This section is from the book "The Law Of Contracts", by William Herbert Page. Also available from Amazon: Commercial Contracts: A Practical Guide to Deals, Contracts, Agreements and Promises.
A statement which by itself might be a mere expression of opinion may be so connected with a statement of a material fact as to amount to fraud. A statement of value involving and coupled with a statement of a material fact is fraud.1 A statement as to the location of realty,2 or as to the quality of realty,3 as a statement that land is well timbered,4 or that it is good farm land and that it is irrigated sufficiently,5 or that an irrigation company will be able to furnish to the land a certain quantity of water,6 or that there are not so many weeds thereon as to prevent the use of the land for agriculture,7 or that damaging frosts do not exist in that locality,8 or that it is in a bad location out from the city, where vendee thus induces vendor, whose agent he is, to sell him the land at one-sixth of its value,9 or that a sewer system can be extended to a certain point,10 may be a statement of fact. A statement as to the title to land involves a statement of fact, unless all the material facts are disclosed in full; and accordingly such statement may amount to fraud.11 A statement that a warehouse is "fire proof," may amount to fraud.12 A statement as to the value of certain kinds of personal property, such as notes13 or bonds,14 involves a positive statement as to the solvency of the debtor and can be fraud. So a statement that a certain stock is worth more than par can be fraud under some circumstances.15 So a statement as to the value of goods,16 may be fraud. A specific statement as to one's own financial condition is a fact.17 A statement by a vendee that he is in as good financial condition and has as good credit at the bank as ever, may
15 Kilmartin v. Chicago, B. & 0. Ry. Co., 137 la. 64, 114 N. W. 522; Douda v. Chicago, Rock Island & Pacific Ry. Co., 141 la. 82, 110 N. W. 272; Doty v. Chicago, St. Paul & Kansas City Ry. Co., 49 Minn. 409, 52 N. W. 135; Nelson v. Chicago &. Northwestern Ry. Co., 111 Minn. 193, 126 N. W. 002; Homuth v. Metropolitan Street Railway Co., 120 Mo. 629, 31 S. W. 003.
16 Douda v. Chicago, Rock Island & Pacific Ry. Co., 141 la. 82, 119 N. W. 272; Nelson v. Chicago & Northwestern Ry. Co., 111 Minn. 103, 126 N. W. 002; Quebe v. Gulf, Colorado & Santa Fe Ry. Co., 08 Tex. 6, 81 S. W. 20.
17 Owens v. Norwood-White Coal Co. (la.), 133 N. W. 716; Marple v. Minneapolis & St. Louis Ry. Co., 115 Minn. 262, 132 N. W. 333.
1 Arkansas. Castleman v. Sehuhardt, 128 Ark. 445, 104 S. W. 1028.
California. Russ, etc., Co. v. Water Co., 120 Cal. 521, 65 Am. St. Rep. 186, 52 Ac. 005; Tracy v. Smith, 175 Cal. 161, 165 Ac. 535; Cooper v. Huntington, - Cal. - , 172 Ac. 591.
Indiana. Peffley v. Noland, 80 Ind.
164; Bolds v. Woods, 9 Ind. App. 657,
36 N. E. 933.
Minnesota. Haven v. Neal, 43 Minn. 315, 45 N. W. 612; Lofgren v. Peterson, 54 Minn. 343, 56 N. W. 44.
Mississippi. Brown v. Lyon, 81 Miss. 438, 33 So. 284.
Missouri. Union National Bank v. Hunt, 76 Mo. 439.
New Hampshire. Bradbury v. Haines, 60 N. H. 123.
New York. Schumaker v. Mather, 133 N. Y. 500, 30 N. E. 755.
North Carolina. J. I. Case Threshing Machine Co. v. Feezor, 152 N. Car. 516, 67 S. E. 1004.
Pennsylvania. Sutton v. Morgan, 158 Pa. St. 204, 38 Am. St. Rep. 841, 27 Atl. 894.
2 Reilly v. Gottleb, 43 Wash. 9, 85 Ac. 675.
3 Reilly v. Gottleb, 43 Wash. 9, 85 Ac. 675.
4 Armstrong v. White, 9 Ind. App. 588,
37 N. E. 28.
5 Hagadorn Investment Co. v. Rieke. 60 Colo. 555, 155 Ac. 381.
6 Cooper v. Huntington, - Cal. - , 172 Ac. 591.
7 Woodward v. Western Canada Colonization Co., 134 Minn. 8, L. R. A. 1917C, 270, 158 N. W. 706.
8 Tracy v. Smith, 175 Cal. 161, 165 Ac. 535.
9 Lofgren v. Peterson, 54 Minn. 343, 56 N. W. 44.
10 Kremer v. Lewis, 137 Minn. 368, 163 N. W. 732.
11 Crane v. Ferrier-Brock Development Co., 164 Cal. 676, 130 Ac. 429; Kathan v. Comstock, 140 Wis. 427, 28 L. R. A. (N.S.) 201, 122 N. W. 1044.
12 Hickey v. Morrell, 102 N. Y. 454, 55 Am. Rep. 824, 7 N. E. 321.
13 A representation that certain-notes were as "good as gold" can be fraud: Andrews v. Jackson, 168 Mass. 266, 60 Am. St. Rep. 390, 37 L. R. A. 402, 47 N. E. 412; or that they are "perfectly good": Crane v. Elder, 48 Kan. 259, 15 L. R. A. 795, 29 Ac. 151. Contra as to subscriptions to books: Casselberry v. Warren, 40 111. App. 626; or that they are good and well secured:
Bish v. Beatty, 111 Ind. 403, 12 N. E. 523. Apparently contra: Deming v. Darling, 148 Mass. 504, SLR. A. 743, 20 N. E. 107.
14 Handy v. Waldron, 18 R. I. 567, 49 Am. St. Rep. 794, 29 Atl. 143.
15 Where the stock was in a corporation apparently formed for legal business, but intended to do an unlawful loan business, under a contract with a bank such that all its assets would ultimately pass over to the bank, a statement by the president of such bank that the stock in such corporation was worth more than par and that it would yield certain dividends was held fraud: Murray v. Tolman, 162 111. 417, 44 N. E. 748.
16 As where old and shop-worn goods were represented as new, and their price overstated by means of a false invoice: Strand v. Griffith, 97 Fed. 854, 38 C. C. A. 444. See for similar facts: McDowell v. Caldwell, 116 la. 475, 89 N. W. 1111.
17 United States. Fecheimer v. Baum, 37 Fed. 167, 2 L. R. A. 153.
Fraud in the Inducement $293 be fraud:18 A statement as to amount of annual accumulations on stock,19 or a statement of the number of monthly payments necessary to discharge a building association mortgage,20 or a statement as to the successful operation of a machine,21 even if no representations as to value were made,22 or a statement that a machine is well adapted for a certain purpose,23 as to the nature of the work that the machine would do and the amount of power necessary to operate it,24 or a statement as to the horse power which a motor will develop,25 or as to the kind of work which a type-setting machine will do,26 or as to the quality of a musical instrument, at least if made to one who does not know anything about musical instruments,27 are facts. A statement that a horse is sound, when in fact it has glanders,28 or that horses will work anywhere, when in fact they are balky,29 may be fraud.
The physical condition of one who has been injured is a material fact; and if the party who is liable for such injury, or his agent makes an intentionally false statement as to the nature and extent of such injuries, the contract of release which is induced by such false statement may be avoided.30 A representation by a master to an injured employe to the effect that the accident was unavoidable, thereby inducing the employe to sign a release, may amount to fraud.31
Arkansas. Richmond v. Mississippi Mills, 52 Ark. 30, 4 L. R. A. 413, 11 S. W. 960.
Mississippi. Brown v. Norman, 65 Miss. 369, 7 Am. St. Rep. 663, 4 So. 293.
Nebraska. Omaha Feed Co. v. Rush-forth, 75 Neb. 340, 106 N. W. 25.
Vermont. Fitzsimmons v. Joslin, 21 Vt. 129, 52 Am. Dec. 46; Chamberlin v. Fuller, 59 Vt. 247, 9 Atl. 832.
18 Clark v. Munroe Co., 127 Mich. 300, 86 N. W. 816.
19 Hunter v. Loan Association, 24 Tex. Civ. App. 453, 59 S. W. 596.
20 Loucks v. Taylor, 23 Ind. App. 245, 55 N. E. 238.
21 Scholfield, etc., Co. v. Scholfield, 71 Conn. 1, 40 Atl. 1046; Walker v. Ayer, 80 S. Car. 292, 61 S. E. 557.
22 Walker v. Ayer, 80 S. Car. 292, 61 S. E. 557.
23 Dowagiac Mfg. Co. v. Gibson, 73 la. 525, 5 Am. St. Rep. 697, 35 N. W. 603.
24 J. I. Case Threshing Machine Co. v. Feezor, 152 N. Car. 516, 67 S. E. 1004.
25 Greene v. Curtis Automobile Co., 144 Wis. 493, 129 N. W. 410.
26 Unitype Co. v. Ashcraft Bros., 155 N. Car. 63, 71 S. E. 61.
27 Couch. O'Brien, 41 Okla. 76, 136 Ac. 1088.
28 Weinberg v. Ladd, 199 Mich. 164, 165 N. W. 711.
29 Castleman v. Schuhardt, 128 Ark. 445, 194 S. W. 1028.
30 St. Louis & San Francisco R. R. Co. v. Richards, 23 Okla. 256, 102 Ac. 92; Chicago, R. I. & P. Ry. Co. v. Johnson, - Okla. - , 175 Ac. 494.
31 Woods v. Wikstrom, 67 Or. 581, 135 Ac. 192.
The existence of the opinion of an expert, such as a physician,32 may be a fact; and if such opinion is falsely stated to exist, when in fact it does not exist, such false statement may be fraud.33
Where a statement might in one view of the evidence be an expression of an opinion and in another be a statement involving a fact, it is a question of fact which meaning was intended and understood.34