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not a pianola, but did not inform the buyer of the fact, and the latter received the instrument on the seller's assurance that it was what he wanted, it was held that the buyer might rescind, whether or not the seller made a mistake.11 So where the buyer of an alleged imported Percheron stallion was induced to purchase by the seller's false representations that the horse was imported and a Percheron, and was without knowledge that such statements were untrue, he was held entitled to maintain an action for rescission of the sale.112 In another case, it appeared that the plaintiff undertook and contracted to perform a certain comedy act or vaudeville turn at the defendant's theater. Defendant had previously seen plaintiff perform this act and was pleased with it, and contracted on the supposition that it would be rendered in the same form and manner at his theater. But the performance as presented under the contract was materially different from that previously given. It was held that the defendant was justified in terminating the contract.118

Similar rules apply in cases where, although the subject of the contract remains the same, there is a fraudulent substitution of parties. Where one person is engaged to act as the agent of the other in a matter of purchase or sale, and, pretending to have found a purchaser or buyer, or to have negotiated with a third person, substitutes himself as the other party to the contract, it is a breach of trust in the nature of a constructive fraud, and warrants the rescission of the contract.114 Thus, if one employs another as his agent to purchase for him a certain amount of stock in a given company, and the agent, in the pretended fulfillment of his duty, but with the intention of deceiving and defrauding his principal, buys no stock but transfers to his principal his own holdings in the company, and receives and retains the money paid therefor, the principal has the

111 Smith & Nixon Co. v. Lewis (Ky.) 112 S. W. 1113. 112 Brucker v. Kairn, 89 Neb. 274, 131 N. W. 382.

113 McLaughlin v. Hammerstein, 99 App. Div. 225, 90 N. Y. Supp. 943.

114 Rohrof v. Schulte, 154 Ind. 183, 55 N. E. 427; Peuchen v. Behrend, 54 App. Div. 585, 66 N. Y. Supp. 1092.

right to rescind the contract because of its fraudulent performance.115 But the mere fact that a purchaser of land presents to the seller a deed running to a different grantee than the one named in the contract, and procures its execution without the grantor's being aware of the difference, is not such a fraud as will warrant the intervention of a court of equity.116 And so the fact that a purchaser of land takes title in the name of a third person, his father, does not, in the absence of any other circumstances showing fraud, constitute a fraud on the grantor, although the latter believes the purchaser to be the one named in the deed.117

§ 30. Conspiracy, Bribery, and Perjury.-A common type of fraud is found in the case where several persons conspire together to induce another to part with his money or property, by means of false representations or a trick, each of the confederates having his own part to play in the plot, and the cumulative effect of their combined efforts being the deception and plundering of the victim. Each of the persons who participates in such a scheme is liable for the damages sustained thereby,118 and where a number of persons thus pursue a common scheme, and by their acts render themselves liable to an action for deceit, they are not relieved from that liability by the fact that they afterwards use a corporate form as a means to advance the business in hand.119 Further, the defrauded party in such a case may rescind the transaction as against each and all of the conspirators, although no one of them went far enough with the plot, considering only his own words or actions, to make out a case of fraud against him.1 Thus, if sev

120

115 Mayo v. Knowlton, 134 N. Y. 250, 31 N. E. 985; Miller v. Curtiss, 59 N. Y. Super. Ct. 503, 15 N. Y. Supp. 140. Compare Talbott v. Manard, 106 Tenn. 60, 59 S. W. 340.

116 United States v. Payette Lumber & Mfg. Co. (D. C.) 198 Fed. 881.

117 Hall v. Bollen, 148 Ky. 20, 145 S. W. 1136, Ann. Cas. 1913E, 436.

118 Wickersham v. Johnson, 51 Mo. 313; Brucker v. Kairn, 89 Neb. 274, 131 N. W. 382.

119 Baker v. Crandall, 7 Mo. App. 564.

120 McDonald v. Smith, 139 Mich. 211, 102 N. W. 668.

eral persons enter into a fraudulent agreement that certain false representations shall be made to another, to induce him to enter into a transaction with them, it is enough to justify the rescission of the contract that such representations were actually made (with knowledge of their falsity) by any one or more of the conspirators, not necessarily by each and all of them.121 Neither is it necessary to prove a conspiracy in the strict sense of the term. Concert of action by several persons, fraudulently inducing another to enter into a transaction, is enough to render them liable for the fraud.122 And a party to the plot, who participates in the spoils, cannot escape liability on the ground that he was not cognizant of the specific acts of deceit practised. by his associates, if he could have informed himself thereof,123 nor on the ground that his participation was not the special cause which induced the victim to act. Thus, in an action of deceit against the directors and officers of a bank, who published a false report as to its financial condition, upon which the plaintiff relied, one of the directors cannot escape liability on the ground that there was no special reliance upon him, where it appears that the plaintiff relied on the report and on the entire directorate.124 Again, it is not necessary, in such a case, that all of the conspirators should have been principals or equally active in the fraud. Those who have actual or constructive knowledge of the fraudulent character of an enterprise, and with such knowledge aid and abet its furtherance, and by means of false representations induce a person to invest in it, are all jointly and equally liable with the principal in the enterprise.125 Even one who knowingly accepts the benefit of a contract procured by another by fraud, partly in his interest, or who, without having participated in the original fraud, claims and receives a part of the fruits thereof, be

121 I. L. Corse & Co. v. Minnesota Grain Co., 94 Minn. 331, 102 N. W. 728.

122 Hanson v. Kline, 136 Iowa, 101, 113 N. W. 504.

123 Baker v. Crandall, 7 Mo. App. 564.

124 Gerner v. Yates, 61 Neb. 100, 84 N. W. 596.

125 White v. Moran, 134 Ill. App. 480; Morehouse v. Yeager, 71 N. Y. 594.

comes equally liable for the fraud.126 For example, an action was brought to recover money bet on a race, the result of which was determined in advance, and the plaintiff joined as defendants, with the conspirators, a bank and its cashier, who were alleged to have assisted in the plot by allowing the use of the bank for the transference of money and to give an air of respectability to the affair, and it was held that they were liable, on this ground, although their further participation in the scheme, by assuring the plaintiff that the conspirators were men of honor, had nothing to do with the result because the plaintiff knew the fact to be otherwise.127 But no one can be held liable unless there is evidence to connect him in some way with the conspiracy, either as a principal, as an abettor, or as a sharer in the resulting gains.128

Another type of conspiracy is that which involves the cooperation of several persons, all acting in concert for a common purpose but each confining his activity to one detail, because the successful carrying through of the plot requires more actors than one. For instance, where persons conspire to obtain large tracts of government land, by procuring others to enter the land in separate parcels as cash purchasers, and pay for it with money furnished by the main conspirators, and to hold the land in secret trust for them, whereby the conspirators expect to obtain title to land which they could not have obtained in their own names, the transaction is fraudulent and illegal, and the title acquired by the entrymen may be vacated in equity.129 So, where a shipper of cotton procured a compress company to divide the bales and issue certificates for half bales as full bales, on which bills of lading were issued, on the faith of which plaintiffs paid drafts and were defrauded, it

126 Goldsmith v. Koopman, 152 Fed. 173, 81 C. C. A. 465; Blome v. Wahl-Henius Institute, 150 Ill. App. 164.

127 Hobbs v. Boatright, 195 Mo. 693, 93 S. W. 934, 5 L. R. A. (N. S.) 906, 113 Am. St. Rep. 709.

128 Wells v. Houston, 23 Tex. Civ. App. 629, 57 S. W. 584; De Klotz v. Broussard, 203 Fed. 942, 122 C. C. A. 244.

129 Wilson Coal Co. v. United States, 188 Fed. 545, 110 C. C. A. 343; United States v. Robbins (D. C.) 157 Fed. 999; United States v. Clark (C. C.) 129 Fed. 241.

was held that the compress company was a party to the fraud and liable for the damages. 180 A similar fraud, giving a right of rescission or to recover damages, is perpetrated by the use of a decoy, as where a respectable third person is put forward as being willing to join with the intended victim in the purchase of a piece of property or a patent right, each to pay half the stipulated price, but such person is only a "stool pigeon," having a secret agreement with the vendor that he is to pay no money at all but to have his half interest for the use of his name and influence.181 Again, where the treasurer of a municipality, confederating with another to assist him in raising money, and for the purpose of misleading the public, takes a municipal warrant which really was illegally issued and is void, and indorses on it a statement that payment of it had been refused only because of a lack of funds, and officially certifies that it will be paid as soon as there are funds in hand, and thereby induces an innocent purchaser to take the warrant for a valuable consideration, he is liable to such purchaser.132 And the case is essentially the same, as also the remedies, where the owner of a piece of land of little value, acting in confederation with another, places the title colorably in the name of such other, the deed reciting the payment of a large consideration in cash, and the confederate then places a mortgage on the property securing an issue of notes of considerable aggregate value, and they are disposed of in the market to unsuspecting purchasers.133

Still another type of fraudulent conspiracy is that which is worked out by a person occupying a position of trust or confidence towards the defrauded party, who treacherously and in betrayal of his trust colludes with a third person, for their joint advantage, to rob or cheat his principal. This kind of fraud always gives ground for an action for rescission or for the cancellation of any conveyance which

180 Wichita Falls Compress Co. v. W. L. Moody & Co. (Tex. Civ. App.) 154 S. W. 1032.

131 King v. White, 119 Ala. 429, 24 South. 710.

132 Whitbeck v. Sees, 10 S. D. 417, 73 N. W. 915.

183 Leonard v. Springer, 197 Ill. 532, 64 N. E. 299; Borders v. Kattleman, 34 Ill. App. 582.

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