In the same year, the case of Moens v. Heyworth1 came before the Court of Exchequer. The learned judges were divided in opinion as they were in Cornfoot v. Fowke.

Lord Abinger said, "The fraud which vitiates a contract and gives the party a right to recover does not in all cases necessarily imply moral turpitude. There may be a misrepresentation as to the facts stated in the contract, all the circumstances in which the party may believe to be true. In policies of insurance, for instance, if an insurer makes a misrepresentation, it vitiates the contract. Such contracts are, it is true, of a peculiar nature, and have relation as well to the rights of the parties as the event.

In the case

of a contract for the sale of a public house, if the seller represent by mistake that the house realized more than in fact it did, he would be defrauding the purchaser and deceiving him; but that might arise from his not having kept proper books, or from nonattendance to his affairs; yet as soon as the other party discovers it, an action may be maintained for the loss consequent upon such misrepresentation, inasmuch as he was thereby induced to give more than the house was worth."

Parke, B., again asserted that to give a right of action it was "essential that there should be moral fraud, and indeed all the cases show it, though the word legal fraud is used. That is a description of fraud not of so grave and serious a character; that is to say, a representation made without any private benefit to the party making it. The case of a policy of insurance does not appear to me to be analogous to the present; those instruments are made on an implied contract between the parties that every thing known to the assured should be disclosed by them. That is the basis on which the contract proceeds; and it is material to see that it is not obtained by means of untrue representation or concealment in any respect."

Alderson, B.: "I consider that if a person makes a representation or takes an oath of that which is true, if he intends that the party to whom the representation is made should not believe it to be true, that is a false representation; and so he who takes an oath in one sense, knowing it to be administered to him in another, takes it falsely. This may be illustrated by an anecdote of a very eminent ambassador, Sir Henry Wotton, who, when he was asked what advice he would give to a young diplomatist going to a foreign

1 10 M. & W. 147.

court, said, 'I have found it best always to tell the truth, as they will never believe any thing an ambassador says, so you are sure to deceive them.' Now, Sir Henry Wotton meant that he should tell a lie. This, no doubt, was only said as a witticism, but it illustrates my meaning."1

It will be perceived that the interesting question involved in this distressing conflict of authority presents itself in three ways: 1. Whether an action for deceit will lie, without proof of moral fraud; 2. Whether false representations made in good faith, can be pleaded in answer to an action on a contract; and, 3. Whether a principal and his agent are in the law so identified, that, in the absence of all bad faith, the former is affected by a representation made by the latter, where he knows the fact to be otherwise, the same as he would be by a fraudulent representation made by himself or by an agent.

1. The first of these three propositions is now settled in the negative, and the doctrine laid down in Fuller v. Wilson, as was afterwards admitted by Lord Denman, is not law. Chief Justice Marshall, in Russell v. Clark,2 seems to have been inclined to confine the doctrine of Haycraft v. Creasy within narrower limits. "Where the communication is honestly made, and the party mak ing it has no interest in the transaction," is his language. But in the more recent case of Lord v. Goddard,3 Mr. Justice Catron, in delivering the judgment of the same court, distinctly says, "The gist of the action is fraud in the defendants and damage to the plaintiff. Fraud means an intention to deceive." And we do not find that the distinction which seems to have been in Chief Justice Marshall's mind, has been elsewhere noticed. The approval of so great an authority as he, may have been the reason why Haycraft v. Creasy was more generally and speedily acquiesced in in the United States than in England, and it must be remembered that Lord Kenyon, although not inclined to introduce the doctrines of equity into the common law, dissented in that case, and thought the action maintainable.

Two cases, following soon after those we have stated, settled the law in England, in accordance with Haycraft v. Creasy, and almost the whole current of American authorities. In 1843, the case of Evans v. Collins, arose in the Court of Queen's Bench.

1 See also Taylor v. Ashton, 11 M. & W. 401.

3 13 How. 198.

27 Cranch, 92.

4 5 Q. B. 804.

It was an action by a sheriff against an attorney to recover damages for falsely representing a certain person to be the man against whom the defendant had sued out a ca. sa., and had so induced the plaintiff to take the wrong man into custody, and thereby be liable in damages. The jury, in their verdict, negatived expressly all fraud or moral turpitude. The court held that the action would lie. Lord Denman cited the case of Humphreys v. Pratt,1 in the House of Lords, which was very similar, but in which Lords Tenterden and Wynford had given no reason for their decision. He further placed the decision upon the ground, that where one of two innocent parties must suffer damage, he who caused the damage ought to bear it; and that therefore the defendant was liable for his misrepresentation. This judgment was reversed in the Exchequer Chamber by the unanimous judgment of Chief Justice Tindal, Justices Coltman, Erskine, and Maule, and Barons Parke, Alderson, Gurney, and Rolfe. These eminent judges held that "fraud must concur with the false statement in order to give a ground of action." Humphreys v. Pratt was sustained on the ground, that there the execution creditor had made the sheriff his mandatory or agent, and was therefore bound to indemnify him.2 The same explanation of the case had been made previously by Mr. Justice Dewey, in Stone v. Denny,3 in the Supreme Judicial Court of Massachusetts.

The law as laid down in Collins v. Evans was again affirmed by the Exchequer Chamber, speaking through Chief Justice Tindal, in Ormrod v. Huth, and was expressly acquiesced in by Lord Denman and the Queen's Bench in 1846, in Barley v. Walford,5 and the question was thus finally set at rest.

From the emphatic manner in which all courts now hold that an intention to deceive is the gist of an action for deceit, it is clear that if Fowke had sued Cornfoot for the misrepresentation of his agent, the knowledge of the principal and the representation of the agent could not be so identified as to constitute a legal fraud, which would have maintained the action. The case would lack the essential ingredient of moral turpitude.

2. We therefore come to the second point raised by our subject; and that is, whether innocent misrepresentations, although not

1 5 Bligh, N. R. 154; s.c. 2 Dow & Clark, 288.

2 Collins v. Evans, 5 Q. B. 820.

5 9 Q. B. 197; and see Childers v.

8 4 Met. 160. Wooler, 2 El. & El. 287.

4 14 M. & W. 650.

actionable, can be pleaded in answer to actions ex contractu. Lord Campbell intimated that there is such a distinction, when, during the argument of Wilde v. Gibson, in the House of Lords,' he said that," in an action upon contract, the representation of an agent is the representation of the principal; but, in an action on the case for deceit, the misrepresentation or concealment must be proved against the principal." So far as this distinction relates to agency, it will be considered hereafter.

The law in regard to sales is perfectly well established. To sustain the defence, there must be proof of either fraud or warranty. And the case of Chandelor v. Lopus,2 in which it was decided that representations by a vendor not fraudulent nor amounting to a warranty, did not avoid the contract, has only been questioned upon the point whether the representations therein made did not amount to a warranty, and not upon the principle of law involved.3 The maxim caveat emptor, upon which it is founded, has been applied in many cases of quite as much hardship as Cornfoot v. Fowke.4

The case of Foss v. Richardson,5 in Massachusetts, was an action to recover back the purchase-money of a patent-right. The defendants conveyed to the plaintiff by deed, Jones's patent-right for an elastic horseshoe, and it appeared that at the time of the sale they exhibited to him a particular kind of horseshoe, which the jury found not to be included in Jones's patent, and which did not appear to have been patented at all; and represented that that was the kind of horseshoe which the specifications of the patent described. Mr. Justice Hoar, in delivering the judgment of the court, says, "Upon this precise statement of the case, we think it clear that the plaintiff could not maintain the action in the absence of fraud or warranty, and that the jury should have been so instructed. The contract was in writing. It purported to convey, and did convey, for a consideration named, a certain interest in Jones's patent, which was a thing in itself a matter of record. It would not be competent to show by parol that it conveyed or was intended to convey any thing else; or that Jones's

1 1 H. L. Cas. 615.

2 Cro. Jac. 4; s.c. 1 Smith's L. C. 238.

32 Kent, Com. (6th ed.) 479, note; Stone v. Denny, 4 Met. 155, 156; Met. Con. 81, 32; 2 Amer. Law Rev. 636.

The cases are collected in the note to Chandelor v. Lopus, 1 Smith's L. C. (6th Amer. ed.) 238.

5 15 Gray, 303.

patent embraced in the contemplation of the parties any other invention or article than that which it did in fact include and describe."

Still more directly in point is the Massachusetts case of Page v. Bent.1 It was an action on a promissory-note, and also on account for goods sold. The defendants pleaded a release, which the plaintiffs sought to avoid on the ground that it was procured by false and fraudulent representations. Mr. Justice Wilde, at Nisi Prius, and the court in bank, held that, in order to avoid the release, it was incumbent on the plaintiffs to show that the representations were fraudulent as well as false. In commenting upon some of the evidence, Chief Justice Shaw said, "As to the amount of the stock in trade, it was matter of estimate and judgment, if not to be considered as a statement from their books; and in either aspect could only be considered as evidence to be left to a jury, as proof of actual fraudulent intent, and without proof of such intent could not avoid the release." This case is hardly reconcilable with the one put as an illustration by Lord Abinger, in Moens v. Heyworth, in regard to the public house.

And so in the later case of King v. Eagle Mills,2 in the same court, Chief Justice Bigelow said, "There can be no doubt that a vendee may rescind a contract for the sale of chattels, and refuse to receive or accept them, if the vendor has been guilty of deceit in inducing the former to enter into the bargain. But to maintain a defence to an action for the price of goods on this ground, the same facts must be proved which would be necessary to maintain an action for deceit in the sale of goods." And Chancellor Kent, in his last edition of his Commentaries, seemed to think that recent cases had carried the law of implied warranty too far; and says, "The maxim caveat emptor, and that other maxim, vigilantibus et non dormientibus jura subveniunt, when discreetly applied as in the English law, are replete with sound and practical wisdom."4 Chief Justice Gibson was of the like opinion, and in McFarland v. Newman,5 in delivering the judgment of the Supreme

1 2 Met. 371.

8

2 10 Allen, 548.

8.P. McDonald v. Trafton, 15 Maine, 225. "It would now appear to be well settled that legal without moral fraud will not generally invalidate a contract." Chitty on