fraud on the ground that the promise

promise to hire for a certain time a livery rig, refusal to take the rig according to the contract being a mere breach thereof, and not a fraud which would support an attachment, Kilpatrick v. Inman (1909) 46 Colo. 514, 26 L.R.A. (N.S.) 188, 105 Pac. 1080;

- promise made by a retail dealer to wholesaler, in statement of financial conditions, that should any injurious changes occur in the retailer's condition he would notify the wholesaler before making further purchases, Murray v. Smith (1891) 42 Ill. App. 548;

- oral promise by a third person that he would guarantee a certain proposed contract to be good, Depugh v. Frazier (1914) 167 Iowa, 742, 149 N. W. 854;

promise to execute bond as surety, Hayes v. Burkam (1875) 51 Ind. 130;

assurance by third parties that coupons in an investment company would mature regularly if the payment of dues thereon was continued, Smith v. Corbin (1909) 135 Ky. 727, 123 S. W. 277;

-promise by officer of medical institution, to furnish medical service for a certain period of time, inducing execution of notes for such prospective services, Crosby v. Ritchey (1896) 47 Neb. 924, 66 N. W. 1005;

- representation by a Christian Science healer that he could and would cure the plaintiff, who was suffering with appendicitis, Spead v. Tomlinson (1904) 73 N. H. 46, 68 L.R.A. 432, 59 Atl. 376;

- representation by debtor who was the owner of a seat in a stock exchange, inducing the creditor to consent to a settlement and discontinuance of an action which he had brought against the debtor, that the latter would not dispose of the seat in the exchange without paying the indebtedness, Lexow v. Julian (1880) 21 Hun (N. Y.) 577, affirmed without opinion in (1881) 86 N. Y. 638;

- promise to discontinue suit, Farrington v. Bullard (1863) 40 Barb. (N. Y.) 512;

representations regarding nature of an edition of a magazine to be issued, inducing advertisement therein, Stumpf v. Sargent (1897) 21 Misc. 674, 47 N. Y. Supp. 1086;

- representation that advertising contract could be canceled at the end

was made with an intention of nonper

of each week; this representation being directly contradicted by the express terms of the contract, and the court saying that it was promissory in nature and was immaterial on the issue of fraud, Lerner v. Roth (1912) 136 N. Y. Supp. 61;

promises by representative of foreign corporation to secure execution of contract by it within a certain number of days, Barbrick V. Carrero (1918) 184 App. Div. 160, 171 N. Y. Supp. 447;

representation by rebate company that it could and would procure the cutting in half of charges which the other party paid for electricity, and that it could and would recover for such party rebates of at least half of all bills that such party had paid for electricity during the past year, Henry W. Boettger Silk Finishing Co. v. Electrical Audit & Rebate Co. (1909) 115 N. Y. Supp. 1102;

representation as to the future details of performance of a contract whereby the defendant promised to pay in instalments for certain trade information to be furnished_him by the plaintiff, Construction Reporter Co. v. Crowninshield (1896) 16 Misc. 381, 38 N. Y. Supp. 72;

- statement made to induce one to give a bond as security for the debts of his sons, that, unless he did so, their creditors would indict them for obtaining goods on false pretenses and they would be sent to the penitentiary, Fulton v. Hood (1859) 34 Pa. 365, 75 Am. Dec. 664;

to

- representation inducing one enter into a subcontract for carrying government mail, that the performance of the service would require but one horse and wagon and one driver; the court saying that, if this were construed to refer to the whole period of the contract, it would seem to amount only to a mere expression of opinion or a prediction which, though mistaken, would not constitute fraud, Devers v. Sollenberger (1904) 25 Pa. Super. Ct. 64;

representation inducing an agreement to pay a certain sum for a life membership in a motor speedway association, as to the time when the speedway would be completed, Philadelphia Motor Speedway Asso. v. Murphy (1919) 71 Pa. Super. Ct. 451;

promise by debtor who had made an assignment for creditors, inducing

143

formance, or was intended, or at least served merely as a device, to de

a settlement with one of his creditors, for one third cash, with notes for the balance, that the debtor would continue in the same business, and resume business relations with the creditor, A. Landreth Co. v. Schevenel (1899) 102 Tenn. 486, 52 S. W. 148;

- promise by creditor of corporation, inducing stockholders to execute to him a note in settlement of the company's indebtedness to him, that he would obtain funds with which to conduct the business of the company in the future, and would give the company and its affairs his personal attention, Martin v. Daniel (1914) — Tex. Civ. App., 164 S. W. 17;

- representation by agent of association organized to market cotton on a co-operative basis, that the expense of handling the cotton would not exceed $2 per bale, the representation being a mere expression of opinion which the evidence tended to show was honestly entertained, Texas Farm Bureau Cotton Asso. V. Craddock (1926) Tex. Civ. App. 285 S. W. 949.

It was held in Pontiac Nursery Co. v. Miller (1926) 236 Mich. 511, 211 N. W. 263, that failure or neglect to perform an alleged oral agreement to put a void oral contract in writing was not, standing alone, fraudulent.

143 If there is no intention of performance, fraud may be predicated

on

-promises by landowner made to induce one to remove a sawmill and relocate it near his property, that he would furnish a certain amount of logs yearly for sawing purposes and would pay a designated sum, and would execute a written contract embodying the terms of this agreement, Olson v. Smith (1912) 116 Minn. 430, 134 N. W. 117;

-representations as to intended improvements on reorganization of street railway, inducing consolidation of lines, Old Colony Trust Co. v. Dubuque Light & Traction Co. (1898; C. C.) 89 Fed. 794;

-promise by creditors of one engaged in the mercantile business, inducing him to execute a chattel mortgage to secure the debt, that he should have an extension of time for payment of the same and that he would be aided by them in continuing the business through being permitted to purchase 51 A.L.R.-11.

ceive and defraud.143 But, in some cases of a miscellaneous nature, the goods on credit and to sell the mortgaged property in due course of trade, Crowley v. Langdon (1901) 127 Mich. 51, 86 N. W. 391;

assurance to the mortgagor by mortgagee, after foreclosure and before the time for redemption had expired, made in order to lull the mortgagor into a sense of security so that he would forego his legal right of redemption and the mortgagee could obtain a deed to the property, that redemption was not necessary, but that he (the mortgagee) would carry the debt upon mere payment of taxes and interest until a future time, Kritzer v. Moffat (1925) 136 Wash. 410, 44 A.L.R. 681, 240 Pac. 355 (see annotation following this case on the question of remedy for fraud preventing redemption from judicial sale, in 44 A.L.R. on p. 690);

- promise by creditor inducing debtor to secure the debt by a mortgage on a stock of goods, that he (the creditor) would not permit a sale thereof under foreclosure at public auction below a certain price, and that, in case such amount were not bid, the creditor would bid in the stock and dispose of the goods at private sale, accounting to the debtor for the surplus after satisfaction of the debt, Cerny v. Paxton & G. Co. (1907) 78 Neb. 134, 10 L.R.A. (N.S.) 640, 110 N. W. 882.

It was held in Macri v. Torello (1927) - Conn. —, 136 Atl. 479, that fraud might be predicated on a promise inducing the promisee to indorse a check to the promisor, that the latter would cash the check and deduct therefrom advances made by him and give the promisee the balance, if the promise was made with the fraudulent intent of depriving the latter of all of the proceeds of the check.

143 See note 22, supra.

In Standard Interlock Elevator Co. v. Wilson (1907) 218 Pa. 280, 67 Atl. 463, an action on a contract by which the plaintiff agreed to equip with safety devices certain elevators for the defendant, it was held to be a defense that the plaintiff had fraudulently represented to the defendant, as an inducement for him to enter into the contract, that a combination or trust was about to be formed for the purpose of controlling the sale of the various elevator safety devices in the

rule has been applied or recognized, that, even if there is an intent at the time the promise is made not to per

market, and that such trust would increase the price of installing such devices after a certain date, that such representations were known by the plaintiff at the time to be false, and that defendant was thereby induced to enter into the contract.

Representations by one soliciting a contract of subscription to a book containing sketches of the representative men in the state, as to the number of persons in the subscriber's town who would be solicited and the total number of persons whose portraits and sketches would be included in the book, were held material, in Greenleaf v. Gerald (1900) 94 Me. 91, 50 L.R.A. 542, 80 Am. St. Rep. 377, 46 Atl. 799, and, if false, sufficient to avoid the contract of subscription made in reliance thereon.

144 In Knowlton v. Keenan (1888) 146 Mass. 86, 4 Am. St. Rep. 282, 15 N. E. 127, an action for breach of a contract entered into to carry United States mail, the defendants being subcontractors from the plaintiffs, who had a contract with the government to carry the mail, it was held not an excuse for nonperformance that, at the time of the execution of the contract, the plaintiffs fraudulently promised to procure a change in the schedule, and fraudulently represented that they could secure such a change, although they knew at the time that they could not do so. It was said: "The fraud which the defendants sought to establish was the failure to perform an oral promise contemporaneous with the written agreement, and constituting a part of the transaction, which the plaintiffs knew they could not perform. The case at bar is readily distinguishable from those cases where it has been held that, if a person makes a representation of a fact as of his own knowledge in a matter susceptible of knowledge, and such representation is not true, or where, in a matter of opinion, judgment, or estimate, dishonestly and with the intent to deceive, he states that as of his own knowledge which is not true, and the party to whom the statement is made relies and acts upon it as true, and thus sustains damage, it is a fraud and deceit for which the party making it is responsible. That which the defendant sought to prove, if it can with propriety be

form it, such unfulfilled promise may not serve as a basis for fraud. 144

Attention is called in the footnote, termed a representation at all, was a representation that something should thereafter be done. Such a representation from its nature could not be true or false at the time it was made, and, if anything, was a contract or promise. The difference between a representation that something exists which does not, and a representation that something shall be done thereafter, is obvious. What the de

fendants sought to establish by their evidence was an oral contract, by which the terms of the written contract were to be changed by the efforts of the plaintiffs, and the mails which the defendants had in writing agreed to transport according to a specified schedule were to be transported according to a different schedule, to be obtained from the Postmaster General. The principle that written contracts are not to be enlarged, added to, or controlled by previous or contemporaneous oral agreements is too well settled to require a citation of authorities. Proof of such representation as that offered by the defendants was proof only of an oral contract to be thereafter executed. Nor, even if the plaintiffs made this oral contract fraudulently, knowing they could not perform it, would that have rendered the evidence admissible. There was no fraud in the written contract itself, and such evidence could not have been received to control its operation, and virtually to annul it."

And in Closius v. Reiners (1897) 13 App. Div. 63, 43 N. Y. Supp. 297, it was held that a cause of action for fraud was not stated by allegations to the effect that, the plaintiff being indebted to the defendant on a note which was usurious, and being unable to pay the same when it came due, the defendant represented to her that she had better confess judgment, that it was unnecessary for her to take legal advice, and that, if she would confess judgment, he would protect her interests on the sale of property belonging to her and would see that the same was based on a certain valuation, that she would obtain a fair market price, and would receive the balance after payment of debts, which representations, it was alleged, were unfulfilled and false and fraudulent and knowingly made to deceive the plaintiff. The

also, to several cases (among possibly others) of subscriptions to charitable or benevolent organizations, where the misrepresentations relied on to avoid the subscription were of a promissory nature, and were held insufficient for this purpose, but the question under annotation was not discussed. 145

VIII. Questions of evidence, pleading, and practice.

It is not the purpose in the present annotation to treat questions of evidence or of pleading and practice, except so far as they are somewhat distinctive to the subject of promises or representations as to future events. One of the important questions which arise is the method of proving an intent not to perform the promises at the time they were made, so as to bring the case within the rule that fraud may be predicated on unfulfilled promises made without intention of per

court said that the representations were not false as to any fact existing when they were made, but had relation solely to future events. It was suggested that the plaintiff might obtain relief in equity by way of vacation of the sale or redemption of the property therefrom. But subsequent cases in this state take the view that fraud may be predicated on a false promise made without intention of performance. See cases in note 14, supra.

The view was taken in one of the earlier New York cases that fraud may not be predicated on representations, made to induce the indorsement of a draft, that the representor would not take the proceeds of the draft to another state, but would, after paying certain claims, immediately return the remainder of the proceeds to the indorser, and would advise the latter how to invest the same, it being said that, even if the promisor intended at the time he made the promise, to repudiate it, the promise was not of such a character as to make him responsible in that action. Gray v. Palmer (1864) 2 Rob. (N. Y.) 500, affirmed, without opinion, in (1869) 41 N. Y. 620. But see note 14, supra.

145 It is held in Hurley v. Y. M. C. A. (1914) 16 Ariz. 26, 52 L.R.A. (N.S.) 220, 140 Pac. 816, that one cannot defeat his subscription to a fund to provide a building and site for a Young

formance. To some extent the question is a general one, which extends beyond the scope of the annotation, involving the question generally of admissibility of evidence to prove a fraudulent intent. It has been said that, 146 when the knowledge and intent of a party are material facts, proof of matters apparently collateral is admissible in many cases, both civil and criminal; and that, to show fraudulent intent with which representations are made, evidence of other fraudulent representations of a similar character, made by the same person and about the same time, is admissible. Such general questions, of course, are not covered in the annotation.

In the class of cases under discussion, it appears to be a general rule that ordinarily a fraudulent intent not to perform the promise cannot be inferred merely from the fact of nonperformance. 147 Indeed, some cases seem Men's Christian Association building, which is stated to be in consideration of the subscriptions of others provided a certain amount is subscribed, by the alleged breach of promises made him by the one soliciting the subscription as to the character and arrangement of the grounds, the time of erection of the building, the beneficiaries of its privileges, and the use of the property.

And Y. M. C. A. v. Olds Co. (1915) 84 Wash. 630, L.R.A.1917F, 1132, 147 Pac. 406, is to the effect that misrepresentations inducing subscription to a building fund of a charitable organization, that the cost of the building to be constructed would not exceed a certain sum, being of a promissory nature and not a statement of existing facts, will not avoid the subscription.

South Carolina. Coleman v. Stevens (1922) 124 S. C. 8, 117 S. E. 305. Texas. King v. Wise (1926) Tex. 282 S. W. 570; Beaumont Carriage Co. v. Price (1907) Tex. Civ. App., 104 S. W. 499; Burchill v. Hermsmeyer (1919) Tex. Civ. App.

212 S. W. 767, later appeal in (1921) Tex. Civ. App. —, 230 S. W. 809; Long v. Calloway (1920) Tex. Civ. App., 220 S. W. 414.

Washington. — Hewett v. Dole (1912) 69 Wash. 163, 124 Pac. 374. Wisconsin. Krouskop v. Krouskop (1897) 95 Wis. 296, 70 N. W. 475, citing Patterson v. Wright (1885) 64 Wis. 289, 25 N. W. 10.

To bring a case within the rule that fraud may be predicated on a promise which the person making it does not at the time intend to perform, there must be some evidence, direct or circumstantial, of an intention of nonperformance at the time the promise is made, and such intention cannot be inferred merely from the fact that the promise is not performed. Long v. Calloway (Tex.) and Beaumont Carriage Co. v. Price (1907) - Tex. Civ. App., 104 S. W. 499. (Otherwise any contemporaneous agreement could be attached to a writing by parol, and the rule of law on this subject would be useless.)

A fraudulent intent in making a promise, which the promisor did not at the time expect to perform, should not be assumed by the court merely as a consequence of nonperformance. Oldham v. Bentley (Ky.) supra.

And it was held in Blaul v. Wandel (1908) 137 Iowa, 301, 114 N. W. 899, that the mere failure to perform an executory agreement, which constituted a bar to the consideration of or inducement to a sale, was not of itself proof of fraud existing at the time of

of an intention not to perform the promise in its inception. 148 The correct rule, however, appears to be that,

the sale. The court applied this doctrine where the purchaser of flour failed to fulfil a promise made at the time of the purchase to cancel a previous order for flour from another company, it being held that the mere failure to countermand the order and receipt of the goods from the other company did not establish a fraudulent purpose in making the agreement with the secret intention not to perform it.

Failure of a purchaser of personal property to pay a draft which he had agreed to honor in payment of the purchase price was held in Baker v. Allen (1920) 68 Colo. 59, 189 Pac. 4, not sufficient evidence of an intent, when the agreement was made, not to perform it, so as to constitute fraud.

In Hewett v. Dole (1912) 69 Wash. 163, 124 Pac. 374, the court said it had no doubt that the weight of authority sustains the contention that, if a promise is made merely as a means of deceiving and with no intention to perform, it constitutes such fraud as will support an action for deceit, and entitles the injured party to a rescission; but that it had been cited to no authority holding that a preconceived intention not to perform is established merely by a subsequent failure or refusal to perform in the absence of antecedent insolvency, except in those cases where the consideration for the transfer was an agreement to support aged or infirm persons. The case was one where a conveyance was made under an agreement by the vendee to pay certain indebtedness of the vendor, and, there being no evidence that the vendee did not enter into the contract in good faith, with an intention to pay as he had agreed to do, it was held that the conveyance could not be rescinded on the ground of fraud, merely because of failure to perform the contract.

In Hone v. Burr (1915) 91 Misc. 520, 155 N. Y. Supp. 377, mere nonfulfilment of the alleged representations or promises to make repairs on the premises, which representations were made by the lessor to induce the lessee to enter into the contract, was held not to show an intention on the part of the lessor at the time the representations were made not to perform them, so as to serve as a basis for fraud.

148 Knudsen v. Domestic Utilities