Farwell v. Metcalf

Mr. Justice Thornton delivered the opinion of the Court: A demurrer was sustained to the declaration in this case, and the action of the court in this regard is the only question for consideration. The first count is according to the most approved precedents, with one exception. In the stating part of the declaration, it avers the fraudulent intent to deceive and injure the plaintiffs, and that the representations were falsely, fraudulently and deceitfully made, and that the defendant well knew that the parties were not fit to be trusted. But in the portion of the declaration which negatives the truth of the representations, the' statement that the .defendant knew that the parties to whom the credit was given were in bad and insolvent circumstances, is omitted. In other respects the representations are fully negatived. This count is formally good. Even if the use of the word “ fraudulently ” is not a sufficient averment of the scienter, the previous averment, that the defendant well knew that the parties were not to be trusted, is sufficient. The second and third counts aver that the representations were made with intent to deceive and defraud the plaintiffs, but omit to charge, in terms, that the defendant knew the insolvency of the parties to whom the credit was given. The question is, therefore, presented as to the meaning and effect of the words “ fraudulently and deceitfully,” and “ with intent to deceive and defraud.” Deceit excludes the idea of mistake, and fraud has been termed a grosser species of deceit. Deceit is a fraudulent misrepresentation, by which one man deceives another, to the injury of the latter. Where false statements are made, with intent to deceive and defraud, the necessary implication is, that the person making such false statements, with such intent, has a knowledge of their falsity. Otherwise the false character of the representations, and the intent to deceive, could not coexist. Fraud has been defined to be “ any cunning, deception or artifice, used to circumvent, cheat or deceive another.” It is inconceivable how fraud could actually exist, as charged, in all its deformity, in the declaration, and yet that the defendant did not know that his representations were false. The principles which govern in this form of action were fully examined in Presley v. Freeman, 3 Term R. 51. Mr. Justice Buller said, “The foundation of the action is fraud and deceit in the defendant, and damage to the plaintiff. Every deceit comprehends a lie, but a deceit is more than a lie.” Fraud practiced, and damage resulting therefrom, will sustain the action. Upton v. Vail, 6 Johns. 181. It would seem to follow, as a necessary implication, if fraud and deceit are broadly charged, the declaration ought to be sustained. It is also laid down in 1 Chitty’s' Plead. 338, that the averment that the representations were fraudulently made might be a sufficient averment of the scienter. The same rule is stated in 2 Saund. Plead. & Ev. 60. In actions at law for deceit in falsely representing a third person fit to be trusted, the scienter must be substantially alleged, and must always be proved. The averment that the representations were made fraudulently, and with the intent to deceive and defraud, must be regarded as equivalent to an averment of the scienter, and the knowledge of the falsity of the representations must be proved as fully as if the declaration Avere in the usual form. Evans v. Edmonds, 76 E. C. L. 777; Terrell v. Bennet, 18 Geo. 404. The declaration is substantially good, and the demurrer should have been overruled. The judgment is reversed and the cause remanded. Judgment reversed.