§ 633. The misrepresentation must, however, be in regard to some material fact, operating as an inducement or consideration to the contract. Thus, if a party should offer an estate for sale, representing at the time that it contained a valuable mine, and thereupon, induced by this fact, some person should buy the land, and the representation should prove false, the contract for the sale, or the sale itself, if completed, would be avoided for fraud; for the misrepresentation touches the very essence of the contract.1 So, also, if a person in the sale of a vessel should falsely represent her to be copper-fastened; or to be newly rigged; or to have been built within a year, - the vendee would not be bound by the contract.2 So, also, false representations that a steam-engine was of twenty-horse power, and fit for mining purposes, that it was free from rust, and was in good order, and had been so certified to be by engineers, would be sufficient to vitiate a contract of sale made on the basis thereof, because the misrepresentations are vital thereto.3 So, also, where, in the treaty for the purchase of a house, the defendant affirmed that the rent was £30 per annum, when it was only £20, it was held, that the falsity of the statement vitiated the contract.4 But if the misrepresentation be in respect to an immaterial fact, which, if known to the purchaser, would not have affected his decision, it affords no ground to set aside the contract.5 Falsity, alone, is not a sufficient ground to avoid a contract, but it must work an injury;6 or, as it has been expressed, "fraud without damage, or damage without fraud, gives no cause of action, but where these two concur and meet together, there an action lieth." 1 The question, however, whether a representation is or is not material in a given case, is for the determination of a jury.2
1 Jackson v. Turquand, Law R. 4 H. L. 305 (1869).
2 Reese River Silver Mining Co. v. Smith, ib. 64 (1869).
3 See also Oakes v. Turquand, Law R. 2 H. L. 325 (1867); Henderson v. Royal British Bank, 7 El. & B. 356 (1857); Venezuela Ry. Co. v. Kisch, Law R. 2 H. L. 99 (1867); Barber v. Meyerstein, Law R. 4 H. L. 317 (1870).
1 Lowndes v. Lane, 2 Cox, 363; Daniel v. Mitchell, 1 Story, 172; 1 Domat, B. 1, tit. 2, § II, art. 12; Dig. Lib. 18, tit. 1, 1. 54; Jarvis v. Duke, 1 Vern. 19; 1 Story, Eq. Jur. § 196.
2 Lowndes v. Lane, 2 Cox, 363; Shepherd v. Kain, 5 B. & Al. 240; Fletcher v. Bowsher, 2 Stark. 561.
3 Hazard v. Irwin, 18 Pick. 95.
4 Risney v. Selby, 1 Salk. 211.
5 1 Story, Eq. Jur. § 190; Morris Canal Co. v. Emmett, 9 Paige, 168; Stebbins v. Eddy, 4 Mason, 414; Winch v. Winchester, 1 Ves. & B. 375; Geddes v. Pennington, 5 Dow, 159; Camp v. Pulver, 5 Barb. 91; Green v. Gosden, 4 Scott, N. R. 13; 3 Man. & Grang. 446; Vane v. Cobbold, 1 Exch. 798.
6 Fellowes v. Lord Gwydyr, 1 Russ. & Myl. 83; Foster v. Charles, 6 Bing. 396; 7 Bing. 105; Vernon v. Keys, 12 East, 637; 2 Kent, Comm. 490. A person employed to serve by the defendant as his substitute in the army may recover the agreed compensation, although through the defendant's advice he deceived the officers as to his name, age, and place of birth, but nevertheless served out the whole period of his enlistment. Servis v. Cooper, 4 Vroom, 68 (1868).
§ 634. Yet in all cases of misrepresentation, it is requisite that the party claiming to set aside the contract should actually have been deceived by it, to his injury; for if he knew the statement to be false at the time when it was made, it could not have influenced his decision, and the reason for which such contracts are treated as void falls to the ground. So, also, if the representation be productive of no injurious results, its mere falsity constitutes no reason for setting the contract aside; for a mere intention to defraud, not carried into effect, will not vitiate a contract.3. If, therefore, a person should represent cloth to be blue, and the buyer should see that it is murrey; or should represent a house to be in good order, and the lessee should see that several windows are broken out; he could not be bound to make good such representation, simply because it could not have deceived the party to whom it was made. But if it actually operate as a deception, - as if the person to whom such a statement is made should be blind, or should actually not perceive the statement to be false, - it will be a fraud.
§ 635. Again, every actual misrepresentation, which is material, is a fraud, although it be apparently true. Thus, if words be used in a double sense, - as if articles be represented to be silver, when they are German silver, and be purchased in the belief that they are Mexican silver, - the contract would be void. So, also, where artifice is employed for the purpose of deception, or where a trick is played, by which a person is deceived into making a contract wholly different from what he intended, the fraud and surprise would vitiate it.
1 Croke, J., 3 Bulst. 95.
2 Lindenau v. Desborough, 8 B. & C. 586; Westbury v. Aberdein, 2 M. & W. 267.
3 Foster v. Charles, 6 Bing. 396; 7 ib. 105; 2 Kent, Comm. 490; Pothier de Vente, n. 210; Vernon v. Keys, 12 East, 637, 638; 1 Story, Eq. Jur. § 202, 203.
Thus, where A. agreed to buy a horse, and to give a barleycorn for the first nail, and to double it for every nail in the horse's shoes, and an action was brought for the price, it was held that a bargain in such terms was void.1 So, also, where the defendant, being about to furnish the plaintiff's son with goods on credit, inquired of the defendant by letter, whether his son had, as he asserted, £300 of his own property, and the defendant answered that he had,- the fact being that he had lent his son £300 on his promissory note, payable with interest, on demand, - and the son afterwards became insolvent, it was held that this was a misrepresentation, for which the defendant was liable in damage to the plaintiff.2 Some of these cases seem to have been determined on the ground that there never was any agreement, because the parties meant different things when they made a contract: there was no assent of the minds. § 636. Yet, though the representation be even wilfully false, in order to found a right in the party to whom it is made to avoid it, it should be of such a nature that he had a clear right to rely upon it, as an actual and undisputed fact; for if he had not, it was his own folly and indiscretion to trust to a statement, made under no legal obligation or pledge for its accuracy; and the policy of the law, which encourages vigilance and caution, will not assist him.3 The question therefore arises, what representations made by one party has the other a right to rely upon. And here the great distinction is between representations as to matters of fact, and as to matters of opinion or judgment. Every misrepresentation of a material fact is fraudulent in law, if the party to whom it was made did not have equal means of knowing or ascertaining its falsity; or if it be made in such a manner as to induce him to forbear making any inquiries in respect to it.4 Thus, in the case of caveat emptor applies, and he must also prove that they were fraudulently intended.1 Again, if the means of knowledge be within the reach of the purchaser, and he is nevertheless induced to forbear to employ them, by the statement of the seller, the contract would be voidable.2 The ground upon which all these doctrines proceed is, that ordinarily a man relies upon his own judgment and skill in making a purchase. But if he actually repose confidence in the statements of the vendor as to matters of fact material to the bargain, whether he be compelled to do so through the necessities of the case, -as when he has not the means of knowledge, - or be persuaded to do so by the seller, the reason for the rule fails, and an exception is, therefore, admitted.3 But if he have the means of knowledge, and do not choose to use them, he has himself only to blame for trusting implicitly to statements which the seller honestly makes. But a distinct assertion by the vendor of a patent-right, as to what was covered by the patent, with knowledge of its falsity and with intent to defraud the buyer, and on which the latter relies, avoids the contract, although the buyer might have discovered the fraud by searching the records of the patent-office.4 Of course, if the seller fraudulently misrepresent facts, or state facts to exist which he knows not to exist, his fraud would vitiate the contract, provided the misstatements were in respect to a material point.5