order to warrant the rescission of a contract. The motive or cause which actuated the party making the representations is not material. If any intention on his part is to be shown, it is the intention that the other party should rely and act upon the representations, not an intention to deceive him. This being shown, together with the actual falsity of the representations, and such party's reliance on them, a case for rescission is made out, without proof of any fraudulent design to deceive.547 In Michigan, it is stated to be the settled doctrine that if there was in fact a misrepresentation, although made innocently, and its deceptive influence was effective, its consequences to the plaintiff being as serious as though it had proceeded from a vicious purpose, he will have a right of action for the damages caused thereby, and of course, for even stronger reasons, a right of rescission, and that, this rule being fully established in equity, there is no reason why it should not equally prevail in a court of law.548 And elsewhere it is said that the motives which actuate a person in making false representations are wholly immaterial, since the law will infer an improper motive if what a party states is false within his own knowledge and is the cause of injury to another.549 But it is always necessary that the representation should have been made with the intention that it should be acted upon by the person to whom it was made or by one to whom it

547 Pittsburg Life & Trust Co. v. Northern Cent. Life Ins. Co. (C. C.) 140 Fed. 888 (affirmed, 148 Fed. 674, 78 C. C. A. 408); Pritchett v. Fife, 8 Ala. App. 462, 62 South. 1001; Spreckels v. Gorrill, 152 Cal. 383, 92 Pac. 1011; Whiting v. Price, 169 Mass. 576, 48 N. E. 772, 61 Am. St. Rep. 307; Pennington v. Roberge, 122 Minn. 295, 142 N. W. 710; Bishop v. Seal, 87 Mo. App. 256; Hammond v. Pennock, 61 N. Y. 145; Cramsey v. Sterling, 188 N. Y. 602, 81 N. E. 1162; Silverman v. Minsky, 186 N. Y. 576, 79 N. E. 1116; Zagarino v. Kurzrok, 135 App. Div. 763, 119 N. Y. Supp. 907; Weller v. Bartlett (Sup.) 45 N. Y. Supp. 626; Cole v. Carter, 22 Tex. Civ. App. 457, 54 S. W. 914; Carter v. Cole (Tex. Civ. App.) 42 S. W. 369; Texas Cotton Products Co. v. Denny Bros. (Tex. Civ. App.) 78 S. W. 557. And see Bethea-Starr Packing & Shipping Co. v. Mayben (Ala.) 68 South. 814; Pepper v. Vedova, 26 Cal. App. 406, 147 Pac. 105; Paschal v. Hudson (Tex. Civ. App.) 169 S. W. 911.

548 Holcomb v. Noble, 69 Mich. 396, 37 N. W. 497; Totten v. Burhans, 91 Mich. 495, 51 N. W. 1119; Krause v. Cook, 144 Mich. 365, 108 N. W. 81.

549 John V. Farwell Co. v. Nathanson, 99 Ill. App. 185.

was intended to be communicated.550 Thus, where the defendant had made certain representations to the plaintiff to be communicated to a creditor of the defendant, in order to obtain an extension of time on a claim which was afterwards transferred to the plaintiff, but the defendant did not know that a note given in payment of the claim was to be taken by the plaintiff, it was held that the latter could not recover for deceit, as the representations were not made with the intention of inducing him to act.551 So a seller who puts false recitals in the contract of sale as to the amount of the purchase price, whereby the purchaser's agent is enabled to defraud the purchaser, is not liable to the latter, in the absence of a showing that his purpose in inserting such recitals was to bring about that result." But a complaint alleging that, because of the false and fraudulent representations of the defendant, on which plaintiff relied, he delivered to defendant stocks which the latter appropriated to his own use, and intended so to appropriate when he made the false representations, states a cause of action for fraud and deceit.553

552

§ 109. Effect of Representations in Actually Deceiving Party. To warrant relief by rescission on the ground of false representations, it is essential that the party complaining should have been actually deceived or misled by them. If he knew the truth of the matter, and so knew that the representations were false or incorrect, and nevertheless accepted the bargain proposed, he cannot have relief against the injurious consequences of his voluntary and intelligent assent to it.554 One of the fundamental principles

550 Henry v. Dennis, 95 Me. 24, 49 Atl. 58, 85 Am. St. Rep. 365. 551 Butterfield v. Barber, 20 R. I. 99, 37 Atl. 532.

552 Thorp v. Smith, 18 Wash. 277, 51 Pac. 381.

553 Maxwell v. Martin, 130 App. Div. 80, 114 N. Y. Supp. 349. 554 Maxon-Nowlin Co. v. Norswing, 166 Cal. 509, 137 Pac. 240; Harper v. Cincinnati, N. O. & T. P. Ry. Co., 15 Ky. Law Rep. 223, 22 S. W. 849; Daab v. New York Cent. & H. R. R. Co., 70 N. J. Eq. 489, 62 Atl. 449; Lane v. Fenn, 65 Misc. Rep. 336, 120 N. Y. Supp. 237; Phipps v. Buckman, 30 Pa. 401; Dube v. Dixon, 27 R. I. 114, 60 Atl. 834; Bonzer v. Garrett (Tex. Civ. App.) 162 S. W. 934; Shoemaker v. Cake, 83 Va. 1, 1 S. E. 387; Miles v. Pike Min. Co., 124 Wis. 278, 102 N. W. 555. And see Gratz v. Schuler, 25 Cal. App.

in regard to fraudulent representations is that the false statement must be believed by the party to whom addressed, otherwise, however false or however fraudulent the intent, the false statement does not constitute any ground for the rescission of a contract.555 For instance, while it is a rule that, in the sale of personal property, a misrepresentation of a material fact by the vendor, on which the purchaser relies as an inducement to the contract, constitutes a fraud available as a defense to an action for the purchase money, still in such a transaction the purchaser cannot refuse to consult his own knowledge of the condition of the subject-matter of the sale and purchase; and if, in the sale of an interest in a mercantile business, the purchaser, by reason of his familiarity with the condition of the business. he is purchasing, knows the statements made by the vendor as inducements to the contract to be false, or has reason to believe they are untrue, and no deception is practised so as to mislead him from consulting his own knowledge of its conditions, the purchaser cannot claim to be deceived, and the misrepresentations do not constitute such a fraud as will be available to him in defense of an action to recover the purchase money.556 So, a contract for the sale of a machine cannot be rescinded on account of the seller's false representations as to the amount and kind of work it will do, where the purchaser has had it in his possession and has been using it for several months before the sale, and so must know its capacity.557 A similar rule was applied in a case where a married woman, in whose name a deed of property had been placed on the purchase thereof by her husband, she having furnished part of the money, died childless and intestate, and the plaintiffs, inheriting an interest in her property, after having fully explained to them the manner in which she acquired the property, each executed quitclaim deeds of their interest to her husband, after obtaining the advice of other relatives. It was held,

117, 142 Pac. 899; De Grasse v. Verona Min. Co. (Mich.) 152 N. W. 242; Hayes v. Sheffield Ice Co. (Mo. App.) 168 S. W. 294.

555 Pennybacker v. Laidley, 33 W. Va. 624, 11 S. E. 39. 556 Hooper v. Whitaker, 130 Ala. 324, 30 South. 355.

557 Troy Laundry Machinery Co. v. Drivers' Independent Laundry Co., 14 Cal. App. 152, 111 Pac. 121.

on proceedings to cancel the deeds, that the execution thereof was not obtained by the fraud or false representations of the husband, and hence they were not subject to cancellation on that ground.558 And so, where a contract is made for the sale of land, and the vendees know that the vendor's title thereto is a receiver's receipt issued after a protest had been filed in the local land office, they cannot allege fraudulent misrepresentations as to such title as a ground for rescission of the contract, or as a defense against an action for the purchase money,559

§ 110. Reliance Upon Representations.-—A contract or obligation cannot be rescinded on the ground of false or fraudulent representations unless it is shown that the party to whom they were made placed his reliance upon them, that is, believed in their accuracy and depended on their correctness, and on the strength of his dependence upon them entered into an engagement or assumed an obligation which otherwise he would have avoided.560 In an

Chemical

558 Johnson v. Franklin, 58 S. C. 394, 36 S. E. 664. 559 Godding v. Decker, 3 Colo. App. 198, 32 Pac. 832. 560 King v. Lamborn, 186 Fed. 21, 108 C. C. A. 123; Bank v. Lyons (C. C.) 137 Fed. 976; Sullivan v. Pierce, 125 Fed. 104, 60 C. C. A. 148; McCaskill v. Scotch Lumber Co., 152 Ala. 349, 44 South. 405; Hockensmith v. Winton, 11 Ala. App. 670, 66 South. 954; Young v. Arntze, 86 Ala. 116, 5 South. 253; Arkadelphia Lumber Co. v. Thornton, 83 Ark. 403, 104 S. W. 169; Ryan v. Batchelor, 95 Ark. 375, 129 S. W. 787; Spinks v. Clark, 147 Cal. 439, 82 Pac. 45; Hutchason v. Spinks, 3 Cal. App. 291, 85 Pac. 132; American Nat. Bank v. Hammond, 25 Colo. 367, 55 Pac. 1090; Boyce v. Watson, 20 Ga. 517; Griffin v. Griffin, 130 Ga. 527, 61 S. E. 16, 16 L. R. A. (N. S.) 937, 14 Ann. Cas. 866; Thomson v. McLaughlin, 13 Ga. App. 334, 79 S. E. 182; Bawden v. Taylor, 254 Ill. 464, 98 N. E. 941; Hooker v. Midland Steel Co., 215 Ill. 444, 74 N. E. 445, 106 Am. St. Rep. 170; Hale Elevator Co. v. Hale, 201 Ill. 131, 66 N. E. 249; Imperial Safe Deposit Co. v. University of Chicago, 187 Ill. App. 229; Dady v. Condit, 163 Ill. 511, 45 N. E. 224; Wesselhoeft v. Schanze, 153 Ill. App. 443; Potter v. Gibson, 184 Ill. App. 112; Bowman v. Carithers, 40 Ind. 90; Kain v. Rinker, 1 Ind. App. 86, 27 N. E. 328; Ross v. Hobson, 131 Ind. 166, 26 N. E. 775; Crouch v. Chamness, 21 Ind. App. 492, 51 N. E. 941; Church v. Baumgardner, 46 Ind. App. 570, 92 N. E. 7; John Blaul & Sons v. Wandel, 137 Iowa, 301, 114 N. W. 899; Evans v. Palmer, 137 Iowa, 425, 114 N. W. 912; Provident Loan Trust Co. v. McIntosh, 68 Kan. 452, 75 Pac. 498, 1 Ann. Cas. 906; Youle v. Fosha, 76 Kan. 20, 90 Pac. 1990; Frank v. Lacey, 3 Ky. Law Rep. 335; Salyer v. Salyer, 141 Ky. 648, 133 S. W. 556; Reynolds v. Evans, 123 Md. 365, 91 Atl. 564; Hamilton

English case it was said: "Cases have frequently occurred in which, upon entering into contracts, misrepresentations made by one party have not been in any degree relied upon by the other party. If the party to whom the representations were made himself resorted to the proper means of verification, before he entered into the contract, it may appear that he relied upon the result of his own investigation and inquiry, and not upon the representations made to him by the other party; or if the means of investigation and verification be at hand, and the attention of the party receiving the representations be drawn to them, the circumstances of the case may be such as to make it incumbent on a court of justice to impute to him a knowledge of the result, which, upon due inquiry, he ought to have obtained, and thus the notion of reliance on the representations made to him may be excluded." 561 But it is not always

v. Billingsley, 37 Mich. 107; Kimble v. Gillard, 177 Mich. 250, 143 N. W. 79; Kost v. Bender, 25 Mich. 515; Priest v. White, 89 Mo. 609, 1 S. W. 361; Shearer v. Hill, 125 Mo. App. 375, 102 S. W. 673; Williamson v. Harris, 167 Mo. App. 347, 151 S. W. 500; Birch Tree State Bank v. Dowler, 167 Mo. App. 373, 151 S. W. 784; McLennon v. Siebel, 135 Mo. App. 261, 115 S. W. 484; Spencer v. Hersam, 31 Mont. 120, 77 Pac. 418; Korbel v. Skocpol, 70 Neb. 45, 96 N. W. 1022; Murphey v. Illinois Trust & Sav. Bank, 57 Neb. 519, 77 N. W. 1102; Griswold v. Hazels, 52 Neb. 64, 71 N. W. 972; Jakway v. Proudfit, 76 Neb. 62, 106 N. W. 1039, 109 N. W. 388, 14 Ann. Cas. 258; Gray v. Bowman (N. J. Ch.) 14 Atl. 905; Powell v. F. C. Linde Co., 171 N. Y. 675, 64 N. E. 1125; Schoeneman v. Chamberlin, 37 App. Div. 628, 55 N. Y. Supp. 845; Dresser v. Mercantile Trust Co., 124 App. Div. 891, 108 N. Y. Supp. 577; Leavitt v. Rosenthal (Sup.) 84 N. Y. Supp. 530; Clark v. East Lake Lumber Co., 158 N. C. 139, 73 S. E. 793; Tarault v. Seip, 158 N. C. 363, 74 S. E. 3; Marshall-McCartney Co. v. Halloran, 15 N. D. 71, 106 N. W. 293; Southard v. Arkansas Valley & W. Ry. Co., 24 Okl. 408, 103 Pac. 750; Horrell v. Manning, 6 Or. 413; David v. Moore, 46 Or. 148, 79 Pac. 415; Devlin v. Moore, 64 Or. 433, 130 Pac. 35; Ackman v. Jaster, 179 Pa. 463, 36 Atl. 324; Continental Nat. Bank v. First Nat. Bank, 108 Tenn. 374, 68 S. W. 497; Bonzer v. Garrett (Tex. Civ. App.) 162 S. W. 934; Max Meadows Land & Improvement Co. v. Brady, 92 Va. 71, 22 S. E. 845; Jordan v. Walker, 115 Va. 109, 78 S. E. 643; Stalnaker v. Janes, 68 W. Va. 176, 69 S. E. 651; Home Gas Co. v. Mannington Co-op. Window Glass Co., 63 W. Va. 266, 61 S. E. 329; J. H. Clark Co. v. Rice, 127 Wis. 451, 106 N. W. 231, 7 Ann. Cas. 505; Wolff v. Carstens, 148 Wis. 178, 134 N. W. 400; Risch v. Von Lillienthal, 34 Wis. 250.

561 Clapham v. Shillito, 7 Beav. 149. And see Aitken v. Bjerkvig (Or.) 150 Pac. 278; Keller v. Roetting (W. Va.) 82 S. E. 755.