reason, regard them, when expressly made, as representations of fact which will be fraudulent where they were falsely made and have misled the other.1 guishable from an offer made, except that it is even more unreliable as an indication of value." False statements as to the price at which property was appraised are not actionable. Bourn v. Davis (1884), 76 Me. 223. And a statement that goods "were billed to me" at a certain price, greater than the real price, was said in Massachusetts not to "go beyond the limits allowed to vendors by what long has been understood to be the law of the Commonwealth." Way v. Ryther, 165 Mass. 226, 42 N. E. R. 1128. But this court has declared its intention not to extend the limits "of such lying talk as dealers may indulge in with legal impunity." Kilgore v. Bruce. 166 Mass. 136. 1 Sandford v. Handy (1840), 23 Wend. (N. Y.) 260; Van Epps v. Harrison (1843), 5 Hill (N. Y.), 63, 40 Am. Dec. 314 (Bronson, J., dissenting); Pendergast v. Reed (1868), 29 Md. 398, 96 Am. Dec. 539; Teachout v. Van Hoesen (1888), 76 Iowa, 113, 40 N. W. R. 96, 14 Am. St. R. 206, 1 L. R. A. 664; Fair child v. McMahon (1893), 139 N. Y. 290, 34 N. E. R. 779, 36 Am. St. R. 701; Townsend v. Felthousen (1898), 156 N. Y. 618, 51 N. E. R. 279; McAleer v. Horsey (1871), 35 Md. 439; Green v. Bryant (1847), 2 Ga. 66; Paetz v. Stoppleman, 75 Wis. 510. · The following have been held to be representations of fact and therefore actionable. Representations that a business is profitable, Cruess v. Fessler (1870), 39 Cal. 336; that a certain income has been realized from the royalty on a patent, Crosland v. Hall (1880), 33 N. J. Eq. 111; that a patent had been sold for a given sum in certain States, Somers v. Richards (1873), 46 Vt. 170; that a note sold is "perfectly good," Crane v. Elder (1892), 48 Kan. 259, 29 Pac. R. 151, 15 L. R. A. 795; Bish v. Beatty, 111 Ind. 403, 12 N. E. R. 523; that a business is profitable and yields a revenue of $20 per day, O'Donnell Brewing Co. v. Farrar, 163 Ill. 471, 45 N. E. R. 283; that a business was earning $2,500 a year net, Boles v. Merrill, 173 Mass. 491, 53 N. E. R. 894; that stock sold was earning a ten per cent. dividend "right along," Handy v. Waldron, 19 R. I. 618, 35 Atl. R. 884; that similar property rights had been sold at certain prices, Potter v. Potter, 65 Ill. App. 74. A statement that the price at which the seller offers the goods to the buyer is the same as that at which he has sold to other persons named is of a matter of fact. Caswell v. Hunton, 87 Me. 277, 32 Atl. R. 899; Kilgore v. Bruce, 166 Mass. 136, 44 N. E. R. 108. [In this last case the court said: "Misrepresentations as to the price paid by a third person, or as to the selling price, have heretofore been held actionable or indictable. Manning v. Albee, 11 Allen, 520; Belcher v. Costello, 122 Mass. 189; Com. v. Wood, 142 Mass. 459; Fairchild v. McMahon, 139 N. Y. 290. Falsehood as to rents received is similar in principle. Brown v. Castles, 11 Cush. 348, 350. False statements as to market value may not be actionable if made to an experienced dealer in the article spoken of. Lilienthal v. Suffolk Brewing Co., 154 Mass. § 938. Representations as to quantity.-Material misrepresentations concerning the quantity of the thing sold, which were made to be acted upon and have deceived the purchaser, will likewise justify rescission or an action. As has been seen, a party may not ordinarily deal with his eyes shut, nor rely upon representations which are obviously untrue; but where the matter is not thus palpable to the observation, the buyer may rely upon the express and positive representations of the seller as to quantity made to influence the buyer's action, and it is no objection that the buyer might by count or measurement have ascertained that the representation was untrue.1 § 939. But here, as in the other cases already considered, the representation must have been made as of a matter 185; Graffenstein v. Epstein, 23 Kan. 443. But it is otherwise if they are made to an unskilled person. Dawe v. Morris, 149 Mass. 188, 191."] A statement that a certain person, upon whose judgment the buyer would naturally rely, had offered a certain price for the property is a representation of fact. Moline Plow Co. v. Carson, 72 Fed. R. 387, 36 U. S. App. 448, 18 C. C. A. 606. So of representations that the seller had been offered a certain price. Strickland v. Graybill, 97 Va. 602, 34 S. E. R. 475. (But Boles v. Merrill, 173 Mass. 491, 53 N. E. R. 894; Cole v. Smith, 26 Colo. 506, 58 Pac. R. 1086, are contra.) And so of statements as to cost, where the agreement was to sell "at cost as per invoice," and the seller secretly went through and changed the figures. Welch v. Burdick, 101 Iowa, 70, 70 N. W. R. 94. To like effect: Miller v. Buchanan, 10 Ind. App. 474, 38 N. E. R. 56. Compare Underwood v. Caldwell, 102 Ga. 16, 29 S. E. R. 164. 1 Thus, in Lewis v. Jewell (1890), 151 Mass. 345, 24 N. E. R. 52, 21 Am. St. R. 454, it was held that if the owner of carpets covering the halls, stairs and twelve rooms of a house knowingly and falsely represents, as of his own knowledge, the number of yards contained, and the buyer relies upon the representation, the seller is liable for the fraud, even though the buyer might have measured the carpets for himself. The earlier Massachusetts cases of Gordon v. Parmelee. 2 Allen, 212; Noble v. Googins, 99 Mass. 231, and Parker v. Moulton, 114 Mass, 99, 19 Am. R. 315, which deny to the buyer of land, open to observation, the right to rely on the vendor's representations as to quantity, were limited. They are also limited in Roberts v. French (1891), 153 Mass. 60, 10 L. R. A. 656, 25 Am. St. R. 611, 26 N. E. R. 416. As to misrepresentations concerning the number of cattle upon a range, where the difficulty of estimating the number and all of the facts are known to the buyer, see Cole v. Smith, 26 Colo. 506, 58 Pac. R. 1086. of fact, and not be merely the expression of the seller's judg ment or opinion as to matters concerning which the buyer may exercise his own judgment as well.1 § 940. Remedies of the buyer.- Five remedies are frequently open to the buyer where the contract has been executed, though not always concurrently: 1. He may rescind the contract and recover what he has parted with.2 2. He may, where the article received is of no value, recover the money paid by him as money paid without consideration. 3. He may, subject to the limitations laid down by such cases as Derry v. Peek, recover damages in an action for the deceit.' 4. He may, where the representation is a term in the contract, or is what is frequently called a fraudulent warranty, ignore the tort and sue as for a breach of warranty. To these may be added another: 5. He may, in an action brought by the seller for the price, recoup his damages for the injury sustained. If the contract is executory, he may refuse performance upon the ground of the fraud by which it was procured. $941. Must restore article.- If the buyer would rescind or recover the consideration paid, he must restore the article or show it to be worthless. If the seller had no title, return to him need not be made. The other remedies, based 1 Thus, where both parties are in a situation to form an independent judgment, an assertion by the seller that the goods were sufficient in quantity to last for a certain time must be regarded as a mere expression of his opinion. Brockhaus v. Schilling, 52 Mo. App. 73. 2 See ante, § 907. Ante, § 839; Ripley v. Case (1889), 78 Mich. 126, 43 N. W. R. 1097, 18 Am. St. R. 428. 4 See ante, § 875. Trice v. Cockran (1852), 8 Gratt. (Va.) 442, 56 Am. Dec. 151. "Peden v. Moore (1831), 1 Stew. & Port. (Ala.) 71, 21 Am. Dec. 649; Bur ton v. Stewart (1828), 3 Wend. (N. Y.) 236, 20 Am. Dec. 692; Van Epps v. Harrison (1843), 5 Hill (N. Y.), 63, 40 Am. Dec. 314, and valuable note. 7 See ante, § 914: Perley v. Balch (1839), 23 Pick. (Mass.) 283, 34 Am. Dec. 56; Burton v. Stewart, supra; Mason v. Wheeler, 2 N. Y. Misc. 523; Havey v. Petrie, 100 Mich. 190, 59 N. W. R. 187 (as to whether the buyer is bound to return a diseased horse which it was unlawful to sell, quære); Ford v. Oliphant, Tex. Civ. App. 32 S. W. R. 437. 8 Bliss v. Clark (1860), 16 Gray (Mass.), 60. upon the existence or affirmance of the contract, do not, of course, require a restoration. $942. Must act promptly. The buyer also, if he would rescind, must act promptly and consistently.' If, having knowledge of such fraud as will justify repudiation, he affirms the contract, he cannot afterwards rescind on discovering that there was greater or other fraud than that of which he was at first aware.2 IV. OF FRAUD UPON CREDITORS. § 943. In general. The element of fraud may likewise be introduced into the contract of sale by the fact that the sale is made for the purpose of defeating the claims of the seller's creditors. This is not the place for any extended discussion of the law of fraudulent conveyances, which belongs to the separate treatises upon that subject, but a very brief survey of some of the more important aspects of the field seems desirable, and will be given. 944. The statutory provisions.-The current rules of law respecting conveyances in fraud of creditors are commonly supposed to find their origin in the statute of 13th Elizabeth, chapter 5, by which all conveyances by debtors made, not 1 See ante, § 908. Buyer must rescind within a reasonable time: (three months too long) Houston v. Cook, 153 Pa. St. 43, 25 Atl. R. 622; (four and one-half months too long) Gamble v. Tripp, 99 Cal. 223, 33 Pac. R. 851; (two months held not too long) Boles v. Merrill (1899), 173 Mass. 491, 53 N. E. R. 894, 73 Am. St. R. 308. See also Wilder v. Beede, 119 Cal. 646, 51 Pac. R. 1083; Snyder v. Hegan, Ky. App. S. W. R. 693; Humbert v. Larson, 99 Iowa, 275, 68 N. W. R. 703; Weich v. Burdick, 101 Iowa, 70, 70 N. W. R. 40 94; Hansen v. Baltimore, etc. Co., 86 Whether he has, by acquiescing in the sale after the discovery of the fraud, elected to treat the property as his own, is a question for the jury. Fleming v. Hanley, 21 R. L. 141, 42 Atl. R. 520; National Bank of Dakota v. Taylor, 5 S. Dak. 99, 58 N. W. R. 297. 40. 2 Campbell v. Fleming, 1 Ad. & E. bona fide and for value, but with the intent to hinder, delay or defraud their creditors, were declared to be void as against such creditors and them only. The later statute of 27th Elizabeth, chapter 4, extended protection to subsequent purchasers of lands. These statutes, although probably forming part of the common law in the original States, have inspired legislation in every State of the Union which not only incorporated the form or substance of the English statutes, but has also in many cases gone farther and expressly declared what the English acts asserted by construction only. The most important of these additions is that which has been made in many States, declaratory of the intent,—that sales of goods made by a vendor having them in his possession or control, and assignments of such goods by way of security or upon condition, shall be presumed to be fraudulent as against creditors or subsequent purchasers in good faith, unless accompanied by immediate delivery and followed by an actual and continued change of possession. § 945. Declaratory of common-law rule. In relation to these statutes of Elizabeth, it is to be noticed that, notwithstanding some expressions to the contrary, the acts were simply declaratory of the common law, which, without the statutes, in the language of Lord Mansfield, "would have attained every end proposed by them."1 $ 946. Transactions voidable, not void. Again, though the language of the statutes is that the conveyance shall be void, it is clear that in the ordinary case it is no more than voidable, at the option and by the action of the defrauded party, because, as will be seen, until he moves the transaction 1 In Cadogan v. Kennett (1776), 2 Cowp. 432. To same effect (per Kent, Ch.): Sands v. Codwise (1808), 4 Johns. (N. Y.) 596, 4 Am. Dec. 313; Farr v. Sims (1832), Rich. Eq. Cas. (S. C.) 122, 24 Am. Dec. 396; Hudnal v. Wilder (1827), 4 McCord (S. C.), 294, 17 Am. Dec. 744; Beckwith v. Burrough (1884), 14 R. I. 366, 51 Am. R. 392. 2" Void" in these statutes is, to carry their spirit into effect, to be construed as "voidable." Anderson v. Roberts, 18 Johns. 515, 9 Am. Dec. 235; Kearney v. Vaughan, 50 Mo. 284; Rappleye v. International Bank, 93 Ill. 396; Lyon v. Robbins, 46 Ill. 276. But see Mason v. Vestal, 88 Cal. 396, 22 Am. St. R. 310, 26 Pac. R. 213. |