been placed in the category of dealer's talk and therefore though false not the subject of a charge of fraud.8

633. Representations as to Value.-As a general rule a false affirmation of value cannot be made the basis of a charge of fraud, as it is the buyer's own folly to credit an assertion of that nature and besides value to a large extent rests in judgment and estimation as to which many men differ," and a fortiori, a charge of fraud cannot be based on the mere failure of the seller to disclose information as to the true value of the property.10 On the other hand representations of material facts bearing on the question of value may be made the basis of a charge of fraud.11 Thus, in case of a sale of a business, a misrepresentation as to what had theretofore been the amount of its business or profits may be made the basis of a charge of fraud.12 And the fact that the books showing the amount of the business were at the disposal of the buyer, from which he could have discovered the falsity of the seller's representation, has been held not to affect his right to rely on such representation. 13 It has been held that if the seller goes to the extent of expressly warranting the value of the article sold, the buyer has the right to rely thereon, and a charge of fraud may be based on it if it was false and knowingly so made.14

8. Neidefer v. Chastain, 71 Ind. 11. Homer v. Perkins, 124 Mass. 363, 36 Am. Rep. 198. 431, 26 Am. Rep. 677; Boles v. Merrill, 173 Mass. 491, 53 N. E. 894, 73 A. S. R. 308; Cressier v. Rees, 27 Neb. 515, 43 N. W. 363, 20 A. S. R. 691; Stewart v. Stearns, 63 N. H. 99, 56 Am. Rep. 496; Handy v. Waldron, 18 R. I. 567, 29 Atl. 143, 49 A. S. R. 794.

9. Moore V. Turbeville, 2 Bibb (Ky.) 602, 5 Am. Dec. 642; Holbrook v. Connor, 60 Me. 578, 11 Am. Rep. 212; Homer v. Perkins, 124 Mass. 431, 26 Am. Rep. 677; Poland v. Brownell, 131 Mass. 138, 41 Am. Rep. 215; Deming v. Darling, 148 Mass. 504, 20 N. E. 107, 2 L.R.A. 743; Morgan v. Dinges, 23 Neb. 271, 36 N. W. 544, 8 A. S. R. 121; Cressler v. Rees, 27 Neb. 515, 43 N. W. 363, 20 A. S. R. 691; Page v. Parker, 43 N. H. 363, 80 Am. Dec. 172; Ellis v. Andrews, 56 N. Y. 83, 15 Am. Rep. 379; Chrysler v. Canaday, 90 N. Y. 272, 43 Am. Rep. 166; Fairchild v. McMahon, 139 N. Y. 290, 34 N. E. 779, 36 A. S. R. 701; Handy v. Waldron, 18 R. I. 567, 29 Atl. 143, 49 A. S. R. 794. But see Bower v. Fenn, 90 Pa. St. 359, 35 Am. Rep. 662.

Notes: 6 Am. Dec. 118; 90 Am. Dec. 428; 11 Am. Rep. 218; 15 Am. Rep. 382; 26 A. S. R. 237; 2 L.R.A. 744;

37 L.R.A. 605.

10. Cooke v. Bagwell Timber Co., 78 Ark. 47, 94 S. W. 695, 8 Ann. Cas. 251.

12. Boles v. Merrill, 173 Mass. 491, 53 N. E. 894, 73 A. S. R. 308; Smith v. Werkheiser, 152 Mich. 177, 115 N. W. 964, 125 A. S. R. 406, 15 L.R.A. (N.S.) 1092; Fargo Gas, etc., Co. v. Fargo Gas, etc., Co., 4 N. D. 219, 59 N. W. 1066, 37 L.R.A. 593.

Note: 6 Eng. Rul. Cas. 501.

It is otherwise concerning representations as to what will be the future profits of the business. See supra, par.

629.

13. Smith v. Werkheiser, 152 Mich. 177, 115 N. W. 964, 125 A. S. R. 406, 15 L.R.A. (N.S.) 1092; Fargo Gas, etc., Co. v. Fargo Gas, etc., Co., 4 N. D. 219, 59 N. W. 1066, 37 L.R.A. 593. 14. Handy v. Waldron, 18 R. I. 567, 29 Atl. 143, 49 A. S. R. 794.

634. Concealments and Representations Concerning the Market.— A seller is under no obligation, even in the case of goods sold to a buyer to be resold, to disclose any information he may have as to the state of the general market,15 and, ordinarily, a charge of fraud cannot be based on a misrepresentation as to the general market price or value of the commodity sold.16 Ordinarily, as between merchants especially, a statement as to the market value of the commodity the buyer is asked to buy is dealer's talk on a subject about which the seller has a right to assume that the buyer will make up his mind for himself, the means of information being equally open to both.17 And in case of a sale of commodities to be resold in the market, a charge of fraud cannot be based on the seller's representations as to what the future market will be.18 If the false representation as to what the property is selling for in the market is accompanied with other false statements, such as the exhibition of false newspaper quotations of the price, a charge of fraud may be sustained.19 It has been said that if the representation was of the existence of particular facts, in their nature calculated to affect the future state of the market, and was false, and known to be so by the seller, and the buyer was thereby deceived and defrauded, it might amount to an actionable fraud.20 Where a seller fraudulently states the market price of a commodity to an experienced prospective purchaser, who says he does not believe the statement, and subsequently signs an unconditional memorandum for the purchase of a certain quantity at a certain price, orally reserving the right, if the price named is subsequently found not to be the market price, to disaffirm the sale, it will be presumed that he relied on the oral condition, and not the fraudulent statement of the seller, though such oral condition cannot be shown to vary the written contract.1

635. Seller's Knowledge of Falsity of Representation.-To found an action of deceit on the falsity of a representation it is ordinarily

15. McCrillis v. Carlton, 37 Vt. 139, 86 Am. Dec. 700.

16. Graffenstein V. Epstein, 23 Kan. 443, 33 Am. Rep. 171; Lilienthal v. Suffolk Brewing Co., 154 Mass. 185, 28 N. E. 151, 26 A. S. R. 234, 12 L.R.A. 821.

Note: 37 L.R.A. 606.

See supra, par 578, as to misrepresentation by a purchaser of the current market price.

17. Lilienthal v. Suffolk Brewing Co., 154 Mass. 185, 28 N. E. 151, 26 A. S. R. 234, 12 L.R.A. 821.

18. McCrillis v. Carlton, 37 Vt. 139, 86 Am. Dec. 700.

19. Homer v. Perkins, 124 Mass. 431, 26 Am. Rep. 677. See also Kenner v. Harding, 85 Ill. 264, 28 Am. Rep. 615; Lilienthal v. Suffolk Brewing Co., 154 Mass. 185, 28 N. E. 151, 26 A. S. R. 234, 12 L.R.A. 821.

Note: 15 Am. Rep. 386.

20. McCrillis v. Carlton, 37 Vt. 139, 86 Am. Dec. 700.

1. Lilienthal v. Suffolk Brewing Co., 154 Mass. 185, 28 N. E. 151, 26 A. S. R. 234, 12 L.R.A. 821. As to the admissibility of oral evidence to vary, etc., written contracts of sale generally, see supra, par. 213 et seq.

necessary to show scienter or knowledge on the part of the defendant of the falsity of his representation, and this rule is generally applied to representations by the seller as to the subject matter of a sale. This is especially true if the seller in good faith believed his representations to be true and did not make them recklessly or regardless of whether they were true or not. On the other hand, if a seller makes a representation of the existence of a fact as of his own knowledge recklessly and without regard to whether such fact exists or not, and without any reason for believing that it does exist, a charge of fraud may be based on its falsity though in fact the seller did not know that it was false. So if the seller takes on himself to

state as true that of which he is wholly ignorant, he will, if it be false, incur the same legal responsibility as if he had made the statement with knowledge of its falsity. The fraud consists in representing that he knows that of which he in fact is consciously ignorant; and likewise a charge of fraud may be sustained if the representations are false and not believed to be true though positive knowledge of their falsity may not exist. So where hay, on which white lead had been accidentally spilt, was sold without the disclosure of such fact, the seller is not relieved from liability because he had attempted to remove the poisonous substance, and thought that he had been successful in so doing.8 Where the sale is made by an agent of the seller, the seller's knowledge of latent defects is to be imputed to the agent for the purpose of basing a charge of fraud against the seller based on the agent's representation that the commodity is free from latent defects. Where there is a false warranty, the seller is bound to answer for its breach in an action on the warranty whether he knew that it was false or not and if the action is for breach of the warranty though knowledge of its falsity is alleged in the complaint it need not be proved, 10 but if the basis of the action is the fraud and not the warranty, though a false warranty is alleged, knowledge and intent to deceive must be proved.11 Frequently a count on the warranty is joined with a count for fraud, and in such cases, where the necessity for a scienter is denied, it is to be noted that such decisions, while sometimes relied on as authority for the position that scienter is not necessary to sustain the charge of fraud, they are not in fact authority for such proposition but merely that the scienter is unnecessary to a recovery on the warranty.12 If the articles sold were especially manufactured by a third person for the seller under such circumstances as entitle the buyer to treat the seller as the manufacturer, and the articles were fraudulently manufactured so as to conceal the defects, the seller may be held liable to the buyer for the fraud, whether he had knowledge of the fraud or not.18

121 Wis. 14, 98 N. W. 923, 105 A. S. R. 1016.

6. Hexter v. Bast, 125 Pa. St. 52, 17 Atl. 252, 11 A. S. R. 874. See also Smith v. Richards, 13 Pet. 26, 10 U. S. (L. ed.) 42.

7. Howard v. Gould, 28 Vt. 523, 67 Am. Dec. 728.

8. French v. Vining, 102 Mass. 132, 3 Am. Rep. 440.

9. Mayer v. Dean, 115 N. Y. 556, 22 N. E. 261, 5 L.R.A. 540. As to the liability of the seller for his agent's fraud, see infra, par. 695.

10. See supra, par. 490.

11. Ross v. Mather, 51 N. Y. 108, 10 Am. Dec. 562; Caldbeck v. Simanton, 82 Vt. 69, 71 Atl. 881, 20 L.R.A.(N.S.) 844.

12. Mahurin v. Harding, 28 N. H. 128, 59 Am. Dec. 401.

13. Durst v. Burton, 47 N. Y. 167, 7 Am. Rep. 428. In this case it appeared that the defendants, the owners of a cheese factory, leased it to C, who agreed to manufacture into cheese the milk furnished by the defendants and others, at a specified rate per hundred pounds. C had the employment, payment and control of the

636. Proof of Fraud.-To prove knowledge of the falsity of a representation of the seller quite a wide latitude is permitted in regard to the admission of evidence, as it is a matter which is ordinarily not the subject of direct proof but is to be inferred from the circumstances surrounding the transaction.14 To prove the making of the alleged false representation, evidence of similar frauds by the seller in other transactions is not admissible.15 Where a seller is guilty of fraud in a sale and on complaint of the buyer agrees to substitute another article for that originally sold which is also unsound, proof of the fraud in the original sale is admissible in evidence to substantiate the claim of the buyer that the seller knowingly made false representations as regards the substituted article. 16

637. Sale of Animals.-Sales of horses or other animals afford one of the most fruitful sources of litigation in which fraud is charged against the seller.17 If the defect in a horse or other animal sold is open and obvious, it would seem that a charge of fraud cannot be based on the seller's failure merely to disclose the same,18 though in some cases the view has been taken that if the seller has knowledge that an open defect in the animal has escaped the observation of the buyer, he is under a duty to make it known.19 The rule requiring the seller to disclose latent defects has frequently been applied in the case of a sale of a horse or other animal,20 but where the rule is adopted that the seller is not required to disclose latent defects provided he is guilty of no misrepresentation or artifice to conceal them, it would apply equally to ordinary latent defects in animals.1

necessary help to carry on the work, and no right of supervision was reserved by the defendants. The sale of the cheese, when prepared for market, was conducted by the defendants, who represented it to be of good quality. It was held that as to the public and the plaintiff, a purchaser, the defendants assumed the character of principals, and were liable for the fraud of C or his subordinates in the manufacture of the cheese.

14. Morehouse V. Northrop, 33 Conn. 380, 89 Am. Dec. 211.

15. Standard Mfg. Co. v. Slot, 121 Wis. 14, 98 N. W. 922. 105 A. S. R. 1016.

16. Robertson v. Halton, 156 N. C. 215, 72 S. E. 316, 7 L.R.A. (N.S.) 298.

17. Notes: L.R.A.1417C 619; Ann. Cas. 1916A 575.

par. 620, as to the general duty of the seller to disclose patent defects; and as to whether a warranty covers open defects, see supra, par. 491.

19. Note: L.R.A.1917C 621.

20. Kitchen v. Long, 67 Fla. 72, 64 So. 429, L.R.A.1917C 617 (failure to disclose that a mule is a "choker"); Hughes v. Robertson, 1 T. B. Mon. (Ky.) 215, 15 Am. Dec. 104 (failure to disclose that a horse is blind knowing that the buyer had not discovered it); Jeffrey v. Bigelow, 13 Wend. (N. Y.) 518, 28 Am. Dec. 476; Hadley v. Clinton County Importing Co., 13 Ohio St. 502, 82 Am. Dec. 454; Puls v. Hornbeck, 24 Okla. 288, 103 Pac. 665, 138 A. S. R. 883, 29 L.R.A. (N.S.) 202; Wintz v. Morrison, 17 Tex. 372, 67 Am. Dec. 658.

Notes: 15 Am. Dec. 107; 29 L.R.A. (N.S.) 202; L.R.A.1917C 621 et seq. 18. Notes: 29 L.R.A. (N.S.) 1. Court v. Snyder, 2 Ind. App. 440, L.R.A.1917C 621 $22. See supra, 28 N. E. 718, 50 A. S. R. 247; Croyle

203;