Sec 236

When false representations are knowingly made, and are operative in inducing the party imposed upon to agree to a contract, it is no defence that the party using the misrepresentation was influenced by good motives.6 Were it otherwise, there could in no case be any liability for fraudulent representation, since there are no fraudulent representations whose making the maker does not excuse to himself by some meritorious pretext. But "it is fraud in law if a party makes representations which he knows to be false and injury ensues, although the motives from which the representations proceeded may not have been bad."1 ... A party is liable to an action for deceit, therefore, if by an intentional misstatement he leads another party to contract with him, no matter how firmly he may have believed the matter would ultimately be made right.2 And the cooperation of other motives constitutes no excuse.3 The same rule applies to fraudulent representations whereby assent to a contract is obtained. If a party making a false representation is aware of its falsity, if he knows that the other party assented to his proposal because he gave it this particular shape, and would not have assented had it not been for this false representation, it is no defence to him to show that in some remote day the transaction would be profitable to the party assenting.4

When there is fraudulent misrepresentation, good motives are no defence.

1 Jones v. Yates, 9 B. & C. 532; Deady v. Harrison, 1 Stark. 50; Robinson v. McDonnell, 2 B. & Ald. 134; Clay v. Ray, 17 C. B. (N. S.) 188; Randall v. Howard, 2 Black, 585; Ayer v. Hewett, 19 Me. 281; Taylor v. Weld, 5 Mass. 116; Nellis v. Clark, 20 Wend. 124; Kisterbock's App., 51 Penn. St. 483; Bixler v. Saylor, 68 Penn. St. 146; Lynch's App., 97 Penn. St. 349; Gondy v. Gebhart, 1 Oh. St. 262; Bradford v. Byers, 17 Oh. St. 396; McQuade v. Rosencrans, 36 Oh. St. 442; Boston v. Balch, 69 Mo. 115; Hoover v. Pierce, 27 Miss. 13.

2 Boynton, C. J., McQuade v. Rosencrans, 36 Oh. St. 448.

3 St. Louis, etc. R. R. v. Mathers, 71 111. 592; Compton v. Bank, 96 111 367.

4 Infra, sec 353.

5 Bessey v. Windham, 6 Q. B. 166; Robinson v. McDonnell, 2 B. & Ald. 134; Dyer v. Homer, 22 Pick. 253; Reichart v. Castator, 5 Binn. 109; Jackson v. Garnsey, 16 John. 189; Sherk v. Endress, 3 W. & S. 255; Worth v. Northam, 4 Ired. L. 102; Dearman v. Ratcliffe, 5 Ala. 192; and other cases cited 2 Ch. on Cont. 11th ed. 1038.

6 See this topic discussed in Wh. Cr. L. 8th ed. sec 119.

Sec 237

The causal relation, however, in suits of this class for fraud, is limited to parties whom the defrauding party intended to affect by his fraud.5 A manufacturer who sends out into the market goods with false brands, is not liable to the vendees of his vendees, however liable he might be to indictment for the special statutory offence of false branding. If every purchaser could sue everybody, no matter how remote, who made deceptive statements about the goods purchased, every person who was concerned in producing or selling such goods, no matter in what rudimental stage, would be liable to every person who should buy such goods, no matter in what stage of transformation. But fraud - dolus - to be the subject of redress, must have been directed especially to the party seeking redress. Hence it has been held that the directors of a company who would have been liable to original allottees of shares for fraudulent representations contained in a prospectus issued by them1 were not liable to subsequent vendees of such shares.2 "Every man," so the limitation is stated by Wood, V. C.,3 "must be held liable for the consequences of a false representation made by him to another, upon which a third person acts, and so acting is injured or damnified, provided it appear that such false representation was made with the intent that it should be acted upon by such third person in the manner that occasions the injury or loss." The furthest extension of which this liability is susceptible, is where goods are sold to one party, under false representation, for another's use. Hence the vendor of a gun, who sold it for the use of the plaintiff and his sons, falsely representing it to be "good, safe, and secure," and of a particular make, is liable, in an action of deceit, brought by one of the sons who was injured by the gun's explosion.* And it may be laid down as a general rule that it is incumbent on a party claiming that he has suffered by another's false statements, to prove that these false statements were made by the party charged with the intention that he should act upon them.5 At the same time it is not necessary, as has been seen, that the false representation should have been made directly to the party injured. It is enough if the party making the representation should know that it is to be communicated to the party to be injured.6

False representation must have been with intent to be acted on by party injured.

1 Tindal, C. J., Foster v. Charles, 7 Bing. 105, adopted by Knight Bruce, V. C, Gibson v. d'Este, 2 Y. & C. 572.

2 Polhill v. Walter, 3 B. & Ad. 114.

3 Reynell v. Sprye, 1 D. M. G. 708; Hough v. Richardson, 3 Story, 659; Matthews v. Bliss, 22 Pick. 48; Turn-bull v. Gadsden, 2 Strobh. Eq. 14; Smith v. Mitchell, 6 Ga. 458.

4 Peck v. Gurney, L. R. 6 H. L. 409; see Murray v. Mann, 2 Exch. 538.

5 Smith's case, L. R. 2 Ch. 616; Collins v. Evans, 5 Q. B. 820; Behn v. Kemble, 7 C. B. N. S. 260; Mahurin v. Harding, 28 N. H. 128; Case v. Bough-ton, 11 Wend. 106; infra, sec 237.

1 Swift v. Winterbotham, L. R. 8 Q. B. 244; Cazeaux v. Mali, 25 Barb. 583.

2 Peck v. Gurney, L. R. 6 H. L. C. 377; see Wells v. Cook, 16 Oh. St. 67, cited Wald's Pollock, 505. Mr. Pollock cites Way v. Hearn, 13 C. B. N. S. 292, as sustaining Peck v. Gurney, which case expressly overrules Bedford v. Bagshaw, 4 H. & N. 538; Bagshaw v. Seymour, 18 C. B. 903.

3 Barry v. Croskey, 2 J. & H. 1, adopted in Anson, 152.

4 Langridge v. Levy, 2 M. & W. 519; see Proctor v. McCall, 2 Bailey, 298. But the limitation of Peck v. Gurney,.

L. R. 6 H. L. C. 377, is not adopted to its full extent in this country; see New Y. & N. H. R. R. v. Schuyler, 34 N. Y. 30; Phelps v. Wait, 30 N. Y. 78; Bruff v. Mali, 36 N. Y. 200; Suy-damn. Moore, 8 Barb. 358; supra, sec 228.

5 Pasley v. Freeman, 3 T. R. 51; Tapp v. Lee, 3 B. & P. 367; Foster v. Charles, 6 Bing. 396; 7 Bing. 105, and cases cited in Bigelow's Lead. Cas. Torts, 1; see Fitzsimmons V. Joslin, 21 Vt. 129, where Langridge v. Levy, 2 M. & W. 519, 4 M. & W. 336, is criticized.

6 Ibid.; Barden v. Keverberg, 2 M. & W. 63; Pilmore v. Hood, 5 Bing. N. C.