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 material facts are not known to the party to whom the false representations of law are made, a statement may be in such form as to involve not only law, but fact as well, and may accordingly be fraud. A false statement of title is fraud,1 if the material facts upon which such statement is based are not disclosed:2 as a statement that a certain title is good, no facts being given;3 or that a certain title is defective;4 that a deed to certain realty is the only conveyance thereof;5 that a certain will6 or deed7 does not pass certain realty; that a tract of land is free from incumbrances;8 or a statement by A that A has had an execution levied against the grantor, under whom B claims, when in fact such execution was not levied until after the conveyance to B;9 or that a certain deed is a forgery,10 are material facts, and not mere representations of law. However, a mere reference to "my land" is an identification of the tract rather than a statement of title.11 A contract between the beneficiary under a will which is entered into because of a mistaken construction of such will, as where the parties erroneously believe that certain gifts of income can not be paid until other pecuniary legacies are paid in full,12 may be avoided by the parties. So a statement that a mortgage is the first lien on the premises, no other facts being given from which such statement could be shown to be an opinion,13 or that a certain amount of property is covered thereby,14 are statements of fact. So false representation as to easements and appurtenances affecting the value of the land, which could not have been ascertained by an examination,15 or that a right of way over adjoining land is appurtenant to the tract conveyed,16 are statements of fact. A false statement of authority as agent,17 as to the transfer of rights under a verbal contract whose terms are not given;18 a statement as to the protection of an invention by a patent,19 or of a book by copyright,20 or that a given patent does not infringe another patent,21 are all statements of material facts, and may constitute fraud; while if the specific facts had been given in detail, and the falsity had consisted in the statement of their legal effect, such statements would not have constituted fraud. So a statement that a certain insurance company has been formed under a specified statute involves fact as well as law.22 A statement that it would be "the same" with a debtor, whether he signed a separate note for his individual debt or whether he signed jointly with another debtor for the sum of the two debts, was treated as a statement of fact.23
11Champion v. Woods, 79 Cal. 17, 12 Am. St. Rep. 120, 21 Pac. 534. For a further discussion of this subject see ch. XVII.
1 California. Crane v. Farrier-Brock Development Co., 164 Cal. 676, 130 Pac. 420.
Kentucky. Morse v. Duryea, 174 Ky. 234, 192 S. W. 477.
Massachusetts. Burns v. Dockray, 156 Mass. 135, 30 N. E. 551.
Texas. Buchanan v. Burnett, 102 Tex. 492, 119 S. W. 1141.
West Virginia. Tolley v. Poteet, 62 W. Va. 231, 57 S. E. 811.
Wisconsin. Kathan v. Corastock, 140 Wis. 427, 28 L. R. A. (N.S.) 201, 122 N. W. 1044.
2 Morse v. Duryea, 174 Ky. 234, 192 S. W. 477.
3 Burns v. Dockray, 156 Mass. 135, 30 N. E. 551; Nash v. Trust Co., 159 Mass. 437, 34 N. E. 625; compare same case, 163 Mass. 574, 47 Am. St. Rep. 489, 28 L. R. A. 753, 40 N. E. 1039; Carlton v. Hulett, 49 Minn. 308, 51
N. W. 1053; Tretheway v. Hulett, 52 Minn. 448, 54 N. W. 486; Cressler v. Rees, 27 Neb. 515, 20 Am. St. Rep. 691, 43 N. W. 363; Buchanan v. Burnett, 102 Tex. 492, 119 S. W. 1141.
"No doubt even a positive statement that a title is good may involve somewhat matter of opinion, but it also imports that there are no facts that affect its validity." Burns v. Dockray, 156 Mass. 135, 137, 30 N. E. 551.
4 Peter v. Wright, 6 Ind. 183.
5 Herman v. Hall, 140 Mo. 270, 41 S. W. 733.
6Hicks v. Deemer, 87 111. App. 384, 58 N. E. 252.
7 Dashiel v. Harshman, 113 la. 283, 85 N. W. 85.
• Carpenter v. Wright, 52 Kan. 221, 34 Pac. 798.
9Farkas v. Monk, 119 Ga. 515, 46 S. E. 670.
10 Robinson v. Reinhart, 137 Ind. 674, 36 N. E. 519.
11 Reuter v. Lowe, 86 Wis. 106, 56 N. W. 472.
12Stahl v. Schwartz, 67 Wash. 25, 120 Pac. 856.
13Bank v. Byers, 139 Mo. 627, 41 S. W. 325; People v. Peckens, 153 N. Y. 576, 47 N. E. 883; Crebbin v. Bank (Tex. Civ. App.), 50 S. W. 402.
14Whiting v. Price, 172 Mass. 240, 70 Am. St. Rep. 262, 51 N. E. 1084; same case, 169 Mass. 576, 61 Am. St. Rep. 307, 48 N. E. 772. (Where the statement was that it covered realty worth half a million, when in fact it covered no realty at all; and the bond on its face purported to be secured by mortgage "on all the property" of mortgagor.) People v. Peckens, 153 N. Y. 576, 47 N. E. 883.
15Fenley v. Moody, 104 Ga. 790, 30 S. E. 1002.
16Durkin v. Cobleigh, 156 Mass. 108, 32 Am. St. Rep. 436, 17 L. R. A. 270, 30 N. E. 474. (Even if not mentioned in the deed except by the general grant of "all the privileges and appurtenances thereunto belonging.")
17Minnesota. Braithwait v. Bain, 66 Minn. 325, 69 N. W. 4.
Missouri. Continental National Bank v. Farris, 77 Mo. App. 186.
New Jersey. Patterson v. Lippin-cott, 47 N. J. L. 457, 54 Am. Rep. 178.
New York. White v. Madison, 26 N. Y. 117; Dung v. Parker, 52 N. Y. 494.
Wisconsin. Oliver v. Morawetz, 97 Wis. 332, 72 N. W. 877.
18Griel v. Lomax, 94 Ala. 641, 10 So. 232.
19 Moyle v. Silbaugh, 105 la. 531, 75 N. W. 362.
20Coffey v. Hendrick (Ky.), 65 S. W. 127.
21 Pratt v. Coke Co., 155 111. 531, 40 N. E. 1032.
22Harris-Emery Co. v. Pitcairn, 122 la. 595, 98 N. W. 476.