This section is from the book "A Treatise On The Construction Of The Statute Of Frauds", by Causten Browne. Also available from Amazon: A treatise on the construction of the Statute of frauds.
1 The word "person" was held to include a corporation in Bush v. Sprague, 51 Mich. 41.
2 Per Gurney, B., in Lyde v. Barnard, Tyrw. & G. 250.
3 9 Geo. TV. cap. 14, § 6, commonly called Lord Tenterden's Act. In the following American States similar statutes have been enacted: Maine, Vermont, Massachusetts, Virginia, Alabama, Kentucky, Indiana, Missouri, Michigan, and Oregon.
§ 182. Soon after the passage of this act, it was made a question, in the Court of Exchequer, whether the representations which were required to be in writing were such only as related to the third person's general pecuniary ability, standing, or condition, or whether the act embraced specific representations as to the state of a certain portion of his property. The plaintiff was about to lend money to T. on the purchase of an annuity, and it was intended to secure the loan by an assignment of his life interest in a particular trust fund. The trustee of the fund being applied to, to inform the plaintiff as to the existing state of T. 's life interest in it, and what encumbrances then affected it, replied verbally that, of six annuities which had been secured by T. on this fund, three had been paid off and discharged in the enrolment office, and that the other three still existed, but that, subject to the above, he, the trustee, had no notice of any other charge on it. At the time this representation was made, T. 's interest in the trust funds had been transferred to the party who had discharged three of the six annuities, subject to the payment of the other three. The plaintiff advanced the money to T., who did not repay it. An action having been brought against the trustee for false representation, the plaintiff was nonsuited, and the present question was upon setting aside the nonsuit. It was conceded that, if the defendant's representation was within the statute at all, it was as concerning the ability of the third person, and upon the meaning of that expression as there used the case is most elaborate and instructive. The court were, however, divided: Chief Baron Lord Abinger and Baron Gurney being of opinion that the representation, as one affecting the third person's ability to give the desired security, was covered by the statute, but Barons Alderson and Parke considering that the statute intended only a man's general pecuniary ability, or standing, or condition, and not, as they regarded this case, merely the state of a certain portion of his property. It was concluded that, although, on account of the equal division, the defendant was entitled to retain his nonsuit, yet the court would permit the rule to be made absolute, on payment of costs to the defendant, in order that the point might be raised upon the record, and carried to a court of error.1
1 Nevada Bank v. Portland National Bank, 59 Fed. Rep. 341. 2 Warren v. Barker, 2 Duv. (Ky.) 156; Dent v. McGrath, 3 Bush (Ky.) 176; Clark v. Lumber Co., 86 Ala. 220.
§ 183. The application of the statute is to be strictly confined to representations in regard to a third party, and made for the purpose of obtaining credit for him.2 It has been held, that it did not bar an action of tort upon oral representations falsely and fraudulently made by a defendant to the plaintiff, on his assuming the prosecution of a contract of work commenced for the defendant by another person (who had become unable to carry it on), that there would be no risk in his undertaking the work, and that defendant had sufficient funds in his hands due to the former contractor.1 In a case in New York, the declaration, after setting forth a proposition for the sale of a quantity of cotton by the plaintiffs to certain third parties, and their inability to pay for it, and the plaintiff's unwillingness to sell upon their sole credit, stated that, to induce the plaintiffs to sell and deliver the cotton, the defendant falsely and deceitfully represented and held out to them that he, the defendant, was willing to indorse a proposed note of the third parties for the price of the cotton. That they did sell and deliver it in confidence of such false representation, when in truth the defendant was then not willing, and did not mean or intend, to indorse the note, or make himself responsible; nor did he then indorse, nor had he at any time since indorsed the note; and they alleged loss of the cotton and the price in consequence. The court held that the Statute of Frauds was a bar to the action, for that, if stripped of the general allegations of fraud and deceit, the case was nothing more than that the defendant encouraged the plaintiffs to sell to the third parties, and as surety promised to indorse their notes.2 In a case in Maryland, the defendant carried a third person to the plaintiff, and passed him off as a particular friend of his, living near, whereby the plaintiff was induced to sell him slaves, which the third party, who turned out to be a slave-dealer from South Carolina, afterward carried off to that State. It was objected that the representation or stipulation of the defendant was within the statute; but held to be clearly not so, but a palpable fraud and cheat, for which the plaintiff was entitled to damages.1 Whether fraudulent verbal misrepresentations as to a third person's residence, or family connection, or other circumstance not embraced in the enumeration in the recent statutes, which are the inducements to giving credit to such third person, should give a cause of action in view of those statutes, the courts may hereafter have difficulty in determining.
1 Lyde v. Barnard, Tyrw. & G. 250. Where the plaintiff was induced to lend money to a third party by the defendant's representation that he had in his possession the title deeds to an estate which he said such third party had lately bought, and nothing could be done without his (the defendant's) knowledge, and that the plaintiff would be perfectly safe in making the desired loan; it was held to amount to a representation that the third party's credit was good, and to be not binding without writing. Swann v. Phillips, 8 Ad. & E. 457. In Massachusetts, it has been held that false assertions fraudulently made by the defendant, as to the cost and other particulars in regard to an estate belonging to a third person, which the plaintiff was thereby induced to buy, were actionable in trespass on the case, without proving that they were made in writing. Medbury v. Watson, 6 Met. 246. See also French v. Fitch, 67 Mich. 492.