In the other of the three actions however the contract, as the court said, did not purport, nor did the plaintiffs intend, to convey to the person who was present and ordered the goods. The buyer introduced himself as a brother of Edward Pape, of Dayton, buying for him. The plaintiffs now understood that they were dealing with the real Edward Pape, and intended to sell to him. Hence, upon these facts, there was no contract; the relation of vendor and purchaser had never been created; and the defendant was liable for the value of the goods.1

In another recent case,2 an action of tort to recover the value of two hundred bedsteads, it appeared that P went to the plaintiff in Maine and gave to him the business card of H. & Co. of Boston, and falsely said that he was A. P., a member of the firm. He wanted bedsteads, of which the plaintiff was maker. The plaintiff agreed, and sent the goods to Boston directed to H. & Co., who refused to receive them. P then took them from the carrier and sold them to the defendant for value and without notice. It was held that the plaintiff was entitled to recover, on the ground that no contract had been made with P.

We have seen that in certain cases silence, in negotiations for insurance, may have the effect to prevent a contract from coming into existence. It follows a fortiori, and it has been laid down, that misrepresentation may have the same effect.3

v. Melvor, L. R. 6 Ex. 36; Heugh v. London Ry. Co., L. R. 5 Ex. 51; Clough v. London Ry. Co., L. R. 7 Ex. 26. Comp. upon the whole subject Ashwell's Case, 16 Q. B. D. 190, where a coin was loaned to the prisoner as a shilling, which was in fact, but not so known at the time to either of the parties, a sovereign. The prisoner having afterwards discovered the fact, appropriated the coin, and was indicted for larceny. The judges were divided

upon the question whether the prisoner was guilty of larceny at common

law.

1 To the same effect Alexander v. Swackhamer, 105 Ind. 81.

2 Moody v. Blake, 117 Mass. 23. 3 Campbell v. New England Life Ins. Co., 98 Mass. 381, 390, 396, Wells, J. citing 3 Kent, 282, 6th ed.; Curry v. Commonwealth Ins. Co., 10 Pick. 535; Wilbur v. Bowditch Ins. Co., 10 Cush. 446; Kimball v. Ætna Ins. Co.,

Still it cannot be true that misrepresentation, even fraudulent misrepresentation, always has the effect of preventing the creation of a (de facto or voidable) contract of insurance; for the minds of the parties may have met perfectly notwithstanding the misrepresentation, as where the fact untruly stated is of the name of another company in which the plaintiff is insured, or of the amount insured in that company, or of its solvency, or of any other fact not changing substantially the complexion of the risk. If however facts which would make a particular risk are so misrepresented as to make an entirely different risk, especially a greater one, then it may be said that the minds of the parties have not met, and there is no contract; there has been mistake on the part of the underwriter in regard to the real risk to be insured.2

§ 2. ACT NOT MISREPRESENTATION.

It is probable that fraud of the kind under consideration may be committed as well by deceptive acts (short of larceny) not of the character of misrepresentation as by misrepresentation. A negotiable or an unnegotiable instrument may be obtained from a party to it, before its delivery, by stratagem or other artful manœuvre consisting of true deception, where nothing has been said or done in the way of representation, in the natural sense of that term. Such a case would perhaps arise where a mere custodian had delivered the instrument contrary to the directions of the maker.8

It is perfectly clear that if the instrument was obtained by

9 Allen, 540; Sawyer v. Coasters' Ins. Co., 6 Gray, 231; 1 Arnould, Insurance, 494, 495, and cases cited.

a life insurance, of the age of the applicant?

3 So held in Chipman v. Tucker, 38

1 Goddard v. Monitor Ins. Co. 108 Wis. 43, Roberts v. McGrath, ib. 52,

Mass. 56.

2 But what difference can there be between a misrepresentation, in a sale of a horse, of the age of the animal, and a misrepresentation, in negotiating

and in Roberts v. Wood, ib. 60. But there is some ground for doubt. Chipman v. Tucker was based upon Burson v. Huntington, 21 Mich. 415; but that case hardly goes so far.

a criminal act, no liability can arise against the parties to it at that time, in favor of any holder whomsoever; and this though the party against whom the crime was committed may have been somewhat careless, as by leaving the paper in an unlocked drawer to which his clerk, or some other servant or person, had access. The case, it seems, would be different where there was no criminal act, on the ground of negligence. But where there has been no negligence, it is believed that no liability can be created through a delivery effected by fraud, though no crime was committed; there can be no assent, nor anything tantamount to assent, in such a

case.

1 Baxendale v. Bennett, 3 Q. B. D. 525, C. A.; Burson v. Huntington, 21 Mich. 415; Fisher v. Beckwith, 30 Wis. 55.

2 Burson v. Huntington, supra; Chapman v. Rose, 56 N. Y. 137; Whitney v. Snyder, 2 Lans. 477; Foster v. Mackinnon, L. R. 4 C. P. 704.

CHAPTER XII.

CONSEQUENCES OF DECEPTION.

THUS far we have had under consideration what constitutes actionable or relievable deception; it remains to consider the consequences attending the wrong. now only with the substantive law; been considered, in treating of the adjective law.

And we are concerned remedies have already

§ 1. MEASURE OF DAMAGES.

The measure of damages will demand attention first. Damages have sometimes, as in Massachusetts, been treated as belonging to the law of remedies rather than to that of substantive rights; but that in principle is a clear mistake. How much a plaintiff is entitled to recover is as much a matter of substantive law as is his right to recover at all.2

The general rule in regard to the measure of damages in actions for deception is commonly stated in substance thus: The defendant is liable, not for everything that follows upon his fraud, but for what may be presumed to have been within his contemplation at the time, as a man of average intelligence.3

The following has been set down in illustration: If one should merely sell timber, which was used to prop up a building, and, by reason of the imperfection of the timber, the building should fall and be destroyed, the seller, though he

1 See Ayer v. Tilden, 15 Gray, 178. Contra of stipulated interest. Ib. There is no sound reason for

such a distinction.

2 Ex parte Heidelback, 2 Lowell, 526,

Lowell, J. denying the Massachusetts rule.

3 Crater v. Binninger, 4 Vroom, 503; Noyes v. Blodgett, 58 N. H. 502; Faris v. Lewis, 2 B. Mon. 375.

had been guilty of fraud in the sale, would not be liable beyond the difference in value between good timber and that sold. The falling of the building could not have been contemplated from the point of view of the parties in the matter of the sale. But if the timber was sold for the very purpose of propping the building, the seller would be liable for all the damage done to the building as within his contemplation.1 And so it was held that if a plaintiff has been fraudulently enticed into an oil speculation by the defendant, the defendant would be answerable for all money put into the business by the plaintiff in the ordinary course.2

It is consistent with the rule under consideration that, in an action for damages caused by the communication of disease by sheep of a vendor who had falsely represented them to be sound, the purchaser, if not at fault, may recover for the loss of other sheep infected, which he owned at the time of the purchase, though the vendor did not know that he owned other sheep. For it was to be presumed that one who was buying sheep had other sheep.

Again if the vendor of a horse, cow, or other animal fraudulently conceal the fact that the animal has a contagious or infectious disease, and the purchaser, not knowing or having reason to know the fact, places the animal with others of the same kind, to which the disease is communicated, the purchaser can recover as damages the value of all the animals lost thereby; or in case none are lost or rendered worthless by taking the disease, he can recover the difference between their value after sickness and before, together, no doubt, with the cost of attempting to cure them.

The rule under consideration implies that the defendant is

1 Crater v. Binninger, 4 Vroom, 513. Wentz v. Morrison, 17 Tex. 372; Brad2 Ib. ley v. Rea, 14 Allen, 20.

8 Marsh v. Webber, 16 Minn. 418; Noyes v. Blodgett, 58 N. H. 502.

4 Sherrod v. Langdon, 21 Iowa, 518; Marsh v. Webber, 16 Minn. 418;

5 Mullett v. Mason, L. R. 1 C. P. 559; Johnson v. Wollower, 18 Minn. 288; s. c. 15 Minn. 474.