Fraudulent misrepresentations indirectly reaching and influencing persons other than the one to whom they were directly addressed, may have the same effect as if made directly to the person influenced, if their effect was intended or should have been anticipated by the party benefiting by them. Thus a buyer of goods is responsible for misrepresentations of solvency, not only when made by him in person, but when made by his agents; and false statements made to commercial agencies and afterward furnished to sellers of goods who act in reliance on the statements, make the buyer guilty of fraud if his statements were made with knowledge of their falsity. Since the purpose of commercial agencies is to give information as to credits, the buyer must know that his statements may be relied upon not only by any customer of the commercial agency to which a statement is made,85 but by others for whom subscribers may procure information.86 If, however, a commercial agency obtains the facts upon which it bases it rating from outside sources, and not from the buyer or some one authorized by him, the seller cannot treat a sale induced thereby as fraudulent." But if in such a case the buyer referred the seller to his commercial rating, he thereby approves it as correct, and is in the same position as if he had originated it.88 It has been held insufficient that the buyer knew of the incorrect rating and that it had been furnished to the seller.89 For how long a time a statement made to a mercantile agency may furnish reasonable ground of reliance to a seller depends in great measure on the circumstances of the case. If the statement was accurate when made, but after lapse of time had ceased to be so, the situation seems similar to that which exists where the mercantile
Riser v. Walton, 78 Cal. 490, 21 Pac. 362; Wolfe v. Pugh, 101 Ind. 203; Day v. Merrick, 158 la. 287,138 N. W. 400; Atlantic Cotton Mills v. Indian Orchard Mills, 147 Mass. 268,17 N. E. 496, 9 Am. St. Rep. 098; Busch v. Wilcox, 82 Mich. 336, 47 N. W. 328, 21 Am. St. Rep. 563; Presby v. Parker, 56 N. H. 409; Bennett v. Judson, 21 N. Y. 238; Erumm v. Beach, 96 N. Y. 398; Fairchild v. McMahon, 139 N. Y. 290, 34 N. E. 779, 36 Am. St. Rep. 701; Coleman v. Stark, 1 Oreg. 115; Mun-dorff v. Wickersham, 63 Pa. 87, 3 Am. Rep. 531; Meyerhoff v. Daniels, 173 Pa. 555, 34 Atl. 298, 51 Am. St. Rep. 782; Schultheis v. Sellers, 223 Pa. 513, 72 Atl. 887, 22 L. R. A. (N. S.) 1210; 0'Leary v. Tillinghast, 22 R. I. 161, 46 AH. 754; Barnard v. Roane Iron Co., 85 Tain. 139, 2 S. W. 21; Fitssimmons v. Joslin, 21 Vt. 129, 52 Am. Dec. 46; Ladd v. Lord, 36 Vt. 194; Crump v. United States Min. Co., 7 Gratt. (Va.) 352, 56 Am. Dec. 116; Nelson v. Title & Trust Co., 52 Wash. 258, 100 Pac. 730; Morse v. Ryan, 26 Wis. 356.
82 See the following section.
83 Huguenin v. Baseley, 14 Ves. 273, 289; Scholefield v. Templer, 4 De Q. A J. 429; Trevitt v. Converse, 31 Ohio St. 60, 71; Atkinson v. Reed (Tex. Civ. App.), 49 S. W. 260, 263; Law v. Grant, 37 Wis. 548. It may be asked what essential difference is there in taking advantage of a misrepresentation by a third person, and silently taking advantage of a known erroneous belief of the other party, however acquired. See supra, Sec. 1497.
84 See infra, Sec.1544.
85 Fechhetmer v Baum (C. C), 37 Fed. 187, 2 L. R. A. 163; In re Epstein (D. C), 109 Fed. 874; W. W. Johnson Co. v. Triplett, 60 Ark. 233, 60 S. W. 455; Soper Lumber Co. v. Hoisted 4 Harmount Co., 73 Conn. 547, 48 Atl. 425; Mashburn & Co. v. Dannenberg Co., 117 Gft. 667, 44 S. E. 97; Tennent Shoe Co. v. Stovall A Brand, 26 Ky. L. Rep. 1615, 78 8. W. 417; Furry t. O'Connor, 1 Ind. App. 573, 28 N. E. 103; Cox Shoe Co. v. Adams, 105 lows, 402, 75 N. W. 316; Courtney v. Knabe, etc., Mfg. Co., 97 Md. 499, 56 Atl. 614, 99 Am. St. Rep. 456; Emerson v. Detroit, etc., Spring Co., 100 Mich, 127, 59 N. W. 659; Stevens v. Ludlum, 46 Minn. 160, 48 N. W. 771, 13 L. R. A. 270, 24 Am. St. Rep. 210; Kellogg Co. v. Holm, 82 Minn. 416, 86 N. W. 169; Farwell Co. v. Boyce, 17 Mont. 83, 42 Pac. 98; Eaton v. Avery, 83 N. Y. 31; Tindle v. Birkctt, 67 N. V. App. Div. 460, 67 N. Y. S. 1017, affd., 171 N. Y. 620, 64 N. E. 210, 89 Am. St. Rep. 822; Arnold v. Richardson, 74 App. Div. 681, 77 N. Y. S. 763; Ernst v.
Cohn (Tenn. Ch. App.), 62 S. W. 186; Gainesville Nat. Bank v. Bamberger, 77 Tex. 48, 13 S. W. 959, 19 Am. St. Rep. 738.
" Davis v. Louisville Trust Co., 181 Fed. 10, 104 C. C. A. 24, 30 L. R. A. (N. S.) 1011.
87 In re Roakwick, 110 Fed. 639; Wachstnuth v. Martini, 164 111. 616, 39 N. E. 129; Cox Shoe Co. v. Adams, 105 Iowa, 402, 75 N. W. 316; Hiller b. Ellis, 72 Miss. 701, 18 So. 96, 41 L. R. A. 707; Berkson v. Heldman, 68 Neb. 595, 79 N. W. 162; Cream City Hat Co. . Tollinger, 62 Neb. 98, 86 N. W. 921; Maccullar v. McKinley, 99 N. Y. 353, 2 N. E. 9.
88 Cox Shoe Co. v. Adams, 106 Iowa, 402, 75 N. W. 316.
89 Cox Shoe Mfg. Co. v. Adams, 105 Iowa, 402, 75 N. W. 316. See also Dorman v. Weakley (Tenn. Ch. App.), 39 S. W. 890. Cf. cases cited in the preceding section, n. 83, which hold that one who knowingly takes advantage of a third person's misrepre-sentationB becomes responsible for agency derives its information from independent sources. In each case the buyer knows that the seller is or may be acting under an erroneous impression, and in each case the buyer is not at fault for that impression except that he has failed to remove it. In one case he is not at fault because he did not make the statement, and in the other case he is not at fault because, although he originally made it, his statement was then neither false nor fraudulent.90 Though it might not generally be held fraud for the buyer to remain silent knowing that the seller was relying or might rely on an erroneous rating, such conduct may be evidence of an intent on the seller's part not to pay for goods,91 and slight circumstances may be sufficient to amount to a representation by the buyer that the rating of the agency is correct.92 If the statement was falsely made, a buyer is en-
90 This view is taken and the transaction held not fraudulent in Burchi-nell v. Hirsh, 5 Colo. App. 500, 39 Pac. 352; Cortland Mfg. Co. v. Platt, 83 Mich. 419, 47 N. W. 330; Reid v. Kempe, 74 Minn. 474, 77 N. W. 413; Strickland v. Willis (Tex. Civ. App.), 43 S. W. 602. Of course if the buyer refers to the statement or in any way induces the seller to act upon it, he thereby in effect makes a new representation that the old rating is accurate and is guilty of fraud. Mooney v. Davis, 75 Mich. 188, 42 N. W. 802, 13 Am. St. Rep. 425.
91 Taylor v. Mississippi Mills, 47 Ark. 247, 1 S. W. 283; Lindauer v. Hay, 61 Iowa, 663, 17 N. W. 08.
92 Cox Shoe Co. v. Adams, 105 Iowa, 402, 75 N. W. 316 (here the buyer referred the seller to the rating of the agency); Frisbee v. Chickering, 115 Mich. 185, 73 N. W. 112. In this case the defendant, Frank Chickering, who had no means, was a member of the firm of Frank Chickering A Co., the office of which was in Ohio. The defendant, however, lived in Michigan and did business there under the name of Chickering & Co. The firm of Frank Chickering & Co., which did business in Ohio, by virtue of its solvent partners, was correctly rated as worth $50,000 to $75,000. Two mercantile agencies listed the firm of Frank Chickering & Co. in their lists for Grand Rapids, Michigan, where the defendant lived. It did not appear conclusively that the defendant was responsible for this, but the evidence pointed that way. The court said (p. 189): "If it be admitted that he was doing business at Grand Rapids for his sole use, under the name of Frank Chickering & Co., he knew that one of the leading mercantile reports of the country was representing that firm as consisting of Mr. Chickering, Mr. Monnette, and Mr. Hull, and that they were worth a large sum of money. He also knew that this report, so far as it related to the business of Frank Chickering & Co., done for his sole benefit, was untrue, and was calculated to mislead, and might result in the consummation of frauds upon the persons who had a right to rely upon these reports, if they acted upon them. He also knew that there was no report in that list of the firm of Frank Chickering & Co., so far as it related to his sole business, and that, when he did business in the name of Frank titled to rely upon the statement, at least for a reasonable time.93 And there seems force in the statement in a New York decision,94 that if the statement originally was made falsely and fraudulently, the fraudulent person "cannot be heard to say that its mischievous force was operative longer than was expected."