other words, of the borrower's intention as to its application is a material statement of fact, and if untrue may be ground for an action of deceit (n). The same principle would seem to apply to a man's statement of the reasons for his conduct, if intended or calculated to influence the conduct of those with whom he is dealing (0); as if an agent employed to buy falsely names, not merely as the highest price he is willing to give, but as the actual limit of his authority, a sum lower than that which he is really empowered to deal for.

Misrepresentations of law. A representation concerning a man's private rights, though it may involve matters of law, is as a whole deemed to be a statement of fact.

(n) Edgington v. Fitzmaurice (1884), 29 Ch. Div. 459, 55 L. J. Ch. 650.

(0) It is submitted that the contrary

opinion given in Vernon v. Keys (1810), Ex. Ch. 4 Taunt. 488, can no longer be considered law.

Misrepresentations of law. The American authorities are in harmony with the text. For example, in Upton v. Tribilcock (91 U. S. 45), where an agent procuring subscriptions for stock of a corporation, represented that the subscribers would be liable for a certain percentage of the stock but the law made them responsible for the whole amount of the shares; it was held that a subscriber cannot defend on the ground of fraud. "There was here no error, mistake, or misrepresentation of any fact The defendant made the subscription he intended to make, and received the certificate he had stipulated for; * But in law the defendant incurred a larger liability than he anticipated." S. P., Ogilvie v. Knox Ins. Co., 22 How. 380. See Steamboat Belfast v. Boon & Co. 41 Ala. 50; Jagar v. Winslow, 30 Minn. 263; Townsend v. Cowles, 31 Ala. 428; Cowles v. Townsend, 37 Id. 77; Clem v. Newcastle, etc. R. Co., 9 Ind. 488; Insurance Co. v. Reed, 33 Ohio St. 283; Lexow v. Julian, 21 Hun, 577; Russell v. Branham, 8 Blackf. 277; People v. Supervisors of San Francisco, 27 Cal. 655; Gormeley v. Gym. Assoc., 55 Wis. 350; Rogers v. Place, 29 Ind. 577.

But the rule does not apply to a case where there is an inseparable connection between false statements of law and fact. As where the holder of a note, the remedy upon which is barred by the statute, goes to the administrator of one of the two makers, and by representing it to be unpaid, and valid, and in full force in the law, procures a bond for the judgment of one-half thereof. Brown v. Rice's Admr., 26 Gratt. 467. So, a party can obtain redress when he has been induced to execute

Where officers of a company incorporated by a private Act of Parliament accept a bill in the name of the company, this is a representation that they have power so to do under the Act of Parliament, and the existence or non-existence of such power is a matter of fact. "Suppose I were to say I have a private Act of Parliament which gives me power to do so and so. Is not that an assertion that I have such an Act of Parliament? It appears to me to be as much a representation of a matter of fact as if I had said I have a particular bound copy of Johnson's Dictionary (p). A statement about the existence or actual text of a public Act of Parliament, or a reported decision, would seem to be no less a statement of fact. With regard to statements of matters of general law made only by implication, or statements of pure propositions of the law, the rule may perhaps be this, that in dealings between parties who have equal means of ascertaining the law, the one will not be presumed to rely upon a statement of matter of law made by the other (g). It has never been decided whether

(p) West London Commercial Bank v. Kitson (1884), 13 Q. B. Div. 360, per Bowen L. J. at p. 363, 53 L. J. Q. B. 345. Cp. Firbank's Executors v. Humphreys (1886), 18 Q. B. Div. 54, 56 L. J. Q. B. 57 (direct

tor's assertion of subsisting authority to issue debentures).

(g) This appears to be the real ground of Rashdall v. Ford (1866), 2 Eq. 750, 35 L. J. Ch. 769.

bill of exchange, supposing it be an ordinary promissory note, from misrepresentations made by the other party. Ross v. Drinkard, 35 Ala. 434; and in this case the following quotation from Townsend v. Cowles, (31 Ala. 428) is approved: "If the defendant was in fact ignorant of the law, and the other party knowing him to be so and knowing the law, took advantage of such ignorance to mislead him by a false statement of the law, it would constitute a fraud."

In negotiations between parties holding confidential relations, false statements of the law may be actionable for deceit practiced. Cooke v. Nathan, 16 Barb. 342; State v. Holloway, 8 Blackf. 45; Sims v. Ferrill, 45 Ga. 585; Porter v. Wright, 6 Ind. 183. As where an immigrant went to a certain country and there met an old friend, who professed to know all about the lands and titles thereto, and who sold him lands and asserted that the title was perfect, but which proved incorrect. Held, that the buyer had redress for the deceit. Moreland v. Atchison, 19 Tex.

proof of such reliance is admissible; it is submitted that if the case arose it could be received, though with caution. Of course a man will not in any event be liable to an action of deceit for misleading another by a statement of law, however erroneous, which at the time he really believed to be correct. That case would fall into the general category of honest though mistaken expressions of opinion. If there be any ground of liability, it is not fraud but negligence, and it must be shown that the duty of giving competent advice had been assumed or accepted.

Falsehood by garbled statements. It remains to be noted that a statement of which every part is literarally true may be false as a whole, if by reason of the omission of material facts it is as a whole calculated to mislead a person ignorant of those facts into an inference contrary to the truth (r). "A suppression of the truth may amount to a suggestion of falsehood" (s).

Knowledge or belief of defendant. (b) As to the knowledge and belief of the person making the statement. He may believe it to be true (t). In that case he incurs

(r) "There must, in my opinion, be some active misstatement of fact, or at all events such a partial and fragmentary statement of fact as that the withholding of that which is not stated makes that which is stated absolutely false: "Lord Cairns, L. R. 6 H. L. 403.

(8) Stewart v. Wyoming Ranche Co. (1888), 128 U. S. 383, 388.

(t) Collins v. Evans (1844), Ex. Ch. 5 Q. B. 820, 13 L. J. Q. B. 180. Good and probable reason as well as good faith was pleaded and proved.

Falsehood by garbled statements. To tell half the truth to conceal the other half, amounts to a false statement, and differs in no respect from the case of false representations. Rhode v. Alley, 27 Tex. 443. "Fraud may consist as well in a suppressio veri as in a suggestio falsi, for in either case, it may operate to the injury of the innocent party.” Mitchell v. McDougall, 62 Ill. 501. See Williams v. Spurr, 24 Mich. 335; Fish v. Cleland, 33 Ill. 238; Cleland v. Fish, 43 Ill. 282.

Knowledge or belief of defendant.

tained by the American authorities.

The statement of the text is sus-
Thus in Hicks v. Stevens (21 Ill.

186; 11 N. E. Rep. 244), the court said: "To maintain an action at

66

no liability, nor is he bound to show that his belief was founded on such grounds as would produce the same belief in a prudent and competent man (u), except so far as the absence of reasonable cause may tend to the inference that there was not any real belief. An honest though dull man cannot be held guilty of fraud any more than of express malice," although there is a point beyond which courts will not believe in honest stupidity. "If an untrue statement is made," said Lord Chelmsford, "founded upon a belief which is destitute of all reasonable grounds, or which the least inquiry would immediately correct, I do not see that it is not fairly and correctly characterized as misrepresentation and deceit" (x); Lord Cranworth preferred to say that such circumstances might be strong evidence, but only evidence, that the statement was not really believed to be true, and any liability of the parties "would be the consequence not of their having stated as true what they had not reasonable ground to believe to be true, but of their having stated as true what they did not believe to be true" (y). Lord Cranworth's opinion has been declared by the House of Lords (z), reversing the

(u) Taylor v. Ashton (1843), 11 M. & W. 401, 12 L. J. Ex. 363, but the actual decision is not consistent with the doctrine of the modern cases on the duty of directors of companies. See per Lord Herschell, 14 App. Ca. at p. 375.

(x) Western Bank of Scotland v. Addie (1867), L. R. 1 Sc. at p. 162.

(y) Ib. at p. 168.

(z) Derry v. Peek (1889), 14 App. Ca. 337, 58 L. J. Ch. 864.

law for fraud and deceit arising from false representations of a material matter connected with the transaction, it is necessary to show that the party making it knew it to be false, or occupied such a position as that the law would impute to him knowledge of the fact." See McDonald v. Trafton, 15 Me. 225; Case v. Voughton, 11 Wend. 106; King v. Eagle, 10 Allen, 548; Stimpson v. Helps, 9 Col. 33; 10 Pac. Rep. 290; Morse v. Dearborn, 109 Mass. 593; Smith v. Richards, 13 Pet. 26; Cabbot v. Cristie, 42 Vt. 121; Twitchell v. Bridge, 42 Vt. 68; Burnett v. Stanton, 2 Ala. 187; Bankhead v. Alloway, 6 Coldw. 56; Bristol v. Braidwood, 28 Mich. 191; Thompson v. Lee, 31 Ala. 292; Foard v. McComb, 12 Bush, 723; Elder v. Allison, 45 Ga. 13; Wilcox v. Iowa Wes. Univ., 32 Ia. 367; Morgan v. Skiddy, 62 N. Y. 319; Davis v. Heard, 44 Miss. 50.