the federal courts, and involved the sale of a silver mine, the alleged false representation being as to the richness. and value of the ore. The purchaser sent an experienced mining engineer to inspect the property, and he took samples of the ore for a test assay. The test was made in the seller's mill and in his presence and with his assistance, and he had an opportunity to inject native silver into the sample without being observed, and it was alleged that he had done so. The test exactly confirmed the seller's representation as to the value of the ore, but after the sale, no ore was found in the mine that would assay more than onefifth as much. A rescission of the sale was decreed. Lurton, J., said: "If the party making false statements as to a matter conjectural in its character, and therefore relating to a matter of opinion, actively intervenes to prevent investigation and the discovery of the truth, and such intervention be effective in the concealment of the facts and in the deception of the buyer, a clear case of operative fraud is made out. In every such case, immunity will not be extended to false expressions of opinion upon the ground of 'puffing' or 'trade talk,' if it appears that the vendor has, by his conduct, prevented investigation and induced reliance upon the statements of the seller. In such a case, the subsequent conduct of the seller in actively preventing the buyer from the formation of an independent opinion so connects itself with the original misrepresentation as to become a part and parcel of the false statement, and amounts in law to the false affirmation of a fact. A false representation may, and most often does, consist in language alone, expressed or written; but it may also consist in conduct alone or external acts. * * * The gravamen of the alleged fraud lies in the allegation that when the complainants undertook to examine this property, and form an independent judgment as to its value, through the active and willful intervention of defendants, their samples were rendered untrustworthy by the secret admixture of silver in a form in which it did not exist in this mine; that the purpose was to give to these samples, otherwise representative of the average value of the ore in sight, a false and fictitious value, which would confirm the untrue statements expressed theretofore as to the silver contents of the mine. Now it must be evident that, if this was done, a most abominable fraud was practised, and that no court would suffer a contract resting upon such a foundation to stand." 99 788 § 123. Degree of Care and Vigilance Required.—It was the old rule, which is still adhered to in some jurisdictions, that a man is bound to exercise ordinary care and diligence to guard against fraud and imposition, and if he fails to do so, he cannot obtain relief in the courts, and that one cannot complain of being deceived by false and fraudulent representations, unless they were of such a nature as would be calculated to deceive an ordinarily or reasonably prudent person.789 Thus, where the representation concerns the size of a physical object which is present before the eyes of the parties, and any person of ordinary observation can see that the dimensions are not correctly given, there is no legal justification for relying on such statements." 790 So, one who can read and who has an opportunity to read a contract by which he assumes an obligation, but neglects. to read it, cannot complain that its contents were falsely stated to him.791 So, in a case where the owner of a stock of goods in a store induced another to purchase the stock as a whole by falsely representing that the goods were fresh and new, it was said: "It is certainly possible for the owner of a stock of goods to deceive a buyer who could, by examining each parcel by itself, avoid being deceived. All such transactions must be looked at reasonably. One who is as prudent on the particular occasion as most pru 788 Mudsill Mining Co. v. Watrous, 61 Fed. 163, 9 C. C. A. 415. 789 Press v. Hair, 133 Ill. App. 528; Clodfelter v. Hulett, 72 Ind. 137; Judd v. Walker, 114 Mo. App. 128, 89 S. W. 558; Alvin Fruit & Truck Ass'n v. Hartman, 146 Mo. App. 155, 123 S. W. 957; Camren v. Squires, 174 Mo. App. 272, 156 S. W. 773; Conway Nat. Bank v. Pease, 76 N. H. 319, 82 Atl. 1068; Wheelwright v. Vanderbilt, 69 Or. 326, 138 Pac. 857; Ross-Armstrong Co. v. Shaw (Tex. Civ. App.) 113 S. W. 558; City of Tacoma v. Tacoma Light & Water Co., 17 Wash. 458, 50 Pac. 55; Simons v. Cissna, 52 Wash. 115, 100 Pac. 200; Davis v. Henry, 4 W. Va. 571. 790 O. L. Packard Machinery Co. v. Schweiger, 147 Wis. 67, 132 N. W. 606. 791 Thornburgh v. Newcastle & D. R. Co., 14 Ind. 499. dent men would be, and is nevertheless cheated, can hardly be held negligent." 792 One is not required, therefore, to be on his guard against misrepresentations where the truth of the matter could not have been discovered by the exercise of ordinary care,793 or by such a casual inspection as a reasonably prudent person would not omit to make,794 but only by the expenditure of considerable time and research,795 or by constant and suspicious watching.796 A party taking a building in exchange for other property is not bound to have it examined by experts to ascertain the cause of its condition, but may rely on the statements of the other party, the latter being entirely familiar with the facts.797 So, a person buying a stock of merchandise is not negligent in relying on the vendor's representation that it is new, clean, and fresh, when a large part of it, being old and unsalable stock, was stored in boxes kept out of sight, placed on top shelving in a back room, and safe from view except on the closest inspection.798 § 124. Rejection of Rule Requiring Ordinary Prudence and Care. In many states, and more especially in recent times, the rule requiring the exercise of care and prudence to guard against fraud has been rejected, in favor of the more reasonable doctrine that, where an intention to deceive is shown, and that the false representation did actually deceive the party to whom it was addressed, it is immaterial that its falsity could have been discovered by the exercise of care and proper diligence, or that the misrepresentation would not have deceived a person of ordinary intelligence and caution.799 It is not necessary for the 792 Jackson v. Collins, 39 Mich. 557. 793 Klock v. Newbury, 63 Wash. 153, 114 Pac. 1032. 799 Mason v. R. M. Thornton & Co., 74 Ark. 46, 84 S. W. 1048; Lefler v. State, 153 Ind. 82, 54 N. E. 439, 45 L. R. A. 424, 74 Am. St. Rep. 300; State v. Fooks, 65 Iowa, 196, 452, 21 N. W. 561, 773; State v. Southall, 77 Minn. 296, 79 N. W. 1007; State v. Montgomery, 56 Iowa, 195, 9 N. W. 120; Miller v. People, 22 Colo. 530, 45 Pac. 408; State v. Stewart, 9 N. D. 409, 83 N. W. 869; State v. complaining party to show that a reasonably prudent man would have relied on the representations under the same circumstances,800 nor is it a defense that a man of ordinary ability would not have believed them.801 "It was once thought that the law was only for the protection of the strong and prudent. That notion has ceased to prevail." 802 "The design of the law is to protect the weak and credulous from the wiles and stratagems of the artful and cunning, as well as those whose vigilance and sagacity enable them to protect themselves." 803 Notable in this connection is a ruling of the Supreme Court of Indiana, in which a long line of its own previous decisions was overruled. Said the court: "In England and many of the states, the rule is that any pretense which deceives the person defrauded is sufficient to sustain an indictment, although it would not have deceived a person of ordinary prudence. * * In reason, and it is believed according to the better modern authorities, a pretense calculated to mislead a weak mind, if practised on such a mind, is just as obnoxious to the law as one calculated to overcome a strong mind, practised on the latter. * * * The great weight of the authorities and the better reason sustain the rule that it is not necessary that the pretense be such as will impose upon a man of ordinary caution, or as cannot be guarded against by ordinary care and prudence. The object and purpose of the law is to protect not only the man of ordinary care and prudence, but also the weak and credulous against the strong, the ignorant, inexperienced, and unsuspecting against the experienced and unscrupulous. * An inexperienced person, a child, or a feeble old man might * * Keyes, 196 Mo. 136, 93 S. W. 801, 6 L. R. A. (N. S.) 369, 7 Ann. 800 Riley v. Bell, 120 Iowa, 618, 95 N. W. 170. be induced to part with his property by false pretenses so flimsy and absurd as not to influence a man of ordinary prudence, and the falsity of which would at once be apparent to a man of experience. Still, if the representations were such as to secure the credit of such a person and deprive him of the possession of his property, no matter how absurd such representations may appear to a person of more experience and of greater sagacity, they would be such representations as are contemplated by the statute." 97804 The § 125. Relative Situation of Parties as to Mental and Business Capacity.-From what has been said in the two preceding sections, it will be perceived that the inflexible rules of the common law are gradually but surely giving way to the more enlightened doctrines of equity. common law, in regard to the exercise of vigilance to detect and guard against fraud, sets up a purely artificial standard of conduct to which every person is expected to conform, that, namely, of the "man of ordinary care and prudence." If the victim of a fraud happens not to be a person of ordinary care and prudence, it is so much the worse for him and so much the better for the person who has defrauded him. But by the principles of equity, every case is to be determined according to its own particular circumstances, and it is eminently proper, and necessary to a right decision, to take into account the relative situation of the parties with reference to mental capacity, experience, shrewdness, and native cunning. The test should therefore be, whether or not the false representations were such as were calculated to deceive a person of such a degree of intelligence and experience as the defrauded party did actually possess, and were such as a person of that measure of intelligence might well be supposed to accept and rely on, and not whether he might have discovered their falsity by the exercise of care and vigilance." This principle is vig 805 804 Lefler v. State, 153 Ind. 82, 54 N. E. 439, 45 L. R. A. 424, 74 Am. St. Rep. 300. 805 Pye v. Pye, 133 Ga. 246, 65 S. E. 424; Foster v. State, 8 Ga. App. 119, 68 S. E. 739; McKee v. State, 111 Ind. 378, 12 N. E. 510: Lefler v. State, 153 Ind. 82, 54 N. E. 439, 45 L. R. A. 424, 74 Am. St. BLACK RESC.-23 |