168

ordinary circumstances, false representations respecting title, inducing the making of a conveyance, may entitle the grantor to a remedy for deceit." A grantor who executes a deed to real estate, trusting to the assurance of the grantee that it would convey nothing, cannot recover for the alleged fraudulent representations, especially if the means of information are equally open to both parties, and the grantor consults his attorney with reference to the deed.169 Misrepresentations may be so extravagant that no reasonably prudent man would have believed in or relied on them. Such of opinion or judgment, the law holds that the person to whom such representations are made has no right to rely upon them if the facts are within his observation, or if he has equal means of knowing the truth, or by the use of reasonable diligence might have ascertained it, and is not induced to forego further inquiry which he otherwise would have made. Foster, J., in Palmer v. Bell, 85 Me. 352, 27 Atl. 250, 251; Gordon v. Parmelee, 2 Allen (Mass.) 212-214; Savage v. Stevens, 126 Mass. 207-208; Rhoda v. Annis, 75 Me. 17-27; Brown v. Leach, 107 Mass. 364; Parker v. Moulton, 114 Mass. 99; Veasey v. Doton, 3 Allen (Mass.) 380; Bradbury v. Haines, 60 N. H. 123124. "The common law affords to every one reasonable protection against fraud in dealing, but it does not go 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." 2 Kent, Comm. (13th Ed.) 485. In a proceeding to enforce specific performance of a written contract, a plea of fraud, even if it involved a want of prudence in relying on fraudulent representations on the part of the party resisting such performance, may be relied on as a defense, as showing that the contract was not valid. Aultman v. Olson, 34 Minn. 450, 26 N. W. 451; Frohreich v. Gammon, 28 Minn. 476, 11 N. W. 88; Miller v. Sawbridge, 29 Minn. 442, 13 N. W. 671; Albany City Sav. Inst. v. Burdick, 87 N. Y. 40; Linington v. Strong, 107 Ill. 295; Gardner v. Trenary, 65 Iowa, 646, 22 N. W. 912; Thoroughgood's Case, 2 Coke, 9; Stanley v. McGauran, L. R. 11 Ir. 314; Redgrave v. Hurd, 20 Ch. Div. 1, 13; Pol. Cont. 401 et seq., and cases cited; Bigelow, Frauds, 523525. Maxfield v. Schwartz, 45 Minn. 429, 47 N. W. 448. It has, however, been held that laches which may prevent a purchaser from rescinding the contract of sale for fraud will not prevent her from maintaining an action for damages sustained by the fraudulent misrepresentation, where such action is not barred by any statute of limitation. Griffin v. Diller, 66 Hun,

633, 21 N. Y. Supp. 407.

168 But see Robins v. Hope, 57 Cal. 493.

169 Cobb v. Wright, 43 Minn. 83, 44 N. W. 662; Slaughter v. Gerson, 13 Wall. 379; Brown v. Leach, 107 Mass. 364; Parker v. Moulton, 114 Mass. 99; Aetna Ins. Co. v. Reed, 33 Ohio St. 283; Morrill v. Madden, 35 Minn. 493, 29 N. W. 193.

will not sustain an action for deceit. But this, as in other cases of due care,170 the jury ordinarily should determine.11

The conduct of the party charged with fraud, in preventing investigation, and generally in throwing the complainant off his guard, may serve to justify what would otherwise be, on the complainant's part, the want of ordinary care.172 Whereas, the efforts of one person to have another pursue his own investigation are calculated to raise a strong presumption of good faith.173

SAME-RESULTING DAMAGE.

194. Fraud without damage, or damage without fraud, will not form the basis of an action, but where both concur an action will lie.174

"Fraud does not consist in mere intention, but in intention carried out by hurtful acts. It consists of conduct that operates prejudicially to the rights of others, and is so intended." 175 In other words, the plaintiff must show, not only that he was deceived by the defendant's fraud, without such negligence or other fault on his part as will bar his right to recover, and that he relied on the defendant's wrongful act, but also that he acted, or refrained from acting, in consequence, whereby damages resulted to him.176 There is no cause of action without actual damage. Damage is the gist of the action.177 The

170 Post, p. 816, "Negligence."

171 Barndt v. Frederick, 78 Wis. 1, 47 N. W. 6.

172 Schwabacker v. Riddle, 99 IL 343; Schumaker v. Mather (Sup.) 14 N. Y. Supp. 411; White v. Mowbray (Sup.) 3 N. Y. Supp. 225 (misrepresentations as to apparent unsoundness of a horse).

173 Woolenslagle v. Runals, 76 Mich. 545, 43 N. W. 454. Cf. Hanscom v. Drullard, 79 Cal. 234, 21 Pac. 736.

174 Cook, J., in Baily v. Merrell, 3 Bulst. 95.

175 Williams, J., in Williams v. Davis, 69 Pa. St. 21-28.

176 Upton v. Levy, 39 Neb. 331, 58 N. W. 95; Dawe v. Morris, 149 Mass. 191, 21 N. E. 313; Busterud v. Farrington, 36 Minn. 320, 31 N. W. 360; Stetson v. Riggs, 37 Neb. 797, 56 N. W. 628; First Nat. Bank v. North (S. D.) 51 N. W. 96.

177 Lord Blackburn, in Smith v. Chadwick, 9 App. Cas. 197; Doran v. Eaton, 40 Minn. 35, 41 N. W. 244; Alden v. Wright, 47 Minn. 225, 49 N. W. 767; Newell v. Chapman, 74 Hun, 111, 26 N. Y. Supp. 361; Melville v. Gary (Md.) 24 Atl. 604.

cause of action accrues, not on the completion of the defendant's fraud, and the plaintiff's conduct in deceived reliance thereon, but upon the happening of the damage subsequent to and consequent thereon.178 Therefore, in order to recover from the vendor of a note for fraudulent representations as to the solvency of the maker, it is necessary to show that the indorser thereon is insolvent, in order to prove damages.179

The damages which are made the basis of recovery must conform to the legal standard. Inasmuch as the law does not presume damage, the damages which are proved must be substantial. More nominal damages are not sufficient.180 Damages which are too vague and speculative in their nature do not satisfy the requirements of the law. Thus, the profits which the purchaser of a business enterprise would have made out of the transfer thereof to a corporation to be organized for the purpose of taking it are too uncertain to be recoverable by the purchaser in an action for fraudulent representation, inducing the purchase, although a syndicate had promised to underwrite the capital of the corporation, thereby, in effect, promising to subscribe all the capital not contributed by others, but had not entered into any definite or obligatory contract with the purchaser.1 181 So damage to business reputation because of loss of money and large creditors, consequent upon a bad bargain induced by the defendant's fraud, cannot be recovered.1 Thus, if the de

182

178 An action to recover damages for alleged false representations as to the value of certain bonds, whereby plaintiff was induced to purchase them, cannot be maintained until the maturity of the bonds, as no damages can be shown until then. Currier v. Poor (Sup.) 32 N. Y. Supp. 74.

179 Hamlin v. Abell, 120 Mo. 188, 25 S. W. 516; Bradford v. Neill, 46 Minu. 347, 49 N. W. 193. Cf. Childs v. Merrill, 63 Vt. 463, 22 Atl. 626. It was held in Tyson v. Ranney (Wis.) 61 N. W. 563, that where a husband contracts to exchange his own property for land, and afterwards informs his wife of the contract, and directs that the land be conveyed to her, she cannot maintain an action against the grantor for false representations as to the character of the land. It is doubtful if this decision can be harmonized with insurance cases where the policy is issued to one person, and the misrepre sentation made to another, who paid the premium.

180 Van Velsor v. Seeberger, 35 Ill. App. 598.

181 Loewer v. Harris, 6 C. C. A. 394, 57 Fed. 368. And, generally, see Davis v. Davis, 84 Mich. 324, 47 N. W. 555.

182 Totten v. Burhans, 91 Mich. 495, 51 N. W. 1119.

fendant, by false representations, induces a third person to revoke a will favorable to the plaintiff, and to execute another will depriv ing such plaintiff of substantial benefits, no action lies. "The possibility of injury is too shadowy and evanescent to be dealt with by courts of law." 183 Remote harm does not complete the cause of action.184 Damages for fraud are governed by ordinary principles. The general rule is compensation.185 Exemplary damages may be awarded under appropriate circumstances.186 The rule as to general and special damages is applied.187

MALICIOUS PROSECUTION.

195. Malicious prosecution is a wrong to person, estate, or reputation, based upon a previous judicial proceeding.

183 Hutchins v. Hutchins, 7 Hill, 104; Randall v. Hazelton, 12 Allen (Mass.) 412.

184 Hemmwell v. Drixbury.

185 The measure of damages for falsely representing the existence of a claim for damages in favor of a lot sold is the value of the claim. Shanks v. Whitney, 66 Vt. 405, 29 Atl. 367; Fixen v. Blake, 47 Minn. 540, 50 N. W. 612; Ellis v. Barlow (Tex. Civ. App.) 26 S. W. 908; Wallace v. Hallowell (Minn.) 58 N. W. 292; Newell v. Chapman, 74 Hun, 111, 26 N. Y. Supp. 361; Tate v. Watts, 42 Ill. App. 103; Thomas v. Dickinson, 67 Hun, 350, 22 N. Y. Supp. 260; Lare v. Westmoreland Specialty Co., 155 Pa. St. 33, 25 Atl. 812; McHose v. Earnshaw, 5 C. C. A. 210, 55 Fed. 584; Stickney v. Jourdan (Minn.) 49 N. W. 980; High v. Berret (Pa. Sup.) 23 Atl. 1004; Atwater v. Whiteman, 41 Fed. 427, followed in Glaspell v. Northern Pac. R. Co., 43 Fed. 900 (under Code Dak. § 1967); Redding v. Godwin, 44 Minn. 355, 46 N. W. 563.

186 Whenever fraud, malice, gross negligence, or oppression mingle in the controversy, the law allows the jury to give exemplary damages. Cady v. Case, 45 Kan. 733, 26 Pac. 448.

187 In an action for false representations made to a purchaser of a business enterprise, the charges of the accountants employed by him to examine the books, and the fees of solicitors employed to organize a corporation to take over the business, must be specially alleged. Loewer v. Harris, 6 C. C. A. 394, 57 Fed. 368. In an action for deceit in selling plaintiff glandered horses, special damages are recoverable for medical treatment of the horses, and for the value of the stable which plaintiff had to burn to prevent contagion. Merguire v. O'Donnell, 103 Cal. 50, 36 Pac. 1033.

196. To sustain an action for malicious prosecution, there must be a concurrence of the following elements:

(a) The commencement of a civil or criminal judicial

proceeding.

(b) Its termination in favor of the plaintiff in malicious prosecution, except where his success was fraudu

lent.

(c) The plaintiff in malicious prosecution must have been the defendant in the original proceeding, and the defendant in malicious prosecution must have been the prosecutor or plaintiff, or cause of the original proceeding.

(d) The absence of any reasonable or probable cause for such proceeding.

(e) The proceeding must have been actuated by malice. (f) It must have resulted in damage, conforming to the legal standards, to plaintiff in malicious prosecution.

Actions on the case were early brought for malicious prosecutions. 188 And, when this wrong was committed by several persons, there was an action on the case, "in the nature of an action of conspiracy," against them.189 The averment of conspiracy, however, came to be rejected as surplusage.190 The wrong now called "conspiracy" has, of course, no special relation to false imprisonment or

188 Daw v. Swiane, 1 Sid. 424; Skinner v. Gunton, 1 Saund. 228; Atwood v. Monger, Style, 378.

189 Phillips v. Jansen, 2 Esp. 624; Lord Chief Justice Holt, in Savile v. Roberts, 1 Ld. Raym. 374; Price v. Crofts, T. Raym. 180; St. 33 Edw. I., “Conspiratoribus," Fitzh. Nat. Brev, p. 1, subd. 14, D. Thus it was held in Mills v. Mills, Cro. Car. 239, Saur. Abr. p. 62, pl. 3: "And this being in fact an action for malicious prosecution, with this difference, that an action for a malicious prosecution may be brought against one only, but an action on the case in the nature of a conspiracy must be against more than one, or against one, charging that he, together with J. S. or others, had conspired to inflict the plaintiff, or charge him with a crime, the grounds of the action therefor are the same."

190 Muriel v. Tracey, 6 Mod. 169. In Bigelow, Cas. Torts, p. 190, a learned and extended discussion will be found.