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.
To constitute fraud the party deceived must act in reliance upon such false representations to his damage.1 Illustrations of action which does not result in damage and in which case therefore fraud does not exist, are employing false representations to induce one to do a legal duty,2 as to secure his own debt,3 or to pay his own debt;4 inducing one to sell his property for its full value,5 or inducing all the stockholders to surrender to the corporation an equal percentage of their holdings;6 misrepresenting the estate conveyed as a fee when it is possibly a life estate, but all the remaindermen are bound by the judgment of the court that it is a fee;7 or inducing one who has a right to renounce a contract for any reason he sees fit, to renounce it.8 If B by fraud induces Y to sign a note payable to himself, which A has already signed without stipulating for an additional maker, A can not take advantage of such fraud unless he can show some injury to himself therefrom.9 A life insurance company can not defend in an action by an examiner for examination fees on' the ground that applicants were induced to apply by the representation of a director that such applications would be for the benefit of such director and the examiner.10 So where even if the facts as represented were true, no advantage could result therefrom to the party to whom they were made, and he has the same legal rights whether they are false or true, fraud does not exist.11 Thus allegations that A, the owner of the fee in a tract of land, and X conspired to defraud B, and that X represented that he had leased the tract for a term of years, had paid a year's rent, and that on completion thereon by X of buildings to cost seventy-five thousand dollars, A was to pay X twenty-five thousand dollars, no part of which was to go to pay for the buildings or to pay contractors, and that by reason of such representations B was induced to make a contract with X for the erection of buildings to cost about sixty-eight thousand dollars, and that under such contract B had done certain work of a certain value which had not been paid, does not state a case of fraud.12
7 Alger v. Keith, 105 Fed. 105, 44 C. C. A. 371.
1 United States. Marshall v. Hubbard, 117 U. S. 415, 29 L. ed. 919.
Alabama. Baker v. Lehman, 186 Ala. 493, 65 So. 321; Lowery v. Mutual Loan Society, - Ala. - , 79 So. 389.
California. Holton v. Noble, 83 Cal. 7, 23 Ac. 58.
Georgia. Freeman v. McDaniel, 23 Ga. 354.
Illinois. Jones v. Foster, 175 111. 459, 51 N. E. 862.
Iowa. Hetzler v. Morrell, 82 la. 562, 48 N. W. 938.
Michigan. Short v. Cure, 100 Mich. 418, 59 N. W. 173.
Minnesota. Alden v. Wright, 47 Minn. 225, 49 N. W. 767.
Nebraska. Lorenzen v. Investment Co., 44 Neb. 99, 62 N. W. 231; McCready v. Phillips, 44 Neb. 790, 63 N. W. 7.
New Hampshire. Hanson v. Edgerly, 29 N. H. 343.
New Mexico. Bank of Commerce v. Broyles, 16 N. M. 414, 120 Ac. 670.
New York. Taylor v. Guest, 58 N. Y. 262; Deobold v. Oppermann, 111 N. Y. 531, 7 Am. St. Rep. 760, 2 L. R. A. 644, 19 N. E. 94; Jex v. Strauss, 122 N. Y. 293, 25 N. E. 478.
North Dakota. Nelson v. Grondahl, 12 N. D. 130, 96 N. W. 299.
South Dakota. First National Bank v; North, 2 S. D. 480, 51 N. W. 96; Sioux Banking Co. v. Kendall, 6 S. D. 543, 62 N. W. 377.
Tennessee. Whitson v. Gray, 40 Tenn. (3 Head) 441.
Texas. Moore v. Cross, 87 Tex. 557, 29 S. W. 1051; Read v. Chambers (Tex. Civ; App.), 45 S. W. 742; Hopkins v. Grocery Co. (Tex. Civ. App.), 66 S. W. 63.
Vermont. Nye v. Merriam, 35 Vt. 438.
Wisconsin. Potter v. Lumber Co., 106 Wis. 25, 80 N. W. 88, 81 N. W. 118.
2 Skowhegan First National Bank v. Maxfield, 83 Me. 576, 22 Atl. 479; Randall v. Hazelton, 94 Mass. (12 All.) 412; Deobold v. Oppermann, 111 N. Y. 531, 7 Am. St. Rep. 760, 2 L. R. A. 644, 19 N. E. 94.
3 Skowhegan First Nat. Bank v. Max-field, 83 Me. 576, 22 Atl. 479 (stating to the principal debtor on a draft which had been paid by parties secondarily liable thereon that it was unpaid and thus getting a mortgage to secure his debt to such parties).
5 Potter v. Lumber Co., 105 Wis. 25, 80 N. W. 88, 81 N. W. 118.