Sec 232a

A party induced by another's fraud to make a bargain, may elect either to rescind the bargain, or may sue the offending party on a false warranty, or in an action in the nature of deceit. The remedy of rescission is hereafter distinctively discussed.3 So far as concerns an action for damages based on fraud, it is proper in the first place to observe that no such action lies for an honest misrepresentation, though in such case a contract induced by such misrepresentation may be rescinded.4 To sustain an action for damages caused by another's fraudulent conduct, falsity and fraud must be proved,5 and there must be a causal relation between the fraud and the injury sustained.6 The distinguishing features of fraud of this class are discussed in detail in succeeding sections;7 it is sufficient now to say that a plaintiff is entitled to damages when he can show that he innocently suffered material injury from an intentional distortion of truth by the defendant or his agents,8 and, as we will hereafter see, a reckless misstatement of a matter of which the party speaking is ignorant imposes liability as much as does a fraudulent misrepresentation.1 Such an action lies on oral fraudulent representations to induce a purchaser to buy property which the statute of frauds requires to be conveyed in writing.2 - The fraud must be causally related to the injury.3 - If after opportunity of inspection the purchase is made, there being no fraud to divert attention, this bars the remedy.4

Party defrauded may rescind or. sue for damages.

1 Infra, sec 242.

2 Fraud is definable much more by the effect it produces than by the features which it exhibits, varying as they do with each case. When, by the intentional misrepresentation of one party, the mind of the other is so perverted that there is no meeting of intentions on one and the same object, then the party by whom the wrong is attempted will not be permitted to avail himself of it by means of a formal contract the other party may have been induced to execute. Knelkamp v. Hidding, 31 Wis. 503.

3 Infra, sec 282 et seq.

4 Supra, sec 214.

5 Infra, sec 239, 240.

6 Infra, sec 242.

7 See infra, sec 244 et seq.

8 See cases cited infra, sec 236 et seq.; Teague v. Irwin, 127 Mass. 217; Spence v. Baldwin, 59 How. Pr. 375; Crosland v. Hall, 33 N. J. Eq. 111; Mechanics' Bank v. Man. Co., 33 N. J. Eq. 486; Buschmann v. Codd, 52 Md. 202; Clement v. Boone, 5 111. Ap. 109; Wynne v. Allen, 7 Baxt. 312; Watson v. Crandall, 7 Mo. Ap. 133.

Sec 233

A contract may be divisible so that while one part of it may be infected by fraud (dolus incidens), the remainder may be valid and binding; and, in such case, by the Roman law, the exceptio doli applies only to the part that is fraudulent. The same rule is adopted in our own law.5 This distinction, however, does not apply when the fraud goes to material features of the contract (dolus causam dans), in which case the defence applies to the contract as a whole.6 It has been held, therefore, that a contract whose consideration is in part illegal is void only as to the illegal consideration.7 And where a party agrees in the same document to sell two distinct species of land, each with its specified price, the contract as to one may be rescinded for fraud, while the contract as to the other stands.8 But, as a general rule, as is elsewhere more fully stated, a party who repudiates a contract must do so in toto. He cannot appropriate its benefits and get rid of its burdens.1

Contracts may be divisible in respect to fraud.

1 Infra, sec 241; Cotzhausen v. Simon, 47 Wis. 103.

2 Lamm v. Port Deposit Co., 49 Md. 233.

3 Infra, sec 242. In Poland v. Brow-nell, Sup. Ct. Mass. 1881, it was held that to maintain an action for deceit in sale of an interest in a stock of goods and business, the plaintiff must prove that he was induced to buy the stock of goods and a share of the business in question by the fraudulent misrepresentation or concealment by the defendant of material facts, and that he suffered damage therefrom.

4 Infra, sec 245.

5 Johnson v. Johnson, 3 B. & P. 162; Goodspeed v. Fuller, 46 Me. 141; Rand v. Webber, 64 Me. 191; Miner v. Bradley, 29 Pick. 457; Clark v. Baker, 5 Met. 452; Morse v. Brackett, 98 Mass. 205; Bartlett v. Drake, 100 Mass. 174; State v. Tasker, 31 Mo. 445; Donnell v. Byern, 69 Mo. 468.

6 Koch, op. cit. sec 76; Herbert v. Ford, 29 Me. 546; Garland v. Spencer, 46 Me. 528; Rand v. Webber, 64 Me. 191; Lynde v. McGregor, 13 Allen, 172; Masson v. Bovet, 1 Denio, 69; Grant v. Law, 29 Wis. 99; Brown v. North, 21 Mo. 528.

7 Bradway's Est., 1 Ash. 212; see infra, sec 338.

7 Rand v. Webber, 64 Me. 191. See Lord v. French, 61 Me. 420.