the most part, this distinction is not recognized, but the courts of law are held competent to give relief as against either kind of fraud.19

§ 21. Definitions of Fraud.-Fraud may be defined as any trick or artifice, whether perpetrated by means of false statements, concealment of material facts, or deceptive conduct, which is intended to (and does) create in the mind of another an erroneous impression concerning the subjectmatter of a transaction, whereby the latter is induced to take action, or to forbear from acting, with reference to a property or legal right of his which results to his disadvantage, and which he would not have consented to had the impression in his mind been correct and in accordance with the real facts.20 Thus, it is said that fraud consists in an undue advantage taken of a party under circumstances which mislead, confuse, or disturb the just results of his judgment, and thus expose him to be the victim of the wilful, the importunate, and the cunning.21 "A wilful intent to deceive, or such gross negligence as is tantamount thereto, and the actual deceit of the victim, to his damage, are essential elements of actual fraud. The perpetrator must have been guilty of some moral turpitude or of some breach of duty, and the victim must have been deceived and must have acted upon the deceit." 22 "Fraud is falsehood applied to the purpose of injury, and will not, in the legal sense of the term, exist unless there is, first, an endeavor to deceive, and, next, a false impression produced. Both of these things must concur, and the existence of both must in some appropriate way be established by the complainant."

"23

19 Goodwin v. Fall, 102 Me. 353, 66 Atl. 727; Western Mfg. Co. v. Cotton, 31 Ky. Law Rep. 1130, 104 S. W. 758, 12 L. R. A. (N. S.) 427; Griffith v. Strand, 19 Wash. 686, 54 Pac. 613.

20 In re Nuttall (D. C.) 201 Fed. 557; Alexander v. Church, 53 Conn. 561, 4 Atl. 103; Maher v. Hibernia Ins. Co., 67 N. Y. 283; Gewin v. Shields, 167 Ala. 593, 52 South. 887; Lacoste v. Handy, Man. Unrep. Cas. (La.) 348; Great Northern Mfg. Co. v. Brown, 113 Me. 51, 92 Atl. 993.

21 Pursley v. Wikle, 118 Ind. 139, 19 N. E. 478.

22 Daniels v. Benedict, 97 Fed. 367, 38 C. C. A. 592; New York Life Ins. Co. v. McMaster, 87 Fed. 63, 30 C. C. A. 532; Farmers' & Merchants' Bank v. Farwell, 58 Fed. 633, 7 C. C. A. 391.

23 Vulcan Oil Co. v. Simons, 6 Phila. (Pa.) 561.

But courts of equity are generally disposed to treat fraud as a breach of trust. That is to say, they define fraud as an act, omission, or concealment which involves a breach of legal or equitable duty, trust, or confidence justly reposed, and which is injurious to another, or by which an undue and unconscientious advantage is taken of another." And undoubtedly the strict rules of law require a person who is dealing at arms' length-dealing with a stranger upon whom he is not in any way dependent, and upon whose candor and fairness he has no special right to rely-to act prudently and warily and be vigilant for the protection of his own interests. To a considerable extent these rules have been relaxed, and replaced by the more sensible doctrine which only weighs the comparative intelligence, shrewdness, and sagacity of the two parties actually before the court. But even now it cannot be said that either law or equity has much compassion for the results of mere blind folly. In such a case, therefore, sharp bargaining, shrewd dealing, or overreaching could not be classed as fraud. For the purpose of the present subject, the rescission of obligations, it may be said that fraud will include any positive act of deception or trickery by which a person is misled to his injury, notwithstanding he has been reasonably careful and prudent, but not the mere negative act of concealing a material fact, which the one person could have discovered for himself, and which the other is not bound, by any trust or confidential relation, to disclose.

But all manner of fraud is abhorrent to the law, and if one person sustains injury through the fraud of another, he will be afforded a proper remedy, whether the injury results from some breach of positive law, or from some violation of a right or duty growing out of the relations existing be

24 See Moore v. Crawford, 130 U. S. 122, 9 Sup. Ct. 447, 32 L. Ed. 878; City of Clay Center v. Myers, 52 Kan. 363, 35 Pac. 25; Downey v. Atchison, T. & S. F. R. Co., 60 Kan. 499, 57 Pac. 101; Cock v. Van Etten, 12 Minn. 522 (Gil. 431); Yuster v. Keefe, 46 Ind. App. 460, 90 N. E. 920; Dickinson v. Stevenson, 142 Iowa, 567, 120 N. W. 324; Wadsworth v. Board of Sup'rs of Livingston County (Sup.) 115 N. Y. Supp. 8; Missouri, K. & T. Ry. Co. v. Maples (Tex. Civ. App.) 162 S. W. 426; Horton v. Smith (Tex. Civ. App.) 145 S. W.

tween the parties.25 "Fraud" is said to be a generic term, which embraces all the multifarious means which human ingenuity can devise, and are resorted to by one individual to get an advantage over another by false suggestions or by the suppression of the truth. No definite and invariable rule can be laid down as a general proposition defining fraud, as it includes all surprise, trick, cunning, dissembling, and any unfair way by which another is cheated. The only boundaries defining it are those which limit human knavery.28 And it should be observed that to defraud another is not only to deprive or withhold from him that which belongs to or is due to him, but also to deprive him of any right, or to induce him to surrender the favorable position in which he has placed himself, by any artifice or wrong practised upon him.27 And it is not essential that fraud should be accomplished by means of spoken or written falsehoods. If the intended result is accomplished, it is immaterial whether the means employed are affirmative or negative, that is, whether they consist of false pretenses or representations, deceptive acts or conduct, or the fraudulent suppression of material facts.28 And again, fraud may arise from facts and circumstances of imposition. It may be apparent from the intrinsic value and subject of the bargain itself, being such as no man in his senses would make on the one hand, and as no honest man would accept on the other hand. Or it may be inferred from the circumstances of the parties contracting that it is as much against conscience to take advantage of a man's weakness or necessity

25 Williams v. Goldberg, 58 Misc. Rep. 210, 109 N. Y. Supp. 15. 26 Barr v. Baker, 9 Mo. 850; Cooper v. Ft. Smith & W. R. Co., 23 Okl. 139, 99 Pac. 785.

27 Tyner v. United States, 23 App. D. C. 324; Ferrell v. Millican (Tex. Civ. App.) 156 S. W. 230.

28 Tyssowski v. F. H. Smith Co., 35 App. D. C. 403; People v. Clark, 10 Mich. 310; Bretthauer v. Foley, 15 Cal. App. 19, 113 Pac. 356. In a case in Iowa, where a vendor, who had by mistake conveyed land to the plaintiff by quitclaim deed, afterwards executed a warranty deed of the same premises to his nephew, which he fraudulently antedated, and thereby induced the plaintiff to reconvey the land to him, it was held that this constituted a deliberate fraud, of which equity could take cognizance. Mullen v. Callanan, 167 Iowa, 367, 149 N. W. 516.

as of his ignorance.29 Further, the applicable principles of law are the same whether the fraud is alleged to have originated in a conspiracy, or to have been solely committed by the defendant without aid or co-operation.30

The statutory definitions of fraud, contained in the codes of some of the states, do not differ materially from the foregoing definitions drawn from the common law. Thus, in Louisiana, fraud, as applied to contracts, is "the cause of an error bearing on a material part of the contract, created or continued by artifice, with design to obtain some unjust advantage to the one party, or to cause an inconvenience or loss to the other." In Georgia, "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 it was not aware that his statement was false. Such misrepresentation may be perpetrated by acts as well as words, and by any artifice designed to mislead. A misrepresentation not acted on is no ground for annulling a contract." 32 In the codes of several of the western states it is enacted that "actual fraud consists of any of the following acts, committed by a party to a contract, or with his connivance, with intent to deceive another party thereto, or to induce him to enter into the contract: (1) The suggestion as a fact of that which is not true, by one who does not believe it to be true; (2) the positive assertion in a manner not warranted by the information of the party making it of that which is not true, though he believes it to be true; (3) the suppression of that which is true by one having knowledge or belief of the fact; (4) a promise made without any intention of performing it; or (5) any other act fitted to deceive." 33

§ 22. Same; Constructive Fraud.-Constructive fraud, as distinguished from actual fraud, consists of any act of

29 Hinchman v. Emans' Adm'rs, 1 N. J. Eq. 100.

30 Von Au v. Magenheimer, 196 N. Y. 510, 89 N. E. 1114.

81 Rev. Civ. Code La., § 1847.

32 Civ. Code Ga. 1910, § 4113.

33 Civ. Code Cal., § 1572; Rev. Civ. Code Mont., § 4978; Rev. Civ. Code N. Dak., § 5293; Rev. Civ. Code S. Dak., § 1201; Rev. Laws Okl., 1910, § 903; Joines v. Combs, 38 Okl. 380, 132 Pac. 1115.

34

omission or commission which is contrary to legal or equitable duty, or trust or confidence justly reposed, and which is contrary to good conscience and operates to the injury of another. "By constructive frauds are meant such acts or contracts as, though not originating in any actual evil design or contrivance to perpetrate a positive fraud or injury upon other persons, are yet, by their tendency to deceive or mislead other persons, or to violate private or public confidence, or to impair or injure the public interest, deemed equally reprehensible with positive fraud, and are therefore prohibited by law as within the same reason and mischief as acts and contracts done malo animo." 35 "Constructive fraud consists in any breach of duty which, without an actually fraudulent intent, gains an advantage to the person in fault, or any one claiming under him, by misleading another to his prejudice, or to the prejudice of any one claiming under him, or in any such act or omission as the law specially declares to be fraudulent, without respect to actual fraud." The important distinction lies in the fact that actual fraud involves moral turpitude, dishonest purpose, or furtive intent, while, in the case of constructive fraud, the motive is immaterial, and may even have been consistent with an innocent intention.37 Now it has sometimes been ruled that the right of a party to rescind a contract for fraud exists only where actual fraud is shown, and that a rescission cannot be had for constructive fraud.38 But this is contrary to the weight of authority; and the

36

34 City of Clay Center v. Myers, 52 Kan. 363, 35 Pac. 25; Civ. Code Ga. 1895, § 4025.

35 Haas v. Sternbach, 156 Ill. 44, 41 N. E. 51.

36 Civ. Code Cal., § 1573; Rev. Civ. Code Mont., § 4979; Rev. Civ. Code N. Dak., § 5294; Rev. Civ. Code S. Dak., § 1202; Rev. Laws Okl., 1910, § 904. And see Curtis v. Armagast, 158 Iowa, 507, 138 N. W. 873.

37 People v. Kelly, 35 Barb. (N. Y.) 444; Butler v. Prentiss, 158 N. Y. 49, 52 N. E. 652; Newell v. Wagness, 1 N. D. 62, 44 N. W. 1014; Forker v. Brown, 10 Misc. Rep. 161, 30 N. Y. Supp. 827; Massachusetts Ben. Life Ass'n v. Robinson, 104 Ga. 256, 30 S. E. 918, 42 L. R. A. 261; Frost v. Latham (C. C.) 181 Fed. 866; Conyers v. Graham, 81 Ga. 615, 8 S. E. 521; Blake v. Thwing, 185 Ill. App. 187; Alsmeier v. Adams (Ind. App.) 105 N. E. 1033; Young v. Barcroft (Tex. Civ. App.) 168 S. W. 392.

38 Barnett v. Speir, 93 Ga. 762, 21 S. E. 168.