§ 641. It is not necessary that the misrepresentation should be made directly between the actual parties; for if a party make a representation to one person in respect to a sale, and that representation is known by the vendor to constitute the basis of a subsequent sale to a person to whom it is communicated, it will be treated as if it were made directly by the vendor himself.2 Where, therefore, the defendant being about to sell a public-house, falsely represented to B. that the receipts were £180 a month, and B., with the knowledge of the defendant, communicated this representation to the plaintiff, who became the purchaser, it was held that an action lay against the defendant at the suit of the plaintiff.3 So, also, if an agent make a misrepresentation which he was not authorized by his principal to make, the principal will be bound thereby, if he were a general agent, or if, being a special agent, he be held out to have a more enlarged authority.4
§ 642. An action will lie against an uninterested person for making a false and fraudulent representation of a fact as then antecedent contract. Are we to infer from the terms used, that the party had expressly contracted the animal should be four years old ? The collocation of the word warranted shows that such was not the intention of the parties. Richardson v. Brown proceeded on this principle, and Dickenson v. Gapp is almost the same case as the present. Interpreting this instrument, therefore, according to the intention of the parties, I think it clear that the warranty was confined to soundness." See Richardson v. Brown, 1 Bing. 344.
1 Shepherd v. Kain, 5 B. & Al. 240; Winsor v. Lombard, 18 Pick. 60; Hogins v. Plympton, 11 Pick. 99; Power v. Barham, 6 Nev. & Man. 62; s. c. 4 Ad. & El. 473; Hastings v. Lovering, 2 Pick. 214. See post, Sales.
2 Crocker v. Lewis, 3 Sumner, 8; Barden v. Keverberg, 2 M. & W. 63, 64.
3 Pilmore v. Hood, 5 Bing. N. C. 97. See also Hill v. Gray, 1 Stark. 434; Langridge v. Levy, 2 M. & W. 519; Medbury v. Watson, 6 Met. 247-260.
4 Lobdell v. Baker, 1 Met. 202. See ante, Agents, § 213.
1 Pasley v. Freeman, 3 T. R. 51; 2 Kent, Comm. 489, and cases cited; Eyre v. Dunsford, 1 East, 318; Allen v. Addington, 7 Wend. 9.
2 Benton v. Pratt, 2 Wend. 385.
3 Ashlin v. White, Holt, N. P. 387; Scott v. Lara, Peake, 226; Shrewsbury v. Blount, 2 Man. & Grang. 475; s. c. 2 Scott, N. R. 588; Haycraft v. Creasy, 2 East, 92; Tapp v. Lee, 3 Bos. & Pul. 367; Gallager v. Brunei, 6 Cow. 346; Hutchinson v. Bell, 1 Taunt. 558; Ames v. Millward, 2 Moore, 713; s. c. 8 Taunt. 637; Eyre v. Dunsford, 1 East, 318; Pasley v. Freeman, 3 T. R. 51; Foster v. Charles, 6 Bing. 396; s. c. 7 Bing. 105; 4 Moo. & P. 741; Young v. Covell, 8 Johns. 23; Lord v. Goddard, 13 How. 198.
4 Haycraft v. Creasy, 2 East, 92. In this case Lord Kenyon disagreed with the other judges, and held that the affirmation by the defendant that the injury should bear it.1 The party defrauded may, however, as we have seen, subsequently assent to the fraud, after he is in full knowledge of it, so as to destroy his right of action. Thus, if he should make a settlement or compromise of the whole matter with the other party, or should release him, he could not set aside the contract. So, also, mere silence and acquiescence for a long time, if entirely unexplained, might deprive him of his right, upon the presumption of a compromise or release, implied from the delay. So, also, the same presumption might arise, if, after the discovery of the fraud, the party defrauded still continue to deal with the other.2 But it is not necessary that a contract void for fraud should be rescinded before an action is brought upon it; it is sufficient if the party entitled to rescind does so before he has done any act to ratify the same.3
This case, however, presses the doctrine quite as far as it would probably be upheld now. But wherever a person fraudulently, and with a design to deceive, misrepresents the circumstances of a third person, as an inducement to another to supply him goods on credit, or to make any contract, he will be liable therefor.1 But in all such cases the party deceived can only recover of the party making the fraudulent statement such damage as is fairly and immediately referable thereto,2 and if no damage is caused by the fraud, there is no right of action.3 And if a person who has sold goods on the representation by another of the purchaser's circumstances, afterwards refuse to sell a greater amount without further references, the person misrepresenting is not liable beyond the damages due at the date of such a refusal by the seller.4 But where the statement is fraudulent, it is not necessary to show that the defendant was benefited thereby,5 or that he colluded with any one who was, in order to entitle the plaintiff deceived to recover.6 Nor is it necessary to prove a malicious motive therefor, since, if the party said what was false within his knowledge? and thereby occasioned an injury, it is a sufficient ground of action.7 But where the fraudulent statement of a third party is not known or connived at by either of the original parties, as between them, the party who trusted to the misrepresentation should bear the loss, on the ground that, where one of two innocent parties must suffer, he whose act afforded the occasion for the fact of the good credit of the party was within his knowledge, rendered him liable in damages. See post, § 1125 et seq., and cases cited.
1 Ibid.; Hamar v. Alexander, 2 Bos. & Pul. N. R. 241; Hutchinson v. Bell, 1 Taunt. 558; Upton v. Vail, 6 Johns. 183; Pasley v. Freeman, 3 T. It. 51; Polhill v. Walter, 3 B. & Ad. 114; Wilson v. Butler, 4 Bing. N. C. 748. See post, Guaranty, § 1125.
2 Corbett v. Brown, 8 Bing. 35; s. c 5 C. & P. 363. See Stafford v. Newsom, 9 Ired. 507; Tuckwell v. Lambert, 5 Cush. 23.
3 Fuller v. Hodgdon, 25 Me. 243; Ide v. Gray, 11 Vt. 615.