is of no importance in that case, and quite unnecessary to show, that the vendor knew of the defects, which constitute the breach, at the time he gave the warranty; for it is matter of contract, and fraud does not enter into the question.' The incautious purchaser, however, is often deprived of his remedy, at law or in equity, by the omission from the written contract of the oral representations on which he relied in striking the bargain. In Pickering v. Dowson' it appeared that the defendants had recently bought the ship under an inventory, with particulars annexed, in which it was stated that she had "undergone a thorough repair, and might be sent to sea at a trifling expense." They were themselves preparing to send her to sea on their own account, when, at the wish of the plaintiffs to buy her, they showed them the former inventory and particulars. They made no statement that these were their representation of the condition of the vessel; and the contract when reduced into writing contained no such representation, and no reference even to the inventory and particulars. The ship, after proceeding to sea, was condemned as unfit for her voyage, sold in a foreign port and broken up. There was no evidence of fraud in the defendants; in consequence of the omission in the written contract, there was no evidence of a warranty: but it is obvious enough that the plaintiffs, although they examined the ship for themselves, relied on the representation in the particulars; and if they had insisted on its appearing in the written contract, at length, or by sufficient reference, they would at least have discovered at the time whether they were purchasing an unwarranted risk. But where a vessel appeared by the bill of sale to have been purchased "on the terms in the registry and inventory," and she stood on the registry, as having been built and launched in 1816, whereas she had been launched in 1815, the plaintiff recovered back the purchase money. The registry in this case satisfied the reference. The "inventory," by common use in the sale of ships, is confined to the ship's stores, and a reference to it alone will not generally Freeman t. Baker, 5 B. & Ad. 797, 802; Williamson v. Allison, 2 East, 446; Steuart v. Wilkins, 1 Doug. 18; Chandelor v. Lopus, 2 Croke, 2. Pickering v. Dowson, 4 Taunt. 779. 3 Saunderson v. Jackson, 2 B. & P. 238. 4 Fletcher v. Bowsher, 2 Stark. 562. Amounting to import a description of the fabric given in the advertisement or particulars,' unless it be under peculiar circumstances. Where the representation is made by one who knows it to be false, in order to induce another to act upon it, and that other does so with damage to himself, this is fraud in law, and a good cause of action; and so it may be, notwithstanding the person making the representation is ignorant of its falsehood, if it appear that it was fraudulently made. And in the absence of any verbal representation whatever, the seller may so fraudu lently practise upon the other, e.g., by covering and disguising defects in the thing sold, as to entitle the purchaser to rescind the contract or recover damages. Gibbs, J., says: "I remember the case of the sale of a house in South Audley Square, where the seller being conscious of a defect in the main wall, plastered it up and papered it over, and it was held that, as the vendor had expressly concealed it, the purchaser might recover."' Where a vessel which had been abandoned to a club of underwriters with her bottom worm-eaten, and her keel broken, was sold under a representation in the advertisement that "her hull was nearly as good as when launched;" the captain, as soon as she was advertised, having had her taken off the ways, where these defects could have been seen, and kept continually afloat, so that her condition escaped observation; the purchaser recovered back the deposit money. 6 If fraud is practised by a dishonest principal through an 1 Freeman v. Baker, 5 B. & Ad. 795. 4 Evans v. Edmonds, 13 C. B. 777, law guilty of a fraud, for he takes upon himself to warrant his own belief of the truth of that which he asserts." Ibid. 5 Per Gibbs, J., Pickering v. Dowson, 4 Taunt. 779, 785; see Hall v. Gray, 1 Stark. 434. But mere silence in the absence of any fraudulent act is no ground of action, even where the vendor knows that the article will not answer the declared purpose of the purchaser, Keates v. Earl of Cadogan, 10 C. B. 591; per Abbott, C. J., Fletcher v. Bowsher, 2 Stark. 562, 565, 66 a person ought either to be silent or to speak the truth; if he speaks at all he is bound to disclose the real fact." 6 Schneider v. Heath, 3 Camp. 506. innocent agent, or by a fraudulent agent on behalf of his unconscious principal, it equally vitiates the contract.' But where an agent innocently, and without the authority of his principal, made a representation which was false in fact, but which he believed at the time to be true, it was held that such evidence would not sustain a plea of fraud to an action by the principal for non-performance of the contract. If the principal, however, were, in answer to inquiries, purposely to refer to an ignorant agent, who, as was expected, makes a representation which is false in fact; or if the principal, knowing the defects of his ship, were to employ an ignorant agent, on purpose to take advantage of his innocent representations, it would be difficult to say that this is not such fraud in the principal as entitles the plaintiff to recover against him." For the purpose of proving fraud, it is immaterial that the Proof of Fraud, contract has been reduced into writing, and the fraudulent ab extra. representation omitted from it; if in fact fraud has been practised on the purchaser, that may always be established by evidence aliunde." Sale. It is a condition of great importance, and now very commonly Conditions of introduced into advertisements and contracts for the sale of ships, that the ship and stores "are to be taken with all faults as they lie." As regards the meaning of these words, Lord Kenyon, in an early case, held that such a condition relates only to those faults which the purchaser could have discovered, or which the vendor was unacquainted with; and that the vendor is bound nevertheless to disclose to the purchaser all latent defects that are known to him. But Lord Ellenborough refusing to subscribe to the doctrine of that case, laid it down Hern v. Nichols, 1 Salk. 289; Doe v. Martin, 4 T. R. 39, 66. * Cornfoot v. Fowke, 6 M. & W. 358; explained by Lord Chancellor Cranworth in National Exchange Company of Glasgow v. Drew, 2 Macq. Ho. of Lds. Cases, 103, 108. See Fuller v. Wilson, 3 Q. B. 68, 1009; Taylor v. Ashton, 11 M. & W. 401; Ormrod v. Huth, 14 M. & W. 651; Wilde v. Gibson, 1 Ho. of Lds. 605; Grant v. Norway, 10 С. В. 665. 3 See Feret v. Hill, 15 C. B. 207. 5 Wright v. Crookes, 1 Scott N. R. 6 Mellish v. Motteux, Peake, R. 156. Sale by Auction. that a vendor by a sale "with all faults," discharges himself from all responsibility for any defects whatever, unless he has used some artifice to disguise them and prevent their being discovered by the purchaser;' and this is now the received rule of law. Where however the ship is sold under a representation respecting her essential character, as that she is copper-fastened, or teak-built, or of such a class at Lloyd's, this condition relates only to such faults as a vessel of that character might have, and the vendor is still liable for the breach of warranty if she does not answer that description." But where a ship was described in the particulars of sale as "teak-built" and "A 1.," and to the condition "with all faults," there was added, "without any allowance for any defect or error whatever," and it turned out that she was neither teakbuilt nor classed A 1., it was held, in an action for breach of warranty, that such misdescription was matter of "error," and that the vendor under such a condition of sale was not liable unless there was fraud.* Most of the cases already cited under this division of the subject have a bearing upon sales of ship-property, whether effected by private contract or by public auction. It remains only to notice one point in connection with the proceedings by way of auction; and that is the employment of puffers at the sale. Upon this question, which is of daily recurrence, the courts of equity and of law are not agreed as to the principle that should govern their decisions. In equity, the employment of one person to bid at a sale in order to protect the property from being sold at an under value, is not held to be fraud, although it is not notified to the other bidders present." At law the private employment of even one person for such a purpose, if he actually bids, is a fraud, which vitiates the 1 Baglehole v. Walters, 3 Camp. 154. Per Curiam, Pickering v. Dowson, 4 Taunt. 779; Shepherd v. Kain, 5 B. & Ald. 240. 3 Shepherd v. Kain, 5 B. & Ald. 240. 4 Taylor v. Bullen, 5 Exch. 779; see The Duke of Norfolk v. Worthy, 1 Camp. 340; Wright v. Wilson, 1 M. & Rob. 207. 5 Smith v. Clarke, 12 Ves. 477; Woodward v. Miller, 2 Coll. 279; Flint v. Woodin, 9 Hare, 618; Bramley v. Alt, 3 Ves. 620; Conolly v. Parsons, 3 id. 625 n. contract of sale. So far equity in this respect approaches common law, that specific performance would not be decreed where the single bidder is privately employed in order generally to enhance the price, or as Sir Wm. Grant elsewhere phrases it, to take advantage of the eagerness of bidders to screw up the price. It is the received doctrine of equity, agreeing herein with the common law, that the employment of more persons than one to bid, is a fraud upon the purchaser. This is but a corollary to the language just quoted from Sir William Grant. For since one person would suffice for the protection of the property, the object of employing more can only be to take advantage of the eagerness of bidders to screw up the price. It is a fraud of the same kind, with the addition of another disguise, for a vendor to employ anyone to bid for him at a sale, after publicly announcing that it is to be without reserve; in equity, as at law, this vitiates the contract." On the other hand, neither law nor equity will countenance the purchaser in the use of unfair means at the sale, by which the result is turned to his advantage at the cost of the seller." In an action for non-delivery of a barge sold by auction to the plaintiff, it appeared that he had addressed the company at the sale, stating that he had a claim against the late owner, by whom he had been ill-used; and when no one would bid 1 Bexwell v. Christie, 1 Cowp. 395; Howard e. Castle, 6 T. R. 642; Rex v. Marsh, 3 Y. & J. 331; Crowder v. Austin, 3 Bing. 368; Wheeler v. Collier, 1 Moo, & Mal. 123; Thornett v. Haines, 15 M. & W. 367. This is also the law of Scotland, where the vendor may not bid at the sale himself or by another, or reserve a single bidding, without publicly announcing this reservation at the time of the sale. Bell Pr. No. 130, 131. 2 Semble, Smith v. Clarke, 12 Ves. 477, 482, 483. Per Sir W. Grant, Smith V. Clarke, 12 Ves. 477, 482, 483. Meadows v. Tanner, 5 Madd. 34; see Rex r. Marsh, 3 Y. & J. 331. There is nothing contrary to equity in an agreement between intending purchasers not to bid against each other, and the passage in Sugd. V. & P. 13 ed. p. 93, describing this as a fraud, for which a court of equity would open the biddings, although the report had been absolutely confirmed, is not supported by authority. In Re Carew's Estate Act, 28 L. J. (Ch.) 218. Knock out sales, which are based upon such agreements, are well known in some trades; but in sales of realty or ship property, or other subjects of considerable value, the mischief occasioned by such agreements may be prevented by previously fixing a reserved price. By the law of Scotland such agreements to defeat or restrain competition vitiate the sale. Bell Pr. No. 131. |