Marshall v. Gray

By the Oourt, Bocees, J. The action was unmistakably in fraud. The complaint charged, as the gist of the action, false and fraudulent representations, made with intent to deceive; and averred guilty knowledge on the part of the [415] defendant. There was no evidence whatever, of such guilty knowledge; and the question here is, simply, whether this was necessary to be proved, in order to establish a cause of action in fraud. It seems to me the question is not ah open one. The rule has been settled, almost from time immemorial, that when a person, on a sale or exchange, warrants property in any particular, he is bound to accountability to the extent of the warranty, whether he knew the fact or not. Hot so, however, if a claim for fraud be made. Then the representations must not only be false, but false to the knowledge of the party making them. (53 Barb. 425. 6 id. 557-563. 11 Wend. 108. 8 Exch. 731-735. 2 Barb. 820. 14 Mees & Wels. 651. 1 Barb. 606, 607. 7 Bing. 103, 6 id. 396. 18 Pick. 95-109. 6 Vesey, 173. Story’s Eq. §§ 191,192, 193.) It is supposed that the case of Bennett v. Judson, (21 N. Y. Rep. 238,) and that of Craig v. Ward, (36 Barb. 377,) have established a different rule, but an analysis of those cases will show this to be a mistake. These cases proceed on the ground that a fraudulent design must be averred and proved, to establish a right of action for deceit. In Bennett v. Judson, fraudulent intent was shown to exist. Judge Comstock says : “ These statements were so minutely descriptive of the land, that on their face they clearly imported a knowledge of the fact, on the part of the person making them.” The remarks of Johnson, J., in Craig v. Ward, were based on the decision in Bennett v. Judson. All the cases make the distinction between fraudulent representations and those which are merely false. While the former give the right of action for deceit, the latter do not. If a person, with intent to deceive and defraud, assert a fact as existing of his own knowledge, when he has no knowledge on the subject, he is liable to the party injured by the falsehood. In that case there is guilty knowledge; for he claims to know, and asserts what he does not know. [416] [Schenectady General Term, April 6, 1870. The distinguishing feature between warranty and fraud is, in general, guilty knowledge of the falsity of the representations on the part of the party making it. Let this distinction be obliterated, and every breach of warranty becomes a fraud, when the warranty consists in mere representations or assertions of facts. Fraud implies deceit or artifice. This cannot be predicated upon the mere assertion of that which is untrue, with no intent to deceive, or knowledge of its falsity. In the case at bar, there was no evidence of guilty knowledge on the part of the defendant—no evidence of fraudulent intent. The nonsuit, therefore, was properly granted. ISTor was there any evidence on this point excluded to the plaintiff’s injury. The judgment of the county court should be affirmed, with costs. Totter, Mosekrans, Mockes and James, Justices.]