or damage.687 On the same principle, it is not fraud to induce a party to sign an instrument of one kind by representing it to be an instrument of another kind, where it accomplishes exactly the same result and does not work any injury to the party misled.638 So, each of the subscribers to the stock of a corporation (the whole being required to be subscribed before any subscription becomes binding) has a right to rely on the genuineness and validity of the other subscriptions. But though some of them may be forged and others obtained by false pretences, yet a subscriber is not entitled to repudiate his contract, if he does not stand in danger of any actual loss or injury.639 And a subscription to pay money to certain associates in consideration of their erecting a pork-packing house is not affected by contemporaneous parol misrepresentations that men of great wealth would take part and that collateral improvements would be made, when the house is erected according to the undertaking.640 Furthermore, the loss or injury must be actual or inevitable, not merely conjectural. Thus, an author is not justified in his refusal to permit a publisher to publish his book, as he had contracted to do, merely because of his doubts as to the publisher's solvency.641

§ 113. Duty to Investigate Truth of Representations.— It is a rule of great antiquity and supported by a great body of authorities that a person about to enter into a contract or assume an obligation should exercise reasonable care and prudence in the matter of accepting at their face value representations concerning the subject-matter made to him by the opposite party; and although the representations were false and fraudulent, and he was deceived by them and misled to his injury, yet he cannot rescind or repudiate his contract on that ground, if it appears that he might have discovered their falsity by mere inspection of the subject,

637 Turchin Sheffield Plate & Sterling Silver Co. v. Baugh (Sup.) 117 N. Y. Supp. 137.

638 Hays v. Hays, 179 Pa. 277, 36 Atl. 311.

639 Haney & Campbell Mfg. Co. v. Adaza Co-operative Creamery Co., 108 Iowa, 313, 79 N. W. 79.

640 Paddock v. Bartlett, 68 Iowa, 16, 25 N. W. 906.

641 Jewett Pub. Co. v. Butler, 159 Mass. 517, 34 N. E. 1087.

or by the exercise of reasonable diligence in recurring to sources of information which were equally open to him as to the other party.42 There are exceptions to this rule (which will be discussed in the succeeding sections), where a fiduciary relationship subsisted between the parties, where the matter was exclusively within the knowledge of one of them, where an examination of the subject-matter would require unusual pains, expense, or trouble, or involve spe

642 King v. Lamborn, 186 Fed. 21, 108 C. C. A. 123; Great Western Mfg. Co. v. Adams, 176 Fed. 325, 99 C. C. A. 615; Dalhoff Const. Co. v. Block, 157 Fed. 227, 85 C. C. A. 25, 17 L. R. A. (N. S.) 419; Metropolitan Life Ins. Co. v. Goodman, 10 Ala. App. 446, 65 South. 449; Nelson v. Brown, 164 Ala. 397, 51 South. 360, 137 Am. St. Rep. 61; Delaney v. Jackson, 95 Ark. 131, 128 S. W. 859; Lion v. McClory, 106 Cal. 623, 40 Pac. 12; Lee v. McClelland, 120 Cal. 147, 52 Pac. 300; Brandt v. Krogh, 14 Cal. App. 39, 111 Pac. 275; Gratz v. Schuler, 25 Cal. App. 117, 142 Pac. 899; Gustafson v. Rustemeyer, 70 Conn. 125, 39 Atl. 104, 39 L. R. A. 644, 66 Am. St. Rep. 92; Stephens v. Orman, 10 Fla. 9; Hunt v. Hardwick, 68 Ga. 100; Miller v. Roberts, 9 Ga. App. 511, 71 S. E. 927; Nelson v. Hudgel, 23 Idaho, 327, 130 Pac. 85; Hand v. Waddell, 167 Ill. 402, 47 N. E. 772; Jones v. Foster, 175 Ill. 459, 51 N. E. 862; Moore v. Recek, 163 Ill. 17, 44 N. E. 868; Stedman v. Boone, 49 Ind. 469; Williamson v. Hitner, 79 Ind. 233; Wood v. Wack, 31 Ind. App. 252, 67 N. E. 562; Anderson Foundry & Machine Works v. Myers, 15 Ind. App. 385, 44 N. E. 193; King v. Williams, 71 Iowa, 74, 32 N. W. 178; Exchange Bank v. E. B. Williams & Co., 120 La. 901, 45 South. 935; Rocchi v. Schwabacher, 33 La. Ann. 1364; Stone v. Pentecost, 206 Mass. 505, 92 N. E. 1021; De Grasse v. Verona Min. Co. (Mich.) 152 N. W. 242; Buford v. Caldwell, 3 Mo. 477; Champion Funding & Foundry Co. v. Heskett, 125 Mo. App. 516, 102 S. W. 1050; Brown v. Kansas City Southern Ry. Co., 187 Mo. App: 104, 173 S. W. 73; Osborne v. Missouri Pac. Ry. Co., 71 Neb. 180, 98 N. W. 685; Wustrack v. Hall, 95 Neb. 384, 145 N. W. 835; Industrial Sav. & Loan Co. v. Plummer (N. J.) 92 Atl. 583, L. R. A. 1915C, 613; Dambmann v. Schulting, 75 N. Y. 55; Creamer v. Peshkin, 81 Misc. Rep. 167, 142 N. Y. Supp. 333; Saunders v. Hatterman, 24 N. C. 32, 37 Am. Dec. 404; Waymire v. Shipley, 52 Or. 464, 97 Pac. 807; Wheelwright v. Vanderbilt, 69 Or. 326, 138 Pac. 857; Griffith v. Herr, 17 Pa. Super. Ct. 601; Baum v. Raley, 53 S. C. 32, 30 S. E. 713; Winter v. Johnson, 27 S. D. 512, 131 N. W. 1020; Perkins v. McGavock, Cooke (Tenn.) 415; Corbett v. McGregor (Tex. Civ. App.) 131 S. W. 422; Equitable Life Assur. Soc. v. Maverick (Tex. Civ. App.) 78 S. W. 560; Mutual Life Ins. Co. v. Hargus (Tex. Civ. App.) 99 S. W. 580; Stewart v. Larkin, 74 Wash. 681, 134 Pac. 186; Francois v. Cady Land Co., 149 Wis. 115, 135 N. W. 484; Morgan v. Hodge, 145 Wis. 143, 129 N. W. 1083; Shaw v. Gilbert, 111 Wis. 165, 86 N. W. 188. Compare Maxon-Nowlin Co. v. Norswing, 166 Cal. 509, 137 Pac. 240.

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cial training or technical knowledge, and so on. But in the absence of such circumstances, the rule applies that where the subject-matter of false representations is at hand, and the truth easily ascertainable, one cannot be heard to say that he has been defrauded by such representations, if he neglected to avail himself of a present and reasonable opportunity to learn the truth.43 "The misrepresentations which will vitiate a contract of sale and prevent a court of equity from aiding its enforcement must relate to a matter, respecting which the complaining party did not possess at hand the means of knowledge. * * A court of equity will not undertake, any more than a court of law, to relieve a party from the consequences of his own inattention and carelessness. Where the means of knowledge are at hand and equally available to both parties, and the subject of purchase is alike open to their inspection, if the purchaser does not avail himself of these means and opportunities, he will not be heard to say that he has been deceived by the vendor's misrepresentations. If, having eyes, he will not see matters directly before them, where no concealment is made or attempted, he will not be entitled to favorable consideration when he complains that he has suffered from his own voluntary blindness, and been misled by over-confidence in the statements of another." 644 "In determining whether the representations are mere expressions of an opinion or statements of fact as such, reference must always be had to the subject-matter to which they relate, the circumstances under which they were made, and the difference in the means of knowledge in reference to the matter between the plaintiff and defendant. If the plaintiff ought, by reasonable diligence, to have known the truth or falsity of the statements, or had equal facilities for knowing as the defendant, he cannot be blindly believing where he ought not to have believed, or trusting where

643 Mulholland v. Washington Match Co., 35 Wash. 315, 77 Pac. 497; Pigott v. Graham, 48 Wash. 348, 93 Pac. 435, 14 L. R. A. (N. S.) 1176; Strubhar v. Shorthose, 78 Ill. App. 394; Mather v. Barnes (C. C.) 146 Fed. 1000; Civ. Code Ga. 1910, § 4581.

644 Slaughter's Adm'r v. Gerson, 13 Wall. 379, 20 L. Ed. 627.

he ought not to have trusted, or, shutting his eyes where he ought to have kept them open, charge the defendant with the consequences of his folly. Every man is bound to exercise his judgment when he can do so, but when the means of forming a correct conclusion are peculiarly possessed by one, then, if that person misrepresents and deceives another to his damage, he is liable, otherwise not." 645 "Fraud consists in a willful misrepresentation of facts, or in fraudulent concealment of them with a view to deceive. If a party honestly believes the representations which he makes to be true, he is guilty of no moral turpitude or legal responsibility for making them. To be guarded against injury, each of the contracting parties should inform himself of the true state of the facts, or exact a warranty from the other for his indemnity, knowing, as he should be taught by the law, that he has no redress over or discharge from his contract, unless he has been deceived into it by the willful misrepresentations or fraudulent concealment of material facts by the other contracting party." 646

This rule is not restricted to cases of sales, but applies equally to other classes of contracts. For instance, a subscriber for stock in a corporation must be deemed to know what he could have known by the exercise of reasonable diligence; and where he could have verified any of the statements inducing the subscription, and could have ascertained everything about the affairs of the corporation, he may not complain on the ground of fraud.647 So, the misrepresentation to another of the contents of a writing, which both have the opportunity and ability to read, and which both sign, where the one does not fraudulently prevent the other from reading it, does not vitiate the writing.648 And a representation as to the market value or current market price of a commodity which is the subject of

645 2 Add. Torts (Wood's edn.) § 1175, note.

646 Livermore v. Middlesborough Town-Lands Co., 106 Ky. 140, 50 S. W. 6.

647 In re American Nat. Beverage Co. (D. C.) 193 Fed. 772.

648 Dunham Lumber Co. v. Holt, 123 Ala. 336, 26 South. 663; United Breeders' Co. v. Wright, 134 Mo. App. 717, 115 S. W. 470. And see, supra, § 52.

the bargain may not be relied on where the true figure can easily be ascertained.649

The rule applies with special force where the matter about which the person claims to have been deceived is a matter within his own personal knowledge. Thus, where an insurance company induced the insured person to settle his claim by representing that, in the application for the policy, then in the insurer's possession, the insured made false statements vitiating the policy, he has no cause of action for deceit, for he must be presumed to know whether or not he signed such a statement, and should have demanded an inspection of the application.50 So the rule is closely applied in cases where the representations relate to matters which can easily be verified by mere inspection, as, where they concern the physical condition of property, its appearance, dimensions, weight, or the like,651 or where an instrument or document shows on its face that it is not what it is represented to be.652 So, where one about to sell a stock of goods represented to the prospective buyer that the stock was worth the invoice price, was practically new, and first-class in every respect and readily salable, and the stock was at hand and the buyer competent to examine it, it was held that the representations related to matters of judgment, concerning which the buyer was required to judge for himself. 653 Also there seems to be special ground for the application of this rule in cases where the party is bound, for other reasons, to be cognizant of the facts. Thus, a misrepresentation made to a board of public officers, concerning a fact which they can ascertain for themselves and which they are bound to know as pertaining to their own duties, but as to which they neglect to inform themselves, does not furnish ground for the interference of a court of equity.654 And where a party places the conduct

649 Kincaid v. Price, 82 Ark. 20, 100 S. W. 76; Graffenstein v. Epstein, 23 Kan. 443, 33 Am. Rep. 171.

650 Davis v. Phoenix Ins. Co., 81 Mo. App. 264.

651 Rowland Lumber Co. v. Ross, 100 Va. 275, 40 S. E. 922; Trammell v. Ashworth, 99 Va. 646, 39 S. E. 593.

652 Hines v. Royce, 127 Mo. App. 718, 106 S. W. 1091.

653 Griffith v. Strand, 19 Wash. 686, 54 Pac. 613.

654 Churchill Tp. v. Cummings Tp., 51 Mich. 446, 16 N. W. 805.

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