150 



FRAUDULENT CONTRACTS. 



Foundation of 

 the action. 



In what Fraud 

 consists. 



There must 

 be moral 

 Fraud. 



Effect of 

 Fraud. 



How the 

 question of 

 Fraud is to be 

 decided. 



Falsehood 

 must be 

 followed by 

 damao'c. 



misrepresentation or deceit (p). Because sucli action lies 

 where a man does any Deceit to the damage of another (q). 



The foundation of this action is Fraud and Deceit in the 

 defendant, and Damage to the pLaintiff. Fraud without 

 Damage or Damage without Fraud gives no cause of 

 action, but where these two concur an action hes (r). 



Fraud generally consists either in the Misrepresentation 

 or Concealment of a material fact. But what does or does 

 not amount to Fraud depends very much on the facts of 

 each particular case, on the relative situation of the parties, 

 and on their means of information [s) . 



To support the action there must always be proof of 

 3Ioral Fraud (f) : because where there is no Warranty, the 

 Scienter or Fraud is the gist of the action. Thus it was 

 held that an action on the Case could not be maintained 

 against the defendant for selling a Horse as his own, when 

 in truth it belonged to A. B. ; because the plaintiif could not 

 prove that the defendant l-new it to be the Horse of A. B., 

 for it appeared that the defendant had bought it in Smith- 

 field Market, but had neglected to get it legally tolled (?^). 



Fraud gives a cause of action, if it leads to any sort of 

 damage ; but it avoids contracts only where it is the ground 

 of the contract, and where, imless it had been employed, 

 the contract would never have been made(i"). 



The facts to constitute Fraud must be found by the 

 Jmy ; but whether certain facts as proved amount to Fraud 

 is a question of law ; and therefore legal fraud may exist, 

 when the Jmy have found that the intention of the de- 

 fendant was not fraudulent (?r). 



If a person knowingly utters a falsehood wdth intent to 

 deprive another party of a benefit and acquire it to him- 

 self (;r) , or mth intent to induce another party to do an act 

 which results in his loss, and damage nati.u"ally flows to the 

 other party from this belief, an action lies (v/). 



(;;) Rex v. Whcathj, 2 Burr. 

 1128. 



[q) Com. Dig-, tit. Action upon 

 the Case for a Deceit, A. 1. 



(/•) Per Croke, J., Bailey y. Mer- 

 rell, 3 Bulst. 95. See Barry v. 

 CrosJicy, 2 J. & H. 21. 



(«) Chit. Coutr. 10th ed. 630. 



\t) Per Parke, B., Taylor v. 

 Ashton, 11 M. & W. 413 ; per Lord 

 Wensleydale, Smith v. Kay, 7 H. 

 L. Cas. 775. 



(?c) iSpriiigircll v. Allen, Aleyn, 

 91, cited in Williamson v. Allison, 



2 East, 448. 



(r) Per Lord Wensleydale, Smith 

 Y..Kay, 7 H. L. Cas. 775; per 

 Byles, J., Hotson v. Brotvn, 9 C. B., 

 N. S. 445. 



(«■) See per Piatt, B., Murray v. 

 Mann, 2 Ex. 539 ; 3[ilne v. Mar- 

 icood, 15 C. B. 778 ; Broom's 

 Maxims, 4th ed. 758, 759 ; Folwill 

 V. Walter, SB. & Ad. 114. 



(.(■) Barley y. Walforcl,9 Q.B. 197. 



[y] Longmeacl v. Holliday, 6 Ex. 

 766 ; and see Levy v. Lanyridge, 4 

 M. & W. 337. 



