will be liable for there is a difference between Scienter. fraud in the ordinary sense of the word and fraud in law (i). Therefore, wherever the seller must be taken in law to have known that the representation was false; thus, where the sale is by a factor or other agent, and the deceit is not in the merchant but in the factor, the principal will nevertheless be liable (k).

ASSUMPSIT FOR MONEY HAD AND RECEIVED.

It often becomes a question, whether, upon the breach of the warranty on the part of the vendor, the purchaser is at liberty to recover back the

(i) It is now clearly settled, that every wilful falsehood is a fraud in law. If the defendant makes a false representation, knowing the same to be false, and the plaintiff thereby receives an injury, whatever may have been the motive of the defendant in making the false representation, whether it was done to injure the plaintiff, or to benefit himself, or to benefit a third party, or whether it was done wholly gratuitously,-an action lies for the constructive fraud. See Polhill v. Walter, 3 B. & Ad. 114, 123; Corbet v. Brown, 8 Bingh. 103; Foster v. Charles, 6 Bingh. 396, 7 Bingh. 105.

For Holt

(k) Hern v. Nicholls, Salk. 289; S. C. Holt, 462. C. J., said, the merchant must be answerable for the deceit of his factor, though not criminaliter, yet civiliter; for, seeing somebody must be a loser by the deceit, it is more reason that he who employs and puts trust and confidence in the deceiver should be a loser, than a stranger. And see Grammer v. Nixon, 1 Str. 653; Southerne v. How, Cro. Jac. 468, 471; Hill v. Gray, 1 Stark. N. P. C. 434; Bull. N. P. 31.

When

maintain

able.

price. This general rule upon the subject may be laid down;-if the contract be broken, the purchaser's remedy is to bring an action for the breach ;-if it be rescinded, he may recover back the money paid, as on a failure of consideration. Accordingly it is now fully established, that, even where there has been an express warranty at the time of the sale, the mere breach of such warranty does not render it competent for the vendee, after complete acceptance of the goods, to sue for money had and received as on a rescinded contract (7): still less is the action maintainable,

(1) See Gompertz v. Denton, 1 Cr. & Mees. 207, and Street v. Blay, 2 B. & Adol. 456; in the latter case especially the subject seems to have been very fully considered.

The apparent difficulty of reconciling the principal cases is altogether removed, if this plain distinction be kept in view :that the foundation of the action for money had and received is a rescission of the contract; while an action on the warranty is founded, not upon the principle of rescinding the contract, but simply upon the express and independant undertaking of the vendor. This distinction seems to be confounded in the argument for the defendant in Patteshall v. Tranter (4 Nev. & Man. 649), and in the opinion which Lord Ellenborough is reported to have expressed in Curtis v. Hannay (3 Esp. 83), where his lordship observed, that he took it to be clear law that the purchaser might, on the breach of the warranty, make his election, either to keep the chattel and sue on the warranty, or return the chattel and bring an action to recover the money paid; (See 2 B. & Ad. 416).

This general rule, then, may be collected:—that it is never competent for the purchaser (either as plaintiff or defendant) to avail himself of the vendor's breach of warranty, if by so doing he proceeds in effect upon a rescission of the contract. Upon this principle it is, that (with the exceptions mentioned in the

maintain

where there has been no warranty, but a mere When erroneous representation (without fraud) on the able. part of the vendor (m).

There seem to be four classes of cases in which

of

text) an action for money had and received cannot be supported (a). So, the breach of warranty cannot be pleaded in bar to an action brought by the vendor for the price (b), especially if unequivocal acts of ownership have been exercised (c). And applying the same doctrine to an exchange with a warranty, the vendee cannot sue in trover for the chattel delivered by way barter for another received (d). In these cases, indeed, another reason has been given, viz. that, as long as the contract remains open, neither an action for money had and received, nor an action of trover, is the proper form of action in which to try a question of warranty (e): but, according to the principle of the rule laid down, this is not the true reason; for such actions could not be maintained even if the breach of warranty were admitted.

On the other hand, the purchaser may avail himself of the breach of warranty, whenever by so doing he does not rely upon a rescinding of the contract. Thus, he may bring his counter action for the breach at any distance of time (ƒ), notwithstanding that he may have wholly accepted the goods, and afterwards resold them, or exercised any act of ownership whatever: or, he may give the breach of warranty in evidence in reduction of damages, in an action brought by the vendor for the price (g). (m) Early v. Garrett, 9 B. & C. 928.

(a) Gompertz v. Denton, 1 Cr. & Mees. 207; Weston v. Downes, 1 Dougl. 23; Power v. Wells, Cowp. 818; Payne v. Whale, 7 East, 274. See Cooke v. Munstone, 1 N. R. 351; Compton's case, cited by Buller, J., 1 T. R. 136. (b) Street v. Blay, 2 B. & Ad. 456. Supra, p. 268.

(c) Id. 264.

(d) Emanuel v. Dane, 3 Campb. 299; Power v. Wells, 1 Dougl. 24; S. C. Cowp. 818. See 2 B. & Ad. 462.

(e) See 3 Campb. 300; Cowp. 819; 7 East, 378. (f) See 1 H. Bl. 19; 4 Nev. & Man. 649.-Infra. (g) See 2 B. & Ad. 462, 464. Supra, p. 268, 9.

When maintain

able.

Original stipulation.

Subsequent

consent.

the vendor's breach of warranty will enable the purchaser to treat the contract as rescinded, and to bring assumpsit for money had and received.

1. The action may be maintained, where there was a stipulation in the original agreement, that, in the event of the failure of the original consideration, the contract should be rescinded. Thus, where the plaintiff purchased a chaise from the defendant for ten guineas, on the condition, that, if the plaintiff's wife should not approve of it, the chaise was to be returned, and the contract instead of a contract of sale was then to be considered a contract of hiring, it was held—the plaintiff's wife having signified her disapproval, and the defendant having tendered back the chaise, with the hire for the time it had been kept,-that an action for money had and received was maintainable (n).

2. Although there may have been no condition in the original contract authorizing the return, the action may still be supported where the vendor has subsequently consented to rescind the contract, either by express offer to receive back the chattel (o), or by tacit acquiescence when the

(n) Towers v. Barrett, 1 T. R. 133. And see per Ashurst, J., 1 Dougl. 24; per Bayley, B., 1 Cr. & Mees. 208.

(0) See per Bayley, B., 1 Cr. & Mees. 208; Long v. Preston, 2 M. & Payne, 262; Linley v. Bates, 2 Tyrw. 753.

maintain

chattel is tendered (p). But where there had been When a warranty of soundness at the time of the original able. contract, and in a subsequent conversation the vendor offered to take back the chattel and return the money if it should be proved to be unsound, it was held that the plaintiff was bound to bring his action upon the warranty, and could not recover in an action for money had and received (q). It has been said (r), that this decision proceeded upon the ground that the subsequent conversation formed no part of the original contract: but the true ground of the decision clearly appears to be, that the subsequent offer was no abandonment of the original undertaking, and that, as the question of the warranty broken or not broken still remained to be discussed, this was not the proper form in which to try it; for the action ought to be brought in such a shape as to give the defendant proper notice(s).

contract.

3. The action may be maintained as long as the Executory contract is executory only, and no complete acceptance has taken place on the part of the vendee. Thus, it was said by Lord Tenterden, C. J.(t),

(p) See per Willes, J., 1 T. R. 135; Davis v. Street, 1 C. & P. 18. See Roper v. Shevely, 1 Cr. & Mees. 497.

(q) Payne v. Whale, 7 East, 274.

(r) 1 Dougl. 24, n.

(s) See the judgment of Lord Ellenborough, 7 East, 278, 9. (t) Delivering the judgment of the Court in Street v. Blāy, 2 B. & Ad. 463. See Okell v. Smith, 1 Stark. N. P. C. 107.