fraud to be predicated merely on the promise.52

of corporate stock to rescind the contract, were in part misrepresentations as to matters of fact, such as the amount of the company's indebtedness, and in part statements as to future dividends which it would declare.

In an action by the vendee to enforce specific performance of a contract for the sale of real estate, in which the defense was false representations on the part of the vendee, inducing the contract, it was held in O'Connor v. Lighthizer (1904) 34 Wash. 152, 75 Pac. 643, that the defense could not be avoided on the ground that it was insufficient to present a case for relief for fraud, in that the allegations related to acts to be performed in the future, and not to present or past facts, where, although some of the representations related to the future, as the establishment of a bank in the building purchased, and the organization of a loan company which would make its headquarters in an adjoining building, and would employ the vendor as its president at a stated salary, yet there were other statements and representations which, in part, induced the conveyance, and related to matters of fact, as the vendee's association with a third party in the contemplated business, and the representations that the latter desired to enter the banking and loan business, and that the vendee represented him in making the purchase, all of these representations being false, and being known by the person making them to be so.

Attention is called also to Fischer v. Hillman (1912) 68 Wash. 222, 39 L.R.A.(N.S.) 1140, 122 Pac. 1016, in which the alleged false representations by the vendor of property related in part to the future (as to the building of a railway line and highway to the property), but where there were other misrepresentations of existing facts, and the question was as to the duty of the purchaser to ascertain the untruthfulness of the representations.

There is a Colorado decision (which seems difficult to reconcile with the foregoing cases) holding that where nonperformance of a promise in itself gives no right of action for deceit, allegations of promises to be fulfilled in the future, made in such an action, are not properly averred as a part of

VI. Special considerations affecting rule in equity.

While courts of equity, in granting

an entire alleged scheme to defraud, in connection with alleged misrepresentations as to past or existing facts. Hart v. Zaitz (1922) 72 Colo. 315, 211 Pac. 391. The court said that, if nonperformance of the promise in itself gives no right of action, it is not good reasoning to say that, because it is alleged as a part of a fraudulent scheme, it adds anything whatever to a cause of action based on false representations of a past or existing fact; that it is false reasoning to say that a nonactionable cause of action strengthens a good cause of action sufficient in itself.

52 The rule that, where one person induces another to part with his property by false representation of an existing or past fact, accompanied with a promise to do something in the future, grounds for relief are afforded, was recognized in Shoup v. TannerBuick Co. (1922) 211 Mo. App. 480, 245 S. W. 364, in which, however, it was held that the rule did not apply, for the reason that the alleged misrepresentation of fact was merely as to a collateral matter, consisting of representations as to the agency of the seller of an automobile for the manufacturer, and the agent's authority to make representations that the purchaser would be protected in case of a reduction in the price of cars within a certain time, the real basis of the action for fraud being, not the alleged false representations of agency, but the promise to do something in the future. The action was against the alleged agent, the seller of the car, who was held not liable for fraud, since the same was predicated merely on a future promise.

Representation, inducing one to enter into a contract for building a railway, that the representor had purchased a certain quantity of rails at a specified price, and that he would sell these rails to the other party at the same price if he would make such a contract, were held in Dawe v. Morris (1889) 149 Mass. 188, 4 L.R.A. 158, 14 Am. St. Rep. 404, 21 N. E. 313, not to constitute a ground for an action of deceit, even if at the time of such representation the promisor did not intend to perform the promise. It was contended that, even if the representation as to the future sale of the rails

relief on the ground of fraud, sometimes go beyond the rules which would be applied in courts of law,53 it should be noted that, so far as the present subject is concerned, no distinction has ordinarily been made between actions at law and suits in equity. Many of the cases have been of an equitable nature, and the courts, without expressly considering the question whether such a distinction should be made, have proceeded to apply the general rules and to cite authorities, without regard to the equitable or legal nature of the case. It has been held 54 that even if there is a present. intention not to perform the promise, existing at the time it is made, the promisee does not have a right to relief on the ground of fraud, either at law or in equity, this holding being in a jurisdiction in which the minority

would not support an action for deceit, the representation that the defendant had then purchased the rails at the price named was material and false, and that the action should rest on that ground. But the court held that if this allegation were separated from the promise to sell the rails, the former was unimportant and immaterial. 63 10 R. C. L. p. 317.

54 Murphy v. Murphy (1901) 189 III. 360, 59 N. E. 796, where the alleged fraud consisted of a promise to pay a certain amount, inducing a conveyance. See also Van Sickle v. Harmeyer (1912) 172 III. App. 218 (set out in note 100, infra), in which, among other cases, the same principle is applied.

55 In Miller v. Fulmer (1904) 25 Pa. Super. Ct. 106, where a purchaser of property misrepresented the purpose for which he intended it, the fact being that he was purchasing it for a competitor of the vendor, to whom he knew the latter would not sell it, the court held that, while the misrepresentation as to the purpose for which the land was desired did not constitute such fraud as in law would avoid the contract, yet a court of equity would not specifically enforce it at the instance of the purchaser. The court in this case took what appears to be the minority view, that a declaration of intention not really entertained, or a promise made with no intention of performance, is not of itself a fraud which will vitiate a contract.

rule is applied that a promise made without intention of performance will not serve as a basis for an action for fraud.

However, where specific performance of a contract is sought, and the defense is fraud in its procurement, the view has been taken that the relief sought may be denied, even though the alleged misrepresentation would not constitute fraud at law, this doctrine apparently being applicable especially in those forms of action where the court has a discretion as to the granting of the relief sought.55 And in cases of conveyances of real estate, where relief is sought in a court of equity, the general rules as to fraud based on promises and representations relating to the future have not always been applied,56 especially where the conveyance was made in consideration of an

In Beaumont v. Dukes (1821) Jacob, 422, 37 Eng. Reprint, 910, the court refused specific performance sought by the vendor of a contract for the sale of land at auction, because of failure to perform a representation, inducing the sale, as to the vendor's plan to widen a street serving as an approach to the property, the vendor representing that he would even apply to Parliament to overcome any obstacles that might intervene, and having given to the auctioneer a paper containing such representations, to be read to the persons at the sale. The court took the view that, as it had a discretion either to grant specific performance or to leave the parties to an action at law, it would refuse to execute the contract, in view of the fact that it was obtained by representations made by the vendor as to his future plans, which he had not carried out. Whether or not the promises were made without intention of performance does not expressly appear, the court saying merely that it was consistent with the facts shown that the plan might have been merely used to allure purchasers, without any design of carrying it into effect.

56 For cases involving trust and confidential relations, see note 44, supra.

In Clark v. Haney (1884) 62 Tex. 511, 50 Am. Rep. 536, the court approved and applied the doctrine that when a grant is made on the faith of a promise, and is induced thereby, the breach of the promise is a fraud, and

agreement by the grantee to support the grantor.57 The question is some

as such is ground for equitable relief. The court said that the case was that of an agreement by the grantor, made before conveyance and as an inducement to it to hold the lands deeded in trust for certain purposes, and to reconvey when the trust was fully executed; that in reliance on the faithful performance of the trust, and to enable the grantee to do so, the deed of conveyance was made, with the distinct understanding that it was not to be absolute, but in trust for the purposes agreed upon between the parties; that to allow the grantee to repudiate the trust after he had obtained the apparent title and gone into possession, and to appropriate to himself the whole benefit of the property, would be to sanction a fraud and a wrong which it was the duty of a court of equity to prevent or to remedy. The suit was one to establish a trust in the granted land, it being held error to sustain a demurrer to the petition. And it was unsuccessfully urged in this case that the understanding between the plaintiff and the defendant amounted merely to a promise on the part of the latter, and that the breach thereof was not a fraud of which a court of equity would take notice.

Attention is called to Miller v. Belville (1924) 98 Vt. 243, 126 Atl. 590, in which the court, while approving the doctrine that a broken promise cannot constitute a fraud, states and applies the rule that, when one conveys the title to property to another in reliance on the latter's promise, a conscientious obligation is imposed, a violation of which for the grantee's own advantage is such a fraud that equity will make him a constructive trustee for the benefit of the grantor or his beneficiary; and that that is true, although the grantee enters into the agreement with an honest intention of performing it.

And in Wolford V. Herrington (1873) 74 Pa. 311, 15 Am. Rep. 548, among other cases supporting the same principle, the rule is laid down that if one having an interest in land is induced to confide in the verbal promise of another that he will purchase the land for the benefit of the former at a sheriff's sale, and in pursuance of this promise allows him to become the holder of the legal title, a

times presented as one of evidence or as one of declaration of a trust in the subsequent denial by the latter of the confidence is such a fraud as will convert the purchaser into a trustee ex maleficio.

Attention is called also to Abbott v. Abbott (Neb.) note 29, supra.

Without discussing the present question, the court in Rozell v. Vansyckle (1895) 11 Wash. 79, 39 Pac. 270, applied the doctrine that whenever the legal title to property has been obtained through actual fraud, misrepresentation, or undue influence, taking advantage of one's weakness or necessities, equity impresses a constructive trust on the property thus acquired in favor of the one who is entitled to the same, to a case where a parol promise was made by the grantee, without intention of performance, that he would hold the premises in trust for the grantor and reconvey them to him on request, the grantee taking advantage of the fear of the grantor (who was an elderly and ignorant person) that a third person was seeking to establish a false claim against him, which would be enforced against the property, and inducing the conveyance ostensibly as a means of protecting the property. And see Closius v. Reiners (N. Y.), note 144, infra. Generally as to conveyances of real property, see VII. c, infra.

57 Generally as to promises of support, see VII. 1, infra.

The doctrine that fraud justifying rescission of a contract cannot be predicated on a mere false representation of intention to perform a future act has not been applied in some states recognizing this doctrine, so as to permit one who, by means of a fraudulent promise, as a promise of support, has obtained a conveyance in consideration thereof, to continue in the enjoyment of the property and at the same time not perform the promise. For example, in Stebbins v. Petty (1904) 209 III. 291, 101 Am. St. Rep. 243, 70 N. E. 673, and Luttrell v. Wyatt (1922) 305 III. 274, 137 N. E. 95, the court said it had been frequently held in that state that where a grantor conveys land, and the consideration is an agreement by the grantee to support, maintain, and care for the grantor during the remainder of his or her natural life, and the grantee neglects or refuses to comply with the contract, the grantor may in equity have a de

property, and extends beyond the limits of the annotation.58 Cases of conveyances of real estate which have applied or recognized the ordinary rules regarding the predicating of fraud on promises and statements as to future events are set out under another subdivision.59

In cases where one is induced to make a will leaving property to another, by the latter's promise to make a certain disposition of the same, or is induced not to make a provision in a will by a promise that if he does not do so the person who thereby derives cree rescinding the contract and setting aside the deed, and reinvesting the grantor with the title to the real estate; that the intervention of equity in such cases is sanctioned on the theory that the neglect or refusal of the grantee to comply with his contract raises a presumption that he did not intend to comply with it in the first instance, and that the contract was fraudulent in its inception, wherefore a court of equity will not permit him to enjoy the conveyance so obtained.

58 It has been held that a mere refusal by the grantee to execute an alleged parol trust or agreement to hold the property for the grantor is not such a fraud as to warrant the admission of parol evidence to show that a deed absolute on its face was given in trust (see, for example, Fairchild v. Rasdall (1859) 9 Wis. 379); also, that a mere failure to perform a promise, honestly made, will not constitute such fraud as will justify a court in decreeing a constructive trust (see Stout v. Stout (1914) 165 Iowa, 552, L.R.A.1915A, 711, 146 N. W. 474); but that one who induces a conveyance without consideration, on a promise made without intention of performance, may be declared a trustee ex maleficio (ibid.).

59 See VII. c, infra.
60 See note 158, infra.

Hoge v. Hoge (1832) 1 Watts (Pa.) 163, 26 Am. Dec. 52, is to the effect that if a testator is induced by fraudulent representations of a devisee to make the devise, under a promise by the devisee to hold the land for another, the fraud of the devisee in failing to carry out the promise and in

a benefit will distribute the property in a certain way, courts of equity have interposed to grant relief, in case the promise is not fulfilled.60 This class of cases opens up a field of equity jurisdiction which is distinctive to cases of this kind, and calls for special treatment not feasible in the present annotation, although there may be, and in fact are, individual cases in the class which are of value on the general question under discussion.

The maxim that "he who comes into equity must come with clean hands" is discussed in other annotation.61

ducing the devise warrants a court of equity in decreeing a trust against the devisee.

In Richardson v. Adams (1837) 10 Yerg. (Tenn.) 273, the court said it had long been settled that if a legatee prevents a testator from making provision in a will for another, by promising that, if it be not done, he will do something for the person thus intended to be provided for, with which the testator is satisfied, the person so promising will be compelled so to perform.

And attention is called to several other cases of the kind in which the rule that fraud may be predicated on unfulfilled future promises, made with the intention of nonperformance, has been applied or recognized as applicable, with regard to

promise to make will giving interest in estate, in consideration of present conveyance from promisee to promisor, Manning v. Pippen (1888) 86 Ala. 357, 11 Am. St. Rep. 46, 5 So. 572;

promise, made to induce testatrix not to sign codicil which would reduce promisor's share, that the latter would give the property to the intended beneficiary, Dowd v. Tucker (1874) 41 Conn. 197;

promise by wife to husband, who was fatally ill, that if he would convey property to her she would make a certain disposition thereof among his heirs, Pollard v. McKenney (1903) 69 Neb. 742, 96 N. W. 679, 101 N. W. 9 (the court regarded the promise, made without intention of performance, as fraudulent even in the absence of confidential relations between the parties).

61 See annotation in 4 A.L.R. 44.

VII. Applications.

a. General statement.

At this point, attention is called to the statement already made 62 regarding the limitations of the present annotation, viz., that it is intended primarily to treat principles or rules of law on the subject under consideration, and to cite concrete illustrations for the purpose of clarifying and illustrating those principles or rules, rather than to treat exhaustively particular classes of cases. It should be observed, therefore, that there may be cases which are somewhat similar on the facts to those set out below, but which are beyond the scope of the annotation, for the reason that they were

62 See I. supra.

63 See VII. f, infra.

64 As to profits to be derived on purchase or exchange of real estate, see VII. c, infra.

The rule that fraud cannot ordinarily be predicated on representations of a promissory nature has been applied, or at least recognized as applicable, with regard to

representations to purchaser of interest in fishing concern as to amount of fish which would be caught, Hansen v. Baltimore Packing & ColdStorage Co. (1898; C. C.) 86 Fed. 832;

representation as to profits to be derived from silk raising, inducing the purchase of certain personal property to be used for that purpose, Hawkins v. Campbell (1846) 6 Ark. 513;

-expressions of opinion, made by seller to purchaser of an interest in real estate business, as to the amount of profits to be derived, Musick v. Gatzmeyer (1893) 47 Ill. App. 329;

representations as to future prospects of mines or mineral lands, inducing purchase of interest in same, Tuck v. Downing (1875) 76 Ill. 71, 7 Mor. Min. Rep. 83;

- misrepresentations, inducing one to purchase and become a partner in a law business, as to its value and probable future business or earnings, Buresh v. Seymour (1914) 187 Ill. App. 295;

-representation by seller of livery business to purchaser that the profits would amount in the future to a certain sum annually, Jenkins v. Long (1862) 19 Ind. 28, 81 Am. Dec. 374; representation that a business

decided on principles not distinctive to the present subject.

b. Future profits and amount of sales generally.

Representations as to the amount of profits to be derived from purchase of corporate stock are treated elsewhere in the annotation.63

The doctrine that fraud cannot ordinarily be predicated on unfulfilled promises or statements as to future events has been applied, or at least recognized as applicable, in various cases where the representation was as to the profits or amount of sales which the other party would make if he entered into the contract in question.64 It seems that the rule is especially apsold was such that the purchaser would be able to meet the instalments on the notes given for the purchase price as the same fell due, Sherman v. Smith (1918) 185 Iowa, 654, 169 N. W. 216;

-representation to purchaser of oil lease as to the future production of wells on the leased property, Engemann v. Allen (1923) 201 Ky. 483, 257 S. W. 25;

- representation by seller of distillery that the brand of whisky sold was worth more than the distillery property itself, and that the purchaser would sell a thousand barrels of whisky a year by the use of that brand, Head v. Dant (1893) 14 Ky. L. Rep. 742, 21 S. W. 528;

representation by seller to purchaser of a saloon and its contents that the stock of goods then on hand would last until a certain date, Brockhaus v. Schilling (1892) 52 Mo. App. 73;