The defendant, discovering the mistake, purchased of a ticket agent of the railroad company a large number of tickets at the rate sheet price. The plaintiff on discovering his mistake offered to return defendant's money and demanded back the tickets, which were refused. It was held that plaintiff was entitled to relief in equity, as a case in which there had been a mistake on one side and a fraudulent advantage taken of him on the other, to the injury of the plaintiff.

§ 25. Fraud. Fraud vitiates a contract of sale and entitles the innocent party to rescind it. It consists in a willful, false representation of a thing as a fact by a party knowing its falsity, or who should know it, and made for the purpose of having it acted upon by another who in fact is lead to act upon it. The representation must be made to the party deceived or caused to be communicated to him. No third person can act upon it and then sue for deceit. If a false statement is ambiguous, it is for the deceived person to say in what sense he took it. What will constitute fraud in any particular case must be determined by the particular circumstances of that case.19

Fraud must be actual, the product of active means, such as spoken or written words or acts20 or concealment of knowledge,21 or mere silence where there was a duty to speak.22 There must be resulting damage from the fraud to make it actionable. Misrepresentation of matters of opinion does not constitute fraud, nor does a mere statement in the way of future prediction. Boasting and puffing of goods are not reckoned as frauds, for the common law regarded them as harmless.

Fraud may be committed by the vendor or the vendee of goods, and we will discuss the effect in each case.

Fraud by the Vendor. A dealer in automobiles with the object of making a sale represents a car to be first-class in every respect, when he knows the engine is defective.

19 Croyle v. Moses, 90 Pa. St. 250.

20 Grigsby v. Stapleton, 94 Mo. 423.

21 Stewart v. Wyoming Ranch Co., 128 U. S. 383.

22 Hanger v. Evins, 38 Ark. 334.

A customer who knows nothing about machines relying upon this representation buys it, and the car soon breaks down because of the engine. The buyer is entitled to rescind the sale, or if he has paid to recover the price.

Fraudulent Intention Necessary. In every case of fraud, a fraudulent intention, or a guilty knowledge, or intentional misstatement, or reckless misstatement, must exist. A falsehood to constitute a fraud must relate to such facts as selling property that has no existence, or not having the ownership or right to sell, or selling property as clear which is encumbered. Mere dealer's talk does not in general amount to fraud,23 such as statements of how much the vendor had been offered by others for the goods, or how much the owner himself paid for the article. Where a person tells a half truth to throw the other off his guard, it may amount to fraud, as where the buyer of a horse asked the seller if the horse was balky, to which he replied that he had balked once with the man he bought him of without telling the buyer that he had bought him as a balky horse.

In auction sales the use of any unfair means by the owner or the auctioneer to raise the bids enables a buyer, if mislead, to avoid the purchase, as where false bids are announced, or if the owner employs bogus bidders, he is guilty of fraud as though he had bought directly in his

own name.

In Biddle v. Levy, 24 defendant told plaintiff that he was about to retire from business in favor of his son, who was a youth of seventeen years of age, and that he would keep an eye on him. He introduced the son to the plaintiff, who sold the son goods to the value of eighteen hundred pounds. The representations made were false and fraudulent, and it was held that an action for goods sold and delivered could be maintained against the father.

A seller is liable in an action of deceit if he fraudulently misrepresents the quality of the thing sold in some particular which the buyer has not equal means with him23 Righter v. Roller, 31 Ark. 170.

24 1 Star. 20.

self of knowing, or if he acts in such a manner as to induce the buyer to forbear making inquiries which he would otherwise have made. If a purchaser makes false and fraudulent representations as to his own insolvency and means of payment, thereby inducing the vendor to sell to him on credit, no right of property or possession is acquired by the purchaser, and the vendor would be justified in retaking the property provided he could do so without violence or breach of the peace.

Retention of Possession as Evidence of Fraud. Retention by the seller is looked upon with suspicion, and was regarded in England in early times as constructively fraudulent as to the creditors. This doctrine has been extended against subsequent purchasers of the goods, as well as in the case of creditors. Generally the retention of the goods is regarded as evidence of fraud. In Illinois retention of possession by the seller is held to be conclusive proof of fraud, unless the retention is provided for in a written contract. Temporary possession is not subject to this unfavorable construction.25

The Sales Act26 provides that "where a person continues in possession of goods he has sold, his subsequent delivery of the goods to another person receiving and paying value for them in good faith, and without notice of the previous sale, shall transfer the property to him," so that one leaves property in the hands of his vendor at his own risk, in most jurisdictions.

Fraud by the Vendee. In the case of fraud by the buyer, the fraud not infrequently consists of misrepresentations by him of his financial ability. Statements as to what he hopes to be worth, or of the amount he hopes to realize from some source, or profits he hopes to make out of the goods he is buying, while they may induce a vendor to part with his goods, do not constitute fraud, as they relate to the future, but a misstatement as to his present financial condition may render the sale voidable. Under financial condition is included his entire assets, and also his liabili25 Rozier v. Williams, 92 Ill. 187. 26 Uniform Sales Act, § 25.

ties, and encumbrances upon his property. False statements as to his identity or business connections, or of his ownership of property, will render a sale voidable; but not every untruth has this effect; for instance, an agent declares that he is not authorized to pay more than a certain price, and on the strength of this statement the vendor sells the goods at that price. Statements involving expressions of opinion, or judgment, or estimates of value, including the value of his own property, do not render the sale voidable. It is fraud on the part of a buyer to purchase goods with the intention, before or at the time of the contract, of not paying for them, as obviously the vendor knowing of such intention would not sell. In Donaldson v. Farwell,27 the court said:

"The doctrine is now established by a preponderance of authority, that a party not intending to pay, who, as in this instance, induces the owner to sell him goods on credit by fradulently concealing his insolvency and his intent not to pay for them, is guilty of a fraud which entitles the vendor, if no innocent third party has acquired an interest in them, to disaffirm the contract and recover the goods."

But more than mere intention is required to constitute fraud. It does not constitute fraud if the buyer does not inform the vendor of certain facts, which if known to him might cause him to raise the price of his goods. In Laidlaw v. Ogden,28 the facts were that a buyer of tobacco, knowing that the Treaty of Ghent had been concluded, ending the War of 1812, bought a quantity of tobacco of a dealer without informing him of the news, although the other party asked him if there was news. But if the party positively misleads another, it amounts to a fraud.

In Bench v. Sheldon,29 the plaintiff lost a flock of twentyone sheep. A neighbor found them in the highway and informed the defendant, Sheldon, who went to the plaintiff and asked if he had found his sheep, and on being told no, said "I suppose you never will," and then agreed to 29 14 Barb. (N. Y.) 66.

27 93 U. S. 630. 28 2 Wheat. 178.

buy them for $10. He was held liable for the full value of the sheep, because he had said something to mislead the

owner.

At an auction sale it is fraud for a buyer to prevent or dissuade others from bidding, or to combine with others not to bid. This does not mean that a number of persons may not club together to buy an article which no one of them could buy alone. It is of course not obligatory upon the party defrauded to avoid the sale.

CONSIDERATION

§ 26. Price. In sales the consideration is the price and the feature of a contract of sale distinguishing it from other contracts affecting the transfer of personal property is that the consideration must be money. A sale means a transfer of title to personal property for a price in money. While money is almost invariably the consideration of a sale, it would seem that any personal property, if measured in money, may be a consideration.30 It is not essential that the exact price should be definitely expressed or fixed at the time of the contract. If it is capable of ascertainment by reference to something else, as to the price of a commodity on the market at a particular time, that is sufficient. Goods are sometimes sold at current prices. By this is meant the market price prevailing at the time and place where the article is sold or is to be delivered.

Artificial Price. An abnormal or artificial price, however, may be disregarded by a jury in fixing a reasonable price. In Kountz v. Kirkpatrick,31 the court, through Agnew, J., said:

"It was a fair question for the jury to determine whether the price which was demanded for oil on the last day of December, 1869, was not a fictitious, unnatural, inflated, and temporary price, the result of a combination to 'bull the market' as it is termed, and to compel sellers to pay a false and swollen price in order to fulfill their contracts. 30 Williston on Sales, p. 206, and Howard v. Harris, 8 Allen (Mass.) 297, there cited.

81 72 Pa. St. 376.