Liability by Estoppel in Pais. At the pres ent day, though there are many expressions still made use of which seem to indicate that either fraud or culpable negligence is an essential element in estoppel, it is cer tain that positive statements of fact as to matters upon which the speaker should be correctly informed give rise to an estoppel, though there is neither fraud nor negligence. Thus Lord Esher says: "If a man by express terms or by conduct makes a representation to another of the existence of a certain state of facts which he intends to be acted upon in a certain way, and it be acted upon in that way, in the belief of the existence of such a state of facts, to the damage of him who so believes and acts, the first is estopped from denying the existence of such a state of facts ; L. R. 10 C. P. 307, 317. See, also, Nickerson v. Insurance Co., 178 Mass. 308, 59 N. E. 814.
In England according to Derry v. Peek, an action for deceit will not lie for an honest misrepresentation. Many American courts go beyond the limits of the English rule, and hold a defendant liable in deceit, irrespective of good or bad faith, for making a positive false statement as to which he had special means of knowledge; Lehigh Zinc & Iron Co. v, Bamford, 150 U. S. 665, 14 Sup. Ct. 219, 37 L. Ed. 1215 ; Huntress v. Blodgett, 206 Mass. 318, 324, 92 N. E. 427 ; Hindman v. Bank, 112 Fed. 931, 50 C. C. A. 623, 57 L. R. A. 108 ; Prestwood v. Carlton, 162 Ala. 327, 50 South. 254 ; Tate v. Bates, 118 N. C. 287, 24 S. E. 482, 54 Am. St. Rep. 719 ; Ward v. Trimble, 103 Ky. 153, 44 S. W. 450.
The doctrine that one who positively states a fact as of his own knowledge is liable if the statement is false is not to be confused with the doctrine that if no reasonable ground existed for the statement it is evi dence of fraud, or is evidence enough to make out a prima facie case of fraud.
In Michigan, the doctrine is settled that if there was in fact a misrepresentation, though made innocently, and its deceptive influence was effective, the plaintiff would have a right of action for damages caused thereby, either at law or in equity ; Hol comb v. Noble, 69 Mich. 396, 37 N. W. 497.
Where a defendant makes a statement which is false if his words are given the natural meaning which his hearer would give them, but which are true if taken in some unnatural sense which he himself put upon them, there is no dishonesty in the de fendant, even though he knew that the facts did not accord with the natural meaning of his words, provided that such natural mean ing did not occur to him, it has been held that a defendant is not liable ; Nash v. Trust Co., 163 Mass. 574, 40 N. E. 1039, 28 L. R. A. 753, 47 Am. St. Rep. 489 ; [1891] 2 Ch. 449.
The law of misrepresentation as laid down in Derry v. Peek is hopelessly inconsistent with the law governing misrepresentation where relied on as the basis of warranty or estoppel. See an article by Prof. Williston in 24 Harv. L. R. 451; DECEIT; FRAUD; Es TOPPEL ; WARRANTY.
It is not necessary that the misrepresenta tions should have been made directly to the plaintiff ; Pollock, Torts 282 ; 2 M. & W. 519; it may be published generally with the intention that they may be acted upon by any who choose; 3 B. & Ad. 114; as a time-table of a railway company announcing a train, which is not, in fact, running ; 5 E.
& B. 860 ; or a prospectus; L. R. 6 H. L. 377.
Where one states that he knows a thing to exist, when he does not know it to ex ist, he is guilty of fraud; this rule applies to facts susceptible of actual knowledge, and not matters of opinion, etc.; one who does not know a fact to exist must ordinarily be deemed to know that he does not know; Chatham Furnace Co. v. Moffatt, 147 Mass. 403, 18 N. E. 168, 9 Am. St. Rep. 727. "If persons take upon themselves to make as sertions as to • which they are ignorant, whether they are true or untrue, they must, in a civil point of view, be held as responsi ble as if they had asserted that which they knew to be untrue"; L. R. 4 H. L. 79 ; this ignorance is conscious ignorance; 14 App. Cas. 371. Where one has honestly made a representation and discovers that it is false before it is acted upon, he is deemed, if he has the means of communicating the truth and does not do so, to be making a false rep resentation with knowledge of its untruth; see 1 D. G. M. & G. 660.
There may be a false pretence by conduct, as where one not a member of the university put on a cap and gown at Oxford and there upon obtained goods on credit; 7 C. & P. 784 ; so where one having no money goes into a restaurant and orders a good dinner and cannot pay for it, it was held to be incurring a liability by fraud ; 42 Sol. Journ. 78.
An action to recover for false representa tions made by the seller of personal proper ty does not survive as against his estate, un der a statute providing that actions "of tres pass and trespass on the case for damages done to . . . personal estate shall sur vive"; Jones v. Ellis' Estate, 68 Vt. 544, 35 AU. 488.
In the absence of any bad faith, a prin cipal is not affected by a representation made by his agent, which the former knew to be untrue, as be would be by a fraudulent representation made either by himself or his agent ; 2 Kent 621, n.; 1 H. L. C. 615 ; Corn foot v. Fowke, 6 M. & W. 358; contra, Fitz simmons v. Joslin, 21 Vt. 129, 52 Am. Dec. 46; 3 Q. B. 58. See Pollock, Torts 384 ; Benj. Sales § 445 ; Broom, Leg. Max. 707.
In the 1911 edition of Leake on Contracts, the editor says in the preface: "I think the time has now arrived when Cornfoot v. Fowke, 6 M. & W. 358, may be consigned to oblivion." Pollock (Contracts [1911] 609) seems to be in accord with this view. See also a discussion of the case in Pollock, Torts (1897 ed.) 291.
Where a purchaser has been induced to buy through the fraud of an agent, the ven dor being innocent, he may rescind the con tract or maintain an action of deceit against the agent personally, but against the prin cipal he can maintain no action unless there was a warranty ; Benj. Sales § 467, notes. See 3 Am. L. Rev. 430 ; Bigel. L. C. Torts 21; Coddington v. Goddard, 16 Gray (Mass.) 436.
If a principal knows the representation of his agent to be false and authorizes him to make it, the former is liable ; if the agent makes the representation without specific authority, but not believing it to be true, the principal is liable (6 M. & W. 373); as to whether, in such case if the agent does be lieve the representation to be true, the prin cipal is liable, is doubtful in England ; Pol lock, Torts 291. See AGErixs; see, generally, DECEIT; FRAUD.