on further still to say, what is, perhaps, not quite so clear, but certainly it is my opinion, where there is a duty or obligation to speak, and a man in breach of that duty or obligation holds his tongue and does not speak, and does not say the thing he was bound to say, if that was done with the intention of inducing the other party to act upon the belief that the reason why he did not speak was because he had nothing to say, I should be inclined myself to hold that that was fraud also."(l)

§ 681. Again, entire silence can hardly deceive: but an imperfect statement may be a perfect untruth. For instance, if the owners of a business, desiring to sell it to a company, put out a prospectus containing various statements, each in itself correct, but keep silence on a material fact, it would seem well worthy of consideration whether these persons who were under no antecedent obligation to make any statement have not, by saying something, assumed an obligation to tell not only the truth but the whole truth. (m) So where a proposed creditor describes a transaction to the proposed sureties, the description may be evidenced of a representation that there is nothing in the transaction that might not naturally be expected to take place between the parties to the transaction described. (n)

§ 682. (5) Further, it must, to prevent confusion, be observed that there are obligations to disclosure which arise from the contract itself: as, for example, the obligation on a vender of real estate honestly to disclose his title. This is a duty arising out of, and subsequent to the contract, and the non-performance of this duty cannot constitute fraud dans locum contractui. With these we are not at present concerned.

§ 683. (6) Lastly, an obligation to disclosure may arise from statute. The 38th section of the companies act, 1867 (30 and 31 Vict., c. 131), (o) provides that "Every prospectus of a company, and every notice inviting persons to subscribe for shares in any joint-stock company, shall specify the dates and the names of the parties to any contract entered into by the company or the promoters, directors, or trus

(1) In Brownlie v. Campbell, 5 App. C., 950. (m) Consider Peek v. Gurney, L. R6 H. L., 377. (n) Lee v. Jones, 17 C. B. (N. S.), 482, 503.

(0) This section, and the cases under it, are discussed in Buckley on the Companies' Acts (3d ed.), 455 et seq.

tees thereof, before the issue of such prospectus or notice, whether subject to adoption by the directors or the company, or otherwise; and any prospectus or notice not specifying the same shall be deemed fraudulent on the part of the promoters, directors, and officers of the company knowingly issuing the same, as regards any person taking shares in the company on the faith of such prospectus, unless he shall have had notice of such contract."

§ 684. But it has never (it is believed) been held by our courts that there is any general obligation to disclosure on the part of a vendor or purchaser of chattels or realty, though the person maintaining silence may know that the other party is acting under an erroneous impression. "Aliud est celare, aliud tacere: neque enim id est celare quicquid reticeas." (p)

It has been justly observed, by Mr. W. W. Story, (q) that "it is the general policy of the law, in order to induce vigilance and caution and thereby to prevent those opportunities of deceit which lead to litigation, to throw upon every man the responsibilities of his own contracts, and to burden him with the consequences of his careless mistakes." "I am not aware," said Lord Chelmsford, addressing the House of Lords in the case of Peek v. Gurney, (r) "of any case in which an action at law has been maintained against a person for an alleged deceit, charging merely his concealment of a material fact which he was morally but not legally bound to disclose." The case of Keates v. The Earl of Cadogan,(s) is an authority for the proposition that there is no obligation on a proposed lessor of a house in a ruinous and unsafe condition to inform the proposed lessee of its state. In Horsfall v. Thomas, (t) it was decided that the vendor of a chattel is under no obligation to disclose a patent defect. In Smith v. Hughes, (u) the court of Queen's Bench determined that the passive acquiescence of the seller of chattels in the self deception of the buyer does not entitle the latter to avoid the contract. Lastly, in Edwards-Wood v. Mar

(p) Cicero De Off. Lib. iii, c. 13. Cicero continues: "Sed cum, quod tu scias, id igno. rare emolumenti tui causa velis eos, quorum intersit id scire." The passage has been cited by Lord Mansfield in Carter v. Boehm (3 Bur., 1910), and by Knight Bruce, L. J, in Nelthorpe v. Holgate (1 Coll., 221). If the whole is to express the principles of our law,

velis must, it is conceived, import not only
will but some act consequent thereupon.
See supra, § 676, note 1.

(9) Law of Contracts (5th ed.), s 644.
(r) L. R. 6 H. L., 390; and see page 403.
(8) 10 C. B., 591.

(t) 1 H. & Colt, 90.
(u) L. R. 6 Q. B., 597.

joribanks, (v) a contract was made for the sale of an advowson, nothing being said or asked as to the income of the living, which was in fact subject to a charge in favor of the Governors of Queen Anne's bounty, for repayment of a sum borrowed from them to rebuild the parsonage; the purchaser filed his bill for specific performance with compensation, but got a decree only for specific performance without compensation; and from this he ineffectually appealed, first to the Lords Justices, and lastly to the House of Lords.

§ 685. Again, as regards the purchaser, he is not under an obligation to communicate any circumstance which may enhance the value of the thing bought by him. So that, for instance, a man knowing of the existence of a mine under an estate may validly deal with the owner who is ignorant of this fact, without any communication of it. (w) And so where a first mortgagee, with power of sale, having entered into an arrangement not amounting to a binding contract for the advantageous sale of part of the mortgaged property, afterwards bought up at a reduced price the interest of the second mortgagee without informing him of the arrangements for sale, a bill to set aside the sale by the second mortgagee, on the ground of the suppression of information by the purchaser, was dismissed by Lord Romilly, M. R., and subsequently by Lord Cranworth.(x) Nor is the purchaser liable to an action for deceit for misrepresenting the seller's chance of sale, or the probability of his getting a better price than that offered. (y)

§ 686. The case is, however, quite different when, in addition to silence, something is done by the one party to conceal from the other some fact material to that other party. Thus, where a wall which required to be maintained against the Thames was industriously concealed, a bill for specific performance was dismissed, though without costs.(z)1

So, again, where colliery owners entered into a contract

(v) 1 Giff., 384; 3 De G. & J., 329; 7 H. L. C., 806. See, also, Haywood v. Cope, 25 Beav., 140.

(2) Fox v. Mackreth, 2 Bro. C. C., 400, 420; cf. Walters v. Morgan, 3 De G. F. & J., 723.

(x) Dolman v. Nokes, 22 Beav, 402. (y) Vernon v. Keys, 12 East, 632. (z) Shirley v. Stratton, 1 Bro. C. C., 440. Distinguish Cook v. Waugh, 2 Giff, 201.

1 Margraft v. Muir, 57 N. Y., 155; Mank v. Patchin, 42 id., 167; Pumpelly v. Phelps, 40 id., 60; Bush v. Cole, 28 id., 261; Taylor v. Merrill, 55 Ill., 52; Fish v. Leser, 69 id., 394.

for the purchase of a farm adjoining their colliery not only without disclosing, but (it would seem) studiously concealing the fact, of which the vendors were at the time wholly ignorant, that they (the purchasers) had wrongfully taken 2,000 tons of coal from under the farm, the court dismissed with costs the purchasers' bill for specific performance of the contract, and ordered it to be delivered up to the vendors for cancellation. (a) And where A. agreed to sell his land to B. at a half-penny per square yard, which amounted to about £500, when the real value was £2,000, and the defendant asked the attorney whom he employed to calculate the amount before the contract was signed, not to tell the plaintiff how small it was, the court granted an interlocutory injunction against the deceiver to stay proceedings at law. (b) In Hill v. Gray, (c) the plaintiff had employed an agent to sell a picture, and the defendant bought it under the belief that it had belonged to a third person. The case has sometimes been thought to support the proposition that mere silence may be fraudulent. But in Keates v. Earl of Cadogan, (d) Jervis, C. J., pointed out that the case really turned on the "aggressive deceit" on the part of the agent of the seller; and if the case cannot be supported on this ground it seems not to be law. (e)

Even as regards a sale with all faults, the industrious and active concealment of faults would be fraudulent. (ƒ)

§ 687. So, though the purchaser may keep silence as to the advantages of the estate, he must not make any false representation as to it, or go any further than silence. "A very little," said Lord Eldon, "is sufficient to affect the application of that principle. If a word, if a single word, be dropped which tends to mislead the vendor, that principle will not be allowed to operate." Accordingly, in the case before his Lordship, the purchaser having made such suggestions of what was not true, the contract was set aside:(g) and in a case where a solicitor bought of a person in difficulties who was selling without professional advice, and untruly represented the nature and title of the prop

(a) Fothergill v. Phillips, L. R. 6 Ch., 770. (b) Deane v. Rastron, Anstr, 64.

(c) 1 Stark., 434.

(d) 10 C. B., 591.

(f) Baglehole v. Walters, 3 Camp., 154; Schneider v. Heath, id, 506.

(g) Furner v. Harvey, Jac., 169, 178; and see Walters v. Morgan, 3 De G. F. & J., 723,

(e) See per Lord Chelmsford in Peek v. 724; Davis v. Cooper, 5 My. & Cr., 270. Gurney, L. R. 6 H., 391.

erty as such that no one but a professional man would purchase it, specific performance was refused. (h)'

§ 688. It must be observed that it is possible that silence which would not constitute fraud may yet constitute such unfairness in a contract as to stay the hand of the court. The case of Ellard v. Lord Llandaff, (i) if it is to be supported on the ground of the silence of the lessee as to the fact that one of the lives in the surrendered lease was, at the time of signing the contract, in extremis, rests upon this principle; and was so put by Lord Manners in deciding it.(j)

§ 689. The employment of a puffer at auctions is in some circumstances regarded as fraud, which will prevent the en

(h) Davis v. Abraham, 5 W. R., 465. Cf. Summers v. Griffith, 35 Beav., 27.

(i) 1 Ball & B., 241.
(j) See, also, supra, § 383.

But in Bowman v. Bates, 2 Bibb., 47, A. discovered a salt spring on B.'s land, and purchased the land at the ordinary price, concealing the fact of the discovery. Held, that the contract should be rescinded. In Ďrake v. Collins, 5 How. (Miss.), 253, however, where property sold low, on execution, it being supposed to be the subject of a prior mortgage, when the fact that it was not might have been easily ascertained, it was held that the mere fact that the purchaser knew to the contrary was not ground to set aside the sale. Livingston v. Peru Iron Co, 2 Paige, 390, is an authority in accordance with the English decisions, as given in the text. In this case, Walworth, Ch, in delivering the opinion of the court, said, that although it had been held that the suppression of a material fact, by either party to the contract, was sufficient for an avoidance of the contract (Perkins v. M'Gavock, Cook's Rep., 417), that the courts of New York had never gone that length; although "very slight circumstances in addition to the intentional concealment of a fact, have been considered sufficient to constitute a fraud upon the other party." In the case before himwhich was this the vendee applied to the vendor, to purchase a lot of wild land, and represented to him that it was worth nothing, except for the purpose of sheep pasture, when he knew that there was a valuable mine on the lot, of the existence of which the vendor was ignorant-he decided that there was such fraud as would avoid the purchase. See the cases of Wendell v. Fosdick, 13 Johns.'s Rep., 325; Weller v. Colden, id., 395, and Turner v. Harvey, Jacob's Rep., 178, cited in the course of the chancellor's opinion. At law, although the principles which must govern the conduct of the vendor, are at exact variance with those of equity (Pars. Contr., vol. 1, p. 461), those which relate to the acts of the vendee, or purchaser, seem to be in perfect unison with them. The leading case on the subject is said to be Laidlow v. Organ, 2 Wheat., 178 (Pars. Contr., vol. 1, p. 461). The facts were these: One Shepherd, interested with Organ, and in treaty with Girault, a member of the firm of Laidlow & Co., at New Orleans, for a quantity of tobacco, had secretly received intelligence over night of the peace of 1815, between England and the United States, which raised the value from thirty to fifty per cent. Organ called on Girault on Sunday morning, a little after sunrise, and was asked if there was any news by which the price of tobacco might be enhanced; but there was no evidence that Organ had asserted, or suggested, anything to induce a belief that such news did not exist; and under the circumstances the bargain was struck. Marshall, C. J., delivered the opinion of the court, to the effect that the buyer was not bound to communicate intelligence of extrinsic circumstances, which might influence the price, though it were exclusively in his possession; and that it would be difficult to circumscribe the contrary doctrine within proper limits, where the means of intelligence are equally accessible to both parties.