of fact, material to the transaction, to induce the other to act thereon, and such other reasonably does so act, to his prejudice, he may avoid the result on the ground of fraud, actual or constructive, and may have the aid of equity to that end, and it is not a sufficient answer to his claim for the person making the representations to say that he did so honestly, since it is his duty to know whereof he speaks, or not to speak at all as of his knowledge.482 This rule has also been enacted by statute in Georgia, where it is provided that "fraud may exist by misrepresentation by either party, made with design to deceive, or which does actually deceive, the other party; and in the latter case such misrepresentation voids the sale, though the party making was not aware that his statement was false." " 483 But it is said that the rule does not apply in the case of a sale which comes within the rule or doctrine of caveat emptor, that is, where no warranty is given either expressly or by implication, where the purchaser has full opportunity for inspection and is bound to be vigilant in his own interest, and where, consequently, he has no legal right to rely on any representations made to him.484

§ 103. Same; Falsity in Express or Implied Assertion of Knowledge.-In the contemplation of equity, he who makes a representation as of his own knowledge, without knowing whether it is true or false, whereas it is actually untrue, is guilty of fraud as much as if he knew it to be untrue. In such a case he acts falsely, to his own knowledge, and the law imputes a fraudulent intent.485 The affirmation of what one does not know or believe to be true is equally, in morals and in law, as unjustifiable as the affirmation of what is known to be positively false.486 Hence we have the rule that a person who makes repre

482 Kathan v. Comstock, 140 Wis. 427, 122 N. W. 1044, 28 L. R. A. (N. S.) 201. But representations by a vendor as to the value of land, which he expressly states he has never seen, cannot be deemed fraudulent. Bunck v. McAulay, 84 Wash. 473, 147 Pac. 33. 488 Civ. Code Ga. 1910, § 4113.

484 Dorsey v. Watkins (C. C.) 151 Fed. 340.

485 Stimson v. Helps, 9 Colo. 33, 10 Pac. 290.

486 Crislip v. Cain, 19 W. Va. 438; Tolley v. Poteet, 62 W. Va. 231, 57 S. E. 811.

sentations concerning a material fact which is of such a nature as to be susceptible of definite knowledge, and asserts it to be true to his personal knowledge (as distinguished from his belief or opinion), when he does not know whether it is true or not, is guilty of falsehood if the assertion is actually untrue, being conscious of his want of knowledge, even though he supposes or believes it to be true. And if the representations are thus made with the intention that they shall be accepted and acted on by another, who does so act to his prejudice, and the party making the representations secures an undue advantage thereby, it is an actionable fraud, and the party is subject to the same liabilities as if the representations had been made with full knowledge of their falsity.487 As

487 Shahan v. Brown, 167 Ala. 534, 52 South. 737; Hutchinson v. Gorman, 71 Ark. 305, 73 S. W. 793; Browning v. National Capital Bank, 13 App. D. C. 1; Upchurch v. Mizell, 50 Fla. 456, 40 South. 29; Miller v. John, 208 Ill. 173, 70 N. E. 27; Ames v. Thren, 125 Ill. App. 312; Crane v. Schaefer, 140 Ill. App. 647; Snively v. Meixsell, 97 Ill. App. 365; John Gund Brewing Co. v. Peterson, 130 Iowa, 301, 106 N. W. 741; Davis v. Central Land Co., 162 Iowa, 269, 143 N. W. 1073, 49 L. R. A. (N. S.) 1219; Haigh v. White Way Laundry Co., 164 Iowa, 143, 145 N. W. 473, 50 L. R. A. (N. S.) 1091; Hanson v. Kline, 136 Iowa, 101, 113 N. W. 504; Ballard v. Thibodeau, 109 Me. 559, 84 Atl. 412; Braley v. Powers, 92 Me. 203, 42 Atl. 362; Litchfield v. Hutchinson, 117 Mass. 195; Adams v. Collins, 196 Mass. 422, 82 N. E. 498; Weeks v. Currier, 172 Mass. 53, 51 N. E. 416; Wann v. Northwestern Trust Co., 120 Minn. 493, 139 N. W. 1061; Flaherty v. Till, 119 Minn. 191, 137 N. W. 815; Riggs v. Thorpe, 67 Minn. 217, 69 N. W. 891; Vincent v. Corbett, 94 Miss. 46, 47 South. 641, 21 L. R. A. (N. S.) 85; Western Cattle Brokerage Co. v. Gates, 190 Mo. 391, 89 S. W. 382; Chase v. Rusk, 90 Mo. App. 25; Paretti v. Rebenack, 81 Mo. App. 494; Miller v. Rankin, 136 Mo. App. 426, 117 S. W. 641; Leach v. Bond, 129 Mo. App. 315, 108 S. W. 596; Stark Brothers Nurseries & Orchards Co. v. Mayhew, 160 Mo. App. 60, 141 S. W. 433; Crosby v. Wells, 73 N. J. Law, 790, 67 Atl. 295; Thompson v. Koewing, 79 N. J. Law, 246, 75 Atl. 752; Hadcock v. Osmer, 153 N. Y. 604, 47 N. E. 923; Frank v. Bradley & Currier Co., 42 App. Div. 178, 58 N. Y. Supp. 1032; Lambert v. Elmendorf, 124 App. Div. 758, 109 N. Y. Supp. 574; Schoeneman v. Chamberlin, 55 App. Div. 351, 67 N. Y. Supp. 284; Kramer v. Bjerrum, 19 App. Div. 332, 46 N. Y. Supp. 496; Prahar v. Tousey, 93 App. Div. 507, 87 N. Y. Supp. 845; Modlin v. Roanoke R. & Lumber Co., 145 N. C. 218, 58 S. E. 1075; Pate v. Blades, 163 N. C. 267, 79 S. E. 608; Bonelli v. Burton, 61 Or. 429, 123 Pac. 37; Thompson v. Chambers, 13 Pa. Super. Ct. 213; United States Gypsum Co. v. Shields (Tex. Civ. App.) 106 S. W. 724; Gibbens v. Bourland (Tex. Civ. App.) 145 S. W. 274; Goodwin v. Daniel

stated in one of the cases: "If a man, having no knowledge whatever upon the subject, takes upon himself to represent a certain state of facts to exist, he does so at his peril; and if it be done either with a view to secure some benefit to himself, or to deceive a third person, he is in law guilty of a fraud, for he takes upon himself to warrant his own belief of the truth of that which he asserts."

"488

The foregoing rule is a rule applicable at law, and not only in equity. It is enforced in actions for damages for deceit or fraud. But since, as stated in the preceding section, scienter is a necessary part of the proof in actions of this kind, whereas it is not so in suits in equity for rescission, it is evident that the case of representations made as of a party's own knowledge, when he is ignorant of the facts, must furnish an even stronger ground for rescission than for an action of deceit. And it is so held.489 It will be observed that the falsehood in a case of this kind consists in the assertion that the party possesses knowledge which he does not in fact possess. And this need not be an explicit assertion or affirmation that the party speaks from his own knowledge, but may follow as a necessary inference from the form in which he makes his statement. An unqualified statement that a fact exists, made by one to induce another to act on it, implies that the former knows it to exist and speaks from his own knowledge.490 (Tex. Civ. App.) 93 S. W. 534; Benton v. Kuykendall (Tex. Civ. App.) 160 S. W. 438; Grant v. Huschke, 74 Wash. 257, 133 Pac. 447; Arrowsmith v. Nelson, 73 Wash. 658, 132 Pac. 743; Dickinson v. Chesapeake & O. R. Co., 7 W. Va. 390; James v. Piggott, 70 W. Va. 435, 74 S. E. 667; Krause v. Busacker, 105 Wis. 350, 81 N. W. 406; Helberg v. Hosmer, 143 Wis. 620, 128 N. W. 439. Compare Bradley v. Oviatt, 86 Conn. 63, 84 Atl. 321, 42 L. R. A. (N. S.) 828; People's Nat. Bank v. Central Trust Co., 179 Mo. 648, 78 S. W. 618. See O'Neill v. Conway, 88 Conn. 651, 92 Atl. 425; Wheatcraft v. Myers, 57 Ind. App. 371, 107 N. E. 81; Bloomquist v. Farson, 88 Misc. Rep. 615, 151 N. Y. Supp. 356; First Nat. Bank of Tigerton v. Hackett, 159 Wis. 113, 149 N. W. 703.

488 Evans v. Edmonds, 13 C. B. 786.

489 L. D. Garrett Co. v. Appleton, 101 App. Div. 507, 92 N. Y. Supp. 136; Dickinson v. Chesapeake & O. R. Co., 7 W. Va. 390; Olcott v. Bolton, 50 Neb. 779, 70 N. W. 366; Annis v. Ferguson, 27 Ky. Law Rep. 56, 84 S. W. 553.

490 New v. Jackson, 50 Ind. App. 120, 95 N. E. 328.

Hence a case is made out when it is shown that the representation was made in a form calculated to convey the impression that the party had actual knowledge of the truth of the matter, and intended to convey that impression, and which did actually convey it, though he may not have distinctly asserted that he knew the truth.491 An intent to deceive is essential to sustain an action for false representations, and the rule that one who makes representations which are untrue, upon a subject as to which he has no knowledge, may be held liable for deceit, should be limited to cases where the circumstances indicate that he intended the injured party to suppose that he spoke from actual knowledge.492

These principles are illustrated in a case before the Supreme Court of the United States, where the action was to recover royalties alleged to be due under a mining lease. Defendants alleged and gave evidence to show that, at the time they took the lease, the mine was flooded so that they could not examine it, but the plaintiff represented that it was a valuable mine and would produce a large amount of zinc and other ores and would be a profitable investment. The following instructions given by the court below were approved on appeal: "A person who makes representations of material facts, assuming or intending to convey the impression that he has actual knowledge of the existence of such facts, when he is conscious that he has no such knowledge, is as much responsible for the injurious consequences of such representations, to one who believes and acts upon them, as if he had actual knowledge of their falsity. Deceit may also be predicated of a vendor or lessor who makes material untrue representations in respect to his own business or property, for the purpose of their being acted upon, and which are in fact relied upon, by the purchaser or lessee, the truth of which representations the vendor or lessor is bound and must be

491 Altoona State Bank v. Hart, 82 Kan, 398, 108 Pac. 818; Brown v. Le May, 101 Ark. 95, 141 S. W. 759; Booth v. Englert, 105 App. Div. 284, 94 N. Y. Supp. 700; Foix v. Moeller (Tex. Civ. App.) 159 S. W. 1048.

492 Marsh v. Falker, 40 N. Y. 562.

presumed to know." Touching the alleged representations as to the value of the leased property, the court said that "general assertions by a vendor or lessor that the property offered for sale or to be leased is valuable or very valuable, although such assertions turn out to be untrue, are not misrepresentations amounting to deceit, nor are they to be regarded as statements of existing facts upon which an action for deceit may be based, but rather as the expressions of opinion or belief; that, as a general rule, fraud upon the part of a vendor or lessor, by means of representations of existing material facts, is not established unless it appears that such representations were made for the purpose of influencing the purchaser or lessee, and with knowledge that they were untrue; but where the representations are material, and are made by the vendor or lessor for the purpose of their being acted upon, and they relate to matters which he is bound to know, or is presumed to know, his actual knowledge of their being untrue is not essential." 498

A similar decision was made in a case where it was alleged that a board of water commissioners and its engineer, in printed notices and statements to contractors, and in other verbal statements corroborative of them, for the purpose of supplying information to contractors expected to act upon it in bidding on the construction of a dam and reservoir, made certain representations as to the approximate amount of work in the proposed project.. It was held that such representations carried with them the assertion of being made upon some basis of superior knowledge and information, and the contractors were entitled to accept and act upon them as such; so that, if they acted upon the faith of the representations and they were untrue, the board would be liable for a fraud, although it did not know that the representations were false. 194 So a statement made by an agent to a prospective purchaser of land that he once owned the land himself

493 Lehigh Zinc & Iron Co. v. Bamford, 150 U. S. 665, 14 Sup. Ct. 219, 37 L. Ed. 1215.

494 Board of Water Com'rs of New London v. Robbins, 82 Conn. 623, 74 Atl. 938.