T UNIVERSITY OF CALIFORNIA LOS ANGELES SCHOOL OF LAW LIBRARY A TREATISE ON THE LAW OF FEAUD AND MISTAKE WILLIAM WILLIAMSON KERR, A.M., Oxon., OF LINCOLN S INN, BARRISTER AT-LAW. SECOND EDITION. LONDON : W. MAXWELL & SON, 8, BELL YARD, TEMPLE BAR, ILato Bool^scllers anti ^Subltsjjtrs. MEREDITH, RAY, & LITTLER, MANCHESTER; HODGES, FIGGIS & CO., AND E. PONSONBY, DUBLIN ; CHARLES F. MAXWELL, MELBOURNE & SYDNEY. 1883. i.ojiuoN : BKAUBURV, AONEW, & CO., PRINTERS, WHITEFRlARb. T SUMMARY OF CONTENTS. PAOB Table of Cases cited vii sxxv Table of Statutes refereed to ... . xxxvii Addenda xxxviii PAET I.-FRAUD. CHAPTER I. General considerations 1 — 14 CHAPTER 11. Misrepresentation and coNCEAiiMENT . . . . 15 — 118 CHAPTER III. Presumptive or constructive fraud , . . . 119 — 174 a 2 IV SUMMARY OF CONTENTS. CHAPTER IV. I'rAVD UrON THIRD PARTIES Section 1. — Frand upon Creditors • Section 2. — Voluntaiy Conveyances in Fraud of Subsequent Purchasers . Section 3. — Constructive Notice Section 4. — Fraud upon Man-iage Articles . Section 5. — Fraud upon the Marital Eights . Section 6. — Marriage and Place Brokage Bonds Section 7. — Bonds to Marry Section 8. — Fraud in Withholding Consent to Marry Section 9. — Fraud in Ecspect of Expectancies Section 10. — Fraud in Respect of Sales liy Auction .... PAGE 175— 2D3 175—236 236—244 244—282 282, 283 288—286 286—288 288, 289 289 289-290 290—293 CHAPTER V. Miscellaneous frauds 294 — 329 Section 1.— Fraud in Wills .... 294—301 Section 2. — Fraud upon Powers . . . . 301 — 309 Section 3. — Fraud in the Prevention by Undue Means of Acts to be Done for the Benefit of Third Parties . . 310,311 Section 4. — Fraudulent Suppression or Destruc- tion of Deeds and other Instru- ments in Violation of, or Injury to, the Rights of Others . . . 311,312 Section 5. — Fraud in the Procurement of the Execution of a Deed . . . , 312, 313 Section 6. — Fraud in Setting-up an Instrument obtained for one Purpose for another Purpose 313 Section 7. — Fraud in Assignments, by Assignees, &c 314 Section 8. — Fraud by and upon Companies . . 315 — 318 Section 9. — Fraud upon the Mortmain Laws . . 318 Section 10. — Fraud on the Law of Forfeiture . 319 SUMMARY OF CONTENTS. Section 11. — Fraud on the Stock Exchange . Section 12. — Fraud on the Marriage Act Section 13. — Fraud upon the Restraining Statutes &c Section 14. — Fraud in Awards . Section 15. — Fraud in Judgments . Section 16. — Fraud upon the Crown . Section 17.— Fraud upon Courts of Competent Jurisdiction . . Section 18. — Fraud upon the Legishioure . PAOB 320 320 — 322 323- 32G- 328, 322 -326 -328 328 328 329 CHAPTER VI. How THE RIGHT TO IMPEACH A TRANSACTION ON THE GROUND OF FRAUD MAY BE LOST . . . Section 1. — Confirmation .... Section 2. — Release ..... Section 3. — Acquiescence .... Section 4. — Delay and Lapse of Time . Section 5. — Purchase for Value without Notice 330—365 330, 331 331, 332 332—337 337—349 349—365 CHAPTER VII. Remedies 366—424 Section 1. — Rescission, and other Remedies of a . 366—401 . 401—413 413,414 , 414—424 like Character . Section 2. — Action of Deceit — Damages Section 3. — Injunction — Receiver . Section 4. — Defence to Specific Performance CHAPTER VIII. Pleading 425—432 CHAPTER IX. Parties 433—447 VI SUMMARY OF CONTENTS. CHAPTER X. PAGE Proof 448—457 CHAPTER XL <^OSTS 458—465 PART II.-MISTAKE. CHAPTER 1 4CC-547 GENERAL INDEX 549_5 59j TABLE OF CASES CITED, Abbott v. Gerality, 263 V. Sworder, 66, 160, 161, 422, 458 Abbotts V. Bany, 392 Aberaman Iron Works v. Wickens, 23, 26, 40, 375 Aberdeen Railway Co. v. Blaikie, 125, 130, 132 Abouloff V. Oppenlieim, 327, 536, Ad- denda Acraman v. Corbett, 178, 182, 189, 199 Adames v. Hallett, 183 Adams v. Graham, 207 V. Jones, 539 V. Sworder, 130, 137, 141, 142, 376, 440 Adamson v. Evitt, 15, 59 Addis V. Campbell, 121, 122, 334, 346 Adlington v. Cann, 319 Adsetts V. Hives, 113, 114 Affleck V. Affleck, 529 Agace, Ex parte, 83 Agassiz V. Squire, 307 Agra Bank v. Barrv, 260, 267, 279, 280 Ahearne o. Hogan, 162, 165, 166 Ainslie v. Medlycott, 20, 27, 29, 416 Aitken's Arbitration, 538 Aldborough, Earl of, v. Trye, 108, 192, 373 Alder v. Boyle, 492 Alderson v. Maddison, 106 Alexander v. Brame, 183 V. Crosbie, 500, 546 Aleyn v. Belcher, 309 Allan V. Thompson, 207 Allen V. Anthony, 255 V. Bonnett, 215, 219, 221 V. Davies, 166 V. Greenslade, 537, 538 V. Kni.4ht,113, 245, 260,351, 356, 358, 459 V. Macpherson, 300, 400 V. Richardson, 522 Allen V. Seckliam, 264, 265 Allfrey v. Allfrey, 12. 126, 137, 155, 341,' 344, 345, 346, 453, 522 Alt V. Alt, 51, 396 Alton V. Harrison, 176, 201, 214 Alvanley v. Kinnaird, 482, 545, 546 Alven V. Bond, 138 Ancona v. Rogers, 204 Anderson v. Ellsworth, 167, 455 V. Fitzgerald, 1, 31, 33 V. Pacific Insurance Co., 43, 89 Anderson's Case, 76 Andrew v. Aitken, 489, 491, 547 Anon., 25, 131, 137, 138, 257 V. Mills, 323 Archbold v. Commissioners of Cliari- table Bequests, 449 V. Lord Howth, 59, 61, 63 V. Scully, 100, 334, 339 Archer v. Hudson, 154, 270 Ardglasse v. Pitt, 126, 168 Arkwright v. Newbold, 53, 55, 77, 403, 411 Armstrong v. Armstrong, 120, 121, 159, 173 Arnold v. Arnold, 418, 419, 421 V. Cheque Bank, 108, 111, 116, 117 V. Hardwick, 301, 308 Arnot V. Biscoe, 122, 395 Arthur v. Midland Railway Co., 380 Arundel v. Trevillian, 287 Arundell, Lady, v. Pliipps, 201 Ashley's Case, 343 Ashurst V. Mill, 496, 514, 546 Ashton V. Blackshaw, 202 Ashwell V. Lomi, 295 j^shwin V. Burton, 3(;3 Askham v. Barber, 301 Aspland v. Watte, 331, 341 Aston V. Curzon, 431 Athenii?um Life Society v. Pooler, 331, 363 Atkinson r. Denby, 232 TALBE OF CASES. Atkinson v. Macreth, 2*77 V. Smith, 197 Attenborough v. St. Katherine's Dock Co., 7 V. Thompson, 206 Atter V. Atkinson, 295 Atterbiuy v. Wallis, 271, 272, 273, 277 Att.-Gen. v. Akers, 322 V. Alford, 378 V. Backhouse, 257, 259 V. Balliol Collej^'e, 374 V. Biphosphated Guano Co., 248, 431 V. Briggs, 84 V. Corporation of Cash el, 138 V. Earl of Clarendon, 129, 138 V. Clements, 322 V. Cradock, 443 V. Earl of Craven, 374 V. Davey, 374 V. Fishmongers' Co., 345 V. Flint, 250, 251, 349, 358, 3G0, 362 V. Grote, 542 V. Hall, 257 V. Jones, 261 V. Kerr, 374 V. Lucas, 322 V. Magdalen College, 373, 374 V. Mullay, 321 V. Pargeter, 259 V. Bay, 28, 33, 510 V. Read, 322 V. Richards, 328 V. Severne, 322 V. Sitwell, 496 V. Stephens, 254 V. Tomline, 535 V. Vernon, 401 V. Wilkins, 349, 359, 432 Atwood V. , 475, 514, 545 V. Small, 15, 31, 35, 38, 39, 57, 341 Atwool V. Merry weather, 435 Auriol V. Smith, 323 Austin V. Chambers, 131, 333 V. Ta^\^^ey, 272 Australasia, Bank of, v. Nias, 327 Australia, Chartered Bank of, v. Lem- priere, 449, 529, 530 Aveline v. Melhuish, 332 Avory v. White, 493 Ayerst v. Jenkins, 185, 437, 460 Ayles V. Cox, 420, 422 Ayleslbrd, Lord, v. Morris, 170, 373, 453, 460 AyMe v. Murray, 125, 128, 129 Ayhvard v. Kearney, 154, 167, 334 Ayre's Case, 29, 84, 85 Azemar v. Casella, 19 Babcock v. Lawson, 110 Badger v. Badger, 427 Bage, Ex 2Mrte, 131, 137 Baglehole v. "Walters, 62, 67 Bagnall v. Carlton, 73, 75, 124, 126, i30, 137, 147, 333, 340, 376, 444, 464 Bagiieley v. Hawley, 70 Bahia and San Francisco Railway Co., Re, 110, 412 BaUey v. Richardson, 254 V. Watkins, 129, 130 Bailey's Patent, Re, 322 Baily v. l\IerreU, 43 Bain v. Fothergill, 406, 526 Bainbrigge v. Blair, 128 V. Browne, 156, 452, 453, 455 V. Moss, 261 Baker v. Batt, 294 V. Bradley, 155, 157, 333, 373, 449, 461 V. Carter, 129, 460 V. Cartwright, 59, 60 V. Loader, 463 V. Monk, 120, 163, 458 V. Paine, 491 r. Read, 338, 341, 344, 459 Ball V. Mannin, 121 V. Storie, 497 Banbury v. 'Wliite, 208 Bandon, Lord, r. Becher, 326 Bankart v. Houghton, 537 Bannerman v. White, 31, 33 Bannfather's Claim, 109, 112, 118, 267, 274 Barber v. Lesiter, 412 V. Richards, 370 Bargate v. Shortridge, 315 Barker v. Harrison, 148 V. Janson, 510, 512 Barkworth v. Young, 51, 396 Barling v. Bishop, 181, 199 Barnard v. Bagshaw, 318 V. By water, 362 V. Hunter, 141 v. Sutton, 437, 438 V. Wallis, 102 Barnardiston v. Lingood, 160, 373 Barnes v. Add}-, 464 V. Freeland, 390 Bamesley v. Powell, 312, 399, 400 Bamett v. Sheffield, 363 Earnhardt v. Greenshields, 246, 255, 256, 257 Barr v. Gibson, 70, 512 TABLE OF CASES. IX Barrack v. M'Culloch, 183 Barrett v. Hartley, 124, 128 V. Wells, 283 Barrett's Case, 35, 57, 86, 87 Barrow, Ex parte, 233 V. Barrow, 500, 506, 546 V. Greenougli, 311 Barry v. Butliii, 294, 295, 299, 301 V. Crosskey, 35, 57, 58, 84, 412, 435, 436 Bartlett v. Salmon, 22, 42, 83, 269, 415, 459 V. Wells, 122 Barton, Ex parte, 218, 219 V. Hassard, 137 V. Vanheythuysen, 175, 180,181, 242, 244 Barwell v. Bar well, 341, 344 Barwick v. English Joint Stock Banking Co., 82, 83, 93, 408, 409, 428 Baskcomb v. Beckwith, 491, 545 Bassett's Estate, Re, 539 Bate V. Bank of England, 167 1;. Hooper, 471 Bateman v. Boynton, 524, 546 V. Ramsay, 439 V. WiUoe, 477 Bates V. Graves, 372 ^y. Hewitt, 89 V. Johnson, 349, 355, 356, 365 Bath V. Sutton, 207 Bath & Montagae's Case, 450 Battersby v. Smyth, 322 Batty V. Chester, 441 Baxendale v. Bennett, 110, 117 ■ V. Scale, 25, 512, 516, 547 Baxter v. Morgan, 542, 543 Baylis v. Att.-Gen., 543 Bayly v. Wilkins, 145 Baynard v. Woolley, 442 Bayspoole ■;;. ColUns, 192, 197, 237, 239, 240 Beaden v. King, 131, 138, 338 Beadles v. Burch, 443, 463, 464 Beales V. Tennent, 207 Beanland v. Bradley, 159, 167 Beasley v. Magrath, 127, 154, 155 Beattie v. Lord Ebury, 52 Beatty v. Fisliel, 449 Beaubien v. Beaubien, 427 Beauchamp, Earl, v. Winn, 246, 333, 341, 346, 372, 468, 469, 470, 525, 526 Beaufort, Duke of, v. Neeld, 477 V. Patrick, 100, 103, 104 Beaumont v. Bramley, 496, 497, 500, 523 V. Dukes, 417 V. Fell, 539 Beavan v. M'Donnell, 120 V. Oxford, Lord, 242, 243, 281 Beck V. Dean, 315 V. Kantorowicz, 59, 147, 148, 435 Beckett v. Cordley, 101, 102, 122, 260 Beckford v. Wade, 337, 340, 344 Beckley v. Newland, 288, 290 Beddoes v. Pugh, 305 Bedford, Duke of, v. Coke, 319 Beere v. Hoffmeister, 303 Begbie v. Phosphate Sewage Co., 438 Behn v. Buruess, 30, 31, 32, 33, 391 Belhaven's Case, Lord, 475 BeU V. Clarke, 283 V. Cureton, 176 V. Gardiner, 476 V. Howard, 121, 167 V. Midland Railway Co., 100 V. Simpson, 217 Bellamy v. Sabine, 13, 142, 157, 346, 372, 415, 433, 434, 448, 458 Bellew V. Bellew, 348 V. Russell, 334, 336 Beloit, Bank of, v. Beale, 391 Benham v. Keane, 279, 281 V. United Guarantee, &c., As- sociation, 31 Bennett, Ex parte, 129, 130, 131, 132, 138, 142, 374, 377 V. Col ley, 333 V. Wade, 121, 444, 451, 463 Benson v. Heathorn, 125, 132, 379, 435, 453 Bentley v. Craven, 148, 152 V. Mackav, 158, 168, 491, 492, 498, 501, 523, 546 Benyon v. Nettlefold, 441, 456 Berdoe v. Daw.son, 126, 155, 156, 158, 264, 333, 334 Bernard's Case, 84 Bernasconi v. Atkinson, 539 Berny v. Pitt, 169 Berrisford v. Milward, 101 Berry v. Armitstead, 378, 443, 463 Berwick, Ex parte, 211 Mayor of, i-. Murray, 247, 378, 379 Besley v. Besley, 513, 545 Bessey v. Windham, 176, 327 Best, Ex parte, 233 Bevan v. Habgood, 139 Beynon v. Cooke, 170 Bigge V. Parkinson, 71 Bilbie v. Lumley, 471, 474 Bill V. Cureton, "238, 244 Billage v. Southee, 126, 158, 166, 373, 449, 453 Billiter v. Young, 5 Bills V. Smith, 225 Bingham v. Bingham, 469, 545 TAP.T.E OF CASES. Birch V. Blagrave, 439 Bird V. Fox, 2(56 Bird's Trust, 492, 493, 496, 508 Birdsall i-. Eussl'11, 247 Birley v. Birley, 3(t6 Bisco V. Eiirl of Banhur}', 2.'')1 Bisliop r. Church, 503 V. Countess i)f Jersey, 446 Bittk'stoue v. Cooke, 217 Blacklnuii, Ex parte, 223, 225, 226, 227 r. Smith, 524 Blackford v. Christian, 121 Black hall v. Coombs, 477 Blackie v. CLirke, 162, 264, 349, 524 Blacklock V. Dobie, 228 Blacklow f. Laws, 249 Blackwell r. England, 206 Blagrave v. Routh, 142, 144 Blaiberg, Ex parte, Addenda V. Parke, 206 Blair v. Bronilev, 13, 82, 83, 345, 445, 448 Blake v. Albion Life Insurance Societv. 84, 448, 451 V. Mowatt, 61, 63, 371 Blake's Case, 76, 380 Blakeney v. J3aggott, 161 Blanchet v. Foster, 286 Bland, Ex imrte, 216 Blenkhorn v. Penrose, 56 Blenkinsopp v. Blenkinsopp, 328 Blennerhassett v. Day, 138, 325, 333, 334, 345, 346 Blest V. Brown, 92, 461 Blood V. Keller, 104 Bloomer ^•. Spittle, 492, 499, 500, 501, 546 Blount V. Harris, 206 Bloye's Trust, Re, 130, 138, 142, 148 Boddington, Re, 401, 541 V. Langford, 138 Bold V. Hutchinson, 48, 51, 53, 501, 502 Boldero r. London and Westminster Bank, 230 Bolland, Ex parte, 211, 223, 224, 227 Bond r. Hopkins, 105 Booth V. Creswicke, 143 Borell V. Dann, 160, 161, 249, 259, 269, 358, 422 Bos V. Helsham, 523 Bosanquet v. Dashwood, 440 Boson V. Statham, 318 Boswell i\ Coaks, Addenda Bott V. Smith, 184, 193, 195 Boulter, Re, 500, 509 Boulton V. Jones, 88, 485 Boursot V. Savage, 12, 246, 259, 270, 271, 273 Bowen v. Evans, 4, 12, 349, 353, 357, 358, 427, 450 V. Kirwan, 162, 164, 165 Bower v. Cooper, 160, 422 Bowes V. Foster, 176, 438, 440, 456 Bowles r. Stuart, 60, 312, 332, 443 Boyd V. Belton, 101 V. Crr)ydon Railway Co., 407 V. Dickson, 54 BojTiton V. Hubbard, 287 Boyse v. Russborough, 159, 294, 296, 297, 299, 300 Bozon V. Williams, 115, 259, 260 Brace v. Duchess of Marlborough, 365, 431 Brachee v. BrowTi, 59 BrackenburA' v. Brackenbury, 438, 439 Braddick v. 'Mattock, 533 Bradford, Earl of, v. Earl of Romney, 497, 546 Bradley v. Riches, 115, 259, 270, 271, 274, 279, 280, 359, 360, 362 Bradwdn v. Harjiiir, 539 Brake, Re, 539, 542 Brandling v. Plummer, 56 Brandlyn v. Ord, 355 Bray v. Briggs, 481, 547 Breadalbane, Marquis of, v. Chandos, 477, 497, 498 Brealey v. Collins, 415 Bree v. Holbech, 69 Brennan v. Bolton, 105 Brent v. Brent, 95, 444, 463 Brett V. Clowser, 22, 53, 522 Bridgman v. Green, 12, 165 Briggs, Ex parte, 265, 334, 382 11. Boss, 205, 206, 207 V. Jones, 112 Bright V. Legerton, 333, 345 Bright's Trust, Re, 250, 261, 263, 265, 266 Biinkley v. Hann, 160 Brisbane v. Dacres, 471, 474 British E(|uitable Insurance Co. v. Great Western Railway Co., 26, 91 British Linen Co. v. Caledonian Insur- > ance Co., 110 British IMutual Invest. Co. v. Smart, 235 Broad r. Munton, 56, 57, 392, 415 Broadbent v. Barlow, 246, 248 Brockwell's Case, 85, 394 Broderick v. Broderick, 15 V. Scale, 205, 207 Bromley v. Smith, 2, 461 Brooke ?;. Gaily, 167 V. Haymes, 534 V. Lord Mostvn, 94, 95, 399, 475 Lord, V. Roundthwaite, 25, 37, 43, 416, 418, 420, 458 TABLE OF CASES. Brooknian v. Rothschild, 378 Bi'ook.sbank v. Siaitli, 338, 523 Broughton v. Broughton, 128 V. Hutt, 103, 470, 477, 545 Broun v. Kennedy, 146, 507, 545 Brown v. Brown, 323 V. Edgington, 71 V. Jones, 187 V. Montgomery, 72, 73 V. Savage, 278 V. Thorp, 101, 102 Browne v. Cross, 337, 338, 346 V. M'Clintock, 346 Browning v. Budd, 294, 300 V. Morris, 440 Brownlie v. Campbell, 16, 29, 53, 64, 65, 68, 98, 246 Bruce v. Bruce, 530, 532 V. Buler, 406 Brumfit v. Morton, 253 Brunton v. Lister, 42 Brydges v. Branfill, 4, 60, 433, 445 Buckell V. Blenkhorn, 310 Buckle V. Mitchell, 237, 238, 245 Bufe V. Turner, 92 Bugden v. Bignold, 364 Bulkley v. Wilford, 95, 145, 310 Buller V. Waterhouse, 243 Bailey v. Bulley, 469 Bullock V. Downes, 333, 475 Buhner v. Hunter, 195, 217 Burchell v. Clark, 492, 495 Burgess's Case, 370 Burke v. Prior, 64, 100 V. Rogerson, 93 Burke's Estate, Re, 281 Burnell, Ex jxirte, 138 V. Brown, 68 Burnes v. Pennell, 5, 35, 57, 84 Burrell, Ex imrte, 49 Burrell's Case, 238 Burrow v. Scammell, 480, 484, 519 Burrowes v. Lock, 29, 161, 395, 396, 460 Burrows v. Walls, 333, 337 Burton, Ex })arte, 216 V. Knight, 323, 325 V. Wookey, 152 Bury V. Oppenheim, 155, 156 Bushby v. Ellis, 395 Bushell V. Bushel], 278, 279 Butcher v. Butcher, 302 V. Stead, 223, 226 Butler V. Miller, 158, 161 V. Mulviliill, 122 V. Lord Portarlington, 257 Butterfield v. Heath, 189 Butterworth v. Walker, 512 Button V. O'Neill, 207 Buxton i\ Lister, 422 Bwlch y Plwm Mining Co. v. Bavnes, 386, 430 Byne t: Vivian, 373 Byrne v. Godfrey, 311 v. Muzio, 426 Caballero v. Henty, 256, 415 Cadman v. Horner, 58, 414 Cadogan v. Kennett, 175, 184, 193, 199, 201 Caillaud v. Est\\ack, 183 Cairncross v. Lorimer, 99, 334 Calcraft v. Roebuck, 325 Callaghan v. Callaghan, 160 Callisher v. Bischoffsheim, 475 Calverley v. Williams, 501, 547 Camberwell, &c.. Building Society v Hollowav, 22, 419, 420 Campbell v. Fleming, 382, 383 V. French, 544 V. Hooper, 120 V. Ingleby, 184, 477 V. Leach, 530 V. Walker, 130, 131 Campion v. Cotton, 1 95 Cane v. Lord Allen, 141, 142, 144, 148, 149 Canham v. Barry, 50 Cann v. Cann, 330, 468 Carman v. Reynolds, 327, 535 Cannock v. Jauncey, 61 Capon's Trust, Re, 309 Carew's Estate, Re, 277, 290 Carey v. Barrett, 231 V. Carev, 154 Cargill V. Bower, 34, 410, 425, 429, 458 Carleton v. Earl of Dorset, 284 Carlisle v. Whaley, 279 Carpenter v. Heriot, 155 Carpmael v. Powis, 24, 478, 507, 51 1 Carr v. London and North Western Railway Co. 96, 98, 107, 116 Carrard v. Meek, 211 Carte v. Carte, 319 Carter, Ex farte, 211 V. Boehm, 33, 88, 89 V. Carter, 351, 352, 356, 530, 531 I'. Hind, 187 v. Palmer, 127, 144, 146, 148, 149, 1.50, 373 Carver v. Richarrls, 308 Casborne v. Barsham, 119, 124, 140, 142, 155, 159 Case V. James, 114, 349, 359, 360 Casey's Trust, Re, 235 Castle V. Downton, 207 Castledon v. Turner, 543 XII TABLE OF CASES. Caswell V. Coare, 385 Cato I'. Thompson, 55, 421, 423 Cat on V. C'aton, 106 Cater V. Burke, 3G3 V. Lord Pembroke, 478 Cavander v. Bulteel, 115, 254, 255 Cave V. Cave, 270, 274, 362 Cawdor, Earl of, v. Lewis 100 Cazenove v. British E(juitable Assur ance Co., 33 Cecil V. Butcher, 437, 438, 439 Chadwick v. Turner, 279, 280 Challinor, Ex jmrte, 210 Chalmer v. Bradley, 131, 337 Chamberlaiue v. Agar, 311 V. Chamberlaine, 311 Cliaiiibers v. Crabbe, 155, 166, 284 V. Minchin, 540 V. Waters, 131, 139 Champion v. Rigbv, 140, 141, 142, 334, 338, 344, 346, 347, 459 Chanter v. Hopkins, 31, 71, 484 Chapman, Ex parte, 209 V. Bradley, 185 V. Chapman, 458 V. Emery, 242 V. Gibson, 527, 528, 533 V. Speller, 70 Chappell V. Gregory, 69, 423 Charing Cross Bank, Ex parte, 210 Charlesworth v. Jennings, 24, 25 Charlton v. Coombs, 399, 400 V. Hay, 78, 410 Charter v. Charter, 539, 542, 543 V. Trevelyan, 148, 149, 333, 334, 346 Cherry, Ee, 223 Cheslyn v. Dalby, 143 Chester v. Spargo, 380 Chesterlield v. Jannsen, 3, 170 Chesterfield, &c.. Colliery Co. v. Black 130 Chetham v. Hoare, 347 Childers v. Cliilders, 438 Ching V. Ching, 537 Cholmondeley v. Clinton, 333, 337, 338 345 ' Chuck V. Creraer, 324 Churchill v. Grove, 281 Chynoweth's Case, 315, 337 Clack V. Holland, 363 Clanricarde, Marquis of, v. Ilennin" 141, 338, 344, 345, 346, 348, 459 ^' Clapham v. Shilleto, 38 Clare v. Lamb, 510, 522, 523 Clare Hall v. Harding, 100, 103 Clark V. Burgh, 505 V. Malpas, 373, 433 Clarke v. Bickers, 505 V. Cobley, 122 Clarke v. Dickson, 6, 35, 55, 367, 369 372, 382, 383, 384, 392, 524 V. Girdwood, 397, 443, 444, 457, 464 V. Grant, 423, 495 V. Hart, 348 V. Mackintosh, 37, 38, 39, 416, 417, 458 V. Malpas, 162 V. Palmer, 113 V. Parker, 289 t). Swaile, 129 V. Tipping, 148 r V. Willott, 238 V. Wright, 185, 186, 237 Clarkson v. Han way, 451 Clayton v. Wilton, 186 Clegg V. Edmondson, 153, 335, 338, 341, 344, 347, 348, 459 V. Fishwick, 153 Cleland v. Leech, 396 Clements v. Hall, 335, 341 V. Welles, 250, 252, 268, 356 Clermont, Viscount, v. Tasbm-gh, 416 Clifford V. Brooke, 406 V. Terrell, 165, 166 Clifton V. Cockburn, 468, 524 Clinan v. Cooke, 105, 106, 496 Clinch V. Financial Corporation, 461 Clint, Re, 196 Clough V. London and North- Western Railway Co., 6, 341, 366, 367, 369, 382, 383, 386 Clowes V. Higginson, 496, 515, 547 Clunn, Ee, 233 Clydesdale Bank v. Paul, 12, 84 Cobb, Ex parte, 233 Cobbett V. Brock, 166, 264, 271, 349 Cochrane v. Chambers, 183 v. Willis, 477, 510, 512 Cock V. Richards, 289 Cockcroft V. Sutcliffe, 305 Cockell V. Taylor, 161, 162, 333, 363 Cockerell, Ex 2xirte, 4, 328 . V. Cholmeley, 330. 333, 531, 532, 546 - ' > Cocking V. Pratt, 468, 470, 476 Cocks V. Master man, 521 Cockshott V. Bennett, 231 Codrington v. Lindsay, 184 Cogan V. Duffield, 398, 496, 502 Cohen, Ex jMrte, 217, 219 Colby V. Gadsden, 41, 42, 43, 416 Colclough V. Bolger, 373, 399 V. Sterum, 357 Cole V. Gibson, 167, 287 Coleman v. Mellersh, 142, 143, 522 V. Riches, 82 V. Wallis, 231 Colemere, fe, 217, 218 TABLE OF CASES. Xlll Coles V. Ilulme, 492 V. Sims, 245, 250 V. Trecothick, 129, 131, 160 Collen V. Wright, 29 CoUett V. Morrison, 497, 498 Collier v. Brown, 160 V. Jenkins, 24, 421 Collins, Ex parte, 209 V. Blantern, 456 V. Cave, 412 V. Evans, 18 V. Hare, 162, 167 Colombine v. Penliall, 195, 217 Colpoys V. Colpoys, 542 Colt V. Woollaston, 3 Colyer v. Clay, 477, 511 V. Finch, 112, 249, 260, 268, 359 Connelly v. Stear, 209 Cook V. Fearn, 500 V. Wotton, 467 Cooke, Ex parte, 235 V. Bnrtchaell, 157 /!. Clay worth, 122 y. Greves, 95 V. Lamotte, 158, 162, 164, 167, 453, 455 V. Setree, 142 Coomer v. Bromley, 446 Coope V. Cresvvell, 235 Cooper, Ex parte, 202, 217, 221 V. Cooper, 302, 304 V. Ibherson, 206 V. Joel, 373 V. Martin, 531 V. Phibbs, 467, 468, 469, 509 V. Vesey, 12, 364 Coote V. Jecks, 203 Copis V. Middleton, 160. 175, 184, 196, 198 Coppin V. F-ernyhough, 251 Corbett v. Brown, 36 Cordeanx v. Fnllerton, 500 Cordingley v. Cheeseborough, 25 Corlett V. Eadcliffe, 184, 199 Corley v. Stafford, 146, 397 Corinick v. Trapaud, 197 Corneforth v. Geer, 537 Cornell v. Hay, 81 Cornfoot V. Fowke, 30, 83 Cornish v. Clark, 200 Corry v. Cremorne, 359 Cory V. Cory, 122 V. Eyre, 115, 245, 259, 268, 359, 443 V. Gertcken, 122, 447 V. Baton, 90 Cesser v. Collingo, 257 Cotching V. Bassett, 414 Cothay v. Sydenham, 261 Cottam V. Eastern Counties Railway Co., 115, 354,452 Cotterell v. Purchase, 12 Cottle V. Fripp, 187 Conlson v. Allison, 158, 166, 183 Contts V. Acworth, 167 Couturier v. Hastie, .■,09 Coverdale v. Eastwood, 50, 51 Coverley v. Burrell, 421 Coward v. Hughes, 470, 545 Cowell V. Watts, 342 Cowen, Ex parte, 231, 233 Covvper v. Cowper, 312 Cox V. Bruton, 468, 525, 545 V. Coventon, 250, 263, 420, 458 V. Middleton, 41, 266, 415 V. Prentice, 511, 524 V. Smith, 122 Cracknall v. Janson, 183, 191, 237, 240, 241, 462 Craig V. Philipps, 63, 81, 448 Cranston v. Marshall, 31 Cranstown, Lord, v. Johnstone, 132, 457 Crawshav v- Thornton, 57 Creagh v. Blood, 121 Credit Co. v. Pott, 211 Cregan v. Cullen, 358 Cripps y. Jee, 457 Crispin, Ex parte, 222 Croft V. Graham, 373 Crofton V. Ormsby, 254, 255 Crofts V. Middleton, 189 Croker y. Martin, 176, 238 Crosby v. Middleton, 505 Cross, Re, 232 V. Sprigge, 49 Crosskill v. Bower, 128 Crossley v. Elworthy, 182, 186, 453 V. Parker, 146 Crowdy V. Day, 141 Crowe V. Ballard, 119, 330, 373 Cullen V. O'Meara, 54, 252, 253 V. Thompson's Trustees, 443 Cullen's Trustees v. John^^ton, 27, 54 CuUingworth v. Lloyd, 231, 232, 461 Cundy v. Lindsay, 8, 485 Currie v. Goold, 471, 472 V. Nind, 238 Curtis V. Perry, 322, 438, 533 V. Price, 176 Curzon v. Bel worthy, 160, 164 Custance v. Cunningham, 167 Cutts V. Salmon, 141 Dacre v. Gorges, 524, 545 Daintree, Ex parte, 91 Daking v. Whimper, 244 XIV TABLE OF CASES. D'Albiac v. D'Albiac, 59, 128, 283, 395 Dalby v. Piillen, 59, 385 Dale V. Hamilton, 105 Dally V. Wonliam, 374, 458 Dalston v. Coatsworth, 311 Daly r. Kelly, 142 Daniel v. Mitchell, 21 V. Sinclaii", 473 Daniels v. Davison, 255, 256 Dann, Ex parte, 217, 219 V. Spurrier, 99, 102 Danvers v. Manning, 538 D'Arcy v. D'Arcy, 167 Dare Valley Eailway Co., Re, 537 Darley v. Singleton, 158 Darlington v. Hamilton, 22, 42, 253, 259, 269 V. Pultenev, 533 Darvill v. Terry, 195,198, 205 Dashwood v. Jermyn, 51 Daubeney v. Cockbiirn, 308 DaugHsh. V. Tennant, 231 Davenport v. Bisbop, 185 V. Stafford, 399 Davey v. Durrant, 374 V. Garrett, 425, 426 Davidson v. Tulloch, 411 Da^des v. Cooper, 59, 61 V. Davies, 64, 101, 102, 154, 455, 458 V. Fitton, 496 V. London, &c.. Provincial Ma- rine Insurance Co., 26, 89, 94, 160, 167, 440, 441 V. I\Iar^^hall, 104 V. OttY, 438, 460 V. Sear, 100, 265 V. Thomas, 251, 356, 358 Davis V. Abraham, 146 V. Burton, Addenda V. Chanter, 95, 514 V. Duke of Marlborough, 169, 289, 373 V. Goodman, 212 V. :Morier, 468, 473 V. Shepherd, 25, 512 V. Lord Strathmore, 281 V. Svnionds, 460 V. Uphill, 305, 307 Davison v. Eobinson, 226 Davoue v. Fanning, 130 Dawes v. Betts, 252 V. Harness, 385, 430 Dawson v. Collis, 391 V. Massev, 153, 154 V. Prince, 246, 266, 349, 353 V. Sadler, 323 Day V. Newman, 161 Dearie v. Hall, 118, 460 Debenham v. Ox, 288 De Bussche v. Alt, 148, 149, 333, 335, 336 De Cordova v, De Cordova, 94, 137 De Hoghton v. Money, 244 De la Touche's Settlement, 494, 496, 501, 508 Del Mare v. Robello, 538, 540, 544 Delves v. Delves, 292 De Manneville v. Crompton, 34, 285, 286 De Mattes v. Gibson, 245 De Montmorency v. Devereux, 330, 331, 455, 459 Dendy v. Cary, 96 Denn v. Wilford, 494 Denne v. Light, 34, 57 Denny v. Hancock, 416, 490 Dent V. Bennett, 144, 158, 162, 166, 458 Denton v. Donner, 138, 162, 455 V. Macneil, 43, 46 Denton CoUiery Co., Re, 502 Denys v. Shuckbiu-gh, 467, 468, 523 Deposit and General Life Assurance Co. V. Ayscough, 386, 430 Dettmar v. Metropolitan and Provincial Bank, 246 Devaynes v. Noble, 503 Devenish v. Baines, 311 Devonshire, Duke of, r. Eglin, 104 Dew V. Clarke, 121 Dicconson v. Talbot, 36, 138 Dickson v. Renter's Telegram Co., 30 Dilkes V. Broadmead, 195, 236 Dimes v. Proprietors of Grand Junction Railway Co., 138 Dimmock v. Hallett, 35, 43, 44, 45, 55, 292, 422 Dimsdale v. Dimsdale, 157, 334 Dinn v. Blake, 537, 538 DLxon V. Baldwin, 390 V. Evans, 475 V. OLmius, 300 V. Muckleston, 107, 249, 267 Dixons V. Monkland Canal Co., 472, 474 DobeU V. Hutchinson, 24 V. Stevens, 40, 41, 45, 57, 62, 406, 456 Dobie V. Duncanson, 383 Doble, Ex parte, 190 Dobson V. Land, 138 Dodds V. HiUs, 248, 263, 349, 355, 356, 363 Doe V. Alsop, 279 V. Ball, 215 V. Bevan, 235 V. Crago, 510 V. Evans, 544 V. Ford, 456 V. Godwin, 494 V. Howells, 456 TABLE OF CASES. XV Doe V. James, 196, 239, 241 V. Le\\-is, 284 V. Manning, 237 V. Martin, 243 V. Martyr, 240 V. Eoberts, 327, 437, 438, 542 V. Eolfe, 190 V. Eoutledge, 240 -y. Rusham, 237, 238, 239 V. Webber, 196, 242 Dolman v. Nokes, 61, 453 Dolphin V. Aylward, 238, 242, 244 Dommett v. Bedford, 235 Donaldson v. Gillott, 115, 312 Donovan v. Fricker, 374, 375 Doolin V. Ward, 290 Door V. Geary, 538, 539, 540 Douglas V. Culverwell, 167 Douglas V. Ward, 242 Dover v. Buck, 129 Dowell V. Dew, 106, 245, 530 Dowle V. Saunders, 113, 114, 452 Downes v. Grazebrook, 129, 130, 131, 138 V. Jennings, 284, 285, 286, 338 V. Power, 250 V. Ship, 24, 76, 342 Doyle V. Hort, 403, 428 Drake v. Drake, 539, 542 Draper v. Borlase, 101, 102 Draper's Co. v. Davis, 142 Drew V. Corp, 22, 419, 420 V. Lord Norbury, 279 Drewry v. Barnes, 471, 477 Driscoll V. Bromley, 148 Druiff V. Parker, 496, 503 Dryden v. Frost, 245, 257, 260, 271 Drysdale v. Mace, 41, 43, 53, 418 Ducane, Ex parte, 168 Duckett V. Cover, 434, 463 Duggan V. Duggan, 302, 307 Dunbar v. Tredennick, 245 Dundas v. Dutens, 183 Dunnage v. White, 95, 514 Dunne v. English, 149, 453 Duranty's Case, 393, 394, 406 Durham, Earl of, v. Legard, 23, 393, 420, 422 Durnell v. Corfield, 295, 296 Durrant v. Ecclesiastical Commissioners, 520, 521 Dutton V. Peel, 311 Dyas V. Stafford, 480, 545 Dyer v. Dyer, 102 V. Hargrave, 39, 65, 393, 416,420, 421 Dykes v. Blake, 23, 42 Eads c. WiUiams, 326 Eaglestield v. Lord Londonderrj', 34, 39, 53 Earl V. Stocker, 323 Early, Ex parte, 234 East India Co. v. Donald, 450, 457, 476, 488, 545 V. Henchman, 57, 147, 148, 425 V. Neave, 476 V. Vincent, 99 Eastabrook v. Scott, 373 Eaton V. Bennett, 498 Ede V. Knowles, 181, 242 Edgeworth v. Edgeworth, 357 Edwards v. Bingham, 500 V. Browne, 10, 378 i\ GljTin, 228 V. Harben, 201 V. M'Cleay, 15, 39, 66, 68, 374, 375, 378, 458 V. Meyrick, 119, 124, 126, 141, 142, 143, 144, 334, 459 'V. !M organ, 545 r. Pike, 318 V, Wickwar, 42, 55, 62 V. Williams, 144 Eicliholtz V. Bannister, 69 Ekins V. Tresham, 45 Ellard v. Llandaff, 62 Elliott V. Ince, 120 EUis, Ex 'parte, 221 V. Barker, 159 V. Colman, 395 Else V. Else, 54, 392 Elsey V. Adams, 463 V. Lutyens, 281 Elwes V. Elwes, 506 Emanuel r. Bridger, 204 Emma Silver Mining Co. v. Grant, 55, 125, 126, 136, 377, 379 V. Le^vds, 376 Eramerton v. Matthews, 70 Empson's Case, 503 England v. Culling, 152 V. Do^ras, 284, 285, 286 Erlanger v. New Sombrero Phosphate Co., 134, 135, 136, 137, 339, 344, 346, 347, 348, 367, 372, 434 Ernest v. Vivian, 341, 342, 347, 348 Esdaile v. La Nauze, 12, 353, 354 Espey I'. Lake, 126, 154, 155, 168, 246, 264, 449 Espin V. Pemberton, 112, 247, 266, 267 270, 271, 275 Essex V. Baugh, 281 Est wick ('. Caillaud, 214 Etty y. Bridges, 118 XVI TABLE OF CASES. Evans v. Bicknell, 15, 107, 112, 314, 457, 459 r. Blood, 121 ('. Bremridj^'e, 93 ('. Carriii^'ton, 59, 313 V. Edmonds, 15, 16 V. Fowler, 29 V. Joues, 513 V. Llewellyn, 119, 161, 167 V. llichardson, 322 r. Williams, 281 V. "W'yatt, 20, 27 Everitt v. Evoritt, 155, 460, 508 Evroy r. Nicholas, 122, 447 Exchange Banking Co., Be, Addenda Ex ton r. Scott, 183 Eyre, Ex parte, 192, 194, 235, 446 V. Burmester, 270, 332, 334, 349 r. Dolphin, 250 V. Dunsford, 406 V. M'Donnell, 138, 279 V. M'Dowell, 279 r. Smith, 234 Eyton V. Eyton, 312 Fagg v. Dobie, 314 Falcke v. Grav, 160, 161, 415, 422 Falkner v. O'Brien, 13, 160, 162 Fallon V. Robins, 496, 498 Fane v. Fane, 95, 157, 515 Farebrother v. Gibson, 37, 38, 41 Farewell v. Coker, 468 Farley, Ex parte, 131, 132 Farmer v. Farmer, 166, 167 V. Martin, 301, 308 Farr v. Sheriffe, 506 Farrant v. Blanchford, 156, 247, 332, 334, 337 Farrer v. St. Katherine's College, 538, 539 Farrow v. Rees, 262 Fawcett v. Whitehouse, 152 Fearnley v. London Guarantee Insur- ance Co., 93 Fearon v. Desb'risay, 302 Featherstonhaugh v. Fenwick, 153 Felgate's Case, 393 Fellowes v. Lord Gwydyr, 37, 48, 58, 88, 423 Fenton v. Browne, 42, 43, 460 Feret v. Hill, 48, 49, 50 Ferguson v. Carrington, 429 Femyhough v. Leader, 315 Ferrars v. Cherry, 251, 356 Ferres v. Ferres, 167 Fewster v. Turner, 421 Field, Ex jxtrte, 216 V. Bolancl, 245 Fielden v. Slater, 252 Fife V. Clayton, 496, 547 Filmer v. Gott, 4, 165, 456 Finch V. Newnham, 312 Firth, Ex parte, 210 Fisher, Ex 2mrte, 218, 219, 220, 221 V. Liverpool Marine Assurance Co., 90 V. Moon, 104 Fisk V. Sarber, 131, 132 Fitch V. Jones, 493 Fletcher, Ex jmrte, 204 V. Fletcher, 183 V. Krehl, 59 Flight V. Barton, 41, 54, 68, 253, 266, 269 V. Booth, 19, 23, 34, 54, 253, 420 Flint V. Woodin, 42, 53, 55, 58, 62, 291 Flood V. Pritchard, 252, 253 Flower v. Lloyd, 4, 427 Flynn v. Robertson, 537 Foley V. Hill, 338 Fonnereau v. Pojnitz, 542 Forbes v. Ross, 128 Ford V. Harrington, 438, 440 V. Kettle, 205 V. Olden, 168 ' V. White, 359 Forester v. Read, 462 Forteblow v. Shirlev, 68 Foster, Re, 142 V. Blackstone, 118 V. Charles, 17, 402 V. Fowler, 202 V. M'Kinnon, 10, 118 Foster and Lister, Re, 187 Fouleys, Ex parte, 21 8 Fowkes V. Manchester and London Life Assurance Co., 91 Fowler v. Fowler, 497, 498, 501 V. Scottish Ecjuitable Life Assur- ance Society, 499, 501, 546 Fowler's Case, 524 Fox V. Hawkes, 112 V. Macreth, 61, 129, 160, 378 Fox's Case, 380 Frail v. Ellis, 250, 258, 277 Franks v. Bollaus, 130, 344, 345 V. W^eaver, 3 Eraser v. Levy, 217 V. Thompson, 184, 195 Frazer v. Jones, 359, 360 Freeman v. Cooke, 96, 97, 98, 486 V. Jeffryes, 520, 521, 524, 537 r. Pope, 177, 178, 180, 181, 194 Freer v. Hesse, 282 French v. French, 176, 177, 178, 183, 198, 199 Frost V. Brewer, 420 FroAvd, Ex parte, 85 TABLE OF CASES. XVU Fuontes v. Montes, 8 Fuller V. Abrahams, 293 V. Bennett, 271 Fullwood V. Fullwood, 338 Fulton V. Andrew, 296, 453, 455 Fyler v. Fyler, 459, 461, 464 Gale v. Gale, 186 V. Lindo, 283, 395 V. Williamson, 191 Galloway v. Corporatiou of London, 140 Galton V. Emuss, 290 Games, Ex ijarte, 214, 222, 228 Gandy v. Adelaide Insurance Co., 89 Ganley v. Ledwidge, 9 Gardner v. Ogden, 149 Garland v. Beverlej^ 539 Gamer v. Garner, 539 Garrard v. Frankel, 488, 491 , 499, 526,546 V. Grinling, 482, 495, 547 V. Lewis, 110 Garth v. Cotton, 2, 175 V. Townsend, 530 Gartside v. Gartside, 325 V. Isherwood, 121, 160, 161 Garvey v. Hibbert, 539 Gas Light and Coke Co. v. Turner, 456 Gas Light Improvement Co. v. Terrell, 227 Geddes v. Pennington, 34 Gedye v. Duke oi Montrose, 458 Gee V. Spencer, 470 General Furnishing Co. v. Venn, 202 General Steam Navigation Co. v. Rolt, 247, 249, 263 George v. Milbank, 192, 240 Gerard v. O'Reilly, 100 Gerhard v. Bates, 15, 437 Gething v. Keighley, 387, 522 Gibbons v. Caunt, 94 Gibbs V. Daniel, 141, 143, 145, 455 V. Guild, 338, 427, 431 Gibson v. D'Este, 23, 374, 375, 378, 379, 458 V. Ingo, 261, 262 V. Jeves, 125, 141, 144, 161, 453 V. Russell, 162, 165, 166 V. Spurrier, 68 Gibson's Case, 85 Giddings v. Giddings, 125, 158 Gilbert v. Lewis, 425, 444, 464 Gilbert's Case, 13.3, 316, 381 Giles V. Giles, 401, 538, 540, 541 Gillett V. Gane, 5.39 V. Peppercorne, 148, 341 Gilliatt V. Gilliatt, 292 Ginger, E:c parte, 82 Glascott V, Lantj, 449 Glasse v. Marshall, 3 Glassington o. Thwaites, 152 Glvn V. Bank of England, 449 Goblett V. Beechey, 544 Godard v. Gray, 536 Goddard v. Carlisle, 145 V. Jeffreys, 415, 417, 480 V. Snow^ 284 Golden v. Gillam, 176, 184, 194, 195, 197, 198 Goldicutt V. Townsend, 34, 183, 186 Goldsmith v. Bruning, 287 V. Russell, 184 Gompertz v. Bartlett, 19 Goodman v. Sayers, 32.3, 471, 537 Goodricke v. Brown, 314 V. Taylor, 179 Goodright v. Moses, 242 Gorarn v. Sweeting, 30 Gordon, Lord v. Marquis of Hertford, 495 Gordon v. Gordon, 94, 95, 474, 514 V. Shaw, 432 Gore, Ex parte, 138 V. Gibson, 122 V. Stacpoole, 357 Gorsuch V. Cree, 22 Goss V. Lord Nugent, 491 Gough V. Everard, 203 Cover, Ex parte, 63, 81, 392, 410 Govett V. Richmond, 101 Gowland v. De Faria, 330, 334 Graham v. Chapman, 221 V. O'Keefe, 180, 191 Grant v. Campbell, 250 V. Grant, 543 V. Munt, 41, 66, 416, 420 V. Shaw, 206, 207, 208 Gray v. Binny, 155, 157 V. Chiswell, 504 V. Fowler, 382 V. Lewis, 461 Grazebrook v. Percival, 286 Great Luxemburg Railway Co. v. Mag- nay, 13, 1.32, 376 Great Northern Railway Co. v. Lan- cashire, &c.. Railway Co., 105 Great Western Railway Co. v. Cripps, 471 Green v. Attenborough, 204 V. Bank of England, 380 ■ V. Baverstocke, 290 V. Gosden, 37, 60 I'. Lowes, 236 V. Nixon, 2, 315 Greenfield v. Bates, 145 V. Edwards, 59, 92, 93, 109, 257 Greenhill v. Church, 323 Greenlaw «. Hugell, 138 h XVIU TABLE OF CASES. Greenlaw v. King, 158 Gieenslade v. Dare, 246, 249, 257, 263, 359 Greenwood v. Bairstow, 254 V. Brownliill, 537 V. Greenwood, 94, 95, 493, 539 Gregory v. Gregory, 129, 130, 334, 338, 340, 344, 346 V. Mighell, 99 V. Wilson, 478 Gresley v. Mousley, 141, 143, 338, 340, 344, 346, 347, 375, 433, 442 Greville v. Tylee, 294, 295, 299 Grieveson v. Kirsopp, 513 Griffin V. Clowes, 109 Griffith, Ex parte, 223, 225, 226, 227 V. Spratley, 160 Griffiths V. Jones, 483 V. Bobbins, 162, 166, 167 Griggs V. Staplee, 285, 286 Grindell v. Brendon, 205 Grisley v. Lother, 287 Grissell v. Peto, 25 Grogan v. Cooke, 214 GrosA'enor v. Green, 41, 252, 266 V. Sherratt, 162, 167, 335, 346 Grove v. Bastard, 459 Grover v. Hugell, 129, 130, 138 Groves v. Groves, 438, 439 V. Perkins, 460 Grylls, Ex parte, 130 Grymes v. Sanders, 477, 478, 523 Guardhouse v. Blackburn, 296 Gubbins v. Creed, 159, 168 Guest V. Smythe, 139 Gumey v. Womersley, 19 Guthing V. Lynn, 492 Guy I'. Pearkes, 183 Gwynne v. Heaton, 161, 373 Haigh v. Haigh, 325, 537 Hale V. Allnutt, 196 V. Saloon Omnibus Co., 195, 198, 214 Hales V. Cox, 244 Halifax Union v. Wheelwright, 111 Hall, Ex parte, 226 V. Conder, 69, 70 V. Hall, 173, 174, 298, 455 V. Hallett, 378 V. Noyes, 130 V. Potter 287 V. Smith, 252 Hallidav, Ex parte, 224 Hallmark's Case, 278 Hallows V. Fernie, 34, 38, 46, 74, 75, 76, 425, 448, 459 Hamar v. Alexander, 406 Hamer v. Tilsley, 103 Hamilton v. Ball 437 V. Chaine, 210 V. Grant, 338 V. Kirwan, 450 V. Eoyse, 246, 250, 251 V. Watson, 92, 93 V. Wright, 128, 130 Hamlyn v. Bettely, 211 Hammersley v. l)e Biel, 50, 51, 106, 396 Hammond, Ex parte, 168 Hampden r. Hampden, 312 Hampshiz'e v. Peirce, 539 Hampson v. Hampson, 400 Hanbury v. Litchfield, 253 Hankey v. Vemon, 477 Hanley v. Pearson, 500, 501 Hannah v. Hodgson, 122 Hannington v. Du Chatel, 288 Hansard v. Hardy, 257 Hanson v. Keating, 13 Harbidge v. Wogan, 506 Harbin v. Darby, 128 Harcourt v. White, 100, 338 Harding v. Wickham, 324, 325 Hardingham v. Nicholls, 358, 431 Hardman v. Booth, 8, 485 V. Ellames, 432 Hare v. Horwood, 477 Hargreave v. Everard, 168 Harman v. fiichards, 184, 187, 190, 193 Harnett v. Baker, 56, 491 Harnor v. Groves, 367 Harpham v. Shacklock, 355 Harrington v. Victoria Graving Dock Co., 151 Harris, Ex parte, 218 V. Ingledew, 431 V. Kemble, 39, 41, 57, 58, 59, 414, 416 V. Pepperell, 448, 499, 545, 546 V. Rickett, 217, 218 Harrison, Expiarte, 131 V. Porth, 355 V. Gardiner, 414 V. Guest, 159, 160, 162, 164, 166, 248, 433 V. Randall, 309 V. Jklayor, &c. , of Southampton, 327 Harrod v. Harrod, 121 Harryman v. Collins, 259, 263 Harston v. Tenison, 345 Hart V. Frontino, &c.. Gold Co., 110 V. Swaine, 15, 21, 22 V. Windsor, 69 Hartley's Case, 502 Hartopp V. Hartopp, 155, 165, 459 TABLE OF CASES. XIX Hartwcll v. Colvin, 337, 338 V. Ilartwell, 288 Harvey v. Cooke, 94, 95, 475 V. Mount, 167, 461, 463, 464 V. Shelton, 325, 326 V. Young, 43, 44, 45 Harwood v. Tooke, 288, 290 Hasell, Ex parte, 344 Haslock V. Ferguson, 452 Hastie v. Couturier, 477 Hatch V. Hatch, 153, 154, 341 V. Searles, 257 Hatton V. English, 205 Hauxvvell, Ex parte, 218, 219 Haven v. Foster, 472 Hawker, Ex parte, 216 Hawkins v. Bone, 122 Hay's Case, 132, 133, 134, 147, 149 Haycraft v. Creasy, 18, 43, 402, 426 Haygarth v. Wearing, 47, 161, 378, 457 Haywood v. Cope, 38, 39, 43, 59, 416, 422, 458 Head v. Godlee, 157 V. Tattersall, 31 Healey v. Healey, 543 Heane v. Rogers, 63 Heap V. Tonge, 185, 197, 290 Heath v. Crealock, 350, 364, 365 Heathcoate v. Paignon, 161 Heatley v. Newton, 291, 444 Heilbuth v. Hickson, 72 Heming v. Swinerton, 323 Hemingway v. Hamilton, 48 Hemmer v. Cooper, 48 Henderson v. Comptoir d'Escompte de Paris, 248 V. Cook, 477 V. Hudson, 22, 416 V. Lacon, 28, 29, 44, 76, 84 ' V. Royal British Bank, 370 Henley v. Stone, 437 Hennequin v. Naylor, 451 Henry v. Armstrong, 173, 454 Henshall v. Fereday, 174 Henty v. Wrey, 302, 303 Herbert v. Bu'lkley, 4 Hercy v. Dinwoody, 337 Hereford Engineering Co., Re, 137 Heme v. Meeres, 125 Heron v. Heron, 155, 157, 332 Hervey v. Hervey, 529 V. Smith, 256, 264 Hesse v. Briant, 141, 150 V. Stevenson, 494 Hewer, Re, 204, 207 V. Cox, 206 Hewison v. Negus, 187 Hewitt V. Looscniore, 112, 247, 260, 267, 268, 271, 273 Hewlins v. Shipham, 104 Heydon's Case, 4 Heynian v. European Central Railway Co., 77 Hichens v. Congreve, 152, 435 Hick V. Philipps, 420 Hickes v. Cooke, 138, 337, 338, 341 Hickley v. Hickley, 139 Hicks V. Morant, 345 Hickson v. Darlow, 210, Addenda V. Lombard, 449 Hiern v. Mill, 245, 257, 260 Higgins V. Joyce, 141 V. Samels, 39, 42, 43, 415, 416, 460 Higginson v. Clowes, 416, 515 V. Kelly, 235 Higgons V. Burton, 486 Higinbotham v. Holme, 235 Hill, Ex parte, 235 V. Bishop of Exeter, 242 V. Buckley, 25, 40, 393, 419, 420 V. Cray, 48, 62, 64 V. Manchester Waterworks Co., 456 V. Perrott, 391 V. Simpson, 248 V. South Staffordshire Railway Co., 100 HHliard v. Eiffe, 449 V. Fulford, 472 Hillman, Ex parte, 190, 200 Hills V. Downton, 533 V. Rowland, 506 Hinchinbrooke, Lord, v. Seymour, 302 Hindson v. Weatherill, 145 Hine v. Campion, 452 V. Dodd, 249 Hinton v. Hinton, 160 Hiorns v. Houltou, 109, 350 Hipkins v. Amery, 260 Hirschfield v. London and North- Western Railway Co., 53 Hitchcock V. Giddings, 477, 510, 512, 546 Hitchin v. Groom, 492 Hobbs V. Norton, 395 Hobday v. Peters, 146, 148, 149, 151 Hodge's Case, 381 Hodges V. Hodges, 462 Hodgkin, Ex parte, 225 Hodgson, Ex parte, 138 V. Clarke, 539 V. Dean, 279, 282 Hogan V. Healey, 368, 393, 411 Hogge V. Burgess, 537 Hoghton V. Hoghton, 126, 155, 156, 157, 373, 455 Holbird v. Anderson, 195, 214 Holderness v. Rankin, 427 Hole, Ex parte, 219, 220, 221 Holland v. Russell, 521 b 2 XX TABLE OF CASES. Hollins V. Fowler, 7, 8, 9 Holloway v. Headiii<4ton, 186 ■ V. Millard, 180, 181 Holman v. Loynes, 127, 140, 141, 142, 143, 145, 150, 433 Holmes V. CoLjliill, 528 V. distance, 538, 540 V. Howes, 1G6 V. Pennev, 177, 180, 192, 193, 194,' 195, 197 V. Powell, 254 Holmes' Estate, Re, 145, 453 Holt y. Holt, 128 Holt's Case, 85 Holwortliy v. Mortlock, 477 Holyman, Ex parte, 138 Honner v Morton, 333, 334 Hood V. Oglander, 480 Hooman, Ex iMrte, 203, 207 Hooper v. Clark, 102 V. Gumm, 101 Hope, Ex parte, 234 V. Liddell, 251 V. Lord Cloncurry, 107 Hopgood V. Ernest, 112, 260, 274, 277 Hopkins v. Tanqueray, 31 Hopkinson v. Eolt, 365 Hore V. Beclier, 476, 477, 511 Horn V. Horn, 183 V. Kilkenny, &c., Railway Co., 315 Hornby v. Matcham, 312 Horsfail v. Thomas, 59 Horton v. Westminster Improvement Commissioners, 456 Hosegood V. Bull, 407, 435 Hotchkiss V. Dickson, 94 Hotson V. Browne, 58, 456 Houghton V. Lees, 290, 545 Houldsworth v. City of Glasgow Bank, 83, 367, 372, 383, 384, 387, 392, 408, 409 Hovenden v. Lord Annesley, 164, 337, 338, 344, 347 How V. Weldon, 161, 167, 357, 363 Howard v. Chaffers, 269 V. Ducane, 138 V. Earl of Shrewsbury, 322 Howe V. Hall, 107 Howell V. George, 480 V. Howell, 376 Howkins v. Jackson, 513, 546 Howland v. Norris, 22, 393, 419, 420, 421 Howley v. Cooke, 172 Hudson, Ex parte, 233 V. Beauchamp, 121, 167 Hughes, Ex parte, 137, 147, 148, 374, 377 Hughes V. Gamer, 349,''426, 431 V. Garth, 431 V. Howard, 314 i\ Jones, 419 V. Seanor, 255, 457, 508 V. Wells, 529 Huguenin v. Basley, 158, 166 Huish's Charity, 304 Hulett's Case, 363 Humber Ironworks, &c., Co., Ee, 316, 381 Hume V. Pocock, 43, 416 Humphrey v. Olver, 302, 450, 452 Humphreys v. Green, 106 V. Pensam, 196, 240 Humphries v. Home, 501, 546 Hunsden v. Cheyney, 101 Hunt, Ec, 544 V. Elnies, 267, 268 • V. Hooper, 201 V. Hort, 543 V. Matthews, 284, 311 Hunter v. Atkins, 125, 151, 164 V. Walters, 5, 11, 108, ] 17, 248, 259, 351, 359, 454 Hutchinson v. Bell, 406 r. Morley, 45 Hutton V. Cruttwell, 217, 218, 219 V. Rossiter, 15, 29, 396 Huxtable, Ex juirte, 200 Hyde v. Bulmer, 412, 428 V. Warren, 253 V. Wliite, 290 Hylton V. Hylton, 153, 154 Ibbotson v. Rhodes, 101, 102 Imperial, &c., Assicuratrice of Trieste V. Funder, 466 Mercantile Credit Association V. Coleman, 132, 379, 446, 463 Imray v. Magnay, 201 Ind's Case, 502 Inglis V. Lumsden, 394 Ingram v. Thorp, 43, 44, 373, 395, 442 Inman v. Inman, 123 Innes v. Jackson, 505 V. Sayer, 529 lonides v. Pacific Insurance Co., 33, 89, 516 Ireland, Bank of, v. Trustees of Evans' Charities, 116, 117 Irlam v. IMidland Railway Co., 429 Irnham, Lord, v. Child, 506, 507 Irvine v. Kirkpatrick, 12, 37, 43, 57, 59, 60, 95, 425 Isherwood, Ex pxiTte, 234 Ives V. Dodgson, 539, 540 V. Medcalfe, 325 Izard, Ex parte, 218, 220 TABLE OF CASES. XXI Izon V. Gorton, 69 Jackman v. Mitchell, 372, 460 Jackson, Ex parte, 234 V. Jackson, 301 V. liing, 121 V. Eowe, 248, 262, 269, 356, 431 Jacobs V. Richards, 120, 121 James, Ex imrte, 128, 129, 130, 131, 138, 142, 473 V. Litchfield, 256 V. Whithread, 229 Jameson v. Stein, 34, 35, 57, 396 Jarrett v. Aldham, 331, 332 Jarvis, Ex parte, 232 V. Duke, 15 Jay, Ex parte, 203, 235 • V. Richardson, 246, 250 Jefferys v. Fairs, 483 V. Jefferys, 186, 536 Jegon V. Vivian, 412, 526 Jendwine v. Slade, 43 Jenkins v. Jones, 356 V. Keymis, 243 Jenkyn v. Vaughan, 180, 181, 182 Jenner v. Jenner, 155, 157 Jennings v. Bond, 363 V. Broughton, 14, 15, 34, 35, 38, 39, 42, 43, 66, 335, 342, 448, 458 V. Jennings, 543 Jerrard v. Saunders, 349 Jewson V. Moulton, 189 Johnson v. Fesemeyer, 144, 224 V. Gallagher, 123 V. Legard, 185, 238 V. Osenton, 202 V. Smart, 43, 417 Johnston v. Renton, 115, 354, 459 & Co. V. Orr Ewing, 413 Jones V. Badley, 319 V. Bennett, 326 V. Bygott, 191, 240, 241, 274 V. Caswell, 290 V. Clifford, 469 V. Croucher, 244 V. Godrich, 295, 299, 300 V. Gordon, 231, 247 V. Harber, 218 V. Harris, 206 V. Jones, 118 V. Just, 70, 71 V. Kearney, 123, 245 V. Keene, 62 V. Marsh, 189 . r. Martin, 283 v. Powles, 12, 353, 354, 356 Jones V. Price, 141 V. Provincial Insurance Co., 90, 91, 92 V. Ricketts, 461 V. Rimmer, 23, 39, 54, 248, 491 V. Roberts, 142 V. Smith, 247, 248, 249, 250, 254, 256, 261, 262, 263, 265, 266, 269 V. Stanlev, 358 V. Thomas, 142, 143, 144 V. Tripp, 143 V. Turberville, 337 V. Williams, 247, 251, 266 V. Wright, 71 Jorden v. Money, 48, 49 Joyce V. De Moleyns, 349, 359 V. Hutton, 189 Jojaies V. Stathara, 482, 495 Judd V. Green, 171, 192 Jury V. Stoker, 79, 80, 410, 411 Kain v. Old, 30, 62 Kay V. Crook, 49, 396 V. Smith, 453 Keat V. Allen, 288 Keate v. Philipps, 362 Keates v. Lord Cadogan, 64, 69 Keech v. Sandford, 128 Kelly V. Solari, 476, 520, 521 & Co., Ex parte, 227, 228 Kelsall V. Bennett, 431 Kelson v. Kelson, 191, 239 Kemp V. Rose, 325 Kempson v. Ashbee, 155, 331, 341, 346, 347 Kendall, Ex parte, 504 V. Wood, 520 Kennard v. Kennard, 530, 531 Kennedy v. Daly, 356 V. Green, 248, 257, 273, 277, 432 V. Panama, &c., Co., 19, 20, 490 Kennell v. Abliott, 400, 541 Kenney v. Browne, 103, 263, 375 Kensington, Lord, v. Bouverie, 375 Kent V. Freehold Land and Brick- making Co., 41, 48, 76, 342, 370, 380, 385 V. Riley, 179 Ker V. Lord Dungannon, 259, 356 Kettlewell v. Watson, 247, 270, 272, 274, 276, 279, 280, 355 Kevan, Ex parte, 224, 225, 226, 227 V. Crawford, 196 Kidney v. Coussmaker, 545 Killick I'. Gray, 500, 529 Kilner, Ex parte, 219, 220 XXll TABLE OF CASES. Kimber v. Barber, 88, 148, 37 G Kiug, Ex parte, 215, 21G, 219, 221 V. Anderson, 12(), 453 V. Hamilton, 415 V. Hamlet, 289, 290, 373 V. King, 155 • v. King-Hai'nian, 502 V. Savery, 372 V. Wilson, 40, 420 King's Case, 316, 381 Kingdon v. Tagert, 52 Kingsford v. Meiiy, 7, 370 Kinleside v. Harrison, 298 Kintrea, Ex parte, 315, 380, 428, 437 Kirk V. Clark, 242 V. Unwin, 493 Kirkwood v. Thompson, 138 Kirwan v. Cullen, 166 Kisch V. Central Venezuela Railway Co., 35, 40, 41, 43, 46, 59, 266, 342, 343 Kitchin v. Hawking, 473 Knatchbull v. Grueber, 24, 421 Knight V. Bowyer, 141, 248, 254, 255, 257, 338, 345 V. Hunt, 231 V. Marjoribanks, 39, 60, 129, 130, 138, 160 Knights V. Whiffen, 97 Knowles v. Houghton, 442 Knox V. Gye, 153, 338 V. Symmonds, 537 Lacet, Ex 'parte, 128, 129,^131, 137, 377 V. Ingle, 365 Lachlan v. Reynolds, 392, 421 Lackersteen v. Lackersteen, 500 Luidlow V. Organ, 61 Laing v. Fidgeon, 71 Laird v. Birkenhead Railway Co., 100, 104, 106 Lamare v. Dixon, 418 Laml) V. Bruce, 493 Lambert v. Lambert, 166 Lamlee v. Hanman, 283 Lanqjlugh v. Lamplugh, 159 Lancaster v. Evors, 432 Lance v. Norman, 284 Lane v. Jackson, 281 V. Page, 301, 309 Langdon v. Goole, 494 Langham v. East Wheal, &c.. Mining Co., 41, 342 Langley v. Fisher, 400, 458 Langridge v. Levy, 436 Langstaffer. Taylor, 146 Laiisdowne i'. Lansdowne, 470 Larch in r. North AVestern Deposit Bank, 208 Larking, Ex ^mrte, 124, 127, 128,' 131, 132, 133, 147 Lassence v. Tierney, 186 Latimer v. Batson, 201 Latouche v. Lord Dunsany, 279 Lavender v. Blackstone, 243 Laver v. Fielder, 51, 396 Law V. Law, 287, 288, 440 Lawless v. Mansfield, 140, 142, 143 Lawley v. Hooj^er, 1, 373 Lawrence v. Rowley, 457 Lawrence's Case, 24, 40, 278, 335, 342 Lawrenson v. Butler, 529 Lawton v. Campion, 475, 514 Layard v. Maud, 113 Leach ■;;. Mullett, 24 Leakins v. Clissell, 44, 45 Leather Cloth Co. v. American Leather Cloth Co., 462 Leddell v. Macdougall, 16 Lee V. Angas, 10 ~ V. Glutton, 280 - V. Fernie, 306 - V. Hart, 217 - V. Jones, 53, 92, 93 - V. Matthews, 190 Leeds, Duke of, v. Lord Amherst, 100, 332, 334, 338, 346 Lees V. Nuttall, 148 Legge V. Croker, 22, 53, 522 Leifchild's Case, 428 Leigh V. Lloyd, 245, 250 Lemesurier v. Vaughan, 516 Lempriere v. Lange, 122, 447 Le Neve v. Le Neve, 271, 279 Lenzberg's Policy, Re, 231 Leonard v. Leonard, 94, 95, 475, 514 Leslie v. Baillie, 472 V. Tompson, 22, 25, 42, 422, 424, 482 Lester v. Garland, 235 Lenty v. Hillas, 477, 497, 525, 545 Levy V. Creighton, 191, 239 Lewes v. Morgan, 146 Lewis, Ex parte, 204, 377 V. Bond, 252 V. Hillman, 130, 142, 148 V. Jones, 52 V. Pead, 164 V. Rees, 237, 238, 239 Leyland v. Illingworth, 42, 45, 393, 418, 458 Liebman v. Harcourt, 336 Life Association of Scotland v. Siddall, 332, 333, 337, 339, 345 Liygins V. Inge, 104 Lightfoot V. Heron, 122 Liliie V. Legh, 105 Lincoln v. Wright, 105, 106 Lindeuau v. Desborough, 90, 92 TABLE OF CASES. XXUl Liiulon V. Sharp, 201 Lindsay v. Gibbs, 99 Lindsey Petroleum Co. v. Hurd, 48, 87, 339, 344, 366, 372, 373, 430, 449 Linehan v. Cotter, 24, 421 Lingood v. Crouclier, 324 Lishman v. Northern Maritime Assur- ance Co., 90 Lister v. Hodgson, 172, 507, 508 V. Turner, 238, 242 Livesey v. Livesey, 473 Lleweilin v. Cobbold, 284 V. Mackworth, 450 Lloyd, Re, 234, Addenda V. Attwood, 95, 112, 183, 184, 271, 331, 333, 353, 365 V. Banks, 118 V. Brewster, 391 V. Clarke, 166 V. Passingham, 94, 349, 353 Llynvi Co. v. Brogden, 412, 527 Load V. Green, 50, 73, 366, 387 Loader v. Clark, 284, 286, 334, 458 Locke V. Prescott, 250 Lotfus V. Maw, 50, 51 Lomas v. Wright, 183 Lomax v. Buxton, 215, 218, 219, 221 V. Ripley, 319 London Assiu'ance v. Mansel, 33, 59, 91 Bank of, v. Tyrrell, 376, 378, 379 and Birmingham Railway Co. V. WintL-r, 495 and County Banking Co. v. Ratcliffe, 264, 365 and South Western Bank v. Wentworth, 108, 110 and South Western Railway Co. V. Blackmore, 332 Londonderry and Enniskillen Railway Co. V. Leishman, 324 Long V. Donegan, 173 Longford, Lord, v. Purdon, 300, 301 Longinate v. Ledger, 121, 124, 167, 373 Lonsdale, Lord, v. Littledale, 324 Loughnan v. Barry, 36 Louisiana, Bank of, v. National Bank of New Orleans, 97 Lovell V. Hicks, 57, 83, 335, 373, 378 Loveridge v. Cooper, 118 Lovesy v. Smith, 398 Lovick V. Crowder, 201 Lowndes v. Lane, .38, 39, 42, 53, 55 Lowther v. Carlton, 355 V. Lowther, 147 Loxley v. Heath, 50, 51 Lucas V. Worswick, 476 Lucena v. Lucena, 531 Lucy, Ex parte, 475 Luftr. Lord, 129, 448, 458 Lund V. Blanshard, 435, 443 Lush's Trust, Re, 102, 124 Luttrell V. Olmius, 310 Lyddon v. Moss, 140, 141, 142, 143, 334, 338, 339, 344 Lyde v. Mynn, 290 Lynch v. Lynch, 188 Lyon V. Home, 159, 166, 331, 460 Lysney v. Selby, 37, 39, 40, 42, 45 Maber v. Hobbs, 285 M'Alpine v. Swift, 524, 546 Macarthy v. Decaix, 468, 470, 476 M'Blair v. Gibbes, 442 Macbride v. Lindsay, 401 Macbryde v. Eykyn, 250 M'Bryde v. Weekes, 335 M'Burnie, Ex imrte, 184, 195 Maccabe v. Hussey, 146 M'Caskie v. Mackay, 49, 106 M'Cormack v. M'Cormack, 501, 508 M'Cormick v. Grogan, 300, 31 1, 401, 450 M'Culloch V. Gregory, 24, 55, 26(5, 379, 392 M'Diarmid v. M'Diarmid, 162, 167 Macdonald v. Law Union and Life Insurance Co., 33 V. Lillie, 145 V. Macdonald, 344 M'Donnell v. White, 345 M'Ewan v. West London Wharves, &c., Co., 428 Macgowan v. Dyer, 407 M'Hattie v. Wood, 206 Mackay, Ex ^Kirte, 202 V. Commercial Bank of New Brunswick, 82, 83, 408, 409, 428 V. Douglas, 178, 182, 453 Mackay's Case, 133, 147 M'Kechnie v. Vaughan, 537 Mackellar v. Wallace, 95 M'Kenzie v. Coulson, 492, 498, 499, 501 • V. Hesketh, 520 M'Keogh V. M'Keogh, 286 M'Kewan v. Sanderson, 231 ]M'Kinnell v. Robinson, 437 Maclure v. Ripley, 59 Macmahon v. M'Elroy, 426 M'Neill V. Cahill, 164, 232, 283 Macneill's Case, 343, 385 M'Pherson v. Watt, 139, 142, 148 M'Queen v. Farquhar, 263, 356, 450, 460 INlacreth v. Symons, 245 Maddeford v. Austwick, 95, 152, 153 Madeley v. Booth, 22, 25, 420, 421, 422 Maden v. Veevers, 334 Madrid Bank, Re, 59 Magee v. Lovell, 516 XXIV TABLE OF CASES. Magennis v. Fallon, 420, 421 Maitland v. Backhoiise, 154, 246, 247 V. Irving, 154, 264 Maiden v. Menill, 467, 513, 524, 525 Ma]et, Re, 508 Malins v. Freeman, 481, 547 !Mallalieu v. Hodgson, 456 Malmesburj' v. Maliuesbury, 496, 525 Malpas V. Ackland, 250 Man V. Ward, 449, 450 Manby v. Bewicke, 121 Mangles V. Dixon, 100, 101, 246, 363 V. Grand Dock Colliery Co., 329 Manning v. Lechmere, 449 Manningford v. Tolenian, 362 Manser V. Back, 481, 483, 496, 516, 547 Manser's Case, 467 Manson v. Thacker, 523 March v. Lee, 365 Mare v. Malachy, 445 Margetson v. Wright, 66 Marjoribanks v. Hovenden, 270, 271 Marker v. Marker, 102 Marlow v. Orgill, 198 Marsden v. Meadows, 202 Marsden's Trust, Re, 302, 305, 306, 451 Marshall v. Berridge, 517 V. Collett, 467, 513 V. Lord Granville, 190 V. Sladden, 463 Martin v. Cotter, 39, 252, 253, 266, 393, 418, 419 V. Martin, 237 V. Mitchell, 415 V. ^lorgan, 63 ?;. Pycroft,122, 423, 495 v. Sedgwick, 118 Martindale w. Booth, 201 V. Falkner, 467 Martinez v. Cooper, 112 Martinson v. Clowes, 138, 139 Mason v. Armitage, 293 V. Harris, 434 Masson v. Bovet, 371 Masters v. Il^berson, 406 Mather v. Fraser, 213 Mathias v. Yetts, 444 Matthew v. Brise, 154, 341 ]\Iatthews, Ex parte, 234 Matthie v. Edward, 150 Matiirin v. Tredennick, 48, 371, 372, 378, 394 Mauleverer v. Hawxby, 493 Maundrell v. Maundrell, 349 Maunsell v. Hedges, 49, 50, 51, 57, 396 V. Maunsell, 398, 455 Maxfield v. Burton, 257, 269, 270, 351, 356, 362 Slay V. Chapman, 370 Maynard r, Eaton, 385 Maynard v. Moseley, 478 Meadows v. IMeadows, 524, 545, 546 . Medbiiry v. Watson, 48 Medd owcroft i;. Hugaenin, 327 Medwin v. Sandham, 529 Melbourne Banking Co. v. Brougham, 138 Mellers v. Duke of Devonshire, 467 Mellish V. Mellish, 154, 538 " V. Motteux, 66 Mercantile Steamship Co. v. Tyser, 89 Mercer v. Peterson, 218, 219 Meredith v. Saunders, 160, 162 Merewether v. Shaw, 20, 29, 34 Mersey, &c.. Steel Co. v. Naylor, 384 Messina v. Petrocchino, 327, 536 Mestaer v. Gillespie, 311, 533 Metcalfe, Re, 166 V. Pulvertoft, 238 Metcalfe's Case, 133 ]\Ietropolitan Bank v. Heiron, 345 Meux's Executors' Case, 84 Michael v. Michael, 454 Middlecombe v. Marlow, 189 Middleton v. Middleton, 159, 310 V. Pollock, 184, 214, 215 V. Sherburne, 159, 166 Midland Great Western Railway Co. of Ireland v. Johnson, 467 Mildmay v. Hungerford, 467, 470 Miles V. Langley, 256 Mill V. Hill, 279, 374 Millar v. Craig, 524 Millard's Case, 431 Miller v. Cook, 455, 459 Mills V. Bowyer's Society, 537, 538 V. Harewood, 331 Millward v. Littlewood, 383, 384 Milner v. Milner, 538 Mince y. Peters, 442 Minshall v. Lloyd, 201 Mitchell V. Homfray, 127, 166, 332 V. Lajxage, 485 V. Steward, 262 V. Thomas, 295, 296 Mixer's Case, 85 Mocatta v. Murgatroyd, 102, 260 Mody V. Gray, 72 Moens v. Hey worth, 17, 29, 33, 402 Mold V. Wheatcroft, 100 Molineux, Ex parte, 138 Molony v. Kernan, 126, 148, 258, 357, 431 V. L'Estrange, 141, 341 Molton V. Camroux, 120, 122 Monckton v. Braddell, 349,350, 351,353, 399 Monro v. Taylor, 496, 512 Montefiore v. Browne, 249, 251 Montetiori v. Montefiori, 395 TABLE OF CASES. XXV Montesquieu v. Sandys, 141, 144, 426, 459 Moodie i\ Reid, 529 Moore v. Frowd, 128 ■ V. Greene, 427 V. Jervis, 363 V. Mayhow, 358, 431 V. Moore, 472 V. Prance, 141, 453, 455, 463 V. Kycault, 189 and De la Torres' Case, 76, 396 Moore's Banking Co., Ex parte, 212 Mordue v. Palmer, 538 Morecock v. Dickens, 278 Moreland v. Richardson, 256 Morewood v. South Yorkshire Railway Co., 192, 207, 208 Morgan, Ex parte, 138, 377 • V. Bruen, 460 V. Evans, 64, 143 V. Hiygins, 141, 142 V. Lewes, 141, 143, 344 • V. Mather, 537 V. Minett, 145 Morland v. Cook, 265 Ex parte, 131 Morley v. Attenborough, 69, 70 V. Clavering, 253, 269 V. Rennoldson, 545 ]\Iorpliett V. Jones, 105 Morrell v. Morrell, 539 Morrett v. Paske, 365 Morris v. Clarkson, 283 V. Li vie, 363 V. M'Culloch, 288 Morrison v. Universal Marine Insurance Association, 382, 383, 385 Morse V. Royal, 129, 131, 161, 162, 330 Mortimer v. Capper, 512 V. Orchard, 547 V. Shortall, 498, 500, 545, 546 Mortlock V. Buller, 483, 519 Moseley v. Simpson, 324 Moss V. Bainbrigge, 143, 144 V. Mersey Docks, &c., Co., 521 Mostyn v. West Mostyn Colliery Co., 66 Motteux V. London Assurance Co., 503 Moulson, Re, 205 Mountain v. Bennett, 296 Mowatt V. Blake, 448 Moxey v. Bigwood, 546 Moxon V. Payne, 94, 125, 331, 448, 456 Moyce v. Newington, 5, 8, 9 Muckleston v. Brown, 318 Mulhallen v. Marum, 148, 154, 155,330, 374, 376, 378, 458 Mullens v. Miller, 82, 83, 418, 422 Mullett V. Mason, 412 Mullins V. Guilfoyle, 185, 188, 196, 241 Mullins V. Howell, 535 Mulvany v. Dillon, 131 Mumford v. Stohwasser, 245, 255, 351 Mundy v. JoUiffe, 105 Murgatroyd's Case, 316 j\lurphy. Ex I'xirte, 235 Re, 543 V. O'Shea, 148, 375 Murray v. M'Kenzie, 206 V. Mann, 17, 391, 449 V. Palmer, 160, 162. 164, 330, 339, 346, 348, 374, 375, 379 V. Parker, 546 V. Pinkett, 227, 363 Mushet's Case, 316 Mutton, Ex parte, 204, 218 Mycock V. Beatson, 380 Myers v. Watson, 415, 417, 423, 458 Nagle v, Baylor, 122, 334 Nanney v. Williams, 145, 310 Nantes v. Corrock, 183 Nantyglo, &c.. Ironworks Co. v Grave, 133 Nash V. Ash, 442 National Assurance Association, Re, 252 National Exchange Co. v. Drew, 39, 43, 57, 58, 83_, 84, 85, 86, 425 National Life Assurance and Investment Association, Re, 248, 249 National Mercantile Bank, Ex parte, 208, 210, 211 Naylor v. Wynch, 467, 468, 475, 514, ' 546 Neale v. Day, 176, 199 V. Neale, 475, 514 Neap V. Abbott, 516, 547 Neate v. Ball, 390 Nedby v. Nedby, 166 Neesom v. Clarkson, 250, 251, 209, 346, 374, 375 Nelson v. Duncombe, 120 V. Stocker, 37, 38, 40 Nelthorpe v. Holgate, 48, 64, 87, 253, 256, 423 V. Pennyman, 142, 377 Nesbitt V. Berridge, 146, 429, 462 V. Tredennick, 168 Nevill V. Snelling, 172, 459 Neville v. Wilkinson, 283, 395 New Brunswick, &c.. Railway Co. v. Conybeare, 35, 38, 41, 43, 53, 82, 84, 85, 86, 425, 458 New Brunswick, &c., Railway Co. v. Muggeridge, 59, 73, 416 New Sombrero Phosphate Co. v. Er- langer, 126, 137, 249, 376, 390, 442, 446 New Zealand Co., Re, 502 XXVI TABLE OF CASES. Nowall V. Tumlinson, 521 Newburgh v. Nuwljur^h, 544 Newman v. Payne, 140, 142, 145, 373 V. Piercy, 539 Newstead v. Searles, 186 Newton v. Newton, 364 Niclioll V. Jones, 124 Nicliolls V. Leeson, 472 V. Nicholls, 159, 160 V. Pinner, 72 V. Eoe, 323, 324 Nichols V. Chalie, 324 V. Hancock, 326 V. Pinner, 451 Nicholson v. Cooper, 207 V. Hooper, 101, 102 Nicol V. Vaughan, 151 Nicoll V. Chambers, 25 V. Fleming, 1 Nicoll's Case, 35, 36, 57, 82, 84, 85, 86, 356, 394 Niell V. Morley, 120 Nixon V. Hamilton, 165, 279 Noble V. Adams, 73 Norcntt V. Dodd, 183 Norfolk, Duke of, v. Worthy, 23, 42 North British Insurance Co. v. Lloyd, 92 North Western Bank, Ex parte, 202 Norton, Ex parte, 226 V. Eelly, 166 Norway v. Rowe, 335, 348 Nott V. Hill, 161, 169 Nottidge V. Prince, 166 Nunn V. Fabian, 100, 106, 107 Nunn's Trust, Re, 539 Oakes v. Turquand, 5, 6, 58, 75, 82, 84, 342, 370, 391 O'Brien v. Lewis, 145 Ochsenbein v. Papelier, 327 Odell, Ex 2)artc, 209 O'Fay V. Burke, 100, 103 Ogilvie V. Currie, 335, 342, 343, 410 V. Jeaffreson, 354, 256, 373 Okill V. Whittaker, 513, 546 Oldham v. Lichfield, 311 Oldin V. Sambourn, 154 Olivant v. Bayley, 71, 484 Oliver, Ex parte, 232 Olliver v. Court, 338, 341 V. King, 99, 101, 176 O'Loghlen v. O'Callaghun, 472 O'Neil V. Hamil, 154, 346 Onions v. Tyrer, 544 Onslow V. Corrie, 314 Oriental Banking Co. v. Coleman, 221 Ormes v. Beadel, 326, 332 Ormrod v. Huth, 18, 402 O'Rorke v. Bolingbroke, 170, 171, 290, 453 Orr V. Union Bank of Scotland, 110 Ortigosa v. Brown, 116, 350 Osborne v. Williams, 288, 322, 440 Osborne's Case, 492 Osmond v. Fitzroy, 121, 167 Overton v. Bannister, 447 Ovey V. Leighton, 432 Owen V. Body, 228 V. Human, 92, 93, 246, 247, 451 V. Owen, 239 Oxwick V. Brockett, 525 Oxwith V, Plummer, 257 Page, Re, 233 V. Home, 166 Pain V. Coombs 105 Paine v. Hall, 300, 311, 318 Painter v. Newby, 422, 424 Palmer v. Neave, 282 V. Wheeler, 250, 301, 334, 440 Panama Telegraph Co. v. India Rubber Telegraph Works Co., 151,^387, 388 Pares v. Pares, 450 Parfit V. Jepson, 291, 292 V. Lawless, 298, 299, 300, 450 Parker v. Bloxam, 346 V. Carter, 187, 188, 237, 358 V. Clarke, 160, 359 V. M'Kenna, 147, 148, 149, 150, 461 V. Palmer, 72 V. Taswell, 506, 545 V. Whyte, 252, 26S, 356 Parkes v. White, 139 Parkinson v. Hanbury, 130, 375, 376 V. Lee, 69, 70 Parnell v. Tyler, 146 Parr v. Eliason, 191 V. Jewell, 448 V. Lovegrove, 458, 461 Parsons v. Parsons, 539 Partridge v. Stevens, 475 Paske V. Ollatt, 294, 295, 299 Pasley v. Freeman, 3, 31, 45, 402, 406 Patch V. Ward, 399 Patent File Co., Re, Ex parte White, 381, 464 Patman v. Harland, 250, 258, 263, 266 Paul V. Paul, 174 Paxton V. Pophara, 456 Payne, Ex parte, 215, 221, 315 V. Mortimer, 183 Payne's Case, 380 Pawles' Case, 343 Peacock v. Evans, 373 Pearson v. Benson, 141 Ex parte, 222 TABLE OF CASES. XXVll Pearson, Re, 182, 235 Pearson's Case, 133 Pease v. Gloaliec, 7 Peek V. Gurnev, 5, 17, 35, 54, 55, 57, 58, 59, 75, 340,^395, 396, 403, 410, 426, 435, 436, 437, 442, 444, 446, 459, 462 Peel V. , 166 V. Loggon, 159 Pelly V. Basconibe, 375 Peiiiber v. Mather, 457 Pennell v. Reynolds, 215, 217 Pennington v. Beecliey, 432 Penny v. Watts, 262 Pentelow's Case, 366 Perfect v. Lane, 42 Perkes, Ex parte, 137 Perrins v. Marine Insurance Co., 33 Perry v. Holl, 246, 263, 268, 271, 277 Perry Herrick v. Attwood, 108, 112, 196, 237, 249, 260 Persse v. Persse, 515 Persse's Case, 385 Peter v. Nicolls, 238 Peto V. Hammond, 251, 258, 260, 357 Petre v. Espinasse, 176 Petts, Re, 541 Peyton v. Bladwell, 282, 288 Plielps V. White, 403, 406, 422, 523 Philips V. Chamberlaine, 538 V. Evans, 537 V. Foxhall, 93 V. Homfray, 65, 412, 415 V. MuUings, 172, 173, 454 V. Philipps, 359, 364, 431, 432 Philipps' Case, 381 Philippson v. Lord Egremont, 326 Philipson v. Kerry, 508, 546 Philpotts V. Philpotts, 438 Philps V. Hornstedt, 221, 222 Phipps V. Tanner, 492 Phosphate Sewage Co. v. Hartmont, 126, 147, 371, 376, 434, 443, 446, 460, 463 Pickard v. Marriage, 204, 205 V. Sears, 96 Pickering v. Dowson, 38, 62 V. Pickering, 94, 95, 137, 475, 514 V. Lord Stamford, 338 Pickett V. Loggon, 159, 162, 314, 373, 376, 400 Pickles V. Pickles, 450, 451 Pickstock I'. Lyster, 214, 228 Pidcock V. Bishop, 93 Piers V Piers, 357 Piggott V. Penrice, 310, 534 V. Stratton, 36, 46, 49, 97, 414 Pike V. Vigers, 37, 450 Pilcher v. Rawlins, 349, 350, 351, 352 PiUiug V. Armitage, 103, 105, 457 Pillmore v. Hood, 62, 325, 406 Pim V. Insall, 236 Pince V. Beattie, 140 Pinkett v. Wright, 363 Pisani v Atty.-Genl. of Gibraltar, 143 Pitcher v. Rigby, 143 Planche v. Colburn, 389 Platamone v. Staple, 438 Piatt V. Bromage, 471 Pledge V. Buss, 462 Plenderleath v. Eraser, 142 Plews and Middleton, Re, 325 Plumb V. Fluitt, 245, 247, 250 Plumer v. Gregory, 445, 446 Podmore v. Gunning, 311, 400 Polhill V. Walter, 17, 58, 402 Poole V. Shergold, 419 Pooley V. Brown, 467 V. Quilter, 137 Pope V. Garland, 41, 54, 252, 253, 266 269, 419 V. Wray, 521 Popham V. Brooke, 62 Popplewell, Ex parte, 208, 209, 211 Portarlington, Lord, v. Soulby, 432 Portman, Lord, v. Mill, 25, 420 Portmore, Lord, v. Morris, 506, 547 Post V. Marsh, 424 Pott V. Todhunter, 191 Potts V. Surr, 155, 157, 331, 341 Poulson V. Wellington, 284, 531 Powell V. Dillon, 254, 255 V. Doubble, 23 V. Lovegrove, 105 V. Smith, 470, 471 V. Thomas, 100 Powles V. Page, 277 Prees v. Coke, 161, 162, 452 Prendergast v. Turton, 335, 341, 342, 348 Prevostv. Gratz, 131 Price V. Berrington, 120, 449 V. Brice, 545 r. Jenkins, 189, 190, 197, 239 V. Jones, 537 V. Ley, 501, 546 V. Macaulay, 22, 29, 35, 39, 40, 415, 416, 419 V. North, 23, 422 V. Salusbury, 105 Priddy v. Rose, 363 Prideaux v. Lonsdale, 137, 155, 158, 162, 167, 286 Prince of Wales Assurance Co. v. Palmer, 452 Pritchard v. Merchants' Life Assurance Society, 91, 510 Pritt y. Clay, 511, 514, 522 Proby !'. Landor, 529 Proctor V. Cooper, 269, 279, 282 V. Gregg, 173 XXVlll TABLE OF CASES. Proctor V. Robinson, 140, 166, 341, 444 Pro(lj,'ers v. Langham, 191, 240 Prole V. Soady, 51, 396 Prosser v. Rice, 245 Proudfoot V. Montefiore, 89 Prudham v. Philipp.s, 327 Prvor V. Prvor, 306 Pui^di, Re, 142 Pulsiord V. Richards, 22, 23, 29, 34, 58, 77, 393, 395, 406, 419, 458 Pulvertol't V. Pulvertoft, 238, 245 Punchard v. Tonikins, 279 Purcell V. Macnamara, 146, 330, 341, 373 Purdie v. JNIillett, 164 Purse I'. Snaplin, 538 Pasev V. Desbouverie, 60, 332, 468, 471 Queen v. Aspinall, 320, 426 V. Mayor, &c., of Tewkesbury, 467 V. Saddlers' Co., 326, 367 V. Wooldale, 494 Eadcliffe v. Warrington, 415 Raffles r. Wickleliaus, 517 Railton v. Matthews, 60 Ramsbotham v. Gosden, 495 V. Parker, 141, 159, 164 Ramsden v. Dyson, 85, 100, 102, 103, 105 V. Hylton, 187, 189, 471 Ranee's Case, 318 Rancliffe v. Parkins, 261, 337 Randall v. Errington, 129, 333, 377 V. Newson, 71 V. Willis, 283 Ranger v. Great Western Railway Co., 84 Ranking v. Barnes, 306, 308 Rapp r. Latham, 83 Rashdall v. Ford, 52 Ratclitfe r. Barnard, 112, 260, 267 Raw V. Bote, 101 Rawlins v. Wickham, 5, 15, 21, 29, 35, 39, 40, 41, 269, 366, 442, 461 Raworth v. Marriott, 145 Rawstone v. Parr, 505 Rayne v. Baker, 358 Read v. Hutchinson, 429 . V. Brest, 445 Reader, E.c parte, 227 Redfern v. Brvning, 493, 539 Redgrave v. Hurd, 15, 16, 38 40, 41, 340, 346, 402, 4.30, 449 Redman r. Recbuan, 282 Reech v. Kennigate, 311 Reed, iJx parte, 220 Be, 202, 387 V. Non-is, 149 Reese River Silver Mining Co. v. Smith, 5, 16, 342, 34.5, 370, 434 Reese River Co. v. At well, 181, 199 Reid V. Reid, 301, 305 V. Shergold, 532 Reilly v. Garnett, 280, 281 Reis V. Equitable Assurance Co., 91 Remfrey v. Butler, 72 Rennie v. Young, 103 Eevett V. Harvey, 154, 155 Rex V. Burdett, 450 V. Duchess of Kingston, 327 Reynard v. Spence, 545 Reynell v. Sprye, 12, 26, 35, 36, 39, 41, 440, 447, 456, 468, 475 Rhodes v. Bate, 93, 126, 127, 141, 148, 150, 151, 154, 156, 159, 162, 167, 461 V. Beauvoir, 140, 142, 150 u^ Cooke, 264 Rice V. Gordon, 161 ■ V. Rice, 113, 114, 245, 360, 361, 362 Richards v. Curlewis, 160, 164 V. French, 159, 167 Richardson v. Goss, 390 V. Horton, 236 V. Silvester, 435 V. Smallwood, 180, 181 Riches v. Evans, 228 Richmond v. Tayleur, 4 Rickards v. Atty.-Genl., 175 Eider v. Kidder, 183 Eidgway v. Gray, 25 V. Newstead, 341 V. Sneyd, 512, 546 Ridler v. Ridler, 178, 179, 180 Ridley v. Ridley, 130 Ringo V, Biuns, 150 Rishton v. Cobb, 541 Rivaz V. Gerussi, 89 River's Case, 539 Robarts v. Tucker, ] 10 Roberts v. Croft, 267, 268 V. Roberts, 438 V. Tunstall, 330, 334, 338, 341, 344, 347 V. Williams, 196, 241, 439 Robertson v. Norris, 309 Robinson v. Briggs, 203, 258, 271 V. Collingwood, 209 V. Dickenson, 509 V. M'Donnell, 176 V. Musgrove, 24 V. Rett, 124, 125, 128 r. Ridley, 378 ' r. Lord Vernon, 4, 456 TABLE OF CASES. XXIX Robinson v. Wall, 201 Robsou V. Earl of Devon, 34, 35, 38, 42 V. Flight, 356 Roche V. O'Brien, 287, 334, 514 Rock Portland Cement Co. v. Wilson, 527 Roddv V. Williams, 59, 250, 270, 271, 464 Rodgers v. Marshall, 533, 536 Roe V. Bradshaw, 205 V. GaUiers, 235 Rogers, Ex -parte, 278 V. Hadley, 4, 456 V. Ingram, 469, 472, 473 Rolfe V. Gregory, 13, 126, 346, 399 RoUand v. Hart, 270, 273, 274 Rolph, Ex parte, 210, 211 Ronayne's Estate, Re, 138 Rooke V. Lord Kensington, 494, 497, 498 Rooper iJ. Harrison, 100, 118, 359, 364, 365 Roots V. Snelling, 422 Rorke's Estate, Re, 271, 279 Rosaz, Re, 542 Rosher v. Williams, 197, 198, 238, 239 Ross V. Estates Investment Co., 28, 43, 48, 55, 76, 370, 380, 385 V. Gutteridge, Addenda ■ V. Steele, 154 Rothschild v. Brockman, 147, 148, 378 Routh V. Roublott, 206 Routledge v. Dorrill, 306 Rowley v. Rowlev, 301, 308, 309 Roy V. Duke of Beaufort, 159, 160 Rule-y. Jewell, 341,342 Russell, Ex parte, 182, 200, 233 V. Austwick, 151 V. Hammond, 180 V. Jackson, 300, 311, 319, 452, 453 V. Russell, 326 Sadler v. Lee, 445 Saffron Walden, &c., Society i\ Rayner, 53, 118, 273 Salkeld v. Vernon, 346 Salmon v. Cutts, 330, 334, 459 Salte V. Field, 390 Saltern v. Melhuish, 312 Saltmarshe v. Barrett, 472 Sanderson v. Aston, 93 V. Walker, 130, 131 Sandford v. Handy, 270 Sanford v. Raikes, 543 Sankey v. Alexander, 275 Saunders v. Dehew, 245, 349, 351 Saunderson v. Marr, 122 Savage v. Canning, 368 V. Carroll, 105 Savage v. Foster, 101, 122, 124 V. Taylor, 374 Savery v. King, 141, 155, 157, 330, 333, 346 Sawyer v. Vernon, 1 Saxon Life Assurance Co., Re, 470, 524 Say V. Barwick, 122, 330 - and Sele's Case, 494 Saver v. Sayer, 527, 528, 530, 536 Scattergood v. Sylvester, 9 Schackleton v. Sutclifte, 39, 42 Schloss V. Stiebel, 541 Schneider v. Heath, 62, 67 Scholefield v. Lockwood, 493, 496 V. Templar, 12, 24, 470, 524 Scholey v. Central Railway of Vene- 7,uela, .3.34 Scholtield v. Lockwood, 496 Schroeder v. Mendl, 402 Scott V. Dixon, 436 V. Dunbar, 149, 225 V. Hanson, 43, 44, 45, 417, 420 V. Littledale, 485, 518 V. Scott, 282, 514 and Young, Ex parte, 322 Scroggs V. Scroggs, 308 Seal V. Claridge, 204 Seaman v. Vawdrey, 68 Seddon v. Connell, 394, 443, 445 Segrave v. Kirwan, 145, 310, 4U0 Selby V. Jackson, 120 Sellack v. Harris, 311 Sells V. Sells, 498 Selsey, Lord, v. Rhoades, 148, 334, 340 Selway v. Fogg, 429 Selwood V. Mildmay, 539, 540, 543, 544 Sepaliuo v. Twitty, 312 Sercombe v. Saunders, 167, 264 Serle, Ex parte, 137 Seymour v. Lucas, 235 Shackleton v. Sutcliffe, 23, 393, 422, 461 Shand v. Du Buisson, 327, 399 V. Grant, 521 Shannon v. Bradstreet, 99, 336, 527, 530, 533 Sharp V. Arbuthnot, 257 V. Cosseratt, 235 V. Leach, 166, 346, 347, 378, 455 V. Taylor, 442 Sharps v. Birch, 205 V. Foy, 102, 124, 276, 277 V. San Paulo Railway Co., 425 Sharpies v. Adams, 349, 351 Sharpley v. Louth and East Coast Rail- way Co., 334, 342, 382 Shaw V. Bunny, 138 V. Foster, 250 V. Jeffery, 13 V. Neale, 142, 281 r. Thackeray, 122 XXX Table of cases. Sheard v. Venables, 42, 418 Shears v. Jacol), 207 Shedden v. Patrick, 326, 327 Sheen, Ex parte, 220 Slieffield Nickel Co. v. Umvin, 13 SlietfiekVs Case, 382 Slieldon v. Cox, 245, 279 Shepherd v. Pylms, 71 V. Rain, 67 V. Sharpe, 64 Sheppard v. Oxenford, 442 V. Union Bank, 8 Sheridan v. Macartney, 203 Sherwin v. Shakespeare, 375 Sherwood v. Eobbins, 25 Sliiel.s, Ex parte, 385 Shillibeer v. Jarvis, 105- Sliip V. Crosskill, 24, 27, 426 Shirley v. Stratton, 422, 483 Shrewsbury and Birmingham Railway Co. V. North "Western Railway Co., 482 Shropshire Union Canal Co. v, Reg., 114, 115, 116, 351, 360 Sibbald V. Hill, .57 Sibbering v. Earl of Balcarres, 337, 338 Sidny v. Ranger, 142, 377 Sillem V. Thornton, 33, 91 Simm V, Anglo-American Telegraph Co., 110 Simpson v. Lord Howden, 329 V. Vaughan. 503 Simpson's Executors' Case, 316 Sims V. Marryatt, 70 Sinclair v. Wilson, 227 Singer Machine Manufacturing Co. v. Loog, 413 V. Wilson, 426 Sismey v. Eley, 441 Skarff V. Soulby, 178 Skillbeck v. Hilton, 332 Skinner, Ex parte, 140 Skottowe V. AVilliams, 332, 338, 348 Slater v. Nolan, 120, 165, 166, 167, 444, 456 Slater's Case, 315 Trust, Re, 170 Slim V. Croucher, 15, 29, 373, 378, 396, 458 Sluysken v. Hunter, 312 Small V. Attwood, 34, 35, 335, 379, 425, 435 V. Currie, 92 Smedley v. Varley, 137 Smee v. Smee, 294 Smidt V. Tiden, 517 Smith V. Adkins, 531 V. Ashton, 533 V. Bakes, 344 V. Bank of Scotland, 64, 92, 93 Smith V. Bromley, 439 V. Bruning, 287 V. Cannan, 215, 216 V. Capron, 252, 253 V. Chadwick, 14, 403, 404, 405, 448 V. Cheese, 208 V. Cherrill, 185, 186 V. Chichester, 364 V. Clay, 337, 338 V. Countryman, 47 V. Crabtree, 539 V. CuflF, 231 V. Day, 535 V. Evans, 109 V. Garland, 238 V. Harrison, 42, 66 V. Hayes, 430 V. Hughes, 64, 72, 485, 486, 487, 488, 517,518, 519 V. Hurst, 182, 228, 229, 231, 243 V. Iliffe, 398, 457, 497, 500, 501 V. Jeffryes, 517 V. Kay, 3, 12, 35, 36, 57, 58, 126, 158,159,162,167,331,425,448 V. Maitland, 540 V. Marrable, 69 V. Parkes, 363 V. Pilgrim, 224, 226 V. Pincombe, 95 V. Reese River Silver Mining Co., 261, 266 V. Tatton, 180, 192, 194 V. Wheatcroft, 485, 496 V. Whitmore, 323, 324, 325, 326 Smith's Case, 28, 34, 40, 41, 73 Smithson v. Powell, 25 Smout V. Ilbery, 16 Smyth V. Griffin, 441 Snook V. Watts, 120 Snow's Case, 380 Solomon v. Honywood, 66 Somersetshire Canal Co. v. Harcourt, 100 Southam, Ex parte, 209 South Sea Co. v. Bumpstead, 4, 325 Spackman v. Timbrell, 236 Spackman's Case, 2, 316, 331, 333, 346 Spaight V. CoAvne, 93, 271, 357 Spain, Queen of, v. Parr, 149 Spencer, Be, 397 V. Clarke, 113, 399 V. Slater, 229 V. Topham, 141 V. Ward, 539 Spettigue v. Carpenter, 325 Spirett V. Willows, 180, 181 Spring V. Pride, 131 Spuniier v. Walsh, 252, 253 Spyve V. Topham, 494 TABLE OF CASES. XXXI Squire v. Camphell, 49G V. Wliittoii, 93 St, Albyn v. Harding, 461 St. AuLyn v. Smart, 445 St. George v. Wake, 286, 286 St. John V. St. John, 440 Stacey v. Elph, 139 Stackhouse v. Countess of Jersey, 359, 362 Stafford V. Stafford, 471 Stainbank v. Fernley, 394, 445 Staines v. Morris, 459 Stain ton v. Carron Co., 143, 514, Stamfcjrd, Earl of, v. Dawson, 378, 465 Standen v. Stand en, 640 Stanes v. Parker, 140, 331 Stanger v. Wilkins, 216 Stanhope's Case, 278, 316, 333, 346 Staniland v. Willotl, 461 Stanley v. Bond, 462 Stannard v. Harrison, 328, 536 Stanton v. Tattersall, 22, 23, 55, 460 Stapylton v. Scott, 483, 509 V. Stapylton, 475 Stead V. Calley, 121 Steadman v. Palling, 154, 332 V. Poole, 250, 257, 262 Stearns v. Page, 427 Stehbing v. Walkey, 639 Stedman v. Collett, 143 V. Hart, 120 Steel V. Baylis, 3 Steele, Re, 202 Steff V. Andrews, 537 Stephens v. Medina, 69 V. Ollive, 180 V. Venables, 43, 395, 396 Stephenson v. Royse, 263 V. Wilson, 477 Stepney v. Biddulph, 374, 376, 378 Sterry v. Combs, 101, 141, 397 Stevens, Fz parte, 215, 219 V. Australasian Insurance Co., 503 V. Lynch, 467, 471 V. Praed, 477 V. Stevens, 112 Stewart v. AUiston, 22, 42, 416, 419, 421, 422 V. Stewart, 94, 476, 514, 515 Stewart's Case, 24, 266, 277, 278, 333, 339 Stickland v. Aldridge, 311, 318 Stikeman v. Dawson, 61, 447, 450 Stileman v. Ashdown, 122, 180, 187 Stillwell V. Wilkins, 161, 414 Stocker v. Stocker, 283 Stockley v. Stockley, 514 Stockton Iron Furnace Co., Re, 234 Stokes V. Cox, 33, 91 Stokoe V. Cowan, 183, 196 Stone V. City and County Bank, 370 V. Godfrey, 334, 467, 468, 469, 478, 523, 646 V. Marine Insurance Co., 510 V. Yeovil, 495 Storey v. Waddle, 509 Story V. Lord Windsor, 357, 368 Strachan v. Barton, 224, 228 Straker v. Ewing, 458 Strange v. Brennan, 140 Strangways v. Bishop, 252 Stratford v. Bosworth, 547 V. Twynam, 131 Stratford and Moreton Railway Co. V. Stratton, 456 Strathmore, Lady, v. Bowes, 284 Stray v. Russell, 72 Street v. Blay, 391 Stribblehill v. Brett, 288 Stribley v. Imperial Marine Insurance Co., 89 Strickland v. Turner, 509, 524 Stringer's Case, 318 Strong V. Strong, 184, 196 Stroughill V. Anstey, 258 Strutt V. Smith, 429 Stubbins, Ex parte, 222, 228 Stuckley v. Bailey, 31 Stump V. Gaby, 330, 331 Sturge V. Sturge, 166, 468, 470, 545 Sturgis V. Morse, 345 SuUivan v. Mitcalfe, 77, 78, 79, 410 Sully V. Frean, 367 Summers v. Griffiths, 161, 162 Sumner v. Powell, 504, 505 Sumter v. Cooper, 280 Surcombe v. Pinniger, 105 Surplice v. Farnsworth, 69 Sutherland v. Briggs, 105 Sutton V. Bath, 208 V. Chetwvnd, 186 V. Temple, 69, 485 Swain v. Great Northern Railway Co., 104 Swainston v. Clay, 202 Swaisland v. Dearsley, 418, 480, 516 Swan V. North British Australasian Co., 15, 29, 96, 107, 116 Sweet V. Southcote, 356 Swift V. Jewsbury, 84, 407 V. Winterbotham, 435, 436 Swire v. Francis, 409 Sykes v. Beadon, 442 Sykes' Case, 316 Tabor v. Cunningham, 167, 246, 285, 461 Talleyrand v. Boulanger, 159 xxxu TABLE OF CASES. Tamplin v James, 479, 480, 527 Tanner v. Elworthv, 158 V. Florence', 250, 257 Tapp V. Lee, 58, 406 Tarback v. MarLnry, 180, 182, 243 Tarleton v. Liddell", 176, 198, 400, 434 Tate V. Williamson, 46, 124, 125, 126, 127, 146, 158, 162, 167 Tatham v. Vernon, 536 Tatton V. Wade, 407 Tayler v. Great Indian Peninsular Eail- wavCc, 108, 117 Taylor, Ex parte, 122, 407 V. Ashton, 15, 16, 402, 406 V. Baker, 262 ■ V. Bowers, 441 . I'. Bullen, 31, 62, 67 V. Chester, 437 V. Chichester, &c., Railway Co., 329 V. Coenea, 177, 178 ■ V. Johnstone, 123 ■ V. Jones, 184, 315 . V. Martindale, 22, 54 V. Obee, 158 V. Pugh, 284, 285 V. Richardson, 540, 543 V. Salmon, 148, 435 V. Shum, 314 V. Stibbert, 245, 250, 254, 255 Teasdale v. Braithwaite, 188 V. Teasdale, 101, 107 Teed v. Beere, 345 Teede v. Johnson, 467 Tempest, Ex parte, 223, 224, 227 Tennent v. City of Glasgow Bank, 371 V. Tennent, 157 Terry v. Wacher, 167 Theyer v. Tombs, 462 Thom V. Bigiand, 15, 16, 18, 426 Thomas v. Frazer, 503 V. Powell, 392, 478 Thompson v. Cartwright, 274, 275 V. Harrison, 445 . V. Hefferman, 166 V. Lambert, 61, 62 V. Simpson, 101 V. Smith, 533 V. Tomkins, 118 V. Webster, 176, 177, 178, 180, 184, 191, 192, 195, 197 V. Whitmore, 507 Thomson v. Eastwood, 338, 449, 461 Thornber v. Sheard, 156, 264 Thorndike v. Hmit, 350 Thornett v. Haines, 292 Thornewell v. Johnson, 252 Thornhill v. Evans, 159 Thornton v. Kempster, 517 Thoroughgood's Case, 10, 454 Thorpe v. Holdsworth, 361, 364 V. Jackson, 503, 504 Thymic. Tliynn, 311, 400 Tilden v. Johnson, 527 Tildesley v. Lodge, 249, 355, 358 Todd V. Wilson, 140 Toft V. Stephenson, 344 Toker v. Toker, 162, 167, 455, 459 V. Townend, 244 Toilet V. Toilet, 529, 531, 533, 534 Tomkins v. Saffery, 224, 225, 227 Tomline v. Underhay, 535 Tommey v. White, 326 Tomson v. Judge, 95, 141, 145 Topham, Ex parte, 223, 224, 226 V. Duke of Portland, 12, 305, 306, 307, 452 Torrance v. Bolton, 22, 23, 35, 54, 452, 489 Torre v. Torre, 497 Toulmin v. Steere, 270, 271, 357, 364 Tourville v. Naish, 358, 431 Towart v. Sellers, 120 Towne, Ex parte, 138 Townend v. Toker, 179, 191, 197, 239, 240 Townsend v. Champernowne, 458, 459 V. Crowdy, 520 V. Low field, 450 V. Westacott, 177, 179, 464 Townshend, Lord, v. Stangroom, 497, 506, 507, 547 Traill v. Baring, 26, 27, 36, 449 V. Smith's Trustees, 12 Travers v. Blundell, 539 Trenchard v. Wanley, 450 Trevelyan v. Charter, 12, 148, 346, 374, 375, 379 V. White, 374 Tribe v. Tribe, 296 Trigge v. Lavallee, 95, 475, 477, 478, 514 Trowell v. Shenton, 186 Trower v. Newcome, 42, 43, 44, 45 Tucker v. Phipps, 312 Tulk V. Moxhav, 245 Turner v. Collins, 155, 172, 332, 334, 454, 507 V. Harvey, 61, 62 V. Hill, 445 V. Turner, 332, 513 and Skelton, Re, 523 Turquand v. Jackson, 43 V. Knight, 464 V. Marshall, 435 V. Rhodes, 420 V. Ricketts, 543 Turton v. Benson, 282, 363 Tuton t\ Sanoner, 207 TABLE OF CASES. xxxm Tweddell, Re, 221 V. Tweddell, 157 Tweedale o. Tweedale, 271 Twiuing v. Morice, 293, 420 Twycross v. Grant, 78, 79, 81, 137, 411 Twyford v. Warcup, 25 Twyne's Case, 184, 193, 196, 201, 243 Tylee v. Webb, 26u Tyler v. Yates, 170, 373, 461 Tyrrell v. Bank of London, 140, 142, 147, 148, 374 Udell v. Atherton, 62, 82, 408 Ulrich V. Litchfield, 538, 544 Underbill v. Horwood, 159, 161, 503 Underwood v. Lord Courtown, 337 Union Bank of London v. Lenanton, 202 United States, 'Bank of, v. Davies, 270, 278 V. Price, 505 Unity Bank, Ex ■parte, 122 Universal and Fire Insurance Co., Re, 33 Uppington v. BuUen, 141, 142, 143, 165, 166, 433 Upton V. Bassett, 242 V. Vanner, 101 Urmston v. Pate, 478 Urquhart v. Macpherson, 13 Van v. Corpe, 41, 54, 253, 266 Vancouver v. Bliss, 458, 459, 460 Vandeleur v. Blagrave, 107, 108, 109, 115 Vane v. Cobbold, 59 V. Fletcher, 310 V. Vane, 13, 270, 346, 357 Van Epps v. Harrison, 45, 48 V. Van Epps, 132 Vaughan v. Vanderstegen, 123, 124 Vaughton v. Noble, 128 Vauxhall Bridge Co. v. Spencer, 287, 395 Veazie v. Williams, 426 Venezuela, Central Railway Co. of, v. Kisch, 40, 46, 58, 59, 73, 74, 75, 76, 246, 249, 333, 434 Veruede v. Weber, 31 Vernon v. Keys, 37, 39, 42, 46, 47, 48 V. Vernon, 530 Vickers v. Bell, 167 V. Hertz, 8, 108 Vigers v. Pike, 37, 38, 3», 334, 335, 382, 415 Viguolles V. Bowen, 23, 266 Villiers i\ Villiers, 450 Vine V. Mitchell, 66 Vivers v. Tuck, 416 Voisey, Ex parte, 234 Vorley v. Cooke, 10 Vyvyan v. Vyvyan, 333 Waddkll v. Blockev, 413 Wade v. Paget, 531 " Wagstaff v. Eead, 431 Wake V. Harrop, 496, 506 V. Wake, 545 Wakefield v. Gilibon, 193 Waldron v. Sloper, 107, 113, 114 Waldy V. Gva.y, 274, 276, 357, 365 Walford V. Adie, 278, 337, 341, 342 Walker v. Armstrong, 497 V. Burrows, 181 V. ]\Iatthews, 9 V. Smith, 145, 299, 453 V. Svmonds, 53, 94, 95, 156, "330, 337, 450 Wall V. Cockerell, 331, 333 V. Stubbs, 44, 422 Wallace v. Wallace, 1 57 Wallgrave v. Tebbs, 319 Wallingford v. Mutual Society, 425 Wallis V. Harrison, 104 V. Duke of Portland, 175 Walhvynn v. Lee, 354 Walms'ley v. Booth, 140, 142, 336 Walsham v. Staiiiton, 12, 345, 427, 433 442, 444 Walsh, Re, 498 Walsh's Trust, Re, 532 Walter v. Maunde, 252 Walters v. Morgan, 61, 63, 414, 415, 423, 451, 460 Waltham v. Broughton, 3 Warburton v. Lovelaud, 4, 238 Ward V. Booth, 310 V. Hartpole, 142, 145, 374, 433, 460 ji). Hobbs, 67 V. Laut, 439 V. Shallett, 189 Warde v. Dickson, 305 Warden v. Jones, 106, 18?, 186 Wardour v. Berisford, 311 Ware v. Egmont, 248, 249, 259, 263 V. Gardiner, 181 Waring v. Waring, 121 AVarner v. Jacob, 310 Warrick v. Warrick, 525 AVarrin v. Thomas, 462 Wason V. Waring, 261 Waterfall v. Penistone, 213 Waters v. Bailey, 158 XXXIV TABLE OF CASES. Waters v. Groom, 131 V. Thorn, 330, 331, 458 Watson, Ex pa rte, 203 V. Marston, 415, 467, 482 V. Rodwell, 387 Watt V. Grove, 141, 148, 1G5, 166, 373, 397, 452 AVatts V. Brooks, 442 V. Ores well, 122 Waugh V. Bussell, 493 Way V. Hearne, 57, 495 Way's Trust, 183 Webb V. Brookes, 471 V. BjTig, 543 V. Rorke, 1 Webster, Ex parte, 209 V. Cecil, 481, 547 Webster's Case, 266 Wedderburn v. Wedderburn, 137, 330, 332, 345 Weir V. BeU, 17, 82, 83, 84, 87, 402, 409, 443 Weise v. Wardle, 447, 464 Welchman v. Coventry Union Bank, 250 Welles V. Middleton, 145 Wellesley v. Lord Mornington, 302 Welman v. Welman, 188, 496, 500 Wensley, Ex parte, 216, 217 Wentworth v. Lloyd, 141, 148, 338, 341 West V. Jones, 15, 96, 109 . V. Rav, 310 V. Reid, 247, 248, 249, 250, 263, 264, 269 Westby v. Westby, 515, 546 Western Bank of Scotland v. Addie, 5, 27, 57, 82, 84, 369, 392, 408, 409 Weston's Case, 132 Wetliered r. Wethered, 288, 290 Whallev v. Wlialley, 161, 165, 335, 337, 338, 347, 348 Wharton v. May, 373 Wheeler v. Caryl, 189 V. Palmer, 304 Wlieelton i-. Hardisty, 33, 35, 57,58, 82, 83, 85, 91 Whelan v. "Wlielan, 167 Whichcote v. Lawrence, 130 Whitbread v. Jordan, 248 V. Smith, 187 Whitcombe, Re, 140 White V. Bradshaw, 23, 416, 491 V. Cuddon, 43 V. Damon, 415 . V. Garden, 50, 370 . V. Hall, 4 V. Small, 121 V. Wakefield, 256 V. Waklev, 100, 104 White V. White, 497, 509 Whitfield V. Faussett, 249 Whitmore v. Claridge, 218 . V. Mason, 235 A\Tiittaker, Ex parte, 50, 72, 73 Whittemore v. Whittemore, 26 Whittington v. Jennings, 181 Whitworth v. Gaugain, 358, 457 Whyte V. Meade, 166 Wickham v. Wickham, 83 Wigg V. Wigg, 358 Wilbraham v. Livesey, 255 Wilbur r. Howe, 290 Wnd V. Harris, 383, 384 V. Hillas, 477 W^ilde V. Gibson, 17, 53, 61, 246, 387, 415, 416, 425, 428, 448, 449 Wilkie V. Holmes, 531 Wilkinson, Ex parte, 220 V. Bravfield, 314 V. Fowkes, 372, 379, 433 V. Joughin, 400 V. Nelson, 500, 506, 529 V. Stafford, 160 Wilkinson's Case, 278 Willan V. Willan, 162, 165, 167, 415, 476 Willats V. Busby, 238 Willes V. Greenhill, 278 Williams, Ex parte, 233 V. Bayley, 120, 158, 160, 167 r. Evans, 106 V. Livesey, 253 V. Lleweilin, 426 V. Mason, 407 V. Piggott, 143 V. Smith, 427 V. Wentworth, 120 V. Williams, 157, 437, 515 Williams' Case, 316 Williamson v. Barbour, 277, 522 r. Brown, 247 V. Gihon, 287, 373 V. Henderson, 504 V. Moriarty, 144 r. Seaber, 377 Willis V. Lord Howe, 346 V. Willis, 60 Willoughby v. Willoughby, 349, 355, 358 Willmott r. Barber, 100, 103, 104, 479, 483 Wills V. Stradling, 105, 106 Wilmot V. Pike, 364 Wilson v. Dunville, 71 • V. Finch Hatton, 69 r. Fuller, 82 V. Greenwood, 153 V. Hart, 248, 252, 253, 261, 268 r. Kirkwood, 212 TABLE OF CASES. XXXV Wilson V. Piggott, 531 V. Short, 39, 41, 148, 266, 373 V. Sinclair, 474 V. AVest Hartlepool Eailway Co., 405 V. Wilson, 493, 494, 496 Wiltshire v. Marshall, 122 V. Rabbits, 118 Winch V. AVinchester, 25, 420, 423 Windsor, Dean and Chapter of, v. Penvin, 322 Winstanley, Re, 220 AVinter v. Brockwell, 104 Wintour v. Clifton, 544 Wiseman v. Beakey, 169 Withington v. Tate, 108, 109, 115 Wollaston v. Tribe, 167, 174, 185, 186, 341, 454 WoUaston's Case, 84, 85 Wolterbeeck v. Barrow, 508 AVolverton Mortgaged Estates, Re, 543 Wood, Re, 215, 216, 222 V. Abrey, 160, 161, 162, 167, 460 V. Barker, 231 V. Dixie, 195, 214 V. Downes, 95, 140, 144, 145, 330 ■ V. Dwarris, 91 V. Grifhth, 537 V. Leadbitter, 104 V. Scarth, 482, 483, 547 Wood's Case, 370, 381, 385 AVoodhams v. Anglo- Australian, &c., Co., 315, 363 AA'oodhouse v. Meredith, 129, 148 V. Murray, 215 V. Shepley, 289 Woodward v. Miller, 291 AVooUam v. Hearn, 496, 526, 547 AVorcester Corn Exchange Co., Re, 277 Wormald v. Maitlund, 245 AVorrall v. Jacob, 507 Worsley v. De Mattos, 176, 184, 193, 287 V. Frank, 488 AA^orthington v. Morgan, 260 Worth's Case, 86, 393, 394 AVortley v. Birkhead, 365 AVright, Ex 2)arte, 497 Re, 226 r. Crookes, 456 V. Goff, 500 ■ V. Howard, 461 V. Proud, 138, 145, 166 V. Snowe, 122 V. A^anderplank, 155, 156, 332, 333, 334, 338, 341, 346, 347, 459 AA^right'.s Case, 383, 386 AVrigley ik Swainson, 286 AVrout V. Da vies, 109, 115 Wyatt V. Barwell, 281 V. Cooke, 172 AVycherley v. AVycherley, 188 Wycombe Railway Co. v, Donnington Hospital, 481 AA^yld, Ex parte, 326 AA'yliie v. PuUen, 270, 272 AVynne Finch v. AVynne Finch, 457 AYyse v. Lambert, 126, 146, 159, 168 AA^ythes v. Labouchere, 92, 93, 271 Yeomans r. Williams, 49, 395 York and North Midland Railway Co. V. Hudson, 132 York Buildings Co. v. M'Kenzie, 130, 131, 147, 148, 149, 374 Young, Ex jMTte, 208 r. Fletcher, 216 r. Grote, 109, 110 V. Guy, 109 V. Halahan, 488, 500 V. Murphy, 60 r. Peachey, 155, 313 V. Smith, 494 V. AA^alter, 537 V. AVaud, 215, 216 V. Young, 354 ZuLDETA I'. Tyrie, 101 TABLE OF STATUTES REFERRED TO. 50 Edw. 3 3 Hen. 7, c. 4 13 Eliz. c. 5, s s 27 Eliz. c. 4 PAGE 6 175 175 1 5,175,176,180,200 6 176, 183, 184, 192, 200 236—244 184, 239, 240 242, 243 175 236 323, 324, 538 279 s. 3 s. 4 29 Eliz, c. 5 39 Eliz. c. 18, s. 31 9 & 10 Will. 3, c. 15 6 Anne, 2 9 Geo. 2, c. 39 318 4 Geo. 4, c. 76, ss. 23, 24 321, 322 9 Geo. 4, c. 14, s. 6 407 11 Geo. 4& 1 Will. 4, c. 47 235 3 & 4 Will. 4, c. 27, s. 26 347 6 & 7 Will. 4, c. 85 321 1 Vict. c. 100 183 5 & 6 Vict. c. 39 8 12 & 13 Vict. c. 68, s. 15 321 17 & 18 Vict. c. 125 323, 324, 538 19 & 20 Vict. c. 119, s. 19 321 22 & 23 Vict. c. 35, ss. 12, 13 531, 532 24 & 25 Vict. c. 96, 8. 100 9 25 & 26 Vict. c. 89 (Companies Act, 1862), s. 35 385, 428, 437 ss. 85, 201 315 88. 101, 165 317, Addenda 8. 164 227 30 & 31 Vict. c. 48 (Sale of Land by Auction Act) 291, 293 PAGE 30 & 31 Vict. c. 131 (Companies Act, 1867) s. 25 502 s. 38 77— 81, .392 31 & 32 Vict. c. 4 (Sales of Ke versions Act) It 9, 170 32 & 33 Vict. c. 19 (Stannaries Act), ss. 25, 35 315 c. 71 (Bankruptcy Act, 1869), s. 6 215, 222 s. 28 232 8. 34 234 8. 49 Addenda 8. 91 200 8. 92 223, 224 ss. 125, 127 2.34 s. 126 232 233 37 & 38 Vict. c. 78 (Vendors & Pur- chasers Act, 1874) 258 41 & 42 Vict. c. 31 (Bills of Sale Act, 1878) 202—213 45 & 46 Vict. c. 38 (Settled Land Act, 1882), ss. 31 (3), 44, 139n. 8. 53, ] 39n. c. 39 (Conveyancing Act, 1882), s.' 3 246,271 c. 43 (Bills of Sale Act, 1882) 202,212,213, 214, Addenda c. 75 (Married Women's Property Act, 1882), 188 ADDENDA. Page 131. The effect of the order giving to a person standing in a fiduciary relation to another person leave to purchase the property which is the subject of such relation is to divest the former altogether of his fiduciary relation, and to put him at arms' length with the vendors. He is therefore under no obligation to disclose anything he knows about the property ; Boswell v. CoaJcs, W. N. (1883), 53 ; 74 L. T. 354. „ 210, n. (z). Hickson v. Darlow is now reported on appeal, 31 W. R. 417. „ 212. The effect of sect. 8 of the Bills of Sale Act, 1882, is to avoid an unregistered bill of sale as against an execution creditor of the grantor only to the extent necessary to satisfy the execution ; Ex parte Blaiberg, W. N. (1883), 44. ,, 212, 213, 214. In Davis v. Burton, ib. 54, a bill of sale was held void on the ground that the provision for immediate pajmient of the whole of the capitalised interest upon breach of any of the covenants, and also the covenants themselves, which were an attempt to evade the provisions of sect. 7 of the Bills of Sale Act, 1882, were not in substantial conformity with the form given in the Schedule to the Act. „ 224, n. {Ji). Re Lloyd is now reported, 48 L. T. K S. 128. ,, 234. A debt incurred by fraud is preserved by sect. 49 of the Bank- ruptcy Act, 1869, Ross v. Gutteridge, 52 L. J. Ch. 280. ,, 327, n. {q). Ahouloff v. Op2}enheimer is now reported, 10 Q. B, D. 295. ,, 317. In lie Exchange BanJcing Co., 52 L. J. Ch. 214, the directors of a company were held liable under sect. 165 of the Companies Act, 1862, to repay the amount of dividends declared and paid dui'ing their directorship. TABLE OF COMPARATIVE REFERENCE FOR THK OLD REPORTS and the REVISED REPORTS. OLD REPORTS. REVISED REPORTS, CASES FROM CITED AS R. R. Anstruther (Ex.), vol. l & 2 . . . loill he found in R. R. vol. 3 » vol. 3 „ „ 4 Blackstone, H. (C. P.), vol. i . . . „ „ 2 „ vol. 2 . . . „ „ 3 Bosanquet & Puller (C. P.), vol. i . „ „ 4 „ vol. 2 . „ ,.5 „ vol. 3 to p. 309 „ „ 6 Z „ vol.3, p. 320 ) to end . )"" " ' (N.R.)(O.P.), vol.1 „ „ 8 „ vol. 2 „ „ 9 Cox (Chy.), vol. 1 ,, ^, 1 - vol. 2 „ „ 2 Durnford & East (T. R.) (K. B.), vol. i-3 „ „ i „ vol. 4 & 5 „ „ 2 ,, vol. r, „ „ 3 „ vol.7&8| to p. 403 j " - „ vol. 8, p. ■) 4 434 to end East (K. B.), vol. 1 to p. 110 . . . „ „ 5 „ vol. 1, p. 139 to end . . „ „ 6 -. ,, vol. 2 6 OLD REPORTS, REVISED REPORTS, CASKS Fl.'i/M East (K. B.), vol. 'A to p. 221 vol. 3, p. 222 to en a vol. 4 & 5 vol. 6 & 7 . . . vol. 8 & 9 . . . ('IT Eh AS It. 11. vnll Espinasse (N. P.), vol. i & 2 „ vol. 3 & 4 „ vol. 5 . . .. vol. 6 , Forrest (Ex.) . . Peake(N.P.), vol. i — .. vol. 2 Schoales & Lefroy, vol. i & 2 . . Smith (K. B.), vol. I & 2 to p. 12 . — ^ — „ vol. 2, p. 202 to end ) of vol. 3 . . . j Taunton (C. P.), vol. i to p. 400 . Vesey Jr. (Chy.),vol. i to p. 226 . • „ vol. 1, p. 227 to end ,. vol. 2 to p. 518 . ,, Vi)l. 2, p. 524 to end „ vol. 3 to p. 299 . ,, vol. 3, p. 30() to end ^- „ vol. 4 . . . . ., vol. 5 & ('» to p. .">7() ,, vol. (), p. 017 t, 5 „ 6 8 9 5 3 „ 4 „ 9 ,, 7 ., S 9 1 „ 2 2 3 . 3 . 4 . 4 „ 5 „ 6 6 „ 7 „ 7 8 9 A TREATISE LAW OF FRAUD AND MISTAKE. PAET I.-FEAUD. CHAPTER I. GENERAL CONSIDERATIONS, It is not easy to give a definition of what constitutes fraud in Chap. I. the extensive signification in which that term is understood by What is fraud, civil Courts of Justice. Courts of Justice have always avoided hampering themselves by defining or laying down as a general proposition what shall be held to constitute fraud (a). Fraud is so various in form and colour that it is difficult, if not im- possible, to confine it within the limits of any precise definition. The fertility of man's invention in devising new schemes of fraud is so great, that courts of equity have declined the hope- less attempt of embracing in one formula all its varieties of form and colour, reserving to themselves the liberty to deal with it under whatever form it may present itself. As new devices of fraud are invented, they will be met by new correc- tives (6). Fraud, in the contemplation of a civil court of justice, may be said to include properly all acts, omissions, and (a) Lmvley v. Hooper, 3 Atk. 279. Kaimes, Life of Lord Kaimes, voL 2, (6) Sawyi'r v. Vernon, 1 Vein. p. 341 ; Anderson v. Fitzgerald, 4 387 ; Lawlcii v. Hooper, 3 Atk. 279 ; H. L. 511, per Lord St. Leonards ; Wehh V. liovke, 2 Sell. & Lef. 00(5. Nicollv. Fleminrj, 19 Ch. D. 267, jJtr Lord Ilaidwicke's Letter to Lord Bacon, V. C. B FRAUD. Chap. I. concealments which involve a breach of legal or equitable duty, trust, or confidence, justly reposed, and are injurious to another, or by which an undue or unconscientious advantage is taken of another (c). All surprise, trick, cunning, dissembling, and other unfair way that is used to cheat any one is considered as fraud (d). Fraud in all cases implies a wilful act on the part of any one, whereby another is sought to be deprived, by illegal or inequitable means, of what he is entitled to, either at law or in equity (e). By fraud, said Le Blanc, J. (/), he understood an intention to deceive, whether from an expectation of advantage to the party himself, or from ill-will towards another. Collusion is considered as a fraud (g)r The Roman jurisconsults attempted definitions of fraud, two of which are here given : " Dolum malum Servius quidem ita definit, machinationem quandam alterius decipiendi causa, cum aliud simulatur et aliud agitur. Laheo autem posse et sine simulatione id agi ut quis circumveniatur ; posse et sine dolo malo aliud agi, aliud simulari ; sicuti faciunt qui per ejusmodi dissimulationem deserviant et tuentur vel sua vel aliena; itaque, ipse sic definit, dolum malum esse omneni calliditatem, falla- ciam, machinationem ad circumveniendum, fallendura, de- cipiendum alterum adhibitum. Labeonis vera definitio est" (/i). The civil code of France, without giving a definition, provides in Art. 1116: "Fraud is a ground for avoiding a contract where the devices {les Tnanoeuvres) practised by one of the parties are such as to make it evident that without these devices the other party would not have contracted." Elements of However difficult it may be to define what fraud is in all cases, it is easy to point out some of the elements which must necessarily exist before a party can be said to have been defrauded. In the first place, it is essential that the means used should be successful in deceiving. However false and dishonest the (c) 1 Fonb. Eq. Book 1, c. 2, s. 3 ; (rj) Garth v. Cotton, 3 Atk. 757 ; Story Eq. Jur. 187. Bromley v. Smith, 26 Beav. 671 ; (d) Finch, 439. Spackman's case, 34 L. J. Ch. 321. (e) Green v. Nixon, 23 Beav. 535. (A,) Dig. lib. iv., tit. 3, leg. 1. (/) 2 Ea.st, 108. fniud. FRAUD. artifices or contrivances may be by which one man may attempt Ohap. I. to induce another to contract, they do not constitute a fraud if that other knows the truth and sees through the artifices or devices. Haucl envni decijntur qui scit se decipi. Next, there can be no fraud without dishonest intention. '7 However false may be the representations of one party to another to induce him to enter into a contract, there is no ground for avoiding it as obtained by fraud if the party making the representation honestly believed it to be true. Lastly, there must be damage to the party deceived, even where there is a wilful false representation, before a cause of action can arise. Fraud without damage or damage without fraud gives no cause of action (i). But fraud gives a cause of action if it leads to any sort of damage (j). The variety of forms which fraud may assume would seem to Lord Hard- set all systematic classification at defiance, but Lord Hardwicke cIhod of flSi" has done much towards simplifying that branch of the subject "^ ^''^'"^' whicli relates to fraud in matters of contract by dividing it into four heads. Firstly, actual fraud, or dolus malus, arising from facts and circumstances of imposition ; secondly, fraud arising from the intrinsic nature and subject of the bargain ; thirdly, fraud which may be presumed from the circumstances and condition of the parties contracting; fourthly, fraud which may be collected and inferred from the matter and circumstances of the transaction as being an imposition and cheat on other persons not parties to the transaction {k). Civil courts of justice do not affect to consider fraud in the Fr:^"^! not light of a crime ; it is not their province to punish (I) ; nor have Tcv\ml they any censorial authority {m) ; they interfere in cases of fraud in a civil and not in a criminal point of view. Civil courts of justice have an original, independent, and Jurisdiction over inherent jurisdiction to relieve against every species of fraud (n), feud except ° fraud of a penal {%) 3 Bulst. 95, per Croke, .J., {I) See Wolflmm v. Broughton, 2 "'''^"'''' Pasley v. Freeman, 3 T. R. 51, per Atk. 43. Seller, J. (,ft) See 2 V. & B. 298. U) Smith V. Kay, 7 H. L. 775, (n) Colt v. Woollaston, 2 P. Wms. per Lord Wensleydale. 156 ; Steel v. Bmjlis, ib. 219 ; Franks Qc) Chesterfield v. Jannseii, 2 Vea. v. Weaver, 10 Beav. 297 ; Glusse v. 155, 156. Marshall, 15 Siin. 71. B 2 FRAUD. Chap. I. not being fraud of a penal nature. Every transfer or convej^- ance of property, by what means soever it be done, is in equity vitiated by fraud. Deeds, obligations, contracts, awards, judg- ments or decrees may be the instruments to which parties may resort to cover fraud, and through which they may obtain the most unrighteous advantages, but none of such devices or in- struments will be permitted by a court of equity to obstruct the requisitions of justice. If a case of fraud be established, the court will set aside all transactions founded upon it by whatever machinery they may have been effected, and not- withstanding any contrivance by which it may have been attempted to protect them. It is immaterial whether such machinery and contrivance consisted of a decree in equity and a purchase under it, or of a judgment at law, or of other transactions between the actors in the fraud (o). " The general rules of construction," said Tindal, C. J., in Warburton v. Loveland (oo), " which have been established from the earliest times require a large and liberal interpreta- tion of any provisions made for the suppression of fraud. In Heydori8 Case{p) the Barons of the Exchequer resolved that the construction of the statute then under consideration before them must be made by enquiring what was the mischief and defect against which the common law did not provide, ' what remedy the Parliament had appointed to cure the disease of the commonwealth and what was the true reason of the remedy,' and the construction which follows in the report is one that never ought to be lost sight of in any case, namely, that ' the office of all judges is always to make such construction as shall suppress the mischief and advance the remedy and to suppress subtle inventions and evasions for continuance of the mischief and 2)'i^o jprivato coinrtiodo, and to add force and life to the cure and remedy according to the true intent of the makers of the (o) Bov:en v. Evans, 2 H. L. 281. 369 ; Robinson v. Lord Vernon, 7 See South Sea Co. v. B^tmpstearl, ,3 C. B. N. S. 231 ; Rogers v. Hadley, Vin. Ab. 140 ; Richmond v. Taijlein; 32 L. J. Exch. 241 ; Flower \. Lloyd, 1 P. Wms. 736 ; Filmer v. Gotf, 4 6 Ch. D. 297 ; 10 Ch. D. 327 ; ex Bro. P. C. 230 ; IVhite v. Hall, 1 2 2'«»''e Cockerell, 4 C. P. D. 39. Ves. 324 ; Herbert v. Bulkeley, PviiIk- (oo) 2 Dow. & CI. 497. 300; Brydfjes v. Branfill, 12 Sim. (/)) 3 Rep. 7. FRAUD. Act p)'o bono lyuhlico.' This principle of construction has Chap. I. always been adopted by courts of justice." The distinction between legal or equitable and criminal juris- Distinction diction in matters of fraud is well laid down in Burnes v. j^^fi criminal Pennell (q). It is the superadded guilty intention which gives J>i"sdictiou. the criminal jurisdiction. A man may not have intended to deceive, and may have believed that he did nat, when he was really suppressing the truth and suggesting what was false. If so, he is not liable to an indictment in a criminal court, but in a civil proceeding it is different. If a man makes a misrepre- sentation in point of fact, whether by suppressing the truth or suggesting what is false, however innocent his motive may have been, he is equally responsible in a civil proceeding as if he had while committing these acts done so with a view to injure others or to benefit himself (r). If the subject matter O'f the transaction be a contract no Contract man is bound by a bargain into which he has been induced f"aud*'^ '^ by fraud to enter, because assent is necessary to a valid cou- tract, and there is no real assent when fraud and deception have been used as instruments to control the will and in- fluence the assent. But a contract or other transaction in- duced or tainted by fraud is not void, but only voidable at Voidable, not the election of the party defrauded (s). Until it is avoided, ^°' " the transaction is valid, so that third parties without notice of the fraud may in the meantime acquire rights and in- terests in the matter Avhich they may enforce against the party defrauded {ss). (q) 2 H. L. 497. lands, goods, or cliattels without (r) Peek v. Gurney, 6 E. & I. A]ip. valuable consideration, conveyances Cas. 409, per Lord Cairns; 13 Eq. are absolutely void by the statute 13 \13, per Lord Romilly. Eliz., c. 5, s. 1, without any further (s) Clarke v. Dickson, El. Bl. & El. step. Billiter v. Young, 6 E. & B. 148 ; Bawlins v. IViekhnm, 3 D. & 17, per Loitl Wensleydale. J. 322 ; Western Bank of Scotland (ss) Oakes v. Tm-qm.nd, 2 E. & I. V. Addie, 1 Sc. App. Ca. 156 ; Oakes App. Ca. 375 ; Reese River Silver v. Turquand, 2 E. & I. App. Ca. 346 ; Mining Co. v. Smith, 4 E. & L App, Hunter v. Walters, 7 Ch. 86. In the Ca. 64 ; Moyce v. Neioington, 4 Q. case of fraud against creditors by B. D. 35. debtors conveying to others their FRAUD. ^h^P - 1- " The fact," said Lord Blackburn, in delivering the judgment of the Court in the Exchequer Chamber in Clough V. London and North Western Railway^ {t) " that the contract has been induced by fraud does not make the contract void or prevent the property passing, but merely gives the party defrauded a right on discovering the fraud to elect whether he shall continue to treat the contract as binding or disaffirm the contract and resume the property. If it can be shown that the party defrauded has at any time after knowledge of the fraud either by express words or by unequivocal acts affirmed the contract, his election is determined for ever. The party defrauded may keep the question open so long as he does nothing to affirm the contract. The question always is, has the person on whom the fraud has been practised, having notice of the fraud, elected not to avoid the contract ? or, has he elected to avoid it ? or, has he made no election ? As long as he has made no election he retains the right to determine it either way, subject to this — that if in the interval whilst he is deliberating, an innocent third party has acquired an interest in the property, or if in conse- quence of his delay the position even of the wrong doer is affected, he will lose his right to rescind." Persons accordingly who have been induced by the fraud of the directors of a company to become shareholders in the company cannot, as against creditors of the company after a winding-up order has been made, repudiate their liabilities as shareholders after discovering the fraud (u) ; so also where an agent in possession of a bill of lading and authorised to sell the goods compi'ised in it and to hand over the bill of lading to a purchaser of the goods, is induced by fraud to enter into a contract uf sale of the goods and hands over to the purchaser the bill of lading, the property vests in the purchaser, and when, before the sale was dis- avowed, the purchaser entered into a verbal contract with («) L. R. 7 Exch. 34. The judg- Blackburn, ment •\vas read by Mr. Ju.'" ^^ *' it IS beneficial. tion may be good as to part and for certain purposes, although voidable as to other parts and for other purposes (e). If a A transaction transaction is fair as between the parties to it, it is not invalid tTpartsTnd fbr merely because it may have been concocted and brousfht about certain purposes, , ^ ° and bad as to by a third party with a fraudulent intention of benefiting ot^^r parts and 1-1CT 1 f -I ^ 1 • ^'-"' other pur- himseli. In such a case, as far as regards the third party, the poses. whole may be looked upon as one transaction in order to judge of his motives and to put a construction upon his acts ; but, as regards the other two, who, though affected by one part of the transaction, may be total strangers to the other part, it is not only not necessary, but it would be unjust to consider every part of the transaction affected by objections, which, in fact, apply only to particular portions of it (/). If, for instance, a man brings about an arrangement between father and son, in order that he might afterwards deal with the son, the motive might be most improper, but the arrangement between father and son must be judged of upon its own merits {g). Nor is an instrument which has been entered into between parties for a purpose which may be considered fraudulent as against a third party necessarily invalid as between themselves (A). {hh) Blair v. Bromley, 2 Ph. 361 ; flurson, 3 App. Ca. 831 ; Sheffield Rolfe V. Gregory, 4 D. J. & S. 579 ; Nickel Co. v. Unwin, 2 Q. B. D. Vane v. Vane, 8 Ch. 383. 223. (c) Falkner v. O'Brien, 2 Ba. & (e) Bellamy v. Sahiiie, 2 Ph. 42.'), Be. 221. 437. (d) Bellamy V. SaJmie, 2 Ph. 450 ; (/) lb. 438, Hanson v. Keating, 4 Ha, 1 ; Great (g) lb. Luxemburg Railway Co. v. Magnay, (h) Shnv: v. Jeffery, 13 ^foo. P. C. 25 Beav. 594 ; Urquhart v. Mar- 432. 14 FRAUD. ^^^P- ^- Although it is the undoubted duty of the Court to relieve Duty of the persons who have been deceived by the fraud of others, it is Court in dealing hit /•^/-^ ^ rni-- with cases of equally the duty or the (Jourt to be careful that in its anxiety a ege rau . ^^ correct frauds it does not enable persons who have joined with others in speculations, to convert their speculations into certainties at the expense of those with whom they have joined (^). (i) Jennings v. Broughton,5 D. M. v. Chadwick, 20 Ch. D. 67,yer Jessel & G. 140, per Turner, L. J. ; Smith M. R. CHAPTER II. MISREPRESENTATION CONCEALMENT. The largest class of cases in which Courts of Justice are called ^^''^P" ^^- (a) Broderick v. BrodericJc, 1 P. Wms. 240 ; Jar vis v. Duke, 1 Vern. 20. (b) Evans y.Bicknell, 6 Ves. 174 Edwards v. M'Cleay, 2 Sw. 287 Adamson v. Ecitt, 2 R. & M. 71 Attwood V. Hmall, 6 CI. & Fin. 233 Gerhard v. Bates, 2 E. & B. 475 Jennings v. Broxujhton, 6 D. M. & G. 126 ; Rawlins v. Wickham, 3 D. & J. 304 ; Slim v. Crovcher, 1 D. F. & J. 518. (c) Taylor v. Ashmrth, 11 M, & W. 413 ; fTesi v. Jones, 1 Sim. N. S 207 ; Evans v. Edmonds, 13 C, B, 786 ; Thorn v. Bigland, 8 Exch. 725 ifiiWon V. Rossiter, 7 D. M. & G. 23 Rawlins v. Wickham, 3 D. & J. 304 ; Swan V. North British Australian Co., 2 H. & C. 182 ; Hart v. Su>ain<; 7 Ch. D. 46 ; Redgrave v. Hurd, 20 Ch. D. 13. upon to give relief against fraud, is where there has been a Misrepresenta tion. misrepresentation or suggestio falsi (a). If a man represents, as true, that which he knows to be false, and makes the representation in such a way or under such circumstances as to induce a reasonable man to believe that it is true, and is meant to be acted on, and the person to whom the representation has been made, believing it to be true, acts upon the faith of it, and by so acting sustains damage, there is fraud to support an action of deceit, and to be a ground for the rescission of the trans- action (6). It is not, however, necessary, in order to constitute fraud, that a man who makes a false representation should know it to be false. It is enough that it be false, if it be made recklessly without any reasonable grounds for believing it to be true, or under circumstances which show that he was careless whether it was in fact true or false, and be made deliberately and in such a way as to give the person to whom it is made reasonable ground for supposing that it was meant to be acted on, and has been acted on by him accordingly (c). If a man intent. 1 MI SREPRESENTATION. ^^^P- ^^- asserts that to be true within his own knowledge, which he does not know to be true, or makes an assertion of fact as to which he is ignorant whether such assertion is true or untrue, and it is, in fact, untrue, he is, in a civil point of view, as responsible as if he had asserted that which he knew to be untrue (l). It is a wrong to state as true what the person making such statement does not know to be true, even though he does not know it to be false, but believes without sufficient grounds that the statement will ultimately turn out to be correct (-wi). There is indeed fraud, if when a man thinks it highly probable a thing exists, he chooses to say that the thing exists, if it does not in fact exist {n). FraiKiuient An intention to deceive being a necessary element or in- gredient of fraud, a false I'epresentation does not amount to a fraud at law, unless it be made with a fraudulent intent. There is a fraudulent intent if a man either with the view of benefiting himself or misleading another into a course of action which may be injurious to him, makes a representation which he knows to be false, or which he does not believe to be true (o). The legal definition of fraud does not, however, include necessarily any degree of moral turpitude (2^). There is fraud in law, if a man makes a representation which he knows to be false, or does not honestly believe to be true, and makes it with the view to induce another to act on the faith of it, who does so accordingly, and by so doing sustains damage, although he may have had no dishonest purpose in making the representation. It is im- material that there may have been no intention on his part to benefit himself or to injure the person to whom the repre- sentation was made. It is enough that it be made wilfully and with the view to induce another to act upon it, who does so (J) Leddell v. Macdowjall, 29 W, Ca. 95.3, jxr Lord Blackburn. R. 404; Reese River Mining Co. v. (0) Taylor v. Ashworth, 11 M. & Sf/iith, 4 E. & I. App. Ca. 79, per W. 413 ; Evans v. Edmonds, 13 C. Lord Cairns ; Redgrave v. Hurd, 20 B. 786 ; Thorn v. Bigland, 8 Exch. Ch. D. 13, per Jessel, M. R. 725. {m) Siiiotit V. llbery, 10 M. & W. (r) 6 M. & W. 377 ; 10 M. & W. 10. 15b, per Lord Abinger. (n) Brownlie v. Cfimphell, 5 App. MISHEPRESENTATION. accordingly to his prejudice. The law imputes to him a Chap. II. fraudulent intent, although he may not have been in fact instigated by a morally bad motive. An intention to deceive or a fraudulent intent in the legal acceptation of the terra, depends upon the knowledge or belief respecting the falsehood of the statement and not upon the actual dishonesty of purpose in making the statement (q). Where, for instance, the defendant had accepted a bill of exchange in the name of the drawee, purporting to do so by procuration, knowing tiiat in fact he had no such authority, but fully believing that the acceptance would be sanctioned and the bill paid by the drawee, and the drawee repudiated the acceptance, it was held, though the jury negatived a fraudulent intention in fact, that the defendant had committed a fraud in law by making a representation which he knew to be untrue, and which he intended othei's to act upon (r). Though a misrepresentation be made with the motive and in the expectation of benefiting a person by his acting upon it, it may in law be fraudulent (/•?•), The presence or absence of a corrupt motive or dishonest purpose distinguishes moral from legal fraud. A misrepre- sentation made without a corrupt motive or dishonest pur- pose is called legal fraud. If there be present a corrupt motive or dishonest purpose in making a misrepresentation, there is moral fraud (s). In Wilde v. Gibson (t), a fraudulent intention was not imputed to a man by reason merely of his having construc- tive notice that a representation made by him was untrue, when he had no actual knowledge that it was untrue. "The effect of constructive notice," said Lord Cottenham (u), " in cases in which it is applicable, as in contests between (q) Foster v. Charles, V Bing. 107 ; (s) Moens v. Heyv:orth, 10 M. & PoMll V. Walter, 3 B. & Ad. 114 ; W. 157, per Lord Wensleydcile ; Murray v. Mann, 2 Excli. 541, ^e?- JVilde v. Gihsov, 1 H. L. 633, ^er Lord Wensleydale ; Wilde v. Gibson, Lord Canjpbell ; but see TVeir v. 1 H. L. 633, per Lord Campbell. Bell, 3 Exch. D. 243, per Lord Brara- (r) Polhill V. JValter, 3 B. & Ad. well. 114. (t) 1 H. L. 605. (rr) Peek v. Gurney, 13 E(|. 110 (u) lb., 6:33. 18 MISEEPRESEXTATION. Chap. II. Misrepresenta- tion made by mistake. equities of innocent parties, is sufficiently severe, and is only resorted to from the necessity of finding some ground of preference between equities otherwise equal, and cannot be applied in support of an imputation of direct personal fraud." If a man makes a representation in the honest belief that it is true, and there be reasonable gi-ound for such belief, a fraudulent intent will not be imputed to him, although it may turn out to be false (v), unless there be a duty cast on him to know the truth (x). A misrepresentation made through honest mistake is not a gi-ound for rescinding a transaction (y), unless the subject matter be different in substance from what it was represented to be. In cases where a contract is sought to be rescinded on the ground of fraud, it is enough to show a fraudulent representation as to any part of that which induced the party to enter into the contract which he seeks to rescind ; but where there has been an innocent misrepresen- tation or misapprehension, it does not authorise a rescission, unless it be such as to show that there is a complete difference between what was represented and what was taken, so as to constitute a failure of consideration. For example, where a horse is bought under a belief that it is sound, if the pur- chaser was induced by a fraudulent representation as to the horse's soundness, the contract may be rescinded. If it was induced by an honest misrepresentation as to its soundness, though it may be clear that both vendor and purchaser thought they were dealing about a sound horse, and were in error, yet the purchaser must pay the whole price, unless there was a warranty ; and even if there was a warranty, he cannot return the horse and claim back the whole of the price, unless there was a condition to that effect in the contract. The principle is well illusti-ated by the civil law as stated in the Digest (z). There, after laying down the general rule that where the parties are not at one as to the subject of the contract there is no agreement, and that this applies where the parties have mi.s- (v) Haycraft v. Creasy, 2 East, 92 ; Collins V. Evans, 5 Q. B. 820 ; Thorn V. Bifjland, 8 Exch. 726. (x) Tliom V. Bigland, ib., infra. (y) Onnrod v. Huth, 14 M. & W. 651. (i) Lib. 18, De contrahenda emp- tione, Tit. 1, leg. 9, 10, 11. MISREPRESENTATION. 19 apprehended each other as to the corpus, as where an ahsent Chap. II. slave was sold, and the buyer thought he was buying Pamphilus, and the vendor thought he was selling Stichus; and pronounc- ing the judgment that in such a case there was no bargain because there was erro7' in corpore, the framers of the Digest moot the point thus : " Inde quoaritur si in ipso corpore non erretur sed in substantia error sit ut piUa si acetum jjro vino veneat, aes p)vo auro, vel quid aliud argento simile ; an eraptio et venditio sit ;" and the answers given by the great jurists quoted are to the effect that if there be a misapprehension as to the substance of the thing, there is no contract ; but if it be only a difference in some quality or accident, even thougli the misapprehension may have been the actuating motive to the purchaser, yet the contract remains binding. Pauliis says, "si aes pro auro veneat, non valet, aliter atque si cmruni guidem fuerit, deterius auteni quam emptor estimaret ; tunc e7iim emptio valet " (a). The principle of our law is the same as that of the civil law. If the thing sold differs in substance from what the purchaser was led by the vendor to believe he was buying, there is no contract. In Gompertz v. Bartlett (b), and Giirney V. Womersley (c), a man who honestly sold what he thought was a bill without recourse to him, was held nevertheless bound to return the price, on its turning out that the supposed bill Avas void under the stamp laws in the one case, and was a forgery in the other {d). So also where cotton was sold by sample, and the sample was long stapled cotton, but the cotton delivered was short stapled cotton, the cotton was held to be different in kind from what the purchaser had contracted to buy, and that he was entitled to reject it [e). If, on the other hand, the purchaser receives what answers the description of the article sold, and there is no difference in substance between the article delivered and the article sold, but only a difference in some quality or accident, the contract remains binding in the (a) Kennedy v. Panama, d'C, Co., (d) See Flujht v. Booth, 1 Bing. L. R. 2 Q. B. 587. N. C. 377. (h) 2 E. & B. 849. (e) A-.eniar v. Casella, L. R. 2 C. (c) 4 E. & B. 133. P. 677. u 2 20 MISREPRESENTATION. ^^^P- ^^- absence of a warranty, even though a misapprehension caused by the incorrect representation of the vendor may have been the actuating motive to the purchaser (/). In such a case the rule caveat emptor will apply (g). In a case, accordingly, where a steam-packet company issued a prospectus stating in efifect that they had entered into a contract with a colonial government for the carrying of mails between certain places, and a man induced by the terms of the prospectus applied for and obtained some of the shares, but the contract, not being binding on the colonial government, was repudiated, it was held that the representation did not affect the substance of the matter, the applicant having actually got shares in the very company, for shares in which he had applied, and the shares being a property of considerable value in the market, though perhaps not so valuable as they would have been had the statement in the prospectus been strictly accurate (h). The difficulty in every case is to determine Avhether the mistake or misapprehension is as to the substance of the whole consider- ation, going, as it were, to the root of the matter, or only as to some point, even though a material point, an error as to which does not affect the substance of the whole considera- tion. There may be misapprehension as to that which is a material part of the motive inducing the transaction, but not so as to prevent the subject matter of the transaction from being in substance what it was represented to be (i). The same principles apply in equity. A man who makes a representation which he honestly and upon reasonable gi'ounds believes to be true, or believes himself entitled to assert, is not, independently of a duty cast on him to know the truth, bound in equity, if the representation turns out to be untrue, to make good what he has so represented (k). " There is no case in equity," said Lord Thurlow, in Merewether (/) Kennedy v. Panama, (&c., Co., L. R. 2 Q. B. 580. L. R. 2 Q. B. 587. (i) lb. 588. (^) lb. 2 E. & B. 850, j)er Lord {k) Mereivether v. Shaw, 2 Cox, Campbell. 134 ; Ainnlie v. Medhjcott, 9 Ves. (/i) Kennedy v. Panama, dr., Co., 21 ; Evans v. Wyatt, 31 Beav. 217. MISREPRESENTATION. 21 V. Shaw {I), " where a man making an lionest representation Chap. II. when called upon to give an account of the circumstances of another, has been held liable in this respect to make good what he has so represented." From certain dicta to be found in the reports, it may appear doubtful whether the same principles apply in equity where a claim is made for the restitution of property acquired through incorrect representations made by honest mistake. In Raivlins v. Wickham (m). Turner, L. J., said that if, upon a treaty for purchase, one of the parties to the contract makes a representation materially affecting the subject matter of the contract, he cannot be allowed to retain any benefit which he has derived, if the representation proves to be untrue, and that no man can be held to what he has done under circumstances which have been erroneously represented to him by the other party to the transaction, however innocently the representation may have been made ; that a contrary doctrine would strike at the root of fair dealing, and would open a door of escape in all cases of representation as to credit, and indeed in all other cases of false representation (w). The words of Mr. Justice Story, in Daniel v. Mitchell {nn), are much to the same effect. " Nothing," he said, " is clearer in equity than the doctrine that a bargain founded upon false representations made by the seller, although made by innocent mistake, will be avoided. Mistake as well as fraud in any representation of a fact material to the contract is a sufKcient ground to set it aside " (o). There is, however, good reason to doubt whether on principle or authority, the equitable rule with respect to the restitution of property acquired through false representations can be carried so far as the words of these learned judges would warrant. In Raivlins v. Wickham, there was, in fact, a duty cast upon the party making the representation to know the truth, so that it is probable that the words of Turner, L. J., though general in terms, should be taken Avith reference to the particular circumstances of the case. The rule at law being (0 2 Cox, 1.34. (o) Hou{)h v. Eirhardson, ,3 Story (m) .3 D. &.J. 317. (Amer.), 691 ; Doggett v. Emerson, (n) Hart v. Sicaine, 7 Ch. D. 46. ib. 733. (nn) 1 Storr (Amer.), 172. 22 MISREPRESENTATION. ^^^P- ^^- reasonable and fully adequate for the purposes of justice, there is no reason for extending the rule in equity, so far as the words of Turner, L. J., would, if taken generally, warrant. There is no ground for contending that the rule caveat emiJtor does not apply in equity as well as at law (p), or that a representation amounts any more in equity to a warranty than it does at law. The sound doctrine would seem to be that the rule in equity is the same as the rule at law, and that if, accordingly, a repre- sentation be honestly and upon fair and reasonable grounds believed to be true by the party making it, and there be no duty cast on him to know the truth, no claim for the restitution of property acquired through the representation can be maintained in equit}^, although the representation proves to be untrue {q), unless the subject matter be so different in substance from what it was represented to be, as to amount to a failure of con- sideration [r). There is a difference in substance amounting to a failure of consideration, if the property is not of the same nature or de- scription as it was represented to be in the particulars of sale (s), as where leasehold or copyhold property is described as free- hold (;') ; or where land sold and conveyed as freehold turns out to be copyhold (u) ; or, perhaps, where an under lease is sold as an original lease (a-) ; or as where upon the sale of an estate let at lease on a rack-rent, such rent is described as a ground-rent {y) ; or where there is a misdescription of the quan- tity of land in regard to acres being statute acres or customary (j)) Gorsuch V. Cree, 29 L. J. C. P. Bolton, 8 Ch. 118. 309. (0 Drewe v. Corp, 9 Ves. 368 ; {q) See Legge v. Croker, 1 Ba. & Puhford v. Ricliards, 17 Beav. 96, per Be. 514 ; BartUtt v. Salmon, 6 D. Lord Romilly. M. & G. 33 ; Brett v. Clo^vser, 5 C. (u) Hart v. Swaine, 7 Ch. D. 46. P. D. 376. (x) Madeley v. Booth, 2 Deg. & S. (r) See Howland v. Norris, 1 Cox, 718 ; Henderson v. Hudson, 15 W. 59 ; Leslie v. Tompson, 9 Ha. 268 ; R. 860. See Darlington v. Hamilton, Bartlett v. Salmon, 6 D. M. & G. 41. Kay, 550 ; but see Cambenvell, do., (s) See Taylor v, Martindale, 1 Y. Building Society v. Hollowaj, 13 Ch. & C. C. C. 658 ; Madeley v. Booth, 2 D. 754. Deg. & S. 722 ; Stanton \. Tattersall, {y) Stewart v. Alliston, 1 Mer, 26. 1 Sm. & G. 536 ; Price v. Macaulay, See Bartlett v. Salmon, 6 D. M. & G. 2 D. M. & G. 346 ; Torrance v. 33. MISREPRESENTATION. 23 acres (z) ; or where the acreage of an estate is very much less ^^^P- I^- than it was represented to be (a) ; or as where a house com - posed externally partly of brick, and partly of timber, and lath and plaster, is described as a brick-built house (h) ; or where property which was in truth an equity of redemption in a re- versionary interest was described as an absolute reversion, or as an immediate reversion expectant on the death of a tenant for life (c) ; or where the rents at which the different parts of a lot of land were stated, but no mention was made of a ground- rent (d). So, also, there is a difference in substance amounting to a failure of consideration, if there be misrepresentation upon a point material to the due enjoyment of the property ; as where a vendor describes land as situated within one mile of a par- ticular town, when it is, in fact, several miles distant there- from (e) ; or where, upon the sale of a lease of a house or shop, the particulars merely stated that the lease contained a restric- tion against certain specified trades being carried on upon the premises, whereas, in fact, several other trades were for- bidden ( /) ; or where, upon the sale of a piece of land described as " a first-rate building plot of ground," no notice was taken of a right of way passing over it (g), or of an underground watercourse which third parties had liberty to open, cleanse, and repair, making satisfaction for damage thereby occasioned (h) ; or as where a house described to be situated in a fashionable street, was not actually in that street, but merely communicated with it by a passage (i). (z) Price V. North, 2 Y. & C. 620 ; (/) Flight v. Booth, 1 Bing. N. C. Earl of Durham v. Legard, 34 Beav. 370. See Vignollcs v. Brown, 12 Ir. 612. Eq. 194, 196, (a) Aberainan Iron Works v. (g) Dykes v. Blake, 4 Biiig. N. C. Wilkins, 4 Ch. 101. 463. See Gibson v. D'Este, 2 Y. & (b) Powell V. Doubble, Sug. V. & C. C. C. 542. P. 29, Dart, V. & P. 90. (h) Shackleton v. Sutcliffe, 1 Deg. (c) Torrance v. Bolton, 8 Ch. 124. & S. 609. (d) Jones v. Rimmer, 14 Ch. D. (i) Stanton v. Tattersall, 1 Sm. & 591. G. 529 ; comp. IFhite v. Bradshaw, (e) Duke of Norfolk v. Worthy, 1 16 Jur. 738. See Dart, V. & P. 88, Camp. 337 ; Pulsford v. Richards, 17 89. Beav. 96, per LurJ Eomilly. 24 MISREPRESENTATION. Chap. II. So, also, there is a difference in substance amounting to a failure of consideration, where the property, as described, is not identical with that intended to be sold (k) ; or where a material part of the property described has no existence, or cannot be found (I) ; or where no title can be shown to it, as where upon the sale of a leasehold house and small yard adjoining, the yard was not included in the lease, but was held from year to year at a separate rent (m) ; or where land was described in the par- ticulars of sale as held under a lease that would expire on a certain day, but it turned out that the tenant of part of the land was entitled under an equitable title to a reversionary term for four lives (n) ; or where an annuity was granted to be calculated on a certain footing by the agent of the gi'antee, and the calculation proved very inaccurate (o) ; or where a man agreed to purchase a share in a partnership business, on the footing of a balance-sheet prepared by an accountant employed by the vendor, which turned out to be very inaccurate in cer- tain particulars ('p) ; or where there was a material variance between the prospectus of a company, on the basis of which a man took shares in the concern, and the memorandum of asso- ciation by which it was governed (q) ; or where a man was released from an obligation, in which he was bound, on a repre- sentation that a certain security deposited with the creditor (which proved to be an imaginary one) was a good security (r). So, also, it may be laid down, as a general rule, that there is a difference in substance amounting to a failure of considera- tion, if the misrepresentation or misdescription is of such a nature that the amount of compensation cannot be esti- (k) Leach v. Mullett, 3 C. & P. (o) Carpmael v. Powis, 10 Beav. 115. 44. (I) Robinson v. Mimjrove, 2 Moo. (p) Charlesworth v. Jennings, 34 & R. 92. Beav. 96. (m) Dohell v. Hntchinson, 3 A. & (g-) Doivnesv. Shi]}, 3 E. & I. App. A. 355. See Knatchhull v. Grueber, Ca. 343 ; Steivart's Case, 1 Ch. 586 ; 1 IMadd. 153 ; M'Culloch v. Gregory, Laicrence's Case, 2 ib. 425 ; Ship v. 1 K. & J. 286. Crossldll, 10 Eq. 82. (n) Linehan v. Cotter, 7 Ir. Eq. (r) Scholfeld v. Templer, 4 D. & J. 177. See (Jollier v. Jenlins, You. 434. 298 : Suii. V. & r. 304. MISREPRESENTATION. 25 mated (s) ; as where on the sale of a reversion expectant on the Chap. II. decease of A. in case he should have no children, his age was described as sixty-six, instead of sixty-four (t) ; or as where on the sale of a wood, the particulars erroneously stated that the average size of the timber approached fifty feet, the number of trees not being stated (u) ; or as where the particulars stated the premises to be in the joint occupation of A. and B. as lessees, when in fact A. was only assignee of the lease, and B. was a mere joint occupier (.c) ; or as where the right to coal under the estate was shown to be in other parties, and no means existed of determining its value (?/). The presence of the words " more or less " in a contract for Words "more or the sale of a deed of conveyance of land after a statement of l^ent of quantity the quantity of acres comprised therein does not import a °^ ^^^^^' ^'^' special engagement that the purchaser takes the risk of the quantity. The words must be taken merely to cover a reason- able excess or deficiency. If it turn out that the quantity falls considerably short of what it was represented to be, the court will relieve the purchaser from payment for the deficiency ; but a slight variation does not afford a ground for relief (0). Nor will the court interfere, although the deficiency be consider- able, if the risk as to the quantity constituted one of the ele- ments of the agreement, or if the sale was of a thing in gross and not by admeasurement (a), or if there was a special stipu- lation that the quantities shall be taken as stated (6). But if the acreage of an estate is very much less than it was repre- sented to be, a proviso in one of the articles of sale that the (s) See Madeleij v. Booth, 2 Deg. Portman v. Mill, 2 Riiss. 570, Sug. & S. 722. V. & P. 324. See Charlesu-orth v. (t) Sherwood v. Rohim, Moo. & M. Jennings, 34 Beav. 96 ; Davis v. 194. See 8 CI. & F. 792. Shepherd, 1 Cli. 410. («) Lord Brooke v. Eoundthicaite, (a) Anon., 2 Freem. 107 ; Tun/- 5 Ha. 298. ford v. IFareup, Finch. 310 ; Baxen- (x) Ridgumj v. Gray, 1 Mac. & G. dale v. Seale, 19 Beav. 601. See 109. See Grissell v. Peto, 2 Sm. & Leslie v. Tompson, 9 Ha. 268. ^- 39- {h) Nieoll v. Chambers, 11 C. B. {y) Smithson v. Powell, 20 L. T. 996. See Sug. V. & P. 324 327 ; l^'"'- Cordiiniley v. Checsehoronqh, 3 Oifi'. (;.) Hill V. Burl.-h-n, 17 Ves. 398 ; 50(5, 4D.'f. & J. 379. iriiirh V. lf^i,irli,'s/n- 1 V. & 15.375; 26 MISREPRESENTATION. Chap. II. estate as to extent should be taken to be conclusively shown by certain deeds, will not estop the purchaser from having the con- tract rescinded on the ground of the deficiency (c). A condi- tion of sale providing that if any error, misstatement, or omission in the particulars should be discovered, it should not annul the sale, nor should any compensation be allowed by the vendor or purchaser in respect thereof, applies only to small errors, and will not cover a large deficiency (d). Duty to disclose Though a party making a representation may at the time dircovery that a ^^^lieve it to be true, and have made it innocently, yet if after representation discovering that it was untrue he suffers the other party to con- was false. tinue in error and to act on the belief that no mistake has been made, this from the time of the discovery becomes in the con- templation of a court of equity a fraudulent misrepresentation, even though not so originally (e). If, moreover, a man makes a representation by which he induces another to take a par- ticular course, and the circumstances are afterwards altered to the knowledge of the party who made the representation, but not to the knowledge of the party to whom the representation was made, and are so altered that the alteration may affect the course of conduct which may be pursued by the party to whom the representation was made, it is the duty of the party who has made the representation to communicate to the party to whom he made it the alteration of those circumstances. The party to whom the representation has been made will not be held bound in equity, unless such a communication has been made (ee). Thus, where a man for the purpose of insuring his life, signed a declaration that he was in good health, but before the policy was completed he consulted a physician, who told him that he was in a dangerous state of health ; it was held that the non- communication to the company of his change in health was fraudulent, and vitiated the policy (/), So also where an (c) Aberainan Iron JVorJcs v. TFick- D. 474. c?is, 4 Ch. 101. (ee) Traill v. Baring, 4 D. J. & S. {d) Whittemorc v. IFhittemore, 8 329 ; Lavies v. London dc Provincial Eq. 603. Marine Insurance Co,, 8 Ch. D. 474. (e) Eeynell v. Sprye, 1 D. M. & G. (/) British Equitable Insurance 660, 709 ; Davies v. London cfc Pro- Co. v. Great Western Railway Co., 38 vincial Marine Insurance Co., 8 Ch. L. J. Ch. 314, MISREPRESENTATION. 27 insurance company proposed to another office a re -insurance on Chap. II. a life, representing as was then the fact, that they retained a large portion of the risk, but before the re-insurance was car- ried into effect, they got rid of the whole of the risk on the life by re-insurance with a third office without communicating that fact to the other office, it was held that the insurance was obtained by fraud, and must be cancelled ((/). On the other hand, a representation that was false at the time it was made may, by a change of circumstances, become a true representation at the time it is acted on. As where a company issued a prospectus, representing that more than half the capital had been subscribed, whereby a man was induced to apply for shares, and the representation was not true at the time when the prospectus was issued, but it had become true at the time of his application ; it was held that there was no misrepresentation entitling him to relief (/t). In considering whether a man has reasonable grounds for Reasonable believing a representation to be true, the position in which ho believing a is placed, and the sources from which he has drawn his informa- representation tion, must be taken into consideration (i). If a man be asked to give an account as to the fortune or circumstances of another, statements appearing in wills, deeds, marriage settlements, &c., are reasonable sources of information. He cannot be called on if the statements therein appearing turn out to be incorrect, to make good his representation (k). The alleged bond fide belief in an untrue statement can be tested only by considering the grounds of such belief, and if an untrue statement is made founded upon a belief destitute of all reasonable grounds, or which the least inquiry would immediately correct, it may fairly be characterised as misrepresentation and deceit (/). If persons make statements which they may bond fide believe to be true, but which, if they had used a little more care and caution they {g) Traill v. Baring, 4 D. J & S. (k) Ainslie v. Medbjcott, 9 Ves. 318. 21 ; Evans v. Wyatt, 31 Beav. 217. (h) Ship V. Crosskill, 10 Eq. 73. (l) Western Bank of Scotland v. (i) Chdlen's Trustee v. Johnston, 3 Addie, 1 Sc. App. Ca. 162, jwr Lord Dec. of Court of Seawiou, 3rd series, Chelmsford. p. 936. 28 MISREPRESENTATION. ^''^P- ^^- must have seen were not true, there is evidence to show that they did not really believe in the truth of what they said {7)i). A man must examine into the truth of representations made to him by others, before putting them forward as true, or as of his own knowledge. He cannot be allowed to escape from the effect of positive representations of matters of fact upon the ground that he relied upon representations made to him by an agent employed by him for the purpose of getting information for him. If a man makes a representation in such a manner as to import a knowledge of the facts to which the representa- tion refers, and the representation is not materially qualified by a reference to any other person as the source of information, he cannot be heard to say, on a claim for the rescission of the transaction, if the representation proves to be untrue, that he made the representation on the authority of his agent, and honestly believed it to be true. If a company give credit to, and assume as true the reports which are made to them by their agents, and represent as facts the matters stated in those reports, and persons are induced to enter into contracts on the foundations of the assumption of the representations which have been made to them, they cannot be heard to say, on a claim for a rescission of the transaction, if the representations prove to be untrue, that they honestly believed them to be true. If the company, instead of stating a thing as a fact, state merely that they have received reports from their agents, and that they have reason to believe the reports to be true, the case may be different (rt). It may be material, where proceedings at law are aimed against a man with a view to obtain damages from him personally for false representation, that he may have believed statements made to him by agents to be true, but it is immaterial where the transaction is sought to be set aside (o). (m) lb. 168, Cranworth. Ray, 9 Cli. 405 ; Cooper v. Levering, (n) Smith's Case, Re Reese River 10 Browne (Amer.), 78 ; Fisher v. Silver Minivg Co., 2 Ch. 604, 611, Mellen, 7 Browne (Amer.), 506. 615 ; Ross V. Estates Investment Co., (o) Smithes Case, Re Reese River 3 Eq. 138, 3 Ch. 682 ; Henderson v. Silver Mining Co., 2 Ch. 615 ; Hen- Lacon, 5 Eq. 261 ; Attij.-Gcnl. v. rlcrson v. Lacoii, 5 Eq. 261. MISREPRESENTATION. 29 A misrepresentation, however, is a fraud at law, although Chap. II. made innocently, and with an honest belief in its truth, if it be Miarepresenta- , , . tion by a man made by a man who ought in the due discharge of his duty to upon whom a have known the truth, or who formerly knew, and ought to j^^^ ^he truth. have remembered, the fact which negatives the representation, and be made under such circumstances or in such a way as to induce a reasonable man to believe that it was true, and was meant to be acted on, and has been acted on by him accordingly to his prejudice. If a duty is cast upon a man to know the truth, and he makes a representation in such a way as to induce a reasonable man to believe that it is true, and is meant to be acted on, he cannot be heard to say, if the representation proves to be untrue, that he believed it to be true, and made the mis- statement through mistake, or ignorance, or forgetfulness (^)). Where accordingly the trustee of a fund represented to a pro- posed assignee that the assignor was entitled to the fund and could make the assignment, forgetting that there was a prior incumbrance upon it, of which he had received notice, he was held bound to make good the representation (q). So also where a man wrote a letter stating that he was willing to grant a lease, knowing that it was to be shown to a person proposing to lend money to the lessee upon the security of the lease, and it appeared that he had before granted a concurrent lease of the same property which he alleged that he had forgotten, he was held responsible for his statement and for the repayment of tlie loan made on the faith of it (?•). The rule established in Collen v. Wright (s) that if a man, Misrepresenta- tion of authority, {p) Burroives v. Lock, 10 Ves. where a brother made, tlirougli mis- 470 ; Moens v. Heyworth, 10 M. & conception, a false representation W. 147 ; Pidsford v. Richards, 17 respecting his sister's fortune to a Beav. 95 ; Ayre's Case, 25 Beav. 522 ; man who was about to marry her, Price V. Maca%da\j, 2 D. M. & G. and did afterwards marry her. See 345 ; Hutton v. Rossitcr, 7 D. M. & also Ainslie v. Medlycntt, 9 Ves. 21 ; G. 9 ; Rawlins v. Wichham, 3 D. & Evans v. Fowler, 21 Beav. 217. J. 304 ; Swan v. North British Aus- (q) Burrowes v. Lock, 10 Ves. 70. tralasian Co., 2 H. & C. 183 ; Hen- (r) Slim v. Croucher, 1 D. F. & J. derson v. Lacon, 5 E([. 262 ; Broimilie 518. V. Campbell, 5 App. Ca. 936 ; comp. {s) 8 E. & B. 647, Merewether v. Shaw, 2 Cox, 134, 30 MISREPRESENTATION. Chap. II. Distinction between a war- ranty and a representation. however honestly, assumes to act as agent for another in respect of a matter over which lie has no authority, and induces another thereby to make a contract, he must be taken in law to promise that he is what he represents himself to be, and must answer for any damage which directly results from confidence being given to his representations, is not an exception to the general rule of law that no action is maintainable for a mere state- ment, although untrue and although acted on to the damage of the person to whom it is made, unless the statement is false to the knowledge of the person making it. The principle of that decision is that when a man, either expressly or by his conduct, invites another to negotiate with him upon the asser- tion that he is filling a certain character, and a contract is entered into upon that footing, he is liable to an action, if he does not fill that character, but the liability arises not from the misrepresentation alone, but from the invitation to act and from the acting in consequence of that invitation {t). A statement which amounts to a warranty, must be distin- guished from a statement which amounts merely to a repre- sentation. A representation is a statement or assertion made by one party to the other before or at the time of the contract of some matter or circumstance relating to it(u). A repre- sentation is not a part of the written instrument, but is col- lateral to it, and entirely independent of it (y). The insertion of the representation in the instrument does not alter its nature. Though a representation is sometimes contained in a written instrument, it is not an integral part of the contract, and conse- quently the contract is not broken, though the representation proves to be untrue (x). In order that a statement or repre- sentation may amount to a warranty, it must appear that it was intended to form a substantive part of the contract (y). A (t) See Dickson v. Eeuter's Tele- foot v. Fowlce, 6 M. & W. 370, inr gram Co., 3 C. P. D. 7. Lord Cranwortli. (w) Behn v. Burness, 3 B. & S. (x) Bchn v. Burness, 3 B. & S. 75.3. 753. (v) Goram v. Siceeting, 2 Wms. (y) Behn v. Burness, 3 B. & S. Saund. 201. See Kain v. Old, 2 B. 754. & C. 634, per Lord Tenterdeu ; Corn- MISREPRESENTATION. 81 warranty Is an express or implied statement of something which ^^^p- ^^- the party making it undertakes shall be a substantive part of the contract, and though part of the contract, yet collateral to the express object of it (z). A representation of intention does not amount to a warranty (a). If a representation or statement is not of the essence of the contract, there is no warranty (?>) . The circumstance of a man selling a particular thing by its proper description is not a warranty that the thing is of that description. If the thing does not answer the description, there is not a breach of warranty, but a non-compliance with a contract which he has engaged to fulfil (c). To constitute a warranty, it is not necessary that the word " warrant " should occur in the bargain (d). Any affirmance or representation made at the time of sale is a warranty if it appears to have been so intended and understood by the parties (e). Nor is it necessary that the statement or representation should be simul- taneous with the close of the bargain. If it be part of the contract, it matters not at what period of the negotiation it was made(/). If a statement amounts to a warranty, the party making it is bound by his warranty. The fact that he may have made the statement in honest mistake, or that the state- ment may be not in a material matter, cannot be taken into consideration (g). The term " warranty " is used in two senses. It is either a condition on the failure or non-performance of which the other party may, if he be so minded, repudiate the contract altogether, (z) Chanter v. Hopkins, 4 M. & W. Baihj, 1 H. & C. 417. 404, per Lord Abinger ; Stucley v. (e) Pasley v. Freeman, 3 T. R. 57, Baihj, 1 H. & C. 415, ^er Martin, B. per Buller, J. ; Stucley v. Bailey, I («) Benhani |v. United Guarantee, H. & C. 405. dec, Assurance Co., 7 Exch. 744. (/) Hopkins v. Tanqueray, 15 C. (6) Cranston v. Marshall, 5 Exch. B. 137, ^er Jervis, C. J. 402; Taylor v. Bullen, ib. 779; {(i) Attivood Y. Small, Q> CI. k Yin. Vernede v. JVeber, 1 H. & N. 311. 232 ; Anderson v. Fitzgerald, 4 H. (c) Chanter v. Hopkins, 4 M. & L. 504, p)er Lord Cranworth ; Ban- W. 404, per Lord Abinger ; Stucley nernian v. White, 10 C. B. N. S. y. Baity, 1 H. & C. 415, ^^er Martin, 844; Behn v. Burness, 3 B. & S. B. 754, 759 ; Head v. Tattersall, L. R. (d) Hopkins v. Tanqueray, 15 C. 7 Excli. 11. B. 137, per Jervis, C. J. ; Stucley v. 32 MISKEPRESENTATION. ^hap. II. and so be released from performing his part of it, or it is an independent agreement, a breach of which will not justify a repudiation of the contract, but will only be a cause of action for compensation in damages. The question whether a state- ment, though intended to be a substantive part of the contract, is a condition precedent, or an independent agreement, is some- times raised in the construction of charter-parties, with refer- ence to stipulations that some future thing shall be done or shall happen, and has given rise to very nice distinctions. Thus a statement that a vessel is to sail, or be made ready to receive a cargo, on or before a given day, has been held to be a con- dition, while a stipulation that she shall sail with all convenient speed, or within a reasonable time, has been held to be only an agreement (h). If the statement be a condition, and it be not complied with, the party to whom it is made may, if he be so minded, repudiate the contract, provided it has not been par- tially executed in his favour. If, indeed, he has received the whole or any substantial part of the consideration for the promise on his part, the warranty ceases to be available as a condition, and becomes a warranty in the narrower sense of the term, that is to say, a stipulation by way of agreement, for the breach of which a compensation may be sought in damages. Accordingly, if a specific thing has been sold, with a warranty of its quality, under such circumstance that the property passes by the sale, the vendee having been thus benefited by the partial execution of the contract, and become the proprietor of the thing sold, cannot treat the failure of the warranty as a condition broken (unless there is a special condition to that effect in the contract), but must have recourse to an action for damages in respect of the breach of warranty. But in cases where the thing sold is not specific, and the property has not passed by the sale, the vendee may i-efuse to receive the thing proffered to him in performance of the contract, on the ground that it does not correspond with the descriptive state- ment, or, in otlier words, that the condition expressed in the contract has not been performed. Still, if he receives the thing (/t) Behn v. Burners, 3 B. & S. 754. MISREPRESENTATION. 33 as sold, and has the enjoyment of it, he cannot afterwards treat Chap. II. the descriptive statement as a condition, but only as an agreement, for a breach of which he may bring an action for damages (i). Affirmations in policies of insurance are in the nature of waiTanties. In the case of policies of marine insurance, and policies against fire, a warranty is also a condition. It is an implied condition of the validity of the policy, that the party proposing the insurance should make a true and complete representation respecting the property which he seeks to insure. Such policies are therefore vitiated by any material misrepre- sentations, even though not fraudulently made (/o). In the case of life assurances, however, it is not an imphed condition of the validity of the policy that the party proposing the insurance should make a true and complete representation respecting the life proposed for insurance. If there be no express warranty or condition on the part of the insured, a policy of life assurance is not vitiated by false representations, unless there be fraud (I). If there be a proviso in a policy of assurance, that any untrue statements shall avoid the policy, the policy is vitiated by any statement false in fact, whether material or not(7n). The same principle applies to the purchase of government annuities on lives in which the information required by the Act forms the basis of the grant of tlie annuity, and accordingly an annuity applied for and granted under a misrepresentation, though un- intentional, in the information required as to the age of a person, was set aside after his death (?i). (i) Behn v. Burness, 3 B. & S. 490. 755. (I) JFheelton v. Hardistij, 8 E. & Qi) Carter v. Boelvm, 3 Burr. 19(\5 ; B. 232, infra. Moens v. Heyworth, 10 M. & W. 157, (m) Anderson v. Fitzgerald, 4 H. per Lord Wensleydale ; Anderson v. L. 484 ; Ca:ienove v. British Equitable Fitzgerald, 4 H. L. 484 ; Sillem v. Assurance Co., 6 C. B. N. S. 437 ; Thornton, 3 E. & B. 868 ; Stokes v. Macdonald v. Laio Union & Life Cox, 1 H. & N. 533 ; Bannerman v. Insurance Co., L. R. 9 Q. B. 328 ; White, 10 C. B. N. S. 860 ; lonides London Assurance Co. v. Mansel, 11 V. Pacific Insurance Co., L. R. 6 Q. Ch. D. 367 ; coinp. Perrins v. Alari^ie, B. 674, 7 Q. B. 520. See Re Uni- d-c. Insurance Co., 2 El. «& El. 317. versal <£• Fire Insurance Co., 19 E4. (n) Attij.-Genl. v. Bag, 9 Ch. 397. D 34 MISREPRESENTATION. Chap. II. Misrepresenta- tion must be material and a determining ground of the transaction. In order that a misrepresentation may support an action, it is essential that it should be material in its nature (o), and should be a determining ground of the ti'ansaction (p). The misrepresentation must, in the language of the Roman law, be dolus dans locum contractui (q). There must be the assertion of a fact on which the person entering into the transaction relied, and in the absence of which it is reasonable to infer that he would not have entered into it at all (r), or at least not on the same terms (s). Both facts must concur ; there must be false and material representations, and the party seeking relief should have acted upon the faith and credit of such representa- tions (t). To say that statements are false is one thing ; to say that a man was deceived by them to enter into a transaction is another thing (u). A misrepresentation to be material must be one necessarily influencing and inducing the transaction (x), and affecting and going to its very essence and substance (y). (o) Jennings v. Broughton, 5 D. M. & G. 126. See Geildes v. Pen- nington, 5 Dow. 159. (j:») Merewether v. Shmn, 2 Cox, 134 ; De Manneville v. Crompton, 1 V. & B. 354 ; Jameson v. Stei7i, 21 Beav. 9 ; Rohson v. Earl of Devon, 4 Jur. N. S. 245, 248 ; Goldicutt v. Toimisend, 28 Beav. 445 ; Jennings v. Brovghton, 5 D. M. & G. 136 ; Dcnne V. Light, 8 D. M. & G. 774. (q) Fraud is divided by the civilians into dolus daiis locum con- tractui and dolus incidens, or acci- dental fraud. The former is that which has been the cause or deter- mining motive of the transaction ; that, in other words, without which the party defrauded would not have contracted. Incidental or accidental fraud is that by which a man, other- wise intending to contract, is de- ceived as to some accessory or acci- dent of the contract ; for example, as to the quality of the object of sale or its price. The determination of the question a.s to the character of the dolus rests in each particular case with the court. Accidental or incidental fraud is not a ground for avoiding a transaction, but simply subjects the party to an action for damages, Duranton, vol. 10, liv. 3, s. 169 ; Toull. Dr. Civ., liv. 3, tit. 3, c. 2, s. 5, art. 90 ; Bedarride, sur Dol. p. 45. This distinction does not obtain in the common law, and is not admitted in equity. (r) Flight v. Booth, 1 Bing. N. C. 370 ; Pidsford v. Richards, 17 Beav. 87, 96 ; Eaglesfield v. Lord London- derry, 4 Ch. D. 709. (,s) 6 M. & AV. 378, fer Lord Abinger. See Hmall v. Atttcood, You. 461. (t) Cargill v. 517. (») Jennings M. & G. 126. (,r) Re Reese River Silver Mining Co. ; Smith's Case, 2 Ch. 611. (;/) Hallows v. Fernic, 3 Eq. 536 ; 3 Ch. 467. Bower, 10 Ch. D. V. Brougliton, 5 D. MISREPRESENTATION. 35 Misrepresentations which are of such a nature as, if true, to Chap. ii. add substantially to the value of property (z), or are calculated to increase substantially its apparent value (a), are material. A misrepresentation goes for nothing unless it is a proximate and immediate cause of the transaction (6). It is not enouo-h that it may have remotely or indirectly contributed to the transaction or may have supplied a motive to the other party to enter into it. The representation must be the very ground on which the transaction has taken place. The transaction must be a necessary and not merely an indirect result of the representation (c). It is not however necessary that the repre- sentation should have been the sole cause of the transaction. It is enough that it may have constituted a material induce- ment. If any one of several statements, all in their nature more or less capable of leading the party to whom they are addressed to adopt a particular line of conduct, be untrue, the whole transaction is considered as having been fraudulently ob- tained, for it is impossible to say that the untrue statement may not have been precisely that which turned the scale in the mind of the party to whom it was addressed (d). A man who has made a false representation in respect of a material matter must, in order to be able to rely on the defence that the trans- action was not entered into on the faith of the representation, be able to prove to demonstration that it was not relied on (e). (2!) Price V. Macaulay, 2 D. M. & wood v. Small, 6 CI. & Fin. 232, 447 ; G. 344 ; Jennings v. Broughton, 5 D- Jameson v. Stein, 21 Beav. 5 ; Robson ]\r. & G. 126 ; Torrance v. Bolton, 8 v. Earl of Devon, 4 Jur. N. S. 245 ; Gil. 118. TFheelton v. Hardisty, 8 E. & B. (a) Small v. Attwood, You. 461 ; 232 ; Smith v. Kay, 7 H. L. 750, Dimmoch v. Hallett, 2 Ch. 27. 775. (6) Barry v. Crosskey, 2 J. & H. 1 ; (d) Reynell v. Sprye, 1 D. M. & G, New Brunswick, d-c, Railway Co. v. 708 ; Jennings v. Broughton, 5 D. Conybeare, 9 H. L. 711 ; Barrett's M. & G. 126; Clarke v. Dickson, 6 Case, 3 D. J. & S. 30 ; Peek v. Gurney, C. B. X. S. 453 ; Smith v. Kay, 7 H. 6 E. & I. App. Ca. 412. L. 750, 775. (c) Bwiies V. Pennell, 2 H. L. 497, (e) Rawlings v. Wickham, 3 D. & 531 ; NicolVs Case, 3 D. & J. 387, J. 304 ; Nicoll's Case, ib. 387 ; Smith 439 ; Barry v. Crosskey, 2 J. & H. 1 ; v. Kay, 7 H. L. 750, 775 ; Kisch v. New Brunswick, dc, Railway Co. v. Central Venezuela Railway Co., 3 D. Conybeare, 9 H. L. 711. See Att- J. & S. 122. I) 2 36 MISREPRESENTATION. Chap. II. It is not enough for him to say that there were other represen- tations by which the transaction may have been induced (/) ; nor can he be heard to say what the other party would have done, had no misrepresentation been made (//). Words, moreover, it must be remembered, are to be construed in courts of justice in the sense in which the person using them wished and beHeved that they should be understood by the person to whom they were addressed {g), and representations must be construed with reference to the circumstances present to the minds of all the parties when they were made Qi). The materiality of a representation depends on the circum- stances. The following cases may be cited as examples : — Upon an insurance ofhce effecting a re-insurance of a risk with another office, the representation that they retained them- selves a substantial share in the risk was held to be material, and the non-disclosure that they had in fact got rid of all risk vitiated the re-insurance (i). "The representation," said Knight-Bruce, L. J. {j), was an important inducement to the company to accept the insurance without more inquiry than was made, and they were entitled to assert and to be believed in asserting, that they would not have acted as they have done if they had known the real facts." So also a representation respecting a person's credit, that he was possessed of a certain amount of capital, without stating that it was borrowed capital and not his own, was held to be a material misrepresentation to a person thereby induced to trust him [k). So also on a sale of goods for ready money, if the purchaser gives a cheque which he knows he has no funds to meet, this amounts to a misrepre- sentation of a material fact, which vitiates the sale, and entitles the seller to rescind the contract {I). "Where, on the other hand, upon the negotiation for a loan of money, the lenders repre- (/) XicolVs Cas4, 3 D. & J. 387, (h) Dicconson v. Talhot, 6 Ch. 40, 430. iier Mellish, L. J. iff) Reynell v. Spnje, 1 D. M. & (i) Traill v. Baring, 4 D. J. & S. G. 660 ; Smith v. Kay, 7 H. L. 750, 318. 770 ; Traill v. Baring, 4 D. J. & S. (j) lb. 326. 330. (k) Corbett v. Bromi, 8 Biiig. 33. (g) Pigott V. Stratton, 1 D. F. & (I) Loughnan v. Barry, I. R. 6 C. J. .50, j)er Lord Campbell. L. 4-57. MISREPRESENTATION. 37 sented that it was lent by a joint-stock loan company, but it Chap. II. was in fact lent by themselves only, who called themselves the company, which did not otherwise exist, the misrepresentation was held to be immaterial, the real inducement to the borrower being the advance of the money (m). So also when upon nego- tiating the sale of some property the seller represented himself to be acting as agent for another, when in fact he was dealing on his own behalf, it was held under the circumstances to be immaterial, as it was not shown to have induced or affected the sale, and the buyer was held bound to specific performance (li). So also where a buyer, in negotiating a purchase, alleged falsely as the reason for the limited amount of his offer that his partners would not consent to his giving more, it was held to be immaterial to the validity of the contract (o). A misrepresentation to be of any avail whatever must enure Reliance on the to the date of the transaction in question (2?). If a man to whom a representation has been made knows at the time or discovers before entering into a transaction that the represen- tation is false (q), or resorts to other means of knowledge open to him, and chooses to judge for himself in the matter, he cannot avail himself of the fact that there has been misrepre- sentation, or say that he has acted on the faith of the represen- tation (?•). Where accordingly an iron company had sent some of their directors for the express purpose of verifying the repre- sentations of a man respecting his works, who expressed their satisfaction with the proofs produced, it was held that the com- pany had, by choosing to judge for themselves in the matter, precluded themselves from being able to say that they had been deceived by the representations of the vendor, and that it was their own fault if they had not availed themselves of all the (m) Green v. Gosden, 3 M. & G. Fin. 650 ; Lord Brooke v. Eound- 446. thwaite, 5 Ha. 298, 306 ; Nelson, v. (rt) Fellowes v. Gicydyr, 1 R. & M. Stockcr, 4 D. & J. 465. 83. (r) Lysney v. Selby, 2 Lord FJay- (0) Vernon V. Keys, 12 East, 632. 1110ml, 1118, 1120; Pike v. Virjers, (p) Irvine v. Kirkpntrkk, 7 Bell, 2 Dr. & Wal. 261 ; Clarke v. Macin- Sc. Ap. 186. tosh, 4 Gift'. 134. See Farebrothcr \\ (2) lb. ; Virjers v. Pike, 8 CI. & Gibson, 1 D. & J. 602. 38 MISREPRESENTATION. Chap. II. knowledge or means of knowledge open to them (s). So also where a man had before purchasing shares in a mine, visited the mine and examined into its condition, it was held that he had not relied on representations made to him by the vendor, and was not entitled to avoid the contract on the ground that they were false, the alleged misstatements being such as lie was com- petent to detect (t). " Cases," said Lord Langdale, in Clapham v. ShiUeto (u), " frequently occur in which, upon entering into contracts, misrepresentations made by one party have not been in any degree relied on by the other. If the party to whom the representations were made himself resorted to the proper means of verification before entering into the contract, it may appear that he relied on the results of his own investigation and inquiry and not upon the representations made to him by the other party (x) ; or if the means of investigation and verifi- cation be at hand, and the attention of the party receiving the representation be drawn to them, the circumstances of the case may be such as to make it incumbent on a court of justice to impute to him a knowledge of the result, which, upon due inquiry, he ought to have obtained, and thus the notion of reliance on the representation made to him may be excluded (y). Again, when we are endeavouring to ascertain what reliance has been placed on representations, we must consider them with reference to the subject matter and the relative knowledge of the parties. If the subject is capable of being accurately known, and one party is, or is supposed to be, possessed of accurate (.s) Attwood V. Small, 6 CI. & Fin. 363 ; Piclcering v. Douson, 4 Taunt. 232. See Redgrave v. Hurd, 20 Ch. 779 ; Attivoodv. Small, 6 CI. & Fin. D. 16. 232 ; Jennings v. Broughton, 17 (t) Jennings v. Broughton, 17 Beav. 234, 5 D. M. & G. 126 ; Hay- Beav. 234, 5 D. M. & G. 126. See wood v. Cope, 25 Beav. 140. Lowndes v. Lane, 2 Cox, 363 ; Vigers (y) See Lowndes v. Lane, 2 Cox, V. Fike, 8 CI. & Fin. 562, 650 ; Robso7i 363 ; Jennings v. Broughton, 17 Beav. v. Lord Devon, 4 Jur. N. S. 245 Hayicood v. Cope, 25 Beav. 148 Nelson v. Stacker, 4 D. & J. 465 234, 5 D. M. & G. 126 ; Farelrothcr v. Gibson, 1 P. & J. 602 ; Clarke v. Macintosh, 4 Giff. 143 ; New Bnms- New Brunswick, cDc, Railway Co. v. wick, Ac, Railway Co. v. Conyleare, Conybeare, 9 H. L. 711, 730. 9 H, L. 711 ; Hallows v. Ferine, 3 (ii) 7 Beav. 149. Ch. 472. (,>j See Lou-ndcs v. Lane, 2 Cox, MISREPRESENTATION. 89 knowledge, and the other is entirely ignorant or has not equal ^^^p- ^^- means of knowledge, and a contract is entered into after repre- sentations made by the party wJio knows or is supposed to know, without any means of verification being resorted to by the other, it may well enough be presumed that the ignorant man relied on the statements made to him by him who was supposed to be better informed (z) ; but if the subject is in its nature uncertain, if all that is known is matter of inference from some- thing else, and if the parties making and receiving representa- tions on the subject have equal knowledge and means of acquiring knowledge, it is not easy to presume that the repre- sentations made by the one would have much or any influence on the other " (a). The allegation of misrepresentation may be effectually met by proof that the party complaining was well aware and cogni- zant of the real facts of the case (6) ; but the proof of know- ledge must be clear and conclusive. Misrepresentation is not to be got rid of by constructive notice (c). A man who by misrepresentation or concealment has misled another cannot be heard to say that he might have known the truth by proper in quiry, but must, in order to be able to rely on the defence that he knew the representation to be untrue, be able to establish the fact upon incontestible evidence and beyond the possibility of a doubt ((/). " If a person," said Jessel, M.R., in (z) See Lysney v. Sdhy, 2 Lord G. 126 ; Haywood v. Coi^e, 25 Beav. Raym. 1118 — 1120 ; Lovmdes v. 140 ; Clarke v. Mncinfosh, 4 Giff. Lane, 2 Gox, 363 ; Edwards v. 143 ; National Exchange Co. v. iJreio, M'Cleay, 2 Svv. 289 ; Vernon v. Keijs, 23 Dec. of Ct. of Session, 2nd series, 12 East, 637, 4 Taunt. 488 ; Martin p. 1. V. Cotter, 3 J. & L. 506 ; Eeynell v. (h) See Eaglesfield v. Lord London- S2)rye, 1 D. M. & G. 660 ; Price v. derry, 4 Ch. D. 709. Macaulay, 2 D. M. & G. 339 ; (o) Jones v. Rimmer, 14 Ch. D. Rawlings v. Wickham, 3 D. & J. 304 ; 590, im- Jessel, M, R. Higgins v. Samels, 2 J. & H. 460. (d) Dyer v. Hargrave, 10 Yes. 505 ; (rt) See Loiundes v. Lane, 2 Cox, Harris v. Kemhle, 5 Bligli, 730 ; 363 ; Harris v. Kemble, 1 Sim. Ill, Vigers v. Pike, 8 CI. & Fin. 562, 650 ; 6 Bligli, 730 ; Athoood v. Small, 6 JVilson v. Short, 6 Ha. 366, 375 ; 01. & Fin. 232 ; Knight v. Marjori- Shackkton v. Sutcliffe, 1 Deg. & S. hanks, 2 H. & Tw. 316 ; Jennings v. 609 ; Martin v. Cotter, 3 J. & L. Droughton, 17 Beav. 234, 5 D. M. & 496, 506 ; lieynell v. Sprye, 8 Ha. 40 MISREPRESENTATION. <^^jap. II. Redgrave v. Hurd {e), " makes a material representation to another to induce him to enter into a contract, and the other enters into that contract, it is not sufficient to say that the party to whom the representation was made does not prove that he entered into the contract, relying upon the representa- tion. If it is a materia] representation calculated to induce him to enter into the contract, it is an inference of law that he was induced by the representation to enter into it; and in order to take away his title to he relieved from the contract on the ground that the representation was untrue, it must be shown either that he had knowledge of the facts contrary to the representation, or that he stated in terms or showed clearly by his conduct that he did not rely on the representation." If the subject matter is not property in this country, where probably independent inquiry would be made and inspection might take place, but property at such a distance that any person purchasing it is obliged to rely on the statement made with respect to it, the argument is the stronger that reliance has been placed on the representations (/). If a definite or particular statement be made as to the contents of property, and the statement be untrue, it is not enough that the party to whom the representation was made may have been acquainted with the property. A very intimate knowledge with the pre- mises will not necessarily imply knowledge of their exact contents, while the particularity of the statement will naturally convey the notion of exact admeasurement {g). The fact that he had the means of knowing or of obtaining information of the truth which he did not use is not sufficient (h). It is not indeed enough that he may have been wanting in caution, A man who has made false representations, by which he has in- 257 ; Price v. Macniilay, 2 D. M. & Silver Mining Co., 2 Ch. 614. Q. 339 ; Kisch v. Central Venezuela (g) Hill v. Buckley, 17 Ves. 394. Kailu-ay Co., 3 D. J. & S. 122 ; Cen- See King v. Wilson, 6 Beav. 124. tral Railway of Venezuela Co. v. (/() Lysney v. Selhy, 2 Lord Rapn. Kisch, 2 E. & I. App. Ca. 114; 111^,1120 ; Dohell v. Stevens, ZB.k Lawrence's Case, 2 Ch. 422. See C. 623 ; Raidins v. Wickham, 3 D. Nelson v. Stacker, 4 D. & J. 46r). & J. 319 ; Aberaman Iron Works v. (e) 20 Ch. D. 21. Wickens, 4 Ch. 101. (/) Smithes Case; Re Reese Ricer MISREPRESENTATION. 4-1 duced another to enter into a transaction, cannot turn round on Gha-y. II. the person whom he has defrauded and say that he ought to have been more prudent and ought not to have concluded the representations to be true in the sense which the language used naturally and fairly imports (/). Nor is it enough that there may be circumstances in the case which, in the absence of the representation, might have been sufficient to put him on in- quiry. The doctrine of notice has no application where a distinct representation has been made. A man to whom a particular and distinct representation has been made is entitled to rely on the representation and need not make any further inquiry, although there are circumstances in the case from which an inference inconsistent with the representation might be drawn (k). He is not bound to inquire unless something has happened to excite suspicion (l), or unless there is something in the case or in the terms of the representation to put him on inquiry (m). The party who has made the representation cannot be allowed to say that he told him where further in- formation was to be got, or recommended him to take advice, and even put into his hands the means of discovering the truth. However negligent the party may have been to whom the in- correct statement has been made, yet that is a matter affording no ground of defence to the other. No man can complain tliat another has relied too implicitly on the truth of what he him- self stated {n). If a vendor has stated in his proposals the (i) Neto BncnswicJc, &c., Railway Hurd, 20 Ch. D. 21. Co. V. Muggeridge, 1 Dr. & Sm. 382 ; (l) Rawlins v. Widlmm, 3 D. & Langham v. East Wheal, &c., Mining J. 304. See Farebrother v. Gibson, 1 Co., 37 L. J. Ch. 254. D. & J. 602. (k) Grant v. Munt, Coop. 173 ; (m) Kent v. Freehold Land and Van V. Coiye, 3 M. & K. 269 ; Fli^/ht Brichnaking Co., 4 Et^. 598. V. Barton, ib. 282 ; Dohell v. Stevens, (n) Reynell v. S^mje, 1 D. M. & 3 B. & C. 623 ; Pojje v. Garland, 4 G. 660, 710 ; Rawlins v. Wickham, Y. & C. 394 ; Wilson v. Short,'6 Ha. 3 D. & J. 318 ; Smith v. Reese River 366, 377 ; Drysdale v. Mace, 2 Sm. Silver Mining Co., 2 Eq. 264 ; Colby & G. 225, 2,30, 5 D. U. & G. 103 ; v. Gadsden, 15 W. R. 1185 ; Lang- Cox V. Middleton, 2 Drew. 209 ; hayn v. East Wheal, d:c., Mining Co., Grosvenor v. Green, 5 Jur. N. S. 117 ; 37 L. J. Ch. 254 ; Redgrave v. Hurd, Raiolins v. Wickham, 3 D. & J. 318 ; 2U Ch. D. 21. See Harris v. Kemblc, Kisch V. Centred Venezuela Railvjay 5 Bligli, 730. Co., 3 D. J. & S. 122 ; Redgrave v. 42 MISREPRESENTATION. Chap. II. value of the property, he cannot, except under special circum- stances, complain that the purchaser has taken the value of the property to be such as he represented it to he (o). The effect of what would be otherwise notice may be destroyed not only by actual misrepresentation but by anything calculated to deceive or even to lull suspicion upon a particular point (p). A vendor of property on lease, for instance, is not justified in parading upon his particulars of sale the existence of covenants beneficial to the estate which he knows or has good reason to believe cannot be enforced (q). The maxim caveat emptor does not apply where there is a positive misrepresentation, essentially material to the subject in question, provided proper diligence be used by the purchaser in the course of the transaction (r). The rule at least of caveat emptor, where there is misrepresentation, if applicable at all, must be applied with great caution (s). Nor will a condition in particulars of sale that misdescriptions or errors in particulars of sale shall not annul the sale cover a fraudulent misrepresen- tation (f). Misrepresenta- A misrepresentation, to be material, should be in respect of resped,"of a^ "^ ^^ ascertainable fact, as distinguished from a mere matter of definite fact, and opinion (it). A representation which merely amounts to a statement of statement of opinion, judgment, probability or expectation, or opinion. .^ vague and indefinite in its nature and terms, or is merely a loose, conjectural, or exaggerated statement, goes for nothing, though it may not be tjue, for a man is not justified in placing (o) Perfect v. Lane, 3 D. F. & J. (t) Duke of Norfolk v. Worthy, 1 36U. Camp. 337 ; Fenton v. Broion, 14 {p) Dykes v. Blalce, 4 Bing. N. C. Ves. 144 ; Steivart v. Alliston, 1 Mer. 463 ; Bartlett v. Salmon, 6 D. M. & 26 ; Troiver v. Neiocome, 3 Mer. 704 ; G. 41 ; Darlington v. Hamilton, Shackleton v. Sutdiffe, 1 Deg. & S. Kay, 550 ; Smith v. Harrison, 26 L. 609 ; Leslie v. Tompson, 9 Ha. 273. J. Ch. 412 ; Sheard v. Venahles, 36 See Edwards v. Wickwar, 1 Eq. 68. L. J. Ch. 922 ; Dart, V. & P. 96. (?«) Lysney v. Selhy, 2 Lord Raym. (g) Flint v. JVoodin, 9 Ha. 618. 1118 ; Brunton v. Lister, 3 Atk. 386 ; (r) Lowndes v. Lane, 2 Cox, 363 ; Vernon v. Keys, 12 East, 632, 4 Eobson V. Earl of Devon, 4 Jiir. N. S. Taunt. 448 ; Jennings v. Broughton, 245. 5 D. M. & G. 134 ; Higgins v. Sumels, (s) Colhy V. Gadsden, 15 W. R. 2 J. & H. 464 ; Lcylnnd v. Illing- 1185. irorth, 2 D. F. & J. 248. MISREPRESENTATION. 43 reliance on it(a'). An indefinite representation "onglit to put the person to whom it is made upon inquiry {y). If he chooses to put faith in such a statement, and abstains from inquiry, he has no ground of complaint {z). Mere exaggeration is a totally different thing from misrepresentation of a precise or definite fact (a). Such statements, for instance, as assertions as to the value of property ih), or representations by the agent of the vendor of land that the title is good (c), or mere general terms of commendation {d), or mere flourishing or exaggerated state- ments as to the profits and prospects of a company (e), or as to the efficiency and utility of an invention (/), or as to the value of securities {(j), or as to the situation of property (A), or mere loose, conjectural, or exaggerated assertions with respect to a subject matter, which is a matter of speculation, or is essen- tially of an uncertain nature (/), or mere conjectural esti- mates (^), are only expressions of opinion or judgment, as to which honest men may well differ materially. Mere general assertions of a vendor of property as to its value, or the price he has been offered for it, or in regard to its condition, qualities, Chap. II. (x) Hay craft v. Creasy, 2 East, 92 ; Drysdale v. Mace, 5 D. M. & G. 107 ; Kisch v. Central Venezuela Railway Co., 3 D. J. & S. 122 ; Denton V. Macniel, 2 Eq. 352 ; Dimmock v. Hallett, 2 Ch. 27 ; Anderson v. Pacific Insurance Co., L. R. 7 C. P. 65. (y) Lord Brooke v. Roundthwaite, 5 Ha. 304 ; Dimmock v. Hallett ^ 2 Ch. 27. (.) lb. (rt) Higgins v. Samels, 2 J. & H. 464 ; Ross v. Estates Investment Co., 3 Eq. 136, 3 Ch. 682. (b) Harvey v. Young, Yelv. 20 ; Bctily V. Merrell, 3 Bulst. 94, Cro. Jac. 386 ; Jendwine v. Slade, 2 Esp. 572 ; Ingram v. Thor}}, 7 Ha. 74 ; Ellis V. Andrews, 15 Amcr. R. 379. (c) Hume v. Pocock, 1 Ch. 385. (rf) Fenton v. Brown, 14 Ves. 144 Trower v. Newcomc, 3 Mer. 704 Scott V. Hanson, 1 R. & i\l. 129 JFhite V. Cnddon, 8 CI. & Fin. 766 ; Dimmock v. Hallett, 2 Ch. 26. See Jennings v. Bi-oug]iton, 5 D. M. & G. 126 ; Johnson v. Smart, 2 Giff. 151 ; Haywood v. Cope, 25 Beav. 140 ; Higgins v. Samels, 2 J. & H. 460. (e) New Brunswick, d-c. Railway Co. V. Conyhecore, 9 H. L. 711 ; Kisch V. Central Venezuela Railway Co., 3 D. J. & S. 122 ; Jackson v. Tur- quand, 4 E. & I. App. Ca. 309. (/) Neidefer v. Chastain, 36 Amer. R. 198. (r/) National Exchange Co. v. Dreto, 23 Dec. of Ct. of Session, 2nd series, p. 1. (A) Colby V. Gadsden, 34 Beav. 416. (i) Jennings v. Broughton, 5 D. M. & G. 136 ; Stej^hens v. V enables, 31 Beav. 124. {k) Irvine v. Kirkpatrick, 7 Bell, So. Ap. Ca. 186. 44 MISREPRESENTATION. Chap. II. and characteristics ; as, for instance, that land is fertile and im- provable, or that soil is adapted for a particular mode of culture, or is well watered, or is capable of producing crops, or support- ing cattle, or that a house is a desirable residence, &c., are assumed to be so commonly made by persons having property for sale, that a purchaser cannot safely place confidence in them. Affirmations of the sort are always understood as afford- ing to a purchaser no ground for neglecting to examine for himself, and ascertain the real condition of the property. They are, strictly speaking, gratis dicta. A man who relies on such affirmations, made by a person whose interest might so readily prompt him to invest the property with exaggerated value, does so at his peril, and must take the consequences of his own imiDrudence; emj^tor emit qiiani ininiino potest; venditor vendit quarn maximo j^otest (I). Although such affirmations may be erroneous or false, they will not, except in extreme cases, be regarded as evidence of a fraudulent intent (m). A statement of value may, however, be so plainly false, as to make it impossible for the party to have believed what he stated {n). So, also, statements with respect to the quality or condition of land, will, if erroneous or false, amount in extreme cases to a misrepresentation in law (o). So, also, a statement in the prospectus of a company, that the promoters of the company had taken " a large portion " of the shares, though vague in its nature, will amount, in extreme cases, to a misrepresenta- tion (2^). (/) 1 Eoll. Ab. 101, pi. IG ; reant, venditorem non obligant, Leakins v. Clisscll, 1 Sid. 146, 1 veluti si dicat .servuni speciosiim, Lev. 102 ; Harvey v. Young, Yelv. domum bene sedificatara. Dig. lib. 20 ; Trou-er v. Nenrome, 3 Mer. 18 tit. 1, r. 43. 704; Scott V. Hanson, 1 R. & M. (?n) Dimmock v. Hallett, 2 Ch. 129 ; Parker v. Moidton, 19 Ainer. 26 ; Kenner v. Harding, 28 Amer. R. 315 ; Mooney v. Miller, ii Browne R. 617. (Amer.), 218 ; Polaiul v. Broiaiell, (n) JVall v. StiMs, 1 Madd. 80; 17 Lathr. (Amer.), 138. TheRuman Ingram v. Thorp, 7 Ha. 74. law concerning the effect of 2:)nffing (0) Dimmock v. Hallett, 2 Ch, one's wares was thus stated : Ea 26. qujB commendandi causa in vendi- (p) Henderson v. Lacon, 5 Eq. tionibus dicuntur, si palani appa- 2-57. MISREPRESEXTATIOX. 45 An assertion that a third pei'son has offered a specified sum ^^^v- ^^- for the property, though false, is, like mere statements of value, an assertion of so vague and loose a character, that a purchaser is not justified in relying on it (q). The difference between a false averment in matter of fact, and a like falsehood in matter of judgment, opinion, and estimate, is well illustrated by familiar cases in the books. If the owner of an estate affirm that it will let or sell for a given sum, when, in fact, such sum cannot be obtained for it, it is, in its own nature, a matter of judgment, and so the parties must have considered it (r). But if an owner falsely affirm that an estate is let for a certain sum, when it is, in fact, let for a smaller sum, or that the profits of a business are more than, in fact, they are, and thereby induces a purchaser to give a higher price for the property, it is fraud, because the matter lies within the private knowledge of the owner (s). If, again, the owner of land represent that it is well watered, the statement will not, although erroneous or false, amount in law to a misrepresenta- tion, except in extreme cases (t) ; but if he represent that land is situated on the banks of a river, whereas it is some miles off from the river, there is misrepresentation, for the false repre- sentation is in respect of a precise and definite fact (u). So, also, is there misrepresentation of a fact, if the representation be calculated to lead the person to whom it is made to believe that there is a natural supply of water on the property, whereas the fact is that the property, though well supplied with water, derives its supply artificially from the waterworks of a town, and by payment of rates (x). (q) Sug. V. & P. 3, 1 Roll. Ab. Hutchinson v. Morleij, 7 Scott, 341 ; 101, pi. 16. Dimmock v. Halktt, 2 Ch. 28. (/•) Harvey v. Young, Yelv. 20, 1 {t) Scott v. Hanson, 1 R. & M. Roll. Ab. 801, pi. 16; Leakins v. 129; Troiver v. Ncivcome, 3 Mer. Clissell, 1 Sid. 146 ; Pasley v. Free- 704. man, 3 T. R. 51 ; comp. Dimmock v. (w) Van Epps v. Harrison, 5 Hill Hallett, 2 Ch. 28. (Amer.), 67. (s) Ekins v. Treshnm, 1 Lev. 102 ; (x) Leyland v. Illinrj worth, 2D. F. Lysnexj v. Hclhy, 2 Lord Raym. 1118 ; & J. 253. Dobell v. Stevens, 3 B. & C. 623 ; 46 MISREPRESENTATION, Chap. II. Exaggeration as distinguished from misrepre- sentation. Disparagement of property by a purchaser. The representation of an actual state of things as existing, is equivalent to the misrepresentation of a fact (?/). In Vernon v. Keys (z), the true rule was stated to be that the seller was liable to an action of deceit, if he fraudulently mis- represent the quality of the thing sold in some particulars which the buyer has not equal means of knowledge with himself; or if he do so in such a manner as to induce the buyer to forbear making the enquiries which, for his own security and advantage, he would otherwise have made. The rule in regard to representations of value applies to mere representation or expressions of opinion respecting the solvency of third persons. A party has no right to rely on them (a). The rule that exaggeration, as distinguished from misrepre- sentation, goes for nothing, applies with peculiar force to the case of statements in the prospectuses of companies. The pro- moters of adventures are so prone to form sanguine expectations as to the prospects of the schemes which they introduce to the public, that some high colouring and some exaggeration in the description of the advantages which are likely to be enjoyed by the subscribers to the undertaking, may generally be expected in such documents. No prudent man can, owing to the well- known prevalence of exaggeration in such documents, accept the prospects which are held out by the originators of every new scheme, without considerable abatement. But though the repre- sentations in the prospectus of a company ought not, perhaps, to be tried by as strict a test as is applied in other cases, they are required to be fair, honest, and bond fide. There must be no misstatement of any material facts or circumstances (a a). As, on the one hand, mere assertions of value by the vendor of property are not fraudulent in law, though erroneous or false ; so, on the other hand, a disparagement of property by a purchaser is not a fraud (h). Nor is a buyer liable for misrepresenting a seller's chance of sale or probability {y) Pujott V. Stratton, Jolin. 359, 1 D. F. & J. 49. (z) 12 East, 632. (a) Homer v. Perkins, 26 Amer. E. 679. (aa) Kisnh v. Central Pdilu-ay Co. of Venezuela, 3 D. J. & S. 122 ; Denton v. Macneil, 2 Eq. 352 ; Cen- tral Railivay Co. of Venezuela v. Kisch, 2 E. & I. App. Ca. 113; Hallovs V. Fernk, 3 Ch. 467. (6) Tate v. JVilliamson , 2 Ch. 65. MISREPRESENTATION. 47 of his getting a better price. It is a false representation in a ^^^v- IJ- matter merely gratis dictum by the bidder, in respect of which he is under no legal duty to the seller for the correctness of his statement, and upon which the seller would be incautious to rely (c). So, also, is a representation by a purchaser to a seller, that his partners would not consent to his giving more than a certain sum, though false, merely a gratis dictum {d). But though the value of property is generally a matter of ^'^^i^^oi" ™''^y P"* J. ± ./ o J ... upon purchaser opinion, a vendor may put upon a purchaser the responsibility the responsi- of informing him correctly as to the market value, or any other j^o- him as to fact known to him, affecting the value of property, and if the ^'^'"®" purchaser answers untruly there is fraud. He is not bound to answer in such cases, but if he does he is bound to speak the truth (e). In a case accordingly, Avhere the seller was ignorant of the value of the property and the purchaser knew that she knew nothing about it, and the seller asked the purchaser the value of the property and relied upon his statement, which was greatly below the value, the sale was set aside (/). " This," said Wickens, V.-C. (^),"was not a mere purchaser's assessment, but a deliberate statement made to her by a person having full knowledge, which statement was asked by her for her guidance and was acted on by her in reliance on its good faith and accuracy." There may be cases in which a purchaser may rely on the representations of the vendor. When, for instance, from a long course of dealing, the party making the representation knows that the other has become accustomed to act upon his repre- sentations, he may not presume upon such confidence to impose a falsehood. So also where peculiar means of knowledge arc possessed by the vendor and are not open to the purchaser, as where a dealer in precious stones trades with one inexperienced and ignorant of the value of such articles. Acquaintance with such values or the tests of quality is not acquired at once or by the mere asking ; it requires training and time. So, if a dealer (c) Vcnion v. Keys, 12 East, 637. v. Cluqrmnn, 28 Anier. R. 8. ((/) lb. (/) Haijfjarth v. JFcaruuj, 12 Eq. (c) Smith V. Counfripnan, 3 Tiff. 320. {Amev.),fi83,'perUi\\er,J.;Atwnnd (y) lb. 328. 48 MISREPRESENTATION. Chap. II. Representations as to price and moneys spent upon land. False represen- tation as to intention. knows that a person is confined to his room by injury or disease and compelled to depend on the information brought to him, and, indeed, generally, when the parties cannot by reasonable care and diligence place themselves upon equal terms, the law casts a higher obligation to reveal the truth (h). But if a vendor, being asked the market price of an article in common use, makes a false representation, and the vendee chooses to accept the statement so made, and to act upon it instead of making enquiry as to the market price, he cannot repudiate his contract on the ground of the falsity of the statement (i). The rejjresentations of a vendor of real estate to the vendee as to the price which he has paid for it are, in respect of the reliance to be placed on them, to be regarded generally in the same light as representations respecting its value, or the offers which have been made for it. A purchaser is not justified in placing confidence on them [k). But a false affirmation by a vendor as to the actual cost of property (I), or as to the amount spent upon it by him in improvements (m), may amount to a fraudulent misrepresentation. A vendor is not bound to disclose to the vendee the true cwnei'ship of the property he is eugaged in selling, but he is bound to abstain from making any misrepresentations respecting the ownership (n). As distinguished from the false representation of a fact, the false representation as to a matter of intention, not amounting to a matter of fact, though it may have influenced a transac- tion, is not a fraud at law (o), nor does it afford a ground for relief in equity (p). Where a man was induced to grant a (h) Graffenstein v. Epjjstein, 33 Amer. R. 171. (t) lb. (A) Medbiiry v. Watson, 6 Mete, (Amer.), 259 ; Hemmer v. Cooper, 8 Allen (Amer.), 334 ; Holhrook v. Connor, 11 Amer. R. 214, 2()E(i. 123, per Bacon, V. C. (Z) Kent V. Freehold Land Co., 4 Eq. 599 ; Lindsey Petroleum Co. v. Hvrd, L. R. 5 P. C. 243 ; Van Epps V. Harrison, 5 Hill (Amer.), 67. (/ft) Ross V. Estates Investment Co., 3 Eq. 136, 3 Ch. 682. {n) Hill \. Gray, 1 Stark. 434 ; Maturiii v. Tredennick, 2 N. R. 514 ; but comp. Fellowes v. Lord Gioydijr, 1 R. & M. 83 ; Nelthorpe v. Holgate, 1 CoH. 203. (o) Vernon v. Keys, 12 East, 637 ; Hemingu-ay v. Hamilton, 4 M. & W. 122 : Feret v. Hill, 15 C. B. 225. (p) Jorden v. Money, 5 H. L. 185 ; Bold V. Hutchinson, 5 D. M. & G. MISRFTRESENTATION. 49 lease of certain premises to another, upon a representation that ^hap. il. he intended to use the premises for a stated purpose, whereas he intended to use, and did use, them for a different and illegal pm-pose, it was held that the misrepresentation did not entitle the lessor to have the lease avoided (q). So, also, where a man who had given a bond to another, upon which judgment had been entered up, had married upon the declaration of the person who held the bond and warrant of attorney, that she had abandoned the claim, and would never trouble him about it, the court would not restrain her from enforcing at law the judgment on the wan-ant of attorney (r). But if the represen- tation, though in form a representation as to a matter of inten- tion, amounts in effect to a representation as to a matter of fact, relief may be had in equity. Where, accordingly, a lessor, pending an agreement for a building lease, represented to the intended lessee, that he could not obstruct the sea view from the houses to be built by the lessee, because he himself was a lessee under a lease for 999 years, containing covenants which restricted him from so doing ; but after the building lease had been taken, and the houses built upon the faith of the represen- tation, the lessor surrendered his 999 years' lease, and took a new lease omitting the restrictive covenants, the Court, con- sidering the representation to have been in effect a representa- tion as to a matter of fact, restrained the lessor by injunction from building so as to obstruct the sea view (s). It is necessary to distinguish where an alleged ground of false representation is set up between a representation of an existing fact which is untrue, and a promise to do something in future, and to consider what the bargain is (t). But the existing inten- tion of a party at the time of contracting is a matter of fact, and may be material to the validity of a contract, so that if it be proved that a person has fraudulently misrepresented his inten- 558 ; Kay v. Crook, 3 Sm. & G. 407 ; comp. Yeomans v. Jniliams, 1 Eq. M'Caskie v. WCaij, I. R. 2 Eq. 453. 185. {q) Feret v. Hill, 15 C. B. 207. (s) Piggott v. Stratton, John. 359, (r) Jorden v. Money, 5 H. L. 185. 1 D. F. & J. 49. See Cross v. Sprigge, 6 Ha. 553; (t) Ex parte Btirr ell, 1 Ch. D. 552, Mannsell v. Hedges, 4 H. L. 1039 ; per Mellisli, L. J. E 50 MISREPRESENTATION. ^^^P- ^^- tions in some material point for the purpose of inducing a con- tract, it may be a sufficient gi-ound for avoiding the contract. Thus a man buying goods must be taken to have made an implied representation that he intended to pay for them, so that if it be clearly made out that at that time he did not intend to pay for them, a case of fraudulent misrepresentation is made out, and the seller may avoid the sale, and recover back the goods from the buyer, or from any person to whom he has transferred them with notice of the sale (u). So, also, when a lessee having power to assign only with the consent of his landlord, which the landlord had promised to give upon his finding a respectable tenant, was induced to assign the lease by a false representation of the assignee that a certain intended tenant was a respectable man, it was held that the representa- tion although only of an intended tenant, involved a sufficiently material fact to avoid the agreement (x). There is a clear distinction between a misrepresentation in point of fact, a representation that something exists at that moment which does not exist, and a representation that some- thing will be done in the future. Of course a representation that something will be done in the future cannot either be true or false at the moment it is made, and although it may be called a representation, if it is anything, it is a contract or promise (y). A representation which amounts to a mere expression of in- tention must be distinguished from a representation which amounts to an engagement. If a representation amounts to an engagement, the party making it is bound in equity to make it good (z). Where, for instance, a man previously to the mar- riage of his daughter said he intended to leave her 10,000^. which was to be settled in a particular way, and that the person about to marry her was for this reason to settle 5,000?. (u) Load V. Green, 15 M. & W. (?/) 7 Ch. 804, ^^er Mellisli, L. J. 216 ; miite v. Gnrden, 10 C. B. 919 ; (z) Hammersley v. De Biel, 12 CI. Ex parte Whittalcer, 10 Ch. 449, & Fin. 45 ; Maunsell v. Hedges, 4 H. per Mellish, L. J, L. 1056 ; Loxley v. Heath, 1 D. F. & (x) Cunhamx. Barry, 15 C. B. 597. J. 492 ; Loffus v. Maio, 3 Giff. 592 ; See Feret v. Hill, 15 C. B. 207. Coverdale v. Eastwood, 15 Eq. 129. MISREPRESENTATION. 51 on her, and the party did make the settlement and married the ^^'^P- ^^- lady, the engagement was held binding, for the circumstances amounted to a contract (a). If, on the other hand, a man pre- viously to the marriage of a relation tells him that he has made his will and left him his property, and that he is confident he never would alter his will to his disadvantage, or tells him before his marriage to his daughter that he would leave her so much money, this is a mere expression of intention, on which the person to whom it is addressed is not justified in relying (&). So, also, when an unattested paper signed by A., and handed by him to B., stated that as a mark of his esteem and gi-eat friend- ship, he agreed to allow him 500^, a year, and that after his death, he had in lieu thereof, bequeathed him 10,000^. ; and B. took the paper to a lady who consented to his marriage with her daughter on the faith of the engagement contained in the paper, but no communication took place between the lady and A., and the marriage took place, it was held that there was no such connection between A.'s promise or representation, and the consent given by the lady as to sustain a claim against A.'s estate (c). A representation which amounts to an engagement is enforced not as being a representation of an intention, but as amounting to a contract {d). There is no middle term, no tertium quid, between a representation so made to be eftective for such a purpose and being effective for it and a contract (e). Where after correspondence and proposals of settlement pre- viously to a marriage, a formal settlement is executed, the settlement will supersede the proposals contained in the corres- pondence, and will be taken to embody all the contract which existed between the parties at the time when it was exe- cuted (/). (a) Hammersley v. De Biel, 12 CI. (c) Dashwood v. Jermyn, 12 Ch. D. & Fin. 45. See Barkworth v. Young, 776. 4 Drew. 1 ; Prole v. Soady, 2 Giff. (d) Bold v. Hutchinson, 5 D. M. & 20 ; Lofns v. Mam, .3 Giff. 592 ; Alt G. 558 ; Mannsell v. Hedges, 4 H. L. v. Alt, 4 Giff. 84. 1056 ; Loxley v. Heath, 1 D. F. & J. (h) Bold, V. Hutchinson, 5 D. M. & 492; C'overdalev.Eastwood,l5 Eq.l29. G. 558 ; Mannsell v. Hedges, 4 H. L. (e) 4 H. L. 1056, per Lord Ci-an- 1039 ; Loxley v. Heath, 1 D. F. & J. worth. 492 ; Laver v. Gilder, 32 Beav. 4. (/) Lorleij v. H-nfh, 1 D. F. & J. 52 MISREPRESENTATION. Chap. n. A misrepresentation of a matter of law does not constitute a Wisrepresenta- fraud, because the law is presumed to be equally within the of law. ^^ knowledge of all the parties. Thus the misrepresentation of the legal effect of a written agreement which a party signs with a full knowledge of its contents is not a sufficient ground for avoiding the agreement (g). So, also, where the directors of a company borrowed money, and issued to the lender a bond in a form that they represented to be valid, but which, according to the general law of such companies, was invalid, it was held that they were not responsible for their representation, as it was merely a matter of law, and was made to a person who was equally informed of the facts, and to whom they held no fidu- ciary relation as advisers (A). So, also, when an agent in a recognised position as the director of a company, represents that he has authority by virtue of his office to bind the com- pany, the extent of the authority incident to the office being a matter of general law within the knowledge of the party to whom the representation is made, the latter must trust to such representation of authority at his own risk (i). So, where an agent represents himself to be an authorised agent under a power of attorney, the extent of his authority depends upon the construction of the power and not upon his assertion respecting it (k). Nor does the principle of relief in equity on the ground of misrepresentation by third persons extend to an incorrect statement of the law. If, for example, a person asks another what the law was upon a particular point and acts upon the re- representation so made, and thereby alters his position to his prejudice, he cannot maintain an action in equity against the latter to make good the representation (l). In a case when the solicitors of trustees of a fund, accepted notice from a mortgagee of part of the fund on behalf of the trustees, it was held that as they were acting under an opinion erroneous in point of law, that their employment as solicitors 489 ; Kiyirjdon v. Tagerf, 17 Ch. D. 777, 7 E. & I. App. Ca. 102. 363. (k) lb., 800, per Mellish, L. J. (g) Leids v. Jones, 4 B. & C. 506. (Z) lb. ; Rashdall v. Ford, 2 Eq. (h) Rashdall v. Ford, 2 Eq. 750. 750. (i) Beaftie v. Lord Eburij, 7 Ch. MISREPRESENTATION. 53 enabled them to accept service, they were not liable (m). So, ^^v- "• also, the assertion by a man of what he thinks himself entitled in point of law to assert is not a misrepresentation, though it may not strictly be correct (n). But matters of private right, although depending on rules of law and legal rules of construction, are in general to be con- sidered as matters of fact in reference to fraud, and therefore it seems that the misrepresentation of the legal effect of a written agreement which the other party is thereby induced to sign, if otherwise fraudulent, would be sufficient ground for avoiding an agreement (o). It has been said that "a statement of fact which involves, as most facts, a conclusion of law, is still a state- ment of fact and not a statement of law." Such are statements regarding personal status, the possession of property, and other statements regarding matters of private right (p). To constitute a fraudulent representation, the representation Misreprcsenta- need not be made in terms expressly stating the existence of beln^expreL some fact which does not exist. If a statement be made by a terms. man in such terms as would naturally lead the person to whom it was made to suppose the existence of a certain state of facts, and if such statement be so made designedly and fraudulently, it is as much a fraudulent misrepresentation as if the statement of an untrue fact were made in express terms (q). A man, moreover, who makes a representation is not only answerable for what he in his own mind intended to represent, but he is answerable for what any one might reasonably suppose to be the meaning of the words he used (r). A representation may be false by reason not only of positive (m) Saffron JValden, o&c, Society derry, 4 Ch. D. 702, per Jessel, M.R. V. Rayner, 14 Ch. D. 406. (s) Lee v. Jones, 17 C. B. N. S. (n) Legge v. Croker, 1 Ba. & Be. 510, per Crompton, J. ; Loimdes v. 506 ; Wilde v. Gibson, 1 H. L. 626 ; Lane,2Cox, 363 ; IFalker v. Symonds, New Brunswick, . {t) Dig. lib. 18, tit, 1, k^g. 43, 588. (w) lb. (h) Taylor v. Martindale, 1 Y. & (x) Pope V. Garland, 4 Y, & C. C, C, C. 658 ; Torrance v. Bolton, 8 401 ; Peek v. Gurney, 6 E. & I. App. Ch. 118. t-'a- 391. (c) Buyd v, Dickson, I. R. 10 Eii. (ij) Flight V. Booth, 1 Bing. N. C. 254. 377 ; Van v. Cor2)e, 3 M. & C. 269 ; (d) Else v. Else, 13 Ec^. 200. MISREPRESENTATION, A representation though true to the letter may be in sub- _ stance a misrepresentation (e). There is a misrepresentation if a statement is calculated to mislead or throw the person to whom it is made off his guard, though it may be literally true ( f). Where particulars of sale contain a statement which is literally true but which is capable of another meaning, and such other meaning is more likely to be taken than the true one by a man reading the particulars, the purchaser, if he knows nothing of the real facts and understands the particulars in the one sense, is entitled to say that the vendor has deceived him (g). If a man states a thing partially, he may make a false state- ment as much as if he had misstated it altogether. Every word he says may be true, but if he leaves out something which qualifies it, he may make a false statement {h). There is misrepresentation if a man represents not the whole of the facts, but only a portion, and omits what he ought to have known was a very material fact. It is an untruthful re- presentation by reason of suppression and concealment of truth, not untruthful in the sense of direct falsehood, but untruthful because it is intended to convey to the public an impression different from the reality, and because it is known by the person who makes it or ought to be known by him to be materially different from that which was the real state of the case (i). It is the duty of the vendor of property to make himself acquainted with all the peculiarities and incidents of the pro- perty which he is going to sell, and when he describes the pro- perty for the information of a purchaser it is his duty to describe everything which it is material for him to know in order to judge of the nature and value of the property. It is not for him just to tell what is not actually untrue, leaving out a great (e) Lowndes v. Lane, 2 Cox, 363 ; iio&s' v. Estates Investment Co.y 3 Ch. Flint V. ^roorfwi, 9 Ha. 618 ; Stanton 682 ; Peek v. Guniey, 6 E. & I. App. V. Tattersall, 1 Sm. & G. 529 ; Ca. 400. M'Culloch T. Gregorii, 1 K. & J. 286 ; (fj) Cato v. Thompson, 9 Q.. B. D. Clarke v. Dickson, 6 C. B. N. S. 453 ; 619. Eoss V. Estates Investment Co., 3 Cli. (k) Arhoright v. Newholdy 17 Ch.. 682. D. 318, jper James, L. J. (/) Edwards v. Wichmr, 1 Eq. (i) Emma Silver Mining Co. v. 68 ; Dimmock v. HalUtt, 2 Ch. 28 ; Grant, 11 Ch. D. 935. 55 Chap. II. 56 MISREPRESENTATION, ^h^P- ^^- deal that is true, and leaving it to the purchaser to enquire whether there is any error or omission in the description or not (k). In conditions of sale there must not be any representation or condition which can mislead the purchaser as to the facts within the knowledge of the vendor, and the vepdor is not at liberty to require the purchaser to assume as the root of his title that which documents in his possession show not to be the fact, even though those documents may show a perfectly good title on another ground. The requirement or insistance in conditions of sale that a certain state of things shall be assumed, does by implication contain an assertion that no facts are known to the persons who require it, which would make that assumption a wrong one according to the facts. A condition is therefore bad as misleading, if it requires the purchaser to assume what the vendor knows to be false, or if it states that the state of the title is not accurately known when in fact it is known to the vendor (l). Though a purchaser will not be bound, if a vendor makes an nntrue statement in the conditions of sale and then tries to bind the purchaser by a condition, the case is otherwise if the vendor merely does not state everything in the conditions of sale, but invites the purchaser to come and see a certain docu- ment for himself, which the conditions of sale tell him is of importance. In such a case the purchaser will be bound by a condition that he shall assume the truth of the document (m). Instead of setting out the whole of the documents in conditions of sale or else an abstract, in which event he is liable to be charged with having stated them incorrectly, a vendor may in- vite attention to documents (n). When the sale is by the Court, the Court is bound to take more especial care, if possible, that there shall be nothing in the conditions or in the representations therein contained which can by possibility mislead a purchaser, because the purchaser (/;) Bradling v. Plmnmer, 2 Drew. v. Baker, 20 Efj. 50. 430. See Broad v. Munton, 12 Cli. (m) Bknkhorn v. Penrose, 29 W. D. 136. R. 238. (0 Broad v.. Munton, .12 Ch. D. ;(/») lb. 1.50, y>»;/' Cotton, L. .J. iiktQ Jlurnett MISREPRESENTATION. 57 has a right to assume that the Court will take good care that Chap. II. there shall be nothing that can in any way mislead him as to the title he is getting (o). A misrepresentation is usually by words ; but it may be as well by acts or deeds, as by words ; by artifices to mislead as well as by actual assertions. Even in chaffering about goods there may be such misrepresentation as to avoid a contract. A man who by act or deed falsely and fraudulently impresses the mind of another with a certain belief whereby he is misled to his injury is as much guilty of a misrepresentation as if he had deliberately asserted a falsehood {p). It is a fraud to impress upon a vendible article the trade-mark of another in order to give it greater currency in the market {q). It is not enough that there has been a misrepresentation, and intent of the that the misrepresentation has conduced in some way to the "^^^i'^®^^" transaction in question. It is necessary that the misrepresen- tation should have been made in relation to the transaction in question, and with the direct intent to induce the party to whom it is immediately made, or a third party, to act in the way that occasions the injury (r). A representation which has been made some time before the date of the transaction in question is not sufficient, unless it can be clearly shown to have been immediately connected with it (s). A representation to (o) Broad v. Munton, 12 Ch. D. National Exchange Co. v. Drew, 2 150, 2^er Cotton, L. J. Macq. 120 ; NicolVs Case, 3 D. & J. (p) Sibbald v. Hill, 2 Dow. 266 ; 387, 440 ; Jamesonx. Stein, 21 Beav. Lovell V. Hicks, 2 Y. & C. 55 ; Craw- 5 ; Denne v. Light, 8 D. M. & G. shay V. Thornton, 4 M. & G. 387 ; 774 ; Barrij v. Crosskey, 2 J. & H. 1 ; Bumes v. Pennell, 2 H. L. 497. Way v. Hearne, 32 L. J. C. P. 34 ; (g) Crawshay v. Thornton, 4 M. & Queen v. Sadler's Co., 10 H. L. 404 ; G. 387. See Kerr on Injunctions, Peek v. Gurney, 6 E. & I. App. Ca. p. 358. 412. (r) East India Co. v. Henchman, 1 (s) Bumes v. Pennell, 2 H. L. Ves, J. 287 ; Ihhell v. Stevens, 3 B. 497, 530. See NicolVs Case, 3 D. & & C. 623 ; Harris v. Kemhle, 5 Bligli, J. 439 ; IVheelton v. Hardisty, 8 E. N. S. 730 ; Attivood v. Small, 6 CI. & B. 232 ; Maunsell v. Hedges, 4 H. & Fin. 232, 445 ; Irvine v. Kirk- L. 1060, per Lord St. Leonards ; Patrick, 7 Bell, Sc. Ap. Ca. 186 ; Barretfs Vase, 3 D. J. & S. 30 ; Bumes v. Pennell, 2 H. L. 497, 529 ; Western Bank of Scotland y. Addic, 1 Smith V. Kay, 7 H. L. 750, 775 ; Sc. App. Ca. 155. 68 MISREPRESENTATION. Misrepresenta- tion must be attended with damage. ^''■'^P- ^^- be of any avail whatever must, unless under special circum- stances, have been made at the time of the treaty {t), and should not have any relation to any collateral matter or other relation or dealing between the parties (ii). Misrepresentation, however, goes for nothing either at law or in equity unless a man has been misled thereby to his prejudice. Fraud without damage is not sufficient to support an action {x). But it is enough if the representation operates to the prejudice of a man to a very small extent {y). Fraud gives a cause of action if it leads to any sort of damage {z). But in order that a false representation should give a cause of action the damage must be the immediate and not the remote effect of the repre- sentation (a). Concealment. Misrepresentation may consist as well in the concealment of what is true as in the assertion of what is false (6). If a man conceals a fact that is material to the transaction, knowing that the other party acts on the presumption that no such fact exists, it is as much a fraud as if the existence of such fact were expressly denied or the reverse of it expressly stated (c). Concealment to be of any avail whatever, either at law or in equity, must be dolus dans locum contractui. There must be the suppression of a fact, the knowledge of which it is reason- able to infer would have made the other party to the transaction abstain from it altogether. Concealment of a fact is not material if the statement of that fact would not have induced a man (otherwise desirous of entering into the transaction) to abstain from it(d)). A concealment to be material must be (t) Harris v. Kemhle, 1 Sim. 122, fer Sir J. Leach, M. R.. See Wheel- ton V. Hardishj, El. Bl. & El. 232 ; HoUom V. Browne, 9 C. B. N. S. 445 ; Smith V. Kay, 7 H. L. 750. (m) Harris v. Kemhle, 1 Sini. 122, 5 Bligh, N. S. 730 ; National Ex- change Co. V. Dreiv, 2 Macq. 103. (x) Polhill V. JValter, 3 B. & Ad. 114 ; Felloives v. Lord Gwydyr, 1 Sim. 63, 1 R. & M. 83. See Flint v. Woodin, 9 Ha. 618. {y) Caiman v. Horner, 18 Ves. 10. (2) Umith v. Kay, 7 H. L. 750, 775. (a) Barry v. Crosskey, 2 J. & H. 1. (6) Tapjj V. Lee, 3 B. & P. 371 ; Central Railway Co. of Venezuela v. Kisch, 2 E. & I. App. Ca. 114 ; Oakes v. Turquand, ib. 326. (c) Peek V. Gurney, 6 E. & I. App. Ca. 400. (d) Pulsford V. Richards, 17 Beav. MISREPRESENTATION. 59 the concealment of something that the party concealing was __^^^L under some legal or equitable obligation to disclose (e). Mere non-disclosure apart from circumstances importing a duty of informing the other party, or evidencing a fraudulent intention in not informing him, is not in general a sufficient ground for avoiding a contract. Where accordingly a governess had been engaged under a written agreement, in which she was described as a " spinster," it was held that the mere non-dis- closure of the fact that she had been married and divorced was not alone a sufficient ground for avoiding the agreement (/). " There is no allegation of fraud," said Lord Blackburn (g), " and short of that the mere concealment of a material fact, except in policies of assurance, does not avoid a contract." So with a promise to marry, it was held to be no ground for avoiding the contract that it had not been disclosed that the promisee was at the time of the promise under a pre-contract to marry another person (h) ; or that the promisee had at one time been insane and confined in a lunatic asylum (i). " There are many things," said Chief Justice Cockburn ( j ), " which a man might desire to have communicated to him if they existed at the time of making the contract, as that the plaintiff is in debt, or subject to other liabilities, or some circumstances relating to her person, her temper, her disposition, the discovery of which would yet 98 ; Peek v. Gurney, 6 E. & I, App. Maclure v. Ei^ley, 2 Mac. & Gr. 274 ; Ca. 400. See Davies v. Goofer, 5 M. Beck v. Kav toroivicz, 3 K. & J. 247 ; &C. 270; Vanev. Gohbold, 1 Exch. Haywood v. Gope, 25 Beav. 140; 798 ; New Brunswick, <£r., Railway Evans v. Gavriwjton, 1 J. & H. 598, Co, V. Muggeridge, 1 Dr. & Sm. 363 ; 2 D. F. & J. 481 ; Greenfield v. Kisch v. Gentral Venezuela Railway Edwards, 2 D, J. & S. 582, 598 ; way Go,, 3 D. J. & S. 122. Central Venezuela Railway Co, v. (e) Irvine v. Kirkpatrick, 7 Bell, Kisch, 2 E. & J. App. Ca. 112 ; Re Be. Ap. 186 ; Horsfall v. Thomas, 1 Madrid Bank, 2 Eq. 216. H. & C. 100, per Bramwell, B. ; (/) Fletcher v. Krdl, 42 L. J. Q. Archbold v. Lord Hoivth, L. E. Ir. 2 B. 55. C. L. 629 ; London Assurance Go. v. (g) lb. Mansel, 11 Ch. D. 367. See Dalbiac Qi) Beachey v. Broicn, E. B. & E. V, Dalbiac, 16 Ves. 124 ; Dalby v. 796. Pullen, 1 R. & M. 296 ; Adamson v. (i) Baker v. Carticright, 10 C. B. Evitt, 2 R, & M. 72 ; Harris v. N. S. 124. Kemble, 1 Sim. Ill, 5 Bligh, 730 ; (j) lb. Roddy V. Williams, 3 J. & L. 21 ; -60 MISREPRESENTATION. ^^^3.p. II. not entitle the defendant to refuse to fulfil his engagement. It might be right to disclose such things, and yet it has never been held that the discovery of them justified a party in breaking his contract." But a promise to marry a woman is impliedly conditional upon the fact of her being chaste, and consequently the fact of unchastity, if not disclosed, would avoid the con- tract {k). If the fact is one which ought to have been disclosed, the circumstance that it may not have been disclosed through mistake, ignorance, or forgetfulness, cannot be taken into con- sideration. It is immaterial that the concealment may not have been wilful or intentional, or with a view to private ad- vantage (Z). It is also essential that the concealment should be in reference to the particular transaction (m), and should enure to the date of it. If a party to a transaction conceals, however fraudulently, a material fact from another with whom he is treating, but that othei", notwithstanding the concealment, gets at the fact concealed before he enters into the transaction, the concealment goes for nothing. It is of no avail, if the party has become in anyway acquainted with the truth (n). Scientia iitrinque par pares contrahentes facit The law will not inter- pose, where both parties to the transaction are equally well informed or are in equal ignorance as to the actual condition or value of the subject matter of the transaction (o). The principles of morals require more scrupulous good faith in the dealings of men with each other than is exacted either at law or in equity. The writers of the moral law hold it to be the duty of the seller to disclose the defects which are within his knowledge (}'>). But the common law is not so strict. The law aims at practical good and general convenience rather than (k) Young v. Murphy, 3 Bing. N. (m) Green v. Gosden, 3 M. & G. C. 54 ; Baker v. Cartimght, 10 C. B. 446. N. S. 124, per Cockburn, C. J. (n) Irvine v. Kirkpatrick, 7 Bell, (/) Piiseyv.Desbouverie,3'P. Wms. Sc. Ap. 186, 237. 315 ; Bowles V. Stuart, 1 Sch. &Lef. (o) Sug. V. & P. 1 ; Knight v. 249 ; Brydgesv. Branfil, 12 Sim. 384 ; Marjorihanks, 11 Beav. 348, 2 Mac. Willi!^ V. Willis, 17 Sim. 218 ; Rail- & G. 10. ton V. Matthews, 10 CI. & Fm. 934. {p) Grot. b. 2, c. 12, s. 9. MISREPRESENTATION. 61 at theoretical perfection. It does not profess to vindicate every Chap. II. deflection from propriety, but requires men in their dealings with each other to exercise proper vigilance and apply their attention to those particulars which may be supposed to be within the reach of their observation and judgment, and not to close their eyes to the means of information which are accessible to them : vigilantibus, non dormientibus, jura subveniunt. If parties are at arms' length, either of them may remain silent and avail himself of his superior knowledge as to facts and circum- stances equally open to the observation of both, or equally within the reach of their ordinary diligence, and is under no obligation either at law or in equity to draw the attention of the other to circumstances affecting the value of the property in question, although he may know him to be ignorant of them. If, for example, a man treats for the purchase of an estate knowing that there is a mine under the land, and the other party makes no inquiry, the former is not bound to inform him of the fact (q). So also a first mortgagee with power of sale, who has made an advantageous contract for the sale of the mortgaged premises, may buy up the interest of a second mort- gagee who supposed the property was insufficient to pay off both mortgages, without informing him of the contract (r). A very little, however, is sufficient to affect the application of the principle. If a single word be dropped by a purchaser which tends to mislead the vendor, the principle will not be allowed to operate (s). "A single word," said Lord Campbell, in Waltei's v. Morgan (t), " or even a nod, or a wink, or a shake of the head, or a smile from the purchaser, intended to induce the vendor to believe the existence of a non-existing fact which (q) Fox V. Macreth, 2 Bro. C. C. 402. 420 ; Turner v. Harvey, Jac. 169, (s) Turner v. Harvey, Jac. 169, 178 ; Stikeman v. Dawson, 1 Deg. & 178 ; Dolman v. Noketf, 22 Beav. S. 90 ; Laidloio v. Organ, 2 Wheat. 402. See Davies v. Cooper, 5 M. & (Amer.), 178 ; IVilde v. Gibson, 1 H. C. 270 ; Blake v. Mowatt, 21 Beav. L. 605 ; Walters v. Morgan, 3 D. F. 603 ; Cannock v. Jauncey, 27 L. J. & J. 723 ; Arclibold v. Lord Howth, Ch. 57 ; Thompson v. Lambert, I. R. 2 Ir. L. R. 2 C. L. 608 ; Sug. V. & P. Eq. 439. 14th ed. 2, 328, 335. {t) 3 D. F. & J. 724. ((•) Dolman v. Xokes, 22 Bc;iv. 62 MISREPRESENTATION. Chap. II, might influence the price of the subject to be sold, is a fraud at law. So a fortiori would a contrivance on the part of the pur- chaser better informed than the vendor of the real value of the subject to be sold, to hurry the vendor into an agreement with- out giving him the opportunity of being fully informed of its real value, or time to deliberate and take advice respecting the conditions of the bargain." If a purchaser conceal the fact of the death or dangerous illness of a person of which the seller is ignorant, and by which the value of the property is materially increased, there is fraud (u). A vendor may not, on the other hand, use any art or practise any artifice to conceal defects, or make any representation for the purpose of throwing the buyer off his guard, or use any device to induce the buyer to omit inquiry or examination into the defects of the thing sold. If he says or does anything whatever with an intention to divert the eye or obscure the observation of the buyer even in relation to open defects, or to prevent his use of any present means of observation, there is fraud (x). As, for example, where a man having a log of maho- gany to sell, turned it over so as to conceal a hole in the under- neath side (y). So also where a man sold a vessel "with all faults," and before the sale took her from the ways on which she lay and kept her afloat in a dock in order to prevent an examination of her bottom, which he knew to be unsound, the purchaser was held entitled to avoid the sale on account of fraud {z). So also if a vendor were to describe the property as let upon lease under certain specified covenants, beneficial to the rever- sion, which however he knew could not be enforced, this would probably be considered delusive (a). So also if a vendor know- ()/) Turner v. Harvey, Jac. 169 ; Edwards v. Wichrar, 1 Eq. 68. Ellard v. Llandaf, 1 B. A. & Be. (y) Udell v. Atherton, 7 H. & N. 241 ; Jones v. Keene, 2 Moo. & Rob. 172. 349. See Popham v. Brooke, 5 Euss. (2) Bcujlehole v. Walters, 3 Camp. 9; Tlwmpson v. Lambert, I. R. 2 154; Schneider v. Heath, ib. 506. Eq. 439. See Pickering v. Dowson, 4 Taunt. (.r) Hill V. Grn>i, 1 Stark. 434 Pilbnore v. Hood, 5 Biiig. N. C. 97 Thhell V. Stevens, 3 B. & C. 623 784 ; Kain v. Old, 2 B. & C. 634 ; Taylor v. Bullen, 5 Exch. 779. {a) Flint v. Woodin, 9 Ha. 621. MISREPRESENTATION. 63 ing of an incumbrance on an estate sells without disclosing the ^^^^v- II- fact, and with knowledge that the purchaser is a stranger to it, and under representations inducing him to buy, he acts fraudu- lently and violates integrity and fair dealing (6). The same rule applies to the case where a party pays money in ignorance of circumstances with which the receiver is acquainted, and does not disclose, and which, if disclosed, would have prevented the payment. In^ that case the parties do not deal on equal terms, and the money is held to be unfairly obtained and may be recovered back (c). So also although a vendor is in general under no obligation to disclose the price at which he has himself purchased or contracted to purchase the subject of sale (d), there may be a fraud upon a purchaser if he misrepresent the price given (e). So also, and upon the same principle, there is fraud, if a man, wishing to advance an undertaking, in which he was interested, determines to purchase shares in it, and another person also interested in the undertaking, takes advantage of the knowledge he possesses of the intention of the former to defeat the parti- cular act, whereby he sought to accomplish his object, and to substitute in the place of it a mode of disposing of a portion of his own interest in the undertaking (/). Mere reticence does not amount to a legal fraud, however it Reticence. may be viewed by moralists. Either party may be innocently silent as to ground open to both to exercise their judgment upon. If the parties are at arms' length neither of them is under any obligation to call the attention of the opposite party to facts or circumstances which lie properly within his know- ledge, although he may see that they are not actually within his knowledge (g). But a man may by mere silence, without active concealment, produce a false impression on the mind of (h) 1 Ves. 96, i^er Lord Hard- (e) Siqna, p. 48. ■wicke. (/) Blake v. Moivatt, 21 Beav. (c) Martin v. Morgan, 1 Brod «& 614. Bing. 289. See Heane v. Rogers, 9 (g) ArchhoJd v. Lord Hou-tli, L. R. B. & C. 577, -per Bayley, J. Ir. 2 C. L. 608. See Walters v. id) Ex -parte Gorer, 1 Ch. D. 182; Morgan, 3 D. F. & J. 723. Craig v. PMlipps, 3 Ch. D. 733. 64 MISREPRESENTATION. Chap. II. another. AUud est celare, aliud tacere ; neque enim id est celare, quicquid reticeas ; sed cum, quod tu scias, id ignorare, emolumenti tui causa, veils eos quorum intersit id scire (h). Silence implies assent when there is a duty to speak. Qui tacet consentire videtur : qui imtest et debet vetare, jubet (i). If a man by his silence produces a false impression on the mind of another there is a fraud. " Where," said Lord Blackburn in Broivnlie v. Campbell (j), " there is a duty or obligation to speak, and a man in breach of that duty or obligation holds his tongue and does not speak, and does not say the thing he was bound to say, if tbat be done with the intention of inducing the other party to act upon the belief that the reason why he did not speak was because he had nothing to say, there is fraud." If the seller knows the buyer to be acting under a mistake or in ignorance as to some quality or matter connected with the subject of sale, and not to be acting on his own inspection or iudcrment, and do not undeceive him, the silence of the seller Jo ' as a means of misleading him may amount to a fraudulent concealment entitling the buyer to avoid the sale (k). When, for example, a man employed to sell a picture had refused to state the name of the owner, and afterwards becoming aware that the buyer was under a delusion as to the ownership which enhanced the price, did not remove the delusion, but took advantage of it to effect the sale, it was held that the buyer might avoid the sale on the ground of fraud (l). If a man interested is present and hears any false or imperfect representation made, and does not set it right, he is fixed by the representation {m). When a statement or representation has been made in the bond fide belief that it is true, and the party who has made it afterwards comes to find out that it is untrue and discovers (h) Cicero de Offic. lib. li, chap. (k) Smith v. Hughes, L. R. 6 Q. B. 12, per Lord Mansfield, 3 Burr. 1910, 605, per Cockburn, C. J. pel Lord Abinger, 6 M. & W. 381 ; (I) Hillv. G-ray, 1 Stark. 434. See Nelthorpe v. Holgate, 1 Coll. 221, per Keetes v. Lord Cadogan, 10 C. B. 600. Knigbt Bruce, L. J. (m) Shepherd v. Sharpe, 4 L. T. {i) Morgan v. Evans, 3 CI. & Fin. 270 ; Davies v. Davies, 6 Jur. N. S. 205 ; Burke v. Prior, 15 Ir. Ch. 106. 1322. See Smith v. Bank of Scot- ( J) 5 App. Ca. 950. lawl^ 1 Dow. 272. MISREPRESENTATIOX. ^^ what he should have said, he can no longer honestly keep up ^^^P" "' that silence on the subject after that has come to his knowledge, thereby allowing the other party to go on upon a statement which was honestly made at the time it was made, but which he has not retracted when he has become aware that it can no longer be honestly persevered in (n). When the purchasers of an estate, being the owners of an adjoining colliery, in negotiating the contract had not disclosed the fact that they had already worked a considerable quantity of coal from under the estate through their colliery, it was held that the vendor was entitled to have the contract set aside (o). "If a man," said Lord Hatherley (^)), " knows that he has com- mitted a trespass of a very serious character upon his neigh- bour's property, and finding it convenient to screen himself from the consequences makes a proposal for the purchase of that pro- perty, he ought to communicate to the person with whom he is dealinof the exact circumstances of the case. . . . The proposal which he makes is not in reality a simple proposal for purchase of the property ; it involves a buying up of rights which the owner has acquired against him, and of which the owner is not aware. . . . for according to the principle of Martin v. Porter, the vendors are entitled to be paid for the coal wrongly severed a sum much greater than its value while ungotten." A vendor is by the civil law bound to wairant the thing he No duty to dis- '' close patent sells or conveys, albeit there be no express warranty ; but the faults. common law binds him not, unless there be a warranty either in deed or law. Caveat emptor is the ordinary rule of the common law (q). If the defects in the subject matter of sale are patent, or such as might and should be discovered by the exercise of ordinary vigilance, and the buyer has an opportunity of inspect- ing it, the law does not require the seller to aid and assist the observation of the purchaser. Even a warranty will not cover defects that are plainly the objects of sense (>•)• Defects, how- (>?) Brou-nlie v. Camphell, 5 App. QO lb. V79. Ca. 950, iier Lord El:u:kburn. {q) Co. Litt. 102 a, Hob. 99, Broom, (o) Plnlijq^f! V. Hutiifraij, 6 Cb. Leg. Max. 768. 770. (r) Dyer v. Haryruve, 10 Ves. 507 ; 60 MISREPRESENTATION. CLap. I!. ever, which are latent (.s), or circumstances materially affecting Duty to disclose the subject matter of sale of which the purchaser has no means, ktent faults, ^^. ^^ j^^^^ ^^^ ^^^ ^^^^j means, of obtaining knowledge, must, if known to the seller, be disclosed. Where, for instance, parti- culars of sale described the subject of sale as a certain interest, if any, the vendor knowing at the time that it was of no value, whereas the purchaser had no means of ascertaining whether it was of any value or not, the transaction was held fraudulent {t). So also on the sale of a ship, which had a latent defect known to the seller, and which the buyer could not by any attention possibly discover, the seller was held bound to disclose it (u). So also where a man sold an estate to another knowing or having reason to know at the time, but concealing the fact that part of the land was an encroachment upon a common to which he had no title, the sale was set aside as having been effected by fraud (x). So also where a lessor of a mine did not disclose the fact that a material portion of the mine was under land between high and low water mark, to which he had no title, it was held a sufficient ground to set aside the lease at the suit of the lessee, who had no means of knowing the defect {y). So also if one of the parties to a transaction knows that the solicitor of the other party has not disclosed to him some matter of a material nature, the concealment may be fraudulent (z). So also if a creditor compounds with his debtor under a false impression in which the debtor knowingly leaves him as to the extent of the debtor's estates, there is a fraud (a). A vendor, however, is not bound to state that the property has been recently valued at a sum greatly less than the intended purchaser's money, or that the tenant has complained of the rent as being excessive (6). Grant v. Munt, Coop. 173 ; Manjet- 287. son V. Wright, 7 Bing. 603 ; Jennings (y) Moshjn v. West Mostyn Coll. V. Broughton, 5 D. M. & G. 131 ; Co., 1 C. P. D. 145. Horsfall V. Thomas, 1 H. & C. 100. (z) Solomon v. Hollywood, 12 W. R. (.s) Mellish V. 3Iottenx, 'PegL'ke.,\'i6. 572. (t) Smith V. Harrison, 26 L. J. Ch. (a) Vine v. Mitchell, 1 Mood. & 412. Rub. 337. (t/) Mellishv. Moiteux,Feake, 156. (b) Abbott v. Sworder, 4 Deg. & S. (x) Edwards v. M'Clcay, 2 Svv. 448, 460. MISREPRESENTATION. 67 A vendor may, on the sale of chattels, expressly stipulate ^^^P- ^^- that the buyer is to take the chattels " with all faults." In Chattels sold , , -J.! • 1 • " with all such case it is immaterial how many faults there are withm his faults." knowledge ; but he may not use any artifice to disguise them, or to prevent the buyer from discovering them (c). So also where animals are sold in a market " with all faults," and it is expressly stated that no warranty will be given, there is no representation by the vendor that they are in the belief of the vendor free from disease ; but if he goes on expressly to say in addition that so far as he knows or believes, or has reason to believe, that the animals are free from disease, and it can be afterwards proved that to his knowledge the animals were diseased, there is a fraudulent representation {d). But the chattel must answer the description and the circum- stances under Avhich it is sold ; thus the sale of a vessel described as " copper fastened " to be taken " with all faults, without allowance for any defect whatsoever," was construed to mean only such defects as were consistent with the description, and not to exclude a misdescription in the vessel not being " copper fastened," which was held to be warranted (e). Where, however, a vessel was sold under the description of " teak -built A 1," and to be taken " with all faults, and without any allowance for any defect or error," the additional stipulation against " error " was held to extend to errors of description, and the seller was not responsible for the ship not being as described (/). If the defects are of such a nature that they cannot be dis- covered by any attention whatever on the part of the purchaser, the insertion of the condition will not excuse the vendor from disclosing the faults within his knowledge {g). A purchaser may by express contract to take the property with the risk of error in the particulars of sale debar himself from complaining afterwards of error in the particulars. In a (c) Baglehole v. Wcdters, 3 Camp. 240. 154; Schneider v. Heath, ib. 506, (/) Taylor v. BuUen, 5 Exch. supra, p. 62. 779. (d) JVardv. Hohh, 4 App. Ca. 1:3. (y) Sug. V. & P. 333. (e) Shepherd v. Kain, 5 B. & Aid. r 2 68 MISBEPEESENTATION. ^^^^P- IJ- case accordingly where it was expressly stated that the pur- chaser shall take the property with all risk of error in the particulars, and a representation is made which is true accord- ing to the knowledge and belief of him who makes it, any error is covered by the express contract of the purchaser to take the property with the risk of error in the particulars (h). Caveat emptor. The maxim caveat em]itor applies with certain specific restrictions and qualifications, both to the title and quality of the subject matter of sale. In the case of real estate the vendor must produce to the purchaser all documents of title in his possession or power, and give information of all material facts not apparent thereon {i). Any charge upon the estate, or right restrictive of the purchaser's absolute enjoyment of it, and the release of which cannot be procured by the vendors, should be stated ; or the omission may, in many cases, render the sale voidable by the purchaser {h) ; e.g., a right of sporting over the estate (I), a right of common every third year {r)i), a right to dig for mines (w), a liability to repair the church chancel (o), or anj'- other right or liability which cannot fairly admit of compensation (j)), or would render the estate different in substance from what the purcliaser was justified in believing it to be {q), would, if undisclosed, have that effect (7-), Disclosure on A vendor need not, however, direct attention to defects, &c., apparent on the title-deeds (s), or to any matter of which the purchaser has actual or constructive notice {t). But if the seller be informed by the purchaser of his object in buying, and the lease contains covenants which defeat that object, mere silence is fraudulent concealment {u). If there has been no fraudulent concealment on the part of the seller, but the title turns out to (7i) Broivnlie v. Campbell, 5 App. (0) Forteblow v. Shirley, cited 2 Sw. Ca. 931. 223. (i) Edunrds v. M'Cleay, Coop. (^j) Dart, V. & P. 116. 308 ; Dart, V. & P. 95. (q) Supra, pp. 22—24. [k) Dart, V. & P. 116. (r) See, further, Dart, V. & P. 117, (0 Bnrncll v. Brown, 1 J. & W. 118. 172. (s) Sug. V. & P. 8. (m) Gibson v. Spurrier, Pea. Ad. {t) Dart, V. & P. 95, 119. C. 50. ('0 Flight v. Barton, 3 ]\r. & K. (») Smman v. Vavdr"ii,\(i Yes. 390. 282. sale of real estate. MISREPllESENTATION. 69 be defective, the rule caveat emptor applies, and the purchaser ^^''V- ^^- has no remedy, unless he take a special covenant or warranty (x). A seller selling in good faith, is not responsible for the goodness of the title beyond the extent of his covenants (?/). There is no implied warranty on a demise of real or leasehold property, that it is fit for the purposes for which it is taken (z). The purchaser takes the risk of its quality and condition, unless he protects himself by an express agreement on the subject {a). But in the letting of a furnished house there is an implied con- dition that it shall be in a good and tenantable condition, and reasonably fit for human occupation from the day on which the tenancy is to begin (6). There is, however, no implied duty cast on the owner of a house in a ruinous and unsafe condition to inform a proposed tenant, that it is unfit for habitation, nor will an action of deceit lie against him for omitting to disclose the fact (c) ; but a seller must not, during a treaty for, or while intending a sale, endeavour to conceal a defect, or to divert a purchaser's attention from it (d). In the case of a sale of goods and chattels, the rule caveat Caveat emptor in the case of a emptor applies to the title, unless the seller knows that he has sale of goods. no title and conceals the fact, or unless the surrounding circum- stancesof the case arc such that a warranty may be implied (e). In the ordinary case, for instance, of the sale of goods in a shop, there is a warranty of title, for the seller, by the very act of selling, holds himself out to the buyer that he is the owner of the articles he offers for sale (/). If, however, the surrounding cir- cumstances are such that the seller must be taken to be merely (x) Parldnson v. Lee, 2 East, 323, G. 576. per Lawrence, J. ; Stephens v. Me- (/>) Smith v. Marrable, 11 M. & (?i)!rt, 4 Q. B. 428, Broom, Leg.Max. W. 5; Wilson v. Finch Hatton, 2 773. Exch. D. 336. (y) See Bree v. Ilolbech, Dougl. (c) Keates v. Cadogan, 10 C. B. 655. 591. (z) Sutton V. Temple, 12 M. & W. (d) Dart, V. & P. 92. 52 ; Hart v. JVindsor, 12 M. & W. (c) Morlcij v. Attenhorough, 3 Exch, 68 ; Keates v. Cadogan, 10 C. B. 500 ; Hall v. Conder, 2 C. B. N. S. 591 ; Chappcll v. Gregorg, 34 Beav. 40; Eichhultzv. Bannister, 17 C B, 250. N. S. 708. (). In such a case the buyer trusts to the manu- facturer or dealer, and relies upon his judgment and not upon his own. " othly. Where a manufacturer undertakes to supply goods manufactured by himself, or in wliich he deals, but which the vendee has not had the opportunity of inspecting, it is an im- plied term in the contract that he shall supply a merchantable article {q). So, also, on a sale by a merchant to a merchant or dealer who has had no opportunity of inspection, there is an implied warranty that the article shall be reasonably fit for the purpose for which it is supplied [r). In every contract to sup- ply goods of a specified description which the buyer has no op- portunity of inspecting, the goods must not only in fact answer the specific description, but must also be saleable and merchant- able under that description " (s). On the sale of a specific article, unless there be a warranty making it part of the bargain that it possesses some particular quality, the purchaser must take the article he has bought, though it does not possess that quality. Even if the vendor was aware that the purchaser thought the article possessed that quality and would not have entered into the con- tract unless he had so thought, still the purchaser is bound, unless the vendor was guilty of some fraud or deceit upon him, (o) Clmnter v. Hopkim, 4 M. & "VV. (q) Laing v, Fid(jeon, 4 Camp. 16!) ; 399 ; Ollivant v. Bayley, 5 Q. B. 6 Taunt. 108 ; Shepherd v. Pijlms, 3 288 ; Wilson v. Dunville, 4 L. E. I. M & G. 868. 256. (r) Bigrje v. Parlhisov, 7 H. & N. {p) Broicn v. EihjiiKjhm, 2 M. & 955, 31 L. J. Exch. 301. G. 279 ; Jones v. ]Vriijht, 5 Bing. (.s) Jones v. Just, L. R. 3 Q. B. 533 ; Randall v. Xeicson, 2 Q. B. D. 197, U.2. 72 MISREPRESENTATION, Chap. II. and a mere abstinence from disabusing the purchaser of that im- pression is not fraud or deceit, for whatever may be the case in a court of morals, there is no legal obligation on the vendor to inform the purchaser that he is under a mistake, not induced by the act of the vendor. When a specific lot of goods is sold by sample which the purchaser inspects instead of the bulk, the law is exactly the same if the sample truly represents the bulk (t). In the sale of goods by sample, the vendor warrants the quality of the bulk to be equal to that of the sample (u) : but the sample must be free from any secret defect of manufacture, not discoverable on inspection and unknown to both parties (cc). When goods are sold by sample, the implied warranty of merchantable quality is excluded only with respect to such matter as could be judged of by the sample (y). The rule caveat emptor renders it lawful for a man holding shares in an insolvent company to sell them to any one willing to buy them, and in the absence of misrepresentation by the seller, the buyer is apparently without any remedy against him [z). Omission of The mere omission of a purchaser of property to disclose his ciose^nTo^iyency!' insolvency to the vendor, is not a fraud for which the sale may be avoided. If no inquiries are made, and the vendee makes no false statements, nor resorts to any artifice or contrivance for the purpose of misleading the vendor, it is not in general fraudu- lent in him to remain silent as to his pecuniary condition (a). An honest though abortive purpose to continue in business and pay for the goods, is consistent with the vendee's knowledge of his own insolvency. But there may be circumstances under which the concealment of a material and sudden change in the circumstances of a purchaser which he has reason to sup- pose to be unknown to a vendor, may amount to a fraud (6). Caveat emptor in case of sale of shares. it) Smith v. Hughes, L. R. 6 Q. B. 607, per Lord Blackburn. (m) Parker v. Palmer, 4 B. & Aid. 387. {x) Heilbuth v. Hkkson,L. R. 7 C. P. 438. {y) MoJy V. Gray, ib., 4 Exch. 52, (z) See Remfrey v. Butler, El., Bl., & El. 887 ; Stray v, Russell, 1 EI. & El. 888. (a) Ex parte TVTiittaker, 10 Ch, 449. (/)) Nichols V, Pinner, 4 Smith (Amer.), 295 ; Brovyn v. Montgomery, 6 Smith (Amer.), 287 ; Talcott v, Henderson, 27 Amer. R. 501. MISREPRESENTATION. 73 A dealer, for instance, who has been of known standing, but has Chap. II. suddenly failed in business, cannot go to those who were ac- quainted with his former position, but have not heard of his failure, and innocently purchase property on credit (c). So, also, there is fraud if a vendee obtain goods upon credit, with a pre- conceived fraudulent design not to pay for them (cZ). The same rules as to false and deceptive statements, which Misrepresenta- Tii ^ .,..,, .. tion and con- are applicable to contracts between individuals, are also applic- ceaiment by able to contracts between an individual and a company. No ^°'"P^^*^^' misstatement or concealment of any material fact or circum- stances ought to be permitted in a prospectus to invite persons to become shareholders in a projected company. The public who are invited by a prospectus to join in any new adventure, ought to have the same opportunity of judging of everything which has a material bearing on its true character, as the pro- moters themselves possess. The promoters of companies, who invite persons to take shares on the faith of representations contained in prospectuses, are bound to state everything with strict and scrupulous accuracy, and not only to abstain from stating as a fact that which is not so, but to omit no one fact within their knowledge, the existence of which might in any way affect the nature, or extent, or quality of the privilege or advan- tage which the prospectus holds out as an inducement to take shares. It cannot be too strongly impressed upon those who, having projected an undertaking, are desirous of obtaining the co-operation of persons who have no other information on the subject than that which they choose to convey, that the utmost candour and honesty ought to characterise their published state- ments (e). It is not merely by one or two statements in the prospectus which are not borne out by the facts, that the matter ought to be tried, but by the combined effect of them all, pro- (c) Brown v. Montgoracry, 6 Smith Co. v. Muggeridge, I Dr. & Sm. 381, (Amer.), 287. 382 ; Ee Reese River Silver Mining (d) Noble V. Adamn, 7 Taunt. 59 ; Co., Smith's Case, 2 Ch. 609 ; Central Load V. Green, 15 M. & W. 216 ; Ex Railmay Co. of Venanda v. Kiscli, 2 ■parte Whittukcr, 10 Ch. 449, iwr E. & I. App. Ca. UZ, UA ; Bagnall Mellish, L. J. v. Carlton, 6 Ch. D. 383. (e) Nexo Brunsicick, cf-c, Railway 7i MISREPRESENTATION. ^^^v- II- ducing a result which would have misled any person who took shares on the faith of the prospectus (/). Though certain statements or suppressions standing alone, might not be sufficient ground to give a man a right to have a transaction set aside, yet another part of the case may lead to a different conclusion, and reflect upon the general fairness of the prospectus, even in those particulars (g). There is a material distinction between the employment of words in a prospectus which can only bear one meaning and of those which are equivocal and which different persons may in- terpret differently. In the latter case no prudent person would act upon his own construction without some inquiry. In con- struing a prospectus the preliminary character of the document must always be taken into consideration. A prospectus is in- tended to usher a company into existence and not to describe its actual formation. This ought always to be borne in mind when a construction is required to be put upon the language of a prospectus, and»unless it distinctly points to what is actually existing at the time, it must be taken to represent what will be the state of things when the company is completely formed (h). If persons publishing a prospectus use such careless language that their statements literally read are untrue, although this literal sense is different from what they intended, this amounts to a misrepresentation for which they may be liable to any one who is deceived or misled by it (i). The absence of any intention to deceive will not relieve directors of a company who have concealed a material fact in the prospectus of a company from the consequences. If the fact is material, and one which ought to have been disclosed, it is immaterial that the directors may have had a sincere and honest belief in the probable success of the company. The con- cealment is in law a false representation, and the belief of the directors who make the representation, and by so doing induce a man to take shares in the company, that the concern will be a (/) Central Railway Co. of Vene- (g) lb. 117. ziiela V. Kisch, 2 E. & I. App. Ca. {h) Hallous v. Ferine^ 3 Ch. 475. 125. (0 lb. 476. MISREPRESENTATION. 75 successful one, will not exonerate them from their liability to ^^^P- ^^- indemnify any person who takes shares from the company on the faith of the prospectus against any loss which may be occasioned to him by reason of such concealment (/;). If a person purchases shares in a company upon the faith of a prospectus, and is referred to any document which will show the untruth or inaccuracy of any of its statements, and chooses not to make use of his means of knowledge, but to continue in a state of wilful ignorance of the facts, he cannot afterwards be heard to complain that he has been deceived by the alleged misstatements {I). In considering, moreover, the question of knowledge or means of knowledge of a person, it is important to see whether he was a person likely, through inexperience, to be misled by a prospectus, or to place implicit reliance upon all it contains (m). Where the prospectus of a company contained a material misrepresentation, at the same time stating that reports and plans might be inspected and further information obtained at the office of the company, it was held that the neglect of a shareholder to use these means was no answer to his claim to be relieved from the contract {n). If it appear that the authors of the prospectus have engaged in a transaction by which the funds of the company were to be applied to a purpose not disclosed by the prospectus, and which they had a direct interest in concealing from those who are invited to embark in the undertaking, and to whom it is most material that they should know the whole truth respecting the engagement, there is a departure from that good faith which courts of justice require (o). So, also, where the prospectus of a company issued for the purpose of inducing persons to take shares, and stating the object of the company to be to purchase the business of a firm without disclosing the fact that the firm was then insolvent, it was held to be fraudulent as against persons contracting to take shares in the company (p). (/.:) J'eek v. Gurneij, 13 Eq. 79. (o) Baynall v. Carlton, 6 Ch. D. {I) Hallows V. Fernie, 3 Ch. 477. 384. {m) lb. (27) Oakes v. THrquand,2E. & I. (?i) Central Jiailway of Venezuela App. Ca. 326 ; Peek v. Gurney, 6 E. V. Kisch, 2 E. & I. App. Ca. 99. & I. App. Ca. 377. 76 MISREPRESENTATION. Chap. II. Materiality of false represen- tation in pro- spectus. When'the objects of a company, as set out in the memorandum of association, go far beyond what was indicated in the prospectus, on the faith of which a man applied for and obtained shares, he is, unless barred by laches or acquiescence, entitled, on discover- ing the difference, to have his name removed from the list of shareholders of the company (q). A mere difference in the language of the prospectus and the memorandum will not relieve him from his liability. The question would be whether the obligations incurred under the two documents were sub- stantially different (r). A prospectus stating that more than half the proposed capital had been subscribed for, when, in fact, it had been merely agreed to be subscribed by an agent of the company under an arrangement that it should be allotted to future applicants without any liability on his part, was held to be a fraudulent representation entitling an allottee to repudiate his shares (s). So, also, a prospectus of a company stating the object to be to construct a railway under a concession granted by a foreign state without disclosing the fact that the concession was in fact to be purchased from other parties for a large sum in reduction of the stated capital of the company, was held to be fraudulent ; and the same prospectus was held to be fraudulent in stating contrary to the fact, that a contract had been made for the required works " at a price considerably within the available capital " (t). So, also, a representation in a prospectus that the directors had taken a large number of shares, or that a certain number of shares or a certain amount had been subscribed for, is, if false, a material misrepresentation, and entitles an allottee of shares to rescind his contract (u). So, also, a statement in a pro- spectus of a company that certain persons have agreed to become directors, may be, if false, a material misrepresentation (x). On (q) Downes v. Shiji, 3 E. & I. App. Ca. 343. (r) lb. (s) Ross V. Estates Investment Co., 3 Ch. 682. (t) Central Railway of Venezuela v. Kisch, 2 E. & I. App. Ca. 99. («) Kent V. Freehold Land, dec., Co. 4 Eq. 599, 3 Ch. 493 ; Henderson v. Lacon, 5 Eq. 257. See Moore^and De la Torre's Case, 18 Eq. 661. (z) Blake's Case, 34 Beav. 642 ; Anderson's Case, 17 Ch. D. 373. See Hallo los V. Fernie, 3 Ch. 472. MISREPRESENTATION. 77 the other hand, the non-disclosure of the fact that a contractor Ci^^P- I^- of the company had agreed to give a director of the company a large amount of paid-up shares, was held to be not material (?/). So, also, the non-disclosure in the prospectus of a proposed company of the fact that the directors had allotted to themselves a large number of shares, and that they had entered into an arrangement with an engineer, which, as alleged, was very beneficial to him but detrimental to the company, was held to be immaterial to the contract of a person who was induced by the prospectus to apply for shares (0). The Companies Act, 1867, 80 &; 31 Vict. c. 131, s. 38, enacts Companies Act, that every prospectus of a company, and every notice inviting ' persons to subscribe for shares in any joint stock company, shall specify the dates and the names of the parties to any contract entered into by the company or the promoters, directors, or trustees thereof before the issue of such prospectus or notice, whether subject to adoption by the directors, or the company, or other- wise ; and that any prospectus or notice not specifying the same shall be deemed fraudulent on the part of the promoters, directors, and officers of the company, knowingly issuing the same, as regards any persons taking shares in the company on the faith of such prospectus, unless he shall have had notice of such contract (a). There has been much difference of opinion among judges as to the meaning of the language of the section. Lord Bramwell is of opinion that the contracts therein mentioned must be limited to those which bind the company, or which ma,y be adopted or assumed by the company, and so affect it when formed, and that if it was intended that intending shareholders should be guided by information given in the prospectiis as to the previous history of the company, its promoters, and the subject of its intended operations, no reason can be given why contracts only were to be stated (b). Lord Blackburn and Lord Justice Baggallay are of opinion that all contracts which would (y) Hey man v. European Central (n) See Arhwriijht v. Ncwhold, 17 Railway Co., 7 Eq. 151. Cli. D. 302. (z) PuUJord V. Richards, 17 Eeav. {b) Sullivan v. Mitcalje, 5 C. P. D, 87. 455. 78 MISREPRESEXTATION. Chap. II. assist a person in determining whether he would heeome a shareholder, though not subject to adoption by the directors of the company, come within the description of contracts therein specified (c). Chief Justice Cockburn was of opinion that the clause was intended to protect the shareholder against the deceptions too often practised in the creation of companies by insuring him full information as to all the material circumstances attending the formation of the company he is invited to join antecedently to the issuing of the prospectus (d). Lord Justice Thesiger was of opinion that every contract relative to the formation of the company, or to its capital, property, or business when formed, or to the position, pecuniary or otherwise, in regard to the company or its promoters or vendor, of the directors or other officers of the company, and which is material to be made known to persons invited to take shares in order to enable them to form a judgment as to the policy of so doing, is a contract within the meaning of sect. 38, and as such must be disclosed under the circumstances and to the extent which the section points out, provided that one of the parties to it is at its date or subsequently becomes a promoter, director, or trustee of the company (e). Chief Baron Kelly was of opinion that a contract to be within the meaning of the clause must have been made with the company if it has been formed, and, if not, with the promoters or directors, or the trustees representing or pur- porting to act on behalf of the future company, and with the intent that the company, when formed, shall execute a corre- sponding contract, and so in effect ratify the act done by the promoters or other body of persons mentioned before its formation ; that it must also be such as to impose or be intended to impose a burden, or obligation, or a loss, or a liability upon the company which would affect the value of the shares in the hands of a purchaser. It seemed to him likewise that no contract between one promoter and another or by and between any person or persons, and to which neither the company nor one of the three bodies of persons mentioned in the clause are (c) lb. ; Charlton v. Hay, 31 L. T, 469. N. S. 437. (e) Sullivan v. Mitcalfe, 5 C. P {d) Twycross v. Grant, 2 C. P. D. D. 455. MISREPRESENTATION. 79 parties can be brought within its operation (/). Lord Justice ^^-'^P- ^^- Brett is of opinion that the clause was intended to insure the disclosure of anything which might reasonably have an effect on the mind of an intended subscriber for shares as to whether he should trust the representations made to him and become a shareholder. Lord Coleridge and Lord Justice Lindley are of opinion that all contracts must be disclosed which are calculated to influence persons reading a prospectus in making up their minds whether or not they will apply for shares in it ; and that any construction of the Act which would exclude from its operation a contract entered into by a promoter before the prospectus was published, and affecting his own payment out of the funds of the company, or the property of the company, or the manipulation of its shares, or the independence of its directors would be too narrow a construction, and ought not to be adopted (g). In Sullivan v. Metcalfe {h), B. and C. being possessed of a patent, agreed to sell it for 56,000^, but, by a series of contracts, it was arranged that only 2,000Z. out of that sum should be retained by them for their own use, and that 54,000Z. should be divided between the promoters of the company. The prospectus issifed on behalf of the company did not mention the contracts relating to the disposal of the purchase-money of the patent. The defendants were promoters and directors of the company. The plaintiff subscribed for shares, but he afterwards sued de- fendants to recover the price of the shares subscribed for by him. It was held upon demurrer by Lords Justices Baggallay and Thesiger (Lord Bramwell dissenting) that the contracts as to the disposal of the purchase-money of the patent ought to have been specified in the prospectus pursuant to sect. 38, and that the defendants were liable to the plaintiff for the price of his shares. So, also, in Jury v. Stoker (i), J. being owner of mills in Cork subject to a mortgage for 8,000Z., and indebted to a bank for 5,000?., with a view of forming a company to purchase (/) Twycrosa v. Grant, -2 C. P. D. I. 397. 46!). (h) 5 C. P. D. 4r>6. (g) lb. See Jury v. Stoker, 9 L. R. (i) 9 L. E. I. 397. 80 MISREPRESENTATION. ^^^P- ^^- and carry on the business of mills, contracted with S. and another, merchants of influence and position, to allow their names to be put forward as directors in consideration of 150 paid-up shares of the company to S. and 100 to the other. A deed was executed between trustees for the bank (who had agreed to purchase the mortgage), J. and S. and C. as trustees for the projected company, whereby the trustees for the bank agreed to sell and convey the mill premises to the company when formed for 8,000^. to be paid by debentures of the company, and that J., on the formation of the company, should assign to it all his stock in trade, book debts, &c., and all his interest in the mill premises in consideration of 2,500 paid-up shares of 51. each. The company was formed, and J. and S- were two of the directors, and the articles of association declared the above agreement binding on the company, and directed the allotment of 2,500 paid-up shares to J. for the purchase of the goodwill and stock in trade. The prospectus stated that the company had acquired "the very valuable concern — viz., the mill premises, goodwill, &c. — on exceptionally favourable terms — viz., for the small sum of 8,000Z. payable in debentures, &c., and 1,000 paid-up shares, in addition to which the vendor will purchase 1,500 shares fully paid-up, thus putting a cash ca^tal of 7,500^. into the concern." The company being wound up, an action was brought by a shareholder against J. and S. for damages for a false representation in the prospectus as to the capital of the company, and for the suppression of the contract between J. and S., under which S. became a director ; and it was held that the suppression was fraudulent under sect. 38. Sir Edward Sullivan, M.E.., agreed with Lords Justices Baggallay and Thesiger as to the construction of sect. 38, and said : " The contract here made was between Stoker, who assumed the character of a trustee for the company, and Jackson, who was the real promoter of the company. I entertain no doubt that the plaintiff knew nothing of that contract, and as little doubt that, if he had known Stoker had got 7501. for allowing himself to be named as director of the compan}^, he would have hesitated before he advanced his money in a concern which could bring nothing but danger and loss to him. But that is not the point. MISREPRESENTATION. 81 The question Is, was this contract a tiling which a man who was Chap. II. about to subscribe his money to the concern ouglit to have known ? I am clearly of opinion that it was, and that this was a contract within sect. 38." The omission in the prospectus of a company of a contract which the promoter of the company had entered into before he became a promoter, is not fraudulent within the meaning of sect. 38 (k). Where, accordingly, a man agreed with the owner of a patent to purchase the patent for a certain sum to be paid partly in cash and partly in the shares of the company to be formed by him ; and, three months afterwards, he made an agreement with a trustee for an intended company to sell the patent for a much larger sum of money than he had given for it, to be paid partly in cash and partly in shares of the company, and a company was afterwards formed, he being a dii'ector, — it was held that when he made the agreement to purchase tlie patent he was not a promoter of the company, and that the omission of that agreement in the prospectus of the company was not a fraudulent one (l). " No impropriety in the contract," said Lord Justice James, " can make it the contract of the company or the contract of a promoter, trustee, or director of a company, when, at the date of the contract, there was no company, no promoter, no trustee, no director. The character of the contract cannot operate as a transformation of the contracting parties " ()//). The words " knowingly issuing " in sect. 38, mean intentionally issuing a prospectus without inserting the contracts which are required by the section to be specified, although they are omitted under the bond JiaIc belief that it is unnecessary to specify them (w). Sect. 38 is only for the protection of shareholders, and does not extend to bondholders. The section amounts simply to a provision that, as between certain parties, a prospectus which does not reveal a certain class of contracts shall be deemed fraudulent (o). Those who, having a duty to perform, represent to those who Misrepresenta- tion by parties (k) Exfarte Gover, 1 Ch. D. 182 ; (») Tinjcross v. Gra)\t, 2 C. P. D. Craig v. Philip]-)^, 3 Ch. D. 733. 460. (0 Ex parte Cover, 1 Cli. T>. 182. (o) CnrncU v. Ha>u L. R. 8 ( '. V. (»)) lb. 328. 82 MISREPRESENTATION. Chap. II. are interested in the performance of it, that it has been per- having a duty to formed, make themselves responsible for all the consequences of perform. ^ / x the non-performance [p). Misrepresenta- The false and fraudulent representations of an agent, when ttdhfg'i'lhe acting within the scope of his authority, bind the principal (q). principal. ^ ^^^^ Cannot take any benefit under false and fraudulent representation made by his agent, although he may have been no party to the representations, and may not have distinctly authorised them (r). He cannot adopt and take the benefit of a contract entered into by his agent, and repudiate the fraud on which it was built. If the agent at the time of the contract makes any repre- sentation or declaration touching the subject-matter, it is the representation and declaration of the principal. The statements of the agent which are involved in the contract, as its foundation or inducement, are in law the statements of the principal. The principal cannot separate the contract itself from that by which it was induced. He must adopt the whole contract, including the statements and representations which induced it, or must repudiate the contract altogether (s). It would be inconsistent with natural justice, to permit a man to retain property acquired through the medium of false representations made by his agent, although he was no party to them, or did not authorise them (t). If an agent employs another person to make representations, it is the same as if the representations had been made by him (it). (p) Blair v. Bromley, 2 Pli. 360, wick, L. R. 5 P. C. 410. jjcj-Lord Cottenham. (s) Udell v. Atherton, 7 H. &. N. (q) Wilson V. Fuller, 3 Q. B. 77 ; 184, per Pollock, G. B., & Wilde, B.; Blair v. Bromley, 2 Ph. 350 ; Cole- Ex parte CHnger,b Ir. Oh. 174 ; Bar- man \. Riches, 16 C. B. 104 ; If 1ml- wick v. Emjlish Joint Stock Bank, L. ton V. Hardisfy, 8 E. & B. 232, 260 ; R. 2 Exch. 265 ; IVeir v. Bell, 3 Uddl V. Atherton, 7 H. & N. 173. Exch. D. 244 ; Mrdlens v. Miller, 22 (r) Nicoll's Case, 3 D. & J. 387, Ch. D. 194. 437, per Turner, L. J. ; Udell v. {t) New Brunswick, cfcc, Go. v. ^^/lerio?;, 7 H. &N. 172, ]3er Pollock, Conyheare, 9 H. L. 711; Western C. B., & Wilde, J. ; New Brtcnsu-ick Bank of Scotland v. Addie, 1 So. d'C, Railway Go. v. Conyheare, 9 H. L. App. Ca. 159 ; Oakcs v. Turquand, 2 714, 726, per Lord Westbnry, il>. E. & I. App. Ca. 325. 739 uer Lord Cranworth ; Mackay (u) Western Bank of Scotland v. V. Commercial Bank of Neic Bruns- Addie, 1 Sc. App. Ca. 159. MISREPRESENTATION. 83 In Cornfoot v. Fou-ke (x), a man had emploj'^cd an agent for Chap. II. the sale of property, who in the course of the treaty for sale made material representations respecting the property which he honestly believed to be true, though they were false in fact and false to the knowledge of the principal ; there being, however, no evidence to show a fraudulent purpose on the part of the principal, it was held that fraud and covin could not be pleaded in bar to an action by him on the contract. Lord Abinger differed from the majority of the Court, being of opiuion that if a principal employs an agent to sell property, and such agent in the course of his employment makes false representations respecting the property, he cannot take advantage of a contract induced by such representations, whether the agent was autho- rised by him or not to make the representations. Cornfoot v. Fowhe has been the subject of much comment. It has been explained by Lord Cranworth in Xational Exchange Gom'pany v. Drew {y), and Bartlett v. Salmon (z), and by Willes, J., in Bar wick v. English Joint Stock Bank (a), as having turned on a point of pleading. Lord St. Leonards in National Exchange Comjxiny v. Drew (6), and Lord Campbell in Wheelton v. Hardisty (c), expressed their disapproval of it : and from the manner in which it was treated in Mackay v. Commercial Bank of New Bnmsiuick (d), Weir v. Bell (e), and Houldsivorth v. City of Glasgoiu Bank (/), it can no longer be considered as law {g). A partnership firm is bound by false and fraudulent repre- Partnership firm sentations made by any of its members whilst acting within the ^entatiins'of'r scope and limits of his authority, and having reference to the partner. proper business of the firm (/i), but is not bound by statements made by him as to his authority to do that which the nature of the business of the firm does not impliedly warrant (?'). (•'■) C M. & W. 358. {y) See Mullens v. Miller, 22 Ch. {y) 2 Macq. 108. D. 194. ('•) 6 D. M. & a. 39. (Ji) Rajyp V. Lalham, 2 B. & Akl. («) L. R. 2 Excli. 2U2. 795 ; Lovell v. llichs, 2 Y. & C. 46, (h) 2 Maoq. 144. 481 ; Blair v. Bromley, 5 Ha. 557, 2 (c) 8 E. & ?>. 270. Plj. 354 . IVic-kham v. irickhain, 2 (d) L. R. 5 P. C. 394. K. & J. 478. {e) 3 Exch. D. 244. (i) Ex ^nuie Agace, 2 Cox, 312. (/) 5 App. Ca. 326. & 2 84 MISREPRESENTATION. Chap. II. A company or corporation is as much bound by the false Companies and" and fraudulent representations of its authorised agents as an rorcrby mis- individual. If the directors or agents of a company or corpora- representation ^^Qj^ ■ j^ ^|-jg course of managing its affairs, or in the course of the u>,en s. lousiness which it is their duty to transact, induce a man by false or fraudulent misrepresentations to enter into a contract for the benefit of the company, the company is bound, and can no more repudiate the fraudulent conduct of its agents than an individual can (k). A company or corporation cannot retain any benefit which it may have obtained through the fraudulent represen- tations of its agents, but is responsible to the extent to which it may have profited from such representations (l). The rule that a company cannot retain any benefit which it may have obtained through the false and fraudulent representa- tions of its agents, applies to the case of a member of the com- pany, who was induced by such representations to take additional shares {m). A principal, however, is not bound by the false and fraudu- lent representations of his agent, unless the agent be acting within the scope of his authority (n). A joint-stock company, tiiey DC acting , i i .i , . . r f • + within the scope for instance, is not bound by the statements ot one ot its onheirautho- j^^^^^i^g^.g^ unless he is also the agent of the company, and unless his business be to make statements on its behalf (o). Nor is a company bound by the statements of one of the Principal not Ijound by repre sentations of agents, unless tiiey be actin (/.■) Burnes v. Pennell, 2 H. L. 497 ; Ranger V. Great IVestern Eail- ivaij Co., 5 H. L. 86 ; National Exchange Co. v. Dreio, 2 Macq. 125, per Lord Cranworth ; Meux Execu- tors' Case, 2 D. M. & G. 522 ; NicolVs Case, 3 D. & J. 387, 437 ; New Bruns- uick, (f-'c, Raihvay Co. v. Conyheare, 9 H. L. 737, j)er Lord Cran^vorth. {I) Western Bank of Scotland v. Addie, 1 Sc. App. Ca. 157 ; Oakes v. Turquand, 2 E. & I. App. Ca. 325 Henderson v. Lacon, 5 Eq. 261 Siuift V. Jewsbunj, L. E. 9 Q. B. 301 Blake v. Albion Life Insurance So- ciety, 4 C. P. D. 91) ; Jrdr v. Bell, 3 Excli. D. 240 ; Clydesdale Bank v. Paid, 4 Dec. of Court of Session, 4th peries, 628. (wi) Western Bank of Scotland v. Addie, L. E. 1 Sc. App. Ca. 163. (n) Bernard's Case, 5 De G. & S. 283 ; Ayre's Case, 25 Beav. 513 ; Burnes v. Pennell, 2 H. L. 497 ; NicoWs Case, 3 D. & J. 387, 437 ; TFoUaston's Case, 4 U. & J. 437 ; Att.-Gen. v. Briggs, I Jur. N. S. 1084 ; New Bninswick, d-c, Puiilway Co. V. Conybeare, 9 H. L. 711. See Barry v. Crosskey, 2 J. & H. 27. (o) Burnes v. Pennell, 2 H. L. 497. MISREPRESENTATION'. 85 directors, or of its manager, or secretary, or of a clerk, if he is <^^^V- ^J- not singly ao agent of the company (2)). The rule that com- panies are bound by the misrepresentations of the directors applies only to the case of directors acting as a body (q). Referees for information respecting a life to be assured are not thereby constituted the agents of the insured. If their information is false and fraudulent, but not to the knowledge of the assured, the insurer is not entitled to avoid the policy on the ground that it was induced by the fraud of the agent of the insured (r). An agent whose authority is unknown cannot bind his principal by misrepresenting the authority conferred (s). Although a principal is not bound by the statements of an agent when not acting within the scope of his authority, the case is different if a principal knows that a man is dealing with his af^ent under the belief that all statements made by the agent are warranted by the principal, and so knowing allows him to expend monies in that behalf. A court of equity will not afterwards allow the principal to set up the want of authority of the agent. The knowledge must, however, be brought home to the principal (t). In BrockiuelVs Case (v.), Kindersley, V.-C, held that if the Brockwell's directors of a company in the exercise of their ordinary functions „ , ' ^ , ^ make a false report to the company, who adopt it, and the report directors of a 1 1 1 - 1.11 1 coiui)auy. finds its way into the hands ot a man who takes shares on the faith of it, he could not be held liable (x). The authority of the case has been on two occasions (y) questioned by Lord Chelmsford {2). He has expressed himself as of opinion that a (]i) Holt's Case, 22 Beav. 48; (.:;) Story on Agency. Ayre's Case, 25 Beuv. 513 ; Gibson's (t) Ramsdcn v. Dijson, 1 E. & I. Crt.se, 2 D. & J. 275 ; NicoWs Case, 3 App. Ca. 129, 2^1- Lord Cranworth. D. & J. 387 ; Ex parte Froivd, 3U L. (11) 4 Drew. 205. J. Ch. 322 ; Wollaston's Case, 4 D. & (;v;) See National Exchamje Co. v. J. 437. Drew, 2 Macq. 103. (q) Nicoll's Case, 3 D. & J. 387, (//) Nicoll's Case, 3 D. & J. 427 ; 440. See National Exchange Co. v. New Brunswick, <&c., UailiLxirj Co. v. Drew, 24 Dec. of Court of Session, Conyheare, 9 H. L. 749. 2nd series, p. 1. (.-i) See, also, Mixer's Case, 4 D. & (r) JVhccltoH V. Uardisty, 8 E. >x J. 583. B. 232. 86 MISREPRESENTATION. Chap. II. company is not bound by false statements contained in reports of the directors to the company, which have been adopted at a general meeting but do not affect to give any more knowledge than what was contained in the directors' report ; and which, although they have been published and have got into the hands of the public, have not been industriously circulated by the company. The distinction, however, suggested and taken by his Lordship does not seem sound law. In two late cases (a), Kindersley, V.-C, said that he adhered to the opinion he had expressed in BrockweU's Case : and the weight of authorities is in favour of the opinion of his Honour (b). The general interests of society demand that as between an innocent company on the one hand and an innocent individual defrauded by the company on the other, misrepresentations by the directors of a company shall bind the company, although the shareholders may be ignorant of the representations and of their falsehood (c). It may be said that the reports of directors are not made by the company, but to the company; but the argument though plausible is not sound. The reports of directors, though ad- dressed to the shareholders, are made under such circumstances that what they so report is known and intended to be known not only to the shareholders but to all persons who may be minded to be shareholders just the same as if they were published to the world : and the exigencies of mankind require that reports so made and circulated should be deemed to be the reports of the company (cZ). The case becomes all the stronger if the reports of directors have been adopted at a general meet- ing of the shareholders. After adoption a report is the act of the company, and not simply of the directors (e). If after adoption a report is industriously circulated, misstatements contained in it must be taken to be made with the authority of the company (/). (a) Worth's Case, 4 Drew. 532 ; L. J. Barrett's Case, 2 Dr. & Sm. 415, 5 N. (c) National Exchange Co. v. Drerv, R. 460. 2 Macq. 125. (h) See National Exchange Co. v. (d) National Exchange Co. v. Drew, Drew, 125, ^Jer Lord Cranwoitli, ib. 2 Macq. 125, i^er Lord Cranworth. 143, ^er Lord St. Leonards ; NicoU's (e) Ik 143, ^^er Lord St. Leonards. Case, 3 D. & J. 387, per Turner, (/) New Brunsicick, &c.. Railway MISREPRESENTATION. 87 When an agent employs a sub-agent, and the latter in the '^^^^^p- ^^- course of his employment is guilty of fraud or misrepresentation, Misrepreseuta- and the agent with knowledge of the fraud derives a material agent, benefit from it, the case becomes analogous to that of a principal who profits by the fraud of his agent, the principle being that he who profits by the fraud of one who is acting by his authority, though committed without his authority, adopts the acts of the agent, and becomes responsible to the party who has been imposed upon and has sustained damage by reason of it. But an intervening agent such as a director of a company who is not a principal, cannot be regarded as a principal wlien he is acting for the interests of his company : nor is he liable for the fraudulent acts of those he employs because he may directly or indirectly receive an ultimate pecuniary benefit which is not the immediate and direct result of the fraud (g). Directors of a company, therefore, are not liable for misrepresentations made without their authority by persons employed by them on behalf of the company, and who in such employment were acting not as their agents but as the agents of the company (Jt). It is not in general fraudulent for an agent to contract as if Agent selling 1 • 1 • r r 1 • 1 • as if he were he were prmcipal without disclosing the fact or his being an principal, agent contracting for another (i), but it may be so under the circumstances of the case. Thus, where an apparent vendor of property had represented to the purchaser by means of a fictitious contract made collusively with the real owner that the property had been sold to him at a certain price, when in fact he was acting only as agent under an agreement by which he was to receive a large discount or commission for obtaining a sale at that price, the transaction was held to be fraudulent and the purchaser entitled to rescind the transaction (A;). On the other hand for a man to represent that he is acting as agent when in fact he is acting on his own behalf is of no consequence, if it is immaterial to the purchaser with whom the contract is Co., 9 H. L. 711. Sqg Barrett's Case, (i) Ndthorpe v. Holyate, 1 Cull. 2 Dr. & Sm. 115. 220. (g) Weir v. Bdl, 3 Excli. D. 249. (A) Lindscn IMrokvm Co. v. Hard, (h) lb. L. R. 5 P. C. 221. 88 MISREPRESENTATION. Chap. II. Duty of dis- closure in the case of policies of assurance. Folicies of raariue assur- ance. made (/), but if it is material, as where the purchaser has been induced to contract because he has a set-ofF against tlie person with whom he intends to contract (m), or where the parties stand in a fiduciary relation to each other (n), the transaction is fraudulent. The principle which treats non-disclosure as equivalent to fraud, when the circumstances impose a duty that disclosure should be made, obtains specially in respect to policies of assurance. The contract of assurance being essentially a con- tract of good faith, inasmuch as the risk which the insurer undertakes can only be learnt from the representations of the party proposing the insurance, courts of justice proceed upon a doctrine strictly analogous to that of the Roman law, and regard non-disclosure as fatal to the validity of the transaction (o). The rule with respect to the duty of disclosure applies with peculiar force in the case of policies of marine insurance. The validity of a contract of marine insurance being condi- tional upon the completeness, the truth, and the accuracy of the representations of the party proposing the insurance as to the risk, he is bound to make known to the underwriter everything within his knowledge which is of a nature to increase the risk which he is asked to undertake. There are many matters as to which he may be innocently silent. He is not bound to mention facts and circumstances which are within the ordinary professional knowledge of an underwriter : nor is he bound to communicate things which are well known to both parties, or which he is warranted in assuming to be within the knowledge of the party who is asked to undertake the risk ; as, for instance, where a fact is one of public notoriety, as of war, or where it is a matter of inference and the materials for forming a judgment are common to both parties. But he is bound to communicate every fact which he is not entitled to assume to be in the knowledge of the underwriter. He (Z) Felloices v. Lord Givydyr, 1 E. & M. 83. (?;() Boidlon V. Jones, 2 H. & N. 564. ()() Kiiiiber v. Barhcr, 8 Cli. 56, infia. (o) Carter v. Boehm, 3 Burr. 1905 ; Lindcnau v. JJenhoroiujh, 8 B. & C. 586. MISREPRESENTATION. 89 may not, however, speculate as to what may or may not be Chap. II. in the mind of the underwriter, or as to what may or may not be brought to his mind by the particulars disclosed to him. It is not enough that the underwriter be furnished with materials from which he may by a course of reasoning and effort of memory see the extent of the risk. The matter must not be left to speculation or peradventure. If the par- ticulars furnished to the underwriter fall short of what the party proposing the insurance is bound to communicate, the contract is vitiated. It is immaterial whether the omission to communicate a material fact has arisen from intention, or indifference, or mistake, or from it not being present to the mind of the party proposing the insurance that the fact was one which ought to have been disclosed (p). The party pro- posing the insurance is bound to communicate not only every material fact of which he has actual knowledge, but every material fact of which he ought in the ordinary course of business to have knowledge, and must take all necessary measures by the employment of competent and honest agents to obtain through the ordinary channels of intelligence in use in the mercantile world all due information as to the subject-matter of the insurance. If by the fraud or negligence of the agent of the party proposing the insurance the under- writer is kept in ignorance of a fact material to the risk, the contract is vitiated (q). The concealment by the assured at the time of effecting a policy of assurance of a fact which is material to enable a rational underwriter, governino- him- self by the principles on which underwriters in practice act, to judge whether he shall accept the risk at all or at what rate, will vitiate the policy, although the fact may not be material with regard to the risk assured (r). An underwriter may, how- (p) Carter V. Buehm, 5 Burr. 1905 ; B. D. 507 ; Davies v. London dc Pro- Bates v. Heioitt, L. R. 2 Q. B. 595, vincial Marine Insurance Co., 8 CIi. 605, 606, 610 ; Gnnchj v. Adelaide D. 474 ; Mercantile Steamship Co. v. Insurance Co., ib. 6 Q. B. 746 ; Tyser, 7 Q. B. D. 77. lonides v. Pender, ib. 9 Q. B. 537 ; (q) Promlfoot v. Montcfiore, L. R. Anderson v. Pacific, (Lc, Insurance 2 Q. B. 511. Co., ib. 7 C. P. 68 ; Strihleij v. (/•) Pumz v. Gerussi, 6 Q. B. D. Imperial Marine Insurance Ck)., 1 Q. 222. 90 MISREPRESENTATION. Chap. II. ever, in any particular case limit the right of full disclosure which he has by law to that of being informed of what is in the knowledge of the party proposing the insurance, not only as to its existence in point of fact, but also to its materiality (s)- After the contract is complete, the party assured need not communicate to the underwriter facts which afterwards come to his knowledge material to the risk assured against (t). Inasmuch, therefore, as according to the practice of insurance, the slip or memorandum of terms made for the purpose of drawing up the policy is considered as the final acceptance of the risk, any information not obtained until after the slip is initialed is immaterial ; and if a policy is executed in accord- ance with the slip, it cannot be avoided on the ground of con- cealment of information (ii). Life aKsurance It was formerly considered that policies of assurance on pohcies. j.^^^^ ^^^^ policies of insurance on ships, were made conditionally upon the truth or completeness of the representations respec- ting the risk, and that misrepresentation or concealment of a material fact, although not fraudulent, vitiated the policy (x). But it is now determined that such is not the case. The assured is always bound not only to make a true answer to the questions put to him, but to disclose spontaneously any fact exclusively within his knowledge, which it is material for the insurer to know. But it is not an implied condition of the validity of the policy that the insured should make a complete and true representation respecting the life proposed for insur- ance. Such condition, if intended, must be made a matter for express stipulation. If there be no warranty or condition on the part of the party proposing the insurance, the insurer is subject to all risks, unless he can show a fraudulent con- cealment or misrepresentation, or a non-communication of material facts known to the assured, which it Avas his duty (s) Jones V. Provincial Insurance B. 577 ; Fisher v. Liverpool Marine Co., 3 C. B. N. S. 86. Insurance Co., ib. 418. (t) Cory V. Patton, L. E. 7 Q. B. (x) Lindenau v. Desborough, 8 B. 304 ; Lishman v. Northern Maritime & C. 586 ; Jones v. Provincial In- Assurance Co., ib. 10 C. P. 179. surance Co., 3 C. B. N. S. 86. (m) lb. Cory v. Patton, L. K. 9 Q. MISREPRESENTATION. 91 to communicate (y). It is, however, an implied condition that ^^'■'V- "• the person whose hfe is assured is alive at the time of making the policy. The policy is void if the person whose life is assured was dead at the date of the policy, though neither party to the policy was aware of his death (z). If there is a proviso that the policy shall not be disputed on the ground of merely untrue statements, not fraudulently made, a mis- representation or concealment undesignedly made does not avoid the policy (a). An insurer may limit his right to that of being informed of what is in the knowledge of the party proposing the insurance, not only as to its existence in point of fact, but also as to its materiality (6). The declaration made as to the basis of the contract is taken as continuing up to the time of executing the policy, so that any inter- mediate change of circumstances rendering it untrue must be communicated ; as where the declaration stated as required the name of the latest medical attendant of the insured, and before completing the policy he took the advice of another medical attendant who gave important information respecting his state of health, it was held that the declaration had become untrue and avoided the policy (c). Policies of insurance against fire are made upon the implied p;^g assurance condition that the description of the property inserted in the po^x^ies. policy is true at the time of making the policy (d) ; and there is an implied condition that the property shall not be altered during the term for which it is insured, so as to increase the risk (e). In effecting an insurance against fire, it is the duty (y) Wheelton v. Hardisty, 8 E. & Reis v. Scottish Ecpiitahlc Life A usur- B. 232 ; Ex parte Daintree, 18 W. arice Co., 2 H. & N. 19 ; JFhcclton K. 396 ; British Equitable Insurance v. Hardisty, 8 E. & B. 232. Co. V. Great Western Railway Co., 38 {h) Jones v. Provincial Insurance L. J. Ch. 314 ; London Assurance Co., 3 C. B. N. S. 86. V. Mansel, 11 Ch. D. 367. See Atty.- (c) British Equitable Insurance Co. Genl. V. Ray, 9 Ch. 407. v. Great Western Railway Co., 38 L. (z) Pritchard v. Merchants Life J. Ch. 314. Ass7irance Society, 3 C. B. N. S. 622. (d) Sillem v. Thornton, 3 E. & B. {a) Forckes \. Manchester & London 868. Life Assurance Co., 3 B. & S. 917. {e) lb. ; Stokes v. Cor, 1 H. & N. See Wood v. Dwarris, 11 Exch. 493 ; 533. 92 MISREPEESENTATION. Chap. 11. of tlie party proposing the insurance to communicate to the insurer all material facts within his knowledge touching the property (/). But the insurer may limit his right to that of being informed of what is in the knowledge of the party pro- posing the assurance, not only as to its existence in point of fact, but also as to its materiality (g). Duty of dis- The strict rule with respect to non-disclosure, which obtains ciusiue in the -^^ ^|^g ^g^gg ^f policies of insurance, does not extend to contracts case of contracts ■•■ . • v • u of guarantee or of suretyship or guarantee. The contract is not one m which suretyship. ^^^^^^ .^ ^ Universal obligation on the part of the creditor to make a full disclosure. But very little said which ought not and very little not said which ought to have been said will be sufficient to prevent the contract being valid (h). If the creditor be specially communicated with on the subject, he is bound to make a full, fair, and honest communication of every circumstance within his knowledge, calculated in any way to influence the discretion of the surety on entering into the required obligation (i). But he is not under any duty to disclose to the intended surety voluntarily and without being asked to do so, any circumstances unconnected with the parti- cular transaction in which he is about to engage, which will render his position more hazardous, or to inform him of any matter affecting the general credit of the debtor, or to call his attention to the transaction, unless there be something in it which might not naturally be expected to take place between the parties {k). If the intended surety desires to know any particular matter of which the creditor may be informed, he must make it the subject of a distinct inquiry (/). But if there (/) Lindenau v. Besboroiujh, 8 B. (i) Oircn v. Homan, 3 Mac. & G. & C. 592 ; Bufe v. Turner, 6 Taunt. 378 ; Blest v. Brown, 4 D. F. & J. 1 338. 367 ; Greenfield v. Edivards, 2 D. J. (r/) Jones v. Provincial Insurance & S. 582, 598. See Smith v. Bank Co., 3 C. B. N. S. 86. 0/ Scotland, 1 Dow, 272. (/i) North British Insurance Co. v. (/.) Hamilton v. Watson, 12 CI. & Lloyd, 10 Excli. 523; JVythes v. Fin. 119 ; Smcdl v. Currie, 2 Drew. Laboucliere, 3 D. & J. 609 ; Lee v. 102 ; JFythes v. Labouchere, 3 D. & Jones, 17 C. B. N. S. 482. See J. 593, 609. See Greenfield v. Greenfield v. Edicards, 2 D. J. & S." Edivards, 2 D. J. & S. 582. 582. (l) Hamilton v. Watson, 12 CI. & MISREPRESENTATION. 93 be anything in the transaction that might not naturally be Chap. II. expected to take place between the parties concerned in it, the knowledge of which it is reasonable to infer would have prevented the surety from entering into the transaction, the creditor is under an obligation to make the disclosure (m). If, for instance, there be any private arrangement, or secret under- standing, between the creditor and the debtor connected with the particular transaction, in which he is about to engage, whereby the risk of the surety is increased (n), or his position is so materially varied, that he is not in the position in which he might reasonably have contemplated to be (o) ; or if a party having reason to suspect the fidelity of his clerk requires security in such a way as to hold him out as one whom he considers a trustworthy person (p), or if, when the guarantee is a continuing one, an employer chooses to con- tinue a clerk in his employment after discovering that he has been guilty of dishonesty in his service (q), or if the creditor has notice that the circumstances under which the debtor has obtained the concurrence of the surety lead to the sus- picion of fraud (?•) ; concealment is fraudulent and will vitiate the transaction (s). " It must in every case," said Lord Blackburn, in Lee v. Jones (t), "depend on the nature of the transaction, whether the fact not disclosed is such that it is impliedly represented not to exist, and that fact must be gene- rally a question of fact for the jury." Fin. 109 ; TVythes v. Lahoxichere, 3 174, 8 D. M. & G. 100 ; Spaiyht D. & J. 609. See Greenfield v. v. C'oinie, 1 II. & M. 359. Edwards, 2 D. J. & S. 582. (2^) Smith v. Bank of Scotland, 1 (in) Hamilton v. JVatson, 12 CI. & Dow, 272. Fill. 109, 119 ; Lee v. Jon.e.% 17 C. (q) Philipps v. FoxliaU, L. R 7 Q. B. N. S. 503 ; BnrJce v. Rogerson, 12 B. 679 ; Sanderson v. Aston, ib., 8 Jur. N. S. 635. See Srfcire v. Exch. 75. Comp. Fearnley v. London JVhitton, I H. L. 333 ; Grccufield v. Guarantee Insurance Co., 6 L. R. I. Edwards, 2 D. J. & S. 582 ; Rhodes 220, 394. V. Bate, 1 Ch. 252 ; Barwick v. (r) Oxrcn v. Homan, 4 H. L. 997 ; English Joint Stock Bank, L. R. 2 Lee v. Jones, 17 C. B. N. S. 503 ; Exch. 259. Rhodes v. Bate, 1 Ch. 252. (?i) Pidcock V. Bishop, 3 B. & C. (s) See Squire v. TFhitton, 1 IT. L. 605. 333. (0) Evans V. Bremridyr, 2 K. & J. (0 17 C. B. N. S. 506. 94 MISREPRESENTATION. Chap. II. Concealment in the case of com- promises. But though the strict rule with respect to non-disclosure which obtains in the case of policies of insurance does not extend to contracts of suretyship, the contract of suretyship is based upon the free and voluntary agency of the individual who enters into it. Anything like pressure used by the intending creditor will have a very serious effect on the validity of the contract, and the case is stronger when pressure is the result of maintaining a false conclusion in the mind of the person pressed (u). In order that a compromise may be supported in equity, it is essential that the parties should have acted with equal know- ledge, or at least equal means of knowledge, in the matter. If one of the parties has knowledge of a material fact, which he withholds from the others, and which they have not reasonable means of knowing, the transaction cannot stand. A compromise cannot be approved of where one party knows only so much of his rights as the opposite party chooses to apprise him of. To constitute a fair compromise of a doubtful right, the facts creating the doubt should be equally known by all the parties. There must be a full and fair communication of all material circumstances affecting the piestion which forms the subject- matter of the agi-eement, which are within the knowledge of the several parties, and which the others have not reasonable means of knowing, whether such information be asked for by them or not. There must not only be good faith and honest intention, but full disclosure, and without full disclosure honest intention is not sufficient. A party to a compromise who has knowledge of a fact, must not take upon himself to decide that the suppressed fact is immaterial, if it could by any possi- bility have had any influence on the decision of the other party (x). If the compromise is a transaction in the nature of (u) Davies v. London & Provincial Marine Insurance Co., 8 Ch. D. 474. (x) Gibbons v. Caunt, 4 Ves. 840 ; Walker v. Syraonds, 3 Sw. 1 ; Gordon V. Gordon, ib. 471 ; Leonard v. Leonard, 2 B. & B. 180 ; Hotchkiss V. Dickson, 2 Bligh, 348 ; Stewart v. Steicart, 6 CI. & Fin. 911 ; Harvey v. Cooke, 4 Riiss. 34 ; Piclcning v. Pic- kering, 2 Beav. 56 ; Greenwood v. Greemvood, 2D. J. & S. 28; Brooke V. Lord Mostijn, ib. 373 ; Moxon v. Payne, 8 Ch. 881 ; De Cordova v. De Cordova, 4 App. Ca. 702. See Lloyd v. Passingham, Coop. 152 ; M'Kellar V. Wallace, 8 Moo. P. C. 378 ; Trigge MISEEPRESENTATION, 95 a family arrangement, or if, under the circumstances of the case, chap. II. it was the duty of the one party to see that the nature of the transaction was fully explained to the other, these principles apply with peculiar force {y). A family settlement will not be supported, if founded on a mistake of either party to which the other is accessory, although such mistake may have been inno- cently made {z). But if the parties to a family arrangement are not on good terms, and are really at arms' length, the ordinary rules as to disclosure in family arrangements have no place (a). The rule with respect to compromises, which applies between private individuals, is not less applicable to compromises by the Court on behalf of infants. The orders of the Court can- not be set aside on grounds less strong than those which •would be required to set aside transactions between competent parties (6). The most comprehensive class of cases in which equitable Concealment by relief is sought on the gi'ound of concealment, is in the case of ;„ ^ position of transactions between persons standing in a fiduciary relation to fi^^'^^^^y i'<^'^- each other. In all such cases the party who fills the position of active confidence, is under an equitable obligation to disclose to the party towards whom he stands in such relation, every material fact which he himself knows calculated to influence his conduct on entering into the transaction. The suppression of any material fact renders the transaction impeachable in equity (c). This subject will come into review in a subsequent page, whei*e the peculiar equities between persons standing in these predicaments come into consideration. V. Lavallee, 15 Moo. P. C. 270 ; Conk {a) Irvine v. KirJqxitrick, 7 Bell, V. Greves, 30 Beav. 378. Sc. App. Ca. 186, 209. (y) Dimnacje v. IVhite, 1 S\v. 137 ; (h) Brooke v. Lord Mostyn, 2 D. Gordonv. Gordon, 3 Sw. 400 ; Leonard J. & S. 416. V. Leonard, 2 B. & B. 180 ; Harvey (c) Walker v. Symonds, 3 Sw. 1 ; V. Cooke, 4 Euss. 58 ; Pickering v. Wood v. Downes, 18 Ves. 120 ; Bulk- Pickering, 2 Beav. 56, 3 Jur. 743 Smith V. Pincomhe, 3 Mac. & G. 653 Davis V. Clianter, 3 W. R. 321 : d'cenivood v. Greemcood, 2 D. J. & S 28. QeeBrentv. Brent, \0 L.J.Cli.84 (2) Fane v. Fane, 20 Eq. 698. ley V. Wil/ord, 2 CI. & Fin. 102, 177 — 181 ; Maddeford v. Austwick, 1 Sim. 89 ; Lloyd v. Atin-ood, 3 D. & J. 614 ; Tomson v. Judge, 3 Drew. 306. 96 MISREPRESENTATION. Chap. II. The principle of law that a man who makes a representation Equitai.le appli- to another in such a way or under such circumstances as to doctrin?o?mis- induce him to believe that it is meant to be acted on, is liable representation. ^^ |q^. ^ fi-^ud in the event of the representation proving to be false and damage thereby accruing to the party to whom it was made, is the ground on which the doctrine of equitable estoppel rests. "The law is clear," said Lord Denman, in delivering the judgment of the Court in PlcJcard v. Sears (d), "that where one by his words or conduct wilfully causes another to believe in a certain state of things, and induces him to act on that belief so as to alter his own previous position, the former is concluded from averring against the latter a different state of things as existing at the same time." In Freeman v. Coohe (e) Lord Wensleydale, in delivering the judgment of the Court, stated that the rule laid down in PicJaird v. Sears, "was to be considered as established, but that by the term 'wilfully' in that rule must be understood, if not that the party represents that to be the truth which he knows to be untrue, at least that he means his representation to be acted upon, and that it is acted upon accordingly ; and if, whatever a man's real meaning may be, he so conducts himself that a reasonable man would take the representation to be true and believe that it was meant that he should act upon it accordingly, and he accord- ingly does act upon it as true, the party making the representa- tion would be equally precluded from contesting its truth " (/). " This doctrine," said Lord Cranwortli in West v. Jo7ies (g), " is not confined to cases where the original representation was fraudulent. The doctrine goes much farther. Even when a representation is made in the most entire good faith, if it be made in order to induce another to act upon it or under circum- stances in which the party may reasonably suppose it will be acted on,thenp'/77ia/acze the party making the representation is bound by it as between himself and those whom he has thus misled. ... A party acting or abstaining to act on the faith (d) 6 A. & E. 476. Lonrlon cD North TFestern Railway (e) 2 Exch. 654. Co., L. R. 10 C. P. 307. (/) See Siran v. North Avstra- (,y) 1 Sim. N. S. 5i07. ladan Co., 2 H. & C. 182 ; Carr v. MISREPRESENTATION, 97 of such a representation has a right as between himself and ^^^^v- ^^- the person by whom he has been so misled to treat the repre- sentation as true." " The doctrine of equitable estoppel by representation," said Lord Selborne in Bank of Louisiana v. National Bank of New Orleans Qi), "is this, that if a man dealincf with another for value makes statements to him as to existing facts which being stated would affect the contract, and without reliance upon which or without the statement of which the party would not enter into the contract, and which being otherwise than as they were stated would leave the situation after the contract different from what it would have been if the representations had not been made, then the person making the representations shall, so far as the powers of the Court extend, be treated as if the representations were true, and shall be compelled to make them good," " Where," said Lord Black- burn in Knights v. Whiffen (i), "one states a thing to another with a view to the other altering his position, or knowing that as a reasonable man he will alter his position, then the person to whom the statement is made is entitled to hold the other bound, and the matter is regulated by the state of facts im- ported by the statement," A man, accordingly, who has by ex- press representation or positive acts induced a reasonable man to believe the existence of a particular fact or state of facts or things and to believe that the representation, as conveyed to his mind, was meant to be acted on, will not be permitted by the Court to derogate from interests which have been created or rights which have been acquired on the faith of the existence of such a fact or state of facts or things, by showing that the fact or state of facts or things was not such as he had represented it to be, or l)y determining the actual state of things which he has so held forth as the consideration for the change of his condition by the other, or to enforce his legal right, if any, against him, unless the latter has received the benefit which he contemplated at the time he was induced to alter liis condition (k). In Freeman v. Cooke it appeared that the representation (//) C E. & T. A\^\\ Ca. ?,m. (/,•) riijott V. Sindlon, Jolin. :3i9, (i) L. R. :> Q. B. l)G4. 1 D. F. & J. 49. 98 MISREPRESENTATION. ^^■•^P- J^- relied on as an estoppel was indeed made so as to induce the defendant to do the act complained of, but not with the inten- tion of inducing him to do that act, and further that it was contradicted before being acted upon, so that, considering the statements together, no reasonable man would have acted uj)on the original representation as true, and the representation was consequently on either of the above grounds holden not to be conclusive. The only case where a representation as to the future can operate as an estoppel is where it relates to the purposed abandonment of an existing right, and was intended to in- fluence, and has in fact influenced, the conduct of the party to whom it was made. An estoppel cannot arise from a promise as to future action with respect to a right to be acquired upon an agreement not yet made (/). The principle is not limited to cases where an express and distinct representation by words has been made, but applies equally to cases where a man by his silence causes another to believe in the existence of a certain state of things, or so conducts himself as to induce a reasonable man to take the re- presentation to be true, and to believe that it was meant that he should act upon it, and he accordingly acts upon it and so alters his previous position. Where there is a duty or obligation to speak, and a man in breach of that duty or obligation holds his tongue and does not speak and does not say the thing he was bound to say, if that be done with the intention of inducing the other party to act upon the belief that the reason why he did not speak was because he had nothing to say, there is fraud (on). "A party," said Lord Wensleydale in Freeman v. Cooke (n), " who, in neglect of a duty cast upon him to speak, stands by and allows another to contract on the faith and understanding of a fact which he can contradict, cannot afterwards dispute that fact in an action against the person whom he has himself assisted in deceiving" (o). " The doctrine," said Lord Campbell (/) Insurance Co. v. Moicrij, 6 Otto (n) 2 Excli. 663. (Amer.), 544. (o) ?ee Carr v. London tfc North (m) Brownlie v. GccmpJtell, 5 Aju?. TVestern Eailiray Co., L. R. 10 C. P. Ca. 950, 2^er Lord Blackburn. 307. MISREPRESENTATION. 90 in Cairncross v. Lorimer (jy), " is to be found in the laws of ^^'^P- ^^- all civilised nations that if a man either by words or conduct has intimated that he consents to an act which has been done, or that he will offer no opposition to it, although it could not have been done lawfully without his consent, and he thereby induces others to do that from which they might otherwise have abstained, he cannot question the legality of the act he has so sanctioned to the prejudice of those who have so given faith to his words or to the fair inference to be drawn from his conduct. ... If a party has an interest to prevent an act being done, and has full notice of its having been done, and he acquiesces in it so as to induce a reasonable belief that he consents to it, and the position of others is altered by their giving credit to his sincerity, he has no more right to challenge the act to their prejudice than he would have had if it had been done by his previous licence." Nor can parties who stand by without asserting their rights and allow^ others to incur liabilities which they might not have incurred if those rights had been asserted, set up those rights as agaiuRt those by whom such liabilities have been incurred (g). When, for instance, a man builds or lays out monies upon land, supposing it to be his own, and believing that he has a good title, and the real owner, perceiving his mistake, abstains from setting him right, and leaves him to persevere in his error ; or where a man, under an expectation created or encouraged by the owner of land that ho sli;ill have a certain interest, takes possession of such land, with the consent of the owner, and upon the faith of such promise or expectation, with the knowledge of the former, and without objection by him, lays out monies upon the land; in such cases a court of ecpiity will not afterwards allow the real owner or the landlord, as the case may be, to assert his legal right against the other, without at least making him a proper compensation for the expenditure wlijch he has incurred (r). If the works on which monies have been laid out (p) 3 Macq. 829. (r) East In<^ia Co. v. Vincent, 2 (q) Olliver v. King, 8 D. M. & G. Atk. 83 ; Dann v. Spurrier, 7 Yes. 118, per Turner, L. J.; Lindmij v. 235 ; Hhnnnnn v. Brnthireef, 1 Sch. Gihbs, 3 D. & J. UUT. & Lei'. 52 ; ^■/•«7-)/•// v. Mu/hcll, IS u 2 100 MISREPRESENTATION. Cha p. II. are of a permanent character, or are works whicli point to per- manence, the Court will not allow them to be interfered with, even upon the payment of a proper compensation. A man who by liis conduct has encouraged another to spend monies on his land, in erecting works of a permanent character, cannot be jiermitted to put an end to the very thing which he has approved. All that he is entitled to is a proper compensation in respect of the land which has been taken (s). The principle applies to companies as well as individuals (t). The case in which the principle has been carried to the farthest extent is Glavering v. Thomas (u). It was there held that a man who has stood by and allowed monies to be spent in open- ing a mine, which he knew could only be worked by a way- leave over his own land, was bound in equity to give the way- leave. Another illustration of the principle that a man who remains silent when there is a duty to speak is bound in equity, is where a man claiming a title in himself to property is privy to the fact of another, with colour of title, or pretending to title, dealing with the property, as being his own, or as being un- incumbered, and conceals his claim. A man who claims an interest in property need not voluntarily communicate the existence of his claim to a person whom he knows to be about purchasing the property (x), but the suppression or conceal- ment of his claim is in equity a fraud, if a man is privy to the fact that the apparent owner or party in possession is about Ves. 328; Cawdor v. Leivis, 1 Y. & (.s) Duke of Beaufort v. Patrick, 17 C. 427 ; Garrard v. O'Reilly, 3 Dr. & Beav. 60 ; Somersetshire Canal Co. v. War. 414 ; Clare v. Harding, 6 Ha. Harcourt, 2 D. & J. 596 ; Mold v. 273; Powell v. Thomas, ib. 305; JF/ieato-o/^, 27 Beav. 516 ; i'fttit's v. Duke of Leeds v. Lord Amhurst, 2 Sear, 7 Eq. 433. See Bell v. Midland Ph. 117; White v. Wakley, 26 Railv-ay Co.,ZT). k S. GT3. Beav. 20 ; Laird v. Birkenhead Bail- (t) Hill v. South Staffordshire way Co., John. 514 ; Harcourt v. Bailuny Co., 11 Jur. N. S. 192. White, 28 Beav. 303 ; Archhold v. (w) Cit. 5 Ves. 689, 6 Ha. 304. Scidly, 9 H. L. 360 ; O'Fayv. Bvrkr, But see WiUmott v. Barber, 15 Ch. 8 Ir. Ch. 225 ; Bvrke v. Prior, 15 Ir. D. 104. Ch. 106. See Ramsden\. Dyson, 1 (x) See Rooper v. Harrison, 2 K.Si, E. Si I. App. Ca. 129 ; Nunn v. J. 103 ; Manyles v. Dixon, 3 H. L. Fabian, 1 Ch. 35. 739. MISREPRESENTATrOX. 101 to deal with tlie property as liis own, ami as unencumbered, and Chap. II. he does not give the party with whom he is about to deal notice of his right. He will not be permitted by the Court to set up afterwards his own interest against a title created by the other (v/). In a case where a mother heard her son before his marriage declare that a certain term was to come to him at her death, and was witness to a deed, whereby the reversion was settled on the issue of the marriage, she was held compellable in equity to make good the settlement (z). So, also, in a case where a man having a claim upon property, which was the subject of a reference, knew that the arbitration was going on but did not bring forward his claim, he was held bound by the award [a). So, also, where a purchaser agreed with the vendor to buy property and the vendor's solicitor concealed the fact that he had an encumbrance on the estate, it was held that he must take subject to the interest which he liad allowed to be acquired in consequence by the person whom he misled in the transaction (6). If indeed a married woman having the oppor- tunity does not repudiate her fraudulent act committed under her husband's coercion, she will be bound by it as against a purchaser who bought without notice. Thus where a woman shortly after her marriage under threats from her husband wrote and signed a paper, whereby she purported to give him her reversionary interest in a sum of stock which the husband subsequently sold to a purchaser who had no notice of the fraud, and the wife on being applied to on his behalf and not being under duress stated that she had before marriage made over her interest to her husband, it was held that as against the purchaser (y) Tmsdale v. Teasdule, Sel. Ca. Zuhu-ta v. Tyrie, 15 Beav. 691 ; Ch. 59 ; Ilunsden v. Cheyncy, 2 Vern. Mavylcs v. Dixon, 3 H. L. 739 ; 150 ; Raio v. Pole, ib. 239 ; DrcqKr Olliver v. King, 8 D. M. & G. 110 ; V. Borlase, ib. 370 ; Ibhotsonv. Rhodes, JJuvies v. Davies, 6 Jur. N. S. 1322 ; ib. 554 ; Savage v. Foster, 9 Mod. Upton v. Vanner, 1 Dr. & Siu. 594 ; 36 ; Berrisford v. Milward, 2 Atk. Hoo])er v. Gumm, 2 Ch. 282. 49 ; Beckett v. Cordley, 1 Bro. C. C. (?;) Hunsden v. Ckeyney, 2 Vern. 357 ; Govett v. Richmond, 7 Sim. 1 ; 150. Brovm v. Thorpe, 11 L. J. Ch. 73 ; {a) Govett v. Richmond, 1 Sim. 1. Boyd\. Bolton, IJ. & L. 730 ; Thomp- {!>) Stcrry v. Combs, 40 L. J. Ch. son V. Sirnpson, 2 J. &, L. 110; 595. Nicholson V. Hooper, 4 'M. & C. 179 ; 102 MISREPRESENTATION. Chap. II. she had lost her equity to a settlement when the fund fell into possession (c). So, where a married woman fraudulently con- cealed a settlement in order to induce a mortgagee to advance his money and the mortgage was completed, but before the deed was acknowledged by the married woman, the mortgagee received notice of the settlement, it was held that her estate was bound and that she could not defeat the mortgage ((/). In Mocatta v. Murgatroyd (e), the principle was applied in the case of a first mortgagee, from the mere circumstance of his being a witness to a second mortgage, but the case goes too far. In order to postpone a prior mortgage, it is necessciry to prove against him fraud or actual notice of the subsequent mort- gage (/). The equitable rule that a man claiming an interest in property may not stand by and conceal his claim, when he sees another dealing with the property as his own, or as unincum- bered, applies with peculiar force, if the person claiming title has in any way actively encouraged the parties to deal with each other (g), or has confirmed the party in the error into which he has fallen, or if he derives any benefit from the delusion so caused (//). In order to justify the aj^plication of the principle, it is indis- pensable that the party standing by should be fully apprised of his rights, and should by his conduct encourage the other party to alter his condition, and that the latter should act on the faith of the encouragement so held out (/). The principle does not apply in favour of a stranger who builds on land, knowing it to be the property of another, nor m favour of a lessee who expends monies with the knowledge of his landlord on the improvement of the estate. If a stranger builds on land (r) Re Lush's Trmt, 4 Ch. 591. v. Davies, 6 Jur. N. S. 1322. (d) Sharp v. Foy, 4 Ch. 35. (A) Nicholson v. Hooper, 4 M. & C. (e) 1 P. W. 393. 179. (/) Beckett v. Cordley, 1 Bro. C. (i) Daim v. Spurrier, 7 Yes. 230 ; C. 353. Barnard v. mdlis, Cr. & Ph. 85 ; ((/) Dyer v. Dyer, 2 Ch. Ca. 108 ; Marker v. Marker, 9 Ha. 16 ; Hooper Draper v. Borlase, 2 Vern. 370 ; v. Clark, 25 L. J. Ch. 467 ; Eamsden Ibbotson V. Rhodes, Hi. 553 ; Brown v. Dyson, 1 E. & I. App. Ca. 129. v. Thoipe, 11 L. J. Ch. 73 ; Davies , MISREPRESENTATIOX. 103 knowing it to be the property of another, equity will not Cha.^- H. prevent the real owner from afterwards claiming the land, with the benefit of all the expenditure upon it. So, also, if a tenant being in possession of land, and knowing the nature and extent of his interest, lays out money upon it in the hope and expecta- tion of an extended term or an allowance for it, then if such hope or expectation has not been created or encouraged by the landloid, the tenant has no equity to prevent the landlord from taking possession of the land and buildings when the tenancy is determined {k). Nor does the principle apply in favour of a man who is conscious of a defect in his title, and with such con- viction in his mind expends money in improvements on the estate (/). A man who, with full knowledge of the real circumstances of the case, permits another, under a mistake, to execute a deed, whereby he incurs a liabihty, cannot be heard to say that he has contracted liability on the faith of the other being subject to the liability (m). But a man is not to be deprived of his legal rights on the ground of acquiescence unless he has acted in such a way as would make it fraudulent in him to set up those rights {n). " There are several elements or requisites," said Mr. Justice Fry (o), "necessary to constitute fraud of that description. In the first place the plaintiff," (the party who alleges acquiescence) " must have made a mistake as to his legal rights. Secondly, he must have expended some money or must have done some act (not necessarily upon the defendant's land) on the faith of his mistaken belief. Thirdly, the defendant, the possessor of the legal right, must know of the existence of his own right, which is inconsistent with the right claimed by the plaintitf. If he does not know of it, he is in the same position as the (k) Pilling v. Armitagc, 12 Ves. lumniey. Young, 2 D. & J. 142. 78 ; Clare Hall v. Harding, 6 Ha. (/) Kenney v. Broun, 3 Ridg. 518. 273 ; Duke of Beaufort v. Patrick, 17 (m) Broughton v, Hntt, 3 D. & J. Bear. GO ; Hamer v. Tildey, Jolm. 501. 487 ; O'Fay v. Burke, 8 Ir. Ch. 226; (») JFillmott v. Barber, 15 Ch. D. Bamsden v. Dyson, 1 E. & I. App. 105. Ca. 121), per Lord Kingxlown. See (o) lb. 104 MISREPRESENTATION. Chap. II. plaintiff, and the doctrine of acquiescence is founded upon con- duct with a knowledge of your legal riglits. Fourthly, the possessor of the legal right must know of the plaintiff's mistaken belief of his rights. If he does not, there is nothing which calls on him to assert his own rights. Lastly, the defendant, the possessor of the legal right, must have encouraged the plaintiff in his expenditure of money or in other acts which he has done either directly or by abstaining from asserting his legal right. When all these elements exist, there is fraud of such a nature as will entitle the Court to restrain the possessor of the legal right from exercising it, but nothing short of this will do." The rule of law as to leave and licence not being counter- mandable cannot, perhaps, as far as it goes, be distinguished from the equitable doctrine of acquiescence {p), but leave and licence executed may be set up at law, as giving a right and title, only in cases where monies have been expended by a man upon his own land {q). No right or title can be acquired to an easement, or other right over the land of another, although the licence may have been executed, and monies may have been expended upon the land of the licensee by his express permission. The licence may be at any time countermanded at the will of the owner of the soil (/■). But in equity the doctrine of acquies- cence applies as well where a man has been induced to expend monies on the land of another, as where the exjDcnditure has been on his own land (s). Part perfoi-m- The equitable doctrine with resjiect to the part performance of parol agreements is founded on the general doctrine of law as to misrepresentation. At law the express language of the (j)) Davies v. Marshall, 10 C. B. "W. 538 ; JVood v. Leadbitter, 13 M. N. S. 711, 2^er Willes, J.; but see & W. 838; Davies y. Marshall, IOC. Sv:aine v. Great Northern Eaihcay B. X. S. 711. See Fisher v. Moon, Co., 9 Jur. N. S. 1196. 11 L. T. N. S. 623 ; but see Blood \. (q) Winter v. Brockwell, 8 East, Keller, 11 Ir. C. L. 124. 309 ; Heidins v. Shipham, 5 B. & C. (s) Duke of Devonshire v. Eglin, 14 221 ; Liggins v. Inge, 7 Bing. 682 ; Beav. 530 ; Duke of Beaufort v. Davies v. Marshall, 10 C. B. N. S. Patrick, 17 Beav. 60 ; White v. 711 ; Blood V. K'lUr, 11 Ir. C. L. Wakley, 26 Beav. 20; Laird v. 124. Birkenhead Railway Co., John. 500 ; ()•) Wallis V. Harrison, 4 M. & Wilhaott v. Barber, 15 Ch. D. 96. ance. MISREPRESENTATION. 105 Statute of Frauds prevails, and the doctrine as to tlie part per- Char. H. formance of parol agreements has no place. But in equity it is a fraud in the eye of the Court to set up the absence of an agreement, where possession has been given on the faith of an agreement. If a man has been permitted to take possession on the faith of an agreement, it is against equity that he should be treated as a trespasser and turned out of possession, on the ground that there is no agreement. Where possession has been given on the faith of an agreement, a Court of equity will, as far as possible, ascertain the terms of the agreement, and give effect to it (f). Nothing, however, is part performance that does not put the party into a situation that it is a fraud upon him, if the agreement be not performed (u). In order, too, that an act of part performance may have any operation whatsoever, it must be shown plainly what the terms of the agreement are, and it must clearly appear that the act of part performance relied on is properly referable to an -agreement such as the one alleged and is not refer- able to another title (x). The expenditure, for instance, by a tenant in possession on repairs, is referable to the title which he has in the estate, and cannot be deemed an act of part per- formance iy). But the laying out of money by a tenant in pos- session, in pursuance of a parol agreement for a lease, or upon the faith of a specific engagement that possession should not be disturbed, is an act of part performance {z). So, also, and upon (t) Mundij V. Jolliffe, 5 ^r. & C. (x) Fry on Specific Perfonnance, 177 ; Wilson v. IFed Hartlejwol 252. See Dale v. Hamilton, 5 Ha. Railway Co., 2 D. J. & S. 475. See 381 ; Lincoln v. Wright, 4 T). & J. Bond V. Hopkins, 1 Sch. & Lef. 413, 16 ; Price v. Salnshury, 32 Beav. 433 ; Morphett v. Jones, 1 S\v. 172 ; 446. Surcombe v. Pinnirjer, 3 D. M. & G. (//) Wills v. Sfradliny, 3 Yes. 378 ; 571; Great Northern Railioay Co. v. rilling v. Armitage, 12 Yes. 78; Lancashire, d-c, Railway Co., 1 Sm. Savage v. Carroll, 1 B. & B. 2(')') ; & G. 81 ; Pou'ell v. Lovegrove, 8 D. Brennan v. Bolton, 2 Dr. & War. M. & G. 357 ; Pain y. Coombs, 1 I). 349. See Romsden v. Dyson, 1 E. & & J. 34; Lilliex. Legh, 3 D. & J. I. App. Ca. 129. 204; Lincoln v. Wright, 4 D. &; J. (;.) Wills v. Stradling, 3 Yes. 378; 16. Mundy v. Jolliffe, 5 M. & C. 167 ; (?/) Clinan v. Cooke, 1 Sch. & Lef. Sutherland v. Briggs, 1 Ha. 26 ; 41. Shillibcer v. Jarvis, 8 D. M. & G. 79 ; 106 MISREPRESENTATION. Chap. II. the same principle, the possession of a tenant after the expira- tion of a lease, is not a part performance, for it is referable to the title he has (a) ; but it is otherwise if the possession be referable to an agi'eemeut for renewal (6). There must be a necessary connection between the act of part performance and the interest in the land which is the alleged subject matter of the agreement. It is not sufficient that the acts are consistent with the existence of such an agreement or that they suggest or indicate the existence of some agreement, unless such agree- ment has reference to the subject matter. Thus payment of part or even of the whole of the purchase money is not suffi- cient to exclude the operation of the Statute of Frauds, unless it is shown that the payment was made in respect of the particu- lar land and the particular interest in the land which is the subject of the parol agreement. On the other hand the admis- sion into possession of a stranger is, speaking in general terras, a sufficient part performance, for it is not explicable upon any other supposition than that it has resulted from a contract" in respect of the land of which possession has been given. Again the continuance in possession of a tenant is not in itself a sufficient part performance of a parol agreement for the purchase of the land, for it is equally consistent with a right depending on his tenancy (c). The mere payment of money is not part performance (d), nor is marriage an act of part performance, but if one of the contracting parties agrees, as the consideration for a marriage, to do something more than marry, as to settle an estate, and in consideration of that promise the other party con- tracts to make a settlement, the settlement made by the one contracting party is a good act of part performance (e). Laird v. Birkenhead Railvmy Co., 41. John. 530 ; Nunn v. Fahian, 1 Ch. (e) Hamracrsley v. De Biel, 12 CI. 35 ; Williams v. Evans, 19 Eq. 547. & Fin. 45. See Warden v. Jones, 2 (a) Wills V. Stradling, 3 Ve«. 378 ; D. & J. 76 ; Caton v. Caton, 1 Ch. Lincoln v. Wright, A D. & J. 20. 137, 2 E. & I. Ap. 127 ; M'Caskie v. (b) Dowell v.Dew,l Y. & C. C. il/'CW^, I. R. 2 Eq. 453. Seefurtlier C. 345. on the subject of part performance, (c) Alderson v. Maddison, 7 Q. B. Fry on Specific Performance, 252 — D. 178, ^Jer Baggallay, L. J. ; Hnrn- 270, Sug. V. & P. 150 — 157 ; Dart, phrcys V. Green, 10 Q. B. D. 154. V. & P. 1023—1032. {d) Clinan v. Cooke, 1 Sell. & Lcf. MISREPRESENTATION. 107 A parol agreemcut to grant a lease, entered into by a tenant ^'^^P- ^^- for life with a leasing power, coupled with part performance by the lessee during the lifetime of the tenant for life, does not bind the remainderman who did not acquiesce in the part per- formance or know of the agreement (/). In cases where the aid of the Court is sought on the ground of part performance, the facts must be looked at carefully to see what confirmation there is of the plaintiff's statement, and in looking through the evidence, the Court is particularly careful to see if there are any documents which confirm it (g). Where no written documents exist, the proof in support of the claim must be clear beyond all reasonable doubt (It). The general doctrine of law with respect to misrepresenta- Negligence may . , be tantamount tion and concealment applies to cases where a man by conduct to misrepreseu- of culpable negligence misleads another to his prejudice, or puts *'^^^°°- it in the power of one man to commit a fraud upon another. If a man by neglect of some duty that is owing to another, or to the general public, of whom he is one, leads him to believe in the existence of a certain state of facts, and the belief so in- duced is the proximate cause of leading him to do a certain act, the former shall not afterwards as against the latter be heard to show that that state of facts did not exist, but must abide by the consequences of his own wilful and unjustifiable neglect {i}. It is immaterial tliat he may have been acting merely care- lessly, and that his conduct may be free from any improper motive. Although a man may be acting in the most entire good faith, if he is guilty of such a degree of neglect as to enable another so to deal with that which is his right as to lead an innocent party to assume that he is dealing with his own, he creates an equity against himself in favour of the innocent party, who has been so misled, and must bear the loss (A:). If (/) ifojjc V. C7o?ic«)T)/, I. R. 8 E([. 160, ^J^'/" Lord Selburne ; Carr v. 555. London cO North Western Eailicay (g) Nun V. Fabian, 1 Ch. 35. Co., L. R. 10 C. P. 307. (h) Howe V. Hall, I. R. 4 Eq. 252. (k) Teasdale v. Teasdale, Sel. Ca. (i) Swan v. North Australasian Ch. 59 ; Evans v. Bidcnell, 6 Ves. Co., 2 H. & C. 182, i)er Lord Black- 181 ; Vandeleur v. Blagrave, 17 L. J. burn ; Dixon, v. Muckleston, 8 Ch. Ch. 45 ; Waldron v. Sloper, 1 Drew. 108 MISREPRESENTATION. Chap. II. he puts into the hands of another the means of obtaining money from a third person, he never can be able to get a de- cree to get rid of that transaction arising out of the securities which he has intrusted to another, and of which he, the party complaining, was the author, without first repaying the monies thus obtained {!). If he arms another with the symbol of pro- perty, he should be the sufferer and not the person who gives credit to the operation and is misled by it (m). It is a well- known principle that where one of two innocent must suffer from the fraud of a third, the loss should be borne by him who has enabled the third party to commit the fraud {n). When accordingly a solicitor fraudulently induced a client to execute a conveyance of an estate to himself, and to sign an indorsed receipt for the purchase money as having been paid to him, though no money had in fact been paid, and the solicitor took possession of the estate and made an equitable mortgage of the estate, representing it to be his own and unincumbered : it was held that the client who had signed the receipt was guilty of such negligence that he ought to be postponed to the equitable mortgagee who had a good equitable title without notice, and Avho had advanced his money on the faith of the representation contained in the instrument (o). So, also, if a man leave a deed executed by him in the hands of another person, and that deed so left in his hands is made by him a security to a third person who acts honestly and fairly in the transaction, it is not competent for the person who has left the deed in his hands to set up against the third party, who has honestly taken it as a 193 ; Perry Herrick v. Attvood, 2 D. Session, 4th series, 925. To come & J. 21. within the principle, it is necessary (I) Lord Aldboroiif/li v. Tnje, 7 CI. that the representation should be & Fin. 463. false, and that the party to whom it (m) Vickers v. Hertz, 2 Sc. App. was made should believe it to be Ca. 115. true, and not have the means which (n) Vandeleur v. Blacjmve, 17 L. would enable a prudent man to dis- J. Ch. 52 ; Taylor v. Great Indian cover the falsehood. Vandeleur v. Peninsula Railway Co., 4 D. & J. Blagrave, 17 L. J. Ch. 52, per Lord 574 ; Arnold v. Cheque Bank, 1 C. Cottenham. T. I>. 581 ; London and South JFestern (o) Hunter v. Walters,! Ch. 75. Bank v. Wentworth, 5 Exch. D. 105 ; See TFithinyton v. Tate, 4 Ch. 288. Rose V. Spavens, 7 Dec. of Court of MISREPRESENTATION. 109 security, the fact, if fact it be, of fraud having been committed Chap. II. upon the person leaving it(j:>). So, also, when a man having dealings with another duly and formally executed a deed in respect of the dealings with a receipt for the money endorsed, and delivered the deed to the agent of the other party with- out receiving the purchase money, and the agent received the purchase money from his principal and misappropriated it, it was hekl that the loss must fall on the former, inasmuch as he had by his negligence in delivering the deed to the agent put it into his power to commit the fraud (q). So, also, when a man having dealings with another in respect of which the same person acted as agent for both parties, delivered to the agent an instrument, reciting the payment of the purchase money, but without a receipt for the money being signed, and the agent re- ceived the money from the other party but did not pay it over to the former, or inform him that it was in his hands, it was held that the latter, who had paid the money into the hands of the agent, must bear the loss (r). So, also, where A. executed a mortgage to B. for 1,000/., which was not acted on, but he afterwards executed another mortgage for 2,O00Z. to B., and the solicitor employed retained the first deed, and after- wards fraudulently induced B. without consideration to sign a memorandum undertaking to transfer the first mortgage to A., and he executed such transfer, and C, on the faith of B.'s act, advanced l,0O0Z., which was received by the solicitor and misapplied, it was held that B. must be postponed to C. («), So, also, where a transfer of certificates in a railway company had been forged, and the company registered the transfer and placed the transferee on the list of shareholders and delivered to him certificates, and he transferred the shares to another person, it was held that the giving of the certificates by (j)) Greenfield x . Edwards, 2 T) . J. v. Guy, 8 Beav. 147; Griffin v. & S. 596. See Bannfather^s Claim, Clowes, 20 Beav-Gl ; JVroutv. Davies, 16 Ch. D. 179. 25 Beav. 369 ; Smith v. Evans, 28 (<^) JVest V. Jones, 1 Sim. N. S. Beav. 63 ; JFithimjton v. Tate, 4 Ch. 208. 288. (r) Vandeleur \. Blagrave, GBeav. (.s) Hiorns v. Honlton, 16 Beav. 565, affirmed 17 L. J. C'li. 45. See 259. Yotmr) v. White, 7 Beav. 506 ; Young 110 MISREPRESEXTATIOX. Chap. II. the company to the transferee amounted to a statement by the company, intended to be acted on by purchasers in the market, that the transferee was entitled to the shares, and that the purchaser from him havinf? acted upon the statement, the company was estopped from denying its truth (t). So, also, where the plaintiffs to whom goods had been pledged and warehoused in their name, were induced by the fraudulent representations of the pledgor that he had sold the goods to the defendants, and would pay them out of the monies received in payment, handed him over a delivery order for the goods, which he gave to the defendants as security for advances, and the defendanst, on the advances not being repaid, sold the goods ; it was held that as the plaintiffs had allowed the pledgor to appear as the ostensible owner of the goods the loss must fall on them (?(). So, also, where the drawer of a cheque fills it up so carelessly as to enable the holder of the cheque to add figures, making it payable for a larger amount, he cannot, as against a banker, who has by his neglect in the mode of drawing up the cheque, been led to pay the forged cheque, complain of that payment or set up the invalidity of the document (x). So, also, a man who gives an acceptance in blank holds out the person to whom it is entrusted as clothed will) ostensible authority to fill in the bill as he pleases within the limits of the stamp (y). So, also, when a bill is accepted in blank for the purpose of being negotiated, and is afterwards filled up with the name and signature of a person as drawer and indorser, the acceptor cannot as against a bond fide indorsee for value adduce evi- dence to show that either the drawing or indorsement is a forgery {z). So, also, where an employer signed an order for {t) Baldav. Scm Francisco Railway 1 Macq. 513. Co., L, R. 3 Q. B. 584. See Hart v. (y) Garrard v. Lewis, 10 Q. B. D. Frontino d-c. Gold Co., ib., 5 Excli. 3.3. Ill ; Simm v. Atiglo-Americcm Tele- (z) London d: South IVestern Bank graph Co., 5 Q. B. D. 213. v. IVentivorth, 5 Exch. D. .96. See (w) Babcock v. Lavson, 4 Q. B. D. Roharts v. Tucker, 16 Q. B. 580 ; 400,5 Q. B. D. 285. com p. Ba.cendale v. Bennett, 3 Q. B. (.r) Young v. Grote, 4 Bing. 253. D. 525. See Orr v. Union Bank of Scotland, MISREPRESENTATION. Ill payment of money which had been drawn up by his clerk in such a negligent way that the amount could be increased, and the clerk afterwards increased the amount, and a bank to which the order was presented cashed it, it was held that the em- ployer was not entitled to complain of the cashing of the order in consequence of the negligent way in which the order had been drawn up (a). The mere fact of a purchaser or mortgagee not being in pos- session of the title deeds will not, in the absence of other circumstances indicative of fraud, or gross and wilful negli- gence (6), affect his legal title as against subsequent purchasers Chap. II. (a) Halifax Union v. Wheelwright, L. R. 10 Ex. Ch. 190. See Arnold v. Cheque Bank, 1 C. P. D. 587. (6) The distinction between mere negligence and gross negligence was recognised by the Roman lawyers. Culjya levis, in the language of the Roman law, is the want of that dili- gence which is taken by prudent, careful persons ; culpa lata is the want of that diligence which might be expected even of a person of less than ordinary prudence. Lindl. on Jur. 131. Cm /jJrt /rtia was considered generally equivalent to dohts. Lata culpa dole comparatur. Dig. 11, tit. 6, leg. 1, § 1. " Lata culpa est nimia negligentia id est non intelli- gere quod omues intelligunt." Dig. Lib. 50, tit. 16, leg. 213. " Si quis non ad eum modum (|m-m nominum natura desiderat diligi'us est, fraude non caret." Dig. Lib. 16, tit. 3, leg. 32. " Sensus est," adds a commen- tator, ib., " latam culpam duobus indiciis deprehendi. Primo, si quis non ad eum modum faciat, quo omnes homines faciunt : altero si qtiis non eodem modo in re aliena ac in suis rebus versetur ; utrumque dolo proxinnun est. Levis est quoties eandem in alienis ([uam in suis rebus diligentiam et fidcm prte- stat, non tamen eam quam circum- spectiores honnnes et diligentissimi adhibent : et, ut paucis dicam, levis culpa est consueta in rebus suis et alienis negligentia lata est in suis dili- gentia in alienis negligentia." If the fault is one which any man in his senses would have scrupled to conmiit, there is lata culpa : if the fault con- sists in falling short of the highest standard of carefulness to avoid injury that could be found ; such, for instance, as the carefulness em- ployed in the management of affairs by a person who would deserve to be called bonus paterfamilias, the culpa was levis or levissima. Or, again, it might consist in falling short of the care which the person guilty of the culpa was accustomed to bestow on his own affairs. Lata culpa was treated very much on tlie same footing as doUis, as there always seems something M'ilful in the ex- treme negligence, the crassa negligen- firt which characterised the lata culpa. — Sandars, Inst. p. 477. When it is said by the Roman lawyers that negligence, heedlessness, or rashness is equivalent in certain cases to dolus, the meaning is that, judging from the conduct of tlie party, it is impossible to detcrinine whether he 112 MISREPRESENTATION. Chap. II. or incumbrancers (c). But if a man on taking the legal estate makes no inquiry for the title deeds v/hich constitute the sole evidence of the title to the property, or allows them to re- main in the hands of the vendor or mortgagor, his conduct affords evidence of an amount of negligence and carelessness sufficient to justify the Court in assuming that he had ab- stained from making the enquiry from a suspicion that his title would be affected if it was made, and in imputing to him the knowledge which by the use of ordinary diligence he might have discovered. So, also, gross negligence will be imputed to a man who, having lent the title deeds to the vendor or mort- gagor for a temporary and reasonable purpose, allows them to remain out of his hands for an unreasonable time, and does not reclaim them with proper diligence. If in either of such cases a fraudulent use is made of the title deeds by the vendor or mortgagor, and a new title is created by means of them in favour of a subsequent purchaser for value Avithout notice, the first purchaser or mortgagee will be postponed in equity to the subsequent incumbrancer (cZ). But if a man on taking the legal estate, either as purchaser or mortgagee, inquires for the title deeds and a reasonable explanation or excuse is given for their non-delivery, or if he parts with them for a reasonable and temporary purpose, and does not allow them to remain out of his hands without making reasonable enquiries for them, or using reasonable endeavours to get them back, gross negligence will not be imputed to him, although a fraud may be practised by means of them upon an innocent party (e). The Court, it was said in Ratcl'tjfe v. Barnard {f ),\\\\\ not take away his intended or whetlier he was negli- 449 ; Perry Her rick v. Attivood, 2 D. gent, heedless, or rash ; and tliat & J. 21 ; Lloyd v. Attvood, 3 D. & such being the case, it shall be pre- J. 614 ; Hopgood v. Ernest, 3 D. J. siinied that he intended, and his & S. 116 ; Brigcjs v. Jo7ies, 10 Eq. liability shall be adjudged accord- 92 ; Ratdiffe v. Barnard, Q Q\\. 652 ; ingly, provided that the question Fox v. Hawhes, 13 Ch. D. 822 ; arise in a civil action. Austin Lect. Bannf cither's Clarut, 16 Ch. D. 179. on Jur., vol. 2, p. 107. (e) Martinez v. Cooper, 2 Russ. (c) Evans v. Bichiell, 6 Ves. 174, 198 ; Stevens v. Stevens, 2 Coll. 20 ; 191 ; Martinez v. Cooper, 2 Kuss. Esjnn v. Pernherton, 3 D. & .1. 547. 198 ; Golyer v. Finch, 5 H. L. 905. (/) 6 Ch. 654 (f/) Hewitt V. Looscmore, 9 Ha. MISREPRESENTATION. 113 legal security from a man unless he has been guilty of fraud, '^^^P- ^^- or of that wilful negligence which leads the Court to conclude that he was an accomplice in the fraud (g). The rule that a purchaser or mortgagee who neglects to make proper enquiries for the title deeds, or who allows them to remain in the hands of the vendor or mortgagor, will be postponed to a subsequent incumbrancer without notice, who obtains possession of the deeds, operates not only for the benefit of the incumbrancer who has obtained possession of the deeds, but also for the benefit of a subsequent incumbrancer who has advanced his money innocently in the belief that there was not any incumbrance prior to that of the incumbrancer in pos- session of the deeds and who has made proper enquiries as to the possession of the deeds (h). In cases where the contract lies between parties having merely equitable interests, unaccompanied by the legal estate, negligence or indiscretion in the one may give the other, although his equity is posterior in creation, a better claim to the assistance of the Court. An equitable mortgagee accordingly, who either omits or neglects to get possession of, or who having got possession of the title deeds gives them up to the mort- gagor and thereby arms him with the means of dealing with the estate, as the absolute legal or equitable owner, free from any shadow of incumbrance or adverse equity, will be postponed to a subsequent equitable incumbrancer without notice, who has got possession of the deeds, and whose equity in other re- spects is of the same nature and quality (^). In examining into the relative merits or equities of two parties having adverse equitable interests, the Court directs its attention not only to the nature and conditions of their respective equitable inte- rests but to the circumstances of their acquisition, and the whole conduct of each party with respect thereto : and in ex- amining into these points it must apply the test not of any (g) See further, infra, notice. Sloper, 1 Drew. 193; Eke v. Rice, 2 (h) Clarke v. Palmer, 21 Ch. D. Drew. 83 ; Doxole v. Saunders, 2 H. 124. & M. 242 ; Adsetts v. Hives, 33 Beav. (i) Allen v. Knight, 5 Ha. 272, 52; Layard v. Maud, 4 Eq. 307; affirmed 11 Jur. 527; Waldron v. Spencer v. Clarke, dCh.. D. 137. I 114 MISREPRESENTATION. Chap. II. technical rule or any rule of partial application, but the same broad principles of right and justice which a Court of equity applies universally in deciding upon contested rights (A.-). "A pre-existing equitable title," said Lord Cairns, in ShropsJdre Union Canal Co. v. Reg. (I), " may be defeated by conduct, by representations, by mis-statements of a character which would operate and cause to forfeit and take away the pre-existing equitable title." When, accordingly, a vendor who chose to leave part of the purchase money unpaid, executed and de- livered to the purchaser a conveyance in which there was a receipt indorsed acknowledging that the purchase money had been paid, and the purchaser fraudulently deposited the deed with an equitable mortgagee, it was held that the equitable mortgagee had a better equity than the vendor, inasmuch as the latter had in effect invited and encouraged the mortgagee to rely on the title of the purchaser {m). So, also, where an equitable mortgagee returned the deeds to the person from whom he had received them, who promised to return them but did not do so, and after keeping them a considerable time, deposited the deeds by way of equitable mortgage with a hand fide purchaser without notice, it was held that the first equit- able mortgagee had by his laches lost his equity as against the second equitable mortgagee (o?). " Persons," said Lord Hatherley, in Shrojishire Union, ■). In the case of equitable interests in personal estate, or choses in action, a purchaser or other incumbrancer, who fails to give notice of his interest to the person in possession of the fund, will be postponed to an incumbrancer, though subsequent in date, who gives notice {I). But this rule has no application whatever to real estate. As between equitable incumbrancers of real estate, he whose security is prior in date, is entitled to priority over a person who takes a subsequent security, not- withstanding that the latter may have been beforehand in giving the party in possession of the estate notice of his secu- rity (m). An equitable incumbrancer on real estate is not as aoainst another equitable incumbrancer postponed by any absence of activity in asserting his legal right, except such as amounts to fraud (n). (k) 2 H. & C. 189, 2}er Cockbiu'n, C. J. See Foster v. Macldnnon, L. E. 4 C. P. 712. (I) Dearie v. Hall, 3 Russ. 1 ; Loveridge v. Cooper, ib. 30 ; Foster v. Blackstone, 1 M, & K. 297 ; Martin V. Sedgwick, 9 Beav. 333 ; Etty v. Bridges, 2 Y. & C. C. C. 486 ; Thomp- son v. Tomkins, 2 Dr. & Sm. 8 ; Lloyd V. Banks, 3 Cli. 490 ; Sajfron Walden, Ac, Society v. Bayner, 14 Ch. D. 410 ; Bannfather's Claim, 16 Ch. D. 179. (?7?) Jones v. Jones, 8 Sim. 642 ; Wiltshire V. Babbits, 14: Sim. 76. (n) Booper v. Harrison, 2 K. & J. 103. CHAPTER III. PRESUMPTIVE OR CONSTRUCTIVE FRAUD. Besides that kind of fraud which consists in misrepresenta- Chap. III. tion, express or implied, there is anotlier which will be pre- sumed, when parties to a transaction do not stand upon the equal footing on which parties to a transaction should stand (a). The general theory of law in regard to acts done and contracts made by parties affecting their rights and interests, being that, in order to bind them there must be a free and full consent, and consent being an act of reason accompanied with delibera- tion, transactions, in which one of the parties is not as free and voluntary an agent as the other, or does not apprehend the meaning and effect of what he is doing, want the very qualities which are essential to the validity of all transactions (6). In order that there should be consent, it is essential that the con- sent should be given with reflection and with knowledge, freely, without restraint or surprise. Fraud, therefore, whether con- sisting in misrepresentation, concealment, violence, duress, or constraint, will nullify consent (c). It is upon this principle that when a person, who from his state of mind, age, weakness, or other peculiar circumstances, is incapable of exercising a free discretion, is induced by another to do any act which may tend to the injury of himself or his representatives, that other shall not be allowed to derive any benefit from his improper conduct. The equitable rule is of universal application that where a man is not a free agent, or is not equal to protecting himself, the court will protect him (d). (a) Edwards v. Meijrid; 2 Ha. s. 2, n. 38. 68. (<0 Evans v. Lleiuellyn, 1 Cox, {!)) Btory, E4. Jur. s. 222. 340 ; Crowe v. Ballard, 1 Ves. Jr. (c) Toull. Cod. Civ., liv. 3, lU. 3, 215 ; Cashornc v. Barsham, 2 Eeav. 120 PRESUMPTIVE OR CONSTRUCTIVE FRAUD. ^^'''^P- ^^^- It is upon the general ground that there is a want of rational Lunacy, idiotcy, and deliberate consent that the contracts of idiots, lunatics, and other persons non compotes mentis are generally deemed in- valid by a court of equity. The mere fact, however, that a man is in a state of lunacy, or is even in confinement, will not |3e?' se induce the Court to interfere, if it be distinctly shown that the transaction was for his own benefit, that no coercion or impo.si- tion was used, and that he knew clearly what he was doing (e) ; and so an executed contract where parties have been dealing fairly and in ignorance of the lunacy, will not be set aside, if injustice would be done to the other side and the parties cannot be placed in statu quo, or in the position in which they stood before the transaction (/). But this rule is not applicable to a case where the question is whether the deed of a lunatic alter- ing the provisions of a settlement is invalid ((/). The same rule prevails at law. To prove lunacy is not enough to avoid a contract. A contract entered into bond fide and in the ordinary course of business, is not void by reason of one of the parties having been at the time a lunatic (/i). To vitiate the contract it must appear that the other party was aware of the fact of lunacy and took advantage of it (i). A party claiming under a deed is not bound to prove the sanity of the person executing it. The burden of proof lies on the other side {h). Imhecility, Independently of that degree of imbecility which will render "•'t"*^^^""'^^^'^' ^ ^^^ legally lion compos, a conveyance may be impeached for mere weakness of intellect, provided it be coupled with other 76 ; Balcer v. Monk, 4 D. J. & S. Beav. 325 ; Jacobs v. Richards, 18 388 ; Williams v. Bayley, 1 E. & I. Beav. 300 ; Price v. Berrington, 3 App. Ca. 200 ; Slater v. Nolan, I. Mac. & G. 486 ; Campbell v. Hoo'per, E. 11 Eq. 367 ; Armstrong v. Arm- 3 Sin. & G. 153. strong, ih. 8 Eq. 1. (g) Elliott v. Ince, 7 D. M. & G. (e) Selby v. Jackson, 6 Beav. 192, 475. 204. See Towart v. Sellers, 5 Dow, Qi) Molton v. Camrotcx, 4 Excli. 231 ; Nelson v. Duncombe, 9 Beav. 17. 211 ; Snook v. Watts, 11 Beav. 105 ; {i) Beavan v. McDonnell, 10 Exch. Stedman v. Hart, Kay, 607. 184. (/) Nidi v. Morley, 9 Ves. 478, (k) Jacobs v. Richards, 18 Beav. 482 ; Williams v. Wenticorth, 5 305. PRESUMPTIVE OR CONSTRUCTIVE FRAUD. 121 circumstances to show that the weakness, such as it is, has been Chap. III. taken advantage of by the other party ; but the mere fact that a man is of weak understanding or is in intellectual capacity below the average of mankind, if there be no fraud, or no undue advantage be taken, is not of itself an adequate ground to set aside a transaction (/)• Till a man be declared legally no7i compos, a deed executed by him is good (m). The common law has not drawn any discriminating line by which to deter- mine how great must be the imbecility of mind to render a transaction void and how much intellect is necessary to support it {n). The boundaries between actual insanity and great mental weakness are so very narrow that the Court must judge of this in each case upon facts and circumstances (o). With regard to what shall constitute mental capacity, the rule in equity is the same as the rule at law. " There cannot," said Lord Hardwicke, in Bennett v. Wade ( jj), " be two rules of judging in law and in equity upon the point of insanity ; " and in Osmond v. Fitzroy (q), the Master of the Rolls said there was no such thing as an equitable incapacity, where there was a legal capacity (r). If a man be drunk to the extent of complete intoxication, so Intoxicatiou. as to be no longer under the guidance of reason, or is in a state of excitement from excessive drinking, almost amounting to madness, any transaction which he may enter into while he is in that state is invalid. If, however, the degree of intoxication (?) Blackford V. Christian,! Knapp, v. Beauchamp, 3 Bligh, 20n. ; Addis 73 ; Ball v. Mannin, 3 Bligli, N. S. v. Campbell, 4 Beav. 401 ; Harrod v. 1, 1 Dow. & CI. 381 ; Armstrong v. Harrod, 1 K. «& J. 7 ; Longmate v. Armstrong, I. R. 8 Eq. 1. Ledxjer, 2 Giff. 163. See as to want (m) Osmond v. Fitzroy, 3 P. Wins. of assent arisinff from partial in- 129. See Gartside v. Ishenvood, 1 sanity, monomania, delusion, &c., Bro. C. C. 559 ; Jacobs v. Richards, &c., Deio v. Clarhe, 5 Russ. 1G7 ; 18 Beav. 300. Comp. Evans v. Waring v. Waring, 6 Moo. P. C. Blood, 3 Bro. P. C. G32. 341 ; Creagh v. Blood, 2 J. & L. 509. {n) Jackson v. King, 4 Cow. See also Steed v. Galley, 1 Keen, (Amer.), 207 ; Munby v. Beincke, 3 620. K. &J. 342. (p) 2Atk. 327. (o) Bennett v. Wade, 9 Mod. 315. (7) 3 P. Wms. 130. See White v. Small, 2 Ch. Ca. 103 ; (r) See Manby v. Bemclce, 3 K. & Bell V. Hoirard, 9 Mod. 302 ; Hudson J. .342. 122 PRESUMPTIVE OR CONSTRUCTIVE FRAUD. Chap. III. falls short of such complete intoxication, he cannot have relief, unless it appear that he was drawn in to drink by the con- trivance of the other party, and that an unfair advantage was taken of his situation («). The rule at law on the subject agrees with the rule in equity (t). Infancy. The rulo is the same both at law and in equity with respect to the general incapacity of infants to enter into a binding con- tract. A man who enters into a contract during his minority is not either at law or in equity bound thereby after his majority on the mere ground that without any false assertion on his part the other party believed him to be of age {it). But if an infant by a false and fraudulent representation that he is of full age induces a man to enter into a contract with him, he is bound in equity {x). Infancy is not in equity an excuse for fraud. An infant who is old and cunning enough to contrive or carry on a fraud is bound in the same manner as if he were an adult {y). It is not necessary that he should actively en- courage fraud. It is enough if he be privy to it. If an infant knowing his rights stands by and seeing another in treaty for the purchase of his estate gives no notice of his title, he will not be permitted afterwards to avoid the purchase (z). An infant cannot be allowed by a Court of equity to take advan- tage of his own fraud ((f). Where an infant had obtained from (s) Cory V. Cory, 1 Ves. 19 ; Cooke (x) Cory v. Gertcken, 2 ]\Iadd. 40 V. Clayworth, 18 Ves. 16; Say v. JFright y. Snoive, 3 DeG. &Sm. 321 Barwich, 1 V. & B. 195 ; Butler v. Ex parte Unity Bank, 3 D. & J. 63 Mulvihill, 1 Bligh, 137 ; Liyhtfoot v. Hannah v. Hodgson, 30 Beav. 23. Heron, 3 Y. & C. 586 ; Nurjle v. Comp. Ex parte Taylor, 8 D. M. & Baylor, 3 Dr. & War. 60 ; Shaiv v. G. 254 ; Nelson v. Stocker, 4 D. & J. Thackeray, 1 Sim. & G. 539 ; JVilt- 458 ; but see Bartlett v. JFells, 1 B. shire v. Marshall, 14 W. R. 602 ; & S. 836 ; Lempriere v. Lange, 12 Coxv. Smith, 19 L. T. N. S. 517. Ch. D. 678. See Addis v. Campbell, 4 Beav. 401 ; (y) Watts v. Cressivell, 9 Vin. Ab. Martin v. Pycroft, 2 D. M. & G. 415 ; Ewoy v. Nicholas, 2 Eq. Ca. 800. Ab. 489 ; Arnot v. Biscoe, 1 Ves. (t) Gore V. Gibson, 13 M. & \V. 95 ; per Lord Hardwicke, Beckett v. 623, 626 ; Molton v. Camruux, 4 Cordlcy, 1 Bro. C. C. 358 ; but see Exch. 17, 19 ; Hatvkins v. Bone, 4 Saunderson v. Marr, 1 H. Bl, 75. F. & F. 313. (j) Savage v. Foster, 9 Mod. 37. (u) Stikeman v. Dawson, 1 De G. & («) Clarke v. Cobley, 2 Cox, 173. Sm. 105. PRESUMPTIVE OR CONSTRUCTIVE FRAUD. 123 a creditor of his wife two promissory notes, in which he was ^^^^p- "^- indebted to him before marriage, on giving his bond to the creditor, he was ordered to give back the notes on his pleading infancy when sued on the bond (6). Where an infant charged his reversionary interest in a fund with payment of a sura lent to him upon his promissory note, and executed a statutory declaration that he was then of full age, and after attaining full age he mortgaged his interest in the fund for an amount ex- ceeding what was ultimately available without disclosing the fact of the prior charge : the Court held that the charge given by the infant during his infancy and incapacity to contract was avoided by the subsequent mortgage executed by him when of full age and capable of contracting to a mortgagee without notice (c). In the absence of proof of the exercise of undue influence on the part of the donee or of the existence of the relation of guardian and ward between the donee and the donor, a gift of her property within a month before her death by an infant aged twenty years, of business habits, firm will, and fully capable of managing her affairs, to a relation with whom she had been residing since her father's dea-th, for a period of five months until her own death, was held not invalid (d). At law a married woman is under an absolute incapacity to Coverture. bind herself by any engagement. Her separate existence is not contemplated, but is merged by the coverture in that of the husband. But in equity the case is wholly different. Her separate existence, both as regards her liabilities and her rights, is acknowledged in equity to the extent of the property which she enjoys for her separate use. In respect of such property she is capable of disposition and of doing other acts as if she were a. feme sole (e). In respect of property not settled to her separate use a married woman cannot bind herself in equity in matter of contract any more than she can at law, but coverture (h) lb. See Junes v. Kmrnexj, 1 {e) Vcmyhan v. Vanderstegen, 2 Dr. & War. 166. Drew. 370 ; Johnson v. Gallagher^ 3 (r) Inman v. hiinan, 15 Eq. 264. D. V. & J. 494 ; but see now 45 & (rf) Taylor v. Johnstone, 19 Cli. D. 46 Vict. c. 75. 603. 124 FRAUD BY PARTIES Chap. III. Inequality of footing between parties to a contract. Principle as to dealings between parties standing in a fiduciary relation to each other. is no excuse in equity for a fraud (/). The acquiescence how- ever of a married woman in a transaction will not bind her, if the person with whom the transaction was entered into knew that she was a married woman (g). The principle which vitiates a contract with an incapacitated person has been extended in equity to cases where from the peculiar relation which subsists between the parties, or from the influence which the one party has acquired over the other, the freedom of action which is essential to the validity of all ti'ansactions is overcome, and the equal footing on which parties to a transaction should stand is destroyed {h). If the relation between the parties is one of a fiduciary nature, transactions between them are watched by a Court of equity with more than ordinary jealousy. The duty of a person who fills a fiduciary position being to protect the interests wdiich are confided to his care, he may not avail himself of the influence which his position gives him for the purposes of his own benefit, and to the prejudice of those interests which he is bound to protect. It is a rule of equity that no man can be permitted to take a benefit where he has a duty to perform which is inconsistent with his acceptance of the benefit (i). Wherever two persons stand in such a relation that, while it continues, confidence is necessarily reposed by the one and the influence which naturally grows out of that confidence is pos- sessed by the other, and this confidence is abused or the influ- ence is exerted to obtain an advantage at the expense of the confiding party, the person so availing himself of his position will not be permitted to retain the advantage, although the transaction could not have been impeached if no such confiden- tial relation had subsisted (j). " The obtaining property," said (/) Savarje v. Foster, 9 Mod. 37 ; Vaughan v. Vanderstegen, 2 Drew. 379 ; Sharpe v. Foy, 4 Cli. 35 ; Ee Lush's Trusts, ib. 591, supra, p. 102. {g) Nicholl v. Jones, 36 L. J. Ch. 554. Qi) See Casborne v. Barsham, 2 Beav. 76 ; Edwards v. Meyrick, 2 Ha. 60 ; Lnnr/mate v. Ledger, 2 Giff. 157 ; Barrett v. Hartley, 2 Eq. 789. {i) Robi7ison v. Pett, 3 P. Wins. 249 ; Ex parte Larking, 4 Ch. D. 566 ; Bagnal v. Carlton, 6 Cli. D. 371. {j) Tate V. Williamson, 2 Ch. 61 ; Bagnal v. Carlton, 6 Ch. D. 371. IN A FIDUCIARY POSITION. 12c James, L.J., in Moxon v. Payne {k), " or of any l)cnefit through ^^lap. III. the medium and unconscientious abuse of influence by a person in whom trust and confidence are placed is a fraud of the gravest character (/). The rule of equity which prohibits a man, who fills a position of a fiduciary character, from taking a benefit from the person towards whom he stands in such a relation, stands upon a motive of general public policy, irrespective of the particular circumstances of the case. The rule is founded on considera- tions as to the difficulty which must, from the condition of the parties, generally exist of obtaining positive evidence as to the fairness of transactions which are peculiarly open to fraud and undue influence. The policy of the rule is to shut the door against temptation {m). The rule does not however go the length of avoiding all transactions between parties standing in a fiduciary relation and those towards whom they stand in such relation. All that a Court of equity requires is that the confidence which has been reposed be not betrayed. A transaction between them will be supported, if it can be shown to the satisfaction of the Court that the parties were, notwithstanding the relation, substantially at arms' length and on an equal footing, and that nothing has happened which might not have happened had no such relation existed. The burthen of proof lies in all cases upon the party who fills the position of active confidence to show that the transaction has been fair. If it can be shown to the satisfaction of the Court that the other party had competent and disin- terested or independent advice, or that he performed the act or entered into the transaction voluntarily, deliberately and ad- visedly, knowing its nature and effect, and that his consent was not obtained by reason of the power of influence to which the relation gave rise, the transaction will be supported (n). A man (k) 8 Ch. 887. V. Heathorn, 1 Y. & C. C. C. .342 ; (l) Emma Silver Mininc) Co. v. Aberdeen Railway Co. v. Blaikie, 1 Grant, 17 Ch. D. 127. Macq. 4(31. {m) Heme \. Meeres,\ Yarn. Adb ; (n) Gibson v. Jeijes, 6 Yes. 278; Aijliffe V. Murray, 2 Atk. 59 ; Robin- Giddings v. Giddings, 3 Kuss. 241 ; son V. Rett, 3 P. Wilis. 251 ; Benson Hunter v. Atlci)is, 3 M. & K. 113 ; 126 FRAUD BY PARTIES Chap. III. standing in a fiduciary relation, if dealing with tlic confiding party, is bound to communicate all the information he has acquired respecting the property, the subject of the transaction, which it was material for him to know in order to enable him to judge of the value of the property (o). But the absence of a competent and disinterested legal adviser may of itself be fatal to the transaction ( 2^). The principles which govern the case of dealings of persons standing in a fiduciary relation apply to the case of persons who clothe themselves with a character which brings them within the range of the principle (q), or who take instruments, securi- ties, or monies with notice that they have been obtained by a person filling a position of a fiduciary character from a person towards whom he stands in such relation (r). In judging of the validity of transactions between persons standing in a confidential relation to each other, the material point to be considered is whether the person conferring a benefit had competent and independent advice. The age or capacity of the person conferring the benefit and the nature of the benefit are of little importance in such cases. They are im- portant only where no such confidential relation exists (s). The general principle, however, as to the incapacity of a person who stands in a fiduciary relation to take a benefit from the party towards whom he stands in such a relation, admits of some limitation. A mere trifling gift to a person standing in a con- Edwards v. MeyricJc, 2 Ha. 60 ; {q) Tate v. Williamson, 2 Ch. 55 ; Billage v. Southee, 9 Ha. 540 ; Hogh- Neio Sombrero Phosphate Co. v. ton V. Hocjht07i, IbBeav. 288 lAllfrey Erlangcr, 5 Ch. D. 75; Bagnal v. v. Allfrey, 1 Mac. & G. 99 ; Smith Carlton, 6 Ch. D. 371 ; Phosphate V. Kay, 7 H. L. 750 ; Rhodes v. Bate, Sewage Co. v. Hartmont, 5 Ch. D. 1 Ch. 252 ; Tate v. Williamson, 2 394 ; Emma Silver Mining Co. v. Ch. 5*5. Grant, 11 Ch. D. 922 ; 17 Ch. D. 127. (o) lb. ; New Somhrero Phosphate (r) Ardglasse v. Pitt, 1 Vern. 238 ; Co. V. Erlanger, 5 Ch. D. 75 ; Bagnal Mohny v. Kernan, 2 Dr. & War. 31 ; V. Carlton, 6 Ch. D. 371 ; Phosphate Espey v. LaTce, 10 Ha. 260 ; Berdoe Sewage Co. v. Hartmont, 5 Ch. D. v. Dawson, 34 Beav. 603 ; Polfe v. 394 ; Emma Silver Mining Co. v. Gregory. 4 D. J. & S. 576 ; Wi/se v. Ch-ant, 11 Ch, D. 922. Lambert, 16 Ir. Ch. 379. Comp. (25) Rhodes v. Bate, 1 Ch. 252 ; lihodes v. Bate, 1 Ch. 260. King v. Anderson, I. K. 8 Eq. 637. (.s-) Rhodes v. Bate, I Ch. 252. IN A FIDUCIARY- POSITION. 127 fidential relation, or a mere trifling liability incurred in favour Chap. III. of such person, cannot stand in the same position as a gift of a man's whole property, or a liability involving it, would stand in. In such cases the Court will not interfere to set them aside upon the mere fact of a confidential relation and the absence of proof of competent and independent advice. The Court requires, before it will undo the benefit conferred, some proof not merely of influence derived from the relation, but of mala Jides, or of undue or unfair exercise of the influence (t). After the termination of the fiduciary relation, it is open to the parties to deal on the same terms as strangers (ii) ; but if a relation of confidence be once established, either some positive act or some complete case of abandonment must be shown in order to determine it. The mere fact that the relation is not called into existence is not sufiicient of itself to determine it (a'). If the confidential relation between the parties has not ter- minated at the commencement of the negotiation, the principles which govern the case of dealings between parties standing in a fiduciary relation continue to operate (y). Although indeed the confidential employment may have ceased, the disability will continue so long as the reasons on which it is founded con- tinue to operate (s). A man, for instance, who has in the course of a fiduciary employment acquired some peculiar knowledge as to the property of his employer cannot, after the cessation of the relation, use the knowledge so acquired for his own benefit and to the prejudice of the other (a). But although a person may have been employed or consulted on one occasion, this will not of itself constitute a confidential relation in respect of a subsequent transaction, occurring at a future and somewhat distant time (h). A common instance of the application of the rule that a man Dealings between trustee and cestui que trust. (t) lb. See Beadey v. Magratli, 2 (//) Tate v. Williamson, 2 Ch. 65. Sell. & Lef. 35 ; Mitchell v. Horn/ray, (z) Carter v. Palmer, 8 CI. & Fin. 8 Q. B. D. 587. 057. (u) Tate v. Williamson, 2 Ch. 65. («) lb. ; Holman v. Loynes, 4 D. See Beaden v. King, 9 Ha. 532 ; M. & G. 270 ; Ex parte Larkimj, 4 Mitchell v. Homfray, 8 Q. B. D. Ch. D. 566. 587. (6) Rhodes v. Bate, 1 Ch. 259. (..;) Rhodes v. Bate, 1 Ch. 260. 128 FRAUD BY PARTIES Chap. III. who fills a position of a fiduciary character cannot derive a benefit from the person towards whom he stands in such rela- tion, is in the case of actual trustees. It is the duty of a trustee to use his best exertions for the advantage of the cestui que trust. He may not place himself in a situation in which his interests will come into conflict with that which his duty requires him to do. Any personal benefit which he may gain by availing himself of his fiduciary character must be acquired by a dereliction of duty and will enure for the benefit of the trust estate (c). There is no more sacred rule of equity than that a trustee cannot so execute a trust as to have the least benefit from it himself ((/). No trustee who buys up an in- cumbrance on the estate of which he is trustee can ever as against the trust estate make a profit out of it (e). The restraint on any personal benefit to the trustee is not confined to his dealings with the estate, but extends to remuneration for services and prevents him from receiving anything beyond the payment of his expenses, unless there be an express stipulation to the contrary (/). There may be cases in which the Court will establish an agreement made with a trustee for a certain allowance beyond the term of his trust, but the Court will be extremely cautious and wary in doing so. The Court looks upon trusts as honorary and a burden on the honour and con- science of the party, and not as taken with mercenary motives (g). But there is no rule which incapacitates a trustee from dealing (c) Holt V. Holt, 1 Cli. Ca. 190 ; entitled to the old lease. Keech v. Ex parte Lacey, G Ves. 625 ; Ex parte Sandford, Sel. Ca. Ch. 61. James, 8 Ves. 337, 344 ; D'Albiacv. (d) Forbes v. Ross, 2 Cox, 116. rJAlbiac, 16 Yes. 123 ; Hamilton v. {«) Ex parte Larking, 4 Ch. D. Wright, 9 CI. & Fin. Ill ; Broughton 566. V Broughton, 5 D. M. & G. 164 ; (/) Robinson v. Pett, 3 P. Wms. Vaughton v. Noble, 30 Beav. 34 ; 249 ; Moore v. Frowd, 3 M. & C. 46 ; Crosskill V. Bower, 32 Beav. 86. A Bainbrigge v. Blair, 8 Beav. 588 ; lease obtained by a trustee or exe- Broughton v. Broughton, 5 D. M. & cutor in his own name, even in the G. 160 ; Harbin v. Darby, 28 Beav. absence of fraud, and upon the 325 ; CrossMl v. Boicer, 32 Be^v. 86 ; refusal of the lessor to grant a new Barrett v. Hartley, 2 E(i. 789. lease to the cestui que trust, shall be (i/) ^^yhtJe v. Murray, 2 Atk. 59. held upon trust for the person IN A FIDUCIARY POSITION., 129 with the cestui que trust in respect of the trust estate. A trustee for sale may purchase the trust estate, if the cestui que trust fully and clearly understands with whom he is dealing and makes no objection to the transaction, and the trustee fairly and honestly discloses all that he knows respecting the property and gives a just and fair price, and does not seek to secure surrep- titiously any advantage for himself (h). But the transaction becomes impeachable, if there is any secret or underhand dealing on the part of the trustee. However fair it may be in other respects, the transaction cannot be supported, if the cestui que trust does not clearly and distinctly understand that he is dealing with the trustee. A trustee cannot under any circum- stances be allowed to deal with himself on behalf of the cestui que trust surreptitiously and without his knowledge and assent. It is immaterial that he may take no advantage from the bargain. It may be that the terms on which he attempts to deal with the trust estate are as good as could have been obtained from any other quarter. They may even be better, but so inflexible is the rule, that no inquiry can be made as to the fairness or unfairness of the transaction. It is enouofh that the act has a tendency to interfere with the duty of protecting the trust estate which the trustee has taken upon himself to perform. The policy of the rule is to shut the door against temptation. It makes no matter whether the transaction relates to real estate, or personalty, or mercantile matters, for the disa- bility arises not from the subject matter, but from the obligation under which a trustee lies to do his utmost for the cestui que trust (i). It makes no difference in tiie application of the prin- Chap. III. (h) Aylife v. Murray, 2 Atk. 59 ; Clarke v. Simile, 2 Ed. 134 ; Ex parte Lacey, 6 Ves. 626 ; Ex parte James, 8 Ves. 348 ; Coles v. Trecothick, 9 Ves. 246 ; Ex parte Bennett, 10 Ves. 381 ; Randall v. Errimjton, ib. 422 ; Morse v. Royal, 12 Ves. 355 ; Doumes V. Grazebrook, 3 Mer. 208 ; Knight v. Marjoribanks, 2 Mac. & G. 10 ; Luf V. Lord, 11 Jur. N. S. 50 ; Dover v. Buck, ib. 580. (t) Fox V. Macreth, 2 Bro. C. C 400, 2 Cox, 320, 4 Bro. P. C. 258 ; Ex parte Lacey, 6 Ves. 627 ; Ex parte James, 8 Ves. 348 ; Ex p)^'>'te Bennett, 10 Ves. 394 ; Randall v Errington, ib. 423 ; Att.-Gen. v Earl of Clarendon, 17 Ves. 500 Gregory v. Gregory, Coop. 201 Woodhouse v. Meredith, 1 J. & W 222 ; Baker v. Carter, 1 Y. & C. 250 ; Grover v. Hugell, 3 Euss. 428 ; Bailey 130 FRAUD BY PARTIES Chap. III. ciple that the sale was by public auction (k), or that the pur- chase was made through another person (I), or that the purchase was made from a co-trustee (on), or that the trustee may have purchased as agent for another person ('/?), or that a third person may by previous arrangement with the trustee have been the purchaser in trust for the separate use and benefit of the wife of the trustee (o). If the transaction is in itself fair and the cestui que trust knows that the person with whom he is dealing is the trustee, and there is nothing to shew that the trustee wished to take an advantage of the cestui que trust, it is not incumbent on the trustee to disclose how much he gave for the property which he sells to the trustee [p). The application of the principle is limited to dealings with the trust estate. In all matters unconnected with the subject of the trust the parties are fully competent with each other as strangers {q). Nor will the principle operate after the relation of trustee and cestui que trust is clearly dissolved, but a man who has been a trustee cannot, after the termination of the relation, be allowed to avail himself for his own benefit, and to the preju- dice of the party for whom he has been trustee, of any informa- tion which he may have acquired during the existence of the V. JVatMns, cit. 6 Bligh, 275 ; Re Bloye's Tnist,! Mac. & G. 490, affd. as Leu-is v. Hillman, 3 H. L. 607 ; Knight v. Alarjorihanks, 2 Mac. & G. 12 ; Hamilton v. Wright, 9 CI. & Fin. Ill ; Aberdeen Railway Co. v. Blaikie, 1 Macq. 461 ; Parkinson v. Hanbury, 2 D. J. & S. 450 ; Ridley V. Ridley, 34 L. J. Ch. 463 ; Franks V. Bollans, 37 L. J. Ch. 155. (k) Campbell v. IValker, 5 Ves. 678 ; Ex parte James, 8 Ves. 348 ; Ex parte Bennett, 10 Ves. 393 ; San- derson V. Walker, 13 Ves. 602 ; York Buildings Co. v. M'Kende, 8 Bro. P. C. 42, 3 Pat. Sc. Ap. 378 ; Bailey v. JVatMns, cit. 6 Bligh, 275 ; Downes V. IrnrMbrook, 3 Jler. 207 ; Graver v. Hugell, 3 Euss. 428 ; Adams v. Sworder, 2 D. J. & S. 44. (I) Sanderson v. Walker, 13 Ves. 602 ; Adams v. Sworder, 2 D. J. & S. 44 ; Bagnal v. Carlton, 6 Ch. D. 371. (m) Hall V. Noyes, cit. 3 Ves. 748, 3 Bro. C. C. 483 ; Whichcote v. Lau- rence, 3 Ves. 740. (n) Ex parte Bennett, 10 Ves. 381, 400 ; Gregory v. Gregory, Coop. 201 ; Ex parte Grylls, 2 Dea. & Ch. 290. (o) Davoue v. Fanning, 2 Johns. Ch. (Amer.), 252. ( p) Chesterfield, <£;c., Colliery Co. v. Black, 26 W. R. 207. {q) Knight v. Marjoribanks, 2 Mac. & G. 12. 2 H. & T\v. 308. IN A FIDUr-IARY POSITION. 131 relation (r). Subject to this limitation a man who has acted in a fiduci?a-y character may, on divesting or discharging himself of the trust, purchase the property in respect of which he has filled a fiduciary position (s). If a man cannot by an act of his own discharge himself of the trust so as to enable him to pur- chase, the Court will, under particular circumstances, divest him of the character and enable him to purchase (t). If the trust property is taken entirely out of a man's hands, and all his authority over it put an end to by the interposition and act of law, as in the case of a sale by execution, there is no I'eason why he should not be able to purchase. The principle upon which a trustee is debarred from purchasing does not apply to such a case (u). The assignee of an insolvent debtor, for instance, may purchase the debtor's estate when sold by the sheriff (ic). So also a creditor taking out execution may pur- chase the property uj)on a sale by the sheriff (2/). But a man Chap. III. (r) Ex parte Lacey, 6 Ves. 627 ; Coles V. Trecothick, 9 Ves. 246 ; Ex parte Bennett, 10 Ves. 394 ; Morse v. Royal, 12 Ves. 373 ; Ex parte Lark- ing, 4 Ch. D. 566. (s) Ex parte James, 8 Ves. 337 ; Sanderson v. Walker, 13 Ves. 601 ; Downes v. Grazehrook, 3 Mer. 200. The expression " shaking off " the character of trustee, or " dissolving the relation " of trustee, used in some of the cases, does not seem to amount to more than that the trans- action takes place with the consent of the parties beneficially interested. Ex parte James, 8 Ves. 352 ; Coles v. Trecothick, 9 Ves. 234, 246 ; Morse V. Royal, 12 Ves. 373 ; Doiimes v. Grazehrook, 3 Mer. 208 ; Chalmer v. Bradley, 1 J. & W. 68. In Austin V. Chambers, 6 CI. & Fin. 1, where it was said that a man might, on shaking off the character of a trustee, purchase tlie trust estate, the solicitor ■ft^as not employed in the sale by his client, and was himself a judgment creditor. A trustee cannot be allowed to purchase the trust estate by his retirement from the trust with that object in view. Sprintj v. Pride, 12 W. R. 510. (t) Campthell v. Walker, 5 Ves. 681. See Ex parte James, 8 Ves. 348 ; Sanderson v. Walker, 13 Ves. 602 ; Mulvany v. Dillon, 1 Ba. & Be. 418 ; Ex parte Harrison, Buck, 17 ; Ex parte Boije, 4 Madd. 460 ; Anon., 2 Russ. 350 ; Ex parte Morland, Mont. & M. 76. ((0 Prevost V. Gratz, Peters C. C. (Anier.), 378 ; Fisk v. Sarher, 6 Watts & Serg. (Amer.), 18. See Ex parte Farley, 3 Dea. & Ch. 110; Austin V. Chambers, 6 CI. & Fin. 1 ; Beaden v. King, 9 Ha. 499. Comp. York Buildings Co. v. M^Kenzie, 3 Pat. Sc. App. 398. (x) Fisk V. Sarber, 6 Watts & Serg. (Amer.), 18. See Ex parte Morland, Mont. & M. 76. (1/) Stratford V. Twynam, J ac. 418 ; Chambers v. Waters, 3 Sim. 42 ; S. C. Waters v. Groom, 11 CI. & Fin. 684. 132 FRAUD BY PARTIES Chap. TIL standing in a fiduciary cliaracter with respect to the property at a judicial sale, cannot purchase unless the entire responsibility of obtaining the highest price had been taken out of his hands (z). If he continues under any duty in respect of the subject matter of the sale, he is incapacitated from purchasing («). Nor will the transaction be allowed to stand, if there appears to have been any unfairness in his conduct with regard to the sale (6), Directors and The principle which affects dealings between trustee and companies. cestui que tvust is not confined to the case of trustees properly so called, but extends to other persons invested with a like fiduciary character, such as the directors or promoters of a company (c). The director of a company is in a fiduciary position towards the company of which he is a director, and is bound to use his best endeavours for the advantage of the company. He may not place himself in a position in which his interests will come into conflict with that which his duty requires him to do. Any personal benefit which he may gain by availing himself of his fiduciary character must be acquired by a dereliction of duty, and will enure for the benefit of the company (d). If he makes any profit on account of transactions of business when he is acting for the company, he must account for it to the com- pany (c). So also, if acting for himself, he proposes to the company a contract from the execution of which he will derive a profit, that profit belongs to the company (/). Where the articles of a joint-stock association declared that if a director had any interest in a contract proposed for acceptance by the (z) Van Ejpfs v. Van E2)2}s, 9 485 ; Crreat Luxemburg Railway Co., Paige Ch. (Amer.), 237; Jewett v. 25 Beav. 587 ; Aberdeen Railiray Co. Miller, 6 Seld. (Amer.), 402. v. Blaikie, 1 Macq. 461. (a) Fiskv. Sarbor, 6 Watts&Serg. (d) lb. ; Hay's Case, 10 Ch. 600; (Amer.), 18. See Ex parte Bennett, Ex parte Larking, 4 Ch. D. 568. 10 Ves. 393 ; ^x^ariei'^aWei/, 3 Dea. (e) Imjierial Mercantile Credit & Ch. 110. Association v. Coleman, 6 E. & I. (b) Lord Cranstoun v. Johnstone, 3 App. Ca. 189 ; Weston's Case, 10 Ves. 182, 5 Ves. 277 ; Perens v. Ch. D. 579. Johnson, 3 Sm. & G. 119. (/) Lmperial Mercantile Credit (c) Benson v. Heathorn, 1 Y. & C. Association v. Coleman, 6 E. & I. C. C. 326 ; York ct- North Midland App. Ca. 189. Railway Co. v. Lladson, 16 Beav. IX A FIDUCIARY POSITION. 133 association, he should declare his interest, it was held that he Cliap. III. must declare the nature of his interest, and that the words were not satisfied by a mere declaration that he had an interest in the matter (g). Nor can he retain a consideration received by him from the promoters as an inducement to become a director. If the consideration has been a gift of fully paid up shares, he may be compelled not only to restore the shares, but to account to the company for the highest value to be attri- buted to them since they have been in his possession ih). He is further chargeable with interest on the highest value of the shares (/). Nor can a director, after a company has ended in disaster, turn his office into profit at the expense of those whose interests he was bound to protect, but which he has failed to protect. Where, accordingly, after a company has gone into liquidation, a director purchased debentures of the company at a discount, he was not allowed to prove for more against the company than he had actually paid (1-). If, moreover, directors of a company having to exercise a fiduciary power choose to place themselves in such a position that their interests pull one way while their duty is plainly to do something quite different, and for that reason they abstain from exercising that power, they will be held to all the same consequences as though that power had been exercised (/). There is no difference in principle between a profit made by a director after he has become a director and profit through a bargain made by him at the time when he becomes a director, with a person who is proposing to enter into a contract with the company of which he is a director (»i). Where, accordingly, before the formation of a company for the purchase of certain property, the vendors agree with a certain person that he should become a director of the company, they providing him with forty shares necessary to qualify him, and (g) lb. calfe's Case, 13 Ch. D. 815. (h) M'Kai/s Case, 2 Ch. D. 1 ; (k) Ex parte Larkivrj, 4 Ch. D. Pearson's Case, 5 Ch. 1). 336. 566. (i) Xant-y-glo, ct-c, Ironworks Co. (I) (lilhert's Case, 5 Ch. 565. V. Grave, 12 Ch. D. 738. See Met- (m) Hay's Case, 10 Ch. 600. 134 FRAUD BY PARTIES Chap. III. tlie aiTangement between them was such that the payment for the shares so provided came out of the funds of the company, the Court held that, he being a director of the company, could not retain for his own benefit monies so paid him by the vendors ; that tlie monies had never ceased to be the monies of the company ; that there had been, in fact, no payment by him in respect of his shares, and that he was liable as a contributory in respect of those shares (n). Promoters of " The word * promoters,' " said Lord Blackburn in Erlanger v. corapanies. j^^^^ Sovihvero Phos2:>hate Co. (o), " is not used in the Companies Act, 1862, 25 & 26 Vict, c, 89. It is, however, a short and con- venient way of designating those who set in motion the machinery by which the Act enables them to create an in- corporated company. Neither does the Act impose any duty on those promoters to have regard to the interests of the company which they are thus empowered to create. But it gives them almost an unlimited power to make the corporation subject to such regulations as they please, and for such purposes as they please, and to create it with a managing body whom they select, having powers such as they choose to give to their managers, so that the promoters can create such a corporation that the corporation, as soon as it comes into being, may be bound by anything, not in itself illegal, which the promoters have chosen. Those, therefore, Avho accept and use such ex- tensive powers, which so greatly affect the interests of the corporation when it comes into being, are not entitled to dis- regard the interests of that corporation altogether. They must make a reasonable use of the powers which they accept from the legislature with regard to the formation of the corporation, and that requires them to pay some regard to its interests, and consequently they stand with regard to that corporation in what is commonly called a fiduciary relation to some extent." " The pilomotors of a com^Dany," said Lord Cairns (p), " stand in a fiduciary position. They have in their hands the creation and moulding of a company ; they have the power of defining how and when, and in what shape, and under what supervision (n) Hays Case, 10 Ch. 600. (p) lb. 1236. (o) 3 App. Ca. 1268. IN A FIDUCIARY POSITION. 135 it shall start into existence and begin to act as a trading cor- Chap. III. poration. If they are doing all this in order that the company may, as soon as it starts into life, become, through its managing directors, the purchaser of the property of themselves, it is incumbent on the promoters to take care that, in forming the company, they provide it with an executive — that is to say, a board of directors who shall both be aware that the property which they are asked to buy is the property of the promoters, and who shall be competent and impartial judges as to whether the purchase ought or ought not to be made. There is no rule that the owner of property may not promote and form a joint- stock company and then sell his property to it ; but, if he does so, he is bound to take care that he sells it to the company through the medium of a board of directors, who can and do exercise an independent and intelligent judgment on the transaction, and who are not left under the belief that the property belongs not to the promoters but to some other person- It is the duty, moreover, of the promoters to take care that the contract for purchase of their property be submitted to the intelligent consideration of a complete number of independent directors. I cannot but regard a meetiuo- at which two of the pi'incipal directors did not and could not attend, at which one who did attend and take part in the deliberation was at once a person buying and selling, when the legal adviser present and assisting was virtually another vendor, and when the two re- maining directors are not shown to have had the means of exercising or to have exercised any intelligent judgment on the subject as little else than a mockery and a delusion." " The contract in this case," said Lord Selborne (q), " was adopted as the contract of the company (having been previously prepared for that purpose by the vendors), through the machinery of a board of directors of the vendors' own creation who were so constituted as to be practically incapable of exercising, and who did not, ia fact, exercise any independent judgment on the subject. All the documents were prepared by the vendors' solicitor, who was also made solicitor to the company, and who participated in the vendors' profit. Of the five directors named in the articles of (7) lb. 1200. 136 FRAUD BY PARTIES Chap. III. association, two were aLsent from this country and were at that time practically incapable of acting ; tlie other three were present when the contract was adopted, but of these one was the nominal vendor and the paid agent and trustee of the real vendor ; another was a mere instrument in the hands of the vendors. The consideration was twice as much as the vendors had paid for the property a month before. Whether this was or was not an excessive price to be asked from the company is a question into which I do not enter. If there had been an independent purchaser and a real bargain, the vendors would have been at liberty to ask what price they pleased ; and, if that purchaser had agreed to pay more for the property than it was worth, he could not complain. But there was, in fact, no such purchaser and no such bargain. The vendors themselves managed the whole thing, and they made those, who, through their means, undertook a trust for others, their passive in- struments." A person not a director may be a promoter of a company which is already incorporated, the capital of which, however, has not been taken up, and which is not yet in a position to perform the obligations imposed on it by its creators (r). The 38th section of the Companies Act, 1867, does contain the word " promoters," but it imposes no fresh duty on them with regard to the company. It imposes a fresh duty towards, and gives new cause of action to, persons who take shtires in the company as individuals : it does not affect the obligation of the promoters towards the corporation. The extent of the fiduciary relation which the promoters bear to the company is a very important consideration in couistruing the section (s). If the promoters of a company are the owners of the property which they are selling to the company, they are bound, like other persons in a fiduciary position, to state in their prospectus that they are the owners, and to make a full and fair disclosure of their intex'est and position with respect to that projjerty. It is not necessary in all cases that the price given by them for the (r) Emma Silver Mining Co. v. Phosphate Co., 3 App. Ca. 1269, per Lewis, 4 C. P. D. 407. Lord Blackburn. (s) Erlanyer v. Neio Sombrero IN A FIDUCIARY TOSITION. 137 property should be stated ; but it is not fair in them to omit to <^hap. III. state that they have just purchased the property at a very much smaller amount than they propose to sell it for to the company which they are promoting or causing to come into existence (0- The concealment of an agreement whereby a benefit is secured to the promoter of a company out of the purchase- money is a fraudulent concealment. The promoter will not be allowed to keep the money. It amounts to an agreement by a vendor with an agent of an intended principal to give him a bribe to betray the interests of the principal {u). Though some time may have elapsed between the agreement and the formation of the company, the rule applies if the parties are still carrying out the scheme into which they have entered (x). There is no difference in principle between money taken from the funds of a company by a secret bargain between the vendor and the promoters, and money so taken by secret bargain between the vendor, the promoters, and the contractors (y). The principle which affects dealings between trustee and Other fiduciary cestui que trust extends also to other persons invested with a like fiduciary character : such as executors and administrators (z); assignees of a bankrupt (a) ; commissioners of bankrupts and (f) New Sombrero Phosphate Co. v. parte Lacey, ib. 625 ; Exparte James, Erlawjer, 5 Ch. D. 73 ; Erlanger v. 8 Ves. 337 ; Ex parte Bennett, 10 New Sonihrero Phosphate Co., 3 App, Ves. 381 ; Pooleij v. Quilter, 2 D. & Cas. 126i) ; Bagnal v. Carlton, 6 Ch. J. 327. See Adams v. Sironler, 2 D, D. 371. J. & S. 44, Leave maybe given by (h) Re Hereford, d-c, Engineering the court to the assignees to purchase Co., 2 Ch. D. 621. the bankrupt's estate. Ex parte (x) Ib. James, 8 Ves. 348 ; Ex piarte Bage, 4 (;/) Twycross v. Grant, 2 C. P. D. Madd. 460 ; Anon., 2 Russ. 350 ; 535, per Cockburn, C. J. Ex parte Serle, 1 Gl. & Ja. 187 ; Ex (?;) Pickering v. Piclcering, 2 Beav. parte Beamont, 1 Mont. & A. 304. 31; JVedderburn \. Wedderhurn, 4 In one case an assignee was removed M. & C. 41 ; Barton v. Hassard, 3 in order that he might bid at a sale Dr. & War. 461 ; Allfrey v. Allfrey, of the bankrupt's estate. Ex parte 1 Mac. & G. 87 ; Smedley v. Varley, Perks, 3 M. D. & Deg. 385. The 23 Beav. 359 ; Prideavx v. Lonsdale, leave must be previously obtained. 1 D. J. & S. 433 ; J)e Cordova v. De Before the court will entertain any Cordova, 4 App. Ca. 702. such a])plication on tlie part uf the {a) Ex parte ReynohU, 5 Ves. 707 ; assignee, he must first obtain tlie Ex parte Hughes, 6 Ves. 617; Ex consent of the creditors, at a meeting 138 FRAUD BY PARTIES Chap. III. other judicial officers (b) ; committees of lunatics (c) ; governors of a charity (d) ; receivers (e) ; arbitrators (/) ; to a member of a corporation taking a lease of the corporate property (g), and many other cases (h). The disability extends in general to all persons who being employed or concerned in the affairs of another acquire a knowledge of his property (i). Partners in business of an assignee in bankruptcy are equally disqualified from purchasing with the assignee himself (k). The principle does not, however, apply to the case of a moi't- gagee dealing with the mortgagor [l), nor to the case of a puisne mortgagee buying the mortgaged property from a j^rior mortgagee under the exercise of his power of sale (ni) ; nor to the case of a tenant for life purchasing from trustees for sale under a power to be exercised with his consent (n) ; nor to the called for the purpose of enabling them to assent to or dissent from the proposed purchase : Ex ^ja;-^e Molineux, 4 D. & C. 4G1 ; Anon., 2 Euss. 350 ; and even then the court will not make the order, excej^t under very special circumstances. Exparte Hodrjson, 1 Gl. & J a. 14 ; Ex 'parte Towne, 4 D. & C. 519. In a case where the court refused to allow an assignee to bid, he was allowed to name the price he would give, if the property was not sold by auction, and afterwards to buy at that price. Ex 2Mrte Holyman, 8 Jur. 156. If a purchase by an assignee be found beneficial, it may be confirmed by the court. Ex parte Gore, G Jur. 1118, 7 Jur. 136. (6) Ex parte James, 8 Ves. 338 ; Ex parte Bennett, 10 Ves. 381. (c) Wright v. Proud, 13 Ves. 136. {d) Att.-Gen. v. Lord Clarendon, 17 Ves. 500. (e) Alven v. Bond, 1 Fl. & Kel. 196 ; Eyre v. M'Uonnell, 15 Ir. Ch. 534 ; Boddington v. Langford, ib. 558. (/) Blennerhassett v. Vag, 2 Ba. & Be. 116. (g) Att.-Gen. v. Corporation of Cashel, 3 Dr. & War. 294. (h) See Ex parte Morgan, 12 Ves. 6 ; Grocer v. Hugell, 3 Euss. 428 ; Greenlaw v. Hugell, 3 Beav. 49 ; Beaden v. King, 9 Ha. 499 ; Dimes v. Proprietors of Grand Junction Railway Co., 3 H. L. 759 ; Denton v. Donner, 23 Beav. 285 ; Re Ronayne's Estate, 13 Ir. Ch. 444. (i) Sug. V. & P. 587, 14th ed., supra, p. 127. {k) Ex parte Burnell, 7 Jur. 116. (I) Knight v. Marjorihanks, 2 Mac. & G. 10, 2 H. & Tw. 308 ; Dobson V. Land, 8 Ha. 220 ; Melbourne Banking Co. v. Brougham, 7 App. Ca. 307 ; but corajj. Hickes v. Cooke, 4 Dow. 16 ; Downes v. Grazebrook, 3 Mer. 200 ; Re Bloye's Trust, 1 Mac. & G. 490 ; Martinson v. Clowes, 21 Ch. D. 860. . (m) Shaw v. Bunny, 2 D. J. & S. 468 ; Kirhcood v. Thompson, ib. 613. (?() Howard v. Dncane, T. & R. 81 ; Dirxonson v. Talbot, 6 Ch. 37. As tenant for life is placed by the IN A FIDUCIARY POSITION. 139 case of a tenant for life or mortgagor with power to sell or Ghay. III. lease selling or leasing to a trustee for himself (o) ; nor does it operate to preclude a tenant for life from effecting a sale which will be advantageous to his own interest, if his conduct has been without blame and blemish (p) ; nor does the principle apply to the case of merely nominal trustees, such as trustees who have disclaimed (q), or trustees to preserve contingent re- mainders (r). Nor when property is sold in a foreclosure suit is the solicitor to some creditors of the mortgagee, one of whom has obtained a decree for the administration of the mortgagee's estate precluded from purchasing, though his name appeared on the particulars of sale as one of several solicitors from whom particulars of sale could be obtained (s). But a mortgagee exercising his power of sale cannot purchase on his own account, nor can the solicitor of the mortgagee acting for him in the matter of the sale purchase on his own account. In a case where property was sold under their power of sale by mortgagees of a building society, it was held that the secretary of the society could not bid at the auction, though he stated he was buying on his own account (t). If the tenant of charity lands happens to be a trustee, that is a circumstance to excite suspicion, if the land be of an inade- quate value. At the same time it must be remembered that Settled Land Act, 1882, s. 53, in tlie own name, indeed it would be rather position of a trustee, he cannot safely indicative of fraud. Dart, V. & P. purchase from or exchange with 41 ; M'Phersoji v. Jratf, 3 App. Ca. himself ; hut see Sug. V. & P. 692 ; 2G3. Dart, V. & P. 37, as to tenant for (o) Bevan v. Hahgood, 1 J. & H. life with power of sale in general. 222. As tenant for life may purchase on {}}) HicJdeij v. IlkldcT/, 2 Ch. D. a sale by the court after obtaining 190. permission from the court : Dart, (q) Staceij v. Elph, 1 M. & K. V. & P. 1195, he may, under the 195 ; Chamhers v. IVaters, 3 Sim. Settled Land Act, 1882, buy from 42. himself with the sanction of the {r) Parkes v. Wlute, 11 Ves. 209, court, for which application may be 226. made under sections 31 (3), 44. A {$) Guest v. Smythc, 5 Ch. 551. purchase by tenant for life in the (t) Martinson v. Clowes, 21 Ch. D. name of a third person, would be no- 860, better than if it were made in his 1-iU FILVUD BY rARTIES Chay. III. the case of a charity estate is one in which of all others the security of the rent is the first object to be regarded. In such cases therefore the inadequacy of the rent reserved is less a badge of fraud than it would be in almost any other case (it). Dealings between Considerations of a similar character apply to the case of solicitor and transactions between persons standing to -each other in the relation of solicitor and client (x). It is the duty of a solicitor to protect the interests of his client. The client is entitled to the full benefit of the best exertions of the solicitor. A solicitor may not bring his own pei\sonal interest in any way into conflict with that which his duty requires him to do {y), or make a gaia for himself in any manner whatever at the expense of his client in respect of the subject of any transactions, connected with or arising out of the relation of solicitor and client, beyond the amount of just and fair professional remuneration to which he is entitled (s). A solicitor may not even enter into an agree- ment with a man to be his solicitor in a particular transaction upon the terms of getting a greater benefit than he would obtain by the costs which he is entitled to charge according to the rules of law (a). If, indeed, a solicitor be a trustee, he is not entitled to charge for professional services in respect of the trust estate (b). A solicitor is not under any incapacity to purchase from or sell to a client. A solicitor may deal with a client or purchase a client's property even during the continuance of the relation, but the burthen of proof lies on him to show that the transac- («) Ex parte Skinner, 2 Mer. 457. J. Ch. N. S. 211 ; Lyddon v. Moss, 4 (x) See Walmsley v. Booth, 2 Atk. D. & J. 104 ; Proctor v. Robinson, 35 39; Newman v. Payne, 2 Ves. Jr. l^it&v.ZZb -jTyrrellx. Bank of London, 201 ; PJwdes v. Beauvoir, 6 Bligli, 10 H. L. 26, 44. 195 ; Casborne v. Barsham, 2 Beav. (a) Strange v. Brennan, 15 L. J. 76 ; Holman v. Loynes, 4 D. M. & Ch. 289 ; Pince v. Beattie, 32 L. J. G. 270. Ch. 734. See Re Whitcombe, 8 BeaA^ (2/) Laioless v. Mansfield, 1 Dr. & 140 ; corap. Lyddon v. Moss, 4 D. & War. 557, 631. J. 104 ; Galloway v. Corporation of (z) Wood V. Dowries, 18 Ves. 120 ; London, 4 Eq. 90. Rhodes v. Beauvoir, 6 Bligli, 195 ; • (6) Stanes v. Parker, 9 Beav. 385 ; Champion v. Rigby, Taml. 421, 9 L. Todd v. JFilson, ib. 486. IN A FIDUCIARY POSITION. 141 tiou has been perfectly fair (c). A prudent man would not deal with his client without the intervention of another soli- citor, but there is no rule that a solicitor may not take such a course (d). He must, however, be prepared to show that he gave his client the same protection as he would have given him, if dealing with a stranger, and must satisfy the court that he has taken no advantage of his professional position, but has duly and honestly advised his client as an independent and disinterested adviser would have done, and has brought to his knowledge everything which he himself knew necessary to enable him to form a judgment in the matter, and he must in particular be able to show that a just and fair price has been given (e). He should, indeed, be prepared to show how the contract was entered into, who made the first offer, and what were the circumstances attending the transaction (/). The possibility of a speculative or contingent advantage does not fall within those communications which a solicitor is bound to disclose to his client, if the transaction has been in other respects fair, and the point was as much open to the observation of the one party as the other (g). If a solicitor be employed as Chap. III. (c) Stqyra, p. 125. (d) Cutis V. Salmon, 21 L. J. Cli. 750, per Lord St. Leonards ; Jones v. Price, 20 L. T. 49. See JVatt v. Ch-ove, 2 Sch. & Lef. 503. (e) Gibson v. Jeyes, 6 Ves. 277 ; Montesquieu v. Sandys, 18 Ves. 302 ; Ca7ie V. Lord Allen, 2 Dow. 294 ; Morgan v. Lewes, 4 Dow. 29, 47 ; Molony v. L'Estrange, Beat. 406 ; Chawpion v. Righy, Tand. 421, 9 L. J. Ch. N. S. 211 ; Uppington v. Bullen, 2 Dr. & War. ] 85 ; Edicards V. Meyrick, 2 Ha. 60 ; Higgiyis v. Joyce, 2 J. & L. 282 ; Spencer v. Topham, 22 Beav. 573 ; Holman v. Loijnes, 4 D. M. & G. 270 ; Hesse v. Briant, 6 D. M. & G. 623 ; Sarery V. King, 5 H. L. 627 ; Tomsoii v. Judge, 3 Drew. 306 ; Barnard v. Hunter, 2 Jur. N. S. 1213 ; Kniglit V. Bowyer, 2 D. .' Lord EMon ; Wood v. (h) Hindson v. WeutheriU, 5 D. Downes, 18 Ves. 120 ; Goddard v. M. & G. 301. See Raworth v. Mar- Carlisle, 9 Pri. 169 ; Ward v. Hart- riott, 1 M. & K. 643. pole, cit. 3 Bligh, 470 ; Tomson v. (i) Segrave v. Kirwan, Beat. 157 ; Judge, 3 Drew. 306 ; Holman v. Macdonald v. Lillie, 1 Bligh, 315 ; Loynes, 4 D. M. & G. 270, 283 ; lie Bulkley v. Wilford, 2 CI. & Fin. 102, Holmes's Estate, 3 Giff. 337 ; Gihbs 8 Bligh, N. S. Ill ; Bayly v. Wilkins, V. Daniel, 4 Giff. 1 ; O'Brien v. 3 J. & L. 630 ; Nanney v. Williams, Lewis, 4 Giff. 221 ; Morgan v. Minett, 22 Beav. 452 ; Greenfield v. Bates, 5 6 Ch. D. 638. Ir. Ch. 219. 146 FRAUDS BY PARTIES Chap. in. Accounts between solicitor and client stand upon different grounds from those between parties standing at arms' length. That which between others would be a conclusive settlement is not so between them. Settlement and payment of a bill, even though a long period may since have elapsed, is not conclusive, and will not bar an examination of the fairness of the demand. If the settlement were made during the pendency of the suit, the client must have been in some degree under the control of the solicitor, and a settlement under such circumstances may be opened (k). The principles which apply in the case of dealings between solicitor and client are also applicable to the case of a counsel employed by a man as his confidential adviser (I) ; to the case of a man who has constituted himself the legal adviser of another (m), or has offered him legal advice in the matter (n) ; and to the case of the clerk of a solicitor who has acquired the confidence of a client of his master (o). In Parnell v. Tyler (p), where on a sale by a mortgagee the purchaser had employed a clerk of the solicitor of the mortgagee to bid for him, the transaction was set aside. Dealing's between Considerations of a like nature apply to the case of persons agfciit. standing in the relation of principal and agent. A person who is an agent for another undertakes a duty in which there is a confidence reposed and which he is bound to execute to the utmost advantage of the person who emj^loys him. The prin- cipal is entitled to the full benefit of the best exertions of the agent. An agent cannot be allowed to place himself in a position which under ordinary circumstances might tempt him not to do that which is the best for his principal, or in which his (k) Lewes v. Morgan, 5 Pr. 56 ; (m) Tate v. JFilliamson, 1 Eri. Langstaffe v. Taylor, 14 Ves. 263; 528, 2 Ch. 65. 8ee JFysev. Lainhert, Crosslcy v. Parker, 1 J. & W. 462. 16 Ir. Ch. 379. [1) Pur cell V. Macnamara, 14 Ves. (?i) Davis v, Abraham, 5 W. E. 91 ; APCahe v. Hussey, 2 Dow, & CI. 465. 440, 5 Bligh, N. S. 715 ; Carter v. (o) Hobday v. Peters, 28 Beav. Palmer, 8 CI. & Fin. 657, 707 ; 349 ; Nesbitt v. Berridge, 32 Beav. Broun v. Kennedy, 33 Beav. 133, 4 284, D. J. &S, 217 ; Corky v. Lord Sfnf- {p) 2 L. J, Ch. N. S. 195. ford, 1 D, & J. 238. IN A FIDUCIARY POSITION. 147 interest and his duty will be in conflict. No agent in the <^^'ap- "^- course and execution of his agency can, without the knowledge and consent of his principal, be allowed to make any profit or advantage out of the matter of his agency and the business in which he is employed beyond the proper remuneration to which he is entitled for his services as agent (q). There is no difference in principle between a profit made by an agent after he has become an agent and profit through a bargain made by him at the time when he becomes an agent with a person who is proposing to enter into a contract with his principal (r). An agent cannot bargain for any benefit derived from the subject on which he is employed without disclosing the fact to his principal (s). Commission received by an agent without the knowledge of his principal is looked on as a bribe. It is a profit which the principal has a right to extract from the agent whenever it comes to his knowledge (t). The rule is the same whether the remuneration received by the agent formed part of the original bargain, or was a present for services ren- dered (u). There is no rule to prevent an agent from dealing with his principal in respect of the matter in which he is employed as agent. But an agent who seeks to uphold a transaction between himself and his principal must be able to show to the satisfac- tion of the Court that he gave his principal the same advice in the matter as an independent and disinterested adviser would have done, and that he made a full disclosure of all he knew respecting the property, and that the principal knew with whom he was dealing and made no objection to the transaction, and finally that the consideration was just and fair (x). However (q) Ecwit India Co. v. Henchman, 1 Ch. D. 566. Ves. Jr. 289 ; Ex parte Hughes, 6 (r) Flai/s Case, 10 Ch. 600. Ves. 617 ; York Buildings Go. v. (s) Bagnall v. Carlton, 6 Ch. D. M'Kenzie, 3 Pat. Sc. Ap. 398, 3 Ro.ss, 389. L. C. Sc. 305 ; Rothschild v. Brock- (t) Phosphate Seicarje Co. v. Hart- man, 2 Dow. & CI. 188, 5 Bligh, N. mont, 5 Ch. D. 456. S. 165 ; Beck v. Kantorowicz, 3 K. & (u) M'Kay's Case, 2 Ch. D. 1. J. 230 ; Tyrrell v. Bank of London, 10 (x) YorkBuildings Co. v. M'Kenzie, H. L. 26, 39 ; Parker v. M'Kenna, 3 Pat. Sc. Ap. 398, 3 Ross, L. C. Sc. 10 Ch. 118; Ex parte Larking, 4 .305; Lnuihcr v. Louihrr, 13 Ves. L -2 148 FRAUDS BY PARTIES Chap. III. fair the tran.';action may be in other respects, any underhand dealing on the part of the agent will render it impeachable at the election of the principal. It is immaterial that the agent may have taken no advantage by the bargain. It is sufficient that he has not acted with that good faith which the Court requires, and has placed himself in a situation which might tempt an agent to allow his own interest to come into conflict with that which his duty requires him to do {y). An agent who is employed to sell cannot become the pur- chaser surreptitiously and without the knowledge or assent of his employer {z) ; nor can an agent, who is employed to pui-- chase, purchase secretly from himself or from his own trustee (a), or for his own benefit (6). The rule applies whether the agent employed to purchase was actually in the position of a vendor, or intended to place himself in that position (c). An agent for 10.3 ; Watt v. Grove, 2 Sch. & Lef. 492 ; Woodhouse v. Meredith, 1 J. & W. 204 ; Lord Selseij v. Ehoades, 2 Sim. & St. 41, 1 Bligh, N. S. 1 ; Cane v. Lord Allen, 2 Dow, 294 ; Rothschild v. Brochnan, 2 Dow. & CI. 188, 5 Bligh, N. S. 165 ; Barler V. Harrison, 2 Coll. 546 ; Molony v. Keryian, 2 Dr. & War. 31 ; Trevehjan V. Charter, 4 L. J. Ch. N. S. 209 ; Charter v. Trevehjan, 11 CI. & Fin. 714, 732 ; Mulhallen v. Marum, 3 Dr. & War. 317 ; Murphy v. O'Shea, 2 J. & IL. 422, 425 ; Clarice v. Tif- 2)ing, 9 Beav. 284 ; Bloye's Trust, 1 Mac. & G. 488 ; Leivis v. Hillman, 3 H. L. 607 ; Rhodes v. Bate, 1 Ch. 252. {y) Gillett v. Peppercorne, 3 Beav. 78; Murphy v. ffShea, 2 J. & L. 422 ; Charter v. Trevehjan, 11 CI. & Fin. 714 ; Wilson v. Short, 6 Ha. 383; Hobday v. Peters, 28 Beav. 349 ; Tyrrell v. Bank of London, 10 H. J. 26 ; Wentworth v. Lhijd, 32 Beav. 467 ; Parker v. M'Kenna, 10 Ch. 118 ; De Bitssrhey. Alt, 8 Ch. D. 316. (2) York Buildings Co. Y. M'Kenzie, 3 Pat. Sc. Ap. 398, 3 Ross, L. C. Sc. 305 ; Ex parte Hughes, 6 Ves. 617 ; Woodhouse v. Meredith, 1 J. & W. 204 ; Trevelyan v. Charter, 4 L. J. Ch. N. S. 209 ; Charter v. Trevehjan, 1 1 CI. & Fin. 714 ; Murphy v. O'Shea, 2 J. & L. 422 ; Lewis v. Hillman, 3 H. L. 607 ; Parker v. M'Kenna, 10 Ch. 118 ; Macp>herson v. Watt, 3 App. Ca. 256. (a) East India Co. v. Henchman, 1 Ves. Jr. 289 ; Massey v. Davies, 3 Ves. 317 ; Rothschild v. Brochnan, 2 Dow. & CI. 188 ; Driscoll v. Bromley, 1 Jur. 238 ; Gillett v. Peppercorne, 3 Beav. 78 ; Barker v. Harrison, 2 Coll. 546 ; Bentley v. Craven, 18 Beav. 75 ; Tyrrell v. Bank of London, 10 H. L. 26 ; Kimher v. Barher, 8 Ch. 57. (6) Lees v. Nuttall, 2 M. & K. 819 ; Taylor v. Salmon, 4 M. & C. 134. See Carter v. Palmer, 8 CI. & Fin. 657 ; Beck v. Kantorovncz, 3 K. & J. 230 ; Hobday v. Peters, 28 Beav. 349. (f) Berk v. Kantorovncz, 3 K. &J. 242. IN A FIDUCIARY POSITION. 149 sale, if he intends to purchase himself, or to take an interest in Chap. III. the purchase, is bound to tell his principal what share in the purchase he intends to take. He is bound to disclose to his principal the exact nature of his interest. It is not enough for him to say that he has an interest or to make statements such as would put the purchaser on inquiry (d). So also an agent who is employed to settle a debt or to make an arrangement cannot purchase up the debt or any charge upon the property which is the subject of the arrangement for his own benefit (e). So also an agent employed to effect an insurance is bound, in the absence of an agreement to the contrary, to account to his principal for any discount which may be allowed by the in- surance office on the premiums paid (/). The disability extends to the case of a sub-agent or substitute employed by the agent (g), and to the case of a clerk of an agent who in the course of his employment has acquired a knowledge of the property of the principal (h). The rule applies with peculiar stringency to the directors of joint-stock companies who are agents for the sales and pur- chases made by the company (i). The rule that an agent dealing with his principal must impart knowledge acquired in his office does not apply where the relation has ceased and there is another agent with equal means of knowledge to guard the interest of the principal in the transaction (j ). After the relation of principal and agent has wholly ceased, or the agent has divested himself of that cha- racter, the parties are restored to their competency to deal with each other (k). But an agent who has in the course of his employment acquired some peculiar knowledge as to the pro- perty cannot after the cessation of the relation use the know- {(1) Dunne v. English, 18 Eq. 524. 287. (e) Cane v. Lord Allen, 2 Dow. (h) Gardner v. Ogden, 8 Smith 294 ; Eeed v. Norris, 2 M. & C. 361 ; (Arner.), 327. Carter v. Palmer, 8 CI. & Fin. 657, (i) Hay's Case, 10 Ch. 600. 11 Bligh, N. S. 397 ; Hobday v. ( j) Scott v. Dunhar, 1 Moll. 442. Peters, 28 Beav. 349. (/) Charter v. Trevelyan, 4 L. J. (/) Queen of Spain v. Parr, 39 Ch. N. S. 209. See York Buildings L. J. Ch. 73. Co. V. M'Knrde, 3 Tat. Sc. Ap. 379 ; (g) De Bussche v. Alt, 8 Ch. D. Parker v. M'Kcnna, 10 Cli. 118. 150 FRAUDS BY PARTIES Chap. III. ledge so acquired for his own benefit and to the prejudice of his former client (l). An agent, for instance, who in the course of his employment as such has discovered a defect in the title of his employer, cannot after the relation has ceased use his knowledge so gained to acquire a title for himself (r/i). Nor can a man who is employed as a confidential agent escape from liability under the pretence that the business has been entrusted to an agent and not to liim, unless it can be shown that the agent was intended to act and in fact acted independently of him (n). So long as a contract remains executory, and the trustee or agent has power either to enforce it or to rescind or alter it, so loner as it remains in that state, a trustee or agent cannot repurchase the property from his own purchaser except for the benefit of his principal. There may be cases of agents for sale who when they have once made the contract have concluded their agency, such as the case of an auctioneer, who when he has knocked down the estate and made the written contract may be said to have terminated his agency. But even in that case the Court would look with considerable suspicion on a re- purchase by such an agent as an auctioneer from the person to whom he sold the estate, because it would always be extremely difficult to find out whether there had not been some previous concert and understanding between them (o). There is no rule preventing the same agent from acting for the opposing parties, but he must be able to satisfy the Court that the parties were substantially at arms' length in the transaction, and that there had been the utmost fairness throughout (p). When a bribe is given or a promise to bribe is made to a person in the employment of another by some one who has ■contracted or is about to contract with the employer, with a (?) Carter v. Palvier, 8 CI. & Fin. 126, yer IMellish, L. J. 657 ; Holiium v. Loynes, 4 D. M. & (jj) Hesse v. Briant, 6 D. M. & G. G. 270. 623 ; Garvey v. McMinn, 9 Ir. Eq. (m) Rivijo V. Binns, 10 Peters 526. See Rhodes v. Beauvoir, 6 (Anier.), 269. Blisli, N. S. 195 ; llattlde v. Edwards, (n Rhodes v. Bates, 1 Ch. 252. 16 L. J. Cli. 405. (o) Parker v. M'Kenna, 10 Ch. IN A FIDUCIARY POSITION. 151 view to induce the person employed to act otherwise than with Chap. III. loyalty and fidelity to his employer, the agreement is a corrupt one, and is not enforceable at law, whatever the effect on the mind of the person bribed may be. It is quite immaterial that the employer has not in fact been damaged. It is sufficient that the consideration upon which the promise was made was intended to be a corrupt one (q). Any surreptitious dealing between one principal and the agent of the other principal is a fraud. The defrauded principal is entitled at his option to have the contract rescinded, or if he elects not to have it rescinded, to have such other adequate relief as the Court may think right to give him (r). A gift by a man to a person who has been for many years his confidential agent and adviser is valid, unless the party who seeks to set it aside can show that some advantage was taken by the airent of the relation in which he stood to the donor. If the con- duct of the agent in the matter appears to have been fair, honest, and bond fide, it is immaterial that the deed of gift may have been drawn up by his solicitor without the intervention of a disin- terested third party (s). The rule with respect to the capacity of an agent to accept a gift from his principal is not so strict as it is in the case of attorney and client, trustee and cestui que trust, and guardian and ward. The relation in which the parties stand to each other being of a sort less known and definite than in those other cases, the jealousy is diminished (t). The principles which govern the case of dealings between Partners, principal and agent apply as between partners. It is the duty of partners towards each other to refrain from all concealment in the transaction of the partnership business. If a partner be guilty of any such concealment, and derive a benefit therefrom, he will be treated in equity as a trustee for the firm, and compelled to account to his co-partners (it). (q) Harrington x. Victoria Graviny Fin. 495. See J?"ijse v. Lambert, 16 Dock Co., 3 Q. B. D. 550. Ir. Cli. 379 ; Rhodes v. Bate, 1 Ch. (r) Panama, d-c, Telegraph Co. v. 252. India Rubber, &c.. Telegraph Works {() Hunter v. Atkins, 3 M. & K. Co. 10 Ch. 526. 113 ; but see Hobday v. Peters, 28 (s) Hunter v. Atkins, 3 M. & K. Beav. 349. 113; Nicol V. Vaughan, 1 CI. & («) Russell v. Austii:ick,i'ri'hn. :>2; 152 FRAUD BY PARTIES Chap. III. This principle will prohibit all clandestine bargains by one partner for his own exclusive benefit, made in contemplation of establishing a partnership with other persons {x). So each partner is bound to refrain {in the absence of consent by his co-partners) from engaging in any other business or speculation which will deprive the partnership of a portion of the skill, industry, diligence or capital which he is bound to employ therein. In other words, he is not at liberty to deal on his own private account in any matter or business which is obviously at variance with his primary duty to the partnership. The object of this prohibitory rule is to withdraw from each partner the temptation to bestow more attention and to exercise a sharper sagacity in respect to his own purchases and sales and negotiations than he does in respect to the concerns of the partnership in the same or in a conflicting line of business. Hence if one partner should secretly carry on another trade, or the same trade, for his own advantage, especially if actually rather than presumably to the injury of the partnership interests, or should divert the capital or funds of the partner- ship to such secret or sinister purposes, he will be compelled to account in equity for all the profits made thereby (y). So if one partner should purchase articles on his own private account in some special trade and business in which the partnership was engaged, the purchase being to the injury of the partner- ship, he would be held to account in equity for his profits (s). In cases of this sort an injunction may be had to restrain the partner from carrying on any such trade or business without the consent of his co-partners (a). A partner cannot make a secret profit out of dealings with the firm. He cannot, for example, supply the firm with goods which he has himself bought for his own use at a lower price without informing his partners of the facts (6). Nor can a Maddeford v. Aushvick,i^x 89, 2 M. Macld. 367 ; England v. Curling, 8 K. 279. Beav. 129. (cc) Fawcett v. JVhitehouse, 1 R. & (z) Burton v. Wookey, 6 Madd. '^. 132, 148 ; Hichens v. Congreve, 4 367. Kiiss. 562. («) Glassington v. Thwaites, 1 Sim. (y) Glasdngton y. Thwaites, 1 Sim. & St. 124. & St. 124, 133 ; Burton v. JVookey,G (h) Bcntleg v. Craven, 18 Beav. 75. IN A FIDUCIAEY POSITION. 153 partner treat privately and behind the backs of his co-partners Chap. III. for a lease of the premises where the joint trade is carried on for his own benefit. A lease obtained in his own name will be held a trust for the partnership (c). A partner in business intending to purchase the interest of his co-partner, must, if he has had the management of the business or the keeping of the accounts, make a full disclosure of the state of the business, otherwise the purchase will be liable to impeachment by the co-partner. In a case accordingly where a partner who had superintended exclusively the accounts of the business, agreed to purchase his co-partner's share therein for a sum which he knew from accounts in his possession to be inadequate, the transaction was set aside on the ground that the purchaser had concealed the state of these accounts (d). There is nothing fiduciary between the surviving partner and the dead man's representative, except that they may sue each other in equity. There are certain legal rights and duties which attach to them, but it is a mistake to apply the word " trust" to the legal relation which is thereby created (e). The rule of equity with respect to dealings between guardian Dealings between and ward is extremely strict (/), and imposes a general inability ^'^^j ^^^ on the parties to deal with each other (g). Where the relation of guardian and ward is subsisting between two parties, if a gift or anything in the nature of a gift proceeds from the ward towards the guardian, when the ward has just come of full age, such transactions are subject to be viewed with the utmost jealousy by courts of equity. It is almost impossible that transactions of such a nature can be sustained, unless the party claiming the benefit of the gift can show to the satisfaction of the Court that his influence has not been misapplied in the particular transaction. Unless it appears to be a spontaneous act on the part of the ward, or unless he was informed in all (c) Fcatherstovhaiujh v. Feiuvid; (e) Knox v. Gyc, 5 E. & I. App, 17 Ves. 311 ; JFilso7i v. Greenivood, 1 Ca. 656. Wil. C. C. 236 ; Cleyg v. Fishwick, (/) Hijlton v. Hylton, 2 Ves. 548, 1 Mac. & G. 294 ; Clegg v. Edmond- 549 ; Hatch v. Hatch, 9 Ves. 292. son, 1 D. M. & G. 787. {(j) See Dawson v. Massey, 1 B. & (f/) Maddcford v. AustuicJc, 1 Sim. B. 226. Tutor rem pupilli emere 89. lion potest. Dig. xviii. tit. l,leg. 347. 154 FRAUDS BY PARTIES Chap. III. the particulars of the nature, character, and probable conse- quence of his proceeding, such a transaction cannot stand {h). Transactions between guardian and ward cannot be allowed to stand, even although they may have taken place after the guardianship has come to a close, unless the influence which is presumed to arise from the relation has ceased to exist (i). The influence may continue to exist for a considerable time after the actual relation has ceased to exist (k). As long as the accounts between the parties have not been fully settled or the estate still remains in some sort under the control of the guardian, the influence will be presumed to exist (I). Tlie influence will indeed be presumed to exist, unless there is distinct evidence of its determination (m). After the relation has entirely ceased, not merely in name but in fact, and a full and fair settlement of all transactions arising out of the relation has been made, and sufficient time has elapsed to put the parties in a position of complete independence to each other, there is no objection to any bounty or grant conferred by the ward on his former guardian (n). It is not necessary for the application of the principle that the relation of guardian and ward should exist in perfect (h) Archer v. Hudson, 15 L. J. Ch. 211 ; Midhallen v. Marum, 3 Dr. eS: War. 317. See Olclin v. Samborn, 2 Atk. 15 ; Beadeij v. Magrath, 2 Sch. & Lef. 35. (i) Hylton v. Hylto7i, 2 Ves. 548, 549 ; Hatch v. Hatch, 9 Ves. 292 ; Carey v. Carey, 2 Sch. & Lef. 173 ; Dawson v. Massey, 1 B. & B. 219 ; Aylward v. Kearney, 2 B. & B. 478 ; O'Neill V. Havimill, Beat. 618 ; Mait- land V. Irving, 15 Siiu. 437 ; Archer V. Hudson, 15 L. J. Ch. 211 ; Mait- land V. Backhouse, 17 L. J. Ch. 121 ; Es2jey v. Lake, 10 Ha. 260. See Bhodes v. Bate, 1 Ch. 252. (k) Hatch V. Hatch, 9 Ves. 292 ; Aylward v. Kearney, 2 B. & B. 463 ; O'Neill V. Hammill, Beat. 618 ; Eevett V. Harveij, 1 Siin. iJl: St. .502 ; Maitland v. Irving, 15 Sim. 437 ; Archer v. Hudsoii, 15 L. J. Ch. 211 ; Maitland v. Backhouse, 17 L. J. Ch. 121 ; Lavies v. Davies, 9 Jur. N. S. 1002. {I) Hylton V. Hylton, 2 Ves. 547 ; Daxoson v. Massey, 1 B. & B. 229- See Bteadman v. Palling, 3 Atk. 423 ; Mellish v. Mellish, 1 Sim. & St. 138 ; Eevett v. Harvey, ib. 502 ; Matthew v. Brise, 14 Beav. 345 ; Es2)ey v. Lake, 10 Ha. 260. (m) Rhodes v. Bate, 1 Ch. 252. See Archer v. Hudson, 15 L. J. Ch. 211. (•/i.) Hylton V. Hylton, 2 Ves. 547, 549. See Beasley v. Magrath, 2 Sch. & Lef. 35 ; Eoss v. Steele, 1 Ir. E(j. 171. IN A FIDUCIARY POSITION, 155 strictness of terms, or that the guardian should be a guardian Chap. III. appointed by the Court of Chancery or nominated by the father. If the young person lives with and is brought up or under the care, influence, and control of a near relative of mature age — if the relation of guardian and ward thus subsist between them — the principle is equally applicable (o). The principle applies to the case of a third party who makes himself a party with the guardian who obtains a security from his ward {jp). The case of parent and child comes within the same prin- Taient and ciple (g). The influence which a parent has naturally over a^"^' cliild makes it the duty of the Court to watch over and protect the interests of the child, A child may deal with or make a gift to a parent, and such dealing or gift is good, if it be not tainted with parental influence operating on the hopes or fears or necessities of the child. A child is presumed to be under parental influence as long as the dominion of the parent lasts. Whilst that dominion lasts, it lies on the parent upholding the transaction or maintaining the gift to disprove the exercise of parental influence by showing that the child was really a free agent and had competent independent advice, or had at least competent means of forming an independent judgment and fully understood what he was doing and was desirous of doing it (r). The principle applies for at least a year after the coming of age of the child, and will extend beyond the year, if (o) Beasley v. Magrath, 2 Sell. & v. Penchey, ib. 254 ; Hoghton v. Lef. 31 ; llevett v. Harvey, 1 Sim. & Hoghton, 15 Beav. 278 ; Hartopp v. St. 502 ; Mulhallen v. Marum, 3 Dr. Hartopp, 21 Beav. 259 ; Baker v. & War. 317 ; Allfrej/ v. Allfrey, 1 Bradley, 7 D. M. & G. 597 ; JFright Mac. & G. 98 ; ]£spey v. Lake, 10 v. Vanderplank, 8 D. M. & G. 135, Ha. 260, 262 ; Frideaux v. Lonsdale, 146 ; Ki7ig v. King, 1 D. & J. 671 ; 1 D. J. & S. 433 ; Everitt v. Everitt, Bury v. Oppenheim, 26 Beav. 594 ; 10 £(£. 410 ; Kempson v. Ashbce, 10 Savery v. King, 5 H. L. 627, 655 ; Cli. 15. Jenner v, Jenner, 2 D. F. & J. 359 ; ( 2j) Espey v. Lake, 10 Ha. 260 ; Berdoe v. Dawson, 34 Beav. 603 ; Kempson v. Ashbee, 10 Ch. 15. Chainhcrs v. Urabbe, ib. 457 ; Potts (q) Casborne v. Barsham, 2 Beav. v. ySurr, ib. 543 ; Turner v. Collins, 76. 7 Ch. 329 ; Gray v. Binny, 7 Dec. of (r) Carpenter v. Heriot, 1 Ed. 338 ; Court of Session, 4th series, 333. Heron v. Heron, 2 Atk. 160 ; Young loG FRAUDS BY PARTIES Chap. III. the dominion lasts (s). The Court will indeed presume the continuance of the influence, unless there is a distinct evidence of its determination {t). The onus prohandi which lies on the father to show that the child had independent advice, and that he executed a deed with full knowledge of its contents, and with the free intention of giving the father the benefit conferred by it, extends to a volunteer claiming through the father, and to any person taking with notice of the circumstances Avhich raise the equity, and no farther. If a solicitor purports to act in the transaction on behalf of the child, a purchaser for value is entitled to assume that he has given the child proper advice, even although he be acting as the father's solicitor. There is no absolute rule in such a transaction that the father and child must be advised by different solicitors {u). Where the parental influence is disproved or that influence has ceased, a dealing between parent and child or a gift from a child to a parent stands on the same footing as any other dealing or gift {x). The entreaty of a sick father to a child does not amount to undue influence {y). Nor is the mere fact of a daughter soon after coming of age voluntarily giving securities to a creditor of her father in payment of his debts of itself ground for imputing undue influence to the father {z). Transactions between parent and child which proceed upon arrangements between them for the settlement of the family property, or which tend to the peace and security of the family and the avoidance of litigation, do not come within the ordinary rules of the Court with respect to parental influence. If the settlement is one by which the parent acquires no benefit, not already possessed by him, and be a reasonable aiTangement and (s) 7 H. L. 772, iwr Lord Cran- D. 188. worth. See Walker v. Symonds, 3 (z) Wright v. Vmuhrplanh, 8 D. Sw. 1, 72 ; Hoyhton v. Hoghton, 15 M. & G. 135, 146 ; Burij v. Oppen- Beav. 300 ; Wright v. Vanderplank, heim, 26 Beav. 594. 8 D. M. & G. 135 ; Bury v. Oppen- (y) Farrant v. Blanchford, 1 D. J. heim, 26 Beav. 594 ; Berdoe v. & S. 107. lJawson,34 Beav. 603 ; Chambers v. (,-) Thornher v. Shcard, 12 Beav. Crahbe, ib. 457. 589. See as to undue iufluerice, (t) Rhodes v. Bate, 1 Ch. 252. infra, p. 158 et seq. (n) Bainbrigge v. Brov:nr, 18 CIi. IX A FIDUCIARY POSITION, 157 for the benefit of the family and be not obtained through mis- Cliap. III. representation or suppression of the truth, it will be suj^ported even although it may appear that the parent did exert parental influence and authority over the son to procure his execution of it. If the child is fully aware of the nature and effect of the transaction, it is of no consequence that he may not have had the advice of a sepai'ate solicitor ; nor can he be heard to say that he executed the settlement with precipitancy. If the settle- ment be for the benefit of the family, a court of equity will not inquire into the degree of influence which may have been exerted (a). Arrangements between members of a family to assist their several objects or relieve their several necessities are affected by so many peculiar considerations and are in- fluenced by so many different motives that they are withdrawn from the ordinary rules by which the Court is guided in adju- dicating between other parties (h). The Court does not minutely weigh the considerations on one side or the other. Even ignorance of rights may not avail to impeach the trans- action. But transactions in the nature of a bounty from a child to a parent soon after coming of age are viewed by the Court with jealousy (c). If the parent gains some advantage by the transaction which he did not previously possess, the general principles with respect to parental influence apply, and the transaction cannot be supported, unless it can be shown that the child knew what he was doing and was desirous of doing it and was not unduly influenced by his father {d). The (a) Tweddell v. Tweddell, T. & R. (c) BaJcer v. Bradley, 7 D. M. & G. 1 ; Bellamy v. Sahine, 2 Ph. 425 ; 620. See Tennent v. Tennents, 2 Sc. Cooke V. Burtchaell, 2 Dr. & War. App. Ca. 9. 165 ; Wallace v. Wallace, ib. 452 ; (d) Heron v. Heron, 2 Atk. 160 ; Hoghton v. Hoghton, 15 Beav. 278, Hoghton v. Hoghton, 15 Beav. 278 ; 305 ; Baker v. Bradley, 7 D. M. & G, 597 ; Diinsdale v. Dimsdale, 3 Drew 556 ; Jenner v. Jenner, 2 D. F. & J 354 ; Potts V. Siirr, 34 Beav. 543 Williams v. Williams, 2 Ch. 295 Baker v. Bradley, 7 D. M. & G. 620 ; Savery v. King, 5 H. L. 627 ; Fane V. Fane, 20 Eq. 698 ; Tahor v. Cun- ningham, 24 W. R. 156 ; Gray v. Binny, 7 Dec. of Court of Session, 4th Faney. Fane, 20 Eq. 698. See Ten- series, 333 ; see Wallace v. Wallace, nent v. Tennents, 2 Sc. App. Ca. 9. 3 Dr. & War. 452 ; Jenner v. Jenner, (b) Bellamy v. Sabine, 2 Ph. 425 ; 2 D. F. & J. 359 ; Potts v. Surr, 34 Head v. Godlee, Joliii,?. 536. UNDUE INFLUEXCE. Dealinjjs in other cases of a fiduciary character. Chap. III. same considerations apply where a third person takes a benefit under a deed executed by a son in favour of his father (e). If, however, the person who takes the benefit is a member of the family and the parent himself takes no benefit, the trans- action will not be set aside, even though considerable pressure may have been used by the parent to induce the son to execute it. In Wycherley v. Wycherley (/), where the father of a family with some warmth of temper insisted upon a deed being executed by a son for the benefit of his two sisters, Lord North- ington would not set it aside (g). The principles which govern the case of dealings of persons standing in a fiduciary relation apply generally to the case of persons who clothe themselves with a character which brings them within the range of the principle (h). A man -who pos- sesses the confidence of another will not be allowed by a court of equity to take advantage of that situation, although the relation of solicitor and client or principal and agent be not strictly constituted between them. It is enough that a man be merely consulted as a confidential friend (i). It is immaterial that no definite relation may exist between the parties (k). Undue influence. The principle on which a court of equity acts in relieving against transactions on the ground of inequality of footing be- tween the parties is not confined to cases where a fiduciary relation can be shown to exist, but extends to all the varieties of relations in which dominion may be exercised by one man over another, and applies to every case where influence is acquired and abused, or where confidence is reposed and betrayed {!). In cases where a fiduciary relation does not subsist between the parties, the Beav. 543 ; Benloe v. Dawsoji, ib. 603. (e) Berdoe v. Dav:son, ib. (/) 2 Eden, 175. {g) Bentley v. Machay, 31 Beav. 151. (h) Tate v. TVilliamson, 2 Ch. 55. See Greenlaw v. King, 5 Jur. 18 ; G-iddings v. Giddings, 3 Russ. 241 ; JVaters v. Bailey, 2 Y. & C. 0. C. 219 ; Tanner v. Elworthy, 4 Beav. 487 ; Smith v. Kay, 7 H. L. 750 ; Coulson v. Allison, 2 D. F. & J. 521 ; Pridiuux V. Lonsdale, 1 D. J. & S. 433. (i) Taylor v. Ohee, 3 Pri. 83. See Darley v. Singleton, Wight. 25. (k) Ib. ; Butler v. Miller, L. R. 1 Ir. Eq. 215. (l) Huguenin v. Basley, 14 Ves, 273, 286 ; Dent v. Bennett, 4 M. & C. 269 ; Cooke v. Lamotte, 15 Beav. 234 ; Billage v. Southee, 9 Ha. 534, 540 ; IFilliams v. Bayley, L. R. 1 UNDUE IXFLUEXCE. 159 Court will not, as it does where a fiduciary relation subsists, presume confidence put and influence exerted : the confidence and the influence must in such cases be proved extrinsicall}'-, but when they are proved extrinsically the rules of equity are just as applicable in the one case as in the other (m). No general rule can be laid down as to what shall constitute undue influence. The question is one which must in each case depend on its own particular circumstances. There is no head of equity more difficult of application than the avoidance of a transaction on the ground of advantage taken of distress (n). The case presents no difficulty where direct restraint, duress, or oppression can be shown (o). The difficulty arises when the Court has to determine whether the advantage taken of distress amounts to oppression (p), or the influence exerted has been so pressing as to be undue within the rule of equity (q). In a case where the holders of forged bills working on the fears of a father for the safety of his son, who had forged them. Chap. III. App. Ca. 200 ; Smith v. Kay, T H. L. 750, 779, ^jer Lord KingsdoAvn ; IFyse V. Lamhert, 16 Ir. Cli. 379 ; Rhodes v. Bate, 1 Ch. 252. (m) 7 H. L. 779, per Lord Kings- down. See Casborne v. Barsham, 2 Beav. 76 ; Bo^jse v, Eussborough, 3 Jur. N. S. 373 ; Beanlandv. Bradley, 2 Sm. & G. 339 ; Harrison v. Guest, 6 D. M. & G. 424 ; Rhodes v. Bate, 1 Ch. 252 ; Lyon v. Home, 6 Eq. 655. {n) Ramsbottom v. ParJ^cr, 6 Mudd. 6. (o)Nichollsv. NichoUs, 1 Atk. 409; Roy V. Dul-e of Beaufort, 2 Atk. 190 ; Thornhill v. Eva7is, ib. 330 ; Talley- rand V. Boulavger, 3 Ves. 448 ; Lamplugh v. Lamflvgh, iDick. 411 ; Gubbins v. Creed, 2 Sch. & Lef. 214 ; Underhill v. Harwood, 10 Ves. 219 ; Pickett V. Loggan, 14 Ves. 215 ; Peel V. , 16 Ves. 157 ; Middleton v. Middleton, 1 J. & W. 94 ; Ellis v. BarJcer, 19 W. K. 963. (p) Rnrnsboffom v. ParJcrr, 6 Madd. 6. (q) Middleton v. Sherburne, 4 Y. & C. 389 ; Boyse v. Russborough, 3 Jur. N. S. 373 ; Rhodes v. Bate, 1 Ch. 252 ; Armstrong v. Armstrong, I. E. 8 Eq. 1 ; comp. Richards v. French, 18 W. R. 636. The civil law always sets aside a contract procured by- force, or from a want of liberty in the contracting party. It was said in the Pandects that the party must be intimidated by the ajsprehension of some serious evil of a present or pressing nature, and such as is capable of making an impression upon a person of courage. Pothier, however, thinks this rule too strict, and that regard should be had to the age, sex, and condition of the party, and that a fear which would not be deemed sufficient to have influence on a man in the prime of life, might be sufficient in respect of a woman, or a man in the decline of life. 01 il. p. J, c. 1, art. 3, s. 2, p. 25. 160 TTNDITE INPLITEXCE. Chap. III. but without any distinct threat, and without any distinct promise not to prosecute, obtained from him a security for the amount of the bills, the transaction was set aside (r). In a case however where a debtor who was under arrest had given to a creditor, at whose suit he was imprisoned, a warrant of attorney to confess judgment for the whole amount claimed the Court held that the arrangement having been entered into deliberately, with full knowledge of the circumstances, and with professional advice, was not impeachable, although one of the debts for which the warrant of attorney was given was barred by the Statute of Limitations (s). The Court is bound to examine carefully into a contract entered into with a party who is in gaol, and to see that no undue advantage has been taken of his position. But it is not true, as a general principle, that a man in insolvent circumstances and in prison cannot sell his property (i^). Inadequacy of Mere inadequacy of consideration or inequality in a bargain consideration. . . . . , , IS not a ground to set aside a transaction, it the parties were on equal terms and in a situation to judge for themselves, and performed the act wittingly and willingly (u). Mere inade- quacy of consideration is not a ground for refusing specific performance of an unexecuted contract, and still less can it be ground for rescinding an executed contract (.«). But inade- quacy of consideration, if it be of so gross a nature as to (r) Williams v. Bmjley, 1 E. & I. Cox, 383 ; Collier v. Bro\vn, ib. 428 ; App. Ca. 200. See Nicholls v. Fox v. Macreth, 2 Cox, 322 ; Murray Nicholls, 1 Atk. 409 ; Davies v. v. Palmer, 2 Sch. & Lef. 488 ; Copis London Mrci/, Haj'. & J. 115 ; Longmate v. Ledger, 2 Giff. 157 ; Custance v. Cunning- ham, 13 Btav. 363 ; Douglas v. (7«^- vericell, 4 D. F. & J. 20 ; Prideaux v. Lonsdale, 1 D. J. & S. 439; Williams v. Bayley, 1 E. & I. App. Ca. 200 ; Davies v. London d; Pro- vinrinl Marine Liisnrance Co., 8 Ch. D. 474. 168 UNDUE INFLUENCE. Chap. III. lawful relation has been constituted between the parties (x). Where, accordingly, a woman while living in adultery with a married man assigned certain property to secure a debt which he owed, the court would not, from the mere existence of the relation, presume undue influence, the woman being of mature intelligence, and the transaction having been entered into deliberately (y). Transactions even between mortgagor and mortgagee are looked on with jealousy where a mortgagor in embarrassed circumstances, and under pressure, sells the equity of redemp- tion to the mortgagee for less than others would have given, and there is evidence to show misconduct on the part of the mortgagee in obtaining the purchase (z). However, when mortgaged premises are to be sold under orders in bank- ruptcy against the mortgagor, the mortgagee may, by appli- cation to the court, obtain permission to become purchaser, if he prove to be the highest bidder at the sale (a). If the mortgagee of leasehold premises obtain a renewal either by beino- in possession or by clandestine conduct towards the mort- gagor, the renewal lease will be treated as a graft upon the old one ; and the mortgagee will not be allowed to retain it for his own benefit, but will hold it in trust (6). In the application of the principles of the court, there is no distinction betw^een the case of one who himself exercises a direct influence, or of another who makes himself a party with the person who exercises the undue influence (c). Whether a transaction can be set aside on the ground of undue influence, where the influence has been exercised, not by the party obtaining the benefit, but by a third person, appears to be doubtful (d). (x) Hargreace v. Evemrd, 6 Ir. Cli. Be. 46. 278. (f) Ardglasse v. Pitt, 1 A'ern. 238 ; fy\ lb. Enpeij v. Lal'e, 10 Ha. 260 ; JTyse v. (;;) Gnhhins v. Creed, 2 Sch. & Lef. Lambert, 16 Ir. Cli. 379, supra, pp. 221 ; Ford v. Olden, 3 Eq. 461. 126, 158. (a) Ex ijarte Diicane, Buck, 18 ; (d) Benthii v. Madaij, 31 Beav. Ex parte Hn)n)noHd,ih.-i(i5. 14:3. See J;>/ FRAUD ON EXPECTANT HEIRS. Chap. III. interest in real or personal estate shall be hereafter ope»ed or set aside merely on the groimd of undervalue. The Act is carefully limited to purchases made bond fide and witliout fraud or unfair dealing, and leaves undervalue still a material element iji cases in which it is not the sole e(iuitable ground of relief. In a case accordingly where the party entitled to a reversionary interest was very poor, and there was a false recital in the deed that more money had been advanced than was actually paid, the deed was only allowed to stand for the money actually advanced (i). But the protection which the court throws round expectant heirs and unwary young men in the hands of unscrupulous persons has not been affected by the repeal of the usury laws or by the change of the law as to the sale of reversionary interests (1^). These changes in the law have in no degree altered the onus 2)robandi where the relative position of the parties is such as, according to the language of Lord Hardwicke in Chesterfield V. Jansen, 2 Ves. 125, to raise from the circumstances the presumption of fraud. Mere inadequacy of price will entitle an expectant heir to apply to the court to set aside on terms the sale of a reversionary interest, and the onus of proving the transaction fair and the price sufficient is on the pur- chaser {I). Where accordingly a money lender advanced monies to a young man entitled to a large reversionary interest in the event of his surviving his father, taking by way of security his acceptances at three months for the sums advanced with interest and discount together exceeding 60 per cent., and the young man had no professional assistance, and no application was made to his father or to the solicitor of his father, an order was made for the delivery up of the bills on payment of the sums actually advanced and interest at five per cent. {m). In each case it must depend on the circumstances whether ({) Re Slater's Trust, 11 Cli. D. (I) Lord Jylc^^ford v. Morris, S Ch. 2;3(S. 490 ; O'Rorke v. Bolinrjhrokc, 2 App. (/,•) Tyhr v. Yates, 6 Ch. 665 ; Ca. 814. Lord Aylesford V.Morris, SQA\.A^i; (m) Lord A)jlesford v. Morris, 8 Beiinon v. Cooke, 10 Ch. 389. Ch. 484. UNCONSCIONABLE BARGAINS. 171 the presumption of fmud is raised. In a case accordingly where <^^"^P- "^- a man purchased the reversionary interest from a lad only a few days above 21 years, in furtherance of an arrangement made whilst he was an infant, the transaction was held good, as upon the evidence it appeared to be not only bond fide and without fraud or unfair dealing, but a fair one and to be for the advantage of the lad, and was sanctioned by his father, who was his natural guardian. The fact that the price given for the reversion was inadequate, as the facts turned out in the end, was considered immaterial, there being evidence to show that the purchaser was not aware that the life of the father was not a good one, and that he was not ignorant of the fact because he had neglected to make proper inquiries or to take steps which he ought to have taken. Nor was the fact that the lad had no professional adviser considered under the cir- cumstances material, as it appeared that he had no friend whom he could consult but his father, and that neither he nor his father had the means of paying a professional adviser. The court was, however, of opinion that had the matter been prac- ticable, and the lad not been penniless, the purchaser should have required him to have had an independent adviser {n). A sale of a reversionary interest by a young man of full age for a substantial purpose stands on the same footing as other contracts (o). The principle on which a Court of Equity relieves from an UnconsciouaWe ,. ., j_j_i- bargains. unconscionable bargain entered into with an expectant lieir or reversioner for the loan of money applies also to the case of money being lent on unconscionable terms (not fully under- stood by the borrower and know^n not to be fully understood by the lender) to a young man, being a minor at the time of the first transaction, the son of a father possessing large property, who has no property of his own and no expectation of any, except such general expectations as are founded on his father's position in life, the money being lent without any thought of repayment by the borrower but on the credit of (h) O'Rjrl-ii V. Buluujhrohe, 2 App. (o) Jadd v. Green, 45 L. J. Ch. Ca. 814. 108. 172 FRAUD IN DEEDS OF GIFT. Chap. III. such general expectations, and in the hope of extorting pay- ment from the father to avoid the exposure attendant on his son being made a bankrupt (p). The abolition of the usury laws does not affect the power of the court to set aside usurious transactions when they are founded on fraud. Accordingly a series of deeds charging sums advanced by a money-lender with exorbitant interest on the borrower's estates, which were ample security, were set aside save to the extent of securing the actual advances with moderate interest, the deeds containing unprecedented clauses, such as authorising a sale without notice and empowering the lender to pay off existing charges (which bore interest at six per cent.) and to charge twenty per cent, thereon, and other clauses of a similar character, the court being of opinion that the clauses were introduced by the fraud and device of the money-lender without the knowledge of the borrower, who was unprotected by proper professional advice (q). Voluntary settle- Considerations of a similar character apply to the case of ments and deeds ^qq^^ of gift and voluntary settlements. A man may make a voluntary settlement if he pleases, either by way of gift or in the shape of a trust to be executed by persons to whom he conveys property. Whether it be a gift or a conveyance upon trust, it must satisfactorily appear that he understood and approved of the contents of the deed, and knew what he was doing, or at all events was protected by independent advice, and that no undue influence was exercised over him by the person in whose favour he made the instrument (r). No general rule can be laid down as to the proper and usual pro- visions in such a settlement, but a power of revocation is not essential. Whether there should be such a power or not must depend on the circumstances of the case (s). The absence of a power of revocation in a voluntary settle- ment, and the fact that the attention of the settlor was not (p) Kevill v. Snelling, 15 Ch. D. (r) Lister v. Hodgson, 4 Eq. 32 ; gy9_ Philip2}S V. MuUings, 7 Ch. 246 ; (q) Howley v. Cook, I. R. 8 Eq. Ttirner v. Collins, ib. 329. 571. See IV'jatt v. Cook, 16 W. R. (•') Philipps v. Mvllings, 7 Ch. 502. 246. FRAUD IN DEEDS OF GIFT. 173 called to that absence, do not make a voluntary settlement Chap. III. invalid. They are merely circumstances to he considered in deciding on the validity of the settlement. The true rule is that the absence of a power of revocation is a circumstance to be taken into account, and is of more or less weight according to the other circumstances of each case (t). The absence of a power of revocation in a voluntary deed not impeached on the ground of undue influence is material when it appears that the settlor did not intend to make an irrevocable settlement, or when the settlement is of such a nature or was made under such circumstances as to be unreasonable and improvident, unless guarded by a power of revocation (u). If there are substantial questions of incapacity and undue influence bond Jide raised, and the Judge is unable to arrive at a favourable conclusion upon them, he cannot thereupon proceed to treat the absence of a power of revocation upon its own merits, as if those other questions had not been raised at all. Without it the grounds of special impeachment might be insufficient. Without these it might itself be insufficient. Yet the two in combination might be fatal to the deed (x). In Philipps V. MuUings (y), where it was the object of the settlor to preserve his property from being ' wasted by himself, and in Proctor v. Gregg {z), where it was the object of the settlor to protect himself against the importunity of his relations, it was held that the absence of a power of revocation was sufficiently accounted for and the deed was upheld. So also in Long v. Donegan (a), where it appeared that the settlor had a strong dislike and fear of some of his relations, and wished to cut them off from his inheritance, the deed was upheld though it contained no power of revocation. In Henshall v. Fereday (b), however, where a lady on the suggestion of her brother executed a deed Vv^hich had been prepared by a solicitor on his instructions, and the solicitor (0 Hall V. Hall, 8 Ch. 430 ; Henry 8 Eq. 45. v. Armstrong, 18 Ch. D. 668. (y) 7 Ch. 244. (v) Hall V. Hall, 8 Ch. 440, per (z) 21 W. R. 240 n. Lord Selborne. (a) 21 W. R. 830. (;);) Armsfrong v. Armsfrovg, I. R. (/>) 21 W. R. .570. 174 FRAUD IN DEEDS OF GIFT. Chap. III. never saw the settlor or perforaied any duty at all towards her, the deed was set aside on the ground that it contained no power of revocation. Where a lady understood what she was doinsr, and that it was a final and irrevocable settlement of her property, and the settlement was reasonable and just, it was upheld, though the deed did not exactly correspond with the instructions, but was read over to and executed by her. The fact that she may have afterwards burned the deed and expressed her satisfaction that she had got rid of it is of no weight. This fact may prove change of mind but does not prove that at the time of the execution of the deed her mind was other than therein expressed (c). Voluntary limitations in a settlement come under the general rule as to undue influence in obtaining the gift {d). But if there is no ground for impeaching the settlement, either on the ground of undue influence or on the ground of the absence of a power of revocation, the provisions of a marriage settle- ment in favour of volunteers cannot be revoked (e). (c) Hall V. Hall, 8 Ch. 437. (e) Paul v. Paul, 20 Ch. D. 742. (^0 WoUaston v. Tribe, 9 Eq. 44. CHAPTER IV. FRAUD UPON THIRD PARTIES. Another class of frauds is where a contract or other act is Chap. IV. substantially a fraud upon the rights, interests, or intentions of third parties. The general rule is that particular persons in contracts and other acts shall not only transact bond fide between themselves, but shall not transact mold fide in respect to other persons who stand in such a relation to either as to be affected by the contract or the consequences of it («). Collu- sion between two persons to the prejudice or loss of a third is in the eye of the Court the same as a fraud (6). SECTION I. — FRAUD UPON CREDITORS. A class of frauds coming under the head of fraud upon tliird Sect. 1. parties embraces all those agreements or other acts of parties which tend to delay, deceive, or defraud creditors. Transactions in fraud of creditors are voidable at common law (c), but the legislature, with the view of affirming the rule and carrying the principles of the common law more fully into effect, declared by Statutes 50 Edw. 3, c. 6, and 3 Hen. 7, c. 4, all fraudulent gifts of goods and chattels in trust for the donor and to defraud creditors to be void. The Statute 13 Eliz. c. 5, perpetuated by 29 Eliz. c. 5, after reciting that feoffments, gifts, grants, alienations, conveyances, (rt) 2 Ves. 15G, 157, i}er Lord Co-pis v. Middleton, 2 Madcl. 428 ; Hardwicke ; JVullis v. JJukcof Fort- Rickards v. Att. -Gen., \2 CI. & Fin. tond, 3 Ves. 502. 44; Barton v. Van Hcijthwjsen., II (&) Garth v. Cotton, 1 Dick. 217. Ha. 132. (c) Cadoyan v. Kennett, Cowp. 432 ; 170 FRAUD UPON CREDITORS. Chap. IV. bonds, suits, iudsfinents, and executions, have been contrived of Sect. 1. . , . ■ — malice, fraud, covin, collusion, &c., to delay, hinder, or defraud creditors or others of their just and lawful actions, suits, debts, accounts, damages, &c., proceeds to declare and enact that every feoffment, fee, of lands, tenements, hereditaments, goods, and chattels, or any of them, by writing or otherwise, and all and every bond, suit, judgment, and execution made for any intent and purpose, before declai-ed and expressed, shall be, as against that person or persons, his or their heirs, succes- sors, executors, &c., whose actions, suits, &c., are or might be iu any wise disturbed, hindered, delayed, or defrauded, utterly void (d). Estates, however, or interests in lands or chattels, &c., conveyed or assured bond fide and on good consideration without notice to the person who is dealing with the person who afterwards becomes insolvent of any fraud or collusion, are excepted from the operation of the Statute (e). As between the parties themselves and all persons claiming under them in privity of estate, voluntary conveyances are binding (/) ; but in so far as they have the effect of delaying, defrauding, or deceiving creditors, voluntary conveyances are not bond fide, and are void as against creditors to the extent to which it may be necessary to deal with the property to their satisfaction. To this extent and to this extent only, they will be treated as if they had not been made. To every other purpose they are good ((/), unless the transaction is so tainted with fraud as to necessitate its avoidance in toto so as to Avork justice between the parties (Ji). (d) Tarleton v. LiddeU, 17 Q. B. piu'pose of defrauding creditors will 391. not pass the property in goods even (e) 13 Eliz. c. 5, s. 6. See Tarleton as between the debtor and his con- V. LiddeU, 17 Q. B. 390 ; TJwmpson federate. Boices v. Foster, 2 H. & N. V. Webder, 7 Jur. N. S. 531, 4 Deg. 779. & S. 538 ; Alton v. Harrison, 4 Ch. (g) Curtis v. Price, 12 Ves. 103 ; 622 ; Golden v. Gillam, 20 (Jh. D. JVorsley v. De Mattos, 1 Burr. 474 ; 392. Croker v. Martin, 1 Bligh, N. S. (/) Petre v. Espinasse, 2 M. & K. 573; Bessey v. Windham, 6 Q. B. 496 ; Robinson v. APDonnell, 5 B. & 166 ; French v. French, 6 D. M. & G. Aid. 134 ; French v. French, 6 D. M. 95 ; Neale v. Day, 28 L. J. Ch. 45. & G. 95 ; Olliver v. King, 8 D. M. (h) Tarleton v. LiddeU, 17 Q. B. • & G. 110. A sliam transfer for the 418,419. FRAUD UPON CREDITORS. 177 The mere fact of a deed beinor voluntary is not enoiidi to Chap. iv. render it void as against creditors (i). But if at the time a man l!^-l_ executes a voluntary settlement he is actually insolvent, the settlement is void as against creditors {k). It is not, however, necessary, in order to invalidate a voluntary settlement, that the settlor should be in a state of insolvency (/). The language of the Act being that any conveyance of property is void against creditors, if it is made to hinder, delay, or defeat credi- tors, the Court has to decide in each particular case, whether under all the circumstances, it can come to the conclusion that the object of the settlor was to hinder, delay, or defeat credi- tors {ni). " I abstain," said Lord Campbell (71), " from sayino- what are the particular proofs that are necessary, or from laying down any particular rule as to what amount of evidence, or what proof of consideration or want of consideration, or what evidence of notice or want of notice may be necessary. Those are facts to be inquired into in each particular case." If there is no evidence to show that the settlor, when he executed the instrument, had any intention to defraud, it is immaterial that he may have been embarrassed at the time, and wanted money to meet claims upon him, if there is no reason for saying that he had the slightest notion of doing more than borrowing money to tide over the difficulty. Though there may be circum- stances in the case which might lead to the presumption that the settlement was made to defeat creditors, yet when the circumstances come to be explained and established, it may be clear that no such intent existed in the minds of either of the parties to the transaction (0). Although there be no intention to defraud, the question then is whether there is any evidence to show that the settlor knew at the time when the settlement was executed that it was a (i) Holmes v. Penney, 3 K. & J 99. (k) French v. Freyich, 6 D. M. & N. S. 531, 'per Lord Campbell in G. 101 ; Freeman v. Pope, 5 Ch. 544 Taylor v. Coenen, 1 Ch. D. 640. {I) Townsend v. JVestacott, 2 Beav 344 ; Thompson v. Webster, 4 Drew (7?;) Thompson v. Webster, 4 Drew. 682, per Kindersley, V.-C, ib. 7 Jur. Dom. Proc. {n) Ib. (0) Thompson v. Webster, 7 Jur. N. S. 533, per Lord Chelmsford in 632, 7 Jur. N. S. 531, in Dom. Proc. Dom. Proc. 178 FRAUD UrON CREDITORS. Chap. IV. necessary consequence of the settlement that his creditors would ^-^^-^ be defrauded (j)), for in order to defeat a voluntary settlement it is not necessary that there should be proof of an actual and express intent to defeat creditors. It is enough if the facts are such as to show that the settlement would necessarily have that effect. If at the date of the settlement the person making the settlement was not in a position actually to pay creditors, the law will infer that he intended by making the voluntary settlement to defeat and delay them. Again, the same infer- ence will be made by the law, if after deducting the property which is the subject of the settlement, sufficient assets are not left for the payment of the settlor's debts (q). The mere fact, however, that a debt exists which existed at the date of the settlement, will not make a deed fraudulent (r). But where the intention to defraud is manifest, and no other purpose appears, this is sufficient to bring the case within the statute and to override all circumstances whatever (s). A man may by executing a settlement defeat, defraud, or delay his creditors although, at the time he makes the settle- ment, he may have more property than would be sufficient to satisfy his creditors, after the settlement has been made, because the property may be so inaccessible as to make it almost impossible for the creditors to got possession of it — it mav be at the antipodes — it may be an accumulation of bad debts very difficult to get. There might be fifty reasons to bring it within the scope of the statute, so that a solvent man in making a settlement may nevertheless be liable to have that settlement avoided, although not only he was not insolvent but might have had more than enough property left in some form or other to satisfy his creditors (t). The existence of debts at the time of the execution of the deed is not sufficient to debar a man from executing a volun- (p) lb. 3G4. (q) Freemmi v. PojJe, 5 Cli. 538 Mackay v. Douglas, 14 Eq. 120 Taylor v. Coenen, 1 Ch. 1). 641 (s) Acraman v. Corhett, 1 J. & H. 423. (t) Thom2yso7i v. Webster, 7 Jiir. liidler v. Bidler, 22 Ch. D. 74. See N. S. 532, per Lord Cranworth, in French v. French, 6 D. M. & G. 101. Dom. Proc. (r) Shirf V. Soulhy, 1 Mac. & G. FRAUD UrON CREDITORS, 179 tary deed. A man may intend to pay every debt as soon as it Chap. IV. is contracted, and constantly use his best endeavours and have ample means to do so, and yet be frequently, if not always, indebted in small sums {it). In the absence of an intent to delay, defraud or defeat creditors, a voluntary settlement made by a settlor in embarrassed circumstances but having prope]-ty not included in the settlement, ample for payment of debts, due by him at the time of making it, may be supported against creditors, although debts due at the date of the settlement may to a considerable amount remain unpaid (a;). It makes no difference whether the voluntary conve3'-ance is to trustees or directly to volunteers : if the conveyance is made to trustees and all the cestuis que trustent are volunteers, the conveyance to the trustees is void under the Statute no less than the interests of the cestuis que trustent (y). A surety is no more justified in placing his property out of the reach of liability for the debt than if he were the principal debtor (z). Nor is a man who has entered into a guarantee for the liability of another justified in making a voluntary settlement, if under the peculiar circumstances of the case the possible liability under the guarantee is likely at no distant date to become an actual debt. There may be a state of things in which the liability of a guarantor might be so remote that it need not be regarded, but if he conveys away all his property by a voluntary settlement, it is doubtful whether the settlement can in any case be supported in the event of his ultimately being called on under his guarantee («). In a case, accordingly, where in 1872 a father gave a bank a guarantee to secure the balance due from his son on his banking account to the extent of £1000 : and in May 1877 the son's account was overdrawn by £1500, and the father in May, 1877, made a voluntary settle ment of a leasehold property worth £200 a year, his only otlicr property being furniture worth less than £200 and a debt of £1500 due to him from his son, and in 1880 the son went into (?'.) Tovmsend v. JFestacott, 2 Beav. (z) Goodricke v. Taylor, 2 II. & 344. M. 380, 2 D. J. & S. 135. (x) Kent V. Riley, 14 Eq. 190. {a) Ridlcr v. Ridler, 22 Cli. D. 74. (//) Townend v. Toker, 1 Ch. 458. 180 FRAUD UPON CREDITOKS. Chap. IV. liquidation ; it was held that the settlement was void as against Sect. 1. . • creditors, for that under the circumstances the liability under the guarantee ought to have been regarded as a substantial one ; that the father had no right to treat the sum of ^£1500 due to him from the son as a good debt, and that after the settlement the father had nothing left to meet his liability under the guarantee (6). The provisions of the stat. 13 Eliz. c. 5, are not confined to existing creditors, but extend to subsequent creditors, whose debts had not been contracted at the date of the settlement (c), but the principle will not operate in favour of subsequent creditors, unless it can be shown either that the settlor made the settlement with the express intent to "delay, hinder, or defraud " persons who might become creditors (d), or that after the settlement the settlor had not sufficient means or reasonable expectation of being able to pay his then existing debts (e), or at least that there are debts unsatisfied which were due at the date of the settlement (/). If at the time of bringing the action no debt due at the execution of the settlement remains unpaid, and there is no evidence to show that the settlement had for its object the delaying, hindering, or defrauding of subsequent creditors, the settlement prevails against them (g), but if any debt due at the date of the settlement remains imsatisfied at the time of bringing the action (Ji), or if there be evidence to show that the settlement was made in contemplation of futui'e debts or in furtherance of a meditated design of future fraud, although the settlor may not have been indebted at the time('i), (6) lb. 132 ; Freeman v. Pope, 5 Cli. 544. (c) Tarback v. Marhury, 2 Yern. (g) Jenkyn v. Vaughan, 3 Drew. 509. 419 ; Smifh v. Tatton, 6 L. E. I. 41. (d) Stileman v. AsMoimx, 2 Atk. See Russell v. Hammond, 1 Atk. 13 ; 481 ; Stephens v. Ollive, 2 Bro. C. C. Thompson v. Webster, 7 Jur. N. S. 91 ; Holloivay v. Millard, 1 Madd. 531. 414 ; Holmes v. Penney, 3 K. & J. {h) Jenhjn v. Vaughan, 3 Drew. 99 ; Murphy v. Abraham, 15 Ir. Ch. 419 ; Freeman v. Pope, 5 Ch. 544. 371. (i) StileTuan v. Ashdown, 2 Atk. (e) Spirett v. Willows, 3 D. J. & S. 481 ; Richardson v. Smalhvood, Jac. 302 ; Freeman v. Pope, 5 Ch. 544. 552 ; Holloway v. Millard, 1 Madd. (/) Jenkyn v. Vawihan, 3 Drew. 414 ; Murphy v. Abraham, 15 Ir. 4\^; Barton \.Vanheyt}iny!r, 29 Beav. 637. 118. (6) Way's Trust, 2 D. J. & S. (h) Adamcs v. Hallctt,ij E^i. 4:(JS. 184 FRAUD UPON CREDITORS. Chap. IV. Sect. 1. hond fide. assured bond fide and for good consideration without notice to the party who is dealing with the person who afterwards where deed is for ^ unable to pay his debts of any fraud or collusion, are valuable con- ^ •' "^ _ sideration and by the 6th section excepted from the operation of the Statute 13 Eliz. c. 5 (?■). There being a similar exception in 27 Eliz. c. 4, s. 3, and the two statutes being in imri materia, the cases which have been determined upon the one are equally appli- cable to the otlier. In order to come within the exception, and escape from the operation of the Statute, it is not sufficient that a conveyance be upon good consideration or hond fide. It must be both for good consideration and hond fide. Although a deed be made upon good consideration within the meaning of the Statute, it is void against creditors, unless it be ho7id fide (k). The ex- pression " good consideration " in the Statute means valuable consideration. Meritorious consideration, such as love, affec- tion, &c., though good as between the parties themselves, is not in the eye of the law hond fide, if it is inconsistent with that good faith which is due to creditors (/). Marriage is in itself a sufficient consideration for an ante- nuptial settlement upon the husband, wife, or issue (to) ; and in the absence of fraud the settlement made by one of the con- tracting parties is not invalidated by reason of the settlement made by the other proving ineffective, as by reason of his or her infancy, nor does any case of election arise as against the other party or his or her representatives (n). When the But a settlement made in pursuance of an agreement entered ™vaiid^one "° '^^^'^ ^" Contemplation of a marriage not recognised as valid by Marriage a Bufficient consideration. (i) Supra, p. 176. (A:) Twyne's Case, 3 Rep. 81 Worsley v. De Mattos, 1 Burr. 474, 475 ; Cadogan v. Kennett, Cowp 434 ; Bott v. S7nith, 21 Beav. 516 Harman v. Richards, 10 Ha. 81 Thompson v. Webster, 4 Drew. 628 Lloyd V. Attivood, 3 D. & J. 655 Fraser v. Thompson, 4 D. & J. 600 Corlett V. RadcUffe, 14 Moo. P. C 121, 135 ; Middleton v. Pollock, 2 Ch P. 108. (I) Copis v. Middleton, 2 Madd. 430 ; Taylor v. Jones, 2 Atk. 600 ; Strong v. Strong, 18 Beav. 408 ; Gold- smith v. Russell, 5 D. M. & G. 547 ; Thompson v. Webster, 7 Jur. N. S. 531 ; Golden v. Gillam, 20 Ch. D. 392. (???) Ex parte M'Burnie, 1 D. M. & G. 441. (n) Campbell v. Ingilby, 21 Beav. 567, 1 D. & J. 393. See however Codrington v. Lindsay, 8 Ch. 593. FRAUD UPON CREDITORS. 185 the laws of this country, as between a man and his deceased Chap. R. •^ _ _ beet. J. wife's sister, cannot (at any rate as far as it is executory (o) ), be supported (p) even as respects a provision made thereby for children of a former legal marriage (q) ; and the same rule, it is conceived, will equally apply where the marriage, though a bond fide one is invalid by reason of one of the parties having contracted a previous marriage which, although not known to be so, is still subsisting. In the case of a settlement executed as part of the arrangements of a marriage within the prohibited degrees, there is not merely the absence of a good consideration, but the presence of that which the Courts necessarily treat as an immoral consideration, namely an agreement for concubinage instead of coverture. But a voluntary settlement upon the woman herself, if not founded upon an agreement for, although it in fact precedes a concubinage of this description, and which purports on the face of it to be voluntary, cannot be set aside by the settlor or his representatives, if it has been perfected by an actual transfer of the property to the trustees (r). A question is frequently raised as to how far the consideration How far the of marriage extends. As aijainst the settlor and his heirs, consideration ° ° 'of marriage limitations in favour of collaterals contained in an ante-nuptial extends, settlement are binding (s), but whether they will be supported as against creditors or subsequent bond fide purchasers for value has been the subject of frequent discussion (f). Limita- tions in favour of collaterals in a marriage settlement are as a general rule voluntary {u), but they will be upheld if there be any party to the settlement who purchases on their behalf (x). There are two exceptions to the rule that the valuable con- sideration of marriage extends only to the husband, wife, and issue of the marriage, and not to collaterals. The first is iu (o) Ayerst v. Jenhins, 16 Eq. 275. Fraud. Conv. 326—344 ; Clarice v. (jy) Couhon v. Allison, 2 J). F. & Jrright, 6 H. & N. 8-4; Mullivs J. 521. V. GuilfoyU, 2 L. R. I. 109. {q) Chapman v. Bradley, 33 Beav. (u) Johnson v. Lecjard, T. & R. 61. 295 ; Smith v. Cherrill, 4 Eq. 390 ; (r) Dart, V. & P. 893. WoUaston v. Trihe, 9 Eq. 44. (s) Davenportv. Bishop, lV\v.m^', {x) Heap v. Tomje, 9 Ha. 104; but pee JVollaston v. Iribe, 9 Eq. 44. Mullins v. Guilfoyle, 2 L. R. I. 109. {t) Dart, V. & P. 893 ; May on 180 FRAUD UPON CREDITORS. Chap. IV. favour of a settlement made before a second marriage on the Sect. 1. . . '— children of a former marriage (y). The second is in favour of a settlement made on the children of either of the marrying parties by a future marriage (z). In Clarke v. Wright (a), Lord Blackburn was of opinion that if the limitations in an ante-nuptial settlement in favour of collaterals so far interfere with those which would naturally be made in favour of the husband, wife, and issue, that they must be presumed to have been agreed upon by all parties as part of the marriage contract, they are not voluntary, and will be upheld. But in a later case Malins, V.-C, held that an ante- nuj^tial settlement containing trusts in favour of the husband, wife, and issue, and also ulterior trusts for collaterals was, so far as the ulterior trusts were concerned, voluntary (6). Post-iraptial A post-nuptial settlement made in pursuance of articles or of wiien valid ^ binding Written agreement drawn up beiore marriage is valid against creditors, g^gr^^j^gt, creditors, but a parol ante-nuptial agreement does not prevent a post-nuptial settlement from being voluntary (c), nor will a written recognition after marriage of a verbal promise made upon marriage support a post-nuptial settlement against creditors {d). Nor can a post-nuptial settlement be supported against creditors if made in pursuance of articles entered into during infancy, and not ratified or referred to in the settle- ment (e). Post-nuptial settlements are, as a general rule voluntary deeds, and therefore void as against creditors ; the fact that a post-nuptial settlement may be founded on a moral duty will not deprive it of its voluntary character (/). But a post-nuptial settlement becomes a settlement for valuable con- (y) Newstead v. Searles, 1 Atk. 551 ; JFarden v. Jones, 2 D. & J. 2G5 ; Clwke v. Wrvjht, 6 H. & N. 7G ; Goldicutt v. Townsend, 28 Beav. 849 ; Gale v. Gale, 6 Cli. D. 144. 445 ; Crosslcij v. Elworthy, 12 Ec^. (z) Sutton v. Chetivynd, 3 Mer. 1G4. 249 ; Clayton v. Winton, 3 Madd. (d) Randall v, Morgan, 12 Ves. 302 11. ; but see WollastonY. Tribe, 9 67 ; Warden v. Jones, 2 D. & J. 7G. E(|. 44. {e) Troicell v. Hhenton, 8 Ch. D. (a) 6 H. & N. 869. 318. (6) Smith V. Gherrill, 4 Eq. 390. (/) Holloway v. Headington, 8 (c) Randall v. Morgan, 12 Ves. Sim. 324 ; Jeffcrys v. Jefferys, Cr. & 67 ; Lassence v. Tierney, 1 Mac. & G. Ph. 138, 141. FRAUD UPON CREDITORS. 187 sideration if made in consideration of the receipt of a further Chap IV. portion ((/), or of an agreement to pay a further portion which is afterwards paid (h), or (on a settlement of the husband's estate) of the wife relinquishing her interest under an existing settle- ment (i) ; or her jointure (j), or dower (if married before the late Act came into operation) (k) ; or mortgaging her separate estate (l), or property over which she had a just power of appointment (m), to pay his debts. So, also, when in a post-nuptial settlement there is a bargain between husband and wife, altering their relative positions as to the estate, and their relative rights and interests in the estate, there is a valuable consideration for the settlement (7?.). Where, accordingly, by a post-nuptial settlement certain freeholds be- longiog to the wife were settled by the husband and wife to the use of the wife for life, and after her decease to such uses as she should by will appoint, and in default of appointment, to the use of children, with a power during her life for the wife to lease at rack-rent, and with a power of sale and exchange in the trustees with her consent, it was held that, inasmuch as the husband by the settlement lost his estate by the curtesy and also his power of preventing the wife from alienating the estate during his life, while on the other hand the wife was reduced by the same instrument from being an owner in fee to a life estate with a testamentary power of appointment, the estate going in default to her children, both of them had given value, and that the settlement therefore was one for valuable consideration (0). So, also, in Heivison v. Ne(jiis (j)), where the wife was entitled in reversion to a moiety in freehold estates, and by a post-nuptial settlement husband and wife by a deed duly acknowledged conveyed their moiety of the estate, subject to (g) Broicn v. Jones, 1 Atk. 190 ; coirim Lord Hatlierley. Stileman v. Ashdown, 2 Atk. 479 ; (m) See Whithread v. Smith, 3 D. Bamsden v. Hylfon, 2 Ves. 308. M. & G. 740. (h) Brown v. Jones, 1 Atk. 190. (h) Ue Foster and Lister, 6 Cli. D. (i) Parker v. Carter, 4 Ha. 4(J9 ; 87. Harman v. liiclumh, 10 Ha. 81. (n) lb. (j) Cottle V. Frijip, 2 Vein. 220. (p) 16 Beav. 594, 22 L. J. Ch. (A-) Sug. 718. G55. (l) Carter v. Hind, 22 L. T. IIG, 188 FRAUD UPON CREDITORS. Chap. IV. -tJie prior life estate, to trustees and their heirs upon trust to Sect. 1, ^ ' . . ^ pay the rents to the wife for life for her separate use, and without power of anticipation, with remainder to the husband for life, and after the decease of husband and wife to such persons as the wife should by will appoint, and in default of appointment to the use of her children as tenants in common in fee, with cross remainders between them, with an ultimate limitation to the wife or heirs, it was held that, inasmuch as the husband had given up his chance of an estate during the coverture and of an estate by the curtesy, and had also given his wife the first life interest in the estate, and the wife on the other hand had given up her fee simple, there was a bargain for value between them, and that the settlement was therefore one for valuable consideration, and ought to be sustained against a subsequent purchaser for value. So, also, in Teasdale v. Braithwaite(q), where a woman having freehold estates married without a settlement and afterwards husband and wife con- veyed by deed duly acknowledged the land to trustees during the life of the wife upon trust for her separate use without power of anticipation, and after her death to the use of the husband for life, with remainder to their children as therein mentioned, it was held that there was sufficient consideration moving from the husband to make the settlement one for valu- able consideration, and that it was not void as against a sub- sequent mortgagee without notice of the settlement. "It is settled," said Bacon, V.-C. (r), " that if husband and wife, each of them having interests, no matter how much or of what degree, or of what quality, come to an agreement which is afterwards embodied in a settlement, that is a bargain between husband and wife which is not a transaction without valuable considera- tion (s)." But a settlement concurred in by husband and wife is (q) 4 Ch. D. 85, 5 Ch. D. 630. husband takes no interest in the (r) lb., 4 Ch. D. 90. property of the wife, where the mar- (s) See Parker v. Carter, 4 Ha. riage has taken place since the passing 409 ; Lynch v. Lynch, 2 L. K. I. of the Act, post-nuptial settlements, 511; Welmanw. Welman,lb Ch..!). which under the old law were 670 ; Mullins v. Guilfoyle, 2 L. R. I. deemed to have been made for a 110. Inasmuch as under the Married vahiable consideration, where there Women's Property Act, 1882, the was a modification of the interests of FRAUD UPON CREDITORS. 189 voluntary, if they merely take Lack under the settlement such Chap. IV. interests as they were respectively entitled to independently of the settlement (t). So, also, money laid out by the husband on land devised to his wife for Hfe with remainder to her children, or in default, &c., to her in fee was held good consideration for a conveyance of it to the use of the wife for life, remainder to her children in fee, and if no children to the husband absolutely (u). So, also, where a wife was entitled to certain property for her life for her separate use, remainder to the husband for life, with remainder to their children as they should appoint, and she conveyed her life estate to trustees for the benefit of her children, and the husband covenanted to assign his life interest, if he should survive his wife, it was held that settlement was for valuable consideration {x). In certain cases a settlement made upon a wife after marriage is not to be treated as wholly voluntary, where it is done in performance of a duty which a court of equity would enforce. Thus, if a man should contract a marriage by stealth with a woman having a considerable fortune in the hands of trustees, and he should afterwards make a suitable provision on her in respect of her fortune, the settlement would not be set aside in favour of the creditors of the husband, since a court of equity would not suffer him to take possession of her fortune, without making a suitable settlement on her (y). In Price v. Jenkins (z), it was held by the Court of Appeal Settlement of - leaseholds. that a settlement of leasehold property is not a voluntary conveyance under the statute on the ground that the assign- ment of leasehold property is of itself a conveyance for valuable husband and wife in the property of and other cases cited 1 Fonb. Bk. 1, the wife, must now be regarded as c. 4, s. 12, and note (h), ib. c. 2, s. 6 ; voluntary. Jones v. Marsh, Ca. t. Talb. 64 ; {t) Jiutterfield v. Heath, 15 Beav. Wheeler v. Caryl, Amb. 121 ; Jewson 408 ; Acraman v. Corbett, 1 J. & H. v. Moulson, 2 Atk. 417 ; Middle- 422. combe v. Marloiv, ib. 519 ; JFard v. (w) Crofts v. Middleton, 2 K. & J. SJudlett, 2 Ves. 16 ; Bamsden v. 208. Hijlfon, ib. 304 ; Arundell v. Phipps, (x) Joyce V. Hutton, 12 Ir. Ch. 77. 10 Ves. 139. (?/) Moore v. Bycaulf, Prec. Cli. 22, {::) 5 Ch. D. 621. 190 FRAUD UPOX CREDITORS. Chap. IV. consideration on account of the implied obligation to perform -^— ^ the covenants in the lease (a). But in Lee v. Matiliews (b), the Court of Appeal in Ireland dissented from the judgment in that case, and declined to follow it. " The question," said Chief Justice May, "in each case is, was the dealing a bargain or a gift ? The existence of onerous liabilities, from which the covenantee covenants to indemnify the assignor, may give the transaction the character of a bargain for good and valuable consideration, while, on the other hand, the gift of a valuable interest in lands is not less a gift because the property so given carries with it certain obligations. The gift is thereby dimin- ished, but it does not necessarily lose its essential character of gift because it must be taken cum onere." And, in Ridler v. Ridler (c), the Court of Appeal held that Price v. Jenldns, though it might perhaps be supported in cases arising under the Statute of 27 Eliz. c. 5, did not apj)ly in cases coming imder 13 Eliz., and that a settlement of leaseholds, though carrying liabilities and covenants, was void under that statute as being under the circumstances calculated to defeat and delay creditors (J ). Concurrence of If a person whose concurrence the parties think essential settlem'ent\iiay joins in a Settlement, his concurrence will be deemed a valuable make it for consideration, even althouo-h he did not substantially part with value. ' o ^1 anything (e). The concurrence in such cases depends not so much on whether the concurrence passed any interest as on whether it enabled a settlement to be made which could not otherwise have been effected (/). The joinder of a necessary party is not, however, always a sufficient consideration. It has been held not to be so where a limitation was made not for his benefit, or at his desire, or in pursuance of any contract of his (g). In separation deeds the covenant usually entered into by the trustees to indemnify the husband against the wife's debts will, (rt.) See Ex parte Hillmmi, 10 Ch. 52 L. J. Ch. 190. D. 622 ; Ex parte Dohle, 26 W. E. (e) Sng. 719. 407. (/) Harman v. Eichards, 10 Ha. (b) 6 L. R. I. 530. 87. (r) 22 Ch. D. 74. 0/) Doe v. Rolfe, 8 A. & E. 650. ((/) See Mar.'ihallv. Lord Granville, FRAUD UPON CREDITORS. 191 as afjainst creditors and also, it is conceived, as against subsequent Chap. IV. ° oect. 1. purchasers, support any further settlement he may make on her (h). A deed which appears on its face to be voluntary, may be Consideration . \ . 1 I. 1^°'' expressoil shown by any evidence (consistent with its terms) to have been ^ay i^e pvovcJ. made for valuable consideration (i), but the evidence must be clear, and it must be proved beyond the shadow of a doubt that there was that additional consideration which the parties did not choose to put on the face of the instrument (/c). If the execution of a voluntary deed be not communicated to the party benefited, there cannot be a question of consideration. There can be no consideration without either contract in the first instance, or such notice on the part of the party benefited by the voluntary instrument, as after knowledge of it changes his position. If, after the voluntary settlement has been executed, its contents are communicated to the person taking the benefit of it, and, acting on the faith of it, he does sub- stantially alter his position— that is, communicates to the donor his acceptance of the further security — then, by so doing, he gives value to the donor, being the value which the donor expected him to give. He has, in fact, accepted the voluntary instrument as a consideration for the action he takes on the faith of it. But where he has no knowledge, it is impossible that he can give consideration in that way (l). A deed, thouo-h voluntary at the time of its execution, may Voluntary deed ' " "^ ..... "I'ly become for afterwards become valuable by a consideration given since its value by lon- , . , , , , re • i sideiation given execution (m), or by subsequent acts. It an assignment or g;,^^.^ j^^ ^^,^^^^, appointment has been made to a volunteer, the subject of which tion. is afterwards assigned for value by the assignee or appointee, the (h) Dart, V. & P. 891 ; May on J. 605 ; Graham v. O'Keefe, 16 Ir. Fraud. Conv. 285—294. Ch. 1 ; Levy v. Crevjhfon, 22 W. R. (i) Pott V. Todhunter, 2 Coll. 76 ; 605. Gale V. Williamson, 8 M. & W. 405; {I) Jones v. Bygott, 44 L. J. Ch. Harman v. Bichards, 10 Ha. 81 ; 487, 2^^^ Jessel, M. R. See Crack- Kelson V. Kelson, 10 Ha. 385 ; Tovm- nail v. Janson, 11 Ch. D. 1. end V. Taker, 1 Ch. 446 ; Levy v. (m) Prodgers v. Ijangham, 1 Sid. Creifjhton, 22 W. R. 605. 133 ; Parr v. Eliawn, 1 East, 95. {!;) Thnmpt^nv v. JVfUter, A T). k 192 FRAUD UPON CREDITORS. Chap. IV. puicliaser from liim has a better equity than the creditors (w). ^^''^' ^' A man who has made a voluntary grant is not entitled to have i3 within sec. 6. it set aside except on paying all that the transferee has paid for it (o). Purchase of a The benefit of section 6 has been extended to cases in which thfrd parties' the purchaser, innocent of any fraud on the part of the owner of the property, has, by making a loan or payment, become a purchaser, not for his own benefit, but for the purpose of inducing the settlor to settle the property on his family (p). In Bayspoole v. ColUns (q), where the owner of an equity of redemption settled it upon his wife and children at the request of a near relative, and, in consequence of a small advance by- way of loan upon the security of his promissory note, the settle- ment was upheld as being for valuable consideration. So, also, where a man being in embarrassed circumstances, his mother aoreed to advance the money necessary to relieve him from his embarrassment, on condition of his settling his estate on his family, the transaction was upheld as being one for valuable consideration (?•). So, also, where a man entitled to a life interest in the dividends of consols, being largely indebted, his brother agreed to pay all debts, not charged on his life interest in the consols, upon condition that such life interest should be settled so as to be applicable for the maintenance of the man, his wife and children, or any of them, at the absolute discretion of the trustees, the settlement was held valid as one made for valuable consideration (s). So, also, where A. and B. were indebted and, being under threat of eviction, executed a deed, afterwards registered as a bill of sale, whereby, in consideration of the payment of the debt by the father-in-law of one of them, they conveyed to him the farm and all its chattels, the deed was held to be for valuable consideration (t). (n) George w Milhanlc,Q Yes. 100; Proc. Moreivood v. South Yorkshire, tic, (q) 6 Ch. 228. Railway Co., 3 H. & N. 798. (r) Thortifsonv. Webster, 7 Jur. N. (o) Lord Aldbroiigh v. Trye, 7 CI. S. 531, in Dom. Proc. & Fin. 463. See Judd v. Green, 45 (s) Holmes v. Penney, 3 K. & J. L J Ch. 111. ^8- ^^^ Ex parte Eyre, 44 L. T. N. ( p) Thompson v. Webster, 4 D. & S. 922. J 605, 7 Jur. N. S. 531, in Dom. (0 Bmitk v. Tatton, 6 L. R. I. 41. FRAUD UPON crf:dito]is. 193 In considering]: whether or not a deed is vokmtary, the Court Chap. IV. Sect. 1. will take into consideration all the circumstances under which . .. „, . J Rules for deter- it was executed, and the relative positions ol the parties, and mining wiietiier will look at other deeds executed at the same time, if they ^^^^^^^ '^ ^°^^'^- appear to be part of the same transaction, although not mentioned in the impeached deed, and will take into considera- tion any evidence which tends to throw light on the reasons and considerations for the settlement, and, though there is no proof either by intrinsic evidence or by anything appearing on the face of the deeds of any stipulation or agreement which there was sufficient consideration to support, yet several transactions may be viewed together, and the parties to them must be con- sidered to have stipulated according to the rights which they had, and any consideration which is found to exist will either support the whole transaction or none at all (u). It is not enough, in order to support a settlement against Peed must be hondfide. creditors, that it be made for valuable consideration, it must also be hondfide. If it be made with intent to delay, hinder, or defraud creditors, it is void against them, although there may be, in the strictest sense of the term, a valuable or even an adequate consideration {x). Cases have frequently occurred in which persons have given a full and fair price for goods, and where the possession has been actually changed, yet being done for the purpose of delaying or defeating creditors, the trans- action has been held fraudulent, and has therefore been set aside as against them {y). In Harman v. Richards (yy), Lord Justice Turner, then a Vice-Chancellor, says, " It remains to be considered whether the settlement which was thus made for valuable consideration was also bond fide ; for a deed, though made for valuable consideration, may be affected by ^nala fides' but those who undertake to impeach the bona fides of a deed which has been executed for valuable consideration have a task of difficulty." " The fact that there is a valuable consideration," (u) Harman v. Richards, 10 Ha. Burr. 474, 475 ; Cadocjan v. Kennett, 88. Cowp. 434 ; Bott v. Smith, 21 Beav. (x) Twyne's Case, 3 Rep. 81; 511. Holmes v. Penney, 3 K. & J. 99. (;///) 10 Ha. 81. (y) lb. ; JForsIey v. A- Mcdfos, 1 194 FKAUD UPON CREDITORS. Chap. IV. said Mr. Justice Fry, in Golden v. Oillam (z), " shows at once Sect. 1. that there may be a purpose in the transaction other than the delaying or defeating of creditors, and renders the case of those who contest the deed more difficult." Where the instrument sought to be set aside as fraudulent against ci^editors is founded on a valuable consideration, an actual and express intent to defeat creditors must be proved (a). The mere fact of a bond fide creditor being defeated is not enough of itself to set aside a deed founded on valuable con- sideration (Jj). In Holmes v. Penney (bb), the creditor was excluded from all remedy in respect of his debt, and the existence of the debt must have been present to the mind of the settlor at the time of the settlement, but Lord Hatherley, then a Vice-Chancellor, being of opinion that the person who advanced the money as the consideration of the settlement, had no knowledge at the time of the settlement that there were any unpaid debts of the settlor in existence, and that his only object ■was to make an honest family arrangement, upheld the deed (c). So, also, in Golden v. Gillaiin (d), where it appeared to be the object of a mother and daughter to make an honest family settlement, under which the mother conveyed a farm to the daughter, and the daughter, in consideration of the con- veyance, undertook to maintain the mother and to pay creditors whose debts had been contracted in connection with the carrying on of the farm, the settlement was upheld, though there was outstanding a debt of another description to which the covenant did not apply, the Court being of opinion that the settlement was a bond fide one, and that the debt in question was not present to the mind of the settlor or her daushter at the time of the settlement. The inquiry in every case is whether the deed was executed with the intent to defeat or delay creditors. The mere fact that, as a collateral result, it may have that effect will not {%) 20 Ch. D. 396. {hh) 3 K. & J. 98. (a) Freeman v. Pope, 5 Ch. 538, (c) See Ex jmrte Eyre, 44 L. T. N. fer Giffard, L. J. S. 922. {})) Sniifh V. Tafton^ 6 L. E. I. (./) 20 Cli. D. 396. 41. FRAUD UPON CREDITORS. 195 make the deed void witliin the statute, if it was otherwise Chap. IV. Sect. 1. made for good consideration and bond fide (e). If the deed be for valuable consideration, it is immaterial that the settlor may retain a life interest under it (/). But if there is any secret trust or any proviso to pay the settlor the dividends until execution issue, the settlement would be fraudulent though made for value ((7). In the case of a merely voluntary settlement, the fact that the settlor may derive any benefit under it would probably be fatal to the deed {li). It is not a ground for invalidating a bond fide sale that it was made with a view to defeat an intended execution. The sale of property for good consideration made bond fide and with a bond fide intention to pass the property, is sufficient to defeat the execution of a creditor (i). Nor is it a fraud to mortgage personal property for money actually lent to the mortgagor, even though the mortgagor's intention may be thus to defeat the expected execution of a judgment creditor (Ic) ; or to confess a judgment in favour of one creditor for the purpose of giving him preference over another who is on the eve of issuing execution on a judgment pi-eviously obtained (l). The consideration of marriage, although the most valuable of all considerations, if there be bona fides (ni), will not support a settlement by a man in insolvent or embarrassed cir- cumstances, if there be evidence to show that the intended wife was implicated in any design to delay or defraud the creditors of the intended husband, or that the marriage was part of a scheme or contrivance between them to protect his property against the claims of his creditors (v). But an ante- (e) lb. (k) Darvill v. Terry, 6 H. & N. (/) Holmes v. Petiney, 3 K. & J. 807. 98; TJiompson V. JFebster, 7 Jm\ N. (/) Holhird v. Anderson, b T. R. S. 531. 235. {g) Holmes v. Pennerj, 3 K. & J. (m) Campion v. Cotton, 17 Ves. 98. 264 ; Ex parte M'Burnie, 1 D. M. & (h) lb. 101. G. 441 ; DiUces v. Broadviead, 2 D. (i) Wood V. Dixie, 7 Q. B. 892 ; F. & J. 566. Hale V. Saloon Omnibus Co., 4 Drew. («) Colomhine v. Penhall, 1 Sm. & 496 ; coinp. Bott v. Smith, 21 Beav. G. 228 ; Eraser v. Thom'pson, 4 D. ^,fy Ch. D. 621 ; {d) Atkinson v. Sm.ith, 3 D. & J. Bosherv. JVillia7ns, 20 Ec^. 217. 186. (a) Bagsjwole v. Collins, 6 Ch. (e) Dart, V. & P. 891. 228. (/) Hefqy v. Tonge, 9 Ha. 90. (6) Thompson v. WehsUr, 7 Jur. N. (//) Conn ick v. Trapa ad, 6 Dow, 60. 197 Cha-i. IV. Se-n. 1. 198 FRAlfD UPON CREDITOKS. Chap. IV. Sect. 1. Nominal consideration insufficient. Pin-cliaser nius-t liave notice of fiau'l. Purchase money may not be taken A nominal consideration is insufficient to support a deed. "When accordingly a deed conveying the whole real estate of the grantor and otherwise voluntary contained a covenant by the grantor that under certain specified circumstances and within a limited period he would build a house on part of the estate conveyed, but there was no shifting clause or proviso for defeasance in case of non-performance of the covenant, it was held that the covenant raised no consideration affecting the voluntary nature of the contract {(j). When there has been a sale for value, not only must fraud be shown, but, in order to avoid the transaction as against a purchaser, it must be shown that he was privy to the fraud against creditors. A conveyance cannot be invalidated where there is a bond Jide purchhaei- (h). The fraudulent intent of the vendor or settlor will not invalidate the deed if the pur- chaser was free from fraud {i). Even though there may be some suspicion in the circumstances of the case, the purchase will be held good unless it is shown that it was a contrivance to defeat creditors and that the purchaser was privy to it (A;). When a recovery was suffered by A., tenant for life, and B. his son, tenant in tail in remainder, and by the deed leading the uses of the recovery, A.'s life estate was limited to B. in order to defraud A.'s creditors, and subject thereto the property was settled on B. for life, with remainder to his first and other sons in tail, but B. was not privy to the fraud, it was held that the recovery was good, and that the deed leading to uses was bad, so that A.'s life estate passed to his assignees in a subse- quent bankruptcy, and subject thereto B. became entitled in fee simple (?)• A conveyance pending an action or judgment is not necessarily void if supported by a valuable consideration (m). The benefit of the section wdiich excepts from the operation ((/) Rusher v. Williams, 20 Ecj. 210. (h) Coijis v. Middkton, 2 Mtidil. 426. (i) French v. French, 6 D. M. & (). 101 ; doUlm V. Gillam., 20 Ch. D. 394. {k) Hale V. :Saloon Oinnibus Cu., 4 Drew. 496. (l) Tarleton v. Liddell, 17 Q. B. 390 ; 4 Deg. & Sm. 538 ; Wakefield V. Gihbon, 1 Giff. 401. (m) See Marlow v. Orgill, 8 Jur. N. S. 789, 829 ; Darvill v. Terry, 6 11. & N. 807, FRAUD UPON CREDITORS. 199 of the statute conveyances made bond fide and for valuable Chap. IV. . , Sect. 1. consideration is strictly confined to the purchaser and the interest created in his favour, so that even when there is a creditors, bond Jide purchaser, the consideration received for property sold by a debtor is liable to the same rules as the property would have been if unsold {n). A fraudulent intention to which the purchaser is a party will Mala fides ,,. . . ., . , . -fi,,, -IT supersedes override all inquiry into the consideration (o). " u, said Lord consideration. Mansfield, in Gadogan v. Kennett {p), " the transaction be not bond Jide, the circumstance of its being done for a valuable consideration will not alone take it out of the statute." If moreover the purchaser must have been aware that the debtor was in a state of insolvency, or that the effect of the deed will be to leave the debtor without the means of paying his debts, the transaction, though for value, cannot be upheld (q). Though there be a judgment against the vendor, and the pur- chaser has notice of it, that fact will not of itself affect the validity of the sale of personal property. But if the purchaser, knowing of the judgment, purchases with the view and purpose to defeat the creditor's execution, it is iniquitous and fraudulent, notwithstanding he may have given a full price, for it is assist- ing the debtor to injure the creditor. The question of fraud depends on the motive (>■). In Barling v. Bishop (s) a voluntary conveyance with the intention of depriving the plaintiff in an action of the fruits of his verdict was held bad. So also, when the object of the deed •was to defeat proceedings under a winding up, it was held bad {t). The absence of any fraudulent intention on the part of the debtor is not sufficient to uphold the settlement, if the settle- ment has been procured by the fraud of the donor. The {n) French v. French, 6 D. M. & G. 103. G. 95 ; Neale v. Buy, 28 L. J. Ch. (r) I Burr. 474, Cowp. 434, per 45, Lord Mansfield ; 8 Tauut. 678, per (o) Acraman v. Corbett, I J. & H. Dallas, C. J. 423. (.s) 29 Beav.4I7. (p) Cowp, 434, (t) Reese River, d-c, Co. v. Atwell, (q) Corlett v. Raddiffe, 14 Moo. P. 7 Eq. 347. C, 135 ; Frejich v. French, 6 D, M, & 200 FRAUD UPON CREDITORS. Chap IV. Sect. 1. Bankruptcy Act, 186'.t, s. 91. Voluutary Bettleinents by traders. Presumption of fraud from debtor remain- ing in possession after conveyance distribution accordingly by a debtor, when in a weak state of mind and body, of the whole of his property among his children, partly in consideration of annuities for his life, partly by volun- tary settlement, and partly by pecuniary gifts, was held void as against creditors under 13 Eliz. c. 5, the Court being satisfied on the evidence, that the children were aware at the time that the creditor's claim would be defeated, though it did not appear that the debtor had any such intention {ii). "Under the Bankruptcy Act, 1869, s. 91, a voluntary settlement, conveyance or transfer of property made by a trader {x), or a postnuptial settlement, conveyance or transfer of property made for the wife or children of the settlor of property which has accrued to the settlor after marriage in right of his wife shall, if the settlor becomes bankrupt within two years after the date of such settlement be void as against the trustee in bankruptcy, and shall, if the settlor becomes bankrupt at any subsequent time within ten years after the date of such settlement, unless the parties claiming under such settlement can prove that the settlor was at the time of making the settlement able to pay all his debts without the aid of the property comprised in such settlement, be void against such trustee {y). In determining whether a trader, who has executed a volun- tary settlement, was within sect. 91 of the Bankruptcy Act, 1869, " at the time of making the settlement able to pay all his debts without the aid of the property comprised in the settle- ment," the value of the implements of his trade, and of the goodwill of his business is not, if he was intending to continue his business, to be taken into account {z). Voluntary settlements made by a non-trader, or by traders •who have not become bankrupt within the periods named, are still governed by the 13 Eliz. c. 5. A strong presumption of fraud against creditors arises where, after a bill of sale of chattel property, purporting on its face to take effect immediately, or to be an absolute conveyance, the (w) Cornish v. ClarJc, 14 Eq. 184. (x) See Ex parte Hillman, 10 Ch. I). 622. Oj) See Kc parte Hiutabk, 2 CL. D. 56. (z) Ex parte Russell, 19 Ch. D. 588. FRAUD UPON CREDITORS. 201 vendor or settlor is after its execution permitted to remain in Chap. IV. possession of the property (a). It is otherwise, however, if his '- — '- — - continuance in possession is consistent with the nature of the transaction, as where a bill of sale is not absolute on its face or in its form, but only conditional, so that possession is not to be given until the condition has been performed (6), or when the transaction is in the nature of a mortgage, and there is a proviso that the debtor should remain in possession until default be made (c). In Echvards v. Harben (d) the Court went so far as to say that possession of goods sold under an absolute bill of sale is conclusive evidence of fraud ; but the tendency of later decisions has been to qualify that doctrine, and the weight of authority is in favour of the modified doctrine that possession by the vendor or settlor affords only a badge or primd facie presumption of fraud, which may be rebutted by explanation, showing the transaction to be fair and honest, and giving a reasonable ground for the retention of possession. The ques- tion as to fraud in such cases is not an inference of law, but one of fact for the jury (e). A judgment and execution " contrived of malice," are within the same mischief as a gift or assignment. An early case on this subject is West v. Skij)2),in which it >vas laid down by Lord Hardwicke that if a creditor seize the goods of his debtor and suffer them to remain long in his hands, this is evidence of fraud (/). As a creditor was thus left liable to incur a loss by trusting Bills of ^^aie 1 • 1 • 1 1 • f. Acts, 187S and to the false appearance of ownership which the continuance or igs-i. the debtor in possession of property presented, " an Act for pre- venting frauds upon creditors by secret bills of sale of personal (a) Ttvy lie's Case, 3 Co. Rep. 81 ; (d) 2 T. R. 587. Edwards v. Harben, 2 T. R. 587 ; (e) Lady Arundell v. Phipps, 10 Alton V. Harrison, 4 Ch. 622. Ves. 145 ; Martindale v. Booth, 3 B. (b) Edwards v. Harben, 2 T. R. & Ad. 498, 505 ; Latimer v. Batson, 587 ; Cadogan v. Kennett, Cowp. 434 ; 4 B. & C. 652 ; Lindon v. Sharp, 6 Martindale v. Booth, 3 B. & Ad. M. & G. 895, 8[)8, per Tiiidal, C. J. 498, 505 ; Minshall v. Lloyd, 2 M. & (/) See Lovick v. Crowder, 8 B. & W. 450 ; but see ivfra as to Bills of C. 132 ; Imray v. Maijnay, 11 M. & Sale. W. 267 ; Hind v. Hooper, 12 M. & ((•) Alton V. Harrison, 4 Ch. 622. "W. 664. 202 FRAUD UPON CREDITORS, Chap. IV. chattels," 17 & 18 Vict. c. 30, was passed, which in certain Sect. 1. . . ' 1 ' '- defined conditions avoided bills of sale of personal chattels, and with the view of securing publicity, specially provided for the registration of bills of sale. An Act was subsequently passed, 29 & 30 Vict, c, 96, for the purpose of amending in certain par- ticulars the former Act. Both the above Acts were repealed by the Bills of Sale Act, 1878, 41 & 42 Vict. c. 31, " An Act to consolidate and amend the law for preventing frauds on credi- tors by secret bills of sale of personal chattels." An Act, 45 & 46 Vict. c. 43, bas been recently passed amending in some particu- lars the Bills of Sale Act, 1878, which so far as is consistent with the tenor thereof, is to be construed as one with the Bills of Sale Act, 1878, but unless the contract otherwise requires, shall not apply to any bill of sale duly registered before its commencement, so long as the registration thereof is not avoided by non-renewal or otherwise (g). Under the term " bill of sale," the Act includes assignments, transfers, declarations of trust without transfer, inventories of goods with receipt thereto attached, or receipts for purchase moneys of goods {h), and other assurances of personal chattels and also powers of attorney, authorities or licences to take pos- session of personal chattels as security for any debt, and also any agreements, whether intended or not to be followed by the execution of any other instrument, by which a right in equity to any personal chattels, or to any charge or security thereon shall be conferred (i) ; but it does not extend to assignments for the benefit of creditors (j), marriage settlements (A;), transfers of ships (Z), transfers of goods in the ordinary course of business of any trade or calling (m), or bills of sale of goods in foreign ((/) 45 & 46 Vict. c. 43, s. 3. articles, is not a marriage settlement (h) See Marsden v. Meadows, 7 Q. within the exception, Fost&r v. B.'d. 80 ; Ex parte Cooper, 10 Ch, Fowkr, 28 L. J. Q. B. 210 ; Ashton D. 321. V. Blackshair, 9 Efj^. 510 ; Be Reed, 1 (i) See Ex parte Maclcay, 8 Ch. (;43. Ch. D. 303. ( j) General Furnishing (Jo. v. Venn, (l) Sicainston v. Clay, 3D. J. & 2 H. & C. 153 ; Johnson v. Osenton, S. 558 ; Union Bank of London v. L. E. 4 Exch. 107. Lenanton, 3 C. P. D. 243. (k) A post-nuptial settlement not (m) Bx parte North IVestern Bank, xnade in pursuance of ante-nuptial 15 Ef^. 69 ; Re Steele, 16 Eq. 414. FRAUD UPON CREDITORS. 203 parts {n) or at sea, bills of lading (o), India warrants, Avarehouse ^^^v-^ Y' keepers' certificates, warrants or orders for tlie delivery of goods, or any other documents used in the ordinary course of business, as proof of the possession or control of goods, or authorising or purporting to authorise, either by indorsement or by delivery, the possessor of such document to transfer or receive goods thereby represented ( ju). Under the term "personal chattels," the Act comprehends goods, furnittire, and other articles capable of complete transfer by delivery {q) ; and, when separately assigned or charged, fix- tures and growing crops, but not chattel interests or real estate, nor fixtures (except trade machinery as hereinafter defined) when assigned together with a freehold or leasehold interest in any land or building to which they are affixed, nor growing crops when assigned together with any interest in the land on which they grow, nor shares or interests in the stocks, funds, or securities of any government, or in the capital, or property of incorpoiated or joint-stock companies, nor choses in action, or any stock or pro- duce upon any farm or lands not removable by reason of any contract or custom (r) ; nor to debentures issued by any mort- gage, loan or other incorporated company and secured upon the capital, stock, or goods, chattels and effects of such com- pany (s). The recent Act, 45 & 46 Vict. c. 43, docs not apply to bills of sale which may be given otherwise than by way of security for the payment of money (t). Personal chattels are deemed to be in the apparent posses- ^PP^^^J'^*^_ sion (u) of the maker of the bill of sale so long as they remain on any land or premises occupied by him, or are used and en- joyed by him in any place whatsoever, notwithstanding that formal possession thereof may have been taken Ijy or given (n) See Coote v. Jech, 13 E.^. (s) 45 & 4G Vict, c 43, s. 17. 597. (^) S. 3. (o) Eximrte JFatson, 5 Ch. D. 35. (u) Gutujh v. Everanl, 2 H. & C. {f) 41 & 42 Vict. c. 31, s. 4. 1 ; Robinson v. Brigrjx, L. R. 6 Exch. (q) See Sheridan v. Macartney, 11 1 ; Ex parte Hooman, 10 Eq. {J3 ; Ex Ir. (.'. L. 506. 'parte Jay, 9 (Jh. 697. ()■) 41 & 42 Vict. c. 31, s. 4. 20'i FRAUD UPON CREDITORS. Chap. IV. to any other person (x). If the grantee takes possession of . !!-l_ the floods and advertises them for sale, as being under a bill of sale, they are not in the apparent possession of the grantor (y) ; but if he takes possession of household furniture by a broker's man, who remains in the house and sleeps in an upper room, but does not remove any of the furniture or interfere with the use of it by the grantor, and if the grantee subse- quently advertises the furniture for sale without mentioning his bill of sale, the advertisement only giving reference to a firm of solicitors for particulars, the goods are still in the possession of the grantor (z). An attempt by the grantee to take possession does not affect the grantor's apparent possession (a), not even where the grantee is entitled to take such possession (6). Where the grantor occuijied as servant to the grantee, counting the occupation as part of his salary, the goods were held, neverthe- less, to be in the possession of the grantor (c). Mod of regis- The bill of Sale with every schedule (cZ) or inventory thereto sale." annexed or therein referred to, and also a true copy of such bill (e), and of every such schedule or inventory, and of every attestation of the execution of such bill of sale, together with an affidavit of the time of such bill of sale being made or given, and of its due execution and attestation, and a description of the residence and occupation of the person making or giving the same (or in case the same is made or given by any person under or in the execution of any process, then a description of the residence and occupation of the person against whom such process issued), and of every attesting witness, shall be pre- sented to, and the said copy and affidavit shall be filed with the (.c) 41 & 42 Vict. c. 31, s. 4. See D. 364. Ex parte Midton, 14 E(^l. 118. {d) See Green v. Attenhorough, 3 (■(/) Emanuel v. Bridger, L. R. 9 Q. H. & C. 468. B. 286. (f) A true copy of a bill of sale {z) Ex parte Lewis, 6 Ch. 626. need not necessarily be an exact (a) Ex parte Fletcher, 5 Ch. D. copy. If the errors or omissions in 809. the copy filed are merely clerical (h) Ancona v. Eogers, 1 Exch. D. and of sucli a nature that no one can 285. See Seal v. Claridge, 7 Q. B. be misled, it is of no consequence. D. 519. Re Heu-er, 21 Ch. D. 875. ((■) Pickard v. Marriage, 1 Exch. FRAUD UPON CREDITORS, 205 registrar (/) within seven clear days after the making of such Chap. IV. bill of sale {h, L. J. Q. B. 187 ; comp. Ex parte 19 Ch. D. 100. Berwick, 29 W. R. 292 ; Ex parte (i) Hamlyn v. Bettcley, 5 C. P. D. Carter, 12 Cli. D. 908. 327. (m) Ex parte BoUand, 21 Ch. D. (k) Credit Co. v. Butt, 6 Q. B. D. 54.3. 299, 2}er Brett, L. J. (n) Ex parte Bopphn-cU, 21 Ch. 80. Y 2 212 FRAUD UPON CREDITORS. Chap. IV. Sect. 1. Schedule of property. Form of Ijill of sale. Attestation. Bill of sale not to affect after- acquired pro- perty. Chattels not to be removed or sold. Bill of sale under 30/. void. Trade machinery. Every bill of sale to which the Act applies shall have annexed to it or written upon it a schedule containing an inventory of the personal chattels comprised in the bill of sale, and such bill of sale with certain exceptions shall have effect only in respect of the chattels specifically described in the schedule, and except as against the grantor shall be void in respect of the personal chattels not so specifically described (o). A bill of sale made or given by way of security for the pay- ment of money by the grantor thereof shall be void, unless made in accordance with the form in the schedule annexed to the Act (p). The execution of every bill of sale by the grantor shall be attested by one or more credible witness or witnesses, not being a party or parties thereto. It need not be attested or explained to the grantor by a solicitor (q). A bill of sale is void except as to the gi'antor in respect of after-acquired chattels, with the exception of growing crops separately assigned or charged where such crops were actually o-rowino- at the time when the bill of sale was executed, or of fixtures separately assigned or charged (r). Fixtures or grow- ing crops are not to be deemed separately as.signed when the land passes by the same instrument (.s)- All personal chattels seized or of which possession is taken under any bill of sale shall remain on the premises where they were so seized or taken possession of, and shall not be removed or sold until after the expiration of five days from the day they were so seized or taken possession of (t). Every bill of sale made or given in consideration of any sum less than 80/. shall be void (u). Trade machinery as defined in the clause is to be deemed (o) 45 & 46 Vict. c. 4.3, s. 4. Under the Act of 1878, a bill of sale was good as between grantor and grantee, although not attested or registered under the Act, Davis v. Goodman, 5 C. P. D. 128. {]i) 45 & 46 Vict. c. 43, s. 9. See JFllson v. Kidwood, W. X. (1883) 40, as to inserting rate of interest. {q) 45 & 46 Vict. c. 43, s. 10. ()•) 45 & 46 Vict. c. 43, ss. 5, 6. (.s) 41 & 42 Vict. c. 31, s. 7. See Ex f arte Moore' 6 Banlciwj Co., 14 Ch. D. 379. (0 45 & 46 Vict. c. 43, s. 1.3. (//) lb. s. 12. FRAUD UPON CREDITORS. 213 personal chattels {x). Where trade machinery is put in substi- Chap. IV. tutiun for any trade machinery which is already the subject of '■ a bill of sale, the new machinery is not covered by the old security. There must be a registration of the new machinery (?/). Where machinery on laud is mortgaged together with the land, this does not constitute a bill of sale of the machinery, but where machinery is only trade machinery, and is conveyed by bill of sale distinct from the land mortgaged, the Act applies (s). Every instrument, except a mining lease, whereby a power of instruments ,. . . 1 1 • 1 n • f giving power of distress is given or agreed to be given by way oi security tor distress withia any debt, and whereby rent is reserved as a mode of providing * '^ ^ '^*'" for the payment of interest on such debt or advance, or other- wise for the purpose of the security only, shall be deemed to be a bill of sale of personal chattels which may be seized or taken under such power of distress (a). The section does not extend to the case of a demise by a mortgagee in possession to the mortgagor, as his tenant at a reasonable rent of any estate or interest in any land, tenement, or hereditament (6). Personal chattels assigned under a bill of sale shall not be Bill of sale with liable to be seized or taken possession of by the grantee for any except in 'certain other than the following causes : — First, if the crrantor shall events, to be ^ *= void. make default in payment of the sum or sums of money thereby received at any time therein provided for payment or in the performance of any covenant or agreement contained in the bill of sale and necessary for maintaining the security ; secondly, if the grantor shall become bankrupt or suffer the said goods or any of them to be distrained for rent, rates, or taxes ; thirdly, if the grantor shall fraudulently either remove or suffer the said goods or any of them to be removed from the premises; fourthly, if the grantor shall not without reasonable excuse, upon demand in writing by the grantee, produce to him Ids last receipts for rent, rates, and taxes ; tifthly, if execution shall (,r) 41 & 42 Vict. c. .31, ?. 5. & B. 87fi. (;/) 4o & 46 Vict. c. 43, .=^. H. {n) 41 & 42 Vict. c. 31 p. 6. (;.) Mather v. Fraser, 2 K. & J. (h) lb. .536 ; Waterfall v. Pcnidonc, 6 E. 214 FRAUD UPON CREDITORS. Chap. IV. have been levied against the goods of the grantor under any Sect. 1. . 1 / \ judgment at law (c). The grantor may within five days from the seizure or taking possession of any chattels on account of any of the above- mentioned causes apply for an order to restrain the grantee from removing or selling the said chattels, and the court or judge, if satisfied that by payment of money or otherwise the said cause of seizure no longer exists, will grant it or make such other order as may seem just (c?). Assignment Transactions which have for their object the defeating or tolSors!''"'' defrauding of creditors must be carefully distinguished from cases where a sale or assignment or other conveyance merely amounts to giving a preference to one creditor or to one set of creditors over another. The law tolerates assignments giving one creditor a preference over another. The fact that a man may have assigned the whole or the bulk of his property to a creditor or set of creditors and that the assign- ment may have been expressly made with the intent to benefit some creditors (e), or to defeat the claim of a particular creditor is of no consequence under the common law or under the Statute of Elizabeth, if the consideration be adequate (/), and the bill of sale or assignment be not a contrivance resorted to by the debtor as a mere cloak for retaining a personal benefit in his own favour ((/). A payment is bond fide within the meaning of the Statute of Elizabeth, if it is intended to be a payment, and a security is bond fide if it was intended to be a security, even though the debtor knew he was insolvent, and even although the creditor who accepted the money knew it. The meaning of the Statute is that the debtor must not retain a benefit for himself. It has no regard whatever to the question of preference or priority amongst the creditors of the debtor. The creditor of an insolvent debtor who dies without having (c) 45 & 46 Vict. c. 43, s. 7. Wood v. Dixie, 7 Q. B. 892 ; Hah v. (cl) Tb. Saloon Omnibus Co., 4 Drew. 492 ; (e) Alton V. Harrison, 4 Ch. 625. Middleton v. Pollock, 2 Ch. D. 106 ; (/) Holhird v. Anderson, 5 T. R. Ex parte Games, 12 Ch. D. 321. 235 ; Estioich v. CaiUavd, ib. 420 ; (r/) Alton v. Harrison, 4 Ch. 625 ; Pickstoclc V. Lyster, 3 M. & S. 371 ; Ex parte Games, 12 Ch. D. 321.. FRAUD UPON CREDITORS. 215 been adjudicated a bankrupt is entitled to the benefit of any Chap. IV. payment or security made or given by the debtor (h). Assi'J-nraents, conveyances, or gifts, though not fraudulent Fran.l upon ^ ',. ^ 1P11. -J. crcflitnrs under within the Statute 18 Eliz. c. 5, may be fraudulent as agamst t,,e baukiupt creditors within the provisions of the bankrupt laws. Any 1^^- transfer which is fraudulent within the meaning of the Statute of Elizabeth is also fraudulent and an act of bankruptcy under the bankrupt lavv, and void as against assignees upon an insolvency {i). But a conveyance to a creditor of his whole property, or of the whole of his property with an exception merely nominal, in consideration of a bygone or pre-existing debt, though not fraudulent within the Statute of Elizabeth, is fraudulent under the Bankruptcy Act, and an act of bank- ruptcy (k). The principle of the bankrupt laws being the etpial distribution of the property and effects of a bankrupt among his creditors (l), acts which are done with the object of preventing an equal distribution of the property and effects of a bankrupt among his creditors are fraudulent within the meaning of those laws (m). The assignment accordingly by a man of the whole of his estate and effects, or of the whole with a colourable exception of part only under such circumstances as necessarily to defeat and delay his creditors, is a fraud within the meaning of those laws, although there be no actual moral fraud {n). But where there is a substantial exception out of the debtor's property, such an exception as might possi- bly enable him to carry on his trade with advantage, an assign- ment of the whole of the rest of his property cannot be neces- sarily and by force of law, without reference to extrinsic circum- stances showing fraud, an act of bankruptcy (o). In such a case it would be necessary to prove some other circumstances Qi) Middleton v. rollock, 2 Ch. D. 35 ; Woodhonse v. Murray, L. R. 2 108. Q. B. 637 ; Alien v. Bonnett, 5 Ch. (i) Doe V. Ball, 11 M. & W. 531. 577 ; Ee Wood, 7 Cli. 305 ; Ex parte (k) Allen v. Bonndt, 5 Ch. 580 ; King, 2 Ch. D. 263 ; Ex ^mrte Re Wood, 7 Ch. 302. Htcvcns, 20 Ec^. 786 ; Ex parte I'aijne, (l) Woodham V. Murray, L. R. 2 11 Ch. D. 531). Q. B. 637. (o) Penndl v. Beijnchh, 11 C. B. (m) Young v. Wand, 8 Exch. 234. N. S. 709 ; Lomax v. Buxton, L. R. (h) Smith V. Cannan, 2 E. &, B. G C. P. 112, ^^er Willes, J. 216 FRAUD UPON CREDITORS. Chap. IV. Sect. 1. Assignment for an advance of money is not fraudulent. besides the mere executiou of the deed to satisfy the Court that it was intended to be a fraud upon creditors (p). Whether an exception is substantial enough depends on the circum- stances of the case (q). If the property excepted out of the assignment is property which cannot be taken in execution by a creditor, it does not constitute a substantial exception (?■)• Nor is there a substantial exception when a trader assigns everything except his household furniture and book debts of small value (s). So also a deed is invalid although a substan- tial part of the property be not comprised in it, if the neces- sary consequence of it be to cause insolv-ency or to defeat and delay creditors {t). The rule applies with peculiar force, if the fact of his embarrassed circumstances be known or must be necessarily taken to be known to the assignee {u). In deter- mining whether a bill of sale comprises the whole of the debtor's property, the value of his book debts is to be taken into consideration {x). The assignment by a trader of his property and effects for a present advance of money is not necessarily a fraud upon the bankrupt laws, though the whole of his stock, present and future, is included in the conveyance. A present substantial advance puts the transaction upon the same footing as an assignment with a substantial exception of part of the pro- perty. The advance may be the means of enabling him to go on with his trade, and so the transaction may be beneficial to creditors. If the conveyance be made bond fide for the pur- pose of enabling him to carry on his business, it cannot be called a fraudulent act as tending to defeat or delay creditors, although the property or effects have been sold or pledged for a sum less than their value. A bond fide sale of goods in a season of pressure by a trader for whatever ready money can be obtained is valid, though the price be small. The proportion (q) Ex parte King, 2 Ch. D, 2G3, per Mellisli, L. J. (?•) E.c parte Havhr, 7 Ch. 214, (s) E.i: parte Bland, 6 D. M. & G, 7G1. (/) Smith y. Cannai), 2 E, & 15, 45 ; Younrjv, TVaud,8Exch, 221 ; Ex parte JFcnsley, 1 D. J. & S. 281 ; Be Wood, 7 Ch. 305. (h) Youiifj V. Fktchcr, 3 H. & C. 732. {x) Ex parte Bnrtou, 13 Ch. D. 102 ; E-f parte Field, ib. 106 n, FRAUD UPON CREDITORS. 217 which the sum raised bears to the value of the property sold Chap. lY. or pledged is a circumstance to be considered in determining '■ whether the transaction is bo7id fide or not, but it is not con- clusive that it is fraudulent (?/). It is fur the Court to say whether, under all the circumstances of the case, the effect of the assignment is to defeat or delay creditors [z). If, however, there was in the minds of the parties the sinister object of de- feating or dela_ying creditors, the advance of even a substantial part of the value of the property at the time of the assignment will not make the transaction valid. But the Court will not hold tliat a deed conveying property in consideration of a present advance which bears a substantial proportion to the value of the property to be invalid imless it is satisfied that there exists an intention to defeat and delay and conse- quently to defraud creditors ; and that ol)ject must be the object not only of the bankrupt but also of the party who is dealing with him. A person dealing bond fide with the bank- rupt would be safe. Unless he knows, or from the very nature of the transaction must be taken necessarily to have known, that the object was to defeat or delay creditors, the deed cannot be impeached («). A conveyance by a trader of all his property was held fraudulent upon creditors within the mean- ing of the bankrupt laws, even though made in consideration of marriage, it being shown that the wife was cognizant of the embarrassed state of the husband's affairs (6). An assignment of all a trader's effects to secure a present advance or present and future advances bond fide agreed to be made for tlie purpose of enabling him to carry on his business, is not an act of bankruptcy (c). So, also, an assignment by a trader of all his effects to secure an advance to enable him to (?/) Bittlcstone V. Cooke, 6 E. & B. («) Pennell v. Reynolds, 11 C. B. 307 ; Bell v. Simpson, 2 H. & N. N. S. 722 ; Fraser v. Levy, 6 H. & N. 410 ; Pennell v, Reynolds, 11 C. B. 16. See Re Colemerc, 1 Cli. 128. N. S. 709. See Ex ixivte IVmsley, 1 [h) Cohmhine v. Penhall, 1 Sm. & D. J. & S. 281. G. 228 ; Balmcy v. Hunter, 8 Eq. 49. (;j) Lee v. Hart, 11 Exch. 880 ; (c) Huttoii v. Grnttmll, 1 E. & B. Pennell v. Reynolds, 11 ('. B. N. S. 15; Bittlestom v. Cooke, 6 p]. & B. 709 ; Er parte Cohen, 7 Ch. 22 ; Ej: 296 ; Harris v. Rickett, 4 H. & N. 1 ; parte Cooper, 10 Ch. D. 325. Ex parte Dann, 17 Ch. D. 26, 218 FRAUD UPON CREDITORS. Chap. IV. satisfy a pressing demand and thus to continue his business, is '- not of itself an act of bankruptcy (d) ; and, if the advance be to pay off a subsisting charge on the property, the transaction will be protected, although the security is not transferred, but a new mortgage is executed (e), even although the person ad- vancing the money had notice of an act of bankruptcy committed by the debtor (/). A security comprising all the debtor's property for an existing debt arishig from a loan previously made will not be an act of bankruptcy if it is made in performance of an agreement, whether written or parol (g), bond Jide entered into at the time of the loan (/i). But an agreement of this sort will not protect the transaction, if it is not absolute but conditional to give a security on the request of the creditor, and such request is purposely postponed until the debtor is in a state of insolvency in order to prevent the destruction of his credit which would result from registering the deed {i). Such a transaction will be regarded as evidence of a design to commit a fraud on the general creditors (Jc). Nor can a man under a secret un- registered agreement borrow money with which to carry on business, enjoy credit, contract debts, and acquire property subject to an undertaking that at any moment he may be called on to pay the money or else to give up not merely the i^roperty he had at the time of the bill of sale, but all the property he might have acquired (I). Assignment hy -^^ assignment by a debtor of all his property and effects debtor r.vrtly in pQ,rtKr as a Security for a past debt and partly as a security for a consideration of ^ -^ _ -^ ^ . a past debt and substantial fresh advance, is not necessarily an act of bank- of money. luptcy. If the assignment is made not merely for an antecedent (d) Hutton V. GruUwell, 1 E. & B. {h) Harris v. Rickett, 4 H. & N. 1 ; 15 ; Harris v. Rickett, 4 H. & N. 1 ; Mercer v. Peterson, L. li. 3 E.\ch. Whitmore v. Claridge, 33 L. J. Q. 104 ; Jo7ies v. Harber, L. K. 6 Q. B. B. 87 ; Re Colemere, 1 Ch. 128 ; Lomax 77 ; Ex parte Fisher, 7 Ch. 636 ; Ex V. Buxton, L. R. 6 C. P. 112. parte Izard, 9Ch. 271. (e) Ex parte Harris, 19 Eq. 253 ; {i) Ex parte Fisher, 7 Ch. 636; Ex Ex parte Mutlon, 14 Eq. 178. jwrie Burton, 13 Ch. D. 102. if) Ex parte Harris, 19 Eq. 253. {k) Ex p)arte Fisher, 7 Ch. 636. {g) Harris v. Rickett, 4 H. & N. (l) Ex parte Hauxwell, W. N. 1 ; Ex parte Foxley. 3 Ch. 515. (1883), 31. FRAUD UPON CREDITORS. 219 debt but also for a present further advance, of which the debtor Chap. iv. Sect. 1. really has the advantage and which he can apply to the purchase of stock or otherwise for his use, the transaction is considered on the same footing as if there was a substantial exception out of the debtor's property, and is therefore not necessarily perse an act of bankruptcy {iii). It is not necessary to the validity of the transaction that a security should be given at the time of the advance. The rule applies where a sum of money is advanced upon the faith of a contract that a bill of sale shall be given. If a bill of sale is subsequently given in performance of an agreement entered into at the time of the further advance, it stands upon the same footing, and will have the same effect with respect to creditors, as if it had been given at the time of the further advance (n). But if the giving of the bill of sale is purposely postponed till the circumstances of the debtor become hopeless and he is on the verge of bankruptcy, the antecedent agreement will not support it (o). Nor will the agreement to give a bill of sale be upheld, if it appear to have been concocted between the creditor and the debtor for the purpose of evading the remedy which the Act as to bills of sale intended to provide for the benefit of creditors (2)). In order that the execution of a bill of a sale of substantially the Avhole of a debtor's property and effects as a security for a pre-existing debt, and further advances may not be an act of bankruptcy, it is necessary that there should be an agreement binding the grantee to make further advances. It is not sufficient that further advances should have been in the con- templation of the parties, the deed being so stamped as to cover them and further advances having been actually made after the execution of the deed (q). But is enough if there is a contem- (m) Lomax v. Buxton, L. E. 6 C. Burton, 1,3 Cli. D. 102 ; Ex parte P. 112 ; Allen v. Bonnett, 5 Ch. Kilner, ib. 249. 577 ; Exfarte Fisher, 7 Ch. 642. {p) Ex parte Cohen, 7 Ch. 20 ; Ex (n) Uutton V. Gruttwell, 1 E. & B. ^^arfe Stevens, 20 Ec^. 786 ; Ex parte 15 ; Mercer v. Peterson, L. R. 3 Hauxwell, W. N. (1883), 31 ; Ex Exch. 105 ; Ex parte King, 2 Ch. D. parte Hole, ib. 32. 263 ; Ex parte Fisher, 7 Ch. 642. (,^) Ex parte Dann, 17 Ch. D. 26. (0) Ex parte Fisher, ib. ; Ex parte 220 FRAUD UPON CREDITORS. Chap. IV. poratieous parol agreement on the part of the creditor to make beet. 1. X ^ X further advances to a sufficient amount, and such advances are afterwards in fact made, even though the deed contains no covenant or obligation on the part of the creditor to make further advances {r). In Ex jKirte WilJdnsoii (s), there was a parol agreement on the part of the creditor to make fresh ad- vances, but no covenant or written agreement binding him to do so, and the transaction was upheld. Where a bill of sale comprising the Avhole of the grantor's property is given on the eve of bankruptcy to secure a pre- existing debt, and it is attempted to support it by an agreement alleged to have been made at the time the money was advanced, it is for the Court to judge from all the surrounding circum- stances whether the agreement was a hondjide one, or whether the bill of sale was purposely postponed in order to protect the grantor's credit. The onus prohandi is upon the person who .sets up the prior agreement to prove not only that the agree- ment did exist, but that it was in all respects a bond Jide agreement (f). It is not essential for the validity of transactions of this sort by way of security that the advance should be of equal value with the existing debt or the property charged, if it be hondjide to enable the debtor to carry on his business (it). Neither is it essential that the equivalent should be a sum of money paid down. If the debtor has something done for him that will enable him to carry on his business, that will be a sufficient equivalent, as where the drawer of bills of exchange took them up at matui'ity at the request of the acceptor (y). So, also, where the agreement was to supply goods on credit and they were supplied {x). To constitute a substantial advance, it is not necessary that there shouhl bo money actually paid down. It is enough if a trader carrying on his business has something done for him (r) Be Winstanley. 1 Ch. D. 290. {u) Ex parte Fisher, 7 Ch. 642 ; («) AV. N. (188.3), 16. Ex parte Imrd, 9 Ch. 271. {t) Ex parte Kilner, 1.3 Ch. D, (v) Ex parte Eeed, 14 Ec^. 593. 246 ; Ex parte Hauxwell, W. X. {x) Ex parte Sheen, 1 Ch. D. 560. (188:3), 31 ; Ex parte Hole, ib. 32. FRAUD UPON CllEDITORS. 221 wliicli will enable him to continue carrying it on (y). The Cli-'^P- I^- T 1 • r- 1 Sect. 1. payment accordmgly of bills by the drawee at the request of the acceptor is a substantial advance, and prevents the assignment by a man of all his property and effects from being an act of bankruptcy iyy). An honest giving of time to a trader may be as fair and valuable an equivalent as an advancement of money {z). But the forbearance of the grantee of a bill of sale to enforce a judgment is not a sufficient consideration for an assignment of the whole of the debtor's property to secure a past debt {a). Whether or not a further advance is a substantial one or only intended to give colour to a security which is in reality made only for the purpose of securing a pre-existing debt, is a question to be determined on the circumstances of each particular case (6). It is not a question whether the further advance is great or small, but whether there was a bond fide intention of carrying on the business (c). Though however the smallness of the fresh advance does not necessarily make the conveyance an act of bankruptcy, it affords evidence that the principal object of the parties in the whole transaction was not to enable the debtor to continue his business or meet his engagements but to secure the past debt {d). Though there may be an advance in point of form, yet if from the mode in which the advance is made, it comes into the hands of the debtor under such circumstances that he does not get the real enjoyment of the money so ad- vanced, the advance will not prevent the transaction from being an act of bankruptcy (c). The lapse of twelve months from the date of a deed by a trader assigning all his estate and effects before any fiat issues will prevent the deed from being invalidated as an act of bankruptcy (/). "If," said Lord Justice Giffard in Allen v. (y) Re Tn-eddell, 14 Eq. 593. 2^er Mellish, L. J. (yy) Il>- (d) Ex parte Fisher, 7 Ch. 642 ; {z) Philps V. Ilonistedt, I Exch. Philps v, Hornstedt, 1 Ex. D. G2 ; D. 62. Ex imrte King, 2 Ch. D. 256. (ft) Ex parte Cooper, 10 Cli. D. (e) Graham v. Chapman, 12 C. 13. 325 ; Ex parte Payne, U Ch.D. 539. 85. See Lomax v. Buxton, L. E. 6 (b) Ex parte Kinrj, 2 Ch. D. 262 ; C. P. 112, per Willes, J. Ex parte Hole, W. N. (1883), 32. (/) Allen v. Bonnett, 5 Ch. 577 ; (0 Ex parte Ellis, 2 Ch, 1). 798, Lomax v. Hntton, L. R. 6 C. P. 112. 222 FRAUD UPON CREDITORS. Chap. IV. Bonnett (a) , " the deed be without consideration or the con- Sect. 1. '■ sideration has been in substance fictitious, or if the deed was not intended to operate according to its tenor and effect, or was a fraudulent preference, or was void as being obnoxious to the provisions of the 13 Eliz. c. 5, the lapse of more than twelve months from its execution would be of no importance, but where these circumstances do not arise, the lapse of twelve months before any fiat issues validates that which would be otherwise impeachable " (h). Kraiiaulent It is enacted by the Bankruptcy Act, 1869, s. 6, sub-s. 2, that Bankruptcy Act, it shall be an act of bankruptcy if the debtor has in England or sub-sectl'. ^' elsewhere (^) made a fraudulent conveyance, gift, delivery or transfer of his property, or of any part thereof. A bill of sale accordingly of his whole property executed by a non-trader to secure a past debt was held to be an act of bankruptcy (k)^ But where a creditor has in his possession goods belonging to his debtor and subject to a lien for the debt, and the debtor requests him to sell the goods for their joint benefit and to pay himself out of the proceeds the amount due and to hand over to him the balance, the transaction is not a fraudulent transfer, even though it should afterwards turn out that the goods in question were the whole property of the debtor (/). A sale is not a fraudulent transfer because there is an inten- tion in the mind of the vendor to use the purchase-money for the purpose of making a voluntary preference, though the pur- chaser may know the motive of the sale and the intention of the vendor with respect to the proceeds (771). But where a sheriff has seized goods under an execution and before sale the debtor agrees with the execution creditor to sell him the goods seized for the amount of his debt and the sheriff's charges, there is a fraudulent transfer, if the debtor was in a state of in- solvency {n). (g) 5 Cli. 581. (l) Philjjs v. Hornstedt, L. R. 8 Qi) Ex parte Games, 12 Ch. D. Excli. 30, 1 Excli. D. (!2. 321. (m) Ex parte Stuhbins, 17 Ch. D. (t) See Ex parte Crispin, 8 Ch. 68. 374. (n) Ex parte Pearson, 8 Ch, 667. {k) Re Wood, 7 Ch. 302. FRAUD UPON CREDITORS. 223 It is enacted by s. 92 Df the Bankruptcy Act, 18G9, that Chap. IV. " everv conveyance or transfer of property or charge thereon •^ ... -. -, Fraudulent made, every payment made, every obhgation incurred, and every jjieiurence. judicial proceeding taken or suffered by any person unable to jj-^^^^^^^^^.^^*- pay his debts as they become due from his own monies (o) in favour of any creditor or any person in trust for any creditor, with a view of giving such creditor a preference over the other creditors ( 2:>), shall, if the person making, taking, paying, or suffering the same become bankrupt within three months after the date of making, taking, paying, or suffering the same, be deemed fraudulent and void as against the trustee in bankruptcy ; but that this section shall not affect the rights of a purchaser, payee, or incumbrancer in good faith and for valuable considera- tion " {([). To constitute a fraudulent preference within the mean- ing of the clause, the payment or assignment must be the spon- taneous act of the debtor, and it must appear either by necessary inference from the circumstances or by direct evidence that the payment or assignment was made with the sole view of pre- ferring the creditor. Unless it be made clearly apparent that the debtor's sole motive was to prefer the creditor paid to the other creditors, the payment cannot be impeached, even although it be obviously in favour of the creditor. The act of the debtor is alone to be considered, the object and purpose for which the payment is made can alone be enquired into; yet, if the act done can be properly referred to some other motive or reason than that of giving the creditor paid a preference over the otlier creditors, the payment will not be held to be fraudu- lent and void {r). If there is no ground for imputing such a motive, as if the payment be made on the application of the creditor, or under circumstances tending to interfere with the free will of the debtor, as if there was a bond fide application or pressure on the part of the creditor or some person having a (o) See Ex parte Blackburn, 12 Eq. In determining Avhether a transaction 363 ; Butcher v. Stead, 7 E. & I. App. amounts to fraudulent preference, Ca. 846, jjer Lord Cairns. the Court will have regard to the (ji) See Ex ijarte Bolland, 7 Cli. language of the section. Ex parte 27, per Mellish, L. J. ; Exjmric To}}- Grijiith, W. N. (1883), 26. ham, 8 Ch. 619, ^jer MellLsh, L. J. (r) Ex parte Tempest, 6 Ch. 74 ; (g) See Ee Cherry, 19 W. R. 1005. Ex parte Topham, 8 Ch. 619. 224 FRAUD UPON CREDITORS. Chap. IV. right, to apply, and the act in any degree proceeded from such — — application or pressure, there is no fraudulent preference (s). Where, accordingly, a payment has been made under pressure [t), or goods have been returned either from the hope on the part of the debtor that he would obtain further credit or only from the pressure (u), there is no fraudulent preference. "If," said Lord Cairns, in Tomkins v. Saffenj (r), " the payment or assignment has been made under pressure, the pressure must be taken to be the causa causans of the payment or assignment, and not any intention of giving preference to a particular creditor." But pressure is not necessary to prevent a payment or assign- ment from being a fraudulent preference. It is sufficient that the payment or assignment be not the spontaneous act of the debtor. If the creditor demands payment, pressure is not neces- sary on his part to take it out of the class of voluntary acts. A mere hondf.de demand by a creditor for payment or for a security without any pressure, is sufficient to support a paym.ent or the giving of a security made in consequence (?/). It is enough that there be such a demand as partly to influence the debtor in making the payment or giving the security so that he did not make or give it voluntarily. There is in such a case no fraudu- lent preference, though there may have been a mixed motive, and the creditor may have been a friend whom the debtor wished to prefer (s). Nor is it a fraudulent preference if there be a demand upon a debtor and a yielding to that demand by making a payment which might not otherwise have been made so soon {<(). Other circumstances besides a demand for payment on the part of the creditor may rebut the presumption of fraudulent preference on the part of the debtor. Although the transaction is apparently voluntary if the effect of the evidence is to show that the desire to give a fraudulent jDreference was not the fg) lb. J- 24 ; Ex parte Tempest, 6 Ch. 74. (() Ex imrte Kevan, 9 Ch. 758. (z) Ex parte Tempest, 6 Cli. 74 ; See Ex parte Holliday, 8 Ch. 287. Ex parte Bolland, 7 Ch. 26 ; Ex (w) Ex parte Topham, 8 Ch. 620 ; _2X"'^<' Topham, 8 Ch. 620. Smith V. Pilgrim, 2 Ch. D. 127. (a) Tomkins v. Saffenj, .3 App. Ca. (a;) 3 App. Ca. 225. 235, per Lord Blackburn. See (y) Strachan v. Barton, 11 Exch. Straclum v. Barton, 11 Exch. 650. C50 ; Johnson v. Fesemeyer, 3 D. & FRAUD UPON CREDITORS. 'ITo motive operating on the debtor in lianding over his assets to ^^^H the particular creditor, the transaction is valid (6). If the - debtor, though he was aware that bankruptcy was unavoidable, and though no application was made for payment, has paid the debt simply in discharge of an obligation he had entered into to pay it on a given day, or in pursuance of a previous agree- ment, or if he makes payment to a creditor in the ordinary course of business without any view of giving a preference to the particular creditor at the expense of the general creditors, there is no fraudulent preference within the meaning of the bankrupt law (c). " If," said Lord Blackburn, in Tomldns v. Saffery{d), "a man pays his debts and sends money to meet his bills on the days on which they become due, and does other things so as to keep himself alive and in good credit for the time, there would not be undue preference, because those payments were not made in favour of certain creditors as against others, but were made in the hope that if he were to keep himself alive something might turn up in his favour." So, also, if the security is given in pursuance of a former promise which has been acted on by the creditor, and which the debtor was ready to fulfil (e), or in reference to an actual undertaking which the debtor has given, and which he is peremptorily called on to fulfil (/), there is no fraudulent preference. Nor is there fraudulent preference if the case made out is merely the ordinary transactions between a banker and his customer, when the banker advances money to his customer for the purpose of carrying on his business (g). Though the case may not be within the Act if the payment is made with a view to prefer the particular creditor and with some additional motive, the additional motive must not be so trifling that it ought not to be taken into account {h). A mere request for payment, though often repeated and refused but ultimately complied with, will not alone prevent a preference on the eve of bankruptcy from being fraudulent (/). (6) Bills V. Smith, 6 B. & S. 321. (/) Bills v. Smith, 6 B. & S. 321. (c) lb. ; Ex parte Blnchhurn, 12 (g) Ex parte Hodgkin, 20 Eq^. I'iS. Eq. 358 ; Ex parte Kevan, !) Cli. (/() Ex parte Griffith, Times, IG 758. February, 1883, per Jessel, M. R. (d) 3 App. Ca. 235. (i) lb", 74 L. T. 297, W. N. («) Ex parte Hodijhn. 20 E4. 755. (1883), 26. IV. Sect. 1. 226 FRAUD UPON CREDITOES. Chap. IV. The knowledge of the creditor preferred or his privity to the Sect. 1. . . II- ...... — circumstances is not to be taken into consideration m estimating whether a transaction is or is not a fraudulent preference. If it appear that a demand was made by the creditor, it is im- material that lie may have been aware of the insolvency of the debtor (k). However desperate the circumstances of the debtor may be, and although the creditor knew them to be desperate, the creditor is not debarred from pressing his debtor for pay- ment or to give him a security, and if he did so press and payment was made or a security given, such payment or the giving of such security, though on the very eve of insolvency, is not a fraudulent preference (l). But to prevent the payment from being a fraudulent preference, there must be a real pres- sure (m). If what has taken place merely amounts to a request on the part of the creditor for preference, it is not enough (n). A creditor who receives notice of his debtor's intention to commit an act of bankruptcy is not bound to inquire whether the act has been committed, but is entitled to avail himself of his remedies just as if he had received no such notice (o). If the Court is satisfied that everything has been done bond fide, the transaction cannot be impeached ; the case, however, Avould be different if the matter had originated with the debtor, and was voluntary on his part {p). The proviso in the 92nd section of the Act in favour of a pur- chaser, payee, or incumbrancer in good faith and for valuable consideration, extends to cases where the consideration is the payment of a pre-existing debt {q). A voluntary payment bond fide made to a creditor in the usual course of business a few days before the debtor stopped payment, but without notice by the creditor of the debtor's insolvency, has been held to be a payment within the proviso (r'). So, also, a bond fide purchase by a creditor of part of liis debtor's property in satisfaction of (/,•) Davison v. Eohinson, 3 Jur. N. (o) Re JFrniht, 3 Ch. D. 70. S. 791. (i?) lb. (Z) Ex parte TophcmK 8 Cli. 619 ; {g) Ex parte Norton, 16 Eq. 408. Smith V. Pilgrim, 2 Ch. D. 127. (r) Ex parte Blackburn, 12 Eq, (m) Ex parte Hall, 19 Ch. D. 580. 358 ; Butcher v. Stead, 7 E. & I. App. (n) Ex parte Griffith, Times, 16 Ca. 839 ; Ex parte Kevan, 9 Ch. Fehniarv, 1883. 758. FRAUD UPON CREDITORS. 227 his debt was held to be protected by the proviso (s) ; and it lias Chap. IV. been laid down generally that a payment in the ordinary course of trade, the procuring of bills of exchange presented at maturity on the payment of debts which have become payable in the customary manner, or payments made in fulfilment of a contract or engagement to pay in a particular manner or at a particular time, are not open to any objection on the ground of their being voluntary, even although they were made without any express demand by the creditor, unless the creditor had at the time notice of an act of bankruptcy committed by the debtor (t). But if the creditor who receives the payment was clearly aware that he who made the payment was unable to pay his debts from his own money as they became due, and that the money was given to him for the very purpose of preferring him to the general body of creditors, he is not a payee in good faith (u). So, also, if the transaction is fraudulent in its inception, and the creditor has been privy to the fraud, it is immaterial that the payment to the creditor has been made under pressure, for he is not a payee in good faith (x). So, also, a security given by an insolvent company for payment of a debt due to a direc- tor cognizant of the state of the company's affairs, was set aside under the Companies Act, 1882, sect. 164, though the director had pressed for the payment of his debt (y). So, also, was a bill of sale given under pressure in pursuance of a prior verbal promise made at the time of an advance, but with the under- standing that the security should not be called for unless the debtor was in difficulties (z). The provisions of the 92nd clause only apply to transactions between a debtor and persons who are in the strict sense of the word his creditors (a). The clause does not apply to trust property (6), or to property appropriated to a particular (s) Ex 2Mrte Tempest, 6 Ch. 14. (y) Gaslight Improvement Co. v. (<) Ex parte Blackburn, 12 Eq. Terrell, 10 Eq. 168. 358. (;i) Ex parte Bolland, 8 Cli. D. 230. (u) TomJcins v. Saffery, 3 App. Ca. (a) Ex parte Kelly cfc Co., 1 1 Cli. 235 ; Ex parte Griffith, Times, 16 D. 306. February, 1883. {h) Sinclair v. Wihou, 20 Bcav. (x) Ex parte Reader, 20 Eq. 765. 324; Murray v. PinJaft, 12 CI. & See Ex 'parte Kevan, 9 Cli. 758. Fin. 764. Q 2 benefit of creditors 228 FRAUD UPON CREDITORS. Chap. IV. purpose (c), or to property restored to some one to whom it ^^^*' ^' rightfully belongs, and from whom it was wrongfully taken (d). In order to protect a transaction from being a fraudulent preference, it is not necessary that the debt should be actually due (e). But the person demanding payment on a security must be some one having a right to make the demand (/). A demand by a surety is sufficient ((/). If the time has passed within which the deed can be set aside as a fraudulent preference, it cannot be treated as void under the bankrupt law (h). Assignment for An assignment by a man of his property for the benefit of his creditors is valid at common law, and under the Statute 13 Eliz. c. 5, and will be supported, provided the deed be bond fide for the benefit of all the creditors, and there be an un- conditional surrender by the debtor of all his property and effects (i). The deed is valid, although it may have the effect of hindering and delaying a particular creditor of his execution, because it does no^ deprive any of the creditors of his fair share of the debtors' property, if he chooses to become a party to the deed ( j). But if the deed is not such a deed as it was reason- able to expect a creditor to become a party to, it cannot be sup- ported (IS). So, also, a deed which the debtor has a power to revoke and attempts to use as a shield against his creditors is fraudulent and void against creditors who are affected by the deed, notwithstanding the deed upon the face of it purports to be for the benefit of all the creditors (l). So, also, is an instru- ment void as against creditors, if there is a secret bargain bet^Yeen the debtor and the trustees that part of the estate shall be kept back (in). So, also, a deed was held void as (c) 1 D. & J. 152. See Ex x>arte 321. Kelly & Co., 11 Ch. D. 306. (0 Smith v. Hurst, 10 Ha. 30 ; (d) Ex parte Stuhbins, 17 Cli. D. Riches v. Evans, 9 C. & P. 641. 5g_ (j) Pickstock V. Lyster, 3 M. & S. (e) Strachan v. Bartoi\, 11 Exch. 371. (;47_ (/t) Owen v. Body, 5 A. & E. 28. ( /\ lb. (0 Smith V. Hurst, 10 Ha, 30. (a) Edmirds v. Ohjn, 2 El. & El. {m) Blacklock v. Dobie, 1 C. P. D. 29. 265. (/?.) Ex parte Games, 12 Ch. D. FRAUD UPON CREDITORS. OOrj against creditors, wliich contained a proviso that a dividend <^^^^p- Y/ should only be paid to a creditor on his assenting to or exe- cutinp. Ca. 486. CONSTRUCTIVE NOTICE. 245 manner by the same equity (p). In accordance with this Chap. iv. Sect. 3. principle the purchaser of property from a trustee, with notice ■ of the trust, is liimself a trustee for the same property (q) ; the purchaser of property which the vendor has contracted to sell is, if he has notice of the contract, bound by the same equity by which the vendor whom he represents was bound (r) ; the purchaser of property with notice of an equitable lien for unpaid purchase-money (s), or of an e([uitable mortgage by deposit of deeds (t), is bound by the equity to which his vendor was liable ; and the purchaser of land which the vendor has covenanted to use in a specified manner is, if he has notice of the covenant, bound by its terms (u). It must, however, be observed that the notice required by the doctrine is notice of an equity, which, if clothed Avith legal completeness, would be indefeasible, and not merely notice of a defeasible legal interest, or of an interest which, if legal, would be defeasible. The principle is, that an interest which, if legal, would be indefeasible shall not be defeated by reason of its equitable character by a party who has notice of it ; if, being legal, it may be defeated at law, there is no equity to support it (.r). A volun- tary conveyance, for instance, has no equity to support it against a subsequent alienation for value, even though with notice, for the right of the volunteer is defeasible by statute (y). A feme covert or an infant is j ust as much bound by notice as an adult (z). Notice is either actual or constructive ; but there is no Actual notice, difference between them in its consequences (a). Actual (p) Taylor v. RtihJiert, 2 Yes. Jr. (t) Phnnh v. Flititf, 2 Anst. 432 ; 437 ; Dunbar v. Trcdennick, 2 Ba. & IJicrn v. Mill, 13 Yes. 114 ; Dryden Be. 310. V. Frowst, 3 M. & C. 670 ; Leigh v. (q) Saunders v. Dehew, 2 Yern. Lloyd, 2 D. J. & S. 330. 271 ; Allen v. Kvighf, 5 Ha. 272, 11 (w) Tulk v. Moxhay, 2 Ph. 774 ; Jur. 527 ; Cory v. Eyre, 1 D. J. & S. Coles v. Sini.<, 5 J). M. & G. 1 ; Dc 14!J ; Mmnford v. Stohicatiser, 18 Ei|. Mattes v. Gi'mn, 4 D. & J. 282. 5o6. (.)•) Adams' Doct. Equity, 152. (r) Taylor v. Stibbert, 2 Yes. Jur. ()/) Pulvertoft v. Pulverfoft, 18 438; Scott v. Dunbar, 1 Moll. 442 ; Yes. 92 ; Buckle v. Mitchell, il). 100. Field V. Boland, 1 Dr. & Wal. 37. (-) Jones v. Kearney, 1 Dr. & See Dowell v. Deu; 1 Y. & C. C. C. War. 166. 345. (a) Sheldon v. Cox, 2 Eden, 224 ; (s) Macreth v. Symons, 15 Yes. Prosser v. Ricr, 28 Beav. 68 ; JVor- 350 ; Rice v. Rue, 2 Drew. 73. maid v. Maitland, -.o L. J. Ch. 69. 246 CONSTRUCTIVE NOTICE. Chap. IV. notice consists in express information of a fact, and brings — !!—-^ home knowledge directly to a party (aa). Actual notice must, in order to be binding, at least when it depends on oral communication only, proceed from some one interested in the property (6), and should be in the same transaction. Mere vague rumours, or the assertions of strangers, will not fix a party with actual notice (hh). Actual notice embraces all degrees and grades of evidence, from the most direct and positive proof to the slightest evidence from which a jury would be warranted in inferring notice. It is a mere question of fact, and is open to every species of legitimate evidence which may tend to strengthen or impair the conclusion (c). If there be knowledge the case of constructive notice cannot arise, it would be absorbed in the proof of knowledge {d ). There is, however, no conclusive rule of law that, because a man has the means of knowledge, he has the knowledge itself. The mere means of knowledge is not the same thing as knowledge. The possession of the means of knowledge is only evidence that the party who has it may have knowledge (e). Constructive Whatever is notice enough to excite the attention of a man of ordinary prudence and call for further inquiry is, in equity, notice of all facts to the knowledge of which an inquiry suggested by such notice, and prosecuted with due and reasonable dili- gence, would have led(/). Notice of this sort is called con- structive notice. Constructive notice, as distinguished from actual notice is a legal inference from established facts, and (aa) 45 & 46 Vict. c. 39, s. 3. (e) Broimlie v. Campbell, 5 App. (b) Earnhardt v. Greenshields, 9 Ca. 952, per Lord Blackburn. See Moo. P. C. C. 18. See G-reenslade v. Earl Beauchamp v. Winn, 6 E. & I. Dare, 20 Beav. 284 ; Jayx. Richard- App. Ca. 233, per Lord Chelmsford. son, 30 Beav. 563. (/) MalUand v. Bad-house, 17 L. (bb) Sug. V. & P. 755. See Grren- J. Ch. 121 ; Espeij v. Lake, 10 Ha. slade V. Dare, 20 Beav. 284 ; Central 260 ; Mangles v. Dixon, 3 H. L. 702 ; Railway Co. of Venezuela y. Kisrh, 2 Oiven v. Homan, 4 H. L. 997 ; Dawson E. & I. App. Ca. 112 ; Hamilton v. V. Prince, 2 D. & J. 41 ; Pen-ij v. Royse, 2 Sch. & Lef. 315. ffoll, 2 D. F. & J. 38 ; Broadbent v. (c) See Bniirsot v. Sav^iye, 2 Eq. Barloiv, 3 D. F. & J. 570 ; Dettmar 134. V. Metrojjolitun and Provincial Bank, ((/) n'ild>- V. (iihsui>, 1 11. L. ()24, 1 H. & M. 641 ; Tabor v. Cunning- j>n- Lonl Cnttfuliaiu. ham, 24 W. R. 156. notice. CONSTRUCTIVE NOTICE. 247 like other legal presumptions, does not admit of dispute (g). If Chap IV. a man has actual notice of circumstances sufficient to put a '■ — — man of ordinary prudence on inquiry as to a particular point, the knowledge which he might, by the exercise of reasonable diligence, have obtained will be imputed to him by the Court The presumption of the existence of knowledge is so strong that it cannot be allowed to be rebutted (h). There is, however, no constructive notice, unless it clearly appear that the inquiry suggested by the facts known or dis- covered would, if fairly pursued, result in the discovery. There must appear to be in the nature of the case such a connec- tion between the fact discovered and the further facts to be discovered that the former may be said to furnish a clue — a reasonable and natural clue — to the latter (i). The doctrine of constructive notice applies with peculiar force where the Court is satisfied that a man has designedly abstained from inquiry for the very purpose of avoiding knowledge. Wilful ignorance is not to be distinguished, in its equitable consequences, from actual knowledge (k). If, however, a man abstain from inquiry where inquiry ought to have been made, it is immaterial that the neglect to make inquiry may not have proceeded from any wish to avoid knowledge. It may be that inquiry might not have brought out the truth ; but a man who abstains from inquiry where inquiry ought to have been made, cannot be heard to say so and to rely on his ignorance (l). In the absence of inquiry, where inquiry ought to have been made, the Court is bound to assume that the person from whom inquiry should have been made would have done what it was (g) Williamson v. Brown, 1 Smith 244 ; Owen v. Homan, 4 H. L. 997, (Amer.), ZbQ,'p&r Selden, J. ; Bird- 1035 ; Jones v. Gordon, 2 Ai>p. Ca. sail V. Russell, 2 Tiff. (Amer.), 249. 632 ; KeUlewell v. IFatson, 21 Ch. (h) Plumb V. Fluiit, 2 Anst. 438, D. 706. per C. B. Eyre ; Hewitt v. Loose- (/) Jones v. Smith, 1 Ha. 43 ; more, 9 Ha. 455, per Turner, L. J. ; IVest v. Eeid, 2 Ha. 249 ; Maitland Espin V. Pemherton, 3D. & J. 554, v. Badhouse, 17 L. J. Ch. 121 ; Jones per Lord Chelmsford ; Jones v. v. Williams, 24 Beav. 47 ; Mayor of Gordon, 2 App. Ca. 632. Berwick v. Murray, 7 D. M. & G. (i) Birdsall v. Russell, 2 Tiff. 497; General Steam Navigation Co. (Amer.), 250. v. Rolf, 6 C. B. N. S. 550. See Far- (k) Jones v. Smith, 1 Ha. 55, 1 Ph. rant v. Blackford, 1 D. J. & S. 107. 248 CONSTRUCTIVE NOTICE, Chap. IV. liis duty to do(//i'). A man cannot escape being fixed with ^ect. 3. ... . , ,. . „ • constructive notice by not using the ordinary caution of em- ploying a solicitor to protect his interest. If a man employs no solicitor he Avill be held to have exactly the same knowledge, and will be liable to the same extent as if he had employed a solicitor (ii). If mere Avant of caution, as distinguished from gross and culpable negligence is all that can be imputed to a man, the doctrine of constructive notice will not apply (o). The doctrine does not go to the extent of fixing a man with such knowledge as he might by the exercise of extreme and extraordinary caution have obtained. A man is in no case bound to use every exertion to obtain information. The want, indeed, of that caution whicli a wary and prudent man might, and probably woidd have adopted, is not such negligence as will affix a party with notice of what he might have ascertained (_p). The means of knowledge by which a man will be affected with notice must be means of knowledge which are practically within reach, and of which a reasonable man or a man of ordinary prudence might have been expected to avail himself (g*). A recent statute enacts that a purchaser, lessee, or mortgagee, or an intending purchaser, lessee, or mortgagee, or other person who for valuable consideration takes or deals for the property, shall not be pre- judicially affected by notice of any instrument, fact, or thing unless it would have come to his knowledge, if such inquiries (m) Kni/jht v.Bowuer,2 D. & J. Insurance and Investment Association, 4r)0. 31 L. J. Cli. 828 ; Hunter v. Walters, (7i) Kennedy v. Green, 3 IM. & K. 7 Ch. 85. 699 ; Harrison v. Guest, 6 D. M. & {q) Jackson v. Eouv, 2 Sim. & St. G. 428, 8 H. L. 481. 472 ; Broadbent v. Barlmv, 3 D. F. & (o) Jones V. Smith, 1 Ha. 55 ; JFest J. 570 ; Att.-Gen. v. Bipliosphated V. Held, 2 Ha. 249, 259 ; Ware v. Guano Co., 11 Cli. D. 337 ; Jones v. Erjmont, 4 D. M. & G. 460 ; JFilson Riuimer, 14 Ch. D. 589; Henderson V. Hart, 2 H. & M. 551. See Dodds v. Oomptoir d'Escompte de Paris, L. V. Hills, ib. 426. E. 5 P. C. 262. It is the duty of (^p) Hill V. Simpson, 7 Yes, 169 ; a purchaser by marriaL,'e to make Whithread v. Jordan, 1 Y. & C. 317 ; inquiries just as much as it is the Jones V. Smith, 1 Ph. 257 ; If^est v. duty of other inirchasers for value. Beid, 2 Ha. 250 ; JTare v. Erimnnt, Jackson v. Nome, 2 Sim. &. St. 472. 4 L). M. & G. 160 ; lu' Xa/iniial Life CONSTRUCTIVE NOTICE. 249 and inspections had been made as ought reasonably to have Chap. IV. . . 1 • 1 Sect. 3. been made by him (r). Mere suspicion, or vague and indeter- minate rumour is not sufficient to put a man upon inquiry (s). There must be a reasonable certainty as to time, place, circum- stances, or persons (0- The question is not whether a man had the means of obtaining, and might by prudent caution have obtained, the knowledge in question, but whether the not ob- taining it was an act of gross and culpable negligence (a). Negligence supposes a disregard of some act known to a man which at least indicates the existence of that fact, notice of which the Court imputes to him (x). There is often much difficulty in drawing the line between the degree of negligence, which shall be gross negligence, and that mere want of caution wdiicli, in the absence of fraud, does not amount to negligence in the legal sense of the term. No general rule can be laid down which shall govern all cases. Each case must depend on its own circumstances (y). " I must not part with the case," said Lord Cran worth, in Warev. Lord Eginont (s), "without expressing my concurrence in what has on many occasions of late years fallen from judges of great eminence on the subject of constructive notice, that it is highly inexpedient to extend the doctrine — to attempt to apply it to cases to which it has not hitherto been held applicable. When a person has actual notice of any state of facts, there can be no danger of injustice if he is held to be (r) 45 & 46 Vict. c. 39, s. 3 (1). 284 ; Tildesley v. Lodge, 3 Sm. & G. (s) Whitfield V. Faiisset, 1 Ves. bAZ ; Be Natiunal Life Assurance and 392 ; Hine v. Dodd, 2 Atk. 275 ; Investment Associatiun, 31 L. J. C'li. Neio Sombrei-o Phosphate Co. v. 828. Erlanrjer, 5 Cli. D. 117. See Central {■>) West v. Reid, 2 Ha. 249, 259. Raihcay Co, of Venezuela v. Kisch, 2 See Greenslade v. Dare, 20 Beav. E. & I. App. Ca. 112. 284. (i) Story, Eq. Jur. 400 ; General (;/) Jones v. Smith, 1 Ha. 55 ; Steam Naxmjation Co. v, Rolt, 6 C. West v. Reid, 2 Ha. 249 ; Ware v. B. N. S. 550. See Bludioivv. Laws, Etjmont, 4 D. M. & G. 460; Colijer 2 Ha. 48. V. Finch, 5 H. L. 905 ; Pernj-Heriick (it) Ware v. Eymont, 4 D. M. & v. Attwood, 2 D. & J. 21 ; PJixon v. G, 460 ; Montefiore v. Browne, 7 H. MucJdeston, 8 Cli. 160. See as to L. 241. See 7>on'M \-.])ann,2 Ha. negligence, s?(;7m. ]i)i. 115 — 117. 44f) ; Grrcnslade v. Dare, 20 JkMv. (v) 4 D. M. &' C. 473. 250 CONSTRUCTIVE NOTICE. Chap. IV. bouud by all the consequences of what he knows to exist. But ^^^^- ^- when he has not actual notice he ought not to be treated as if he had, unless the circumstances of the case are such as to enable the Court to say not only that he might have acquired, but also that he ought to have acquired, the notice with which it is sought to affect him — that he would have acquired it but for his gross negligence in conducting the business in question (a). If a man has actual notice that the property in question is in fact charged, encumbered, or in some way affected, or has actual notice of facts raising a presumption that it is so, he is bound in equity, with constructive notice of all facts and instruments, to a knowledge of which he would have been led by an inquiry after the charge, incumbrance, or other circumstances affecting the property of which he had actual notice (6). Where, accordingly a man has notice, whether by recital, description of parties, or otherwise, of an instrument, which from its nature must form directly or presumptively a link in the title, or is told at the time that it does so, he will be presumed to have examined it, and therefore to have notice of all instru- ments or facts to which an examination would have led him (c). Notice of a deed A purchaser, accordingly, who has actual notice of a deed, is bound by all its contents (d), and has notice of all equities springing out of the deed (e), and of all instruments to which (a) See Armstrong v. iyjm, I. R. JVest v. Reid, 2 Ha. 249 ; Patmanv. 9 Eq. 195. Harland, 17 Ch. D. 353. See Plumb (b) 1 Ha. 55, jjerWigram, V.-C, v. Fluitt, 2 Anst. 432; Palmer v. 7 H. L. 2G2, jjer Lord Chelmsford. Wheeler, 2 Ba. & Be. 31 ; FAjre v. See X>ow«es v. Power, 2 Ba. & Be. Dolphin, \h. 2^0 ; Malpasv. Acldand, 493 ; Grant v. Camx>hell, 6 Dow. 3 Russ. 273 ; Roddy v. Williams, 3 239 ; Neesom v. Clarkson, 2 Ha. 163 ; J. & L. 1 ; Steadman v. Poole, 16 L. West V. Reid, ib. 249 ; Att.-Gen. v. J. Ch. 349 ; Cox v. Coventon, 31 Fliyit 4 Ha. 147 ; Frail v. Ellis, 16 Beav. 378 ; Clements v. Welles, 1 Beav. 350 ; Re BrigMs Trusts, 21 Eq. 200 ; Shaw v. Foster, 5 E. & I. Beav. 430 ; Coles v. Sims, 5 D. M. & App. Ca. 336. G. 1 ; Welchman v. Coventry Union (d) Tanner v. Florence, 1 Ch. Ca. Bank, 8 W. R. 729 ; Jay v. Richard- 259 ; Taylor v. Stibbert, 2 Ves. Jr. son 30 Beav. 563 ; Cox v. Coventon, 437 ; Neesom v. Clarkson, 2 Ha. 173. 31 'Beav. 388 ; Locke v. Prescott, 32 (e) Hamilton v. Royse, 2 Sch. & Beav. 261 ; Leigh v. Lloyd, 2 D. J. Lef. 326 ; but see LI. & G. 264, per & S. 330 ; M'Bryde v. Eykyn, 25 L. Lord St. Leonards, Sug. V. & P. T. N. S. 192. 777. (,■) Join's V. Smith, 1 Ph. 253; is notice of its contents. CONSTRUCTIVE NOTICE. 251 an examination of the deed would liave led him (/) ; even chap. iv. although such instruments are not actually recited, but there - '—- ^ is only a recital that the property is subject to limitations which in fact correspond with the limitations thereby created (g). If the deed under which he takes title be a settlement, he takes with notice of all equities springing out of the settlement (h). Notice of a post-nuptial and apparently voluntary settlement agreement is notice of the ante-nuptial settlement on which it is founded (^). So, also, notice of an equitable claim as affecting an unspecified portion of the property is notice of the claim as in fact affecting the entirety (k). If the deed under which he takes title shows that there are incumbrances affectinof the property to which the deed relates, he takes with notice of all such incumbrances (I). In Peto v. Hammond {m), the pur- chaser of land from the allottees of a building society, who had not inquired for the conveyance of the land to the trustees of the society, was held bound not only by the notice of the deed, but also by what would have certainly been told him, if he had inquired for the deed, namely, that the deed had been retained by the party who had sold the land to the trustees, as an equitable mortgage, with a covenant from the trustees to convey the legal estate to him, if required. So, also, it has been held that notice of a prior conveyance and of the then vendor's title is notice of his lien for unpaid purchase-monies (n). So, also, an inaccurate recital of a will has been held notice of its real contents (o). So, also, if a man purchases from a seller whose conveyance was " subject to all the mortgages and charges affecting the same," he will be bound by a prior deposit of the deeds relating to a portion of the estate of which he had not notice, although there were other charges of which he was informed, which satisfied the word, " mortgages and charges "(^). (/) Goppin V. FernyhoiKjh, 2 Bro. (?') Ferrarsv. Cherry, 2 Vern. 384. C. C. 291 ; Bisco v. Earl of Banbury, (k) Att.-Gen. v. Flint, 4 Ha. 147. 1 Ch. Ca. 287, 291 ; Tanner v. (/) Montefiore v. Browne, 7 H. L. Florence, ib. 259, 260 ; Davies v. 241 ; but see Sug. V. & P. 777. Thomas, 2 Y. & C. 234. {m) 30 Beav. 495. (r/) Neesom v. Clurkson, 2 Ha. 163. (n) Davies v. Thomas, 2 Y. & C.234. (/() Hamilton v. Eoi/se, 2 Sell. >.<;; (n) Hope v. Liddell, 21 Beav. 183. Lei'. 326. ( p) Jones v. U'illiiuns, 24 Beav. 47, 252 CONSTRUCTIVE NOTICE. Chap. IV. A prospectus, however, of a company, mentioning an Act of ^ '^ Parliament, in which Act a deed of settlement is recited, is not is notice of all its contents of itself sufficient to fix any person reading the prospectus with constructive notice of the contents of the deed. To hold that he was, would be carrying the doctrine of constructive notice too far ((/). Notice of a lease So, also, notice of a lease is notice of all its contents (r). If a purchaser has notice that property is held under a lease, he cannot object that he had no notice of any particular covenant therein contained (s). The omission on the part of the vendor to state unusual covenants in the particulars of sale does not affect the title {t), nor is it a misrepresentation, although the value of the premises may be lessened by such covenants iii). In a case where the conditions of sale were silent as to the nature of the covenants, and required that the purchaser should covenant with the vendor for the performance of the covenants and conditions in the lease, a covenant in the lease against carrying on certain specified trades, " or any other noisome or offensive trade," was held to be no objection to the title {x). So, also, a clause against alienation without the lessor's consent was held to be no objection in the lease of a house, at least in or near London {y). A man who wishes to protect himself against unusual or par- ticular covenants should before purchasing inquire into the covenants and stipulations of the original lease, so as to know precisely the terms on which the property is held (0). If there (^) Re, Nafiomd Assurance Asso- 394. ciation, Ahercom's Case, 4 D. F. & J. (n) Sjmnner v. U'idsh, 10 Ir. Eq. Ill, 386, 11 Ir. Eq. 598. (r) Hall V. Smith, 14 Ves. 42fi ; (.c) Grosvenor v. Green, 28 L. J. W^alter v. Maunde, 1 J. & W. 181 ; Cli. 173 ; Flood v. Pritchard, 40 L. Smith V. Cwpron, 7 Ha. 191 ; Dawes T. N. S. 873; Tlwrneivell v. Johnson, V. Betts, 12 Jur. 709 ; Lewis v. Bond, 50 L. J. Ch. 661. 18 Beav. 85 ; Parker v. White, 1 H. (y) Strangwaijs v. BisJioj), 29 L. T. & M. 167 ; Clements v. Welles, 1 Eq. 120. 200 ; Fielden v. Slater, 7 Eq. 523 ; {z) Pope v. Garland, 4 Y. & C. but see Martin v. Cotter, 3 J. & L. 394 ; Martin v. Cotter, 3 J. & L. 50(^,per Lord St. Leonards. 506 ; Cullen v. O'Meara, L. R. Ir. 2 (.,) lb. C. L. 663 ; Wilson v. Hart, 1 Ch. (0 Pope V. Garland, 4 Y. & C. 463. constructtvp: notice. 253 be no misrepresentation by the vendor, the purchaser is bound Chap. IV. Sect. 3. by the contents of the lease (a) ; but if there be misrepresen tation so that the acuteness and industry of the pui'chaser is set to sleep, and he is induced to believe the contrary of what is the real state of the case, the vendor is in such case bound by the misrepresentation (b). If, for instance, the terms of a particular covenant turn out to be of a much more stringent description than they were represented to be, there is fraud (c). Tlie rule that notice of a lease is notice of its contents applies to the case of sales under a decree as well as to the case of sales out of Court (d). Though notice of a lease is notice of its contents, the Court may, on the application for specific j^erformance, decline to grant specific performance of a lease containing covenants of an unusual nature, if the person against whom the relief is sought had no reasonable means of inspecting the original lease, or knowing its contents (r). If, however, he has had reasonable means of inspecting the lease, specific performance will be decreed (/), although he may have intended to apply the pro- perty to a purpose which, as it turned out, was prohibited (cf). It is immaterial in such case whether or not the vendor knew the purchaser's intention (It). So, also, and upon the same principle, where a man is of Notice that a right in possession of corporeal hereditaments, he is entitled pli^session of to impute knowledge of that possession to all who deal for any ''^"^' '** "°*'''^'^ "^ _ "^ his equities interest in the property, and persons so dealing cannot be heard therein and thereto. (rt) Po2^e V. Garland, 4 Y. & C. 282 ; Nelthnrpe v. Holgafc, 1 Coll. 394 ; Spunner v. JFalsh, 10 Ir. Ecj^. 203 ; Martin v. Cotter, 3 J. & L. 400 ; Wilson v. Hart, 1 C'h. 463. 507 ; Williams v. Livescij, 18 Beav. (h) Pope V. Garland, 4 Y. & C. 206 ; Brumfit v. Morton, 3 Jur. N. 394. S. \\m ; Darlington v. Hamilton, (c) Flight V. Booth, 1 Bing. N. C. Kay, 5.50 ; Hgde v. Warren, 3 Excli. 377 ; Van v. Gorpe, 3 M. & K. 269 ; D. 80. Cullen v. O'Meara, Ir. 4 C. L. 538, (/) Smith v. Capron, 7 Ha. 191 ; supra, p. b4. Flood v. Pritchard, 40 L. T. N. S. (d) Spanner v. Walsh, 10 Ir. Eq. 873. 386. (f/) Morley v. Clavcring, 29 Beav. (e) Hanhury v. Litchfield, 2 M. & 84. K. 629 ; Flight v. Barton, 3 M. & K. {h) lb. 254 CONSTRUCTIVE NOTICE. Chap. IV. to deny notice of the title under which the possession is held (i). — Notice, accordingly, that the occupier holds as tenant to A. is notice of A.'s title (k). So also notice that the rents are received by A. is notice of A.'s title and of the instrument under which he claims (l), and of the character in which he receives them (r)i). So also notice that receipts have been given to and accepted by the vendor for an annual payment as rent, but which the vendor and purchaser claiming under him subse- quently contend was in fact a rent-charge, is notice to the pur- chaser of the payee's title to the freehold (n) ; nor is it neces- sary that such possession should be continually visible or actively asserted. If a man has once received rightful posses- sion of land, he may go to any distance from it without author- ising any servant, or agent, or other person to enter upon it, or look after it, may leave it for years uncultivated and unused, may set no mark of ownership upon it, and his possession may nevertheless continue, at least unless his conduct affords evidence of intentional abandonment. A man who knows, or cannot be heard to deny that he knows, another to be in posses- sion of a certain property, cannot for any civil purpose, as against him at least, be heard to deny having thereby notice of the title or alleged title under which, or in respect of which, the former is or claims to be in that possession (p). Where, accord- ingly, the purchaser of mines took possession under the agree- ment for purchase, without any conveyance, it was held that a subsequent purchaser of land, without any exception of mines, took with notice of the agreement (q). The rule that if a person is in possession of property, notice of the title under which he is in possession must be attributed ({) Taylor v. Stihbert, 2 Ves. Jr. 640. 437 ; Crofton v. Vrmshy, 2 Sch. & (m) S. C. 2 D. & J. 421. Lef. 583; Powell v. Dillon, 2 Ba. & (n) Att.-Gen. v. Stephens, 1 K. & Be. 416 ; Greenicood v. Bairstow, 5 J. 750, 6 D. M. & G. 111. L. J. Ch. N. S. 179 ; Jones v. Smith, (p) Holmes v. Poicell, 8 D. M. & 1 Ha. 60 ; Holmes v. Powell, 8 D. M. G. 580 ; but see Cavander v. Bulteel, & G. 580. 9 Ch. 82, per James, L. J. (k) Bailey v. Richardson, 9 Ha. (g) Holmes v. Powell, 8 D. M. & 734. G- 580. {1} Knight v. Bowyer, 23 Eeav. CONSTULXTIVK NOTICK. I to every one wlio deals with that property, npplies to cases where Chap. IV. a partnership firm is in possession of property. If a partner- ship firm is in possession of property, a person who deals with one of the parties in respect of that property is put upon inquiry as to the interest of the firm in it. He has notice that the part-owners have made some bargain about it which gives each an interest in the moiety belonging to the other, and he is put upon inquiry what the extent of that interest is (r). If moreover, the title deeds of the property are handed over by way of equitable mortgage by one of the partners to secure a private debt of his own, and the equitable mortgagee has notice that the property is partnership property, the partner- ship property must as against him be applied in payment of partnership debts whether contracted before or after the security (s). If there be a tenant in possession of land, a purchaser is bound by all the equities which the tenant could enforce against the vendor, and the equity of the tenant extends not only to interests connected with his tenancy, as in Taylor v. Stihbert (t), but also to interests under collateral agree- ments (u), the principle being the same in both cases, namely, that the possession of the tenant is notice that he has some interest in the land, and that a purchaser having notice of that fact is bound either to inquire what the interest is, or to give effect to it whatever it may be (x). If the tenant has even chano-ed his character by having agreed to purchase the estate, his possession amounts to notice of his equitable title as pur- chaser (y). The principle that possession by a tenant of land is notice of the terms of his holding, applies to a case where a man buys property subject to an easement. He is bound by all the (r) Gavander v. Bulteel, 9 Ch. 79, Moo. P. C. 32 ; Knight v. Bowyer, 2 (s) lb. D- & J- 450 ; Mumford v. Stohwasser, (<) 2 Ves. Jr. 437. 18 Eq. 556. (v) Daniels v. Davison, 16 Ves. (y) Daniels v. Davison, 16 Ves. 249, 17 Vfs. 433 ; Allen v. Anthony, 249, 17 Ves. 433 ; Croftonv. Ormshy, 1 Mer. 282. Conip. Hughes v. 2 Sch. & Lef. 583 ; Powell v, Dillon, Sea7ior, 18 W. R. 1122. 2 Ba. & Be. 416; JFUbraham v. (x) Earnhardt v. Greenshields, 9 Livesey, 18 Beav. 206. 256 CONSTRUCTIVE NOTICE. Chap. IV, equities which bound his vendors (z). So also when the mort- Sect. 3, — g^gee of a burial ground had notice of the purposes to which it was devoted, he was held bound by the right of burial, tem- porary or in perpetuity, granted by his mortgagor when left in possession («). Notice, however, of a past tenancy is not notice of the tenant's equitable interests (6), nor when the vendor is himself the tenant, and has acknowledged payment of the purchase-money both in the body of the conveyance and by the usual endorsed receipt, is the tenancy notice of his lien for any part thereof which may in fact remain unpaid (c). Nor is notice of a tenancy necessarily notice of the tenant's equities as between vendor and purchaser (r?). A man who has notice of the occupation of a tenant is not bound to go to the tenant and inquire what is the nature of his tenancy (e). There are some dicta in James v. Litchfield (ee), which go nearly to that extent, and which support the notion that the doctrine of Daniels v. Davison applies as between vendor and purchaser, and whilst the matter still rests in contract. The doctrine in question refers to equities between the purchaser and the tenant when the legal estate has passed and has nothing to do with the rights and liabilities of vendors and purchasers between them- selves. If there is anything in the nature of the tenancies which affects the property sold, the vendor is bound to tell the purchaser and let him know what it is which is being sold (/). Nor is notice of a tenancy constructive notice of the lessor's title ((/). Nor will a bond fide purchaser, otherwise with- out notice, be affected by the mere circumstance of the vendor having been out of possession for many years. A purchaser neglecting to inquire into the title of the occupier is not affected by any other equities than those which such occupier may insist (2) Hervey v. Smith, 1 K. ' & J. (d) Ndthorpe v. Holgate, 1 Coll. 389, 22 Beav. 299. 203. (a) Moreland v. liichardson, 22 (e) Cahallcro v. Hentij, 9 Ch. 447. Beav. 596. (ee) 9 Eq. 54. (b) Miles V. Lamjlcy, 1 R. & M. (/) Cahallero v. Hentij,9 Ch. 447. 39, 2 R. & M. 626. (fl) Jones v. Smith, 1 Ha. 63, per (c) White V. Wakefield, 7 Sim. Wigram, V. C. ; Earnhardt v. Oreeti- 4(jl. shields, 9 Moo. P. C. 34. CONSTRUCTIVE NOTK.^E, 257 on. If a person equitably entitled to an estate lets it to a Chap. IV. tenant who takes possession, and then the person having the legal estate sells to a person who purchases bond Jide and with- out notice of the equitable claim, the purchaser will hold against the equitable owner, although he had notice of the tenant being in possession (h). In all cases the possession relied on has been the actual occupation of the land, and the equity sought to be enforced has been on behalf of the party so in pos- session (l). But it must be remembered that by the ixirty in occupation is meant, not merely the person who by himself and his labourers tills the ground, but the person who is known to receive the rents from the person in occupation [k). So also notice of the legal estate being outstanding is notice of the trusts on which it is held {I) ; and notice that the title deeds are in the possession of a third party is notice of any charge he has upon the property {m). So also notice that the title is a mortgage title seems to be notice of any dealings by the mort- gagee with the mortgagor which may have kept alive the equity of redemption {n). So also, and upon the same principle, a person has been held Person held to to be affected with notice of a fraud affecting a deed, and which f^^^^-g ^^.jj),^ \^ the unusual manner in which it was executed ought to have °"^'''*' ^'^ ^^""'^ ° kiiowu. suggested to his solicitor (o). So also if a bill be accepted in blank, and the acceptor was aware of the fact, there is notice of any fraudulent use that may have been made of it (j)). So also a lessee (q), or a sub-lessee, has notice of the title of the immediate and (in the case of a sub-lessee) original lessor (?■), (h) Oxivith V. Plummer, 2 Vern. 699. See Greenslade v. Dare, 20 636 ; Barnhardt v. Greenshields, 9 Beav. 291 ; Greenfield v. Edwards, 2 Moo. P. C. 34. D. J. & S. 582, Sug. V. & P. 776. (i) Barnhardt v. Greenshields, ib. (|)) Hatch v. Searles, 24 L. J. Ch. (k) Knight v. Boioyer, 23 Beav. 22, See Sharp v. Arhuthnot, 13 Jur. 609, 640, 641, 2 D. & J. 421. 219. (1) Anon., 2 Freem. 137. (q) Att.-Gen. v. BacBiouse, 17 Ves. (vri) Hiern v. Mill, 13 Ves. 122 ; 293 ; Butler v. Lord Portarlington, 1 Dryden v. Frost, 3 M. & C. 670 ; Dr. & War. 20 ; Att.-Gen.w Hall, 16 Maxfield v. Burton, 17 Eq. 18. Beav. 388. (n) See Hansard V.Hardy, 18 Yes. (r) Steedman v. Poole, G Ha. 193. 462. Soe Cosser v. Collimje, 3 M. & K. (o) Kennedy v. Green, 3 M. & K. 283. 258 CONSTRUCTIVE NOTICl!;. Chap. I\'. and the mere fact that he is precluded by the terms of the contract or by the Vendors and Purchasers Act, 1874, s. 2, from calling for the lessor's title, will not exempt him from the consequences of notice (s). So where a family solicitor, Avho had prepared a marriage settlement, became the apparent pur chaser of the estate under a fictitious exercise of the usual power of sale, and subsequently executed instruments purporting to vest the estate in the husband, and then, as the husband's solicitor, applied for a loan on mortgage, and delivered an abstract of the title as above referred to in the usual way, with his name as solicitor, it was held that the purchaser had implied notice of his having been the solicitor who prepared the settle- ment, and of the irregularity of the nominal purchase (t). So, a mortgagee, having notice that a bill which formed part of the consideration for the purchase of the estate by the mortgagor remained unpaid, has been held bound to inquire whether the vendor has any lien on the estate, the deed of conveyance leaving the point doubtful (u). So, a purchaser dealing with trustees for sale, at a time or under circumstances suggestive of the probability of the sale being a breach of trust, is bound to inquire and see whether any such breach of trust is in fact being committed (x). So also notice of a deed is not only notice of its contents,-but of the facts to a knowledge of which the insisting on its production would have necessarily led (y). So also a man who buys property from an agent, with distinct notice that the party with whom he is dealing is an agent, has cast upon him the liability of sustaining the transaction just as much as the agent himself. If the transaction could not be upheld by the agent, neither could it be supported by a pur- chaser from that agent, if he deals with him in his character of agent (z). When, however, a sale by fiduciary vendors is apparently regular, a purchaser need not inquire into collateral questions, (s) ratmun v. Hiniand, 17 Cli. D. G. 635. 353. (y) Peto v. Hammond, 30 Beav. {t) Robinson v. Brir/gs, 1 Sm. & G. 495. 188. (z) Molony v. Kernan, 2 Dr. & (tt) Frail v, Ellis, 16 Beav. 350. War. 40. {x) Stroughill v. Anstey, 1 D. M. & CONSTRUCTIVE NOTICE. 259 such as the mode in which the sale has been conducted (a), Chap. IV. ^ ^ .Sect. 3. although he will be affected with notice of a breach of trust clearly deducible from facts appearing on the face of the assur- ance (d), or suggesting enquiry (c). Nor, although a purchaser of a lease is bound to know from whom the lessor derived his title, is he affected with notice of all the circumstances under which he so derived it(d). Nor, semhle, is notice of a lease notice of collateral facts mentioned in the lease (e). Nor on the purchase of A., one of two adjoining estates belonging to the same owner, is notice of building covenants entered into by such owner with a mortgagee of the adjoining estate B., notice of the expenditure on both estates of money which, under the covenant, ought to have been expended on B. exclusively (/). So, also, slight discrepancies in the plans or the deeds which, if enquired into, might have led to the detection of a fraudulent dealing with the property, were held not to be constructive notice of it {g). The possession of a client's deeds by a solicitor is so usual. Possession of and so much in the ordinary course of transactions, that where a solicitor of man purchases an estate and is informed that the deeds are in l^^^i^^ ^^ ""'^ the hands of the solicitor of the owner of the estate, there is nothing which renders it necessary for him to inquire under what circumstances the solicitor held the deeds (A). But if a solicitor acquires by contract a different interest beyond what his character of solicitor confers (such as equitable mortgagee), it is incumbent on him immediately to give clear and distinct notice of such interest to all persons in visible ownership of the estate. Such a case is not within the principle of the cases in which a purchaser of land has been held bound to inquire of the tenant in possession the nature of his interest (/), (a) See Borell v. Dann, 2 Ha. 440, Kay, 556. 450. See Ware, v. Egmont, 4 D. M. (/) Harrymanv. Collins, 18 Bc.av, & G. 460. 19. (b) See Att.-Gen v. Pargeter, 6 (r/) Hunter v. Walters, 7 Ch. 75. Beav. 150 ; Kerr y. Lord Dumjannon, (h) Bozon v. Williams, 3 Y. & J. 1 Dr. & War. 509, 542. 150 ; Cory v. Eyre, 1 D. J. & S. 149 ; (c) Boursot V. Savage, 2 Eq. 134. Bradley v. Riches, 9 Ch. D. 193. (d) Att.-Gen. v. Backhouse, 17 Ves. (i) Bo::on v. Williams, 3 Y. & J. 293. 150. (fi) See Darlington v. Hamilton, s 2 260 CONSTRUCTIVE NOTICE. Chap. IV. The omission of a purchaser of property to inquire after the title deeds is gross negligence, and will affect him with the inquh-e'foAitle knowledge which he might have obtained upon inquiry. The deeds of -possession of the les^al estate will not protect a man who has property. ^ . omitted to inquire after the title deeds, or who accepts a fri- volous excuse for their non-production against the claim of an innocent party (k). The Court will in such a case infer that he has abstained from inquiry in order to deprive himself of know- ledge, and that he has wilfully shut his eyes to the facts (/). " A purchaser or mortgagee," said Lord Selborne, in Agra Bank V. Barry (vi), " should make inquiries after the title deeds. It is merely the course which a man dealing bond fide in the proper and usual manner for his own interest ought, by himself or his solicitor, to follow with a view to his own title and his own security. If he does not follow that course the omission of it may be a thing requiring to be accounted for and explained. It may be evidence, if it is not explained, of a design inconsis- tent with bond fide dealing to avoid knowledge of the true state of the title. What is a sufficient explanation must always be a question to be decided with reference to the nature and circumstances of each particular case." So also, a man taking from a vendor who has not possession of the deeds, will take with notice of any claim which the party in possession of the title deeds has {n). The omission, however, of a purchaser to inquire for the deeds will not affect him with knowledge of fraud committed by the person of whom he was bound to make inquiry (o). Party not fixed Though notice of a deed is notice of its contents, the mere by notice of deed . • ^ i i -n merely because fact that a man has been witness to the execution oi a deed will to il^^ ^ ^^ '^^^^ not of itself fix him with notice of the contents (25). Nor is (k) Worthington v. Morgan, 16 {I) Eatdiff \\ Barnard, Q C\\. Qb-i^. Sim. 547 ; Tylee y. JFehb, 6 Beav. (m) 7 E. & I. Apjj. Ca. 157. 552 ; Allen v. Knight, 5 Ha. 272, 11 (n) Dryden v. Frost, 3 M. & C. Jur. 527 ; Hewitt v. Loosemore, 9 670. See Hiern v. Mill, 13 Ves. Ha. 449 ; Colyer v. Finch, 5 H. L. 122. Comp. Bozon v. Williams, 3 905 ; Perry -Herrich v. Attwood, 2 D. Y. & J. 150, sujira, pp. 112, 113. & J. 21 ; PetO V. Hamviond, 30 Beav. (0) Hipkins v. Amery, 2 Giff. 292. 495 ; Hojigood v. Ernest, 3 D. J. & S. (j)) Mocatta v. Margatroyd, 1 P. 116, 5)/pm, pp. 112, 113. Wins. 393; Beckett v. Cordley, 1 CONSTRUCTIVE NOTICE, 261 notice of a will passing all the testator's real estates generally, Chnp. IV. Sect. 3. and not specifically, notice of all the particular estates which the testator had to pass (q). Nor if a purchaser has notice only heard a draft that a draft of the deed is prepared, and not that the deed was prepared executed, would he be bound by notice, although the deed was actually executed ; for a purchaser is not to be affected by notice of a deed in contemplation (•>•). A mere statement that further information is to be had at A mere state- ,^ ry^ n • i 1 , i iiient that infor- the omce oi a company is not enough to put persons upon nation may be inquiry whether statements put forward by directors are true or }!^^^^ a par- '■ -^ i -^ ticular place is false (s). But if a man, on being specially referred to another not notice. for information, neglects to apply to him, he will be held to have f "^j^.^if '^e^ferred notice of what he might have learnt upon inquiry {t). So also to another for . . information, he if a man, having reasonable grounds to suspect the existence of is fixed with a fact of importance, asks one of the parties to the transaction, "° ^'^'^' °* who refuses all information, but does not ask other parties, whom he has reason to believe to be able and willing to give him information, his ignorance is wilful {u). A party relying on his ignorance of fact must show, not only that he had not the information, but that he could not with diligence have obtained it (x). A man who in dealing for property is told of anything as If a man has affecting the property, though incorrectly, cannot rely on what jjeHy'^is affJcted, is told him, but is bound to make further inquiry and to ascer- ^^1'' ^^^'^^ ^'*'^ '^ "^ notice as to the tain the exact truth (y). If he knows that another has or nature of the claims an interest in the property, he, in dealing for that cannot' rely on property, is bound to inquire what that interest is, although it given'to'him'aa may be inaccurately described (z.). If he is told or has notice *« ^ts nature, that a certain instrument affects the property in question in Bro. C. C. 357 ; Puincliffe v. Parkins, (u) Bainhrigge v. Moss, 3 Jur. N. 6 Dow. 141), 222, Sug. V. & P. 751. S. 58. (q) Rancliffe v. Parkins, 6 Dow. (x) JFason v. Waring, 15 Beav. 149,222-224. 151. (r) Cothay v. Sydenham, 2 Bro. C. (y) IVihon v. Hart, 2 H. & M. C. 391. See Jones v. Smith, 1 Ha. 551, 1 Ch. 463. See Jones v. Smith, (J3, 1 Ph. 256. 1 Ph. 255. Comp. Re Bright's (s) Smith V. Eeese River Co., 2 E(j. Trust, 21 Beav. 430. 269. (z) Gibson v. Ingo, 6 Ha. 112, 124. (t) JFason v. JFaring, 15 Beav. See Att.-Gen. v. Jones, 2 Juv. 369. 151. 262 CONSTRUCTIVE NOTICE. Chap. IV. some particular respect, lie will be fixed with notice of its pro- visions if it should turn out to affect the property in other respects also (a). Notice of a charge to an indefinite amount, although the notice be innacurate as to the particulars or the extent of the charge, is sufficient to put upon inquiry a party dealing for the property subject to the charge ; and if the actual charge appear afterwards to be incorrectly described in the notice, it is nevertheless suflficient as a ground for giving priority for the true amount of the charge as against the party who received the incorrect notice but made no inquiry (b). In Taylor v. Baker (c), a party, at the time of making his purchase, and before it was made, had actual notice that a certain person had a judgment and warrant of attorney which affected the purchased estate. It turned out, however, that he had a mortgage and not a judgment, and the court held that the purchaser, having notice that he had an interest affecting the property, could not ward off the claim to the incumbrance, only because the nature of the claim was different from that which the notice conveyed to him () 2 E(|. 142. 449 ; .4««7>H)-y v. ^Fa/iis, 8 D. M. & 274 CONSTRUCTIVE NOTICE. Chap. IV. dersley, V.-C (x), "that the solicitor may be committing a fraiid '- — ^ in relation to a transaction in Avhich he is employed, cannot afford any reason why the client should not be affected with con- structive knowledge of the facts. The constructive knowledge of all the facts must be imputed to him whether there is fraud relating to the transaction or not. It is the existence of the trust, and not of the fraud, of which he is held to have construc- tive notice. The constructive notice of the trust must be imputed to him whether there is fraud relating to it or not." So also in a case where the plaintiff jointly with his solicitor contributed money on loan on a deposit of deeds, and the soli- citor subsequently took a mortgage to himself and deposited the deeds with a bank as security for monies advanced to him, it was held that notice of the plaintiff's advance must be im- puted to the bank (7/). " Where," said Mr. Justice Fry (z), "there is an interest and a duty, the Court will not presume that the solicitor will follow his interest and not his duty. If, moreover, the circumstances of the case are looked to, the suggestion that the transaction would have failed if the solicitor had made known to the bank the advance of the plaintiff does not arise. The mortgage was taken by the bank as the best thing it could get." The tendency of later decisions, however, has been in favour of the doctrine that when a man employs a solicitor, whose whole purpose and meaning in the transaction is to cheat and defraud his client, and who in furtherance of this intention keeps back purposely from his knowledge the true state of the case, the presumption is conclusively repelled that the client has imputed or constructive notice through the solicitor of the fact which has been concealed from him («), " This exception," said Mr. Justice Fry, in Cave v. Cave (b), " has been put in two ways. In Rollancl v. Hart, Lord Hatherley put it substantially (x) 2 Eq. 142. (jood v. Ernest, 3 D. J. & S. 116 ; {y) Bradley v. Riches, 9 Ch. D. Waldy v. Gray, 20 Eq. 251 ; Jones ] 93. V. Bygoft, 44 L. .1. Ch. 487 ; Bann- (2) lb. father's Claim, 16 Ch. D. 178 ; Kettle- (a) Espin v. Pemberton, 3 D. & J. vjell v. Watson, 21 Ch. D. 680. 547 ; Thompson v. Cartwright, 33 (h) 15 Ch. D. 644. Beav. 185, 2 D. J. & S. 10 ; Hop- CONSTRUCTIVE NOTICE. 2/0 in this way, that you must look at the circumstances of the case, Chap, rv' . and inquire whether the Court can see that the solicitor in ■ tended a fraud, which would require the suppression of know- ledge of the incumbrance from the person upon whom he was committing the fraud (c). In Thompson v. Cartwright, Lord Romilly puts it differently, and it appears that in his view you must inquire whether there are circumstances in the case, inde- pendently of the fact under inquiry, as to raise an incontro- vertible conclusion that the notice has not been communicated. In the one view notice is not imputed, because the circumstances are such as not to raise the conclusion of law which does ordi- narily arise from the mere existence of notice to the agent ; in the other view, that of Lord Hatherley and Lord Chelmsford, in Esphi V. Pemberton, the act done by him in his character of agent is such as cannot be said to be done by him in his character of agent, but is done by him in the character of a party to an independent fraud on his principal, and that is not to be imputed to the principal as an act done by his agent {d). Where, accordingly, a trustee, a solicitor, used trust funds in purchasing an estate which was conveyed to his brother, and afterwards acted as solicitor to his brother, the mortgagor, in raising money on the estate by a legal mortgage, it was held that the legal mortgagee had priority over the cestuis que trust, for that the fraud of the solicitor ran through the whole trans- action and prevented the imputation of notice. According to Thompson v. Cartwright, I am bound to look at the terms of the mortgage in considering whether there was an intention on the part of the solicitor to commit a fraud, and looking at it, the conclusion I had arrived at independently of them is strongly confirmed. The conclusion I have arrived at is that the mortgagee has sustained the burden cast upon him of proving that the circumstances are such as to repel the con- struction or imputation to the principal of notice to the agent. I hold, therefore, that his mortgage has priority over that of the plaintiffs." "The presumption from duty," said further Mr. (r) See F^nnhiy v. Ah'.aiuthr, I. R. {d) See f^anlmj v. Alexander, I. R. 9 E«i. 319. '.» iiq- 317. T 2 276 CONSTRUCTIVE NOTICE. Chap. IV. Justice Frv, in Kettlewell v. Watson (e), " in the asfent may be Sect. 3. ■' . . . repelled by showing that whilst he was acting as agent, he was also acting in another character, namel}', as a party to a scheme or design of fraud, and that the knowledge he attained was at- tained by him in the latter character, and therefore there would be no ground to assume that the duty of the agent was per- formed by a person who filled that double character." "If," said Bacon, V.-C, in Wcddy v. Gray{f), "the dis- closure of that fact of which knowleJo-e is sought to be fixed upon the client Avould have imputed fraud to the solicitor, it is not to be presumed that the solicitor did make disclosure of that fact ; or if a person employed as a solicitor has done things which if disclosed would prevent the perfection of the security in which he is engaged, which would show that a good title does not exist to that which he is the instrument of con- veying to a purchaser, it is not to be expected or inferred that he would communicate what he has done to his client. The suppression of a thing done by a man in direct violation of his duty as trustee is an act which must relieve his client of all imputed knowledge of the transaction upon any theory of notice through a solicitor." Where, accordingly, a trustee of a settle- ment, being a solicitor, advanced the monies of the trust upon a mortgage of real estate, of which he took a conveyance to him- self and his co-trustee, and obtained possession of the title deeds, and fraudulently handed them over to the mortgagor, who sup- pressed the mortgage deed, and deposited the rest of the deeds with a bank to secure his current account, and the manager of the bank requiring a certificate of title, the mortgagor referred him to the solicitor who had fraudulently handed over to him the deeds, who gave a certificate that there was a good title ; it Avas held that by reason of the fraud of the solicitor notice of the mortgage could not be imputed through him to the bankers (^). The same considerations apply where one solicitor is employed by both parties to a transaction, and the evidence establishes the fact that the solicitor has entered into a conspiracy with one client to defraud the other (Ji). Nor is notice to a solicitor notice (e) 21 Ch. D. 707. (r/) lb. (/) 20 Ei^. 251. (/() Shar2) v. Foy, 4 Ch. 35. CONSTRUCTIVE NOTICE. 277 to a client where the person giving the information knows or Ctap. IV. has good reason to beheve that it will not be communicated to the client (l). Though a client may by reason of the fraud of a solicitor be not affected with notice through the fraud of the solicitor, he may be affected by his negligence (k). In determining the equities between parties who have been defrauded by a common solicitor, the Court looks to see whether there has been anything in the transaction calculated to put either of the parties upon inquiry. If there be anything in the case calculated to excite suspicion or to put either of tbe parties upon inquiry, and he abstains from inquiry, the same know- ledge will be imputed to him as he would have been affected with, had he employed an independent solicitor (I). Notice to one partner in a partnership matter during the con- Notice to tinuance of the partnership is notice to the other partners {m). ^''^^ ^'^^' A partner, however, is not necessarily fixed with notice of the contents of his own books (n). Nor is the knowledge of a fraud by one partner necessarily the knowledge of the firm (o). The rule that notice to one partner is notice to the other Notice to direc- . . tors or share- partners does not apply to the case of corporations or jomt- holders of a stock companies. Notice on the part of a shareholder, or non- ^""^^^"y- acting director, does not affect the whole body (j9) ; but notice to one of the persons legally intrusted with the proper business to which the notice relates, or who has authority to act for the corporation in the particular matter in regard to which the notice is given, will bind the corporation (q). Notice, however, to the officer of a corporation, or knowledge obtained by him whilst not engaged officially in the business of the com- (i) Shaiy v. Foij, 4 Cb. 35. (n) See Steioarfs Ca^ic, 1 Ch. 574. (/;) Hopgoodv. Ernest/SJ). J. &8. (o) Williamson v. Barbour, 9 Ch. IKl D. 529, })er Jessel, M. R. (/) Kennedy v. Green, 3 M. & K. {j}) Poivles v. Page, 3 C. B. 16 ; 699 ; Frail v. Ellis, 16 Beav. 357 ; Re Gareios Estate, 31 Beav. 45. Atterbury v. JVallis, 25 L. J. Ch. (q) Worcester Corn Exchange Co., Z 794 ; Perry Y. Holl, 2 D. F. &J. 38. D. M. & G. 183 ; Re Carew's Estate^ (h?) Atkinson v. Macreth, 2 Eq. 31 Beav. 45 ; Paiouns ou Contiacts, 570. See Williaiiuon v. Barbour, 9 p. 65. Ch. D. 535. 278 CONSTRUCTIVE NOTICE. Chap. IV. Sect. 3. Notice to trustees. Rc;,'istiation of an as!^ul•ance is not notice. pany, is inoperative as notice to the latter. But in the case of a joint agency (e. g., the directors of a company), notice to either whilst engaged in the business of his agency is notice to the principal ()■). There is no presumption of law that a director knows the con- tents of the books of the company (s). A shareholder in a company formed under the Companies Act, 1862, is not necessarily fixed with a knowledge of the con- tents of the memorandum or articles of association of the com- pany {t). But he must, within a reasonable time after the registration of the memorandum and articles of association, be presumed to acquaint himself with their contents. After the lapse of a reasonable time he cannot be heard to say that he had no knowledge of their contents. What will be a reasonable time may in some degree vary in different cases, but must always be measured with reference to the thing to be done {u). The shareholders in a company are not bound to look into the management, and will not be held bound to have notice of everything which has been done by the directors, who may be assumed by the shareholders to have done their duty {x). Notice to one of several trustees is, as a general rule, notice to all {y), but not where the trustee to whom alone notice is given has an interest adverse to that of his co-trustee, as e. g., where he has a beneficial interest which he has secretly in- cumbered {z). The registration of an assurance is not of itself notice. A prior equitable incumbrance will not, although registered, affect a subsequent purchaser without notice who has obtained the legal estate {a). But if a purchaser search the register, he will be presumed to have notice, unless the presumption can be re- (r) Bcmlc of United States v. Davies, 2 Hill (Amer.), 4G2. But see Story on Agency, ss. 140 a, 140 h. (s^HailmarKs Case, 9 Cli. D. 329. (/) Steioart's Case, 1 Cli. 574. (m) Lawrences Case, 2 Ch. 425 ; JVilkinxons Case, Re Madrid Bank, ib. 540. (.(•) atanlwijes Ca-:). A purchaser or mortgagee is not bound to make any inquiries with a view to the discovery of unregistered instruments. But if he or his agent actually knows of the existence of such unregistered instruments when he takes his own deed, and has abstained from inquiry with a view to avoid notice, the Court may post- pone him ; biit the case must be one in which the Court is able to come to a clear decision as to the fact of fraud (/). The non- production in a register county of deeds to the solicitor instructed to prepare a mortgage upon an estate there will not of itself be deemed a proof that the solicitor has acted fraudulentl}^ or even negligently so as to affect the interests of his client. The con- struction to be put upon his conduct does not depend, on an in- flexible rule of law, but upon the circumstances of the case (m). Where, therefore, the owner of an estate in Ireland had already created an equitable mortgage upon it by depositing the deeds with a creditor (which equitable mortgage was not registered), and afterwards, on being asked for them by a solicitor who was about to prepare a mortgage for another creditor, gave an excuse for their non-i^roduction, which under the circumstances appeared satisfactory, and also supplied in his own handwriting a summary of their contents, and the solicitor, in total ignorance of the equitable mortgage and of all that had been previously done, prepared the legal mortgage, which was duly registered, it was held that the legal mortgage had priority over the equit- able mortgage and was not assailable on the ground that the solicitor had improperly acted in preparing it without insisting on the production of the deed (7?). The Registry Acts do not apply to interests in land which are created in equity without writing (o). A man who takes a (/() JFyatt V. BarireU, 11) Ves. 435 ;■ {I) Lee v. Clutton, 46 L. J. CIi. 48. Cliaihdck v. Turner, 1 Ch. 310. (vi) Agra Bank v. Barrij, 7 E. & I. {{) Beilly v. Garnett, I. R. 7 Eq. App. Ca. 149. 25 ; Agra Bank v. Barry, 7 E. & I. (x) lb. App. Ca. 148 ; Lee v. Clutton, 4G L. (0) Snmptcr v. Cuopcr, 2 B. & Ad. J. Ch. 48. 223 ; Kdtlcu-dl v. JJ'atson, 21 Ch. D, (/.•) Bradley v. Bichcs, <) Cli. D. l.')3. C85. CONSTRUCTIVE NOTICE. 281 mere deposit of title deeds without writing or a written instru- Chap IV. ment will not lose his security by the mere registration of a con- veyance subsequently dealing with the property, the subject matter of the title deeds {p). But if an equitable mortgage by deposit of title deeds be accompanied by writing, it becomes capable of registration, and should be registered {q). A purchaser, who has advanced his money and taken a con- veyance without notice of a prior deed unregistered (r), of which has been imperfectly registered, may, upon acquiring a notice of it, register his own deed and so gain priority (s). So also may a purchaser whose equitable title has been completed before notice of a prior unregistered equity, but who afterwards obtains such notice, protect himself by registration [t). The same principles were held under the old law to apply to Notice of un- the case of a purchaser with notice of undocketed judgments {u) ; ii^KiockTted but under the new law a purchaser, even with notice, is not i"'4'i^iei^ts. bound by a judgment, unless it has been duly registered in the Common Pleas {v) ; nor will notice of a registered judgment affect a purchaser, unless it has been re-registered in due time [w). As between judgment creditors notice is not material (.r). Purchasers of lands in Middlesex are bound by notice of un- registered or undocketed judgments, but as between judgment creditors notice is not material. A prior judgment creditor has no equity against a subsequent judgment creditor, who has registered with notice (//). The registration of a judgment is not' notice (e), unless a Registration of judgineuts. (2O Rd Burlces Estate, 9 L. R. I. Ikaven v. Lord Oxford, 6 D. U. & G. 41. 492 ; Shaw v. Neale, 6 H. L. 5S4 ; (q) llcilhj V. Gurndt, I. R. 7 Eq Benham v. Keane, 1 J. & H. 685, 3 26. D. F. & J. 318 ; Evans v. Williams, (r) Elscy v. Lntijens, 8 Ha. 159. 34 L. J. Ch. 485. (s) Essex V. Bawjh, 1 Y. & C. C. (.>) Benham v. Keanc, 1 J. & 11. C. 620. 685, 3 D. F. & J, 318. SceiiVwis v. (0 RcilliJ V. Garnetf, I. R, 7 E4. Williamf:, 34 L. J. Ch. 485. 26. (ij) Benham v. Keane, 3 D. F. & J. (u) Davis V. Lord Stratlnuore, 16 318. Vus. 419 ; Sug. V. & P. 521. (;.) Chnrchill v. Grove, 1 Ch. Ca. (f) Sug. Y. & r. 533. 35, Freein. Ch. Ca. 176 ; Latic v, (v) 18 Vict. c. 15, s;. 3. Sue Jackson, 20 Betiv. 535. 282 FRAUD UPON MARRIAGE ARTICLES. Chap. IV. search has been made for judgments, in which case notice will '- — '- be presumed («.) ; but it seems that a title depending on the fact of the vendor having been a purchaser without notice of a registered judgment cannot be forced on a purchaser (6). Act of Parlia- A purchaser may be affected with constructive notice, not pend€7is &c. through his knowledge of any fact leading him to actual notice, notice. j^y^ ]^-y ]^jg neglect of the usual and recognised means for ac- quiring such knowledge or notice. For instance, a public Act of Parliament is notice to all the world (c) ; so is a liti pendens if registered under 2 Vict. c. 11, or a deed or will registered in a registered county or entered on Court Rolls, if the purchaser search over the period within which the instrument is registered (d) or the entry is made {dd). SECTION IV. — FRAUD UPON MARRIAGE ARTICLES. Sect. 4. Another class of frauds upon third parties, which will be re- lieved against, is where persons, after doing acts required to be done on a treaty of marriage, render those acts unavailing by entering into other secret agreements, or derogate from those acts, or otherwise commit a fraud upon the relatives or friends of one of the contracting parties (e) ; as where a parent declines to consent to a marriage on account of the intended husband being in debt, and the brother of the latter gives a bond for the debt to procure such consent, and the intended husband then gives a counter-bond to his brother to indemnify him against the first bond (/). So, also, where a creditor of the intended husband concealed his own debt and misrepresented to the lady's father the amount of the debts of the intended husband, the transac- tion was treated as a fraud upon the marriage, and the creditor was restrained from enforcing his debt at law against the lius- (a) Procter v. Cooiier, 2 Drew. 1, I (dd) Dart, V. & P. 863. Jur. N. S. 149. (e) Peyton v. Bladwell, I Vern. (6) Freer v. Hesse, 4 D. M. & G. 240. 495. (/) Redman v. Redman, 1 Vern. (c) Dart, V. & P. 863. 348 ; Turton v. Benson, I P. Wms. (f?) Hodgson V. Dean, 2 Sim. & St. 496 ; Scott v. Scott, 1 Cox, 366 ; 221. Palmer v. Neave, 11 Ves. 166. FRAUD UPON MARITAL RIGHTS, 283 band after the marriage {g). So, also, where a brother on the <^'i'ap- IV. marriage of his sister let her have a sum of money privately that her fortune might appear to be as much as was insisted on by the other side, and the sister gave a bond to the brother to repay it, the bond was set aside {h). So, also, where the money due by an intended husband upon a mortgage was represented by the mortgagee to the relations of the wife to be much less than was really due, he was not allowed to recover more than he had represented the debt to amount to (i). Another case of fraud upon marriage articles is where a father, who had on the marriage of his daughter covenanted that he would upon his death leave her certain tenements, and would also by his will give and leave her a full and equal share with her brothers and sisters of all his personal estates, transfers afterwards during his life a very large portion of his personal property to his son, retaining the dividends for his own life (A*). Covenants of this sort do not prohibit a parent from making any disposition of his property during his lifetime among his children more favourable to one than another. But they do prohibit a man from doing any acts which are designed to defeat or defraud the covenant. A parent may, if he pleases, notwith- standing the covenant, make an absolute gift to a child ; but the gift must be an absolute and unqualified one, and must not be a mere reversionary gift, which saves the income to the parent during his own life (/). SECTION V. — FRAUD UPON THE MARITAL RIGHTS. Another class of transactions which will be relieved asrainst Sect. 5. as being in fraud of the marriage contract are conveyances made {(]) Neville V. Wilkinson, 1 Bro. C. (^) Jones v. Martin, 3 Anst. 882, C. 543. See D'Albiac v. D'Alhiac, 5 Ves. 265 n. ; 8 Bro. P. C. 242. 1(5 Ves. 124 ; Morris v. Clarkson, 1 See Randall v. Willis, 5 Ves. 261 ; J. & VV. 107. M'Neill v. Cahill, 2 Bligh, 228. Qi) Gale v. Linda, 1 Vern. 475 ; Comp. Slacken v. Stocken, 4 M. & C. Lamlec v. Hanman, 2 Vera. 499. 95 ; Bell v. Clarke, 25 Beav. 436. (i) Barren v. Wells, Tree. Ch. (l) Jones v. Martin , 3 Anst. 882, 131. 5 Vea, 265 ii. 284 FRAUD UPON MARITAL RIGHTS. Chap. IV. lay an uuraarried woman of her property, durino- the treaty of marriage, without the knowledge of her intended husband, in contravention of his marital rights, or in disappointment of his just expectations (m). Several circumstances appear to have been thought material as negativing the imputed fraud : such, for instance, as the poverty of the husband, the fact that he has made no settlement on the wife, the fulfilment of a moral obli- gatiini, as in the case of a settlement upon the children of a former marriage, or of a bond given to secure a debt contracted for a valuable consideration, or the fact of the ignorance of the husband that his wife possessed the property (n). There can be no doubt that any of these facts would be a good ground for insisting that there should be a settlement, but it is not so easy to understand why they should constitute reasons for practising concealment upon him, or for treating such concealment as im- material (o). If both the property and the mode of its convey- ance, pending the marriage treaty, were concealed from the in- tended husband, there still is or may be a fraud practised on him. It is true that the non-acquisition of the property is no disappointment, but still his legal right is defeated, and the conveying away of the property for the benefit of a third person or the vesting and continuance of a separate power in the wife over property which ought to have been his, and which is with- out his consent made independent of his control, is a surprise upon him, and might, if previously known, have induced him to abstain from the marriage ( jj»). The mere fact, however, of (m) Lance v. Norman, 2 Ch. Eep. 1035. 41 ; Lady Strathmore v. Bowes, 2 («) Hunt v. Matthews, 1 Vern. Bro. C. C. 345, 2 Cox, 33, 1 Ves. Jr. 408 ; Taylor v. Puijh, 1 Ha. 608. 22 ; Goddard v. Sno^v, 1 Russ. 485 ; See Doicnes v. Jennings, 32 Beav. JLngland v. Downs, 2 Beav. 522 ; 290. Taylor v. Pugh, 1 Ha. 608 ; Llexvellin (o) England v. Doxrns, 2 Beav. V. Cohbold, 1 Siu. & G. 376 ; Downes 522, 529 ; Taylor v. Pugh, 1 Ha. 608, V. Jennings, 32 Beav, 290. See 613; Chambers v. Crabbe, 34 Beav. Loader v. Clark, 2 Mac. & G, 387 ; 457. See Poulson v. Wellington, 2 Chambers v. Crabbe, 34 Bear. 457, P. Wms. 533 ; Lady Strathnwre v. A secret settlement by a woman of Bowes, 2 Bro. C. C. 345, 6 Bro. P. C. her property during a treaty of mar- 427, 1 Ves. Jr. 22. riage, is not necessarily void at law. ( p) Carlcton v. Earl of Dorset, 2 Doe d. Eichcu'ds \. Lewis, 11 C. B. Vera. 17; Goddard y, Snov:, I Unas. FRAUD UPON MARITAL RIGHTS. 285 concealment, or rather the non-communication to liim, is notne- Chap. IV. Sect. 5. cessarily and under all circumstances equivalent to fraud. In the absence of any representation as to specific property, there is no implied contract on the part of the lady that her property shall not be in any way diminished before the marriage : but it is for the Court to determine in each case whether, having regard to the condition of the parties and the other attendant circum- stances, a transaction complained of by the husband should be treated as fraudulent (q). Where the husband has so conducted himself towards the intended wife that she cannot without dis- grace retire from the marriage, as where he had induced her to cohabit with him before marriage, a settlement made by her of her property without his knowledge will not be treated as in' fraud of his marital rights (r). The equity in favour of the husband does not arise, unless it can be clearly made out that at the time of the conveyance of her property by the wife there was an engagement of marriage between them (s). A conveyance to be fraudulent must be made in contemplation of a particular marriage (t). Nor has the husband any equity to set it aside, if before the marriage he has notice that the intended wife has dealt in some way with her property. It is essential to the application of the principle that the husband should, up to the moment of the marriage, have been kept in ignorance of the transaction. If he has notice before the marriage that the lady intended to make a settlement of her property, and nothing took place to justify a belief on his part that at the time of the marriage no such set- tlement had been made, he has no equity to set it aside, although he may not be proved to have been aware of any set- tlement having been actually made. If the husband has notice that the property has been in some way dealt with aud makes 485 ; Enrjland v. Do^vns, 2 Beav. 608. 522, 529 ; Doivnes v. Jennings, 32 (/■) Taylor v. Pugh, 1 Ha. G08. Beav. 290 ; Tahor v. Cunnivghmn, (s) England v. Downs, 2 Beav. 24 W. R. 156. 522 ; fJriggs v. Staplee, 2 Deg. & S. (q) De Manneville v. Compton, 1 572. V. & B. 354 ; St. George v. IFake, 1 (t) Mahcr v. IFohhs, 2 Y. & C. 317. M. & K. 610 ; Taylor v. Pugh, 1 Ha. 286 FRAUD UPON THIRD PARTIES. Chap. IV. no inquiry, he is bound by what has been done. It is enougli OCCli. 0« that he had notice of the intended settlement, though he may not have been aware of the trusts (u). If a bond be given by a woman before marriage to secure a debt contracted for valuable consideration, there is no fraud on the husband though it be concealed from him (x). The right of the husband to impeach a transaction, as being in fraud of his marital rights, may be lost by acquiescence or delay (y) ; nor have his representatives after his death any equity against the wife, if he does not before his death discover the fraud upon his marital rights (z). A wife has no similar equity to have a conveyance of the property of or a security given by the intended husband set aside as being a fraud upon her marital rights (a). But where upon a marriage the father of the husband agreed to give up to him a farm and stock in consideration of the wife's fortune being paid to the father, it being then stated that the intended husband was not indebted to any extent, and a deed was drawn up and executed in pursuance of the agreement, and on the same day that the deed was executed the intended husband gave his father a promissory note for 200^., it was held that the giving this note, coupled with the statement that the son was not indebted to any extent, was a fraud upon the intended wife and her father who gave the fortune, and that the father of the husband could not recover on the note against his son if he was alive, nor against his assets after his death (6). SECTION VT.— MARRIAGE AND PLACE BROKAGE BONDS. Sect. 6. Another class of transactions which are relieved against as being in fraud of third parties, are contracts or agreements to (li) St. George v. JValce, 1 M. & K. V. & B. 354 ; Loader v. Clarke, 2 610 ; England v. Doinis, 2 Beav. Mac. & G. 382 ; Doumes v. Jennings, 522 ; Griggs v. Staplee, 2 Deg. & S. 32 Beav. 290. See infra. 572 ; Wrigley v. Sioaimon, 3 Deg. & (2) Grazebrook v. Percival, 14 Jur. S. 458. See Prideaiix v. Lonsdale, 1 1103. D. J. & S. 433. (rt) M'Keogh v. M'Keogh, T. R. 4 {x) Blanchet v. Foster, 2 Ves. 2fi4. Eq. 338. (;/) Ik Mamievilh v. ('oinpton, 1 (/») lb. FKAUD UPON THIRD PARTIES. 287 negotiate a marriage between two parties for a certain compen- ^^^P- ^^ • sation (c). In some early cases, Grisley v. Lother (d), and a case cited in Hall v. Potter (e), a marriage brokage bond was held good at law ; but these cases cannot be considered law. The better opinion would seem to be that a marriage brokage bond is void at law upon grounds of public policy. In equity it has long been settled that such bonds will be relieved against, as well upon grounds of public policy, as because they tend to in- duce the exercise of undue influence in the promotion of mar- riages, and are a fraud on the families of those who are so induced to marry without taking the advice of their friends (/). Marriage brokage contracts are so adverse to public policy as not to be capable of confirmation (g) : and even money paid under them may be reclaimed (h). It makes no difference that the marriage is between persons of equal rank, age, and fortune, for the contract is equally open to objection upon general principles, as being of dangerous consequence (i). The principle has even gone further, and a bond given for assisting a clandestine mar- riage has been set aside, though given voluntarily after the marriage and without any previous agreement for the pur- pose (/.;). Upon a similar ground, if a parent or guardian, or any person nearly connected to a party privately connive with a third per- son, and agree to procure a marriage between such parties in consideration of a certain compensation, or agree upon payment of a certain sum to consent to such marriage, the contract is (c) See TForsley v. De Mattos, 1 match-makers, to receive a reward Burr. 476, 2)er Lord Mansfield. for their services to a limited extent. (d) Hob. 10. Story, Eq. Jur. 260. (e) 3 Lev. 412. (g) Cole v. Gibson, 1 Ves. 503, 506, (/) Hall v. Potter, 3 Lev. 412, 507 ; Boche v. O'Brien, 1 Ea. & Be. Show. P. C. 76 ; Arundel v. Tre- 358. villian, 1 Ch. Eep. 47 ; Laiv v. Law, (h) Smith v. Bruning, 2 Vein. Ca. t. Talb. 140, 142 ; Cole v. Gibson, 392 ; Goldsmith v. Bruning, 1 Eq. 1 Ves. 503 ; Vauxhall Bridge Co. v. Cp. Ah. 89. Spencer, Jac. 67 ; Boynton v. Hub- (i) Hall v. Potter, 3 Lev. 411, 1 hard, 7 Mass. (Amer.) 112. The Fonb. bk. 1, c. 4, .s. 10. civil law does not seem to have held (k) Williamson v. Gibson, 2 Sch. contracts of this sort in such severe & Lef. 357. rebuke, for it allowed proxertetm, or 288 FRAUD UPON THIRD PARTIES. Chap. IV. utterly void upon the ground that it is a bargain in contra- Sect. 6. . vention of the rights of third parties, whose interests are thus controlled and sacrificed (/). Of a kindred nature to marriage brokage contracts and governed by the same rule, are cases where bonds are given, or other agreements made as a reward for using influence and power over another person to induce him to make a will in favour of the obligee and for his benefit, for all such contracts tend to the deceit and injury of third parties, and encourage artifice and improper attempt to control the exercise of their free j udgment (771). But such cases are carefully to be distin- guished from those in which there is an agreement among heirs or other near relatives to share the estate equally between them, whatever may be the will made by the testator ; for such an agreement is generally made to suppress fraud and undue influ- ence, and cannot truly be said to disappoint the testator's inten- tion, if he does not impose any restriction on his devisee (n). Office brokage Of a kindred nature to marriage brokage contracts are office bonds. brokage bonds. Bonds of this sort are fraudulent, and there- fore void upon grounds of public policy, the tendency of such bonds being to introduce unfit persons into places of great public trust, and to defraud the public of the service of the most efficient candidates or officers (0). SECTION VII. BONDS TO MARRY. Sect. 7. A bond given by a young woman secretly to a man, con- ditioned to pay him a sum of money, if she did not marry him on the death of the parent or other individual from whom she has expectancies, but kept secret from him, is in equity looked {I) Peyton v. Bladwell, 1 Vern. TFetheredy. TFethered, ih. IS3; Story, 240 ; StribbleUll v. Brett, 2 Vera. Eq. Jur. 265, 785. 445 ; Keat v. Allen, ib. 588, 1 Funb. (0) Law v. Lau; Ca. t. Talb. 140, Eq. bk. 1, c. 4, s. 11; Story, Eq. d 'P. ^Vms. 291 ; Morris y. M'Culloch, Jur. 266, 267. 2 Eden, 190 ; Hannimjton v. IM (m) Dcbenham v. Ox, I Yes. 276. CJiatel, 1 Bro. C. C. 124 ; Hartwell («) Beckleyv. Newland,2 P. Wins. v. Harticell, 4 Ves. 811 ; Osborne v. ISl ; Harwood v. Tool-e, 2 Sim. 192 ; JVilliains, 18 Ves. 379. FRAUD UPON THIRD PARTIES. 289 on as a fraud on the parent or other individual, from whom she Chap. IV. ^ . . . Sects. 8, 9 has expectations, who disapproved of the marriage, and might be misled into making a provision for her, which, had he known of the bond, he might have done in sucli a manner as would have prevented the marriage (p). SECTION VIII. — FRAUD IN WITHHOLDING CONSENT TO MARRIAGE. Gifts and legacies are often bestowed upon persons upon con- Sect. 8. dition that they shall not marry without the consent of parents, guardians, or other confidential persons. If such consent to the marriage is withheld from a corrupt motive, the Court of Chan- cery may interfere. It has been contended that if the jDerson whose consent is required is interested in withholding it, he must show a reason for his dissent. But if the author of the trust chooses to require the consent of a person whom he knows at the time to have an interest in refusing it, it is difiScuIt to con- ceive an equity interfering with his choice. At all events, no equity will arise if the trustee has meant to act honestly, though his decision may not be the same as that at which the Court would have arrived (q). SECTION IX. — FRAUD IN RESPECT OF EXPECTANCIES. It would appear to have been partly, if not mainly, on the Sect. 9 ground that a bargain with an expectant heir in respect of his ~ expectancy during the life, and without the knowledge of the person from whom the expectancy was looked for, was a fraud on the latter, that a bargain with an expectant heir was liable to be opened and set aside upon the ground merely of under- value (r). Where, however, the heir deals not behind the back of (p) IFoodhovse v. Slwphy, 2 Atk. (?•) Davis v. Duke of Marlhoroiujh, 536 ; Cock v. Richards, 10 Ves. 429. 2 Sw. 140, 143 ; Kircg v. Hamlet, 2 (q) Clarke v. Parker, 19 Ves. 1. M. & K. 456, aiq^ra, p. 169. 290 FRAUD UPON THIRD PARTIES. Chap. IV. l^is father, hut with his sanction and assistance, and has all the protection which his father can give him, he is not entitled to relief, as if the contract had been entered into without such parental protection (s). So, also, a fair and bond fide agreement between expectants to share equally, or in a certain manner, the property which might be left them, although entered into behind the back of the person from whom the expectancy is looked for, has always been held valid in equity {t). SECTION X. FRAUD IN RESPECT OF SALES BY AUCTION. Sect. 10. Agreements whereby parties for the purpose of preventing competition at an auction, and of depressing the value of the property below its market price, engage not to bid against each other, have been held in some American cases to operate as a fraud upon third parties (u). But it is difficult to see upon what principle it can be maintained that a mere agreement between two persons, each desirous of effecting the purchase of an estate, that they will not bid against each other, but that one shall retire and leave the field open to the other, can be held to invalidate the sale, and in two cases before our own courts an agreement to this effect has been held good {x). In sales by auction the employment by the vendor of a puffer or agent to bid for the purpose of increasing the price without disclosing the fact was held by the Courts of Common Law to be fraudulent, and the purchaser might avoid the sale {y), and (s) King v. Hamlet, 2 M. & K. (Amer.), 29 ; Doolin v. Ward, 6 456 ; O'Rorke v. Bolinghroke, 2 Ajip. Johns. (Amer.), 194 ; H'ilbnr\. How, Ca. 834. 8 Johns. (Amer.), 444 ; Haivley v. (t) BccUey v. Newland, 2 P. Wms. Cramer, 4 Cow. (Amer.), 7l7 ; Bris- 182 ; Wethered v. Wethered, 2 Sim. hane v. Adams, 3 Comst. (Amer.), 183 ; Harifood v. Tooke, ib. 192 ; 129 ; Story, Eq. Jur. 293. Hyde v. White, 5 Sim. 524 ; Lyde v. (x) Galton v. Emuss, 1 Coll. 242 ; Mynn, 1 M. & K. 683. &ee Houghton Re Garew'f: Estate, 26 Beav. 187. V. Lees, 1 Jur. N. S. 862 ; Heap v. (y) Gh-een v. Baverstock, 14 C. B. Tonge, 9 Ha. 100. N. S. 204. (m) Jones V. Caswell, 3 Johns. FRAUD UPON THIRD PARTIES. 291 bids by the auctioneer as the vendor's agent have the same Chap. IV. effect (z). Courts of equity drew a distinction between the em ■ ployment of a bidder for the purpose of protecting the property from being sold at an undervalue, which was not considered fraudulent, and the employment of a bidder to increase the price ; but the employment of more persons than one to bid Avas held to be fraudulent, because only one could be necessary for the protection of the property, and the employment of more could only be for the purpose of increasing the price (a). In order to remove any conflict between the rule at law and in equity upon the subject in the case of sales by auction of land the Sale of Land by Auction Act, 30 & 31 Vict. c. 48, was passed, enacting by sec. 4 that where a sale by auction of land would be invalid at law by reason of the employment of a puffer, the same shall be deemed invalid in equity as well as at law (b). The announcement that property is to be sold by auction " without reserve " imports that there shall be no bidding directly or indirectly on the part of the vendor, and the em- ployment of any bidder at a sale under such conditions is fraud- ulent. "Where," said Lord Cottenham, in Robinson v. Wall (c), " a property is offered for sale without reserve, the meaning and the only meaning that can be attached to it is that of the bidders who choose to attend the sale, whoever bids the highest shall be the purchaser ; that the biddings shall be left to them- selves, and that there shall be no bidding on the part of the vendor, and it is not without reserve, the biddings are not left to themselves, if any means or contrivance, it matters not what, be resorted to for the purpose of preventing the effect of open competition. I consider, therefore, the term ' without reserve ' to exclude any interference on the part of the vendor or of those who come in under him which can under any possible circumstances affect the right of the highest bidder to have the (z) Parfity. Jepson, 46 L. J. C. P. Flint v. JFoodin, 9 Ha. 618. 529. (b) See Heatlcy v. Newton, 19 Ch. (a) Woodward v. Miller, 2 Coll- D. 326. 279 ; Robinson v. JFall, 2 Ph. 372 ; (r) 2 Ph. 375. I' 2 292 FRAUD UPON THIRD PARTIES. Chap. IV, property knocked down to him, and iliat without reference to the amount to which that highest bidder shall go " {d). In a case where a sale was stated to be "without reserve but with liberty to the parties interested to bid," it was held that the purchaser could not avoid his contract upon the ground that the vendor had increased the price by bidding against him (e). With respect to sales " without reserve " the above statute has enacted by sec. 5 that the particulars or conditions of sale by auction of land shall state whether such land will be sold without reserve or subject to a reserve price or whether a right to bid is reserved, and that if it is stated that such land shall be sold without reserve it shall not be lawful for the seller to employ any person to bid at such sale or for the auctioneer to take knowingly any bidding from any such person. The section makes a distinction between a reserved price and a reserved right to bid, and under conditions stating the former only it is not competent for the vendor to employ a person to bid up to the price stated to be reserved, and a sale effected by means of such bidding was set aside (/). By sec. 6 it is enacted that where any sale by auction of land is declared either in the particulars or conditions of such sale to be subject to a right for the seller to bid, it shall be lawful for the seller or any one person on his behalf to bid ; but in a case where the seller reserved a right to bid once, and the auctioneer, with his sanction, bid thrice, the sale was held voidable at the option of the purchaser ((/). It seems that a seller's right to bid once would be exercised by the auctioneer starting the property at a price or by the seller or p,uctioneer naming a reserve {h). Sec. 7 takes away the power of the Court to open biddings after sales by auction of land under its authority unless on the ground of fraud or improper conduct in the management of the sale (/). {(l) See Thornett v. Haines, 15 M. (g) Parfit v. Jepson, 46 L. J. C. P. & W. 372, 2^er Lord Wensleydale. 529. (e) Dimmoch v. Hallett, 2 Ch. 26. Qi) lb. 531, fer Grove, J. (/) Gilliatt V. Gilliatt, 9 Eq. 60. {i) See Delves v. Delves, 20 Eq. 77. FRAUD UPON THIRD PARTIES. 293 On tlie other hand, if a purchaser procure a sale to himself Chap. IV. by fraudulently or wrongfully preventing other persons from — — '- — bidding, the vendor may avoid the sale (k). So, also, where the purchaser employed the vendor's agent to bid for him, which deterred other persons from bidding who supposed him to be bidding for the vendor, it was held sufficient ground for refusing specific performance (l). (k) Fuller v. Abrahams, 3 B, & B. C. 326. See Maso7i v. Armitage, 13 116. Ves. 25. (J) Twining v. Morrice, 2 Bro. C. CHAPTER Y. MISCELLANEOUS FEAUDS. SECTION I. FRAUD IN WILLS. Chup. V. Frauds upon testators in the making of wills are a class of !!-:_J frauds against which the Court will relieve. The execution of a will with due solemnities by a person of competent understanding and apparently a free agent being duly proved, the presumption is that the testator was cognisant of its contents, and that the instrument expresses his will {a), unless there be other circumstances to lead to a different con- clusion, in which case the burden of proof lies upon the party propounding the will, and the Court will not pronounce in its favour unless it is judicially satisfied that the instrument pro- pounded is the last will of a free and capable testator (6). Any- one who questions the validity of a will is entitled to put the person who alleges that it was made by a capable testator upon proof that he was of sound mind at the time of execution (c). By the Roman law qui se scripsit heredem could take no benefit under a will {d). This is not the case by the law of England, but if a person benefited by a will has himself pre- pared it or procured it to be prepared, the law looks on the case with suspicion, and the Court requires clear and satisfactory proof that the testator knew and approved the contents of the instru- ment, and that it expressed his real intentions (e). If there be (a) Boyse v. Russborough, 6 H. L. ((/) Dig. lib. 34, s. 8. 49 ; Browning v. Budd, 6 Moo. P. C. (e) Paske v. Ollatt, 2 Phillim. 324 ; 435, Baker v. Bait, 2 Moo. P. C. 321 ; (b) Broivning v. Budd, ib. Barry v. Butlin, ib. 491 ; Greville v. (c) Srnee v. Smee, 5 Pr. D. 90. Tylee, 7 Moo. P. C. 320. FRAUD IN WILLS. 295 no evidence of instructions previously given, or knowledge of its ^^^^^- J- contents, the party propounding it must prove by evidence of — some description or other that the testator knew and approved of the instrument (/). The onus of proof may be increased by circumstances, such as unbounded confidence in the drawer of the will, extreme debility in the testator, clandestine and other circumstances, which may increase the presumption even so much as to be conclusive against the instrument (g). "Proof of knowledge of the contents of a will," said Dr. Lushington in Durnell v. Corfield (h), " may be given in any form. The degree of proof depends on the circumstances of each case. Although in perfect capacity, knowledge of the contents will be inferred ; yet where capacity is impaired, and the benefit of the drawer of the will large, the suspicion is strong, and the proof must be most stringent. The Court must be satisfied of proof of knowledge of the contents of the will. I must add another ingredient— the nature of the instrument executed, its simplicity or complexity, because when you are measuring the power of a weakened intellect the quality of the subject to which it is to be applied must always be an important test. Where the drawer of an instrument gives himself a benefit under the instrument, it is a case for suspicion, depending more or less upon the circumstances of each individual case that the proof must be in proportion to the degree of suspicion, which of course will vary. The greater the benefit and the less the capacity, the more stringent is the requirement of proof of knowledge of the contents." If a testator being of sound mind and capacity has read the will, there is, as a general rule, sufificient evidence to show that he knew and approved of its contents (i). So also if a will has been read over to a capable testator on the occasion of its exe- cution, or there is evidence to show that its contents have been brought to his notice in any other way, this fact when coupled (/) Barrij v. BtMin, 2 Moo. P. C. Greville v. Tylee, 7 Moo. P. C. 320 ; 491 ; Mitchell v. Thomas, 6 Moo. P. Ashwell v. Lomi, 2 Pr. & Div. 477. Q. 137. (h) 1 Roberts, 63. (y) Paske v. Ollatt, 2 Phillim. 324 ; (i) A tier v. Atkinson, 1 Pr. & Div. Joius V. Oodrich, 5 Moo. P. C. 16 ; 665. 296 MISCELLANEOUS FRAUDS. Chap. V. with his execution thereof will, as a general rule,, he sufficient l^ll_ ^Q show that he approved as well as knew the contents thereof (J). But circumstances may exist which may require that something further shall be done in the matter than the mere establishment of the fact of the testator having been a person of sound mind and capacity, and also of his having had read over to him that which had been prepared for him, and which he executed as his will. There is no unyielding rule of law (especially when the ingredient of fraud enters into the case) that when it has been proved that a testator, competent in mind, has had a will read over to him, and has thereupon executed it, all further inquiry is shut out (k). The exercise of undue influence may be a ground for the interposition of the Court to set aside a will. Though a man may have a mind of sufficient soundness and discretion to manage his own affairs in general, still, if such a dominion or influence be obtained over him as to prevent his exercising that discretion in the making a will, he cannot be considered as having such a disposing mind as will give it efiect (/). In cases of weakness of mind arising from the near approach of death or otherwise, strong evidence may be required that the contents of the will were known to and approved by the testator executing the will at such time (m), and that the execution was his spontaneous act (n). When it has been proved that a will has been executed with due solemnities by a person of competent understanding, and apparently a free agent, the burden of proving that it was executed under undue influence rests on the party who alleges it (o), or at least he must show facts from which the Court would be justified in treating the circumstances attending the bounty as suspicious. Further, in order to set aside the will of a person of sound mind, it is not sufficient to show that the (j) Guardhouse v. Blackhurn, ib. (in) Mitchell v. Thonms, 6 Moo. P. 116. C. 137 ; Durnell v. Coijield, 1 Roberts, (k) Fidton V. Andrew, 7 E. & L (33 ; 8 Jiu". 915. App. Ca. 469. (») Tribe v. Tribe, 13 Jur. 793. (l) MQuntain v. Bennett, 1 Cox, (o) Botjse v. Eussborough, 6 H. L. 355, 2,49. FRAUD IN WILLS. 297 circumstances attending its execution are consistent with the Chap. V, Sect. 1. hypothesis tliat it was obtained by undue influence, it must be shown that they are inconsistent with a contrary hy^ao- thesis (^9). A distinction exists between the influence which is held to be undue in the case of transactions i7iter vivos, and that which is called undue in relation to a will. In the first place, in the case of gifts or contracts inter vivos, there is a transaction in which the person beneBted at least takes part, whether he unduly urges his influence or not, and in calling on him to explain the part he took, and the circumstances that brought about the gift or obligation, the Court is plainly requiring of him an explanation within his knowledge. But in the case of a legacy under a will, the legatee may have and in general has no part or even knowledge of the act ; and to cast on him, on the bare proof of the legacy and his relation to the testator, the burden of showing how the thing came about, and under what influence, or with what motives the legacy was made, or what advice the testator had, professional or otherwise, would be to cast a duty on him which in many, if not in most, cases he could not possibly discharge. Another distinction is this. In the case of gifts or transaction inter vivos, it is considered that the natural influence Avhich such relations as those in question involve, exerted by those Avho possess it to obtain a benefit for themselves, is an undue influence. Gifts or contracts brought about by it are therefore set aside, unless the party benefited can show affirmatively that the other party to the transaction was placed in such a position as would enable him to form an absolutely free and unfettered judgment. The law reo^arding wills is very different. The natural influence of the parent or guardian over the child, or the husband over the wife, or the attorney over the client, may lawfully be exerted to obtain a will or legacy so long as the testator thoroughly under- stood what he is doing and is a free agent. There is nothing illegal in the parent or husband pressing his claims on a child or wife, and obtaining a recognition of these claims in a legacy, provided that persuasion stop short of coercion, and that the (p) lb. 5]. 298 MISCELLANEOrS FRAUDS. Chap. V. volition of the testator, though biassed and impressed by tlie ^—^ relation in which he stands to the legatee, is not overborne and subjected to the domination of another (q). " The influence which will set aside a will," said Mr. Justice Williams (r), " must amount to force and coercion destroying free agency ; it must not be the influence of affection or attach- ment ; it must not be the mere desire of gratifying the wishes of another, for that would be a strong ground in support of a testamentary act ; further, there must be proof that the act was obtained by this coercion, by importunity which could not be resisted — that it was done merely for the sake of peace, so that the motive was tantamount to force and fear." To the same effect were the words of Lord Penzance in charging a jury with resjDect to what shall constitute undue influence in the making of a will, in Hall v. Hall (s) : " To make a good will a man must be a free agent, but all influences are not unlawful. Persuasion appeals to the affections or ties of kindred, to a sentiment of gratitude for past services, or pity for future destitution, or the like — these are all legitimate, and may be fairly pressed on a testator. On the other hand, pres- sure of whatever character, whether acting on the fears or the hopes, if so exerted as to overpower the volition without con- vincing the judgment, is a species of restraint under which no valid will can be made. Importunity or threats such as the testator has not the courage to resist ; moral command asserted and yielded for the sake of peace and quiet or of escaping from distress of mind or social discomfort ; these, if carried to a degree in which the free play of the testator's judgment, discretion, or wishes is overborne, will constitute undue influence, though no force is either used or threatened. In a word, a testator may be led, not driven, and his will must be the offspring of his own volition and not that of another " {t). In a case, accordingly, where the plaintiff, a Roman Catholic priest, had resided with the testatrix and her husband many years as chaplain, and for a (q) Parfit v. Lcncless, 2 Pr. & Div. (s) 1 Pr. & Div. 482. 4(39_ (t) See KinUside v. Harrison, 2 Or) Executors and Administrators, Phillim. 551 ; Baker v. Batt, 2 Moo. Book 2, Cli. 1, s. 2. P. C. 321. FRAUD IN WILLS. 299 part of the time as confessor, and was confessor at the time the C'hap. V. will in dispute was made, but there was no evidence that the ■ plaintiff had interfered in the making of the will, or that he had procured the gift of the residue to himself, or that he had brought such gift about by coercion or dominion exercised over the testatrix against her will or by importunity not to be resisted, it was held that there was no evidence to go to the jury on the issue of undue influence (u). So, also, a solicitor may take a benefit under the will of a client, although he may himself have prepared it, if no undue influence has been exerted by him over the testator (x). So, also, a bequest of the bulk of her property by an old woman to her medical attendant (who was a stranger to her in blood, and in whose house she resided) was upheld, though many of the acts of the medical man with respect to the property deserved serious reprobation ; none of them, how- ever, being so connected with the will as to justify the Court in deciding that the execution of the will was procured by means which the law holds to be fraudulent (y). The difficulty of defining the point at which influence over the mind of a testator becomes so pressing as to be properly described as coercion is greatly enhanced when the question is one between husband and wife (s). The influence to be undue within the rule of law which would make it sufficient to vitiate a will may be exercised by means of fraud. " If," said Lord Cranworth, in Boyse v. Russhorough (a), "a wife by falsehood raises prejudice in the mind of her husband against those who would be the natural objects of his bounty, and by contrivance keeps him from intercourse with his relations to the end that these impressions which she knows he had thus formed to their disadvantage may never be removed, such contrivances may, perhaps, be equivalent to positive fraud, and may render invalid any will executed under false impres- (u) Parfit V. Lawless, 2 Pr. & Div. {y) Jones v. Godrich, 7 Moo. P. C. 472. 16. See Grevilk v. Tylec, ib. 320. (x) Paske v. Ollatt,2?\n\\\m. 323 ; {z) Boyse v. Russboronrjh, G H. L. Barry v. Bidlin, 2 Moo. P. C. 480 ; 48. Walker v. Smith, 29 Beav. 394. X«) 6 H. L. 49. 800 MISCELLANEOUS FRAUDS. Chap. V. sions thus kept alive" (b). So, also, the revocation of a will Sect 1 • I \ ' _ — ^ procured by false and fraudulent representations respecting the character and conduct of a legatee, when made for the purpose of imposing on a testator and inducing him to revoke the bequest in favour of the person calumniated, is void (c). Relief also will be given in equity on the ground of fraud, if a testator be induced to omit the insertion in his will of a formal provision for any intended object of his bounty, upon the faith of assurances, given by liis heir or other person who would take his property in the event of his omitting to insert the particular bequest in his will, that his, the testator's, wishes shall be executed as punctually and as fully as if the bequest were formally made (d). An engagement of a like nature may be entered into not only by words but may be inferred from conduct (e). The case of course will be much the stronger if the insertion of the provision be prevented by physical inter- ference on the part of the interested person (/). To invalidate a will on the ground of fraud or undue influence it must be shown that they were practised with reference to the will itself, or so contemporaneously with the will or connected with it as by almost necessary presumption to affect it (g). But where it appears that at or near the time when the will sought to be impeached was executed, the testator was in other important transactions so under the influence of the person benefited by the will that as to him he was not a free agent, but was acting under undue control, the circumstances may be such as fairly to warrant the conclusion, even in the absence of evidence bearing directly on the execution of the will, that in regard to that also the same undue influence was exercised (//.). An issue whether a will was obtained by fraud ought not to be submitted to a jury unless there is reasonable evidence : 1, that (b) Comp. Browning v. Budd, 6 (e) lb. ; Paine v. Hall, 18 Ves. Moo. P. C. 430. 475. (c) Allen V. Macpherson, 1 H. L. (/) Dixon v. Olmius, 1 Cox, 414, 207 ; Lord Longford v. Purdon, 1 L. (g) Jones v. Godrich, 5 Moo. P. C. K. I. 82. 40. (d) Russell v. Jackson, 10 Ha. 213 ; (h) Botjse v. Russhorotigh, 6 H. L. M'Cormick v. Grogan, 4 E. & I. App. 51. See Parf.t v. Lmdess, 2 Pr. & Ca. 88. Div. 472. FRAUD UPON POWERS. 301 fraud had been practised ; 2, that its influence continued so Chap. V. '■ ^ Sect. 1. that the testator was labouring under it at the time he made his will ; 3, that he was by that means induced to make his will (i). Nor ought an issue whether a will was obtained by undue influence to be submitted to a jury unless there is reasonable evidence : 1, that the person charged had influence over the testator ; 2, that he exercised that influence over the testator to the extent of coercion in relation to the will itself ; 3, that the execution of the impeached instrument was procured by the exercise of such influence as the causa causans of the act itself (A;). It lies on the person who brings the charge to prove it by direct or circumstantial evidence. Circumstantial evidence is enough, for a jury is at liberty to infer undue influence, not as matter of surmise, but if the evidence leaves no other rational hjrpothesis on which the conduct of the testator can be accounted for(0. SECTION IT. — FRAUD UPON POWERS. A class of frauds against which courts of equity will relieve, gect. 2. are frauds upon powers. There is a fraud upon a power if a man, having a power of appointment, corruptly exercises the power with a view to his own personal benefit and advantage. An appointment under a power, accordingly, Avill be set aside in equity if it appear that the person in whose favour the power has been exercised has agreed or stipulated to give the donee of the power some benefit or advantage in tlie event of the power being exercised in his favour (m), or if the circumstances of the case attending the execution of the power are such as to show conclusively that {i) Lord Longford v. Purdon, 1 L. Palmer v. TVheeler, 2 Ba. & Be, 31 ; R. I. 75, Farmer v. Martin, 2 Sim. 511 ; (Jc) lb. Arnold v, Hardwick, 7 Sim. 343 ; (I) Barry v. Butlin, 2 Moo. P. C. Jackson v. Jackson, 7 CI. & Fin. 977 ; 491 ; Lord Longford v, Purdon, 1 L. Roirley v. Bov-ley, Kay, 242 ; Reid\. R. I. 80. Reid, 25 Beav. 478. See Askham v. (m) Lane v. Page, Aml)l. 233 ; Barher, 17 Beav. 44. 302 MISCELLANEOUS FRAUDS. ^s'e^ct' 2 ' *^^^ appointment was made with a view to some profit ultimately — accruing to the donee of the power (n) ; as, for instance, where a parent, having a power of appointment among children, exercises it in favour of a son, a lunatic, in very bad health and likely to die, in which event the parent would of course become entitled to the fund, as the personal representative of the son (o). So, also, and for the same reason, where a parent having power to raise portions for children, appointed a portion to a child in a delicate state of health long before it was required, and the child died shortly afterwards, the appointment was held invalid (p). So, also, an appointment by a parent in favour of a daughter, with a view to obtaining the benefit of the fund so appointed, through the exercise of undue parental influence over her, would be held invalid (q). Under a power to appoint to children a fund actually set apart or provided, shares may be appointed to a child so as to vest long before they are required. A bond fide appointment to a child of very tender age, and in good health, of an estate or fund which has been previously set apart or provided for the benefit of children is in itself no sign of fraud. It is of no consequence that the child may die shortly afterwards, if it was in good health at the time the power was exercised. If the power be in other respects well executed, it is immaterial that it may have in fact been exercised with the object of providing that in any event the persons entitled in remainder on failure of children shall not take the estate or fund (r). Where the donee of a power of raising portions for the benefit of children has under the terms of the power clear authority to fix the times at which portions shall vest, and appoints a portion to vest immediately, the Court will not hold the appointment invalid as a fraud upon the power, because in the events which have happened the donee of the power has (n) Humiihrey v. Olver, 28 L. J. mour, 1 Bro. C. C. 395. See Henty Ch. 406. See Cooper v. Cooper, 8 v. Wrey, 21 Cli. D. 332. Eq. 312, 5 Ch. 203 ; Duggan v. (y) Ee Marsden's Trusts, 4 Drew. Duggan, 7 L, R. I. 155. 601. (o) Wellesky v. Mornington, 2 K. (?•) Butcher v. Butcher, 14 Sim. & J. 143. 444 ; Fenron v. Deshrisay, 14 Bear. {p) Lord Hinchinhrool:e v. f>ey- 635. FRAUD UPON POWERS. 303 obtained a benefit from its exercise. In a case, accordinwly, Chap. V. Sect. 2. where a parent having such a power exercised it in favour of three daughters of tender age, it was held that the mere fact that the portions were appointed so that upon the death of the children the father took the benefit of their shares as next of kin was not of itself sufficient to induce the Court to set aside the appointment as a fraud on the power (s). It would be otherwise, however, if there were evidence to show that tlie early death of any of the children might have been reasonably expected (t). "The results," said Lord Justice Lindley, in Henfy v. Wrey (u) " at which I have arrived from a careful examination of all the authorities are as follows : — First, that powers to appoint portions charged on land ought, if their language is doubtful, to be construed so as not to authorize appointments vesting those portions in the appointees before they want them, that is, before they attain twenty-one, or, if daughters, marry ; secondly, that when, on the true construction of the power, and the appoiiitment, the portion has not vested in the lifetime of the appointee, the portion is not raisable, but sinks into the inheritance ; thirdly, that when the language is clear and un- ambiguous, effect must be given to it ; fourthly, that Avhen, upon the true construction of both instruments, the portion has vested in the appointee, the portion is raisable, even although the appointee dies under twenty-one, or, if a daughter, un- married ; fifthly, that appointments vesting portions charged on land in children of tender years who die soon afterwards are looked at with suspicion, and very little additional evidence of improper motive or object will induce the Court to set aside the appointment or treat it as invalid, but that, without some addi- tional evidence, the Court cannot do so." The fact that the donee of the power may derive a benefit under the appointment does not necessarily render the appoint- ment invalid (x). If the object of the appointment be to secure a benefit for (s) Henty v. JFrey, 21 Ch. D. 332. (r) Beere v. Ilofmeister, 23 Beav. (0 lb. 101. (u) 21 Ch. D. 359. .304 MISCELLANEOUS FRAUDS. Chap. V. all the objects of the power, the appointment is good, though the appointor may to some extent participate in such benefit {y). Thus, in a case where it was urged that certain appointments (made by a tenant for life acting under a power given by a marriage settlement), the object of which was to effect build- ing leases were for the benefit of the appointor, and therefore, not being authorized by the settlement, were invalid, the Court considered that this principle should give way when the benefit of the appointment extended to parties in interest. The building leases had indeed benefited the tenant for life but they had also benefited the other interested parties in the improved value of the property, which they would lose if the appointment were declared void. To hold otherwise would be to strain a rule intended to benefit the objects of the power to a rigid exactness which would inflict manifest injury to them {z). So, also, where a father, having a power of appointment over a fund in favour of children, on the marriage of a daughter appointed a share to her to be held upon the trusts declared by her marriage settlement, and by the settlement the fund so appointed was limited for the benefit of the husband and wife during their respective lives and then for the benefit of children, with an ultimate trust in default of children for the father, his executors, administrators, and assigns, it was held that the appointment was not in fraud of the power {a). "The transaction," said Lord Hatherley (6), " is a virtuous and proper transaction, in which the father takes care that the interests of the children shall be protected, and simply protects the pro- perty against the marital right, which would otherwise transfer it altogether from the source from which it came, and he puts it back into the channel in which it was at the time of the marriage." If a person be the only child who has been kind to a parent in distress, there is no fraud if the parent exercises a power of appointment in his favour (c). Nor is there fraud if a parent exercises a power of appointment in favour of two of {y) Re HuislCs Cliarity, 10 Eq^. 5. (h) lb. (z) lb. (c) JVheeler v. Palmer, 2 Ba. & Be. (a) Cooper v. Conjper, 5 Cli. 212. 31. FRAUD UPON POWERS. r^oj his sons to enable them to embark in business, and then, at C^li^ap- V- their request, becomes a partner with them in the business, -- there being no evidence to prove any bargain between them in the event of his exercising the power in a particular way [d). An appointment, however, to one of several objects of a power in payment of a debt due to him from the appointor is bad (e). Although an appointment by a parent in favour of a child, over whom he exercises undue influence, cannot be sup- ported (/), it is otherwise if the exercise of undue influence be disproved ig). A. child to whom property has been appointed by a parent may, in such a case, give the parent a benefit or advantage in the property so appointed {h). In an arrangement settling the interests of all the branches of a family, children may contract with each other to give to a parent, who had power to distribute property among them, some advantage which the parent, without their contract with each other, could not have (i). In order, however, to constitute a fraud upon a power, it is not necessary that the object of the exercise of the power should be the personal benefit or advantage of the donee of the power. If the design of the donee in exercising the power is to confer a benefit, not upon himself actually, but upon some other person not being an object of the power, that motive just as much interferes with and defeats the purpose for which the power was created as if it had been for the personal benefit of the donee himself. If the donee of a power of appointment exercises the power in favour of one of several objects of the power, with a view to the benefit of a stranger, tlie appointment is fraudulent and void, even although the motive of the donee is not morally wrong {h). A man who takes property absolutely under an ap- pointment may do with the property so appointed as he pleases, {d) Cockroft V. Sutdiffe, 2 Jur. N. (r/) See swpra, p. 157. S. 323. (/') Davis v. Uphill, 1 Sw. 136 ; (e) Beid v. Reid, 25 Beav. 478. fFarde v. Dic/csoH, 5 Jur. N. S. 699. See Beddoes v. Pugh, 26 Beav. 411. {i) Davis v. Uphill, 1 Sw. 136. {f) Re. Marsden's Trusts, 4 Drew. (k) Re Marsden's Trusts, 4 Drew. 601. See Tophnm v. Diikf of Port- 601. and, 1 D. J. & S. 517. 30G MISCELLANEOUS FRAUDS, ■Chap. V. and may settle it on persons who are not objects of the power (?) ; but there is a fraud upon a poAver if an appointment be made upon a bargain for the benefit of persons who are not objects of the power (m). The appointment, accordingly, of a portion of a fund to a daughter, for the purpose of paying her hus- band's debts, was held void (n). So also, where a married woman, having a power to appoint a fund of which she received the income for her life, appointed the whole fund at her death absolutely in favour of her daughter, in order that thereout the daughter should benefit the father, the appointment was held invalid (o). The principle has been held even to apply to a case where an arrangement was entered into between the original donor and creator of the power and any of the objects of the power, to benefit persons other than those Avithin the power (p). The principle that the donee of a power may not aiDpolnt to a person who is not an object of the power applies even although the appointee is not privy to the intentions of the donee of the power. The design to defeat the purpose for which the power was created Avill stand just the same whether the appointee Avas aware of it or not (q). Where, accordingly, a married Avoman, having a poAver to appoint a fund of Avhich she received the income for her life among her children, ap- pointed the whole fund at her death in favour of her daughter in order that thereout the daughter should benefit her father, relying on the influence Avhich the father aa^ouM have over her to carry out the secret arrangement, the appointment was held invalid, although the daughter Avas not informed of the mother's intention until after her mother's death (r). The fact, hoAvever, that under the provisions of an appoint- ment, Avhether such provisions appear on the face of the instru- ment itself or are to be gathered from intrinsic evidence, some (l) Routledge v. Dor rill, 2 Ves. Jr, 601. 357. See BirUy x. Birhn, 25 Beav. {p) Lee v. Fernie, 1 Beav. 483. 2:)9. {q) Re Marsden's Trusts, 4 DreAV. (m) Birleij v. Birletj, ib. ; Pnjor v. 601 ; Topham v. Duke of Portland, 5 Pryor, 2 D. J. & S. 205. Ch. 61. (n) Ranking v. Barnes, U W. R. (r) Ih. Si^e Rankinfj v. Barnes, 12 568. ^Y. R. 568. (o) Re Marsden's Trusts, 4 DreAV. FRAUD UPON POWERS. 307 persons Avho are not objects of the power may take interests ^^ap. V. in the appointed fund either in conjunction with or in succes sion to persons who are objects of the power is not of itself sufficient to invalidate the appointment (s). If there is nothing on the -face of tiie transaction or in the evidence to indicate that the appointment was made with the intention of benefiting the donee of the power, or that it was other than part of a fair and reasonable division of the pro- perty of a father among his children, the appointment is not invalid, though the effect may be to confer a benefit, not only upon the donee, but also upon others who were not objects of the power (t). Although children may contract with each other to give to a parent, who has power to distribute property among them, some advantage which the parent, without their contract with each other, would not have (u), a transaction of the sort cannot be upheld if, taken as a whole, it a^opears not to be a bond jide family arrangement, but to have been entered into in fraud of the power, for the purpose of giving a benefit to a person who was by the donor excluded from being an appointee or from deriving any advantage from the exercise of the power {x). There is a fraud upon a power, not only where it is exercised in favour of persons who are not the proper objects of the power, but also where it is exercised for purposes foreign to those for which the power was created {y). The donee of the power shall, at the time of the exercise of the power, and for any pur- pose for which it is used, act with good faith and sincerity, and with an entire and single view to the real purpose and object of the power, and not for the purpose of accomplishing or carrying into effect any object which is beyond the purpose and intent of the power {z). It is, accordingly, a fraud upon a power, if a man having a power to appoint among two sisters appoints the (s) Roach V. Trood, 3 Ch. D. 440, {y) Tophnm v. DiiJye of Portland, 1 per Baggallay, J. D. J. & S. 570. (t) Roach V. Trood, 3 Ch. D. 440. (z) Duke of Portland v. Toj^ham, (u) Davis V. Uphill, 1 Sw. 136. 11 H. L. 54, per Lord Westljury, 5 (x) Ayassiz v. Squire, 18 Beav. Cli. 60 ; Daygan v. Dngyan, 1 L. T?. 431. I. 155. X 2 ;0S MISCELLANEOUS FRAUDS. Chap. V. whole to one of them, it beincf understood that she was onlv to Sect. 2. . . ° receive one moiety of the fund to her own use, and was to allow the other to accumulate, subject to some future arrange- ment (a). In determining whether there is a fraud upon a power, the Court looks to the purpose with which the power was exercised (h). In Scroggs v. Scroggs (c), the consent of a trus- tee was necessary to the exercise of a powei-, and the donee of the power procured the trustee's consent by a false representa- tion, to which the appointee does not appear to have been in any way a party ; yet the Court set aside the appointment (d). Any attempt to exceed the limitations of a power through the medium of any appointment to one of the objects of it in ex- clusion of the other is equally invalid, whether the purpose of the donee be selfish or, as he supposes, a more beneficial mode of effecting that which he takes the donor of the power to have desired. The Court will not allow him to interpret the donor's intention in any other sense than the Court itself holds to be the trrc construction of the instrument creating the power, and a literal execution of the power with a purpose which it does not sanction is regarded as a fraud on the power (e). If there be a fraudulent arrangement between the donee of a power and the appointee, the bad purpose will, in general, vitiate the appointment in toto, and not merely the part to which the fraud extends (/). Appointments to children, ac- cordingly, in part fraudulent, have almost always been avoided altogether (g). In ^ases, however, where the evidence enables the Court to distinguish what is attributable to an authorised from what is attributable to an unauthorised purpose, the bad purpose will not affect the whole appointment (Ji). So when (a) lb. 32. 626. (6) Topham v. Duke of Portland, (g) lb. ; Farmer v. Martin, 2 Sim. 1 D. J. & S. 570, 5 Ch. 60. 511 ; Arnold v. Hardivicke, 7 Sim. (c) Ainbl . 272. 343. See Roivley v. Rowley, Kay, 259. (d) Per Turner, L. J., 1 D. J. & (h) Topham v. Duke of Portland, 1 S. 570. D. J. & S. 572, per Turner, L. J. (e) Topham v. Duke of Portland, 5 See Carver v. Richards, 27 Beav. Ch. 59. 488 ; Ranking v. Barnes, 12 W. R. (/) Daubeny v. Cockbnrn, 1 Mt-r. 565. FRAUD UPON POWERS. 309 there is a sum of money to be appointed among children, Chap. V. although an appointment to one child may be void on account — ■ of a corrupt agreement, an appointment to another child, although by a contemporaneous deed, if it can be severed from the previous appointment so as not to form part of the same transaction, will be valid (i). Although in the case of appointments to children, a fraudu- lent arrangmeut between the donee of the power and the appointee will, in general, vitiate the whole appointment, a ditferent doctrine has been maintained in the case of appoint- ments by way of jointure. The appointment will, in such cases, be only vitiated to the extent to which it is affected by the fraud (/t-). The legitimate purpose of a power of sale in a mortgage being to secure the repayment of the money advanced in the mort- gage, if the mortgagee uses the power for another purpose, either from an ill motive to effect other purposes or to serve the purposes of individuals, the Court considers that to be a fraud in the exercise of the power, because it is using the power for purposes foreign to that for which the power was intended (?). But if he exercises the power of sale for the purpose of realising his debt and without collusion with the purchaser, the Court will not interfere, even though the sale be disadvantageous, unless the price be so low as to be evidence of fraud {in). It was formerly held that Illusory appointments under a power illusory api.oint- were void In equity, e. g., appointments of a nominal instead of a substantial share to one of the members of a class where power was given to appoint among them all. An appointment of this kind was always valid at law, and It would perhaps be diffi- cult to reconcile with principle Its avoidance In equity. The doctrine has been abolished by statute {n). {i) Rouicy v. Rowley, Kuy, 242. (l) Robertson v. Norriii, 1 Gitf. 421. See Harrison v. Randall, 9 Ha. 3!J7. (m) Warner v. Jacob, 20 Cli. D. (/f) Lane v. Paye, Amb. 233 ; 220. Aleyn v. BelcJier, 1 Eden. 138, Sug. (/() 11 Geo. 4 & 1 Wm. 4, c. 46 ; Pow. 610. See Roiiiey v. Roidey, Re Capon's Trust, 10 Ch. D. 484. Kay, 200. 310 MISCELLANEOUS FEAirDS. Chap. y. SECTION III. FRAUD IN THE PREVENTION BY UNDUE MEANS OF ACTS TO BE DONE FOR THE BENEFIT OF THIRD PARTIES. Tliere is fraud against which a Court of Equity will relieve, if a man be prevented by undue means from doing an act for the benefit of third parties. If a man be prevented by duress, undue influence, or other undue means, from executing an instrument, the Court will treat it as if it had been executed (o). When, for instance, a tenant in tail, meaning to suffer a recovery, Avas prevented on his deathbed from suffering it, by the fraud of the person whose wife was entitled in remainder, it was held that the estate ought to be held as if the recovery had been per- fected, though even in favour of a volunteer, and against one not a party to the fraud {p). So also when a person interested in the non-execution of a power has the deed creating the power in his custody, and the donee of the power, wishing to execute it, sends for the deed, which the party refuses to deliver, and tliereupon the donee does an act with an intent to execute the power, equity will uphold the execution, although defective by reason of the fraud in the person who was to have the benefit of the original settlement (g-). But the mere refusal or neglect of an attorney with whom a deed containing a power has been deposited to deliver it up to the donee of the power, in the absence of fraud, is no ground for relief against informality (r). Equity Avould extend the relief to a case where a wife, having a power of revocation over an estate vested in her husband, is desirous to exercise it, but the husband hinders anybody from coming to her, or prevents the execution, or obstructs the engrossing of the deed of revocation (s). (o) Middlet&n v. Middleton, 1 J. & Bay, Kay, 385. W. 96. (,•) BucMl V. Bhnkhorn, 5 Ha. 131. (2)) Luttrdl v. Qlmius, cit. H (s) Pigyott v. Penrice, Com. 250, Ves. 638, 14 Ves. 290, 1 J. & W. 96. Pvec. Cb. 471 ; Vane v. Fletcher, 1 (q) See 3 Ch. Ca. 67, 83, 84, 89, P. Wnis. 354 ; Segrave v. Kincan, 93, 108, 122 ; TFard v. Booth, cit. 3 Beatt. 157 ; BiiUdey v. JVilford, 2 CI. Ch. Ca. 69. See Fort. 383 ; BucJccll & Fin. 102 ; Nanneyx. IFiUiutna, 22 Y. Bknkhorn, 5 Ha. 131 ; West v. Beav, 452. MISCELLANEOUS FRAUDS. •' The principle applies to cases where a man has been induced Chjip- V. by false promises to abstain from doing an act for the benefit of third parties. If, for example, a testator be induced to omit the insertion in his will of a formal provision for any intended object of his bounty upon the faith of assurances given by his heir or other person, who would take his property in the event of his omitting to insert the particular bequest in his will, that his, the testator's, wishes shall be executed as punctually and fully as if the bequest were formally made, this promise and undertaking will raise a trust, which, though not available at law, will be enforced in equity on the ground of fraud (t). So, also, if a father devises an estate to one son who engages if the estate is devised to him to give a certain amount of money to another son, the promise will be enforced in equity (u). An engagement to the same effect may be entered into, not only by words, but by silent assent, or may be inferred from conduct so as equally to raise a trust (x). SECTION IV.— FRAUDULENT SUPPRESSION OR DESTRUCTION OF DEEDS AND OTHER INSTRUMENTS IN VIOLATION OF OR INJURY TO THE RIGHTS OF OTHERS. If an heir should suppress deeds, wills, &c., iu order to prevent ^ Sect. 4. another party, as grantee or devisee, from obtaining the estate vested in him thereby, Courts of Equity, upon due proof by other evidence, would grant relief and perpetuate the possession and enjoyment of the estate in such grantee or devisee {y). If the (0 Dutton v. Pool, 1 Vent. 318 ; Jackson, 10 Ha. 213 ; ArCormick v. Thynn v. Thynn, 1 Vem. 296 ; Sel- G-rogan, 4 E. & I. App. Ca. 88. lack V. Harris, 5 Vin. Ab. 521 ; (u) Stdckland v. Aldrvbje, 9 Ves. Devenish v. Baines, Prec. Ch. 3 ; 519 ; M'Cormkk v. Groyan, i E. & Oldham v. Litchfield, 2 Vera. 506, 2 I. App. Ca. 88. Frcem. Ch. 284; Chamberlaim v. (x) Byrm v. Godfrey, 4 Ves. 10; Chamherlaine, 2 Freem. Ch. 34; Paine v. FaH, 18 Ves. 475 ; M'G'or- Beech v. Kennigate, Anil). 67 ; Barroio mick v. Grorjan, 4 E. & I. App. Ca. V. Greenough, 3 Ves. 153 ; Mestaerv. 88. Gillespie, 11 Ves. 638 ; Chamherlaine (;/) Hunt w Matthews, 1 Vein. V. Agar, 2 V. & B. 262 ; Podimre v. 408 ; IVardour v. Bcrisford, ib. 452, Gimning, 7 Sim. 660 ; Russell v. cit. 2 P. Wm. 748, 749 ; Dalston v. 312 ]^rrscELLAXE()Us frauds. Chap. V. contents of a suppressed or destroyed instrument are proved, Sect. 4. — — the party will receive the same benefit as if the instrument were produced (z). No valid instmraent which effectually conveys property can lose its effect merely by reason of its fraudulent cancellation or destruction (a). Where there has been a spoliation or suppression of instru- ments, which might have thrown light upon a suit, everything will be presumed against the party by whose agent such spolia- tion and suppression have been practised, and every presump- tion will be made in favour of the primd facie rights of the other party (6). Frhnd facie the cancellation of a deed is evidence of its discharge, but in a Court of Equity it is open to the party claiming under the deed, to show that it was cancelled by fraud, mistake, or accident. AVhere the deed has always been in the hands of the party beneficially interested under it, should it appear to have been cancelled, the proof that this was done by fraud would rest with that party; but where the deed has con- stantly remained in the power of the maker thereof, or has been deposited by him with a person of his own selection, circum- stances may throw upon the maker of the deed the onus of showing, not only that such deed is cancelled, but that the obligation it imposed has been duly discharged and satis- fied (c). SECTION V. — FEAUD IN THE PROCUREMENT OF THE EXECUTION OF A DEED. Sect. 5. No man will be permitted to take advantage of a deed which he has fraudulently induced another to execute that the former 1 Coatsvjorth, P. Wms. 731 ; Finch Eq. 277. v. Neunham, 2 Vern. 216 ; Barnesley (b) Boides v. Stnart, 1 Sch. & Lef. V. Powell, 1 Ves. 289 ; Tucker v. 222 ; Exjton v. Eyton, 1 Bro. P. C. Phipps, 3 Atk. 360. See Hornby v. 153 ; Humpden v. Hampden, ib. Matcham, 16 Sim. 325. 252 ; Sepaliriov. Tmttii,St\. Ca. Ch. (z) Saltern v. Melh^iish, Amb. 247 ; 76. Covper V. Coupcr, 2 P. Wms. 719. (c) Sluyslcen v. Hunter, 1 Mer. 45. («) Donaldson v. Gillott, L. R. 3 MISCELLANEOUS FRAUDS. 318 may commit an offecce against morality, to the injury or loss of Chap. V. the party by whom the deed is executed ((7). Thus, where a '— married woman obtains a separation deed from her husband, with pecuniary allowance, for the purpose of enabling her the more effectually to carry on an adulterous intercourse with another, the Court will, on the petition of the husband, order that the deed be delivered up to be cancelled (e), and proof of subsequent adultery with a person with whom the wife had sexual intercourse before marriage, and had continued on terms of improper intimacy afterwards, seems to be sufficient evidence that such a deed was obtained for the fraudulent purpose of pro- moting the adultery (/). But such a deed will not be set aside for adultery previously committed ; nor will a marriage settle- ment be annulled on the ground that the Avife has concealed from her husband the fact of previous incontinence, though he alleges that he would not have married her had he known it. The case may, however, be different where there is proof that an unchaste Avomau conspired with others, by fraudulent mis- representations, to pass herself off as a virgin, and so get married (g). SECTION VI. — FRAUD IN SETTING UP AN INSTRUMENT OBTAINED FOR ONE PURPOSE FOR ANOTHER PURPOSE. Where a man obtains an instrument or conveyance from Sect 6. another in order to answer one particular purpose, but after- wards makes use of it for another, a Court of Equity will relieve under the head of fraud. It is immaterial that the conveyance may be perfected by act of record (h). Where, accordingly, a father, who was tenant for life of real estate, fearing that the husband of his daughter, who was tenant in tail of the property, would waste the property, induced him and the daughter to join in a I'ecovery with a view to protecting the property from his creditors, and the property was conveyed to the father for a mere (d) Evans v. Carnnrjton,2 D. F. & (/) lb. J. 481. {rj) lb. (e) lb. (/() Young v. Peachcy, 2 Atk. 256. 314 MISCELLANEOUS FRAUDS. nominal sum, the recovery was set aside signees in insolvency of his son-in-law (i). Chap. V. nominal sum, the recovery was set aside at the suit of the as- Sect. 6. -^ SECTION VI r. — FRAUD IN ASSIGNMENTS, BY ASSIGNEES, ETC. Sect. 7. " -^n assignment by the assignee of a lease or term is not a fraudulent assignment. If a man assign nominally only, retain- ing the beneficial enjoyment, it is fraudulent, because while he assumes to do one thing he really does another. He retains the benefit, and by a false act endeavours to get rid of the burthen. But if he assigns really, getting rid of the burthen and giving up really the benefit also (if any) to his assignee, it is not a fraudulent act. His motive for parting with it or the other's motive for receiving it are not enough to make it fraudulent, if the act done be a real act, intended really to operate as it appears to do. The assignment even to a beggar is not fraudu- lent, although made in order to avoid payment of a sum of money chargeable on the property under the original agreement. The motive which induces the assignee to assign over has no bearing upon the question whether the assignment is fraudulent or not, provided the assignment is real and intended to operate, as it appears to operate (/o). Where the assignee of a lease, subject to a mortgage, induced the lessor, a friend and client, to take advantage of a forfeiture, which was committed by the lessee expressly for that jDurpose, and, after \\\q forfeiture Avas complete, induced the lessor to grant him a new lease of the property on the same terms, the Court declared that the new lease was subject to the mort- gage (Z). (i) lb. See Wilkinson v. Bray- (k) Taylor v. Shum, 1 B. & P. 21 ; field, 2 Vem. 307 ; Goodricke v. Onsloio v. Corrie, 2 Madd. 340 ; Fagij Brown, 2 Freem. 180, 1 Ch. Ca. 49 ; v. Dobie, 3 Y. & C. 103. Evans \.Bicknell, 6 Yes. 191 ; Pickett (I) Hughes v. Hoicard, 25 Beav. V, Loggon, 14 Ves. 234. 575. MISCELLANEOUS FRAUDS. 31i SECTION VIII. FRAUD BY AND UPON COMPANIES. Fraud which consists in misrepresentation or conceahnent on c},ap. v. the part of companies has been ah-eady considered ; but there ^'^^*" ^' are other acts on the part of companies which are fraudulent in the contemplation of a Court of Equity. The creditor of a company who has recovered judgment against the company may, unless in the case of companies within the Companies Act, 1862 {m), proceed to execution at his pleasure against any particular shareholder (n) ; but if a company enter into an agreement with one of its creditors that he shall recover judgment against the company, and take out execution against a particular shareholder, there is fraud, against which relief may be had in equity (o). The rule that a partner cannot buy in a debt and enforce it against his copartners applies equally as between shareholders in joint stock com- panies ( p). A shareholder in a company acting bona fide may sell his shares to another person or give him money to take the shares, if the transaction be open and not merely colourable ; but if a shareholder gets rid of his shares by assigning them to a pauper or person of no substance, or to a person over whom he has entire control, in order to avoid paying his share of the debts of the company, and to throw them upon the other shareholders, the transaction is fraudulent (q), and the name of the transferee will be struck off the list of shareholders, and that of tlie share- holder replaced on the register (7^). A shareholder of a company entitled to transfer his shares with the approval of the directors is bound to procure a trans- feree, whom he knows to be a person fitted by position and (m) 25 & 26 Vict. c. 8S), ss. 85, L. 297. 201. (2') Woodhams v. Aiujlo-Aas- (h) Green v. Nixon, 23 Beav. 530 ; tnilia, &c., Co., 2 D. J. & S. 162. Beck V. Dean, 3 Jiir. N. S. 14. {q) Slater's Case, 35 Beav. 393 ; (0) Taylor v. Ihifjhes, 2 J. & L. Clvjnoweth's Case, In Ch. B. 20. See 24; Feniihomjh v. Leader, 15 L. J. Stannaries Act, 32 & 33 Vict. c. 19, Ch, 458, 4 Ea. Ca. 373 ; Horn v. ss. 25, 35. Kilkenny, dr., Eailicmj Co*, 1 K. & (r) Kintrea's Case, 5 Ch. 95 ; J. 399 ; Burgate v. Shortridyc, 5 II. Payne's Case, 9 Eq. 223. 31G MISCELLAXEOUS FRAUDS. ^{'^P- 7- solvency to become a co-partner with the other shareholders. If he should propose for the approval of the directors a trans- feree whom he or his agent in the transaction knew or could have known to be an unfit person to become a shareholder, the appi'oval of the transferee may be no bar to keeping the trans- feror on the list of contributories (s). The power given to directors of a company to approve or dis- approve of a proposed transferee of shares is given to them for the benefit of the shareholders, whose interest it is that all members of the company should be capable of meeting liability on their shares. Every shareholder of a company proposing a transferee of his shares is bound to give such information re- specting him as will enable the directors to arrive at a correct decision, and if by misrepresentation or concealment they are induced to approve of an unfit person as transferee, the transfer will be set aside (t), and the name of the transferor will be replaced on the register instead of the transferee. The fact that the directors may have approved of the transfer under threat of legal proceedings in case of refusal, and that they had acquiesced in the transfer for seven months after becoming aware of the truth, is not sufficient to protect the transfer (u). In a case in which it was shown that the directors of a com- pany had postponed making a call in order to enable one of their number to transfer his shares to a person of no substance, and to get the transfer registered, it was held that the transfer was of no avail (y). When there is a transfer of shares, the transferor will be held a contributory, if the evidence shows, not only that the transfer was made to get rid of liability, but that it was not a real trans- action, and was not intended to divest the interest of the trans- feror, and to render the transferee the bond fide owner of the shares, but that the transferee held them subject to the order of the transferor. The Court has held that a transaction of this (s) Re European Assurance ArU- Case, 17 Sol. J. 648 ; William's Case, tration, MurgatroycVs Case, 18 Sol. J. 18 Sol. J. 84 ; Mushet's Case, 18 Sol. 28. J. 202. (t) Re European Assurance Society {u) lb: Arbitration, Simpson's Executors (v) Gilbert's Case, 5 Ch. 559. MISCELLANEOUS FRAUDS. 317 kind, which is a sham, a fraud, produces no effect whatsoever, Chap. V. and it restores the transferor who has resorted to such a device, '- to the position in which he was before the device was resorted to. But if shares are purchased in the open market and trans- ferred by the direction of the purchaser to a nominee of no substance for the purpose of escaping liability, the name of the purchaser cannot, when the company is wound up, be placed on the list of contributories (r). If the directors of a company enter into an arrangement with a shareholder, that on payment of a certain sum of money his .shares shall be forfeited, and the arrangement is not within the power of the directors, it is a fraud upon the other shareholders, inasmuch as it deprives them of one of those for whose just liability with themselves they had originally stipulated, and in the event of a winding uj), his name will be replaced on the list of contributories (y). Where, under a power in the articles of association to receive payment of calls in advance, the directors of a company paid into the bank the amount remaining uncalled on their shares, and on the same day appropriated the money in payment of their fees, for which there were at the time, as they knew, no available assets ; it was held that the effect of the transaction was that there had been no bond fide payment in anticipation of calls, and that the directors, who were bound to exercise the powers given to them for the benefit of the company generally, and not with a view to their own private interest, were not relieved from liability upon their shares [z). The Court has summary jurisdiction under ss. 101, 165 of the Companies Act, 1862, to order a contributory or director to repay a dividend declared and paid under a delusive or fraudu- lent balance sheet. But the balance sheet of a company en- gaged in a hazardous trade will not be considered delusive and fraudulent merely because an estimated value was put upon assets of the company, which were then in jeopardy, and were {x) King's Case, 6 Cli. 19G ; Re Spackman v. Evans, 3 E. & I. A]ip. Humher Iron Works, cfcc, Co., 45 L. Ca. 171. J. Ch. 48. (z) Syke's Case, 13 Eq. 25."). (y) Stanhope's Case, 1 Ch. 169 ; 318 MISCELLANEOUS FRAUDS. Chap. y. subsequently lost, or because the company was obliged to borrow money, to pay the dividend, provided the facts fairly appeared on the balance sheet, and the balance fairly represented profits (a). The Court has summary power in a voluntary winding-up on the application of the liquidator to make an order under ss. 138 and 165 of the Companies Act, 1862, calling on a director to repay a dividend of bonus declared and paid to him under a delusive balance sheet (h). Where shares in a joint stock company have been issued fraudulently, a bo7id fide purchaser of these shares in the market before any bill has been filed to impeach the trans- action is entitled, on the winding-up of the company, notwith- standing the fraud, and notwithstanding that he bought the shares at a very great discount, to prove on equal terms with the other shareholders of the company who bought their shares at par ; but this privilege does not extend to any person who purchased his shares after the filing of the bill, unless his vendor was a bond fide holder of the shares before bill filed, and the onus of proof that such was the case is upon him (c). Sect. 9. SECTION IX. FRAUD UPON THE MORTMAIN LAWS. The Court will relieve against a fraud on the Mortmain laws. The statute 9 Geo. II. c. 36, cannot be evaded by a secret trust, and the heir may compel the devisee to disclose any promise which he may have made to the testator to devote the land to charity (c?) ; and such promise, if denied by the devisee, may be proved by evidence aliunde (e). The trust, by whatever means established, invalidates the devise. This doctrine evidently assumes that the trust, if legal, would have been binding on the conscience of, and might have been enforced against, the devisee ; and this ground failing, the rule does not apply : as where a testator, after devising lands by a will duly attested, (a) Stringer's Case, 4 Cli. 475. Mucldeston v. Brown, 6 Ves. 52 ; {h) Ranee's Case, 6 Ch. 104. Stickland v. Alclridge, 9 Ves. 516; (c) Barnard v. Bagshaw, 1 H. & M. Paine v. Hull, 18 Ves. 475. ea (e) Edwards v. Pike, 1 Ed. 267, 1 (d) Boson V. Stafharn, 1 E.l. 508 ; Cox, 17. MISCELLANEOUS FRAUDS. 319 declares a trust in favour of a charity by an unattested paper or Chap. V. 1 • !• 1 Sect. 9. by parol, the Statute law, which affoi'ds to the devisee a valid defence against any claim on the part of the charity, of course equally defends him against the claim of the heir, founded on the charitable trust (/). The case would be different, however^ if the devisee had prevailed on the testator to give him the estate absolutely under an assurance that the unattested paper was a sufficient declaration of trust for the charity {e procured by a party to the marriage to be solemnized between persons, one or both of whom shall be under the age of twenty-one years, not being a widower or widow, by means of such party falsely swearing as to any matter to which such party is required by the Act personally to swear, such party wilfully and knowingly so swear- ing, or if any valid marriage by banns shall be procured by a party thereto to be solemnized by banns between persons, one or both of whom shall be under the age of twenty-one years, not being a widower or widow, such party knowing that such person under the age of twenty-one years had a parent or guardian then living, and that such marriage was had without the consent of such parent or guardian, and knowing that banns (0 Ih. (m) Queen v. Aspinall, 2 Q. B. D. 48. MISCELLANEOUS FRAUDS. '^-i had not oeen duly published, aud having knowingly caused or g^^l'^^' procured the undue publication of banns, in every such case it ~ shall be lawful for the Attorney-General by information at the relation of a parent or guardian of the minor whose consent has not been given to such marriage, and who shall be responsible for any costs incurred in such suit, such parent or guardian previously making oath as is by the Act required, to sue for a forfeiture of all estate, right, title, and interest in any property which hath accrued or shall accrue to the party so offending by force of such marriage ; and the Court shall have power to declare such forfeiture, and thereupon to order and direct that all such estate, right, title, and interest, in any property as shall then have accrued or shall thereafter accrue to such offend- ing party by force of such marriage shall be secured under the direction of the Court for the benefit of the innocent party or of the issue of the marriage, or of any of them, in such manner as the Court shall think fit, for the purpose of preventing the offending party from deriving any interest in real or personal estate, or pecuniary benefits from such marriage. Sect. 24 avoids all settlements, agreements, &:c., made upon such marriages. By the Marriage and Registration Amendment Act, 1856 (19 & 20 Vict. c. 119), s. 19, the same penalties are extended to the case of a marriage before a registrar under 6 & 7 Will. 4, c. 85 had by means of any wilfully false declaration, notice, or certificate. And by 12 & 13 Vict. c. 68, s. 15, the same penalties attach when a marriage is celebrated abroad under the pro- visions of the Act by means of any wilfully false notice, oath, affirmation, or declaration made by either party to such marriage (n). When a forfeiture has been incurred under s. 23 tiie Court has no discretion to mitigate the penalty, but is bound to settle and secure all property present and future of the wife for the benefit of herself or the issue of the marriage (o), so as to (n) See as to the extension of these 18, s. 2. provisions to marriages according to (o) Att.-Gen. v. Mtdlay, 4 Russ. the usages of Quakers and Jews, 19 329. &20 Vict. c. 119, s. 21 ; 23 Vict. c. 322 MISCELLANEOUS FRAUDS. Chap. V. prevent the offending husband from deriving any interest or Sect. 12. pecuniary benefit from the marriage jure mariti ( ^). 1 he Act applies to the case of a woman marrying an infant by means of a false affidavit that he is of full age {q). In Attorney-General y. Read{r), Bacon, V.-C, following with great reluctance the order made in Attorney-General v. Lucas, did not exclude the offending husband from the general power of appointment to the wife in default of children (s). The Attorney-General must appear separately from tlie relator in such cases [t). To sustain the information, it is not necessary to show that the infant with whom the marriage was procured, was entitled at the time thereof to any property either in possession, re- version, remainder or expectancy (u). The offending husband will not be allowed his costs out of the fund {x). SECTION XT [I. FRAUD UPON RESTRAINING STATUTES, ETC. Sect. 13. In addition to those already enumerated, there are other frauds upon Statutes or Acts of Parliament, against which relief may be had in equity : such as, fraud upon the Restrain- ing Statutes iy) ; fraud upon the Registry Acts {z) ; fraud upon a private Act of Parliament (a) ; fraud on the Revenue laws (/>) ; and fraud upon the Patent law (c). {■p) Att.-Gen. v. Lucas, 2 Ph. 753. 36. (q) Att.-Gen. v. Severne, 1 Coll. (y) Dean and Chapiter of Windam- 3L3. V. Penvin, Moor. 789. (»•) 12 Eq. 38. (z) Curtis v. Perry, 6 Ves. 739 ; (s) See Att.-Gen. v. Clements, ib. Osborne v. Williams, 18 Ves. 379 ; 32. See as to form of order, Att.- Battersby v. Smyth, 3 Madd. 110. Gen. V. Akei-s, Set. on Dec. 768. (o) Hoivard v. Earl of Shrewsbury, (0 Att.-Gen. v. Read, 12 Eq. 41. 2 Ch. 772. (h) Att.-Gen. v. Severne, 1 Coll. (6) Evans v. Richardson, 3 I\Ier. 313. 469. {x) Att.-Gen. v. Akers (W. N. 1872) (r) Re Bailey's Patent, 8 Ch. 60 ; 45; Att.-Gen. v. Clements, 12 Eq. Ex parte Scott \. Young, Q Ch.. ilb. FRAUD IN AWARDS. SECTION XIV. — FRAUD IN AWARDS. Courts of equity have from a very early period had juris- Chap. V. diction to set aside awards on the ground of fraud {d), and still entertain the jurisdiction, except where it is excluded by statute (e). In cases where the submission to arbitration was by agree^ ment between the parties, the only mode of obtaining relief formerly against an award which had been obtained under cir- cumstances of fraud and corruption on the part of the arbitra- tor, was by bill in equity. But if the agreement or submission to arbitration be in writing, and contain a proviso that it may be made a rule of Court, the case is now governed by stat. 9 & 10 Will. 3, c. 15, and the jurisdiction of equity is ex- cluded (/). A court of equity has no jurisdiction, even on the ground of fraud, if a submission has been made a rule of a court of common law under the statute {g). If there be a proviso in the agreement or submission to arbi- tration enabling the parties to make it a rule of Court, it is immaterial that it may not have been actually made a rule of Court until after the award has been made, or until after bill filed (/i). The Court of Chancery is one of the Courts of record invested with summary jurisdiction under the statute {%). If there was no proviso in the agreement or submission to arbitra- tion enabling the parties to make it a rule of Court, the jurisdiction was, until a recent period, exclusive in equity (Jc). But by the seventeenth clause of the Common Law Procedure Act, 17 & 18 Vict. c. 12o, it is declared that every agreement or submission to arbitration by consent, whether by deed or instrument in writing, may be made a rule of a court of com- (c?.) G-reenhill v. Church, 3 Rep. 576, 2 D. J. & S. 297. Ch. 49 ; Brovm v. Brovm, 1 Vem. (g) Auriol v. Smith, T. & R. 121 ; 156 ; Earl v. Stocker, 1 Vem. 251 ; Dawson v. Sadler, 1 Sim. & St. 537. Burton v. Knight, ib. 514. (/() Nichoh v. Eoe, 3 M. & K. 439 ; (e) Smith v. JVhitmore, 1 H. & M. Heming v. Sicinerton, 2 Ph. 79. 576, 2 D. J. & S. 297. (i) Heming v. Sicinertm, 2 Ph. 79. (/) Heming v. Sunnerton, 2 Ph. (k) v. Mills, 17 Ves. 419 ; 79 ; Smith v. JVhifviore, 1 H. & M. Goodman v. Sayeri^, 2 J. & W. -I-i'J. V 2 3!>4. FRAUD IN AWARDS. Sect. 14. Chap. V. nion law, unless a contrary intention appears. Tlie mere existence, however, of a power to make an agreement or sub- mission to arbitration a rule of Court is not tantamount to an agreement that it shall be made so, nor does it of itself, and independently of agreement, exclude the ordinary jurisdiction of the Court (l). If there be no proviso that it may be made a rule of Court, it does not become a rule of Court under the Common Law Procedure Act, unless it be actually made a rule of Court (m). Before the statute 9 & 10 Will. 3, c. 15, courts of law were in the practice, upon consent of parties, of referring causes to arbitration, either by rule of Court or by order of a judge, or at nisiprius, and of making the submission at the same time a rule of Court. In such cases courts of equity exercised a con- current jurisdiction over the award made upon the reference with courts of law, and the statute of William does not appear to have interfered with the jurisdiction (n). Nor has the juris- diction been excluded by the enlarged powers conferred on courts of common law by the Common Law Procedure Act, 17 & 18 Vict. c. 125 (o). It is, however, the rule of the Court not to interfere with an award made under a reference at law, unless there be something in the circumstances of the case to show or to make it appear that a court of law has not full power and jurisdiction to grant full and adequate relief. The fact that a court of common law has a power of remitting the award for reconsideration, has weight with a court of chancery when called upon to interfere (p). There is fraud in an award, if it be obtained through corrup- tion or partiality on the part of the arbitrator (q). In a case where arbitrators had, either by force or fraud, excluded a co- {l) Smith V. JVhitmore, 2 D. J. & (p) Londonderry and Enniskillen S. 308, per Turner, L. J. Railway Co. v. Leisham, 12 Beav, (m) lb. 423 ; Harding v. Wickham, 2 J. & (?i) Lwd Lonsdale v. Littledale, 2 H. 676. Ves. Jr. 451 ; Nicols v. Chalie, 14 (q) Lord Lonsdale v. Littledale, 2 Ves. 267 ; Nicolls v. Roe, 3 M. & K. Ves. Jr. 453 ; Lingood v. Croucher, 2 439 ; Chuck v. Cremer, 2 Ph. 477 ; Atk. 396 ; Moseley v. Simpson, 16 Harding V. Wickham, 2 J. & H. 676. Eq. 226. (o) ISs. 3—16. FRALTD IN AWARDS. 325 arbitrator, or either of the parties, from their meetings, it was Chap. V. Sect. 14. held to furnish such a presumption of corruption as to be a sufficient ground for setting aside the award (r). So, also, it is against good faith for a person appointed arbitrator to consider himself as agent of the person appointing him (s), or to buy up the unsustained claims of any of the parties to the reference (t). So, also, there is fraud, if the award has been obtained by fraud or concealment of material circumstances on the part of one of the parties, so as to mislead the arbitrator. If either party be guilty of fraudulent concealment of matters which he ought to have declared, or if he wilfidly mislead or deceive the arbitrator, the award may be set aside (u). An award will not, however, be set aside on the ground that the arbitrator has been misled by the evidence of a witness who might have been cross- examined (x). There is also fraud to set aside an award, if the award be obtained by undue means, as, for instance, if the witnesses have been examined in the absence of the parties (y) ; or if the award has been made clandestinely without hearing each party (z) ; or if the aAvavd has been made by one arbitrator apart from the others (a) ; or if the interviews have taken place between the arbitrator and one party in the absence of the others (h). So, also, the existence of any ground calculated to bias the mind of the arbitrator, unknown to either of the parties, is sufficient for the interference of the Court (c) ; or if one of the parties has not been allowed a proper opportunity of discussing his case (d). If interviews have taken place between the arbitrator and one of the parties in the absence of the other, (r) Burton v. Knight, 2 Vern. 514. 845. See Haigh v. Huigh, 3 D. F. See Haigh v. Hcngh, 3 D. F. & J. & J. 159. 159. (z) Ives V. Medcalfe, 1 Atk. 64 ; (s) Calcraft v. Roebuck, 1 Ves. Jr. Harding v. Wichham, 2 J. & H. 676. 226. See Smith v. Whitmore, 1 H. & M. (<) Blennerhasset v. Day, 2 Ba. & 576. Be. 116. (a) Re Plews and Middleton, 6 Q. B. (u) South Sea Co. v. Bumjistead, 582. Vin. Ab. Arbitr. (1 a.) 39, 2 Eq. Ca. (6) Harvey. \. Shelton, 7Beav.455. Ab. 80 ; Ives v. Medcalfe, 1 Atk. 64 ; (c) Kemjo v. Rose, 1 GifF. 258. Gartside v. Gartside, 3 Anst. 735. (rf) S^ettigue v. Carpenter, 3 P. (x) Pibnore v. Hood, 8 Scott, 180. Wms. 361. (?/) Re Plews and Middleton, 6 Q. B. 326 FRAUD IN JUDGMENTS. Chap. V. similar misconduct on the part of the person applying will not Sect. 14. prevent the Court from setting aside the award, for the matter concerns the due administration of justice (e). Equity will not give relief against an award, if the conduct of the party making the application has been such as to destroy his right to resort to the Court for relief (/). An agreement for reference, accordingly, cannot be set aside as obtained by undue pressure, if the party objecting has attended the reference and taken the chance of an award in his favour ( g). Nor can relief be had against an awaixl when there has been any laches on the part of the person making the application (h). Similar misconduct, however, to that complained of on the part of the person making the application, will not prevent the Court from setting aside an award, if the award has been obtained by undue means {i). In cases where fraud is charged, the Court will in general refuse to send the dispute to arbitration, if the party charged with fraud desires a public enquiry. But where the objection to arbiti'ation is by the party charging the fraud, the Court will not necessarily accede to it, and will never do so, unless a prima facie case of fraud is proved {k). SECTION XV. — FRAUD IN JUDGMENTS. ^^''^- ^^- A judgment or decree obtained by fraud upon a Court, binds not such Court or any other, and its nullity upon this ground, though it has not been set aside or reversed, may be alleged in a collateral proceeding {I). "Fraud," said De Grey, C.J., "isan extrinsic, collateral act, which vitiates the most solemn proceed- («) Harvey \. Shelton, 7 Beav. 455. (i) Harvey v. ShelUm, 7 Beav. 455. . (/) Smith v. Whitmore, 1 H. & (/.) Russell v. Russell, 14 Ch. D. M. 576, 2 D. J. & S. 297. 471. (g) Ormes v. Beatlel, 2 Giff. 166, 2 (l) Philippson v. Lord Er/remont, 6 D. F. & J. 333 ; Ex parte JFyld, 2 Q. B. 582 ; Lord Bandon v. Becker, D. F. & J. 642. 3 CI. & Fin. 510 ; Sheddenv. Patrick, (h) Jones v. Bennett, 1 Bro. P. C. 1 ]\Iac(i. 535 ; Reg. v. Saddlers' Co., .r>28. See Eads v. Wdlliarns, 4 D. 10 H. L. 431, per Willes, J. See l\. & G. 674 ; Nichols v. Hancock, 7 Tommeyv. White, 4 H. L. 313. D. M. & G. 3U(i. FRAUD IN JUDGMENTS. 327 ings of Courts of justice. Lord Coke says it avoids all judicial ^bap. V. acts ecclesiastical and temporal " (ni). In applying this rule, it — " — - matters not whether the judgment impugned has been pro- nounced by an inferior or by the highest Court of judicature in the realm, but in all cases alike it is competent for every Court, "whether superior or inferior, to treat as a nullity any judgment which can be clearly shown to have been obtained by manifest fraud (n). Whether an innocent party would be allowed to prove in one court that a judgment against him in another court was obtained by fraud, is a question not equally clear, as it would be in his power to apply directly to the court which pronounced it to vacate it (o). But however this point may be ultimately determined, thus much is evident, that a guilty party would not be permitted to defeat a judgment by showing that in obtaining it he had practised an imposition on the Court, for it would be an outrage on justice and common sense, if a person could thus avoid the consequences of his own fraudulent conduct (p). A foreign judgment can be impeached, if it be made to appear that it was fraudulently obtained. When a question between the parties has been decided by a foreign Court, with jurisdiction, that decision is, as a general rule, conclusive, and cannot be opened on the merits ; but if the foreign judgment was obtained by fraud, that would be an answer to any proceed- ing founded on the judgment {q). A judgment by consent is binding, but if it appear that the consent was obtained by fraud, the Court will treat the con- (m) Rex V. Duchess of Kingston, 20 763, 20 How. St. Tr. 479, 481 ; Rex How. St. Tr. 544, 2 Smith, L. C. v. Duchess of Kingston, 20 How. St. 687 ; Sliand v. Du Buisson, 18 Ec^. Tr. 544. 283. See Meddowcroftx. Hugv.enin, {p) Prndham v. Philipjis, 2 Amhl. 4 Moo. P. C. 386 ; Perry v. Meddow- 763, 20 How. St. Tr. 479 ; Doe v. croft, 10 Beav. 122 ; Harrison v. Roberts, 2 B. & Aid. 367 ; Bcsseij v. Mayor, <&€., of Southampton, 4 T). M. Windham,, 6 Q. B. 166. & G. 137 ; Gannan v. Reynolds, 5 E- (r/) Bank of Australasia v. Nias, & B. 306. 16 Q. B. 717 ; Ochsenbein v. Papelier, (n) Shedden v. Patrick, 1 Macq. 8 Ch. 700 ; Messina v. Petrochino, L. 535. R. 4 P. C. 144 ; Ahouloff v. Oppen- (o) Prudharn v. Philipps, 2 Ambl. Itcim, 52 L. J. Q. B. 1. n28 MISCELLANEOUS FRAUDS. Chap. V. sent as a nullity (r). So, also, if it be made to appear that a ■ '- — '- — judge's order has been obtained by fraud or by the suppression of information which it was essential the Court should know, the order Avill be set aside (s). SECTION XVI. FRAUD UPON THE CEOWN. Sect. 16. A conveyance executed in fraud of proceedings under an out- "" lawry, is a fraud upon the Crown, and will be set aside (t). Sect. 17. SECTION XVII. — FRAUD UPON COURTS OF COMPETENT JURISDICTION. The Court of Chancery would give assistance to enforce the judgments, decrees, or sentences of other courts of competent and lawful civil jurisdiction, when the execution of such judgments, decrees, and sentences was defeated or obstructed by fraudulent contrivances (u). A voluntary settlement, accordingly, of real and personal estate, made by a man who was defendant in a suit in the Ecclesiastical Court, with the intent of withdrawing his property from the process of that Court, was set aside (x). Although the deed might have been executed before any right was declared, or any order for payment of money was made, yet if it appeared that the deed was executed for the purpose of defeating the right which the defendant knew the plaintiff was entitled to establish, it was considered to have been executed with the view and intention of defrauding him (y). SECTION XVIII.— FRAUD UPON THE LEGISLATURE. Sect. 18. In Vauxhall Bridge Co. v. Emi Silencer [z), it was held (r) Stannard v. Harrison, 19 W. (h) Blenkinsojip v. Blenkinsopp, 12 R. 812. Beav. 586. (s) Ex parte Cock^rell, 4 C. P. D. (re) lb. ; 1 D. M. & G. 500. 39, per Lord Coleridge. (y) lb. (t) Att.-G^n. V. Rid-ards, 1 Ph. (z) 2 Madd. 366, S. C. Jac. 64. 383, 12 CI. & Fin. 43. FRAUDS UPON THE CROWN. 329 that an agreement between a landowner and a company, that, Chap. V. in the event of his not opposing an application to Parliament, '. — '. — the landowner should receive a sura of money, is a fraud upon the legislature if concealed from Parliament, and is therefore void upon grounds of public policy. But the principle upon which that case was founded is open to much question. The better opinion would seem to be, that there is no fraud upon the legislature unless the agreement is one which the parties are bound to communicate. There maybe cases in which an agree- ment of the sort should be communicated to the legislature, but there can be no doubt that in ordinary cases it is open to parties to enter into such an agreement, and that there is no obligation incumbent on them to communicate it to the legislature (a). The question whether such an agreement is binding on the Company after incorporation, is a very different one. (a) Simpson v. Lord Hoicden, 10 obtaining a local Act of Parliament, A. & E. 793, 9 CI. & Fin. 61 ; Taylor Mangles v. Grand Dock Colliery Co., v. Chichester, d-c, Railway Co., L. R. 10 Sim. 519. 2 Exch. 356. See as to fraud in CHAPTER VI. HOW THE RIGHT TO IMPEACH A TRANSACTION ON THE GROUND OF FRAUD MAY BE LOST. Chap. VI. Transactions, although impeachable in equity at the time of iuceptioD, and for some time afterwards, on the ground of fraud, may become unimpeachable by a subsequent confirmation, by acquiescence, or by the mere lapse of time. SECTION I. — CONFIRMATION. Sect. 1. In order that an act may have any effect or validity as a confirmation, it must clearly appear that the party confirming was fully apprised of his right to impeach the transaction, and acted freely, deliberately, and advisedly, with the intention of confirming a transaction which he knew, or might, or ought with reasonable or proper diligence to have known, to be im- peachable. If his right to impeach the transaction be concealed from him, or a free disclosure be not made to him of every circumstance which it is material for him to know, or if the act takes place under pressure or constraint, or by the exercise of undue influence, or under the delusive opinion that the original transaction is binding on him, or if it be merely a continuation of the original transaction, the confirmation operates as nothing (a). (a) Cann v. Cann, 1 P. Wms. 727 ; v. Cholmondeley, 1 R. & M. 425 ; Crotve V. Ballard, 3 Bro. C. C. 119,2 IFedderburn v. IVedderhurn, 2 Keen, Cox, 253 ; Walker \. Symonds, 3Sw. 722 ; De Montmorency v. Devereux, 7 1 • Murray v. Palmer, 2 Sch. & Lef. CI. & Fin. 188 ; Mulhallen \ . Marum, 486 ; Morse v. Royal, 12 Ves. 355 ; 3 Dr. & War. 317 ; Salmon v. Cults, Purcell V. Macnamara, 14 Ves. 91 ; 4 Deg. & S. 132 ; Stump v. Gaby, 2 Goioland v. Ve Faria, 17 Ves. 20 ; D. M. & G. 623 ; Roberts v. Tunstall, Wood V. Dovmes, 18 Ves. 128 ; Say 4 Ha. 257 ; Waters v. Thorn, 22 Beav. V. Bancid; 1 V. & B. 195 ; Cockerell 547 ; Savery v. King, 5 H. L. 627 ; RELEASE. 331 To make a confirmation of any value, the parties must be at Chap. VI. , . . Sect. 1. arms length, on equal terms, with equal knowledge, and with sufficient advice for protection. There must be full knowledge of all the facts, full knowledge of the equitable rights arising out of these facts, and an absolute release from the undue influence by which the fraud was practised (6). Confirmation may be by will as well as by deed (c). A confirmation by will of a previous gift to a person filling a fiduciary character will confirm the gift, although the fiduciary relation was still sub- sisting at the death of the testator ((/), unless the will was part of the same scheme of fraud (e). If an independent legal adviser be employed, it will be assumed that he had satisfied himself, before approving of the transaction, that it was for the benefit of his client to confirm it (/). But an agreement by way of confirmation though prepared by an independent solicitor may be set aside, if that one of the parties for whom the solicitor is acting is under the influence of the other party (g). There can be no confirmation where there is such a gross fraud as that a deed is void on the face of it at law (/t) ; nor can an agreement rendered inoperative by a collateral fraudulent agreement be made valid by an abandonment of the collateral agreement (i). A confirmation of part of a deed confirms the whole (j). SECTION II.— RELEASE. The same requisites which are necessary to render a confirma- ggct. 2. tion valid, are necessary to render a release valid (/o). Athenrenm JAfe Society v. Pooley, 3 (/) Staines v. Purker, 9 Beav. 388; D. & J. 299 ; Smith v. Kay, 7 H. L. De Montmorency v. Vevcreux, 7 CI. & 750 ; Wall v. Vockerell, 10 H. L. Fin. 188 ; Asphmd v. JVatte, 20 229 ; Potts V. Surr, 34 Beav. 543 ; Beav. 474. Kempson v. Ashbee, 10 Ch. 15. Qj) Moxon v. Payne, 8 Cli. 881. (6) Moxon V. Pmj7ie, 8 Ch. 881. (/)) Stum2) v. Gaby, 2 D. M. & G. (f) Stump V. Gaby, 2 D. M. & G. G30. 623. See IFaters v. Thorn, 22 Beav. {i) Moxon v. Payne, 8 Cli. 881. 547. (j) Milner v. Harewood, 18 Yes. {d) Stump V. Gaby, 2 D. M. & G. 277 ; Jarrett v. Aldham, 9 E.j. 463. 623. (A-) Lloyd v. Attwood, 3 I). & J. (e) Lyon v. Home, 6 J'lq. 658. 614 ; SpackmaiCs Case, 34 L. J. Cli. 332 ACQUIESCENCE, Chap. VI. The efeueral words in a release are limited always to that Sect. 2. , . ^ , , . _ , . ,, . , , . thing or those things which were especially m the contemplation of the parties at the time when the release was made. But a dispute that had not emerged on a question which had not at all arisen cannot be considered as bound or concluded by the anticipatory words of a general release [1). SECTION III. — ACQUIESCENCE. S^*^^- ^- It is not necessary, in order to render a transaction un- impeachable, that any positive act of confirmation or release should take place. It is enough, if proof can be given of a fixed and unbiassed determination not to impeach the transaction. This may be proved, either by acts evidencing acquiescence, or by the mere lapse of time during which the transaction has been allowed to stand {m). Acquiescence or delay for a length of time after a man is in a situation to enforce a right, and with a full knowledge of facts, is, in equity, cogent evidence of a waiver and abandonment of the right (n). If a voidable contract, or other transaction, is voluntarily acted on, with a knowledge of all the facts, in the hope that it may turn out to the advantage of a party who might have avoided it, he may not void it when, after abiding that event, it has turned out to his disadvantage (o). To fix acquiescence upon a party it must unequivocally appear that he knew or had notice of the fact upon whicli the 329 ; Farrant v. Blanchford, 1 D. J. 623, per Lord Westbury ; Turner v. & S. 119 ; Aveline v. MeUmish, 2 D. Turner, 14 Cli. D. 829. J. & S. 289. See Heron v. Heron, 2 (m) JVright v. Vanderplank, 8 D. Atk. 160 ; Pusey v. Desbouverie, 3 P. M. & G. 133 ; Jarrett v. Aldam, 9 Wms. 315 ; Steadman v. Palling, 3 Eq. 466 ; Turner v. Collins, 7 Ch. Atk. 423 ; Bowles v. Stuart, 1 Sch. 329 ; Mitchell v. Homfray, 8 Q. B. & Lef. 209 ; Wedderhurn v. TVedder- D. 587. burn, 2 Keen, 728,4 M. & C. 41 ; (n) Duke of Leeds v. Lord Amherst, Duke of Leeds v. Amherst, 2 Ph. 117 ; 2 Ph. 117, 123 ; Life Association of Eyre v, Burmester, 10 H. L. 106 ; Scotland v. Siddall, 3 D. F. & J. 73 ; Skilbeck v. Hilton, 2 Eq. 587. Shottowe v. Williams, ib. 535. {I) London ck Souih-Westnn BoU- (o) Ormes v. Beadel, 2 D. F. & J. u-ay Co. V. Blackmore, 4 E. & I. App. 2d6, per Lord Campbell. ACQUIESCENCE. 333 alleged acquiescence is founded, and to which it refers (p). Chap. VI. Acquiescence imports and is founded on knowledge. A recogni tion resulting from ignorance of a material fact goes for nothing. The question as to acquiescence cannot arise unless the party against whom it is set up was aware of his rights. A man can- not be said to acquiesce in what he does not know, nor can he be bound by acquiescence unless he is fully apprised as to his risrhts and all the material facts and circumstances of the case (q). Acquiescence in what has been done will not be a bar to relief when the party alleged to have acquiesced has acted or abstained from acting through being iguorant that he possessed rights which would be available against that which he permitted to be enjoyed (r). Nor, indeed, is a recognition of avail which assumes the validity of a transaction, if the question as to its validity does not appear to have come before the parties (s). The mere fact that a man may have heard unfavourable rumours, and conceived suspicions, is not enough to fix him with acquiescence (t). The proof of knowledge lies on the party who alleges acquiescence, and sets it up as a defence (u). If the transaction has taken place under pressure, or the exercise of undue influence, it must (p) Randall v. Erriiigton, 10 Ves. Vyvyan, 30 Beav. 65 ; Spackman's 428 ; Spademan's Case, 34 L. J. Ch. Case, 34 L. J. Ch. 329 ; Stewart's 321, 326 ; Stanhope's Case, 1 Ch. 161 ; Case, 1 Ch. 514 ; Bagnall v. Carlton, Stewart's Case, ib. 514. 6 Ch. D. 371 ; De Bussche v. Alt, 8 {q) Randall v. Errington, 10 "Ves. Ch. D. 287, supra, pp. 102, 103. 426 ; Blennerhassett v. Day, 2 B. & (r) Earl Beauchamp v. Winn, 6 B. 104 ; Cholmondeley v. Clinton, 2 E. & I. App. Ca. 223. Mer. 361 ; Honner v. Morton, 3 (s) Honner v. Morton, 3 Russ. 65 ; Russ. 65 ; Cockerell v. Cholmeky Wright v. Vanderplank, 8 D. M. & Taml. 435 ; Austin v. Chambers, 6 G. 133. See Baker v. Bradley, 7 D. CI. & Fin. 1 ; Charter v. Trevelyan, M. & G. 597. 11 CI. & Fin. 714 ; Cockell v. Taylor, (t) Central Railway Co. of Vene- 15 Beav. 122 ; Burrows v. Walls, 5 zuela v. Kisch, E. & I. 2 App. Ca. D. M. & G. 233 ; Lloyd v. Attwood, 112. 3 D. & J. 624 ; Sarery v. Kiiig, 5 H. (u) Bennett v. Colley, 2 M. & K. L. 627 ; Bright v. Legerton, 2 D. F. 225 ; Biuroivs v. Walls, 5 D. M. & & J. 617 ; Life Association of Scot- G. 233 ; Life Association of Scotland land v. Siddall, 3 D. F. & J. 74 ; v. Siddall, 3 D. F. & J. 58 ; Wall v. Bullock v. Downes, 9 H. L. 1 ; Jf'all Cockerell, 10 H. L. 229 ; Spackman's v. Cockerell, 10 H. L. 229 ; Berdoe v. Case, 34 L. J. Ch. 329. Dawscrn, 34 Beav. 603 ; J'ynjan v. 334 Af'QTTIESCENCE. Chap. VI. clearly and unequivocally appear that the party against whom Sect. 3. . . , ... — acquiescence is alleged was sui juris, and was released from the influence or the pressure under which he stood at the time of the transaction, and acted freely and advisedly in abstaining from impeaching it. Acquiescence goes for nothing so long as a man continues in the same situation in which he was at the date of the transaction (x). But as soon as a man with full know- ledge, or at least with sufficient notice or means of knowledge, of his rights, and of all the material circumstances of the case, freely and advisedly does anything which amounts to the recog- nition of a transaction, or acts in a manner inconsistent with its repudiation, or lies by for a considerable time, and knowingly and deliberately permits anotlier to deal with the property, or incur expense, under the belief that the transaction has been recognised, or freely and advisedly abstains for a considerable lapse of time from impeaching it, there is acquiescence, and the transaction, although originally impeachable, becomes unim- peachable in equity (y). If, for instance, a man after discovering that the representations in a prospectus, on the faith of which he has purchased shares, are false, deals with the shares as owner, by instructing a broker to sell them (z), or receives a dividend and pays a call (a), or attends meetings and continues to act as a shareholder (6), or concurs in the appointment of a (x) Gowland v. De Faria, 17 Ves. Fin. 714; Ghampionv. Rigby, T ami. 25 ; Gregory v. Gi-ecjory, Coop. 201 ; 421, 9 L. J. Ch. N. S. 211 ; Maden Roche V. O'Brien, 1 B. & B. 3.38 ; v. Veevers, 5 Beav. 511 ; Nugle v. Aylward v. Kearney, 2 B. & B. 463 ; Baylor, 3 Dr. & War. 60 ; Edtvards Palmer v. Wheeler, ib. 31 ; Honner v. Meyrick, 2 Ha. 75 ; Loader v. V. Morton, 3 Russ. 65 ; TJuke of Leeds Clark, 2 I\Iac. & G. 387 ; Stoyie v. V. Lord Amherst, 2 Ph. 117 ; Addis Godfrey, 5 D. M. & G. 76 ; Lyddon V. Campbell, 4 Beav. 401 ; Roberts v. v. Moss, 4 D. & J. 104 ; Dimsdale v. Tunstall, 7 Ha. 257 ; Salmon v. CiUts, Dimsdale, 3 Drew, 556 ; Farrant v. 4 Deg. & Sm. 132 ; Wright v. 'Fan- Blanchford, 1 D. J. & S. 107 ; Cairn- derplank, 8 D. M. & G. 133 ; Eyre v. cross v. Lorimer, 3 Macq. 830 ; Arch- M'Donnell, 15 Ir. Ch. 534 ; Berdoev. bold v. Scully, 9 H. L. 360 ; Turner Dawson, 34 Beav. 603. v. Collins, 7 Ch. 329. (y) Selsey v. Rhodes, 1 Bligh. N. S. (z) Ex parte Briggs, 1 Eq. 483. 1 ; Bellexo v. Rtissell, 1 Ba. & Be. 96 ; (a) Scholey v. Central Railway of Blennerhassett v. Day, 2 Ba. & Be. Venezuela, 9 Eq. 266 n. 118; Vifjers v. Pike, 8 CI. & Fin. (b) Sharpley y. Louth d- EaM Coast 652 ; Charter v. Trerehjan, 11 CI. & Railway Co., 2 Ch. D. 685. ACQUIESCENCE. 335 committee of investigation into the affairs of the company on behalf of the shareholders (c), or does anything which amounts - to an affirmation of the contract {d}, there is acquiescence. So where a party, with full knowledge of the niLsrepresentation alleged to have been made, by his conduct agrees to treat the transaction as binding, he is precluded in equity from insisting on the misrepresentation in a suit for specific performance (e). And where plaintiffs sought to avoid an agreement for the lease of a mine, on the ground of fraudulent misrepresentation of its value, it was held that having continued to work the mine after full knowledge of all the circumstances of the fraud, they were not entitled to relief (/). The equitable rule as to acquiescence applies with peculiar force to the case of property which is of a speculative character, or is subject to contingencies, and can only be rendered produc- tive by a large and uncertain outlay (g). A distinction must be taken between cases where the ac- quiescence alleged takes place while the act is in progress, and cases where it does not take place until after the act has been completed. " The term ' acquiescence,' " said Thesiger, L. J., in De Busscke v. Alt {h), " is one which was said by Lord Cotteu- ham in Duke of Leeds v. Aonhhsf, ought not to be used ; in other words, it does not accurately express any known legal defence, but if used at all, it must have attached to it a very different signification, according to whether the acquiescence alleged occurs while the act is in progress, or only after it has been completed. If a person having a right, and seeing another person about to commit, or in the course of committing an act infringing on that right, stands by in such a manner as really Chap. VI. Sect. 3. (c) Lawrence's Case, 2 Ch. 424, (d) Ogilvie v. Currie, 37 L. J. Ch. 547. (e) Macbrijde v. Weekes, 22 Beav. 533. (/) Vigers v. Pike, 8 CI. & Fin. 562. (g) Norway v. Rmrc, 19 Yes. 144 ; Small V. Attwood, 6 CI. & Fin. 232, 359 ; Prendergast v. Turfmi, 1 Y. & C. C. C. 98, 13 L. J. Ch. 268 ; Lovell v. Hicks, 2 Y. & C. 46 ; Jennings v. Broughton, 5 D. M. & G. 140 ; Clegg V. Edmondson, 8 D. M. & G. 787 Clements v. Hall, 2 D. & J. 173 Grosvenor v. Sherratt, 28 Beav. 659 Whalley v. WhalUij, 2 D. F. & J. 310. (/() 8 Ch. D. 314. 336 ACQUIESCENCE. Chap. VI. to induce the person committing the act, and who might other- Sect. 3. . . ° Wise have abstamed from it, to believe that he assents to its being committed, he cannot afterwards be heard to complain of the act. This, as Lord Cottenham said, is the proper sense of the word ' acquiescence,' and in that sense may be defined as quiescence under such circumstances, as that assent may be reasonably inferred from it, and is no more than an instance of the law of estoppel by words or conduct. But when once the act is completed without any knowledge or assent upon the part of the person whose right is infringed, the matter is to be determined on very different legal considerations. A right was then vested in him, which at all events cannot be divested without accord and satisfaction or release under seal. Mere submission to the injury for any period short of the period limited by statute for the enforcement of the right of action, cannot take away any such right, although, under the name of laches, it may afford ground for refusing relief under particular circumstances, and it is clear that even an express promise by the person injured that he would not take any legal proceedings to redress the injury done to him, could not by itself constitute a bar to such proceedings, for the promise would be without consideration, and therefore not binding." Where a wrongful act has been completed without the know- ledge or assent of the party injured, his right of action is not ordinarily barred by mere submission to the injury, or even by a voluntary promise not to seek redress ; some conduct amount- ing to release, or accord and satisfaction, must be shown, although on account of laches relief may be refused under certain circum- stances (i). The representatives of a man who has acquiesced in a par- ticular transaction, cannot be in a better position than the man himself (k). So, also, may a remainderman be bound by acquiescence (l). But there is no acquiescence, if the remainderman acts in a transaction merely as the attorney of the tenant for life (vi). (i) 8 Ch. D. 314. (/) Shannon v. Bradstreet, 1 ,Sch. & {k) WalmesUy v. Boofh, 2 Atk. Lef. 73. 2;") ; Bellew v. iJi/ssc//, 1 Bii. it Be. (?n) Liehman v. Harcourt, 2 Mer. y6. 520. DELAY AND LAPSE OF TLME. 337 If a company have recognised a transfer of shares, by forfeit- Chap. VL ing the shares for non-payment of calls, they lose the right to set aside the transfer, or to deal with the transferee as a share- holder (n). If the company, before the winding-up, have re- cognised a transfer of shares, the Court will not, in the winding- up, set aside the transfer, and put the name of the transferor on the list of contributories (o). The doctrine of acquiescence applies even as between trustee and cestui que trust, even in cases of express trusts (^)). A cestui que trust, whose interest is reversionary, though not bound to assert his title until he comes into possession, is not less capable of giving his assent to a breach of trust while the interest is in reversion than when it is in possession. Whether he has done so or not depends on the facts of each particular case (q). SECTION IV. — DELAY AND LAPSE OF TIME. The mere lapse of time during which a transaction has been Sect. 4. allowed to stand may render it unimpeachable in equity. A man who seeks the aid of the Court must assert his claim with reasonable diligence (■?•). It is a rule of equity not to encourage stale demands, or give relief to parties who sleep on their rights. The rule is founded on the difficulty of procuring full evidence of the character and particulars of remote transactions, and is independent of the Statute of Limitations (s). In the case of (n) Chynoioeth's Case, 15 Ch. D. & Lef. 71 ; HicJces v. Cooke, 4 Dow. 20. 16 ; Chalmer v, Bradley, 1 J. & W. (o) lb. 59 ; TFalford v. Adie, 5 Ha. 112. {j}) Walker v. Byinonds, 3 Sw. 64, (s) Hovenden v. Lord Annesley, 2 75 ; Burrows v. JFalls, 5 D. M. & G. Sch. & Lef. 630 ; Beckford v. JFadc, 233 ; Farrant v. Blanchford, 1 D. J. 17 Ves. 87 ; Chalmer v. Bradley, 1 J. & S. 107. & W. 63 ; Hickes v. Cooke, 4 Dow- (7) Life Association of Scotland v. 16 ; Rancliffe v. Parkins, 6 Dow. Siddall, 3 D. F. & J. 58, 73. 149, 232 ; JVhalley v. TFhalley, 3 (r) Smith V. Clay, cit. 3 Bro. C. C. Bligh, 17 ; Cholmondeley y. Clinton, 639 ; Jones V. Tnrherville, 2 Ves. .Jr. 4 Bligh, 119; Sibbering v. Earl of 11; Hercy v. Dimvoody, il). 87; Balcarres, 3 Deg. Si S. 735 ; Browne Underwood v. Lord Courtown, 2 Sch. v. Cross, 14 Beav. 105 ; Hartvi'U \\ 338 DELAY Chap. VI. Sect. 4. legal titles and legal demands, Courts of Equity act in obedi- ence to the Statutes of Limitations {t) : but if the demand is not of a legal nature, or is strictly equitable, the Statutes of Limitations are not a bar in equity. Courts of Equity, however, look to them as guides (u), and assimilate their rules as far as they can, and as far as the transactions will admit, to the law (x). Where a bar exists by statute, equity will, in analogous cases, consider the equitable rights as bound by the same limita- tions (y) : but in cases where the analogies of law do not apply, a Court of Equity is governed by its own inherent docrine not to encourage stale demands. Parties who would have had the clearest title to relief, had they come in reasonable time, may deprive themselves of their equity by a delay which falls short of the period fixed by the statutes (z). Lapse of time, when it does not operate as a positive or statutory bar, operates in equity as an evidence of assent, acquiescence, or waiver (a). The Colvin, 16 Beav. 140 ; Beaden v. King, 9 Ha. 532 ; Knight v. Boivyer, 2 D. & J. 421, 443 ; Gh'esley v. Mousley, 4 D. & J. 78 ; Harcourt v. White, 28 Beav. 312 ; Skottoive v. Williams, 3 D. F. & J. 535. {t) Hovenden v. Lord Annesley, 2 Sch. & Lef. 631 ; Foley v. Hill, 1 Ph. 399 ; Fulwood v. Fulwood, 9 Ch. D. 178 ; Gibbs v. Guild, 9 Q. B. D. 69. (u) Hamilton v. Grant, 3 Dow. 33 ; Whalley v. Whalley, 3 Bligli, 17 ; Knox V. Gye, 5 E. & I. App. Ca. 656. (x) Chohnondeley v. Clinton, 4 Bligli, 1, 95 ; Brooksbankv. Smith, 2 Y. & C. 60 ; Knox v. Gye, 5 E. & I. App. Ca. 656 ; Gibbs v. Guild, 9 Q. B. D. 59. (?/) Smith V. Clay, cit. 3 Bro. C. C. 639 ; Hovenden v. Lord Annesley, 2 Sch. & Lef. 607, 632 ; Wlialley v. IVhalley, 3 Bligh, 17 ; Chohnondeley V. Clinton, 4 Bligh, 1, 119 ; Sihber- ing V. Earl of Balcarres, 3 Deg. & S. 735 ; Duke of Leeds v. Lord Amherst, 2 Ph. 117 ; Fulwood v. Fulwood, 9 Ch. D. 178. (a) Oliver X. Court, 8 Pri. 167, 168 ; Gh-egory v. Gregory, Coop. 201 ; Hickes V. Cooke, 4 Dow. 16 ; Whalley v. Whalley, 3 Bligh, 17 ; Chohnondeley V. Clinton, 4 Bligh, 1, 95 ; Champion V. Rigby, 9 L. J. Ch. N. S. 211 ; Sibbering v. Earl of Balcarres, 3 Deg. & S. 735 ; Roberts v. Tunstall, 4 Ha. 257 ; Broiime v. Cross, 14 Beav. 106 ; Hartvjell v. Colvin, 16 Beav, 140 ; Baker v. Read, 18 Beav. 398 ; Wright V. Vanderplank, 8 D. M. & G. 133 ; Gresley v. Mousley, 4 D. & J. 78 ; Lyddon v. Moss, lb. 104 ; Harcourt v. White, 28 Beav. 312 ; Clegg v. Edmondson, 8 D. M. & G. 810 ; Clanricarde v. Henning, 30 Beav. 175 ; Wentworth v. Lloyd, 32 Beav. 467 ; Downes v. Jennings, ib. 290 ; Thompson v. Eastwood, 2 App. Ca, 236. {a) Pickering v. Lord Stamford, 2 Ves. Jr. 583 ; Gregory v. Gregory, Coop. 201 ; IVhalley v. Whalley, 3 Bligh, 1, 13 ; Roberts v. Tnnstall, 4 AND LAPSE OF TIME. 339 two propositions of bar by length of time, and bar by acquies- Chap. VI. cence, are not distinct propositions, ihey constitute but one proposition (6). Acquiescence, however, as distinguished from delay, imports conduct (c). " The doctrine of laches in a Court of Equity," said the Court, in Lindsey 'Petroleum Co. v. Hurd (d), "is not an arbitrary or a technical doctrine. Where it would be practically unjust to give a remedy, either because the party has by his conduct done that which might fairly be regarded as equivalent to an evasion of it, or where, by his conduct and neglect he has, though per- haps not waiving that remedy, yet put the other party in a situation in which it would not be reasonable to place him, if the remedy were afterwards to be asserted, in either of these cases lapse of time and delay are most material. But in every case if an argument against relief, which would otherwise be just, is founded on mere delay, that delay, of course, not amount- ing to a bar by any statute of limitations, the validity of that defence must be tried upon principles substantially equitable. " Two circumstances always important in such cases are the length of the delay, and the nature of the acts done during the interval, which might affect either party, and cause a balance of justice or injustice in taking the one course or the other, so far as relates to the remedy. If the situation of the parties has in no substantial way been altered, either by the delay, or by any- thing done during the interval, there is nothing to give special importance to the defence founded on time." " I have looked in vain," said Lord Blackburn, in Erlaiigev V. New Sonibrero PhosjjJtafe Co. (e), " for any authority which gives a more distinct and definite rule than the passage just cited ; and I think, from the nature of the inquiry, it must always be a question of more or less depending on the degree Ha. 257 ; Life Association of Scotland See Murray v. Palmer, 2 Sch. & Lef. V. Sicldall, 3 D. F. & J. 73. See 486 ; Archbold v. Scully, 9 H. L. Stewart's Case, 1 Ch. 513. 360. (6) Life Association of Scotland v. (d) L. R. 5 P. C. 240. Lord Siddall, 3 D. F. & J. 73, per Turner, Selborne was present at the liearing L. J. of the case. (c) Lyddon v. Moss, 4 D. & J. 104. (e) 3 App. Ca. 1279. z 2 340 DELAY Chap. Yi. of diligence which might reavsonably be required, and the degi'ee • of change which has occurred, whether the balance of justice and injustice is in favour of granting the remedy, or withholding it. The determination of such a question must largely depend on the turn of mind of those who have to decide, and must therefore be subject to uncertainty, but that is inherent in the nature of the inquiry." The effect of false representation is not got rid of on the ground that the person to whom it was made has been guilty of negligence. No mere delay short of the jjeriod fixed by the Statute of Limitations is sufficient to deprive a man of his right to rescind on the ground of fraud (/). Nor to an action for damages for deceit is there a bar arising from delay, unless the delay is such as would bring the Statute of Limitations applic- able to the case into operation (g). The rule that a man who sleeps on his rights cannot come to a Court of Equity for relief holds good, not only in circum- stances where the length of time would render it extremely difficult to ascertain the true state of the fact, but where the true state of the fact is easily ascertained, and where it is per- fectly clear that relief would have been given had there been no delay {h). No precise or defined limit of time can be stated within which the interposition of the Court must be sought. What is a reasonable time cannot well be defined so as to establish any general rule, and must in a great measure depend upon the exercise of the sound discretion of the Court under all the cir- cumstances of each particular case (i). In Gregory v. Gre- gory (Jc), Sir W. Grant, M. R., refused to set aside a purchase by a trustee after a lapse of eighteen years. So in Selsey v. Rlioades (l), where a lease was granted to a steward, and eleven years had elapsed, the Court refused to set the lease aside, (/) Redgrave v. Hurd, 20 Ch. D. (i) Gresley v. Mousley, 4 D. & J. 13, per Jessel, M. R. 78 ; Bacjnall v. Carlton, 6 Ch. D. {g) Peekv. Gurneij, 6 E. & I. Ajip. 371. Ca. 402, per Lord Cairns. (/:) Coop. 201. (h) Beckford v. TFade, 17 Ves. 87, (l) 2 Siui. & St. 41 ; 1 Bligh, N. 97. S. 1, AND LAPSE OF TIME. 341 thonorh there were special circumstances in tlie case. So in ^^''-'^p- ^^• * ' . Sect. 4. Baker v. Read{m), a bill filed after the lapse of seventeen years to set aside a purchase of a testator's estate by his executor, at an undervalue, was dismissed on the ground of delay (n). But in Kempson v, Ashhee (o), where a young lady executed a bond as surety to secure the repayment of money by her stepfather, and some years afterwards executed a second bond as security for money due by him, the Court held that she was entitled, notwithstanding the lapse of thirteen years from the date of the first bond, to have the bonds delivered up to be cancelled. The question as to delay may be much aifected by reference to the nature of the property ( p), or to the change of circumstances as to the character or value of the property in the intermediate period {q). A delay which might have been of no consequence in an ordinary case, may be amply sufficient to bar the title of relief, when the pro- perty is of a speculative character, or is subject to contingen- cies (7'), or where the rights and liabilities of others have been in the meantime varied (s), or where an innocent third party has acquired an interest in the matter, or where in conse- quence of the delay the position even of the wrongdoer is affected (^). If the property is of a speculative or precarious {m) 18 Beav. 398. JVentworth v. Lloyd, 32 Beav. 467 ; (h) See Purcell v. Macnamara, 14 Eidgway v. Newstead, 3 D. F. & J. Ves. 91 ; Oliver v. Court, 8 Pri. 127 Molony v. L'Edrange, Beat. 406 Gillett V. Peppercorn, 3 Beav. 78 Roberts v. Tmistall, 4 Ha. 257 474. (r) Attwood V. Small, 6 CI. & Fin. 232, 357 ; Walford v. Adie, 5 Ha. 112 ; Prendergast v. Turton, 1 Y. & Matheiv v. Brise, 14 Beav. 343 ; Asp- C. C. C. 98, 13 L. J. Cli. 268 ; Clegg hmdv. Watte, 20 Beav. 4S0 ; Allfrey v. Edmondson, 8 D. M. & G. 787; V. Allfrey, 1 Mac. & G. 87; Barivell Clements v. Hall, 2 1), & J. 173; V. Bar well, 34 Beav. 371 ; Potts v. Ernest v. Vivian, 33 L. J. Ch. 513 ; Surr, ib. 543 ; Proctor v. Robinson, Ride v. Jewell, 18 Gh. D. 660. 35 Beav. 335. (s) Ridgivay v. Newstead, 3 D. F. & (0) 10 Ch. 15. J. 474. Where the lapse of time ( p) Hatch V. Hatch, 9 Ves. 292 ; has not alteriid the position of the IFright v. Vanderplank, 8 D. ]\I. & parties interested, it is of little or no G. 133 ; Clegg v. Edmondson, ib. importance. WoUaston v. Tribe, 9 807 ; Ernest v. Vivian, 33 L. J. Ch, Eq. 50 ; Lord Beauchamp v. JVinn, 513. 6 E. & I. App. Ca. 232. (q) Hickes v. Cooke, 4 Dow. 16 ; (t) Clough v. London dc North S42 DELAY Chap. VI. nature, it is the duty of a man complaining of fraud to put forward his complaint at the earliest possible time (it). He cannot be allowed to remain passive, prepared to affirm the transaction if the concern should prosper, or to repudiate it if that should prove to his advantage (x). Parties who are in the position of shareholders in companies must, if they come to the Court to be released from their shares on the ground of fraud, come with diligence and promptitude (y). A man indeed who, after being fully aware of the false representation in the pro- spectus of a company, by which he has been induced to take shares, delays for an unreasonable time in taking proceedings to have his name removed from the list of shareholders cannot claim to be entitled, even after the creditors are paid, to be treated as between himself and the company, as if he were not a shareholder, and to have repayment upon that footing (0). So, also, in the case of companies formed under the Companies Act, 1862, persons who apply for shares on the faith of a pro- spectus are bound to ascertain at the earliest possible moment whether the memorandum and articles of association are in accordance with the prospectus. If they fail to do so, and the objects of the company are extended beyond those described in the prospectus, the persons who have so taken shares on the faith of the prospectus will be held bound by acquies- cence (a). It is difficult to lay down any general rule as to the time within which an objection on the ground of misrepresentation in the prospectus of a company should be made the ground of IFestern Bailway Co., L. R. 7 Exch. 541 ; Kisch v. Central Railway Co. of 34, supra, p. 5. Venezuela, 2 E. & I. App. Ca. 125 ; {u) Jennings v. Broughton, 5 D. Feese River Silver Mining Co., 4 E. M. & G. 126 ; Er7iest v. Vivian, 33 & I. App. Ca. 64 ; Kent v. Freehold L. J. Ch. 513. Comp. Langham v Land, dkc, Co., 3 Ch. 493 ; Sharpley East Wheal, dec. Mining Co., 37 L. v, Louth (t East Coast Railway Co., 2 ^.Ch. 253. Ch. D. 685. (x) JValford v. Adie, 5 Ha. 112 ; (z) Ogilvie \. Currie, 37 L. J. Ch. Prendergast v. Turton, 13 L. J. Ch. 541, 268 ; Cowell v. JVatts, 19 L. J. Cli. (a) Oalces v. Turquand, 2 E. & I. 455 ; Lawrence's Case, 2 Ch. 425 ; Apj). Ca. 352, per Lord Clichnsford ; iluley. Jewell, 18 Ch. D. 660. Downes v. Ship, 3 E. e^ I. App. Ca. (1/) Ogilvie v. Currie, 37 L. J. Ch. 343, AND LAPSE OF TIME. 343 repudiation of shares after it has been discovered. In every Chap. YI. case attention must be paid to the circumstances (h). A delay — '- — '- pending the hearing and decision of the case of another share- holder in the same position, agreed to be taken as a representa- tive case, was held not to prejudice the party, notwithstanding tliat a winding-up order intervened (c). So, also, in a case where, before the winding-up order, a large number of the shareholders repudiated and refused to pay the allotment money, and the company sent out a circular to say that in consequence of the proceedings at law taken by one of the shareholders, who had repudiated, they did not intend to sue them : it was held that one of the number who had repudiated was not debarred from taking proceedings to have his name removed from the list of shareholders by his delay in not taking proceedings until after the winding-up order, and after the result of the trial at law (d). But a shareholder who did not repudiate, but remained silent, and attended meetings, and took no steps in the matter until after the winding-up order and after the result of the trial, was held debarred by his delay from taking proceedings to have his name removed from the list of shareholders (e). - In determining whether a shareholder has acted Avith suffi- cient diligence and promptitude, allowance will be made for a reasonable delay in taking proceedings. In Kisch v. Central Railway Co. of Venezuela {f), the shareholder who repudiated spent some months in examining the books and in investi- gating the affairs of the company, after first being put on inquiry and before bringing his action, and it was held that the time so employed was not sufficient to bar him from taking proceedings against the company. In Ogilvie v. Currie (g), on the other hand, where shares had been allotted to a man in June, 1865, and he had full know- ledge of the misrepresentations in the prospectus on the 30th of {h) Ocjilvie v. Currie, 37 L. J. Ch. (e) Ashhifs Case, 9 Eq. 263. 644, per Lord Cairns. (/) 3 D. J. & S. 122, 2 E. & I. (c) Pawle's Case, 4 Ch. 497. Ajjp. Ca. 100. (d) M'NeiWs Case, 10 Eq. 607. (g) 37 L. J. Ch. 541. 344 DELAY Chap. yi. May following, but took no steps to repudiate his shares till the 21st of July, it was held that he was barred by his delay. The question as to delay may be also materially affected by- reference to the relation which subsists between the parties. A delay which might be available by way of defence to persons not under any fiduciary relation or obligation may not be available to those who are affected by a fiduciary relation or obligation (h). If, for instance, the transaction be between solicitor and client, a delay which would be fatal in other cases may be permitted, for the solicitor must know that the onus of supporting the transaction will rest on him, and that, if he desire it to be upheld, he must preserve the evidence which will be required to uphold it (i). The rules of the Court as to lapse of time being a bar in equity apply to cases of constructive trust (j), and even to transactions between trustee and cestui que trust in respect of the trust estate (k), as well as to ordinary transactions. Length of time can, however, have no effect between trustee and cestui que trust, except the trusts are properly executed (I). There is a wide distinction between trusts which are actual and express and constructive trusts. A trust by Avhich a man undertakes to hold and apply property for the benefit of another is Avidely different from the case of ownership, subject to the claims of another, if he thinks proper to enforce it (m). In the case of a bribe received or profit made by a person in a fidu- ciary position, the cestui que trust who is wronged is not barred by any length of time, so long as that wrong is concealed from (li) Lindsey Petroleum Go. v. Hurd, 17 Ves. 97 ; Ex ■parte Hasell, 3 Y. & L. E. 5 P. C. 242 ; Erlancjer v. New C. 617 ; Clegy v. Edmondson, 8 D, Sombrero PhoqiJiate Co., 3 App. Ca. M. & G. 787-'j Glanricarde v. He7i- 1248. ninrj, 30 Beav. 180. (i) Gresley v. Mousley, 4 D. & J. {k) Gregory v. Gregory, Coop. 201 ; 78. See M'Donald v. M' Donald, 1 Eoherts v. Timstall, 4 Ha. 257 ; Baker Bligh, 315 ; Morgan v. Lewes, 4 v. Bead, 18 Beav. 398 ; Barivell v. Dow. 29, 45 ; Ghampion v. Righy, 9 Buncell, 34 Beav. 371 ; hut see Sviith L. J. Ch. N, S, 211 ; Allfrey v. v. Bakes, 20 Beav. 568. Allfrey, 1 Mac. & G. 87. Coinp. (l) Franks v. Bollans, 37 L. J. Ch. Lyddon v. Moss, 4 D. & J. 104. 155. {j) Hovendcn v. Lord Annesley, 2 {m) Toft v. Stephenson, 7 Ha. 15. Sch. & Lef. 633 ; Beckford v. Wade, AND LAPSE OF TIME. 345 nim by the wrongdoer; but a Coiu't of e([uity will, whether by ^Lip. VI. analogy or in obedience to the Statute of Limitations, hold the claim barred, if the cestui que trust stands by and takes no proceedings for six years from the time when he became aware of it. The money sought to be recovered in such a case is in no sense the money of the cestui que trust, unless it is made so by a decree founded on the act by which the trustee got the money into his hands. The case is different from that of a cestui que trust seeking to recover money which was his own before an act wrongfully done by the trustee (ji). In the case of continuing express trusts, created by act of parties, no time is a bar, for from the privity existing between the parties, the possession of the one is the possession of the other, and there is no adverse title (o). Nor is length of time a bar where a debt has accrued in consequence of a violation of confidence be- stowed in a fiduciary character ( _23). But if the trust, though express, be not continuous, and the case be one of gross laches, tlie general rule of equity, that encouragement is not to be given to stale demands, is equally applicable (q). If there be laches on both sides, the ordinary rules as to delay and acquiescence may not apply (r). Time, however, does not begin to run against a man in cases of fraud, until he has knowledge of the fraud. Time begins to run only from the discovery (s). The Statute of Limitations is no bar in equity in cases of fraud (t). The right of the party defrauded is not affected by lapse of time, or, generally speaking, (n) Metro2)olitan Bank v. Heiron, 5 (q) Bright v. Legerton, 2 D. F. & Exch. D. 323. J. 606 ; Harston v. Tenison, 20 Cb. (o) Chohiondeley V.Clinton, AWl\^-\, D. 120. See M'Donnell v. White, 1 ; JFedderburn v. Wedderhurn, 2 11 H. L. 570. Keen, 749, 4 M. & C. 41 ; Kiiight v. (r) Hicks v. Morant, 2 Dow. & CI. Botvyer, 2 D. & J. 421, 443 ; Clanri- 414. cardcv. Henning, 30 liiinv. 175. See (s) Blamerhasscitv. Day, 2 Ba.. & Att.-Gen. v. Fishmongers'' Co., 5 M. & Be. 129 ; Blair v. Bromley, 5 Ha. C. 16 ; Life Association of Scotland 559, 2 Ph. 360 ; Allfreyv. Allfrey, 1 \.Siddall,3F. & J. 58, 73 ; M'Donnell Mac. & J. 99 ; JFahham v. Stainton, V. White, 11 H. L. 570. See Franks 1 D. J. & G. 678; Re Reese River V. Bollans, 37 L J. Ch. 155. Silver Mining Co., Smith's Case, 2 Ch. (2)) Teed v. Bcere, 5 Jur. N. S. 613. 381. {t) Sturgis v. Morse, 24 Beav. 541 346 DELAY Chap. VI. by anything done or omitted to be done, so long as he remains, ^ — '- without any fault of his own, in ignorance of the fraud that has been committed {u). Lapse of time imputed as laches may be excused by the obscurity of the transaction, whereby a man is disabled from obtaining full information of his rights (x). Time does not begin to run against a man, so as to bar the remedy, until he has full information of his rights and injuries (y), or has in his possession full means of knowledge (z), or might by the exercise of reasonable diligence have obtained evidence of the fraud (a), or, at least, has sufficient notice to put him on inquiry (6), and, in cases where the transaction has taken place under pressure, or the exercise of undue influence, is emancipated from the dominion under which he stood at the date of the transaction (c). The objection of time is removed, so long as a man remains, without any fault of his own, in ignorance of his rights and injuries {d), or is under a legal dis- ability (e), or so long as the dominion or undue influence which (u) Rolfe V. Gregory, 4 D. J. & S. 579. See Allfrey v. Allfrey, 1 Mac, & G. 99. (x) Murray v. Palmer, 2 Sch. & Lef. 486 ; Erlanger v. Neiv Sombrero I'Jiosphate Co., 3 App. Ca. 1231. (y) Salkeld v. Vernon, 1 Eden, 64 ; Blennerhassett v. Day, 2 Ba. & Be. 104, 119 ; Wlialley v. TFlialley, 3 Blish, 1 ; O'Neill v. Hamill, Beat. 618 ; Trevelyan v. Charter, 4 L. J. C'h. N. S. 209 ; CJiarter v. Trevelyan, 11 CI. & Fin. 714 ; Bromne v. Cross, 14 Beav. 106 ; Parker v. Bloxam, 20 Beav. 295 ; Savery v. Kmg, 5 H. L. 627. (z) Broivne v. M'Clintock, 6 E. & I. App. Ca. 456 ; Redgrave v. Hurd, 20 Ch. D. 13. The fact, however, that a man has the means of knowledge is not the same thing as knowledge, if no culpable negligence can be im- puted to him. Earl Beauchamp v. Winn, 6 E. & I. App. Ca. 233. («) Chetham v. Hoare, 9 Eq. 571 ; Vane v. Vane, 8 Ch. 383 ; JVillis v. Lord Hoioe, 50 L. J. Ch. 4. (b) Clanricarde v. Ilenning, 30 Beav. 175 ; Spackman's Case, 34 L. J. Ch. 321, 326 ; Stanhope's Case, 1 Ch. 161. (c) Gregory v. Gregory, Coop. 201 Addis V. Campbell, 4 Beav. 401 Champion v. Righy, 9 L. J. Ch. N. S 211 ; Bellamy v. Sabine, 2 Ph. 425 Grosvenor v. Sherratt, 28 Beav. 659 Sharp V. Leach, 31 Beav. 491 ; Kemp- son V. Ashbee, 10 Ch. 15. (d) Trevelyan v. Charter,^ L. J. Ch. N. S. 209 ; Charter v. Trevelyan, 11 CI. & Fin. 714 ; Allfrey v. Allfrey, 1 Mac. & G. 87 ; Rolfe v. Gregory, 4 D. J. & S. 579 ; Spackman's Case, 34 L. J. Ch. 329 ; Stanhope's Case, 1 Ch. 161. (e) Duke of Leeds v. Lord Amherst, 2 Ph. 117 ; Neesom v. Clarkson, 2 Ha. 163 ; Wright v. Vanderplank, 8 D. M. & G. 133 ; Gresley v. Mousley, 4 D. & J. 78. AND LAPSE OF TIME. 347 vitiated the transaction is in full force (/). The mere fact, Cbap. yi. IScct. -1. however, of the poverty or pecuniary embarrassment of the injured or defrauded party, is not a sufficient excuse for delay (^ndente lite at any time before decree to settle priorities (a). But an equitable incumbrancer cannot Lc^^al estate of I ^ ' '■ , . liarc trustee. after receiving notice of a prior equitable mcumbrance obtam priority over it by getting in a legal estate from a bare trustee (h). The doctrine in regard to the effect of notice, does not affect Person afTecte.i a title derived from another person, in whose hands it stood tree benefit of want of from any such taint. A purchaser will not be affected by notice ","ej-^tcVui-''" of an equitable claim, if he purchase from a vendor who him- chaser, self bought bond fide without notice (c). A bond fide purchaser for value without notice has a right to convey to a person even with notice any legal or equitable interest which he has acquired, and a person acquiring such legal or equitable interest under such purchaser, has a valid title to it {d). So, also, if a person who hus notice sells to another who has no notice, and is, also, a bond fide purchaser for valuable consideration, the latter (x) Willoughby v. Willoughby, 1 T. (c) Harrison v. Forth, Prec. CIi. Jl 7(53. 51, 1 Eq. Ca. Ab. 331, pi. 6 ; Loiother (rj) Tildesley v. Lodge, 3 Sm. & G. v. Carlton, 2 Atk. 242 ; Brandlyn v. 543. Ord, 1 Atk. 571 ; Siveetv. Southcote, {z) Dodds V. Hills, 2 H. & M. 424. 2 Bro. C. C. 66 ; Andrew v. JVrigley, (a) Bates v. Johnsm, John. 315 4 ib. 125. (h) Haridiam v. Shacklock, 19 Vh. ( " that every conveyance of an equit- able interest is an innocent conveyance, that is to say, the grant (i) Rooper v. Harrison, 1 K. & J. 75. 108, IC9. (on) Fraser v. Jones, 17 L. J. Ch. {h) Joyce v. De Moleyns, 2 J. & L. 353, 356 ; Rooper v. Harrison, 2 K. 374. *S: J. 108, 109; Ford v. White, 16 {I) Att.-Gen. v. Wilkins, 17 Eeav. Beav. 120; StackhouseY. Countess of 203 ; but see Philipps v. Philipps, 4 Jersey, 1 J. & H. 721 ; Case v. James, D. -F. & J. 217. 3 1). F. & J. 264 ; Parker v. Clarke, (ni) Greenslade v. Dare, 17 Beav. 30 Beav. 54 ; Cory v. Eyre, 1 D. J. 502. & S. 167 ; Philipps v. Philipps, 4 D. (?() Co^(/er V. i^Mic/i, 19 Ecav. 500 ; F. & J. 215; Bradley v. Riches, 9 Carry v. Cremorne, 12 Ir. Ch. 136. Cli. D. 193. (o) Colyer v. Finch, 5 H. L. 905 ; (p) i D. F. & J. 215. Hunter v. Walters, 11 Eq. 314, 7 Cb. 360 PURCHASE FOR VALUE Chap. VI. of a person entitled merely in equity passes only that which he '- — '■ is justly entitled to, and no more. If, therefore, a person seised of an equitable interest (the legal interest being outstanding) makes an assurance by way of mortgage or grants an annuity, and afterwards conveys the whole estate to a purchaser, he can grant to the purchaser that which he has, namely, the estate subject to the mortgage or annuity, and no more. The subse- quent grantee takes only that which is left in the grantor. Hence, grantees and incumbrancers claiming equity take and are ranked according to the date of their securities, and the maxim applies. Qui prior est tempore, j^otior est jure." The rule, hoAvever, that as between equities priority of time gives the better equity is not an absolute rule, but is subject to the condition that the equity which ranks prior in point of time is an equity of equal rank in all other respects with the equity wdiich ranks later in point of time. If after a close examina- tion of all the circumstances of the case there appears to be nothing to give the one a better equity than the other, then and then only resort must be had to the maxim, Qui prior est tempore, p>otior est jure (q). " The meaning of the rule," said Kindersley, V.-C. (r), " is this, that in a contest between persons having only equitable interests, priority in time is the ground of preference last resorted to, i.e., that a court of equity Avill not prefer the one to the other on the mere ground of priority of time until it finds upon an examination of their relative merits that there is no other sufficient ground of preference between them, or in other words that their equities are in all other respects equal, and that if the one has on other grounds a better equity than the other, priority of time is immaterial " (s). In a case in which the authorities were fully reviewed the rule was thus stated by Lord Justice Giffard : "As between equitable incumbrancers, relief will be given to the incumbrancer prior in point of date, unless he has lost his priority by some act or neglect of his own; and relief will not be refused him as against (q) Rice v. Rice, 2 Drew. 85. 150 ; Case v. James,. 3 D. F. «& J, (?•) lb. 78. 263 ; Shropshire Union, dr., Canal (s) See Freezer v. Jones, 17 L. J. Co., 7 E. & I. App. Ca. 510; Bradley Ch. 355; Att.-Gen. v. Flint, 4 Ha. v. Riches, 9 Ch. D. 19.3. WITHOUT NOTICE. 3(51 a subsequent incflmbrancer on the sole ground of the latter ^liap. VI. ^ . ^ . ® Sect. 5. being a purchaser for value without notice, unless he has the legal estate or the best right to call for it " (t). As between two persons whose equitable interests are of precisely the same nature and quality, and in that respect precisely equal, the possession of the title-deeds gives the better equity. But the possession of the title-deeds will not in all cases and under all circumstances give the better equity (u). The deeds may be in the possession of a party in such a manner and under such circumstances that such possession will confer no advantage whatever. For example, in Allen v. Knvjld («), deeds had been delivered to the first equitable mortgagee, and by some unexplained means they had got back into the posses- sion of the mortgagor, who delivered them to a subsequent equitable incumbrancer. It was insisted by the latter that it must be presumed that it was by the fault or neglect of the first mortgagee that the deeds had got out of his possession, or that at all events the Court should direct an inquiry as to the circumstances. But the Court held that the onus lay on the second mortgagee of proving such alleged fault or neglect of the first mortgagee, and as he had failed to prove it, the Court could not presume it nor direct an inquiry on the subject, and decreed in favour of the first mortgagee. So the deeds may have come into the hands of a subsequent equitable mortgagee by means of an act committed by another person which con- stituted a breach of an express trust as against the person having the prior equitable interest. In such a case it would be contrary to the principles of a court of equity to allow the subsequent mortgagee to avail himself of the injury which had been thus done to the party having the prior equitable estate or interest {y). In all cases of contests between persons having equitable interests, the conduct of the parties and all the circumstances must be taken into consideration in order to determine which has the better equity ; and if it appear, after (0 Thorpe v. Hokhworfh, 7 Eq. (x) 5 Ha. 272 ; an'd. II Jur. 527. 146. (y) nice V. Rice, 2 Drew. 82, per ■ (?i) Rice V. Rice, 2 Drew. 81 ; Kinderpley, V.-C. Thorpe v. Holdsrcorth, 7 Eq. 139. 362 PURCHASE FOR VALUE Chap. vi. a close examination of all these matters, that there has been Sect. 5. some default or neglect on the part of the first mortgagee or incumbrancer, the possession of the deeds will give the better equity {z). As between a vendor's lien for unpaid purchase-money and an equitable mortgagee by deposit of deeds, the equities being of equal rank, that which is prior in date will according to the general rule be preferred {a). So also the right of the cestui que trust to follow into land trust monies which have been misappropriated by the trustee being an equitable lien of the same quality as an equitable mortgage by deposit of deeds, the claim of the cestui que trust, when prior in point of date, has priority over the claim of the equitable mortgagee, though a purchaser for value without notice (6). So when bankers took an equitable mortgage by deposit of title-deeds of an estate which was subject to a secret trust of which they had no notice, it Avas held that such trust must prevail against their secu- rity (c). In a case however accompanied by circumstances of a very complicated nature, it was held that the rule. Qui "prior est tempore, potior est jure, could not be applied, and that a pur- chaser for value without notice, by deposit of title-deeds, though subsequent in date, was entitled to priority {d). A bond Jlde equitable mortgagee by deposit of deeds has priority as against a subsequent mortgagee who has the legal estate (e). When a man in depositing deeds with his banker to secure the balance of his account has executed a memorandum whereby he agreed at their request to execute any deed neces- sary for legally carrying out the security, he cannot deprive them of priority by conveying the property to a party with whom he has entered into a subsequent contract for value, even though such party was a purchaser without notice (/). The assignee of a chose in action cannot set up the defence (z) Bice V. Rice, 2 Drew. 82. Jersey, 1 J. & H. 721. (a) lb. {d) Keafe v. Philixqos, 18 Ch. D. {})) Cavev. Cave, lo Ch. D. 643. 570. See Bradley y. Riches, 9 Ch. D. 193. (e) Barnard v. Byimter, 17 W. R. (c) Manningford v. Toleman, 1 71. Coll. 670. See Att.-Gen. v. Flint, 4 (/) Maxjield v. Burton, 17 Eq. Ha. 156 ; Stackhouse v. Countess of 18. WITHOUT NOTICE. SG3 of purchase for value without notice as against equities which ^^^p- y^- attached to the security in the hands of the assignor ((/). There may be such dealings between the assignee and the party liable originally as to preclude him from insisting as against the assignee upon rights which he might have claimed as against the assignor : but, as a general rule, a person who buys a chose in action takes subject to the equities which afifect the assignor, even although he be a bond fide purchaser with- out notice {h). Where, accordingl}^, a man bought in the market, in the ordinary course of business, debentures which had been issued in fraud of a company, the fact that the transfer of the debentures had been registered in the books of the company, and interest had been paid on them, and that the holder was a bond fide purchaser without notice, was held not to affect the application of the rule, and the holder of them was restrained from suing at law upon them {i). The rule that a man who purchases a chose in action takes it subject to the equities, which attach to it in the hands of the assignor, applies even where the person himself who asserts the equity has created the interest under which the assignee claims it {k). Where, accordingly, A. mortgaged a fund in Court to B., and afterwards joined B. in a sub-mortgage to C, and it was decided that the mortgage to B. was fraudulent and void, it was held void as to C, and that neither A.'s concurrence in the first nor second mortgage prevented him from insisting on the invalidity of the transaction, he not being aware of his rights (/). (jd v. Attwood, 3 254. D. & J. 614. (t) Jeremy E(|. Jur. h. 1, c. 2, s. (x) Brace v. Duchess of Marl- 1 ; Story, E(|. Jur. 412. borough, 2 P. Wms. 491 ; Hopkinson (u) March v. Lee, 1 Ch. Ca. 162 ; v. Rolt, 9 H. L. 514. See London Jb Morrett v. Paske, 2 Atk. 52 ; Worthy County Banking Co. v. Rakiiff, G v. Birkhcad, 2 Ves. 571 ; Lacey v. App. Ca. 739. Ingle, 2 Ph. 419 ; Eoo2)erv. Harrison, (y) Toulmin v. Stcere, 3 Mer. 224. CHAPTER VIL REMEDIES. SECTION 1. — RESCISSION, AND OTHER REMEDIES OF A LIKE CHARACTER. Chap. VII. If ^ contract for sale or purchase of goods, chattels, or real ^^'^^' ^' estate be induced by false and fraudulent representations, or a transaction be in any way tainted by fraud, and the defraud- ing party is party to the contract or transaction, the party defrauded has a right at his election, after knowledge of the fraud, to rescind and avoid the contract or other transaction, and to recover back what he has paid, or sold, or conveyed, provided always the parties can be restored to the position in which they stood before or at the time of the contract or trans- action (a), for it would be unjust that a person who has been in possession of property under the contract or transaction, which he seeks to repudiate, should be allowed to throw that back on the other party's hands without accounting for any benefit he may have derived from the use of the property, or if the property, though not destroyed, has been in the interval dete- riorated, without making compensation for that deteriora- tion (6). The effect of the avoidance of an agreement on the Sfround of fraud, is to place the parties in the same position as if it had never been made, and all rights which are transferred or created by the agreement are revested or discharged by the avoidance. If, when it is avoided, nothing has occurred to alter the position (a) Load v. Green, 15 M. & W. Lindsej/ Petroleum Co. v. Kurd, ib. 220-; Baxiiins v. IVickham, 3 D. & .1. 5 P. C. 221. 322 ; Pentelow's Case, 4 Cli. 178 ; (h) 3 App. Ca. 1278, per Lord Clough V. London <& North- Western Blackl^urn. Bailway Co., L. R. 7 Exdi. 34 ; RESCISSION. 367 of affairs, the riohts and remedies of the parties are the same, (^''•'^p- vir. '^ ... Sect. 1. as if it had been void from the beginning ; but if any alteration has taken place, their rights and remedies are subject to the effect of that alteration (c). There can be no avoidance of an agreement unless the parties can be restored to their original condition. As a condition to rescission, there must be a restitutio in integrum. Though the party defrauded may rescind the transaction and demand restitution, he can only do so on the terms that he himself makes restitution. If, either from his own act, or from misfortune, it is impossible to make sucii restitution, it is too late to rescind (a). A contract cannot be rescinded in part, and stand good for the residue. A man cannot treat the agreement as avoided by him, so as to resume the property which he parted with under it, and at the same time keep the money or other advantages which he has obtained under it. There cannot be rescission if the circumstances have in the meantime so far changed that the parties cannot be restored to the position in which they stood before or at the time of the contract. There cannot, indeed, be rescission if the position even of the wrongdoer is so affected that he cannot be placed in statu quo (e). Thus, where a person has been induced by fraud to buy goods on credit, in order to avoid the contract upon the discovery of the fraud, he must return the goods, and if he does not, or cannot do so, he must pay the price, or, at least, show a fraudulent defect in the goods in reduction of the price, in answer to an action for the price. After consuming the goods wholly, or in part, he cannot avoid the contract by which he obtained them, because he can no longer return them (/). So, in the case of a bill given for goods sold and delivered, the buyer cannot avoid the bill on the ground of the sale being fraudulent so long as he retains the goods (g). So, (c) Queen v. Sadlers' Co., 10 II. L. jj/uite Co., 3 App. Ca. 1268 ; Houlds- 420, per Lord Blackburn. worth v. City of Glasgow Bank, 5 App. (d) 5 App. Ca. 338, per Lord Black- Ca. 338, jxr Lord Blackburn, burn. (/) Clarke v. DicJcson, El. Bl. & (e) Clarke V. Dickson, El. Bl. & El. El. 148. See Harnor v. Groves, 15 148 ; Chough v. London d- North C. B. 6G7. Western Railway Co., L. R. 7 Q. B. (y) Sully v. Frean, 10 Excli. r)35. 34 ; Erlanger v. Nerc Somhrero Phos- 368 RESCISSION. Chap. YII. also, a resale of goods by the vendee, though without notice of ^^'^^' ^' the fraud, is an absolute bar to rescission of the original contract of sale. The rule is not subject to an exception where the act ■which rendered restitution impossible has been induced by the same fraud as had procured the original contract ; nor is the right of rescission subject to the condition of restoring the other party to the same condition as before so far as iwssihle. This contention is contrary to the principle upon which all cases of avoidance of contracts rest. It is of the essence of such an avoidance that no part of the consideration originally passed, or that if it did pass, the ivhole consideration subsequently failed, either by reason of a return, or a tender of all benefit received under the contract by the avoiding party, or for some other cause. So long as part of the consideration is retained, the party is not permitted to allege that his retention is un- lawful, and rightful retention involves the continued existence of the contract under which alone the consideration can be rightfully held Qi). In a case where, on the treaty of a mar- riaoe, a promissory note was given in consideration of the mar- riao-e, which was afterwards solemnised, and an action Avas subsequently brought by the indorsee against the two joint and several makers of the note, it was held that as the marriage, the consideration for the note, could not be undone, it was not competent to the defendants to avoid the note on the ground of fraud practised during the marriage treaty (i). The rule that a party cannot repudiate an executed contract on the ground of fraud, unless on the condition of restoring the other party to his original condition, is not affected by the fact that the latter has by his acts rendered such restoration impossible {h). Where a party retains any benefit from a con- tract induced by fraud, ignorance of the fraud at the time such benefit accrued will not enable him to repudiate the con- tract (?). Upon the same principle, where a man has been induced to take shares in a cost book mining company by fraudulent re- Qi) Hogan v. Heulij,!. R. II C. (k) Savage v. Cunning, IG W. E. L. 122. 133. (t) lb. (0 lb. RESCISSION. 3G9 presentations of the directors, and the company was afterwards Chap. vii. . . . . . . , Sect, 1. converted into a registered joint stock company with limited ■ liability, in wliieh he received shares on account of liis original shares ; it was held that it was no longer open to him, upon a subsequent discovery of the fraud, to avoid his contract, because he could no longer return the shares in the same state in which they were at the time of making the con- tract (m). In Western Bank of Scotland v. Addle (71), where a man had been induced, by fraudulent representations of the directors, to take shares in the company, and he claimed to recover the value of his shai'es, and to be re-imbursed in damages which he had sustained ; but after his purchase of shares, and before he instituted the action, the bank, which was an unincorporated company, was, with his concurrence, incorporated and registered under the Joint Stock Companies Act, 1856, for the purpose of being wound up ; upon these facts, it was held he had no remedy against the new corporation which had been formed. Lord Cranworth said : " He was a party to a proceeding whereby the company from which the purchase was made was put an end to ; it ceased to be an unincorporated, and became an in- corporated, company with many statutal)le incidents connected with it, which did not exist before the incorporation. The new company is now in the course of being wound up. He comes too late ; the appellants are not the persons who were guilty of the fraud, and although the incorporated company is by the express provisions of the statute, under which it was incorporated, made liable for the debts and liabilities incurred before the incorporation, I cannot read the statute as transferring to the incorporated company a liability to be sued for frauds or other acts committed by the directors before incorporation." Nor can there be rescission if third parties, without notice of the fraud, have in the mean time acquired rights and interests in the matter (o). Thus, where a man has bought goods by means {m) Clarke v. Dickson, El. Bl. & (<;) Cloaijh v. London 'r- 3 Ch. 682 ; Ree.se River Silver Mining ge..,'s Case, 15 Ch. D. 5o7 ; I'Ut soe Co. v. Smith, 4 E. & I. App. Ca. 64. RESCISSION. 371 inw-iip a contract to take shares can be rcsciuJcJ on the gruund Ci.ap. VH. - ' Sect. 1. of fraud, depends on the particidar circumstances of the case. If the company has become insolvent and has stopped pay- ment, a rescission of the contract to take shares cannot be per- mitted (it). Though as a general rule there cannot be rescission of a contract unless the circumstances of the case are such that the contract can be rescinded in toto, and that there can be a restitiitlo in integrum, there is an exception to the rule when the subject of the sale is practically worthless, as, for example, a concession from a foreign government that had become for- feited before sale, there being nothing in such a case to return (x). So, also, is there an exception to the rule where the contract or transaction is severable, or is of such a nature that it can be partially rescinded. If the contract or transaction is sever- able, inability to rescind it as to part is not fatal to the right to rescind it as to another part (?/). The fact, for instance, that a man who has been induced by fraiul to purchase shares in a particular company may liave sold some of the shares before discovering the fraud, will not deprive him of the right to have the transaction as to the remaining shares rescinded (z). Nor is the inability of a man to rescind a transaction as a whole fatal to his right of rescission, if his inability to do so is attribut- able to the party against whom he seeks relief. If the latter has entangled and complicated the subject of the transaction in such a manner as to render it impossible that he should be restored, the party defrauded may, on doing whatever it is in his power to do, have the transaction rescinded («). So, also, it is no objection to the rescission of a transaction for the pur- chase of shares obtained by fraud that the shares have fallen in value since the date of the transaction {h). Nor is a man, if the property is of a perishable nature, bound to keep it in a state of («) Teitnent V. City of Glu!<(/ov R. 740. .Ra/(A-, 4 App. Ca. 615. (-v) lb. (x) Phosphate Stwuijc Co. v. Hart- {a) Micsm v. Doiel, 1 Deniu. ■7iiont, 5 Ch. 1). 394. (Amer.), (i9. (y) Maiuroi v. Tredcnnid; 12 W. (6) Blake y. Mowatt, 21 Beav. G13. B B 2 372 RESCISSION. Cliiip. VII. preservation until bill filed (c). His only duty is to do nothing ■ — ^ with the property after the bill tiled ; and in cases where damage is likely to occur, and might be prevented, he ought, perhaps, to give intimation to the defendant, leaving him to do what he pleased (d). A party seeking to set aside a sale of shares is not bound to pay calls on them to prevent forfeiture after filing his bill (e). It is not fatal to his right of rescission that some of the shares may have been forfeited for non-payment of calls since bill filed (/). A sale, however, of several kinds of shares in one transaction cannot be set aside for misrepresentation, if the person seeking relief is unable to restore all the shares he has taken (g). So, also, there may be rescission when the situation of the parties has been in no substantial way altered, and the Court is satisfied that by the exercise of its equitable powers to impose terms upon the parties, as a condition of rescission, it can do what is practically just, and can restore the party against whom relief is sought to that which shall be a just situation with reference to the rights which he held antecedently to the trans- action, though it may not be able to restore the parties pre- cisely to the state they were in before the transaction (h). The terms on which a transaction will be rescinded vary with the particular circumstances of the case. In some cases deeds have been absolutely rescinded (i) by the Court decreeing them to be delivered up to be cancelled (k) ; but the usual course of the Court in setting aside a transaction, is to proceed on the maxim that he who seeks equity must do equity (/). Instruments, accordingly, are either set aside on ((■) Matiirin V. Tredenmck,2'S.B.. Phosphate Co., 3 App. Ca. 1278, per 514, 4 N. K. 15, 12 "W. H. 740. Lord Blaekbum ; Limheij Petroleum ((/) lb. Co. V. Hunl, L. E. 5 P. C. 240 ; (e) lb. Houldsuwth v. City of Glascjov Bank, (y) lb. 5 App. Ca. 338, per Lord Blackburu. Qj) lb. (t) Bates V. Graves, 2 Ves. Jr. 287. (/(,) Bellamy v. Sabine, 2 Ph. 425 ; (Jc) See Jachaan v. Mitchell, 13 King v. Savery, 5 H. L. 627 ; Clarke Veg. 586. V. Dickson, El. Bl. & El. 148 ; Earl (l) JVUhinson v. Foickes, 9 Ha. Beauclump v. Winn, 6 E. & I. App. 594. Ca. 234 ; Erlanger v. Neto Sombrero RESCISSION. 373 repayment of the actual consideration with interest thereon at a Chap. VII. . Sect. 1. reasonable rate (m), or are directed to stand as a security for the monies actually advanced, with interest thereon at a reasonable rate (n), or for what upon investigation shall be ascer- tained to be really due (o). If the property is personal, a decree for the repayment of monies, or the delivery up and cancellation of the instrument, will be complete relief, although the legal interest should have been conveyed (p). But if the Reconveyance ordGrGci wiicn. subject-matter of the transaction be real estate, it is usual to subject-matter direct a reconveyance, because if this is not done, a question ''^ esute. may arise as to what has become of the real estate (q). If, however, the deed is not merely voidable, but wholly void, no reconveyance is necessary (r). The terms on which a reconveyance will be ordered are the Terms of rccou- repayment of the purchase monies and all sums laid out in im- provements and repairs of a permanent and substantial nature, by which the present value is improved, with interest thereon from the times when they were actually disbursed. On the other hand, charges for the deterioration of the j^roperty must be set off against the allowances for permanent improvements. The party in possession must also account for all rents received by him and for all profits, such as monies arising from the sale (vi) Barnadiston v. Lingond, 2 155 ; Tiiln- v. Yates, 6 Cli. 665 ; Atk. 133 ; Lawley v. Hooper, 3 Atk. Lord Aylesford v. Morris, 8 Ch. 484. 278 ; Givyime v. Heaton, 1 Bro. C. (o) Wharton v. May, 5 Ves. 27 ; C. ] ; Lovdl V. Hicks, 2 Y. & C. 55 ; Purcell v. Macnamara, 14 Ves. 91 ; Wiko7i V. SJiort, 6 Ha. 384 ; Ingram Watt v. Grove, 2 Sch. & Lef. 492 ; V. Thorp, 7 Ha. 67. Longmate v. Ledger, 2Giff. 157. (h) Crowe v. Ballard, i^vo. C. C. {p) See 1 Ves. 376 ; W illiamsoii 120 ; Neicman v. Payne, 2 Ves. Jr. v. Gihon, 2 Sch. & Lef. 357 ; Easta- 199 ; Byne v. Vivian, 5 Ves. 604 ; hrook v. ticntt, 3 Ves. 455 ; Cooper v. Davis y. Duke of Marlborough, 2 iiw. Joel, 1 D. F. & J, 240; Slimy. 166 ; Peacock v. Evans, 16 Ves. 512 ; Croucher, ib. 520. Colclough V. Bolger,4 Dow. 64 ; King (q) Pickett v. Loggon, 14 Ves. 231 ; V. Hamlet, 2 M. & K. 456, 3 CI. & Clark v. Malpas, 4 D. F. & J. 401 ; Fin. 218 ; Earl of Aldborough v. Lindsey Petroleum Co. v. Hurd, L. R. Trye, 7 CI. & Fin. 436, 462 ; Carter 5 P. G. 242 ; but see Hoghton v. V. Palmer, 8 CI. & Fin. 657, 11 Hoghton, 15 Beav. 278 ; Att.-Gcn. v. Bligh, 397 ; Billagc v. SmUhee, Ha. Magdalen College, 18 Beav. 255. 540 ; £((Ac)- V. /?m(7/(';/, 7 D. M. & G. (r) Ogilvie v. Jeaffreson, 2 Gilf. 597 ; Croft v. Graham, 2 D. J. & S. 381. 374 RESCISSION. Chap. VII. of timber, or from working miues, with interest thereon, from -_!!_^— the times of the receipt thereof. He must also pay an occupa- tion rent for such part of the estate as may have been in his actual possession (s). Allowance for lasting improvements can only be for such as were made during the period of accounting for the rents (t). The account of rents and profits on the one side, and of lasting improvements on the other, must be carried back to the same time (?<). The decree is erroneous if it directs the account of rents and profits to begin at one time, and the account of lasting improvements at another, unless there is some special reason for doing so (x). The party in possession would also, it is conceived, be required to reinstate premises which he had materially altered ; e. g. a private resi- dence into a shop (y). The value of permanent and substantial improvements of all kinds, by which the present value of the property is improved, such as for the erection of a mansion house, and for plantations of shrubs, will be allowed (z). But no allowance will be made for monies which have been expended by the party in possession, as a matter of taste or personal enjoyment (a). Nor will (s) Savage v. Taijhr, Forretit, 2.34 ; Att.-Gen. v. Balliol College, 9 Mod. 412 ; York Biiildings Co. v. M'Kenzie, 3 Pat. Sc. App. Ca. .398, 579, 3 Ross. L. C. Sc. 305 ; Ward v. Hartpole, cit. 3 Bligb, 470 ; Ex park Hughes, 6 Ves. 617 ; Ex parte Bennett, 10 Ves. 381 ; Murray v. Palraer, 2 Sch. & Let". 490 ; Ed (cards v. M'Cleaij, Coop. 308, 2 Sw. 287 ; Donovan v. Fricker, Jac. 165 ; Trevdyan v. Charter, 4 L. J. Ch. X. S. 214 ; 7'/r- velyan v. While, 1 Beav. 5b8 ; J/u/- halkn V. Manun, 3 Dr. & War. 337 ; Gibson V. D'Kstc. 2 Y. & C. C. C. 581 ; Mill V. Hill, 3 H. L. 828 ; Davey v. D arrant, 1 D. & J. 554 ; Tyrrell v. Bank of London, 10 H. L. 26 ; Hte]>nnj v. Biddulph, 13 W. R. 57(i, .") N. H. .")ii() ; ]>((lhi V. ]]'oiiki(iii. 3 1 ;.•,■. V. 162. {t) Att.-Gen. v. Earl of Craven, 21 Beav. 411. (u) Neesoni v. Clarkson, 4 Ha. 103. (.'j) lb. See as to allowance for improvements of charity property, Att.-Gen. v. Kerr, 2 Beav. 429 ; Att.- Gen. V. Magdalen College, 18 Beav. 254 ; Att.-Gen. v. Davey, 19 Beav. 527. ((/) Donovan v. Fricker, Jac. 165. (;.) York Buildings Co. V. M''Ken%ie^ 3 Pat. Sc. Ap. 398, 579, 3 Ross. L. ('!. Sc. 305 ; Stepney v. Biddulph, 13 W. E. 576, 5 N. R. 506. («) YorkBuildings Co. v. M'Kenzie, 3 Pat. Sc. Ap. 398, 579, 3 Ross. L. C. Sc. 305 ; Att.-Gen. v. Kerr, 2 Beav. 429 ; J//// v. Hill, 3 H. L. S28. RESCISSION,. .37.') allowance be made f<;r inonios which have Leeu expeuded upon Chap. MI. .... Se^t. 1. the property with tlie view ol rendering it impossible for the real owner to recover his estate, and so improving liini out of it, as it may be called (b). A purchaser who seeks to set aside a transaction on the ground of fraud should specially pray in his statement of claim for the repayment of repairs and improvements. He will be credited with the amount of repairs and improvements, executed before the discovery of the defect in title, if their repayment is specially prayed (c) ; and probably, if necessary, repairs executetl during or pending litigation, if specially prayed (d^ A purchaser who has a contract for the sale of land set aside on the ground of fraud is entitled to a lien on the land for the purcliase money which he has paid (e). In a case where a purchase was set asule for fraud, and the purchaser was decreed to pay an occupation rent, receiving back his purchase monies with interest, there being a consider- able excess of the rent over the interest, annual rests were directed, until the principal should be liquidated (/) ; but 'a special case must be shown to warrant such a direction (g). It is not the course of the Court to direct an acc(Dunt of wilful neglect and default, in cases where the possession is not primarily referable to the character of mortgagee (h). When persons, though in fact mortgagees, enter into posse.ssion of rents and profits in another chai^acter, they cannot be subjected (6) Ken ney V. Brown, SRidg. b\8 ; (h) Murray v. Pahner, 2 Sch. & Stepney v. Biddulph, 5 N. R. 505, 13 Lef. 486 ; Trevdyan v. Charter, 4 L. W. R. 576, Sag. V. & P. 287. See J. Ch. N. S. 214 ; Murphy \. O'Shea, Pelly V. Bascomhe, 4Giff. 390. 2 J. & L. 422 ; Sherwin v. Slmke- (c) See EiJwards v. M'Cleay,2 Sw. speare, 5 D. M. & G. 531 ; Lord Km- 289. sington v. Bourerie, 7 D. M. & G. (d) Sug. V. & P. 279 ; Dart, V. & 134, 156, 157 ; Parkinson v. Han- P. 439. bury, 2 D. J. & S. 450. See decree (e) Aberaman Iron IVorhs Co. v. in Gresley v. Mousley, 4 D. &J. 101 ; J-Fickens, 4 Ch. 101. but see decree in Murray v. Palmer, (/) Donovan v. Frkker, Jar. 165. 2 Sell. & Lef. 489 ; Gibson v. UEstc, (,<11 v. Atln-no,}, Y..unge, cent, only wa.s debited. 50,. ((/) M'Calloch V. Ornjnry, 1 K. & (/) Lindl. on Part. p. 9:i7. J. 28(3. 380 RESCISSION. Chap. VII. ing the partnership debts and liabilities, and in respect of any — — '- sums which he has paid or might pay in satisfaction of partner- ship debts, he is entitled to stand in the place of the partnership creditors to whom he made the payment (k). Terms of rescis- If ^ '^^^n has been induced by false representations in the sion where a prospcctus of a Company to take shares from the company, he man lias been r r i ^z induced i.y fraud is entitled to recover his money, and to have his name removed a°company"^^ '" from the register (l). If he has received dividends before dis- covering the fraud, the terms of rescission are that his name shall be removed from the register, and that an account shall be taken of what sums have been paid to him by the com- pany, and of what sums he has received with interest at a reasonable rate, and that the balance shall be paid to him with all costs (m). Removal of Where a person in order to defraud his creditors has trans- fictitious name fg^.^ed stock to a flctitious person, upon proof of the fact, it will from register. '■ i r u be ordered that the fictitious name shall be erased Irom the reo-ister, and that the name of the real owner be inserted {n). Removal of When the directors of a company have power to decline to name of trans- ^.go-ister anv transfer of shares, if they do not approve of the feree when there & •' i • i i is fraud in the transferee, and have registered a transfer of shares which they company. ^^^^ reason to believe was a bond fide instrument, the Court will, after a winding-up order has been made, expunge from the list of shareholders the name of the transferee and substi- tute in his place the name of the shareholder, if it be shown that the transferee was a man of straw, and that the deed of transfer had been executed in collusion between him and the shareholder, so as to enable the latter to escape from his liability to the creditors of the company (o). So, also, when a director of a company, making an improper use of his posi- tion, had transferred his shares to his clerk, under circumstances (A-) Mycock v. Bcatson, 13 Cli. D. Brichnaling Co., 4 Eq. 598. 384. (») Green v. Bank nf England, 3 (l) Blake's Case, 34 Beav. 639 ; Y. & C. 722 ; Arthur v. Midland Ross V. Estates Investment Co., 3 Eq. Eaihcay Co., 3 K. «& J. 204. 122 ; Fox's Case, 37 L. J. Ch. 257 ; (o) Payne's Case, 9 Eq. 224 ; Km- Chester v. S^mrgo, 16 W. R. 576. trca's Case, 5 Ch. 95 ; Snow's Case, 19 (m) Kent v. Freehold Land and W. R. 1057. RESCISSION, 381 which showed that he did so to escape liis liability, and the Cli.-ip. VII, transfer was registered, the name of the transferee was removed ^ — ' from the list of shareholders, and that of the director was sub- stituted (p). So, also, where a shareholder in a company in which the approval of the directors is necessary to the transfer of shares pays a person to accept a transfer of his shares, and the company is afterwards wound up, his name will be placed on the list of contributories instead of his transferee, unless he can show that the consideration expressed to be paid to the trans- feree was in fact received by him for his own benefit, and that the directors were in fact informed of everything which was material for their decision when they approved the transfer (q). So, also, Avhen there is transfer of shares, the name of the trans- feree will be struck out from the register, and that of the trans- feror substituted in its stead, if it appear, not only that the transfer was made to get rid of liability, but that it was a sham and not a real transaction, and was not intended to divest the interest of the transferor and to render the transferee the real owner of the shares, but the transferee held them subject to the order of tlie transferor (i'). If a man's name has been placed on the register of share- Removal of name holders of a company without his consent, through the false S|^o'y'^ representations of a third party, and an order to wind up the ^'^o'^tcr. company has been subsequently made, the Court will order it to be removed from the register (s). There can be no rescission of a contract or other transaction. Waiver of right if it appear that the defrauded party has at any time after ^ '■''^^^^^^'^^ knowledge of the fraud, either by express words or unequivocal acts, elected to afhrm the contract. If after discoverincr the fraud he has in any manner elected to affirm the contract, his right to rescind is waived. He cannot revoke his election, and avail himself of the fiaud in avoidance of the contract, accord- ing to the general maxim as to election quod semel placidt in (2)) Gilbert's Case, 5 Cli. 560. Hiimher Iron JForh, d-c., Co., 45 L. (q) Be European Association Arhi- J. Ch. 48. tration, Philipp's Case, 18 Sol. J. (.s) Re Patent File Co., Ex parte 380. See Hodfje's Case, ib. 708. White, 15 W. E. 754, See JFood's (/•) Kim/s Case, G Ch. 19G ; lie Case, 15 Ecj. 240. 382 RESCISSION. Chap. VII. electionihas (wvplius displicere nan potest (t). Thus, wliere a Sect. 1. man after knowledge of the fraud continues to deal with the property as his own, he thereby affirms the contract («.). So, also, the taking steps to enforce a contract is a conclusive election not to rescind on account of anything known at the time (x). So a man who had been induced by fraudulent misrepresenta- tions to take a lease of a mine, having continued to work the mine after full discovery of all the circumstances of fraud, was held to have lost thereby his claim to be relieved from the lease {y). But in a case wdiere the insurance of a ship had been obtained by the non-disclosure of material information respecting it, entitling the underwriter to an election to avoid the insurance, it was held that the merely formal act of deliver- ing out the stamped policy, in conformity with the slip or memorandum previously signed, was not such an act as of itself determined the election (z). Upon the same principle, when a man has been induced to take shares in a company by misrepresentation contained in the prospectus, and after discovering the true state of the facts, exercises acts of ownership over the shares inconsistent with the repudiation of thern, as by contracting to sell the?n, he can no longer have the contract set aside and his name removed from the register of shareholders («). So, also, the same principle applies where a man, after notice of the fraud, accepts divi- dends upon the shares (b) ; or does any act in affirmance of his position as shareholder (c). If the party defrauded, having once discovered his right to avoid the contract as fraudulent, elects to affirm it, his right to avoid it is not revived by the subsequent discovery of additional incidents of fraud by which it was obtained, the effect of such (t) Co. Litt. 146 ; Com. Dig. 562. Election, C. 2 ; Cloiujh v. London & (,-;) MorrUon v. Lhiirersal Marine North Western Ruilway Co., L. R. 7 Insurance Association, L. li. 8 Excli. Exch. 35. 197. (i() Campbell V. Flemincj, 1 A. & («) Ex jwrte Brigi/s, 1 Eq. 483. E. 40. {b) Sheffield's Case, John. 451 ; (x) Gray v. Forder, I.. R. 8 Excli. Clarice v. Dickson, El. Bl. & El. 148. 280, per LoitI Blackburn. (c) SJiarplei/ v. Louth Railway Co., (//) f'iyers V. J'ike, 8 CI. & Fin. 2 Cli. D. 663, A-«jL*ra, p. 334. ..RKscrssioN. -^So discovery Leinu' only to streiiatlien the evidence of tlie fraud nnd <'iiap. ^ n. . . . . . •'^eet. 1. not to affect tlie right of repudiation Avhich had been waived (^/). But the repudiation of a contract may be supported by any grounds of fraud subsequently discovered (e). Mere delay in determining his election may in some cases preclude the party defrauded from avoiding the contract, and so operate in affirmance of it. Lapse of time without rescinding will furnish evidence that he has determined to affirm the con- tract, and when the lapse of time is great, it probably would in practice be treated as conclusive evidence that he has so deter- mined (/). Thus when a contract for insurance is voidable for concealment, if the insurer by delaying his election to rescind were to prevent the insured from insuring elsewhere, he would be precluded from afterwards avoiding the insurance (g). The party defrauded may, instead of rescinding his contract, Right of party stand to the bargain even after discovery of the fraud, and recover <^^^''^"'^^*^'l *<> o -^ ' atiirtn contnict damages for the fraud, or he may recoup in damages if sued by ^^'^ recover the vendor for the price. The affirmance of the contract by the vendee after discovery of the fraud merelj' extinguishes his right to rescind. His other remedies remain unimpaired (h). The party defrauded may elect to affirm the contract for the purpose of obtaining the remedy upon it in damages, although the fraud renders the performance impossible, and the other party cannot allege his own fraud by way of defence ; thus, when a woman was induced to enter into a promise to marry a man by his con- cealing the fact that he was already married, it was held that she might affirm the contract by remaining unmarried for the purpose of claiming damages for the breach, and that he could not set up the marriage which he had fraudulently concealed in (rJ) CamiMl V. Flrmimj, 1 A. & E. Insurance Co., L. R. 8. Exch. 204. 40. {h) Wild V. Harris, 7 C. B. 99f> ; if) Wright's Case, 7 Ch. .').'). Millward v. Littlewood, 5 Exch. 77.->; (/■) Glourjh V. London cO North Clarke v. Dickson, El. Bl. & El. Western Baibvaij Co., L. R. 7 Exch. US ; Honldsu-orth v. Citij of Glasgow 35 ; per Cur. Morrison v. Unice.rsal Bank, 5 App. Ca. 323, per Lord Marine Insurance Co., ib., 8 Excli. Cairns. Hen Bobiex. Ihincanson, 10 204, supra, p. 'V.y^. I'oc. of Court of Si'ssioii, 4th scries, (rj) Morrison V. Univcr.<^((l Marine 810. 384 RESCISSION. Chap. VII. order to cli-scliarge liini from his promise (/). Though a person ■ '- purchasing a chattel or goods concerning which the vendor makes a fraudulent misrepresentation, may, on finding out the fraud, elect to retain the chattel or goods, and still have his action to recover any damages he has sustained, the same principle does not apply to shares or stock in a joint-stock com- pany, for a person induced by the fraud of the agents of a joint- stock company to become a partner in that company can bring no action against the company whilst he remains in it : his only remedy is restitutio in iiitegruvi and rescission of the con- tract ; and if that becomes impossible by the winding up of the company or by any other means, his action for damages cannot be maintained (/.•). Mode of exercise If a party elects to rescind, he must manifest that election of right of elec- . . .... . , tion to rescind. "Jy communicatmg to the other party his intention to rescind the transaction and claim no interest under it. The com- munication need not be formal, provided it is a distinct and positive repudiation of the transaction. The true question in determining whether there has been rescission is whether the acts and conduct of the party evince an intention to rescind {I). If a buyer of goods has been imposed on by the vendor, he may refuse to accept the goods, if he discover the fraud before delivery or return them, if the discovery be not made till after delivery : and if he has paid the price, he may recover it back on offering to return the goods in the same state in which he received them (m). If the party defrauded has executed a conveyance, he may, on returning or offering to return the consideration or whatever property he may have received in exchange for that which he has conveyed, recover back what he has conveyed. If the subject-matter of the contract be land, and there has been a conveyance to him, he should tender a reconveyance. After the tender of the property, or a reconveyance if it be land, on refusal by the vendor to receive the same, the expense of keeping (i) WHO. v.Ham.^,'7 C. B. 999 ; (I) Mersey, Ac, Steel Co. x.Naylor, MiUimrd v. Littlev:ood, 5 Excli. 775. 9 Q. B. D. C(56. (A) Houldsworth v. City of Glasgow (m) Clarke v. IHclson, El. Bl. & Bank, 5 App. Ca. 317. El. 148. RESCISSION. 385 the property from tlio time of the tender may be recovered (n). Cliap. YII. ■^ ' '' ■• _ Sect. 1. It is a sufficient repudiation of a contract to take shares in a com- pany if a man brings an action to have his name removed from the list of shareholders, or takes proceedings under sect. 35 of the Companies Act, 1862, before a petition for winding up has been presented (o), or promptly requires the directors to remove his name from the register, though he docs not take proceedings under sect. 35 of the Companies Act, 1862 (p), or if he has refused to pay the allotment money, and has stated to the secretary and openly at a public meeting of the company that he repudiates the shares, though he has taken no steps to have his name taken off the list of shareholders and no action has been brought against him for the allotment money (q). But it seems that if, notwithstanding an express repudiation, the other party persists in treating the contract as in force, judicial steps should be taken in order to make the rescission complete as against rights of third persons which may subsequently intervene (r). When the original contract was made with an agent for the other party, communication of the rescission to that agent is sufficient, at all events before the principal is disclosed (s). It remains open to the party defrauded to rescind the contract by way of defence to any action or legal proceeding brought upon it. The plea of fraud would be a sufficient determination of election to avoid the contract, although there was no declaration of intent to rescind before the time of pleading (t). The plea at common law is in the general form that the defendant was induced to make the contract by the fraud of the plaintiff without further alleging the avoidance. But the pica im])orts an avoidance of the contract, and it is necessary to prove some act of avoidance in support of the plea, as the return of the goods sold or the like, when the circumstances of the case require it (ti). (») Cusvell V. Coare, 1 Taunt. 5r,G. (q) M'NeilVs Case, 10 Eq. 503. See Dalhij v. P alien, 1 R. & M. (/•) Kent v. Freehold, Sc, Land 296. Society, 3 Ch. 493. (o) Eosx V. Estates Investment Co., (s) Mai/navd v. Eaton, 9 Ch. 414. 3 Ch. 682 ; Persse's Case, I. R. 6 Eq. (t) Morrison v. Universal Marine 298. Insurance Co., L. R. 8 Exch. 204. ( /)) E.C parte Skids, I. R. 7 Eq. («) Dawes v. Harness, L. R. 10 (•. 264 ; JFood's Case, 15 Eq. 243. 1'. 166. When a defendant tu an c c 386 RESCISSION. ^'sect Y^' Where the effect of the contract is to place the party in a position or invest him with property to which liabilities are attached, as in the case of an allotment of shares in a company induced by fraud or misrepresentation on the part of the company, the party defrauded, in order to discharge the liability, must not only avoid the contract, but must also disclaim and repudiate the property to which the liability is incident. Ih an action accordingly against a shareholder in a company for calls, it was held that a plea alleging merely that he was induced to become a shareholder by fraud was insufficient as admitting that he was still a shai-eholder and subject to the liability, and that it was necessary further to allege that as far as possible he had repudiated, the shares (x). The effect of repudiating the shares upon the ground of fraudulent allotment is to discharge the liabilities ab initio, and a shareholder was held entitled to the full benefit of such discharge, although in ignorance of the fraud he had accepted a cancellation of the shares at a later date upon other grounds (y). Parties privy to Parties who are implicated in the fraud, or who take with the fraud affected . n t n ^ ■ • ^ , • , ,^ i ^ c ii by rescission. notice 01 the iraud, acquire no rights against the party defrauded, and their rights acquired through the contract are voidable together with the contract upon which they depend. Thus where goods bought under a fraudulent sale were consigned to a third party who assisted in the fraud, and who sought to recover them from the carrier through Avhom they had been consigned, it was held that the avoidance of the contract by the seller was an answer to his claim, and even after he had com- menced an action against the carrier {z). Rescission when There may be rescission, if the fraud inducing the contract induced by fraud was that of an agent acting in the business of his principal and agent. within the scope of his authority, though the principal was ignorant of the fraud and free from all moral guilt, or even, action pleads fraud, the Court will ranee Association w. Aiiscough,Q'E.& require him to bring into Court any B. 761 ; Bwlch y Plwn Mining Go. money which the plaintiff has paid v. Baynes, L. R. 2 Exch. 324. to him. Clongh v. London d- North (y) JVright's Case, 7 Ch. 55. Western RaUnrni Co., L. I?. 7 Exch. (z) Clowjh v. London d; North 26. J f 'est em Railway Co., L. R. 7 Exch. (.'■) Jhjiosil d- Crilt'ral Tjifr AsxU- 2<5. RESCISSION. 887 being a corporation, was necessarily incapable of knowing Chap. Yil. 1 • 11 Sect. 1. anything except by its agents, and, therefore, free from all moral guilt, if such a phrase can be properly applied to a corporation {a). After a conveyance has been executed, the Court will set Rescission after aside a transaction only on the ground of actual fraud. Mere exeluted.'^^ constructive notice is not sufficient (6). Where accounts are impeached, the Court will order them to Oijening be opened, though extending over a long period of years, if they ^^'^"°""*^- contain a single fraudulent entry, and will not merely give liberty to surcharge and falsify (c). In the case of the bankruptcy of the fraudulent buyer, the Rescission by seller may avoid the sale and claim back the goods against the baid^riptc^i^of" trustee in bankruptcy, because the trustee takes only the riofht f''aud»lent ^ -" Jo buyer. and interest of the bankrupt ; nor can the trustee claim to retain the goods as having been in the possession of the bank- rupt with the consent of the true owner, for the seller never consented to any other possession in the bankrupt thaa in the right of buyer, and the seller does not resume the position of real owner until disaffirmance of the sale (d). It has been said that any surreptitious dealing between one Rescission when principal to a contract and the agent of the other principal is a t?t-Inis deaS" fraud in equity, and entitles the last-named principal to have the between one principal and contract rescinded and to refuse altogether to proceed with it (e). the agent of the But Lord Justice Mellish was not willing to go so far. The t* Tc^ntracr consequence of fraud in his opinion was that the Court would see that the defrauded party obtained fall redress for the fraud, as far as that could be given. If it could be obtained ivith the contract it should be so given ; if not, it must be given without the contract, and rescission must be allowed. It was his opinion that the situation of the contract in question was one of the latter kind. The only way in which the injured party could be (a) Houldsivorth v. City of Glasgoiv D. 150. Bank, 5 App. Ca. 338, jJei- Lord () Abbotts V. Barry, 2 Bro. & B. (s) lb. ; M'Culloch v. Gregonj, 1 3GI). K. & J. 28G ; Else v. Else, 13 Eq. (7) Clarice v. Dickson, El. Bl. & El. 19(5 ; Broad v. Miinton, 12 Cli. D. 149 ; Western Bank of Scotland v. 131. Addie, 1 Sc. App. Ca. 167 ; Houlds- (t) Thomas v. Powell, 2 Cox, 394 ; worth V. City of Glasrjow Bank, 5 Ai^\x M'Culloch v. Gre(jory, 1 K. & J. 286. Ca. 338, i^er Lord Blackljurn. (it) Covers Case, 1 Ch. D. 182, (/•) Lachhm v. Beyiwlds, Kay, 55. RESCISSION. 393 paid by him under tlic contract, and has a valid defence against Clmp. Yll. an action for recovery of sums which would otherwise be due • under the contract (x). Anything which in law constitutes a consideration moving to the innocent party, and which actually passes from the contracting party, is a benefit within the rule that benefits received by a person seeking to avoid a fraudulent contract must be restored before avoidance (y). If the false representation by which a contract has been Compensation induced was not made fraudulently, but was made through of false rcpre- mistake or misapprehension, and the subject-matter of tlie ^j^"J'^^'JJ"j^j^^^^g contract, though different in some respects and in certain incidents from what it was represented to be, is not so different in substance from what it was represented to be as to amount to a failure of consideration, the transaction will not be set aside, if the party Avho made the representation is willing to give compensation for the variance (z), and the variance is such as to admit of compensation by a pecuniary equivalent (a). If, however, the misdescription of the property is such that it cannot be estimated by a pecuniary equivalent, there is no case for compensation, and the transaction will be set aside (h). If the person by whose fraudulent misrepresentation a trans- No rescission if action has been induced, is not himself a party to the trans- Sl'^Jlot'a pf.-trtlf action, the transaction stands good and cannot be repudiated, if tlie transaction. the other party to the transaction has not been party or privy to the fraud (c). If, for instance, a man has been induced by the false representations of a third party to deal with another, he cannot have the transaction rescinded, if the other party to the transaction has not been party or privy to tlie false repre- sentation (d). So, also, if a man has been induced to take (x) lIo(jan V. Healey, I, R. 11 C. {h) Leyland v. Illingu-orih, 2 D. F. L. 122. , & J. 248 ; Kirl of Durham v. Lajard, (»/) lb. 125. 34 Beav. 612. See Iloidund v. (2) See Dijer v. Ilanjrave, 10 Yes. Norris, 1 Cox, 61. 507 ; Hill v. Buclcky, 17 Ves. 395 ; (c) Pulsforcl v. Richards, 17 Beav. Martin v. Cotter, 3 J. & L. 496 ; 95 ; Duranty's Case, 26 Beav. 270 ; Shackleton v. Sutcliffe, 1 Deg. & S. Worth's Case, 4 Drew. 529 ; Re Fel- 620 ; Palsford v. Richards, 17 Beav. gate's Case, 2 D. J. & S. 456. 96. ((/) Pulsford v. Richards, 17 Beav. ((() Infra, pp. 419, 420,421. 95 ; Duranty's Case, 26 Beav. 271. 394 REMEDIES. Chap. YII. shares from a company by fraudulent misrepresentations made by ' ! some person, not by an agent of the company, authorised to make any representations or authorised to deal on behalf of the com- pany, he is bound by his contract with the company, and cannot have it rescinded (e). So, also, if a man has been induced to buy shares in a company from a shareholder, on false and fraudulent representations made to him by the seller, the com- pany not being a party or privy to the fraud, he is not entitled to have the transfer set aside as between himself and the company, or to restrain the company from making calls on him, whilst he is a shareholder. His remedy is against his vendor, to compel him to accept a re-transfer of the shares, and for an indemnity for the losses he has sustained in consequence of having taken the shares (/). Cases in which a man has been induced by false represen- tations to purchase shares directly from a company must be distinguished from cases in which the transaction is not with the company, but is between two individuals, meeting in the market and dealing for their private interests, like the seller and purchaser of transferable shares. If a man be induced by false representations on the part of the directors of a company to purchase shares in the company from an actual shareholder who has not been himself a party or privy to the false repre- sentations, the shares cannot be forced back on the vendor, because on his part the transaction has been bond fide, nor can the transaction be set aside as between the purchaser of the shares and the company ; for the contract has been between individuals, and the company stands in point of law in the relation of a third party. The purchaser of the shares must seek his remedy in an action against the parties by whose false representations he has been misled {g). If defraiuliiig Where a man has been induced to enter into a transaction party is not a (e) Brochceirs Case, 4 Drew. 205 ; 26 Beav. 271, 273 ; JForth's Case, 4 NicoU's Case, 3 D. & J. 427. Drew. 529. (/) See Stainbank v. Fernley, 9 {g) Durantifs Cose, 26 Beav. 273, Sim. 556 ; Seddon v. Connell, 10 Sim. 274 ; Inglis v. Lumsden, 21 Dec. of 58, 79 ; Maturin v. Tredennich, 2 N. Court of Session, 2iid series, 200. R. 514, 4 N. B. 15 ; Duranfy's Case, See JForth's Case, 4 Drew. 529. REMEDIES. 395 by the false and fraudulent representations of a person wlio is Chap. vil. not a party to the transaction, the Court will, when it can do . . . -1 1 7 \ P^rty'to the SO, make hira make good his assertion as far as is possible {ft), transaction he And it can do this in many cases. Where, accordingly, upon a be required to treaty for marriage, a person, to whom the intended husband ^•'^^® »*'°^' .'"^ •^ o ' 1 ' representation. was indebted, was asked by the father of the lady to make out a list of the debts of the intended husband, and in doing so omitted the debt which w^as due to himself, on the representa- tion made to him by the intended husband, that, if the debt were disclosed, the marriage would be prevented taking place, he was after the marriage restrained by perpetual injunction from enforcing the debt against the husband (/). So, also, where upon a treaty of marriage, a brother, m order to make it appear that his sister had a fortune of 6001. whereas she had only 350/., gave her a sum of loOl., so as to make up 500/., and she gave him a bond for the amount, and the marriage took place upon the faith of the representation, it was held that the bond could not be enforced, and it was ordered to be delivered up to be cancelled (k). So, also, where a man had made a false representation as to the value of property, which he had agreed to charge as security for another person, his representatives were held bound to make it good (l). So, also, where issue in tail told the purchaser of an annuity bequeathed to a younger brother by the father's will that there was a settlement, but that he had not seen it, he was held bound to make the annuity good (m). So, also, where a marriage was contracted, and a settlement made on the faith of representations by the executor of a will, under which a certain sum of money was left to the intended husband, that the legacy was substantial (h) Pidsfonl V. Richards, 17 Beav. 16 Ves. 124 ; Vauxhall Bridge Co. v. 87, 95. See Arnot v. Biscoe, 1 Ves. Lord Spencer, Jac. (J7. 95 ; Burrowes v. Lode, 10 Ves. 47U ; {h) Gale v. Lindo, 1 Vern. 475. Bushhij V. Elli^, 17 Beav. 229 ; See Montefiori v. Moufejiori, 1 W. Ste-phens v. Venahles, 31 Beav. 127 ; Bl. 363. Yeomans v. Williamx, 1 E(i. 185 ; {I) Ingram v. Tliorpe, 7 Ha. 67. comp. Ellis V. Coleman, 25 Beav. See Peek v. Gurncij, 6 E. & I. A]>p. 673. Ca. 393. (0 Neville v. Wilkinson, 1 Bro. (},() Hobbs v. Norton, 1 Vein. 135. C. C. 543. See Dalbiac v. Dalbiac, 396 REMEDIES. Chap. VII. and safe and would bo paid at a future time, the estate of the Sect. 1. 1 1 1 1 — — executor was held to have thereby become indebted for the whole amount (n). So, also, where a father, previously to the marriage of his daughter, promised to the intended husband to leave her a sum of money, and the promise amounted to a distinct engagement or undertaking, and the marriage took place on the faith of such representation, the Court gave effect to it against the estate of the father (u). So, also, the trustee of a fund, who, having received notice of an incumbrance on the fund, had represented to a creditor of the beneficiary that the fund was unincumbered, and that the beneficiary had a right to make an assignment, was held bound to make up the deficiency (p). So, also, a solicitor who had made to his client untrue representations respecting a property on which his client was about to advance money, was compelled to make good his representations (q). So, also, where a partnership consisting of more tlian seven members was formed for the purpose of jiro- moting a particular undertaking, and two of the promoters, being members, made a representation that a certain sum of money had been subscribed, and that a certain sum of money would be required for the purpose of carrying out the under- taking, it was held, on an order for winding-up being made, that they must be settled on the list of contributories for all the balance of the unsubscribed capital up to the sum as stated by them that it would cost (■}■)• So, also, where A. entered into a partnershijD with B., the terms being that B. should bring in as capital the business premises a,nd so much more as to make up a certain sum, and the person acting as solicitor for B. in the transaction, who furnished the valuer with particulars, concealed the fact that he had a mortgage over the premises, it was held (n) Hutton v. Rossiter, 7 D. M. & Soadij, 2 Giff. 1 ; Stephens v. Venables, G. 9. 31 Beav. 128. (o) Hammersley v. De Bid, 12 CI. (^j) Burrowes v. Lock, 10 Ves. & Fin. 45 ; Barkworth v. Young, 4 470 ; Slim v. Croucher, 1 D. F. & J. Drew. 1 ; Mcmnsell v. Hedrjes, 4 H. 518. See Peek v. Gnrncy, 6 E. & I, L. 10.39 ; Laver v. Fielder, 32 Beav. App. Ca 390. \; Alty. Alt, 4 Giff. 84. See /a?Jic- {q) Cleland v. Leech, 5 Ir. Ch. 478. son V. Stein, 21 Beav. 5 ; Kay v. (r) Moore Jb De la Torre's Case, 18 Crook, 3 Sm. & G. 407 ; Prole v. Eq. (561. RECTIFICATION. 397 on the bankruptcy of B. that the sohcitor must make good to Ch^P- "^'H. A. the amount of the mortgage (.s). If a man either makes or adopts a representation the contrary of which he ought have known, or if he had exercised reasonable care might have known to be the truth, and obtains from the Court on the footing of that representation a wrong order, he is bound to afford to persons injured by the making of that order a complete indemnity of its consequences, inclading the costs of setting the matter right. Solicitors accordingly are liable for procuring payment of money to the wrong person (t). Though, as a general rule, there can be no rectification when Rectification of marriage settle- an instrument is founded on fraud (;u), there may be rectification ment on ground of a marriage settlement when the Court is satisfied that the ° settlement has been drawn up and prepared in violation of the agreement and understanding which was come to between the husband and wife before the marriage. When a party acting in the transaction and claiming a benefit under it is proved to have occupied a confidential relation to a lady whom he after- wards marries, and has undertaken to have a proper settlement prepared for her, has an improper settlement made in his own favour, the Court makes the settlement as it ought to have been made, on the principle that the husband undertook to the wife as agent to see that a right settlement was made, and that he is bound by such undertaking (.r). In Clarke v. Girdivood (y), where the intended husband had undertaken as agent of the in- tended wife to have a settlement prepared, and marriage articles were drawn up by a solicitor upon instructions given by the in- tended husband the night before the marriage, by which the wife's property was limited in the first instance to him for life, the Court hold, in an action by the wife, that he was bound under the circumstances to have such a settlement prepared as the Court would sanction, that such settlement Avould give the wife the first life interest in her own property, and that there- fore the limitations were contrary to the intentions of the (s) Sterry v. Coombs, 40 L. J. Cli. 502. 595. (.':) Corku v. Lord Stafford, 1 D. & (0 Be Spencer, 18 W. E. 240. J. 239. (h) mat v. Grove, 2 Scli. & Lef. (j/) 7 Cli. D. 18. 398 REMEDIES. Chap. VII. Sect. 1. Relief l)y declar- ing a party trustee. plaintiff, and it was ordered that the settlement should be - rectified (z). The order was made on the uncorroborated testimony of the wife (a). So, also, in Smith v. IR-ffe (h), a lady, a ward of Court, had married during her minority, and the Court had approved of the settlement. Her personalty was by the instrument limited on the death of her husband and in default of children (both which events had happened) to the wife as she should by will appoint, and in default to her next of kin. She complained that the Court had not provided for her interests as they ought to have been provided for, she being an infant ; and the Court held that it was the right of the lady after tlie death of the husband to have the settlement reformed and put in such a shape as the Court would have approved of if the thing were new and nothing had been done, and rectified the settlement by limiting the property in the events which had happened to herself, her executors, and administrators absolutely (c). Another class of cases in which the Court will rectify a settle- ment is when an action is brought by the grantor to set aside a voluntary deed in so far as it conferred a benefit on collateral volunteers on the ground that the grantor did not know the precise effect of the deed which he had executed or the conse- quences of its execution. In a case, accordingly, where the Court was satisfied that a lady did not understand the true effect of the limitation to collaterals in a voluntary deed executed by her, that it was not properly explained to her, and that the instructions she had given for the preparation of the settlement were materially departed from, a decree was made that the limitation in question to collaterals should be can- celled, and a clause introduced so as to bring the settlement into accordance with the instructions she had given (d). The Court may in the exercise of its equitable powers relieve against fraud by converting the person guilty of the fraud into a trustee for the person defrauded. In cases, for instance, (;.) See Lovesy v. Smith, 15 Ch. D. G55. (a) Tb, (b) 20 Eq. 666. (c)See Cogan v. Duffiehl, 20 Eq. 789. (d) Maunsell v. Maunsell, 1 L. R. I. 547. REMEDIES. 399 where a man has fraudulently appropriated to his own use Chap. VII. monies belonging to another, the Court will declare him a trustee of such monies, and order him to make them good (), or cases in which the party has been named as trustee, or has engaged to take as such ((/), or in which the Court of Probate could afford no adequate or proper remedy (r)." A legacy given to a person in a character which the legatee does not fill, and by the fraudu- lent assumption of which character the testator has been deceived, will not take effect. A false character, however, attributed by a testator to a legatee will not affect the validity {!() Barneslyv. Poii-ell,! Yes. 120, 287; AlJen v. Maciilierson, 1 Ph. 285. 145, 1 H. L. 213. {I) Cruise Dig. tit. xxxv., c. 14, g. (o) 1 H. L. 214. 12. See Pickdt v. Lorjgon, 14 Ves. (^j) Kcnnell v. Abbott, 4 Ves. 802. 234 ; Hampson v. Hampson, 3 V. & (q) Tliynn v. Thynn, 1 Vem. 296 ; B. 42 ; Langley v. Fisher, 9 Beav. Kennell v. Abbott, 4 Vea. 802 ; Pod- 100 ; Tarleton v. Liddell, 17 Q. B. more v. Gunninrj, 7 Sim. 660. 414. (r) See Scgrave v. Kinoan, Beat. (?)i) Allen V. Macpherson, 1 H. L. 157 ; Charlton v. Coombs, 4 Giff. 191. 3ti5 ; Wilkinson v. Joiujhin, 2 E) Haycraft v. Creasy, 2 East, 92 ; (y) Ib. ; Pasley v. Freeman, 3 T. Ormrod v. Huth, 14 M. & W. 651. R. 52. (c) Schroeder v. Mendl, 37 L. T. (z) Taylor v. Ashton,\\ M. & W. N. S. 452. 415 ; Weir v. Bell, 3 Exch. D. (rf) Mocns v. Heyivorth, 10 M. & ACTION OF DECEIT. 403 A distinction must be drawn between an action of deceit and Chap. Vll. Sect. 2. an action or proceeding to set aside a contract or to make the directors of a company answerable in damages for money which they have received. Mere conceahnent is not sufficient to give a right of action to a man who if the real facts had been known would not have entered into the contract. Mere non-disclosure of material facts, however morally censurable, however that non- disclosure may be a gi'ound in a proper proceeding and at a proper time for setting aside a contract, will not form a ground of action in the nature of an action of deceit. There must be some active misstatement of fact, or at all events such a partial and fragmentary statement of fact as that the withholding of that which is not stated makes that which is stated absolutely false (e). In an action, moreover, for setting aside a contract which has been obtained by misrepresentation, the plaintiff may succeed, although the misrepresentation was innocent ; but in an action of deceit the representation to found the action must not be innocent, that is to say, it must be made either with knowledge of its being false or with a reckless disregard as to whether it is or is not true. Tlie coming into existence of a fact which would have made a statement in the prospectus untrue if it had existed at the time of issuing the prospectus will not in an action for deceit entitle the plaintiffto relief : nor are persons issuing a prospectus liable to an action for deceit because they do not mention a fact coming to their knowledge • before the allotment of shares which falsifies the prospectus. Moreover in an action of deceit the plaintiff cannot establish a title to relief simply . by showing that the defendants have made a fraudulent statement; he must also show that he was deceived by the statement and acted on it to his pre- judice (/). To be a ground for an action of deceit the false statement must be material. With respect to the materiality of the W. 147 ; Doyle v. Horf, 4 L. E. I. Ca. 403, per Lord Cairns. 668 ; PMps v. White, 7 L. R. I. (/) Arkwriyht v. Newbold, 17 Ch. 160, suprn, p. 29. D. 320 ; Smith v. Chadicick, 20 Ch. (e) Peek v. Gurneij, 6 E. & I. App- D- 27. D D 2 404 REMEDIES. Chap. VIT, statement, if the Court sees on tlie face of it that it is of such a Sect. 2. , , . ■, nature as would induce a person to enter uito a contract or would tend to induce him to do so or that it would be part of the inducement to enter into the contract, the infe- rence is if he entered into the contract, that he acted on the inducement so held out, and no evidence is needed to show that he did so act ; but even then it may be shown that in fact he did not so act in one of two ways, either by showing that he knew the truth before he entered into the contract and therefore could not rely on the misstatement, or else by showing that he avowedly did not rely on it whether he knew the facts or not. He may by contract have bound himself not to rely on it, that is, to take the matter at his own ri.sk, whether it were true or not, but unless it is shown in one way or other that he did not rely on the statement, the inference follows. Again, in an action of deceit, even though the statement may be untrue, yet if it was made in good faith and the defendant had reasonable grounds for believing it to be true, the action will not lie {g). Finally, it is not every misstatement, although untrue, and untrue to the defendant's knowledge, that will do. It may be that the misstatement is trivial — so trivial that the Court will be of opinion that it could not have affected the plaintiff's mind at all, or induced him to enter into the contract ; or it may be although the means of knowledge were in the hands of the defendant, yet the matter was minute and required a careful examination, and there may have been reasonable grounds for the defendant to believe that this statement was true, although he had those means of knowledge in his possession. In that way also he would be entitled to succeed {h). In a case Avhere there was a misstatement of the valuation of a property in the prospectus of a company to the amount of 8000^. out of 300,000/. the misstatement was held not material (i). So also, when money was to be paid by instal- ments, the omission to mention that interest was also payable was held not material (Jc). (g) Smith v. Chadirid; 20 Cli. D. (i) lb. 44, per Jessel, M. R. (k) lb. (/.) lb. ACTION or DECEIT. 405 If the name of a person is improperly placed on the list of ^^^v- ^'^^■ directors of a company, it must depend on the circumstances of ■ the case whether it is a material misstatement. There may be cases in which the name of a man is so well known and notorious in connection with the business and subject matter of a company that the occurrence of his name on the list of directors would be clear and undoubted inducement to persons to embark in the concern. But in the absence of some special reason, the mere fact that one name out of several happens to be wrongly inserted in the list of directors is not sufficient to support an action of deceit (l) . An action of deceit will not lie if the Court shall be of opinion that the representations in the prospectus of a company, though in some respects inaccurate and not free from careless- ness, are a fair, honest, and bond fide statement on the part of the defendant. If once the Court comes to the conclusion that the persons who made the representations intended to act honestly, and there is any doubt as to the meaning of the tei'ms, the rule will prevail that things will be j^resumed to have been done rightly. If a statement by which the plaintiff says he has been deceived is ambiguous, he is bound to state the meaning which he attached to it and cannot leave tlie Court to put a meaning on it {m). In a case where the defendants sent to the plaintiff the prospectus of a company for which they acted as agents, on the faith of which the plaintiff took shares in the company ; and a few days afterwards the defendants sent to the plaintiff a circular containing other statements respecting the company, but the plaintiff did not receive it till after he had taken the shares ; it was held that the circular could not be taken as a contemjioraneous document with the prosj^ectus and could not be read for the purpose of explaining it {ii). Where a transaction has been induced by fraud but rescission is not competent to the pai'ty defrauded, cither because the parties cannot be restored to their original condition (o), or because .the person by whose fraud the transaction has been {I) Xniifh v. Cluvlwid; 20 Cli. D. 27. 44. (») lb. (in) Smith v. Chadwick, 20 Cli. D. (y) Supra, p. 367. 406 REMEDIES. Chap. Yll. induced is not a party to the transaction (p), the party defrauded '- — '- may bring an action of deceit against the party by whose fraud he has been misled to his injury (q). So also the party defrauded may if he pleases stand to the contract after discovery of the fraud, and recover damages in an action of deceit for the fraud (r). So also an action of deceit will lie if A. makes inquiry of B. as to the circumstances and solvency of C, and B. fraudulently misrepresents them, in consequence of which A. sells goods to C. and suffers loss thereby (s). So also where a man enters into a contract for the sale of real estate, knowing that he has no title to it nor any means of acquiring it, the purchaser may recover damages in an action of deceit (t). A purchaser may, after the execution of a conveyance, bring an action for compensation in damages for fraudulent misrepre- sentation of the property (u). The fact that he had the means of discovering an error amounting in law to fraudulent misrepre- sentation before completion does not take away his right to compensation in damages, if the Court is satisfied that the error was not in fact discovered by himself or his solicitor until after the completion of the purchase (x). Where the owners of a mine or other business, which they know to be a failure, in order to retrieve sell it at a large price to a trustee for a company consisting of themselves in which they all take shares, there is not as between themselves a fraud of which any of them can complain. But if any of the share- holders of the new company sell his shares to anybody of the outside public upon the faith of the simulated agreement for the purchase of the undertaking being a true one, the person so deceived has his remedy against the person who sold him the {p) Sup a, pp. 333, 394. Hamar v. Alexander, 2 B. & P. N. C. {q) Pasley v. Freeman, 3 T. E. 62 Masters v. Ibherson, 8 C. B. 100 Taylor V. Ashton, 11 M. & W. 413 Pulsford V. Richards, 17 Beav. 95 241 ; Clifford v. Brooke, 13 Ves. 133 ; Bruce v. Ruler, 2 Man. & R. 3. {t) Bain v. Fothergill, 7 E. & I. Apj). Ca. 207. Duranty's Case, 26 Beav. 271. (») Lohell v. Stephens, 3 B. & C. (r) Siqyra, pp. 383, 384. 623 ; Pillmore v. Hood, 5 Bing. N. (s) Hutchinson v. Bell, 1 Taunt. C. 97. 558 ; Tcqip v. Lee, 3 B. & P. 370 ; (x) Phelps v. White, 7 L. R. I. Eyre v. Duns/ord, 1 East, 318 ; 160. ACTION OF DECEIT. 407 shares, but there would be no liability on the part of the com- Chap. VII. ' '' ^ Sect. 2. pany as such [y). — ~~ Under Lord Tenterden's Act, 9 Geo. 4, c. 14, s. 6, no action shall be brought whereby to charge any person upon or by reason of any representation or assurance, made oi" given con- cerning or relating to tlie character, credit, conduct, ability, trade or dealings of any other person, to the intent or purpose that such other person may obtain credit, money or goods upon, unless such representation or assurance be made in writing signed by the party to be charged therewith, A representation partly written and partly verbal is sufficient, if the written part forms a material part of the representation {z). The representation must be signed by the party, a signature by his agent will not suffice (a). The word " person" applies to corporations (6). One partner of a firm signing such a representation in the name of the firm with the authority of the firm will thereby make himself only, and not his partners liable on such representation (c). A principal is liable to third persons for frauds, deceits, con- Action of (loceit . . . aijainst principal cealments, torts, and omissions of duty of his agent, when acting for f,aud of in the course of his employment, although the principal did not ^°^^ ' authorise or justify or participate in, or indeed know of such mis- conduct, or even if he forbade the acts or disapproved of them. But the principal is not liable for the torts, or negligence of his agent in any matter beyond the scope of his agency, unless he has expressly authorised or has subsequently adopted them for his own use and benefit (/i). It was formerly considered to be the law that to found an action of deceit, the fraud must be a personal one on the part of the person making the representation, and that a principal was not liable in damages for the false representation of his agent, unless he had impliedly authorised him to make the representa- {y) Ex parte TaijJor, 14 Ch. D. 390. Bing. N. C. 669. (2) Tattonv. JVade, ISO. B. 371. (c) Williams v. Mason, 28 L. T. (a) Sioift V. Jewsbury, L. R. 9 Q. 232. B. 301 ; Hoserjood v. Btdl, 36 L. T. {). When the rescission of a contract is (k) Piggott v. Stratton, John. 359, (n) Stillu-ell v. Jenkins, Jac. 280 ; 1 D. F. & J. 33. Kerr on Receivers, 58. (l) Harrison v. Gardiner, 2 Madd. (o) Harris v. Kemble, 7 L. J. Ch. 198. 83, 5 Bligh, 730. See Walters v. (m) Catching v. Bassett, 32 Beav. Morgan, 3 D. F. & J. 718. 101. See further, sujira, 96 — 102; {p) Cachyiany.Horner, 16 Yes. 10; Kerr on Inj. 184. SPECIFIC PERFORMANCE. 415 souo-ht, a case must be made out showing that the transaction Chap. VII. . .Sect. 4. is not only unfit to be acted on in equity, but is also unfit to be acted on at law (q) ; but it does not follow, though a contract be good in point of law% that it must be carried into execution in equity. Many circumstances may operate to induce a court of equity to refuse its assistance, though the agreement may stand the te.st of a court of law (r). The Court in such cases simply refuses to interfere, leaving the parties to such consequences as may follow from the legal rights which the contract may have given them (s). Specific perform- ance rests with the discretion of the Court upon a view of all the circumstances (t), and with an eye to the substantial justice of the case (u). There can be no specific performance if a material and important fact be untruly stated (x), or if there be a mis- description of the property to a material extent in the conditions of sale iy). It is no answer, in a suit for specific performance, to the fact of the plaintiff having made a false representation, to say that the defendant was imprudent. A man who calls for specific performance must be able to show that his conduct has been clear, honourable, and fair (z). The Court must see its way very clearly before it will decree specific performance, and must be satisfied as to the integrity and good faith of the party seeking its interference (a). Misrepresentation as to a small portion only of the property, the subject of the contract, will, if the misrepresentation is intentional, prevent a man from coming Vigers v. Pike, 8 CI. & Fin. 645 ; Fald-e v. Gray, 4 Drew. 659 ; Watson Wilde V. Gibson, 1 H. L. 607 ; Raw- v. Marston, 4 D. M. & G. 230. lins V. Wickham, 3 D. & J. 322 ; (u) King v. Hamilton, 4 Peters Broad v. Munton, 12 Ch. D. 131. (Amer.), 311. (q) Vigers v. Pike, 8 CI. & Fin. (.;;) Price v. Macaulay, 2 D. M. & 645. See Willan v. Willan, 2 Dow. G. 339. 275. (;/) CahaUero v. Henty, 9 Ch. (r) Martin v. Mitchell, 2 J. & W. 447 ; Goddard v. Jeffreys, 51 L. J. 420 ; Bartlett v. iialmon, 6 D. M. & Ch. 57. G. 33 ; Higgins v. Samels, 2 J. & H. (z) Cox v. Middleton, 2 Drew. 220 ; 460. Walters v. Morgan, 3 D. F. & J. 718. (s) Bellamy v. Sabine, 2 Ph. 449 ; See Philipps v. Homfray, 6 Ch. 770. Myers V. Watson, 1 Sim. N. S. 529. (r/) BreaJy v. Collins, You. 327 ; (?) White V. Damon, 7 Ves. 33 ; Walters v. Morgan, 3 D. F. & J. 718. Rudcliffe v. Warrington, 12 Yes. 331 ; 416 DEFENCE TO Cliap. VIT. to the Court to have the contract enforced. It is not sufficient - ! ' that the vendor offer to waive the portion affected by the representation {b). The effect of a partial misrepresentation is not to alter or modify the agreement 2'''f^ tanto, but to destroy it entirely, and to operate as a personal bar to the party making the application (c). Misrepresentation of a material fact, although innocently made, will be a bar to the application {d). If a prospectus be issued containing material representations, and a person accepts shares on the faith of the representations, the party who made the representations cannot, if they prove to be untrue, compel the other party to accept the shares, although he believed what he stated to be true (e). It is a defence to a bill for specific performance that the plaintiff has made inaccurate representations with respect to the property, the subject of the contract, although these representations proceeded upon and had reference to sources of information which were equally open to all parties, and might have enabled the defendant to detect the alleged inaccuracies, if the evidence shows that they could not have been easily detected (/). There may, however, be specific performance although the description of the property, the subject of the contract, be incorrect, if it appear that the purchaser knew at the time of the purchase that the representa- tion was untrue, or inspected the property before making the purchase, and so acted ujDon his own judgment in the matter (g) ; (h) Viscount Clermont V. TasbunjJi, (/) Harris v. Kemble, 7 L. J. Ch. 1 J. & W. 119, 120. 85, 5 Bligh, 730 ; Denmj v. Hancock, (c) lb. ; Steicart v. Alliston, 1 6 Ch. 1. See Rauiins v. JFickham, Mer. 26. See Euwlins v. JFiclhara, 3 D. & J. 318 ; Higgins v. Samcls, 2 3 D. &J. 321. J. & H. 468 ; Colby v. Gadsden, 15 (d) Ainslie v. Medlijcott, 9 Ves. 13, W. E. 1185. 21; Higginson v. Clowes, 15 Ves. [g) Dyer v. Ha7-grave, 10 Yes. 505 ; 524 ; Stewart v. Alliston, 1 Mer. 26 ; Grant v. Munt, Coop. 177 ; Lord Price V. Macaulay, 2 D. M. & G. Brooke v. Roundtliioaite, 5 Ha. 306 ; 339 ; Higgins v. Samels, 2 J. & H. Haiju-ood v. Cope, 25 Beav. 140 ; 460 ; comp. JFhite v. Bradshaw, 16 Clarke v. Mackintosh, 4 Gift'. 134 ; Jur. 738 ; Hume v. Pocock, 1 Ch. Henderson v. Hudson, 15 W. R. 860. 379. Comp. Higgins v. Samcls, 2 J. & H. (e) New Brimsicick, &c.. Railway 468 ; Vivers v. Tuck, 1 Moo. P. C. Co. V. Muggeridge, 1 Dr. & Sm. 363, N. S. 526 ; Denny v. Hancock, 6 382. Ch. 1. SPECIFIC PERFORMANCE. 417 or if there were circumstances in the case wliich demanded Chap. Vii. further investigation, for which tlie vendor afforded every l-!ll-J-__ facility {h), or if the representations which have been made are vague in their terms, and merely amount to a statement of value or opinion (/). So also may there be specific performance of a contract if the representation at the time of completion be accurate, although at the time of sale the representation was not correct. When, accordingly, several cottages let to weekly tenants were put up for sale and described as "producing £73 a year," which was not correct at the time the particulars of sale were issued, but before the sale the vendors had entered into a con- tract to do certain repairs, and had given notice to the tenants that their rents would be raised, and before the day fixed for completion the repairs were done and the rents were raised threepence a week, so that on the day of completion the particulars were quite accurate, it was held there was not such a misrepresentation as to entitle the purchaser to resist specific performance {k). So, also, a misstatement in the particulars of sale of the length of the term for which a tenant of the vendor holds a portion of the property is not (in the absence of any evidence as to whether such misstatement is to the advantage of the purchaser or not) such a misrepresentation as will enal)le him to resist specific performance (/). A representation of intention as to future acts upon faith in which the contract is made may be a ground for refusing specific performance ; as where a vendor announced at the sale his in- tention of making improvements in the neighbourhood and approaches which would materially enhance the value of the property sold, the Court refused to give specific performance, unless he fulfilled the expectation held out to the purchaser <(ni). So, also, specific performance of an agreement to take a lease was refused, although the lessee had taken possession and Qi) Clarke v. Macldntosh, 4 Giff. {It) Goddard v. Jeffnjes, 51 L. J. 134. Ch. C7. {i) Scott V. Hanson, 1 R. & U. (l) lb. 128; Johnson v. Smart, 2 (lilf. If)!, (,//) Bcaumovt v. Dukes, J;ic.. 422 ; s^vpra, pp. 42, 45, 44. Mijcrs y. U'utsoH, 1 Sim. N. S. .')23. £ E 418 DEFENCE TO Chap. VII. occupied for two years, on the ground tliat the lessor had not Sect. -1. ^ J ' to fulfilled promises made to improve the premises (n). There cannot be specific performance if the description of the property is of so ambiguous a nature that it cannot with certainty be known what it was the purchaser imagined himself he was contracting for (o). A vendor of properly who makes statements respecting the property, is bound to make them free from all ambiguity ; and the purchaser is not bound to take upon himself the peril of ascertaining the true meaning of the statements (p). A definite representation upon a fact affecting the value of the subject of sale will entitle the purchaser, if the representation be untrue, to resist specific performance (q). It is the duty of every vendor to state all the circumstances con- nected with the property he is selling, and the incidents to which it is subject, in such a manner that they can be understood by a person of ordinary intelligence, and not merely in such a way that only a skilled lawyer would be able to ascertain the nature of the title under which he is purchasing (r). If leasehold property, which is sold in separate lots, is held under one lease, it is incumbent on the vendor to state the fact in plain and distinct language (s'^. An agent empowered by a vendor to find a purchaser has authority to describe the property, and to state any fact or circumstance which may affect the value, so as to bind the vendor. If the agent makes a false statement as to the descrip- tion or value (though not instructed so to do) which the purchaser is led to believe and upon which he relies, the vendor cannot have specific performance (t). If there be unusual covenants in a lease, and the seller is silent as to their existence, he will not be able to enforce specific (n) Lamnre v. Dvj-ov, 6 E. & I. Beav. 430. App. Ca. 414. (7) Lord Brooke v. Roundthiraite, o (0) Stewart v. Alliston, 1 Mer. 26 ; Ha. 304. Leyland v. Illingvorth , 2 D. F. & J. (r) Sheard v. Venables, 36 L. J. 253. Cb. 922. (p) Martin v. Cotter, 3 J. & L. (s) lb. 49H, 507 ; Drysdale v. Moxe, 5 D. M. (/) Mvllens v. Miller, 22 Ch. D. & G. 107; Su-aisland v. Dearsley, 29 194. SPECIFIC PERFORMANCE. 410 perfurmauce against a purchaser buying in ignorance of the t:W- ^''I- covenants (ii). ' Although, according to the decided cases, a vendor who con- tracts for the sale of leasehold property described as held under a lease cannot, if nothing further is said, make a good title, unless it is held under an original lease, yet in a case where the particulars and conditions of sale of property so described contain enough to give notice to a purchaser that the property was held under a derivative lease, the purchaser cannot on that account refuse to complete or claim compensation on the ground of misdescription (x). In sales by the Court, the Court ought to treat the purchaser more liberally than in the case of ordinary sale3 (y). A purchaser cannot, however, on the application for specific Specific perform - c ''XL 1 ance with com- performance, take advantage of small circumstances of variation pensation. in the description of the thing contracted for (z). Althougli the description of the property, the subject-matter of the contract, may be inaccurate in some particulars, or may be different in some respects and in certain incidents from what it was repre- sented to be, specific performance will be decreed if the property is not different in substance from what it was represented to be, and the misrepresentation has been made innocently or through mistake, and not wilfully, upon the terms of the vendor making good his representation or allowing or giving compensation (a). If, for instance, the property be subject to incumbrances con- cealed from the purchaser, the seller may have specific perform- ance on making good his assertion and redeeming those charges. So, also, if the property is subject to a small rent not stated, or the rental is somewhat less than it was represented to be (d), or if (n) Martin v. Cotter, 3 J. & L, Drewe v. Corp, 9 Yes. 368 ; Hill v. 506. Buckley, 17 Ves. 394 ; Puhford v. (x) Camberwell, dr., Building Richards, 17 Beav. 87, 96 ; Price v. Society v. Holloa-ay, 13 Ch. D. Macaulay, 2 D. M. & G. 344. 754. {h) Ptdsford v. Richards, 17 Beav. (]/) Arnold v. Arnold, 14 Ch. D. 87, 96, yer Lord Rouiilly ; Hughes \. 279. Jones, 3 D. F. & J. 307. See How- (z) Poole V. Sheryold, 1 Cox, 274 ; land v. Norris, 1 Cox, 61 ; Pope v. Stewart v. AUiston, 1 Mer. 26. Garland, 4 Y. & C. 394. (o) Howland v. Xorria, 1 Cox, 59 ; £ £ 2 420 DEFENCE TO Chap. YII. the property is smaller than it was represented to be (c), or is ' - — '- not in the state and condition in which it was represented to be (d), there may be specific performance on the terms of the vendor allowing a sufficient deduction or abatement from the purchase-money (e). The principle on which the Court proceeds in such cases is, that if the purchaser gets substantially that for which he has contracted, a slight variation or deficiency will not entitle him to recede from his contract when compensation can be made in money for the difference (/). A purchaser cannot, however, be compelled, upon the principle of compensation, to take something substantially or materially different from that for which he contracted (g). There can be no specific performance if the description be inaccurate, and the Court feels that it cannot measure the difference between that which was promised and the actual fact, so as to found a proper basis for compensation (A). If, for example, a man has contracted for the purchase of a freehold, he will not be compelled to take a leasehold (though held for a very long term) (i), or a copyhold (k) ; nor can a man who has con- tracted for a copyhold be compelled to take a freehold (T) ; nor will a man be compelled to take property held in a different man- ner from that which is expressed or implied in the contract, as the assignment of an underlease instead of an original lease (m), (c) Hill V. Buckley, 17 Ves. 395 ; Ilafjennis v. Fallo7i, 2 Moll. 588 ; Winch V. Winchester, 1 V. & B, 375; Flight v. Booth, 1 Bing. N. C. 377 ; Portman v. Mill, 2 Euss. 570 ; Kiyig Arnold v. Arnold, 14 Ch. D. 279. V. Wihon, 6 Beav. 124 ; Frost v. (h) Lord Brooke v. Roundthicaite, Breuer,'S Jnr. Ido ; Ayles \. Cox, 16 5 Ha. 298; Cox v. Coventon, 31 Beav. 23 ; Arnold v. Arnold, 14 Ch. Beav. 388. D. 279. {i) Brcicc v. Corp, 9 Ves. 368. (d) Dyer v. Harrjrave, 10 Ves. 508 ; (A) Tinning v. Morice, 2 Bro. C. Grant v. Mtint, Coop. 173 ; Scott v, C. 331 ; Hick v. Philipps, Free. Ch. Hanson, 1 R. & M. 131. 575 ; Turquand, v. Rhodes, 37 L. J. (e) See further Dart, V. & P. 1078 ; Ch. 832. See Farl of DurJmm v. Powell V. Elliott, 10 Ch. 424. Legard, 34 Beav. 612. (/) Hoiclaml v. Norris,\ Cox, 61 Dyer v. Hargravc, 10 Ves. 507 Magennis v. Fallon, 2 Moll. 588 {I) Ayles V. Cox, 16 Beav. 23. (?n) Madeley v. Booth, 2 Deg. & S. 718 ; but see Cambencell, d:c., Build- Arnold V. Arnold, 14 Ch. D. 279. ing Society v. Holloway, 13 Ch. D. (g) DvfAL-e V. Corp, 9 Ves. 368 ; 754, suj)ra, p. 419. SPECIFIC PERFORMANCE. 421 or of a redeemable instead of an absolute interest (n), or of an improved instead of a ground rent (o). Nor can a man ■ wlio has contracted for an estate iu possession be compelled to take a reversion expectant on a life estate (p), or on a subsisting or d/or^iori a reversionary lease (q). Nor where the vendor has contracted to show a marketable title, will the purchaser be forced to complete, if the lease is stibject to restrictive cove- nants (r). Nor will a man, who has been led by the representa- tions of the vendor to believe that the property, the subject of sale, was in the possession of a tenant of the vendor, be compelled to take a mere right of entry (s). Nor can a man be compelled to take an estate where incumbrances or liabilities exist which would materially affect its enjoyment (t), or where the property to which a title cannot be made is a material part of the property bouglit, as where a man is led to believe that he is purchasing a farm or close, and the vendor can only make out a title to a portion of the farm or close (u). The Court will not conipdl a man to take compensation for that which can hardly be estimated by pecuniary value (x). Several of the cases to be found in the books have carried the subject of compensation farther than at the present time it would be carried (y). When upon the sale of land, represented to consist of a certain specified number of acres, there proves to be a deficiency in quantity, such deficiency is properly the subject for compensa- tion, if the deficiency be not too great. If the difference be great, there is no case for compensation. The party prejudiced by the error may, if he pleases, avoid the contract ; but he can- Chap. VII. Sect. 4. (n) Coverlerj v. Burrcll, Sug. V. & P. 299 ; Dart, V. & P. 1073. (o) Stewart v. Alliston, 1 Mer. 26. {p) Collier v. Jenkins, You. 298. (q) Lintluin v. Cotter, 7 Ir. E(j^. 176; Dart, V. & P. 1073. (r) Cato V. Tlmnpson, 9 Q. B. D. 618. {s) Larhlan v. Reynolds, Kay, 54. (0 Dart, V. & P. 1075. ((/) Arnold v. Arnold, 14 Cli. D. 279. (x) Dyer V. Hargrave, 10 Ves. 507 ; Mugennis v. Fallon, 2 Moll. 588 ; Feirster v. Turner, 6 Jur. 144 ; Cato V. Thompson, 9 Q. B. D. 618. (?/) Rowland v. N orris, 1 Cox, 61 Dyer v. Hargrave, 10 Ves. 507 Knatchbull v. Grueher, 1 Madd. 153 Magennis v. Fallon, 2 Moll. 588 Collier V. Jenkins, You. 298 ; Madeley v. Booth, 2 Deg. & S. 722 ; Cato v. Tliompson, 9 Q. B. D. 618. 422 DEFENCE TO Chap. YII. Sect. 4. false represen tations as to ralue, &c. not have .specific performance unless lie is willing to perform the contract without compensation (z). Conditions of sale providing for compensation in cases of error or mistake apply only to innocent errors or accidental slips, and not to cases where the subject matter of the contract is materially different in substance from what it was represented to be (a), nor to cases where the eiTor amounts to a misrepresenta- tion in law. The function of such conditions is to prevent such errors from either vitiating the contract altogether, or causing loss to the purchaser by holding him bound by a contract which through accident or inaccuracy it is not possible for the vendor literally to perform (6). Specific perform- ^ fj^jg^ representation as to the value of property may be auce not ordered ^ • f> r / \ on ground of enough to inducc the Court to withhold specific performance (c). If a vendor affirm that the estate was valued by persons of competent judgment at a greater price than it was worth, and the purchaser acts on that representation (d), or if he falsely affirms that the estate had not been already in the market at a much lower price, and the purchaser acts on the representation and agrees to give him what he demands (e), the vendor cannot have specific performance. In Midlens v. Miller (/), when an agent commissioned by a vendor to sell property made a false statement as to its value (though not instructed so to do) which the purchaser was led to believe and on which he relied, it was held that the vendor could not have specific performance. Mere inadequacy of consideration is not a ground for resisting specific performance (r/) ; but if the inadequacy is very great^ specific performance will not be decreed {h). Shirley v. Stratton, 1 Bro. C. C. 440 ; jrall V. Stubhs, 1 Madd. 81. (d) Sug. Y. & P. 2. (e) Roots V. Snelliny, 48 L. T. N. S. 216. (a) Earl of Durham v. Legard, 34 Beav. 612. See Price v. North, 2 Y. & C. 620. (a) Ste^cart v. Alli.- IX. plaintiff's father with a view to being acted on by the plaintiff, it was held that by acting on it the plaintiff had a right of redress (r), So, also, a party may make inquiry where such is the custom through his bankers (instead of personally) concern- ing the standing of a third person, and it is no objection to a claim for redress for a fraudulent answer given to the plaintiff^s banker that the representation was not made to the plaintiff (s). So, also, where directors of a company put forth a prospectus containing false representations for the purpose of selling shares of the company, the false representations are deemed to have been made to all who read the prospectus and became purchasers of shares from the company in reliance upon the statements there made (f). The right of an allottee of shares in a company who has been induced to apply for them on the faith of false and fraudulent statements contained in the prospectus, to bring an action of deceit against the directors does not extend to a purchaser of shares in the market, though he may have purchased the shares upon the faith of statements contained in the prospectus. The responsibility of directors who issue a prospectus for an intended company misrepresenting actual or material facts or concealing facts material to be known does not, as of course, follow the shares on their transfer from an allottee to a purchaser from him. In order that the purchaser should be enabled to maintain an action of deceit against the directors in respect of losses occasioned by his belief in the prospectus and his consequent purchase of shares, he must show some direct connection between them and himself in the communication of the pro- spectus and its influence upon his conduct in becoming a pur- chaser (u). There must be something to connect the directors making the representation with the purchaser as in Scott v. Dixon {x), by selling a report containing the misrepresentation complained of to a person who afterwards purchases shares upon (r) Langridge v. Lem/, 4 M. & W. Peek v. Gurney, 6 E. & I. App. Ca. 337. 378. (s) Sinft V. Winterhotham, L. R. 8 {u) Peek v, Gurney, 6 E. & I. App. Q. B. 244. Ca. 378. (0 Barry v. CroseJcey, 2 J. & H. 21 ; (x) 29 L. J. Exch. 62 n. PARTIES. '^'^'^ the faith of it; or as suggested in Gerhard v. Bates (y), hy _^^^v^^ — delivering the fraudulent prospectus to a person who thereupon became a purchaser of shares ; or by making an allotment of shares to a person who has been induced by the prospectus to apply for such allotment {z). A party partially interested in an estate may maintain an action to set aside a conveyance of such interest fraudulently obtained from him, without making the other persons interested in the estate parties (a). Applications under the Companies Act, 1862 (25 & 26 Vict. c. 89, s. 35) to have a name removed from the list of shareholders must be made by the person aggrieved or any member of the company or the company itself. When a winding-up order has been made, the application must be made in the name of the company and not of the liquidator (6). It is a s-eneral rule that a Court of Justice will not interpose Plaintiff " , . , . . particeps actively in favour of a man who is j)aTticeps cnmims in an criminis. illegal or fraudulent transaction (c). The Court will take the objection as to the illegality of the transaction, even although the defendant himself does not (d). Where both parties are equally offenders against the law, the maxim, potior est conditio possidentis, prevails, not because the defendant is more favoured, where both are equally criminal, but because on the principle of public poKcy the Court will not assist a plaintiff who has paid over money or handed over property in pursuance of an illegal or immoral contract to recover it back (e). If, accordingly, a deed has been executed, or a conveyance made, to enable a party to contravene the provisions of an Act of Parlianaent, no suit in equity will lie to set aside the deed or recover the estate. The party executing it cannot be heard to allege his own (y) 2 E» & B. 47C. 439 ; Barnard v. Sutton, 7 Jur. 685, (z) Peek V. Gurney, 6 E. & I. App. per Lord Lyndlnust ; IVilliams. v. Ca. 398. Williams, 20 Ch. D. 659. ^Q^Ayertt (a) Henley v. Stone, 3 Beav. 35.5. v. Jenkins, 16 Eq. 282^ (6) Kinirea's Case, 5 Ch. 95. (d) Hamilton v. Ball, 2 Ir. Eq. (c) Cecil V. Butcher, 2 J. & W. 572 ; 191 , 194. Doe V. Roberts, 2 B. & Aid. 369 ; (e) Taylor v. Cluster, L. E. 4 Q. B. M'Kinncll v. Robinson, S M. & W. 312. 4.S8 PARTIES. Chap. IX. fraudulent purpose. He is estopped from coufining the opera- tion of his deed within the limits of his intended fraud (/). In a case where a man, in order to give his brother a colourable qualification to kill game, conveyed some land to him, it was held that his widow could not avoid the conveyance in an action of ejectment against her by the brother (g). So, also, if a man, with a view of defeating his creditors, makes a conveyance of his real and personal estate to another, no suit is, in general, main- tainable by him against that other for the recovery of .the property (h). So, also, money paid in furtherance of a fraud or other unlawful purpose cannot be recovered back (i). A distinction has been taken between cases where a deed executed, or a conveyance made, for an illegal purpose, has performed its office, and been accompanied by the completion of the purpose, and cases where the deed or conveyance has not been used for the purpose for which it was executed. In Platamone v. Staple (k), the Vice-Chancellor appears to have considered, that the circumstance of the purpose for which the deed was made not having .been accomplished, made a material distinction (1). But the distinction does not seem sound. If a grantor, so far as he can, completes the transaction for an illegal purpose, and leaves it in the power of the grantee to make at his pleasure the illegal use of the instrument originally intended, he merits the consequences attached to the illegality of his act (m). It is difficult to see upon what principle it can be contended that a man, who intends to commit a fraud, shall not have relief if he succeed in his attempt, but shall be (/) Curtis v. Perry, 6 Ves. 747 ; Sidton, 7 Jur. 685. BracJcenhury v. Brackenhury,2 J. & (i) Begbiev.Phosphatc Sewage Com- W. 391 ; Cecil v. Butcher, ib. 572 ; j;oh?/, L. E. 10 Q. B. 499. Groves v. Groves, 3 Y. & J. 163. {k) Coo2). 251. Conip. Childers v. Childers, 1 D. & J. (/) See Barnard v. Suttov, 7 Jur. 482 ; Davies v. Otty, 35 Beav. 208. 685, (g) Doe v. Roberts, 2 B. & Aid. (m) Cecil v. Butcher, 2 J. & W. 369. See Phillpotts v. Phillpotts, 10 578 ; Doe v. Roberts, 2 B. & Aid. 369 ; C. B. 85 ; Boires v. Foster, 2 H. & N. Roberts v. Roberts, Dan. 143 ; Groves 785. v. Groves, 3 Y. & J. 163. See Brack- (h) Nellisv. Clark, 4 H.\\\. (Amer.), enbury v. Brackenbiiry, 2 J. & W. 426 ; Ford v. Harrington, 2 Smith 391. (Amer.), 285. Comp. Barnard v. PARTIES. 439 relieved if he fails or hesitates to proceed, because he fears a ^^^p- ^^- failure. His intention is as fraudulent in the one case as in the other (n). A distinction has also been taken between cases where the conveyance has been made with, the privity of, or the deed has been delivered to, the grantee, and cases where the conveyance has not been communicated to the grantee, nor the deed parted with by the grantor (o). But there is a preponderance of authority in support of the proposition that, although a volun- tary deed is made without the knowledge of the grantee, and has been kept in the hands of the grantor, a Court of Equity will not relieve against it (^j). In Brackenhury v. Brackenbury (q), the grantoi had never parted with the possession of the deed, nor had it been used for the fraudulent purpose with a view to which it was executed. After the death of the grantor, the grantee obtained possession by deceit, and under a promise to return it immediately, yet the Court refused to relieve. Inasmuch as it is well established law that a man who executes a voluntary settlement passes the estate out of himself, though he retains the deed in his own possession (r), it is impossible to contend that the distinction attempted to be made is a sound one. The rule that a Court of Justice will not actively interpose in favour of a man who is particeps crirtiinis in an illegal or fraudulent transaction, like most other general rules, admits of exceptions. An exception to the rule takes place where the party seeking relief, although particeps criminis, is not in j>ari delicto with his associate in the matter. There may be, and often are, very different degrees of guilt of parties who concur in an illegal act. One party may act under circumstances of oppression, imposition, undue influence, of great inequality of ao"e or condition, so that his guilt may be far less in degree than that of the other party (s). {n) Bateman v. Bamsaij, San. & Sc. (p) Cecil v. Butcher, 2 J. & W. 578. 478. ' (?) lb. 391. (o) Ward v. Lant, Prec. Ch. 182 ; (r) Roberts v. Williams, 4 Ha. 130 Birch v. Blagruce, Amb. 264 ; Gi-oves (s) Smith v. Bromley, 2 Doug. Y, Groves. 3 Y. & J. 163. 696 a.; Bosanqnet v. Dashwood, Ca. 440 PARTIES. Cliap. IX. Illegality resulting fvoiu pressure aud illegality resulting from an attempt to stifle a prosecution, do not fall within that class of illegalities in which the CWrt stays its hand, but are of a class in which the Court will actively give its assistance in favour of the oppressed party, by directing monies to be repaid {t). Other cases which form an exception to the general rule are cases where the act or deed in which the parties concur is against the principles of morality or public policy. In such cases there may be on the part of the Court itself a necessity of supporting the public interest or policy, however reprehensible the conduct of the parties t;Jiemselves may be {u). Although, for instance, a Court of Equity will not reheve a man who assigns property to another with the view of defeating his creditors, the case is different if the person who assigns the property is a client, and the person to whom it has been assigned is his attorney. The rvde of public policy which prohibits an attorney from obtaining any advantage in transactions must prevail, and the attorney must reconvey the property (x). So, also, the purchase of a bankrupt's estate secretly, by a person for the ' benefit of the solicitor to the assignees was set aside at the suit of the bankrupt, after his bankruptcy had been annulled, though there was evidence to show that the bankrupt had been privy to the transacticm (y). If money is paid or goods delivered for an illegal purpose, the person who has so paid the money or delivered the goods may recover them back before the illegal purpose is carried out ; but if he wait till the illegal purpose is carried out, Or if he seeks to enforce the illegal transaction, in neither case can he maintain an action. The law will not allow that to be done. In permitting a man to recover before the illegal pui-pose is carried out, the law does not carry out the illegal transaction. t. Tall). 41 ; Broxnuwj v. Morris, Marine Insurance Co., 8 Ch. D. 4V7. Cowp. 790 ; Osborne v. Williams, 18 (ti) Law v. Law, Ca. t. Talb. 140 ; Ves. 379 ; Palmer v. Wheeler, 2 Ba. St. John v. St. John, 1 1 Ves. 535. k Be. 31 ; Reynell v. Bprye, 1 D. M. {x) Ford v. Harrington, 2 Smith & G. 678, 679 ; Boives v. Foster, 2 H. (Amer.), 285. &. N. 785. i'j) Adams v. Sicorder, 2 D. J. & {t) Daviti v. London d: Procincial S. 44. PARTIES. 441 The effect is to put the parties in the same situation as they ^_CLap^ were in before the illegal transaction was determined upon and before the parties took any steps to carry it out {z). There is great difficulty in applying tlie maxim potior est conditio possidentis to a case where money has been placed in medio, and where the Court must do something with it or leave it to be locked up for ever {a). When a party to an illegal or immoral contract comes himself to be relieved from tliat contract, or its obligations, he must distinctly and conclusively state such grounds of relief as the Court can legally attend to. He should not accompany his claims to relief, which may be legitimate, with claims and complaints, which are contaminated with the original immoral purpose (b). A distinction will be taken between cases where a party has actually accomplished the bad purpose to which a deed was auxiliary, and cases in which he had not participated in the bad purpose which it was the very object of the deed to procure (c). In Sismey v. Eley (d), where a plaintiff sought to be relieved from a deed by which he had agreed to pay an annuity to a woman, on the ground that the consideration for it was a promise made to him to live with him as his mistress, a demurrer to the bill was overruled, as it did not appear that the plaintiff had availed himself of the promise. A distinction is taken in equity between enforcing illegal contracts, and asserting title to monies arising from an illegal contract. If the transaction alleged to be illegal is completed and closed, so that it will not be in any manner affected by what the Court is asked to do, the party to the transaction, who has possessed himself of the monies arising out of the trans- action, cannot be permitted to set up the illegality of the transaction against the otherwise clear title of the other. One of two partners, or joint adventurers, therefore, who has pos- sessed himself of the property, common to both, cannot be permitted to retain it, by merely showing that in realising it (z) Taylor v. Boiverx, 1 Q. B. D. (b) Batty v. Chester, 5 Beav. 103. 3QQ_ ((■) Smyth v. Grijfin, 13 Sim. 254 ; (a) Dacies v. London d- Provincial Benyon v. Nettle/old, 17 Sim. 56. Marine Insurance Co., 8 Ch. D. 477. ('/) lb. 1. 442 PARTIES. Chap. IX. some provisions in an Act of Parliament, or in the fiscal law of a foreign state, may have been violated (e). So, also, and upon a similar principle, if two trustees are equally guilty of a breach of trust, but one has received the monies, the other may main- tain a bill against him to recover the amount (/). In SyJces v. Beaclon (g), however, Jessel, M. K, said he did not think the fact that an illegal transaction may be concluded was a ground for the interference of the Court. He said he was of opinion that no Court of Law or Equity would lend its assistance in any way towards carrying out an illegal contract : that such a contract cannot be enforced by one party to it against the other, either directly by asking the Court to carry it into effect or indirectly by claiming damages or compensation for breach of it : though there might be cases in which a party to such a contract might recover from a third person money paid over to that person in pursuance of the contract and other cases in which a person might recover from the parties to such a contract monies obtained by them from him on the representation that the contract was legal. Parties In all cascs of fraud the hand of the Court is not arrested by defendauts. ^j^^ death of the wrongdoer. An action survives against his executor when the wrong complained of has benefited the estate of the deceased (/t). But if no benefit has accrued to the estate of the deceased from the wrong complained of, an action will not survive against his executor (i), unless in cases where the executor can be said to have taken the estate with the liability to make good his testator's representations out of it (/c).. All persons who lend themselves to a fraud and receive money from the defrauded party may be made parties to an (c) Sharp V. Taylor, 2 Ph. 801 ; (if) H Ch. D. 170. Sheppard v. Oxenford, 1 K. & J. (h) Rawlins v. Wickham, 3 D. & 496 ; M'Blair v. Gibbes, 17 How. J. 304 ; Gresley v. Mousley, 4 D. & J. (Amer.), 232. See also Nash v. Ash, 78 ; Walsham v. Stainton, 1 D. J. & 1 Eden. 378 ; Mince v. Peters, Harg. S. 690 ; Ne^v Sombrero Phosphate Co. MSS. No. 112, p. 86 ; Watts v. Brooks, v. Erlanyer, 5 Ch. D. 74. 3Ves. 612 ; Knoivlcs v. Ho\ujhton, 11 {i) Peek v. Gurney, 6 E. & I. App. Ves. 168. Ca. 392. (/) Baynard v. Woolley, 20 Beav. (A:) Ingram v. Thorpe, 7 Ha. 67. 683. PARTIES. 443 action to set aside the transaction, and to recover the monies ^^'^v- I^- which they have received. If trustees lend themselves to a fraud, by their cestui que trust, the liability is a joint and several one of all the accomplices (0- If third parties have aided the directors of a company in misapplying the funds of the company, an action against them and the directors is not multifarious {rii). So, also, a man who has been guilty of a fraud, in concert with one of several trustees, may be joined in an action against the trustees generally (n). All persons concerned in the commission of a fraud are to be treated as principals : no person can be permitted to excuse himself as the agent or servant of another (o). If an agent in the course of his employment commits a fraud upon another party, whereby damage ensues to the party injured, he will be liable to the party injured, though his principal would be so likewise (p). The right of action is given to the party injured by the fraud against all persons who have joined in committing it, although the concurrence of some of these persons might be unknown to the party injured at the time of the injury (q). If a man has abetted a fraud, the absence of a personal benefit resulting from it is no excuse ; he may be justly made respon- sible for its results, and even if no other relief can be had against him, he may be compelled to pay the costs of the action (r). Solicitors or attornies who have abetted their clients in a fraud, or have prepared deeds to carry it out, may be made parties to an action to set aside the fraudulent trans- action, and are liable to pay the costs, even though they may have derived no personal benefit therefrom {s). (l) Phosphate Sewage Co. v. Hart- 4 Macq. 432. mont, 5 Ch. D. 45t). (r) Seddon v. Connell, 10 Sim. 85 ; (m) Lund v. Blanshard, 4 Ha. 9. Clark v. Girdwood, 7 Ch. D. 18. (ri) Att.-Gen. v. Cradock, 3 M. & (s) Bowles v. Stewart, 1 Sch. & Lef. C^ 85. 227 ; Beadles v. Burch, 10 Sim. 332 ; (o) Cullen V. Thompson's Trustees, Berry v. Armitstead, 2 Keen, 227 ; 4 Macq. 424, per Lord Westbury. Phosphate Seicage Co. v. Harimont, 5 (p) Weir V. Bell, 3 Exch. D. 248, Ch. D. 444. See Cory v. Eyre, 1 D. per Cockburii, C. J. J- & ^- 1^7. (g) Cullen v. Thompsons Trustees, 444 PARTIES. Chap. IS. A solicitor, who is implicated in a case of fraud, may be made a party to an action seeking relief in respect of that fraud, merely for the purposes of discovery, the only relief asked being that he should be ordered to pay costs (u). The case, of course, is all the stronger, if the solicitor has gained a personal benefit from a transaction into which he has induced his client to enter (x). In an action, however, founded on alleged misrepresentation, it is improper to make as party to the action an attorney, agent, or arbitrator who has taken no active part in making the state- ment out of which the action arises, and who has been cbn- nected with it in such a way as to have made no profit oat of it, merely with a view to making him liable for costs in case the principal defendant should fail (y). Where the object of the action is not to set aside the trans- action but to recover profits unfairly made by persons in a fiduciary charactei", a solicitor quel solicitor who has not shared in the profits is not a proper party (z). Nor is a solicitor who has di'awn up an instrument which is set aside or rectified on the ground of fraud, a proper party to the action, if he has only committed a blunder in the matter and not abetted the fraud (a). A person filling a position of a fiduciary character, as an agent, is liable for a breach of duty, though he may have derived no benefit from it. Where two agents concur in a fraud, and one of them only derives benefit from the fraud, the other is also liable in equity for the benefit so derived (aa). Those who having a duty to iserform, represent to others, who are interested in the performance of it, that it has been per- (u) Gilbert v. Lewis, 1 D. J. & S. held to lie rightly made a partj'-. 52; ,Slatorv. Nolan,!. H. 11 '£.([. 407. (z) Bagnal v. Carlton, 6 Ch. D. [x) Bennett v. Vade, 2 Atk. 327 ; 372. Proctor v. Robinson, 35 Beav. 335. (a) Clark v. Girdwood, 7 Ch. D. See Brent v. Brent, 10 L. J. Ch. 84. 18. (tj) Mathias v. Yetts, 46 L. T. N. (aa) IVahham v. Stainton, 1 D. J. S. 497 ; comp. Heatley v. Neioton, 19 & S. 678. See Peek v. Gurney, 6 E. Ch. L), 326, where an auctioneer was & I. App. Ca. 393. PARTIES. 445 formed, make themselves responsible for all the consequences of Chap. IX. the non-performance (b). If a man has been inducod by the false representations, or fraud, of a particular shareholder in a company to purchase shares, the only necessary party to a bill filed for the return of the purchase-money, and for an indemnity, is the person who sold the shares (c). It is not necessary that all the parties charged with fraud should be made parties (d). Where there are several partners, some of whom have committed fraud, any of the persons jointly and severally liable may be sued without making the others parties (e). A man who has released the principal actor in a fraud, cannot go on against the other parties who would have been liable only in a secondary degree (/). In a suit to set aside a settlement of real and personal estate for fraud, or undue influence on the part of the trustees, one or more of the parties beneficially interested is or are necessary parties (g). A partner, being liable for the fraud of his co-partner, when acting within the proper scope of the partnership business, a firm of bankers or solicitors is liable for fraud practised upon a client by a member of the firm (fi). The client, or principal, is entitled to relief against the other partners, not only if the case is one in which he might have recovered against such other partners, but also if the remedy at law against the other paitners is barred by lapse of time (i). The original liability of one partner for the fraud of a co-partner is continued as well after as before the dissolution of the partnership (k). A fraud, how- ever, committed by a partner whilst acting on his own separate (6) Blair v. Bromley, 2 Ph. 360. (g) Read v. Prcst, 1 K. & J. 183. (c) Stainhanh v. Fernley, 9 Sim. (h) Brydges v. Branfill, 12 Sim. 556 ; Mare v. Malachy, 1 M. & C. 369 ; Sadler v. Lee, 6 Beav. 330 ; 559 ; Turner v. Hill, 11 Sim. 1. Blair v. Bromley, 5 Ha. 542, 2 Ph. (d) Seddon v. Connell, 10 Sim. 79. 354 ; St. Aubyn v. Smart, 3 Ch. 64G. (e) Plumer v. Gregory, 18 Eq. 627. {i) Blair v. Bromley, 2 Ph. 354. (/) TJwmpson v. Harrison, 2 Bro. (/.:) lb. C. C. 164, 1 Cox, 346. 446 PARTIES. Chap. IX. account, is not imputable to the firm, although, had he not beeu connected with it, he might not have been in a position to commit the fraud (l). But if the firm has derived benefit from the fraudulent trans- action, the other partners are jointly and severally liable with the partner who has committed the fraud to make good the money which has been fraudulently received by the firm, though the other partners have not committed any violation of duty (m). Inasmuch as one partner has no authority to bind the other partners by borrowing money, unless it is borrowed in the usual course of business and for business purposes, if a client advances money to one of a firm of solicitors on the representa- tion that it was to be lent to a client, and the solicitor fraudu- lently appropriates the money, his partner, if he had no know- ledge of the fraud, is not liable to make it good, for it is not the business of a solicitor to act as a scrivener (n). The case how- ever would be different, if the fii'm were employed to prepare securities. In such case a payment to one of the partners would have been a payment to the partnership firm, because it would then have been received for the purpose of being invested in a specific security ; and until the matter is brought to an agreement to invest the money on a specific security, it does not come within the ordinary business of the partner- ship (o). Where a syndicate has been formed for promoting a company and fraud has been practised in the matter, the members of the syndicate are jointly and severally liable (^>). The estate of a deceased member of the syndicate is liable to the extent that it may have been benefited by the fraud (q). The infancy of the defrauding party will not exempt him, for (i) Ex parte Eyre, 1 Ph. 227 ; (o) lb. Coomer v. Bromley, 5. Deg. & Sm, (p) New Sombrero Phosp)}iate Co. 532 ; Bishop v. Countess of Jersey, 2 v. Erlanger, 5 Ch. D. 74 ; Phosphate Drew. 143. Seroage Co. v. Hartmont, i]\ 394. (m) Imperial Mercantile Credit (q) 'Nev: Somhrero Phosphate Co. y. Association v. Coleman, 6 E. & I. Erlanger, ib. 74 ; Peek v. Gurney, 6 App. Ca. 189. E. & I. App. Ca. 377. (n) Plumer v. Gregory, 18 Eq. G21. PARTIES. 447 though the law protects him from binding himself by contract, Chap. IX. it gives him no authority to cheat others (r). A bankrupt is not a proper party to an action brought by the trustee under his bankruptcy to set aside a conveyance executed by the bankrupt with intent to delay or defeat his creditors (s). An action which may have been brought for the purpose of setting aside a transaction on the grovmd of fraud, will not fail, merely because the bill may have incorrectly and untruly alleged a third pei'son to have been a pai'ticipator and joint actor in the fraud, although such incorrect mode of stating the case may affect the costs (t). (r) Evroy v. Nicholas, 2 Eq. Ca. 678. Ab. 488 ; Cory v. Oertcken, 2 Madcl (s) fFeise v. TVardle, 19 Eq. 171. 40 ; Overton v. Bannister, 3 Ha. 503 ; {t) Eeynell v. Hprye, 1 D. M. & G. Stikeman v. Davison, 1 Deg. & Sni. 684. 90 ; Lemjiriere v. Lmujc, 1 2 Ch. !)• CHAPTER X. PROOF. Chap. X. A MAN who alleges fraud must clearly and distinctly prove the fraud he alleges. The onus prohandi is upon him to prove his case as it is alleged in the statement of claim (a). If he complains of fraud in the prospectus of a company, it is for him to prove that it was false, and false to the knowledge of the defendant, or at all events that he did not believe it, and it is for him to prove that he was misled (6). If the fraud is not strictly and clearly proved, as it is alleged, relief cannot be had, although the party against whom relief is sought may not have been perfectly clear in his dealings (c). Fraud will not be carried by way of relief one tittle beyond the manner in which it is proved to the satisfaction of the Court (d). When a man seeks to charge another with fraud, he cannot succeed by proving that he understood the statement in a sense in which the other did not, and that in the sense in which he understood what the other said it was false (e). If a case of actual fraups, 79. 3 Ch. D. 733. (/) Parr v. Jeu-ell, IK & J. 671 ; (6) Smith V. Chadvnck, 20 Ch. D. IFilde v. Gibson, 1 H. L. 605. 16, per Lindley, L. J.; Blake v. (y) Moxon v. Payne, 8 Ch. 881. Albion Life Insurance Society, 4 C. rnooF. 449 If tlie statement of claim alle-ges a case of frand, and the title Chap. X. to relief rests upon that fraud only, the action will be dismissed, if the fraud as alleged is not proved. It cannot be allowed to be used for any secondary purpose. But if the case does not entirely rest upon the proof of fraud, but rests also upon other matters, which are sufficient to give the Court jurisdiction, and are separable from the case of fraud, and the case of fraud is not proved, but the other matters are proved, relief will be given in respect of so much of the statement of claim as is proved (h). If the defendant alleges that a contract sued on was obtained from him by fraud, the burden of proving the fraud lies on him (i). So, also, if fraud is established against a party, it is for him, if he alleges acquiescence in the other party, to show when the latter acquired a knowledge of the truth and prove that he knowingly forbore to assert his rights {k). So, also, where a man makes a false representation to another, the onus prohandi is on him to show that the other party waived it and relied on his own knowledge (l). The rules of evidence are the same in equity as at law (on). Evidence Whether certain facts, as proved, amount to a fraud, is a question for the Court as well at law as in equity. The facts to constitute a fraud must be proved at law by the jury(>i)- In equity they are found by the Court ; but a Court of Equity is not justified in finding such facts upon any less or different kind of proof than would be required to satisfy a jury. Tiie law in no case presumes fraud. The presumption is always in favour of innocence, and not of guilt. In no doubtful matter (h) Glascott V. Lang, 2 Th. 310 ; L. R. 4 P. C. 597 ; Thomson v. East- Wilde V. Gibson, 1 H. L. 607 ; Arch- wood, 2 App. Ca. 236. hold V. Commissioners of Charitable (i) Beatfy v. Fishel, 4 Browne 2 H. L. 440 ; Price v. (Amer.), 448. Berrington, 3 Mac. & G. 486 ; Billage (k) Lindsey Petroleum Co. v. Hard, v. Southee, 9 Ha. 535 ; Espeij v. Lake, L. R. 5 P. C. 221. 10 Ha. 260 ; Baker v. Bradley, 7 D. {I) Redgrave v. Hurd, 20 Ch. D. M. & G. 597 ; Traill v. Baring, 4 D. 13. J. & S. 331 ; Hickson v. Lombard, 1 (m) Manning v. Lechmere, 1 Atk. E. & I. App. Ca. 324 ; Hilliard v. 453 ; Man v. Ward, 2 Atk. 229 ; Eiffe, 7 E. & I. App. Ca. 39 ; Char- Glyn v. Bank of England, 2 Ves. 41. tered Bank of Australia v. Lempriere, («) Murray v. Mann, 2 Exch. 539. 450 PROOF. Chap. X^^ does tlie Court lean to the conclusion of fraud. Fraud is not to be assumed on doubtful evidence. The facts constituting fraud must be clearly and conclusively established (o). Circumstances of mere suspicion will not warrant the conclusion of fraud {p). The proof must be such as to create belief; and not merely suspicion. If the case made out is consistent with fair dealing and honesty, a charge of fraud fails {q). It is not, however, necessary, in order to establish fraud, that direct affirmative or positive proof of fraud be given (r). Cir- cumstantial evidence is not only sufficient, but in many cases it is the only proof that can be adduced. In matters that regard the conduct of men the certainty of mathematical demonstra- tion cannot be expected or required. Like much of human knowledge on all subjects, fraud may be inferred from facts that are established. Care must be taken not to draw the conclusion hastily from premises that will not warrant it ; but a rational belief should not be discarded because it is not conclusively made out. If the facts established afford a sufficient and reasonable ground for drawing the inference of fraud, the con- clusion to which the proof tends must, in the absence of ex- planation, or contradiction, be adopted (s). It is enough if from the conduct of a party the Court is satisfied that it can draw a reasonable inference of fraud {t), or if facts be established, from which it would be impossible, upon a fair and reasonable (o) Boiven v. Evans, 2 H. L. 257 ; 401 ; Pares v. Pares, 33 L. J. Ch. Pike V. Vigers, 2 Dr. & Wal. 267 ; 218. M'Cormick v. Grogan, 4 E. & I. App. (r) Llewellin v. Mackworth, 2 Atk. Ca. 97. 40 ; Villiers v. Villiers,\h. 71 ; Man (p) Trenchard v. IVanhy, 2 P. v. Ward, ib. 229 ; East India Go. v. "VYms. 166 ; Bath and Montagu's Donald, 9 Ves. 282 ; Stikernan v. Case, 3 Ch. Ca. 114; Toumsend \ Lowfield, 1 Ves. 35, 3 Atk 536 M' Queen v. Farquhar, 11 Ves. 467 Dawson, 1 Deg. & Sm. 105 ; Pickles V. Pickles, 9 W. E. 397, 31 L. J. Ch. 146. Walker v. Sijmonds, 3 Sw. 61 ; Harail- (s) Rex v. Burdett, 4 B. & Aid. ton v. Kinvan, 2 J. & L. 401 ; 161, 162 ; Stikernan v. Dauson, 1 Parfit V. Lawless, 2 Pr. & Div. 471 ; Deg. & Sm. 105 ; Humphrey v. Olver, M'Cormick v. Grogan, 4 E. & I. App. 28 L. J. Ch. 406 ; Parfit v. Lawless, Ca. 97. 2 Pr. & Div. 472. (q) Hamilton v. Kincan, 2 J. & L. (0 10 Ch. 530, 2W Mellish, L. J. PROOF. 451 conclusion, to conclude but that there must have been fraud (u). Ciiap. X. Fraud may be proved from the acts and conduct of a party as well as from his written declai-ation (x). The motives with which an act is done may be, and often are, ascertained and determined by circumstances connected with the transaction, and the parties to it. Various facts and circumstances evince sometimes with unerring certainty the hidden pm-poses of the mind (t/). " A deduction of fraud," says Kent (.~), " may be made, not only from deceptive assertions and false representations, but from facts, incidents, and circumstances, which may be trivial in themselves, but may, in a given case, be often decisive of a fraudulent design " (a). Evidence of similar frauds on the part of the defendant com- mitted on other parties in the same manner are admissible in evidence, if they tend to prove the motive or intention which actuated the defendant in the transaction under investigation. In a vast number of cases such evidence is the only means of establishing fraud. Many fraudulent transactions are apparently fair until the fraud is shown by proving virtually what has happened — the real facts underlying the evident ones — and one great element of fraud is the intent of the parties. Intent, motive, design, complicity, together with other acts, may show fraud. If evidence of this kind were inadmissible, fraud would frequently never be proved. It is no doubt true that in order to prove that A. has committed fraud on B., it is neither suffi- cient nor relevant to prove that A. has committed fraud on C. D., and E. But the case is different, if it can be shown that the fraud on B. is one of a class of other transactions, havinsf common features, the features being the false pretence and tie knowledge of that false pretence on the part of the defendant (6). In an action against a vendor for misrepresentation in the sale of goods, if it is shown that a material representation has (ji) Pkldes V. Pickle!^, 9 W. E. 307, 10 Smith (Amer.), 141. 31 L. J. Ch. 146 ; Ea Marsden's Trust, (z) 2 Comni. p. 484. 4 Drew. 599. (a) See Clarhmn v. Hanway, 2 P. (a;) Walters v. Morgan, 3 D. F. & Wm. 205 ; Bennett v. Vade, 9 Mod. J. 718. 315 ; Owen v. Homan, 4 H. L. 1033. {y) Nichols V. Pinner, 4 Smith {h) Blahe y . Alhinn Life Asmrance (Amer.), 295 ; Hennequin v. Noylor, Society, 4 C. P. D. lol. lo;. G (i 2 452 PROOF. Chap. X. been made by the vendor to induce the purchaser to buy, and that such representation is not true in fact, and it is proved that it was not true to the vendor's knowledge, the question cannot be asked him as to whether he did or did not entertain some other behef as to its truth, as the Court cannot enter into any question as to the state of a man's mind when the repre- sentation was made (c). Where the fraud on a vendor is effected by means of assur- ances given by a third person of the buyer's solvency and ability to pay, the proof that such assurances were made must be in writing (d). Burden of proof Thougli the proof of fraud rests on the party who alleges it, may be shifted, circumstances may exist to shift the burden of proof from the party impeaching a transaction on the party upholding it. If the evidence establishes a primd facie case of fraud, or shows that an instrument is false in any material part, the burden of showing that the transaction was fair lies upon the party who seeks to uphold it (e). If, for example, it appear that the donee of a power of appointment had at any time before the exercise of the power, the intention to derive a personal benefit from its exercise, or to make an appointment in fraud of the power, the burden rests on those who support the appointment to show that the intention had been abaiidoned at the time of the execution of the appointment (/). So, also, where conditions of sale are mis- leading, the onus is on the vendor to show not only that the purchaser had the means of information, but that he relied on his own information or judgment and was not in fact misled by the misrepresentation (g). So, also, where within a few months after making a voluntary settlement the settlor calls a meeting of his creditors and lays before them a statement showing him- self to be insolvent, the burden is on him to show solvency at the (c) Hine v. Caminon, 7 Ch. D. 344, Eastern Counties Railway Co., 1 J. & per Jessel, M. R. H. 243 ; Uoide v. Saunders, 2 H. & (d) Haslock v. Ferguson, 1 A. & E. M. 250 ; Frees v. Coke, 6 Ch. 648. 86. (/) Hunvphrey v. Olver, 28 L. J, (e) Watt V. Grore, 2 Sch. & Lef. Ch. 406 ; Topham v. Duke of Port- 502 ; Prince of Wales Assurance Co. land, 5 Ch. 61 ; Bahibrigc/e v. Browne, V. Palmer, 25 Beav. 605 ; Bussell v. 18 Ch. D. 188. Jackson, 10 Ha. 213; Cottam v. (*/) Torrance v. Bolton, 8 Ch. 118. PROOF. 453 date of the settlement (h). So, also, if a man fraudulently <^'^»p- ^- mingles monies belonging to another with monies of his own, it lies on him to sever the portion which is affected by the fraud from that which is not affected by the fraud (i). Upon the same principle, if it appear that a fiduciary, or confidential relation exist between the parties to a transaction (k), or if it be established by evidence that one of the parties possessed a power of influence over the other (I), or was in a position to exercise dominion over the other (m), the burden of proof lies upon the party filling the position of active confidence, or possessing the power of influence, or dominion, as the case may be, to establish, beyond all reasonable doubt, the perfect fairness and honesty of the transaction. He is bound to preserve the evidence to show that all was rightly done (n). Parol evidence is admissible in such cases to prove the fairness of the transaction, but it is to be received and weighed with the most scrupulous accuracy, and to be dealt with as having its weight affected by the circum- stances under which the parties stood {nn). If an agent for sale purchases the estate, or an interest in the estate, that he is employed to sell, the burden of proving that a full disclosure was made to his principal of the exact nature of his interest lies on him, and is not discharged merely by swearing that he did so if his evidence is contradicted by the principal, and is not corroborated (o). So, also, and upon the same principle, those who take a benefit under a will, and have been instrumental in pre- paring and obtaining it have thrown upon them the burden of showing the righteousness of the transaction ( j9). So, also, a (/i) Crossley v. Elworthy, 12 Eq. hricjge v. Broime, 18 Ch. D. 188, 158 ; Mackay v. Douglas, 14 Eq. siq}ra, pp. 158, 164. 106. (w*) Lord Aylesford v. Morris, 8 (i) Russell V. Jackson, 10 Ha. 213. Ch. 498 ; O'Eorke v. Bolimjhroke, 2 \k) Gibson v. Jeyes, 6 Ves. 278 ; App. Ca. 834. Benson v. Heathorn, 1 Y. & C. C. C. (n) King v. Anderson, I. E. 8 Eq. 340 ; Allfrey v. Allfrey, 1 Mac. & G. 637. 99 ; Billage v. Southce, 9 Ha. 540 ; {mi) Be Holmeis Estate, 3 Giff. Moore v. France, ib. 303, supra, pp. 347 ; Walker v. Umith, 29 Beav. 126, 129. 394. {I) Cooke V. Lamotte, 15 Bcav. 240 ; (o) Dunne v. English, 18 Eq. 524. Kay V. Smith, 7 H. L. 750 ; Topham ( p) Fulton v. Andrew, 7 E. & I. V. Duke of Portland, 5 Ch. 61 ; Bain- App. Ca. 449, supra, pp. 294, 296, 454 PROOF. Chap. X. man who takes advantage of a deed of gift or voluntary settlement, and sets it up against the donor or author of the settlement must, as a general rule, be able to show that the donor or author thoroughly understood the contents of the deed, knew Avhat he was doing, or at all events was protected by independent advice, and was not acting under the pressure of undue influence. If there are any unusual provisions in the deed, he must be able to show that they were brought to the notice of and were understood and approved of by the donor or author of the settlement (q). If, for example, the gift be not subject to a power of revocation, the party taking the benefit may have thrown upon him the burden of proving that the donor meant the gift to be irrevocable (r). But where a voluntary deed is impeached, the onus of supporting it does not necessarily rest upon those who set it up. A man of full age and sound mind, who has executed a voluntary deed by which lie has denuded himself of his property is bound by his own act, and if he comes to have the deed set aside, he must prove some substantial reason why it should be set aside (s). The Court will not act upon the ignorance of a deed by a person who can read and write, but requires evidence of a con- trivance in the opposite party to have the instrument drawn wrong and keep the matter in the dark (t). The presumption, however, that a person who can read knows the contents of an instrument which he executes only stands until proof of the contrary is proved (u). Where a party to a deed undertakes to read a deed to the other party it is a fraud if he does not read it correctly. It is immaterial that the other party to the deed is capable of reading (x). When a party is under the obligation of showing that an un- (f/) Philiiqis V. Mullhigs, 7 Cli. 7 Ch. 75, supra, p. 11. 24:6 ; Turner v. Collins, ib. 329. (it) Harris v. Delaivar, 3 Ired. (r) Wollaston v. Trihe, 9 Eq. 44. (Amer.), 213. (,s) Henry v. Armstrong, 18 Ch. D. (s;) Btarnijs\. Bracy, 1 How. (Miss.) 668 Aiuer. 212. See ThoronylujoocVs (t) Michael v. Michael, 4 Ired. Case, 2 Co. Rep. 9 b., suprco, p. 10. (Amer.), 349. See Hunter v. Wcdttrs, PROOF. ^^^ professional person understood the contents of a deed or instru- ^^'^P- ^- ment which he executed, the mere proof of its having been read over to him unaccompanied with proper explanations, is not sufficient to satisfy the Court that the person hearing it read understood it (y). It must be proved by those who claim under it, upon satisfactory evidence, that the nature, effect, and con- tents of the deed were explained to and perfectly understood by him (0). It is not sufficient for a solicitor who is employed to prepare a marriage settlement for a lady whose property is the subject of it to say in general terms that he explained it to her. He ought to say what was the explanation he gave, and what was the meaning and effect of the limitations as stated by him to her (a). The intervention of an independent third party, or adviser, is an important ingredient in showiog the fairness of a trans- action (b). If a solicitor be employed, there is always strong prima facie evidence that the party for whom he was acting knew the nature of the transaction (c) : in all cases, indeed, where an independent legal adviser or solicitor is employed, the evidence that everything which was necessary to be known had been brought to the knowledge of his employer, would be con- clusive {(l). The intervention, however, of another solicitor or adviser, who, with the knowledge of the other party to the transaction, a former solicitor of his employer, neglects, or does not properly discharge his duty, is not sufficient to support a transaction between them (e). Nor is the intervention of a solicitor sufficient to support a transaction, if that one of the (y) Hocjhton v. Hoghton, 15 Beav. (a) Maunsell v. Mmmsell, 1 L. R. 311 ; Moore v. Prance, 9 Ha. 304. I. 549. See /S'/wxrp v. Leoxh, 31 Beav. 503 ; {h) Cooke v. Lamotte, 15 Beav. Toker v. Toker, 3 D. J. & S, 487 ; 240 ; Bainbrigge v. Browne, 18 Ch. Fulton. V. Amlreiv, 7 E. & I. Ajip. D. 188. Ca. 449. (c) Benton y. Bonner, 23 Beav. (z) Moore v. Prance, 9 Ha. 304 ; 291 ; Miller v. Cook, 10 Eq. 641. Anderson v. Ellsworth, 3 Giff. 154 ; (d) De Montmorency v. Devereux, Davics V. Davies, 4 Giff. 417 ; Toker 7 CI. & Fin. 188. V. Toker, 3 D. J. & S. 487 ; Hcdl v (e) Gihbs v. Daniel, 4 Giff. 1. Hall, 8 Cli. 430. 4oG PROOF. Cliap. X. Admission of extrinsic evi- dence to avoid a deed. parties for whom the solicitor is acting is under the influence of (/), or for the interests of the other party {g). A party is not estopped from avoiding his deed, by proving that it was executed for a fraudulent, illegal, or immoral pur- pose (/<,). Notwithstanding the solemnity and force which the law ascribes to deeds, and all the strictness with which it in general prohibits the introduction of extrinsic evidence, to prove that an instrument goes beyond, or does not fully contain, or in- correctly exhibits, the terms of the contract, which it was written and signed for the purpose of expressing and recording ; the rule is settled, and not merely in Courts of Equity, that a deed, on its face just and righteous, may be vitiated and avoided, by alleging and adducing extrinsic evidence to prove that it was founded on a consideration, or had a view or purpose contrary to law or public policy (/). Although a party may thus, in certain cases, be enabled to take advantage of his own wrong {h), this evil is of a trifling nature in comparison with the flagrant evasions that would, in many cases, result from the adoption of a difterent rule (J). If a person be induced by fraudulent statements to enter into a written contract, it is competent for him to prove fraud by evidence aliunde, although the written contract, or the deed of conveyance, is silent on the subject to which the fraudulent representation refers (ni). So, also, fraud, whether in a record, or deed, or writing under seal, may be proved by parol evidence (n). (/) Moxon V. Payne, 8 Ch. 881. {ei\\-.670 ; St. Albyn (p. (n) Moore v. Prance, 9 Ha. 303. Ca. 189. See Beadles v. Burch, 10 Sim. 332 ; (s) Marshall v. Sladden, 7 Ha. Btrry v. Armitstead, 2 Keen, 227 ; 4CA COSTS. Chap. XI. Although costs may not be given against a solicitor who has mixed himself up in a fraudulent transaction, costs will not be given to him (;r). In Harvey v. Mount (y), a solicitor who acted as such in a transaction which was impeachable on the ground of fraud, but was himself free from moral culpability, was ordered to pay his own costs, as he had not acted with proper prudence in the matter. So, also, in Fyler v. Fyler (z), where a solicitor, by mixing up his personal interest in his client's transactions, rendered an investigation not unreasonable, the bill was dismissed against him without costs, though it contained unproven charges of fraud. Where a solicitor has not been guilty of participation in a fraud, but at most only of a blunder, for which the remedy is an action for professional negligence, there is no jurisdiction to order him to pay the costs of the suit («). No other person can be made a defendant for the purpose of having the costs paid by him, but a solicitor or other agent, or an arbitrator (h). The costs of a suit to set aside a deed for fraud, will not be given against a solicitor, or party to the fraud, if they are not specifically prayed in the statement of claim (c). If they are not specifically prayed, a demurrer will lie (d). If a man be accessory to a fraud on creditors, as being the trustee of a voluntary settlement, he will not be allowed his costs on setting aside the deed, although he may have derived no benefit from it {e). In a case where the name of a man had, by the false repre- sentations of a third party, been inserted on the register of the shareholders of a company, it was held that the company, though innocent, must bear the costs of the application (/). Gilbert v. Lewis, 1 D. J. & S. 52 ; (c) Beadles v. Burch, 10 Sim. 338 ; Bagnall v. Carlton, 6 Ch. D. 371. Roddy v. JVilliams, 3 J. & L. 16. (x) Roddy v. IFillianis, 3 J. & L. (d) Beadles v. Burch, 10 Sim. 338. 23. («) Tovmsend v. IFestacott, 4 Beav. (y) 8 Beav. 439. 58 ; Turquand v. Knight, 14 Sim. (z) 3 Beav. 550. 644. (a) Clark v. Girdwood, 7 Ch. D. 9. (f) Re Patent File Co., 15 W. R. {h) Weise v. War die, 19 Eq. 172. 754. See Barnes v. Addy, 9 Ch. 244. COSTS. ^Go The Consolidated Orders 38, r. 2, reg. 2, do not contemplate ^^^v- ^i- the cause of fraud, so that, although the value of the subject- matter of the suit at the time of filing the bill may be con- siderably less than lOOOZ., the costs will be allowed on the higher scale (g). (g) Earl of Stamford v. Dawson, 15 W. R. 896. PART IL-MISTAKE. CHAPTER I. Chap. I. Mistake may be said to be some unintentional act, omission, or error arising from unconsciousness, ignorance, forgetfulness, imposition, or misplaced confidence (a). There is mistake if a man through ignorance be induced to do a thing which he ■would not have done, had he not been in error (6). Mistake may be either in matter of law or in matter of fact (c). Mistake of law. A mistake of law happens when a party having full know- ledge of the facts comes to an erroneous conclusion as to their legal effect. It is a mistaken opinion or inference arising from an imperfect or incorrect exercise of the judgment upon facts as they really are (d). Mistake as to foreign law is a mistake of fact (e). The rule that mistake in matter of law cannot be admitted as a valid excuse either for doing an act prohibited by the law, or for the omission of a duty which it imposes, is common to all systems of law. Regula est juris ignorantiam cuique nocere, is the language of the Pandects (/). Ignorantia juris lion excused, is the maxim of the common law. " It is to be presumed," says Manwood, as reported by Plowden {g), " that no subject of this realm is miscognisant of the law whereby he (a) Story, Eq. Jur. 110. Eep. 743. (h) Jeremj', Eq. Jur. Bk. 2, pt. 2, (e) Imperial, dx., Assicuratrice of p. 358. Trieste v. Funder, 21 W. R. 116. (c) Dig. Lib. 22, tit. 6. (/) Dig. Lib. 22, tit. 6, leg. 9. (d) Hurd V. Hall, 12 Wis. (Amer.), (g) 1 Plowd. 342. 113 ; Burkhauser v. Schmitt, 30 Amer. MISTAKE OF LAW. 4G7 is governed. Ignorance of the law excuseth none " (h). There ^^^v- I- is, however, no presumption of law in this country, that every one knows the law. The rule is that ignorance of law shall not excuse a man or relieve him from the consequences of a crime or from liability on a contract (^). The rule is not only expe- dient, but is absolute^-y necessary. If ignorance of law were admitted as a ground of exemption, the Court would be involved in questions which it were scarcely possible to solve, and which would render the administration of justice next to impractic- able, for in almost every case ignorance of law would be alleged, and the Court would for the purpose of determining the point, be often compelled to enter upon questions of fact, insoluble and interminable (k). The rule is the same in equity. Mistake in matter of law cannot in general be admitted as a ground of relief in equity (/). The maxim, juris ignorantia non excusat, is not, however, universally applicable in equity (m). " If," said Lord Westbury in Coo2:>er v. Phibhs (n), " the word jus is used in the sense of denoting general law, the ordinary law of the country, no excep- tion can be admitted to the general application of the maxim ; but it is otherwise when the word jus is used in the sense of denoting a private right. Private right of ownership is a matter of fact ; it may also be the result of a matter of law, but if parties contract under a mutual mistake and misapprehen- sion as to their relative and respective rights, the result is that the agreement is liable to be set aside as having proceeded on a common mistake." " Ignorance of a matter of law," said Lord (h) See Manser's Case, 2 Co. Rep. 24.3 ; Marshall v. C'olleU, 1 Y. & C. 3 a, b. ; Cook v. JVotion, 4 Leon. 1!)0 ; 232 ; Denys v. Shuckhurgh, 4 Y. & C. Stevens v. Lynch, 12 East, 3S ; Tstyn, 2 D. J. 254 ; Ex parte Lucy, 4 D. M. & U. & 8. 373, stqmi, pp. 94, 95. 356 ; Lawton v. Campion, 18 Beav. (,/) Jjixon v. Evans, 5 E. & I. App. 87 ; Partridge v. StCj hcn.t, !) Jur. N. Ca. 606. S. 742 ; Trigge v. Lavallee, 15 Moo. 476 MISTAKE OF FACT. Chap. I. it is in matter of law. The admission of ignorance of fact as a ground of relief, is not attended with those inconveniences which seem to be the reason for rejecting ignorance of law as a valid excuse. Whether the ignorance really existed, and whether it was imputable or not to the inadvertence of the party, is a question which may be solved by looking at the circumstances of the case. The inquiry is limited to a given incident, and to the circumstances attending that incident, and is, therefore, not interminable (e). Opiuion of According to Savigny, ignorance has not, as such, any effect dfs\mctiou upon the legal consequences of an act or transaction in which it ^'f*,'^^,®" T*^*?'^® occurs. The effect generally attributed to ignorance is properly take of fact. attributable to the negligence which is the cause of it. Ignorance which is not the effect of gross negligence is not prejudicial to the ignorant party, but ignorance which is the effect of such negligence is prejudicial to him. Whether ignorance be or be not the result of gross negligence, depends on circumstances ; it is presumed to be so when a man is ignorant of the general laws of his country, or of his own affairs, but it is not so pre- sumed when he is ignorant of other matters. The presumption which arises in each of these cases is rebuttable, but is conclu- sive if not rebutted by the person against whom it arises. Ignorance of matters of law and ignorance of matters of fact, are thus placed on the same footing ; both are prejudicial when the result of gross negligence ; both are harmless when not so (/). Definition of Mistake of fact is a mistake not caused by the neglect of legal duty on the part of the person making the mistake (//), and con- sisting in an unconsciousness (h), ignorance (i), or forgetful- ness (/i-) of a fact past (l) or present (m), material to the (e) Austin, Jur. vol. 2, p. 172. 465 ; Bell v. Gardiner, 4 j\I. & G. (/) Lindley on Jur. App. p. 19. 11. (g) New York Civil Code, Art. (k) Kelly v. Solari, 9 M. & W. 54 ; 7(52. Lucas v. Worswich, 1 Moo. & R. 293. (/i) See Kelly v. Solari, 9 M. «& W. {I) See East India Co. v. Neave, 5 54. Ves. 173 ; East India Co. v. Donald, (i) See Cocking v. Pratt, 1 Ves. 9 Ves. 275 ; Willan v. Willan, 16 400 ; East India Co. v. Neave, 5 Ves. Ves. 72 ; McCarthy v. Decaix, 2 R. & 173 ; East India Co. v. Donald, 9 M. 614. Ves. 275 ; Hore v. Becher, 12 Sim. {rn) See Cocking v. Pratt, 1 Ves. juistake of fact. MISTAKE OF FACT. 477 transaction ; or in the belief in the present existence of a tiling *^'^iap. I. material to the transaction, which does not exist'(w), or in the past existence of a thing which has not existed (o). In " fraud," as distinguished from " mistake," there is, neces- Mistake as sarily, a misapprehension or mistake in the party defrauded, frlmfrAu± which alone would not vitiate his dealings with others ; but there is the additional circumstance that the party with whom he deals intentionally causes the mistake for the purpose of effect- ing the dealing, and this precludes the party so occasioning the mistake from holding the other bound to it. What is the nature or degree of mistake which is relievable Mistake as dis- in equity, as distinguished from mistake which is due to negli- negligence, gence (_^j), and therefore not relievable, cannot well be defined so as to establish a general rule, and must, in a great measure, depend on the discretion of the Court under all the circum- stances of the case. Though the Court will relieve against mistake, it will not assist a man whose condition is attributable only to that want of due diligence which may be fairly expected from a reasonable person (q). Parties, for instance, who, having a good defence, or plain and complete remedy at law, have neglected to avail themselves of it there, cannot come to equity for relief (r). Nor has a purchaser who is evicted by reason of a defect in title, which his legal adviser has overlooked, an 400 ; ffore v. Becker, 12 Sim. 465 ; CI. & Fin. 248, 286 ; Oamj)bell v. Cohjery. Clay, 7 Beav. 188 ; Brough- Ingilby, 1 D. & J. 403 ; Leutu v. tonv. Hutt, ST). & 3. 501. Hillas, 2 D. & J. 110; Wild v. (n) See Hitchcock v. Giddings, 4 Hillas, 18 L. J. CL 170. See Trigge Pri. 135 ;CoZi/erv.Ctoi/, 7 Beav.. 188 ; v. LavalUe, 15 Moo. P. C. 270; Hastie v. Couturier, 9 Exch. 102, Grymes v. Sanders, 3 Otto (Aiiiev.), 5 H. L. 673; Strickland v. Twner, 61. 7 Excli. 208 ; Cochrane v. Willis, 1 (r) Stephemon v. Wilson, 2 Vern. Ch. 58. 325 ; Blackhall v. Coomhs, 2 P. W. (o) See New York Civil Code, 70 ; Hohvorthy v. Mortlock, 1 Cox, Art. 762. 141 ; Hankey v. Vernon, 2 Cox, 12 ; ( p) Supra, pp. 93, 94. Facti Stevens v. Praed, 2 Ves. Jr. 529 ; ignorantia ita demum cuique non Bateman v. Willoe, 1 Sch. & Lei", nocet, si non ei sumraa negligentia 201 ; Hare v. Honcood, 14 Ves. 31 ; ol)jiciatui'. Quid enim si omnes in Drewry v. Barnes, 3 Russ. 94. See civitate sciaiit quod ille solus ignorat. Marquis of Breadalbane v. Marquis Dig. Lib. 22, tit. 6, 1. 9. of Chandos, 2 M. & C. 719 ; Hender- (q) Duke of Beaufort v. Neeld, 12 son v. Cook, 4 Drew. 306. 478 MISTAKE OF FACT. Chap. I. Mistake as a ground of relief must be mate-, rial, &c. equity to recover his purchase-money (s). Nor can reHef be had against h forfeiture, where a man who is charged with a legal obligation neglects to perform it (t). So, also, where a sum of money was paid by the purchaser of an estate to persons supposed to be entitled in remainder, to procure their concur- rence in a recovery, which was suffered accordingly, Lord Nottingham refused to direct the money to be refunded {u). Mistake in matter of law or matter of fact, to be a ground for relief, must be of a material nature, and must be the determin- ing ground of the transaction. A man who seeks relief against mistake must be able to satisfy the Court that his conduct has been determined by the mistake. Mistake in matters which are only incidental to and are not of the essence of a transaction, and without, or in the absence of which it is reasonable to infer that the transaction would nevertheless have taken place, goes for nothing. If the mistake has not been the only cause by which the conduct of a man has been induced, but another motive has inter- vened, the mistake cannot be set up as a ground for relief (x). Nor, indeed, does the circumstance that the mistake may be in a material matter always of itself entitle a man to the interposition of the Court. The law does not go the length of requiring that parties who deal with each other at arms' length, should be on the same level as to information and knowledge. If parties stand upon an equal footing,and the means of information and knowledge are open to them both, either of them is entitled to the benefit of bis own judgment, skill, and sagacity. If the parties act otherwise fairly in the transaction, and it is not a case in which one of them is bound, upon the ground of confidence, or otherwise, to make a disclosure to the other of matters affecting the subject matter in respect of which they are dealing, the Court will not interfere. A man cannot have relief on the ground of mistake, uoless the (s) Urmston v. Pate, 3 Ves. 235, n. See Cator v. Lord Pembroke, 1 Bro. C. C. 301, 2 Bro. C. C. 282 ; Thomas V. Poivell, 2 Cox, 394. (t) Gregory v. Wilson, 9 Ha. 683, 689. (ii) Maynardv. Moseley, 3 Sw. 651. (x) Stone V. Godfrey, 5 D. M. & G. 76 ; Carpmael v. Poivis, 10 Beav. 39 ; Trujge v. Lavallee, 15 Moo. P. C. 276 ; Grymes v. Sanders, 3 Otto (Amer.), 60. See Both. Oblig. part 1, c. 1, s. 1, art. 3, s. 1 ; Domat. Liv. 1, tit. 18, sec, 1, art. 13—17 ; ToulL Cod. Civ. Liv. 3, c. 2, s. 2, art. 1—4. MISTAKE OF FACT. 479 party benefited by the mistake is disentitled in equity and con- (^^^^v- I- science from retaining the advantage which he has acquired {y). Mistake of fact is not the less a ground for relief because the person who made the mistake had the means of knowledge (2). Mistake of fact may be the mistake of one party only to a con- Mistake of fact ■^ • • J.1 either on the tract, or there may be a mistake of both parties respcctmg tlie part of one party same matter ; and thus there arise two different conditions of J^^i^^or m"utuli the question, which are governed by considerations of a different to both. character. The mistake of one party only is attended by different conse- Mistake of one . . . f party only, nut quences, accordingly as the other party is or is not cognizant 01 known to the , . , , other. the mistake. The law judges of an agreement between two persons exclu- sively from the mutual communications which take place between them. If the terms of the proposal of the one are unambiguous and unmistakeable, and the answer of the other is an unequivocal and unconditional acceptance, the latter is bound, in the absence of fraud or warranty, ^however clearly he may afterwards make it appear that he was labouring under a mistake in his acceptance of the proposal. He cannot be allowed to escape from the effect of his agreement by merely showing that he understood the terms in a different sense from that which they bear in their grammatical construction and legal effect. If a man will not take reasonable care to ascertain what he is doing, he must bear the consequences. Nor indeed is it sufl&cient to resist specific performance for the purchaser to say that he has made a mistake, if the terms of the contract are not ambiguous, and the property has been described in a manner which could not mislead anybody who took reasonable care (a). In a case before Lord Romilly, where the defendant alleged that he had misunderstood the particulars of sale, he said that "If there appears on the particulars no ground for the mistake, if no man with his senses about him could have misapprehended the character of the parcels, then (y) 1 Fonb. Eq. B. 1, c. 2, s. 7, (s) TVillinolt v. Barber, 15 Ch. D. Story, Eq. Jiir. 147—151 ; Warner 97. V. Daniels, 1 Wood & Min. (Amer.). (a) Tmnplin v. James, 15 Ch. D. 90, supra, pp . 60, 6 1 , 63. 2 1 7. 480 MISTAKE OF FACT. ^^^v- J- I do not think it is sufficient for the purchaser to swear that he did make a mistake, or that he did not understand what he was about " (b). Where, accordingly, an inn together with a saddler's shop was put up for sale, and at the back of the inn and saddler's shop were two pieces of garden ground not belonging to the vendor, one of which had been for many years occupied with the inn, and the other with the saddler's shop, and which were hardly at all fenced from the premises with which they were occupied, and the purchaser, who was ac- quainted with the property, and knew the gardens to be occu- pied along with the inn and saddler's shop, did not look at the plan, but bought in the belief that he was buying the whole of the property in the occupation of the tenants, it was held that he could not resist specific performance, as the description of the property was accurate and free from ambiguity (c). So also, on the other hand, where a purchaser believed he was buying and intended to buy the whole of the premises comprised in the particulars of sale, and there was no ambiguity in the par- ticulars of the property sold, it is not competent to the vendor to say merely that he lias made a mistake, and did not intend to sell a portion of the property (d). The Court may, however, refuse to enforce specific perform- ance of a contract on the ground of mistake, even in cases where the mistake is purely the mistake of the person against whom relief is sought, and has not been contributed to in any way by the other party to the contract, if in the opinion of the Court a hardship amounting to injustice would be inflicted on the party against whom relief is sought by holding him to his bargain (e). Thus specific performance was refused against a vendor who had contracted to sell an estate under the mistake that he was entitled to the purchase money absolutely, whereas, in fact, lie was bound to reinvest it in the purchase of other land (/). So (I)) Swaiskmcl v. Dcarsley, 29 Beav. (e) Tamplin v. James, 15 Ch, D. 430 ; approved by Baggallay, L. J. 220 ; Btirrow v. Scammell, 19 Ch. D. 15 Ch. D. 218. 182 ; Dyas v. Stafford, 7 L. E. I. (r) Tamplin v. Ja^nes, 15 Ch. D. 605 ; Goddard v. Jefryes, 51 L. J. 217. Ch. 67. (rf) Diias V. Stafford, 7 L. E. L (/) Hotrell v. George, 1 Madd. 1 ; 606. Hood V. Ocjlander, 34 Beav. 513. MISTAKE OF FACT. '^l also, where a vendor had offered property for sale by a letter, in ^ P" ' which the price was stated to be £1,250, instead of £2,250, and the purchaser accepted the offer by letter, the Court refused to enforce the contract at the price mentioned in the letter, the vendor having given notice of the mistake immediately on dis- covering it ((j). So, also, where a man entered into a contract for the purchase of land under the belief that he would be able to build over the whole site, but he subsecpiently discovered that he would not be able to do so by reason of certain pro- visions in an Act of Parliament, the Court would not enforce specific performance against him (h). So, also, where a man who was employed to bid for one of two distinct estates offered for sale at the same time and place came into the auction room, and after hearing the description of a lot which was perfectly different from that for which he was engaged to bid, kept bidding in a hasty and inconsiderate manner, and ultimately purchased the lot, which, by his own gross mistake, he thought to be the lot for which he was to bid, the Court refused speci- fically to carry out the sale(?). So, also, where a vendor had revoked the authority of the auctioneer as to part of the property, and the auctioneer inadvertently sold the whole, the Court refused specific performance, although the purchaser was justified in believing. that he purchased all he claimed by his bill(/c). Where the subject of sale was the reversionary estate in land under a lease, and the price was fixed in the contract without any mention of the rent payable under the lease, and the vendor proved his understanding of the contract to have l)een that the rent was to be paid to him during the term, besides the contract price, it was held that the purchaser could not have specific performance upon any other construction of the contract, and his bill was dismissed, but without prejudice to his legal rights (/). So, also, where a mortgagee, having obtained a foreclosure, contracted to sell, subject to a clause in the contract (ry) JFebster v. Cecil, 30 Beav. 62. (k) Manser v. Back, 6 Ha. 443. (/i) Bray v. Briggs, 20 W. R. 962. (l) JFycomhe v. Bennington Hos- (i) Malins v. Freeman, 2 Keen, 2J^'"^ 1 ^h. 268. 25. 482 MISTAKE OF FACT. Chap. I. stating the vendor to be a mortgagee with power of sale, and that the covenants would be restricted accordingly, and the pur- chaser insisted upon a conveyance under the power of sale in the mortgage, which might have the effect of opening the fore- closure, it was held that the vendor might resist a specific performance in the form claimed, upon the ground that the clause referring to the power of sale was inserted by mis- take (m). So, also, a defendant charged with the performance of an agreement to give a lease may show that the stipulation for the tenant to pay the rent, " free from taxes," was omitted from the agreement by mistake (n). So wliiere the subject of the lease was a malting, and by mistake the condition was omitted that the lessees should covenant as to the quantity of malt to be made (o) ; and where in offering an agreement for a lease on certain terms, which were accepted, the lessor had omitted by mistake to insert the term that he required a certain sum for a premium ( ^9). So, also, where a description of parcels was prepared by the vendor's solicitor from a previous description, which had been prepared by another solicitor, in the report of a surveyor, and the description turned out to be erroneous as to quantity, the Court would not enforce the sale on the vendor unless the case were one for compensation, and the purchaser would submit to it (q). So, also, where a contract for sale includes, by mistake in drawing up the particulars of sale, property not intended to be sold, the Court will refuse to enforce the contract, unless the purchaser consent to take only the property intended to be gold (r). So, also, the Court would not enforce specific performance against a vendor who had contracted to sell at an inadequate price, in ignorance of the report of his agent upon the value, {m) Watson v, Marston, 4 D, M. (p) Wood v. Scarth, 2 K. & J. & G. 230. 33. (n) Joynes v. Statham, 3 Atk. (q) Leslie v. Tompson, 9 Ha. 268. 388. ('■) Alvanley v. Kinnaird, 2 Mac. (0) Garrard v. Grinliny, 2 Sw. & G. 1. 244, MISTAKE OF FACT. 4S.S which the agent had neglected to present (.s) ; and against a Chap. I. vendor who had reserved a bidding for the protection of the sale, but his agent had by mistake omitted to bid (t). So it seems that specific performance might be successfully resisted by a purchaser w^ho supposed a certain property to be included in his purchase that formed a material inducement for him to make the contract, and which proves, in fact, not to be in- cluded (u). Nor will the Court compel a man specifically to perform an agreement where the result would be to compel him to commit a breach of a prior agi-eement with another person (?;), When, on the other hand, an estate was put up to auction and bought upon the terms of the purchaser taking the timber at a fixed price, it was held that a mistake of the vendor in valuing the timber was no ground for relief in equity, and that the con- tract was binding (x). So, also, where a man agreed to take a mining lease entitling him to search for and take coal, &c., &c., at a fixed annual rent, upon the supposition that a certain vein of coal existed under the surface ; it was held that he was bound to take the lease and pay the rent, although he was unsuccessful in finding the supposed vein of coal, as he had in fact obtained all that he had bai'gained for, and there had been no representa- tion by the lessor as to the existence of the coal (?/). So, also where a man, being desirous of becoming a freeholder in Essex, contracted to purchase a house on the north side of the river Thames, which he supposed to be in that county, but which proved to be in Kent, the contract was held binding, and he was compelled to complete the purchase specifically (z). If the mistake cannot be established without evidence, the Court will allow a defendant an action for specific performance to support a defence founded on this ground by evidence dehors the agreement {a). (s) Mortlock V. Buller, 10 Ves. (x) Griffiths v. Jones, 15 Eq. 279. 292. (y) Jeffreys v. Fairs, 4 Ch. D. (0 lb. 448. («) See Strqnjlton V. Scott, 13 Ves. (2) Shirley v. Davis, cited 6 Ves. 426, jyer Lord Erskine. 678, 7 Ves. 270. (v) Willmott V. Barher, 15 Ch. D. {a) Manser v. Back, 6 Ha. 448 ; 9G. Wood V. Scarth, 2 K. & .1. ?,?,. 1 1 2 party in motive. 484 MISTAKE OF FACT, Chap. I. Though the Court may refuse to grant specific performance in the case of mistake where the exercise of tlie jurisdiction would have the effect of imposing too great a burden on the party who had made the mistake, no case can be found in which the mistaking party has sought for or could derive any ad- vantage beyond the relief from the burden (b). In a case where a defendant had agreed to let and the plaintiff had agreed to take premises on a lease, and the plaintiff had gone into posses- sion under the agreement, and laid out money on the premises, and on the title of the defendant being investigated, it was found that he had only a title to the moiety of the premises, he was decreed specifically to perform as mucli of the contract as he was able to perform with an abatement of one moiety of the rent (c). Mistake of one When a party is mistaken in his motive for entering into a contract, or in his expectations respecting it, such mistake does not affect the validity of the contract. If a man purchases a specific article, believing that it will answer a particular purpose to which he intends to put it, and it fails to do so, he is not the less on that account bound to pay for it. A mistake by the buyer in supposing that the article bought by him will answer a certain purpose for which it turns out to be unavailable is not a mistake as to the subject-matter of the contract, but is only a mistake as to a collateral fact, and affords him no ground for pretending that he did not assent to the bargain whatever may be his right afterwards to rescind, if the vendor warranted its adaptibility to the intended purpose {d). His mistake, unless induced by the seller, is immaterial to the validity of the con- tract. Such is the case of a person buying a horse without a warranty, believing it to be sound or useful for some special purpose, and the horse turns out to be unsound or not equal to the expectation ; and such is the case generally of the sale of a specific chattel in its then state and condition without warranty, (b) Burrow v. Srammell, 19 Cli. D. (d) Chanter v. HojMns, 4 M. & W. 181. 399 ; Ollimnt v. Baijley, 5 Q. B. (c) lb. 288. MISTAKE OF FACT. 485 which is found to have a latent defect (e). Thus, when a sale Chap. I. of oats was made by a sample which the buyer, a trainer of horses, supposed to be old oats, and therefore suitable for his purpose, new oats being unsuitable ; and nothing was said at the time about the quality of the oats ; it was held that unless the seller understood the buyer to stipulate as to the quality of tlie oats, the sale was good, although the oats were in fact new, and not suitable for the purpose of the buyer (/). So, also, on the other hand, where a sale was made of 100 chests of tea out of a specific cargo warranted to be equal to a sample shown at the time of sale, which the seller then believed to be, but which was not in fact, a sample of the cargo ; it was held that he had no right to avoid the contract by giving notice to the buyer of the mistake respecting the sample (g). A mistake as to the -person with whom the contract is made Mistake as to may or may not avoid the contract, according to the circum- ^.*i|om jjig con. stances of the case. Where the consideration of the person with *''''^<^* '^ m-dde. whom a man thinks he is contracting does not at all enter into the contract, and he would have been equally willing to make the contract with any person whatever as with him with whom he thought he was dealing, a mistake of identity will not prevent the formation of the contract. But when the con- sideration of the person with whom a man is willing to contract enters as an important element in the contract, as if it be a sale on credit where the solvency of the buyer is the chief motive which influences the assent of the vendor, or where a purchaser buys from one whom he supposes to be his debtor and against whom he would have the right of set off, a mistake as to the person dealt with prevents the contract from coming into existence for want of assent {h). Where a person passes himself off as another (i), or falsely represents himself as agent for another for whom he professes to (e) Sutton V. TemjAe, 12 M. & AV. (h) Mitchell v. Laparjc, Holt, N. P. 64, per Lord Wensleydale. 253 ; Boulton v. Jones, 2 H. & N. (/) Stnilh V. Hv(jhes, L. 11. (5 Q. 564 ; Smith v. JVheatcroft, 9 Ch. D. B. 5*}7. 230 ; Pothier, Oblig. 19. ({/) Scott V. Littlcdale, 8 E. & B. (/) Ihirdman v. Booth, 1 H. & C. 815. 8U3 ; Cund\jY. Lindsay, 3 App. Ca. 468. 486 MISTAKE OF FACT. ^ Chap. I. Ijuy (7^)^ and thus obtains the vendor's assent to a sale and even a delivery of goods, the whole contract is void ; it has never come into existence, for the vendor never assented to sell to the person thus deceiving him (l). Party may so When the mistake is that of one party alone, it must be conduct himself . ■ t ■, i i r< i • i as to appear to borne m mmd that the general rule of law is that whatever a terms^oAhr man's Tectl intention may be, if he so conducts himself that a other party. reasonable man would believe that he was assenting to the terms proposed by the other party, and that other party, on that belief, enters into a contract with him, the party thus conduct- ing himself would be equally bound as if he had intended to agree to the other party's terms (m). Mistake of one When the mistake of one party to a contract is known to the party known to i i •, i , i • i i i • i the other. Other, though it has not been in any way caused by liim, there may be cases in which a contract between them founded on the mistake would be void. If, for example, the one party is ignorant of a fact materially affecting the transaction, and the other party is aware of his ignorance, and knew of his intention to contract only with reference to a supposed different state of facts, he is precluded from denying that he understood the con- tract in the same sense as the other, namely, as conditional on the existence of the supposed state of facts. So, also, if a con- tract be entered into between two parties for the sale of a ship, and the vendor knew that the purchaser had a different ship in his mind from that intended by the vendor, there would be no contract, for by the rule of law established in Freeman v. Cooke (n), the vendor would not be in a position to show that he had been induced to act by a manifestation of the buyer's intention different from his real intention. But as a general rule in sales the vendor and purchaser deal at arms' length, each relying on his own skill and knowledge, and each at liberty to impose conditions or exact warranties before giving assent, and each taking upon himself all risks other than those arising from fraud or from the causes against which he has fortified himself {k) HiggoHS v. Burton, 26 L. J. 663 ; Smith v. Hughes, L. E. 6 Q. B. Exch. 342. 607, jper Lord Blackhuin, supra, 96. (0 Supra, pp. 7, 8. {n) 2 Exch. 654, supra, p. 96. (ru) Freeman v. Cooke, 2 Exch. MISTAKE OF FACT. 487 by exacting conditions or warranties. So that even if the *^''i*P- I- vendor should know that the buyer was purchasing, for instance, cotton goods submitted to his inspection in the mistaken belief that they were made of linen, or if the purchaser should know that the vendor was selling a valuable estate under the mistaken belief that a search for mines under it had proved unsuccessful, neither part}^ could avoid the contract under the supposed error or mistake. The exception to this rule exists only in cases where from the relation between the parties some special duty is incumbent on the one to make full and candid disclosure of all he knows on the subject to the other (o). Thus, when a man sold oats by sample without any other representation as to their quality, and the buyer in reliance on his own judgment bought them for old oats which quality only would serve his purpose, as being a trainer of horses, and which in fact the seller knew them not to be, it was hold that the mere passive acquiescence of the seller in the self-deception of the buyer did not entitle the latter to avoid the contract, and that there was no legal obligation on the seller to inform the bu3^er that he was under a mistake not induced by the act of the seller, and that there was no common understanding that the sale was for old oats (oo). But it was said ( p) by Chief Justice Cockburu " that if the buyer had said anything which showed that he was not acting on his own inspection and judgment, but assumed as the foundation of the contract that the oats Avere old, the silence of the seller as a means of misleading him might have amounted to a fraudulent concealment, such as would have entitled the buyer to avoid the contract." Where, however, on a sale of goods by sample, the purchaser is aware that the vendor is under a mistake as to the sample he was offering, the vendor would be entitled to say that he had not intended to enter into the contract by which the purchaser sought to bind him (q). When one of the parties to a transaction is aware of a mis- (o) Benjamin on Sale, 374. (p) lb. (oo) Smith V. Hughes, L. E. 6 Q. (q) lb., per Hannen, J. B. 597. 48S MISTAKE OF FACT. ^'''■'^P- ^- take of the other in a matter materially inducing it, relief may be had in equity even though no fiduciary relation appear to subsist between the parties, where, under the special circum- stances of the case, it appears inequitable that the one party should hold the other to the engagement (r). Relief accordingly was given where an instrument had been delivered up under the ignorance of one party and with the knowledge of the other as to a fact upon which the rights attached (s). Mistake of one If the mistake is in the expression of the agreement, one of throtbei-'in'tl°e ^^^® parties cannot in equity hold the other bound to an expres- exprcssion of gion of intention which he knew to be not in accordance with the agreement. his real intention (t). Where, for instance, a man supposes that he has entered into a contract for a lease at one rent, and it turns out that the rent specified in the agreement is of a differ- ent amount, the contract will be set aside, unless the party against whom relief is sought shall agree to accept the rent which he knew it was the intention of the plaintiff to give (u). So, also, where in a conveyance of messuages, the plan on the deed comprised a piece of land not intended by the vendor to 1)0 included, a decree was made to vary the deed, an option being given to the purchaser to have his contract annulled (x). If the mistake of the one party in expressing the agreement be known to the other party at the time, it may be available even at common law in avoidance of the apparent contract, so long as the evidence remains open and is not excluded by a written contract, for, as a general rule, a party cannot hold the other to an expression of terms which he knows at the time are agreed to under a mistake and not in accordance with the real intention (y). The doctrine has been stated as follows by Mr. Justice Hannen in Smith v. Hughes (z) : " The promisor is not bound to fulfil a promise in a sense in which the promisee (r) East India Co. v. Donahl, !) 9 Ei^. 80. Ves, 275. (x) Harris v. Pejyperell, 5 Eq. 1, («) lb. See Younr/ v. Halahan, 1. R. 9 Eq. {t) Garrard v. Franhd, 30 Beav. 80. 445. {y) Leake on Contract.'^, 317. (h) lb. See Worsley v. Fra-nk, 11 (s) L. E. 6 Q. B. 610. L. T. 392 ; Ymivfi v. Halahan, I. R. MISTAKE OF FACT. 489 knew at the time the promisor did not intend it ; and in con- Chap. I. sidering the question in what sense a promisee is entitled to enforce the promise, it matters not in what way the knowledge of the meaning in which tlie promisor made it is brought to the mind of the promisee, whether by express words, or by con- duct, or b}'- previous dealing.s, or by other circumstances. If by any means he knows that there was no real agreement between him and the promisor, he is not entitled to insist that the pro- mise shall be fulfilled in a sense to wliich the mind of the promisor did not assent." If the other party to the contract has caused the mistake, Mistake caused different considerations arise according: to the circumstances of J^'y m'srepreseu- o tation. the case. If he has caused the mistake by misrepresentation intentionally and for the purpose of inducing the contract, it is a fraud, and the contract may be avoided on that ground (a). In Torrance v, Bolton (h), it was held that where a bidder at an auction was misled by the particulars advertised, as to the property exposed for sale, and being deaf did not hear the con- ditions read out at the sale in which the property was stated to be subject to moi"tgages, he was not bound by the contract made by mistake under such misleading particulars, which had induced him to believe he was buying the absolute reversion of the free- hold and not an equity of redemption. No fraud was shown, but the Court said that the description was " improper, insuffi- cient, and not very fair." So, also, in Andreiv v. Aitken (c), when a vendor by his assent to the assumption of the pur- chaser that the property, the subject of the contract, was not subject to any ]-estrictive agreement, whereas in fact it was so subject, the transaction was set aside on the ground of mistake induced by the vendor. If he has caused the mistake unintentionally, and with an Mistake caused honest belief in the truth of his representation, the contract is "•^"'^'^'^tionally. in general absolute, and inde})eudent of any mistake or er- roneous supposition respecting the qualities and accidents of the article, if the specific article bo accurately identified in sub- (ft) Sjqmt, pp. 15, 16. (c) 22 Cli. D. 218. (6) 8 Ch. 118. 490 MISTAKE OF FACT. ^^^^P- ^- stance, and be not so different in substance from what it was represented to be as to constitute a failure of consideration {d). For example, where a horse is bought under the belief that it is sound, if the sale was induced by an honest misrepresentation as to its soundness, though it may be clear that both vendor and purchaser thought they were dealing about a sound horse and were in error, yet the purchaser must pay the whole price unless there was a warranty, and even if there was a warranty he cannot return the horse and claim back the whole price, unless there was a condition to that effect in the contract (e). Where accordingly new shares were offered by a company and accepted, under the supposition that the company had obtained a contract that required an extension of their business, and in fact the supposed contract proved to be invalid, it was held that the contract to take the shares was absolute and not condi- tional upon the validity of the supposed contract, for that the mistake did not affect the substance or validity of the shares actually contracted for and accepted, nor did it constitute a failure of consideration (/). No specific per- If ^ P^-ty to the contract has caused the mistake of the other formance at suit ^.^^.^y ^(^ ^\^q contract by negligence of himself or his agent, or of pai-ty who 1. J ^ o o o j has caused the in any manner for which he may be responsible, although unin- tentionally and without any fraudulent intention, he cannot have specific performance. Where, for example, on a sale by auction the plan annexed to the particulars of the property showed a shrubbery on the western boundary, and the defendant, going to inspect the property before the sale with the plan in his hand, found on the western side a belt of shrubs with an iron fence outside enclosing three ornamental trees, and he then bought the property, believing that the fence was the boundary, but the real boundary was a line of shrubs within the shrubbery and did enclose the trees, the Court held the mistake was increased at least by crassa negligentia on the part of the vendor, and dismissed the bill for specific performance (g). So, also, where (d) Sup-a, pp. 19—21. L. E. 2 Q. B. 687, supra, p. 20. (e) Supi-a,-p. 18. ig) Dennij v. Hancock, 6 Ch. 1. (/) Kenned]! v. ranawa, dx., Co., MISTAKE OF FACT. 491 land was put up for sale according to a plan annexed to the Cliap. I. particulars of sale and subject to a condition that no public house should be built upon the estate ; and a purchaser bought, supposing the plan to represent the whole estate, but it omitted to point out a plot reserved by the vendor for the building of a public house ; it was held that as the plan contributed to the mistake of the purchaser, the vendor must either admit the restrictive condition to extend to the plot reserved, or must have his bill for specific performance dismissed, and in either case must pay the costs of the purchaser (h). Nor will specific performance be enforced against a purchaser where the condi- tions of sale are misleading and erroneous (i). But when a man bought a house described as 39, Regency Square, Brighton, without any previous inspection or enquiry about the situation, it was held that he could not afterwards object to complete the sale upon the ground of having been mistaken in the situation of the house, which stood, not in the sfpiare, but in the adjoining street, and he was compelled to take the house that was in fact known and identified by that name and description (j). By the general rule of the common law, if there be a contract Parol evidence which has been reduced into writing, verbal evidence is not equity 'in ^casea allowed to be given of what passed between the parties, either °^ mistake, before the written instrument Vv^as made, or during the tinie it was in a state of preparation, so as to add cr subtract from, or in any manner to vary or qualify the written contract (k). A Court of equity, however, admits such evidence, whether the purpose of the action be to rectify or rescind an agreement (I). Parol evidence is admitted, not to contradict the form of the agreement, which cannot be allowed, but to prove a mistake therein which cannot otherwise be proved (m). But the Court will not act upon such evidence, unless the proof be clear and conclusive. In all cases where such evidence is given, great at- (h) Bnskcoinb v. Beckwith, 8 Eq. 7.38. 100. See Andrew v. Aitken, 22 Cli. (k) Goss v. Lord Nugent, 5 B. & D. 218, supra, p. 489. Ad. 58. (i) Harriett v. Baker, 20 Eq. oO ; (l) Bentleij v. AIackay,4D. F. & J. Jones V. Riwmer, 14 Ch. D. 592, per 279 ; Garrard v. Fronkel, 30 Beav. Jessel, M. R. 451. (j) IVhite V. Bradshav, Ifi Jur. {m) Baker \. Paine, 1 Vcs. 457. 492 MISTAKE OF FACT. <^hap. I. tention will bo paid to what is stated by tlie other party to the instrument (n). Mistake of fact The mistake may be common to botli parties to a traasaction, parties" ^ '^ '^^^ "-^^^ cousist either in the expression of their agreement, or in some matter inducing or influencing the agreement, or in some matter to which the agreement is to be applied. The rule at law is that an agreement cannot be varied by external evidence, and that the parties are bound by the docu- ment, which they have signed and accepted as their agree- ment (o), unless there be error on the face of it so obvious as to leave no doubt of the intention of the parties, without the assistance of external evidence. In ex n-cssion ^^ ^^^® parties have expressed themselves in language so of agreement. vague and unintelligible that the Court finds it impossible to affix a definite meaning to their agreement, it cannot take effect and is void (jj). So, also, if there be on the face of the instrument what is called a patent ambiguity, that is, a doubt or uncertainty appearing in the terms of the agreement as ex- pressed by themselves, it cannot be altered or explained by extrinsic evidence ; and if it is incapable of a rational interpre- tation, the agreement at least to the extent of the ambiguity is necessarily void (q). Where the mistake in the expression of a written contract is obvious upon the face of the instrument so as to leave no doubt of the intention of the parties without extrinsic evidence to explain it, the mistake is corrected as a mere matter of con- struction, and the contract is construed in accordance with the obvious intention, both at law and in equity (r). "Where, for example, a bond was drawn binding the obligor in 7700, witliout adding any denomination, and the condition was for the pay- ment of a sum of pounds sterling, the Court supplied the word "pounds" in the bond (is). So, also, a bond conditioned to (ji) Bentley v. Maclcaij, 4 D. F. & (q) See Coles v. Hulme, 8 B. & C. J. 279 ; M'Kcnzie v. Coulson, 8 E(|. 5(58 ; Alder v. Boyle, 4 C. B. 635. 375 ; Bloomer v. Shittk, 13 Eq. 429, (r) See 10 Co. 133 a. ; Osborne's infra, p. 500. Case, Bird's Tr^ist, 3 Ch. D. 214 ; (u) Hiichin v. Groom, 5 C. B. 515. Barchell v. Clark, 2 C. P. D. 88. (ij) Guthiny v. Lhjnn, 2 B. & Ad. (s) Coles v. Hulme, 8 B. & C. 5(J8. 232. S^e Pkipjjs v. Tanner, 5 C. & P. 488. MISTAKE OF FACT. 493 pay instalments until the full sum of "one pounds" should be C^^^v- I- paid, was construed, according to the context, to mean " one hundred pounds" (t). So, also, where the condition of a bond was expressed to be that in the events specified "the condition" of this obligation, instead of "this obligation" to be void, the phrase was read as corrected (^t). So where the condition of a bond was Avritten that it should be void if the obligee did " not" pay, the Court read the bond without the word " not " (.i-). So, also, a promissory note, dated 1st January, 1851, pa^^able two months after date, and bearing a contemporaneous memorandum by the drawer that it was due 1st March, 1855, was read with the date corrected to 1st January, 1855, on which day it appeared by the evidence to have been made (y). So where a date 1806 was obviously written by mistake for 187G {z). So, also, where in a series of deeds relating to the same transaction, iJl,200 was in one instance written instead of ^61,400, the Court read it correctly without a suit to rectify the mistake (a). So, also, where in a submission to arbitration the words " shall appoint " were obviously omitted in giving time to enlarge the time for the award, these words were read as supplied (6) ; and in a marriage settlement of real estate, in which the word " heirs " had been obviously omitted throughout, the deed was rectified by supplying that word wherever it was necessary for the limitation of the intended estates (c). So, also, an omitted life estate (d), and a clause giving to children of one daughter an interest similar to that given to children of other daudi- ters (e), has been supplied by reference to the' context. Where it is manifest upon the face of an instrument that one name has been written in mistake for another, the Court will (t) Wuiujh v. Bussell, 5 Taunt. 538. 707. (a) Scholejicld v. Lockwood, 32 (u) Mauleverer v. Hawxhij, 2 Will. Beav. 436. Saund. 78, the words miglit be re- (h) Kirk v. Uiiwin, 20 L. J. Exch. jected as surplusage ; ib. HeeAvory 345. V. White, 1 Lord Eaym. 38. (f) Bird's Trusts, 3 Ch. D. 214. (x) Wilson V. Wilson, 5 H. L. 67, (d) Grecmvood v. Greenwood, 5 Cli. per Lord St. Leonards. D. 955. (y) Fitch V. Jones, 5 E. & B. 238. (e) Ihdfmi v. Bryniwi, 6 Ch. D. (7^ Lmihw. Bruce, ib L. J. Q. B. 1:33. 494 MISTAKE OF FACT. Chap. I. read the instrument with the mistake corrected (/). So where the name of the grantor was omitted in the operative part of a deed, or where the name of the obligee was omitted in a bond, it was supplied from the other parts of the instrument ((/). So the Court may presume from the mere inspection of a settlement that words which, though they make sense, give a result which is unreasonable and repugnant to the general intention and to the usual frame of such instruments, were inserted by mistake Qi). However general the words of a covenant may be, if standing alone, yet if, from other covenants in the same deed, it is plainly and irresistibly to be inferred that the party could not have intended to use the words in the general sense which they import, the Court will limit the operation of the general words {%). Similarly the effect of general words of conveyance is con- fined to property of the same kind with that which has been specifically described and conveyed {li). Where there is a specific description of a particular kind of property followed by words which prmid facie would be sufficient to include other property of the same kind, it has been held that those words do not include the property not specifically described on the principle expressio unius est exclusio alterius (?'). A lease after covenants of the lessee to pay rent, and not to assign without licence, provided for a right of re-entry by the lessor, if any of the covenants " hereinafter contained ," on the part of the lessee should be broken. There were no covenants thereinafter contained on the part of the lessee ; the Court in construing the lease refused to reject the words "hereinafter contained " (?n). (/) Spyve Y.Tojyham, 3 'EAst, 115; (i) Hesse v. Stevenson, Z B. & P. Qtieen v. JVooldale, 6 Q. B. 563 ; 574. Wilson v. Wilson, 5 H. L. 66, j3e?- (k) Rooke v. Kensuujton, 2 K. & J. Lord St. Leonards. 77 L (g) Langdon v. Goole, 3 Lev. 21 ; (l) Denn v. Wilford, 8 Dow. & Ry. Lord Say & SeUs Case, 10 Mod. 46 ; 549. Dent V. Clayton, 33 L. J. Ch. 503. (?7i) Doe v. Godwin, 4 M. & S. 265. See Young v. Smith, 1 Eq. 183. Though it was plain there was a (h) De la Touclie's Settlement, 10 mistakesomewhere, it was not certain E(]. 603. whether it was in the insertion of MUTUAL MISTAKE. 495 Upon this principle, where an obvious mistake appears in Chap. i. applying the contract to the facts, the instrument will be con- strued and applied according to the manifest intention of the parties (n) ; as where an agreement dated 24th October, referred to a bill of exchange " payable at three months from this date," and it appeared that the only bill applicable was dated 25th October, it was held that the bill was sufficiently identified and referred to (o). So where a lease was executed for a terra stated in the habeyidum to be for ninety-four years, and the reddendum stated the rent to be payable " during the said term of ninety-one years hereby demised," and the counterpart of the lease stated the term in the habendum to be ninety-one years ; the Court construed the documents toarether as intendinsf a lease" for ninety-one years only, so as to entitle the lessor to recover possession against an assignee of the lessee, who claimed to hold under the lease for a term of ninety-one years (l). So, also, in construing an Act of Parliament, a word that makes a passage unintelligible may be altogether struck out (q). The defence that the contract sought to be enforced is not in ^° specific per- . •11 formance of an conformity with the real agreement between the parties, but agreement incor- has been drawn up incorrectly by mistake, may be set up by except"n^erms. parol evidence in answer to an action for specific perform- ance (r). If the defendant can show that the instrument does not represent the real agreement between the parties, the plaintiff cannot have specific performance, unless he consent to the variation as set up by the defendant. If the plaintiff will not accept specific performance with the variation as set up and proved by the defendant, his action will be dismissed (s) ; and these words, or iu the omission of (?•) Joynes v. Statham, 3 Atk. 388 ; the subsequent covenants. Ih., 2)er Garrard v. Grinling, 2 Sw. 244; Bayley, J. Lord Gordon v. Marquis of Hertford, (n) Leake on Contracts, 329. 2 Madcl. 106. (o) IFaij V. Hearne, 13 C. B. N. S. (s) Joynes v. Statham, 3 Atk. 388 ; 292. Clarke v. Grant, 14 Ves. 519 ; Rams- ( p) Burchdl v. Clarke, 2 C. P. D. bottom v. Gosden, 1 V. & B. 165 ; 88. London and Birminqham Faihcay (q) Stone \. Yeovil, 1 C. P. D. 691. Co. v. JFinter, Cv. & Pli. 57 ; Martin 496 MUTUAL MISTAKE. Chap. I. Rectification of agreement on the ground of mistake. specific performance of the agreement, witli the variation proved, may be decreed at the instance of the defendant without a cross action (t). Althougli a defendant may show by parol that the written instrument does not represent the contract between the parties, a plaintiff cannot have a decree for specific performance of a written contract with a variation upoL parol evidence, for the Statute of Frauds is a bar to the relief (it). Parol evidence is admissible on the part of the party resisting specific performance, not to vary the terms of the agreement, but to show that it is unconscientious in the plaintiff to seek specific performance, without submitting to the variation set up and proved by the other (x). If parties enter into an agreement, but there is an error in the reduction of the agreement into writing, so that the written instrument fails through some mistake of the draftsman, either in matter of law (y) or of fact, to represent the real agreement of the parties, or omits or contains terms or stipulations contrary to the common intention of the parties, a court of equity will correct and reform the instrument, so as to make it conformable to the real intent of the parties (z). So, also, if a conveyance, executed for the purpose of giving effect to and executing an agreement, should by mistake give the purchaser less than the agreement entitled him to, he may call on the Court to rectify the defective conveyance, and give him all that the agreement comprehended (a). The principle upon which the Court acts v. Pycroft, 2 D. M. & G. 785 ; Fallon v. Robins, 16 Ir. Cli. 428 ; Smith v. J'Flieatcroft, 9 Ch. D. 223. (t) Fife V, Clayton, 13 Ves. 546. (tt) Woollam V. Hearn, 7 Ves. 211 ; Clinan v. Cooke, 1 Sch. & Lef. 22, 39 ; Squire v. Canvpbell, 1 M. & C. 459, 480, per Lord Cottenham Att.-Gen. v. Sitwell, 1 Y. & C. 559 Davies v. Fitton, 2 Dr. & War. 225 Manser v. Back, 6 Ha. 443, 447 TVilson V. Wilso7i, 5 H. L. 65, per Lord St. Leonards ; but see Fry on Specific Performance, 350 — 353. (:/■) Clov-es v. Hi(jginson, 1 V. & B. 524. (y) Wake v. Harrop, 1 H. & C. 202. (z) Beaumont v. Bramley, T. & R. 41 ; Ashhurst v. Mill, 7 Ha. 502 ; Murray v. Parker, 19 Beav. 308 ; Malmesbury v. Malmesbury, 31 Beav. 407 ; Scholefield v. Locktcood, 32 Beav. 436, 33 L. J. Ch. 106 ; Druiff v. Parker, 5 Eq. 137 ; De la Touche's Settlement, 10 Eq. 600 ; Cor/an v. Uuffield, 20 Eq. 789; Re Bird's Trust, 3 Ch. D. 214 ; Welman v. JFelman, 15 Ch. D. 570. (a) Monro v. Tniilor, 3 :\rac. & G. MUTUAL MISTAKE. 407 in correcting instruments, is, that the parties are to be placed Chap. I. in the same situation as they would have stood in, if the error to be corrected had not been committed. When a deed as drawn up goes beyond the instructions and intention of the parties, it will be rectified (h). The fact that a provision in- serted in a settlement (^.^., a restraint on anticipation of the income of the wife's property) is in itself usual, and is generally considered proper, is not a ground for the Court to refuse to strike it out where its insertion is shown to have been contrary to the desire of the parties and the instructions given by them (c). Relief upon a defective instrument is the more readily afforded, when the party to be charged thereon is him- self the person who prepared or perfected it (d). The fact, however, that the defective instrument may have been drawn up by the party seeking relief is immaterial, if a proper case be made out (e). It is, moreover, immaterial to the exercise of the jurisdiction that the instrument sought to be rectified was made under an order of the Court (/). A person, however, who seeks to rectify an instrument, on the ground of mistake, must be able to prove not only that there has been a mistake, but must be able to show exactly and precisely the form to which the deed ought to be brought, in order that h may be set right, according to what was really intended, and must be able to establish in the clearest and most satisfactory manner, that the alleged intention of the parties to which he desires to make it comformable, continued concurrently in the minds of all parties down to the time of its execution. The evidence must be such as to leave no fair and reasonable doubt upon the mind that the deed does not em- body the final intention of the parties (g). If, upon a personal 718 ; Lent-ii v. Hillas, 2 D. & J. 120, 218. 4 Jur. N. S. 1167 ; JFhite v. JVhite, (/) Smith v. lUffe, 20 Eq. 666. .. 15 Eq. 249. (g) Lord Toionshend v. Stanyroom, (b) IValker v. Ainastromj, 8 D. M. 6 Ves, 334 ; Beaumont v. Bramleij, & G. 544. T. & R. 41, 50 ; Marquis of Breadal- (c) Torre v. Torre, 1 Sm. &G. 518. bane v. Marquis of Cluindos, 2 M. & (d) Eximrte Wrvjht, 19 Ves. 257 ; C. 740 ; Rooke v. Lord Keiisingt'oi, 2 Collett V. Morrison, 9 Ha. 176. K. & J. 764 ; Fodder v. Foider, 4 D. (e) Ball v. Storie, 1 Sim. & St. & J. 265 ; Earl of Bradford v. Larl K K 498 MUTUAL MISTAKE. Chap. I. agreement for a life assurance, a policy be drawn by the insur- ' ~ ance office in a form which differs from the terms of the agree- ment, and varies the rights of the parties assured, equity will interfere and deal with the case on the footing of the agreement, and not on that of the policy {h). If it appear that there was a change of intention, by which the circumstance that the instru- ment does not follow the terms of the original contract might be explained, there can be no rectification (i) ; so also if it appear that the parties took different views of what was intended, there would be no contract between them which could be carried into effect by rectifying the instrument (A;). There can be no rectification, if the mistake be not mutual or common to all parties to the instrument (1), or if one of the parties knew of the mistake at the time he executed the deed. Where one party only has been under a mistake, while the other, without fraud, knew what the character of the deed was, and intended that it should be, the Court cannot interfere, for otherwise it would be forcing on the latter a contract he never entered into, or depriving him of a benefit he had bond fide acquired by an executed deed. Rectification can only be had where both parties have executed an instrument under a common mistake, and have done what neither of them in- tended (m). A mistake on one side may be a ground for rescinding, but not for correcting or rectifying an agree- ment {n). In a case where the plaintiff negotiated the terms of an insurance upon the life of a person with the agent of a company, but a mistake was made in drawing up the terms of the result- ing proposal, which was forwarded to the company ; and the of Bomney, 30 Beav. 431 ; Bentley v. & J. 753 ; Fowler v. Fowler, 4 D. & Mackay, 4 D. F. & J. 279 ; Sells v. J. 265 ;■ Sells v. Sells, 1 Dr. & Sm. Sells, 1 Dr. & Sm. 42 ; M'Kenzie v. 42 ; Re Walsh, 15 W. R 1117. Goulson, 8 Eq. 375. (m) Eato7i v. Bennett, 34 Beav. (h) Collett v. Morrison, 9 Ha. 162. 196 ; Fallon v. Robins, 16 Ir. Ch. (i) Marquis of Breadalhane v. Mar- 422. quis of Chamlos, 2 M. & C. 740. (n) Mortimer v. Shortall, 2 Dr. & (k) Bentley v. Mackay, 4 D. F. & War. 372 ; Fowler v. Fowler 4 D. & J. 279. J. 265 ; Re Walsh, 15 W. K. 1117. (l) Ixooke V. Lord Kensington, 2 K. MUTUAL MISTAKE. 491) proposal in the terms sent was accepted by the company, and ^^"^p- I- the policy was gi-anted accordingly ; and the person afterwards died under circumstances which, in consequence of the mistake, were not within the policy ; the Court refused to rectify the policy according to the intention of the insured, as there was no mistake on the part of the company in granting it (o). So, also, where an underwriter had executed a policy of insurance upon a cargo in general terms, it was held, upon an application by him to rectify the policy, that it was not competent for him to allege that the words " free of particular average," inserted in the slip, had been omitted by mistake in the policy, the insured denying that he intended or would have accepted a policy on such terras, and the slip being held to be a mere matter of preliminary negotiation, and that the policy was valid as it stood (oo). In a case where in a conveyance of land, a reservation of minerals to the vendor was inserted by a mistake, common to both parties, as the purchaser alleged, though denied by the vendor in his answer, who died before cross-examination, the Court, being of opinion that the mistake was, as the pur- chaser alleged, common to both parties, gave the representatives of the vendor the option to have the conveyance rectified, or to have the whole transaction set aside, and ordered that in the event of the purchaser not choosing to have the transaction set aside, the action should be dismissed without costs (j^). In Harris v. Pepperell (q), Lord Romilly, M.R., said that the rule that the Court will not rectify an instrument on the ground of mistake, except the mistake be mutual, is liable to an excep- tion in a case between vendor and purchaser. But the distinc- tion is not supported by the authorities, and does not seem sound. Garrard v. Frankel (r), and Harris v. Pepperell {s), were, there is no reason to doubt, correctly determined ; but the (o) Fowler v. Scottish Equitable mistakenly excluded. Insurance Co., 28 L. J. Cli. 225. (oo) M'Kenzie v. Voulson, 8 Eq. The Coart however set aside the 368. policy, and ordered a return of the {-p) Bloomer v. Spittle, 13 Eq. 428. premiums as having been paid by {q) 5 Eq. 1. mistake. This does not seem equit- (r) 30 Beav. 451. able, as tlie company had incurved (s) 5 Eq. 1. the risk in all other events than that R Iv 2 '00 MUTUAL MISTAKE, ^''''*P- J- principle upon which they are to be upheld is that the Court in these cases merely abstained from setting the agreement aside on the consent of the defendant to submit to the variation alleged by the plaintiff [t). In cases of rectification, properly so called, the Court does not put it to the defendant to submit to the variation alleged by the plaintiff, but makes the iustriiment conformable to the intent of the parties without any such offer or submission. Although, however, the Court will not rectify a transaction between two or more parties, unless on the ground of mutual mistake, a deed poll by way of appointment may be rectified on the ground of mistake, if the mistake is clearly proved on the part of the person making it (u). Parol evidence is admissible on the application to rectify an instrument to show what the intention of the parties really was (a;), even although the contract be one required by the Statute of Frauds to be proved by writing (?/). In most, if not in all, the cases in which the Court has reformed an instrument, there has been something beyond the parol evidence, such, for instance, as a rough draft of the agreement, written instructions for preparing it or the like, but the Court will act where the mistake is clearly established by parol evidence, even though there is nothing in writing to which the parol evidence may attach (z). If, however, there is not anything in writing beyond the parol evidence to go by, and the defendant by his answer denies the case set up by the plaintiff, the plaintiff will often be without a remedy, though even in such cases the parol evidence may be so conclusive as to justify the Court in granting the relief prayed (a). (t) See Bloomer v. Spittle, 13 Eq. Lackersteen,6 Jur. N. S. 1111. 429 ; Young v. Halahan, I. E. 9 Eq. {y) Re Boulter, 4 CIi. D. 241. 80. (z) Alexander v. Crosbic, LI. & G. (u) TFright v. Gof, 22 Beav. 214 ; 149 ; Mortimer v. Shortall, 2 Dr. & Wilkinson v. Nelson, 7 Jur. N, S. War. 373; Smith y. Iliffe, 20 Eq, 481 ; Killick v. Ch-ay, 46 L, T. N. S. 666 ; Hanley v. Pearson, 13 Ch. D. 583. 545 ; Welman v. Welman, 15 Ch. (x) Alexander v. Crosbie, LI. & G. D. 570 ; Cook v. Fearn, 48 L. J. Ch. temp. Sug. 145 ; Mortimer v. Shortall, 63 ; Edwards v. Biwjlutm, 28 W. R. 2 Dr. & War. 363 ; Barrow v. Bar- 89 ; Cordeavx v. Fidlerton, ib. 320. roi/', 18 Beav. 532; Lackersteen v. (n) Ih.; Beaimont v. Bramley,T. MUTUAL :\[TSTAKE. 501 A settlement may be rectified even against previous articles ___Cliap^ on the settlor's uncontradicted evidence of departure from the real intention, if no further evidence can be obtained (b). If the original acjreement is of doubtful construction, and the conveyance is definite and unequivocal, it is not easy to avoid the conclusion that the latter may be the best evidence of the terms of the actual agreement (c). Where a document has been signed as an agreement in a common mistake as to its contents, and it appears that no real agreement was come to between the parties according to which it might be rectified, the Court will set it aside (d). " Courts of equity," said James, L. J., in M'Kenzie v. Coulson{e), "do not rectify contracts ; they may and do rectify instruments pur- porting to have been made in pursuance of the terms of contracts. But it is always necessary for a plaintiff to show that there was an actual concluded contract antecedent to the instru- ment which is sought to be rectified, and that such contract is inaccurately represented in the instrument. It is impossible for the Court to rescind or alter a contract with reference to the terms of the negotiation which preceded it." There can be no rectification, if one of the contracting parties never heard of that which is said to be the real agreement (/). Where the instrument sought to be rectified on the ground of mistake was a marriage settlement the doctrine in the older cases was that where the articles and settlement were both before marriage, the Court would not interfere unless the settle- ment was expressed to be made in pursuance of the articles, for, without such a recital, the Court supposed that the parties had altered their intentions as regarded the terms of the contract ((/). & R 52 ; Fowler v. Foider, 4 D. & Jr. 210 ; Price v. Let/, 4 Gift". 235, J. 273 ; Bentley v. Maclcay, 4 D. F. atf. 11 W. R. 475 ; Foivler v. Scottish & J. 279 ; De la Touche's Settlement, Equitable Life Assurance Society, 28 10 Eq. 600 ; Bloomer v. Spittle, 13 L. J. Ch. 228. E(i. 430 ; M'Cormack v. M'Cormack, (e) 8 Eq. 375. 1 L.R. I. 124. (/) Fowler v. Scottish Equitable (b) Smith V. Iliffe, 20 Ec^. 666 ; Life Assurance Society, 28 L, J. Ch. Hanley v. Pearson, 13 Ch. D. 545. 228. (c) Hnmphries v. Home, 3 Ha. ((/) Bold v. Hutchinson, 5 D. M. & 277. G. 566. {(I) Calcerky v. •JFilliams, 1 Ves. 502 MUTUAL MISTAKE. Chap. I. The later authorities, however, dispense with the necessity of a reference to previous articles in the settlement (h). Where a settlement purports to be in pursuance of articles entered into before marriage, and there is any variance, then no evidence is necessary to have the settlement corrected ; and although the settlement contains no reference to the articles, yet if it can be shown that the settlement was intended to be in conformity with the articles, and there is clear and satisfactory evidence, showing that the discrepancy had arisen from a mistake, the Court will reform the settlement, and make it conformable to the real intention of the parties (i). Though the limitations in a post-nuptial settlement purport- ing to be made in pursuance of articles may agree with the Avords of the articles, if it does not carry out their intent, the Court will reform it, and will, so far as is consistent with the articles, construe them so as to make such a settlement as is generally approved by the Court, and will supplement the articles accordingly (k). Where shares have not been registered in accordance with sect. 25 of the Companies Act, 1867, and the mistake is common to the directors and the allottee, the Court will rectify the instrument when it is for the common benefit of the parties that the mistake should be rectified, whether it be a mistake in law or in fact (L). So, also, where a transfer of certain shares was executed in which the shares were wrongly numbered by mistake, it was held that the transfer was substantially valid so as to render the transferee a shareholder, and that the numbers might afterwards be rectified ('»i). So, also, where a man purchased land of a building society under an airangemeut that he should mortgage it to the society to secure the purchase- money, but the deeds were drawn and executed in mistake as representing an advance of money to a member with covenants {h) Bold V. Hutchinson, 5 D. M. & 16 ; Re Nexo Zealand Co., ib. 17 n. G. 566. The directors have power under (i)lh. 568 ; Kinijv. King- Harman, similar circumstances to rectify the I. R. 7 Eq. 447. instrument. Hartley's Case, 10 Ch. (k) Cogan v. Duffield, 2 Ch. D. 49. 157. (/) Re Denton Colliery Co., 18 Eq. (m) Ind's Case, 7 Ch. 485. MUTUAL MISTAKE. 503 to make all payments in respect of his shares," it was held on ^^^P- ^- the liquidation of the society that he could not be charged as a member under the deeds, but must be charged according to the real transaction (n). So, where a bill of exchange drawn in renewal of a former bill between an indorser, drawer, and indorsee had by mistake the name of the indorsee inserted in the place of the drawer, in which form the bill was accepted and indorsed to him, and in an action by the intended indorsee against the drawer, the latter relied in defence upon the apparent form of the bill, the Court entertained a bill for rectifying the instrument (o). So, also, where an agreement was made for the insurance of a ship beginning the risk at and froTn a named port, and the policy was by mistake drawn out for the risk/j-owi the port only, the policy was corrected so as to entitle the assured to recover for a loss at the port ( 2>). So, under an open policy of assur- ance upon goods to be declared as shipped in order of shipment, it was held that the insured might, according to the usage of merchants and underwriters, correct a mistake in the order of declaring the shipments after a loss had become known, so as to bring the goods within the insurance according to the true order {q). In some cases where the fact of the mistake can be fairly Rectification in cei-tain cases, implied from the nature of the transaction, relief will be given though mistake although the fact of the mistake is not established by direct ^ygg^g^j^^pg"^ evidence. Thus, in cases where there has been a joint loan of money to two or more obligors, and they are by the instrument made jointly liable, but not jointly and severally, the Court has reformed the instrument and made the obligation joint and several so as to charge the estate of a deceased obligor, upon the reasonable presumption from the nature of the transaction that it was so intended by the parties (r). The debt being (w) Empson's Case, 9 Eq. 597. 31, 32 ; Bishoi) v. Church, 2 Yes. (o) Druiffv. Parker, 5 Ec|. 131. 100, 371 ; Thomas v. Frazer, 3 Ves. {p) Motteiix V.London Assurance 399; Underhill v. Hortcood, 10 Yes. Co., 1 Atk. 545. 227 ; Devaynes v. Noble, Sl'eech's (q) Stephens v. Australasian In- Crtsc, 1 Mer. 564 ; Thorpe v. Jackson, surance Co., L. R 8 C. P. 18. 2 Y. & C. 553. (r) Sini2}Soii v. Vaughan, 2 Atk. 504 MUTUAL MISTAKE. Chap. I. joint, the natural if not tlie irresistible inference in such cases is that it is intended by all parties that in every event the responsibility should attach to each obligor and to all equally. This can be done only by making the bond several as well as joint ; for otherwise, in case of the death of one of the obligors, the survivor or survivors only would be liable at law for the debt (s). Indeed, it is now well established, as a general principle, that every contract for a joint loan is in equity to be deemed, as to the parties borrowing, a joint and several contract, whether the transaction be of a mercantile nature or not ; for in every such case it may fairly be presumed to be the intention of the parties that the creditor should have the several as well as the joint security of all the borrowers for the payment of the debt (t). Hence, if one of the borrowers should die, the creditor has a right to proceed for immediate relief out of the assets of the deceased party, without claiming any relief against the surviving joint contractors, and without showing that the latter are unable to pay by reason of their insolvency (u). But where the inference of a joint original debt or liability is repelled a court of equity will not interfere ; for in such a case there is no ground to presume a mistake. The doctrine has been thus stated by Sir W. Grant in Sumner v. Poiuell (x) : " Where the obligation exists only in virtue of a covenant, its extent can be measured only by the words in which it is con- ceived. A partnership debt has been treated in equity as the several debt of each partner, although at law it is only the joint debt of all. But then all the partners have had a benefit from the money or the credit given ; and the obligation of all to pay exists independently of any instrument by which the debt may have been secured. So, where a joint bond has in equity been considered as several, there has been a credit previously given to the different persons who have entered into the obligation. It is not the bond that first created the liability." It is upon the same ground that a court of equity will not (s) Gray v. Chmrdl, 9 Ves. 118; {u) lb. ; IFilliam-'iOHX. Henderson, Ex parte Kendall, 17 Ves. 525. 1 M. & K. 582. (0 Thorpe v. Jackson, 2 Y. & C. (x) 2 Mer. 36. 553. MUTUAL MISTAKE. 505 reform a joint bond against a mere surety, so as to make it Chap. I. several against bira upon the presumption of a mistake from the nature of the transaction, but it will require positive proof of an express agreement by him that it should be several as well as joint {y). So, where an obligee of a joint and several bond elected to take a judgment against all the obligors, and thus at law lost his right of a several remedy, a court of equity refused him a remedy against the personal assets of a deceased obligor, who was only a surety {z). So, also, in cases where the obligation or covenant is purely matter of arbitrary convention, not growing out of any antecedent liability in all or any of the obligors or covenantors to do what they have undertaken (as, for example, a bond or covenant of indemnity for the acts or debts of third persons), a court of equity will not by implication extend the responsibility from that of a joint to a joint and several undertaking ('=tp- ^- a mistake of fact of either party to which the other party is accessory, although such mistake may have been innocently brought about by the other party (l). Where accordingly a resettlement of family estates was made by the father, tenant for life, and the son, tenant in tail in remainder, upon the sup- position that a charge for portions was within the power of the father to appoint or release, and not, as was the fact, a subsist- ing charge, it was set aside as being founded on a mistake (m). The instrument of contract may be correctly expressed ac- Mistake as to J. , . • ^ 1 1 1 1 application of cordmg to the intention oi each party, and yet there may be no contract. real agreement by reason of a mistake between them as to the application of the expression to the facts. This may arise from the generality or ambiguity of the expression, admitting of two different constructions or meanings as applied to the facts or from a certain expression applying equally to two different things (n). The expression of the contract may be sufficiently general or ambiguous to admit of different applications, and may be ac- cepted by each party with a different application unknown to the other. In this case the written contract must be construed and applied, if po.ssible, according to its terms, but it is open to either party to show his application of the contract so far as is consistent with the terms used, and if no reasonably certain construction can be adopted in the application to the facts, the contract would be void in law by reason of the uncertainty and impossibility of executing it (o). Thus, where the particulars of a sale by auction were ambiguous as to including or excluding timber, and the vendor and purchaser accepted them with a different meaning ; it was held that specific performance could not be decreed upon either construction (p). So where upon the sale of a reversion of an undivided moiety of an estate, the V. Neale, 1 Keen, 672 ; JVesiby v. (m) lb. Westhij, 2 Dr. & War. 502 ; Stewart (n) Leake on Contracts, 329. V. Stewart, 6 CI. & Fin. 911 ; Persse (o) lb. 330. V. Per sse, I CI. &V in. 279 ; Williams (j)) Higcjinson v. Clowes, \b Ves. V. Williams, 2 Dr. «& Sm. 378. 516 ; Clowes v. Higcjinson, 1 V. «& 13. {I) Fane v. Fane, 20 Eq. 706. 524. 51 C MUTUAL MISTAKE. Chap. I. rent was stated upon the particulars of sale- to be at a certain sum, leaving it ambiguous whether the half or the whole of the stated rent was the subject of sale, a bill for specific perform- ance charging the contract as for a purchase of half the rent mentioned, was dismissed upon the ground that the purchaser was induced by the particulars to believe that he purchased the whole rent (q). So, also, where the terms of a contract were ambiguous and something different from what was claimed by the purchaser was intended to be sold by the vendor, the Court would not at the suit of the purchaser, compel the vendor specifically to con- vey property not intended or believed by him to be included in the contract, though the vendor was the author of the am- biguity (r). If, in the- application of the contract to the facts and circum- stances, it appears that a thing or matter referred to is suffi- ciently identified, but with some inaccurate description or addition, the latter may be rejected or corrected in the applica- tion as expressed in the maxim falsa demonstratio non voeet (s). Thus, where a tenant contracted to transfer his tenancy in certain premises, describing them as the premises he then occupied, and known by a certain name, and it appeared that he occupied a part only of the premises known by that name ; it was held upon a construction of the contract as applied to the facts that the premises occupied were the essential de- scription, and were alone included in the contract (t). So, also, where an insurance is effected upon a ship, or upon goods on board a ship, if the subject of insurance be sufficiently identified, a mere misnomer of the ship would be immaterial (u). A mistake in the application of the instrument of contract may arise from some expression therein sufficiently certain in itself, applying equally to two different things, one of which was (q) Swaisland v. Dcarsley, 29 Beav. (t) Magee v. Lavell, L, R. 9 C. P. 430. 107. (r) Neap v. Ahhott, C. P. C. 333 ; (u) Le Mesurier v. Vaughan, 6 Manser v. Back, 6 Ha. 443 ; Baxen- East, 382 ; lonides v. Pacific Insu- dale V. Sealo, 19 Beav. 601. rancc Co., L. R. 7 Q. B. 517. (s) Leake on Contracts, 330. MUTUAL MISTAKE. 517 intended by one party and the other by the otlier (x). This is CL-'^P- I- called a latent ambiguity, and extrinsic evidence is admissible to prove the intention of the parties (y), and if it appear that each party mistook the meaning of the other, and that they intended different things by the same expression, the contract is void on account of the absence of a consensus ad idem, for each party was assenting to a different contract, notwithstanding the apparent mutual consent (s). In Thornton v. Kempster {a), the sale was of ten tons of sound merchantable hemp, but it was intended by the vendor to sell Petersburg hemp, and by the buyer to purchase Riga hemp. The broker had made a mistake in describing the hemp to the buyer, and the Court held that there had been no contract what- ever, the assent of the parties not having really existed as to the same subject-matter of sale. So, also in Rajjies v. Wickelhaus (&), where A. and B. contracted for the sale of the cargo to arrive " j^er ship Peerless from Bombay," and it appeared that there were two ships of that name then arriving from Bombay, and that A. meant one ship and B. the other, it was held that there was no contract. So when the master of a ship having chartered it to a broker, who again chartered it in his own name, the latter placed a cargo on board for which the master signed bills of lading for delivery, "paying freight for the said goods, as ^^ei' charter party," and the cargo was delivered and the shipper paid his charterer before either party had any notice or knowledge of the other charter ; it was held that the master could not recover freight upon the bill of lading* because that document being equally applicable to either charter- party, there was in fact no agreement or contract between them, and it was further held that there could be no implied contract with the master to pay a reasonable freight for the carriage of the cargo because it was shipped in fulfilment of a contract expressly exclusive of such intention (c). " It appears," said (y) Leiike on Contracts, 331. Ch. 333. (y) Smith v. Jeffnjes, 15 M. & \V. (a) 5 Taunt. 786. 562, per- Alderson, B. (h) 2 H. & C. 906. (a) Smith v. Hughes, L. R. 6 Q. B. (c) Smidt v. Ti(kn, L. R. 9 Q. B. 597 ; Marshall v. JJerridcje, 51 L. J- 446. 518 MUTUAL MISTAKE. Chap. I. the Court (cZ), "that each of the parties acted under a mistake. The master supposed that the bill of lading which he signed referred to his charter-party ; the defendants supposed that it referred to the charter-party which they had made. Each of them was ignorant of what was in the mind of the other ; each acted in good faith, and neither of them did anything calculated to or which did in any way mislead the other. Under these circumstances, the bill of lading being ambiguous and equally capable of being applied to the one charter-party as to the other, we cannot hold it to be a contract or evidence of a con- tract between the parties. It does not express that which was common to both minds, and therefore it is not binding upon the parties." But one of the parties to an apparent contract may by his own fault be precluded from setting up that he entered into it in a different sense to that in which it was understood by the other. Thus, in the case of a sale by sample where the vendor exhibited by mistake a wrong sample, it was held that the con- tract was not avoided by this error of the vendor (e). But if the purchaser be aware that the vendor was under a mistake as to the sample he was offering, the vendor would be entitled to show that be had not intended to enter into the contract by which the purchaser sought to bind him (/). "If, therefore," said Mr. Justice Hannen (g), "the plaintiff knew that the defendant in dealing with him for oats did so on the assumption that the plaintiff was contracting to sell him old oats, he was aware that he apprehended the contract in a different sense to tliat in which he meant it, and he is thereby deprived of the right to insist that the defendant shall be bound by that which was only the apparent and not the real bargain." >» Care must be taken not to confound a common mis- take as to the subject-matter of sale or the price or the terms which prevent the sale from ever coming into exist- ence by reason of the absence of a consensus ad idem, with a mistake made by one of the parties as to a collateral fact (fZ) lb., 449. (/) Smith v. Hw/hes, L. R. 6 (e) Scott V. Littledcdc, 8 E. & B. Q. B. 607. 815. (y) lb., 610. MUTUAL MISTAKE. 519 or what maybe termed a mistake in motive. If the buyer pur- Chap. I. chases the very article at the very price and on the very terms intended by him and by the vendor, the sale is complete by mutual assent, even though the buyer or the seller may be totally mistaken in the motive which induced the assent (/i). If, for example, a nmn buy a horse withouc a waiTanty, believing him to be sound, and the horse turns out unsound, it is not open to him to say that as he had intended to buy a sound horse and the seller to sell an unsound one, the contract is void because the seller must have known from the price the buyer was willing to give, or, from his general habits as a buyer of horses, that he thought the horse was sound. So, also, if a trtdner of horses agree to buy a particular parcel of oats, believing them to be old oats, and therefore suitable for his purpose, new oats being unsuitable, but omits to make their age a condition of the con- tract, the sale is good although the oats are new and unsuitable for the purpose of the buyer (i). " All that can be said," said Chief Justice Cockburn (j), " is that the two minds were not ad idem as to the age of the oats. They certainly were ad idem as to the sale and purchase of them." Where one of the parties to a contract having partial in- Specific perform- , , , . . , . , „ , -11 1 ■ ^nce with com- terests, but believing himseli to be entitled to the entirety, pensation in enters into a contract with a purchaser to sell the estate in its '^'^^^ "^'^** ®" entirety, it is not competent to him afterwards to say that be- cause the purchaser cannot have the estate in its entirety, he is not entitled to such an interest as the vendor can give. The vendor is bound by the assertion in his contract, and if the pur- chaser chooses to take as much as the vendor can give a title to, he is entitled to have specific performance of as much as the vendor can give a title to, with an abatement or compensation for the deficiency (/o). Mistake is not an answer to an action for specific performance when the mistake is not as to the essential terms of a contract, but is a mistake as to the quantity of acres of land comprised (h) Benjamin on Sale, 58. (k) Mortlock v. Bnller, 10 Ves. (i) Smith V. Hwjhes, L. R. 6 Q. 315 ; Burroiv v. Scammell, 19 Ch. B. 597. D. 175. (j ) lb., 600. 520 MISTAKE OF FACT. Chap. I. in a contract. In such a case the mistake is a proper suLject for compensation (I). Where accordingly the plaintiff offered to take a lease of a farm belonging to the defendant at a rent of 600?. per annum, specifying in his tender the closes which he wished to take with their acreage, amounting in the whole to 249 acres, and defendant's agent, who had in fact let one of the closes to another person and desired only to let 214 acres with the farm, accepted plaintiff's offer ; it was held that the defendant must grant the plaintiff a lease of 214 acres at a rent reduced in proportion (ni). Money paid Moncy paid voluntarily under mistake of fact is recoverable o" fiut!"'**'^ ^ hoth at law and in equity where it is against justice and con- science that the receiver should retain it (n). It is not suffi- cient to preclude a man from recovering money paid by him under a mistake of fact that he had the means of knowledge of the fact, or that he has been careless in omitting to use due diligence to inquire into the fact (o). Money, indeed, paid under a bond fide forgetfulness of facts which disentitled the receiver to receive it, may be recovered back (p). If, however, money is iutentionally paid without reference to the truth or falsehood of the fact, the party paying meaning to waive all enquiry into it, and that the person receiving it shall have the money at all events, whether the fact be true or false, the latter is entitled to retain it (2^2)). Money paid in ignorance of the facts is recoverable, provided there has been no laches in the party paying. There may be cases where on account of the mutual relation between the parties, the party paying the money, though under mistake of fact, is by breach of duty disentitled from recovering (q). Thus, a banker who paid money on a forged cheque and had not, as bankers are bound to do, given notice of the forgery of the (l) M'Kenzie v. HesJceth, 7 Ch. D. Toinisend v. Crovdy, 8 C. B. N. S. 680. 494. (m) lb. (p) Kelly v. iiolari, 9 M. & W. (ft) Kelhj V. Solari, 9 M. & W. 54. ^4 ; Freeman v. Jeffries, L. E. 4 {pp) Ih., per Lord Wensleydale. Exch. 198 ; Kendal v. Wood, ib., 6 {q) Durrani v. Ecclesiastical Com- Exch. 252. missioners, C Q. B. D. 235. (';) Kelhj V. Solari, 9 M. & W. 54 ; MISTAKE OF FACT. 521 cheque, was held not entitled to recover the money back (r). Chap. I. But if there is no duty cast on the party paying money which makes his delay in discovering the mistake laches on his part, he may recover back money paid by him imder mistake of fact (s). In a case accordingly where the plaintiff by mistake paid to defendants who were owners of the tithes of a parish tithe rent- charge in respect of lands not in his occupation, and did not discover the mistake until the two years limited by G & 7 Will. IV., c. 71, for the recovery of a rent-charge had expired and the defendants had lost their remedy for their arrears against the lands actually chargeable ; it was held that he might re- cover the money paid by him in mistake from the defendants, inasmuch as there was no duty cast on him in relation to the defendants which made his delay in discovering the mistake laches on his part (t). Where money has been paid to an agent under a mistake of fact and the agent has either paid it over or settled his account with his principal and is guilty of no fraud in the matter, he is not liable to refund the money. Recourse must be had to the principal (u). The principle that money paid under mistake of fact may be recovered back does not apply where the mistake was not made by the person who paid the money, but by another person on whose mistake he thought fit to act (x). In cases in which the party receiving the money may have been ignorant of the mistake of the party paying it, a demand should be made before bringing an action to recover it (y). In cases of fraud, however, the instant that money is paid under a misrepresentation of fact the right of action accrues (z). Where accounts are impeached and it is shown that they con- En-oi-s in accounts. (?•) Cocks V. Mastennan, 9 B. & C. 405. 902. (f) Moss V. Mersey Docks, cC-c, Co. (s) Durrant v. Ecclesiastical Com- 20 W. R. 700. missioiiers, 6 Q. B. D. 235. (y) Kelly v. Solan, 9 M. & W. 58, (t) lb. iJtr Lord Weusleydale ; Freeman v. (tt) Holland v. Russell, 1 B. & S. Jeffries, L. R. 4. Excli. 198. 432, 4 B. & S. 14. See Shand v. (z) Pope v. Wray,4M. ScW. 453 ; Grant, 15 C. B.N. S. 325; comp. ^x/' Lord "Weusleydale. Nevxdl V. Tomlinson, L. R. 6 C P. 522 MISTAKE. ChapJL^ tain eiTors of considerable extent, both in number and ira- Opening portance, the Court will order such accounts, though extendincr accounts. i • i p i over a long period of jears, to be opened, and will not merely give liberty to surcharge and falsify. If a fiduciary relation exists between the parties, the Court will make a similar order, if such accounts are shown to contain a less number of errors (a). A single important error in an account is sufficient to entitle the Court to open an account if it thinks fit to do so (6). But where a single item is complained of and the accounts are of some years' standing, the Court will not, as a general rule, except in the case of fraud, order the whole ac- count to be opened, but will order that the plaintiff be at liberty to surcharge and falsify (c). Errors rhscoyered ^g ^ sfeneral rule a purchaser, after the conveyance is executed after execution ° '■ ' "^ of conveyance, by all necessary parties, has no remedy in respect of any defect either in the title to or quantity or quality of the estate which are not covered by the vendor's covenants (d). In the case of Legye v. Croker (e) it was held that no compensation could be granted in a case where a lease had been deliberately executed making no mention of a right of way over the premises, though there was such a right of way and though the lessor had more than once represented to the lessee that there was no such right of uay, and though the heads of the intended agreement be- tween the parties, including the statement that there was no such right of way, had been reduced to writing, but not signed by the parties before the lease was prepared. So also in Brett V. Clowser (/), the Court held that a purchaser was not entitled to compensation after the completion of the purchase for the absence of a right of way which the auctioneer at the sale honestly, but under a mistake, represented to belong to the premises. (((,) Williamson v. Barbour, 9 Ch. 650. D. 529. {d) Clare v. Lamb, L. E. 10 C. P. (b) Coleman v. Metier sh, 2 Mac. & 335 ; Allen v. Eicliardson, 13 Ch. D. G. 309 ; Pritt v. Clay, 6 Beav. 503. 524. (c) Allfrey v. Allfrey, 1 Mac. & G. (e) 1 Ba. & Be. 506. 87 ; Gelhiyirj v. Kcifjhley, 9 Gh. D. (/) 5 C. P. D. 388. MISTAKE. 523 But whore in an agreement for the sale of land the conditions ^h^P- I- of sale provide that if any error or misstatement should be found in the particulars of sale, it sliould not annul the sale, but that compensation should be made in respect thereof, an error although not discovered until after the completion of the conveyance, is a proper subject cf compensation within the meaning of the condition. If no distinction is made in the conditions of sale between an error or mistake discovered before and one discovered after the execution of the conveyance, it will not be imported into the contract (g). In a case where leasehold premises were sold by the executors of a deceased husband under a mistake that the property belonged to him, whereas it belonged to the wife, and the con- veyance was completed, the property being afterwards re- covered by the widow, it was held that the purchaser could not recover the purchase-monies as upon a failure of considera- tion (h). " Here," it was said (hh), " the plaintiff is calling on the vendors to refund money which they honestly believed themselves to be entitled to at the time they received it" (?'). The application for relief on the ground of mistake must be Frinciples on made with due diligence (k). In cases of mistake, as in cases hiterposes^on of fraud, time runs from the discovery (I). t^^ ground of ' -^ ^ ' mistake. Where there has been some common mistake as to some essential fact, forming an inducement to the contract, whether it be a mistake as to the subject-matter of the contract, or the price, or the terms, that is, where the circumstances justify the inference that no contract would have been made if the whole truth had been known to the parties, the contract is voidable at the election of either of the parties. If either party has per- formed his part of the contract during the contiiuiance of the ((/) Bos V. Helsham, L. R. 2 Exch. (k) Beaumont v. Bramley, T. & R. 76 ; Re Turner £■ Skelton, 13 Cli. D. 43 ; Denys v. SlmcJcbunjh, 4 Y. & C. 130 ; Phelps v. IFhite, 7 L. R. I. 53 ; Stone v. Godfrey, 5 D. M. & G. 160 ; co)itra Manson v. Tliacker, 7 76 ; Bentley v. Mackay, 31 Bear. Ch. D. 623. 143, 4 D. F. & J. 279, supra, p. 339 (/() Clare v. Lamb, L. R. 10 C. P. d seq. ; Grijrncs v. Sanders, 3 Otto 340. (Amer.) 62. (hh) lb. (l) Brookshnnk v. Smith, 2 Y. & (i) Supra, p. 520. C. 60, supra, p. 345. 524 MISTAKE. Chap. I. mistake, he may set aside the contract on discovering the truth, unless he has done something to render it impossible for him to restore the other party to the condition in which he was before the contract was made (m). Transactions, although impeachable on the ground of mistake, are nevertheless subject to all real and just equities between the parties. The Court will not set aside a transaction without restoring the party against whom it interferes, as far as possible, to that which shall be a just situation with reference to the rights which he had antecedently to the transaction {n). If the Court sees that it can restore the parties to their former con- dition, or place them in the same situation in which they would have stood but for the mistake, without interfering with any new right acquired by others, on the faith of the altered con- dition of tlie legal rights, the jurisdiction will be exercised (o). The Court will not, however, relieve against a mistake, unless it is fully satisfied that it can make ample compensation (p). If the Court sees that the parties cannot be restored to that which shall be a just situation with reference to the rights which they had antecedently to the transaction, or that the mistake cannot be corrected without breaking in upon, or atfecting the rights of innocent parties, who were not aware of the existence of the mistake, when their rights accrued, relief cannot be given (q). But if a good case be made out, the Court will not hold its hand merely because on account of cir- cumstances which have intervened, it may be difficult to restore (m) Cox V. Prentice, 3 M. & S. 344 Blackburn v. Smith, 2 Exch. 783 Strickland v. Turner, 7 Exch. 208 CUtrJce V. Dickson, E. B. & E. 148 (^)) Macalpine v. Sioift, 1 Ba, & Be. 293 ; Dacre v. Gorges, 2 Sim. & St. 454, supra, p. 372. {q) Maiden v. Menill, 2 Atk. 8 ; Freeman v. Jeffries, L E. 4 Exch. Clifton v. Cockhurn, 3 M. & K. 76 ; jr)5_ Blackie v. Clarke, 15 Beav. 595 ; Re (n) Supra, p. 367. Saxon Life Insurance Co., 2 J. & H. (o) M' Alpine v. Swift, 1 Ba. & Be. 408 ; Bateman v. Boynton, 1 Ch. 293 ; Dacre v. Gorges, 2 Sim. & St. 359 ; Fowler's Case, 14 Eq. 316 ; 454. See Millar v. Craig, 6 Beav. snpra, pp. 367, 369, 370. Comp. 433; Meadoimv. Meadoios, 16 Beav. Broughton v. Hutt, 3 D. & J. 501. 404; Scholfield v. Templcr, John, See,also, Domat. Liv. 1, tit. 18, s. 1, 165.' ^^'*- 13—17. MISTAKE. 525 the parties exactly to their original condition (r). It is enough ^'^=^p- ^- if the Court sees that it would not be difficult to adjust so as to place the parties in a position in which they would receive little or no prejudice from what has been done (s). As against bond fide purchasers for value without notice, no relief can be had in equity (t). But if lands shown to a purchaser are accepted in the conveyance under a name by which he did not know them, he may, by getting in an outstanding legal estate, hold them, even as against a subsequent purchaser for valuable consideration, and without notice (lo). If the subject matter of the transaction be real estate, and there has been a conveyance, a reconveyance will be ordered, if a case be made out for the interference of the Court (x). On setting aside a transaction on the ground of mistake, the Court may, with a view of putting the parties in the position in which they have an equity to stand, annex conditions to the decree. In a case, for example, where, by a mistake in drawing up an instrument, the rent named as payable upon the lease of premises was considerably less than the amount actually agTeed upon between the parties, and the mistake was known to one of the parties at the time of the execution of the instrument, but not to the other, the Court gave the lessee an election to continue in the tenancy, on consenting to pay the amount of rent, which ought to have been inserted in the instrument, or to abandon the lease, and pay for use and occupation during the period he had been in possession of the premises at the higher rate, being compensated for all repairs of a permanent cha- racter, but not for the expense of taking possession of the premises and establishing himself in business. It was also held that the lessor was responsible to refund the monies advanced to the lessee upon the security of the lease with costs ; the (?•) Earl Beauchamj} v. Winn, 6 Ab. 355. E. & I. App. Ca. 232. (x) Cox v. Bmton, 5 W. E. 544 ; (s) lb. Leaty v. Hillas, 2 D. & J. 120 ; (i) Maiden v. Menill, 2 Atk. 8 ; Malmesbury v. Mahneshury, 31 Beav. Warrick v. Warrick, 3 Atk. 293; 418: sup-a, p. 373. See as to terms supra, p. 349 et seq. of reconveyance, supra, iiji. 37:5, (u) Oxivick V. Brockett, 1 E(j[. Ca. 374, 375. 52G MISTAKE. ^^^P- ^- lessee being liable over to the lessor for repayment of the same, on the ground that, if the lease were rejected, the premises must stand as a security for the money so advanced ; and if the lease was accepted, it was primarily liable for the repayment of the same to the lessor {y). Acquiescence in what has been done will not be a bar to relief where the party alleged to have acquiesced has acted or abstained from acting through being ignorant that he possessed rights which would be available against that which he per- mitted to be enjoyed (z). A party to an apparent agreement which is void on the ground of mistake may assert the nullity of the transaction by way of defence, and may seek by counterclaim to have the instrument sued on set aside. If he has actually paid money as in performance of a supposed valid agreement, and in ignorance of the facts which exclude the validity of the agree- ment, he may recover back his money as having been paid without consideration. Where the defendant had induced the plaintiff to execute an agreement to take a lease at a certain rent under the represen- tation that that was the rent at which he held the same pre- mises of his landlord, whereas in fact he held at a lower rent ; upon a bill filed for the correction of the agreement and for specific performance by granting a lease at a lower rent ; it was held that although the plaintiff could not be compelled to take the lease at the rent stated in the agreement, he was not entitled to have one at the lower rent, because the defendant could not be charged with any other agreement than that executed (a). Measure of Upon a contract for the sale and purchase of real estate, if damages. ^\yQ vendor, without fraud, is incapable of making a good title, the proposing purchaser is not entitled to recover damages for the loss of his bargain. He can only recover the expenses he has incurred (6). To entitle a plaintiff, in an action for specific (?/) Garrard v. Frankel, 30 Beav. (a) Woollam v. Hearn, 7 Ves. 445. 211. (z) Earl Beauchamp v. JVinn, 6 E. (h) Bain v. Father gill, 7 E. & I. & I. App. Ca. 223, supyra, p. 333-335. App. Ca. 158. MISTAKE. 527 performance, to recover damages other than his expenses in ^'^'^P- ^- respect of a breach of contract by defendant, misrepresentation must be pleaded and established (c). In an action for taking coal from plaintiff's land, in the absence of any wilful wrong, or other circumstances warranting punitive damages, the true rule of damages is the value of the coal at the pit's mouth, less the cost of labour in severing it from the freehold and raising it to the pit's mouth (cZ). In an action for logs of wood cut and carried away in the mistaken belief that the defendant's employer was the owner, the measure of damages is the value in the woods whence they were taken, and not at the mill where they were carried to be sawed (e). Where an action is brought for specific performance, and specific performance is refused on the ground of mistake, the Court ought to give the same damages as would, under the old practice, have been given in an action at law (/). Courts of equity have iurisdiction on the "Tound of mistake Defective , "^ . , execution of to relieve against the defective execution of a power. If the powers, formalities required by a power are not strictly complied with, an appointment under the power is invalid at law, and the property which is the subject of the power will go as in default of appointment. In equity, however, if an intention to execute the power be .sufficiently declared, but, by reason of some in- formality, the act declaring the intention is not an execution of the power, the Court will, in favour of certain parties, aid the defective execution, by compelling the person seised of the legal estate to do that which was intended to be done (g). The supplying the surrender of a copyhold and the supplying the execution of a power which is defective in form go hand in hand. Wherever there is a decision that the Court will supply (c) Rock Portland Cement Co. v. (/) Tamiilin v. James, 15 Cli. D. Wilso7i, 31 W. E. 193. 220. (rf) Llynvi Co. v. Brocjden, 11 Eq. {(j) Chapman v, Gibson, 3 Bro. C. 188 ; Jegon v. Vifian, 6 Ch. 742. C. 229 ; Shannon v. Bradstreet, 1 (e) Tildcn v. Johnson, 36 Amer. Sch. & Lef. 63 ; Sayer v. fiaycr, 7 Rep. 769. Ha. 377. ')28 DEFECTIVE EXECUTION Chap. I. a surrender, it follows that the Court will also supply the defec- tive execution of a power (Ji). The powers to which the equity extends are those which have been created by way of use, as distinct from bare authorities con- ferred by law. Acts done under authorities of this latter kind, as for example leases or conveyances by a tenant in tail, are only binding, when regular and complete. The principle of the dis- tinction appears to be that powers limited by use are mere reservations out of the original ownership, constituting the donee a ^itasi-owner and the remainderman a ^'uasi-heir ; and, consequently, that in conformity with this hypothesis, the donee's contracts for value ought to bind the remainderman, and his meritorious intention, if unaltered, ought to have the same effect (i). The soundness of this equity has been ques- tioned by Sir William Grant, and its principle seems difficult to sustain. For the power given, though doubtless in some sense a modified ownership, does not confer an absolute right to dispose of the property, but a right to do so in a specific way; and the chance that the power may never be executed or that it may not be executed in the manner prescribed is an advantao-e given to the remainderman. If therefore his interest is to be regarded, it is difficult to see why he should be bound by any other than the prescribed act, for he is a stranger to any equity between the donee of the power and the party in whose favour it is intended to be executed. If, on the other hand, his interest is subordinate to the intention of the donee of the power, the intention of such donee ought to be sustained, whatever be the consideration on which it rests (k). Whatever opinion may, however, be entertained as to the orio-inal siunJness of the equity, there is no question that it is established by precedent, but it is confined to cases of execution formally defective, or of contract amounting to such defective execution (I). If there be no such execution or contract, the Court cannot interpose ; for unless where the power is in the (7i) Sayer v. Sayer, 7 Ha. 387 ; (k) Holmes v. Coghill, 7 Ves. 506, per Wigram, V.-C. ; Chapman v. 12 Ves. 206, Adams DoctEq. 99. aihmn, 3 Bro. C. C. 229. (0 Adams Doct. E-i. 100. {i) Adams Doct. Eq. 99. OF POWERS, 5-^ nature of a trust, tlic donee has his choice whether to execute ^^^^v- ^- it or not ; and if he does not execute or attempt to execute, there is no equity to execute it for him or to do that for him which he did not think fit to do himself (m). Nor can an exe- cution be aided in equity, if the defect be not formal, but in the substance of the power, for such aid would defeat the intention of the donor. If, for example, a tenant for life has power to lease with the consent of trustees or others, an agreement by the tenant for life alone to lease will not be aided {n). The only persons in whose favour equity will interpose to Persons in whose •^ ^ . „ 7 " favour the defec- supply the defect in the execution of a power are, a bona ^[yQ execution of fide purchaser for valuable consideration (o), a creditor (j)), a ^.J^^^'^"^ ^^''" ^^ charity (q), a wife or a legitimate child (r). To no other per- sons, except a wife and legitimate child, will the aid of the Court be gi-anted upon the ground of a meritorious consideration (.s). The equity does not extend to the case of a defective execution by a wife in favour of her husband (t) ; nor to a defective exe- cution in favour of a natural child, a father, mother, brother, sister, nephew, or cousin : d fortiori it does not extend to a volunteer (u). The character of purchaser, creditor, wife, or child, must be borne by the party claiming relief in relation to the donee of the power and not to the person creating the power (^r;). In Wilkinson v. Nelson (?/), a deed of appointment in favour of some of the objects of a power, was rectified by the insertion of a hotchpot clause, the Court being satisfied that the intention of the donee of the power was to produce equality, and that the clause had been omitted by mistake (z). (m) Toilet V. Toilet, 2 P. Wms. Mfdinn v. ^andham, 3 Sw. 686 ; 489. Prohy v. Landor, 28 Beav. 504. (n) Lawrenson v. Butler, 1 Sch. & {s) Moodie v. Reid, 1 Madd. 516. Lef. 13. (0 lb. (o) Hughes v. IVelh, 9 Ila. 769 ; (?0 Sug. Pow. 535, and cases AJfeck V. Afech, 3 Sin. & G. 394 ; cited. Sug. Pow. 533, 534. (x) Sug. Pow. 537. (2)) Chartered Bank of Australia (y) 7 Jur. N. S. 481. V. Lempriere, L. R. 4 P. C. 597. (;.) See Killick v. Gray, 46 L. T. (g) Innes v. Sayer, 7 Ha. 377. N. S. 583. (r) Ilervey v. Ilervey, 1 Atk. 567 ; 580 DEFECTIVE EXECUTION Chap. I. It is not sufficient in order to constitute a case entitling a Intention to party to relief in equity on the ground of the defective execu- power must tion of a powcr that there should be a mere intention on the appear. ^^^^.^ ^^ ^j^^ donee to execute the power, without some steps taken to give it a legal effect. Some steps must be taken or some acts must be done with this sole and definite intention, and such steps or acts must be properly referable to an intention to execute the power (a). A mere parol promise or agreement to execute the power is not sufficient (b). Nor is the mere expression of a wish contained in a memorandum sufficient (c). But if an intention to execute the power appear clearly by some paper or instrument in writing, equity will aid a defect which arises from the instrument itself being informal or inappro- priate (d) : as, for instance, where the donee of a power cove- nants (e), or merely enters into an agreement, not under seal, to execute the power (/), or when by his will he desires the remainderman to create the estate authorised by the power {g), or if he promises by letter to grant an estate which he could only do by the exercise of his power (h), or if having a power to appoint by an instrument sealed and delivered, he wrote and signed an unattested paper expressing his intention that a par- ticular child shall have the property which is the subject of the power (i), or where a woman having a power to appoint a fund by deed or will gives a letter charging the fund in favour of a purchaser for value (A;). In all these and the like cases equity will supply the defect. So also a recital by the donee of a power, in the marriage settlement of one of his daughters, who was one of the objects of the power, that she was entitled to a share of a sum to which she could only be entitled by his (a) Garth V. Townsend, 7 Eq. 223 ; C. C. 345 ; Sug. Pow. 550. Bruce V. Bruce, 11 Eci- 372. (g) Vernon v. Ver7ion, Amb. 3; (h) Carter v. Carter, Mose. 370 ; Sag. Pow. 550. Shannon v. Bradstreet, 1 Sell. & Lef. (h) Campbell v. Leach, Amb. 740 ; 72. Sug. Pow. 550. (c) Garth v. Tovmsernl, 7 Eq. 233. (i) Kennard v. Kennard, 8 Ch. (d) Sayer v. Saijer, 7 Ha. 377. 228. (e) Sug. Pow. 550. (k) Chartered Bank of A ustralia v. (/) Shannon v. Bradstreet, 1 Sch. Lewprierc, L. R. 4 P. C. 597. & Lef. 52 ; Dowell v. Dew, 1 Y. & C. OF POWERS. 531 appointment, has been held sufficient evidence of his intention Chap. I. to execute the power, so as to be aided in equity (/), and even an answer to a bill in chancery stating that the jJarty does appoint and intend by writing in due form to appoint will be an execution of the power for this purpose-(')H). So, also, if the power ought to be executed by deed, but it is executed by will, the defective execution will be supplied {n), if there is nothing in the instrument creating the power to mark the intention of the creator of the power beyond the fact that he has pointed to a deed as the mode of executing the power. But it is competent to a settlor to make the nature and character of the instrument by which the power he creates shall be executed of the essence of the power, without observing which no execution of his power shall be valid. Equity in such a case will not ui)hol(l an act which will defeat what the person creating the power has declared by expression or necessary implication to be a material part of his intention (o). The Court will supply the defect where there has been a defec- tive execution of a power by a formal or appropriate instrument: as, for instance, if a deed be required by the power to be exe- cuted in the presence of a certain number of witne.sses, and it be executed in the presence of a smaller number of witne.sses : or if it is required to be signed and scaled, and .sealing is omitted (jj). In wills not coming within the operation of the Wills Act, 1 Vict. c. 26, a defect in the execution of a power, consisting in the want of the number of witnesses recpiircd by the power, was supplied in equity (q). But the power to assist defective executions of appointments within the statute has ceased as to wills made on or after the 18th January, 1838. (l) JVilson V. Piggott, 2 Yen. Jr. 228. An appointment by deed is 3.51. See Poulson v. Welling, 2 P. now rendered valid in many cases, Wnis. 533. altliouL,'h not executed or attested (m) Carter \\ Carter, Mo.se. 365. Avitli all the solenuiities required by (?<) Toilet v. Toilet, 2 P. Wms. tlie instrument crealini,' the ]io\ver, 489 ; Smith v. Adkins, 14 Eq. 405. 22 & 23 Vict. c. 35, s. 12. (o) Cooper V. Martin, 'iCKbl. (q) IVilkie \. Holme.t, 1 Sch. & (p) Wade v. Paget, 1 Bro. C. C. Let. GO n. ; Lucena v. Lncena, 5 363 ; Cockerell v. Cholwdey, 1 H. & Beav. 249; Sug. Pow. 547. M. 424 ; Kennard v. Kennard, 8 Ch. M M 2 ;32 DEFECTIVE EXECUTION No relief so as to defeat inten- tion of author of ijower. Chap. I. The validity of an appointment by will, so far as regards execution and attestation, now wholly depends on the Statute Law (>•). The Court will also, in order to give eiTeet to the intention of the donee of the power for that purpose, aid the execution of a power not specially referred to, though such power was not present to the mind of the donee at the time of execution (s). Equity will m no case aid a defective execution of a power, if the intention of the person creating the power would be thereby defeated. Although a power will be aided, if it has been executed by a will, when it ought strictly to have been executed by deed (t), the case is otherwise, if a power, required to be exercised by will, has been executed by deed (»). The in- tention of a power to appoint by will being to reserve to the donee of the power a certain control over the estate, until the moment of the death of the donee, if the donee of such a power should execute an appointment or a conveyance of tlie estate by an absolute deed, it will be invalid, because such an appoint- ment or conveyance, if it avail to any purpose, must avail to the destruction of the power, since it would be no longer revocable, as a will would be. The distinction between this case and the case of a power executed by will, though required to be executed by deed, is marked and obvious. An act done not strictly according to the terms of the power, but consistent with its intent, may be upheld in equity. But an act which defeats the intention of the person creating the power, and determines the control over the property, which was meant to rest in the donee, is repugnant to it, and cannot be deemed in any just sense to be an execution of it (x). As against jj^ q\i cases, however, where the aid of the Court is sought for whom equity _ _ _ will aid a defec- the purposc of aiding the defective execution of a power, the tive execution. , , . , . « , , ^ • , • , party seekmg reliet must stand upon some equity superior to (r) Siig. Pow. p. 559. (s) Bruce v. Bruce, 11 Eq. 377. \t) Supra, p. 531. (u) Eeid V. SherrjoM, 10 A'es. 370, 380; Be Walsh's Trust, 1 L. R. I. 373. (x) lb. ; Sug. Pow. 560, 561. See, also, Cockerell v. Cholmeley, 1 E. & M. 424, 2 R. & M. 751 ; but see 22 & 23 Vict. c. 35, s. 13. OF POWERS. 533 that of the party against wliom he seeks it {y). Tlieve can be ^^^^P- ^- no relief, if the aid of the defective execution would be in- equitable to other parties, or if it is repelled by some counter- equity [z). As against a purchaser for valuable consideration without notice, equity will in no case aid the defective execution of a power {a). But as against a remainderman, who takes, although by purchase, subject to the power (b), and also in general as against an heir-at-law or customary heir (c), relief may be had against the defective execution of a poAver. Whether, however, equity will afford its aid as against an heir totally unprovided for, seems dou])tful upon the authorities {). And so, if the words of the bequest are plain, evidence of a different intention is inadmissible to establish a mistake (c) ; nor will a mistake be rectified, if it does not appear clearly what the testator would have done in the case, if there had been no mistake (tZ). But if the omission of some word or phrase is so palpable on the face of the will, that no difficulty occurs in pronouncing the testator to have used an expression which does not accurately convey his meaning, and it is not ■ only apparent that he has used the wrong word or phrase, but it is also apparent what is the right one, the Court will substitute the right one (e). Although the particulars which the testator has included in his description of the property, the subject of the gift, should be inaccurate, the gift will be upheld if there be enough of correspondence to afford the means of identifica- tion (/). If the property the subject of the gift be capable of being accurately identified, certain errors in the description will not vitiate the gift (g). The same considerations apply, when the particulars which the testator has included in his description of the object of the gift are inaccurate. If the devisee or legatee is so designated as to be distinguished from every other person, the inaptitude of some of the particulars introduced in the description is immaterial (/t). If there is a person to answer the name given in the will, it is immaterial that any further descrii^tion does not precisely apply (i).' A gift by will to a person described as the husband, or wife, or widow of another, is not in general affected by the fact of the devisee or legatee not actually answering the description, by reason of the invalidity of the supposed marriage, or by reason of the second marriage of the supposed widow or otherwise {h). And on the same principle (h) Holmes v. Custance, 12 Ves. (g) Door v. Geary, 1 Ves. 255 ; 27() Seliuood V. Mildmay, 3 Ves. 306 ; (c) Chamhcrs v. Minchin, 4 Ves. Jarm. on Wills, vol. 1, p. 423. g>7g (h) Jarm. on Wills, vol. 1, p. 428. (d) See Smith v. Maitland, 1 Ves. (i) Stunden v. Standen, 2 Ves. Jr. jj. 3g3_ 589 ; Del Mare v. Bohello, 3 Bro. C. (e) Taylor v. Eichardson, 2 Drew. C. 446 ; Holmes v. Custance, 12 Ves. 16 ; Ives v. Dodgson, 9 Eq. 401. 279. (J) Jarm. on Wills. ToL 1, p. 423. (k) Giles v. Giles, 1 Keen, 685, MISTAKE IN WILLS. '^^'■ a legacy to a person described as the testator's intended wife, ^^''^^^ ^' lias been held to be payable although the testator did not eventually marry her(Z). A different rule, however, prevails where a fraud has been practised on a testator, the know- ledge or discovery of which, there is reason to believe, would have destroyed or removed the motive for the gift. When, for example, a testatrix under a power of appointment be- queathed a legacy to a man wliom she described and with whom she lived as her husband, but the marriage was invalid on account of his having a wife at the time, which fact was not known to the testatrix, the bequest was held void (m). The question in all such cases is, whether the mistake of the testator has been induced by the fraud of the object of his intended bounty. Though it is clear that a legacy given to a person in a character which the legatee does not fill, and by the fraudu- lent assumption of which chai-acter the testator has been deceived, will not take effect ; yet, if the testator is not de- ceived, although a false character is in fact assumed, the legacy will be good. A fortiori it will be good, if both parties not only knew the actual facts, but are designedly parties to the assumption of the false character (n). A false reason, however, given for a legacy, is not alone a sufficient ground to avoid the act or bequest in equity. To have such an effect, it must be clear that no other motive mingled in the legacy, and that it constituted the substantial ground for the act or bequest (o). If the language of a will is either capable of more than one Parol evidence ill certain cases G92, 693 ; Rishton v. Cohb, 5 M. & nunque doli exceptio locum hahchit, C. 145 ; Be Petts, 27 Beav. 576. si prohetur, alias legaturum non (l) Schloss v. Stiebel, 6 Sim. 1. fuisse. Dig. lib. 35, tit. 1, leg. 72, § (m) Kennell v. Abbott, 4 Ves. 804 ; 6. The meaning of tliis passage is Ee Boddiwjton, 22 Cli. D. 602. that a false reason given for tlie (?i) Giles V. Giles, 1 Keen, 685, legacy is not of itself sufficient to 692, 693. destroy it. But tliere must be an (o) Kennell v. Abbott, 4 Ves. 802. exception of any fraud practised The civil law seems to have pro- from -wliich it may be presumed ceeded upon the same ground. The that the person gi^ang the legacy Digest says, Falsam causam legato would not, if that fraud had been non obesse verius est; quia ratio le- known to him, have given it. Kcn- gandi I lato non coJueret. Bed pU- nell v. Abbott, 4 Ves. 808, 542 MISTAKE IN WILLS. explain the will. Chap. I. meaning, or is incapable of any certain meaning, parol evidence admissible to Cannot be admitted to show what the testator intended to have expressed {])). The Court is not entitled to inquire into the intention of the testator apart from the language he has used(g'). Evidence of the declaration of the intention of a testator before the making of his will with respect to the disposition of his property, and also after the will was made as to the persons in whose favour he made it, cannot be admitted (r). It is only where the description of the person or thing intended is ap- plicable with legal certainty to each of several objects that extrinsic evidence, including proof of declarations of intention, is admissible to establish which of such objects was intended by the testator (s). But the Court has a right to ascertain all the facts which were known to the testator at the time he made his will, and thus to place itself in the testator's position in order to ascertain the bearing and application of the language which he uses, and in order to ascertain whether there exists any person or thing to which the whole description given in the will can be reasonably and with sufficient certainty applied {t). The Court in construing a will cannot shut its eyes to the state of facts under which the will was made (u). Where, accord- ingly, a testator has inaccurately or imperfectly described the thing meant to be given by his will, so as to make the inter- pretation of the words in their primary sense impossible, parol evidence is admissible to influence the construction of the will (x). The principle is exemiDlified in those cases in which a devise of land at a given place has been extended to property not strictly answering to the locality, because there is none which does precisely correspond to it (?/) ; or in which an {p) Wigram on Wills, 95. Pr. D. 217 ; Baxter v. Morgan, 7 L. {q) Re Eosax, 2 Pr. D. 68. R. I. 505. (r) Drake v. Drake, 8 H. L. 179 ; (if) Jarm. on Wills, vol. 1, p. 422. Charter v. Charter, 7 E. & I. App. (x) Fonnereau v. Poyntz, 1 Bro. C. Ca. 370. C. 472 ; Att.- Gen. v. Grotc, 3 Mer. (.s) DraJce v. Drake, 8 H. L. 179 ; 316 ; Colpoys v. Colpoys, Jac. 451 ; Cliarter v. Charter, 7 E. & I. App. Ca. Wigrani on Wills, 65. 370. {y) Doe V. lioherts, 1 B. & AM. (t) lb. 377, p«- Lord Cairns. See 407 ; Jarm. on Wills, vol. 1, p. 423. lie Eosaz, 2 Pr. D. 68 ; Be Brake, 6 MISTAKE IN WILLS. 54' apparently specific bequest of stock in the public funds has been ^■'^p- ^- held to authorise payment of the legacy out of the general personal estate, the testator having no such stock when he made the bequest (z). So also if the subject of devise is described by reference to some extrinsic fact, it is not merely competent but necessary to admit extrinsic evidence to ascertain the subject of devise (a). The same considerations apply when the description or terms employed by the testator are insufficient to determine the person intended by the testator. If the object of the testator's bounty, or the person meant by him, is described in terms which are applicable indifferently to more than one person, parol evidence is admissible to prove which of the persons so described was intended by the testator (6). So also if it appear that the name inserted in the will is not the correct name of any one in exist- ence, the Court may look at the circumstances surrounding the testator to ascertain who was meant b}' him(c). Before resorting to parol evidence to explain a latent ambi- guity, tbe Court should be satisfied that the ambiguity cannot be removed by the construction of the will itself, having regard to the circumstances surrounding the testator (r/). If the words of a will, aided by evidence of the material facts of the case, are insufficient to determine the meaning of the testator, evidence to prove the sense in which he intended to use them is, as a general proposition, inadmissible (e). Thus, evidence is inadmissible for the purpose of filling up a total blank in a will (/), or inserting a devise inadvertently omitted (z) Selivood V. Mildmay, 3 Ves. 436, and cases cited. 306 ; Jarm, on Wills, vol. 1, p. 42.3. (c) Re Murjihy, 7 L. R. I. 562. (a) Sanford v. Raikes, 1 Mer. 646, See Charter v. Charter, 7 E. & I. per Sir W. Grant ; Webh v. Byncj, 1 Apji. Ca. 382, jper Lord Cairns. K. k J. 580 ; Turquand v. Ricketts, (d) Healeij v. Healey, I. R. 9 Eq. 1 H. L. 472 ; Jennings v. Jennings, 418. 1 L. R. I. 562 ; Jarm. on Wills, vol. (e) Wigram on Wills, pp. 94, 98. 1, p. 426. (/) Baylis v. Att.-Gen., 2 Atk. (6) Grant v. Grant, L. R. 5 C. P. 239 ; Castlcdon v. Turner, 3 Atk. 727 ; Re Wulverton Mortgaged Estates, 257 ; Hunt v. Hort, 3 Bro. C. C. 7 Ch. D. 199 ; Baxter v. Morgan, 7 311 ; Taylor v. Richardson, 2 Drew. L. R. I. 501 ; Wi-ram on Wills, 109 ; 16. Januan on Wills, vol. 1, pp. 428 — 54i MISTAKE. Chap. I. Ke vocation of will under mistake. Document signed as will by mistake. Election under mistake. by the mistake of the person drawing, making, or copying the Avill(f/), or of proving what w^as meant by an unintelligible word (It) ; or of proving that a thing in substance different from that described in the will was intended (i) ; of changing the person described (Ic) ; or of reconciling conflicting clauses in a will(/). Wliere a testator by a codicil revokes a devise or bequest in his will or in a previous codicil, expressly grounding such revo- cation on the assumption of a fact which turns out to be false, the revocation does not take effect, being, it is considered, con- ditional, and dependent on a contingency which fails (m). So, also, if a will is cancelled by mistake, or on the presumption that a later will is good, which proves void, the heir is not let in, but the mistake may be relieved against {n). In such case equity does not alter the will ; it merely relieves the party from the effect of the mistake, thus placing him in the same condition as if the mistake had not happened (o). Where a document has been signed by a man and has been duly attested in mistake for his will, it was held not admissible to probate (p). An election made by a party under a mistake of facts or a misconception as to his rights is not binding in equity. In order to constitute a valid election, the act done must be with a full knowledge of the circumstances of the case, and the right to which the person put to his election was entitled (q). In order to presume an election from the acts of any person, that person must be shown to have had a full knowledge of all the {(/) Newhurqh v. Nev:hurgh, 5 Madd. 364 ; Javni. on Wills, vol. 1, pp. 412 — 414. It would, however, seem that if a clause be in- advertently introduced, there may he an issue to try whether it is part of the testator's will. lb ; Wigram on Wills, 121. (7i,) Gohlett v. Bcedmj, 3 Smi. 24. (i) Sehoood v. Mildmay, 3 Ves. 30G. (k) Del Marc v. Eohcllo, 1 Ves. Jr. 412. (l) Ulrich V. Litchfield, 2 Atk. 372, per Lord Hardwicke. (m) Campbell v. French, 3 Ves. 321 ; Doe v. Evans, 10 A. & E. 228 ; Jarm. on Wills, vol. 1, p. 183. (n) Onions v. Tyrer, 1 P. Wms. 345. (0) lb. (p) Re Hunt, 3 Pr. & Div. 250. (ry) Wintour v. Clifton, 21 Beav. 4G8, afiirmed 3 Jur. N. S. 74. MISTAKE. 545 requisite circumstances, as to the amount of the different pro- Chap. I. parties, his own rights in respect of them, &c. ()'). A person who has elected under a misconception is entitled to make a fresh election (s). The Court will not inquire into the fact of whether a testator Coudition was mistaken or not with reference to his daughter's health and ullsuke." capacity assigned by his will as a condition for imposing a con- dition in restraint of marriage (t). The costs of the suit, in cases of mistake, depend on the costs. conduct of the parties (u). If a deed is set aside or varied on the ground of mistake, the decree will be with costs against the defendant, if the suit is either wholly or mainly due to his conduct in the matter (x). So, also, a decree for specific per- formance of an ordinary agreement (y), or of an agreement by Avay of compromise (2) will be with costs, if the case set up by the defendant fails wholly on the merits, or the litigation has been due to his conduct in the matter (a). If, on the other hand, the mistake is entirely owing to the conduct of the plaintiff, he must pay all the costs of the suit (b). So, also, if the case set up by the plaintiff wholly fails on the merits, and the de- fendant has not been to blame in the matter, the bill Avill be (r) JFake v. Wake, 1 Ves. Jr. 335, and the other cases mentioned ; 1 Sw. 381 n. ; Reynard v. Spence, 4 Beav. 103 ; Edwards v. Morgan, 13 Pri. 782, 1 Bligh, N. S. 401 ; Brice V. Brice, 2 Moll. 21. (s) Kidney v. Coussmaker, 12 Yes. 136 ; Jarman on Wills, vol. 1, p. 471. (<) Morley v. Eennoldson, 2 Ha. 584. («) Mortimer v. ShortaU, 2 Dr. & War. 373 ; Alvanley v. Kinnaird, 2 Mac. & G. 9 ; Harris v. Pepperell, 5 Eq. 1 ; supra, p. 460. (x) Bingham v. Bingham, 1 Ves. 126 ; East India Co. v. Donald, 9 Ves. 275 ; Dacre v. Gorges, 2 Sim. & St. 456 ; Sturgev. Sturgc, 12 Beav. 245 ; Meadows v. Meadows, 16 Beav. 404 ; Coward v. Hughes, 1 K. & J. 451 j Cox V. Bruton, 5 W. R. 544 ; Leuty V. Hillas, 2 D. & J. 122 ; Broughton V. Hutt, 3 D. & J. 501 ; Broun v. Kennedy, 33 Beav. 154 ; Harris v. Pep-perell, 5 Eq. 1. (y) Parker v. Taswell, 2 D. & J. 576 ; Dyas v. Stafford, 7 L. R. I. 605. (;;) At f wood v. , 1 Russ. 353, 5 Russ. 150 ; Houghton v. Lees, 1 Jur. N. S. 862. (a) Parker v. TasweU, 2 D. & J. 576. (i) Harris v, Peppercll, 5 Eq. 1, per Lord Romilly ; Baskcomb v. Beck- with, 8 Et|. 109 ; Besley v. Besley, 9 Ch. D. 103. 546 MISTAKE, Chap. I. dismissed with costs, whether the object of the suit be to rectify an instrument or to rescind a transaction (c). So, also, if an action for the specific performance of an agree- ment be dismissed, the dismissal Avill be with costs, if the case of mistake as set up by the plaintiff fails on the merits (cZ ). If there have been faults on both sides, costs will be given to neither, whether the object of the suit be to rectify or rescind a transaction (e). Although an action for the rescission of a transaction, on the ground of mistake, be dismissed, the dismissal will be without costs, if the case of the plaintiff be a reasonable one on the merits ; but his title to relief has failed through the absence of due diligence on his part in bringing the action (/), or because the mistake was due to his own solicitor (g), or because the Court could not interfere without prejudicing the rights of innocent parties (/<-). So, also, although an action for the rectification of an instrument be dismissed, the dismissal will be without costs, if the case as set up by the plaintiff be on the whole a reasouable one (^). So, also, although a deed be cancelled, the circum- stances of the case may be such that it will be without costs (^). So, also, although an action for the specific performance of an agreement be dismissed, the dismissal will be without costs, if the (c) Naylor v. JVinch, 1 Sim. & St. L. J. Ch. 228 ; Garrard v. FranJcd, 30 555 ; Alexander v. Crosbie, LI. & G. Beav. 459 ; Price v. Ley, 11 W. R. temp. Sug. 153 ; Okill v. Whittaker, 475 ; Harris y. Pepper ell, 5 Eq. 1, 1 Deg. & Sm. 83, 2 Ph. 338 ; Westhy supra, p. 460. V. Westhy, 2 Dr. & War. 502 ; How- (/) Stone v. Godfrey, 18 Jur. 166 ; kins V. Jackson, 2 Mac. & G. 372 ; Bloomer v. Spittle, 13 Eq. 429 ; but Meadows v. Meadows, 16 Beav. 405 ; see Stone v. Godfrey on appeal, 5 D. Ridgivay v. Siieyd, Kay, 637 ; Bentley M. & G. 93. V. Mackay, 31 Beav. 159 ; Bateman (r/) Bloomer v. Spittle, 13 Eq. 429. V. Boynton, 1 Ch. 368. (//) M' Alpine v. Swifi, 1 Ba. i&Be. {d) Humphries v. Home, 3 Ha. 293. 276; Moxey V. Bigwood, AD.F. &J. (i) Cockerell v. Cholmeley, Taml. 351. 445, 1 R & M. 425 ; Ashhurst v. {e) Hitchcock v. Giddings, 4 Pri. Mill, 7 Ha. 515, 516 ; Barrow v. 135 ; Mortimer v. Shortull, 2 Dr. & Barrow, 18 Beav. 537 ; Lord Brad- War. 373 ; Murray v. Parker, 19 ford v. Lord Roraney, 30 Beav. 441 ; Beav. 305 ; Alvanley v. Kinnaird, 2 Bloomer v. Spittle, 13 Eq. 429. Mac. & G. 9 ; FovAer v. Scottish (A) Philippson v. Kerry, 32 Beav. Equitable Life Assurance Society, 28 638. MISTAKE. 547 defendant has been to blame in the matter, either by mistaking the terms of the agreement or by other acts of negligence, and the refusal of the Court to interfere has proceeded merely on considerations as to the hardship to which the defendant would be exposed by being compelled to perform his agreement speci- fically (l). So, also, where there has been a mutual misunder- standing (m), or the nature of the defence has been in some respects unfounded (n), or where the terms of the contract are ambiguous, so that the one party may have reasonably put a different construction on the contract from what was contem- plated by the other (o), an action for specific performance will be dismissed without costs. And so where parol evidence was admitted in opposition to specific performance (p). If parol evidence to vary the contract is introduced by the defendant, the action should be strictly dismissed ; and, there- fore, if the Court makes a decree at plaintiff's desire for specific performance of the contract according to defendant's evidence, the plaintiff must pay costs (q). But inasmuch as parol evidence to vary the contract cannot be admitted on the part of the plaintiff to a bill for specific performance (?'), an action for the specific performance of a contract with parol variation, though left out by fraud, was dismissed, but without costs (s). Chap. I. (Z) Malms v. Freeman, 2 Keen, 32 ; Manser v. Back, 6 Ha. 443 ; JVood V. Scarth, 2 K. & J. 33 ; IFeb- ster V. Cecil, 30 Beav. 64 ; Bray v. Brigrjs, 20 W. R. 962. {vi) Calverley v. Williams, 1 Ves, Jr. 210 ; Stratford v. Bostoorth, 2 V. & B. 342. See Clowes v. Higcjinson, 1 V. & B. 524. (n) Andrno v. Aitlcen, 22 Ch. D. 218. (o) Neap V. Abbott, 1 C. P. Coop. temp. Cott. 382 ; Baxendale v. Scale, 19 Beav. 613. (p) Townshend v. Stangroom, 6 Ves. 328 ; Garrard v. Grinling, 2 Sw. 250. (q) Fife V. Clayton, 13 Ves. 546 ; Mortimer v. Orchard, 2 Ves. Jr. 243. (?•) Supra, p. 495. (s) Woollam v. Hearn, 7 Ves. 211 ; Lord Portman v. Morris, 2 Bro. C. C. 219. See Cloices v. Higginson, 1 V. & B. 524. GENERAL INDEX. ABATEMENT, of price for misdescription, 25, 393 purchaser compelled to accept with, 419, 420, 421 ACCOUNT, on setting aside a sale as fraudulent against vendor, 373, 374, 375, 376, 377, 378 •what interest allowed on taking, 378, 379 on setting aside a sale of shares as fraudulent against purchaser, 376, 377, 380 no reconveyance until, be taken, 379 of wilful default, in what cases ordered, 375, 376 ordered from time of bringing the action, if there has been delay, 376 ACCOUNTS, opened on ground of fraud, if there be a single fraudulent entry, 387 between solicitor and client, 146 opened after a long lapse of time, 146 between guardian and ward, 154 between partners, 153 •when opened on account of errors, 521, 522 ACQUIESCENCE, principle of, 97, 98, 99, 100, 101, 102, 103, 332, 333, 334 founded on fraud, 97, 98, 103, 104 what is necessary to constitute, 102, 103, 104, 333, 334 extent of the principle, 97, 98, 99, 100, 101, 102 cases in which the principle does not applj', 102, 103, 333 cases in which the principle applies with peculiar force, 335 distinction between cases where the alleged, takes place while the act is in progress, and where it does not take place until after the act is completed, 335, 336 in expenditure on his land binds landowner, 99 applies as between trustee and ccdui que trust, 337 representatives of man bound by his, 336 remainderman may be bound by, 336 company bound by, 337 550 GENERAL INDEX. ACT OF PARLIAMENT, may not be used to perpetrate a fraud, 401 ACTION OF DECEIT. See Damages. when maintainable, 401, 402, 403, 404 can be maintained by whom, 402, 406, 435 in what cases not maintainable, 402, 403, 404, 436 maintainable by shareholder of a company, 405, 406, 436 not maintainable by shareholder of a company, 384, 405, 436 maintainable, though rescission cannot be had, 392, 405, 406 though contract be affirmed, 406 against third party, 15, 16, 406, 407 by shareholder of company, 394, 407, 435 by shareholder of company against directors, under Companies Act, 1867, 392, 410 against principal for fraud of agent, 407, 408, 409 not maintainable by one who has by laches lost right to rescission, 410 after execution of conveyance, 406 not maintainable against one agent for fraud of another, 410 except in particular cases, 410 pleading in, 428, 429 ACTION TO EECOVEE MONEY, on avoidance of contract, party defrauded may bring, 391, 392, 393 AGENT. See Principal and Agent. principal bound by misrepresentation of, 82, 83, 422 unless he be acting idtra vires, 84, 85, 87 action of deceit against principal for fraud of, 407, 408, 409 Belling as if he were principal, 87, 88, 423 in what cases bound by fraud of sub-agent, 87 of one principal dealing surreptitiously with other principal, 151 for sale or management cannot purchase, 148, 149 for purchaser may not sell to principal, 148 may not make profit out of his business, 147, 149 notice to, notice to principal, 269, 270, 271 abetting fraud on principal may be made party to action, 444 AGEEEMENT. See Contract. misrepresentation a bar to specific performance of, 414, 415 although made innocently, 416 unless compensation can be made, 419, 420, 421 mistake a bar to specific performance of, 480, 481, 482, 491 unless with a variation, 495, 496 mistake in written, when rectified, 496 — 505 when not rectified, 498, 506 when relieved against, 500 GENERAL INDEX. 551 AGREEMENT- continued. parol evidence admissible to explain errors in, 491, 500 not to bid at auction valid, 290 fraudulent, respecting marriage, 282 — 285 to secure influence over other persons, 287, 288 among heirs to share equally, 290 addition by parol to written, not admissible at law, 491 or on behalf of plaintiff in equity, 496 when admissible as a defence in equity, 423, 483, 491, 500 ALLOWANCE. See ACCOUNT. AMBIGUITY, of agreement, 492, 515, 510, 517 patent, 492; latent, 517, 542, 543 in what cases evidence admissible to explain, 517 a ground of defence in equity, 418, 515, 516 for refusal of costs, 547 in wills, 542, 543 parol evidence when admissible to explain, 541, 542, 643 AMBIGUOUS EECITAL, not notice, 263 APPOINTMENT. See Power. fraud upon power of, when relieved against, 301 — 309 when vitiated in toto by fraud, and when in part, 308 defective execution of power of, when relieved against, 527—534 relief in case of illusorj', 309 ARBITEATOE. See Award. may not purchase claims of parties for reference, 138, 325 corruption or jjartiality of, 324, 325 ARRANGEMENT. See Family Arrangement. ASSIGNEE OF BANKRUPT, may not purchase bankrupt's estate, 137 except leave be obtained, 137 n. ASSIGNMENT of equitable interest in personal estate, notice of, to trustee necessary to comijlete title, 118 fraud in, 314 to a beggar not fraudulent, 314 by debtors giving preference to creditors, when valid or not, 214, 215, 223 for benefit of creditors, when valid or not, 228, 229, 230 ATTESTING WITNESS, whether afl'octod with notice of contents of deed, 260 662 GENERAL INDEX. ATTOENEY. See Solicitor and Client. AUCTION, engagemeut by parties not to bid against each other at an, vaUd, 290 employment of puffers or underbidders at, 291, 292 purchase at, by fiduciary vendor, voidable, 130 fraud by purchaser at, 293 AUTHORITY, misrepresentation of, 29, 30 AWARD. See Arbitratoe. jurisdiction over, 323, 324 fraud in, 4, 324, 325, 326 mistake in, when relievable, 537, 538 circumstances excluding equity for relief against, 326 BANKRUPT, estate of, may not be bought by assignee, 137 nor by commissioner, 137 BANKRUPT LAWS, fraud under the, 215, 234 assignment by a man of the whole of his estate and effects, is a, 215 assignment by a man of the whole of his estate and effects with, a substantial exception, 215, 216 or for a present advance of money, 216 or for a present advance and future advances agreed to be made, 217, 218 or for a past debt and a fresh advance, 218, 219, 220 or for a past debt and a fresh advance agreed to be made, 219, 220, 221 is not a fraud on the, if the transaction be bo-nd fide, 220 and has not for its object fraud upon creditors, 217, 218 composition when a, 232, 233 liquidation when a, 234 drawing and accepting bills when a, 231 effect of lapse of time in validating what would otherwise be a, 221, 222, 223, 228 preference of a particular creditor a, 223 — 227 unless in particular cases, 223 — 228 or there be good faith, 226, 227 composition deeds when a, 233 liquidation by arrangement when a, 234 giving one creditor preference over another is, 223, 224, 225, 226, 227, 228 covenant or bond by a man to pay monies in contingency of bankruptcy is, in general, a, 235 GENERAL INDEX. 553 BANKRUPT LAWS— continued. fraud on, settlement by a man on Umself until bankruptcj', is, 235 settlement by a third party ou a man until bankruptcy, is not a, 235 assignment of property for benefit of creditors, when a, 228, 229, 230, 231 what lapse of time will prevent a deed, &c., from being invalidated as a, 221, 222, 223 BIDDER, employment of, at auction, when allowable, 292 employment of, at auction, a fraud at law, 291 BILL OF SALE. See Fraudulent Conveyance. what instruments it extends to, 202, 203, 212, 213 must be registered, 204, 205, 209, 212 mode of registering, 204, 205, 20G, 208 affidavit on registering, 205, 206, 20", 208 consideration for, must be stated, 210, 211 must be attested, 212 form of, 212 does not affect after- acquired property, 213 with power to seize except in certain events to be void, 213, 214 effect of, as to reputed ownership, 201, 202, 203 given upon faith of agreement to make further advance of money, not act of bankruptcy, 219, 220 except in certain cases, 219, 220, 221 BONA FIDE PURCHASER. See Pukchaser for Value without Notice. protected in equity, 349, 350, 351 BOND, marriage and place brokage, 286, 287, 288 to marry given secretly, 288, 289 for giving consent to marriage, fraudulent, 282 fraudulent upon an intended marriage, 283 obtained by solicitors from their clients, 143 reform of mistake in, 503, 504, 505 joint, when deemed joint and several, 503, 504 BROKAGE BONDS, marriage and place, 286, 287, 288 BURTHEN OF PROOF, in cases of constructive fraud, 125, 129, 141, 143, 452, 453 CANCELLATION, of deeda by fraud or mistake, 312 554 GENERAL INDEX. CAUTION, more want of, as distinguished from gross nogligonco, 2-18, 249 purchaser not bound to use excessive, 248 CAVEAT EMPTOE, the rule of the common law, 60, 68 in case of purchase of real estate, 68, 69 in case of purchase of goods, 69, 70, 71, 72 does not ai)ply where there is a distinct and positive misrepresen- tation, 42 CESTUI QUE TEUST, right of, to impeach purchase by trustee, 129, 130, 376, 377 may be lost by acquiescence, 337 or lapse of time, 344, 345 right of, to impeach purchase from trustee, 129, 130, 376, 377 CESTUI QUE VIE, death of, before date of contract, 509, 510 CHANGE, of solicitors not notice of change of interest, 263 CHAEITY, governor of, lease to, of the lands, invalid, 138 within the rule as to purchasers without notice, 349 lands, tenant of, also a trustee, 139, 140 inadequacy of rent of charity estates as a badge of fraud, 139, 140 CHAETEE, obtained by fraud, 401 CHASTITY, misrepresentation as to, 60, 313 CHEAT, goods, instruments, &c., obtained by, as distinguished from goods, instruments, &c., obtained by fraud, 7, 8, 9, 10 CHILD, and parent, contracts, gifts, &c., between, when valid, 156, 157, 158 defective execution of power suj^pliod in favour of, 529 CHOSES IN ACTION, assignee of, cannot set up defence of purchase for value without notice, 363 rule as to notice of assignment of, does not apply to equitable interests in land, 118 CLAIM, concealment of, may amount to fraud, 100, 101, 102 CLEEICAL EREOE, corrected by courts of law, 492, 493, 494, 495 GENERAL INDEX. 000 CLERK may bo in confidential situation, 146 CLIENT AND ATTORNEY. See Solicitor axd Client. • COLLUSION, 2, 175 between a company and a creditor to enforce bis debt against a par- ticular sbareholder, 315 COMMENDATION, of property by vendor, allowable, 43, 44, 45, 46, 47 COMMISSIONERS of bankrupts may not buy bankrupt's estate, 137 COMMITTEE of lunatic may not purchase or rent the lunatic's estate, 138 COMPANIES ACT, 1867, s. 38, what is fraud within meaning of, 77 — 81 omission to specify contracts required by, not a ground for rescission, 392 a ground for action of damages, 392, 410 COMPANY, misrepresentation and concealment in prospectus of a, 73, 74, 75, 76 party induced by, to take shares relieved from his shares, 76, 434, 437 when not relieved from his shares, 394 must act with diligence, 334, 342, 343, 347 vague representations in prospectus of a, 46, 74 may bring action in its own name to set aside contracts, 434 must however act with diligence, 347, 318 bound by rejjresentation of agents when acting within the scope of their authority, 84, 85, 86 collusion between directors of, and a creditor to enforce debt ag-iiust a particular shareholder, 315 purchase of shares in a, when entitled to bring action of deceit against directors, 435, 436 fraud upon a, by shareholder, 315 — 318, 380 directors, 315—318, 381 how i-elieved against, 380, 381 notice to proper officers of, is notice to, 277, 278 notice to directors, not notice to, 277, 278 notice to shareholder of, not notice to, 277, 278, 347 COMPENSATION, defects, &c., not admitting of, avoid contract, if undisclosed, 19, 24, 419, 420 conditions resjiecting, 4'22, 523 what matters do not admit of, 22, 23, 24, 25, 420, 421 556 GENERAL INDEX. COMPENSATION— cojiiJn«ed purchaser compelled to take defective estate with, 419, 420, 421, 519 vend(Ji''s or purchaser's right to, for difference in quantity, 25, 421, 519, 520 for improvements on an estate on setting aside a transaction, 374, 375 allowed in respect of false representation through mistake, 393 COMPOSITION DEEDS, secret arrangements by creditors, a fraud upon, 231, 232 under " Bankruptcy Act, 1869," 232, 233 in what cases a fraud upon creditors, 233, 234 COMPROMISES, vitiated by concealment, 94, 95 of doubtful rights, not vitiated by mistake, 474, 475 may be vitiated by mistake of fact, 513, 514 consideration for, 474, 514 CONCEALMENT. See Misrepresentation, 54, 55, 56, 58 a fraud, if there be a duty to disclose, 58, 59, 60, 61, 62, 64, 65 as distinguished from silence, 59, 61, 63 must be of a material fact, 58 must be in reference to the transaction, 58, 60 immaterial if fact be known, 60, 61 a fraud, if there be artifices to mislead, 62, 63, 64, 67 of truth, after discovery of misrepresentation, 26, 27, 65 of patent faults, 65 of latent faults, 66, 67 by vendor of ownership of property, 48, 64 by purchaser of advantages, &c., 61, 65 by purchaser of his insolvency, 72, 73 by agent, binding on principal, 82, 83, 84, 85 in prospectuses of companies, 73, 74, 75, 70, 77, 78, 79, 80 in policies of marine assurance, 88, 89, 90 life assurance, 90, 91 fire assurance, 91 in guarantees, and contracts of suretyship, 92, 93 in compromises, 94, 95 by parties in dealings with others towards whom they stand in a fiduciary position, 95, 126, 127 trustee and cestui que trust, 129 solicitor and client, 141, 142 principal and agent, 147, 148 guardian and ward, 154 parent and child, 155, 156, 157 partners, 151, 152, 153 parties generally coming within the principle, 158 of claim by incumbrancer, 99, 100, 101 GENERAL INDEX. 557 CONCEALMENT— coHff/M(Pr/. in fraud of marriage, 282, 283, 28-i of title with desiga to mislead, 97, 98, 99, 100 contract procured by, not enforced in equity, 415 CONDITION, imposed under mistake, 545 CONDITIONS OF SALE, must not be misleading, 54, 55, 56 more especially if sale is by the Court, 5G, 57, 419 effect of certain requirements in, 56 inviting attention to documents, 56 stipulating that buyer is to take a chattel "with all faults," 67 by which purchaser is debarred from complaining of error in par- ticulars, 67, 68 providing that errors shall not annul the contract, 26, 523 do not cover a fraudulent misrepi'csentation, 42, 422 only apply to innocent errors, 422 apply to eri'ors not discovered until after conveyance, 523 CONFIDENTIAL RELATION. See Fiduciary Relation. what constitutes a, 124, 125 CONFIRMATION, of impeachable transaction, when binding in equity, 330, 331 concealment will vitiate, 331 marriage brokage bonds incapable of, 287 CONSENT, necessary in contracts, 119 what is necessary to constitute, 119 to marriage, fraud in withholding, 289 CONSIDERATION. Se6 Inadequacy of Consideration. may be either good or valuable, 184 what will constitute a valuable, 184 — 190 marriage a valuable, 184 — 186 unless there be fraud, 195 inadequacy of, not per se a ground for relief, 1 60 or for refusing specific performance, 160 when a ground for relief, 141, 161 — 164 false statement of, 164, 165 may vitiate a deed, 164, 165, 166 not exj)ressed, may be proved, 191, 239 in what cases amount of, not material, 239, 240 in what cases question of, cannot arise, 191, 240, 241 CONSTRUCTIVE NOTICE. See Notice. what is, 246—250 as distinguished from actual notice, 246 558 GENERAL INDEX. CONSTRUCTIVE '^OTIC^— continued. limits of doctrine of, 247—250, 260, 2G1 party not fixed with, of instruments or facts whicli may only by possibility affect property, 263, 264, 265 may be excluded by positive representation, &c., 39, 40, 41, 265 — 268 on]y operates in matters affecting title, 269 CONTRACT. See Agreement. vitiated by absence of consent, 5 induced by fraud voidable, not void, 5, 6 of lunatic, idiot, &c., 120 of person in a state of mental imbecility, 120, 121 of person in a state of intoxication, 121 of infant, 122, 123 of married woman, 123, 124 by a party under duress or imprisonment, 159, 160 in a state of embarrassment, 162 vitiated on the ground of undue influence, 124, 155, 158, 159, 162—164, 166, 167 with persons in a fiduciary relation, 124 marriage brokage, not capable of confirmation, 287 CONVEYANCE. See Feattdulext Conveyance. reformed in equity, 496, 509 errors discovered after execution of, 522, 523 COPYHOLD, sxirrender of, supplied in equity, 527 purchaser need not take, instead of freehold, 22, 420 nor need he take freehold instead of, 420 COEPOEATION, lease to member of, of corporate property sot aside, 1 38 bound by representations of its agents, 84 COSTS, sale to solicitor in discharge of, 143 solicitor may not take security for future, 143 general rule as to, 458 charges of fraud, if unsubstantiated, visited with, 459, 461 unsuccessful litigant as a general rule has to pay, 458, 460, 545, 546 do not always follow the event, 459, 460 unsuccessful litigant exempted from payment of, 459, 460, 545, 546 solicitor made party to a suit for the purpose of having costs paid by him, 443, 444, 463, 464 costs must be jKayed by the bill, 464 party abetting a fraud made party, and ordered to pay, 442, 443, 463, 464 COUNSEL, rule in equity as to dealings between client and, 146 notice to, is notice to client, 270, 271 GENERAL INDEX, 559 COURT, sale by the, when not enforced against a purchaser, 419 set aside on ground of fraud, .392 settlement under order of the, set aside as obtained by fraud, 392 conditions of sale on sale by the, must not be misleading, 56, 57 party obtaining a wrong order from the, by false representation, bound to indemnify the other party, 397 COUETS OF COMPETENT JURISDICTION, assistance of coui'ts of equity to prevent fraud upon, 328 COVENANTS, notice of lease is notice of, 252, 253 in lease, deceptive statements respecting, 54, 62 COVERTURE, rights of married women in equity in respect of separate property notwithstanding, 123 no excuse for participation in fraud, 124 CREDITORS. See Fraudulent Coxveyances. fraud upon, 175—183, 193—199 when on sale of chattels vendor remains in possession, 200, 201, 202, 203 assignment for benefit of, when valid or not, 228 — 230 fraudulent devises in fraud of, 235 favoured in equity in cases of defective execution of powers, 529 preference of particular, 214,.215, 223 — 227 assignment to fictitious, a fraud on the bankrupt laws, 233 trust deeds for, when fraudulent, 233, 234 CROWN, fraud upon the, 328 DAMAGES, See Action of Deceit. party defrauded may recover, 15, 406 measure of, in actions of deceit, 410 — 413 not recoverable if remote, 412 for communication of disease by animals sold through fra;id, 411 mtsasiu'e of, where coal has been by m.istake taken from a mine, 527 where specific performance is refused on ground of mistake, 527 not recoverable for loss of bargain, in absence of fraud, 526 recoverable in actions of specific performance when there has been misrepresentation, 527 shareholder of company cannot recover against, 384 DECEIT. See Action of Deceit. DECEPTIVE STATEMENT, is a fraud, 53, 54, 55, oG, 62 560 GENERAL INDEX. DECREE, fraud in, remediablo in equity, 4, 326, 399, 400 purchasers under, take with notice of fraud apparent on face of, 357 DEEDS, fraudulent suppression and destruction of, 311, 312 given in extreme intoxication, 121, 122 vendor need not state defects apparent on face of, 68 cancellation of, 312 fraud in the procurement of the execution of, 312 omission to ask for, or to retain, its effects as regards priority, 112, 113, 260 notice of, as affecting property, is notice of entire contents, 250, 251, 252, 253 notice that party holds, is notice of his incumbrance, 245, 258 attesting witness not affected with notice of contents of, 260 fraud in, proveable by parol evidence, 456 possession of, by solicitor not notice, 259 DEFECTS, patent and latent, what are, 65, 66 disclosure or concealment of, by vendor, 66, 67, 68, 69 in execution of power, when supplied in equity, 527—534 in instruments, when supplied in equity, 534, 536, 537 in estate abatement of purchase monies in respect of, 25, 419, 420, 421 DEFICIENCY, in quantity of estate, compensation for, 25, 421 DELAY. See Time. in instituting a suit to impeach a transaction a bar to relief, 337 — 348 especially in certain cases, 339, 341 even as between trustee and cestui que trust, 344, 345 in cases where a fiduciary relation exists, 344 in the case of shareholders in companies, 342, 343 may be set up against a company, 347, 348 acquiescence, as distinguished from, 339 representatives of a man bound by his, 348 bill dismissed on ground of, dismissed without costs, 459, 546 DEPEECIATOEY remarks, &c., by purchaser, their effect, 46, 47 DESTRUCTION of deeds, fraudulent, 311, 312 DIRECTORS of public companies, misrepresentation by, 73 — 81 binds the company, 84, 85, 86 GENERAL INDEX. 561 BmECTOJXS- contimied. stand iu a fiduciary relation to the companies, 132, 133 may not make profit out of the business of the companies, 132, 133 bound to account for all profits made by them, 132, 133 fraud by, 310, 317, 318 DISCLOSURE. See Concealment. of facts, defects, &c., by vendor, 62, 63, 64, 65, 66 of advantages, &c., by purchaser, 61 DISTRESS, rule of equity as to transactions entered into by a person in, 15i), 162, 163, 164 DOLUS, accoi'ding to the civilians, 111, n. DRUNKARDS, acts and contracts of, relievable, where there is fraud, 121 ■where relief refused to, 121, 122 DURESS, relief in cases of, 159, 160, 162, 163, 164 ELECTION, what is necessary to constitute a valid, 544, 545 relief against, made under mistake, 545 to affirm is a waiver of right to rescind, 381, 382 what constitutes, 381, 382 delay, evidence of, 383 by party defrauded, and to recover damages, 383, 384 to rescind a contract, 6 mode of exercise of, 384, 385 may be exercised by plea, 385 ENCOURAGEMENT, of party in error may amount to fraud, 61, 62, 00, 102, 103, 470 EQUITABLE ESTATE. See Equitable Interest. in land, purchaser of, acquires no priority, by notice to owner of legal estate, 118 EQUITABLE ESTOPPEL, 96—104, 486, 518 doctrine of, founded on fraud, 100, 101, 103, 104 may arise from passive conduct or concealment, 08, 100, lOl what necessary to constitute, 102, 103, 104 EQUITABLE INTEREST, in personal estate, purchaser of, acquires priority by giving notice to person in possession of fund, 118 o o 562 GENERAL INDEX. EQUITABLE mTEUEST— continued. as between parties claiming a mere, he who is prior in time has a better equity, 359 — 363 defence of purchase for value without notice has no place, 359—363 the negligence of one may give the other a better equity, 113, 114, 115, 361, 362 the possession of the deeds may give a better equity, 113, 114, 361 EQUITABLE TITLE, of purchaser without notice protected by the legal estate, 349 — 354 mere, postponed to prior equities, 359 — 363 with possession of deeds and the ownership of the legal estate, pri- orities between, 112, 113, 114, 360 EQUITIES, as between innocent parties defrauded, 107, 108, 109, 110, 111, 112, 113 as between mere, purchase for value without notice has no place, 359—363 priorities as between, 361, 362, 363 EQUIVOCAL terms of agreement a ground for refusing costs, 547 EEROR. Sec Mistake. clerical, in agreement, corrected by Court, 492, 493, 494, 495 not discovered until after execution of conveyance, 522, 523 compensation for, when it may be had, 523 ESTATE TAIL, barred by fraud, remedy of remainderman, 433, 434 EVIDENCE. See Proof. rules of, same in equity as at law, 449 to prove fi'aud, 450, 451 parol, where admissible to prove consideration in a deed, 165 when admissible to controvert a recital in a deed, 534 of variation in or addition to agreement admissible in defence to a suit for specific performance, 423, 483, 495 admissible on application to rectify or rescind an instrument on the ground of mistake, 491, 492, 500 when admissible to explain ambiguity in an agreement, 516, 517 when admissible to explain a will, 541, 542, 543 of one witness cannot prevail against a denial by the answer, 457 of other frauds when admissible, 451 EXECUTION, defective, of power, when relieved against in equity, 527, 529 — 534 GENERAL INDEX. 563 EXECUTOR. See Fiduciary Relation. rule in equity as to, dealing in respect of the testator's estate, 137 may file a bill to have a transaction, fraudulent as against his testator, set aside, 433 EXPECTANCY, fraud in respect of sale of, 289, 290 EXPECTANT HEIRS, fraud upon, relieved against, 169, 170, 171 EXPENDITURE, in improvements, allowed to a purchaser in account, on rescinding a transaction, 373, 374: purchaser when protected in equity against person encouraging, 98, 99, 100, 101 when a part-performance in equity, 105, 106 EXPENSES, allowed to party complaining, on transaction being set aside for fraud, 378 FALSE REPRESENTATION. See Misrepresentation. FALSE STATEMENT of consideration, 164, 165 FAMILY ARRANGEMENT, rule of equitj' as to validity of, 156, 157, 307 valid in equity notwithstanding mistake of parties, 514 FAMILY SETTLEMENT, upheld though consideration bo small, 197 FATHER, and son, rule in equity as to dealings between, 155 — 158 FAULTS, sale with all, 67 FELONY, goods obtained by, aa distinguished from goods obtained by fraud, 7, 8, 9 FEME COVERT, may dispose of separate property, 123 bound by fraudulent representations, 123, 124 defective execution of power aided in favour of, 529 FIDUCIARY RELATION, rule of equity as to dealings between parties standing in a position to each other of, 124, 125, 126, 127, 128, 129, 130, 132, 137, 138 proof of fairness of transaction rests on party filling the position of, 125 u o 2 5G4 GENERAL INDEX. FIDUCIARY RELATION— co/ifrnwecZ. limitation of general rule as to dealings between parties in a, 126, 127, 129 after termination of, parties may deal with each other, 127, 130, 131 rule of equity as to dealings between parties in a, may continue after cessation of, 127 applies to third persons who make themselves parties to such dealings, 126, 158 may apply, even though no definite relation subsist between the parties, 158 on what terms a transaction between persons standing in a, is set aside, 376, 377 eflfect of court giving a person in a, leave to purchase, Addenda FINE, obtained by fraud, relieved against, 400 FOREIGN JUDGMENT, may be impeached for fraud, 327, 535 when impeachable for mistake, 535 FORFEITURE, fraud on the law of, 319 FORGED INSTRUMENT, purchaser under, yet protected by getting in legal estate, 353, 354 legal estate cannot pass under a, 11, 354 FRAUD. See Concealment — Misrepresentation. what is, 1, 2 moral, as distinguished from legal, 16, 17 elements of, 2, 3, 16, 57, 58 duty of court in dealing with cases of alleged, 14 on contract induced by, the property passes, 7, 9, 11 jurisdiction of Civil Courts of Justice in cases of, 3, 4 distinction between civil and criminal jurisdiction in cases of, 5 classification of forms of, 3 contract or transaction tainted by, voidable only, not void, 5, 6 not voidable, if right of others intervene, 6 goods, insti'uments, &c., obtained through a trick or cheat, as dis- tinguished from goods, instruments, &c., obtained through, 7, 8 9, 10, 11, 12 original vice continues to taint a transaction founded upon, 12 no lapse of time will screen, 12, 13 must be clearly proved, 448 onus prohandi rests on party alleging, 448 will be presumed, where the parties are on an unequal footing, 119, unless party upholding the transaction can prove the fairness of it, 126, 158, 453 GENERAL INDEX. 565 FKAUD — continued. evidence of, 450, 451, 452, 453, 454, 455 must be pleaded, 415, 416 who may sue to set aside a transaction on the ground of, 433, 434, 435, 436, 437 'particeps crimirds, 437 — 442 who may be made defendants to a suit to set aside a transaction on ground of, 442 — 447 transaction impeachable on the ground of, may become unimpeach- able by confirmation, 330, 331 by acquiescence, 332 — 337 by lapse of time or delay in instituting a suit, 337 — 343 of agent, principal bound by, 82, 83, 84, 85 of one member of a firm afi'ects co-partner, 83, 445 infancy or covertui-e no excuse for, 122, 123 by vendor, incumbrancer encouraging, &c., postponed in equity, 99, 100, 101, 102 gross negligence may be treated as equivalent to, 107, 108, 112, 113, 249 mere suspicion of, does not aft'ect a purchaser, 248, 249, 263, 264 of his own professional adviser, whether pui'chaser has implied notice of, 273—277 how purchaser guilty of, must account, if sale sot aside, 373, 374 groundless imputation of, its eit'ect ou costs, 459 a ground for setting aside a sale by the court, 399 incases of idiots, lunatics, &c., 120, 121 in case of drunkards, 121, 122 married women, 123, 124 infants, 122 undue influence, 158, 159 duress, 159 inadequacy of consideration, 160, 161, 162, 163 suppression and destruction of deeds, 311, 312 the prevention of acts to be done for the benefit of thii'd persons, 310, 311 setting up an instrument obtained for one purpose for another pui'pose, 313 in the procurement of the execution of a deed, 312 by falsely reading it, 10, 11, 12 by substituting one deed for another, 10 by and upon companies, 315 — 318 upon the mortmain laws, 318 m assignments, by assignees, &c., 314 on the law of forfeiture, 319 upon the Bankrupt Laws, 215 — 231 in awards, 324, 325, 326 upon particular statutes, 320, 321, 322 in judgments and decrees, 326, 327 566 GENERAL INDEX. FEAUD — continued. upon the crown, 328 upon tlie legislature, 328 upon other courts, 328 upon powers, 301 — 309 upon creditors, 175 — 236 upon maniage articles, 282, 283 upon the marital rights, 283 — 286 in respect of bond to marry, 288 in withholding consent to marriage, 289 in respect of expectancies, 289, 290 upon exj^ectant heiis, 169 — 171 in wills, 294 — 301 in respect of sales by auction, 290 — 293 voluntary conveyances in, of subsequent purchasers, 236 — 244 when persons purchase with notice of adverse title, 244 — 282 in marriage and place brokage contracts, 286 — 288 arising from peculiar fiduciary relations, 124 — 158 between trustee and cestui que trust, 127—140 between solicitor and client, 140 — 146 between principal and agent, 146 — 151 between guardian and ward, 153 — 155 between parent and child, 155 — 158 between partners, 151 — 153 between principal and surety, 92 — 93 in other special cases, 126, 132—138, 146, 158 FEAUDULENT CONVEYANCE, void against creditors under Stat. 13 Eliz. c. 5, 175, 176, 183 voluntary conveyance not necessarily a, 176, 184, 192 unless its effect be to delay creditors, 177, 178 voluntary conveyance by sui'ety may be a, 179 though debtor not insolvent at date of, 177, 182 may be void against subsequent creditors, 180, 181, 182 conveyance made bond fide and for good consideration is not a, 176, 184 purchase by thii-d party for benefit of wife and children of settlor may be a, 192 deed, though for value, if not hand fide, is a, 193, 195, 196 the mere fact that a creditor is defeated by a deed does not make it a, 194, 195 a deed, if hona fide, is not a, 194, 195 though made to defeat execution, 195 though the consideration be small, 196, 197 inadequacy of consideration when evidence of a, 196, 197, 198 what is strong evidence of a, 182 sale for value is a, if purchaser acts mala fide, 199, 200 sale for value is not a, unless purchaser has notice of fraud, 198 GENERAL INDEX. 567 FRAUDULENT CONVEYANCE— coufrnwe^Z. marriage settlement when a, 195 insertion of power of revocation evidence of a, 182, 242, 243 by whom may be avoided, 176, 183 creditor under a voluntary covenant, 183 deed in trust for creditors when a, 228, 229, 230, 231 fraud a question for a jury, 201 presumj^tion of, from continuance in possession, 200, 201, 203, 204 may be rebutted, 201 by notoriety of transfer, 202 by registration under Bills of Sale Acts, 202, 204 by provision for continuance in possession, 201 must be of property liable to discharge of debts, 183 transfer to a particular creditor is not a, at common law, 214 or under Statute 13 Eliz. c. 5, 214, 215 what is a, under the Bankrupt Law, 215 what is not a, under the Banki-upt Law, 215, 216, 217, 218, 219, 220, 221 voluntary conveyance of real estate in regard to subsequent purchaser is a, under Statute 27 Eliz. c. 4, 236 — 244 defeated by sale though purchaser takes with notice, 237 who are purchasers, 242 purchaser not such, unless for value, 240, 241, 242 conveyance made bond fide and for good consideration is not a, 239, 240, 241 evidence admissible to prove consideration, 239 inadequacy of consideration how far material to prove a, 239, 241 conveyance may be not a, though consideration be small, 239 conveyance with power of revocation is a, 242, 243 or with what is virtually a power of revocation is a, 243 settlement of personalty is not a, 244 being defeated by sale, volunteers have no equity against purchase- money, 243, 244 FRAUDULENT DEYISE, 235, 236 FRAUDULENT TRANSFER, 222 FRAUDULENT INTENT, 57 what constitutes, 16 in particular cases imputed, 16, 17 not imputed if a man makes a representation which ho honestly believes to be true, 18 FRAUDULENT PREFERENCE, what is, 223, 224 what is necessary to constitute, 224, 225, 226 payment in good faith and for valuable consideration is not a, 226, 227, 228 568 GENERAL INDEX. GIFT, by client to solicitor is not valid, 144, 145 by principal to agent, 151 by child to parent, 155, 156, 157 mere trifling, may be valid, though a large one would be invalid, 126, 127 GOVEENOR, of charity cannot buy or take a lease of charity land, 138 GUARANTEE, avoided by non-disclosure or concealment of material facts, 92, 93 GUARDIAN AND WARD, rule of equity as to dealings between, 153 not limited to cases where the relation actually exists at the time, 154, 155 after complete termination of relation of, parties may deal, 154 cases coming within the rule of equity with respect to dealings between, 154, 155 HEIR, of party defrauded may file a bill for relief, 433 of voluntary settlor cannot defeat the settlement by a sale, 237 agreement between expectant heirs to share equally is valid, 290 dealings with expectant, 169, 170, 171 HUSBAND, defective execution of a power by wife in favour of, not aided in equity, 529 IDIOTS. See Lunatic. IGNORANCE. See Mistake. wilful, tantamount to actual knowledge, 247 of law, 466, 467, 468, 469 monies paid in, 471, 472, 473 of fact, 476 ILLEGAL purpose, concealed from vendor, does not avoid conveyance, 49 purpose, party may avoid his deed by showing that it was executed for an, 456 ILLITERATE PERSON, falsely reading instrument to, is a fraud, 10, 454 ILLUSORY APPOINTMENT, oog GENERAL INDEX. 569 IMBECILITY, mental, relief in cases of, 120, I'll where there is duress, or undue influence, 1G2, 1G3 IMPEISONMENT, contract by party under, IGO IMPROVEMENTS, expenditure in, allowed to a piirchaser on setting aside a trausactiou, 373, 374 refusal to execute promised, a defence in equity to bill for specific performance, 417, 418 by lessee on land of lessor not allowed, 102, 103, 104 purchaser who seeks to set aside a transaction on ground of fraud should pray for, 375 false representation as to amount spent in, upon property may amount to a fraud, 48 IMPROVIDENCE, of transaction, not a ground of relief, 161, 162 INADEQUACY OF CONSIDERATION, not in general a ground for relief, 160 or for refusing si^ecific performance, 160 a ground of relief, if grossly inadequate, 160, 161, 196, 197, 198 or if the parties are in a position of fiduciary relation, 141, 142, 162 or if the one possesses an influence over the other, 162, 163, 164 till recently a ground for setting aside the sale of a reversion, 169, 170 a ground for setting aside the sale of a reversion by an expectant heir, 170, 171 INCAPACITY, to contract, renders a contract fraudulent, 119, 120, 121 INCUMBRANCES. See Notice. vendor must disclose, if not apparent on the deeds, 68 notice of, to purchaser, before conveyance, binds, 358 right of pui'chaser to pay off, after conveyance, out of unpaid purchase- monies, 358 legal estate, when a protection against, 349, 350, 358 concealment of, by third party, 100, 101, 102 prioritj' as between equitable, 113, 114, 115, 116, 359, 360, 361, 362 INFANT, general incapacity of, to contract, 122 . bound by fraudulent representations, 122, 123 incumbrancer, fraudulent concealment by, relieved against, 122, 446 gift by, may bo valid, 123 570 GENERAL INDEX. INFLUENCE, undue, transaction set aside on ground of, 158, 159, 1G2, 163, 166, 167 INJUNCTION, remedy by, in cases of fraud, 413, 414 INQUIRY, purchaser fraudulently abstaining from, case of, 247 purchaser negligently abstaining from, fixed with notice, 247, 248 mere suspicion not enough to put a man upon, 248, 263, 264 INSANITY. See Lunatic. INSOLVENCY, concealment by purchaser of his, 72, 73 when assignee in, may purchase, 137, 138 INSPECTION, of property by purchaser, its effect on misdescription, 37, 38, 39 INSURANCE. See Policies of Insurakce. INTENTION, false representation as to, not a ground for relief, 48, 49, 50, 51 a ground for refusing specific performance, 417 evidence of, admissible when there has been a mistake in the ex- pression of an agreement, 500, 516, 517 of author of power, no relief, so as to defeat, 532 of testator, when evidence admissible to explain, 541, 542, 543 INTEREST, of vendor in property, purchaser must disclose facts increasing, 62, 65 in property, conveying party mistaking, has no remedy, 512, 513 on monies advanced, allowed on setting aside a transaction, 373, 378 on improvements, allowed to purchaser on setting aside a trans- action, 378 in respect of costs, charges and expenses, allowed to complaining party on setting aside a transaction, 378 INTOXICATION, of party to contract, its effect, 121, 122 JOINT CONTRACTS, when held in equity joint and several, 503, 504, 505 JUDGMENTS, fi-aud in, 4, 326, 327, 399 how relieved against, 399, 400 registered, are notice only if search be made, 281 purchasers when bound by notice of unregistered, 28 1 mistake in, 535 GEXEllAL INDEX. 571 JUDICIAL PROCEEDINGS, fraud in, '627, 328 how relieved against, 399 mistake in, 535 JURISDICTION, of courts of justice in cases of fraud, 2, -1 LACHES. See Delay. LATENT, defects, what are, 66, 67 must be disclosed by vendor, 66, 67 ambiguity in agreement, 516, 517 parol evidence admissible to explain, 517 LANGUAGE, how, is construed in courts of justice, 36 LAW, misrepresentation of, not in general relievable, 52 except in particular cases, 53 LEASE, notice of, whether notice of all its contents, 252, 253 covenants in, need not be mentioned on sale of, 253 there must, however, be no misrepresentation, 253 misdescription respecting, when fatal, 22, 23, 24 purchaser of, has what notice of lessee's title, 259 not bound to take underlease, 420 except in certain cases, 419 LEASEHOLD, described as freehold, variance is material, 22, 23, 420 LEAVE AND LICENCE, rule at law as to, 104 as distinguished from equitable doctrine of acquiescence, 104 LEGACIES, fraud in the prevention of, 311 revocation of, under mistake, 544 false reason given for, when avoiding, 400, 401, 540, 541 obtained under a false character, 400, 401 LEGAL ESTATE, how far a protection to purchaser, 349 not a protection where a purchaser has omitted to inquire for tho title deeds, 112, 113, 260 being outstanding, notice of, is notice of the trusts on which it is held, 257 572 GENERAL INDEX. LEGISLATURE, fraud upon the, 32S, 329 LESSEE, has constructive notice of lessor's title, 257 LESSOR, notice of tenancy, not notice of title of, 256 lessee or purchaser from lessee has notice of title of, 258 LICENCE, to exercise a right over the laud of another may be countermanded at law by the owner of the soil, 104 not so in equity, if there has been acquiescence or encouragement to spend monies, 101, 102, 103, 104 LIEN, notice of possession of deeds is notice of, 260 vendor's tenancy, when not notice of, 256 LIMITATIONS, STATUTE OF, equity acts upon analogy of, and follows as to legal demands, 33S no delay short of period fixed by, is a bar to relief in cases of false representation, 340 effect of, upon equitable demands and in cases of equitable titles, 338, 339 delay for less than time allowed by, may bar right to relief in equity, 338 not a bar in cases of fraud, 345 LIS PENDENS, when notice, 282 LUNATIC, how far incompetent to contract, 120, 121 committee of, may not jDurchase lunatic's estate, 138 MARITAL RIGHTS, of husband, fraud upon the, 283, 284, 285 settlement or conveyance of propertj'- during treatjf of marriage without notice to the intended husband, 284, 285 acquiescence by husband in, 286 of wife, in what case fraud upon, 286 MARKET OVERT, goods purchased in, not reclaimable though obtained by lelon\', 8 unless on conviction of thief, 9 GENERAL IXDEX. 573 MAERIAGE. See Settlement. a sufficient consideration foi' a settlement, 184 except in particulai* cases, 184, 185 settlement before, may bo fraudulent and void, 195, 196 whether valid in favour of collaterals, 174, 185, 186 on faith of false representation as to pecuniary standing, 283, 395 is not a jiart perfomiance of parol agreement, 106 fraud in -withholding consent to, 289 mistake in settlement of, 497, 501, 502 MAEEIAGE ACT, fraud on the, 320, 321, 322 MAEEIAGE AETICLES, fraud upon, 282, 283 MAEEIAGE BEOKAGE BONDS, 280, 287 incapable of confirmation, 287 MAEEIED WOMAN, how far incapable to sell or buy, 123, 124 acting fraudulently is bound, 123, 124 separation deed to enable a, to carry on adulterous intercourse, 313 ante-nuptial settlement by, in fraud of husband's marital rights, 284, 285 participation of, in fraud with husband, 195, 217 MAEEY, bond to, 288 MEDICAL MAN, as to pui'chases bj', and gifts to, from patient, KJO MTSAPPEEHENSION , agreement entered into under, when not enforced, 480 MISDESCEIPTION. See Misrepresentation. condition respecting, 42 destroys effect of what would otherwise be notice, 39, 40, 265, 266 what so material as to avoid a contract, 22, 23, 24, 25 specific performance decreed notwithstanding, where compensation can be made, 419, 420, 421 MISEEPRESENTATION. See Concealment. what constitutes, 15, 16 in putting forth as true the reports of others, 28 must be of something material, 34, 35, 36, 37 must be relied on, 35, 36, 37, 38, 39 must be a proximate cause of a transaction, 35, 57, 58 must be in respect of a fact, 42, 43, 45, 46 allegation of, may be met by proof of knowledge, 39, 40, 41, 42 574 GENERAL INDEX. MISEEPEESENTATION— co»2, 93 contract of, vitiated by pressure, 9-1 SUREENDEE, of copyhold supplied in equity, 527, 534 SUSPICION, mere, of fraud, is not notice, 248, 263 circumstances of, do not warrant conclusion of fraud, 450 TACKING, foundation of doctrine of, 365 confined to bond fide purchaser, 365 what is, 365 TENANCY, notice of, is notice of tenant's interests, 254, 255 but not of lessor's title, 256 past, notice of, not notice of tenant's interests, 256, 257 of vendor, notice of, is no notice of lien, when, 256, 257 TENANT, what acts by, are part performance, 105 TENANT FOE LIFE, may purchase from trustees of settlement, 138 with power to sell or lease, may sell or lease to himself, 138, 139 under Settled Land Act, 1882, cannot purchase from himself except by leave of Court, 139 n. concealment of death or dangerous illness of, by purchaser of rever- sion, 62 death of, unknown to both parties at time of contract, contract vitiated by, 509, 510 TENANT IN TAIL, induced by fraud to bar the entail, remedy of remainderman, 433, 434 TEEM OF YEAES, instead of fee, purchaser need not accept, 22, 420 TEEMS, on which a transaction is rescinded for fraud, 372, 373, 374, 375 of rescission of partnership transactions for fraud, 379 of rescission of contract for purchase of shares, 380 on setting aside a transaction for mistake, 524, 525 GENERAL INDEX. 591 TIME. See Delay. lapse of, a bar to relief, 'S'.il — 348 not a bar, if short of the period fixed by the Statute of Li natations, 340 begins, in cases of fraud and mistake, to run from, the discovery, 34.), 346, 347, 524 does not run where there is undue influence, 346 lapse of, as affecting remainderman, 348, 349 lapse of, effect of, as between trustee and cestui que trust, 344, 34.5 what lapse of, sufficient to bar relief in ec^uity, 339, 340, 34 1 , 348 TITLE DEEDS, possession of, 111, 112, 2G0 TEICK. See Cheat. TRUSTEE, and cestui que trust, rule of equity as to dealings between, 127, 12S, 129, 130, 131 concealment in dealings between, 129, 130 what parties within the rule, 132, 137, 138 what parties not within the rule, 131, 138, 139 dealings between, after termination of relation, 130 may not derive any profit in the execution of his trust, 128, 376, 377 selling property of his own secretly to the cestui que trust, 376 buying property secretly from cestui que trust, 377 acquiescence by cestui que trust in dealings with, when binding, 344, 345 legal estate got in from, when available, 349, 350 jtu'isdiction of the Court to declare a person who has acquii-ed an estate by fraud to be a, 400, 401 UNCONSCIONABLE BARGAINS, relieved against, 171, 172 UNDER-LEASE. Bee Sub-lessee. instead of lease, purchaser need not accept, 419, 420 UNDUE INFLUENCE, what is, 158, 159, 162 rule of equity as to, 119, 124, 158, 159 in what cases has been relieved against, 162, 163, 164, 166, 167, 168, 172, 174 in obtaining a will, 296, 298, 299, 300 in the case of transactions, inter vivos, and in obtaining a vriW, dis- tinction between, 297 must be practised in relation to the will itself, 300 592 GENERAL INDEX. UNDUE INFLUENCE— fo«