those which belong to the nature, character, condition, title, safety, use, or enjoyment, &c., of the subject-matter of the contract, such as natural or artificial defects in the subject-matter. Extrinsic circumstances are properly those which are accidentally connected with it, or rather bear upon it at the time of the contract, and may enhance or diminish its value or price, or operate as a motive to make or decline the contract; such as facts respecting the occurrence of peace or war, the rise or fall of markets, the character of the neighborhood,1 the increase or diminution of duties, or the like circumstances.

§301. Same. In regard to extrinsic as well as to intrinsic circumstances the Roman law seems to have adopted a very liberal doctrine, carrying out to a considerable extent the clear dictates of sound morals. It required the utmost good faith in all cases of contracts involving mutual interests; and it therefore not only prohibited the assertion of any falsehood, but also the suppression of any facts touching the subject-matter of the contract of which the other party was ignorant, and which he had an interest in knowing. In an especial manner it applied this doctrine to cases of sales, and required that the vendor and vendee should disclose, each to the other, every circumstance within his knowledge touching the thing sold, which either had an interest in knowing. The declaration in regard to the vendor (as we have seen) is, "Dolum malum a se abesse præstare venditor debet; qui non tantum in eo est, qui fallendi causa obscure loquitur; sed etiam, qui insidiose, obscure dissimulat; " and the same rule was applied to the vendee.2 According to these principles the vendor was by the Roman law required not only not to conceal any defects of the thing sold, which were within his knowledge, and of which the other party was ignorant, whenever those defects might, as vices upon the implied warranty created by the sale, entitle him to a redhibition or a rescission of the contract, but also all other defects which the other party was interested in knowing.3

$302. Doctrine of Caveat Emptor Applies. In regard to intrinsic circumstances the common law however has in many cases adopted a rule very different from that of the civil law, and especially in cases of sales of goods. In such cases the maxim" caveat emptor." is applied; and unless there be some misrepresentation 1 Pothier De Vente, n. 236.

2 Dig. Lib. 18, tit. 1, l. 43, § 2; Pothier De Vente, n. 233 to 241; Id. n. 296; ante, § 270; Laidlaw v. Organ, 15 U. S. 178, 4 L. Ed. 214; Pothier De Vente, cited in note c, p. 185.

3 Pothier De Vente, n. 235.

or artifice to disguise the thing sold, or some warranty as to its character or quality, the vendee is understood to be bound by the sale, notwithstanding there may be intrinsic defects and vices in it, known to the vendor and unknown to the vendee, materially affecting its value. However questionable such a doctrine may be in its origin, in point of morals or general convenience (upon which many learned doubts have at various times been expressed), it is too firmly established to be now open to legal controversy; 1 and Courts of Equity as well as Courts of Law abstain from any interference with it.

$303. Same. In regard to intrinsic circumstances generally Courts of Equity as well as Courts of Law seem to adopt the same maxim to a large extent, and relax its application only when there are circumstances of peculiar trust or confidence or relation between the parties.2

§ 304. Silence as a Direct Affirmation.

But there are cases

of intrinsic circumstances in which Courts of Law and Courts of Equity both proceed upon a doctrine strictly analogous to that of the Roman law, and treat the concealment of them as a breach of trust and confidence justly reposed. Indeed in most cases of this sort the very silence of the party must import as much as a direct affirmation, and be deemed equivalent to it.3

$305. Same. Thus if a party taking a guaranty from a surety conceals from him facts which go to increase his risk and suffers him to enter into the contract under false impressions as to the real state of the facts, such a concealment will amount to a fraud, because the party is bound to make the disclosure; and the omission to make it under such circumstances is equivalent to an affirmation that the facts do not exist. So if a party know1 See 2 Kent, Comm. Lect. 39, pp. 478, 479 (4th ed.); 2 Black. Comm. 451.

2 The case of Martin v. Morgan, 1 Brod. & Bing. R. 289, is a strong application of the doctrine of concealment, avoiding a payment. In that case there was no special confidence between the parties; but a postdated check being paid to the holder by a banker, at a time when the latter had no funds of the drawer, and the holder knew that the drawer had become insolvent, of which the banker was ignorant, the amount was allowed to be recovered back on account of the concealment.

3 See Martin v. Morgan, 1 Brod. & Bing. 289; Pidlock v. Bishop, 3 B. & Cressw. 605; 2 Kent, Comm. Lect. 39, p. 483; Id. 488, note (4th ed.); Smith v. Bank of Scotland, 1 Dow, Parl. R. 292, 294; Etting v. Bank of United States, 24 U. S. 59, 6 L. Ed. 419.

Pidlock v. Bishop, 3 B. & Cressw. 605; post, § 512. See Carew's Case, 7 DeG. M. & G. 43. If a surety has by his conduct reasonably led a cosurety to believe that he is a principal, equity will not give him relief against the co-surety. Coleman v. Norman, 10 Heisk. 590.

ing himself to be cheated by his clerk, and concealing the fact, applies for security in such a manner and under such circumstances as holds the clerk out to others as one whom he considers as a trustworthy person, and another person becomes his security, acting under the impression that the clerk is so considered by his employer, the contract of suretyship will be void;1 for the very silence under such circumstances becomes expressive of a trust and confidence held out to the public equivalent to an affirmation.2 §306. Silence as Affecting Insurance Risk. Cases of insurance afford a ready illustration of the same doctrine. In such cases the underwriter necessarily reposes a trust and confidence in the insured as to all facts and circumstances affecting the risk which are peculiarly within his knowledge, and which are not of a public and general nature, or which the underwriter either knows or is bound to know.3 Indeed most of the facts and circumstances which may affect the risk are generally within the knowledge of the insured only, and therefore the underwriter may be said emphatically to place trust and confidence in him as to all such matters. And hence the general principle is, that in all cases of insurance the insured is bound to communicate to the underwriter all facts and circumstances material to the risk, within his knowledge; and if they are withheld, whether the concealment be by design or by accident, it is equally fatal to the contract.4

§ 307. Silence by One Whose Duty Is to Disclose Facts. The same principle applies in all cases where the party is under an obligation to make a disclosure and conceals material facts. Therefore if a release is obtained from a party in ignorance of

1 Maltby's Case, cited 1 Dow, Parl. Cas. 294; Smith v. Bank of Scotland, 1 Dow, Parl. Cas. 272. See Etting v. Bank of United States, 24 U. S.

59, 6 L. Ed. 419.

2 It is held that there is no such duty of disclosure towards a surety as there is towards one in a relation of confidence, though very little said or done may vitiate the surety's contract. Davies v. London Ins. Co., 8 Ch.

D. 469. See post, § 448, and note.

3 Marshall on Insur. B. 1, ch. 11, § 3.

4 Ibid.; Lindenau v. Desborough, 8 B. & Cressw. 586, 592; 2 Kent, Comm. Lect. 39, p. 488, note (4th ed.). It has been remarked by Lord Eldon, that concealment is of different natures; an intentional concealment, and an actual concealment, where there may be an obligation not to conceal, even if a disclosure is not required. Walker v. Symonds, 3 Swanst. R. 62; Cottingham v. Ins. Co., 168 N. C. 259, 84 S. E. 274; Gardner v. North State Mut. Life Ins. Co., 163 N. C. 367, 79 S. E. 806; Etna Life Ins. Co. v. Conway, 11 Ga. App. 557, 75 S. E. 915; Continental Ins. Co. v. Ford, 140 Ky. 406, 131 S. W. 189; Vaughan v. United States Fidelity & Guaranty Co., 137 App. Div. 623, 122 N. Y. Supp. 393.

material facts which it is the duty of the other side to disclose, the release will be held invalid. So in cases of family agreements and compromises, if there is any concealment of material facts, the compromise will be held invalid upon the ground of mutual trust and confidence reposed between the parties.2 And in like manner if a devisee, by concealing from the heir the fact that the will has not been duly executed, procures from the latter a release of his title, pretending that it will facilitate the raising of money to pay the testator's debts, the release will be void on account of the fraudulent concealment.3

§308. Undue Concealment as Affecting Fiduciary Relationship. -But by far the most comprehensive class of cases of undue concealment arises from some peculiar relation or fiduciary character between the parties. Among this class of cases are to be found those which arise from the relation of client and attorney, principal and agent, principal and surety, landlord and tenant, parent and child, guardian and ward, ancestor and heir, husband and wife, trustee and cestui que trust, executors or administrators and creditors, legatees, or distributees, appointor and appointee under powers, and partners, and part-owners. In these and the like cases the law, in order to prevent undue advantage from the unlimited confidence, affection, or sense of duty which the relation naturally creates, requires the utmost degree of good faith (uberrima fides) in all transactions between the parties. If there is any misrepresentation, or any concealment of a material fact, or any just suspicion of artifice or undue influence, Courts of Equity will interpose and pronounce the transaction void, and as far as possible restore the parties to their original rights. 4

§ 309. Concealment by an Attorney. This subject will naturally come in review in a subsequent page, when we come to consider what may be deemed the peculiar equities between parties in these predicaments, and the guards which are interposed by the law by way of prohibition upon their transactions. It may suffice here, merely by way of illustration, to suggest a few applications of the doctrine. Thus for instance if an attorney employed

1 Bowles v. Stewart, 1 Sch. & Lefr. 209, 224; Broderick v. Broderick, 1 P. Will. 240; ante, §§ 219, 220, 278, 279; Lee v. Pearce, 68 N. C. 76. 2 Gordon v. Gordon, 3 Swanst. R. 399, 463, 467, 470, 473, 476, 477: Leonard v. Leonard, 2 B. & Beatt. R. 171, 180, 181, 182.

3 Broderick v. Broderick, 1 P. Will. 239, 249.

See Ormond v. Hutchinson, 13 Ves. 51; Beaumont v. Boultbee, 5 Ves. 485; Gartside v. Isherwood, 1 Bro. Ch. R. App. 558, 560, 561.

5 Post, §§ 431 to 452.

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by the party should designedly conceal from his client a material fact or principle of law by which he should gain an interest not intended by the client, it will be held a positive fraud, and he will be treated as a mere trustee for the benefit of his client and his representatives. And in a case of this sort it will not be permitted to the attorney to set up his ignorance of law, or his negligence, as a defence or an excuse. It has been justly remarked that it would be too dangerous to the interests of mankind to allow those who are bound to advise, and who ought to be able to give good and sound advice, to take advantage of their own professional ignorance to the prejudice of others.1 Attorneys must, from the nature of the relation, be held bound to give all the information which they ought to give, and not be permitted to plead ignorance of that which they ought to know.2

In like manner a

$310. Suppression of Facts by Trustee. trustee cannot by the suppression of a fact entitle himself to a benefit to the prejudice of his cestui que trust. Thus a creditor of the husband concealing the fact cannot, by procuring himself by such concealment to be appointed the trustee of the wife, entitle himself to deduct his debt from the trust fund against the wife or her representatives, or even against the person in whose favor and at whose instance he has made the suppression.3 So if a partner who exclusively superintends the business and accounts of the concern should by concealment of the true state of the accounts and business purchase the share of the other partner for an inadequate price by means of such concealment, the purchase will be held void.

§311. [Duty of Partner to Disclose Information as to Partnership Business. Each partner occupies a dual relation; he is a trustee in respect to his dealings with the firm assets, and a cestui que trust in respect to the dealings of his copartner with the assets. Out of this dual relation arises the reciprocal duty on the part of all the partners to refrain from all concealment in their transactions affecting the community interests; and, if any one or more

1 See Lord Eldon's Judgment in the House of Lords, in Bulkley v. Wilford, 2 Clark & Finnell. R. 102, 177 to 181, 183; post, § 434; Weil v. Fineran, 78 Ark. 87, 93 S. W. 568; In re Egan, 22 S. Dak. 355, 117 N. W. 874; Cooper v. Keys & Bell, 127 Tenn. 142, 153 S. W. 844; In re Flannery, 150 App. Div. 369, 135 N. Y. Supp. 612.

2 Citizens Loan Fund & Savings Assn. v. Friedley, 123 Ind. 143, 23 N. E. 1075, 7 L. R. A. 669, 18 Am. St. Rep. 320.

3 Dalbiac v. Dalbiac, 16 Ves. 115, 124; Neville v. Wilkinson, 1 Bro. Ch. R. 543; post, § 446.

4 Maddeford v. Austwick, 1 Sim. R. 89. See Smith In re Hay, 6 Madd. R. 2.