principle that, in order to set aside a purchase perfected by conveyance and payment of the purchase money, there must be proof of the direct personal knowledge and concealment by the principal, and not merely by an agent, and that such proof was wanting in the case. (d) This decision has by no means given universal satisfaction, (e) but whether correct or not, it leaves intact the doctrine established in Edwards v. McLeay. § 658. Where a misrepresentation has been made by the vendor with regard to some patent defect in the thing sold, and it is proved that the purchaser had seen the thing sold, so that this defect must have been known to him, he will not be able to avail himself of the defect as a bar to specific performance.' This was decided by Grant, M. R., in the case of Dyer v. Hargrave, (f) where a farm was described as all lying within a ring-fence, whereas it did not in fact so lie; but it was clearly proved that the defendant had lived in the neighborhood all his life, had seen the farm before purchasing it, and must have known whether it did lie in a ring-fence or not; and on these facts the master of the rolls decided that the defendant was clearly excluded from (d) Same note, Wilde v. Gibson, 1 H. L. C., 605 See Brownlie v. Campbell, 5 App C., 925, 937; and consider Brett v. Clowser, 5 C. P. D., 376, 388. (e) St. Leon. Law of Prop., 614. 1 Each party having an opportunity to examine, and doing so.] 'The rule that when a purchaser has examined property containing defects which can be discovered by ordinary vigilance, he is not entitled to relief on account of such defects, does not apply when fraudulent means have been employed to conceal the defects. The obligation to communicate facts ceases when each party has an opportunity of examining for himself, and undertakes to do, without relying on the statements of the other. But it is not the mere opportunity to examine which relieves the other party from the duty to disclose. For although the opportunity exists, yet if the purchaser is led to repose confidence in the vendor, and does not examine for himself, the duty to disclose defects is equally obligatory, and the vendor will be held bound for all statements and all undue concealments." Sharkey, J., in Hall v. Thompson, 1 Sm. & Marsh., 443. Purchaser need not give vendor information of inhanced value.] The purchaser is not bound to advise the vendor of a fact which may increase the value of the property. There may be a mine upon the land of vendor, of which he is ignorant, an intending purchaser who is aware of the fact, is not bound to disclose it. The rule appears to be, that the vendor must put the purchaser in possession of any fact which decreases the value of the property; but the purchaser is not reciprocally bound to advise the vendor of a fact which may increase its value. Fox v. Mackreth, 2 Bro. C. C., 400, 420; Walters v. Morgan, 3 De G. F. & J., 923; Wilde v. Gibson, 1 H. of Lds., 605; Laidlaw v. Organ, 2 Wheat., 178; Livingston v. Penn. Iron Co., 2 Paige's Ch., 390; Perkins v. McGanock, Cooke, 415; Smith v. Beaty, 2 Ired. Eq., 456; Harris v. Tyson, 24 Pa. St., 347; Butler's App., 26 Pa. St., 63. See contra, where fraudulent misrepresentations were used. Swimm v. Bush, 23 Mich., 99. insisting upon the misrepresentation as a defense. This principle will, of course, only apply where the thing in respect of which the representation is made is one perfectly visible to everybody.(g) § 659. This case was supported by Grant, M. R., by the analogy of warranties at common law, in which, however general, defects apparent at the time of the bargain are not included, because they can form no subject of deceit or fraud; so that, for example, a person who buys a horse knowing it to be blind in both eyes, cannot sue for this defect on a general warranty of soundness. (h) § 660. But for the vendor thus to countervail the effects of his own misrepresentation, the evidence of knowledge in the other party must be conclusive; he "must show very clearly that the purchaser knew that to be untrue which was represented to him as true; for no man can be heard to say that he is to be assumed not to have spoken the truth." (i)' § 661. Such being the proof required, it is very certain (g) Grant v. Munt, Coop., 173; infra, § 849 et seq. (h) Bayly v. Merrel, Cro. Jac, 386; Margetson v. Wright, 7 Bing., 603 (1) Per Knight Bruce, L. J., in Price v. Macaulay, 2 De G. M. & G., 346; Wilson v. The 1 Chitty's Contr. (6th Am. ed.), 445, 446; Story's Contr., §§ 530, 532. rale, however, at law, is not every where uniform. "A general warranty,' says Mr. Parsons (vol. 1, bk. 3, ch. 5, p. 400, n. [i]), "is said not to cover dofects plain and obvious to the purchaser, or of which he had cognizance: thus, if a horse be warranted perfect, and want a tail or an ear. 13 H., 4, 1 b, pl., 4; 11 Edw., 4, 6 b, pl., 10; Southerne v. Howe, 2 Rol. Rep., 5; Long v. Hicks, 2 Hump., 305; Schuyler v. Russ, 2 Caines, 202; Margetson v. Wright, 5 M. & P., 606; Dillard v. Moore, 2 Eng. (Ark.), 166. The same rule applies whether the warranty is express or whether the warranty is implied by law, from a sound price, as is the case in some States. Richardson v. Johnson, 1 Louis. Ann. Rep., 389. But care should be taken not to misunderstand nor misapply this rule. A vendor may warrant against a defect which is patent and obvious, as well as against any other. And a general warranty that a horse was sound, for instance, would, perhaps, be broken, if one eye was so badly injured, or so malformed as to be entirely useless; and although this defect might have been noticed by the purchaser at the time of sale. He may choose to rely upon the warranty of the vendor, rather than upon his own judgment, and we see not why he should not be permitted to do so. A warranty that a horse is sound, is broken if he cannot see with one eye. House v. Fort, 4 Blackf. 293. Why may not the vendor be equally liable if one eye was entirely gone? In Margetson v. Wright, 8 Bing., 454, 7 id., 603, a horse warranted sound had a splint then; this was visible at the time of the sale; but the animal was not then lame from it. He afterwards became lame from the effects of it, and the warranty was held to be broken. In Liddard v. Kain, 2 Bing., 183, an action was brought to recover the value of horses sold and delivered. The defense was that, at the time of the purchase, the plaintiff agreed to deliver the horses at the end of a fortnight, sound and free from blemish, and that at the end of a fortnight one had a cough and the other a swelled leg; but it also appeared that the seller informed the buyer that one of the horses had a cold on him, and that this, as well as the swelled leg, was apparent to every observer. The jury having that the mere circumstance of other means of knowledge being open to the purchaser will not have this effect, even though, independently of any statement, the party relying on the representation would in law have been taken to have had notice of the contrary. The doctrine of notice has no application where there has been a representation as to the fact of which notice would be implied ;(j) the proof must go further, and clearly show the purchaser to have had communicated to his mind information of the real state of facts. (k) § 662. Therefore, where a distinct representation has been made, it will not be countervailed by any general statement or any circumstances from which an inference inconsistent with the representation might be drawn, even though, in the absence of such representation, they might be sufficient to put the other party on inquiry.(7) § 663. These principles are applicable not only where the deceived party resists specific performance, but where he assumes the position of plaintiff and seeks to set aside the contract on the ground of misrepresentation. In Rawlins v. Wickham, (m) the plaintiff successfully repudiated a contract of partnership after he had been a partner for four years with full power of access to the books, and these books would have shown the falsity of the representation made to him. § 664. Nor will it prevent the effect of a misrepresentation that the party making it recommended the other to consult his friends and professional advisors, for "no man can complain that another has too implicitly relied on the truth of what he has himself stated."(n) (j) Drysdale v. Mace, 2 Sm. & Gif., 225, 230; cf. per Jessel, M. R., in Jones v. Rimmer, 14 Ch D., 590. (k) Price v. Macaulay, 2 De G. M. & G., 339. See, also, Gibson v. D'Este, 2 Y. & C. C. C., 542, 572. (1) Wilson v. Short, 6 Ha., 366, 377. (m) 1 Giff, 355; 3 De G. & J., 304. (n) Reynell v. Sprye, 1 De G. M. & G., 660, 710; Dobell v. Stevens, 3 B. & C., 623. found a verdict for the defendant, a rule for a new trial was moved on, on the ground that where defects are patent, a warranty against them is inoperative. The court refused the rule, on the ground that the warranty did not apply to the time of the sale, but to a subsequent period. In Stucky v. Clyburn, Cheves, 186, a slave sold had a hernia; this was known to the buyer. Yet it was held to be within an express warranty of soundness. So of a swelling in the abdomen, plainly visible and known to the purchaser. Wilson v. Ferguson, Cheves, 109. So where a slave had the scrofula at the time of sale. Thompson v. Botts, 8 Mis., 710. And where a defect is obvious, yet, if the purchaser be misled as to its character or extent, a warranty is implied. Wood v. Ashe, 3 Strobh's L., 64." Upon this view of the case, the analogy of Sir William Grant, in Bayly v. Merrel, referred to in the text, would be neither so cogent nor so apt in this country as in England. § 665. Thus where a misrepresentation is made by a vendor in respect of a lease, of the covenants in which the purchaser would, by law, be implied to have notice, the vendor will be equally bound by his statement as if no such implication arose. (0) On the same principle it was decided that where a vendor represented the house to be substantially and well built, and it proved to be the contrary, the vendor was not entitled to specific performance, though the defendant might, of course, have inquired into its actual state. (p) § 666. In Harris v. Kemble(g) there was a contract consequent upon certain misrepresentations as to the profits of a theatre. Leach, V. C., was of opinion that these representations, being manifestly founded on accounts which were equally open to both parties (they being joint owners of the theater), and being justified by the accounts, did not avoid the contract; but his decision was overruled by Lord Lyndhurst and afterwards by the House of Lords, on the ground that the representations were made with a view to the contract, and that the accounts were so kept as to render it difficult without employing an accountant to draw any certain conclusion from them. § 667. The circumstance that the vendor sold "with all faults," though it may serve to put the purchaser on his guard, will not enable the vendor to say that the purchaser did not rely on any representation made, or prevent the purchaser from avoiding the sale, if that representation were false. (r) § 668. The principle that, in order to render a misrepresentation operative, there must be reliance on it by the party who uses it as a defense, applies to the case of the assignment of a contract originally affected by such a circumstance: thus it seems that if A. contract with B., and in so doing there are misrepresentations on the part of A. which would prevent his enforcing the contract against B., and B. assign the contract to C., on whom no fraud is practised and who is not affected by the original misrepresentation, in such circumstances the contract might be (0) Van v. Corpe, 3 My. & K., 269; Flight v. Barton, id., 282; Pope v. Garland, 4 Y. & C. Ex., 394, 401. Distinguish Paterson v. Long, 6 Beav., 590. (p) Cox v. Middleton, 2 Drew, 209. (g) 1 Sm, 111, particularly 120; S. C., 5 Bli. (N. S.), 730. (r) Schneider v. Heath, 3 Cam., 506. See, also, infra, § 857. enforced against C., for he placed no reliance on the misrepresentation made to B.(s) § 669. From the same principle it follows that if A. make a misrepresentation to the agent of B., which is believed by the agent to be true but known by B. to be false, B. cannot avail himself of this as a defense to specific performance(t)1 § 670. (6) It is, for obvious reasons, necessary, to constitute a misrepresentation which will prevent a specific performance, that the statement in question shall be so material to the contract built on it that, if the statement be false, the contract becomes one which it would be unconscionable for the party having made the statement to enforce. In other words, the misrepresentation must be shown to have operated to the prejudice of the defendant. (u) Therefore, where A. induced a purchaser to think that he was contracting with B. through his (A.'s) agency, whereas he was, in fact, contracting with A. himself, but there was nothing to induce the belief that he would not have contracted on the same terms with A., or that he had sustained any loss or inconvenience from acting under the mistake, the court enforced performance of the contract. (v) But it is sufficient if the misrepresentation operate to the prejudice of the defendant to a very small extent. (w) § 671. The effect of misrepresentation on the contract and the rights of the parties under it is considered in connection with cases of fraud in the next chapter. (8) Smith v. Clarke, 12 Ves., 477, 484. (t) Nelson v. Stocker, 4 De G. & J., 458. (u) See Polhill v. Walter, 3 B. & Ad., 114. (v) Fellowes v. Lord Gwydyr, 1 Sim., 63; S. C., 1 R. & My., 83; cf. Flint v. Woodin, 9 Ha., 618. (w) Cadman v. Horner, 18 Ves., 10. The distinction of the casuists between error antecedens and concomitans was the same as that referred to in this section. Error" dividitur in antecedentem qui dat causam contractui, 1 Fraudulent representations by the agent of a corporation.] The corporation is bound by the acts of its accredited agent, acting within the scope of his authority, and must be held for his fraudulent acts. Burnes v. Pennell, 2 H. of Lds., 499; National Exch. Co. v. Drew, 2 McIl., 125; Ranger v. Gt. Western R. R. Co., 5 H. of Lds., 86; Custer v. Titusville Water and Gas Co., 63 Pa. St., 381; see, however, Brockwell's Case, 4 Drew, 205. Where the agent has no authority.] Where an agent has no authority to do the act, yet where a principal suffers a party to expend his money, believing that the representations of such agent were authorized by the principal, equity will not suffer such principle to plead that his agent had no authority. Kerr on Fraud and Mis., 117; Ramsden v. Dyson, L. R. 1 Ch., 129. |