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.
Even the courts which adhere most rigidly to the rule that if the means of knowledge are equal, the party deceived is bound to use such means, recognize a class of cases which they refuse to define exactly, preferring to say that each separate case rests on its own facts and circumstances,1 in which the means of knowledge are not equal, and in which the defrauded party is therefore excused from investigating.2 The rule that one can not remain blind voluntarily to facts concerning which false statements are made applies only to cases where such person has a present opportunity and means of learning such facts; and it does not apply to cases where a further subsequent investigation would be necessary to ascertain such facts.3 The fact that the property about which the representation is made is at a distance,4 or that the matter with reference to which such false statement was made is not readily apparent,5 is sometimes emphasized as a ground for excusing the defrauded party from making an investigation. "Where investigation is difficult,6 as where the false statement is as to rock or minerals underlying land,7 or where the land as to the quality of which such representation has been made is covered with snow so that an examination thereof is not possible,8 or where a statement is made as to the result of submarine soundings and as to the thickness of rock to be removed,9 or where the bottom of pits filled with water was said to show ore,10 or where statements are made as to underground supply pipes,11 or as to the condition of a boiler, which can be learned only by taking control of it and expending a considerable amount of time, work, and money,12 or where the property in question is at some distance so that further research is necessary to ascertain the falsity of the statement,13 or where a vendor of a stock of goods so located that the vendee can not inspect them represents that it is a first-class stock of goods of the best quality,14 or where the party making the statement induces the other to refrain from examination,15 as by pretending to read information from an authen-
1 "The circumstances of each case should be considered to determine whether the plaintiff has been guilty of such inexcusable negligence as should preclude him, under a general rule of public policy, from having a remedy against one who has fraudulently abused his confidence."Hoist v. Stewart, 161 Mass. 516, 42 Am. St. Rep. 442, 37 N. E. 755.
2 Cady v. Rainwater, 129 Ark. 498, 196 S. W. 125; H. W. Abts Co. v. Cunningham, 95 Neb. 836, 146 N. W. 1036; Van Horn v. Chambers, 89 Wash. 553, 154 Ac. 1084.
3 Lawson v. Vernon, 38 Wash. 422, 107 Am. St. Rep. 880, 80 Ac. 559; McMulten v. Rousseau, 40 Wash. 497, 82 Ac. 883; Wooddy v. Water Co., 54
Wash. 124, 132 Am. St. Rep. 1102, 102 Ac. 1054; Beecher v. Wilson, 63 Wash. 149, 114 Ac. 899.
4 Lindsay v. Davidson, 57 Wash. 517, 107 Ac. 514; Van Horn v. Chambers, 89 Wash. 553, 154 Ac. 1084.
5 Klock v. Newbury, 63 Wash. 153, 114 Ac. 1032.
6 Illinois. Mayberry v. Rogers, 81 HI. App. 581.
Indiana. Ross v. Hobson, 131 Ind. 166, 26 N. E. 775.
Michigan. Morman v. Harrington, 118 Mich. 623, 77 N. W. 242.
Nebraska. McKnight v. Thompson, 39 Neb. 752, 58 N. W. 453.
New York. Simar v. Canaday, 53 N. Y. 298, 13 Am. Rep. 523.
7 Morman v. Harrington, 118 Mich. 623, 77 N. W. 242.
8 Knapp v. Schemmel (la.), 124 N. W. 309.
9 Hingston v. Smith Co., 114 Fed. 294, 52 C. C. A. 206.
10 Green v. Turner, 86 Fed. 837, 30 C. C. A. 427.
11 Tacoma v. Water Co., 17 Wash. 458, 50 Ac. 55 [reversing 16 Wash. 288, 47 Ac. 7381.
12 Beecher v. Wilson, 63 Wash. 149, 114 Ac. 899.
13 United States. Smith v. Richards,
38 U. S. (13 Pet.) 26, 10 L. ed. 42. Illinois. Witherwax v. Riddle, 121
III. 140, 13 N. E. 545.
Indiana. Robinson v. Reinhart, 137 Ind. 674, 36 N. E. 519.
Iowa. King v. Trust Co., 76 la. 11,
39 N. W. 919; Haack v. Scott (la.), 124 N. W. 1068.
Minnesota. Mountain v. Day, 91 Minn. 249, 97 N. W. 883.
Nebraska. Cressler v. Rees, 27 Neb. 515, 20 Am. St. Rep. 691, 43 N. W. 363; Mullen v. Kinsey, 50 Neb. 466, 70 N. W. 18.
"A statement as to the character or even the value of property where the same is at a distance, or so located that the person to whom they are made may reasonably rely thereon, for the purpose of inducing him to enter into a contract or incur expense or part with anything of value, is the statement of a fact, not a mere expression of opinion."Benolkin v. Guthrie, 111 Wis. 554, 87 N. W. 466 [citing Henderson v. Henshall, 54 Fed. 320; Wither-wax v. Riddle, 121 III. 140, 13 N. E. 545; Harris v. McMurray, 23 Ind. 9; McKnight v. Thompson, 39 Neb. 752, 58 N. W. 453].
14 Benolkin v. Guthrie, 111 Wis. 554, 87 N. W. 466.
15 United States. Henderson v. Hen-shall, 54 Fed. 320.
California. Hanscom v. Drullard, 79 Cal. 234, 21 Ac. 736.
Massachusetts. Hoist v. Stewart, 161 Mass. 516, 42 Am. St. Rep. 442, 37 N.. E. 755.
Michigan. Swimm v. Bush, 23 Mich. 99.
Minnesota. Burr v. Willson, 22 Minn. 206.
tic source,16 or where the party who makes the statement prevents investigation,17 or where the party making the statement has means of knowledge not possessed by the other,18 as where one makes statements concerning the condition of his own business,19 or as to the condition of an animal which could not be discovered by ordinary examination,20 the courts are practically unanimous in holding that fraud may exist.