So it follows that the chief difference in the manner in which fraud is dealt with by courts of law and of equity, is that the jurisdiction over constructive fraud is exclusive in equity, there being no remedy at law, although opinion is divided upon this in some cases. Intentional falsity is the chief distinguishing element between actual and constructive fraud, it always being an essential in actual, whereas it is not present in constructive, fraud. "Constructive fraud is simply a term applied to a great variety of transactions, having little resemblance either in form or in nature, which equity regards as wrongful, to which it attributes the same or similar effects as those which follow from actual fraud, and for which it gives the same or similar relief, as that granted in cases of real fraud." This shows the part law and equity take in dealing with fraud. Law affords damages for the actual fraud, while equity undoes what has been done by means of either kind of fraud, and places the parties in their former condition, subject to certain conditions and limitations.

§ 716. Fraud Ex Delicto Injures What Rights.-Actual fraud, giving rise to wrongs ex delicto redressible in the courts of law, is varied in character and numerous in form, and may affect nearly all the rights of persons-rights in personam and in rem. For this reason, as stated in the introductory to this chapter, the general principles underlying this wrong are brought together under the head of "Fraud," rather than under the head of the rights which it affects.

It may affect the rights of persons sustaining "Confidential, Trust and Quasi Trust Relation," treated in Chapter IX.

It may affect the Rights of Persons in their Domestic Relations, Chapter XXIX.

72 Pomeroy's Equity Jurisprudence, sec. 922.

It is the chief element of the wrong committed in infringements of a trademark, considered in Chapter

XL.

And lastly, it affects property rights of all kinds.

§ 717. When Action in Tort Will Lie.-The commonlaw right of action for deceit furnished a remedy only for cases of actual or intentional fraud, nothing less sustaining the action. A mere breach of duty or an omission to use due care did not give rise to an action at law. The gravamen of such an action was a false and material representation, knowingly made. But a statement made recklessly, without knowing whether it was true or false, also gave rise to a right of action, as one who makes a representation which he neither knows nor cares whether it is true or not, can have no real belief in the truth of what he asserts, and is justly guilty of deception. It was an action of case founded on the ancient writ of deceit," and it is insisted that the remedy ought to be preserved and kept within its ancient limits, and that it should not, by construction, be extended to cases not induced by actual intentional fraud, because cases of constructive fraud are redressible only in equity.10 It is considered fraud for an attorney to take advantage of the relations between himself and client, which may be generally redressed in equity. This is considered in a former chapter.11 So breaches of trusts were redressible in courts of equity, the remedy in case not being permissible, but we have shown in a former chapter that this distinction does not prevail with us where but one form of action is in use.12

8 Evans v. Edmonds, 13 Com. B. 777; Kountze v. Kennedy, 147 N. Y. 124, 49 Am. St. Rep. 651, 41 N. E. 414.

• Webb's Pollock on Torts, p. 349.

10 Kountze v. Kennedy, supra.

11 Ante, sec. 126, notes 11, 12.

12 Ante, sec. 127, note 28.

Whether an action in tort will lie for wrongs done by constructive fraud is a question surrounded with doubt. In general, the remedy in equity is the only adequate one, and hence is pursued in such cases. It is said that: "There is no reason for a difference in action in such cases between courts of law and courts

"13

of equity." If one falsely asserts a material fact susceptible of accurate knowledge, to be true of his own knowledge, thereby inducing another to act upon it to his damage, it is held that an action in tort will lie.14

§ 718. Same Continued-Must Cause Damage or Injury. It has been a time-honored rule that there can be no right of action in law in the nature of tort, for the recovery of damages, unless the party complaining has suffered actual damage; for "fraud without damage, or damage without fraud, gives no cause of action, but when these two concur an action lies." 15 Numerous cases in this country have followed the same doctrine.16 The damage must be the clear and

13 Holcomb v. Noble, 69 Mich. 397, 37 N. W. 497.

14 Kountze v. Kennedy, 147 N. Y. 124, 49 Am. St. Rep. 651, 41 N. E. 414.

15 Pasley v. Freeman, 3 Bulst. 95; Smith v. Chadwick (1884), 9 App. Cas. at p. 196.

16 Alabama: Jordan v. Pickett, 78 Ala. 331.

California: Holton v. Noble, 83 Cal. 7, 23 Pac. 58; Marshall v. Buchanan, 35 Cal. 264, 95 Am. Dec. 95.

Colorado: Sellar v. Clelland, 2 Colo. 532; Lahay v. City Nat. Bank, 15 Colo. 339, 22 Am. St. Rep. 407, 25 Pac. 704.

Florida: Williams v. McFadden, 23 Fla. 143, 11 Am. St. Rep. 345,

1 South. 618.

Georgia: Freeman v. McDaniel, 23 Ga. 354.

Illinois: Dickinson v. Atkins (1902), 100 Ill. App. 401.

Maine: Danforth v. Cushing, 77 Me. 182.

Massachusetts: Dawe v. Morris, 149 Mass. 188, 14 Am. St. Rep. 404, 21 N. E. 313.

Minnesota: Hedin v. Minneapolis Medical etc. Institute, 62 Minn. 146, 54 Am. St. Rep. 628, 64 N. W. 158.

New Jersey: Bryard v. Holmes, 34 N. J. L. 296.

necessary consequence of the tort, and must be of such a nature or character that it can be clearly defined and ascertained.1 17

§ 719. Modes of Representation. The usual means of deception and the one most easily proven consists of false statements of fact. By positive averments of material facts actions may be readily induced when they would not be by other means. Again, the presence of an intention to deceive is very easy to perceive when a verbal statement of fact is shown. But fraud is not confined to this one mode of representation. Any mode of conveying ideas when intentionally employed for fraudulent purposes is equally blameworthy with positive averments. Thus, when one by motions or actions induces the belief on the part of another in the existence of some fact, this will be considered a representation.18 It may be by arts or artifices calculated to deceive as well as by positive assertions.19 In many cases silence will be considered as conveying ideas which, if false and intentionally conveyed, will constitute fraud.20 In probably most of these latter cases it will be found that the silence is construed as a warranty. In all sales of property there are many implied warranties, and where nothing is said concerning the facts implied by such warranties there is an implied representation that certain facts and qualities exist. Where such representations prove to be untrue, however, it would seem that

New York: Kountze v. Kennedy, 147 N. Y. 124, 49 Am. St. Rep. 651, 41 N. E. 414; Brown v. Brockett, 55 How. Pr. 32.

Vermont: Nye v. Merriam, 35 Vt. 438; Childs v. Merrill, 63 Vt. 626, 14 L. R. A. 264, 22 Atl. 626.

17 Dawe v. Morris, 149 Mass. 188, 14 Am. St. Rep. 404, 21 N. E. 313; Lamb v. Stone, 11 Pick. 527; Bradley v. Fuller, 118 Mass. 239. 18 Chisolm v. Gadsen, 1 Strob. 220, 47 Am. Dec. 550.

19 Croyle v. Moses, 90 Pa. St. 250, 35 Am. Rep. 655. It may be by deeds or acts as well as by words; by artifices to deceive: Juzan v. Toulmin, 9 Ala, 662, 44 Am. Dec. 448.

20 See post, sec. 733.

an action for loss occasioned thereby should be upon an implied contract of warranty and not in fraud. But there are in other cases duties and obligations to speak which cannot be construed into warranties, and when one is silent under such duties and an erroneous

belief is thereby induced, an action for deceit will lie, to recover the damages suffered.21

§ 720. The Representation-Intention.-In the class of fraud remediable in actions ex delicto intentional fraud is necessary; that is, the one charged must have known at the time of making the representation that it was false.22 The law, however, recognizes different kinds of intentional misrepresentations, viz., actual false representations known to be false at the time or reckless statements without actual knowledge of the truth or falsity thereof,23 or statements not known to be true or false, and not honestly believed to be true; or not knowing whether they are true or false, the source or extent of knowledge is misstated.24 But misjudgment, however gross, or want of caution, however marked, is not fraud.25 Nor does mere negligence, ignorance or stupidity on the part of one making representations constitute fraud.20 This subject is closely allied with knowledge of the falsity next discussed.

§ 721. Knowledge of Falsity.-It has long been a fundamental principle that to sustain an action on the

21 See post, sec. 723; Juzan v. Toulmin, 9 Ala. 662, 44 Am. Dec. 448.

22 Kountze v. Kennedy, 147 N. Y. 124, 49 Am. St. Rep. 651, 41 N. E. 414; Hedin v. Minneapolis Medical etc. Institute, 62 Minn. 146, 54 Am. St. Rep. 628, 64 N. W. 158; Humphrey v. Merriam, 32 Minn. 197, 20 N. W. 138.

23 Kountze v. Kennedy, supra; Snively v. Meixsell, 97 Ill. App. 365.

24 Humphrey v. Merriam, 32 Minn. 197, 20 N. W. 138.

25 Kountze v. Kennedy, supra.

26 Nash v. Minnesota Title Ins. etc. Co., 163 Mass. 574, 47 Am. St. Rep. 489, 40 N. E. 1039.