DEFINITION OF FRAUD.

Ir may be thought, and not without ground, to be both rash and dangerous to offer a definition of the term 'fraud.' Fraud is manifested in such endless variety of form and phase, in such manifold and ever-changing disguises and colors, that a definition might at first indeed appear hopeless. Judges have declined to attempt one, sometimes on the ground of its hopelessness, sometimes of supposed danger.2 Perhaps a more potent reason may not infrequently have been want of time for sufficient examination of the term, in the midst of questions pressing for immediate answer; certain it is that definitions have been given. Writers on the Roman law did not hesitate to offer them; the dictionaries do not pass over the term in silence; not all the judges and text-writers of our own law have been above making the attempt.

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It will not be necessary to quote all the definitions, or

1 Reynell v. Sprye, 1 De G. M. & G. 660, 691, Lord Cranworth; Marsh v. Cook, 32 N. J. Eq. 262, 266; Wise v. Fuller, 29 N. J. Eq. 257, 262; Hanger v. Evins, 38 Ark. 334.

2 Mortlock v. Buller, 10 Ves. 292, 306; Lawley v. Hooper, 3 Atk. 278, 279. Lord Hardwicke in a letter to Lord Kames, as quoted by Mr. Justice Story, once said: 'As to relief against frauds, no invariable rules can be established. Fraud is infinite; and were a court of equity once to lay down rules how far they would go, and no further, in extending their relief against it, or

to define strictly the species or evidence of it, the jurisdiction would be cramped and perpetually eluded by new schemes, which the fertility of man's invention would contrive.' 1 Story, Equity, § 186, note; Parkes, Hist. of Chancery, 501, 508.

3 Infra, p. 4; Dig. 4, 3, 1, 2 ; ib. 2, 14, 7, 9.

4 Chesterfield v. Janssen, 2 Ves. 125, 155; Le Neve v. Le Neve, 3 Atk. 646, 654; s. c. 1 Ves. 64.

5 Jeremy, Equity, Bk. 3, pt. 2, p. 358; 1 Story, Equity, § 187.

descriptions, for some are more properly descriptive; enough that they indicate that it is not useless or dangerous to endeavor to state in something like exact language the meaning of the term in question. Indeed it is clear that some definite meaning must be observed, in the mind at least, in order to any consistent adjudication touching the subject; and if this is so, there is no reason why that meaning should not be stated in terms. Definition is not rule, but the means of laying down a rule; a great variety of rules may often be deduced from or applied to a single definition. To lay down a hard and fast rule of law, limiting all frauds by it, would be dangerous in the extreme; but to start with some clear and exact idea of fraud is absolutely necessary to the declaration of any required rule, not to dwell upon the need of a basis for classification of the parts of the subject.

Justified thus in proceeding to definition, we may, by way of a first step, say on good authority that the characteristic factor in fraud civiliter, the subject of this work, is either deception, touching motives, or it is circumvention, not touching motives; and each, it should be well observed, involves guilt. 1. In the first form of the factor the plaintiff and defendant were concerned together in some transaction; in the second they were not. 2. In either form the factor may affect general or particular rights, i. e. rights in rem2 or rights in personam.3 3. In defining fraud the question of its success may be disregarded; for though as a rule the courts refuse to take cognizance of fraud which comes to nothing,

1 Ulpian tells us that Servius defined fraud, 'dolus malus,' to be, 'machinationem quandam alterius decipiendi causa, cum aliud simulatur et aliud agitur.' But Labeo, he says, considered this defective, and thus defined the term 'Dolum malum esse omnem calliditatem, fallaciam, machinationem ad circumreniendum, fallendum, decipiendum alterum adhibitam.' And Ulpian adds, Labeonis definitio vera est.' Dig. 4,

3, 1, 2. (The same passage tells us why 'malus' is added to 'dolus'). Deception or circumvention, it will be seen, is the characteristic factor; and the two together are broad enough to cover the whole ground.

2 Rights that avail against all men, as rights of property.

8 Rights that avail against certain determinate men, as rights of contract.

still it is plain that everything which goes to constitute it is present as much in fraud which is abortive as in fraud which is successful.1

Accordingly, understanding deception and circumvention as above limited, fraud may be said to consist, on the one hand, (1) in one man's endeavoring by deception to alter another man's general rights, or (2) in one man's endeavoring by eircumvention to alter the general rights of another; or on the other hand, (3) in one man's endeavoring by deception to alter another man's particular rights, or (4) in one man's endeavoring by circumvention to alter the particular rights of another. And this may be compressed into the following: Fraud consists in endeavor to alter rights, by deception touching motives, or by circumvention not touching motives.2

The four classes may be put in the concrete thus:

1. The owner of a horse seeks to sell it to me on the representation that it was foaled by Flora Temple,' when he knows, or ought to know, that the representation is false, or when he knows nothing about its truth or falsity. He is endeavoring by deception (practised on my motives) to alter one of my general rights, the right to my money. A man to whom I am about to sell property on credit intends not to pay me for it. His conduct is of the same nature; for I have

1 Evidence of unsuccessful fraud may, where the connection is close enough, be evidence of fraud in a scheme carried out. See Lynde v. McGregor, 13 Allen, 172, 179.

2 The qualifying words in regard to motives are necessary to make deception and circumvention exclusive of each other. 'Touching motives' however appears to be within the primary meaning of deception. See Lewis & Short, Latin Lex., 'capere,' 1, b, c.

3 One of the cases put, where the party ought to know,' may need explanation. He who makes to me a positive statement, which he believes to be

true, is so far guilty of no wrong, though his knowledge be incorrect; but his situation towards the facts may have been such that he ought to have known the truth. In that case he has not merely asserted knowledge for belief, which might not be enough to make him guilty of fraud, - he has asserted for knowledge what he must have known he ought not even to have believed. He has therefore endeavored by deception to alter my rights. The case of one who makes a representation knowing nothing about its truth or falsity needs no explanation.

a right to suppose that his promise to pay means what it purports.1

2. Again if I am arrested on Sunday on a trumped-up charge of crime, and held until Monday, all for the purpose of arresting me on Monday on civil process, the officer, or the person who procured him to act, or both, have sought by circumvention (not practised on my motives) to alter one of my general rights, my right to liberty. If on pretence of searching for stolen goods, but in reality to find goods to attach, an officer should wrongfully open a trunk, his conduct would fall within the same category.2

3. The maker of a promissory note payable to me, signed by him and by another as surety, seeks to induce me to substitute for it a new written agreement, signed apparently by the same surety, upon a false representation of the genuineness of the surety's signature. He is endeavoring by deception to alter one of my particular rights, the right to the benefit, unimpaired, of the obligation he was (and still is, together with the surety 3) under to me. The obligor in a bond payable to me seeks to induce me to cancel it upon a representation by him that it has been paid, knowing the contrary; this is a fraud of the same nature.

4. Once more if in the case of a sale on credit the buyer, though intending at the time to pay me, should afterwards change his mind, and put his property out of his hands to prevent me from obtaining payment, his conduct would be that of one endeavoring by circumvention to alter a particular right of mine, the right to payment for the property sold.

1 Some of the courts, against the weight of authority, refuse to take cognizance of such cases, where the conduct of the purchaser stops short of any act of deception aside from the promise. Smith v. Smith, 21 Penn. St. 367; Backentoss v. Speicher, 31 Penn. St. 324. Contra, Kline v. Baker, 99 Mass. 253; Donaldson v. Farwell, 93 U. S.

631, and cases cited; Bristol v. Wilsmore, 1 Barn. & C. 513. But it is useless to argue that such a case is only one of dishonesty and not of fraud, as was done in Smith v. Smith, supra.

Estoppel in pais will be referred to later, p. 16.

2 Pomroy v. Parmlee, 9 Iowa, 140. 8 Kincaid v. Yates, 63 Mo. 45.