one may remain silent regarding it, even though he is aware of the other's ignorance. 11 In some particular transactions and special relations, notably in fiduciary relations, wherever confidence is reposed and accepted, there is an affirmative duty upon the one party to disclose to the other all he knows regarding the subject matter of the relation or transaction. A failure to make such disclosures is a fraud.12 concealment 8. Active concealment. - Active should not be confused with passive non-disclosure. Failure to disclose, when accompanied by words, acts or devices designed and calculated to distract the attention of the plaintiff or otherwise prevent him from discovering the truth, ceases to be mere passive non-disclosure; it is a peculiar form of active misrepresentation and is fully as effective in creating tort liability.13 9. Representation by conduct.-Commonly the active misrepresentation constituting the deceit is an express statement made by spoken or written words. Actions, however, may express a meaning as well as words. A false representation may be made by conduct alone, or partly by conduct and partly by words. If one creates in the mind of another a belief that a certain state of facts exists, by acts that would naturally convey such impression 11 Laidlaw v. Organ, 2 Wheat. 178 (U. S.); Smith v. Hughes, L. R., 6 Q. B. 597 (Eng.); Newell v. Randall, 32 Minn. 171. Where there is partial disclosure of the facts, partial non-disclosure may cause that which is disclosed to convey a false impression. See §§ 10 and 11. 12 Fisher v. Budlong, 10 R. I. 525. 13 Mudsill Min. Co. v. Watrous, 61 Fed. 163; Kuelling v. Roderick Lean Manufacturing Co., 183 N. Y. 78. to the mind of the ordinary man, the legal effect is the same as if he made such a statement in express words.14 In Rex v. Barnard,15 the fact that the defendant at Oxford appeared in university cap and gown was held a sufficient representation by conduct that he was a member of the university to render him criminally liable for obtaining goods by false pretenses. Similarly, where the defendant, in the assumed character of a porter, delivered to another a mock parcel with a printed ticket, reciting charges for delivery, and received the charges so recited, he was held criminally liable.16 "Salting" a mine with silver to deceive the plaintiff and induce him to purchase it is fraudulent misrepresentation.17 In the sale of goods, the act of making the sale, together with the circumstances under which it is made, is regarded as involving certain implied representations on the seller's part respecting his title to the goods and their quality. It is the doctrine of "implied warranties" and is commonly discussed from the standpoint of warranty rather than from that of deceit.18 10. Meaning of the representation.-The words are to be taken in the sense in which they were actually understood by the plaintiff, provided that 14 Rex v. Barnard, 7 C. & P. 784 (Eng.), LEADING ILLUSTRATIVE CASES; Rex v. Douglas, 7 C. & P. 644, note (Eng.), LEADING ILLUSTRATIVE CASES; Mudsill Mining Company v. Watrous, 61 Fed. 163; Swift v. Rounds, 19 R. I. 527. 15 7 C. & P. 784 (Eng.). 16 Rex v. Douglas, 7 C. & P. 644, note (Eng.). 17 Mudsill Min. Co. v. Watrous, 61 Fed. 163. 18 See subject, SALES. is a sense in which they were intended by the defendant, or in which he actually foresaw or ought to have foreseen that they might very likely be understood.19 It is not a question what the defendant meant by the words, but what the plaintiff reasonably and properly understood by them. One who speaks words is responsible for their reasonably apparent meaning to others, the meaning which they are likely to convey to others; this he ought to foresee and for this he is therefore legally responsible. All the more is he responsible for a certain meaning if he actually foresaw or intended that the words should so be understood. On the other hand, though one be legally responsible for his words in a certain sense, yet if they are not in fact understood by the other in that sense, but only in another sense for which one is not legally responsible, there is no liability.20 It is the representation as a whole, with the meaning given to it by the accompanying acts and the surrounding circumstances, that is to be considered. The literal meaning of the words used often indicates very inadequately the real sense of the representation. While there is ordinarily no duty to dis 19 Peek v. Gurney, L. R., 6 H. of L. 377 (Eng.), LEADING ILLUSTRATIVE CASES; Smith v. Chadwick, 9 App. Cas. 187 (Eng.); Arnison v. Smith, 41 Ch. Div. 348 (Eng.); Peek v. Derry, 37 Ch. Div. 541, 587 (Eng.); Newell v. Randall, 32 Minn. 171. Of liability for the intended meaning no doubt has ever been suggested. The other branch of the rule is amply supported by the authorities, which repeatedly assert the defendant's responsibility for the "ordinary" or "reasonable" meaning of the language used, that which an ordinary man would be likely to put upon it, "how a reader of ordinary intelligence would understand it." But see the doubt expressed by Lord Blackburn in Smith v. Chadwick, cited above. 20 Smith v. Chadwick, 9 App. Cas. 187 (Eng.). close facts known, yet the partial withholding of facts may give a marked color to that which is disclosed and materially affect the meaning of the representation.21 11. Falsity of the representation. To constitute actionable deceit the representation must be false; to tell the truth is justifiable and imposes no liability.22 But truth of the representation in the sense intended by the defendant is not enough, it must be true in the sense in which the representation is actually and properly understood by the plaintiff.23 If the plaintiff understands the representation in a sense for which the defendant is not responsible, its truth is obviously immaterial, for the defendant is nowise responsible for its effect, be it true or false. Should the representation, however, be relied upon in a sense for which its maker is legally responsible, then the truth of the statement in that sense becomes material, though the truth or falsity of any other possible meaning which it might possess is immaterial. The words used may be literally true, but if the impression which the statement, as a whole, creates is not true, the representation is false. Partial withholding of facts will often render a statement false; if the defendant suppresses a material fact, and such suppression renders what he has said untrue, or 21 Smith v. Chadwick, 20 Ch. Div. 27, 36, 58 (Eng.); Newell v. Randall, 32 Minn. 171; Boyd's Ex'rs v. Browne, 6 Pa. 310; Kidney v. Stoddard, 7 Met. 252 (Mass.). 22 This is asserted or assumed in all the cases. Compare the similar principle in defamation. 23 Smith v. Chadwick, 20 Ch. Div. 27, 46, 64, 9 App. Cas. 187 (Eng.). causes it to convey, as a whole, a false impression, he is liable.24 12. Nature of the representation-Future facts. -To be actionable as tortious deceit, the misrepresentation must relate to present or past facts. It must be a statement of a fact and not a mere opinion, and it must not relate merely to some future event or act by way of promise or prediction, or assertion of probability or expectation. A statement that some event will or will not happen in the future is not actionable deceit.25 He who makes such a prediction is not answerable for its fulfillment. To induce subscriptions to stock, for instance, by representations that the value of the lands of the subscribers will be greatly increased by a proposed railroad, that it will enable them to sell their wheat for a higher price, and that the company will pay large dividends (which predictions are not realized), is not fraud.26 Similarly, a promise that is subsequently broken is not deceit. If the requisites of a binding contract are present, there may be a liability for breach of contract, but no tort; and if the agreement is not valid as a contract, there is no liability at all." In Long v. Woodman,28 the defendant and another, having lent money to the plaintiff, induced him to convey to 24 See § 10, n. 21. 25 Sawyer v. Prickett, 19 Wall. 146 (U. S.); 26 Sawyer v. Prickett, 19 Wall. 146 (U. S.). opinion, and is actionable if made in bad faith. 625; Gerhard v. Bates, 2 El. & Bl. 476 (Eng.). Holton v. Noble, 83 Cal. 7. 27 Long v. Woodman, 58 Me. 49; Union Pacific Ry. Co. v. Barnes, 64 Fed. 80. 28 58 Me. 49. |