there is a misrepresentation of a fact upon which fraud may be predicated, Montana. Kelly v. Ellis (1909) 39 Mont. 597, 104 Pac. 873 (statute regarded as declaratory of common-law rule); McIntyre v. Dawes (1924) 71 Mont. 367, 229 Pac. 846 (same). Nebraska. McCready v. Phillips (1898) 56 Neb. 446, 76 N. W. 885; Pollard v. McKenney (1903) 69 Neb. 742, 96 N. W. 679, 101 N. W. 9; Cerny v. Paxton & G. Co. (1907) 78 Neb. 134, 10 L.R.A. (N.S.) 640, 110 N. W. 882; Farmers Co-op. Grain Co. v. Startzer (1924) 112 Neb. 19, 198 N. W. 170. See also Abbott v. Abbott (1886) 18 Neb. 503, 26 N. W. 361. Nevada. Ivancovich v. Stern (1879) 14 Nev. 341. New York.-Deyo v. Hudson (1919) 225 N. Y. 602, 122 N. E. 635; Adams v. Clark (1925) 239 N. Y. 403, 146 N. E. 642; Jones v. Jones (1903) 40 Misc. 360, 82 N. Y. Supp. 325; Berstein v. Lester (1903) 84 N. Y. Supp. 496; Robert v. Robert (1914) 87 Misc. 629, 150 N. Y. Supp. 366; Podolsky v. Sandler (1916) 161 N. Y. Supp. 363; Stoltz v. Reynolds (1918) 169 N. Y. Supp. 170; Hobaica v. Byrne (1924) 123 Misc. 107, 205 N. Y. Supp. 7, later proceedings sustaining rule reported in (1926) 216 App. Div. 307, 214 N. Y. Supp. 759. See also Adams v. Gillig (1910) 199 N. Y. 314, 32 L.R.A. (N.S.) 127, 92 N. E. 670, 20 Ann. Cas. 910; Ritzwoller v. Lurie (1919) 225 N. Y. 464, 122 N. E. 634; Kennedy v. Spilka (1911) 72 Misc. 89, 129 N. Y. Supp. 390; Eichorn V. Serlis & Co. (1922) 118 Misc. 256, 192 N. Y. Supp. 797; Rutstein v. Rutstein (1927) 221 App. Div. 70, 222 N. Y. Supp. 688. Contra, Gallager v. Brunel (1826) 6 Cow. 346; Fisher v. New York Common Pleas (1836) 18 Wend. 608; Gray v. Palmer (1864) 2 Robt. 500, affirmed, without opinion, in (1869) 41 N. Y. 620; Closius v. Reiners (1897) 13 App. Div. 163, 43 N. Y. Supp. 297. See also Farrington v. Bullard (1863) 40 Barb. 512. Blake v. Blackley North Carolina. (1891) 109 N. C. 257, 26 Am. St. Rep. 566, 13 S. E. 786; Hill v. Gettys (1904) 135 N. C. 373, 47 S. E. 449; Troxler v. New Era Bldg. Co. (1904) 137 N. C. 51, 49 S. E. 58; Braddy v. Elliott (1908) 146 N. C. 578, 16 L.R.A. (N.S.) 51 A.L.R.-5. the gist of the fraud in such a case being not the breach of the agreement 1121, 125 Am. St. Rep. 523, 60 S. E. 507; Herndon v. Durham & S. R. Co. (1913) 161 N. C. 650, 77 S. E. 683; Williams v. Hedgepeth (1922) 184 N. C. 114, 113 S. E. 602; White v. Fisheries Products Co. (1923) 185 N. C. 68, 116 S. E. 169; Planters Bank & T. Co. v. Yelverton (1923) 185 N. C. 314, 117 S. E. 229; Erskine v. Chevrolet Motors Co. (1923) 185 N. C. 479, 32 A.L.R. 196, 117 S. E. 706. North Dakota. - FOSTER V. DWIRE (reported herewith) ante, 21. For earlier cases referring to statute, see IX. infra.) Ohio. American Hosiery Co. v. Baker (1899) 18 Ohio C. C. 604, 10 Ohio C. D. 219. Contra, Smith v. Bowler (1858) 1 Disney, 520, affirmed in (1858) 2 Disney, 153. Oklahoma. Blackburn v. Morrison (1910) 29 Okla. 510, 118 Pac. 402, Ann. Cas. 1913A, 523; McLean v. Southwestern Casualty Ins. Co. (1916) 61 Okla. 79, 159 Pac. 660; Rogers v. Harris (1919) 76 Okla. 215, 184 Pac. 459; Haggerty v. Key (1924) 100 Okla. 238, 229 Pac. 548. Texas. RUSSELL V. INDUSTRIAL TRANSP. Co. (reported herewith) ante, 1; Henderson v. San Antonio & M. G. R. Co. (1856) 17 Tex. 560, 67 Am. Dec. 675; Chicago, T. & M. C. R. Co. v. Titterington (1892) 84 Tex. 218, 31 Am. St. Rep. 39, 19 S. W. 472; Rapid Transit R. Co. v. Smith (1905) 98 Tex. 553, 86 S. W. 322; Cearly v. May (1914) 106 Tex. 444, 167 S. W. 725; Edward Thompson Co. v. Sawyers (1921) 111 Tex. 374, 234 S. W. 873; King v. - Tex. Wise (1926) 282 S. W. 570; Touchstone v. Staggs (1897) Tex. Civ. App. —, 39 S. W. 189; McFarland v. McGill (1897) 16 Tex. Civ. App. 298, 41 S. W. 402; American Cotton Co. v. Collier (1902) 30 Tex. Civ. App. 105, 69 S. W. 1021; O'Brien v. Camp (1907) 46 Tex. Civ. App. 12, 101 S. W. 557; to perform, but the fraudulent intent of the promisor and the false representation of an existing intention to -- Scoggin v. Mason (1907) 46 Tex. Civ. App. 480, 103 S. W. 831; Beaumont Carriage Co. v. Price (1907) Tex. Civ. App. 104 S. W. 499; Mutual Reserve L. Ins. Co. v. Seidel (1908) 52 Tex. Civ. App. 278, 113 S. W. 945; International Land Co. v. Parmer (1909) 58 Tex. Civ. App. 70, 123 S. W. 196; Selari v. Selari (1909) Tex. Civ. App., 124 S. W. 997; Geiser Mfg. Co. v. Lunsford (1911) Tex. Civ. App. —, 139 S. W. 64; Chambers v. Wyatt (1912) Tex. Civ. App., 151 S. W. 864, later appeal in (1915) · Tex. Civ. App. 182 S. W. 16; Ferrell v. Millican (1913) 156 Tex. Civ. App. S. W. 230; South Texas Mortg. Co. v. Coe (1914) - Tex. Civ. App. - 166 S. W. 419; Atchison, T. & S. F. R. Co. v. Skeen (1915) Tex. Civ. App. 174 S. W. 655; Barnes v. Campbell (1915) - Tex. Civ. App., 179 S. W. 444 (recognizing rule); General Bonding & C. Ins. Co. v. Mount (1916) Tex. Civ. App. 183 S. W. 783; MidContinent L. Ins. Co. v. Pendleton (1918) — Tex. Civ. App. -, 202 S. W. 769 (recognizing rule); Lott Town & Improv. Co. v. Harper (1918) Tex. Civ. App., 204 S. W. 452, affirmed in (1921) Tex. 228 S. W. 188 (same); Burchill V. Hermsmeyer (1919) Tex. Civ. App. —, 212 S. W. 767, later appeal in (1921) Tex. Civ. App. 230 S. W. 809; Texas Co-op. Invest. Co. v. Clark (1919) Tex. Civ. App., 216 S. W. 220, modified on other grounds in (1922) - Tex. 239 S. W. 198; Long v. Calloway (1920) Tex. Civ. App. 220 S. W. 414; Gustafson v. Ameriican Land Co. (1921) - Tex. Civ. App. perform, when such intent did not in fact exist;15 and the courts have pointed out that the state of the prom son (1924) Tex. Civ. App. —, 263 S. W. 330; Hancock v. Blumentritt (1925) Tex. Civ. App. 269 S. W. 177; Higginbotham-Bartlett Co. V. Powell (1925) Tex. Civ. App. 270 S. W. 193; Lockney Farmers' Coop. Soc. v. Egan (1925) Tex. Civ. App. 275 S. W. 732, affirmed in (1926) Tex., 284 S. W. 937; Starnes v. Motsinger (1925) Tex. Civ. App. 278 S. W. 496; Clem v. Evans (1926) Tex. Civ. App. —, 286 S. W. 273, reversed on other grounds in (1927) Tex. - A.L.R., 291 S. W. 871; Capley v. Hudson (1926) Tex. Civ. App. —, 286 S. W. 531; Siggel v. Lindig (1927) Tex. Civ. App. 291 S. W. 920; Dibrell v. Central Nat. Bank (1927) — Tex. Civ. App. —, 293 S. W. 874. See also M. T. Jones Lumber Co. v. Villegas (1894) 8 Tex. Civ. App. 669, 28 S. W. 558 (recognizing rule); Byers Bros. v. Maxwell (1903) Tex. Civ. App. 73 S. W. 437; Wagner v. J. B. Colt Co. (1921) Tex. Civ. App., 234 S. W. 934 (recognizing rule); Bush & G. Piano Co. v. Thomas (1924) - Tex. Civ. App. 261 S. W. 202 (same). Virginia. See Scott v. Boyd (1902) 101 Va. 28, 42 S. E. 918. Washington. Lovell v. Dotson (1924) 128 Wash. 669, 223 Pac. 1061; Kritzer v. Moffat (1925) 136 Wash. 410, 44 A.L.R. 681, 240 Pac. 355; Jacquot v. Farmers' Straw Gas Producer Co. (1926) 140 Wash. 482, 249 Pac. 984. See also Rozell v. Vansyckle (1895) 11 Wash. 79, 39 Pac. 270; Hewett v. Dole (1912) 69 Wash. 163, 124 Pac. 374 (recognizing rule). West Virginia. See Martin v. South Bluefield Land Co. (1917) 81 W. Va. 62, 94 S. E. 493. Contra, Love v. Teter (1884) 24 W. Va. 741. 15 FOSTER V. DWIRE (reported herewith) ante, 21. While the mere failure to perform an executory agreement which is part of the consideration or inducement to the making of a contract of sale will not per se constitute such fraud as to authorize a subsequent rescission of the contract by the other parties, yet, if it can be shown that, when the inducing promise was made and a sale consummated in reliance thereon, the buyer had a secret intention not to perform the obligation which he undertook to perform in the future, then isor's mind at the time he makes the promise is a fact, and one which is exclusively within his own knowledge; and if he represents his state of mind, this secret intention not to perform, in itself, constituted such fraud as to warrant a rescission, if the promise was relied on by the seller and was a material inducement to the making of the sale. Blaul v. Wandel (1908) 137 Iowa, 301, 14 N. W. 899. To the same effect, that the gist of the fraud in the cases supporting the above rule is not the breach of the promise, but the fraudulent intent of the promisor, at the time he made the promise or executed the contract, not to perform the same and to deceive the obligee by his false promise, are Blackburn v. Morrison (1910) 29 Okla. 510, 118 Pac. 402, Ann. Cas. 1913A, 523; Rogers v. Harris (1919) 76 Okla. 215, 184 Pac. 459; Crowley v. Langdon (1901) 127 Mich. 51, 86 N. W. 391; Fenwick v. Grimes (1839) 5 Cranch, C. C. 603, Fed. Cas. No. 4,734. A promise is usually without the domain of the law unless it creates a contract, but if made when there is no intention of performance, and for the purpose of inducing action by another, it is fraudulent, and may be made the ground for relief. Herndon v. Durham & S. R. Co. (1913) 161 N. C. 650, 77 S. E. 683; Erskine v. Chevrolet Motors Co. (1923) 185 N. C. 479, 32 A.L.R. 196, 117 S. E. 706. It was said in McLean v. Southwestern Casualty Ins. Co. (1916) 61 Okla. 79, 159 Pac. 660, that there is a wide distinction between the nonperformance of a promise and a promise made mala fide and without any intention at the time of making it to perform it; that while ordinarily a statement upon which fraud may be predicated must be an existing fact, yet if a promise is made to be performed in the future, as an inducement to obtain a contract, if the intention not to perform the promise is shown to have existed at the time it was made, such false promise constitutes cognizable fraud. 16 King v. Wise (1926) Tex. 282 S. W. 570. It was said that the representation may appropriately take the guise of a promise to do, or to refrain from doing, something in the future, thus importing a declaration of present intent in accord with the promise, whereas the real intent (the fact) is not to do the thing promised, or is to do the thing whose omission i. e., his intent, as being one thing, whereas it is the opposite, he misrepresents a then existent fact.16 In other words, there is a prima facie presump was promised; that in such a case there is actionable fraud if the fact thus represented is material and is relied on by the other party to his injury. In Texas Farm Bureau Cotton Asso. v. Craddock (1926) Tex. Civ. App. 285 S. W. 949, it is said (dictum) that fraud may be predicated on a statement which purports to be only the expression of an opinion entertained, if the person expressing the opinion in reality does not entertain it, but falsely pretends he does for the purpose of deceiving another person. The doctrine that, if one fraudulently misrepresents his intention at the time of contracting, this is a misrepresentation of an existing fact which may constitute fraud sufficient to avoid the contract, is approved, also, in Gale v. McCullough (1912) 118 Md. 287, 84 Atl. 469, and in Brager v. Friedenwald (1916) 128 Md. 8, 97 Atl. 515. The reason for the doctrine that fraud may be predicated on a promise made without the intention of performance is that the promisor impliedly represents that he intends to perform the promise, and therefore falsely represents the condition of his mind, which is a representation of fact. Church v. Swetland (1917) 156 C. C. A. 69, 243 Fed. 289, appeal dismissed in (1919) 249 U. S. 579, 63 L. ed. 785, 39 Sup. Ct. Rep. 256. And it is said in Feldman v. Witmark (1926) 254 Mass. 480, 150 N. E. 329, that present intention as to a future act is a fact susceptible of proof; and that when such intention does not exist, and the maker of the representation knows it does not exist, it is a misrepresentation of a material fact. Where one promises to do a certain thing, having at the time no intention of keeping his promise, the same constitutes a fraudulent misrepresentation of a fact, and is actionable as such. Hight v. Richmond Park Improv. Co. (1918) 47 App. D. C. 518. In Hobaica v. Byrne (1924) 123 Misc. 107, 205 N. Y. Supp. 7, the court said: "It is true that the mere failure to keep one's promise, even if the promisor has no excuse for his failure so to do, cannot be made the basis of an action in fraud. But where one, tion of fairness and honesty in the dealings of individuals, and where one makes a promise to another as an inducement for a change of position or other action on the part of the latter, he, if not expressly, impliedly avers that he has an existing intent to fulfil his promise, and such implied averment of existing intent is one of mat for the purpose of inducing another to enter into a contract with him, intentionally makes a false statement of what he intends to and will do, such statement constitutes fraud, if the party to whom it was made relies thereon, and will sustain an action for damages; in other words, a person's existing intent shows his state of mind, and a person's state of mind is an existing fact, and when one asserts that he intends to or will do a certain thing in the future, when in fact he has no such intention, that is a statement of an existing fact, and not a recital simply promissory in its nature." Where a promise implies a present state of mind or existing intention on the part of the promisor, and such is not the fact, but the promisor falsely induces the promisee to believe him and rely on the existence of such state of mind or present intention, such conduct may constitute legal fraud. Cox v. Edwards (1913) 120 Minn. 512, 139 N. W. 1070; Albitz v. Minneapolis & P. R. Co. (1889) 40 Minn. 476, 42 N. W. 394. And in Guy T. Bisbee Co. v. Granite City Invest. Corp. (1924) 159 Minn. 238, 199 N. W. 14, the court approved the rule that a statement of the representor's or of a third person's intention or capacity to do a thing, or of his expectation as to a matter in future, is a representation of the present existence of such intention or capacity, and is a statement of a fact, and not merely a promise. Statements of opinion or intention may be so grossly erroneous, deceitful, and fraudulent as to repel the conclusion that the representations were mere matters of opinion, especially where there is an intention not to fulfil the promises made. Fernandina Shipbuilding & Dry Dock Co. v. Peters (1922; D. C.) 283 Fed. 621. 17 Rogers v. Virginia-Carolina Chemical Co. (1906) 78 C. C. A. 615, 149 Fed. 1. 18 Under the rule that a false statement as to what a person thinks is ac ter of fact, and if false and fraudulent is a fraudulent representation which may or may not, according to circumstances, furnish the basis for an action ex delicto in the nature of deceit. 17 And so, fraud may be predicated on a false representation as to what one thinks about the occurrence of future events.18 And it has been tionable if it is made to defraud, it was held in Ouilette v. Theobald (1918) 78 N. H. 547, 103 Atl. 306, that a statement by the seller of a horse that he thought it would recover from a disease from which it was then suffering was actionable, where there was a fair inference that he thought otherwise from the facts that the improvement in its condition on several former occasions had been only temporary, that he had been advised by a veterinarian that recovery of the animal was improbable, and that he sold it for only about half the price of a sound horse. It may be observed that the rule that fraud may be predicated on false representation as to one's opinion arises in cases not within the scope of the annotation, the court in this case, for example, citing Sleeper v. Smith (1914) 77 N. H. 337, 91 Atl. 866, where the statement was as to the value of property and the almost worthless character of the plaintiff's mortgage, inducing an assignment of the mortgage to the person making such representation. It was held in Conlan v. Roemer (1889) 52 N. J. L. 53, 18 Atl. 858, that if one engaged in the drilling of wells induced a party to enter into a contract for the drilling of a well at a certain price per foot, under a representation that water would probably be reached at a depth of 25 feet, whereas he knew from experience in drilling wells in that locality that it would be necessary to go to a depth of more than 200 feet in order to obtain water, the assertion was one of fact, for which he could be held liable. A person should not be at liberty to misrepresent the condition of his mind in order to defraud another of his property, any more than he should be permitted to misrepresent the condition of his estate for the same purpose. Jones v. Jones (1903) 40 Misc. 360, 82 N. Y. Supp. 325. In Edgington v. Fitzmaurice (1884) L. R. 29 Ch. Div. (Eng.) 459-C. A., one of the judges makes the statement, held that if one asserts as a fact that he is about to do something, and thereby induces another to enter into contractual relations with him, and such other party will be injured by the nonperformance of the representations, the representor cannot avoid cancelation of the contract on the ground that the representations were mere matter of opinion; and even an actual fraudulent intent does not appear to be essential under this view, but may, it which has been quoted many times in the opinions on the present subject, that the state of a man's mind is as much a fact as the state of his digestion; that while it is difficult to prove what the state of a person's mind is at a particular time, yet, if it can be ascertained, this is as much a fact as anything else; and that a misstatement as to the state of a person's mind is, therefore, a misstatement of fact. 19 In Rorer Iron Co. v. Trout (1887) 83 Va. 397, 5 Am. St. Rep. 285, 2 S. E. 713, a suit to annul a lease of mineral land for a period of twenty years, in consideration of a certain sum per ton for minerals obtained from the premises, the annulment being sought on the ground that, to induce the execution of the lease, the lessees represented that they were about to engage on a large scale in the business of mining and marketing ores, that they intended to set to work on the leased premises a large force, enabling them to transport and ship a certain number of tons per day, and that the bonus per ton would yield at least a certain income to the lessors per day, the court, in holding that a cause of action was stated, said: "The bill does not set up a different agreement from that contained in the deed of lease, but avers that the deed of lease was itself procured by fraudulent misrepresentations. These representations were of material things well calculated to, and doubtless did, induce the complainants to execute the lease to Lewis and Preston, thereby seriously encumbering a very valuable property without any corresponding benefit to the lessors. The false representations thus made by the lessees, and by means of which an unconscionable advantage was taken of the lessors, were of matters peculiarly within the knowledge of the lessees, and on which the lessors relied and acted, as they had the seems, be inferred or conclusively presumed.19 The courts have pointed out that promises made without intention of fulfilment, in order to induce others to contract, may be as material and as culpable and as harmful as are wilful misrepresentations of existing facts;20 and in various cases the misrepresentations have been held to be so related to the present as to constitute misrepresentations of fact,21 or have been right to do; and they were deceived and injured by them, because they were false. These false representations were not held out as opinions merely, but were positive affirmations especially adapted to the end in view, which was to obtain the lease of the mining privileges aforesaid. By these means they obtained the deed of lease, but the lessors got nothing in return. And it is on this ground that the suit was brought to annul the deed. It is of every day occurrence that courts of equity cancel contracts on such grounds. It matters not whethor the party making the representation knew it to be false or not, so the other party relied and acted on it, as he had a right to do, without further inquiry." See VI. infra, as to special considerations affecting rule in equity. 20 Edward Thompson Co. v. Sawyers (1921) 111 Tex. 374, 234 S. W. 873. It is said in Lockney Farmers' Coop. Soc. v. Egan (1925) - Tex. Civ. App. - 275 S. W. 732, affirmed in (1926) Tex., 284 S. W. 937, that promises made without intention of fulfilment, if knowingly false, which are relied on by the other party, constitute false representations just as material as a false representation of an existing fact. 21 See in this connection, V. infra. In Buhler v. Loftus (1917) 53 Mont. 546, 165 Pac. 601, the court recognizes the rule that ordinarily a misrepresentation as to what will be done in the future, or a statement of intention or opinion, however erroneous, is not sufficient on which to predicate fraud; but states that, although the fact concerning which the statement is made may be with reference to the future, yet it may be so related to present existing conditions that its affirmation as a fact will constitute fraudulent representation. This doctrine was applied |