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V. Promises blended or associated with misrepresentations of fact.

In a number of cases, the alleged false representations or promises have not been the only inducement on which the party to whom they were made relied. And the rule has been laid down that, while a mere promise to perform an act in the future is not, in a legal ing with a question which only involves the violation of a bare promise between parties dealing with each other on an equal footing or at arms' length. The questions presented for our consideration are those which concern parties to a transaction between whom there exists that relationship which the law terms confidential. The record before us shows that the relationship between the plaintiffs and the defendant was confidential in fact as well as in law, and that both actual and constructive fraud has been committed in this case."

In Murray v. Tolman (1896) 162 III. 417, 44 N. Ě. 748, where the promoter of a corporation was the president of a bank from which the stockholder borrowed money, the decision that fraud warranting rescission of the contract of subscription was shown may apparently be regarded as based partly on the ground of the confidential relation of the parties. See this case under note 86, infra.

Denying that confidential relations. existed between a divorced husband and wife, so as to enable the latter to predicate fraud on his promises to perform certain acts in the future, see Van Sickle v. Harmeyer (1912) 172 Ill. App. 218, which is set out under note 100, infra.

Attention is called, also, to Catalani v. Catalani (1890) 124 Ind. 54, 19 Am. St. Rep. 73, 24 N. E. 375, which does not discuss the present question, but is based on the ground that the Statute of Frauds should not be permitted to aid in the perpetration of fraud, and that a cause of action for reconveyance was shown where one conveyed land

sense, a representation, nor does a failure to perform such promise convert it into a false representation, yet, if the promise is accompanied with statements of existing facts showing the ability of the promisor to perform the promise, without which it would not have been accepted or acted upon, such statements constitute representanave (1891) 91 Cal. 41, 27 Pac. 521, arising out of the fiduciary relation of the parties; as, where one standing in such relation to another obtains property by means of a parol promise to reconvey, which he refuses to perform. But these are beyond the scope of the annotation.

But in Legler v. Tyler (1924) 184 Wis. 238, 199 N. W. 149, an action against real-estate brokers for fraud in representing that they had a purchaser for property which they induced the plaintiff to receive in exchange for property which she owned, the court overruled the contention that the situation between the parties was such as to create a fiduciary relationship whereby the opinions or promises of the defendants as to the possible future sale or exchange of the plaintiff's newly acquired property partook of the nature of facts, which, when relied upon by the plaintiff, came within the field of actionable fraudulent representations.

And in Wellington v. Rugg (1922) 243 Mass. 30, 136 N. E. 831, notwithstanding the relation of trust and confidence existing between persons engaged to be married, it was held that promises made by the prospective husband inducing the making of an antenuptial agreement, that he would provide for the wife, in addition to the

provision made in the agreement for her, and would always during her lifetime provide for her a home where they were then living, were merely promissory statements on which fraud could not be predicated. See in this connection cases in note 100, infra.

So, in Basye v. Basye (1899) 152

and others of the kind in annotation in 29 A.L.R. 198, 216), the decision may perhaps be regarded as resting apparently on the confidential or trust

without any consideration, to one who, Ind. 172, 52 N. E. 797 (see this case by virtue of the intimate and confidential relation existing between the parties, induced her to do so under an alleged oral agreement to reconvey the land upon the grantor's marriage, which promise the grantee refused to perform.

There are, of course, other cases of constructive fraud, like Alaniz v. Case

relation of the parties, rather than on

the false representation of an existing

intention, although the latter feature is present in the case. It was held. that a deed from the husband to the

tions, and if falsely made are grounds for avoiding the contract, although the act which is promised to be performed is wholly in the future.45 And it has been said that where a promise is inseparably linked with a misrepresentation of an existing fact, the breach may be the subject of a claim,46 and that, even if reliance is placed upon the mere promises of the defendant, as well as upon his false representations, still a cause of action for fraud may be maintained, provided the representations had a material effect in accom

wife might be rescinded on the ground of fraud, in that, without the husband's fault, the wife, who had treated him coldly for a long time, suddenly became profuse in her professions and demonstrations of love, promised to be a dutiful wife, this conduct being hypocrisy and indulged in for the purpose of inducing him to deed his interest in property to her, which he did, relying on the apparent sincerity of her actions and promises, immediately after which she abandoned him and filed suit for divorce. The court regarded the false representations of the wife as made concerning an existing fact, viz., her affection for him, and referred to the doctrine that a present state of mind is a present fact; also, that there existed between the parties a relation of special confidence and trust, and that whenever the confidence resulting from such a relationship is abused equity will interfere.

As to confidential relations of the parties in cases of conveyances made in consideration for the support of the grantor, see cases under VII. 1, infra.

45 Russ Lumber & Mill. Co. v. Muscupiabe Land & Water Co. (1898) 120 Cal. 521, 65 Am. St. Rep. 186, 52 Pac. 995; California Credit & Collection Corp. v. Goodin (1926) Cal. App. 246 Pac. 121.

The above rule was applied in Pocatello Secur. Trust Co. v. Henry (1922) 35.Idaho, 321, 27 A.L.R. 337, 206 Pac. 175, to a case of representation made by one engaged in opening a tract of land for settlement, to induce purchase of a lot, that street pavements, sewers, and other improvements would be installed on the tract, the same being accompanied by a false representation that many of the proposed improvements were under way, and

plishing the deception, it not being necessary that they should be the sole inducing cause.47

If one relies, in entering into a contract, in part at least, on misrepresentation of a past or existing fact, the courts will not indulge in psychology in an attempt to split hairs and make a metaphysical division of inducements in order to permit the guilty party to escape responsibility for the fraud, even though there was reliance in part on a promise which would not itself serve as a basis for fraud.48 And it that prominent people were engaged in erecting expensive dwellings on the tract. On the particular facts, see annotation following this case in 27 A.L.R. on p. 343.

46 O'Sullivan v. France (1918) 168 N. Y. Supp. 28. The action was for damages for alleged fraud and deceit upon a sale to the plaintiff of a rooming-house business in which the defendant acted as agent for the vendor. The defendant's promise that certain repairs would be made was predicated upon the wilfully false statement that he was agent of the owner. And it was therefore held that, although the representation as to the repairs was merely in the nature of a promise, yet the plaintiff could recover the amount expended by her for this purpose.

47

Kley v. Healy (1891) 127 N. Y. 555, 28 N. E. 593.

48 Where the representations inducing a subscription to the stock of an insurance company were that the company at that time had received a certain sum in cash in payment of stock, and had made arrangements to obtain all the money it wanted at a certain per cent, which were false, it was held that a case for rescission of the contract arose, even though the subscription was made on the further inducement that the company would lend to the subscriber as much as he might desire, provided he furnish good security. Commonwealth Bonding & C. Ins. Co. v. Bomar (1914) - Tex. Civ. App. -, 169 S. W. 1060. The court said that, because the subscriber relied upon the promise to lend money to him, which the law might say he did not have a right to rely upon as an element for the rescission of the contract, this fact did not argue that he did not rely upon a material representation which would give color and strength to the promise made; that, if a mate

has been held that the rule that a breach of a promise is not of itself fraud, or evidence of fraud, does not apply to a case where a fraud has been accomplished in part by false representations of fact and in part by false promises, so as to exclude evidence of the latter; but that in such a case the promises are admissible in evidence because they are inseparably con

rial misrepresentation is shown to have been relied upon, though blended with other statements which may have partially actuated another's conduct, it is not a defense to "indulge in psychology-to split hairs and attempt a metaphysical division-in order to escape the fraud."

And in Massirer v. Milam (1920)

Tex. Civ. App. 223 S. W. 302, where one of the alleged promises or representations inducing the purchase of lots was that the sales agent would resell the lot within a short time at an advance in price, the court said that, where a number of false representations are made, each of which influences the purchaser in the transaction, and each of which is material, the purchaser may rescind the contract, notwithstanding the fact that one of the promises, without which he would not have made the purchase, affords no ground for rescission. In this case there were other alleged false representations of fact, which it was held required submission of the case to the jury.

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The decision in Milam v. Launder (1918) Tex. Civ. App. -, 204 S. W. 1071, in which the alleged misrepresentations were as to the size of the lot sold by the defendant to the plaintiff and the promise of the salesman to effect a resale at a profit within a short time, that the plaintiff was not entitled to a rescission of the contract, is based on the ground that, as he testified, his reliance in making the purchase was solely on the personal promise of the salesman to effect the resale, and not upon the other misrepresentations. It was held that, as the plaintiff testified, in effect, that the promise of resale was the controlling reason which influenced him to purchase the lots, the finding of the jury that he relied upon and was influenced by the statement of the agent as to the size of the lot was so contrary to the testimony that the court should have set aside the verdict. It may be

nected with representations of fact,49 and that this is true even though the promise is to do something which is contrary to public policy and is therefore void.50 There are, accordingly, various cases in which the alleged false representations have consisted in part of promises or statements relating to future events.51

observed, also, that the alleged misrepresentations, in so far as they were of a promissory nature, were made by the agent personally and not on behalf of the defendants, the vendors, so that the effect of reliance on such a promise was not an issue in the case.

49 McDonald v. Smith (1905) 139 Mich. 211, 102 N. W. 668.

In Horowitz v. Kuehl (1921) 117 Wash. 16, 200 Pac. 570, the court said it is not the rule that all false representations as to future events are nonactionable; that when they are so mingled with existing facts as to form an integral part thereof, the representation as a whole may be shown. The rule was applied where one of the alleged false representations inducing the giving of a note for the purchase price of the right to publish a musicians' directory was that the directory had such a high standing among the musicians of a certain territory that 95 per cent of them would renew their subscriptions to the publication without solicitation.

And in Matteson v. Weaver (1924) 229 Mich. 495, 201 N. W. 473, while it is said that mere promises are not misrepresentations of existing facts and of themselves do not constitute fraud, yet the court states, also, that where a promise is made in bad faith, with no present intent to perform it, and it dovetails into and forms a part of the scheme to defraud, it may be considered by the court.

50 McDonald v. Smith (Mich.) note 49, supra.

51 See in this connection note 88, infra, as to representations inducing stock subscriptions.

It may be observed that this line of cases cannot be exhaustively treated within the scope of the present anno

tation for the reason that the principle

involved is not distinctive to cases in which the other inducement is an unfulfilled promise or representation as to a future event. See among possibly other cases supporting the principle

The alleged misrepresentations of fact with which the promise is blended

involved, Addington v. Allen (1833) 11 Wend. (N. Y.) 374.

In Hamar v. Alexander (1806) 2 Bos. & P. N. R. 241, 127 Eng. Reprint, 618, it was held that an action for deceit would lie for misrepresenting the circumstances of one in order to induce an extension of credit to him for goods sold, even though the misrepresentation was accompanied by a promise, which was void under the Statute of Frauds, that, if he did not pay, the promisor would do so. It was unsuccessfully contended that the action could not be sustained for deceit, because the injury might have arisen from the void promise, and not from the false representations, and it was impossible to determine how much injury might have been done by the one and how much by the other.

The representations made to induce a purchase of realty, which were held actionable in F. H. Smith Co. v. Low (1927) App. D. C. —, 18 F. (2d) 817, consisted in part of statements concerning existing facts and conditions, and in part of statements or promises relating to the future, and included representations as to the value of the property, as to ability to obtain a loan thereon, and as to arrangements alleged to have been made whereby the lease on a portion of the property could be purchased for a certain sum, and an encumbrance on this and other property released as to this portion.

In Harris v. Dumont (1904) 207 Ill. 583, 69 N. E. 811, where a conveyance of land was made on representations by the grantee that he was an unmarried man, and on his promise to marry her, the grantor, and provide a home for her, it was held that rescission could not be avoided on the ground that the representation was merely as to a promise, since the promise was based on a false representation of an existing fact. See note 100, infra.

While recognizing the doctrine that a mere promise to pay a debt in the future, however false and fraudulent it may be in fact, is not in law a representation upon which fraud can be predicated with a view to a rescission of a contract or the recovery of damages, the court in Reagan v. Hadley (1877) 57 Ind. 509, held that the representations in this case amounted to more than a promise, being coupled with statements as to facts upon which fraud could be predicated,

in that the representations inducing the release of the plaintiff's mortgage were not merely that the mortgagor would pay the debt, but were also that he had an arrangement with a certain insurance company for a loan of money wherewith to pay the same, and that all that remained to enable him to consummate the arrangement and negotiate the loan was that the plaintiff should release the mortgage so that he could mortgage the land to the company to secure the loan.

And in Robinson v. Reinhart (1894) 137 Ind. 674, 36 N. E. 519, while the court recognized the rule that a promise to do a thing in the future is not fraud although there may be no intention of fulfilling the promise, yet it was said that, because the promise was not kept, it did not follow that the promisor's other representations were harmless, there being in this instance, in addition to the promise, which was not fulfilled, false representations of existing facts by the promisor.

And in Nelson v. Berkner (1918) 139 Minn. 301, 166 N. W. 347, it was held that if a promise is based upon false representations in respect to existing facts, made in connection with the promise, it affords a ground for rescinding a contract induced thereby.

In Sicklick v. Interurban Home Co. (1909) 116 N. Y. Supp. 553, where the alleged misrepresentations were made. by the seller of lots to the purchaser, regarding improvements which it was represented were then under way, as well as statements respecting future events, the court said that the mere fact that the statements as to matters of fact were reinforced by other statements promissory in their nature in no way weakened the plaintiff's case; that it was clear that the plaintiff relied upon the former's statements, rather than those which were merely promissory.

In Shaw v. Stine (1861) 8 Bosw. (N. Y.) 157, an action to recover the amount of a bill of goods sold by the plaintiff to a third person, by reason of alleged false and fraudulent representations made by the defendants as to the credit and responsibility of such third party, it was held that it was not necessary that the fraudulent representations complained of should be the sole consideration or inducement moving the plaintiff to make the sale, but that the action could be maintained

or associated must, however, not be of a collateral matter merely, leaving the

if the representations were a contributing factor to such inducement, even though the sale was in part brought about by promises of the defendants to indorse such third party's note, which promise was not fulfilled.

The contention that the alleged fraudulent representations were merely promises in regard to future conduct on which fraud could not be predicated was overruled in Wilkinson v. Starr (1884) 14 W. N. C. (Pa.) 359, where the alleged misrepresentations were that, in consideration of a certain sum of money paid by the plaintiff to the defendant, the latter would deliver to the plaintiff, out of the first issue to the defendant, certain bonds of a specified company, and represented that these bonds were then due him from the company, and that he had no doubt they would be delivered within a certain number of days, whereas the bonds were not due the defendant, as he knew when he made the representations with the intention to defraud the plaintiff.

And it was held in Sutton v. Morgan (1893) 158 Pa. 204, 38 Am. St. Rep. 841, 27 Atl. 894, that fraud warranting rescission of a contract made by the plaintiff for the purchase of a farm from the defendant was shown, where the fraudulent misrepresentations were that there was an active demand for lots on the farm, that shops of a railroad company were to be moved to that neighborhood, and that men connected with the road had declared that it was their purpose to erect another city there, and that a syndicate connected with the railroad company had been formed to secure the farm, and had offered a certain sum for it.

While the alleged false representations were in part of a promissory nature, the court in Bloomberg v. Pugh Bros. Co. (1923) 45 R. I. 360, 121 Atl. 430, held that, as they were accompanied by false statements of existing facts, actionable fraud was shown if the false statements were established, where, to induce the plaintiff to purchase a truck, the agent of the defendant represented that the latter controlled the trucking business of prominent mercantile firms in a certain city, with authority to transfer that business to the plaintiff, and promised to do so if the plaintiff would purchase the truck from the defendant.

In Britton Mill. Co. v. Williams

(1921) 44 S. D. 464, 21 A.L.R. 1352, 184 N. W. 265, where the maker of a note given for shares of stock set up as a defense alleged false and fraudulent representations inducing the subscription, it was unsuccessfully contended that these representations were insufficient to constitute a defense, as they were not representations of existing facts, but were only promises and representations as to the future; the court saying that, except as to the representations in regard to the amount of dividends that would be paid on the stock, the representations were in regard to what purported to be then existing facts or were promises of acts to be performed by the company, constituting a part consideration for the note.

It was held in Davis v. Driscoll (1899) 22 Tex. Civ. App. 14, 54 S. W. 43, that the doctrine that representations of a promissory nature may not constitute fraud did not apply where the representations were to the effect that one had certain appliances by which he could remedy the evils resulting from an influx of quicksand into wells, coupled with the assurance that he would put them into the wells if the contract were executed for his drilling the same, there being evidence to the effect that he did not have such appliances, and the representations therefore relating to a matter of fact.

In an action on a note given for the purchase price of a lot, which the defendant alleged had been purchased under false representations that the lot had a certain frontage, and that curbing and sidewalks would be placed in front of it by a certain date, it was held in Dingman v. Pahl (1921) Tex. Civ. App. —, 226 S. W. 446, that an answer alleging such false representations as a ground for a cross action was not subject to demurrer, but stated a cause of action.

And in Wilbur v. Prior (1893) 67 Vt. 508, 32 Atl. 474, it was held that while, in an action on a note, a promise not to enforce the note would be of no avail, yet that the maker of a note delivered on such a promise is not barred by the rule applicable to the promise, from showing that the note was procured by deceitful practices of which the promise was a part.

The false representations which it was held in Grim v. Byrd (1879) 32 Gratt. (Va.) 293, entitled a purchaser

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