4. What constitutes fraud. 1. It must be such an appropriation as is not permitted by law. 2. It must be with knowledge that the property is another's, and with design to de prive him of it. 3. It is not in itself a crime, for want of a criminal intent; though it may become such in cases provided by law. Livermore, Penal Law, 739.
Fraud, in its ordinary application to cases -of contracts, includes any trick or artifice employed by one person to induce another to fall into or to detain him in an error, so that he may make an agreement contrary to his interest; and it may consist in misrepresent ing or concealing material facts, and may be effected by words or by actions.
While, on the one hand, the courts have aimed to repress the practice of fraud, on the other, they have required that before reliev ing a party from a contract on the ground of fraud, it should be made to appear that on entering into such contract he exercised a due degree of caution. Vigilantibus, non dormientibus, succurrunt leges. A misrepre sentation as to a fact the truth or falsehood of which the other party has an opportunity of ascertaining, or the concealment of a matter which a person of ordinary sense, vigilance, or skill might discover, does not in law constitute fraud. Misrepresentation as to the legal effect of an agreement does not avoid it as against a party whom such misrepresentation has induced to enter into it,—every man being presumed to know the legal effect of an instrument which be signs or of an act which he performs.
5. An intention to violate entertained at the time of entering into a contract, but not afterwards carried into effect, does not vitiate the contract. Per Tindal, C. J., 2 Scott, 588, 594; 4 Barnew. & C. 506, 512; per Parke, B., 4 Mee's. & W. Exch. 115, 122. But when one person misrepresents or con ceals a material fact which is peculiarly with in his own knowledge, or if it is also within the reach of the other party, is a device to induce him to refrain from inquiry, and it is shown that the concealment or other decep tion was practised with respect to the par ticular transaction, such transaction will he void on the ground of fraud. 6 Clark & F. Hon. L. 232 ; Comyn, Contr. 38; per Tindal, C. J., 3 Mann. & G. 446, 450. And even the concealment of a matter which may disable a party from performing the contract is a fraud. 9 Barnew. & C. 387; per Little
dale, J.
6. Equity doctrine of fraud. It is some dines inaccurately said that such and such transactions amount to fraud in equity, though not in law; according to the popular notion that the law allows or overlooks cer tain kinds of fraud which the more conscien tious rules of equity condemn and punish. But, properly speaking, fraud in all its shapes is as odious in law as in equity. The differ ence is that, as the law courts are constituted, and as it has been found in centuries of ex perience that it is convenient they should be constituted, they cannot deal with fraud otherwise than to punish it by the infliction of damages. All those manifold varieties of fraud against which specific relief, of a pre ventive or remedial sort, is required for the purposes of substantial justice, are the sub jects of equity and not of law jurisdiction.
I. What constitutes a case of fraud in the view of courts of equity, it would be difficult to specify. It is, indeed, part of the equity doctrine of fraud not to define it, not to lay down any rule as to the nature of it, lest the craft of men should find ways of committing fraud which might escape the limits of such a rule or definition. It includes all acts, omissions, or concealments which involve a breach of legal or equitable duty, trust or confidence justly reposed, and are injurious to another, or by which an undue and unconscientious advantage is taken of another.
It is said by Lord Hardwicke, 2 Ves. Ch. 155, that in equity fraud may be presumed from circumstances, but in law it must be proved. His meaning is, unquestionably, no more than this:—that courts of equity will grant relief upon the ground of fraud esta blished by a degree of presumptive evidence which courts of law would not deem suffi cient proof for their purposes ; that a higher degree, not a different kind, of proof may be required by courts of law to make out what they will act upon as fraud. Both tribunals accept presumptive or circumstantial proof. if of sufficient force. Circumstances of mere suspicion, leading to no certain results, will not, in either, be held sufficient to establish fraud.