ise by the purchasers that they would erect buildings thereon and become residents of the town; that he had sold and conveyed to the defendant one of the lots for a nominal price and for the further consideration of the defendant's promise that he would construct a building of a specified size on the lot within a certain time, which the defendant had neglected and refused to do.323 § 92. False Representations as to Agency, Authority, or Official Character.-Where a person induces another to sell him goods by representing that he is buying as the agent of a certain firm or corporation, when he is really buying for himself, it is a fraud upon the seller which entitles the latter to rescind the contract of sale.324 And so where the buyer represents that he is a member of a certain firm, for whom the purchase is made, but is in reality only an employé of the firm,325 or where he falsely represents that he is interested in the matter solely for a certain party, for whom he is acting, the truth being that he is acting for himself conjointly with a different party,326 or where the purchaser of land represents that he wants it for himself, and so is enabled, for special and personal reasons, to get it at a low price, when in reality he is acting for a third person to whom he immediately transfers it.327 So it appeared in another case that the mortgagors of certain property, being unable to pay the mortgage debt when due, proposed to the defendant, who was the agent of the mortgagee, that they should convey the mortgaged lands to the mortgagee in satisfaction of the debt. The defendant consulted with the mortgagee, and was authorized to accept this proposition, but he falsely stated to the mortgagors that his principal would not accept the premises and release the debt, unless the mortgagors would also convey to him a certain five-acre tract of land in addition. The mort 323 Willard v. Ford, 16 Neb. 543, 20 N. W. 859. But see Tacoma Water Supply Co. v. Dumermuth, 51 Wash. 609, 99 Pac. 741; State v. Blize, 37 Or. 404, 61 Pac. 735. 824 Mayhew v. Mather, 82 Wis. 355, 52 N. W. 436. 325 Howe v. Combs, 18 Ky. Law Rep. 1002, 38 S. W. 1052. 326 Robinson v. Richards, 209 Mass. 295, 95 N. E. 790. 827 Grundy v. Louisville & N. R. Co., 98 Ky. 117, 32 S. W. 392. gagors, relying on this representation, and being threatened with a deficiency judgment if they did not comply with the demand, conveyed the mortgaged premises to the mortgagee, and conveyed the five acres to one to whom the defendant stated the mortgagee wished it to be conveyed, but who was in fact receiving it for the defendant, to whom he afterwards transferred it, the mortgagee knowing nothing about it. It was held that such a fraud had been perpetrated upon the mortgagors as entitled them to recover the land from the defendant.328 On somewhat similar principles, ground for rescission was found in certain fraudulent representations made by the agent of the purchaser of land, that the purchaser was a man of means with a small family who wanted the lot, which was next to the vendor's residence, for a home, whereas the purchaser was a religious society which wanted the land for the purpose of building a church. on it.329 And in an action for fraudulent representations, relief may be granted on a showing that defendant falsely represented that he was the agent for certain property, and that plaintiff, relying thereon, contracted with him for its purchase, and that at the time defendant was not such agent, and that, instead of applying the money for the purchase of the land, he fraudulently converted it.330 And generally, an action will lie against one who deceives and causes damage to the plaintiff by falsely representing himself to be a public officer.331 § 93. Representations by Agents and Other Third Persons. In order that a person should be held liable for false and fraudulent representations, to the extent of having a contract made with him rescinded or an obligation given. to him canceled, it is not necessary that the representations should have been made directly by him, but the effect is the same if they were made by his duly authorized agent or representative.332 But it is requisite that the agent or rep 328 Cook v. Skinner, 50 Wash. 317, 97 Pac. 234. 332 Pictorial Review Co. v. Gerald FitzGibbon & Son, 163 Iowa, 644, 145 N. W. 315; Smither v. Calvert, 44 Ind. 242; Woods v. resentative should have been directly authorized to make the representations complained of, or else that the transaction in question (not necessarily the representations) should have been within the scope of his general or special employment. 333 Or the same result will follow if the principal, not having authorized the representations to be made, knows of their having been made and approves of the agent's course in so making them,334 or if he ratifies an entirely unauthorized and fraudulent act of his agent, in respect to making such representations, by failing to explain or repudiate after acquiring knowledge of the way in which the bargain was induced, and by accepting and retaining the fruits or benefits of the contract.335 But fraud cannot be charged against a party to a contract or other transaction on account of fraudulent misrepresentations made by a Pine Mountain R. Co. (Ky.) 113 S. W. 94; Hedden v. Griffin, 136 Mass. 229, 49 Am. Rep. 25; Michigan Mut. Life Ins. Co. v. Reed, 84 Mich. 524, 47 N. W. 1106, 13 L. R. A. 349; Tiffany v. Times Square Automobile Co., 168 Mo. App. 729, 154 S. W. 865; Shoudy v. Reeser, 48 Mont. 579, 142 Pac. 205; Delouche v. Metropolitan Life Ins. Co., 69 N. H. 587, 45 Atl. 414; Keeler v. Seaman, 47 Misc. Rep. 292, 95 N. Y. Supp. 920; White Sewing Machine Co. v. Bullock, 161 N. C. 1, 76 S. E. 634; United States Life Ins. Co. v. Wright, 33 Ohio St. 533; Equitable Life Assur. Soc. v. Maverick (Tex. Civ. App.) 78 S. W. 560; Johns v. Coffee, 74 Wash. 189, 133 Pac. 4. See F. C. Austin Mfg. Co. v. Decker, 109 Iowa, 277, 80 N. W. 312. A principal may, without inquiry, rely upon the statements of his own agent or confidential adviser, as to the details of a transaction or the contents of a written instrument. Robinson v. Glass, 94 Ind. 211; Pouppirt v. Greenwood, 48 Colo. 405, 110 Pac. 195. And see, supra, § 42. But where a contract for the sale of an acetylene gas plant was made directly with the seller, and at that time no representations were made as to the relative cost of acetylene gas and electricity, and the contract was silent on the subject, and there was no fraud or mistake in the contract, it cannot be rescinded for a misrepresentation by an agent of the seller some time before as to the relative cost of the two systems of lighting. Daylight Acetylene Gas Co. v. Hardesty (Ky.) 112 S. W. 847. 333 Wallace v. Hallowell, 66 Minn. 473, 69 N. W. 466; Roper v. Noel, 32 S. D. 405, 143 N. W. 130. A grantor who does not know the boundaries of his land, and sends a mere farm hand to point them out, is not liable for false information given by the latter without any fraudulent intent. Tarault v. Seip, 158 N. C. 363, 74 S. E. 3. 334 Travis v. Taylor (Ky.) 118 S. W. 988. 335 Forster v. Wilshusen, 14 Misc. Rep. 520, 35 N. Y. Supp. 1083; Foix v. Moeller (Tex. Civ. App.) 159 S. W. 1048. stranger, having no authority to act for such party, where. he himself took no part in the fraud and was not cognizant of the deception practised on the other party. Thus, although a person was induced to subscribe for stock in a corporation by false and fraudulent representations made to him, yet if they did not proceed from any person authorized to act in behalf of the corporation or to represent it, but from a mere stranger, they furnish no ground for rescinding the contract of subscription; nor does it alter the case that such stranger was himself a subscriber for stock, and interested in getting others to subscribe.387 So, fraudulent representations as to the extent or value of property to be purchased by a syndicate formed for that purpose cannot be set up against a note given by one of the members of the syndicate for his subscription to it, when such representations were made by his associates in the syndicate and by the promoters thereof, but not by the vendor.338 Again, a purchaser is not entitled to a rescission by reason. of misrepresentations made by remote vendors in selling the property. And a mortgagee of a dwelling house is not liable for alleged misrepresentations as to its sanitary condition made by the mortgagor in possession in letting the same, in the absence of any evidence that he was acting as the agent of the mortgagee.340 So where a party, before closing a contract for the sale of property, agrees to be governed by the report of a third person as to the quality and value of the lands offered to him, and such third person examines the land and the contract is closed on his report, it cannot be set aside on the ground of fraudulent misrepre 339 836 Compton v. Bunker Hill Bank, 96 Ill. 301, 36 Am. Dec. 147; Brounfield v. Denton, 72 N. J. Law, 235, 61 Atl. 378; Equitable Life Assur. Soc. v. Cosby (Ky.) 126 S. W. 142; Maney v. Morris (Tenn. Ch. App.) 57 S. W. 442. See Hughes v. Lockington, 221 Ill. 571, 77 N. E. 1105. 337 Jewett v. Valley Ry. Co., 34 Ohio St. 601. And see Duranty's Case, 26 Beav. 268; Cunningham v. Edgefield R. Co., 2 Head (Tenn.) 23. 338 Tradesmen's Nat. Bank v. Looney, 99 Tenn. 278, 42 S. W. 149, 38 L. R. A. 837, 63 Am. St. Rep. 830. 339 Jones v. Middlesborough Town Lands Co., 106 Ky. 194, 50 S. 340 Tilden v. Greenwood, 149 Mass. 567, 22 N. E. 45. sentations by such third person, unless it is shown that he was in collusion with the other party to the contract.341 But though a person refrains from making any false representations, yet if he takes advantage of a misrepresentation proceeding from a third person and turns it to his own advantage and to the detriment of the other party, he is responsible for it. This was ruled, for instance, in a case where the register of deeds unintentionally made a mistake in an abstract of title prepared by him, and the vendor of the land, perceiving it, used it to deceive the purchaser in a material point.342 So, one guilty of fraud cannot escape responsibility by sending his victim to a confederate for an opinion.348 But it is not sufficient evidence of one's commission of a fraudulent act that it was for his interest, and that of no one else, to have the act done; as, where fictitious letters offering to buy land in a distant state at more than its real value, are shown to an intending purchaser and influence him in deciding to buy, but no complicity on the part of the owner of the land is shown, though it is shown that he is the only person who could have been benefited by the letters.344 However, there are cases in which complicity in a fraud has been held established by evidence. not much stronger than this. Thus, in a case in Oklahoma, a husband was induced by his affection for his wife and by representations made to him by the physician who was treating her for an illness to give her a deed of certain of his lands. But afterwards he discovered that the representations were false, and that his wife and the doctor were living in illicit relations, and it was held that he was entitled to have the deed canceled for fraud.34 There are also cases in which agency or authority to act for another may be implied from the relations of the parties. For example, where the president of a corporation is the chief executive officer and head of the company, under the by-laws, with general control of its business, and is engag 841 Schramm v. O'Connor, 98 Ill. 539. 342 Scadin v. Sherwood, 67 Mich. 230, 34 N. W. 553. 343 Barron v. Myers, 146 Mich. 510, 109 N. W. 862. 844 Hanna v. Rayburn, 84 Ill. 533. 345 Rumbaugh v. Rumbaugh, 39 Okl. 445, 135 Pac. 937. |