, 19 Ga. 448. In the case of
active misrepresentation it is no answer, in proceedings either for damages
or for setting aside the contract, to say that the pirty complaining of the
misrepresentation had the means of making inquiries. Dabell r. Stevens, 2
H. L. 121. See Dyer r. Hargrave, 10 Yes. at p. 509. The principle is that
''No man can complain that another has too implicitly relied on the truth of
what he has himself stated.*' Beynell v. Sptye, 1 D. M. & G. at p. 710;
Prii*e r. M:u^uly, 2 D. M. & G. 339, 346. It is not enough to show that tlie
p;irty misled did make wme examination on his own account; proof of cursory
and inctfectual inquiries will not do. Kedgrave v. Hurd, C. A. 20 Ch. D.
I. In onlor to bar him of his remedy, it must be shown either that he knew
the true state of the facts, or that he did not rely on the facts as represented.
/./. >», 21, per Sir Geo. Jessel, M. R. See, further, Central Ry. Co. of Vene-
»«ela r, Kiscb, U R. 2 H. K 99, 120.

When, bowt^ver, the fact is not roisrepreaentefl but concealed (or rather not
fonmouicated^, and there is nothing done to induce the other party not to



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♦The writei*s of the moral law hold it to be the duty [ * 484 ]
of the seller to disclose the defects which are within his

avail himself of the means of knowledge within his reach, if he neglects to
do so he may have no right to complain, hecause his ignorance of the fact is
attribatable to his own negligence. New Brunswick, &c., Co. r. Conybeare, 9.
H. L. C. 711, 742; Graves r. Lebanon National Bank, 10 Bush. 23; Stone n.
Covell, 29 Mich. 359; Foster v. Kennedy, 38 Ala. 359; Smith v. Richards,
13 Peters. 26.

AVhere there is an attempt to conceal a defect in an article, and the pur-
chaser takes it without examination he is not deceived, although there was
an intention to deceive. Horsfall v. Thomas, 1 H. A C. 90; 31 L. J. Ex.
StK; dissented from by Cockbum, C. J. ; Smith P.JHughes, L. R. 6 Q. B. p. 605.
See Hill v. Bush, 19 Ark. 522; Poland v, Brownell, 131 Mass. 138.

Tlie representations must be of material facts properly constituting an in-
ducement, though not necessarily the sole inducement to the contract. Hill
r. Carley, 8 Hun. 636; Safford v. Grout, 120 Mass. 20; Hull v. Fields, 76,
Va. 594; \yinter v. Bandel, M Ark. 362. It is not essential that the be-
lieved falsity was the only inducement to the contract, it is sufficient that if
without this misrepresentation consent would not have been given. This is
als:) the rule in the criminal law of false representation. 2 Bishop Crim.
Law, sec. 461.

A material fact may be said to be anything that would affect the judg-
ment of a rea-sonable man governing himself by the principles by which men
in practice act in the kind of biisiness in hand. lonides v. Pender, L. R. 9
Q. B. 539; Murgatroyd r. Crawford, 3 Dallas (U. S.), 491; Hoyt t?. Oilman,
8 Mass. 3:^.

It does not matter whether the representation is made by express words or
by conduct. Denny v. Oilman, 26 Me. 149; Bnford v. Caldwell, 3 Mo. 477;
MilHgan v. Bailey, 28 Ga. 507. Nor whether it consists in the positive asser-
tion or suggestion of that which is false or in the active concealment of
something material to be known to the other for the purpose of deciding
whether he shall enter into the contract Aorston v. Ridgway, 18 111. 23;
Trigg V. Read, 5 Hump. 529; Wintz v. Morrison, 17 Texas, 372; Belden n.
Henriques, 8 Cal. 87. There may be false statements of specific facts. Stone
V. Denny, 4 Met 151; Hubbell v. Meigs, 50 N. Y. 480; Campbell v. Hill-
man, 15 B. Monr. 508; Hall v. Bradbury, 48 Conn. 32. Or the representa-
tion may be of a general state of things. Reynell v. Sprye, 1 D. M. G.
680. A deceitful promise made with the intention of not being performed is
a fraud. Dowd v. Tucker, 41 Conn. 197; Miller v. Howell, 1 Scam. 499;
Farrar r. Bridges, 3 Humph 566.

If one party asks the other some question upon a collateral matter on
which he is not bound to answer or give information, mere silence on the
other's part is not equivalent to a representation. Laidlaw v. Organ, 2
Wheat 178; Harris v. Tyson, 12 Hatris (Pa.), 347; Bell v. Byerson, 11
Iowa, 233; Hobbs r. Parker, 31 Me. 143. One party is not required to an-
swer what the other asks, but, if he does so, he must speak the truth. Butler's
App., 2 Casey (Pa.), 63; Knitzing v. McElratb, 5 Barr, 467. A mistake
cau.s(Hi by ignorance or forgetfulness is no excuse. Kerr on Fraud and Mis-
take, 57; Cabot p. Christie, 42 Vt 126; Fi.sher v. Mellon, 103 Mass. 503. A
person must have rea.<^nable grounds for believing the truth of what he says.
Stone V. Denny, 4 Met. 151; Hazard r. Irwin, 18 Pick. Merely puffing
one*8own goods and depreciating those of another, provided the article reveals
its own qualities and is open to the parties equal inspection, is not fraud.
Hill r. Bush, 19 Ark. 522; Poland r. Brownell, 131 Mass. 138; Armstrong
V. Huffstuter, 19 Ala. 51. A man may praise the value of his own goods
and depreciate the value of those he buys and it is no fraud. Adams u.
Soule, 3;^ Vt. 549; Gatly r. Holcomb, 44 Ark. 216; French r. Griffin, 3 a
£. Green. 279. As to puffing of value, &c., see, farther, Vazie r. Williams, 8



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knowledge (a). Bat the common law is not qnite so strict If
the defects in the article sold be open equally to the observation
of both parties, the law does not require the vendor to aid and
assist the observation of the vendea Even a warranty will not
cover defects that are plainly the objects of the senses (6);
though if the vendor says or does any thing whatever, with an in-
tention to divert the eye, or obscure the observation of the buyer,
even in relation to open defects, he would be guilty of an act of
fraud (c). A deduction of fraud may be made, not only from
deceptive assertions and false representations, but from facts, in-
cidents, and circumstances, which may be trivial in themselves,
but decisive evidence in the given case of a fraudulent design (d).
When, however, the means of information relative to facts and
circumstances affecting the value of the commodity, be equally
accessible to both parties, and neither of them does or says any
thing tending to impose upon the other, the disclosure of any
superior knowledge which one party may have over the other, as
to those facts and circumstences, is not requisite to the validity
of a contract (e). There is no breach of any implied confidence
that one party will not profit by his superior knowledge, as to

(a) Gnrthut, b. 2, c. 12, r. 9. Paiey^s Moral Philosophy, b. 3, ch. 7.

16) Schuyler c. Ross, 2 Games' Rep. 202. Dyer r. Hargrave, 10 Vesey, 5C7.

(c) 3 BJacksit'Om. 165. 2 Rot, Rep, 5.

\d) If the party intcDtionally misrepresents a material (act, or prod aces a
false impression by words or acts, in order to mislead, or to obtain an nndoe
advantage, it is a case of manifest fhiad. Story's Conun. on Eq, Jurisprudence,
201. But in order to afford relief, the misrepresentation mast be of some-
thing material, constituting an inducement or motive to the other party,
and on which he placed trust and confidence, and was actually misled to
his injury. /6»rf. 204, 205.

(e) Laidlaw a Organ, 2 IVheaUm, 178. A more stem rale of morality and
law respecting the duty of disclosure of information which would materially
affect the price, is laid down in Frazer v. Gervais, 1 WcUker's Miss. R. 72,
and it overrules, as far as the authority of the case can go, the decision in
Laidlaw v. Organ.

Howard, 134; Pennock's Appeal, 2 Harris, 449; Faucett r. Curer, 115 Mass.
20; Trust v. Delaphain, 3 £. D. Smith, 219. A person is answerable even
if the assertion of the untruth was made with gooid intentions and without
designing fraud. r..eakeon Contracts, 187; Bispham's Eq., 4 Ed. sec 214;
Bankhead v. Alloway, 6 Cold. (Tenn.) 75. According to modern authorities
a man has no more right to assert what he does not know to be true, than
to state what he knows to be lalse. Smyth v. Dye, 15 Mo. App. 585; Hub-
bell r. MeigH, 50 N. Y. 489.

The representation must be false in point of fact, it must be a misrepre-
sentation of something that is a matter of fact and not of mere opinion.
Bennett v. Jndson, 21 N. Y. 238; Tyler r. Black, 13 How. 230; Curry ».
Keyser, 30 Ind. 214; Stow v. Bozeman, 29 Ala. 397; Watts o. Cummings,
9 P. F. Smith, 84; Sawyer v. Prickett, 19 Wallace, 146.



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facts and circamstances open to the observation of both parties,
or equally within the reach of their ordinary diligence; becanse
neither party reposes in any such confidence, unless it be specially
tendered or required. Each one, in ordinary cases, judges for
himself, and relies confidently, and perhaps presumptuously, upon
the sufficiency of his own knowledge, skill and dili-
gence. The common law affords to every one ^reason- [ * 485 ]
able protection against fraud in dealing) but it does not
goto the romantic length of giving indemnity against the conse-
quences of indolence and folly, or a careless indifference to the
ordinary and accessible means of information. It reconciles the
claims of convenience with the duties of good faith, to every ex-
tent compatible with the interests of commerce. This it does by
requiring the purchaser to apply his attention to those particulars
which may be supposed within the reach of his observation and
judgment; and the vendor to communicate those particulars and
defects which cannot be supposed to be immediately within the
reach of such attention. If the purchaser be wanting of atten-
tion to these points, where attention would have been sufficient
to protect him from surprise or imposition, the maxim caveat
emptor ought to apply. Even against this maxim he may pro-
vide, by requiring the vendor to warrant that which the law
would not imply to be warranted; and if the vendor be wanting

Online LibraryWilliam M. Lacy James KentCommentaries on American law, Volume 2 → online text (page 81 of 108)