M. & Gr. 747, 39 E. C. L. R., which involves the same principle. So does the case of Coppock v. Bower, 4 M. & W. 361, in which an agreement to withdraw an election petition in consideration of a sum of money was held void. So does *Arkwright v. Can[*137] trell, 7 A. & E. 565, 34 E. C. L. R., where the grant of a judicial office to a person interested in the matters which would become the subjects of adjudication was held void.

The instances which I have mentioned, are those in which illegality at common law is most frequently set up for the purpose of invalidating a contract. To these must be added the third class of cases which I specified; those, namely, in which the contract is avoided on the ground of fraud; that is, deceit practised upon the contracting party in order to induce him to enter into it. This is so very well known a point, and one of such continual recurrence in practice, that it is useless to multiply examples of its application. (a) As to the mode in which *the defence of fraud is set up, and rebutted in a court of

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ment of oppression or extortion, but not where the arrest was legal. (Smith v. Monteith, 13 M. & W. 427; see also The Duke de Cadaval v. Collins, 4 Ad. & Ell. 858, 31 E. C. L. R.; Gas Light Company v. Turner, 5 Bing. N. C. 675, 35 E. C. L. R.; and Skeate v. Beale, 11 Ad. & Ell. 983, 39 E. C. L. R.) Agreements in consideration of compounding any criminal proceedings, are void; but when they relate to offences which may be made the subject of an action as well as an indictment, agreements to pay the costs of the action on its being stopped, are valid; and also in cases of misdemeanours not of a public nature, such as assaults, &c., a defendant is permitted "to speak with the prosecutor," i. e. compound the offence, after conviction and before judgment, with the sanction of the Court. (See 1 Greaves, Russell on Crimes, 132; see also Beeley v. Wingfield, 11 East, 46; and Baker v. Townshend, 7 Taunt. 422, 2 E. C. L. R.)1 (a) Since these Lectures were written, cases have occurred which

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law, you may refer to Edwards v. *Brown, 1 C. & J. 307; Gale v. Williamson, 8 M. & W. 405.

give increased importance to the subject of frauds as applied to contracts. Dormant discrepancies of judicial opinion have been revived, and the law, as laid down in recent judgments, invites inquiry into the authority and principle on which it rests. Fraud consists either in the wilful misrepresentation or concealment of some material fact, by which the party defrauded was naturally misled: the question of whether the fact be or not material, is for the jury. (Lindenau v. Desborough, 8 B. & Cr. 586, 15 E. C. L. R.) A mere lie is not always legally a fraud, for if the party defrauded might, by the exercise of ordinary prudence, have detected it, it would not naturally mislead him, and he is remediless, on the principle of vigilantibus non dormientibus succurrunt jura. In contracts of sale these lies are of constant occurrence, the seller extolling and the buyer depreciating the article to be sold; these assertions, however, are not calculated to prevent either party from the exercise of such caution as would render them harmless; and where they do not enter into the contract itself, they do not amount to fraud, however false they may be. A distinction was taken in very old cases between fraud

It is in fact no more than an application of the maxim simplex commendatio non obligat. Thus Lord Brougham said, in delivering his judgment in the House of Lords, in the great case of Small v. Atwood, 6 Clark v. Finelly, that the inference he drew from the authorities was that "general fraudulent conduct signifies nothing; that general dishonesty of purpose signifies nothing; that attempts to overreach go for nothing; that an intention and design to deceive may go for nothing; unless all this dishonesty of purpose, all this fraud, all this intention and design, can be connected with the particular transaction, and not only connected with the particular transaction, but must be made to be the very ground upon which this transaction took place, and must have given rise to this contract. If a mere general intention to overreach were enough, I hardly know a contract, even between persons of very strict morality, that could stand. We generally find the case to be, that there has been an attempt of the one party to overreach the other, and of the other to overreach the first, but that does not make void the contract.” It has therefore been held, that mere general statements of what property would thereafter be worth, afforded no ground for rescission of the contract, the matter being fully within the vendee's own calculation; Donelson v. Weakley, 3 Yerger, 178, and so of any other

*We next come to that class of contracts which are void because infected with illegality,

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and falsehood, which is useful in determining doubtful cases, namely, between statements of facts which are peculiarly within the knowledge of the party making them, and such as are equally ascertainable by either party. In Leakins v. Clissel, Siderfin, 146 (temp. 15 Car. II.), we find this distinction drawn between the statement that houses are worth so much, and that they let for so much, the one being matter of opinion, the other of fact. (See also 1 Rolle's Abr. 91). In Risney v. Selby, 1 Salk. 211 (temp. 3 Ann.), under similar circumstances it was contended that the "plaintiff was over credulous in taking the defendant's word for it, but the plaintiff had his judgment; for the value of the rent is matter that lies in the private knowledge of the landlord and his tenant, and if they affirm the rent to be more than it is, the purchaser is cheated, and ought to have a remedy for it." (See also Bailey v. Merrel, 3 Bulstr. 94; Pilmore v. Hood, 5 Bing. N. C. 97, 35 E. C. L. R.)

Another very important point in the requirements of fraud is the vexed question whether there can be legal fraud without moral fraud; whether the fraud must have been intentional in order to give a remedy to the party thereby defrauded? And the question has commonly turned upon the fact whether the person making the statement did or did not know of its falsehood; in other words, whether, general representation, open to examination; Stray v. Peters, 2 Root; Bell v. Henderson, 6 Howard (Miss.), 311; Anderson v. Hill, 12 Sm. & Mar. 683; Taylor v. Fleet, 4 Barbour's S. C. R. 95. Foley v. Cowgill, 5 Blackford, 18. But it must also be observed, that although the subject of the false statement may be one within the vendee's own range of inquiry, yet if the statement is designedly made in order to prevent such inquiry, the rule is otherwise. Thus in Dobell v. Stevens, 3 Barn. & Cres. 623, 10 E. C. L. R., in the negotiation of the sale of the lease and good-will of a public house, a false representation was made by the vendor with respect to the quantity of beer drawn during a certain period. The books were in the house, and it was part of the defendant's case that the plaintiff might have had access to them, but, notwithstanding that fact, the Court of King's Bench held that an action for damages, might, under such circumstances be sustained, and the same principle will be found applied in the case of Hunt v. Moore, 2 Barr, 107; Napier v. Elam, 6 Yerger, 108; Campbell v. Whittingham, 5 J. J. Marsh. 96, Buford v. Caldwell, 3 Missouri, 477.

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existing *not by the rules of Common Law, but under the express provisions of some statute.

in order to maintain an action for the misrepresentation or fraud, it be necessary to aver and prove the scienter. Of course, the question alone applies to cases where the representation is not embodied in the contract, as in cases of warranty; where the party guarantees for the truth of his statement; in which case his knowledge of its falsehood is perfectly immaterial, as he expressly guarantees its truth; and the gravamen is the breach of warranty, and not the deceit. (See Budd v. Fairmaner, 8 Bing. 52, 21 E. C. L. R., per Tindal, C. J.; and Williamson v. Alison, 2 East, 466.) The question arises in all cases of implied, but not of express warranties. It is nowise affected by the fact that the misrepresentation was made by an agent or third party instead of the principal, the right to bring the action, whether against the agent or the principal, for the misrepresentation, depends on precisely the same principles (see Ormrod v. Huth, 14 M. & W. 662, per Tindal, C. J.), and involves the same question, whether the scienter is essential or not. The question also equally arises in respect of what is necessary to support actions in tort, for the misrepresentation, and in respect of what is necessary to support the plea of fraud in defences to actions of debt or assumpsit.

So wide is the range of cases, therefore, which involves this point, and so materially does it affect commercial interests, that it is requisite that the subject be noticed, and the leading authorities in conflict upon it cited here, especially with reference to recent decisions in the Exchequer Chamber.

There is no question that at first moral fraud was essential to the original writ of "disceit:" it, in fact, contained the words "fraudulente et maliciose." (Fitz. Nat. Brev. p. 95, ed. 1635; see also Dyall's Case, Cro. Eliz. 44.) The earliest doubt on record appears to have occurred in the case of Chandelor v. Lopus, Croke Jac. 4. The defendant sold to the plaintiff a stone, which he affirmed to be a bezoar stone, when it was not; and it was held that the bare affirmation that it was a bezoar stone, without warranting it be so, was no cause of action. It is also there said, that "although he knew it to be no bezoar stone, it is not material;" and Anderson, J., held that the mere selling of the stone as a bezoar stone without warranty was actionable. Buller's "Nisi Prius" expressly maintains the necessity

It should be recollected of this leading case (which has been often misunderstood), that the decision turned simply upon the insufficiency

*Now with regard to this class I need hardly [#142]

say that no contract prohibited by the express

of the scienter, (p. 30, 1st edit.) In 1778 we find Ld. Mansfield, C. J., holding another doctrine. In the case of Pawson v. Watson, Cowp. 785, which was an action against the underwriters on a policy of assurance alleged to have been made on a false verbal representation, "If in a life policy," said Ld. Mansfield, "a man warrants another to be in good health, when he knows at the same time he is ill of a fever, that will not avoid the policy; because by the warranty he takes the risk upon himself. But if there is no warranty, and he says, 'the man is in good health,' when in fact he knows him to be ill, it is false. So it is if he does not know whether he is well or ill; for it is equally false to undertake to say that which he knows nothing at all of, as to say that is true which he knows is not true.” It is however to be observed, that Lord Mansfield refers to such misstatements as affect the interest of the party making them.

This intimation of the immateriality of the scienter is at variance with the dicta of two of the judges in the subsequent case of Pasley v. Freeman, 3 T. R. 51, where Mr. Justice Buller says, "The fraud is that the defendant procured the plaintiffs to sell goods on credit to one whom they would not otherwise have trusted, by asserting that which he knew to be false;" and Ashurst, J., says, "the quo animo is a great part of the gist of the action." The case itself, however, merely decided that it is not necessary to an action on the case for a deceit, that the person making the false statement should derive benefit from it, or that he should collude with the person who is benefitted and this had been held before.

Haycroft v. Creasy, 2 East, 92 (A. D. 1801), was the first case in which the question directly arose whether the knowledge of the fraud by the defendant was essential to an action for a false statement

of the declaration which neither contained an allegation of a warranty, nor that the defendant knew the stone not to be a Bezoar stone, and the expression quoted above, that "although he knew it to be no Bezoar stone, it is not material," was a mere dictum, and has been repeatedly denied, and the opinion of Anderson, J., which, as cited above, would seem to be part of the ruling of the case, was in fact his dissent from the opinion of the court; "But Anderson to the contrary, for the deceit in selling it for a Bezoar, whereas it was not so, is cause of action. But, notwithstanding, it was adjudged to be no cause, and judgment was reversed."