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§ 120. Matters of fact.-In order to amount to a fraud the false representation must have been of a fact, that is, something existent or nonexistent in the present or past. Representations as to matters in the future are not actionable for fraud, for such things can not be Isaid to have existence. Statements as to the future can be no more than promises, or mere predictions. If they are construed as promises, they must be enforced as contracts, not remedied as frauds; and if they are predictions they are merely opinions, which the law will not recognize as instruments of fraud.

§ 121. Fraudulent promises.-Although the general rule is well established that a promise unfulfilled is not a fraud nor the evidence of fraud, yet it must be admitted that in actual business affairs a promise is often used as the principal means of committing a deception. In recognition of this, some of the courts, though not all, have attempted to escape the rigor of the rule. It has in some states been held that, if there is a present fraudulent intent not to keep the promise, there is a fraud; for example, if one should buy goods and promise to pay for them, having the secret intention not to pay for them, this would be a false statement as to a present fact, namely, the intent. The decisions are not uniform, however. Many courts hold that the law can not recognize as a fact the present intent as to a future act.

§ 122. Materiality. It is essential that the misrepresentation shall have been material, that is, it must have influenced and been a controlling reason for the transaction. It need not, however, have been the sole or even the principal inducement. Its materiality is made to appear sufficiently, if in the judgment of a reasonable

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person the false statement was one of the reasons for acting.

§ 123. Falsity.-The representation must have been false, but it need not have been literally false. If such words were used as would carry to an average man the false meaning, they would be effective for the fraudulent purpose. Indeed a fraud might be accomplished by the use of words true in a literal sense, but false in the sense that would be commonly given them.

knowledge.—If

§ 124. Wrongdoer's one innocently and upon reasonable grounds makes a statement, he can not be deemed guilty of a fraud even though the statement turn out to be false. He must have had some knowledge of the falsity. A statement will be regarded as false to defendant's knowledge, (1) if he had actual knowledge, (2) if he recklessly stated something as true when he had no grounds one way or the other, (3) if he stated something to be true of his own knowledge when he had only a belief. In each of these cases the defendant created in the mind of the plaintiff the impression that the defendant actually knew about the fact. There is another class in which the defendant may actually have had no bad motive and yet be deemed guilty of fraud, namely, where he was so specially situated that he was bound to know the truth.

§ 125. Wrongdoer's intent that the representation be acted on. It is essential, to constitute a fraud in the legal sense, that the representation shall have been made with the intent that it should be relied and acted upon. This intent is to be gathered from the circumstances of the case. Where the representation is made between the parties themselves in a transaction, it is

presumed that it was intended to be acted on, and no further proof is necessary in order to show such intention than that the defendant made the misstatement with knowledge of its falsity. But when the representation is made by a third person, such presumption does not arise, and there must be some proof that the person intended the misstatement to be relied on, or knew or had reason to know it was to be acted on.

§ 126. Who entitled to rely on representations.It would be obviously impracticable to permit persons to rely upon any and every misstatement they may hear or read, and to hold the author responsible for ensuing damage, for business operations and even social intercourse would involve such risk as to be unsafe. The law wisely restricts the right of action for fraud to the persons who were intended to be influenced by the misrepresentation. If one who was not intended to be influenced nevertheless acts and is injured by a misrepresentation, he is remediless. There are cases, however, where the whole public are intended to be influenced, as where corporations publish false prospectuses. In such cases any individual of the public who relies thereon and is injured has a right of action against the authors of the misrepresentation.

§ 127. Representation must have been acted on.It is self-evident that if the misrepresentation is not acted upon, any damage that results can not be attributed to it. If it appears that the party complaining did not at all rely on the misstatement, whether because he did not believe it, or because he preferred to examine for himself, there is no right of action. If, however, the misrepresentation formed any material part, even though slight, of the in

ducement for entering into the transaction, the whole is tainted with the fraud and remedy will be given.

§ 128. Injured party's belief. It is essential, in order to make out a case of fraud to show that the injured person believed the misstatement to be true. Of course, if he knew it was false, there is an end to the action. And so, if by the exercise of ordinary diligence he could have known the truth, he can not complain that he was defrauded. If he did not know and was prevented from exercising ordinary diligence by any devices or tricks of the wrongdoer, his belief in the false statement would be justifiable.

As a general rule, a person is entitled to rely on a statement when it is made to him for the purpose of having him rely on it, and he is not chargeable with negligence if he does not make examination for himself. But there are some obvious precautions that every one ought to take, as for instance, one ought to read an instrument before signing it, and failure to do so would be such negligence as would bar a recovery for fraud unless the person is for any reason unable to read or prevented by a clear trick from reading. And it is held that if the opportunity for verification is immediately at hand, it is one's duty to make examination rather than rely on a statement.

§ 129. Damage. It is an essential of the cause of action for a fraud that there shall have been some damage done by acting on the misrepresentation. It is not sufficient that damage may occur in the future; it must have occurred.

§ 130. The remedies.-The law will redress a fraud, either by way of action, or by way of defense. The injured person may recover damages for his injury,

he may recover back what he has been defrauded of, or he may have injunction against the wrongdoer's bringing an action, or against his disposing of the property fraudulently obtained. If an action has been brought by the wrongdoer upon the fraudulent transaction, the injured person may plead the fraud as a defense. In many cases of fraud, the law remedies the wrong by way of estoppel, that is to say, it compels the wrongdoer to abide by his false statement, and will not permit him to show it to be false.

§ 131. Personal injuries through fraud.-As has been shown under the head of assault and battery, it is usually a good defense to show that plaintiff consented to the act; but if the consent was obtained by fraud, the defense is overcome. The fraud in such case is the essential thing giving a right of action. If one person knowingly hands another an explosive, and the latter, being ignorant, is without fault injured, the former is guilty of a gross fraud; the action, however, would be for an assault and battery, or for negligence. And so, where one leaves exposed anything that is dangerous, whether on his own premises or elsewhere, in such a manner as to create an appearance of safety, and in consequence injury occurs to innocent persons, it is clear that the most important element of wrong is the deception; yet the action would properly be considered as one for negligence or for nuisance. Where fraud produces personal injury, there is generally some other ground than fraud upon which the case may rest. It is conceivable, however, that there might be a case in which a malevolent person could by fraud alone cause direct personal injury, and which would be redressed upon the ground of fraud and deception. The usual field for fraud is that of property and contracts.

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