SAME-CONDUCT OF PLAINTIFF.

192. A false representation has no connection as cause of the damage claimed, unless-

(a) It actually operated to deceive; and

(b) It was relied on, although not exclusively.

193. Plaintiff's contributory negligence, or credulity, in relying on a false representation, is ordinarily no defense to the fraud.

Connection as Cause.

Fraud or deceit is an instrument by which one person injures another. If, therefore, the misrepresentation be not as to a mate. rial matter, and be not relied on, and not it, but something else, is the cause of the damage, it cannot be made the basis of recovery. In connecting such instrumentalities as the cause of the damage, it is not necessary that it should be shown to be the sole or only cause. It is sufficient if it be a proximate cause.124 A person

123

48, 13 S. W. 959; Claflin v. Flack (Com. Pl.) 13 N. Y. Supp. 269. As to the duty of a merchant to notify a mercantile agency to whom he has made a statement that his circumstances have since changed, see Cortland Manufg Co. v. Crosky, 2 Johns. & H. 1. Where a merchant makes a report to a commercial agency of material facts as to his financial condition, knowing them to be false, for the purpose of obtaining a standing thereby, one to whom the agent communicates the report, and who by reason thereof, believing it to be true, sells goods to the merchant on credit, may recover in an action against him for the fraudulent representation. Hinchman v. Weeks, 85 Mich. 535, 48 N. W. 790; ante, note 115.

123 Safford v. Grout, 120 Mass. 20; James v. Hodsden, 47 Vt. 127; Warder v. Bowen, 31 Minn. 335, 17 N. W. 943; Sioux Nat. Bank v. Norfolk State Bank, 5 C. C. A. 448, 56 Fed. 139. If the plaintiff's mind was partly influenced by defendant's misstatements, the defendant will not be any less liable because the plaintiff was also partly influenced by a mistake of his own. Per Bowen, L. J., in Edgington v. Fitzmaurice, 29 Ch. Div. 459-483; Peek v. Derry, 37 Ch. Div. 541. And see Saunders v. McClintock, 46 Mo. App. 216.

124 Addington v. Allen, 11 Wend. (N. Y.) 374; Fishback v. Miller, 15 Nev. 428; Lebby v. Ahrens, 26 S. C. 275, 2 S. E. 387; Winter v. Bandel, 30 Ark. 362; Black v. Black, 110 N. C. 399, 14 S. E. 971; Lewis v. Jewell, 151 Mass. 345, 24 N. E. 52; Ming v. Woolfolk, 116 U. S. 599, 6 Sup. Ct. 489; Ledbetter v. Davis, 121 Ind. 119, 22 N. E. 744; Roseman v. Canovan, 43 Cal. 110; Web

may have relied both upon the misrepresentation of another, and upon other considerations. It has been held, however, that reliance on such false representations must be a predominating motive. "The term 'predominate,' in its natural and ordinary signification, is understood to be something greater or superior in power and influence with which it is connected or compared. So understood, a predominating motive, when several motives may have operated, is one of greater force and effect than any other motive. But the court are of opinion that if the false and fraudulent representation was a motive at all, conducive to the act,-if it was one of several motives acting together, and by their combined force producing the result,-it should be left to the jury so to find it.” 125

The Plaintiff must have been Deceived.

Deceit which does not deceive is not fraud.126

Therefore, if

the vendor conceals a defect in a cannon sold to the vendee, and the latter does not inspect the cannon, he cannot recover in fraud for damages caused by its subsequent explosion.127 "A mere naked lie, though told with intent to deceive, upon which nobody acts, and by which nobody is deceived, is not actionable." A declaration alleging, in substance, that the defendant falsely and fraudulently represented that he had a valid claim against plaintiffs for damages, that the latter relied upon the representation, and that they had investigated, at a large expense, and found the representation to be false, does not, therefore, state a cause of action. "One or the other of the last two allegations is as untruthful as the representations are claimed to be. Both cannot be true. If the plaintiffs rely upon the representations, they did

ster v. Bailey, 31 Mich. 36; Parmlee v. Adolph, 28 Ohio St. 10; Wakeman v. Dalley, 51 N. Y. 27; Risch v. Von Lillienthal, 34 Wis. 250; Endsley v. Johns, 120 Ill. 469, 12 N. E. 247; Fowler v. McCann, 86 Wis. 427, 56 N. W. 1085; Fulton v. Hood, 34 Pa. St. 365; Pratt v. Philbrook, 41 Me. 132.

125 Mathews v. Bliss, 22 Pick. 48. Cf. Tatton v. Wade, 18 C. B. 371, where part of the representation is in writing, and actionable under the statute of frauds, and part is spoken only.

126 Fraser, Torts, 130.

127 Horsfall v. Thomas, 1 Hurl. & C. 90. But see Cockburn, C. J., in Smith v. Hughes, L. R. 6 Q. B. 605. And see Smith v. Chadwick, L. R. 20 Ch. Div. 27; Sheldon v. Davidson, 85 Wis. 138, 55 N. W. 161.

not investigate them; if they investigated them, they did not rely upon them."

"128

A distinction between reliance and deception should be noted. There may be deception without reliance. One may be deceived by another's misrepresentation, and still not be entitled to recover, because he did not rely upon such representation; as where such representations were made a long time prior to his conduct,129 and his conduct was influenced altogether by other considerations. But, on the other hand, there can be no sufficient reliance with deception. Thus, if a person knew statements to be false, 130 or did not believe them,131 or if he did not know of them specifically,182 he cannot say that he relied on them.

Reliance.

False representations do not constitute a cause of action, unless it appears that the person complaining believed them to be true, and acted thereon to his injury.133 The plaintiff must allege and affirmatively prove that he believed the statement of the defendant, and relied on it.1 He cannot recover if it appears that he

134

128 Enfield v. Colburn, 63 N. H. 218.

129 Representations made a year before plaintiff's conduct causing damage are not, as a matter of law, actionable. Reeve v. Dennett, 145 Mass. 23, 11 N. E. 938.

130 "However fraudulent and wicked a statement may be, if the innocent party, before being tied, and while in a situation to retreat without prejudice in any manner, becomes acquainted with the truth, the misrepresentation will not be a ground of defense against the contract." Graves, J., in Whiting v. Hill, 23 Mich. 399-405, and cases cited. And see Bowman v. Carithers, 40 Ind. 90; Stitt v. Little, 63 N. Y. 427; McCormick v. Kelly, 28 Minn. 135, 9 N. W. 675; Michaud v. Eisenmenger, 46 Minn. 405, 49 N. W. 202; Lincoln v. Ragsdale, 37 N. E. 25. "But if a person employs an agent to take orders, and a representation is made to him of the solvency of a person whom he advises his employers to trust for goods, if at the time the agent knew that such person was insolvent, though he did not communicate it to his employers, they cannot maintain an action against the person who made such false representation." Cowen v. Simpson, 2 Esp. 290.

131 Grithing v. Diller, 66 Hun, 633, 21 N. Y. Supp. 407.

132 Brackett v. Griswold, 112 N. Y. 454, 20 N. E. 376.

133 Upton v. Levy, 39 Neb. 331, 58 N. W. 95; Pearl v. Walter, 80 Mich. 317, 45 N. W. 181; Windram v. French, 151 Mass. 547, 24 N. E. 914.

134 Becraft v. Grist, 52 Mo. App. 586. See, also. Timmis v. Wade, 5 Ind. App. 139, 31 N. E. 827; Henderson v. Henshall, 4 C. C. A. 357, 54 Fed. 320;

would have acted as he did in the absence of any representation on the part of the defendant.135 Hence, if he learns of the falsity of the representation before the transaction is completed, and carries it out notwithstanding, he cannot recover.136 Representation after consummation of a sale are not actionable." 137 And generally knowledge of the falsity of the representation, or failure of the plaintiff to believe it, or reliance on his own investigation, shows that he did not rely thereon,138 especially where means of correct information were equally accessible to both parties.1

139

Stevens v. Allen, 51 Kan. 144, 32 Pac. 922; Barnes v. Union Pac. Ry. Co., 12 U. S. 1, 4 C. C. A. 199, 54 Fed. 87. Nye v. Merriam, 35 Vt. 438; Hagee v. Grossman, 31 Ind. 223; Griffing v. Diller, 66 Hun, 633, 21 N. Y. Supp. 407; Humphrey v. Merriam, 32 Minn. 197; Cheney v. Powell, 88 Ga. 629, 15 S. E. 750; Fowler v. McCann, 86 Wis. 427, 56 N. W. 1085; Robbins v. Bartom, 50 Kan. 120, 31 Pac. 686; Runge v. Brown, 23 Neb. 817, 37 N. W. 660; Sheldon v. Davidson, 85 Wis. 138, 55 N. W. 161; Upton v. Levy, 39 Neb. 331, 58 N. W. 95; Stetson v. Riggs, 37 Neb. 797, 56 N. W. 628.

135 Ming v. Wollfolk, 116 U. S. 599, 6 Sup. Ct. 489; Black v. Black, 110 N. C. 398, 14 S. E. 971; Holdom v. Ayer, 110 Ill. 448; Wimer v. Smith, 22 Or. 469, 30 Pac. 416; Humphrey v. Merriam, 32 Minn. 197, 20 N. W. 138; Powers v. Fowler, 157 Mass. 318, 32 N. E. 166. In an action on a note given for the exclusive right to use a patented article within a certain territory, where defendant claimed damages on the ground that others were entitled to use the article therein, and testified that plaintiffs' agent told him that as soon as he was ready to use it the others would have to "get out" of the territory, and the purchase was made with that understanding, and otherwise would not have been made, an instruction that, if these representations were made, it is a material question whether defendant considered them as material, and they operated as a material inducement to enter into the contract, is proper (97 Mich. 419, 56 N. W. 774, reversed). Davis v. Davis, 100 Mich. 162, 58 N. W. 651.

136 McEacheran v. Western Transp. Co., 97 Mich. 479, 56 N. W. 860; Whiting v. Hill, 23 Mich. 399; Vernol v. Vernol, 63 N. Y. 45. And see Pratt v. Philbrook, 41 Me. 132; Tuck v. Downing, 76 Ill. 71. But see Matlock v. Reppy, 47 Ark. 148, 14 S. W. 546.

137 Farmers' Stock-Breeding Ass'n v. Scott (Kan.) 36 Pac. 978.

138 Clopton v. Cozart, 13 Smedes & M. (Miss.) 363; Ellison v. Barker, 14 Mont. 96, 35 Pac. 722; Hagee v. Grossman, 31 Ind. 223; Proctor v. McCord, 60 Iowa, 153, 14 N. W. 208; Humphrey v. Merriam, 32 Minn. 197, 20 N. W. 138; Lincoln v. Ragsdale, 9 Ind. App. 555, 37 N. E. 25; Nelson v. Luling, 62

139 Nounnan v. Sutter County Land Co., 81 Cal. 1, 22 Pac. 515.

If the statement complained of is capable of being understood in more than one sense, the plaintiff must, of course, show that he acted upon it in the sense in which it is false.14

As between vendor and vendee, there are three phases in which a case of false representation may appear: First, the vendee may be induced to purchase, relying solely on the false representations of the vendor; second, he may be induced to make the investment by the combined false representation of the vendor, and certain information received from some other source; 141 or, third, although the vendor may have made such false statements, yet the vendee may not trust them, and may act alone from information received from other sources.142 It is only in the first and second cases that the vendee is entitled to an action for damages.

But a mere perfunctory inquiry on the part of the plaintiff is not sufficient to enable a falsifying defendant to escape.143 In general, to escape liability, the defendant may prove that the other party (1) knew the truth,144 or (2) relied on his own investigation,145 (3) was not really influenced by the defendant's misrepresenta

or

N. Y. 645; Nye v. Merriam, 35 Vt. 438; Bowman v. Carithers, 40 Ind. 90; Anderson v. Bernett, 6 Miss. 165; Doran v. Eaton, 40 Minn. 35, 41 N. W. 244; Freeman v. McDaniel, 23 Ga. 354; Byard v. Holmes, 34 N. J. Law, 296; Hanson v. Edgerly, 29 N. H. 343; Taylor v. Guest, 58 N. Y. 262; Fuller v. Hodgdon, 25 Me. 243.

140 Lindley, L. J., in Smith v. Chadwick, 20 Ch. Div. 27. This is for the jury. Powers v. Fowler, 157 Mass. 318, 32 N. E. 166.

141 A dealer and expert in violins, who gives a false and fraudulent opinion as to the make and value of such an instrument, to a purchaser ignorant of such matters, is liable to such purchaser, who buys in reliance on such representations, in an action for deceit, even though the latter attached no importance to the statements as to the maker, and did not rely solely thereon. Powell v. Flechter (Com. Pl. N. Y.) 18 N. Y. Supp. 451.

142 Moris v. Moris (Ga.) 20 S. E. 506; Black v. Black, 110 N. C. 398, 14 S. E. 971 (exchange of a mule for a horse); Nye v. Merriam, 35 Vt. 438. 143 Redgrave v. Hurd, 20 Ch. Div. 1; Schumaker v. Mather, 133 N. Y. 590, 30 N. E. 755.

144 Michaud v. Eisenmenger, 46 Minn. 405, 49 N. W. 202.

145 Black v. Black, 110 N. C. 398, 14 S. E. 971; Wimer v. Smith (Or.) 30 Pac. 416; Hall v. Thompson, 1 Smedes & M. (Miss.) 443. If defendant endeavored to mislead plaintiff in making these investigations, this may be new and actionable fraud. Roseman v. Canovan, 43 Cal. 110; Webster v. Bailey, 31 Mich. 36.

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