Sec. 292. General Statement

Fraud may be based on representations that others have offered a certain price for the property, or that a certain price was paid for the property,1 or that the property brings a certain rental, or as to improvements on the property, or as to its situation, or with respect to the maturity of the mortgages thereon, or even with respect to the vendor's title. (Sec.293-300.)

Sec. 293. Representation That Certain Price Had Been Offered

"A false representation that a person had offered to purchase the property from the owner for a fixed price, when in fact the only offer made was an offer for a very much smaller price, is actionable if a person thereby is induced to buy the property, anticipating that he may sell to the person who made the first offer, and supposing the amount stated to have been true. Such a statement is not one as to the value of property, but is the statement of a fact, namely, the offer made by the first person, which is peculiarly within the owner's knowledge."2

1 As to this the authorities are conflicting.

2 Ismail v. Lorlng, 130 App. Div. 849 (N. Y. 1909); 20 Cyc. 69.

Sec. 294. Representation As To Value And Price Paid For Property

It has been held that a false statement by a vendor to a vendee concerning the value "of property about to be sold, will not sustain an action for fraud, but the vendee in such cases must rely on his own judgment. It may be that the rule in such cases would be different if the purchaser was prevented by any act or artifice of the seller from exercising his judgment in ascertaining the value." 3

Where the question was not one arising out of a representation as to value but was with respect to a fact which might, in the ordinary course of business, influence the action and control the judgment of the purchaser, namely, the price paid for the property by the vendor within less than a month prior to the sale, it was held "that a false statement with respect to the price paid under such circumstances, which is intended to influence the purchaser, and does influence him, constitutes a sufficient basis for a finding of fraud." 4 While the vendor may not be bound to speak on the subject, if he does, he should speak the truth.5

But the authorities on this subject are in conflict.6 Thus in Bosley v. Monahan, 112 N. W. 1102 (Iowa 1907) it was said: "There seems to be a difference of opinion * * * among the courts, as to whether a statement as to the price paid by the seller or the price which has been offered to the seller is a material statement of fact on which the buyer may rely, or, like a general statement of value, to be treated only as trade talk. This court has taken the view that such statements may be relied on as material representations of fact."7

3 Ellis v. Andrews, 56 N. Y. 83 (1874).

4 Fatrehlld v. McMahon, 139 N. Y. 290, 293, 294 (1893).

5 Id.

6 20 Cyc. 54.

7 Citing Teachont v. Van Hoesen, 76 Iowa 113; 40 N. W. 96; 1 L. R. A. 664; 14 Am. St. Rep. 206; Dorr v. Cory, 108 Iowa 725; 78 N. W. 682; Scott v. Burnight, 131 Iowa 507; 107 N. W. 422.