equally within the reach of his observation. In the sale of a ship, which had a latent defect known to the seller, and which the buyer could not by any attention possibly discover, the seller was held to be bound to disclose it, and the concealment was justly considered to be a breach of honesty and good faith. So, if one party suffers the other to buy an article under a delusion created by his own conduct, it will be deemed fraudulent, and fatal to the contract; as if the seller produces an impression upon the mind of the buyer, by his acts, that he is purchasing a picture belonging to a person of great skill in painting, and which the seller knows not to be the fact,

and yet suffers the impression to remain, though *483 *he knows it materially enhances the value of the

picture in the mind of the buyer. One party must not practice any artifice to conceal defects, or make any representations for the purpose of throwing the buyer off his guard. The same principle had been long ago declared by Lord Hardwicke, when he stated,d that if a vendor, knowing of an incumbrance upon an estate sells without disclosing the fact, and with knowledge that the purchaser is a stranger to it, and under representations inducing him to buy, he acts fraudulently, and violates integrity and fair dealing. The inference of fraud is

a

The rule here laid down, though one undoubtedly of moral obligation, is perhaps too broadly stated, to be sustained by the practical doctrine of the courts. The qualification of the rule is, that the party in possession of the facts must be under some special obligation, by confidence reposed, or otherwise, to communicate them truly and fairly. Vide infra, p. 484. 490.

Mellish v. Motteaux, Peak's Cases, 115. This case was afterwards overruled by Lord Eilenborough, ia Baglehole v. Walters, 3 Camp. Rep. 154, and the latter decision confirmed in Pickering v. Dowson, 4 Taunt. Rep. 779; but it was upon another point, respecting the effect of a sale with all faults; and the principle of the decision, as stated in the text, remaius unmoved. The same principle was urged in Southern v. Howe, 2 Rol. Rep. 5, and it was stated, that if a man sells wine, knowing it to be corrupt, an action of deceit lies against him, though there be no warranty Hill v. Gray, 1 Starkie's Rep. 352. Pilmore v. Hood, 5 Bingham, N.

C. 97.

1 Vesey, 96.

easily and almost inevitably drawn, when there is a suppression or concealment of material circumstances, and one of the contracting parties is knowingly suffered to deal under a delusion. It was upon this ground that Lord Mansfield must have considered,a that selling an unsound article, knowing it to be unsound, for a sound price, was actionable. It is equivalent to the concealment of a latent defect; and the ground of action is, the deceit practised upon the buyer.b The same rule applies to the case where a party pays money in ignorance of circumstances with which the receiver is acquainted, and does not disclose, and which, if disclosed, would have prevented the payment. In that case, the parties do not deal on equal terms, and the money is held to be unfairly obtained, and may be recovered back.c It applies, also, to the case where a person takes a guaranty from a surety, and conceals from him facts which go to increase his risk, and suffers him to enter into the contract under false impressions. Such concealment is held to be fraud, and vitiates the contract.d

⚫ Stuart v. Wilson, Doug. Rep. 18.

Hough v. Evans, 4 M Cord's Rep. 169. If a person having the legal title to property, stands by and acquiesces in the sale of it by another person claiming, or having color of title, he will be estopped afterward in asserting his title against the purchaser. Qui tacet, consentire videtur. Qui potest et debet vetare jubet, si non vetat. Wendell v. Van Rensselaer, 1 Johnson's Ch. Rep. 354. Storrs v. Barker, 6 Ib. 166. Hobbs v. Norton, 1 Vern. 136. 2 Ch. Ca. 128. See also, to S. P. 6 Conn. Rep. 212 -214. 12 Serg. & R. 23. 12 Vesey, 85. Irwin v. Morell, Dudley's Geo. Rep. 72. Skinner v. Stouse, 4 Missouri Rep. 93. Pickard v. Sears, 6 Adolphus & Ellis, 469. Gregg v. Wells, Theobald & Ebden, 10 Adol. & Ellis, 90. Story on Eq. vol. i. sec. 386. 391. This kind of estoppel was first established by courts of equity, and has, to a certain extent, been adopted by courts of law.

• Martin v. Morgan, 1 Brod. & Bing. 289. The sound doctrine on this subject was declared by Bayley, J., in Heane v. Rogers, 9 B. & Cress. 577, and affirmed by the Court, in Dewey v. Field, 4 Metcalf's Mass. Rep. 381.

Pidcock v. Bishop, 3 Barnw. f Cress. 605. Maltby's case, cited by Lord Eldon, in 1 Dow's P. C. 294. Smith v. Bank of Scotland, 1 Ibid.

*The writers of the moral law hold it to be the duty of the seller to disclose the defects which are

272. In the old English law the Writ of Deceit lay not only for personal injuries, but for frauds in relation to real property, and to which it principally applied. But a special action in the case for damages in nature of a writ of deceit, had long ago taken the place of the other, and the writ of deceit was abolished by the statute of 3 and 4 Wm. IV. c. 2. See 3 Blacks. Comm. 165. In the sense of a court of equity fraud includes all acts, omissions and concealments, which involve a breach of either legal or equitable duty, trust or confidence justly reposed, and are injurious to another. See infra, p. 561. A court of chancery will exercise the power of setting aside judgments and decrees of any court, foreign or domestic, in cases of fraud. The authorities are collected in the case of Van Meter v. Jones, in the able and elaborate opinion of Chancellor Vroom. 1 Green, N. J. Ch. Rep. 520. Neither a bona fide debt, nor an actual advance of money, will sustain a security infected with fraud. Sandford, Chancellor, 2 Sandford's Ch. Rep. 631. The law requires the utmost degree of good faith (uberrima fides,) in transactions between parties standing in a peculiar relation, or fiduciary character, between each other, as for instance, in the relation of client and attorney, physician and patient, principal and agent, principal and surety, guardian and ward, trustee and cestui que trust, partners and part-owners. Any misrepresentation or concealment of any material fact, or any just suspicion of artifice or undue influence, will be fatal to the validity of the transaction between them, especially in the view of a court of equity. The principle on which courts of equity act in regard to cases arising under such a confidential or fiduciary relation, stand, (independent of any ingredient of deceit or imposition which is usually mixed with such cases,) upon a motive of general public policy. It is when confidence is reposed and confidence abused by some advantage gained by means of the relation. Lord Eldon in Gibson v. Jeyes, 6 Vesey, 278. Champion v. Rigby, 1 Russ. & Mylne, 539. Edwards v. Meyrick, 2 Hare Rep. 60. Carter v. Palmer, 8 Clark & Fin. 657. Poillon v. Martin, 1 Sandford's Ch. Rep. 569. These were cases applicable to the relation of attorney and client. And for the general principle respecting fiduciary relations, see Story's Comm. on Eq. Jurisprudence, 224, 304— 323. Lord Hardwicke, in the great case of Chesterfield v. Jansen, 2 Vesey, 125, 155, classified fraud into four kinds: (1) Fraud, or dolus malus may be actual, arising from facts and circumstances of imposition. (2.) It may be apparent from the intrinsic value and subject of the bargain itself—such as no man in his senses, and not under delusion, would make on the one hand, and as no honest and fair man would accept on the other. (3.) It may be inferred from the circumstances and condition of the parties, for it is as much against conscience to take advantage of a man's weakness or

within his knowledge. But the common law is not quite so strict. If the defects in the article sold be open equally to the observation of both parties, the law does not require the vendor to aid and assist the observation of the vendee. Even a warranty will not cover defects that are plainly the objects of the senses; though if the vendor says or does any thing whatever, with an intention to divert the eye, or obscure the observation of the buyer, even in relation to open defects, he would be guilty of an act of fraud. A deduction of fraud may be made, not only from deceptive assertions and false representations, but from facts, incidents and circumstances, which may be trivial in themselves, but decisive evidence in the given case of a fraudulent design.d When, however, the

necessity, as his ignorance. (4.) It may be collected from the nature and circumstances of the transaction, as being an imposition on third persons. In Dent v. Bennett, 7 Simons, 539, the vice-chancellor declared an agreement between a medical adviser and his patient for a large sum to be paid by the latter after his death, for past and future services, null and void. It was held, to be a glaring abuse of confidence, and the vice-chancellor enforced with spirit and energy the doctrine, that wherever we find the relation of employer and agent existing in situations in which, of necessity, much confidence must be placed by the employer in the agent, then the case arises for watchfulness on the part of the court, that the confidence shall not be abused.

a Grotius, b. 1. c. 12. s. 9. Paley's Moral Philosophy, b. 3. c. ch. 7. b Schuyler v. Russ, 2 Caines' Rep. 202. Dyer v. Hargrave, 10 Vesey, 507.

3 Blacks. Com. 165. 2 Rol. Rep. 5.

a If the party intentionally misrepresents a material fact, or produces a false impression by words or acts, in order to mislead, or to obtain an undue advantage, it is a case of manifest fraud. Story's Comm. on Eq. Jurisprudence, 201. Nelson, J., in Welland Canal Co. v. Hathaway, 8 Wend. 483. Denman Ch. J. in Pickhard v. Sear, 6 Adolph. & Ellis, 474. Doggett v. Emerson, 3 Story's Rep. 700. A sale of goods procured through a false representation of the vendee in regard to his solvency and credit, passes no title as between the parties. The People v. Kendel, 25 Wendell, 399. Cary v. Hotailing, 1 Hill's N. Y. Rep. 311. See also post, p. 497. But in order to afford relief, the misrepresentation must be of something material, constituting an inducement or motive to the other party, and on which he placed trust and confidence, and was actually misled to his in

means of intormation relative to facts and circumstances

affecting the value of the commodity, be equally accessible to both parties, and neither of them does or says any thing tending to impose upon the other, the disclosure of any superior knowledge which one party may have over the other, as to those facts and circumstances, is not requisite to the validity of a contract. There is no breach of any implied confidence that one party will not profit by his superior knowledge, as to facts and circumstances open to the observation of both parties, or equally within the reach of their ordinary diligence; because neither party reposes in any such confidence, unless it be specially tendered or required. Each one, in ordinary cases, judges for himself, and relies confidently, and perhaps presumptuously, upon the sufficiency of his own know

ledge, skill and diligence. The common law affords *485 to every one *reasonable protection against fraud in

dealing; but it does not go to the romantic length of giving indemnity against the consequences of indolence and folly, or a careless indifference to the ordinary and accessible means of information. It reconciles the claims of convenience with the duties of good faith, to every extent compatible with the interests of commerce. This it does by requiring the purchaser to apply his attention to those particulars which may be supposed within the reach of his observation and judgment; and the vendor to communicate those particulars and defects which cannot be

jury. Ibid. 204, 205. Representations by A. to B. in respect to a sale afterwards made by A. to C., founded on the representations which A. made to B. or he to C., are treated in the same way as if made by the vendor to C. Crocker v. Lewis, 3 Summer, 1. It is fraud to sell an article as designated by another person's name, in order to give it greater currency, and the perpetrator of the fraud is liable to an action. Thomson v. Winchester, 19 Pick. 214.

Laidlaw v. Organ, 2 Wheaton, 178. Hough v. Richardson, 3 Story's Rep. 659. A more stern rule of morality and law respecting the duty of disclosure of information which would materially affect the price, is laid down in Frazer v. Gervais, 1 Walker Miss. Rep. 72, and it overrules, as far as the authority of the case can go, the decision in Laidlaw v. Organ.