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of the same kind or quality sell or would sell, such variation will afford a legal presumption of a fraud or error in the contract or sale.
* Such a presumption is not conclusive, but is open to refutation, by proving the true reason and inducement for such derviation from the market price, and showing that the agreement did not proceed from fraud or
“ Good faith is essential to the obligation of contracts: he who coinmits a fraud in making a bargain, leaves the other party at liberty to set aside the agreement, if it be not executed ; or to claim to be restored, as near as may be, to the situation he was in before the bargain ; provided always, that the fraud is of such a nature as to make it evident, that without it, the contract would not have been made at all, or not on such terms.
“ Fraud may be either direct fraud, or the fraud of unfair advantage.
“ Direct frand in contracts comprehends every falsehood, art, trick or maneuvre, practised by the one party to mislead or deceive the other concerning the subject or terms of the contract.
“ It partakes of the nature of fraud in contracts, for either party to take an advantage of the other on any point, where it was presumed by the one party, and understood to be so presumed by the other, that no advantage would be taken ; and where no such advantage could be taken, except through the means of the trust thus reposed.
“ This trust may be directly reposed ; as in the appointment of an agent, or trustee, or guardian: and the use of such confidence by an agent or trustee, to his principal's or trustor's injury and his own benefit, is fraudulent, being a breach of direct confidence.
“When in any contract or sale advantage is taken by concealment of knowledge as to any of those material facts concerning the terms or the subject of the contract, which necessarily and of course enter into all calculations of price among those whose demand and supply, and estimation of value, fix the market price of similar things; this concealment is a breach of implied confidence, and therefore unfair.
“ These material facts, necessarily entering into all calculations of market price, may relate either to circumstances extrinsic, or to those intrinsic to the subject of the contract.
“ Extrinsic circumstances, materially affecting the terms of a contract, are those which influence the market price of such things, or their exchangeable value.
6 Intrinsic circumstances material to the terms of a contract, are such as relate to those qualities of the subject of the contract, which in similar things fit them for their ordinary use, and create the demand of those whose use or desire for such things give them their value in sales or exchange.
Circumstances matérial in their nature, are not material in degree, unless they are such, as if known, would so affect the value of the thing sold or done, in the general estimation of those whose use or estimation fixes the market price of similar things, as to make the price of the actual subject of the contract vary materially from that of other things of the same nature or use.
“ Concealment of such circumstances, whether intrinsic or extrinsic, if they are material in nature and degree, vitiates the contract, whenever the thing is sold, or contracted for, with reference to its ordinary
6. When a special purpose for the thing bought or agreed for, is intended by one party, and known to be so intended by the other, it is a breach of implied confidence, to take an advantage by concealment of any such fact, as, if known, would affect the worth or value of the thing in the estimation of any reasonable inan having the same object ; and with regard to which, the agreement alone proves that it was presumed no advantage would be taken.
“ It is perfectly justifiable in bargains to use superior sagacity as to probabilities, or to apply greater skill and more accurate information, as to those facts which do not necessarily enter into the common calculations of price; and concerning which no presumption or confidence, express or implied, can reasonably be entertained, that if either party possessed superior knowledge, he would not use it.
“ Wherever, either by the known usage of trade, or by express words, notice is given that the sale or agreement is made at all risks, and without recourse in case of error or loss ; neither party is answerable except for positive and direct fraud.
“ The responsibility of making good injuries caused by direct fraud, can never be disclaimed in any way.
“Mutual error as to the subject of the contract, does not of course vitiate the contract ; But,
“ A contract or sale is not duly executed, when the thing done or delivered varies inaterially, in kind or quality, from the kind or quality expressed or understood between the parties.
“ These are implied from the custom of trade and the price paid ; which if settled with reference to market price, raises the presumption that it was understood as a condition of the contract, that the subject of it had the usual qualities, and was fit for the uses which create the market demand for such things.
“The kind or quality are also implied from the avowed object of the purchaser, which, if known to the other party, raises the presumption that the subject of the contract was understood to possess the usual qualities which fit similar things for the intended use.
“ In all contracts of reciprocal interest, there is an implied warranty that the agreement will be duly executed; unless there be some stipulation, notice, or known usage, that the contract is at all risks, except that of positive fraud.
“ The seller, whether of goods, of services, or of the uses of things, impliedly warrants against all secret defects of what he sells, which make the thing useless for the object for which it is avowedly intended, or for the coinmon purposes and uses of similar things; or which so lessen those uses that the buyer would not have purchased, or only at a lower rate, if he had known such defects.
“ This warranty includes defects unknown to the seller, as well as those known to him.
“ This implied warranty does not extend to defects known to the buyer.
“ If defects are apparent on inspection, the law must presume that they were known to the buyer ; but such presumption may be refuted by positive contrary evidence.
6 If the defects were unknown to the seller, and the sale in all respects honest, he may in the first instance replace the thing sold by others which will correspond with the true intent and meaning of the bargain.
" If this cannot be done, he is bound either to return the price, receive
back his goods or other things sold, or to pay the difference of value, and interest thereon, if any ; but no farther.
“ The object being to restore the parties as nearly as may be to their former situation before the bargain, if this be done, the manner is not important ; but if the bargain cannot be executed according to its true intent, the wisest legal policy, as a general rule, is unquestionably that of the Roinan and French law, which in cases of honest error as to intrinsic defects, give the option of rescinding the bargain, or of recovering the difference of value, to the buyer.
“ If the seller knew these intrinsic secret defects, he is bound, moreover, to make good all damages resulting from the error of the injured party.
“ The same responsibility attaches to any party to a contract, who gains an advantage therein by fraud of any sort.
“In every contract of sale the seller impliedly warrants that title or right of property which he purports to sell.
“ If there be no description or representation of the right or kind of property, the sale impliedly includes a warranty of full and absolute property ; subject to this exception :
“When the buyer knows, from the understood custom of trade, or the law, or in any other way, that he buys not the absolute property,
but the seller's right or clạim.
6 Mutual mistake as to title, without warranty, is a ground to rescind a sale at the option of the buyer.
“ If the seller did not know the defects of his title, he is answerable only to make good the price paid him ; if he knew them, the sale is then fraudulent ; and he is answerable moreover for all damages or losses resulting therefrom.
“ Mutual ke or mutual ignorance, of extrinsic circumstances material to the terms of a contract, do not in strict right affect the contract, or impose any liability.
- In cases of mutual ignorance or error, there is no implied warranty as to such qualities of the subject of the contract, as are not ascertainable as matters of fact, but depend upon individual taste and opinion, concerning which the parties severally rely upon their own judgment.
" Where, from the nature of the subject, or of the transaction, the value of the things sold appears to liave been estimated as contingent, (there being no fraud or concealment,) there is no implied warranty as to those facts on which the contingency depends. This is exemplified in the discounting of uncurrent bank notes, the sale of negotiable paper without endorsement, and frequently in bona fide sales of stock, at the current rate, though above its true monied value. Here the risk is assumed, impliedly, by the buyer, while the seller is answerable only for the fraud, or unfair concealment.
“ Such are the general principles and rules of honest dealing in bargains, and the execution of them. To make them perfectiy fit for legal direction, they require inore precision and circumstantiality, and many subordinate rules under each head. Besides this, in order to be readily comprehended and easily applied, they would also need the addition of examples or of adjudged cases.
“ Otherwise they are the rules of strict honesty, and of wise legal policy on this head, and need no other limitations, than are common to all such principles,-those arising from the necessity of general rules of evidence, or those imposed by obvious public policy."--pp. 224—234.
We do not mean to say that some of the minor propositions in this work are not doubtful, or even erroneous, but we consider the general course of his reasoning to be clear, and the results justly deduced; and this is no slight praise, when we can add, that it is also in a great degree original. We hope and believe, that as it eminently deserves, it will receive attention, and that not from lawyers only, but from intelligent merchants, legislators, and, in short, from every. class in the community which wishes to advance its highest political interest, which is, undoubtedly, that of jurisprudence. Nothing is more delightful or more animating to the lovers of truth and excellence, than to observe the progress of liberal and just ideas on this allimportant subject. This generation cannot pass away without many improvements, and we may venture to predict, that our immediate successors will see the advancement of the law from a trade to a SCIENCE.
Since writing the above remarks, we have heard of a recent legal des cision, which, in our opinion, is very apposite to prove the justice of Mr. Verplanck's argument, in regard to the doctrine caveat emptor. It is the case of Osgood v. Lewis, which recently arose in Baltimore, and was decided by the Supreme Court of Maryland.
It was an action to recover damages on a sale of sperm oil, described in a bill of parcels, and sold, as winter pressed sperm oil; it proved to be summer strained oil. The court (Judge Archer dissenting) decided, that the bill of parcels was not a warranty, and that, to recover, it was necessary to prove that the defendant sold the oil for winter strained, knowing it not to be so. Judge Hansen, in delivering the opinion of the court, declared the preference the court was disposed to accord to the civil law, and its wish to consider such an affirmation as implying a warranty ; but that, however desirable it was that the law should be what it ought to be, yet it was not the province of the court to make it so. It was their duty to expound the law as it is, and after a research into the British authorities, the court had determined to rely on the authority of Chancellor Kent.
Now, the occurrence of such a case as this, in the commercial city of Baltimore, and the litigation which grew out of it, is conclusive proof that the law is not known to those who ought to know it. A law wrongly settled, never is fully settled. The ordinary notions of good sense and equity, which influence men in their transactions of business, are constantly leading to the infriugement of the law; and the same sentiments are not always without their effects upon the bench. In the above case, if the cause had been tried before a jury, Judge Archer presiding, the plaintiff would have prevailed. The frank confession of the judges is, we think, the highest authority in favour of Mr. Verplanck's argument.
Art. XI. A Letter to the Lord Chancellor on the Necessity and
Practicability of forming a Code of the Laws of England; to whreh is annexed, the New Bankrupt Law; arranged in the Method of Domat's Civil Law, and in a style suited to the humblest capacity; proposed to be adopted as the Statute Law of the Realm. By CROFTON UNIACKE, Esq. of Lincoln's Inn, Barrister at Law; and late Judge of the Vice-Admiralty Court of the Province of Nova Scotia. London. 1825. .
The work, the title of which we have given above, is among the numerous signs of the spirit of legal improvement which is now widely diffused. This spirit is no longer contined to speculative philosophers, but has extended itself to the cabinets and councils of nations. A general impression seems to prevail, that the system of civil and criminal legislation, and of the procedure by which justice is administered, in most civilized countries, is far behind the improved condition of the age, and the increasing demands which public opinion makes upon the rulers of the states. Every other branch of knowledge is in a state of progressive and rapid improvement. Why, then, should the science of jurisprudence, which is so vitally important to the happiness of society, be abandoned to the careless and occasional efforts of reform produced by its more glaring defects, instead of being brought to the test of an enlightened philosophy, and systematicaìly examined with a view to its revision and adaptation to the new order of things which has been produced by the improvement of other branches of knowledge? The words of Mr. Canning, in his speech at Bristol, which are quoted by the author of this letter to Lord Eldon, appear to us to be pregnant with meaning. " It would appear," says that eminent statesman, speaking of the public affairs of Great Britain, 6 that the WHOLE MACHINE of society has received an accelerating impulse, and that this country is beginning a course of prosperity which shall exceed all that has gone before, as much as the present exceeds all past expectations." This is not only true of England, but of other civilized countries, excepting, perhaps, the benighted regions of Austria and Russia. In every other European nation, and the countries colonized by Europe, an active discussion is going on upon the laws of trade, and those by which justice is administered. The respective merit of written codes, and of common law of different systems of punishment for crimes of the organization of judicial tribunals, and their forms of procedure-of the trial by jury, and written and oral evidence