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.
If the false representation was material and influenced the party to whom it was made, it may constitute fraud, although the party acted as he did from several motives of which this was but one;1 as where vendee buys, relying on the false statements of the vendor, but influenced in part by information from other sources.2 Some courts hold that the party deceived must show that he would not have acted as he did but for the false representation to establish fraud.3 So where one acts on the report of a commercial agency which is based in part on false statements of vendee and in part on independent investigation, some courts hold that this can not be fraud.4
1 Heidenbluth v. Rudolph, 152 111. 316,
38 N. E. 930; Roth miller v. Stein, 143 N. Y. 581, 26 L. R. A. 148, 38 N. E. 718.
2 Rothmiller v. Stein, 143 N. Y. 581, 26 L. R. A. 148, 38 N. E. 718.
But in Merchants' National Bank v. Thorns, 1 Ohio Dec. 226, it was held that a circular intended to obtain depositors can not be fraud where relied on by a pledgee of stock who makes advances thereon. See Sec. 318.
1 United States. Sioux National Bank v. Bank, 56 Fed. 139.
Alabama. Rice v. Gilbreath, 119 Ala. 424, 24 So. 421.
Connecticut. Sprague v. Taylor, 58 Conn. 542, 20 Atl. 612; Schofleld, etc., Co. v. Schofleld, 71 Conn. 1, 40 Atl. 1046.
Illinois. Ruff v. Jarrett, 94 111. 475.
Maryland. Cook v. Gill, 83 Md. 177, 34 Atl. 248.
Massachusetts. Matthews v. Bliss,
39 Mass. (22 Pick) 48; Safford v. Grout, 120 Mass. 20; Roberts v. French, 153 Mass. 60, 25 Am. St. Rep. 611, 26 N. E. 416.
Minnesota. Marshall v. Gilman, 52 Minn. 88, 53 N. W. 811.
Missouri. Saunders v. McClintock, 46 Mo. App. 216; Becraft v. Grist, 52 Mo. App. 586.
Nevada. Fishback v. Miller, 15 Nev. 428.
Rhode Island. Handy v. Waldron, 19 R. I. 618, 35 Atl. 884; same case, 18 R. I. 567, 49 Am. St. Rep. 794, 29 Atl. 143.
Tennessee. Richardson v. Vick, 125 Tenn. 532, 145 S. W. 174.
Vermont. James v. Hodsden, 47 Vt. 127.
2 Marshall v. Gilman, 52 Minn. 88, 53 N. W. 811; Becraft v. Grist, 52 Mo. App. 586; Richardson v. Vick, 125 Tenn. 532, 145 S. W. 174.
3 Huber v. Guggenheim, 89 Fed. 598.
4 Wachsmuth v. Martini, 154 111. 515, 39 N. E. 129; Hiller v. Ellis, 72 Miss. 701, 41 L. R. A. 707, 18 So. 95; Berk-son v. Heldman, 58 Neb. 595, 79 N. W. 162; Poska v. Stearns, 56 Neb. 541, 71 Am. St. Rep. 688, 42 L. R. A. 427, 76 N. W. 1078.
515 Fraud in the Inducement Sec. 326
This view is unsound in principle and if carried to its logical limit would practically destroy the doctrine of fraud, since in almost every case the defrauded party relies in part on some knowledge outside of the false statements,5 and some jurisdictions which have entertained it seem to have abandoned it.6 Of the cases cited, some can be explained on other grounds, as where the report of the agency advised the party asking for it that the statement in question was incorrect,7 or where the report was not based on the statement.8 A change made by the agency correcting an error in addition is not such an independent report as to prevent the false statement thus forwarded from being fraud.9