Again, where a party has made a false representation to one person as an inducement to a contract, and he knows that that person has stated such representation to a third person, who, upon faith thereof, makes a contract with the first party, the intermediate person will be considered as an agent of the first party by implication. Thus, where A., being about to sell a public-house, falsely represented to B., who was about to purchase it, that the receipts were ,£180 a month, and B., to the knowledge of the defendant, communicated this misstatement to the plaintiff, who became the purchaser instead of B., it was held, that an action lay against the seller, he having, by his silence, made the representation of B. his own.1
§ 622. The party guilty of fraud cannot, however, avoid the contract, for no man can take advantage of his own wrong,2 unless it be in some few instances, excepted upon grounds of public policy. It is solely at the option, therefore, of the party upon whom the fraud is practised, whether he will be bound by the agreement or not.3 Yet, if he determine to avoid a contract because of the fraud, he must give notice of such the time touching the sale, as a part of the res gestce; and as to the purchasers, it makes no difference whether these representations were made by the authority of the owners or not, if they were material to and constituted the basis of the sale, and it was made by the purchaser on the faith and credit of these representations. Under such circumstances, the sale is good in the entirety, or not good at all. The owners have no right to insist upon the validity of the sale independent of the representations. The whole must be taken together as a part of one and the same transaction. It cannot be adopted in part and rejected in part. It must be taken as good for the whole or not at all. I have on several occasions expressed my opinion upon this point; and especially in the case of Daniel v. Mitchell and others, 1 Story, 172; and in another case recently argued, Doggett v. Emerson and others, and decided in favor of the plaintiff. The case of Small v. Attwood, Younge, 407, and the same case on appeal, Attwood v. Small, 6 CI. & Finn. 232, go far to support the same doctrine, although somewhat distinguishable in its circumstances."Doggett v. Emerson, 3 Story, 729; Veazie v. Williams, 3 Story, 612.
1 Pilmore v. Hood, 6 Scott, 827; s. c. 5 Bing. N. C. 97. See Gerhard v. Bates, 2 El. & B. 476; 20 Eng. Law & Eq. 129; Crocker v. Lewis, 3 Sumner, 8; Hunt v. Moore, 2 Barr, 105; Weatherford v. Fishback, 3 Scam. 170; McCracken v. West, 17 Ohio, 16.
2 See Bessey v. Windham, 6 Q. B. 166; Nichols v. Patten, 18 Me. 231.
3 Steel v. Brown, 1 Taunt. 381; Deady v. Harrison, 1 Stark. 60.
1 Masson v. Bovet, 1 Denio, 69; Herrin v. Libbey, 36 Me. 350; Tisdale v. Buckmore, 33 Me. 461. And if possible must put the other party in statu quo. Cook v. Gilman, 34 N. H. 556; Poor v. Woodburn, 25 Vt. 234.
2 Ferguson v. Carrington, 9 B. & C. 59.
3 Campbell v. Fleming, 1 Ad. & El. 40; s. c. 3 Nev. & Man. 834; Selway v. Fogg, 5 M. & W. 83; Miles v. Dell, 3 Stark. 23.
4 Vigers v. Pike, 8 CI. & Finn. 580; Parsons v. Hughes, 9 Paige, 591; Hough v. Richardson, 3 Story, 695, 698.
5 Ibid.; Campbell v. Fleming, 1 Ad. & EL 40; Selway v. Fogg, 5 M. & W. 83; Masson v. Bovet, 1 Denio, 69.
6 Saratoga Railroad Co. v. Row, 24 Wend. 74. And see Blydenbur'gb v. Welsh, Baldwin, 331; Lamerson v. Marvin, 8 Barb. 10; Selway v. Fogg, 5 M. & W. 83; Campbell v. Fleming, 1 Ad. & El. 40.
7 Doggett v. Emerson, 3 Story, 740. In this case, which was a sale of covery, what length of time passes before his discovery of the fraud, provided he had not the means of discovering it before, and provided he is not guilty of laches.1 Lapse of time, however, always constitutes an objection to the maintenance of a suit; since the fact that a long time has passed without complaint or perception of injury would indicate an absence of fraud; and still greater weight would be given thereto, if it should appear to have operated to obscure or destroy the evitimber lands under a false representation that they contained a great amount of timber, a bill was brought, after the lapse of six years, on which the plaintiff was held to be entitled to recover. Mr. Justice Story said: "In the next place, as to the lapse of time. This in many cases is a most important consideration, and weighs much, and sometimes, Est maximi et momenti ponderis, especially when there has been a great change of circumstances as to the character and value of the property, in the intermediate period; and a fortiori, where the party complaining has been fairly put upon his diligence, and has had ample means of inquiring as to all the material facts, and has chosen to lie by in gross indifference and indolence. This question does not indeed seem fairly open upon the present pleadings. The bill charges that the plaintiff first discovered the gross fraud and imposition practised upon him in July, 1841, and, as it should seem, by means of the memorial of Emerson to the commissioners, in March, 1841, and their report thereon made in July, 1841. The answer sets up no denial to this statement of the bill; and does by implication admit its correctness. But whether this be a just inference or not, it seems to me that the lapse of time cannot interpose any bar to the relief asked by the bill, if otherwise well founded; for the memorial of Emerson is of itself clear proof, that he was before that time fully aware of all the material facts; and there is no pretence to say, that he communicated them to the plaintiff. Neither is it shown that the plaintiff had, by any other means, obtained suitable information to put him upon inquiry. In short, for aught that appears in the case, the plaintiff never discovered the gross falsity of the representations made to him until the memorial and report brought it home to his knowledge. Besides, as was remarked by the Lord Chancellor, in Partridge v. Usborne, 5 Russ. 195, 232, when one party to a contract makes a positive representation, it is not ladies in the other not to proceed immediately to verify that representation. At all events, the defence is not put upon any such ground as the lapse of time, and knowledge by the plaintiff of the material facts, so as to have called upon him for precise proofs of his real situation and of the time when he first discovered the full nature and extent of the deception practised upon him. So that it seems to me that the court is not called upon in this case, by the state of the pleadings and evidence, to act upon any such defence as the lapse of time, whatever, under other circumstances, might have been the just value of any such defence."