"The principles of these cases we consider founded in sound morals and law. They rest upon the ground that the party selling property must be presumed to know whether the representation which he makes of it is true or false. If he knows it to be false, that is fraud of the most positive kind; but if he does not know it, then it can only be from gross negligence; and in contemplation of a court of equity, representations founded on mistake, resulting from such negligence, is fraud. (6 Ves., 180, 189; Jeremy, 385, 386.) The purchaser confides in it, upon the assumption that the owner knows his own property, and truly represents it; and, as was well argued in the case in Cranch, it is immaterial to the purchaser whether the misrepresentations proceeded from mistake or fraud. The injury to him is the same, whatever may have been the motives of the seller."

The rule that a person may be held liable in an action of deceit for the false statements which he may make recklessly is based upon the principle that the speaker is conscious either that he knows, or that he does not know, the truth of what he states, and that when, conscious of his ignorance, he assumes to have knowledge, he acts in bad faith and must he held to warrant the truth of his assertion, and so is liable in an action for deceit.21

In Stimson vs. Helps, 22 the Court said: "The law holds a contracting party liable as for a fraud on his express representations concerning facts material to the treaty, the truth of which he assumes to know, and the truth of which is not known to the other contracting party, where the representations were

21 20 Cyc., 27; Hanger vs. Emms,

38 Ark., 334; Trimble vs.

Reid, 97 Ky., 713.

Vol. IV.-9

22 10 Pac., 290.

false, and the other party, relying upon them, has been misled to his injury. Upon such representations so made the contracting party to whom they are made has a right to rely, nor is there any duty of investigation cast upon him. In such a case the law holds a party bound to know the truth of his representations. Bigelow, Fraud, 57, 60, 63, 67, 68, 87; Kerr, Fraud and M., 54, et seq.; 3 Wait, Act. and Def., 436. This is the law of this case, and, on the evidence, warranted the judgment of the court below.

"The objection was made below, and is renewed here, that the complaint does not state sufficient facts to constitute a cause of action. Two points are made: (1) That the complaint does not allege that the defendant knew the representations to be false; (2) That it does not allege intent to defraud.

"It is necessary, in order to constitute a fraud, that the party who makes a false representation should know it to be false. He who makes a representation as of his own knowledge, not knowing whether it be true or false, and it is in fact untrue, is guilty of fraud as much as if he know it to be untrue. In such a case he acts to his own knowledge falsely, and the law imputes a fraudulent intent. Kerr, Fraud and M., 54, et seq., and cases cited; Bigelow, Fraud, 63, 84, 453; 3 Wait, Act. and Def., 438 et seq.; 2 Estee Pr., 394 et seq. 'Fraud' is a term which the law applies to certain facts, and where, upon the facts, the law adjudges fraud, it is not essential that the complaint should, in terms, allege it. It is sufficient if the facts stated amount to a case of fraud. Kerr, Fraud and M., 366 et seq., and cases cited; 2 Estee, Pl., 423. The complaint in this case states a substantial cause of action, and is fully supported by the evidence.

"The action of the county court in refusing to allow the appellant to appeal to the district court after he had given notice of an appeal to this court, and time had been given in which to perfect it, cannot be assigned as error on this record. If it was an error, it was error not before, but after, the final judgment from which this appeal is taken."

A person is not at libetry to make positive assertions about the facts material to a transaction unless he knows them to be true; and if a statement so made is in fact false, the assertor cannot relieve himself from the imputation of fraud by pleading ignorance, but must respond in damages to any one who has sustained loss

acting in reasonable reliance upon such assertion.23

Where the vendor honestly expresses an incorrect opinion as to the amount, quality, and value of the goods he disposes of in a sale of his business and good-will thereof, and the purchaser sees or knows the property, or has an opportunity to know it, no action for false representations will lie.24

Mere "dealing talk" in the sale of goods, unless accompanied by some artifice to deceive the purchaser or throw him off his guard, or some concealment of intrinsic defects not easily detected by ordinary care and diligence, does not amount to misrepresentation.25

It is not necessary in an action of deceit to show that the defendant had any interest in the subject matter or that he received any benefit from the fraud.20 The defendant is liable, in such cases, not upon any idea of benefit to himself, but because on account of his

Lynch vs. Mercantile Trust Co., 18 Fed. Rep., 486.

24 Collins vs. Jackson, 19 N. W. Rep., 947.

25 Reynolds vs. Palmer, 19 Fed. Rep., 433.

VS.

26 Leonard vs. Springer, 197 Ill., 532, citing Weatherford Fishback, 3 Scan., 170; Eames vs. Morgan, 37 Ill., 260; Endsley vs. Johns, 120 Íll., 469.

wrongful act, he is responsible for the consequent injury to the other party.”

27

SECTION 58. PLAINTIFF'S BELIEF IN THE TRUTH OF THE REPRESENTATIONS.

It is not enough that the defendants should have known that the representations were false; it is also necessary that the plaintiff should have been ignorant of such falsity, and should have believed the statements to be true. The purpose of an action for deceit is not to punish the defendant, but to recompense the plaintiff for the injury he has received. If he had knowledge of the falsity of the statements made by the defendant, he cannot have been injured thereby. If, in spite of his knowledge of such falsity, he still enters into the contract with the defendant he must be deemed to have done so on account of some other motive than that furnished by the statements known to be false.28 And it has been held that the plaintiff cannot maintain an action of deceit merely for the loss of a good bargain, as where a vendor misrepresents the boundaries of the land and the purchaser on discovering that the vendor has no title to a part of the land within the boundaries as represented, refuses to accept the deed; the remedy being an action to recover back the purchase money.

The question, whether in each particular case, the plaintiff was justified in relying upon the representations of the defendant, or should have investigated the truth of the matter for himself, is a question of fact for the jury. The defendant can never set up the manifest absurdity of his false representations as a defense to an action of deceit against him. In Barnett

7 14 Am. and Eng. Ency. of Law,

2nd Ed., p. 153.

28 Clantman vs. Bailey, 62 N. H., 44; Stafford vs. Newson, 31 N. C., 509; Spencer vs. King,

5 Ohio S. and C. Pl. Dec., 113; Loper vs. Robinson, 54 Tex., 510.

29 20 Cy., 32; Fogan vs. Newson, 12 N. C., 20.

30

vs. Ferderick, the Court said: "It is difficult to draw a line beyond which human credulity cannot go, especially in speculations in mining stocks. If the representations were so extravagant that sensible, cautious people would not have believed them, that is a proper consideration for the jury in determining whether plaintiff believed and relied upon them; but it does not preclude a finding that plaintiff did so, nor relieve defendant from his liability for his fraud if he committed fraud. It is as much an actionable fraud wilfully to deceive a credulous person with an improbable falsehood as it is to deceive a cautious, sagacious person with a plausible one. The law draws no line between the two falsehoods. It only asks, in either case, was the lie spoken with intent to deceive and defraud, and was the false statement believed and money paid on the faith that it was true? These questions are for the jury."

SECTION 59. NECESSITY THAT THE

SHOULD

DEFENDANT

HAVE MADE THE REPRESENTATION

WITH THE INTENTION THAT IT SHOULD

BE ACTED UPON.

The representation, relied upon as the basis of the suit, must have been made with the intention of being acted upon. It is sufficient that the representations were either made especially to the plaintiff; or to a class of persons in which the plaintiff was included; or generally to the public with the intention of inducing anyone who would to act upon them. Fraudulent mining advertisements will serve as a very common illustration of this last method. The plaintiff cannot recover on the strength of representations, 30 78 Wis., 1, 11; 47 N. W., 6.