SECTION IV.

Misrepresentation, Fraud, and kindred Topics common to Torts and Contracts.

THIS was an action upon a written agreement, dated the 12th of November, 1838, made between the plaintiff and the defendant, whereby the defendant agreed to take a ready-furnished house of the plaintiff, for the term of two years, at the rent of £375 per annum, but which the defendant had refused to perform.

Plea, that the plaintiff caused and procured the defendant to enter into the said agreement, and that the defendant was induced to enter into the said agreement, through and by means of the fraud, covin, and misrepresentation of the plaintiff, and others in collusion with him. Verification.

The replication traversed the plea, upon which issue was joined.

At the trial before Lord ABINGER, C. B., at the Middlesex Sittings, after last Trinity Term, the following facts appeared in evidence. The defendant, being in search of a town residence for the purpose of educating his children, applied to Mr. F. B. Clarke, No. 116 Crawford Street, to know if he had a ready furnished house to let in that neighborhood. Mr. F. B. Clarke mentioned several houses, which on looking at them, the defendant thought would not suit him. Subsequently to this, on the 29th October, 1838, Mr. F. B. Clarke wrote to inform him of the house in question, belonging to the plaintiff, stating that the rent required was 400 guineas, but that he thought 350 guineas might be taken, but certainly not less.

Upon the receipt of this letter, the defendant went with two of his sons and a friend, to look at the house in question, No. 16 York Place, Baker Street, and there saw Mr. Clarke, the father of F. B. Clarke, who had been employed by the plaintiff to let the house in question, and to whom persons making inquiries about the house had been referred. On seeing him the defendant said that he had seen Mr. Clarke, of Crawford Street, about taking the house. Mr. Clarke replied, that that Mr. Clarke was his son, but that he himself had the letting of the house. The defendant then said, "Pray, sir, is there anything objectionable about the house?" to which Mr. Clarke replied, "Nothing whatever; " upon which the defendant said, "Then I do not think I shall object to give 350 guineas for the house; to which Mr. Clarke replied, that his son had made a mistake, that the rent was 450

guineas, and not 350. The defendant thereupon declined to give that rent, and left the house. Afterwards, however, in consequence of some further negotiation, the rent was reduced to £375, and the defendant agreed to take the house on those terms, and the agreement, for the breach of which the action was brought, was drawn up by Mr. Clarke, and signed by the defendant and afterwards by the plaintiff. On the 13th of November, the day after signing the agreement, the defendant discovered that the adjoining house to the plaintiff's (which was a corner house), situate in Davies Street, was a brothel of the worst description, of which there was ample evidence given at the trial, and in consequence of it persons in the immediate neighborhood of it could not let their lodgings, and were obliged to leave their houses. It was also proved that the plaintiff was fully aware of it, and had consulted some of the neighbors as to the best mode of putting down the nuis sance. The defendant, on the 14th November, through his attorneys, Messrs. Egan & Waterman, gave notice of his determination not to take possession of the house, because, to his great astonishment, he had discovered that the next house to it was a house of ill fame. The defendant's family, it appeared, consisted of two sons and two daughters, the eldest daughter being sixteen or seventeen years of age.

At the trial, the defendant began, and having proved the above facts, Thesiger, for the plaintiff, objected that the question put to Mr. Clarke, the agent, by the defendant, whether there was any objection about the house, must be considered as applying to objections within the house, or to the house itself, but not to objections arising from something outside and apart from the house; which, he contended, the agent who was merely authorized to let the house, had no authority from his principal to answer. The learned judge overruled the objection, but left it to the jury to say whether the nuisance was such as formed a solid objection to the house; if so, and if they thought that when the defendant used the expression "about the house," Mr. Clarke could not have understood him in any other sense than that of an objection to the house, they ought to find their verdict for the defendant and he stated his opinion to be, that although an agent could not bind his principal beyond the scope of his authority, it did not follow that the principal could enforce a contract procured by the false representation of his agent, and that the representation made by the agent must have the same effect as if made by the plaintiff himself. The jury answered both questions in favor of the defendant, and gave their verdict accordingly.

Thesiger, in Easter Term last, obtained a rule to show cause why there should not be a new trial on the ground of misdirection.

Kelly, Channell, and Willcock, in Michaelmas Term, showed cause.
Thesiger and W. H. Watson, contra.
Cur. adv. vult.

The judges, differing in opinion, now delivered their judgments seriatim.

ROLFE, B. The jury found for the defendant, and the counsel for the plaintiff afterwards obtained this rule nisi to set aside the verdict, and for a new trial, on the ground that Clarke was not proved to have had authority to make such a statement, or to have known of the nuisance in question, though the plaintiff himself must have been aware of its existence. The point for our decision is, whether it was properly left to the jury, in the absence of proof of express authority, to treat the defendant as not being liable in this action, on the ground that the representation of Clarke was a representation by an agent made in the ordinary course of business, and therefore binding on the principal. It was not shown at the trial what was the precise extent of the authority given to Clarke, but I will assume that he had all the authority usually confided to house agents, and in the absence of express proof he cannot be assumed to have bad more. If an agent so authorized should enter into an agreement to let the house of his principal, making it part of the contract that the house was free from any particular nuisance, as, for instance, the immediate neighborhood of a brothel, it is obvious the principal could only enforce the contract, or recover damages for the breach of it, by showing that he was able and willing to do what his agent had contracted to do, that is, to let to the intended tenant the house free from the particular nuisance. No question as to the extent of the agent's authority could in such a case arise. The landlord insisting on his agent's contract, must take it in solido, with all its qualifications and provisions. If, instead of an action at the suit of the landlord, the intended tenant should sue the intended landlord for the breach of such a contract, on the ground that the agent had agreed to let a house free from the nuisance of a brothel, then the question argued in this case, as to the authority of a house-agent to make such a contract binding on his principal, would arise. But the present is not a question as to the power of an agent to bind his priucipal by contract, but as to his power to affect him by a representation collateral to the contract. Now, in order to do this, it is essential, according to what was laid down by GIBBS, C. J., in Pickering v. Dowson, 4 Taunt. 786, to bring home fraud to the principal; and that was certainly not done in this case, where all the facts are consistent with the hypothesis that the plaintiff innocently gave no directions whatever on the subject, supposing that the intended tenant would make the necessary inquiries for himself, or even with the stronger supposition that he expressly desired Clarke not to make any representation at all on the subject. If the plaintiff, knowing of the nuisance, expressly authorized Clarke to state that it did not exist, or to make any statement of similar import; or if he purposely employed an agent, ignorant of the truth, in order that such agent night innocently make a false statement believing it to be true, and might so deceive the party with whom he was dealing, in either of these cases he would be guilty

1 After stating the case. - ED.

of a fraud, and the truth of the plea would then, I think, have been established. But on the general ground of the authority of an agent to bind his principal in matters within the scope of his authority, on which the case was left to the jury, I think that, as no express authority was proved to have been given by the plaintiff, authorizing Clarke to make the representation in question, the fraud stated by the plea is not made out, and consequently the rule for a new trial ought to be made absolute.

ALDERSON, B. In this case the parties have entered into an agreement which is in writing, and to the terms of which nothing can be added, and from them nothing subtracted.

The agent makes a representation at the time of the negotiation, which is contrary to the fact. If that were a fraudulent representation, and in consequence of that representation the bargain was made, the defendant will not be liable, by reason of the fraud, and this is the point raised by these pleadings.

But here the representation, though false, was believed by the agent to be true. He therefore, if the case stopped here, has been guilty of no fraud.

The jury have, however, found that the true facts were known to the principal, though not communicated by him to the agent; and it is said this knowledge, on the part of the principal, is sufficient to establish the fraud.

If, indeed, the principal had instructed his agent to make the false statement, this would be so, although the agent would be innocent of any deceit. But this fact also fails. It may perhaps be admitted, that such a statement, if made part of the original written contract, would be within the scope of the general agency here shown to exist. But the contract is in writing, and this is no part of it. And I think it impossible to sustain a charge of fraud, when neither principal nor agent has committed any, the principal, because, though he knew the fact, he was not cognizant of the misrepresentation being made, nor ever directed the agent to make it; and the agent, because though he made a misrepresentation, yet he did not know it to be one at the time he made it, but gave his answer bona fide.

It is said that this will open a door to fraud, by enabling parties in the situation of this principal, themselves conscious of objections to their premises, to appoint agents, who unconsciously may make misrepresentations to the injury of third persons. This does not follow. If the fact could be shown, it would be a fraud on the part of the principal with such a motive to appoint such an agent; and the third party is not (except from his own imprudence) in any real danger, for he may always protect himself by making the representation a part of the contract, in which case its falsehood, whether fraudulent or not, will be a good defence to him. For these reasons, I think there should be a new trial.

PARKE, B. In this case I concur in opinion with my learned Brothers who have preceded me, that there should be a new trial.

It is an action on an agreement by the defendant, to take the plaintiff's house, ready furnished, for a term. The defendant pleads, that the agreement was void, on the ground of fraud, covin, and misrepresentation of the plaintiff, and others in collusion with him. That plea the

defendant is to prove.

The alleged fraud consists in an untrue representation made by a house-agent, employed by the plaintiff, in answer to a question by the defendant. The question was, whether there was any objection to the house; the answer, that there was none; and it appeared that the next door was a brothel, and that the plaintiff knew it before, but the agent did not. My Lord Chief Baron thought the plaintiff was bound by the agent's representation, and left the question to the jury, whether that representation was intended to relate to intrinsic objections only, or applied to extrinsic objections also. The jury found that it was meant and understood to refer to both, and to the mode in which that question was left to the jury, or their finding upon it, no objection is made. But it is said, and I think justly said, that it is not enough to support the plea, that the representation is untrue; it must be proved to have been fraudulently made. As this representation is not embodied in the contract itself, the contract cannot be affected, unless it be a fraudulent representation, and that is the principle on which the plea is founded.

Now the simple facts, that the plaintiff knew of the existence of the nuisance, and that the agent, who did not know of it, represented that it did not exist, are not enough to constitute fraud: each person is innocent, because the plaintiff makes no false representation, and the agent, though he makes one, does not know it to be false; and it seems to me to be an untenable proposition, that if each be innocent, the act of either or both can be a fraud. No case could be found in which such a principle is laid down, as was admitted in the course of the argument. It must be conceded, that if one employ an agent to make a contract, and that agent, though the principal be perfectly guiltless, knowingly commit a fraud in making it, not only is the contract void, but the principal is liable to an action. Lord Holt held, that in an action of deceit, for selling one sort of silk for another, upon evidence that there was no actual deceit in the defendant, but that it was in his factor beyond sea, the merchant was liable. Hern v. Nichols, 1 Salk. 289. But, in the present case, the agent acted without any fraudulent intent; and therefore his act alone neither renders the plaintiff liable to an action nor vitiates the contract. It must also be admitted that if the plaintiff not merely knew of the nuisance, but purposely employed an ignorant agent, suspecting that a question would be asked from him, and at the same time believing or suspecting that it would, by reason of such ignorance, be answered in the negative, the plaintiff would unquestionably be guilty of a fraud, and the contract