added that part performance by a company of a contract not under seal, which is not in its nature the subject of specific performance, as, e. g., a contract for work and labor, will not give the court jurisdiction. (h)

§ 623. The subject chiefly dealt with in this chapter is more fully discussed in various works on corporations and companies with which our law libraries abound, amongst which the well-known work of Mr. Justice Lindley has long held the foremost place.

(h) Crampton v. Varna Railway Co., L. R. 7 Ch., 562; supra, § 84.

CHAPTER XIII.

OF MISREPRESENTATION.

§ 624. A misrepresentation, having relation to the contract, made by one of the parties to the other of them, is a ground for refusing the interference of the court in specific performance at the instance of the former party; and may in certain cases be a ground for its active interference in setting aside the contract at the instance of the latter. (a)1 (a) Edwards v. M'Leay, Coop., 308; S. C.,2 542, reversed in D. P., s. n., Wilde v. Gibson, Sw., 287; Gibson v. D'Este, 2 Y. & C. C. C., 1 H. L. C., 605; St. Leon. Law of Prop., 614.

1 False statements with relation to a contract sought to be specifically enforced.] Both law and equity will prevent the enforcement of a contract, where there has been a deliberate misrepresentation of a material fact. Broderick v. Broderick, 1 P. Wms., 240; Jennings v. Broughton, 6 De G. M. & G., 126; McShane v. Hazlehurst, 50 Md., 107. Where the statements are recklessly made, without knowledge of their truth, this is a fraud, even when there is no evil intention. Taylor v. Ashworth, 11 M. & W., 413; Rawlins v. Wickham, 3 De G. & J., 304; Stone v. Demy, 4 Metc., 151; Hazard v. Irwin, 1 B. Pick., 96; Lindsley v. Veasey, 62 Ala., 421. Where one party to a contract deliberately makes a misrepresentation with relation to it, a court of equity will refuse to decree specific performance between the parties. Edwards v. McLeay, 2 Swanst., 287; Lord Gordon v. Lord Hutford, 2 Mad., 106; Monroe v. Taylor, 8 Hare, 56; Wilde v. Gibson, 1 H. of Lds., 605; Clowes v. Higginson, 1 Ves. & Beav., 524; Stapylton v. Scott, 13 Ves., 425; Swaisland v. Dearsley, 29 Beav., 430; Cockrane v. Willis, L. R., 1 Ch., 58; Harnett v. Yielding, 2 Sch. & Lef., 549; Wuesthoff v. Seymour, 22 N. J., 69; Plummer v. Kepler, 26 id., 481; James v. State Bank, 17 Ala., 69; Fuller v. Perkins, 7 Ohio, 196; Solinger V. Jewett, 25 Ill, 479; Gilroy v. Alis, 22 Iowa, 174; Cuff v. Dorland, 50 Barb., 438; Snedaker v. Moore, 2 Duvall, 542; Spure v. Benedict, 99 Mass., 406; Hill v. Brower, 76 N. C., 124.

Fraudulent representations; partnership formed on account of.] A party made false and fraudulent representations with respect to the extent of his business, and a partnership was made for a definite time. Held, that equity would decree that the partnership should be annulled, and that the fraudulent party should be restrained from the use of his partner's name in the business; and that defendant must repay the money received on account of the partnership. Smith v. Everett, 126 Mass., 304. It will be good reason for rescinding the contract where it is shown that a direct falsehood has been told, or a truth has been concealed, which, if known, would have been a good reason for causing the terms of the contract to be different. In such a case, the party who is damaged by such fraud may, if an action is brought against him founded on the contract, successfully defend, or he may rescind the contract; he may also have the damages that he can show himself to have sustained. Thweatt v. McLeod, 56 Ala., 375; see, also, Raynor v. Wilson, 43 Md., 440; Comyn on Contracts, vol. 3, 304. In a note to Lynch v. Brockhoff, 15 Abb. Pr., 357, will be found the rule which operates to prevent specific performance being decreed

Representations are most usually by words, written or spoken, but they may be by act, as, for instance, by the performance of fraudulent experiments, on the faith of which a contract was entered into for a license under a patent. (b)1

(b) Lovell v. Hicks, 2 Y. & C. Ex., 46.

where fraud, surprise, mistake or hardship are pleaded. See, also, Quinn v. Roath, 37 Conn., 16.

Either the law or the facts may be fraudulently misrepresented.] A court of equity will not only refuse to decree specific performance when such is the case, but will relieve against it. Broadwell v. Broadwell, 1 Gilm., 599.

For examples of misrepresentation which were relieved against, see Wells v. Millett, 23 Wis., 64; Holmes' App., 77 Pa. St., 50; Carmichael v. Vandebur, 50 Iowa, 651; Hickey v. Drake, 47 Mo., 369; Kelley v. Sheldon, 8 Wis., 258; Chestnut Hill Res. Co. v. Chase, 14 Conn., 123; Warner v. Daniels, 1 Wood. & Minot, 90; Gazzard v. Webb, 4 Porter (Ala.), 73. In Dale v. Roosevelt, 5 John.'s Ch., 173 (aff'd, 2 Cow., 129), there was no evidence of fraud, or intentional misrepresentation.

Deception may consist of acts as well as words.] "A nod, or a wink, or a shake of the head, or a smile from the purchaser, intended to induce the vendor to believe the existence of a non-existing fact, which might influence the price of the subject to be sold, is a fraud at law. So, a fortiori, would work a contrivance on the part of the purchaser, better informed than the vender of the real value of the subject to be sold, to hurry the vendor into an agreement without giving him the opportunity of being fully informed of its real value, or time to deliberate and take advice respecting the conditions of the bargain." Lord Campbell, in Walters v. Morgan, 3 De G. F. & J., 724.

If one person makes a representation to another who is about dealing with him upon the faith thereof, he shall make it good if he knew it to be false; but to induce a court of equity to interfere in such a case, it must be shown that the misrepresentation was in a matter important to the interests of the other party, and that it actually did mislead him. And the same consequences follow a misrepresentation, if the party make the assertion recklessly, without knowing whether it was true or false, or even innocently, if it operated as a surprise. But a misrepresentation in a matter of opinion and fact, open to the inquiries of both parties, and in respect to which neither can be presumed to have trusted the other, unless there be fraud, in cases of peculiar relationship or confidence, or whether the other party has justly reposed upon it, and been misled, furnishes no ground for relief. Juzan v. Toulmin, 9 Ala., 662. So, where the vendor of a forty-acre tract of land, well knowing the location of the corners and lines, represented one of the lines so to run as to embrace nine or ten acres of cleared land, when, in truth, it contained much less, and the difference of value between the land pointed out and that conveyed amounted to almost one-third the purchase money, it was held that these facts were such misrepresentations as entitled the vendee to have the contract set aside. Elliot v. Boaz, 9 Ala., 272. Warner v. Daniels, 1 W. & M., 90, is also a case in point. There D. purchased a farm, paying him therefor in shares of the stock of the Cleft Ledge Granite Co., which he represented to be worth $6,000. Several representations were made to W. by D., and also by F., who was concerned in the same company, to induce W. to take the stock in payment, which representations proved to be false, and the stock worthless. On a bill in equity by W. for relief, it was decreed that the sale should be rescinded, the shares reconveyed by W. to D., and the farm by D. to W., and a master appointed to report the amount of rents and waste, after deducting permanent improvements which should be allowed by W. to D. Where a conveyance is set aside for misrepresentations, the ground of the decision must be considered to have been fraud; and, in such a case, interest is to be paid and the money refunded with out reference to any demand, and from the time it was received, and interest on the interest from the time of its payment on any notes originally given. Doggett v. Emerson, 1 W. & M., 195. It is of no consequence that the con

§ 625. Such misrepresentations may be resolved into some or all of the following elements, namely,-first, a

tract, of which a recission is sought on these grounds, does not contain the misrepresentation upon which relief is asked. Hough v. Richardson, 3 Story, 659. And where the vendee of land made representations respecting the value of what was taken for the consideration, which were false in material points, and which influenced the vendor to sell, it was held that whether the vendee knew them to be false or not, they would vitiate the sale. So, also, if they were made by another person, in the presence of the vendee, and he was benefited by them. Warner v Daniels, 1 W. & M., 90. The same consequences would result, although there was no fraudulent intent on the part of the party making the representations. Taylor v. Fleet, 1 Barb., 471. It is, however, necessary that the party deceived should, in cases arising from false representations, have entered into the contract upon the faith of these representations. Id. A misrepresentation made by the vendor in a matter of substance affecting the value of the estate sold, is a good defense to a suit by him for a specific performance, although both vendor and vendee were ignorant of its untruth. Best v. Stow, 2 Sandf.'s Ch., 298. Relief will not be granted where the vendee has had opportunity of making an examination of the property, concerning which the false representations have been made Mason v. Crosby, 1 W. & M, 342; Hough v. Richardson, 3 Story, 659. And so where A. gave a certificate that certain lands which he had "partially explored" contained, as far as my knowledge extends," a certain average of timber, and it appeared that the purchasers, to whom it was given, had as full means of knowledge as A., it was held that they were not entitled to place implicit reliance thereon, and make it the basis of their contract, but that they should have investigated the grounds of the opinion therein expressed, and the extent of the exploration by A. Id. But an examination, however, will not prevent a recovery for fraud, if falsehood was practiced in respect to some of the examination; as, for example, the quality of timber in this case, and the size of streams on the lands sold upon which to float timber, or any matter within the vendor's knowledge; and if the purchaser, relying in part on the false representations, made only a slight examination, he will be entitled to relief. Mason v. Crosby, 1 W. & M, 342. Nevertheless, no purchaser is at liberty to remain intentionally ignorant of facts relating to his purchase within his reach, and then claim protection as an innocent purchaser. Eldredge v. Jenkins, 3 Story, 181. Although, when a party to a contract places a known trust and confidence in the other party, and acts upon his opinion, any misrepresentation by the party confided in, in a material matter constituting an inducement to the act of the other party, and by which an undue advantage is taken, will be treated with severity, and regarded as a fraud. Shaeffer v. Sleade, 7 Blackf., 178. But no misrepresentation can have the effect of barring the rights of a party, unless another person is injured thereby, by being induced to part with his property, or unless it be so gross as to amount to proof of fraud. Stuart v. Luddington, 1 Rand., 463; see Morgan v. Bliss, 2 Mass., 112; Fuller v. Hcgdon, 25 Me., 243; Ide v. Gray, 11 Verm., 616; Farrar v. Alston, 1 Dev.. 69. Misrepresentations may arise where a party makes a statement which is literally true, but substantially false. Corbett v. Brown, 8 Bing., 33; 1 Moore & Scott, 85. In this case the defendant's son, having purchased goods from the plaintiffs on credit, they wrote to the defendant requesting to know whether his son had, as he stated, £300 capital, his own property, to commence business with; to which the defendant replied that his son's statement as to the £300 was perfectly correct, as the defendant had advanced him the money. It was proved that, at the time of the advance, the defendant had taken a promissory note from the son for £300, payable on demand, with interest, which interest was paid. Six months after this communication to the plaintiffs, the defendant's son became bankrupt. Held, that it was properly left to the jury to say whether the representation made by the defendant was false within his own knowledge, and, the jury having found a verdict for him, the court granted a new trial. Denny v. Gilman, 26 Me., 149, is a case of the same kind. See, also, Allen v. Addington, 7 Wend., 9; Ward v. Center, 3 John.'s R., 271; Upton v. Vail, 6 id., 181; Barney v. Dewey, 13 id., 224, 395.

statement actually untrue: secondly, the making of that statement by a party to the contract: thirdly, the condition of mind of the person making the statement as to its truth or untruth: fourthly, the intent in the party making the statement to induce the other party to enter into the contract: fifthly, the reliance on the statement by the party to whom it is made: sixthly, the statement having such a relation to the contract as that the statement being false makes the contract unconscionable.

§ 626. It will be desirable to discuss these points separately; and, in doing so, it must be remembered that it makes a material difference whether the misrepresentation in question is alleged by way of defense to an action for specific performance, or to a common law action on the contract, or as the ground for an action of deceit, or for the rescission of the contract; for somewhat less than the ingredients requisite for either of the two latter proceedings (c) will suffice to prevent the active interference of the court in specific performance. The object of the present chapter being to consider misrepresentations in relation to specific performance, it is, of course, only incidentally and very partially discussed in any other relation.

§ 627. A misrepresentation may or may not be a fraud. Where it is false to the knowledge of the person making it, it is a fraud.' Where its falsity was not known, it may

(c) Attwood v. Small, 6 Cl. & Fin., 232, 395, 444; Lovell v. Hicks, 2 Y. & C., 46, 51; Aberaman Iron Works v. Wickens, L. R. 4 Ch., 101, reversing the decree of Malins, V. C., L. R. 5

Eq, 485. Consider Arkwright v. Newbold, 29 W. R., 455. reversing S. C., 28 id., 828; 49 L. J. Ch., 684.

1 Innocent misrepresentation, and asserting a fact without knowledge.] "The gist of the inquiry is, not whether the party making the statement knew it to be false, but whether the assertion uttered as true was believed by the party to whom it was made to be true, and if false, deceived him to his injury. The consequences of an innocent misrepresentation, if there can be such a thing, must fall on him who was the author of it, on the principle that the acts of even an innocent man shall prejudice him, rather than a stranger equally innocent." Gibson, Ch. J., in Tyson v. Passmore, 2 Pa. St., 122. Where a party makes a representation as true, and has no positive knowledge as to its truth or falsity, he is guilty of reckless negligence, and if another party is misled he is responsible. Pulsiford v. Richards, 17 Beav., 87; Reese v. Wyman, 9 Ga,, 439; Hunt v. Moore, 2 Pa. St., 105; Smith v. Richards, 13 Pet, 26; Hough v. Richardson, 3 Story, 659; York v. Gregg, 9 Tex, 85; Turnbull v Gadsden, 2 Strobh. Eq., 14; Tayman v. Mitchell, 1 Md. Ch., 496; Lewis v. McLemore, 10 Yerg., 206; Thompson v. Lee, 31 Ala., 292; Oswold v. McGehee, 28 Miss., 340; Bennett v. Judson, 21 N. Y., 238; Phillips v. Hollister, 2 Coldw., 269; Beebe v. Young, 14 Mich., 136; Gunly v. Sluter, 44 Md., 237; Frenzell v. Miller, 37 Ind., 1; Elder v. Allison, 45 Ga., 13.

The truth may be so stated as to be a misrepresentation.] The exact truth may