The general rule is that mere silence is no fraud, except where the silence amounts to an affirmation that a state of things exists which does not.7 That which is ethical is not always the law, nor does the law always correspond with the ethical. If a man is about to sell his property, what information ought he to give the proposed buyer, and what information may he properly withhold? This presents a question of ethics on the one hand and a question of law on the other. It is not a novel question. Even Cicero, who practised law 1900 years ago, seems to have had occasion to go into the question, and we may assume from what he says that even in those days some of the real estate agents "knew the business." He says in the third book of the De Officiis:
"A good man sells a house on account of some defects, of which he himself is aware and others ignorant. Perhaps it is unhealthy, and is supposed to be healthy, - it is not generally known that snakes make their appearance in all the bedrooms, - it is built of bad materials, and is in a ruinous condition; but nobody knows this except the owner. I ask, if the seller should have failed to tell these things to the buyer, and should thus have sold his house for a higher price than he could reasonably have expected, whether he would have acted unjustly or unfairly? 'Yes, he would,' says Antipater; ' for what is meant by not putting into the right way one who has lost his way (which at Athens exposed a man to public execration), if it does not include a case in which a buyer is permitted to rush blindly on and through his mistake to fall into a heavy loss by fraudulent means f It is even worse than not showing the right way; it is knowingly leading another into the wrong way.' Diogenes, on the other hand says: 'Did he who did not even advise you to buy, force you to buy? He advertised for sale what he did not like; you bought what you did like. Certainly, if those who advertise a good and well-built house are not regarded as swindlers, even though it is neither good nor properly built, much less should those be so regarded who have said nothing in praise of their house. For in a case in which the buyer can exercise his own judgment, what fraud can there be on the part of the seller? And if all that is said is not to be guaranteed, do you think that what is not said ought to be guaranteed? What could be more foolish than for the seller to tell the defects of the articles that he is selling? Nay, what so absurd as for an auctioneer, by the owner's direction, to proclaim," I am selling an unhealthful house? " ' Thus, then, in certain doubtful cases the right is defended on the one side; on the other, expediency is urged on the ground that it is not only right to do what seems expedient, but even wrong not to do it. This is the discrepancy which seems often to exist between the expedient and the right. But I must state my decision in these cases; for I introduced them, not to raise the inquiry concerning them, but to give their solution. It seems to me, then, that neither that Rhodian corn-merchant nor this seller of the house ought to have practiced concealment with the buyers. In truth, reticence with regard to any matter whatever does not constitute concealment; but concealment consists in willingly hiding from others for your own advantage something that you know. Who does not see what sort of an act such concealment is, and what sort of a man he must be who practices it? Certainly this is not the conduct of an open, frank, honest, good man, but rather of a wily, dark, crafty, deceitful, ill-meaning, cunning man, an old rogue, a swindler. Is it not inexpedient to become liable to these so numerous and to many more bad names? "8
7 Cooley on Torts (2d Ed.), pp. 557-565.
If the fear of having the names in Cicero's category applied to them, deterred many of the Romans from the conduct discussed, how different they must have been from some of the brokers we meet in our day!
Cicero, though he handles the subject so pleasantly, does not after all give a decided opinion, for does he not in effect argue that concealment is wrong? But what concealment is, he leaves for others to determine. The cases in our own courts are, as a whole, hardly more explicit. In People's Bank v. Bogart, 81 N. Y. 107 (1880), it is said that "the law requires disclosure to be made only when there is a duty to make it, and this duty is not raised by the mere circumstance that the undisclosed fact is material, and is known to the one party and not to the other, or by the additional circumstance that the party to whom it is known, knows that the other party is acting in ignorance of it." The court quotes Story on Contracts to the effect that "the general rule both of law and equity, in respect to concealments, is that mere silence with regard to a material fact which there is no legal obligation to divulge will not avoid a contract, although it operates to the injury of the party from whom it is concealed."