No payment or advance made under a contract which was intentionally fraudulent can give validity to it; and if any part of the original purpose, or of the remaining purpose, is fraudulent, the whole contract is avoided. (qq)

In the next place, the fraud must work an actual injury. If it be only an intended fraud, which is never carried into effect, or if all be done that was intended, but the expected consequences do not result from it, the law cannot recognize it. (r) And if there be a fraud, and it be actually injurious, the injured party can recover only the damage directly attributable to the fraud. (s) and not an increase of this damage caused by his own * indiscretion or mistake in relation to it. (t) And if no damage be caused by the fraud, no action lies. (u)

Though the law cannot lay hold of a merely intended fraud, yet it will recognize as a fraud a statement which is literally true, but substantially false; for the purpose and effect of the thing will prebe untrue, and that the other was thereby induced to enter into the contract. Moens v. Heyworth, 10 M. & W. 147. And see McDonald v. Trafton, 15 Me. 225; Cunningham v. Smith, 10 Oratt. 255; Wilson v. Butler, 4 Bing. N. C 748; Gillett v. Phelps, 12 Wis. 392.

(qq) Lynde v. McGregor, 13 Allen, 172.

(r) Hemingway v. Hamilton, 4 M. & W. 115. Lord Abinger there said: "Suppose a man contracts in writing to sell foods at a certain price, and afterwards delivers them, could the buyer plead, that at the time of the contract the seller fraudulently intended not to deliver them, but to dispose of them otherwise?" In Feret v. Hill, 15 C. B. 207, 26 Eng. L. & Eq. 261, it was held, that an intention existing in the mind of one of the parties to a contract, to use the thing therein contracted for, in an illegal manner, would not render the contract illegal, although he fraudulently induced the other party to enter into the contract, by stating that he wanted the property for a legal purpose. See, as to this case, Canham v. Barry, 15 C B. 597, 29 Eng. L. 6 Eq. 290. See also Abbey v. Dewey, 25 Penn. St. 413.

(s) Per Lord Ellenborough, in Vernon v. Keys, 12 East, 632. Where an action was brought to recover the value of certain horses, alleged to have died from eating corn mixed with arsenic, which the plaintiff bought from the defendant, it was held, that notwithstanding the defendant had fraudulently concealed from the plaintiff the fact that arsenic was so mixed with the corn, yet, if the plaintiff was informed of the act before he gave it to his horses, he could only recover damages to the value of the corn. Stafford v. Newsom, 9 Ired. 507. In Tuckwell v. Lambert, 5 Cush. 23, the purchaser of a vessel, falsely and fraudulently represented by the seller as eighteen instead of twenty-eight years old, having sent her to sea before he had knowledge that such representation was false, and the vessel being afterwards condemned in a foreign port, it was held, that the purchaser was entitled to recover his actual damages, occasioned by sending the vessel to sea, not exceeding the value of the vessel rail over its form; as if one asserts, that another whom he recommends, has property to a certain amount, knowing all the while, that although he possesses this property, he owes for it more than it is worth. (v) And there are indeed cases in which the intention seems to constitute the fraud, and to have the force and effect of fraud. For if one buys on credit, but does not pay, still the title of the goods is in him; but if one buys on credit, intending not to pay, this is an actual fraud, and it avoids the sale entirely, so that no property passes to the purchaser. (w) 1 So, likewise, a contract between two parties, with intent to defraud a third, cannot be enforced by either against the other; and the fact that the claim of the third party is itself fraudulent, does not change the character of such a contract. (x) If the question were res nova, perhaps it might be doubted whether the rule established by these cases is correct. It is clear, that if * a purchaser makes false representations of his ability to pay his property, or credit, the sale is void, and no title passes as between the original parties to the contract. (y) But it is equally true, that the mere insolvency of the purchaser, and his utter inability to pay for goods when purchased, although well known to himself, will not avoid the sale, if no false representations or means are used to induce the vendor to part with his goods. (z)1

(t) Thus, in Corbett v. Brown, 5 C. & P. 363, it was held, that a tradesman can only recover against a person making a false representation of the means of one who referred to him, such damage as is justly and immediately referable to the false representation. Therefore, if the tradesman gives an indiscreet and illjudging credit, he cannot make the referee answerable for any loss occasioned by it.

(u) Morgan v. Bliss, 2 Mass. 112; Puller v. Hodgdon, 25 Me. 243; Ide v. Gray, 11 Vt. 615; Farrar v. Alston, 1 Dev. 69.

(v) Corbett v. Brown, 8 Bing. S3, 1 Moore & S. 85. In this case, the defendant's son having purchased goods from the plaintiffs on credit, they wrote to the defendant requesting to know whether his son had, as he stated, £800 capital, his own property, to commence business with; to which the defendant replied, that his son's statement as to the £300 was perfectly correct, as the defendant had advanced him the money. It was proved that, at the time of the advance, the defendant had taken a promissory note from his son for £300, payable on demand, with interest, which interest was paid. Six months after the communication to the plaintiffs, the defendant's son became bankrupt. Held, that it was properly left to the jury to say whether the representation made by the defendant was false within his own knowledge; and, the jury having found a verdict for him, the court granted a new trial. Denny v. Oilman, 26 Me. 149, also shows, that a representation may be literally true, and yet, if made with intent to deceive, and it does deceive another to his injury, the author may be liable. It is, perhaps, on this ground, that a second vendee of land, who takes his deed with knowledge of a prior unrecorded deed, cannot hold the estate, although he complies with the letter of the statute by first putting his deed on record. See Ludlow v. Gill, 1 D. Chip. 49.