pany's charter; he cannot safely rely upon the representations of its agents. But so far as this is sound doctrine, it rests upon special law relating to corporations; such bodies being without capacity to do, or to authorize the doing of, acts not within their granted powers. 3 To induce one however to forbear investigation, or to prevent effective examination, will, as follows from what has already been said of representations, excuse a failure to inquire; and this even in those cases in which, as where there is only a representation of value, the party was presumptively bound to inquire.2 Indeed where one induces another to abstain from seeking information, mere concealment of material facts may become fraudulent; nor will relief be refused in such a case, merely because a sharp business man might not have been deceived. Nor is the rule different where the vendor suggests examination to the purchaser, but in such a way as to indicate that such a step would be unnecessary. If for example the vendor suggest that the purchaser should go and look at the property, 'as their judgments might not agree, and if not satisfied the vendor would pay his expenses, but if satisfied the purchaser should himself pay them,' it is held that such a proposal asserts by implication the exercise by the vendor of an intelligent judgment upon the subject, tends to dissuade from inquiry, and renders him liable, if the statements prove false, even though he believed them to be true.5 Again though a purchaser may on close inspection detect a vice in the property sold, still if the vendor divert his at Mon. 4; Andrews v. Ohio & M. R. Co., 8 See however Halls v. Thompson, 1 Smedes & M. 443. 4 Swimm v. Bush, 23 Mich. 99; Starkweather v. Benjamin, 32 Mich. 1 Parker v. Moulton, 114 Mass. 99; 305; Oswald v. McGehee, 28 Miss. Tabor v. Peters, 74 Ala. 90. 340; Roseman v. Canovan, 43 Cal. 2 Carmichael v. Vandebur, 50 Iowa, 111. 651. 5 Webster v. Bailey, 31 Mich 36. 1 tention, the sale may be avoided. So if a party make a false and fraudulent explanation of a visible defect in property to be sold by him, he is liable as well as if he had made a false and fraudulent statement concerning the latent condition of the property. And in general where a party put upon notice is by any means actually misled and induced not to prosecute investigation by the opposite party, he will be entitled to relief. The maxim caveat emptor' does not apply when the vendor of property resorts to any artifice to put the purchaser off his guard.1 Further, accepting and paying for goods upon delivery will not bar the purchaser from relief, though the goods were open to his inspection at the time, if such acceptance and payment were procured by fraudulent artifices on the part of the vendor. Thus where the defendants, manufacturers and vendors of tobacco, had fraudulently used damaged tobacco in the manufacture, and had fraudulently used boxes of green lumber, and while the tobacco was being manufactured they exhibited to the plaintiff from time to time, in order to mislead him, specimens of tobacco as of the kind they were supplying him, when in fact they were making a different and inferior kind, it was held, notwithstanding acceptance and payment, the plaintiff was entitled to recover damages for the loss sustained.5 However if a party assert that he relied upon the statement of another, instead of using the means of information at his hands, the burden of proof is upon him to establish the statement. For, where persons can see for themselves if they choose to look, a presumption arises that they do look and 1 Oswald v. McGehee, 28 Miss. 340; Baker v. Seahorn, 1 Swan, 54. It was said in Baker v. Seahorn that if the vendor of a horse merely suggest a doubt as to the goodness of the animal's eyes, knowing that they are defective, this is a fraud. But see ante, p. 474. Still if prudence was disarmed, that is enough. Ante, p. 529, note. 2 Gant v. Shelton, 3 B. Mon. 423. 3 Roseman v. Canovan, 43 Cal. 111. 4 Biggs v. Perkins, 75 N. C. 397; Baker v. Seahorn, 1 Swan, 54. McAvoy v. Wright, 25 Ind. 22. ascertain the fact for themselves; and this presumption must be overcome, if they would prevail. But, as we have seen, proof that a party is diverted from looking for himself, by the act or conduct of the opposite party, will rebut the presumption.1 Even though a party sell at the risk of the purchaser, he will not be permitted to practise fraud upon him. Thus it has been held that where a party, during a negotiation for the sale of property, stated that the other contracting party must take the property at his own risk, such statement would not exonerate the party from liability for a deceitful suppression of the truth or for the suggestion of a falsehood.2 Where the parties do not stand upon an equal footing, the objection to a plea or claim of false representations, that the party to whom they were made was 'negligent' in not making inquiry or examination, has still less force and would nowhere be allowed. This rests upon the just and salutary ground that the injured party in such a case is in the power, to a greater or less extent, of the wrongdoer, so as to be more easily imposed upon than if he were standing at arm's length, and acting upon an equal footing with him. 1 Wilder v. De Cou, 18 Minn. 470, 480; Bailey v. Smock, 61 Mo. 213. 2 George v. Johnson, 6 Humph. 36. 8 Wannell v. Kem, 57 Mo. 478. CHAPTER IV. MISREPRESENTATION: INTENTION TO INDUCE ACTION. IN regard to the rule which requires the party complaining of deceit to prove that the opposite party intended his representation to be acted upon, it is to be observed that, while the rule is probably inflexible, its force appears chiefly in cases in which the deceit was practised with reference to a negotiation between the plaintiff and a third person, and not in cases of contract between the plaintiff and the defendant. In cases of contract between the parties to the suit, especially in contracts of sale, the intention to mislead obviously follows from the defendant's knowledge of the falsity of his representation; that makes a case of fraud, and no further evidence of intention is required.1 In cases of the other kind however, an example of which is found in false representations to the complaining party of the solvency of a third person, it is plain that the transaction with the third person, though shown to have been caused by the false representation in question, affords no evidence of an intention in the party complained of that the representation should be acted upon by the other. The defendant, notwithstanding his knowledge of the falsity of his representation, may not have been apprised of the fact that the plaintiff was about to act upon his representation. And this though it appeared that the defendant had not volunteered his state 1 Collins v. Denison, 12 Met. 549. Claflin v. Commonwealth Ins. Co., 110 U. S. 81. But even in cases of contract, if the representation was made to a third person, it must be made to appear that it was intended for the opposite party before he can complain of it. Savings Bank ". Albee, 63 N. H. 152. See ante, p. 12, note 1. ments, but had made them only upon inquiry by the plaintiff; for the plaintiff might have appeared to make the inquiry out of curiosity, or out of a mere general interest in the affairs of the third person. Proof of such facts would show that the defendant had not intended to injure the plaintiff. The representation would then be a mere idle falsehood. If the false representation amounted to defamation, the person who had been slandered in his character, profession, or occupation might indeed maintain an action of slander against the party uttering the language; or he might maintain an action of slander of title (so called), if false representations of the state of his property had been made to his actual damage; but no right of action would arise in favor of any one addressed, and none of course in favor of any bystander, who might have acted upon the representation to his own injury. It follows that where a party complains of false representations, whereby he was caused to suffer damage in a transaction with some third person, it devolves upon him to show expressly that the alleged wrongdoer intended, or, what is the same thing, that he may reasonably be supposed under the circumstances to have intended,1 that the plaintiff should act upon the misrepresentation; and that it is not enough to prove that the misrepresentation was made with knowledge of its falsity.2 The existence of such a class of cases as this has been recognized for a hundred years.3 And from the first case in which it is clearly enunciated, it has been settled law that it is not necessary that the misrepresentation complained of s. c. Bigelow's L. C. Torts, 1, and note, 36; Thom v. Bigland, 8 Ex. 725, 731; Tapp v. Lee, 3 Bos. & P. 367; Foster v. Charles, 6 Bing. 396; 7 Bing. 105. 3 It dates from Pasley v. Freeman, 3 T. R. 51, A. D. 1789. 1 Freeman v. Cooke, 2 Ex. 654; Carr v. London Ry. Co., L. R. 10 C. P. 307; Arnold v. Banks, 1 C. P. D. 578; Leather Manuf. Bank v. Morgan, 117 U. S. 96, 108; Hardy v. Chesapeake Bank, 51 Md. 562; Manufacturers' Bank v. Hazard, 30 N. Y. 226. 2 Pasley v. Freeman, 3 T. R. 51; 4 Pasley v. Freeman, supra. |