well as in equity (a) to making it with knowledge of its untruth. In this place we may note the special application of the doc- Sales by trine of Fraud to sales by auction. The courts of law held the auction: employemployment of a puffer to bid on behalf of the vendor to be ment of evidence of fraud in the absence of any express condition fixing puffer. a reserved price or reserving a right of bidding; for such a practice is inconsistent with the terms on which a sale by auction is assumed to proceed, namely that the highest bidder is to be the purchaser, and is a device to put an artificial value on the thing offered for sale (). There existed or was supposed to exist (c) in courts of equity the different rule that the employment of one puffer to prevent a sale at an undervalue was justifiable (d), with the extraordinary result that in this particular case a contract might be valid in equity which a court of law would treat as voidable on the ground of fraud. The Sale of Land by Auction Act, 1867, (30 & 31 Vict. c. 48) assimilated the rule of equity to that of law. The Indian Contract Act (s. 123) adopts the rule of the common law (e). It may also be mentioned here that marriage is an exception Fraud does to the general rule: but marriage, though including a contract, not avoid marriage. is so much more than a contract that the exception is hardly a real one. It is the law of England, and probably of all civilized countries, that "unless the party imposed upon has been deceived as to the person and thus has given no consent at all, there is no degree of deception which can avail to set aside a contract of marriage knowingly made" (f). Much less is a marriage rendered invalid by the parties or one of them having practised a fraud on the persons who performed the ceremony. Where a marriage had been celebrated in due form by Roman ecclesiastics at Rome between two Protestants, who had previously made a formal abjuration (the marriage not being otherwise possible by the law of the place as it then was), (a) See p. 465 above. (b) Green v. Baverstock, 14 C. B. N. S. 204, 32 L. J. C. P. 181. (c) Doubt was thrown upon it in Mortimer v. Bell, 1 Ch. 10, 16. (d) Smith v. Clarke, 12 Ves. 483; Flint v. Woodin, 9 Ha. 618. (e) "If at a sale by auction the seller makes use of pretended biddings to raise the price, the sale is voidable at the option of the buyer." (f) Swift v. Kelly, 3 Knapp, 257, As to promises to marry, 293. Consent of third persons obtained by fraud. Examination of special it was held immaterial whether the abjuration had been sincere or not, though as to the woman there was strong evidence to show that it was not (a). We may also observe in this place that when the consent of a third party is required to give complete effect to a transaction between others, that consent may be voidable if procured by fraud, and the same rules are applied, so far as applicable, which determine the like questions as between contracting parties. Thus where the approval of the directors is necessary for the transfer of shares in a company, a false description of the transferee's condition, such as naming him "gentleman" when he is a servant or messenger, or a false statement of a consideration paid by him for the shares, when in truth he paid nothing or was paid to execute the transfer, is a fraud upon the directors, the object being to mislead them by the false suggestion of a real purchase of the shares by a man of independent position; and on a winding-up the Court will replace the transferor's name on the register for the purpose of making him a contributory (b). We have now to examine the following questions: What must be shown with regard to the representation itself questions. to give a right to relief to the party misled? As to the representation relied on for rescinding contract. What is the extent of that right, and within what bounds can it be exercised? The answers to these questions, with few or no exceptions, are the same for a case of simple misrepresentation as for a case of fraud. 1. As to the representation itself. a. It must be a representation of fact, as distinguished on the one hand from matter of law, and on the other hand from a matter of mere intention. As to the first branch of the distinction, there is distinct authority at law that a misrepresentation It must be of the legal effect of an instrument by one of the parties to it does not enable the other to avoid it (e). And in equity there not of law is no reason to suppose that the rule is otherwise, though the of matter of fact, (a) Ibid. (b) Ex parte Kintrea, 5 Ch. 95, Payne's ca. and Williams' ca. 9 Eq. 223; Lindley, 2. 1436. (c) Lewis v. Jones, 4 B. & C. 506. Not so if the actual contents or nature of the instrument are misrepresented, as we saw in Ch. VIII. as to authorities only go to this extent, that no independent liability (but qu. can arise from a misrepresentation of what is purely matter of deliberate law (a). But it would be rash to infer that there is in no case a fraud). remedy against a deliberately fraudulent mis-statement of the law. The circumstances and the position of the parties might well be such as to make it not imprudent or unreasonable for the person to whom the statement was made to rely on the knowledge of the person making it and it would certainly work injustice if it were held necessary to apply to such a case the maxim that every one is presumed to know the law. of mere As to the second branch, we must put aside the cases already And not mentioned in which the substance of the fraud is not misrepre- motive or sentation, but a wrongful intention going to the whole matter of intention. the contract. Apart from these it appears to be the rule that a false representation of motive or intention, not amounting to or including an assertion of existing facts, is inoperative. On this ground was put the decision in Vernon v. Keys (b), where the defendant bought a business on behalf of a partnership firm. The price was fixed at £4,500 on his statement that his partners would not give more: a statement afterwards shown to be false by the fact that he charged them in account with a greater price and kept the resulting difference in their shares of the purchase-money for himself. It was held that the vendor could not maintain an action of deceit, as the statement amounted only to giving a false reason for not offering a higher price. The case also illustrates the principle that collateral fraud practised by or against a third person does not avoid a contract. Here there was fraud, and of a gross kind, as between the buyer and his partners; but we must dismiss this from consideration in order to form a correct estimate of the decision as between the buyer and seller. It must be judged of as if the buyer had communicated the whole thing to his partners and charged them only with the price really given. Still the decision is difficult to accept. For the buyer was the agent of the firm, and in (a) Rashdall v. Ford, 2 Eq. 750; Beattie v. Lord Ebury, 7 Ch. 777, 802, L. R. 7 H. L. 102, 130 (the House of Lords held there was no misrepresentation at all). (b) 12 East 632, in Ex. Ch. 4 Taunt. 488. The language used in the Ex. Ch. to the effect that the substance made a false statement of a distinct matter of fact touching the extent of his authority, though it was no doubt a matter as to which he was not bound to make any statement or to answer any questions. And it has been lately held in the Privy Council that it is clearly fraudulent for A. and B. to combine to sell property in B's name, B. not being in truth the owner but only an intermediate agent, and the nominal price not being the real price to be paid to the owner A., but including a commission to be retained by B (a). This seems to shake the authority of Vernon v. Keys, if not virtually to dispose of it. This difficulty, however, affects only the particular application of the doctrine on which the Court proceeded. Cases in But there are a series of decisions in equity which establish equity on a somewhat different rule. Where a contract has been entered principle of "making into upon the representations of one party that he will do somerepresenta- thing material to the other party's interest under it, and he does tions good." not make good that representation, he cannot enforce specific performance of the contract (b): and in one case the contract has even been set aside at the suit of the party misled. No doubt it would be possible in most if not in all of these cases to treat the representation as amounting to a collateral agreement, and perhaps in the last case to say that the original contract was conditional on its performance. But the judgments seem studiously to avoid that mode of handling the subject (c): otherwise we should venture to suggest this as the more correct and convenient view, and perhaps it deserves attention that the bearing of the decision in Jorden v. Money (d) on this particular question does not appear to have been as yet seriously discussed. In the first set of cases, (a) Lindsay Petroleum Co. V. Hurd, L. R. 5 P. C. 221, 243. Strictly and technically the Privy Council cannot even by express dissent overrule the decision of an English Court: see per Pollock, B. L. R. 9 Ex. at p. 138. (b) Peacock v. Penson, 11 Beav. 355, is perhaps an authority that the other party may sue for specific performance with fulfilment of the collateral representation or compensation in the alternative. But the Court appears to have treated the representation as substantially embodied or implied in the contract itself, (c) Myers v. Watson, 1 Sim. N. S. 523, Lamare v. Dixon, L. R. 6 H. L. 414, 428, per Lord Cairns: Lord Chelmsford does use the word agreement, at p. 423; and see last note. (d) 5 H. L. C. 185. The consideration of that decision in Piggott v. Stratton, 1 D. F. J. 33, is not inconsistent with the statement in the text. For the case was one of equitable estoppel, so far as not decided on the ground of actual contract, and the representation was not of intention, but that a certain state of things existed and would continue to exist. where specific performance was refused, the vendor or lessor had represented that he would do something for the purchaser's or lessee's benefit, either in the way of repair or improvement on the property itself (a), or by executing works on adjoining property as part of a general plan (b). In the one case which goes farther the contract was a partial re-insurance effected by one insurance society (A.) with another (B.) for one-third of the original risk, on the understanding that one-third was to be re-insured in like manner with another office C., and the remaining one-third retained by A., the first insurers. This last one-third was afterwards re-insured by A. with C. without communication with B. It was held that society B. was entitled to set aside the policy of re-insurance given by it on the faith that society A. would retain part of the liability. And it was said to make no difference that such an intention was really entertained at the time for the change of intention ought to have been communicated. "If a person makes a representation by which he induces another to take a particular course, and the circumstances are afterwards altered to the knowledge of the party making the representation, but not to the knowledge of the party to whom the representation is made, and are so altered that the alteration of the circumstances may affect the course of conduct which may be pursued by the party to whom the representation is made, it is the imperative duty of the party who has made the representation to communicate to the party to whom the representation has been made the alteration of those circumstances" (c). On the whole the view taken in the cases appears to be that the They seem representation of a definite thing or state of things as existing to involve or about to exist, though it may not amount to an agreement, tion of a gives a person to whom it was made and who has acted upon it substana substantive right in equity to have the representation made good () and then, on the principle of avoiding circuity of the repreaction, this right involves that of resisting the enforcement of a not an contract obtained by such representation if the representation agreement. has not been fulfilled, or even of preventing it by a suit for (a) Lamare v. Dixon, supra. (b) Beaumont v. Dukes, Jac. 422, Myers v. Watson, supra. (c) Traill v. Baring, 4 D. J. S. 318, 329, per Turner, L. J. (d) As in Slim v. Croucher, 1 D. F. J. 518. Where the repre- the asser tive right, even where sentation is |