QJnrtipU Ham ^rlynnl ICibtary 
 
KD 1583^B78" """"'"'"' '""'"^ 
 
 The law relating to actionable non-disci 
 
 3 1924 022 489 565 
 
m 
 
 Cornell University 
 Library 
 
 The original of tiiis book is in 
 the Cornell University Library. 
 
 There are no known copyright restrictions in 
 the United States on the use of the text. 
 
 http://www.archive.org/details/cu31924022489565 
 
THE LAW RELATING TO 
 ACTIONABLE NON-DISCLOSURE 
 
THE LAW 
 
 RELATING TO 
 
 ACTIONABLE 
 NON-DISCLOSURE 
 
 AND OTHER BREACHES OF DUTY 
 
 IN RELATIONS OF 
 
 CONFIDENCE AND INFLUENCE 
 
 BY 
 
 GEORGE SPENCER BOWER 
 
 ONE OF HIS majesty's COUNSEL ; A MASTER OF THE BENCH OF THE INNER TEMPLE ; 
 
 AUTHOR OF " A CODE OF THE LAW OF ACTIONABLE DEFAMATION;" 
 
 "the law of ACTIONABLE MISKEPKESENTATION ; " 
 
 ETC., ETC. 
 
 " d>- ZeC, T( Spdaw ; devrepov hTjtjjdiu KaKds, 
 
 Soph., Philoct. 908, 909. 
 
 " Justitiee soror 
 Inoorrupta Fides, nudaque Veritas." 
 
 Hoe., Carm. I. xxiv, 
 
 LONDON : 
 
 BUTTERWORTH & CO., Bell Yaed, Temple Bar. 
 Haw ipublisbers. 
 
 SYDNEY : BUTTBEWORTH & CO. (AUSTEAlLi), LTD. 
 
 CAIGUTTA : BUTTERWORTH & CO. (iNDLi), LTD. 
 
 WINNIPEG : BUTTERWORTH & CO. (CANADA), LTD. 
 
 WELLINGTON (n.Z.) : BUTTERWORTH & CO. (AUSTRALIA), LTD. 
 
 1915. 
 
r^Li^l 
 
 I'BINTBD BX 
 
 WILLIAM CLOWES AND 80NB, LIMITED, 
 
 LONDON AND BECCLK6. 
 
PEEFACE. 
 
 Each of the quotations appearing on the title-page of this book 
 emphasizes the two aspects of the general duty of honesty in the 
 use of speech between man and man. " Nuda Veritas," and its 
 contravention by the " Xiytov aiaxioT lirGiv," formed the subject of my 
 former work on Actionable Misrepresentation. The present treatise 
 is devoted to "incorrupta fides," and its violation by the " kpvtttwv a 
 firi Sei." The two books, therefore, may be regarded as, in a sense, 
 the counterparts and complements of one another. 
 
 The close alliance between these two branches of what is really 
 one great jural department, with the necessary result that at many 
 points they intersect and overlap one another, is not without 
 embarrassment and inconvenience to the writer who essays to treat 
 them separately and successively. The specialist is prone to regard 
 every phenomenon as in some way connected with his subject. 
 Accordingly, when specializing on misrepresentation, I was assailed 
 by the strong temptation to regard certain species of non-disclosure 
 as merely so many forms of implied misrepresentation, just as, in 
 dealing with non-disclosure, I have often been sensible of the converse 
 temptation, though not nearly in the same degree. The result 
 has been that in some parts of the present work I have retraversed 
 ground already covered by its predecessor. This, however, I venture 
 to think, was unavoidable. Where an actionable wrong may reason- 
 ably be regarded in either of two lights, it is rightly the subject of 
 double treatment. The " SsvTipov KUKog," whether in jurisprudence 
 or in ethics, is necessarily exposed to cross fires. 
 
 The several matters with which the present treatise is concerned 
 are classified, and the scheme and arrangement of each chapter is 
 set forth and fully explained, in the First or introductory Chapter; 
 and it is unnecessary to repeat here what is said there. 
 
 To my Commentary on Misrepresentation I prefixed a statement of 
 the law in a codified form. The present work contains no such code. 
 I made an attempt in this direction; but the result was not at all 
 satisfactory, and I was soon convinced that the subject does not lend 
 
VI PREFACE. 
 
 itself to this mode of treatment. The concepts and principles involved 
 are too fluid and delicate to justify the Procrustean extension or 
 compression which would be necessary to fit them into the rigid frame- 
 work of a code. The requisite propositions must either be drawn 
 out to a length sufficient to comprehend the infinite developments, 
 and possibilities of development, of the various doctrines — which 
 would be to reproduce the very " wilderness of single instances " 
 which it is the function of a good code to get rid of, — or else they 
 must be expressed in terms of such blank and naked universality 
 as to afford no guidance or instruction, the result being (as Bacon 
 said " of all rules that are very general ") a mere " sound in the 
 air," — a series of statements lucifera, perhaps, but not fructifera, — 
 tenuity, if not obscurity. As Aristotle wisely observed with reference 
 to similar generalities in the domain of ethics, " Eurt to filv tnruv 
 Olirwe aXriOic fjiv, ovdiv §£ <Ta(f>sg" [Eth. vi. 1, 2). 
 
 It has been no easy matter to devise a title for the present work 
 which shall at once accurately and completely indicate its intended 
 scope. "Actionable Non-Disclosure," without more, would be a 
 correct designation of the contents of the greater part of the work, but 
 it would not perhaps be considered adequate as a description of the 
 important subjects dealt with in the Fourth and Fifth Chapters, since 
 these include certain obligations of good faith in relations of con- 
 fidence, and of influence, which are regarded by most lawyers as 
 additional to that of disclosure, though (as will be seen) there is 
 some reason for deeming them either forms, or species, or offshoots 
 of the one primary duty of disclosure in its largest sense (see 
 §§ 316, 366, 473-9). "Actionable Abuses of Confidence, and of 
 Influence," would, no doubt, cover the whole ground, but it would 
 include a good deal more ; and, in any case, the phrase lacks termi- 
 nological precision. On the whole, the title selected seemed the 
 least open to objection of any which suggested themselves. 
 
 These are not propitious times for the bringing out of a 
 jurisprudential treatise. Amid the clash of arms, not laws only, but 
 law books are silenced. The thunder of legions over the face of the 
 earth may seem for the moment to have drowned the pure voice of 
 Justice, and the fumes of smouldering cathedrals to have clouded her 
 august features. We have seen the criminal violation in the inter- 
 national arena of all those duties of good faith in relations of 
 confidence and influence which, as estabhshed in British jurisprudence 
 between individuals, it has been the object of this work to expound, — 
 we have seen a trustee and guardian State ravishing the honour and 
 independence and devastating the possessions of the State which was 
 
PREFACE. VU 
 
 its cestui que trust and ward. Nay, more, — we have heard these crimes 
 justified by a commandeered philosophy which has not scrupled to 
 " push beyond her mark, and be Procuress to the lords of Hell." It 
 remains to be seen whether these " armed opinions " are to subjugate 
 mankind, or mankind them. Only one who despairs of the moral 
 order of the universe can doubt the ultimate result, or hesitate to 
 acknowledge the existence and sovereignty in human affairs of inter- 
 national Duty and Honour; not, indeed, in the narrow Austinian 
 aspect, but in that higher sense in which Hooker hymns the 
 majesty of Law at the close of the First Book of his Ecclesiastical 
 Polity. " Of Law there can be no less acknowledged than that 
 her seat is the bosom of God; her voice the harmony of the 
 world; all things in heaven and on earth do her homage, the very 
 least as feeling her care, and the greatest as not exempting her 
 power." This is that immutable, absolute, and universal Duty to 
 whose beauty and sanctity the German philosopher of other and 
 better times paid as lively a homage as the English poet of a later 
 day. Wordsworth's superb apostrophe is but the translation into 
 poetry of Kant's " categorical imperative." 
 
 " Thou dost preserve the stars from wrong ; 
 And the most ancient heavens through Thee are fresh and strong." 
 
 There is no longer any Amphictyonic Council, or College of Fetiales, 
 to enforce the observance of this Duty on nations in the CECumenical 
 convulsion now raging around us. But it is our pride to know that 
 by land, by sea, by air, — in the heights and in the depths, — as near 
 to our shores as the trenches in Flanders, and as far away overseas 
 as the Falkland Islands, — the British Empire is unweariedly uphold- 
 ing in arms against delinquent States those same principles of good 
 faith, honour, and justice which for centuries past she has enforced 
 in her Courts upon her own subjects. 
 
 And now, inauspicious as the moment of its birth may be, 
 without more ado I leave my offspring on the doorstep of public 
 hospitality, addressing to it the language of •' Herrick to his Book": — 
 
 " Go thou forth, my book, though late, 
 Yet be timely fortunate. 
 It may chance good luck may send 
 Thee a kinsman, or a friend, 
 That may harbour thee, when I 
 With my fates neglected lie. 
 If thou know'st not where to dwell, 
 See, the fire's by: farewell." 
 
 G. SPENCEK BOWER. 
 
 2, Habe Oodet, Temple. 
 February, 1915. 
 
TABLE OF CONTENTS. 
 
 FAQE 
 
 Preface ---_._ ______y 
 
 Table of Cases ---_______ xvii 
 
 Table of Statutes --_______ xliii 
 
 THE COMMENTARY ----_____ 
 
 Chapter I. Introductory -----__-1 
 
 Sect. 1. Scope of the Treatise -_____-i 
 
 Sect. 2. Classification of the Transactions and Relations giving rise 
 
 to the Duty of Disclosure, etc. ------ 2 
 
 Sect. 3. Topics Included— Order of Treatment ----- 4 
 
 Sect. 4. Topics Excluded -_-----_6 
 
 Chapter II. General Propositions and Definitions in relation 
 
 TO Disclosure, Materiality and KNowLEuaE - 7 
 Sect. 1. Disclosure -_-__----7 
 
 Sect. 2. Materiality ---------12 
 
 Sub-sect. 1. What are deemed Facts or Circumstances - - 13 
 Sub-sect. 2. The Meaning of Materiality ----- 16 
 
 Sect. 3. Knowledge _-_---_-- 19 
 Sub-sect. 1. Actual and Presumptive Ejiowledge - - - 20 
 Sub-sect. 2. Presumptive Knowledge of Matters of General 
 
 Notoriety -__-_-_ 21 
 Sub-sect. 3. Presumptive Knowledge of Facts and Usages 
 
 peculiar to the Business or Transaction - - 24 
 Sub-sect. 4. Presumptive Knowledge through Agents - - 27 
 Sub-sect. 5. Knowledge of Facts or Documents presumed from 
 
 Actual Knowledge of Other Facts or Documents 38 
 Sub-sect. 6. Statutory Presumptions of KJtiowledge - - - 48 
 Sub-sect. 7. Judicial Observationsonthe Doctrine of Presumptive 
 
 Knowledge -------55 
 
 Chapter III. The Duty of Disclosure in Negotiations for 
 
 CERTAIN Contracts termed Uberrima Fidei - 58 
 
 Sect. 1. General Statement and Theory ------ 58 
 
 Sect. 2. The various Species of Contracts and Transactions to which 
 
 the Rule applies -------- go 
 
 Sub-sect. 1. General Description ------ 60 
 
 Sub-sect. 2. Insurance -------- 61 
 
X Table op Contents. 
 
 PAGE 
 
 Chapter III. The Duty op Disclosure in NEaoTiATioNS for 
 CERTAIN Contracts termed Uberrima Fidei — continued. 
 
 Sect. 2. The various Species of Contracts and Transactions to which 
 the Rule applies — continued. 
 
 Sub-sect. 3. Contracts between Vendor and Purchaser - - 76 
 
 Sub-sect. 4. Contracts of Suretyship ----- 85 
 
 Sub-sect. 5. Releases, Waivers, Compromises, and Compositions 96 
 
 Sub-sect. 6. Contracts for Partnership - - - - - 110 
 
 Sub-sect. 7. Contracts to Marry and Separation Deeds - - 112 
 Sub-sect. 8. Cases not within any of the foregoing classes, where 
 nevertheless one of the negotiating parties may be, 
 or become, subject to a duty of disclosure - 120 
 Sub-sect. 9. Efieot of Warranties and Conditions as to Dis- 
 closure -------- 144 
 
 Sect. 3. Nature and Extent of the Burden of Proof on the Party 
 
 Complaining ______ 149 
 
 Sub-sect. 1. The Duty to Disclose (Materiality, etc.) - - 151 
 Sub-sect. 2. The Existence or Occurrence of the Alleged Undis- 
 closed Fact - - ----- - 151 
 
 Sub-sect. 3. The Non-Disclosure ------ 157 
 
 Sub-sect. 4. Knowledge of the Party Charged - - - - 161 
 
 Sub-sect. 5. Ignorance of the Party Complaining - - - 164 
 Sub-sect. 6. Matters which it is not incumbent on the Party 
 
 Complaining to establish ----- 170 
 
 Sect. 4. Affirmative Answers available to the Party Charged - - 173 
 
 Sub-sect. 1. Waiver ________ 174 
 
 Sub-sect. 2. Affirmation ------- 185 
 
 Sub-sect. 3. Matters which, per se, constitute no answer to the 
 
 case of the Party Complaining - - _ 188 
 
 Sect. 5. Relief and Remedies -------- 196 
 
 Sub-sect. 1. Offensive Proceedings for the Avoidance of the 
 
 Contract ------- 197 
 
 Sub-sect. 2. Defensive Proceedings available to the Party 
 
 Complaining ------- 214 
 
 Sub-sect. 3. What Remedies are respectively appropriate to the 
 
 several classes of case mentioned in this Chapter 218 
 
 Sect. 6. Questions of Law and Pact -__-__ 225 
 
 Sub-sect. 1. As to Materiality ------ 225 
 
 Sub-sect. 2. As to the Occurrence or Existence of the Alleged 
 
 Undisclosed Fact ------ 232 
 
 Sub-sect. 3. As to the Non- Disclosure ----- 232 
 
 Sub-sect. 4. As to Knowledge of the Undisclosed Fact possessed 
 
 by, or imputed to, either party - - _ 233 
 
 Sub-sect. 5. As to Waiver ------- 236 
 
 Sub-sect. 6. As to Affirmation and Election - - - _ 237 
 
 Sect. 7. Parties ------_-__ 239 
 
 Sub-sect. 1. Who are entitled to assert the right to relief - - 239 
 
 Sub-sect. 2. Against whom the right to relief may be asserted - 243 
 
Table of Contents. xi 
 
 PAGE 
 
 Chapter III. The Duty of Disclosure in Negotiations roR 
 CERTAIN Contracts teemed Ubeerimje Fidei — continued. 
 Sect. 8. Critical Observations on certain debateable Decisions 
 
 relating to Matters dealt with in this Chapter - 249 
 Sub-sect. 1. The Cases of James v. Morgan and Thornborow v. 
 
 WMiacre _______ 249 
 
 Sub-sect. 2. The Case of Wilde v. Gibson - - - - 255 
 
 Sub-sect. 3. The Case of Turner v. Green - - - - 262 
 
 Sub-sect. 4. The Case of Ellard v. Lord Llandaff - - - 269 
 
 Chapter IV. The Duty of Disclosure incidental to Eelations 
 
 OF Confidence _______ 272 
 
 Sect. 1. General Statement and Theory ______ 273 
 
 Sect. 2. The Several Relations to which the Principle is applied, and 
 the Nature of the Duties of Disclosure arising out of such 
 Eelations respectively - - _ - _ - -279 
 
 Sub-sect. 1. Trustee and Cestui Que Trust _ _ _ - 279 
 
 Sub-sect. 2. Promoter and Company _____ 285 
 
 Sub-sect. 3. Principal and Agent __-_-_ 294 
 Sub-sect. 4. Examination of Certain Relations not deemed 
 
 prima facie of a Fiduciary Character - - 306 
 
 Sect. 3. The Burden of Allegation and Proof on the Party Complaining 313 
 
 Sub-sect. 1. The Existence of the Relation _ - _ - 314 
 Sub-sect. 2. The Existence or Occurrence of the Undisclosed Fact 
 
 or Transaction ______ 318 
 
 Sub-sect. 3. Matters which it is not incumbent on the Party 
 
 Complaining to Allege or Prove - - - 319 
 
 Sect. 4. Affirmative Answers to the Case of the Party Complaining - 326 
 Sub-sect. 1. The Termination or Suspension of the Relation at the 
 
 time of the Transaction _____ 327 
 
 Sub-sect. 2. The Complete Discharge of the Duty of Disclosure 
 
 and Consequential Duties _ _ _ _ 329 
 
 Sub-sect. 3. Knowledge of the Party Complaining _ - - 331 
 
 Sub-sect. 4. Contract to waive Disclosure _ _ _ _ 333 
 
 Sub-sect. 6. Confirmation of the Transaction - - - 334 
 Sub-sect. 6. Matters which do not, per se, constitute Affirmative 
 
 Answers _______ 336 
 
 Sect. 5. The Relief Available to the Party Complaining _ _ _ 338 
 
 Sub-sect. 1. Remedies against the Party Charged _ _ - 338 
 Sub-sect. 2. Remedies against the Contractee who has corrupted 
 
 the Agent of the Party Complaining - - 348 
 
 Sub-sect. 3. Miscellaneous Forms of Relief _ _ _ _ 350 
 
 Sect. 6. Questions of Law and Fact ______ 352 
 
 Sect. 7. Parties --------__ 353 
 
 Sub-sect. 1. Who are entitled to assert the right to relief - - 353 
 Sub-seot. 2. Against whom the right to relief may be asserted - 357 
 
xii Table or Contents. 
 
 Chapter V. The Duty of Disclosure and other Duties inci- 
 dental TO Relations of Influence _ _ _ 352 
 Sect. 1. General Principles and Theory ------ 363 
 
 Sect, 2. TheClassesof Relations from which the Influence is 'presumed 369 
 Sub-sect. 1. The Relation between Parent and Child, and 
 
 Analogous Relations ----- 372 
 
 Sub-sect. 2. The Relation between Solicitor or other Legal 
 
 Adviser, and Client ----- 377 
 
 Sub-sect. 3. The Sacerdotal Relation ----- 382 
 
 Sub-sect. 4. The Relation between Physician and Patient - 386 
 Sub-sect. 5. Relations created by the Particular Circumstances 
 
 and Conditions of the Case - - - - 3g8 
 
 Sub-sect. 6. The Relation between an "Expectant" and a 
 person dealing with him in respect of his Ex- 
 pectancy ___--__ 399 
 Sub-sect. 7. Examination of Certain Relations which of them- 
 selves give rise to no Presumption of Influence - 412 
 Sect. 3. Burden of Allegation and Proof on the Servient Party - - 417 
 Sub-sect. 1. Proof of the Relation ------ 418 
 
 Sub-sect. 2. Proof of the Transaction ----- 420 
 
 Sub-sect. 3. Matters which the Servient Party is not required 
 
 to allege or prove ------ 423 
 
 Sect. 4. The Affirmative Answers available to the Dominant Party - 426 
 Sub-sect. 1. Proof that the Presumed influence was not operative 
 
 upon the Transaction _ - - _ _ 427 
 Sub-sect. 2. The Propriety of the Transaction, and the Due 
 
 Exercise of the Influence in Fact - - - 431 
 Sub-sect. 3. Confirmation of the Transaction by the Servient 
 
 Party --------446 
 
 Sub-sect. 4. " Family Arrangement " - - - - - 448 
 
 Sub-sect. 5. Certain Matters which are not deemed valid Affirma- 
 tive Answers ------- 449 
 
 Sect. 6. The Relief Available to the Servient Party - - - - 453 
 
 Sub-sect. 1. Rescission and Consequential Relief - - - 453 
 
 Sub-sect. 2. Defensive Proceedings - _ _ _ _ 453 
 
 Sub-sect. 3. Miscellaneous Forms of ReKef - - - - 459 
 
 Sect. 6. Questions of Law and Fact --_-__ 459 
 
 Sub-sect. I. Questions as to the Relation - _ - _ 46O 
 
 Sub-sect. 2. Questions as to the Transaction - - - - 461 
 
 Sub-sect. 3. Questions as to Value ------ 462 
 
 Sect. 7. Parties ----------462 
 
 Sub-sect. 1. Who are entitled to assert the right to relief - - 462 
 
 Sub-sect. 2. Against whom the right to relief may be asserted - 463 
 
 Chapter VI. The Statutory Law as to Non-Disclosure in Pro- 
 spectuses OF Companies _ - _ _ - 467 
 Sect. 1. Origin and Object of the Enactment ----- 468 
 Sect. 2. The Prospectus -------- 472 
 
Table op Contents. xiii 
 
 PAGE 
 
 Chapter VI. The Statutory Law as to Non-Disclosttee in Pro- 
 spectuses OF Companies — continued. 
 Sect. 3. The Matters required to be disclosed in the Prospectus - - 477 
 Sect. 4. The Persons by and against whom the Statutory Relief may be 
 
 claimed _______ 434 
 
 Sub-sect. 1. By whom the Statutory Relief may be claimed - 485 
 Sub-sect. 2. Against whom the Statutory Relief may be claimed 486 
 Sect. 5. Btirden of Proof on the Plaintiff in an action for breach of the 
 
 Statutory Duty - - - - - - 489 
 
 Sub-sect. 1. The Existence of the Duty to Disclose in the Pro- 
 spectus ______-- 490 
 
 Sub-sect. 2. The Existence of the Matter omitted from the Pro- 
 spectus -__--_-_ 492 
 Sub-sect. 3. The Omission from the Prospectus _ _ _ 493 
 Sub-sect. 4. The Defendant's Knowledge, in one class of case 
 
 only ________ 494 
 
 Sub-sect. 5. Inducement and Damage _____ 496 
 
 Sect. 6. Affirmative Defences to the Action for Statutory Non- 
 Disclosure ________ 498 
 
 Sub-sect. 1. Non-Statutory Affirmative Pleas unaffected by the 
 
 Enactment - - - - - - -498 
 
 Sub-sect. 2. Waiver — how affected by the Enactment - - 499 
 Sub-sect. 3. The Defendant's Ignorance of the Undisclosed 
 
 Matter ________ 500 
 
 Sub-sect. 4. The Defendant's " Honest Mistake of Fact " - 500 
 Sect. 7. The Statutory Relief _______ goi 
 
 Chapter VII. Concealment prom Courts, Public Authorities, 
 
 AND OTHER ThIED PERSONS _ - - _ _ 509 
 
 Sect. 1. Concealment of Material Facts from a Judicial Tribunal - 609 
 Sub-sect. 1. English Judgments, etc., procured by Non- 
 Disclosure _______ 509 
 
 Sub-sect. 2. Foreign Judgments, etc., procured by Non-Dis- 
 closure ________ 526 
 
 Sect. 2. Concealment of Material Facts from the Crown or the State - 517 
 
 Sect. 3. Concealment of Material Facts from Private Third Persons - 521 
 
 Sub-sect. 1. Concealment from Private Third Persons in General 522 
 Sub-sect. 2. Concealment from Creditors in Negotiations for 
 
 Composition Arrangements _ _ _ _ 523 
 
 Chapter VIII. Jurisdiction and Procedure _ _ _ _ 532 
 
 Sect. I. Jurisdiction _________ 532 
 
 Sect. 2. Procedure _________ 534 
 
 Sub-sect. 1. Certain Rules of Pleading and Discovery in Pro- 
 ceedings for Non-Disclosure - _ _ _ 534 
 Sub-sect. 2. Certain Rules of Practice in Proceedings for Non- 
 Disclosure _______ 538 
 
xiv Table of Contents. 
 
 PAGE 
 
 Chai'tee VIII. Jurisdiction and Peoceduee — continued. 
 Sect. 1. Jurisdiction — continued. 
 
 Sub-sect. 3. Misfeasance Procedure in the Liquidation of Com- 
 panies -------- 540 
 
 Sub-sect. 4. Costs in Proceedings for Non-Disclosure - - 545 
 
 APPENDICES ----------555 
 
 Appendix A. Terminological Questions ----- 555 
 
 Sect. L General Observations on the Importance of Terminology - 555 
 Sect. 2. Criticism of the Use of the Terms " Fraud," " Negligence," 
 
 and " Mistake," ia relation to Non-Disclosure, etc. - - 556 
 Sub-sect. 1. Double Use of the word " Fraud " - - - 557 
 Sub-sect. 2. Misuse of the term " Fraud " in connection with 
 
 the Doctrine of Presumptive Knowledge - - 561 
 Sub-sect. 3. Misuse of the term " Negligence " as the equivalent 
 of " Fraud " in connection with the Doctrine of 
 Presumptive Knowledge ----- 563 
 
 Sub-sect. 4. Whether such terms as " Negligence " and " Duty " 
 are applicable at all to cases of Presumptive 
 Knowledge ------- 565 
 
 Sub-sect. 5. Lax Use of the Term "Mistake" ia the Law of 
 
 Non-Disclosure _--_-_ 566 
 Sect. 3. Criticism of Terminology applied to Relations of Confidence 
 
 and Influence -------- 567 
 
 Sect. 4. Criticism of Conflicting Terminology applied to the Doctrine of 
 
 Actual and Presumptive Knowledge _ - - - 568 
 
 Sect. 5. Observations on the Proverbial Philosophy of the Subject, 
 
 and on Judicial Expression of Propositions - _ - 570 
 
 Appendix B. Comparison between Jurisprudence and Ethics 
 
 IN relation to the Duty oe Disclosure and the 
 
 Use and Abuse of Confidence and Influence - £73 
 
 Sect. 1. As to the Substantial Correspondence between the Moral and 
 
 the Juridical Treatment of the Duty of Disclosure and 
 
 Fiduciary Obligations generally ----- 573 
 
 Sect. 2. Comparison between Jurisprudence and Popular Sentiment, 
 or Moral Philosophy, ia relation to particular Doctrines and 
 Rules of Disclosure and Good Faith - - - _ 577 
 Sub-sect. 1. In respect of the Duty of Disclosure in Negotiations 
 
 for certain Contracts _ - _ _ - 577 
 Sub-sect. 2. In respect of the Duty of Disclosure ia Relations 
 
 of Confldence ------ 550 
 
 Sub-sect. 3. As to the " Suspected " Relations of Influence - 584 
 Sub-sect. 4. As to Oppression and Usury _ - - - 537 
 Sub-sect. 6. As to Gifts ------- 588 
 
 Sub-sect. 6. As to the Doctrine of " Wilful Ignorance " - - 590 
 Sect. 3. When, and why, Jurisprudence disregards Ethics - - - 591 
 
Table of Contents. xv 
 
 PAGE 
 
 Appendix C. The Roman Law of Non-Disclosuke and Abuses of 
 
 Confidence and Influence _ _ .. _ eoi 
 Sect. 1. General View of Dolus as involving Non-Disclosure in Roman 
 
 Jurisprudence - - - - - - - -601 
 
 Sect. 2. The Duty of Disclosure between Negotiating Parties in Roman 
 
 Law --___-_--- 605 
 Sect. 3. Roman Law as to the Duty of Disclosiure in Relations of 
 
 Confidence __--_-- __606 
 
 Sect. 4. The Roman Doctrine of Good Faith in Relations of Influence 607 
 
 Sub-sect. 1. As to the Parental, or quasi-Parental, Relation - 607 
 Sub- sect. 2. As to the Relation between Legal Adviser and 
 
 CKent -------- 607 
 
 Sub-sect. 3. As to Spiritual Influence ----- 608 
 
 Sub-sect. 4. As to Medical Influence ----- 608 
 
 Sub-sect. 5. As to Undue Influence in Fact _ _ _ - 609 
 
 Sub-sect. 6. As to Unconscionable Bargains with Expectants - 609 
 Sect. 5. Roman Law as to Burden of Proof, Affirmative Defences, and 
 
 Relief, in cases of Non-Disclosure - - - - - 611 
 
 Sub-sect. 1. As to the Facts required to establish the Actio or 
 
 Exceptio Doli - - - - - -611 
 
 Sub-sect. 2. As to the Affirmative Answers available to the 
 
 Party Charged ------ 612 
 
 Sub-sect. 3. As to Relief _-_--_- 613 
 Sect. 6. Applications of, and Reference to, the Principles of the Roman 
 
 Law of Non-Disclosure and Dolus in English Judgments - 614 
 
 Appendix D. The Scottish Law of Non-Disclosure - - - 617 
 Sect. 1. As to the Duty of Disclosure in Negotiations for Contracts 
 
 deemed Uberrimm Fidei ------ 617 
 
 Sect. 2. As to the Duties of Disclosure and Good Faith in Relations 
 
 of Confidence -------- 618 
 
 Sect. 3. As to the like Duties in Relations of Influence - - - 618 
 Sect. 4. As to Relief ---------619 
 
 Sect. 5. As to Statutory Duties and Provisions _ _ - _ 620 
 
 Index 
 
 B.N.D. 
 
TABLE OF OASES. 
 
 Aaron's Beefs, Ltd. v. Twiss . 
 
 Aas V. Beuham 
 
 Abbott V. Sworder .... 
 
 Aberaman Ironworks, Ltd. v. Wickens 
 
 Aberdeen Railway Co. v. Blakie Bros. 
 
 Abouloff V. Oppenheimer . 
 
 Abrahams v. Dimmock 
 
 Adam v. Newbigging 
 
 Adams v., Scott .... 
 
 Adamson, Ex p. ; Se Collie 
 
 V. Evitt 
 
 • V. Jervis 
 
 Addis V. Campbell 
 Agar-Ellis, Re 
 Agra Bank, Ltd. v. Barry 
 Ahearne v. Hogan 
 Aitohison v. Baker 
 Aloock V. Cooke 
 Aldborough (Earl) v, 
 Alison, Ee 
 Allcard v. Skinner 
 Allen V. Anthony 
 
 V. Davis . 
 
 V. Flood . 
 
 ■ V. Hyatt. 
 
 V. Seckham 
 
 Allis Chalmers Co. v. Fidelity & Deposit Co, 
 
 AUison V. Clayhills . 
 
 Alton Woods, Case of 
 
 Ambrose Lake Tin & Copper Co., Be 
 
 Anderson's Case ; Re Scottish Petroleum Co. 
 
 Anderson v. CosteUo 
 
 V. Fitzgerald 
 
 V. Thornton 
 
 Andrew v. Aitken 
 Andrewes v. Garstin 
 Andrews v. Bamsay & Co. 
 ■ ■ V. Rosa 
 
 276 
 
 1, 296; 
 
 324, 
 
 386, 387; 
 
 ,388, 
 
 Trye 
 
 367, 383, 385, 386, 427, 
 
 429. 
 
 440; 
 
 445, 
 
 402, 
 447. 
 
 450, 
 
 Angel V. Jay ..... 
 Anglo-Austrian Printing & Publishing Union, Se 
 Anglo-French Co-operative Society, Re ; Ex p. Pelley 
 
 Angus V. Clifford 
 
 Anstey v. British National Premium Life Association 
 Anstis's Claim ; Re National Motor Mail Coach Co. 
 Archbold v. Commissioners of Charitable Bequests in Ireland 
 Archer's Case ; Re North Australian Territory Co, 
 
 Archer v. Hudson .... 
 V. Stone .... 
 
 PAGE 
 
 190, 217, 471 
 . 305, 331 
 . 284 
 . 195, 210 
 347, 615, 618, 619 
 . 516 
 . 534 
 . 203, 310 
 . 310, 312 
 . 489 
 76, 79, 83, 131 
 . 128, 488 
 210, 397, 441, 457, 465 
 . 599 
 44, 52, 54, 565, 569 
 396, 397, 398, 430, 458. 
 . 114, 224 
 517,518, 520' 
 409, 411, 462, 463 
 . 310, 311 
 552, 574, 590' 
 . 44 
 . 396, 422 
 . 137, 415 
 139, 308, 356, 539' 
 47, 56, 570 
 153, 157, 214 
 429, 430, 434, 443 
 517, 518, 520 
 . 319, 355 
 . 129' 
 . 217 
 . 145 
 65, 170, 204, 260 
 81, 126. 
 142, 144, 224, 230 
 299, 347, 348 
 . 117 
 . 201 
 . 242 
 302, 326, 544 
 . 14 
 . 175 
 . 506, 507 
 . 260 
 278, 302, 303, 325, 344 345, 346, 
 542, 544 
 363, 367, 374, 376, 429, 434, 437, 440, 483, 485 
 141 
 
 of Maryland 
 364, 377, 382, 
 
 419, 
 
 110, 
 
 428, 
 
 112, 
 
xviii Table of Cases. 
 
 PAGE 
 
 Arkwright v. Newbold . . . 123, 129, 134, 136, 141, 483, 492, 493, 504, 505 
 Armstrong v. Armstrong .......... 390, 547 
 
 V. Turquand 149, 187, 197,198 
 
 Arnison v. Smith 128, 130, 174, 486, 504, 538 
 
 Arnold, Re 222 
 
 Aruot V. Bisooe 31, 80, 219, 232, 233, 244 
 
 Ashburner v. Sewell 22, 84 
 
 Ashton, JJe ; £a; p. MoGowan 31,56 
 
 Asjar & Co. v. Blundell 10, 40, 67 
 
 Askew's Case ; Ee Ruby Consolidated Mining Co 212, 213 
 
 Assets Development Co. v. Close Bros. & Co. ....... 546 
 
 Astley V. New Tivoli, Ltd. 544 
 
 Aston V. Kelsey 26, 331 
 
 Atkinson v. Denby 524, 525, 527, 528 
 
 V. Newcastle & Gateshead Waterworks Co. ...... 502 
 
 Atterbury v. Wallis 38 
 
 Att.-Gen. v. Ashbourne Recreation Ground Co. ....... 502 
 
 u. Lord Dudley 282,325,345,548 
 
 for the Dominion of Canada v. Standard Trust Co. of N. Y. . . 291, 293 
 
 Attree v. Hawe ............ 474 
 
 Attwood V. Small 145, 201, 202, 614 
 
 Atwool V. Merryweather 290, 299, 338, 357 
 
 Austin V. Chambers 308, 317 
 
 Ayles w. Cox 182, 195 
 
 Aylesford (Earl) v. Morris . 389, 391, 392, 400, 401, 403, 404, 405, 406, 407, 408, 
 
 410, 411, 523, 550, 568 
 Aylward v. Kearney 374, 443, 449, 456 
 
 B. 
 
 Babcock v. Lawson ........... 247 
 
 Baddeley 1). Mortlook 114,153,224 
 
 Baglehole v. Walters 122, 176, 177 
 
 Bagnall & Co., Re ; Ex p. Dick 483 
 
 Bagnall (John) & Sons, Ltd. v. Carlton . . . 286, 330, 341, 342, 343, 360, 547 
 Bagot V. Chapman ............ 206 
 
 Bailey v. Barnes 43, 49, 52, 56, 566 
 
 • ■ V. Richardson ........... 44 
 
 Bainbrigge v. Browne 373, 376, 427, 429, 434, 465, 466 
 
 Baker v. Bradley 373, 375, 424, 439, 450, 457, 464 
 
 V. Cartwright 113, 114, 224 
 
 V. Loader 394, 441, 547, 549 
 
 V. Monk 367, 424, 426, 443, 452, 462 
 
 V. Moss 52, 219 
 
 V. Read 280, 284, 335 
 
 Banister, Re 1, 9, 12, 77, 80, 175, 177, 178, 215, 219, 222 
 
 Bank of Australia v. Mas .......... 516 
 
 Hindustan, China, and Japan, 5e ,■ Campbell's and Hippisley's Cases . 187 
 
 Montreal v. Stuart .... 296, 413, 414, 433, 436, 439, 460, 465 
 
 Scotland v. Morrison 91, 92 
 
 Banque d'Hochelaga v. Murray ........ 517, 518 
 
 Barber v. Fletcher ............ 241 
 
 Baring v. Stanton 26, 332 
 
 Barker v. Harrison 296, 298, 337, 342, 345, 352 
 
 Barnard v. Hunter 297, 298, 338, 381, 441, 452 
 
 V. Taylor 476 
 
 Barnardiston t;. Lingood 401,405,407,408,411,426,456,458 
 
 Barnes v. Addy ............ 549 
 
 Barnhart v. Greenshields .......... 43, 44 
 
 Barrett v. Hartley 403, 417 
 
 Barron v. Willis 366, 368, 413, 445, 447, 466, 592 
 
 Barrow's Case ; Re Stapleford CoUiery Co 248 
 
 Barton v. Hassard ............ 283 
 
Table op Cases. xix 
 
 PAGE 
 
 Bartram & Sons v. Lloyd 8, 10, 299, 335 
 
 Barwell v. Barwell 397 
 
 Barwick v. English Joint Stock Bank" . 28 
 
 Bates V. Hewitt . 11, 16, 18, 20, 21, 22, 25, 66, 165, 166, 167, 168, 170, 231, 233, 
 
 562, 563, 566, 579 
 
 Bath D. Standard Land Co 308,319,343,359 
 
 Battison v. Hobson 52, 54, 55 
 
 Baty V. Keswick 474, 483, 497 
 
 Bawden v. London, Edinburgh & Glasgow Assurance Co 29, 612 
 
 Baylis v. Bishop of London 136, 572, 599 
 
 Bayly v. Wilkins 436, 458 
 
 Beachey v. Brown . . . .17, 60, 112, 113, 114, 116, 137, 142, 144, 224, 230 
 
 Beadles v. Burch ............ 549 
 
 Beanland v. Bradley ........... 414 
 
 Beaumont v. Bukes 206, 217 
 
 Beck V. Kantorowicz 299, 324, 354, 548 
 
 Beckwith v. Sydebotham ........... 65 
 
 Bedouin, The 13, 25, 40, 67, 131, 132, 133, 158, 160, 234 
 
 Beeching v. Lloyd 539 
 
 Begbie v. Phosphate Sewage Co. 523 
 
 Bell V. BeU 15, 65 
 
 BeUamy v. Sabine 103, 373, 375, 455 
 
 Bench v. Merrick 113, 114, 144, 167 
 
 Bennett, Exp 276, 321, 325, 338, 340, 358 
 
 V. Lord Bury ........... 539 
 
 V. Vade 10, 395, 436, 464, 549 
 
 Benson v. Heathorn 276, 296, 299, 300, 307, 355 
 
 Bentinck D. Penn 316,319,354,542,544 
 
 Bentley v. Black ............ 535 
 
 V. Craven 276, 296, 322, 324, 341, 342, 548 
 
 Benyon v. Cook 403, 405, 407, 410, 412, 456, 551, 559 
 
 Berdoe v. Dawson 373, 376, 447 
 
 Berney «;. Pitt 403,404,406,407,411,426 
 
 Berthon v. Loughman 16, 18, 228, 229 
 
 Bevan's Case ; Be Holmes's Estate 365, 380, 422, 429, 459 
 
 Berwick & Co. v. Price 31, 33, 36, 37, 38, 42, 49, 563, 565 
 
 Berwick Corporation v. Oswald ......... 95 
 
 Bexwell v. Christie ............ 141 
 
 Beyfus and Masters' Contract, Se ........ . 183 
 
 Biggar v. Rook Life Assurance Co. ......... 37 
 
 Biggs V. Hoddinott ............ 416 
 
 Billage (or Billing) v. Southee 386, 387, 422, 433, 436, 456 
 
 Bingham v. Bingham ........... 201 
 
 Birch V. Birch 513, 514, 535 
 
 V. EUames 42 
 
 Bird V. Bass ............. 50 
 
 Birnam Wood, The 57 
 
 BischofE's Trustees v. Prank 412, 414 
 
 Blackburn, Low & Co. i/. Haslam . . . . . . . . 65, 161 
 
 V. Vigore . 13, 25, 29, 30, 31, 34, 57, 60, 65, 161, 219, 234, 
 
 244, 557, 558, 571, 592, 595 
 
 Blaokie v. Clark 388, 438, 458 
 
 Blaiberg v. Keeves 178, 181 
 
 Blair v. Bromley 213 
 
 Open Hearth Furnace Co., Se 471, 503 
 
 Blaker v. Hawes & Brown 26, 331 
 
 Bland's Case ; Be Westmoreland Green & Blue Slate Co. . . 303, 334, 345, 542 
 Blest V. Brown ............ 95 
 
 Blisset V. Daniel ........... 59, 615 
 
 Bloye's Trusts, Be 250, 258 
 
 Boaler v. Power 514 
 
 Bonar v. Macdonald 95, 618 
 
 Booth V. New Afrikander Gold Mining Co. 475, 507 
 
 Boothby v. Boothby 462, 550 
 
 Bos V. Helsham 202 
 
XX 
 
 Table of Cases. 
 
 Boston Deep Sea Fisheries & Ice Co. v. Ansell 
 Boswell V. Coaks ..... 
 Boulton V. Houlder Bros. 
 Boursot V. Savage ..... 
 Bonsfield v. Hodges .... 
 Bowles V. Round ..... 
 V. Stewart ..... 
 
 Boyd V. Dubois ..... 
 Boyd & Forrest v. Glasgow & S. W. Ky. Co. 
 Boyae v. Rossborough .... 
 Bradford v. Symondson .... 
 Bradley v. Carritt ..... 
 
 V. Riches ..... 
 
 Brandling v. Plummer .... 
 
 Bray v. Ford ...... 
 
 Brazilian Rubber Plantations & Estates, Ltd., Be 
 Brenehley v. Higgins .... 
 
 Brewer and Hankin's Contract, Be 
 Brewin v. Briscoe ..... 
 
 Bridgeman v. Green .... 
 
 Bridges v. Hunter ..... 
 
 Briggs's Case ; Be Hop & Malt Exchange Warehouse Co, 
 Bright V. Legerton ..... 
 
 Brinsmead (T. E.) & Sons, Ltd., Be; Tomline's Case 
 Brisbane v. Dacres ..... 
 
 British Equitable Insurance Co. v. G. W. Ry. Co 
 
 Guardian Life Association, Be 
 
 Linen Co. v. Cowan 
 
 Provident Life & Guarantee Association, Be 
 
 - Seamless Paper Box Co., Be . 
 
 -Workmen's & General Assurance Co. v. Cunliffe 
 
 28, 
 
 9,15, 
 
 276, 
 
 Bromley v. Holland 
 V. Smith 
 
 15, 17, 
 
 Brooke v. Lord Mostyn 
 
 Brooke (Lord) v. Rounthwaite . 
 
 Brookes v. Hansen ..... 
 
 Brooking v. Maudslay .... 
 
 Broome v. Speak ..... 
 
 Brotherton v. Hatt ..... 
 
 Brougham, Ex p. ; Be Darby . 
 
 Broun v. Kennedy ..... 
 
 Brownlie v. Campbell .... 
 
 Brunton v. Hawkes ..... 
 
 Bryan (Doe d.) v. Bancks 
 
 Bufe V. Turner 
 
 BuLkeley v. Wilford ..... 
 Burdett v. Home ..... 
 Burgess's Case ; Be Hull & County Bank . 
 Burlaud v. Earle ..... 
 Burnes v. Pennell ..... 
 Burrell, Ex p. . 
 
 Burrows v. Matabele Gold Reef & Estates Co, 
 Burstall v. Beyfus ..... 
 Burton v. Bevan ..... 
 Bwloh-y-Plwm Lead Mining Co. v. Baynes . 
 
 107, 
 
 PAGE 
 
 276, 300, 322, 343, 347,581 
 
 510, 513, 516 
 
 . 537, 538 
 
 29, 32, 35, 36, 38 
 
 . 175 
 
 22, 167 
 
 97, 223, 244, 549 
 
 65, 231 
 
 . 141 
 
 413, 414, 567 
 
 19. 63, 161, 549 
 
 . 416 
 
 . 36, 38, 569 
 
 8, 12, 22, 76, 81, 167, 222 
 
 , 277, 302, 322, 323, 351, 368 
 
 .175 
 
 407, 409, 410, 441, 444, 457 
 
 . 80, 84, 85, 182, 221 
 
 . 31 
 
 394, 398, 466 
 
 13, 15, 64, 170, 226, 231 
 
 . 187 
 
 . 192 
 
 199 
 
 .' 572, 589 
 
 18, 59, 74, 128, 129, 245 
 
 . 544 
 
 . 127 
 
 De Ruvigne's Case 302, 303, 
 
 345, 346 
 
 330, 331, 355 
 
 204, 205, 212, 213 
 
 209 
 
 400, 403, 452, 551, 568 
 159, 208, 223, 510, 511, 513, 514 
 . 195,217 
 . 480, 481 
 . 209, 540 
 18, 491, 492, 493, 497, 501, 504,561 
 29, 30 
 . 291, 292, 315, 343, 351, 355 
 367, 379, 380, 437, 439, 452, 589, 600 
 18, 63, 129, 135, 176, 201, 258, 618, 619 
 
 . 517 
 . 198 
 
 18, 75,. 171, 226 
 339, 380, 458, 461 
 . 213 
 . 487 
 315, 354, 357 
 143, 619, 620 
 131, 141, 540 
 . 474, 507 
 . 550 
 505, 506, 507 
 . 217 
 
 c. 
 
 Caballeho v. Henty 45, 82, 167, 220 
 
 Cachar Co., iJe; Lawrence's Case . . . . . . . .46,187 
 
 Caokett v. Keswick . 12, 98, 483, 491, 492, 493, 494, 496, 498, 501, 504, 505, 561 
 Cadman v. Home .... ....... 216 
 
Table of Cases. xxi 
 
 PAGE 
 
 Caerphilly Colliery Co., Re 303, 345, 581 
 
 Callisher v. Bischoffsheim 108 
 
 CamberweU & East London Building Society v. Holloway 183 
 
 Cammell v. Sewell 516 
 
 Campbell's Case ; Re Bank of Hindustan, China, and Japan . . . .187 
 
 Campbell v. Fleming 187, 188 
 
 V. Riokards 227, 244 
 
 — ■ V. Walker 340 
 
 Canadian Land Claims & Colonizing Co., Re ; Coventry & Dixon's Case . . 542, 543 
 
 Oil Works Corporation, Re ; Hav's Case . . . 302, 303, 352, 581 
 
 Cane v. Lord AUen . . . . " 277, 364, 382, 548 
 
 Caun V. Cann 100, 103, 108, 109 
 
 Canning v. Parq^uhar 130, 157 
 
 Cantiniere Meocanico Brindisino v. Jannson . 14, 65, 131, 132, 146, 167, 176, 180, 
 
 241 
 
 Capel & Co. V. Sim's Ships Composition Co 209, 210, 483, 492 
 
 Capell V. Winter 51 
 
 Cardiff Savings Bank, Re ; Davies's Case 542, 543 
 
 Carew v. Johnston 417, 456, 466, 512, 515 
 
 Cargill V. Bower 187 
 
 Carlish t). Salt 82,85,171,212,220 
 
 Carriage Co-operative Supply Association, Re . . 302, 322, 326, 345, 352, 359, 544 
 
 Carter's Case ; Re Great Western Forest of Dean Coal Co 543 
 
 Carter v. Boehm . 13, 15, 22, 24, 62, 63, 64, 66, 131, 165, 167, 170, 179, 180, 218, 229, 
 
 557, 579, 615 
 
 V. Palmer 298, 316, 317, 328, 338, 345, 352, 379 
 
 Cassels v. Stewart 275, 295, 309, 584, 618, 619 
 
 CasteU V. Brown, Ltd. ........... 40 
 
 Cavalier v. Pope ............ 138 
 
 Cave V. Cave 37, 38 
 
 Cavendish v. Strutt 370, 395, 429, 436, 452, 549 
 
 Caxton Accrington Union v. Dew . . . . . . . . 95, 166 
 
 Cazenove v. British Equitable Assurance Co. ....... 74 
 
 Chadwick v. Turner ........... 52, 53 
 
 Chalmers (AUis) Co. v. FideUty & Deposit Co. of Maryland . . . 153, 157, 214 
 
 Champion v. Rigby 381, 438, 443, 444, 546, 548 
 
 Chandler v. Webster 208 
 
 Chaplin v. Hicks 250 
 
 Chaplin & Co. o. Brammall 396, 413, 436, 439, 458 
 
 Charlesworth v. Faber 25, 40, 67, 234, 548 
 
 Charlton v. Hay 491 
 
 Charter v. Trevelyan . . 194, 201, 296, 298, 330, 331, 337, 338, 356, 360, 513 
 
 Chesterfield (Earl) v. Harding 210 
 
 — ■ V. Jannsen . 254, 366, 389, 397, 400, 401, 403, 404, 405, 407, 408, 
 
 412, 425, 448, 522, 523, 524, 558, 571, 596, 615 
 ChUde and Hodgson's Contract, iJe ......... 41 
 
 China S.S. Co. v. Commercial Assurance Co. ....... 537 
 
 Trading Assurance Co. v. Royal Exchange Assurance Co. .... 537 
 
 Cholmondeley v. Clinton .......... 310, 311 
 
 Christineville Rubber Estate, Ltd., Re ... . 187, 190, 480, 481, 498 
 
 Chynoweth's Case ; Re Wheal Unity Wood Mining Co 187, 561 
 
 City of Vancouver v. Vancouver Lumber Co. ..... 517, 519, 520 
 
 Civil Service Co-operative Society v. General Steam Navigation Co. . . . 545 
 
 Clare v. Joseph 380, 438 
 
 Clark V. Mark 309 
 
 Clarke v. Dickson 202, 203, 206 
 
 V. Malpas 10, 397, 442, 443, 457, 458 
 
 V. Tipping 278, 323, 324, 342 
 
 Clay V. Ray 527 
 
 Clements v. Hall 16, 111, 187, 189, 208, 224, 242 
 
 Clough V. L. & N. W. Ry. Co. . . . 186, 187, 190, 197, 199, 202, 205, 217, 247 
 Coaks V. Boswell . . .15, 78, 79, 124, 131, 132, 141, 158, 193, 194, 222, 511 
 
 Coal Economizing Gas Co., Re ; Cover's Case 483, 503 
 
 Coats (J. & P.), Ltd. V. Crossland . . . 483, 485, 486, 504, 505, 508, 540, 546 
 Cobbett V. Brock 414, 465 
 
xxii Table or Cases. 
 
 PAQB 
 
 Cockburn v. Edwards . . . .26, 233, 235, 381, 436, 442, 450, 459, 461 
 
 Cockell V. Taylor 242, 254, 393, 427, 443, 464, 549 
 
 Cockerell, ^a; p 512 
 
 Cockshott V. Bennett 525, 526 
 
 Cole V. Gibbons 401, 404, 448 
 
 — — V. Langford ............ 510 
 
 Coleman v. Riches ............ 616 
 
 Coles V. Trecothick 277, 281, 282, 284, 327, 328, 330, 331, 358 
 
 Collie, Se ; Ex p. Adamson 489 
 
 Compania Sansinena de Carnes Congeladas v. Houlder Bros. & Co. . . . 640 
 
 Components Tube Co. v. Naylor 214 
 
 Connecticut Kre Insurance Co. v. Kavanagh . 260 
 
 Conolly V. Parsons 614, 616 
 
 Cook V. Collingridge 276, 282, 321 
 
 V. Fountain ............ 594 
 
 V. Wright 108 
 
 Cooke V. Fitzpayne ............ 453 
 
 V. Lamotte 418, 455, 592 
 
 Coomber, Ee 390, 399, 414, 421, 435, 438, 443, 464, 567 
 
 Cooper V. Joel 209 
 
 V. Phibbs 23, 201, 258 
 
 Cordingley v. Cheeseborough 178, 184, 216 
 
 Cornell v. Hay . ! 475, 483 
 
 Cornfoote v. Powke 62, 615 
 
 Cory V. Gertcken ............ 245 
 
 V. Patton 65, 163 
 
 Cosser v. CoUinge 40, 41, 78, 81 
 
 Costa Rica Railway Co. v. Porwood . . .9, 276, 297, 322, 324, 333, 355, 360, 683 
 
 Coulson V. AUinson 10, 12, 13, 117 
 
 County of Gloucester Bank v. Rudry Merthyr, &c., Colliery Co 46 
 
 Marine Insurance Co., Be ........ . 543 
 
 Court V. Martineau 15, 65, 167, 218 
 
 Cousins, Be 34, 36, 56 
 
 Coutts V. Ackworth ............ 418 
 
 Coventry and Dixon's Case ; Be Canadian Land, &o., Co 542, 543 
 
 Coverley v. Burrell 79, 80, 219 
 
 Cowling V. Topping ............ 212 
 
 Cowper V. Earl Cowper ........... 594 
 
 Cox V. Lee ............. 674 
 
 and Neve's Contract, iJe 81,175,183 
 
 Croft V. Graham 403, 406, 407, 456, 650 
 
 Croskey v. Bank of Wales .......... 539 
 
 Cross, Be 524, 529 
 
 V. Mutual Reserve Life Insurance Co. ....... 190 
 
 Crouch V. Credit Eoncier of England 246 
 
 Crowe V. BaEard 121, 278, 296, 395, 447, 451 
 
 Crowly V. Bergtheil 53, 64, 512, 613, 516, 614 
 
 Cundy v. Lindsay ............ 126 
 
 Curson v. Belworthy ........... 418 
 
 Curtis V. Bottomley 394, 452, 459 
 
 Cutts V. Salmon 10, 328, 347, 558 
 
 Da Costa v. Edwards ......... 24, 69 234 
 
 Daintree, Ex p. ; Be General Provincial Life Insurance Co. . 72, 73, 131, 133, 241 
 Dalbiac v. Dalbiac ............ 522 
 
 Dalby v. India & London Life Assurance Co. ....... 74 
 
 Dalglish i;. Jarvie . 16,18,512,515 
 
 Dalby v. Wenham 397, 443, 445, 457 
 
 Dane v. Mortgage Insurance Corporation ........ 88 
 
 Daniels v. Davison ............ 44 
 
 Darby, iJe ; ^a; y. Brougham 291,292,315,343,351,365 
 
Table of Cases. 
 
 xxiu 
 
 PAGE 
 
 Dauglish v. Tennent 525, 529, 530 
 
 Davey v. Durrant 310, 312, 313 
 
 David Payne & Co., Ltd., Be 33 
 
 Davidson v. M'Gregor 525, 527, 531 
 
 V. TuUoch 619 
 
 Davies's Case ; Be Cardiff Savings Bank 542, 543 
 
 Da vies v. Cooper 435, 441, 443, 458 
 
 V. London & Provincial Marine Insurance Co. 15, 86, 123, 127, 129, 135, 151, 272 
 
 V. Thomas 41 
 
 Davis and Cavey, Be 81, 185, 220, 221 
 
 V. Chester ............ 245 
 
 V. Hatchings 56 
 
 V. Duke of Marlborough 402, 406, 588 
 
 Davoren v. Wootton 488 
 
 Davy V. Garrett 535 
 
 Dawes v. Harness 217 
 
 Dawson v. Great Northern & City Railway Co 242 
 
 V. Lawes ............ 95 
 
 ^j;. Massey 374,376,438,443,445 
 
 De Beers Consolidated Mines, Ltd. v. British South Africa Co 416 
 
 De Bussche v. Alt . 194, 294, 301, 322, 324, 329, 332, 334, 335, 337, 342, 343, 358, 581 
 De Cordova v. De Cordova . . . . . . . . . .282 
 
 De Ruvigne's Case ; Be British Provident Life & Guarantee Association 302, 303, 345, 
 
 346 
 
 De Witte v. Addison 373, 376, 441, 464 
 
 Dean v. MacDowell 294, 304, 305 
 
 Debenham v. Sawbridge . 
 Delves v. Delves 
 Denny v. Hancock . 
 Dent V. Bennett 
 Denton v. Donner . 
 
 V. G. N. Ry. Co. . 
 
 Deposit Life Assurance Co. v. Ayscough 
 Deny v. Peek ..... 
 Diamond Fuel Co., ^e ; Mitcalfe's Case (13 C. D, 
 
 (13 C. D 
 
 Dicconson v. Talbot 
 
 Dick, Ea p. ; Be Bagnall & Co, 
 
 Dickinson v. MurreU 
 
 Dimmock v. Hallett 
 
 Dimsdale v. Dimsdale 
 
 Disderi & Co., Be 
 
 Dixon V. Winch 
 
 Dobell V. Hutchinson 
 
 Dobson V. Sotheby . 
 
 Doe d. Bryan v. Bancks . 
 
 Nash V. Birch 
 
 Rochester (Bishop) v. Bridge 
 
 Dolman v. Nokes 
 
 Dominion of Canada Trading & Investment Corporation v. Brigstocke 
 
 370, 371 
 
 Be 
 Ltd. 
 
 Dominion Cotton Mills Co. v. Amyot 
 
 Dougan v. Macpherson 
 
 Dover v. Buck. 
 
 Dover Coalfield Extension, Ltd. 
 
 Downes v. Grazebrook 
 
 Driefontein Consolidated Mines, 
 
 Drincqbier v. Wood . 
 
 Dryden v. Frost 
 
 Duck V. Tower Galvanizing Co, 
 
 Duckett V. Williams 
 
 Duffel V. Wilson 
 
 Dunbar v. Harvey . 
 
 V. Tredennick 
 
 DunbeU, Be ; Ex p. Hughes 
 Duncan, Be . 
 
 Janson 
 
 ,386: 
 
 169) 
 815) 
 
 15, 263, 264, 320, 322, 
 
 280, 281, 
 
 182, 183, 201, 202, 222 
 . 318 
 . 195 
 
 387, 388, 
 
 422, 430, 443, 457 
 338, 339 
 . 128 
 . 217 
 472, 566 
 303, 325, 345 
 . 310 
 . 309 
 . 483 
 . 242 
 76, 82, 171, 183, 222 
 373, 375, 377, 454, 546 
 302, 352 
 . 30 
 
 . 183 
 
 . 75 
 
 . 198 
 
 . 198 
 
 . 501 
 
 . 141 
 
 . 607 
 
 . 357 
 
 325, 330, 337, 338, 580, 618 
 
 281, 307, 335, 542 
 
 . 304 
 
 311, 327, 331, 332, 338, 358 
 
 . 597 
 
 474, 476, 486, 498 
 
 . 42 
 
 . 46 
 
 72, 149, 154, 204 
 
 . 198,213 
 
 . 534 
 
 . 297,335 
 
 . 340 
 
 . 488 
 
xxiv Table of Cases. 
 
 PAGE 
 
 Duncan v. Worrall ......■••••• 209 
 
 Dunlop-Truffauld Cycle & Tube Manufacturing Co., iJe ; Sj; jj. Shearman . .187 
 
 Dunn V. Cox 514, 515 
 
 Dunnage «. White 101,102,396,398,399,412,451 
 
 Dunne v. English 9, 13, 297, 332, 342, 343 
 
 Durham Corporation v. Fowler .......... 93 
 
 DurreU v. Bederley 13, 16, 21, 61, 226, 228 
 
 Dyson v. Lum 280, 324, 326, 338, 341 
 
 E. 
 
 Early v. Garrett 176, 177 
 
 East of England Bank, Re ; Pelton's Executors' Case 544 
 
 Eastern Archipelago Co. «. R 517, 518, 520 
 
 Eastgate, Re ; Ex p. Ward 247 
 
 Edelstein v. Eussell ....■• 537 
 
 Eden v. Eidsdale's Railway Lamp & Lighting Co. 303, 316, 322, 323, 329, 345, 346 
 
 Edgbaston v. Fitzmaurice ........•• 14 
 
 Edinburgh United Breweries, Ltd. v. MoUeson .....-• 619 
 
 Edwards and Daniel Sykes & Co., Ltd., Re 130 
 
 Edwards, £a; y. ; iJe Metropolitan Coal Consumers Association . . . .186 
 
 V. Browne 426, 456 
 
 V. Burt 462, 463, 550 
 
 V. M'Leay 80, 127, 189, 201, 219, 220, 262 
 
 I). MaUan 148 
 
 «. Meyrick 21, 382, 428, 437, 438 
 
 V. WiUiama 419, 420, 431 
 
 Edwards-Woods v. Majoribanks ........ 78, 83 
 
 Elkin V. Janson .... 60, 65, 150, 152, 157, 158, 160, 161, 166, 226 
 
 EUard v. Lord Llandaff . 18, 78, 135, 136, 137, 138, 216, 220, 263, 269, 270, 271, 600 
 
 Ellis V. Rogers 20, 79, 81, 167, 214, 220 
 
 Elson V. Crooks 205 
 
 Elton V. Larkins 226 
 
 Emma SUver Mine Co. u. Grant (1879), 11 C. D. 918, C. A. . 292, 315, 341, 342, 343, 
 
 351 
 
 (1880), 17 C. D. 122, C. A 360 
 
 V. Lewis 286, 287, 292, 316, 341, 343 
 
 Empress Assurance Co. v. Bowring ......... 309 
 
 Englefield Colliery Co., Re 302, 342, 359 
 
 English & Scottish Mercantile Investment Co. v. Brunton . . 40, 41, 43, 56, 57, 570 
 
 Englishman, The 488 
 
 Erlanger v. New Sombrero Phosphate Co. . 83, 138, 286, 287, 288, 289, 290, 291, 292, 
 293, 294, 307, 315, 322, 326, 336, 338, 344, 354, 360, 365, 431, 558, 574 
 
 Erskine, Oxenford & Co. v. Sachs 302, 316, 343 
 
 Espey V. Lake 260, 374, 376, 425, 458 
 
 Espin V. Pemberton 33, 37, 44, 569, 570 
 
 Etna Insurance Co., Re ; Slattery's Case ........ 200 
 
 Evans v. BiokneU 562, 563, 564 
 
 V. Carrington 117, 119, 224 
 
 V. Edmonds 15, 118, 119, 137, 163, 214, 224, 600 
 
 V. LleweUin 397 
 
 Evanson v. Crookes ............ 205 
 
 Eventurel v. Eventurel ........... 597 
 
 Everett v. Desborough 30, 73, 171, 180, 204 
 
 EvToy V. Nicholas 142 
 
 Eyre v. Dolphin 39, 565 
 
 V. Hughes ............ 417 
 
 V. Smith 515 
 
 V. Wynne-Mackenzie .......... 417 
 
 F. 
 
 FAiECLotroH V. Swan Brewer v Co 416 
 
 Fane v. Fane ..." 101, 102, 103, 104 
 
 Farmer v. Farmer 390, 454 
 
Table op Cases. xxv 
 
 PAGE 
 
 Farrant v. Blanohford 40, 97, 165, 330, 331, 335 
 
 Farrar v. Earrars, Ltd 310, 312 
 
 Fawoett v. Gye . . . . 524, 525, 527 
 
 ■ and Holmes, Se 182, 183 
 
 V. Whitehouse 299, 342, 343, 353 
 
 Featherstonehaugh v. Fenwick 300, 339, 345 
 
 Fellowes v. Lord Gwydyr 141 
 
 Pelton's Executors' Case ; Re East of England Bank '.'.'.... 544 
 
 Fenn v. Craig 217, 218 
 
 Fenwick, Stobart & Co., Ltd., Se '. '. '. '. '. .... 33 
 
 Ferguson v. Wilson 619 
 
 Fitzherbert v. Mather 30, 64, 203 
 
 Fitzroy Bessemer Steel Co., Ee . . . 37, 288, 292, 323, 326, 344, 345, 346, 355 
 
 V. Cave 242 
 
 Flatau, Se '.'.'..... 515 
 
 Fletcher v. Krell ....".!!!.'... 142 
 
 Flight ?;. Booth 81,84,171,183,184,195,198,212,213,219 
 
 Flower v. Lloyd (6 C. D. 297, C. A.) 515 
 
 (10 C. D. 327, C. A.) 511, 513 
 
 Foley V. Moline 65 
 
 V. Tabor 24, 25, 29, 165, 167, 226 
 
 Footer. Haine 113,143 
 
 Forbes v. Ross 283 
 
 Ford V. Hill 134 
 
 V. Olden 417, 464 
 
 1;. Stier 117 
 
 Forest of Dean Coal Mining Co., Ee 295, 304, 316, 317, 542 
 
 Forester v. Read 546 
 
 Foeman & Co. Proprietary, Ltd. o. S.S. Lidderdale 195 
 
 Forrester v. Jones ............ 533 
 
 V. Pigou ............ 241 
 
 Poster V. Mentor Life Assurance Co 72 
 
 V. Roberts 409, 457 462, 463, 550, 561 
 
 PothergiU v. Phillips 214, 220 
 
 Poulkes «. Sellway 15,114,224 
 
 Pour Solicitors, Se 378, 584 
 
 Fowkes V. Manchester & London Life & Loan Association, No. 1 . . . 73, 162 
 
 — , No. 2 . . . . 149 
 
 Fox V. Mackreth 136, 139, 277, 283, 298. 324, 338, 402, 594 
 
 V. Wright 411, 463 
 
 Pracis, Times & Co. v. Saa Insurance Co 66, 226, 228, 229 
 
 Prank v. Frank 108 
 
 Frankenburg v. Great Horseless Carriage Co 488, 540 
 
 Franks v. BoUans 281, 282, 311, 335, 338 
 
 V. Weaver ............ 574 
 
 Preeland v. Glover ............ 13 
 
 Freeman v. Bishop ........... 404, 406 
 
 V. Cooke 135 
 
 Friere v. Woodhouse 14, 25, 65, 570 
 
 Fry U.Lane . . . 404,407,411,412,441,448,458,459,462,549,550,559,568 
 
 G. 
 
 Gainsbokotjoh (Earl) v. Watcombe Terra Cotta Clay Co 42, 43, 566 
 
 Gallard, Ee 281, 318, 330, 337, 351 
 
 Gamage (A. W.) Ltd. v. Charlesworth ........ 619 
 
 Gandy i). Adelaide Marine Insurance Co. . . . 11,15,21,25,226,230,231,236 
 
 Garraud v. Prankel ............ 201 
 
 Gates's Case ; Vaughan v. Vanderstegen 247 
 
 Geach v. Ingall 72, 149, 162 
 
 Gedge v. Royal Exchange Assurance Corporation ..... 68, 548 
 Geere v. Mare 526, 531 
 
XXVI 
 
 Table op Cases. 
 
 PAGE 
 
 General Insurance Co. of Trieste v. Miller ........ 240 
 
 Provident Assurance Co., Be ........ 543 
 
 Provincial Life Assurance Co., iJe ; Mxp. Daintree . . 72, 73, 131, 133, 241 
 
 Railway Syndicate, Re ; Whiteley's Case 214 
 
 Gibbons v. Caunt 103, 109 
 
 Gibson v. D'Este . . . .30, 189, 191, 209, 219, 227, 255, 257, 261, 615 
 
 V. Jeyes . 281, 284, 285, 297, 298, 307, 324, 327, 329, 330, 353, 381, 429, 437, 
 
 438, 443, 460, 463, 464, 593, 595 
 ■ V. RusseU 388, 396, 424, 433, 437, 546, 548 
 
 GUbert v. Endean . 
 Giles, Re ; Ex p. Stone 
 Gill, Ex p. ; Re Shaw 
 Gillett V. Peppercorne 
 Gladstone v. King 
 
 . 105, 129, 214, 223, 239, 268, 269 
 
 489 
 
 525, 528 
 
 276, 278, 296, 322, 324, 325, 332, 338, 581, 592 
 29, 30, 64, 170, 218, 219 
 
 Glasgow Assurance Corporation u. W. Symondson & Co. 15, 19, 63, 69, 70, 131, 153, 
 
 196, 218, 226, 228, 230, 310 
 
 Pavilion Ltd. v. Motherwell 507, 620 
 
 and South Western By. Co. v. Boyd & Forrest ..... 141 
 
 Glasier v. RoUs 315, 504 
 
 Gledstanes v. Earl of Sandwich ........ 517, 520 
 
 Gluckstein v. Barnes . . . . 9, H, 292, 315, 334, 342, 343, 354, 355, 359 
 
 Goddard v. Carlisle 378, 380, 440, 458, 466 
 
 Goldberg, iJe 525,528 
 
 Golding V. Royal London Auxiliary Insurance Co. ..... 128, 134 
 
 GomersaU, iJe 206 
 
 Goode & Bennion v. Harrison ........ 129, 197, 198 
 
 Gooding v. White 66, 171 
 
 Gordon v. Gordon . 9, 13, 14, 101, 103, 104, 106, 107, 109, 137, 167, 193, 208, 265—268, 
 
 270, 456, 600 
 
 V. Holland 249, 280, 300, 567 
 
 V. Street 141, 472, 610 
 
 Gordon-Cumming v. Houldsworth ........ 52, 620 
 
 Gorris ?;. Scott 502 
 
 Gossain v. Gossain ........... 516, 517 
 
 Gossip V. Wright ............ 416 
 
 Gover's Case, Re Coal Economizing Gas Co. ...... 483, 503 
 
 Gower v. Couldridge ........... 540 
 
 Gowers' Case ; Re London & Provincial Starch Co. ...... 200 
 
 Gowland v. De Faria 400, 407, 408, 412, 462, 463, 550 
 
 Grant v. Easton ............ 516 
 
 V. Gold Exploration & Development Syndicate . 18, 300, 322, 325, 348, 349, 350 
 
 Gray v. Warner 282, 351 
 
 Great Berlin Steamboat Co., Re ..... . . . 523 
 
 Eastern Railway Co. v. Goldsmid 517, 518, 521 
 
 V. Turner 295 
 
 ■ Luxembourg Railway Co. v. Magnay 
 
 ■ Northern S.S. Fishery Co. v. Edgehill 
 
 • Western Forest of Dean Coal Co., Re ; 
 ■ Insurance Co. v. Cunliffe 
 
 Carter's Case 
 
 • Wheal Polgooth Railway Co., Be 
 
 . 296, 339 
 
 . 501, 502 
 
 . 543 
 
 26, 317, 333, 334 
 
 287, 309, 315, 543 
 
 . 616 
 
 Green v. Baverstock 
 
 (E.) & Son, Ltd. V. Tughan & Co 300, 343 
 
 Greenhalgh v. Brindley 83, 547 
 
 Greenlaw v. King 276, 307, 322, 337, 338, 354, 360, 361, 580 
 
 Greenwood v. Greenwood . . . 8, 9, 11, 13, 17, 106, 131, 157, 159, 161, 167, 223 
 
 V. Humber & Co. (Portugal), Ltd 489 
 
 - V. Leather Shod Wheel Co, 
 
 Greer, Re 
 Gregory v. Gregory . 
 Gresley v. Mousley . 
 Griffiths V. Robins . 
 Grigsby v. Cox 
 Grosvenor v. Sherratt 
 Groves v. Perkins 
 Gwynne v. Heaton . 
 
 12, 97, 98, 210, 483, 508, 540 
 . 42 
 . 283,548 
 378, 381, 438, 450, 465 
 367, 395, 440, 456 
 . 413,453 
 365, 397, 434, 435, 436, 443, 444, 463 
 .9, 396, 424, 425, 435, 546 
 402, 405, 407, 408, 410, 425, 455, 550, 559, 615 
 
Table of Cases. xxvii 
 
 H. 
 
 PAGE 
 
 Haddington Island Quarry Co. v. Huson 310, 312, 313 
 
 Haedioke and Lipski's Contract, iJe .... 40,79,81,167,175,176,221 
 Hale, Exp. ; Re London & Provincial Electric Light & Power Co. . . .188 
 
 Hallt). HaU ^ 117 
 
 —--V.Wright ...'.'.'.'.'. '. 112,114,156,197 
 
 Hallows V. Eernie ............ 539 
 
 Hambroughi;. Mutual Life Insurance Co. of N. Y. ". '. '. '. '. 145,171 
 
 Hamilton v. Watson 89, 91, 131, 132, 173, 223, 618, 619 
 
 — K.Wright 276,277,282,322,323,325,338,347,360 
 
 Hampshire v. Wickens 235 
 
 Land Co., Se 33 
 
 Harbin v. Masterman ........... 512 
 
 Hardman v. Booth ............ J25 
 
 Hare and O'More's Contract, Re 130, 217, 220, 221 
 
 Harley v. Stone 206 
 
 Harrington v. Pearl Life Assurance Co 129, 157 
 
 • ■ V. Victoria Graving Dock Co. . 300, 323, 325, 347, 348, 352, 353, 523, 581 
 
 Harris v. Clarkson 10, 22, 253, 390, 536 
 
 V. Pepperell ............ 201 
 
 V. Tremenheere .... 276, 297, 298, 329, 330, 421, 435, 547, 595 
 
 Harrison v. Guest 390, 419, 547 
 
 Harrod v. Benton 515 
 
 narrower v. Hutchinson . . 21, 22, 25, 26, 27, 66, 125, 126, 131, 132, 167, 566, 615 
 
 Harse v. Pearl Life Assurance Co 205 
 
 Hart V. Swaine ............ 201 
 
 Hartopp V. Hartopp 373, 375, 437 
 
 Harvey, Re ; Ex p. Phillips 525, 528, 529 
 
 V. Mount 390, 396, 434, 440, 547 
 
 Harward v. Hackney Union .......... 566 
 
 Haslam & Hier Evans, Re 10, 276, 331, 382, 436 
 
 Hatch V. Hatch 365, 367, 368, 374, 425, 429, 435, 450, 546 
 
 Hay's Case ; Re Canadian Oil Works Corporation . . . 302, 303, 352, 581 
 
 Haygarth v. Wearing 206, 210, 247, 398, 419, 435 
 
 Haywood v. Eogers 13, 17, 131, 132, 146, 228 
 
 Hearn v. Thomas ............ 46 
 
 Helmore v. Smith ............ 295 
 
 Hemmings v. Sceptre Life Association ...... 149, 175, 187 
 
 Henderson v. Astwood .......... 310, 312 
 
 ■ V. Lacon 210, 211 
 
 Henry v. Armstrong .......... 390, 418 
 
 Hepworth v. Pickles 30, 33, 41, 81, 154, 547 
 
 Herbert v. Edgington 114, 224 
 
 Hereford & S. Wales Waggon & Engineering Co., Re . . . . 292, 341, 347 
 
 Herring v. Jackson 66, 226, 558 
 
 Hesketh, Ex p. ; Re Sale Hotel & Botanical Gardens, Ltd. . . 291, 322, 331, 544 
 
 Hesse v. Briant 296, 298 
 
 Hewitt V. Loosemoore 29, 37, 563, 569, 570 
 
 Bros. V. Wnson 65, 177 
 
 Heywood v. MaUalien 9, 80, 171, 213, 214, 220 
 
 Hichens v. Congreve . . . 285, 290, 291, 293, 324, 341, 342, 351, 355, 357 
 
 Hiokley v. Hickley 282 
 
 Hickson v. Lombard ........... 260 
 
 Hiern v. Mill 21, 24, 33, 34, 41, 569 
 
 Higgins V. Pitt 524, 525, 529 
 
 HiU V. Gray 135, 136 
 
 V. Sampson 39 
 
 . — V. Thompson ............ 517 
 
 Hill's Waterfall Estate & Gold Mining Co., Re 542, 543 
 
 Hindson v. Weatherill 414 
 
 Hine v. Dodd 52, 53 
 
 Hippisley's Case ; Be Bank of Hindustan, China, & Japan 187 
 
 Hippisley v. Knee Bros 26, 300, 322, 331, 333, 343, 582 
 
 Hoare v. Bembridge 209, 218, 223 
 
XXVill 
 
 Table oi" Cases. 
 
 PAGE 
 
 Hoblynv. HoWyn 101,102,373,375,451,455 
 
 Hodgaon, Ee ; Ex p. Oliver 525 
 
 V. Sidney .......■••.. 485 
 
 Hodson V. Deans 312, 358 
 
 Hoggart's Settlement, Ee 437, 441, 451, 459, 547 
 
 Hoghton V. Hoghton 101, 102, 366, 373, 375, 418, 457 
 
 Holdsworth v. Lancashire & Yorkshire Insurance Co 29 
 
 Holman v. Loynes 381, 418, 427, 428, 429, 430, 434, 438, 443 
 
 Holmes v. Brunsliill . . . . . 95, 96 
 
 Holmer's Estate, Be ; Sevan's Case 
 
 Home Counties & General Life Insurance Co., Ee 
 
 Hoole V. Speali 
 
 Hop & Malt Exchange Warehouse Co., Be ; Brigg's Case 
 
 Horsfall v. Thomas 
 
 Horton v. Reilly ..... 
 
 Horwell v. London Greneral Omnibus Co. . 
 
 Hough V. Guardian Fire and Life Assurance Co. 
 
 Houldsworth v. City of Glasgow Bank 
 
 Hovenden & Sons v. Millhoff 
 
 Howarth v. Pioneer Life Association 
 
 Howatson v. Webb 
 
 Howden v. Haigh 
 
 Howe V. Smith 
 
 Howes V, Bishop 
 
 Howley v. Cook 
 
 Huckman v. Fernie 
 
 Hughes, V. Ex p. ; Be Dunbell 
 
 V. Jones 
 
 Huguenin v. Baseley 
 
 ■ V. Rayley 
 
 300, 322, 
 
 365, 380, 422, 429, 459 
 
 ; Ex p. WooUaston . . . 200 
 
 476, 485, 488, 508 
 
 . 187 
 
 121, 135, 138 
 
 525, 527, 528 
 
 . 488 
 
 . 29 
 
 . 487 
 
 324, 325, 348, 349, 582 
 
 . 205 
 
 . 206 
 
 . 525, 526 
 
 . 205 
 
 390, 413, 414, 460, 461 
 
 253, 395, 436, 456, 548 
 
 . 35 
 
 . 340 
 
 . 216 
 
 367, 369, 370, 383, 384, 392, 398, 414, 420, 425, 433, 435, 436, 
 
 438, 466, 586, 609 
 
 73, 226, 231 
 
 Hull & County Baiik, Be ; Burgess's Case 487 
 
 Hunt V. Elmes 43, 563 
 
 V. Luck 43, 44, 45, 49 
 
 Hunter v. Atkins .... 365, 369, 370, 399, 418, 431, 432, 547, 590, 592 
 
 Hutton V. Waterloo Life Assurance Co 71, 73 
 
 Hyde v. Warden 81, 220, 235 
 
 V. Watt 198 
 
 Hylton V. Hylton 97, 367, 368, 374, 430, 447 
 
 10, 
 
 I. 
 
 Impeeiai, Land Co. oi' Mabseilles, Be . 
 
 — Mercantile Credit Association v. Coleman 
 
 543 
 
 lonides v. Pender 
 Irving V. Greenwood 
 
 9, 18, 297, 322, 323, 324, 342, 
 343, 351, 359 
 
 9, 13, 14, 16, 17, 40, 63, 69, 75, 152, 158, 160, 171, 226, 228, 230 
 113, 114, 153, 167 
 
 J.W.J. . 
 Jacobs V. Revell 
 Jack V. Kipping 
 Jackman v. Mitchell 
 Jackson v. Duchaire 
 James, Ex p. . 
 
 — V. Kerr 
 
 V. Litchfield 
 
 V. Morgan 
 
 Jauson V. Property Insmance Co. 
 
 V. Solarte 
 
 Jarrett v. Kennedy 
 Jenkins v. Hales 
 
 275- 
 
 ',277, 
 
 . 117 
 
 183, 185, 210 
 
 . 489 
 
 524, 525, 527 
 
 . 622 
 
 282, 283, 298, 321, 324, 327, 338, 340, 357, 358 
 403, 416, 417, 424, 425 
 . 45, 80, 82 
 23, 249, 250, 254 
 . 539, 540 
 . 537 
 127, 128, 187 
 9, 77, 175 
 
Table of Cases. 
 
 XXIX 
 
 FAQE 
 
 Jenner v. Jenner 373, 375, 590 
 
 Jennings v. Moore 31 
 
 Joel V. Law Union & Crown Insurance Co. . 5, 18, 63, 71, 72, 74, 146, 147, 149, 157, 158, 
 
 160, 162, 171, 181, 204, 226, 232 
 
 Johnson's Patent, Me 513, 514, 518, 519 
 
 Johnson ^. R 213 
 
 Johnston v. Conneotiout Gas Co. of Toronto 502 
 
 Joint Stock Trust & Finance Corporation, Re 97, 544 
 
 JoUfie V. Baker 202 
 
 Jolland V. Stainbridgo 52, 53 
 
 Jones, Ex p, ; Re Jones 142 
 
 V. Bowden ............ 121 
 
 V. Clifford 202 
 
 V. Garcia del Rio 539 
 
 V. Gordon 206 
 
 V. Keene 131, 136, 213 
 
 V. Matthie 310, 312 
 
 V. Pacaya Rubber & Produce Co 212 
 
 V. Provincial Insurance Co 63, 71, 73, 148 
 
 V. Ricketts 409, 462, 550 
 
 V. Rimmer 80, 220, 222 
 
 V. Smith 39, 41, 42, 43, 562, 564 
 
 K.Thomas 381,428,443 
 
 V. Williams 41, 42, 43, 44, 662 
 
 Judd?;. Green 402,411 
 
 Jury V. Stoker 482, 483, 504, 505 
 
 Kali Bakhsh Singh v. Ram Gcpal Singh .... 374, 396, 437, 441, 590 
 
 Kar berg's Case ; Re Metropolitan Coal Consumers Association . . .186, 209 
 
 Keates v. Cadogan 83, 136, 1 38, 236 
 
 Kelly V. Metropolitan Railway Co. ......... 148 
 
 Kempson i;. Ashbee 374,376,434,436,437,450 
 
 Kennedy v. Broun ........... 590, 615 
 
 J). De TrafEord 311 
 
 V. Green 28, 29, 32, 33, 34, 37, 200, 247 
 
 K. 
 
 Kent County Gas Light & Coke Co., Re . 
 Kettlewell v. Refuge Assurance Co. . 
 
 V. Watson ..... 
 
 Kimber v. Barber ...... 
 
 Kincard'a Case ; Re Russian (Vyksounsky) Ironworks 
 King V. Hamlet ...... 
 
 V. Wilson ...... 
 
 (F.) & Co. V. Gillard & Co. 
 
 (J.), Ltd. V. Hay Currie .... 
 
 Viall & Benson v. Howell 
 
 Kingsland (Viscount) v. Barnewall 
 
 Kingston's (Duchess) Case .... 
 
 Kingston i'. Knibbs ...... 
 
 Cotton Mill Co., Re (No. 1) 
 
 (No. 2) 
 
 Co. 
 
 Kirby v. Smith 
 Kirk V. Todd . 
 Krrkwood v. Thompson 
 KnatchbuU v. Krueger 
 Knight V. Bowyer . 
 
 V. Hunt 
 
 V. Marjoribanks 
 
 Knox V. Gye . 
 
 Kreglinger v. New Patagonia Meat & 
 
 Krell V. Henry 
 
 Kuhliez v. Lambert Bros., Ltd. 
 
 Cold Storage Co 
 
 29, 35^ 
 
 272 
 
 . 359, 360 
 198, 201, 213 
 , 37, 52, 54, 55, 56, 664 
 296, 341, 342, 649 
 46, 187 
 410, 446, 454 
 . 216 
 . 545 
 395, 399, 465 
 296, 325, 326, 348, 358 
 379, 382, 399, 443, 465 
 610, 515 
 
 24, 69, 234 
 
 . 643 
 
 . 642 
 
 65, 231 
 
 . 488 
 
 . 310 
 
 195, 217 
 
 . 44 
 
 525, 527, 530 
 
 . 281, 310 
 
 279, 656, 667, 571 
 
 416, 656, 572, 697 
 
 . 208 
 
 302, 322, 323, 343 
 
XXX 
 
 Table of Cases. 
 
 L. 
 
 203 
 
 Lacey, Exp. . 
 
 Lachlan v. Reynolds .... 
 
 Lady Forrest (Muiohison) Gold Mine, Ltd., Re 
 
 Ladywell Mining Co. v. Brookes 
 
 Lagunas Nitrate Co. v. Lagunas Syndicate . 
 
 Laing v. Union Marine Insurance Co. 
 
 Lala Mahabir Prasad v. Mussamat Taj Begum 
 
 Lamb v. Sambas Rubber & Gutta Percha Co. 
 
 Lands Allotment Co., Be . 
 
 Law V. Law ... 78, 99, 100, 105, 109, 11 
 
 Guarantee Trust & Accident Society, Ltd., Re 
 
 Lawrance v. Lord Norreys 
 
 Lawrence's Case ; Re Cachar Co. 
 
 Le Lievre v. Gould . 
 
 Le Neve v. Le Neve 
 
 Lebon v. Straits Assurance Co. 
 
 Lee V. Angas . 
 
 v^ Jones 
 
 Leeds (Duke) v. Amberst (Earl) 
 
 & Hanley Theatre of Varieties, Ltd., Re 
 
 ,164, 
 
 167, 
 
 Legge V. Croker 
 Leicester v. Rose 
 Leigh V. AdarQS 
 Leitch V. Abbott 
 Lempriere v. Lange 
 Lenzberg's Policy, Ee 
 Leo S.S. Co. V. Corderoy 
 Leonard v. Leonard 
 Leslie v. Thompson . 
 Levy V. Abercorris Slate Co. 
 
 • V. Scottish Employers Insurance Co. 
 
 Lewellin v. Cobbold 
 Lewis V. Hillman 
 
 V. Levy 
 
 ■ V. Mills . 
 
 Leyland and Taylor's Contract, Re 
 Liberator Benefit Building Society, Be 
 Lichfield Corporation v. Simpson 
 Life Association of Scotland v. Siddall 
 
 and Health Assurance Co. v. Yule 
 
 Liles V. Terry .... 364, 366, 367, 
 
 Lindenau v. Desborough . 
 
 Lindsay Petroleum Co. v. Hurd 
 
 Lishman v. Northern Maritime Insurance Co. 
 
 Lister v. Lister 
 
 & Co. V. Stubbs 
 
 Littledale v. Kenyon 
 Lloyd V. Atwood 
 
 V. Grace, Smith & Co. 
 
 • V. Passingham 
 
 Lloyds Bank v. BuUock . 
 
 ■ • Banking Co. v. Jones 
 
 Load V. Green 
 
 Locking v. Parker . 
 
 Loftus V. Roberts 
 
 London Assurance Co. v. Mansel . 18, 63, 72, 
 
 Chartered Bank of Australasia v. Lempriere 
 
 General Omnibus Co. v. HoUoway 
 
 & General Bank, Re 
 
 ■ Joint Stock Bank v. Simmons 
 
 & Mediterranean Bank, Re ; Wright's Case (No 
 
 (No, 
 
 PAOB 
 
 275, 277, 283, 319. 323, 340 
 
 . 187,222 
 
 . 315, 354 
 
 287, 315, 316, 339, 341, 354, 360 
 
 203, 292, 293, 339, 359, 360 
 
 18, 27, 158, 160, 179, 234, 237 
 
 . 381 
 
 . 212 
 
 295, 326 
 
 199, 223, 241, 244 
 
 . 88 
 
 193, 535, 536 
 
 46, 187 
 
 . 561 
 
 32, 52, 53, 54, 614 
 
 69 
 
 200 
 
 89, 90, 91, 614, 615 
 
 . 187, 194 
 
 288, 291, 292, 315, 339, 341, 343, 344, 
 
 355, 369 
 
 262 
 
 525, 527 
 
 378, 
 201 
 
 ', 100 
 
 380, 
 203, 
 
 73, 132, 134, 204, 
 
 86, 
 
 11, 
 
 15, 25, 
 
 ,101 
 
 102, 
 
 , 27, 68, 169, 570 
 
 . 537 
 
 . 211 
 
 526, 528 
 
 . 240 
 
 103, 106, 109, 223 
 
 . 182 
 
 . 474 
 
 11, 30 
 
 . 200 
 
 296, 324, 350 
 
 . 597 
 
 . 395, 397 
 
 23,82, 184,221 
 
 . 543 
 
 . 501 
 
 . 194 
 
 . 619 
 
 429, 432, 440, 589, 590, 592 
 
 17, 63, 171, 226, 228, 232 
 
 290, 292, 331, 337, 338, 339 
 
 163 
 
 . 275, 340 
 
 300, 343, 344, 349 
 
 65, 226 
 
 282, 298, 335, 374, 441 
 
 . 572 
 
 . 103, 247 
 
 . 51 
 
 32, 43 
 
 . 247 
 
 . 310, 311 
 
 117 
 
 ,209,218,226,512,559 
 
 . 260 
 
 87, 89, 91, 92, 93, 171 
 
 . 643 
 
 246, 247, 248, 565 
 
 . 200 
 
 . 200 
 
 97, 
 
Table of Cases. xxxi 
 
 PAQB 
 
 London & Provincial Electric Light and Power Co., Se ; Ex p. Hale . . . 188 
 
 -Insurance Co. v. Chambers 
 ■ V. Seymour 
 
 Starch Co., Se ; Gowers' Case 
 
 & South Western Canal, Ltd., Be . 
 
 Railway Co. v. Blackmore 
 
 638 
 
 66, 209, 212, 218 
 
 . . 200 
 
 302, 303, 345, 359 
 
 . 97 
 
 ■ & Westminster Loan & Discount Co. v. Bilton 10, 22, 373, 432, 436, 439, 458, 
 
 465 
 
 Long V. Yonge 539 
 
 Longmate v. Ledger 397, 424, 443, 456, 458 
 
 Lovell V. Hicks 125 
 
 Low V. Bouverie ............ 32 
 
 Lowther v. Carlton ............ 248 
 
 V. Lord Lowther 140, 277, 298, 345, 353, 356 
 
 Luddy's Trustee v. Peard 277, 325, 345, 356 
 
 Luff V. Lord 281, 282, 331 
 
 Lurgan (LoTd)'s Case ; Re Metals Constituents, Ltd 187, 201 
 
 LyaU V. Edwards 97 
 
 Lyddon v. Moss 381, 428, 446 
 
 Lydney & Wigpool L:on Ore Co. v. Bird . . 287, 288, 292, 316, 343, 352, 358, 360 
 Lynch v. Dunsford 14, 64, 67, 168 
 
 M. 
 
 MacCabe v. Hussey 293, 298, 421 
 
 M'Carthy v. Decaix 97, 241, 244 
 
 McConnell v. Wright 483, 496, 504, 505 
 
 McGowan, Ex p. ; Re Ashton 31, 56 
 
 McKay's Case ; Re Morvah Consols Tin Mining Co. . 302, 303, 317, 345, 346, 543 
 
 Mackintosh & Dreyer v. Marshall 25, 165 
 
 Mackreth v. Walmisley 94, 132, 133 
 
 Macleay v. Tait 482, 483, 494, 497, 501 
 
 McPherson v. Watt . 141, 296, 307, 316, 322, 324, 325, 338, 339, 356, 361, 379, 381 
 
 Mactaggart v. Wilson 95, 618 
 
 Maddeford D. Austwick 78,110,111,187,223,224,300 
 
 Madeley v. Booth 183, 184, 195 
 
 Madell v. Thomas 247 
 
 Madrid Bank, Re ; Ex p. Williams 9, 293, 347 
 
 Mahomed Kala Mea v. Harperink 80, 219, 222 
 
 Mahony v. East Anglian Mming Co. ......... 45 
 
 Mallalieu v. Hodgson 525, 529, 530 
 
 Manchester Trust v. Purness 41, 57, 79 
 
 Mangles v. Dixon 143, 248 
 
 Manks v. Whiteley 52 
 
 Manners v. Mew 562, 564 
 
 V. Whitehead 213 
 
 Markt & Co. v. Knight S.S. Co 529 
 
 Marnham v. Weaver 126, 127 
 
 Marsden v. Reid 241 
 
 Marsh and Earl GranviUe, Re 1, 9, 12, 77, 80, 175, 176, 221 
 
 Marshall and Scottish Employers Liability & General Insurance Co., Re . . 129 
 
 Martin v. Cooper 80, 222 
 
 Martinson v. Clowes ........... 310 
 
 Mathias v. Yetts 550 
 
 Maturin v. Tredenniok 203 
 
 Maxfield v. Barton 42, 44 
 
 Maxwell v. Port Tennant Patent Steam Fuel & Coal Co. 275, 285, 293, 295, 302, 347, 
 
 348 
 
 May V. Piatt 201 
 
 Mayhew v. Boyes 527, 529 
 
 V. Eames ............ 32 
 
 Maynard v. Rhodes 29, 72, 180' 
 
 Mears v. Western Canada Pulp & Paper Co 506, 507 
 
 B.N.D. C 
 
xxxii Table op Cases. 
 
 PAGE 
 
 Meldou V. Lawless 217 
 
 Mellor V. Lees ............. 416 
 
 MercaDtUe S.S. Co. v. Tyser 26, 41, 67, 234 
 
 Trading Co., Se ; Stringer's Case 641 
 
 Merino v. Mutual Reserve Life Insurance Co. . . . . . . .190 
 
 Merryweather v. Nixan ........... 488 
 
 Metal Constituents, Ltd., Ee ; Lord Lurgan's Case 187, 201 
 
 Metcalfe's Trusts, Re 384, 385, 454 
 
 Metropolitan Bank v. Heiron . ... 32, 299, 326, 343, 344, 351 
 
 Coal Consumers Association, iJe ; ^K ;p. Edwards . . . .186 
 
 Karberg's Case . . . 186, 209 
 
 Middleton v. Brown 390, 568 
 
 V. Sherburne 370, 385, 393, 398, 414, 568, 586 
 
 Milch V. Coborn 201 
 
 Miles V. Langley ............ 45 
 
 V. New Zealand Alford Estate Co 108 
 
 Milner, fep 624, 525, 529, 530 ■ 
 
 Mitcalfe's Case ; Re Diamond Fuel Co. (13 C. D. 169) .... 303, 326, 345 
 
 (13 C. D. 815) 310 
 
 Mitchell V. Homfray .... 386, 388, 422, 440, 447, 461, 462, 632, 590 
 
 Mixer's Case ; Ee Royal British Bank ........ 187 
 
 Moens v. Heyworth . . ........ 59, 62 
 
 Mogridge v. Clapp ... ........ 61 
 
 Mogul S.S. Co. V. McGregor, Gow & Co 568 
 
 Molloy V. Mutual Reserve Life Insurance Co. . . .... 190 
 
 Molony v. Kernan 298, 338, 358, 361 
 
 Molyneux v. Hawtrey 40, 47, 49, 66, 81, 214, 220, 236 
 
 Montefiori v. Montefiori ........... 143 
 
 Montesquieu v. Sandys 426, 428, 546 
 
 Moore, Re 281, 351 
 
 V. Explosives Co. ........... 533 
 
 V. Prance 381, 426, 433, 436, 437, 438, 548 
 
 Moorhouse v. Woolfe ........... 213 
 
 Morgan v. EUord 316 
 
 — • V. Minett .... 365, 367, 368, 371, 379, 380, 424, 429, 432, 437 
 
 u. Seaward 617, 518 
 
 Morison v. Thompson 299, 342 
 
 Morley v. Loughnan 383, 385, 386, 394, 396, 466 
 
 Morrison v. Muspratt 72, 73, 151, 152, 226 
 
 V. Universal Marine Insurance Co. . 26, 29, 65, 156, 186, 190, 197, 236, 238 
 
 Morse v. Royal 282, 330, 335, 336, 360 
 
 Morvah Consols Tin Mining Co., Ee ; McKay's Case . 302, 303, 317, 345, 346, 543 
 
 Moses V. Macferlan ............ 614 
 
 Moss u. Moss 116,117 
 
 & Co. V. Swansea Corporation ......... 213 
 
 Mostyn (Lord) v. Brooke 107, 159 
 
 V. West Mostyn Coke & Iron Co. . . 78, 80, 171, 206, 214, 217, 220, 532 
 
 Moth V. Attwood 410, 411, 426, 462, 463 
 
 Motion V. Moojen 511, 514 
 
 Mountford v. Scott 34, 35, 42 
 
 TMoxon V. Payne . . .10, 103, 105, 121, 223, 425, 437, 447, 451, 462, 558 
 
 Mulvany v. Dillon 282, 314, 350, 352 
 
 Mumford v. Stohwasser ........... 45 
 
 Murphy v. O'Shea 13, 296, 297, 324, 328, 338 
 
 Murray v. Palmer .... 187, 194, 207, 210, 390, 392, 443, 446, 447, 460 
 
 , Dixon, & Murray, Ee ......... . 190 
 
 Mutual Reserve Life Insurance Co. v, Foster . . . . . . .190 
 
 Myddleton v. Lord Kenyon 206, 535 
 
 N. 
 
 Nant-y-Glo & Blaina Ieonwoeks Co. v. Grave . . . 303, 316, 345, 346 
 Nash V. Birch 198 
 
Table op Cases. xxxiii 
 
 PAGE 
 
 Nash V. Calthorpo 483, 496, 497, 498 
 
 V. Dix 14]^ 
 
 National Exchange Co. v. Dew ......... 619 
 
 Motor Mail Coach Co., Re ; Anstis's & McLean's Claims . . 506, 507 
 
 Provincial Bank of England v. Glanusk 89, 91 
 
 Natusch V. Henderson ........... 64 
 
 Navulshaw v. Brownrigg . . . . . . . . . . .51 
 
 Naylor v. Winch '99, IO9, 279, 307 
 
 Nedby v. Nedby 413^ 414 
 
 Nelthorpe v. Holgate 131, 133, 134, 141, 615 
 
 Nesbitt V. Berridge 405, 406, 462, 463, 466, 551 
 
 Nevill V. Snelling 395, 399, 401, 403, 406, 436, 456, 651 
 
 Neville v. Wilkinson ........... 552 
 
 New Brunswick & Canada Ry. & Land Co. v. Conybeare . . 40, 46, 545, 546 
 
 ' V. Muggeridge . . . . .136 
 
 Haw Estate Trusts, -Re ........ . 282 328 
 
 Ixion Tyre & Cycle Co. v. Spilsbury '55 
 
 Mashonaland Exploration Co. ......... 544 
 
 York Bowery Fire Insurance Co. v. N. Y. Pire Insurance .... 75 
 
 Newbigging v. Adam . . . . . . . . . . .210 
 
 Newcastle Fire Insurance Co. v. Macmorran & Co. ..... 63 145 
 
 Newman v. Payne ........... 370 455 
 
 Nicholson J). Power 11, 25, 27, 65, 169] 170 
 
 Nickells v. Rolls ............ 517 
 
 Nicol V. Vaughan 399, 421, 422, 461, 536, 590 
 
 NiooU t). Chambers ........... 178 182 
 
 Nitedals Taendstickfabrili v. Bruster ......... 343 
 
 Nixon V. Hamilton 34, 35, 52, 53, 54 
 
 V. Loundes ............ 515 
 
 Noakes & Co., Ltd. v. Price .......... 416 
 
 Noble V. Adams ............ igg 
 
 V. Kennaway ........... 24 570 
 
 Nocton V. Lord Ashburton . . . 20,168,260,332,381,424,425,427,459,559 
 
 Nordenfeldt v. Nordenfeldt Maxim Gun &, Ammunition Co. .... 573, 597 
 North Australian Territory Co., Be ; Archer's Case 278, 302, 303, 325, 344, 345, 346,'542, 
 
 544 
 
 British Insurance Co. ?;. Lloyd . . . 86,87,88,93,126,171,173,227 
 
 Western Railway Co. v. Whinray ........ 95 
 
 Salt Co. V. Electrolytic Alkali Co. ...... 548 
 
 Northern Counties of England Fire Insurance Co. v. Whipp 42, 43, 44, 562, 563, 564 
 
 Norton v. Relly 367, 383, 384, 385, 456', 457 
 
 Nottidge V. Prince 367, 370, 371, 383, 384, 385, 440, 457, 586 
 
 Nottingham Patent Brick & Tile Co. v. Butler . 12, 80, 81, 97, 126, 159, 175, 176, 183, 
 
 185, 214, 220, 249' 
 Nutt V. Easton 301, 312, 313, 335 
 
 0. 
 
 Oakes & Peek, Ex p. ; Re Overend, Gurney & Co. ...... 56O 
 
 O'Brien v. Lewis 367, 368, 380, 429, 446, 589, 590 
 
 Ochsenbein v. Papelier ........... 516 
 
 Ockford V. Barrett ............ 108 
 
 Oelkers v. Ellis 12, 203, 296, 316, 321, 329, 353 
 
 Oesterreichische Export, &c. v. British Indemnity Assurance Co. .... 540 
 Ogilvie V. Currie ............ 187 
 
 Oldham v. Hand 380, 428, 448 
 
 Oliver, Ex p. ; Re Hodgson 525 
 
 V. Hinton 44, 49, 563, 564, 572 
 
 Olympia, Ltd., Re ........... , 289 
 
 Omnium Electric Palaces, Ltd. v. Baines . 274, 288, 289, 291, 293, 319, 331, 334, 335, 
 
 354, 355, 536, 567 
 
 Onions v. Cohen 209 
 
 Ormond (Lady) v.' Hutchinson 276, 356, 367 
 
XXX IV 
 
 Table of Cases. 
 
 O'Eorke v. Bolingbroke .... 
 Osmond v. Fitzroy ..... 
 Othwaite's Case ; Vaughan v. Vanderstegen 
 Otway, Ee . . . ■ ■ • 
 Ougier v. Jennings ..... 
 Overend, Gurney & Co., Be ; Ex p. Oakes & Peek 
 Owen V. Homan ...... 
 
 PAGE 
 
 408, 410, 411. 441, 444 
 390, 394, 398, 453, 457, 458 
 . 247 
 . 525, 528 
 24, 69, 234 
 . 560 
 87, 95, 562 
 
 Paoaya Rubber & Peodttce Co., Be 
 Paget V. Marshall .... 
 Paine v. Chisholm .... 
 Palmer v. Johnson .... 
 
 V. Wick .... 
 
 Panama & S. Pacific Telegraph Co. v. India Rubber, &c. Co. 
 
 , Ltd., Be 
 
 Parfitt V. Lawless 
 
 Park Gate Wagon Works Co., Be 
 
 Parker v. McKenna 
 
 Parr v. Jewell . 
 
 Pasley v. Freeman 
 
 Patch V. Ward 
 
 Patman v. Harland 
 
 Patten v. Hamilton 
 
 Pawson V. Watson 
 
 Payne (David) & Co 
 
 Peacock v. Evans 
 
 Pearce v. Foster 
 
 Pearson v. Morgan 
 
 ■ (S. & Sons), Ltd. 0. Dublin Corporation 
 
 Pease v. Gloahec 
 Peek V, Derry . 
 
 V. Gurney 
 
 Peel's Case 
 
 PeUy, Ex p. ; Be Anglo-French Co-operative Society 
 
 Pendlebury v. Walker 
 
 Penny v. Watts 
 
 Pepperell, Be . 
 
 Percival v. Wright . 
 
 Perens v. Johnson . 
 
 Perry v. HoU . 
 
 V. Meddowcroft 
 
 Peto V. Hammond .... 
 Phillips, Ex p. ; Be Harvey 
 
 V. Foxall .... 
 
 V. Homfray (6 Ch. App. 770) 
 
 (24 C. D. 439, C. A.) 
 
 V. Mullings .... 
 
 V. Royal London Mutual Insurance Co. 
 
 Phosphate Sewage Co. o. Hartmont 
 
 Pickering v. Dowson 
 
 Pickersgill (Wm. & Sons), Ltd. v. London & 
 
 Co 
 
 Pidcock V. Bishop . 
 
 Piggott V. Stratton . 
 
 Pilmore v. Hood 
 
 Pim & Rogers v. Reid 
 
 Pimm V. Lewis 
 
 Pisani v. Att.-Gen. of Gibraltar 
 
 Pitt V. Mackreth 
 
 Pittard v. Oliver 
 
 Plowright V. Lambert 
 
 Provincial 
 
 301 
 
 317, 
 
 533 
 
 201 
 
 546 
 
 202 
 
 488 
 
 276, 278, 301, 342, 348, 
 
 349, 581, 599 
 
 . 412, 414 
 
 . 242 
 
 322, 323, 329, 342, 546 
 
 . 260 
 
 . 593 
 
 . 547 
 
 . 43 
 
 298, 322, 337, 351 
 
 . 145 
 
 33 
 
 407, 458, 462, 550 
 
 276, 278, 301, 323, 325 
 
 1 
 
 175, 178, 569 
 
 . 246 
 
 . 504 
 
 . 136, 488 
 
 . 46 
 
 302, 326, 544 
 
 . 525, 528 
 
 . 39 
 
 282, 337, 338, 533 
 
 140, 295, 308, 332, 356 
 
 122, 297, 335, 338 
 
 . 33 
 
 . 515 
 
 . 42 
 
 . 525, 528 
 
 90, 92, 95 
 
 122, 123, 140, 167, 278 
 
 . 488 
 
 . 418 
 
 . 205 
 
 292, 339, 342, 549 
 
 . 176 
 
 General Insurance 
 
 . 17, 60, 66, 245 
 90, 522, 524 
 . 594, 596 
 . 126 
 . 74, 75, 155, 156 
 22, 71, 75, 148, 167 
 ', 420, 431, 438, 462, 547 
 356 
 564 
 282, 283, 322, 338, 356, 360, 532 
 
 139 
 
 76 
 
 Marine & 
 
 379, 382, 419, 
 
Table of Cases. 
 
 XXXV 
 
 PAGE 
 
 Polak V. Everett 95, 96, 126 
 
 Popham V. Brooke 387, 388, 457 
 
 Portman v. Mill 183, 185 
 
 Portmore (Earl) v. Taylor ...'.' 406, 407, 408, 410, 460, 462, 463, 550 
 
 Postage Stamp Automatic Delivery Co., Be ... . 303, 345, 353, 355 
 
 Postlethwaite, Re 280, 318, 336 
 
 Potts V. Surr 373, 375, 376, 438 
 
 Powell V. Browne 51, 57 
 
 — V. Powell 364, 373, 374, 380, 440, 442, 443, 549 
 
 & Thomas v. Evans, Jones & Co 299, 300, 343, 344, 350, 358 
 
 Pratt V. Barker 388, 399, 438 
 
 Price V. Dewhm'st 516, 517 
 
 V. Macaulay 182, 183 
 
 Priestman v. Thomas 510, 514 
 
 Procter v. Robinson 10, 379, 396, 397, 398, 436, 437, 450 
 
 Proof V. Hines 392 
 
 Property Insurance Co. v. National Protection Insurance Co. . . . 41, 67, 174 
 
 Prosser v. Edwards 242 
 
 Proudfoot V. Montefiore 25, 29, 30, 65 
 
 Puckett and Smith's Contract, Re 84, 85, 167, 183, 185, 221 
 
 Pulleu V. Ready 109 
 
 Pulsford V. Richards . . . . . . . . . . .187 
 
 Purcell V. M'Namara 395, 398, 447, 456 
 
 Pybus V. Gibb 95 
 
 Q. 
 
 Qtjinn v. Leathem 572 
 
 E. 
 
 Radium Oee Mines, Ltd., Re 
 
 Rae V. Joyce . 390, 400, 403, 404, 411, 424, 425, 431, 
 
 RaUton v. Matthews & Leonard 
 
 Raja Manesha Bakhsh v. Shadi Lai 
 
 Randall v. Errington ..... 280, 
 
 Ranger v. G. W. Railway Co, 
 
 Ratcliffe v. Barnard 
 
 — ■;;. Evans . 
 
 Rawlins v. Desborough 
 
 V. Wickham 
 
 Rayner v. Ritzen 
 
 Read v. Baily . 
 
 Eeaddy v. Pendergast 
 
 Redgrave v. Hurd . 
 
 Rede v. Farr . 
 
 Rees V. De Bernardy ...... 394, 435; 
 
 Reese River Mining Co. 0. Smith 
 Reeve v. Gibson 
 
 V. Berridge 
 
 Refuge Assurance Co. v. KettleweU 
 
 Republic of Bolivia Exploration Syndicate, Ltd., Re 
 
 Reid V. London & Staffordshire Eire Insurance Co. 
 
 Revell V. Harvey 290; 
 
 R. V. Boucher . 
 
 — V. Butler 
 
 — V. Kempe . 
 
 — V. Kenrick . 
 
 — V. Local Government Board 
 ■ — V. Middleton 
 
 — V. Wheeler ... 
 
 433, 442, 452, 453, 456, 550, 
 
 18, 92, 161, 171, 223, 618, 
 
 424, 452, 
 
 324, 327, 337, 338, 356, 360, 
 
 43, 562, 
 
 293, 
 
 441, 
 
 296, 
 
 73, 226, 
 . 189, 
 
 . 442, 
 174, 189, 214, 
 
 '449, 450, 454, 
 
 40, 77, 81, 
 
 23, 296, 507, 
 
 436, 441, 457, 
 . 517, 
 . 517, 
 517, 518, 
 
 517, 
 
 534 
 568 
 619 
 458 
 361 
 141 
 564 
 535 
 232 
 210 
 537 
 489 
 455 
 535 
 198 
 457 
 207 
 199 
 223 
 213 
 544 
 187 
 458 
 519 
 521 
 520 
 141 
 599 
 576 
 518 
 
XXXVl 
 
 Table op Cases. 
 
 PAGE 
 
 Reynell «. Sprye 15,128,201,208,616 
 
 Rhodes v. Bate 379, 380, 396, 419, 425, 430, 433, 440, 445, 460, 461, 465, 466, 546, 549, 
 
 589, 590 
 Richards v. Gelatly ---......■.• 127 
 
 Richardson v. Mellish 
 Rickards v. Murdock 
 Riding v. Hawkins . 
 Ripley v. Paper Bottle Co. 
 Rivaz V. Gerussi Bros. 
 Roberts, Re . 
 
 V. Jones 
 
 - V. Security Co. . 
 
 Robertson v. Morris 
 Robinson, Ee ; Ex p. Burrell 
 
 V. Mollett 
 
 V. Pett . 
 
 V. Woodward . 
 
 Roohard v. Fulton . 
 Rochester (Bishop) v. Bridges 
 Roddy V. Williams . 
 Rolland v. Hart 
 Ross V. Rugge-Price 
 Rothschild V. Brookman 26, 276, 278, 296, 321, 322; 
 Roussell V. Burnham 
 Royal British Bank, Be ; Mixer's Case 
 Ruby Consolidated Mining Co., Me ; Askew' 
 Russell V. Austwick . 
 V. Thornton 
 
 's Case 
 
 8, 15, 16; 
 
 15, 99, 103, 
 
 26, 59, 276; 
 
 ',278; 
 
 324, 331, 
 
 18, 65, 127, 
 
 Russian (Vyksounsky) Ironworks Co., Be ; Kincaid's Case . 
 
 ■ Taite's Case 
 
 Whitehouse's Case 
 
 Ryall V. Kidwell & Son 
 Ryan v. Maomath . 
 
 . 597 
 
 65, 226, 227, 229, 244 
 
 . 536 
 
 . 212 
 
 68, 208, 218, 532, 540 
 
 106,173,214,223,243 
 
 . 144 
 
 . 157 
 
 310, 311, 312 
 
 131, 141, 540 
 
 296, 347, 581, 592 
 
 282 
 
 52,53 
 
 41, 52, 54 
 
 . 501 
 
 33, 34, 56 
 
 28, 35, 52, 53, 54, 569 
 
 . 502 
 
 335, 338, 342, 344, 581 
 
 476, 477, 484, 488 
 
 . 187 
 
 212, 213 
 
 300, 342 
 
 186, 204, 503, 506 
 
 46, 187 
 
 . 187 
 
 187, 188 
 
 83, 138 
 
 . 209 
 
 146, 
 
 B. 
 
 S., a Solicitor, Ee 512 
 
 Sachs V. Spielman .........••■ 537 
 
 Sadler «. Lee 28,43,66,67,565 
 
 • V. Whiteman ........... 588 
 
 Saffron Walden Second Benefit Building Society v. Rayner . . . .20, 30, 34 
 
 St. Albyn i;. Hardinge 462,550,551 
 
 Sajjad Husain v. Wazir Ali Khan ......... 396 
 
 Sale Hotel & Botanical Gardens, Ltd., Be ; Ex p. Hesketh . . 291, 322, 331, 544 
 
 SaHord Corporation u. Lever 300,326,348,349 
 
 Salmon v. Cutts 276, 335, 347, 548 
 
 Salomons v. Pender 276, 278, 296, 324, 347 
 
 Salter v. Bradshaw 412, 450, 462, 550 
 
 Salvador v. Hopkins 24, 25, 69 
 
 Samuel ?;. Jarrah Timber & Wood Paving Corporation .... 416,587 
 
 V. Newbold 467 
 
 Sandbach and Edmondson's Contract, Be . . . . . ■ ■ 177, 178 
 
 Sanderson v. Walker 278, 281, 282, 327, 328, 341, 354 
 
 Santley v. Wilde 416 
 
 Saunders v. Holborn District Board of Works ....... 502 
 
 Savery u. King 10,373,376,381,438,447,454,455 
 
 Sawtell V. Loudon 65, 164, 231 
 
 Schneider v. Heath 122, 176, 177 
 
 Soholey v. Central Railway Co. of Venezuela . . . . . . .187 
 
 Scott V. Brown, Doering, McNab & Co 522, 523, 583 
 
 V. Hanson ............ 216 
 
 V. Scott 600 
 
Table of Cases. xxxvii 
 
 PAGE 
 
 Scottish Petroleum Co., Se ; Anderson's Case 129 
 
 — Wallace's Case 129, 200 
 
 Shire Line, Ltd. v. London & Provincial Marine & General Insurance Co. 68, 171, 
 „ . ^ „ „ 226,228,230 
 
 Scriven Bros. & Co. v. Hindley & Co 566 
 
 Seaton v. Burnaud 18, 88, 94, 132, 134, 230 
 
 — — - t'. Heath 2, 61, 62, 63, 86, 87, 88, 89, 94 
 
 Sebright v. Sebright 117 
 
 Seddon v. North Eastern Salt Co. . '. '. '. '. '. 126, 135, 187, 201 
 
 Selsey (Lord) v. Rhoades 913 298' 33o', 335 
 
 Selwyn v. Garfit I79 
 
 Serconabe v. Sanders .".'.' 374 376 440 
 
 Seymour v. London & Provincial Marine Insurance Co ' 145*, 147 
 
 Shackleton v. Sutcliffe 80, 183, 220,' 546 
 
 bhambati Koeri v. Jago Bibi .......... 396 
 
 Sharp i;. Leach .' 10, 436,' 439, 443, 449, 457, 549 
 
 Ibharpe v. Foy ........... 28 37 
 
 Sharpley u. Louth & East Coast Railway Co. ..'.". '. '. 187, 'l 94 
 
 Shaw, Re ; Ex p. Gm 625,' 528 
 
 V. HoUand 345^ 357 
 
 bhearman, i;a;p. ,• iJeDunlop-Truffauld, &o., Co 187 
 
 Sheffield (Earl) v. London Joint Stock Bank 246, 247 
 
 Nickel & Silver Plating Co. v. Unwin 203 
 
 Shelly w. Nash 402,408,411,463 
 
 Shepheard v. Bray 482, 483, 488, 498 
 
 V. Broome .... 477, 482, 483, 488, 494, 496, 504, 505, 661 
 
 Shepherd ?;. Croft 84,85,176,184,214 
 
 SherweU v. Combined Incandescent Mantles Syndicate, Ltd. . . 473, 474, 506 
 
 Shipway v. Broadwood 275, 276, 348, 536 
 
 Shoolbred v. Nutt I45 
 
 Shurrock v. Littlejohn 510 
 
 Sibbald ?;. Hill 17,620 
 
 SiUe'm v. Thornton 75' 155 
 
 Simpson v. Lord Howden ' 209 
 
 Simpson & Thomas Moy, Ltd., Be 184 
 
 Sims V. Tuffs ............. 523 
 
 Skyring v. Greenwood ........... 589 
 
 Slattery's Case ; Re Etna Insurance Co. ........ 200 
 
 Sleigh V. Glasgow & Transvaal Options, Ltd. . . . 475, 484, 497, 503, 620 
 
 Small V. Currie ........... 95, 260 
 
 Smedley v. Varley ' 338 
 
 Smith V. Bank of Scotland 86, 92, 227, 618, 619 
 
 • V. Bromley 525, 528 
 
 V. Capron 39, 81, 570 
 
 V. Colbourne ............ 83 
 
 V. Cuff 525, 527 
 
 V. Harrison 12, 80, 209, 219 
 
 V. Hughes 107, 137, 138, 139, 576 
 
 V. Kay 273, 371, 381, 382, 441, 458, 594 
 
 V. Land & House Property Corporation . . . . . . .214 
 
 • V. Pincombe 17, 223, 549 
 
 V. Scott 136, 137, 138 
 
 V. Sorby 325, 348, 583 
 
 V. Wheatcroft ........... 141 
 
 Snaddon v. London, Edinburgh & Glasgow Corporation ..... 95 
 
 Snowball, Ex p 50 
 
 Societe Generate de Paris v. Tramways Union Co. ..... 32, 34 
 
 Society of Practical Knowledge t;. Abbott 285,291,345,355 
 
 Solicitor, Be a, 467, 684 
 
 jBeS., a 512 
 
 Solicitors, Re Pour 378, 584 
 
 Soper V. Arnold ............ 201 
 
 Sottomayer t). De Barros 116 
 
 South of England Natural Gas & Petroleuna Co., Re . . 474, 478, 486, 503, 507 
 
xxxviii Table of Cases. 
 
 PAGE 
 
 Spaight V. Cowne ............ 38 
 
 Spain (Queen of) v. Parr 300, 342 
 
 Sparenborg v. Edinburgh Life Insurance Co. . . . . . .198, 205 
 
 Speneer v. Clarke ............ 44 
 
 V. Topham 34, 38, 351, 361, 382, 431 
 
 Spink, iJe 351,511 
 
 Spring V. Pride 282, 338 
 
 Stainbank v. Eernley 204, 210 
 
 Stanton v. Tattersall . . . . . . . . . . .183 
 
 Stapilton v. Stapilton 101, 103, 109 
 
 Stapleford Colliery Co., Re ; Barrow's Case ....... 248 
 
 Stevens v. Adamson 31, 76, 82, 219 
 
 — — V. Chown 501, 502 
 
 V. Hoare 483, 492, 493, 495, 496, 504, 505 
 
 Stewart v. Bell 24, 570 
 
 V. Kennedy ........... 619 
 
 V. M'Kean 95 
 
 V. Stewart 99, 103, 109, 243, 618, 619 
 
 Stiff V. Eastbourne Local Board 93, 223 
 
 Stikeman v. Dawson . 136, 142, 158, 159, 165, 166, 167, 596, 610, 612, 614, 616 
 
 Stirling v. Rose 10, 22, 295, 437 
 
 Stockley v. Stockley 101, 108, 109 
 
 Stokell V. Heywood ............ 74 
 
 Stokes V. Cox ............. 75 
 
 Stone, Ex p. ; Re Giles 489 
 
 V. City & County Bank 213 
 
 Stribley v. Imperial Marine Insurance Co. . . . 65, 150, 219, 228, 231, 669 
 
 Stringer's Case ; Re Mercantile Trading Co. ....... 541 
 
 Stroud V. Lawsou ............ 540 
 
 Stubbs V. Slater 26, 331 
 
 Stumm V. Dixon ............ 592 
 
 Stump V. Gabey 243, 414, 448 
 
 Sturge V. Sturge 201, 396, 441, 443, 459 
 
 Sudisbt Lai v. Mussummat Sheobarat Kunwar ...... 396, 437 
 
 Sullivan v. MitcaHe 482, 497 
 
 Summerson, Re 81, 154, 222, 547 
 
 Sumpter v. Cooper ........... 52, 54 
 
 Sunlight Incandescent Co., Re ......... . 541 
 
 Swale V. Ipswich Tannery, Ltd. ... 32, 275, 300, 325, 332, 335, 347, 582 
 
 Sweet V. Southcote ............ 248 
 
 Swete V. Fairlie 71, 73, 162, 226, 228 
 
 Swift V. Kelly 117, 118 
 
 Swinfen v. Lord Chelmsford .......... 260 
 
 Sykes, Re 333, 334 
 
 T. 
 
 Tackey v. McBain 140, 308, 582 
 
 Taite's Case ; Re Russian (Vyksounsky) Ironworks Co. ..... 187 
 
 Talbot V. Stainforth 407, 412, 450, 462, 551 
 
 V. Von Boris ........... 413 
 
 Tatam v. Haslar 246 
 
 Tate V. WiUiamson 371, 393, 424, 435, 442, 443, 456, 462, 549 
 
 & Sons V. Hyslop . . . 17, 18, 24, 26, 30, 68, 158, 160, 167, 171, 226, 233,234 
 
 Tayleiu v. Wildin 95 
 
 Taylor v. Baker 39, 44 
 
 V. Caldwell 208 
 
 V. Johnston 414, 438, 547 
 
 V. London & County Banking Co. ........ 34 
 
 V. Obee 390, 441, 443, 445 
 
 V. Stibbert ............ 44 
 
 V. Yorkshire Insurance Co 35, 71, 75, 167, 198, 234, 559 
 
 Telescriptor Syndicate, Ltd., Re 325, 352, 582, 600 
 
Table of Cases. 
 
 XXXIX 
 
 Tennent v. City of Glasgow Bank 
 
 V. Tennent ..... 
 
 Terry and White's Contract, Re 
 
 Tewarry v. Nawab Syed Ali Hassein Khan 
 
 Thames & Mersey Marine Insurance Co. v. Gunford Ship Co. 
 
 PAGE 
 
 . 619 
 
 102, 103, 284, 286, 288, 289 
 
 183, 184, 215, 216 
 
 396, 437, 456 
 
 16, 67, 69, 147, 179, 226, 
 
 228, 230, 231, 237, 579, 618, 619, 620 
 
 ... 260 
 
 Thorn V. Bigland ........ 
 
 Thomas, iJe 310 
 
 Thompson v. Adams .......•••• ^^^ 
 
 V. Cartwright 34, 37, 38 
 
 ■ V. Hopper 135, 155, 614 
 
 V. Lambert 124, 130, 136 
 
 Thomson v. Lord Clanmorris 498, 504, 505 
 
 »;. Eastwood 281,284,330,546 
 
 V. Weems 63, 71, 73, 145, 148, 204, 618, 619 
 
 Thorn v. London Corporation ......■••• 1*1 
 
 Thornber v. Sheard 373, 376, 424, 436, 447, 456 
 
 Thornborow v. Whitacre ......•• 23, 250 254 
 
 Thornett v Haines .....••* 616 
 
 Thornton-Smith t!. Motor Union Insurance Co 29,75,133,158,214 
 
 Tilley i>. Bowmann, Ltd '^'^'^'tln 
 
 Tofts V. Pearl Life Assurance Co. ......••• ^05 
 
 Toker j;. Toker 374,376,435,437 
 
 Tomline's Case ; Re Thomas Edward Brinsmead & Sons, Ltd 199 
 
 Tomson w. Judge 364,365,377,380,422,431,434,456 
 
 Torrance J). Boulton 80,130,151,156,219,362,558 
 
 Tottenham i>. Green 406,446,548 550 
 
 Toulmin v. Steere lie 
 
 Towle V. National Guardian Assurance Co. ^ -^ If £ 
 
 Traill V. Baring . . . . 15, 17, 19, 73, 128, 171, 208, 209, 218, 229, 260 
 
 Transvaal Lands Co. v. New Belgium (Transvaal) Land & Development Co. 276, 296, 
 
 ^ 324, 333, 338, 333, 348, 358 
 
 305,306,584 
 . 248 
 . 175 
 
 Trimble v. Goldberg 
 
 Truman v. Attenborough 
 
 TuUis V. Jacson 
 
 TurnbuU v. Garden . 
 
 & Co. V. Duval 
 
 Turner v. Collins 
 
 V. Green 
 
 V. Harvey 
 
 V. Stallibrass 
 
 Twistleton v. Griffith 
 
 'T''wi7p11 u Allpn 
 
 Twyoross'y. Grant (1877), 2 C. P. D. 469, C. A. 287, 315, 469, 482, 483, 490, 492 494, 
 ^ 495,497,499,501,504,505 
 
 435,488 
 
 . 403, 404, 407, 436, 456, 464, 551 
 
 296,300,342,549 
 
 240 
 
 276, 300, 332, 342, 356, 581 
 396,414,457 
 102, 373, 376, 377, 433, 447, 453, 455, 549 
 103, 104, 105, 135, 136, 138, 239, 243, 262—271, 615 
 123, 124, 128, 131, 137, 139, 219 
 
 148 
 
 392, 398, 401, 407, 550 
 . 537, 538 
 
 (1878), 4 C. P. D. 40, C. A. 
 
 Tyler v. Yates ..... 
 
 Tyrrell v. Bank of London 
 
 Tyser v. Shipowners Syndicate (Re-assured) 
 
 U. 
 
 Udell v. Atherton '^^ 
 
 Ungley v. Ungley . . • . • • • • • • ■ " '^ 
 
 United Shoe Machinery Co. of Canada v. Brunet . . . . 187, 197, 206 
 
 Usill V. Hales °97 
 
 V. 
 
 Vadala v. Lawes .... 
 Vallance v. Dewar .... 
 Valletort Sanitary Steam Laundry Co., Re 
 
 . 516 
 
 . 24, 69, 234 
 
 40,41,43,49,57 
 
xl Table of Cases. 
 
 PAGE 
 
 Vaughan v. Vanderstegen ; Gates's Case ......•• 247 
 
 Othwaite's Case 247 
 
 Vigors V. Pike 202 
 
 Vorley v. Cooke .....••■•• 
 
 200 
 
 W. 
 
 Wainwbight v. Bland ^''' H' I!k 
 
 Wakefield & Burnley Banking Co. v. Normanton Local Board . . . 187, 245 
 
 Waldyt;. Gray 37 
 
 Wallingford v. Mutual Society 2oo 
 
 Wallis V. Smith „ o°° 
 
 Walker t>. Lynom 3^' *„' ?„? 
 
 W.Smith 380,422,433 
 
 V. Symonds ^' ^^^ 
 
 Wallace's Case ; Me Scottish Petroleum Co 129, 200 
 
 Walsham v. Stainton 122, 211 
 
 Walters v. Morgan 76, 78, 79, 123, 124, 135, 144, 216, 220, 594 
 
 Ward, Ex p. ; Re Eastgate ?*' 
 
 ^.Hobbs 122,176,177 
 
 • ■ and Jordan's Contract, Re 80, 83, 85, 221 
 
 Ware v. Lord Egmont 39, 43, 56, 665 
 
 Warner v. Jacob ........••• 310, 313 
 
 Wason V. Walter .......■••■• ^zl 
 
 «. Wareing 47,105,167,223 
 
 Waters v. Groom ........-••• •'lO 
 
 Watson V. Mainwaring .....■••■•• '^ 
 
 Watt V. Assets Co. 99, 106, 149, 154, 157, 159, 166, 167, 192, 193, 223, 242, 618, 619, 620 
 
 V Grove 297, 323, 347, 358 
 
 Watts w. Bucknall 12,98,332,471,483,491,492,494,495,499 
 
 Webb Re . . . • ■ 10 
 
 \. Rorke '.'.'.'.'.... 415,460,462,465,574 
 
 Webster v. Cook 406 
 
 Welles V. Middleton . . 364, 366, 367, 368, 377, 380, 424, 425, 446, 452, 546 
 
 Weniger's Policy, Re ........... ■*2 
 
 West V. Reid 42, 43, 565, 570 
 
 West of England Bank v. Canton Insurance Co. ...... 537, 538 
 
 Jewell Tin Mining Co., iJe ,- Weston's Case .... 303,345,346 
 
 Yorkshire Darracq Agency, Ltd., Re . . . . . ■ • • 478 
 
 Westbury v. Aberdein . . . . . . . . • . 8, 65, 226 
 
 Western Bank of Scotland v. Addie .......•• 203 
 
 ■ Counties Steam Bakery & Milling Co., iJe 543 
 
 Westmoreland Green & Blue Slate Co., Re ; Bland's Case . . 303, 334, 345, 542 
 
 Weston's Case ; Re West JeweU Tin Mining Co 303, 345, 346 
 
 Whaley Bridge Calico Printing Co. v. Green . 287, 292, 315, 324, 343, 348, 349, 353 
 Wharton v. Lewis ........... 113, 143 
 
 Wheal Unity Wood Mining Co., Re ; Chynoweth's Case .... 187, 561 
 
 Wheelton v. Hardisty 63, 145, 149, 175, 181 
 
 Whichcote V. Lawrence ... . 278, 281, 283, 285, 345, 354, 531, 537 
 
 Whitcher jj. Hall 95 
 
 White V. Cudden 182, 184, 217 
 
 V. Garden ............ 246 
 
 V. Haymen 476, 477 
 
 v. Ivory 610,516 
 
 ■ V. Meade 385, 386, 440, 457 
 
 ■ and Smith's Contract, Re . . . 26, 40, 47, 79, 81, 220, 221, 233, 236 
 
 Whitehorn Bros. v. Davison 247, 248 
 
 Whitehouse's Case ; Re Russian (Vykskounsky) Ironworks Co. . . . 187, 188 
 
 Whiteley's Case ; Re General Railway Syndicate ...... 214 
 
 Whiteley v. Delaney ........... 54 
 
 Whitemau v. Sadler 503 
 
 Whittemore v. Whittemore 182, 184, 222 
 
 Whittington v. Seale-Haynes . . . . . . . . . .210 
 
Table of Cases. xli 
 
 PAQE 
 
 Whurr v. Devenish 129, 141 
 
 Whyte V. Ahrens ■...'.'.'...... 537 
 
 Wiedemann v. Walpole . . '. ', ' ] '. '. . . .127 
 
 Wilbraham v. Livesey ..'."."' .' ." .' 40, 81, 220, 235 
 
 Wilde v. Gibson '20,34,80,153,161,201,216,255—262 
 
 Wilkes V. Spooner 43, 249 
 
 Wilkinson's Case ; Be Madrid Bank .!!".!.... 46 
 
 Willan V. Willan 397, 455, 456, 460 
 
 Willes V. Glover 15, 16, 64, 231 
 
 Willey V. Great Northern Railway Co 144 
 
 WUliams, Ex p. ; Re Madrid Bank 9, 293, 347 
 
 ■ V. Scott 296, 328, 330, 331, 351, 358 
 
 V. Stevens 300, 325, 342 
 
 V. Williams 101 
 
 Williamson v. Barber 28, 34, 36 
 
 V. Hine Bros. 26, 275, 300, 316, 331, 343, 352 
 
 V. Seaber 282 
 
 Willis V. Bank of England 32 
 
 V. Barron 10, 379, 380, 413, 419, 424, 436, 439, 442 
 
 ■ V. Willis 93, 161, 171, 223 
 
 Wilson V. Fuller 196 
 
 V. Hart 56 
 
 • V. Ray 528 
 
 — • V. Salamanda Assurance Co. of St. Petersburg 30, 234 
 
 V. Short 296, 326, 338, 356 
 
 V. Thornbury ........... 187 
 
 Wimbledon Olympia, Ltd., Re 478, 483, 503 
 
 Wing V. Harvey ............ 29 
 
 Wingrove v. Wingrove ........... 568 
 
 Wiseman v. Beake 404, 451, 452, 453, 465, 551 
 
 Wolverhampton New Waterworks Co. v. Hawkesford 501, 502 
 
 Wontner v. Shairp ............ 186 
 
 Wood V. Abrey 393, 402, 406, 412, 441, 443 
 
 V. Barker 526, 528, 530 
 
 V. Downes 242, 381, 429, 447, 456 
 
 V. Dwarris 149, 175, 181 
 
 V. Woodhouse & Rawson 242 
 
 WooUaston, Ex p. ; Re Home Counties & General Life Insurance Co. . . . 200 
 
 Worssam, Re 339 
 
 Worthington, Re ........... . 507 
 
 V. Morgan ........... 42 
 
 Wright's Case ; iZe London & Mediterranean Bank (No. 1 ) ..... 200 
 
 (No. 21 200 
 
 Wright V. Carter 10, 364, 365, 380, 381, 382, 419, 422, 430, 434, 436, 440, 442, 443, 445, 
 
 455, 457, 549 
 
 V. Proud 365, 374, 422, 424, 430, 435, 437 
 
 V. Vanderplank 373, 377, 425, 429, 433, 446 
 
 Wyatt V. Barwell 52, 53 
 
 V. Palmer ............ 515 
 
 Wycherley v. Wycherley 373, 375 
 
 Wythes v. Labouchere 24, 86, 91, 131, 223 
 
 Wyllie V. PoUen 34, 35, 56 
 
 Y. 
 
 Yaoee v. Guardian Assurance Co 75, 156, 164, 226 
 
 Yorks & North Midland Railway Co. v. Hudson . 293, 295, 301, 325, 332, 342, 343, 345 
 
 ZiERENBEBG V. Labouchere .......... 536 
 
TABLE OF STATUTES. 
 
 Limitation Act, 1623 (21 Jao. 1, o. 16) 
 
 Clandestine Mortgages Act, 1692 (4 & 5 W. 4, c. 16), ss. 2, 3 
 
 2 & 3 Anne, c. 4 . 
 
 6 Anne, c. 2, o. 20, c. 35, and o. 62 
 Middlesex Registry Act, 1708 (7 Anne, c. 20), s. 1 
 
 7 Geo. 2, c. 14 
 
 8 Geo. 2, c, 
 
 c. 59), s. 24 
 0. 38), s. 8 
 
 22, 23, 24 . 
 
 26 Geo. 2, o. 33 
 
 4 Geo. 4, c. 76, s. 27 
 6 Geo. 4, c. 94, ss. 2, 4 
 
 CivU Procedure Act, 1833 (3 & 4 W. 4, c. 42), s. 3 
 3 & 4 W. 4, c. 74, s. 91 
 2 & 3 Vict. c. 29 
 
 5 & 6 Vict. c. 39, s. 4 
 
 Joint Stock Companies Act, 1844 (7 & 8 Viot. c. 110) 
 Evidence Act, 1851 (14 & 15 Vict. o. 99), s. 2 
 Usury Laws Repeal Act, 1854 (17 & 18 Vict. c. 90) 
 Bills of Lading Act, 1855 (18 & 19 Viot. c. Ill) . 
 
 20 & 21 Vict. c. 57, s. 1 
 
 Law of Property Amendment Act, 1859 (22 & 23 Viot. 
 
 1860 (23 & 24 Vict, 
 Companies Act, 1862 (25 & 26 Vict. o. 89), s. 138 
 
 s. 165 
 Companies Clauses Act, 1863 (26 & 27 Viot. o. 118), ss, 
 Sale of Land by Auction Act, 1867 (30 & 31 Viot. o. 48) 
 Companies Act, 1867 (30 & 31 Vict., o. 131), s. 38 
 
 PoUcies of Assurance Act, 1867 (30 & 31 Vict. c. 144) 
 Sales of Reversion Act, 1867 (31 Vict. o. 4) 
 Stannaries Act, 1869 (32 & 33 Viot. c. 19), s. 35 . 
 Debtors Act, 1869 (32 & 33 Vict. c. 62), s. 4 
 
 ss. 11, 13 
 Bankruptcy Act, 1869 (32 & 33 Vict. o. 71), s. 20 
 Judicature Act, 1873 (36 & 37 Vict. c. 66), s. 24 . 
 
 s. 25 (6) 
 
 s. 34 
 Infants Relief Act, 1874 (37 & 38 Vict. c. 62), s. 1 
 Vendor & Purchaser Act, 1874 (37 & 38 Viot. c. 78) 
 
 Judicature Act, 1875 (38 & 39 Viot. c. 77), s. 11 . 
 Factors Act, 1877 (40 & 41 Viot. c. 39), s. 2 
 
 Conveyancing & Law of Property Act, 1881 (44 & 45 Viot. c. 41) s. 21 (2) 
 
 s. 55 (1) 
 Newspaper Libel & Registration Act, 1881 (44 & 45 Viot. o. 60) . 
 Settled Land Act, 1882 (45 & 46 Vict. c. 38), s. 45 
 Conveyancing Act, 1882 (45 & 46 Vict. c. 39), s. 1 (4) 
 
 s. 3 
 
 PAOE 
 
 321, 326, 344, 498 
 467 
 
 52 
 
 52 
 
 52 
 
 512 
 
 52 
 
 116 
 
 116 
 
 51 
 
 498 
 
 512 
 
 50 
 
 51 
 
 285 
 
 158 
 
 403 
 
 246 
 
 512 
 
 467 
 
 467 
 
 541 
 
 540—544 
 
 . 475 
 
 468, 620 
 
 469—472, 474—477, 481—488, 
 
 491—499, 503, 504, 506, 508, 560 
 
 . 245 
 
 403, 404, 445, 468 
 
 561 
 
 310 
 
 460 
 
 57 
 
 532 
 
 245 
 
 532 
 
 198 
 
 183, 185, 214, 220, 221, 533, 
 
 534, 620 
 
 533 
 
 51 
 
 52 
 
 50 
 
 468 
 
 51 
 
 48,49 
 
 .29, 34, 35, 36, 42, 48, 49, 52, 
 
 66, 563, 665, 566 
 
xliv 
 
 Table op Statutes. 
 
 Billa of Exchange Act, 1883 (45 & 46 Vict., c. 61), s. 29 
 
 
 
 60, 246 
 
 s. 30 
 
 
 
 . 246 
 
 s. 36 
 
 
 
 . 246 
 
 s. 38 (2) 
 
 
 
 . 246 
 
 s. 73 
 
 
 
 . 246 
 
 s. 89 
 
 
 
 . 246 
 
 Bankruptcy Act, 1883 (46 & 47 Vict. c. 52), s. 4 (1) . 
 
 
 
 . 544 
 
 s. 7(3) . 
 
 
 
 . 528 
 
 S3. 45, 49 
 
 
 
 . 50 
 
 Patents, Designs & Trademarks Act, 1883 (46 & 47 Vict. c. 
 
 57), s.'26 
 
 
 . 519 
 
 
 s. 87 
 
 
 . 55 
 
 Yorkshire Registries Act, 1884 (47 & 48 Vict. c. 54) . 
 
 
 
 . 52, 54, 55 
 
 : Amendment Act, 1885 (48 & 49 Vict, c 
 
 "26) .' 
 
 
 . 52 
 
 County Courts Act, 1888 (51 & 52 Vict. c. 43), s. 116 . 
 
 
 
 . 147 
 
 Trustee Act, 1888 (51 & 52 Vict. c. 59), s. 8 
 
 
 
 . 326 
 
 Factors Act, 1889 (52 & 53 Vict. c. 4), s. 2 . 
 
 
 
 . 51 
 
 Partnership Act, 1890 (53 & 54 Viot. c. 39), s. 16 
 
 
 
 . 28, 35, 50 
 
 ss. 29, 30 
 
 
 
 . 306 
 
 Directors LiabiHty Act, 1890 (53 & 54 Vict. c. 64) 472, 475 
 
 ' 476, 486, 
 
 488,4 
 
 98, 504, 608 
 
 Companies (Winding up) Act, 1890 (53 & 54 Vict. c. 83), s. 10 
 
 
 . 540—544 
 
 Betting & Loans (Infants) Act, 1892 (55 Vict. u. 4), ss. 2 (2) 
 
 3 . 
 
 
 . 52 
 
 Sale of Goods Act, 1893 (56 & 57 Vict. c. 71), ss. 10—15 
 
 
 
 . 146 
 
 s. 12 . 
 
 
 
 . 79 
 
 s. 21 . 
 
 
 
 . 79 
 
 8.23 . 
 
 
 
 . 248 
 
 s. 33 (1) 
 
 
 
 . 146 
 
 s. 35 . 
 
 
 
 . 186 
 
 Merchant Shipping Act, 1894 (57 & 58 Vict. c. 60), s. 57 
 
 
 
 . 55 
 
 London Building Act, 1894 (57 & 58 Vict. cap. ccxiii), ss. 98 
 
 ,99 '. 
 
 
 . 83 
 
 Mortgagees Legal Costs Act, 1895 (58 & 59 Vict. c. 25) 
 
 
 
 . 417 
 
 CoUeotive Societies & Industrial Insurance Companies Act, 1896 (59 & 6( 
 
 )Vict. 
 
 c.26). 
 
 s. 7 
 
 
 
 . 212 
 
 Stannaries Court (Abolition) Act, 1896 (59 & 60 Viot. c.45) 
 
 
 
 . 533 
 
 Moneylenders Act, 1900 (63 & 64 Vict. c. 51) 
 
 467,468, 
 
 472,5 
 
 34, 609, 610 
 
 s. 3 
 
 
 
 . 52 
 
 Companies Act, 1900 (63 & 64 Vict. c. 48), s. 4 . 
 
 
 
 505, 506 
 
 s. 5 . 
 
 
 
 506, 506 
 
 s. 8 . 
 
 
 
 . 507 
 
 s. 10 . 470 
 
 475,"479, 
 
 480,4 
 
 84, 499, 500 
 
 s. 33 (1) . 
 
 
 
 . 470 
 
 Trade Marks Act, 1905 (5 Edw. 7, o. 15), s. 12 . 
 
 
 
 . 519 
 
 s. 35 . 
 
 
 
 . 519 
 
 s. 38 . 
 
 
 
 . 56 
 
 Marine In.surance Act, 1906 (6 Edw. 7, c. 41), s. 1 
 
 
 
 64, 245 
 
 ss. 2, 3 . 
 
 
 
 . 64 
 
 s. 17 . 
 
 
 
 . 2, 64 
 
 s. 18 . 
 
 16, 21, 24 
 
 50, 6 
 
 4, 131, 132, 
 
 
 
 146, 1 
 
 56, 227, 230 
 
 s. 19 . 
 
 
 
 31, 50, 64 
 
 ss. 21, 22 
 
 
 
 64, 156 
 
 s. 24 . 
 
 
 
 . 239 
 
 B. 33 . 
 
 
 
 145, 146 
 
 ss. 35-^1 
 
 
 
 . 146 
 
 s. 50 . 
 
 
 
 . 245 
 
 ss. 82, 83, 84 . 
 
 
 
 . 204 
 
 Prevention of Corruption Act, 1906 (6 Edw. 7, c. 34) . 
 
 
 4 
 
 37, 582, 583 
 
 Public Trustee Act, 1906 (6 Edw. 7, c. 55) . 
 
 
 
 282, 328 
 
 Patents & Designs Act, 1907 (6 Edw. 7, c. 29), s. 14 (1) 
 
 
 
 . 517 
 
 s. 18 . 
 
 
 
 . 618 
 
 s. 25 . 
 
 
 
 . 519 
 
 ri. 71 (3) 
 
 
 
 . 55 
 
 Companies Act, 1907 (7 Edw. 7, c. 50), s. 1 
 
 
 
 470, 471 
 
 s. 2. 
 
 
 
 . 471 
 
 Companies (Consolidation) Act, 1908 (8 Edw. 7, c. 69), s. 14 ( 
 
 1) '. 
 
 
 . 46 
 
 3.32 
 
 
 
 . 212 
 
Table of Statutes. 
 
 xlv 
 
 Companies (Consolidation) Act, 1908 (8 Edw. 7, o. 69) {ctd.), s. 65 
 
 s. 80 
 s. 81 
 s. 82 
 s. 84 
 
 s. 85 
 
 s. 86 
 
 s. 87 
 s. 89 
 s. 121 
 
 ss. 132, 133 
 s. 193 
 s. 215 
 s. 280 
 s. 285 
 
 Assurance Companies Act, 1909 (9 Edw. 7, o. 49), s. 30 
 Conveyancing Act, 1911 (1 & 2 Geo. 5, o. 37), s. 5 (1) . 
 Moneylenders Act, 1911 (1 & 2 Geo. 5, c. 38) 
 Companies Act, 1913 (3 & 4 Geo. 5, c. 25) . 
 Bankruptcy Act, 1914 (4 & 5 Geo. 6, c. 59), s. 1 (1), (g) 
 
 s. 5 (3) . 
 
 s. 93 (3) . 
 
 ss. 154, 160 
 
 PAGE 
 
 . 507 
 
 473, 477, 495 
 
 52, 468—507, 566 
 
 . 470,503 
 
 285, 472, 475, 484, 486 
 
 487, 488, 496, 498, 499, 
 
 504, 508 
 472,476,478, 484, 
 
 499, 505, 506, 507 
 472, 476, 478, 484, 503, 
 
 505, 506 
 477, 478, 480 
 
 473, 475, 480, 507 
 . 289, 470 
 , 135, 136 . . 533 
 . 541 
 541, 542, 543, 544 
 . 534 
 473, 474, 475, 476, 
 477, 485, 486, 487 
 . 70 
 . 52 
 48, 52, 53, 467, 468 
 . 470 
 . 544 
 . 528 
 . 517 
 . 467 
 
THE LAW EELATING TO 
 
 ACTIONABLE NON-DISCLOSUEE 
 
 AND OTHER BREACHES OF DUTY IN 
 
 RELATIONS OF 
 
 CONFIDENCE AND INFLUENCE. 
 
 CHAPTEE I. 
 
 INTRODUCTORY. 
 
 Sect. 1. Scope of the Treatise. 
 
 1, In all transactions and relations of which the law takes cognizance 
 there is a general duty of veracity owed by the parties to one another, in the 
 sense and to the extent that any departure from this duty constitutes, under 
 certaia conditions (a), a misrepresentation which is actionable at the suit of 
 the party misled. But there are also certain, defined types of transaction and 
 relation (6), in. which the parties are under an obligation not merely to state 
 truly whatever is stated, but to divulge with candour and completeness facts 
 which, in transactions and relations not falling within the recognized classes, 
 there is no obligation to disclose at all. In the former description of case, 
 the law requires no more from the party than to speak the truth, if he speaks 
 at all ; in the latter, it exacts not merely a deliverance of " the truth and 
 nothing but the truth," but a full revelation of " the whole truth " (c). This 
 has been occasionally, though perhaps not very felicitously, expressed by the 
 proposition that, whereas in all contracts and relations good faith is required, 
 a superlative degree of good faith, extending to duties of disclosure and others, 
 is demanded in negotiations for contracts, or during the subsistence of relations, 
 which fall within the special classes above referred to (d). In other words, 
 whilst bona fides only need characterize the one, uberrima fides must char- 
 acterize the other. It may be doubted whether these terms are judiciously 
 
 (a) Such as materiality, inducement, and, in certain cases, fraud and damage. 
 
 (6) The statement of Btjllee, J., sitting in Chancery, at p. 389 of Pearson v. Morgan 
 (1788), 2 Brown C. C. 388 — " it is always considered a constructive /ra«d when the party 
 knows the truth and conceals it, and such constructive fraud always makes the party 
 liable " — is quite incorrect, unless this proposition is to be taken as limited to those trans- 
 actions and relations which are described in the text. 
 
 (c) See the observations of Pby, J., at p. 136 of Be Banister (1879), 12 C. D. 131, C. A. 
 ("it must be the truth, and the whole truth ") ; and again at p. 17 of Be Marsh and Earl 
 Granville (1883), 24 C. D. II, C. A. (" he must tell the truth, and all the truth "). 
 
 (d) See the expressions of Lord Mausfield, C. J., and Lord Abingbe, C.B., as cited in 
 notes (a) and (6) to § 87, fost, and those of Tubnek, V.-C, cited in note (r) to § 82, 'post. 
 
 B.N.D. B 
 
2 CH. I, SECTS. 1, 2. 
 
 chosen, and whether it was wise to introduce, and encourage, the idea of 
 comparative degrees of honesty at all (e), but they now occupy too firm a 
 place in the glossaries of oui jurisprudence to be easily dislodged. Indeed, 
 the English equivalent of uberrima fides has latterly been accorded the express 
 recognition and imprimatur of the legislature (/). 
 
 2. Apart from relations of the above character, involving confidence only, 
 and giving rise to a purely fiduciary duty of disclosure, there are relations 
 from which the law presumes the existence and exercise of domination 
 and influence by the one party over the other. Here it is not merely a 
 case of the one party necessarily trusting to the other for full information 
 as to those matters which, from the nature of the contract, transaction, or 
 relation, he cannot ordinarily be supposed to know himself ; it is a case where 
 one of the two parties is not only superior in knowledge, but also in will and 
 moral strength, and therefore comes into the arena with a double advantage 
 and inequality, involving a correspondingly double duty on his part, before 
 entering upon any transaction with the other party during the subsistence of 
 the relationship and the influence resulting from it, to see that the other's 
 mind is fully instructed, and his will completely emancipated, and that, in 
 these and other respects, the " inequality " is removed or neutralized. 
 
 3. This treatise is concerned with the duties of disclosure and otherwise 
 which arise out of the transactions and relations indicated, and the civil 
 rights and liabilities occasioned by the violation of those duties. 
 
 Sect. 2. 'Classification of the Transactions and Eelations giving 
 RISE to the Duty of Disclosure and Kindred Duties. 
 
 4. There are five genera, divisible in each case into various species, of the 
 transactions and relations in question, all of which involve the duty of dis- 
 closure, and some of which involve other duties as well. 
 
 5. The first of these classes consists of cases where, in negotiating for 
 contracts of certain kinds, the one party must necessarily, from the nature of 
 the contemplated transaction, be cognisant of facts of which the other party 
 must be presumed ignorant, and for the disclosure of which the latter must 
 rely on the good faith of the former, to enable him to form a judgment as to 
 the expediency of entering into the contract on the terms proposed. The one 
 knows, and is trusted : the other does not know, and trusts. The first is 
 therefore, under a duty, down to the moment when the contract is concluded, 
 
 (e) It seems somewhat ridiciilous to apply the Aristotelian neaov to such a subject-matter 
 as this, and to suggest the possibility of a distinction between conduct which is " indifferent 
 honest," and excessively honest — between faith and super-faith. The Roman law 
 distinguishes between actions lonm fidei, that is, actions in respect of contracts and 
 relations of a fiduciary character, and actions which are not honos fidei ; it does not erect 
 into a third and superlative class, with a special name, such transactions and relations 
 as English law designates vherrimce fidei. See App. C, § 672, post. 
 
 (/) In the Marine Insurance Act, 1906 (6Edw. 7, c. 41), s. 17: "a contract of 
 marine insurance is a contract based upon the utmost good faith, and, if the utmost 
 good faith be not observed by either party, the contract may be avoided by the other 
 party " At p. 792 of Seaton v. Heath, [1899] 1 Q. B. 782, C. A., Romee, L.J., describes 
 the phrase as "short and convenient." 
 
§§ 1-7 (introductory). 3 
 
 to disclose all such material facts as are withia his actual or presumptive 
 knowledge, and are not within the actual or presumptive knowledge of the 
 other. This class comprises negotiations preliminary to contracts of insurance, 
 sale, suretyship, releases and compromises, and the like. The extent and 
 degree of the required disclosure vary considerably according to the species of 
 contract which is in contemplation, but in all cases alike there is an obligation 
 to disclose material facts, though in the character and nature of the facts 
 deemed material in the several species there is the widest difierence (g). 
 
 6. In the second class, it is no longer a question of disclosure of matters 
 likely to afiect the judgment of one of the parties to a negotiation or treaty. 
 It is here assumed that a relation has already been established, whether by 
 express contract or by conduct and circumstances, which implies a fiduciary 
 bond between the persons so related, and a consequent duty on the party ia 
 whom confidence is placed to observe good faith towards the party reposing 
 that confidence, when entering into any transaction, either with him or 
 with third persons, during the continuance of the relation. The relations 
 referred to are those of trustee and cestui que trust, promoter and company, 
 and principal and agent (including partner and firm). The duty here is 
 on the trustee, promoter, or agent, to disclose to his cestui que trust, 
 to the company promoted by him, or to his principal, as the case may 
 be, the nature and particulars of any transaction with a third person 
 whereby he has obtained, or is promised, a personal profit or advantage ; 
 and, in the case of a transaction direct with the cestui que trust, company, 
 or principal, his duty is to divulge all material information acquired or 
 possessed by him during his trusteeship, promotership, or agency, with the 
 added duty of refraining from the transaction altogether, unless the cestui que 
 trust, company, or principal is independently advised, or he (the trustee, &c.) 
 has given the cestui que trust, &c., exactly the same advice and protection 
 against himself as he would have given him against a stranger, and (in cer- 
 tain cases of purchase) unless he has given full value {h). 
 
 7. The third class consists of all those relations in which there is either 
 presimied in law, or proved in fact, to have existed on the one side supremacy, 
 and, on the other, subjection ; in which (to adopt the phraseology of the law of 
 easements) the will of the one party is " dominant," and the will of the other 
 is " servient." These include domestic relations, such as those of parent and 
 child, or guardian and ward, and relations between persons in loco parentis, or 
 standing in the position of guardians, though not so in strict technicality, and 
 the persons committed to, or in fact under, their charge and protection ; 
 professional relations such as those between solicitor and client, between 
 medical man and patient, and between priest, or spiritual director, and 
 penitent, or disciple ; and such relations of influence and domination as, in 
 any particular case, may be proved to have existed in fact. In all these cases 
 the duty of the dominant party, whilst the relation exists, and further whilst 
 the influence arising from the relation endures, is not to accept any gift from, 
 
 (g) C h. Ill, post, deals with this class. (li) See Ch. IV, 'post. 
 
4 CH. I, SECTS. 2-4. 
 
 or make any contract with, the servient party, unless he has not only put him 
 in possession of all material circumstances, but also has honestly and fully 
 informed him as to his rights and interests, and further (in cases of gifts) has 
 procured for him the independent and competent advice of a third person, and 
 (in certain cases of contract) has given full value and consideration (i). 
 
 8. All cases of a positive statutory duty of disclosure, for the violation 
 of which a party aggrieved has a civil remedy, are included in the fourth class(j). 
 It is obvious that, in such cases, in order to determine the nature and limits of 
 the duty, the precise matters to be disclosed, the parties entitled and liable, 
 and the form and mode of relief, resort must be had to the express provisions 
 of the particular statute or enactment. The most important of these enact- 
 ments are certain sections of the Companies (Consolidation) Act, 1908, with 
 reference to prospectuses of companies (k). 
 
 9. The fifth, and last, class consists of cases in which a person is iajuriously 
 afEected by, and has a right of complaint and relief in respect of, another 
 person's breach of a duty of disclosure owed by him, primarily or immediately 
 to the Court, the State, or a class of third persons, and not, except iadirectly, 
 to the party complaiaing (I). 
 
 Sect. 3. Topics included. Oedee of Treatment. 
 
 10. In this Commentary, it is intended, after a preliminary discussion of 
 certaia leading principles and conceptions which imderlie the whole law of the 
 subject (m), to discuss separately and seriatim the duty of disclosure and other 
 analogous duties of good faith, in their civil aspect, arising out of the five 
 classes of transactions and relations above enumerated (w), and to add a 
 chapter on jurisdiction and procedure (o), followed by four Appendices, dealing 
 with terminology, the ethical (as compared with the juridical) treatment of 
 the subject, Roman law, and Scottish law, respectively (j>). 
 
 1 1 . The Chapters (q) on the first three of the five classes above enumerated 
 are all constructed on the same plan, and divided into the same number of 
 Sections, which, in each case, deal with the subject of the chapter, in the 
 following (which is conceived to be the logical) order of treatment. Sect. 1 
 is devoted to a short statement of the theory and principle on which the duty 
 is based, and a general description of the nature and limits of the duty. 
 Sect. 2 deals successively with the various species of the class, and with 
 the kinds of matters required to be disclosed, and the other duties (if 
 any) to be discharged, in transactions and relations belonging to each 
 particular species. Sect. 3 treats of the burden of proof which rests on the 
 
 (»') This class is the subject of Ch. V, post. 
 
 (j) SeeGh.YI, post. 
 
 {k) See Ch. VI, post. 
 
 (I) See Ch. VII, post. 
 
 (to) These are expounded in Ch. II, post. • 
 
 (n) In §§ 4-9, sup. 
 
 (o) Ch. VIII, post. 
 
 (p) Appendices A, B, C, and D, respectively, post. 
 
 (?) Chs. Ill, IV, V, post. 
 
§§ 7-13 (introductory). 5 
 
 party to whom the duty is owed ; Sect. 4, of the afarmative defences by which, 
 and (in many cases) hy which alone, the prima facie case established against 
 him can be rebutted by the party owing the duty ; Sect. 5, of remedies and 
 relief ; Sect. 6, of questions of law and fact ; and Sect. 7, of the parties to the 
 duty, and to the proceedings arising out of an alleged violation of such duty. 
 Each of the last two of the five classes obviously demands a separate and 
 special mode of treatment (r). 
 
 12. Throughout this treatise, whenever it seems desirable for the purpose 
 of avoiding troublesome reduplication of language and involution of sentences, 
 the party who is entitled to insist on the observance of a duty of disclosure 
 or other duty of good faith is termed " the party complaining," and the party 
 who owes the duty is described as " the party charged." It may be said that 
 these expressions are inapt, because the one party may never complain, and the 
 other party may never be charged, and that the duty will none the less have 
 existed all the time. To this the answer is that, until the one complains, and 
 the other is charged, the law of actionable non-disclosure is not concerned with 
 either. Except as actual or potential litigants, the parties have no interest for 
 a treatise which is devoted to the dynamics, and not the statics, of the subject. 
 Duties and rights, abstracted from their amenability to legal process, and 
 contemplated as in a state of rest, are the concern of ethics rather than of 
 jurisprudence. It may then be objected that, in that case, there is no reason 
 why the parties should not be called plaintifi and defendant respectively. 
 There is, however, this very important reason — viz. that the right of the 
 party complaining is, as regards most of the transactions and relations to be 
 considered, asserted quite as often by affirmative defence, as in the form of 
 active proceedings for rescission or otherwise (s), and, in one very important 
 and extensive type of transaction, namely, insurance, it is almost invariably 
 so asserted (i). 
 
 Sect. 4. Topics excluded. 
 
 13. Where the parties to any transaction have made an express " contract 
 for the truth " (m), or for full disclosure of all material facts, as is frequently 
 the case in life or health insurance business («), the sole question is whether the 
 express term, condition, or warranty (as the case may be) has, or has not, been 
 complied with. This question, so far, belongs strictly to the domain of 
 contract law, and not to that of non-disclosure : but, inasmuch as the 
 existence of such a contractual engagement does not necessarily exclude the 
 possibility of a co-existing obligation to disclose material facts not provided for 
 by the warranty or condition, the subject demands, and receives, special 
 consideration in its proper place (w). 
 
 (r) See Chs. VI, and VII, j)ost. 
 
 is) See Ch. Ill, Sect. 3, Ch. IV, Sect. 3, and Ch. V, Sect. 3, post, 
 {t) See Ch. Ill, Sect. 3, post. 
 
 (u) The expression of Mototon, L.J., at p. 885 of Joel v. Law Union and Crown 
 Insurance Co., [1908] 2 K. B. 863, C. A. 
 {v) See §§ 169-171, post, 
 (w) Ibid. 
 
6 CH. I, SECT. 4; CH. 11, SECT. I. 
 
 14. " Non-disclosure " excludes " mistake," which, in its strict and proper 
 sense, imports a self-induced misapprehension, either on the part of both the 
 parties to a transaction, or on the part of one of them, arising from ignorance 
 of some fact in the case, but not of any fact which it was the duty of one of the 
 parties to reveal to the other. Of course every case of non-disclosure, or 
 indeed of misrepresentation, does produce " mistake " in one sense of the 
 word, but not in the sense in which that term is understood by lawyers. 
 
 15. Ex vi termini, non-disclosure has no concern with pure misrepresenta- 
 tion, as such. But those types of implied misrepresentation which consist of 
 the omission or suppression of qualifying facts, or facts which the circum- 
 stances of the individual case raise a duty to divulge, fall within the limits of 
 this work (x), as well as within those of the law relating to misrepresentation (y) . 
 
 16. There are several legal consequences of non -disclosure besides civil 
 liability. That form of estoppel in pais which results from inaction and 
 negligence is one (z) ; criminal responsibility, where non-disclosure of specified 
 matters is made an ofience by the express provisions of a statute (a), or 
 where, with other circumstances, it amoimts to a "false pretence," is another. 
 But since neither of these constitutes, or confers, as such, a cause of action, 
 neither of them comes within the scope of actionable non-disclosure. 
 
 (x) See Oh. Ill, Sect. 2, Sub-s. (8), post. 
 
 ly) And, as such, this topic is dealt with in §§ 82-92, and §§ 103-106, of the author's 
 Law of Actionable Misrepresentation. 
 
 (z) Estoppel is a rule of evidence, not a cause of action. The same facts which 
 establish the estoppel may of course be ground for relief in proceedings for non-disclosure ; 
 but this is only an accident. Estoppel, as such, merely removes a barrier in the way of, 
 or interposes an obstacle to, a cause of action which would otherwise fail or succeed 
 respectively. 
 
 (o) Many such statutory offences are created by the Companies (Consolidation) Act, 
 1908 (8 Edw. 7, c. 69). 
 
§§ 14-20 (disclosure). 
 
 CHAPTEK 11. 
 
 GENERAL PROPOSITIONS AND DEFINITIONS IN RELATION TO 
 DISCLOSURE, MATERIALITY, AND KNOWLEDGE. 
 
 17. In all tlie classes of transactions and relations which form the subject of 
 this work, there is a duty on one, or sometimes on each, of the parties to 
 disclose to the other, or to one another, as the case may be, all material 
 facts which are within the knowledge, actual or presumed, of the person who 
 owes the duty, and are not within the knowledge, actual or presumed, of the 
 person to whom the duty is owed. In some of the relations, there are other, 
 and very important, coexisting duties, which must be discharged in addition 
 to that of disclosure ; but this latter obligation is a feature common to all 
 of them. 
 
 18. The mere enunciation of the above general rule instantly provokes the 
 following inquiries : (1) what is the kind and degree of disclosure which 
 satisfies the requirements of the rule ? (2) what is the legal meaning of 
 materiality ? and (3) when is a party proved or presumed in law to know a 
 fact ? It is essential, therefore, that an analysis of these three leading 
 concepts, Disclosure, Materiality, and Knowledge, should be entered upon 
 at the outset, before commencing to deal with the several classes of matters 
 to all of which alike the general principle is applied. 
 
 Sect. 1. Disclosure. 
 
 19. The only kind of disclosure which satisfies the requirements of the 
 law is a disclosure which is both (i) exact and complete, and also (ii) explicit 
 and unambiguous. Any communication which falls short of the above 
 whether the failure to divulge the whole truth in clear language arose from 
 intellectual incapacity, or mere carelessness, or, on the other hand, from a 
 preconceived and fraudulent design, is in law no disclosure at all. 
 
 20. First, as to the requirement of precision and completeness, the rule, 
 and the reason for it, have never been more clearly and succinctly stated than 
 in a sentence taken from the work of a moral philosopher whose statements 
 of the root principles and the theory of law are always admirable, and have 
 rarely been improved upon by professed lawyers (6). " In insurances," says 
 Paley — and insurances may be taken as typical of all the transactions com- 
 prised in the first of the classes already enumerated (c) — " in which the 
 
 (6) On the peculiar qualifications (natural and acquired) of Paley to speak with 
 authority on matters of jurisprudence, and the justification for the frequent citation of his 
 views in these pages, see § 650, post. 
 
 (c) See § 5, ante. 
 
8 CH. II, SECT. I. 
 
 imderwriter computes his risk entirely from the accoimt given by the person 
 insured, it is absolutely necessary to the justice and validity of the contract 
 that this account be exact and complete " (rf). To adopt another form of 
 words, frequently used by judges, which bears precisely the same meaning, 
 the disclosure must be " full and fair " (e). A " partial or imperfect " revela- 
 tion of the facts (/), or " a half-disclosure " (g), will not do. Indeed, a " half- 
 disclosure " may be worse than no disclosure at all, because of its greater 
 tendency to mislead, just as, in the provinces of misrepresentation or defama- 
 tion, " the lie which is half the truth " has a more insidious potency of decep- 
 tion or denigration, as the case may be, than "a lie which is all a lie " (h). 
 So, in relation to contracts for the sale of land, it has been well observed that 
 " it is not for him "—the vendor — " just to tell what is not actually untrue, 
 leavmg out a great deal that is true, and leaving it to the purchaser to inquire 
 whether there is any . . . omission in the description or not " {i). 
 
 21 . Several instances of the recognition and strict application of the rule 
 that incomplete and inexact disclosure is in law no disclosure at all, are to be 
 found amongst the decisions relating to each of the different kinds of transaction 
 in respect of which disclosure is obligatory (j), such as marine insurances (A), 
 
 (d) Principles of Moral and Political Philosophy, Bk. Ill, Part I, Ch. viii (" Contracts 
 of Hazard"). 
 
 (e) See, for example, BowUs v. Stewart (1803), 1 Sch. & Lefr. 209, per Lord Rbdesdale, 
 L.C. (Ir.), at p. 226. 
 
 ( / ) Greenwood v. Greenwood (1863), 2 De G. J. & S. 28, per Turner, L. J., at pp. 42, 43. 
 
 (g) Tlie expression of Coliins, M.R., at p. 359 of Bartram dh Sons y. Lloyd (1904), 
 90 L. T. 357, C. A. Cp. Walker v. Symonds (1818), 3 Swanst. 1 (per Lord Eldon, L.C, 
 at p. 73 : " he who . . . gives but half information, in the doctrine of this Court, 
 conceals"). 
 
 {h) See the author's Law of Actionable Misrepresentation, Ch. IV, Sect. 4, Sub-s. (2), 
 as to the half-truths which amount to misrepresentation. 
 
 (i) Per KiNDERSLEY, V.-C, at p. 430 of Brandling v. Plummer (1854), 2 Dr. 427 ; 
 100 B. R. 209. 
 
 {j ) It will be understood here that the common type of case, where the party charged 
 makes no disclosure at all, examples of which are cited in the notes to Chapters III, IV, 
 and V, passim, is not now under examination. It is only cases where the party charged 
 is shown to have revealed something, but not everything, or not to have been sufficiently 
 precise and clear in his disclosure, which concern the present discussion. 
 
 (k) See Eickards v. Murdoch (1830), 10 B. & C. 527 (where the plaintiff sued on a 
 policy on goods on board the " Cumberland," which he had effected as agent for one 
 Campbell, a Sydney merchant, and the defendant set up non-disclosure. It was proved 
 that Campbell had written to the plaintiff, after the vessel had started, instructing him, 
 in the event of the letter arriving before the ship, to wait thirty days to give her a chance 
 of arriving, and, if not arrived at the end of that period, to insure. The plaintiff waited 
 the thirty days, and the ship not having arrived, instructed his broker to insure. The 
 broker did so, at the same time giving the defendant the following " partial " information, 
 viz. (i) the date when the " Cumberland " sailed, (ii) the date when Campbell's letter 
 was written, (iii) a portion of the contents of such letter, which he read out ; but he did 
 not disclose, (iv) when the letter was received, or (v) the important part of such letter, 
 viz. the instructions to wait thirty days, and, if the vessel had not then arrived, to insure. 
 Held, an inadequate disclosure, and therefore no disclosure at all) ; Wesibury v. Aberdein 
 (1837), 2 M. & W. 267 (where the material facts were— (i) that the " King George " on 
 which a policy had been effected from Malaga to London, and another vessel, the ' ' Fruiter," 
 had sailed from Malaga on the 9th and 10th October, respectively, (ii) that the " Eruiter " 
 arrived without the " King George," and (iii) that the captain of the " Eruiter " had parted 
 company with the " King George " in a gale off Oporto on the 21st October. The plaintiff 
 disclosed (i), and the defendant was apprised of (ii) by Lloyd's Lists, but no disclosure 
 was made to the defendant, nor had he any knowledge aliunde of, (iii). Held that if 
 
§§ 20, 21 (disclosure). 9 
 
 contracts between vendor and purchaser (1), releases and compromises (m), 
 contracts of waiver (w), transactions between promoter and company (o), or 
 between principal and agents or partners (p), or contracts and gifts induced 
 by undue influence (q). 
 
 (iii) was material, as to which there was some doubt, there had been a failure to make 
 complete disclosure, and the defendant would be entitled to succeed) ; lonides v. Pender 
 (1874), L. R. 9 Q. B. 531 (where the party charged, the plaintiff, had disclosed that the 
 spirits on board the vessel had been valued with anticipated or imaginary profits, but not 
 that they had been valued with an addition of profit to an amount greater than could 
 possibly be expected under any normal circumstances. This was a communication of 
 something, but not of everything, material, and the party complaining, the defendant, 
 was held entitled to the verdict). 
 
 (I) Re Banister (1879), 12 C. D. 131, C. A. (per Pry, J., at p. 136 : " the statement of 
 fact must be an honest and fair one ; it must not for the purpose in hand be a part of 
 the truth only ; it must, so far as that purpose is concerned, be the truth, and the whole 
 truth ") ; Re Marsh and Earl Granville (1883), 24 C. D. 11, C. A. [per Pry, J., again, at 
 p. 17 • "he must tell the truth, and all the truth, which is relevant to the matter in hand ") ; 
 Heywood v. Mallalieu (1883), 25 C. D. 357, per Bacon, V.-C, at pp. 361, 364, 365, 
 wiiere the party charged (plaintiff and defendant to counterclaim) was held not to have 
 discharged his duty of disclosure, by a mere communication, through his solicitor, of 
 the fact that certain privileges and rights over the property being sold had been vaguely 
 asserted by third persons, without also divulging the fact that those claims had assumed 
 a definite and precise form to his knowledge, and that it was at least possible, if not pro- 
 bable, that they were well-founded. See also the cases cited in note (x) to § 24, post. 
 
 (m) Bowles v. Stewart (1803), 1 Sch. & Lefr. 209, 227; Oordonr. Gordon (1821), 30 
 Swanst. 400 ; 19 R. R. 230 (per Lord Eldon, L.C, at p. 473 : " in contracts of this sort, 
 full and complete communication of all material circumstances is what the Court must 
 insist on ") ; Greenwood v. Greenwood (1863), 2 De G. J. & S. 28 (per Turner, L.J., at 
 p. 42 : " now I take the rule of law to be that in order to support a transaction not other- 
 wise valid, upon the footing of a family arrangement, the parties must be upon an equal 
 footing, and there must be a full and fair communication of all the circumstances affecting 
 the question which forms the subject of the arrangement "). On reference to the above 
 cases, it will be seen that in all of them some disclosure was made, but not enough. 
 
 {n) Jenkins v. Hales (1802), 6 Ves. 646, per Lord Eldon, L.C, at p. 655 : " where 
 the vendor is plaintiff, if the rule is founded on a principle of conscience, and requiring 
 all possible security to be given to a purchaser, the Court will at least take care that, 
 when it is contended that the defendant has waived his right ... it shall be clear that 
 . . . there has been a/jiZZ ored /air repre^ewtafo'ore as to the title on the part of the plaintiff." 
 See also generally, the oases referred to in some of the notes to § 371, and to § 562, post. 
 
 (o) Re Madrid Bank, Ex p. Williams [l&QQ), L. R. 2 Eq. 216, per Lord Romilly, M.R., 
 at pp. 218, 219 (where part of the material agreement was disclosed by the promoters, 
 but not the whole) ; Oluckstein v. Barnes, [1900] A. C. 240, H. L., per Lord Halsbury, L.C, 
 at p. 246, Lord Maonaghten, at p. 249, and Lord Robertson, at pp. 256-8. 
 
 ( p) Selsey (Lord) Y.Rhoades (1824), 2 Sim. & St. 41 ; 25 R. R. 150, affirmed, on other 
 grounds, (1827) 1 Bligh N. S. 1 ; 30 R. R. 1 (per Leach, V.-C, at pp. 49, 50 : "the 
 steward is bound to make out that the employer was fully informed of every circumstance 
 respecting the property which was either within the knowledge of the steward, or ought 
 to have been within his knowledge, which would tend to demonstrate the value of the 
 property" — so far as the transaction was a purchase — "and the precise measure and 
 extent of the bounty of the employer " — so far as the transaction was " united with motives 
 of bounty "). In Dunne v. English (1872), L. R. 18 Eq. 524 (per Jessel, M.R., at pp. 533, 
 535, 536), Imperial Mercantile Credit Association v. Coleman (1873), L. R. 6 H. L. 189 
 (per Lord Chelmsford, at p. 200, and Lord Cairns, at p. 205), and Costa Rica Railway 
 Co. V. Forwood, [1900] 1 Ch. 746, C. A. (per Rigby, L. J., at p. 756, Vatjghan Williams, L. J., 
 at p. 761, and Stieung, L.J., at p. 766), the distinction was clearly drawn between the 
 mere declaration of the existence of an interest, and the disclosure of the exact character 
 and extent of that interest, and it was held that the partner in the first case, and the 
 
 (q) Groves v. Perkins (1834), 6 Sim. 676, per Shadwbll, V.-C, at p. 583 (mere state- 
 ment of fact that the intestate's property was " considerable " was not enough, without 
 full disclosure of the extent, nature, and particulars of the property) ; Wright v. Carter, 
 [1903] 1 Ch. 27, C A. (per Vatjghan Williams, L.J., at pp. 64-56, and Stirling, L.J., 
 at p. 60). 
 
10 CH. II, SECT. I, 
 
 22. Where it is a question of a transaction (whetter contract or gift) whicli 
 cannot be entered into without disclosure of all material circumstances 
 bearing upon it, the party upon whom the duty of disclosure lies does not 
 acquit himself of his duty by merely stating the terms of the transaction, 
 and the facts upon which it is based and is intended to operate. He must 
 also explain with precision and in detail the legal efiect of the transaction 
 upon the other party's rights and interests (r), and, further, must make it 
 clear in certain cases that the other party has the right to revoke the gift 
 or avoid the contract, if he so pleases (s). 
 
 23. When it is said that disclosure must be exact and complete, exactitude 
 and completeness in all material particulars is meant. The law does not 
 require more than a substantial disclosure. If this be made, it does not 
 signify that immaterial details are omitted (t). Conversely, the most precise 
 and punctilious disclosure of unimportant minutice will not avail to render 
 the disclosure valid, if it is incomplete in essential matters (u). The 
 
 director in the other two, in communicating merely the former, without the latter, infor- 
 mation, had not made that disclosure which the law requires in order to validate the 
 transaction. Lord Caibns, at p. 205 of Imperial Mercantile Credit Association v. Coleman, 
 ubi sup. , states the principle very convincingly as follows : ' ' Now was it material that Mr. 
 Coleman's co-directors should know what his interest was ? In my opinion, it was most 
 material. No better instance of the materiality of such a declaration could be found than in 
 the present case. . . . Did he then declare what his interest was ? Certainly he did not. 
 A man declares his opinion or his intentions when he states what his opinion is, or what 
 his intentions are, not that he has an opinion, or that he has intentions ; and so ... a 
 man declares his interest, not when he states that he has an interest, but when he states 
 what his interest is." See also Bartram & Sons v. Lloyd (1904), 90 L. T. 357, C. A., where, 
 in the plaintiff's action for damages for breach of contract, the defendant pleaded that the 
 plaintiff had made a secret arrangement with his (the defendant's) agent, one Campbell, 
 in the nature of a bribe, and it was held by the C. A., reversing Bbttcb, J., that though 
 the defendant was told by the plaintiff, or knew from other sources, (i) that a commission 
 was being paid by the plaintiff to Campbell, and (ii) the nature of the dealings of the 
 plaintiff with Campbell for this purpose, he was not informed of (iii) the fact that the 
 commission had been promised by the plaintiff during the negotiations for the contract 
 which was the subject of the action, and with the intention and result of procuring such 
 contract, and that this " half-disclosure " was not a compliance with his duty by the 
 party charged {per Collins, M.R., at p. 539). 
 
 (r) Bennett v. Vade (1742), 2 Atk. 324 (per Lord Haedwicke, L.C, at p. 327) ; Cutis 
 V. Salmon (1852), 21 L. J. (Ch.) 750 (per Loud St. Leonards, L.C, at p. 751) ; Savery 
 V. King (1856), 5 H. L. C. 627 ; Coidson v. Allison (1860), 2 De G. T. & J. 521 (per Lord 
 Campbell, L.C, at p. 525 — see the citation in note (z) to § 24, post) ; Sharp v. Leach 
 (1862), 31 Beav. 491 (per RojOLLy, M.R., at pp. 494^501) ; Clarke v. Malpas (1862), 
 4 De G. F. & J. 401 (per KjUQHT-BntrcE, L.J., at p. 404) ; Moxon v. Payne (1873), 8 Ch. 
 App. 881 (per James, L.J., at p. 885) ; Rowley v. Cook (1873), Ir. E. 8 Eq. 370 (as to 
 the duty to explain the effect of unprecedented clauses in a mortgage) ; Willis v. Barron, 
 [1902] A. C. 271, H. L. (per Lord Halsbtiey, L.C, at p. 276, and Lord Macnaghtbn, 
 at pp. 280, 281) ; Re Haslam & Bier-Evans, [1902] 1 Ch. 765, C A. (per Vatjghan Williams, 
 L.J., at p. 769) ; Harris v. Glarson (1910), 27 T. L. R. 30 (where Channell, J.,heldthat 
 it was the duty of a moneylender to explain very clearly to the borrower the effect of a 
 clause in the contract whereby the whole of the money became due on failure to pay any 
 one instalment) ; London & Westminster Loan & Discount Co. v. Bilton (1911), 27 T. L. E. 
 184 (the like) ; Stirling v. Eose (1913), 30 T. L. R. 67 (the like). 
 
 (s) Savery v. King, sup., per Lord Ceanwobth, L.C, at pp. 663, 664 ; Procter v. 
 Robinson (1867), 15 L. T. 431, per Ttjenbe, L.J., at pp. 431, 432, and Caibns, L.J., at 
 pp. 432, 433. Cp. Re Webb, [1894] 1 Ch. 73, C. A. (per Lindley, L.J., at p. 79, as to the 
 duty of a solicitor to inform the party complaining that his bill may be taxed). 
 
 (t) Asjar & Co. v. Blundell, [1896] 1 Q. B. 123, C. A. (per Lord Eshee, M.R., at pp. 129, 
 130). 
 
 (u) A corresponding rule prevails in the law of misrepresentation. See § 71 of the 
 
§§ 22-24 (disclosure). U 
 
 disclosure may be made in any form, or by any means, unless it be expressly 
 
 agreed between the parties that it shall not be deemed such, unless made in 
 
 a particular specified manner, as, for instance, in the form of answers to be 
 
 given by the assured in writing to specific questions contaiaed in documents 
 
 tendered by the insurers (mm). 
 
 24. Besides being exact and complete, the disclosure must be made in 
 
 terms which are clear and unambiguous. The party on whom the obligation 
 
 lies^must not leave the other party to put two and two together. He must 
 
 put them together himself, and call them four. Though x +y = z, that is, 
 
 though facts x and y lead to a reasonable inference of fact z, the duty is 
 
 nevertheless to disclose z, and not a; +y, or not merely x -\-y. When the 
 
 shorter and simpler course is not adopted, there must be some reason for not 
 
 doing so, and that reason is almost invariably that the party on the one hand 
 
 hopes that z will not be inferred from x -\-y, and, on the other, has the 
 
 fraudulent intention of setting up the revelation of a; -\-y z.s3, defence in the 
 
 event of a case of concealment being afterwards made against him. It is idle 
 
 to urge that something tantamount to disclosure was done. In business of 
 
 this kind, the artist's claim, — "piece out our imperfections with your thoughts," 
 
 — ^has no place. These " doubtful equivalents " are not disclosure in law, 
 
 but non -disclosure [v), and non -disclosure of a particularly disingenuous 
 
 type (w). Illustrations are frequent of the failure of such expedients for the 
 
 purpose of withholding material facts, whilst insuring in advance against 
 
 the consequences of so doing, as " catching " conditions and particulars 
 
 author's Law of Actionable Misrepresentation : " where the entirety of a representation 
 forms a faithful picture or transcript of the facts, its truth is established, and is not affected 
 by any number of inaccuracies in unimportant details. . . . On the other hand, if the 
 general impression conveyed is false, the utmost precision and the most punctual and 
 scrupulous accuracy in a number of immaterial minutiae will not avail to stamp the mis- 
 representation with the sign of truth." 
 
 (uu) As in Levy v. Scottish Employers Insurance Co. (1901), 17 T. L. E. 229, Div. Ct. 
 (per Wills, J., at p. 230). 
 
 (v) Bates v. Hewitt (1867), L. K. 2 Q. B. 595, a marine insurance case, where the 
 defendant set up non-disclosure of the fact that the vessel insured, the S.8. " Georgia," 
 had been a Confederate cruiser, and was therefore Uable to capture by the United States, 
 and it was held that the mere communication by the plaintiff of certain particulars which, 
 together with what the defendant already knew as to the past history of the Confederate 
 ".Georgia," might have led to the truth, was not enough, it not being proved that the 
 plaiotifE had in plain terms informed the defendant that the " Georgia " insured was 
 identical with the Confederate cruiser of that name. This amounted to no more than 
 "partial information" (per Cockbubn, C.J., at p. 608), or the use of "doubtful equi- 
 valents in lieu of actual and plain communications " (per Mblloe, J., at p. 610) ; Gandy 
 V. Adelaide Marine Insurance Co. (1871), L. E. 6 Q. B. 746 (where, at p. 758, Cgckbtjbn, 
 C.J., said that the duty of disclosure is not excused " where a material fact is matter of 
 positive knowledge to the party proposing the insurance, and only matter of possible infer- 
 ence, from very imperfect materials, to the underwriter "). The two cases of Nicholson 
 V. Power (1869), 20 L. T. 580, and Leigh v. Adams (1871), 25 L. T. 566, are both excellent 
 illustrations of the futility of the pretence that leaving the party to put two and two together 
 amounts to a discharge of the duty of disclosure. For the facts of these two cases see 
 note (Ic) to § 43, post. 
 
 (w) Greenwood v. Greenwood (1863), 2 De G. J. & S. 28, per Ttjenee, L.J., at pp. 42, 43 : 
 " this Court . . . expects and requires in such cases the most perfect bona fides, and it 
 is not, in my opinion, consistent with bona fides that partial and imperfect statements 
 should be made on the one side, the party making them taking the chance whether a full 
 and perfect explanation will be required on the other side." Cf. Gluckstein v. Barnes, 
 [1900] A. C. 240, H. L. (per Lord Halsbitbv, L.C, at pp. 246, 247). 
 
12 CH. II, SECT. 2, SUB-S. (1). 
 
 of sale in contracts between vendor and puichaser {x), " tricky " waiver clauses 
 in prospectuses of companies (y), and other like subdolous pretences of candour 
 without its reality (z). 
 
 Sect. 2. Materiality. 
 
 25. The full and clear disclosure required by the law, as already explained, 
 is a full and clear disclosure of such facts and circumstances (a) only as are 
 
 (x) See Brandling v. Plummer (1854), 2 Drew. 427 ; 100 E. B. 209, per Ktndeesley, 
 V.-C, at pp. 430-3 ; Smith v. Harrison (1857), 26 L. J. (Ch.) 412, wKere " the chattel 
 interest, If any," of a certain person in the stock fixtures and effects of his late firm, and 
 in a certain lease, was put up for sale by a vendor who knew that in fact the person in 
 question had no saleable interest whatever in the property, the^ whole assets of the firm 
 being insufficient to pay its creditors, and where Page-Wood, V.-C, at p. 414, draws 
 particular attention to the misleading ambiguity — which, with inexplicable generosity, 
 he hesitates to call fraudulent — of the expression " if any," used as it was by the vendor 
 in the secret sense of " if any, which there is not," but intended at the same time to 
 convey to the purchaser the possibility of the interest in question having some value, 
 however slight or remote ; Be Banister (1879). 12 C. D. 131, C. A. (per Fry, J., at p. 136 : 
 "it is, therefore" — i.e. because the one party knows, and the other trusts — "fair that 
 the person who does know should explain his meaning so as to be perfectly intelligible 
 to the person who does not know ") ; Se Marsh and Sari Oranville {1882), 2iC.D. 11, C. A., 
 per Fey, J., at p. 17 (" explicit and plain conditions"), Baggallay, L. J., at pp. 22, 23, 
 and Cotton, L.J., at p. 24; Nottingham Patent Brick <& Tile Co. v. Butler (1896), 16 
 Q. B. D, 778, C. A. (per Lindley, L.J., at p. 788). 
 
 (y) See the prospectus cases of Greenwood v. Leather Shod Wheel Co., [1900] 1 Ch. 421, 
 431, C. A. '; Caclcett v. Keswick, [19021 2 Ch. 456, 467, 476-8, C. A. ; Watts v. Bucknall, 
 [1903] 1 Ch. 766, 775, 778, C. A., as to the designedly equivocal phrase, " there may be 
 contracts," &c. 
 
 (z) Such as Coulson v. Allison (1860), 2 De G. F. & J. 521, where, a widower, one 
 Nicholson, having married his deceased wife's sister, it was held by Lord Campbell, L.C. , 
 affirming Stuart, V.-C, that it was incumbent upon him, when claiming the benefit 
 of a marriage settlement made upon him by the lady, to prove that she had been " fully 
 and duly and truly informed of all the circumstances of the case, and of the possible 
 consequences of what she was about to do " (p. 524) ; — to which he adds, at p. 525 : " I 
 am of opinion that . . . there is an entire absence of evidence that she was fully, fairly, 
 and truly informed of the situation in which she stood. It was represented to her as 
 a matter of some doubt whether the alleged marriage was valid or not, whereas at that 
 time it had solemnly been adjudged that the marriage of a widower with a sister of his 
 deceased wife was illegal, and absolutely null and void. She ought to have been informed 
 of that, and not left in a state of uncertainty as to the consequences which might result 
 from a continuation of her cohabitation with Nicholson. Again it is not made to appear 
 that Mrs. Welbank was duly informed of the risk she ran in executing a deed conveying 
 away all her property, except her small annuity, to Nicholson, of being abandoned at 
 any moment and left without any other resource than her annuity. The moving con- 
 sideration for the deed was clearly the notion of a valid subsisting marriage. This is 
 shown by the wording of the deed, every syllable of which proceeds upon the footing of 
 a supposed subsisting marriage, and it is further shown by her executing and acknow- 
 ledging it in the character of a married woman." In other words, Nicholson vainly hoped 
 that the above ambidextrous phraseology and devices would serve as an immediate 
 inducement to the lady to believe that she was validly married, and at the same time 
 as a prophylactic against any charge of non-disclosure in the future. Cp. Oluchstein v. 
 Barnes, [1900] A. C. 240, H. L., and the caustic observations of Lord Macnaghten, 
 at p. 249, as to the attempt — described by him as " almost a stroke of genius " — to make 
 out that the lavish use of the phrase " interim investments " ainounted to a fair and un- 
 ambiguous disclosure of the promoter's secret operations and profits. See, also, Oelhers 
 V. Ellis, [1914] 2 K. B. 139, for an excellent example of a fraudulent semi-disclosure 
 (per HoERiDGB, J., at pp. 147, 148). A number of these amphibologiw, as they are termed 
 in theological casuistry, are collected in § 82, and the notes thereto, of the author's Law 
 of Actionable Misrepresentation. 
 
 (a) "Fact" and "circumstance" are used here as convertible terms. The latter 
 expression has the advantage over the former of suggesting the idea of relevancy to the 
 
§§ 24-27 (materiality). 13 
 
 material in the particular case (6). This statement involves the preliminary 
 question as to what undisclosed matters are in contemplation of law facts 
 or circumstances ; for nothing can carry with it the possibility even of 
 materiality which is not a fact or circumstance at all. 
 
 Subs. (1). What are deemed Facts or Circumstances. 
 
 26. For the purpose of the rules relating to disclosure, a fact or circumstance 
 has the same juridical connotation as it has for the purpose of the law relating 
 to misrepresentation (c). That is to say, the expression includes any event or 
 thiug, present or past {d) ; and the present or past qualities, attributes, 
 state, condition, or incidents, of any such event or thiug. 
 
 27. It has long been settled, chiefly in reference to marine insurance, 
 that reports, instructions, advices, information, intelligence, and even, in 
 certaiu cases, rumours, are circumstances or facts which, if material, must 
 be divulged (e). This means that the receipt of the information or intelligence 
 
 tranaaction in hand, circumstantia being neither more nor lesa than " surrounding facts." 
 " Circumstances," rather than " facts," are referred to in many of the judgments relating 
 to the duty of disclosure, e.^r. in those of Lord Mansfield, C. J., in Carter y. Boehm{n6e), 
 3 Burr. 1905, Lord ELLENBOKOtrOH, C.J., at p. 18 of Bridges r. Hunter (1813), 1 M. & S. 
 15, Lord Eldoit, L.C, at p. 473 of Qordon v. Gordon (1821), 3 Swaust. 400, Leach, 
 V.-C, at pp. 49, 50 of Selsey (Lord) v. Shoades (1824), 2 Sim. & St. 41, Lord Campbell, 
 L.C, at p. 524 of Coulson v. Allison (1860), 2 De G. P. & J. 521, and Ttonee, L.J., at p. 42 
 of Greenwood v. Greenwood (1863), 2 De G. J. & S. 28, not to mention numerous others. 
 And the statute which codifies the law relating to marine insurance — the Marine Insurance 
 Act, 1906 — ^prescribes disclosure of " every material circumstance known to the assured " 
 in 3. 18, sub-s. (1), and, in sub-s. (5) of the same section, states what " tJie term ' circum- 
 stance^ includes." It will be noticed that the phrase "surrounding circumstances" 
 — in very common use — is as glaring a pleonasm as " a round circle," or a " rectangular 
 square," would be. 
 
 (6) This is clearly stated or assumed in all the authorities. Where a general and 
 summary form of words is used which omits this qualification, as, for instance, by Lord 
 St. Leonards, who, when Sir Edward Sugden, L.C. (Ir.), at p. 425 of Murphy v. O'Shea 
 (1845), 2 Jo. & Lat. 422, spoke of "a full disclosure of all that he" — the agent, when 
 dealing with his principal — " knows with respect to the property," the qualification must 
 be supplied, as was pointed out by Jessel, M.E.., at p. 534 of Dunne v. English (1872), 
 L. B. 18 Eq. 524, where, after citing the above expression, he added, — " that of course 
 means everything material which he knows." As regards marine insurance, see the 
 judgment of the Court of Q. B. at p. 539 of lonides v. Pender (1874), L. R. 9 Q. B. 531 : 
 " we agree that it would be too much to put on the assured the duty of disclosing 
 everything which might influence the mind of an underwriter. Business could hardly 
 be carried on if this were required " ; and The Bedouin, [1894] P. 1., C. A. {per Lord 
 EsHBB, M.B., at p. 12 : " the assured is bound to tell him " — i.e. the underwriter — " not 
 every fact, but the material facts "). 
 
 (c) See §§ 15-18, 28-44, of the author's Law of Actionable Misrepresentation. 
 
 {d) Whether a past event is material or not in the particular case is another question 
 altogether. This depends on the degree of proximity in time, and the closeness of con- 
 nection from other points of view, between the past event and the transaction in which 
 the duty of disclosure arises. See Carter v. Boehm (1766), 3 Burr. 1905 (where it was held 
 that a design which the French had upon Fort Marlborough the year Ijefore, and which 
 had been laid aside, was of no importance) ; Haywood v. Rogers (1804), 4 East, 590 (per 
 Lord Ellbnbobotjoh, C.J., at pp. 596, 597, as to what circumstances in the past history 
 of a vessel are, and what are not, required to be disclosed in contracts of mariae insur- 
 ance) ; Freeland v. Olover (1806), 7 East, 457 (per Gbosb, J., and Lawrence, J., at 
 p. 463,— the like) ; Blackburn, Low & Co. v. Vigors (1887), 12 A. C. 531, H. L. {per Lord 
 HALSBTteY, L.C, at pp. 536, 537). 
 
 (e) Durrell v. Bederley (1816), Holt N. P. 283; 17 R. R. 639, where, to an action 
 on a policy of marine insurance on a vessel which had been captured, the defendant set' 
 
14 CH. II, SECT. 2, SUB-S. (1). 
 
 is in itself a fact whicli may be material, apart altogether from the question 
 whether its subject-matter, in the sense of having, or having had, a real 
 existence, is a fact or not. However ill foimded the report, communication, 
 or rumour, may subsequently turn out to lave been, the existence of it is a 
 " circumstance " which, if within the knowledge of the party subject to the 
 duty of disclosure, must be revealed to the party to whom that duty is owed, 
 if it is of a nature to afiect the latter's judgment in considering whether or 
 not to enter into the contract or transaction in question on the terms pro- 
 posed (/). Still less is the party's duty of disclosure afiected by the mere 
 fact that he bond fide believed the information or rumour to be untrue {ff). 
 
 28. It is equally well established that a person's existing mental condition 
 is a " circumstance " which has the capacity of materiality, and, as such, 
 may have to be disclosed. " The state of a man's mind is as much a fact 
 as the state of his digestion," according to Bowen, L.J. " It is true," he 
 adds, " that it is very difiS.cult to prove what the state of a man's mind at a 
 particular time is, but if it can be substantiated, it is as much fact as anything 
 else " ig). A man's mental state may mean the state of his will, or the state 
 
 up non-disclosure by the plaintiff of reports current in Jersey some weeks back, of captures 
 effected by a Rrencli frigate in those waters, and where Gibbs, C.J., directed the jury, 
 at p. 285, that " intelligence, properly so called, and as it is understood by mercantile 
 men, ought to be disclosed when known.. If the concealment be of a material fact, 
 whether a rumour, report, or an article of intelligence, it ought to be communicated," and, 
 at p. 286, that " he " — the plaintiff — " knew the current knowledge of Jersey on this 
 subject, the underwriters could know nothing of it " ; Friere v. Woodhouse (1816), 
 Holt N. P. 572 ; 17 R. B. 679, where it was again recognized that an " article of intelli- 
 gence " is a " fact," though in this case the party complaining failed, because he had 
 presumptive knowledge of the fact ; Gordon v. Gordon (1821), 3 Swanst. 400 ; 19 E. R. 
 230, a compromise case, in which Lord Eldon, L.C, set aside an agreement between 
 two brothers for the division of family estates which proceeded on the basis of the elder 
 brother's legitimacy being at least doubtful, the ground of his decision being that the 
 younger had not disclosed to the elder certain information which he had received from 
 two persons, and also the currency, known to him, of rumours, to the effect that a private 
 ceremony of marriage between the parents had taken place (p. 473) ; lonides v. Pender 
 (1874), L. R. 9 Q. B. 531, per Our. at p. 538, approving an American case, abstracted in 
 note (w) to § 104, post, where again "information" was treated as a fact to be disclosed. 
 
 (/) Lynch v. Dunsford (1811), 14 East, 494, per Lord Ellbnboeotjgh, C. J., at p. 497 : 
 " the duty . . . must attach at the time of effecting the insurance, and caimot depend 
 upon the subsequent event," and, therefore (pp. 497, 498) the proved falsity of the rumour 
 or intelligence in that case was not allowed to affect the result. 
 
 {ff) Gordon v. Gordon, sup., where Lord Eldon, L.C, at pp. 463, 464, pointed out 
 that though the defendant honestly believed that the reported ceremony was not a. 
 marriage de jure, he ought none the less to have communicated to the plaintiff the fact 
 that it had been so reported, and left the plaintiff to form his own judgment as to the 
 weight to be attached to the report. So also in respect of information which he had 
 personally received from certain persona as to the ceremony, " although he might not 
 have believed that statement, still he was bound to communicate it to his brother " 
 (p. 474). On the same principle, if an assured party has a report or opinion of an 
 expert as to the condition of a vessel " though he thinks it erroneous, he must disclose 
 . . . his unfavourable report " : per Soeutton, J., at p. 116 of Cantiniere Meccanico 
 Brindisino v. Janson, [1912] 2 K. B. 112, cited and approved by Vattghajt Williams, 
 L.J., at pp. 461, 462 of the report of the case on appeal, [1912] 3 K. B. 452, C.A. 
 
 {g) At p. 483 of Edgington v. Fitzmaurice (1885), 29 C. D. 459, C. A. Cp. his observa- 
 tions to the same effect at p. 470 of Angus v. Clifford, [1891] 2 Ch. 449, C. A. Both 
 these were misrepresentation cases, but since a representation is a statement of fact, 
 it became necessary in each of them to consider whether, and in what sense, a man's 
 mental state is a fact. 
 
§§ 27-29 (materiality). 15 
 
 of his belief, whether as to the past, the present, or the future. Consequently, 
 the present intention (h), or the opinion, whether professional or otherwise, 
 as to any existing or past matter (i), or the expectations (j), or apprehensions (k) 
 as to the future, whether of an individual, or of a class, or body of persons, 
 are all " facts," to which the obligation of disclosure may attach ; and here 
 again the existence of the intention, opinion, hope, or fear is not the less a 
 fact merely because the intention may not materialize, or merely because 
 the opinion, hope, or fear, may prove to have been groundless, or the party 
 charged may at the time have thought it to be so (kJc). 
 
 29. Similarly the making of an agreement is a fact, which may be subject 
 
 {h) Carter v. Boehm (1766), 3 Burr. 1905 (a marine insurance case, in which Lord 
 JIansfield, C.J., recognized that a design of the French upon Fort Marlborough was a 
 fact which might be material, though in the circumstances of that case, the design having 
 been entertained and abandoned a year previously, it was held not to be so) ; Bridges v. 
 Hunter (1813), 1 M. &. S. 15 (also a marine insurance case, in which the intention of the 
 captain to sail on a certain date was clearly considered a "fact ") ; Evans v. Edmonds 
 (1853), 13 C. B. 777 (as to the undisclosed intention of a trustee of a separation deed 
 to use his position as trustee for the purpose of facilitating the continuance of an adulterous 
 ntercourse with the wife) ; Evans v. Carrington (1860), 2 De F. G. & J. 481, a similar case ; 
 Traill v. Baring (1864), 4 De G. J. & S. 318 (in which it was the basis of the decision that 
 the alteration in the originally expressed intention of the party to take a third of the 
 life insurance risk was a fact) ; Oandy v. Adelaide Marine Insurance Co. (1871), L. R. 
 6 Q. B. 746 (a marine insurance case, in which the resolution of the plaintiff not to continue 
 the ship on Lloyd's register was,, in one of the questions left to the jury, described as a 
 " fact ") ; Leigh v. Adams (1871), 25 L. T. 566 (the intention to ship a cargo on a certain 
 vessel for the assured ; also the intention of the owners of the vessel to lose her on her next 
 voyage) ; Glasgow Assurance Corporation v. William Symondson & Co. (1911), 104 L. T. 
 254, where, at p. 258, ScRTTTTCif, J., obviously considered the " intention " of the defendant 
 to declare his own underwriting partners as assured, was a fact, capable of being, though 
 in this case it was not, material. Cp. the misrepresentation oases cited in the notes to 
 § 17, and in note (q) to § 90, of the author's Law of Actionable Misrepresentation, all of 
 which are illustrations of intention being regarded as a fact. 
 
 (i) Opinions of the party charged, or of third persons, as to matters of law, were held 
 to be facts which, being material, ought to have been disclosed, in Bowles v. Stewart (1803), 
 1 Soh. & Lefr. 209, per Lord Rbdbsdale, L.C. (Ir.), at p. 226 (a case where a deed of release 
 executed by one from whom counsel's opinion had been withheld was set aside) ; Beynell 
 V. Sprye (1852), 1 De G. M. & G. 660 (per Lord Ceanwobth, L. J., at pp. 703-705, a similar 
 case of imperfect disclosure of counsel's opinion) ; Davies v. London and Provincial 
 Marine Insurance Co. (1878), 8 0. D. 469 (suppression of counsel's opinion that no 
 criminal offence had been committed : per Fey, J., at p. 477) ; Re Roberts, [1905] 1 Ch. 
 704, C. A. (at p. 710). The same views have been expressed in respect of opinions 
 on other matters, e.g., valuations, as in Brooke v. Lord Mostyn (1865), 3 De 6. J. 
 & S. 373 ; Dougan v. Maepherson, [1902] A. C. 197, H. L. ; a medical opinion as to a 
 person's expectation of life, as in Coahs v. Boswell (1886), 11 App. Cas. 232, H. L. ; or 
 " the opinion of the neighbourhood " as to a woman's character, as in Foulkes v. Sellway 
 (1800), 3 Esp. 235 (as to which case see note (s) to § 148, post). Cp. the misrepresentation 
 cases in the notes to §§ 32-35 of the author's Law of Actionable Misrepresentation, as 
 to a statement of an opinion being a statement of the fact that the opinion is entertained 
 by the person to whom it is attributed. 
 
 (J) Willes V. Clover (1804), 1 B. & P. (N. R.) 14 ; 8 R. R. 739 (per Sir James Mans- 
 field, C.J., at p. 16). 
 
 (k) Court V. Martineau (1782), 3 Dougl. (K. B.) 161 (fears of the owner of two prizes 
 that one of them may have been retaken) ; Richards v. Murdoch (1830), 10 B. & C. 527 
 (fears of the owner of the vessel as to her arrival). In Bell v. Bell (1810), 2 Campb. 475 
 the remark of Lord ELLBKBOBOiraH, C.J., that the " sensation and apprehensions at Riga" 
 as to the effect of an order of the Russian Government upon the safety of the vessel 
 did not constitute " facts " was made per incuriam. It must be supposed that he meant 
 no more than that the facts in question were probably not material. 
 
 (Teh) See the last of the oases cited in note (//) to § 27, ante. 
 
16 CH. II, SECT. 2, SUB-S. (2). 
 
 to the rules of disclosure, whether the agreement so made be valid and 
 enforceable or not (I). 
 
 Subs. (2). The Meaning of Materiality. 
 
 30. Any fact or circumstance is deemed " material to be disclosed," which, 
 if disclosed, would influence the mind of a reasonable person in determining 
 whether to enter into the proposed contract or transaction at all, or in deciding 
 upon the terms of such contract or transaction, having regard to its class and 
 character (11). This definition has been expressed in various forms of words, 
 as applied to the difierent classes of transactions and relations giving 
 rise to the duty of disclosure (m), but the substance of it is as above 
 stated. 
 
 31. It will be observed that in each case the question to be determined, 
 in accordance with the above proposition, is not so much whether the undis- 
 closed fact was material to the contract itself or (in the case of insurance) 
 to the precise risk undertaken, as whether it was material to the inducement, 
 that is, whether it was of a nature to afEect the judgment of the party from 
 
 (() See Thames and Mersey Marine Insurance Co. v. Gunford Ship Co., [1911] A. C. 
 529, H. L., per Lord Alveestone, at pp. 537, 638, as to "honour" policies of marine 
 insurance, which are facts, and material facts, though not legally enforceable contracts, 
 
 (11) This is a vital consideration : for, as will be seen from an abundance of illustrations 
 appearing hereafter— see §§ 84, 85, 92, 93, 95, 96, 99, 117, 120, 122, 123, 137, 141, 147, 
 note (p), 148, 150 — there are many circumstances which, though material in the sense of 
 being important for the party to know, are yet not "material to be disclosed," that 
 is to say not such that, from the nature of the contract or business, the party is entitled 
 to assume their non-existence. 
 
 (m) As to marine insurance, see the expressions used by Sir James Manspield, C.J., 
 at p. 16 of Willes v. Glover (1804), 1 B. & P. (N. R.) 14 ("an opportunity of exercising 
 their judgment in settling the premium ") ; by Gibbs, C. J., at p. 286 of Durrell v. Bederley 
 (1816), Holt N. P. 283 ; by Holkoyd, J., at p. 259 of Berihon v. Loughman {ISII), 2 Stark. 
 259 (" whether particular facts, if disclosed to an underwriter would . . . make a difference 
 as to the amount of premium ") ; by Loed Tentekden, C.J., at p. 540 of Rickards v. 
 Murdock (1830), 10 B. & C. 527 (" would have influenced the mind of the underwriter 
 in deciding upon what terms he would accept the risk ") ; by Rolfe, B., at pp. 243, 244 
 of Dalglish v. Jarvie (1850), 2 Macn. & 6. 231 ("anything that may afEect the rate of 
 premium which the underwriter may require ") ; by Cookbuen, C.J., at pp. 604, 605 of 
 Bates V. Hewitt (1867), L. R. 2 Q. B. 595 ("all matters which will enable him to determine 
 the extent of the risk against which he undertakes to guarantee the assured ") ; by the 
 Court of Queen's Bench at p. 539 of lonides v. Pender (1874), L. R. 9 Q. B. 531 (" the 
 rule laid down in Parsons on Insurance, vol. i. p. 495, that all should be disclosed which 
 would afEect the judgment of a rational underwriter governing himself by the principles 
 and calculations on which underwriters do in practice act, seems to us a sound one ") ; 
 and by the legislature in the Marine Insurance Act, 1906 (6 Edw. 7, c. 41), s. 18, sub-s. (2) : 
 " every circumstance is material which would influence the judgment of a prudent insurer 
 in fixing the premium, or determining whether he will take the risk." As regards partner- 
 ship, Lord Ckanwoeth, L.C, at p. 188 of Clements v. Ball (1858), 2 De G. & J. 173, said 
 that a surviving partner is bound to divulge "every fact which may enable the represen- 
 tative " — i.e. of the deceased partner — " to exercise a sound discretion as to the course he 
 ought to pursue." Generally, for illustrations of the application of the definition to the 
 several classes of transactions and relations dealt with in this treatise, see Ch. Ill, Sect. 
 2, Ch. IV, Sect. 2, and Ch. V, Sect. 2, post. As to what materiality means as applied to a 
 representation, see § 126 of the author's Law of Actionable Misrepresentation. 
 
§§ 29-33 (materiality). 17 
 
 wliom the fact is withheld (n). The same distinction is to be noted in cases 
 of misrepresentation (o). 
 
 32. Another observation which it is proper to make in this connexion is 
 that, in order to establish materiality, it is not necessary to show that the 
 disclosure of the uncommimicated fact would inevitably have deterred the 
 party from entering into the contract or transaction on any terms, or on 
 the terms proposed : it is enough to show that it might possibly have 
 had such a deterrent effect, and would certainly have had some efiect upon 
 his judgment, in the sense that it would have presented something for him 
 to weigh and take into consideration, and would have " given him pause " {p). 
 
 33. The belief of any of the parties to a contract or transaction as to the 
 materiality or non-materiality of any undisclosed fact is quite unimportant. 
 On the one hand, if the fact is not shown by evidence or otherwise to have 
 been material, the opinion entertained at the time, or professed at the 
 trial, by the party complaining cannot make it so (q) : on the other hand, 
 if the fact undisclosed is proved to have been material, such materiality 
 cannot be afiected by any allegation (even if believed) of the party charged 
 that he did not at the time, or does not at the trial, consider it to have been 
 material (r). But, where the matter is in dubio, words or acts of the party 
 
 (n) lonides v. Pender, sup., per Cur. at p. 538 : " it was argued before us that the 
 nature of the risks (that is to say, the strength and seaworthy qualities of the Da Capo, 
 and the probability of encountering storms on the voyage, and so forth) was not in the 
 least affected by the amount at which the goods were valued : which is no doubt true " : 
 but, said the Court (see pp. 538, 539), it was enough that the over valuation, though strictly 
 extraneous to the risk, would, as had been proved by evidence, affect an underwriter's 
 mind; Tate & Sons v. Hyslop (1885), 15 Q. B. J>. 368, C. A., another marine insurance 
 case (per Bbett, M.R., at p. 376 : " the authorities show that the materiality is not as to 
 the risk, but as to whether it would influence the underwriters in entering upon the 
 insurance or the terms on which they would insure "). 
 
 (o) Thus in Sibbald v. Hill (ISli), 2 Dow. H. L. 263, Lord Eldon, L.C, decided in favour 
 of the underwriters, " not on the ground that the misrepresentation affected the nature 
 of the risk, but because it induced a confidence without which the party would not have 
 acted " (p. 267). And cp. § 129 of the author's Law of Actionable Misrepresentation, 
 and the authorities there cited. 
 
 (p) See Smith v. Pincombe (1852), 2 Macn. & G. 653, per Lord Teubo,L.C., at pp. 658, 
 659 (" calculated to influence the judgment in the adoption of the compromise ") ; Green- 
 wood V. Greenwood (1863), 2 De G. J. & S. 28, per Tueneb, L.J., at p. 43 (" a fuU and fair 
 communication . . . would, or at least might, have materially influenced the other 
 parties in determining the question whether they would have entered into the agreement ") ; 
 TraiU v. Baring (1864), 4 De G. J. & S. 318 (per Tttkner, L.J., at p. 330 : " it is impossible 
 to say what course the plaintiffs might have pursued, whether they would or would not 
 have accepted the policy. They might have done so, but it is equally clear that they 
 might not, and we cannot say whether they would or would not ; but it was to them 
 that the communication should have been made, in order that they might exercise their 
 option upon the subject) ; Brooke v. Lord Mostyn (1865), 2 De G. J. & S. 373 ; William 
 Piekersgill & Sons, Ltd. v. London and Provincial Marine and General Insurance Co., 
 [1912] 3 K. B. 614 (per Hamilton, J., at p. 619). 
 
 (q) Haywood v. Badgers (1804), 4 East, 590 (per Lord Ellenboeottqh, C.J., who, at 
 p. 597, speaks of the " almost absolute impossibility for the assured to state . . . every- 
 thing which, if stated, might have been deemed, in the judgment of the underv/riter, material 
 to the question ") ; Beachey v. Brown (1860), E. B. & E. 796 (per Crompton, J., at p. 803 : 
 " I do not think that non-disclosure of a fact which is material in the mind of the defendant " 
 —who in that case was setting up non-disclosure as an answer to an action for 
 breach of promise of marriage — " is enough "). 
 
 (r) Lindenau v. Desborowgh (1828), 8 B. & C. 586, a life insurance case, per Baylby, J., 
 at p. 592 (" the proper question is, whether any particular circumstance was in fact material, 
 
 B.N.D. O 
 
18 CH. II, SECT. 2, suB-s. (2) ; Sect. 3. 
 
 charged, or of the party compIairiiBg, which indicate a belief or consciousness 
 on his part that the withheld fact was, or was not, material, as the case may 
 be, may be sufficient to turn the scale against him (s). The mere individual 
 views of a witness as to the materiality of a fact, as distinguished from his 
 evidence as to the general belief and practice of men engaged in the trade to 
 which the transaction ia question belongs, is equally without significance (t). 
 
 and not whether the party beheved it to be so. The contrary doctrine would lead to 
 frequent suppression of information, and it would often be extremely difficult to show 
 that the party neglecting to give the information thought it material "), and per 
 LiTTLEDALE, J., at p. 593 ("the question on such a policy is not whether a certain 
 individual thought a particular fact material, but whether it was in fact material, 
 and of that the jury are by law constituted the judges ") ; RaiUon v. Mathews and Leonard 
 (1844), 10 CI. & F. 934 (a suretyship case), per Lord Campbell, at p. 944 ; Dalglish v. 
 Jarvie (1850), 2 Maon. & G. 231, per Rolfe, B., at p. 243 (" in cases of insurance, a party 
 ia required not only to state all matters within his knowledge which he believes to be 
 material to the question of insurance, but aU which in point of fact are so ") ; Bates v. 
 Hewitt (1867), L. R. 2 Q. B. 595, a marine insurance case, per Cockburn, C.J., at p. 607 
 ("it is immaterial whether the omission to communicate a material fact arose from . . . 
 its not being present to the mind of the assured that the fact was one which it was material 
 to be made known ") ; Imperial Mercantile Credit Association v. Coleman (1873), L.R. 
 6 H. L. 189, a principal and agent case {per Lord Cairns at pp. 209, 210) ; London Assur- 
 ance Co. V. Mansel (1879), 11 C. D. 363, a life insurance case {per Jessel, M.R., at p. 368) ; 
 Brownlie v. Campbell (1880), 5 App. Cas. 925, H. L., per Lord Blackburn at p. 954 
 ("the concealment of a material circumstance known to you, whether you thought it 
 material or not, avoids the policy ") ; Grant v. Gold Exploration and Development Syndicate, 
 [1900] 1 Q. B. 233, C. A., a principal and agent case {per CoLLnsrs, L.J., at pp. 248-250) ; 
 Joel V. Law Union and Croum Insurance Co., [1908] 2 K. B. 863, C. A., a life insurance 
 case {per MotrLTON, L.J., at p. 885). 
 
 {s) In the following cases, acts and conduct of the party charged, evidencing a con- 
 sciousness or suspicion on his part of materiahty, were held to conclude the issue of materi- 
 ahty in fact (which otherwise might have been doubtful) against such party : Ellard v. 
 Lord Llandaff {ISIO), 1 BaU & Beatty, 241 ; 12 R. R. 22, where Lord Manners, L.C. (Jr.), at 
 pp. 248, 249, refers to a variety of expressions used by the party charged, and his conduct 
 generally, and, at p. 149, concludes : "is not this decisive to show that in the opinion of 
 the plaintiff this was a material fact ? ", the plaintiff being the party charged, and on this 
 consciousness he founds his decision that the undisclosed circumstances were in point 
 of fact material, a decision at which he would not probably have otherwise arrived, and 
 which, indeed, even so, has not escaped much adverse criticism ; Bufe v. Turner (1815), 
 6 Taunt. 338, a fire insurance case, which is abstracted in note {w) to § 104, post, in which 
 the assured by his mode of dealing with the situation evinced a keen sense of the materiality 
 of a iire in neighbouring premises to his own, and of the force and applicability of tua res 
 agitur, paries cum proximus ardet ; Russell v. Thornton (1859), 4 H. & N. 788, a marine 
 insurance case, per Channell, B., at pp. 802, 803 ("the plaintiff himself, in communi- 
 cating and sending a copy of it to his own agents . . . thought the information most 
 material ") ; British Equitable Insurance Co. v. G. W. My. Co. (1869), 38 L. J. Ch. 314 
 (a life insurance case, where the fact that the assured took, and believed, the opinion of a 
 specialist in preference to that of the general practitioner, was evidence of his own sense 
 of the gravity of the disease) ; London Assurance Co. v. Mansel, sup., per Jessel, M.R., 
 at pp. 371, 372 ; Tate A Sons v. Hyslop (1885), 15 Q. B. D. 368, C.A., per Brett, M.R., 
 at pp. 375-377; Laing v. Union Marine Insurance Go. (1895), 1 Coram. Cas. 11, per 
 Mathew, J., at pp. 17, 18. Conversely, in Seaton v. Burnand, [1900] A. C. 135, H. L., the 
 fact that the party complaining had shown by his conduct that he did not regard the 
 undisclosed circumstances as material, and had directed his inquiries to, and concerned 
 himself with, circumstances of a different nature, which had been duly disclosed, was held 
 to be of considerable importance in arriving at the decision, which was adverse to the party 
 complaining (see the observations of Lord Halsbtjry, L.C, at pp. 139, 141, 142, Lord 
 Shand at pp. 146, 147, and Lord Brampton at p. 148) ; Broome v. Speak, [1903] 1 Ch. 
 586, C. A. {per Collins, M.R., at p. 614), as to a prospectus. 
 
 (t) See Berthon v. Loughman (1817), 2 Stark. 258, a marine insurance case, where 
 HoLROYD, J., at p. 259, in directing the jury, said: "whether particular facts, if dis- 
 closed to an underwriter, would, in the opinion of a witness, or as a matter of judgment, 
 make a difference in the amount of premium is, I think, admissible evidence," but was 
 
§§ 33-35 (knowledge). 19 
 
 Similar rules prevail in the law of misrepresentation, witli regard to tlie views 
 of parties as to the materiality of a statement (m), and in the law of defamation, 
 with regard to the views of parties and witnesses as to the meaning of the 
 alleged defamatory matter («). 
 
 34. As will be explained hereafter in detail, materiality is a question of 
 fact {iv), the burden of establishing which is on the party complaining (a;). 
 
 Sect. 3. Knowledge. 
 
 35. The question of the knowledge (actual or presumptive) possessed by 
 either of the parties to a contract or transaction involving a duty of disclosure, 
 as to the existence of the facts which in the particular case are the subject of 
 the duty, is of obvious and vital importance. In a treatise of high merit and 
 authority (y), concealment or non-disclosure is said to exist " where one party 
 suppresses or neglects to commimicate to the other a material fact which, 
 if communicated, would tend directly to prevent the other from entering 
 into the contract, or to induce him to demand terms more favourable to 
 himself, and which is known, or presumed to be so, to the party not dis- 
 closing it, and is not known, or presumed to be so, to the other." This 
 definition involves three propositions : — (i) that non-disclosuie of what is 
 known to the party complaining is not actionable, for scientia utrinque par 
 pares contrahentes facit, (ii) that non-disclosure of what is not known to 
 the party charged is equally devoid of legal consequences, for ignorantia 
 utrinque par pares contrahentes facit (2), and (iii) that knowledge may be 
 actual or presumed. In every case, therefore, it must appear that the 
 material fact undisclosed was within the knowledge of the one party, and 
 without the knowledge of the other. Further, in cases where express or 
 implied waiver is set up as an answer to an allegation of non-disclosure, or 
 where affirmation or confirmation is suggested as a bar to relief (a), knowledge 
 of all material facts on the part of the party alleged to have waived the dis- 
 closure, or to have affirmed or confirmed the contract or transaction, must 
 
 careful to add : " the question is not what the private opinion of the individual may be 
 as to the probable course of his conduct in a particular case, but what in his judgment 
 the general opinion would be amongst those conversant with such matters. " So also, in 
 Glasgow Assurance Corporation v. William Symondson & Co. (1911), 104 L. T. 254, 
 ScBTJTTON, J., points out that, in marine insurance, it is the opinion of the prudent insurer 
 which counts, and not that of the general pubho (p. 257). See also Traill v. Saririg (1864), 
 4 De G. J. & S. 318 (per Tuener, L.J., at p. 330). 
 
 (u) See §§ 127, 128 of the author's Law of Actionable Misrepresentation. 
 
 (v) See Article 17 (5) of the author's Code of the Law of Actionable Defamation. 
 
 {w) This topic is dealt with in Ch. Ill, Sect. 6, Sub-s. (1), and in Ch. IV, Sect. 6, post. 
 
 (x) See § 174, post. 
 
 ly) Phillips on Insurance, § 531. The proposition cited in the text, though intended 
 to be applied immediately to cases of insurance, is so worded as to admit of a general 
 application to aU classes of case which involve the duty of disclosure. Vid. note (a) to 
 § 629, post, as to Lord Esheb's high opinion of Phillips as a clear and precise expounder 
 of legal principles. 
 
 (2) See the observation of Bbamwell, L.J., at p. 464 of Bradford v. Symondson (1881), 
 7 Q. B. D. 456, C. A. ^ " if it is true " — i.e. that the party is not liable for non-disclosure 
 — " when both parties know, it is equally true when they do not." 
 
 (a) See Ch. Ill, Sect. 4, Sub-ss. (2) and (4), Ch. IV, Sect. 4, Sub-ss. (3) and (4), and 
 Ch. V, Sect. 4, Sub-s. (3), post. 
 
20 CH. II, SECT. 3, SUB-SS. (1), (2). 
 
 be clearly establislied. Again, where it is a question of tlie rights and 
 liabilities of an assignee of a contract alleged to be voidable for non- 
 disclosure, the assignee's notice, or want of notice, of the non-disclosure set 
 up as a ground for such voidability may be, or become, of the utmost 
 materiality (6). From all these points of view, knowledge or notice must 
 always be a subject of vital concern in every transaction or relation giving 
 rise to a duty of disclosure, and, as such, demands special examination at 
 the outset. 
 
 Subs. (1). Actual and Presumptive Knowledge. 
 
 36. Knowledge may be either a fact, to be established by evidence, like 
 any other fact ; or it may be deemed in law to have existed, without proof 
 as a fact. The former class of knowledge is usually called " actual " know- 
 ledge or notice, though the epithet has been extended by some authorities to 
 certain species of the other class : the latter has been termed " constructive," 
 " imputed," or " presumed," knowledge or notice. These expressions, how- 
 ever, have been used in so many different senses, and have been so variously 
 distinguished from one another, at difierent times and by difierent judges 
 and jurists — as will be indicated hereafter (c) — that it is necessary to state 
 at once the terminology intended to be adopted and adhered to in this treatise, 
 which is as follows. Wherever the term " actual " knowledge is used in this 
 work, it means actual and personal knowledge. Every other kind of knowledge 
 will be comprised under the general name of " presumptive " knowledge, 
 of which there are the several species enumerated below (d). 
 
 37. Actual knowledge or notice, in the above sense, when alleged, must 
 be strictly proved as a fact by evidence. That is to say, the fact of which 
 the actual knowledge is set up must be shown to have been personally, 
 and not vicariously, known to the person to whom it is attributed (e), and 
 actually present to his mind at the material date (/). 
 
 38. Presumptive knowledge consists of five species, which may be stated 
 broadly and summarily as follows : — 
 
 (b) See Ch. Ill, Sect. 7, Ch. IV, Sect. 7, and Ch. V, Sect. 7, post. 
 
 (c) §§ 644, 645, App. A, Sect. 4, post, 
 {d) See § 38, inf. 
 
 (e) Saffron Walden Second Benefit Building Society v. Sayner (1880), 14 C. D. 406, C. A. 
 (per James, L.J., at pp. 410^12, Baggat.t.ay, L.J., at p. 414, and Bkamwell, L.J., at 
 pp. 417, 418). Cp. what is said by Lord Cottenham, L.C, at pp. 623, 624 of Wilde v. 
 Gibson (1848), 1 H. L. C. 605, as to the irrelevance of a suggested case of constructive notice, 
 where personal notice is distinctly alleged, and made the sole foundation of the claim to 
 reUef. 
 
 ( / ) In Bates v. Hewitt (1867), L. R. 2 Q. B. 595, it was pointed out by Cockbubk-, C.J., 
 at p. 605, that the party charged had failed to prove that the party complaining knew that 
 the S.S. "Georgia," the subject of the policy, had been the notorious Confederate cruiser of 
 that name, it appearing that though he had at one time known the history of the Confede- 
 rate " Georgia," he had, at the date of the insurance, forgotten it, so that the knowledge in 
 question was not then present to his mind, and it was the duty of the party charged to bring 
 home to him such information as would enable him to identify the vessel, in which duty 
 he had failed. Cp. Ellis v. Sogers (1885), 29 C. D. 661, C. A., a vendor and purchaser case, 
 where the purchaser knew of the restrictive covenants, the suppression of which he com- 
 plained of, but did not know or believe that they were operative at the time : per Cotton, 
 L.J., at p. 671 ; Nocton v. Lord Ashburton, [1914] A. C. 932, H.L. (per Lord Dunedin at. 
 p. 962), a solicitor and client case. 
 
§§ 35-39 (knowledge ). 21 
 
 (i) Facts of public notoriety, and rules and principles of general applica- 
 tion in ordinary life, are presumed without proof to be within the 
 knowledge of both parties : 
 
 (ii) The law presumes, without proof, knowledge of all facts which, in 
 the course of his business, the party ought to be acquainted with : 
 
 (iii) From the proved actual knowledge of a fact by an agent, if lie be 
 " an agent to know," the law infers, without proof, a knowledge of 
 that fact on the part of his principal : 
 
 (iv) From the proved actual knowledge by a party of a fact, the law 
 infers, without proof, a knowledge by that party of any further 
 fact to which, the actual knowledge of the first fact would naturally 
 have led, or which such inquiries as wore reasonable under the 
 circumstances would have elicited : 
 (v) By virtue of certain enactments, the legislature imputes knowledge 
 of certain facts to the persons, and under the conditions, prescribed. 
 
 These several species form the subject of separate and successive treatment 
 in the next five sub-sections (g). 
 
 Suh-s. (2). Presumptive Knowledge of Blatters of General Notoriety. 
 
 39. For the purposes of the duty of disclosure, any party to a contract 
 or transaction is presumed to be acquainted with all matters of general 
 notoriety (A), whether the notoriety extends to the entire coromunity, or only 
 to a class or section of the public, if the class or section is one to which the 
 party to whomtbe knowledge is imputed belongs [i), or to a locality or district, 
 if it is one in which the party to whom the local knowledge is ascribed either 
 carries on business or resides, as the case may be {ii). 
 
 (gf) The two first of these classes, in relation to marine insurance, are dealt with in the 
 famous judgment of Lord Mansfield, C.J., in Carter v. Boehm (1766), 3 Burr. 1905, at 
 pp. 1910, 1911 ; also by Cockbtirn, C.J., at pp. 605, 607, Melloe, J., at pp. 609, 610, and 
 Shteb, J., at pp. 610, 611 of Bates v. Hewitt, sup. ; by Cockbtjbn, C.J., at p. 757 of Gandy v. 
 Adelaide Marine Insurance Co. (1871), L. R. 6 Q. B. 746; and in s. 18 of the Marine 
 Insurance Act, 1906. The third and fourth are summarily described by Lord Eldon, L.C, 
 at p. 120 of Hiern v. Mill (1806), 13 Ves. 114. 
 
 (h) See the citations from the marine insurance cases cited in the last note, and s. 18, 
 sub-s. (3) (b) of the Marine Insurance Act, 1906, whereby it is provided that " the insurer 
 is presumed to know matters of common notoriety or knowledge." It is true that in the 
 corresponding provision in this Act relating to the presumed knowledge of the assured — 
 s. 18, sub-s. (1) — there is no express mention of such matters, but they are probably 
 intended to be included in the general phrase " every circumstance which, in the ordinary 
 course of business, ought to be known to him." 
 
 (i) This in Durrell v. Bederley (1816), Holt N. P. 283 ; 17 R. R. 639, a marine insurance 
 case, " the current knowledge of Jersey " as to a French frigate which had made captures 
 on that coast, was imputed to the plaintiif who was the party charged (for he carried on 
 his business there), but was not imputed to the party complaining, the underwriter in 
 London, for " the underwriters could kaow nothing of it " (per GiBBS, C.J., at p. 286). See 
 also Harrower v. Hutchinson (1870), L. R. 5 Q. B. 584, Exch. Ch., per Kelly, C.B., at 
 pp. 591-593, as to the presumption of an underwriter's knowledge of the local regulations 
 of foreign States. Again, in Edwards v. Meyrick (1842), 2 Hare, 60, a solicitor and client 
 case, WiGKAM, V.-C, at pp. 73-75, pointed out that the solicitor was not bound to caU his 
 client's attention to the speculative possibility that a railway, which in the district where 
 the parties resided was known to be in contemplation, might improve the value of the 
 land which was the subject of the action. 
 
 [ii) Thus, in vendor and purchaser cases, the purchaser is presumed to know, if resident 
 
22 CH. II, SECT. 3, SUB-S. (2). 
 
 40. Amongst matters of sucli general notoriety that every person of 
 average education and ordinary intelligence is deemed to be cognizant of 
 them, and of which no person can be heard to assert his ignorance, whether 
 such ignorance actually exists or not, are " general topics of specalation ; 
 as, for instance," in cases of marine insurance, " the underwriter is bound to 
 know every cause which may occasion natural perils ; as the difficulty of 
 the voyages — ^the kind of seasons — ^the probability of lightning, hurricanes, 
 earthquakes, etc. He is bound to know every cause which may occasion 
 political perils, from war, and the various operations of it. . . . Men argue 
 difierently from natural phenomena and political appearances : . . . but 
 the means of information are open to both : each professes to act from his 
 own skill and capacity ; and, therefore, neither needs to communicate to the 
 other " {j). And, in addition to the ordinary physical laws and phenomena 
 above referred to, a knowledge would probably be imputed to either party 
 of all such elementary and general rules of mathematical and other sciences, 
 as may be supposed to be within the limits of the ordinary education of a 
 normal person : but not of any method of calculation or scientific principle 
 going a step beyond these limits. Thus the borrower of money from a money- 
 lender is not presumed to appreciate, without explanation, the efiect on the 
 rate of interest charged of a clause in the contract providing for the whole 
 amount becoming due on failure to pay any one instalment, and the money - 
 lender has no right to assume that the borrower is mathematician enough to 
 make the necessary calculation {k) ; and probably, though the two ancient 
 authorities on the point do not ofier much guidance, an appreciation of the 
 
 in the locality, all those features of the property sold which are within the physical 
 cognizance of the neighbourhood : see Bowles v. Round (1800), 5 Ves. 508, where to an 
 action for specific performance of an agreement to purchase a meadow the defence was 
 non-disclosure of the fact that there was a way round it, and a footpath across it, which 
 Lord LoTTGHBOBOirGH, L.C., disposed of by the observation, at p. 509 : " certainly the 
 meadow is very much the worse for a road going through it ; but I cannot help the care- 
 lessness of the purchaser, who does not choose to enq[uire. It is moi a latent defect." But 
 it must be remembered that, in such cases, no more knowledge is imputed even to a 
 resident than " what any person going over the property would acquire from ocular 
 inspection " : per ICindebsley, V.C., at p. 431 of Brandling v. Plummer (1854), 2 Drew. 
 427 ; 100 B. R. 209. See also Pimm v. Lewis (1862), 2 F. & P. 778, where one party was 
 presumed to know that the other party was in the habit of grinding rice-chaff in his mill 
 (which was the undisclosed fact), since the practice was public and open, and the parties 
 were neighbours. Chitty, J., at pp. 408, 409 of AsMurner v. Sewell, [1891] 3 Ch. 405, 
 states very clearly the rule as to " patent defects " of which knowledge is presumed, and 
 " latent defects " of which no knowledge is presumed, in particular reference to rights of 
 way. The case before him was one of latent defect. With the above may be usefully 
 contrasted those " objects of sense " cases where a positive misrepresentation has been 
 made, and where therefore the presumption is excluded, or at least is much less readily 
 made. See note (I) to § 209 of the author's Law of Actionable Misrepresentation. Cp. also 
 the " latent defect " cases cited in notes (t) and (v) to § 118, post. 
 
 (j) Garter V. Boehm (1766), 3 Burr. 1905, per Lord Mausfibld, C.J., at pp. 1910, 1911. 
 Cp. Bates v. Hewitt (1867), L. R. 2 Q. B. 595, and Harrower v. Hutchinson (1870), L. R. 
 5 Q. B. 584, Exch. Ch., per Kelly, C.B., at pp. 591-593, as to the presumption that 
 underwriters are acquainted with (inter alia) matters of political, geographical, and marine 
 information in general. 
 
 (k) Harris v. Clarson (1910), 27 T. L. R. 30 (per Channell, J.) ; London and West- 
 minster Loan and Discount Co. v. Bilton (1911), 27 T. L. R. 184 (per Joyce, J.) ; Stirling v. 
 Hose (1913), 30 T. L. R. 67. 
 
§§ 40, 41 (presumptive knowledge). 23 
 
 terrific results of applying to an everyday transaction even such a simple 
 mathematical law as that of geometrical progression is not to be attributed 
 to the ordinary or normal person (1). This " normal person" whose capacity 
 is made the standard of the kind of presumptive knowledge now under 
 consideration, is neither an idiot nor a genius : he is " the man in the 
 street," the average citizen, " the prudent man" in business, the Aristotelian 
 " tjipovijxos " (m). In the Digest the rule as to the normal person is thus 
 stated : " Facti ignorantia ita demum cuique non nocet si non ei summa 
 negligentia objiciatur. Quid enim si omnes in civitate sciant quod ille solus 
 ignorat ? Et recte Labeo definit scientiam neque curiosissimi neque negli- 
 gentissimi hominis accipiendam " (m). 
 
 41 . The general principles of the corpus juris are presumed to be within 
 the cognizance of every citizen, not because they form part of his ordinary 
 education, but on grounds of public policy (o). This, however, does not 
 mean that a party is deemed to know and appreciate questions relating to 
 particular titles, estates, and interests, or the rights and liabilities flowing 
 from a particular contract or transaction {p). Indeed it is the non-disclosure 
 of such matters which forms one of the most important and frequent grounds 
 for avoiding releases, compromises (q), contracts or transactions between 
 trustee and cestui que trust (r), between principal and agent (s), and, 
 generally, between parties standing in a fiduciary relation to one another (t) , 
 and for refusing to give efiect to pleas of waiver (m) or affirmation [v). 
 
 (l) The two authorities referred to are James v. Morgan (1674), 1 Lev. Ill ; 1 Keb. 569, 
 and Thorriborow v. Whitacre (1705), 2 Ld. Raym. 1164 ; 6 Mod. 305. They are abstracted 
 and discussed in Ch. III., Sect. 8, Sub-s. (1), post. 
 
 (m) See the Ethics, passim. As to the like characteristics of the " normal person," for 
 the purpose of determining questions as to the meaning of alleged defamatory matter, see 
 the author's Code of the Law of Actionable Defamation, Article 15, note (m), and App. VI, 
 Sect. 1. 
 
 (™) Dig. 22. 6. 9. 2. The passage is cited by Khtght-Brtjcb, L. J., at p. 687 of Beynell v. 
 Sprye (1852), 1 De G. M. & G. 660. 
 
 (o) Cooper v. Phibbs (1867), L. R. 2 H. L. 149, per Lord Westbtjry, at p. 170 ; The 
 Bedouin, [1894] P. 1 {per Lord Eshbb, M.R., at p. 12 : " the assured is not bound to tell the 
 underwriter what the law is "). A party has thus been presumed to be acquainted with 
 even the general principles of local government law : see Be Leyland and Taylor'' s Contract, 
 [1900] 2 Ch. 625, C. A. {per Lord Alvbkstonb, M.R., at p. 630). The rule of Roman 
 jurisprudence was that knowledge of law was imputed to one who had access to a juris- 
 consult, or was one himself : see Dig. 22. 6. 9. 3 (" sed juris ignorantiam non prodesse 
 Labeo ita acoipiendum existimat, si juris consulti copiam haberet, vel sul prudentia 
 instructus sit, ut cui facile sit scire, ei detrimento sit juris ignorantia ; quod rar6 accipi- 
 endum est ") — ^a passage which is also cited by Knight- Betjoe, L.J., in Beynell v. Sprye, 
 ubi sup. It should be rioted here that an ambassador or diplomatic agent is excepted 
 from the presumption, and no knowledge even of the general law of this country can be 
 imputed to him : Be Bepublic of Bolivia Exploration Syndicate, [1914] 1 Ch. 139 (per 
 ASTBTJBY, J., at p. 156). 
 
 (p) Beynell v. Sprye, sup., per Knight-Betjoe, L.J., at p. 687, and Lord Crakwoeth, 
 L.J., at p. 710 ; Cooper v. Phibbs, sup. ; with which compare §§ 41, 42 of the author's 
 Law of ActionahU Misrepresentation, as to misstatements of law. 
 
 {q) See Ch. IIL Sect. 2, Sub-s. (5), post. 
 
 (r) See Ch. IV, Sect. 2, Sub-s. (1), post. 
 
 («) See Ch. IV, Sect. 2, Sub-s. (3), post. 
 
 {t) See Ch. V, post. 
 
 {u) See §§ 201-208, post. 
 
 {v) See §§ 209-215, 372, 373, 480, 481, post. 
 
24 CH. II, SECT. 3, SUB-S. (3). 
 
 Subs. (3). Presumptive Knowledge of Facts and Usages peculiar to the 
 Business or Transaction. 
 
 42. Apart from matters of general notoriety, the parties to any contract 
 or transaction as to which a duty of disclosure exists are presumed in law to 
 be acquainted with all such facts, circumstances, practices, and usages as form 
 part of the common stock of knowledge, or are current in the particular 
 business which either of them carries on, and to have all such notice as is, 
 so to speak, inherent in the nature of the contract or transaction in which 
 they are engaged, or contemplate being engaged (w). Thus, in the department 
 of marine insurance, which is the most fruitful in illustrations of the species 
 of presumptive knowledge now under discussion, the underwriter is " presumed 
 to know . . . matters which an insurer, in the ordinary course of his business, 
 as such, ought to know " (x) ; and amongst such matters are the practices 
 and customs of the trade or business of the assured in relation to the subject 
 of the insurance (y), the situation and local usages of ports (z), the ordinary 
 
 (w) Carter v. Boehm (1766), 3 Burr. 1905, per Lord Mansfield, C.J., at pp. 1910, 1911 
 (" if an underwriter insures private ships of war, ... he needs not to be told the secret 
 ■enterprises they are destined upon, because he knows some expedition must be in view, 
 and from the nature of the contract, without being told, he waives the information ") ; 
 Hiern v. MiU (1806), 13 Ves. 114, per Lord Ekskinb, L.C, who dealing with instances of 
 constructive notice, says at p. 120 : " another case is where the law imputes that notice 
 which, from the nature of the transaction, every person of ordinary prudence must 
 necessarily have " ; Wythes v. Labouchere (1859), 3 De G. & J. 593, per Lord Chelmsford, 
 L.C, at p. 610. 
 
 (x) Marine Insurance Act, 1906, o. 18, sub-s. (3) (b). 
 
 iy) " Every underwriter is presumed to be acquainted with the practice of the trade he 
 insures, and that whether it is established or not. If he does not know it, he ought to 
 inform himseK " : per Lord Maitsiteld, C.J., at p. 512 of Nohle v. Kennaway (1780), 
 2 Dougl. (k.b.) 510. If, however. Lord Mansfield intended by the words " whether 
 established or not " to lay down that an underwriter has presumptive knowledge of every 
 usage or practice, however recent, he was to this extent in conflict with later authority 
 (see note (h) to § 43, post), and was certainly wrong. The usage or practice of which know- 
 ledge was imputed in that case was one which prevailed in the Newfoundland fishing trade, 
 and so also in Ougier v. Jennings (1800), 1 Campb. 504 u., per Lobd Eldon, C.J., and in 
 Vallance v. Dewar (1808), I Campb. 503, per Lord Ellenbokough, C.J., at p. 506 ("the 
 broker must communicate what is in the special knowledge of the assured, not what is in 
 the middle between them and the underwriters " : the usage there, which was " in the 
 middle between " the parties was the custom of employing the ship in " banking " or fishing 
 on the bank of Newfoundland). In Salvador v. Hopkins (1765), 3 Burr. 1707, Lord 
 Mansfield, C. J., at p. 1715, characterized " the usage of the East India Company's trade, 
 and the course of their voyages " as " a fact notorious, and so well known both to the 
 insurers and the insured that they must be supposed fully apprized and suflBciently 
 conversant of it " ; in Foley v. Tahor (1861), 2 F. & P. 106, the underwriter was deemed to 
 have presumptive notice of the fact that railways were then being constructed in India, 
 and that most trading ships going to Kurrachee carried cargoes of iron for that purpose. 
 Eor other practices of which a knowledge was imputed to the underwriter, see Da Gosta v. 
 Edwards (1815), 4 Campb. 142 (mode of loading and stowing carboys of vitriol) ; Stewart v. 
 Bell (1821), 5 B. & Aid. 238, per Cur. at p. 239 ("the underwriter is presumed to be 
 acquainted with the usual course of the voyage," and " should enquire, therefore, what is 
 the usual mode of landing the goods insured. Here it appears to have been the usage to 
 tranship the goods into shallops ") ; Tate tb Sons v. Hyslop (1885), 15 Q. B. D. 
 368, C. A., where, per Bebtt, M.R., at p. 378, it was recognized that if it had been proved, 
 which it had not, that there was a general practice amongst sugar refiners to employ 
 lightermen on terms of restricted liability, the underwriters would have been presumed 
 cognizant thereof. 
 
 (z) See Kingston v. Knibbs (1809), 1 Campb. 508 n. (custom to take in part of the cargo 
 inside, and the remainder outside, the bar of Oporto) ; Stewart v. Bell, sup. (practice in 
 
§ 42 (presumptive knowledge). 25 
 
 clauses and provisions of ctarter-parties and otiier commercial instruments 
 
 used for purposes of marine adventures, or in the particular trade of tlie 
 
 vessel insured (a) , as well as the rules and practice of underwriters generally (b), 
 
 and all such facts as may be gleaned from the usual sources of information 
 
 available to an underwriter in his business ; such as Lloyd's Shipping Lists and 
 
 Eegisters, and the like (c). So also, in principal and agent cases, the principal 
 
 Jamaica, for vessels drawing a certain amount of water to discharge their cargo at Port 
 Morant into shallops, and tranship to the place required) ; Harrmver v. Hutchinson (1870), 
 L. B. 5 Q. B. 584, Exch. Ch. {per Kelly, C.B., at pp. 591-593, as to an underwriter's 
 presumptive acquaintance with the situation of recognized ports generally, and local 
 regulations, &c.). 
 
 (a) See Salvador v. Hopkins (1765), 3 Burr. 1707 (charter-party in a well-known printed 
 form — per Lord Mansfield, C.J., at p. 1715) ; The Bedouin, [1894] P. 1, C. A. (the common 
 " 24 hours " clause in a time-charter : per Lord Esher, M.R., at pp. 12, 13) ; Charlesworth 
 V. Faher (1900), 5 Comm. Gas. 408 (per Bigham, J., at pp. 411, 412, as to Clause 7 of the 
 '" Elder Dempster & Co.'s Clauses," which was proved to be in common use). 
 
 (5) See Bates v. Hewitt (1867), L. B. 2 Q. B. 595 (per Shee, J., at p. 610 : " he is not 
 bound to communicate facts or circumstances which are within the ordinary professional 
 knowledge of an underwriter ") ; Oandy v. Adelaide Marine Insurance Go. (1871), L. B. 
 6 Q. B. 746 (rules of Lloyd's as to classification of ships ; per Melloe, J., delivering the 
 judgment of the majority of the Court, at p. 755 : " primd facie we should think that every 
 underwriter who relies upon the classification of a ship in Lloyd's Register, as determining 
 the rate of insurance, ought to be acquainted with the rules and practice which give the 
 classification its value "). 
 
 (c) It was laid down generally in Friere v. Woodhouse (1816), Holt N. P. 572 ; 17 B. B. 
 679, per Bueegtjgh, J., at p. 573, that " what the underwriters by fair inquiry or due 
 diligence may learn from the ordinary sources of information need not be disclosed," and, 
 as regards the similarly presumed knowledge of the assured, by the Court of Q.B., 
 at pp. 521, 522 of Proudfoot v. Montefiore (1867), L. B. 2 Q. B. 511, that " the insurer is 
 entitled to assume, as the basis of the contract between him and the assured, that . . . 
 the latter will take the necessary measures ... to obtain, through the ordinary channels 
 of intelligence in use in the mercantile world, all due information as to the subject-matter 
 of the insurance," and by Lord Halsetjry, L.C, at pp. 536, 537 of Blackburn, Low tfc 
 Co. V. Vigors (1877), 12 App. Cas. 531, H. L., that " when a man comes for insurance on 
 his ship, he may be expected to know both the then condition and the history of the ship 
 he seeks to insure." As to Lloyd's Lists and Registers, and the knowledge of their contents 
 which is imputed to underwriters, see Friere v. Woodhouse, sup. ; Mackintosh d; Dreyer v. 
 Marshall (1843), 11 M. & W. 116 (where it was recognized that, but for the positive mis- 
 representation which was proved there, the knowledge in question would have been 
 presumed, per Lord Abinger, C.B., at p. 127 : " the materiality of such a document at 
 Lloyd's depends entirely on the silence of all parties respecting the date of the vessel's 
 sailing. When there is no wrong representation about it, no communication calculated 
 to mislead, then the document at Lloyd's is competent evidence where the means of know- 
 ledge are common to both. These are the only cases in which that document concludes 
 the underwriter ") ; Foley v. Tahor (1861), 2 P. & F. 663 (per Ekle, C.J., at p. 672, as to 
 the imputed knowledge of the nature of cargoes of vessels from a book for that purpose 
 kept at Lloyd's) ; Nicholson v. Power (1869), 20 L. T. 580, Exch. Ch., where the rule was 
 recognized, though it was held inapplicable to the circumstances of that case : see note (k) 
 to § 43, post; Leigh v. Adams (1871), 25 L. T. 566, per Cockbubn, C.J., at p. 569 ("it 
 has been laid down that the lists at Lloyd's are within the knowledge that every underwriter 
 is presumed to possess ") ; Oandy v. Adelaide Marine Insurance Go. (1871), L. R. 6 Q. B. 
 746 (Lloyd's Register of classification of ships). In Morrison v. Universal Marine 
 Insurance Co. (1872), L. R. 8 Exch. 40, it was said by the Court of Exchequer, per Mabtin, 
 B., at pp. 52, 53, that no one is presumed, as a matter of law, to carry in his head the 
 whole contents of Lloyd's Lists, and per Beamwell, B., at p. 54, that the only matters 
 of which a knowledge is imputed to the underwriter from those lists are " matters of 
 general knowledge, not matters relating to any particular ship." These pronouncements 
 are certainly not law. The decision itself was reversed by the Exchequer Chamber (1873), 
 L. R. 8 Exoh. 197, but the point in question was not there debated, there having been no 
 leave reserved to raise it. If it had been discussed, it can hardly be doubted that the 
 Exchequer Chamber would have disagreed with the Court of Exchequer on this question, 
 as well as on the others. 
 
26 CH. II, SECT. 3, SUB-SS. (3), (4). 
 
 is presumed to be cognizant of tlie well-known and established customs and 
 practices of the business in whicli the agent is employed as to discounts, 
 rebates, allowances, bonuses, and the like, and, where such presumptive know- 
 ledge exists, he is unable to establish against the agent a case of secret profit 
 or advantage (d). 
 
 43. The above rule, like all others emanating from the doctrine of con- 
 structive notice, is cautiously applied, and is hedged round with many and 
 stringent limitations. Thus, no knowledge is imputed of a custom which, 
 if given effect to, would alter the whole contractual relation between the 
 parties, and turn, for instance, an agent or broker into a vendor or pur- 
 chaser (e), nor of a practice or usage which is not honest (/). Again, there 
 is no presumed knowledge of a practice which is not clearly proved to have 
 existed, or which is only one of two or more general practices, and not the 
 general practice set up {g), nor of a usage which is of recent growth, and not 
 established (h), nor of unusual and novel clauses in mercantile instruments (hh), 
 nor of occasional and temporary regulations of foreign States in relation to 
 marine commerce (i). And, in cases of marine insurance, though the under- 
 writer is presumed to know the situation of foreign ports, he is not expected 
 to know of the existence or locality or dangers of places not established as 
 
 (d) Great Western Insurance Co. v. Cunliffe (1874), 9 Ch. App. 525, per Jambs, L.J., 
 at pp. 537, 538, and Melush, L.J., at pp. 539, 540 ; Baring v. Stanton (1876), 3 C. D. 502, 
 C. A. {per James, L. J., at p. 606, Melmsh, L. J., at p. 506, and Bagqallay, L. J., at p. 507) ; 
 Williamson v. Hine Brothers, [1891] I Ch. 390, C. A. (aa to the practice of paying commissions 
 on insurance premiums and apprentices' fees, per Kbkewich, J., affirmed by the C. A., at 
 p. 391) ; Re White and Smith's Contract, [1896] 1 Ch. 637 {per SimiAsa, J., at p. 642 : no 
 presumptive notice of custom in City of London to deposit leases with solicitors on sales 
 of leaseholds) ; Stiibbs v. Slater, [1910] 1 Ch. 632, C. A. (as to stockholder's charges, per 
 Cozbns-Habdy, M.R., at p. 642, and Joyce, J., at p. 648) ; Aston v. Kelsey, [1913] 3 K. B. 
 314, C. A. (the like) ; Blaker v. Hawes (1913), 109 L. T. 320 (the like). 
 
 (e) Brookman v. Rothschild (1831), 5 Bligh (N.S.) 165 ; Robinson v. Mollett (1875), 
 L. R. 7 H. L. 802. See also, generally, many of the cases cited in the notes to Ch. IV, 
 Sect. 2, Sub-s. (3), post. As to the reluctance of the Courts to extend the doctrine of 
 constructive notice, see §§ 77, 78, post. 
 
 (/) Brookman v. Rothschild, ubi sup., per Lord WYifEOED, at pp. 190, 201, 202; 
 Robinson v. Mollett, ubi sup., per Lord Chelmseord at pp. 837, 838, adopting the views of 
 the Judges who had been summoned to a concilium, and particularly those of Bbbtt, J., 
 at pp. 817-819, and 825 ; Hippisley v. Knee Brothers, [1905] 1 K. B. 1, Div. Ct., per Lord 
 Alveestone, C.J., at p. 7, and Kennedy, J., at p. 9. Here again, see several of the 
 cases cited in the notes to Ch. IV, Sect. 2, Sub-s. (3), post. 
 
 {g) Tate & Sons v. Hyshp (1885), 15 Q. B. D. 368, C. A., per Brett, M.R., at p. 378 ; 
 Williamson v. Hine Brothers, [1891] 1 Ch. 390, C. A., where the alleged custom of which it 
 was sought to impute knowledge to the party complaining (viz. a custom for the managing 
 owners of a vessel to retain for themselves brokerage on freights and charters procured by 
 them, as against the other owners) was not proved : per Kbkewich, J., at pp. 393, 394). 
 
 {h) narrower v. Hutchinson (1870), L. R. 5 Q. B. 584, Exch. Ch., per Kelly, C.B., 
 at p. 591 (" usages of trade can only exist in a known and established trade, and all the 
 analogies seem to show that the usages of trade mentioned . . . are confined to owners of 
 a known and established trade "). The dictum of Lord Mansfield, C.J., to the contrary 
 — see note {y) to § 42, ante — ^must be considered incorrect. 
 
 {hh) See Mercantile Steamship Co. v. Tyser (1881), 7 Q. B. D. 73 {per Colbridge, C.J., 
 at p. 77) ; Cockburn v. Edwards (1881), 18 C. D. 449, 455, 462, C. A. 
 
 (i) narrower v. Hutchinson, sup., per Kblly, C.B., at p. 591 (" a recent foreign trade 
 law . . . not known or presumed from its publicity or otherwise to be so to the under- 
 writer "), and again at p. 592 (" new and shifting regulations of foreign states by which 
 the property is exposed to seizure . . . cannot be presumed to be necessarily within the 
 knowledge of the underwriter "). 
 
§§ 42-44 (presumptive knowledge). 27 
 
 ports in general use (j). Nor is a party deemed to be acquainted with more 
 than the actual contents of any mercantile register, book, or instrument in 
 general use in the particular business, and such further facts as ought reason- 
 ably to be inferred therefrom by one carrying on that business : and in any 
 case where there is any undisclosed circumstance or detail, or unsupplied 
 information, which was necessary to give materiality and significance to 
 such contents, no knowledge is imputed to the party to whom the duty of 
 making the disclosure was owed, in favour of the party who was subject to 
 the obligation, and left it undischarged (k). 
 
 Subs. (4). Fresuniftive Knowledge through Agents. 
 
 44. For purposes of the law of disclosure, as for other purposes, it may 
 be stated generally, though perhaps somewhat elliptically (I), that the 
 
 (J) Harrmver v. HutcMnson, sup., where the plaintiff effected a policy of marine in- 
 surance on bone and bone ash on board a vessel " at and from Buenos Ayres and port or 
 porta of loading in the province of Buenos Ayres, to a port or ports of call and discharge 
 in the United Kingdom." The vessel sailed from Buenos Ayres to a place called Laguna 
 de lo3 Padres, in the province of Buenos Ayres, but being unable to get a cargo there, she 
 returned to Buenos Ajnres, and was lost on her way. There was no artificial port at the 
 place in question, which was merely a slaughter-house with a wooden jetty or pier, and a 
 roadstead in a bay formed by natural headlands. It was unknown to underwriters in 
 general as a place of loading, and there was no trade between it and Europe, though there 
 was a purely local trade between it and Buenos Ayres in hides, bones, &c. (p. 388). The 
 Exchequer Chamber, reversing the Q. B., held that though the defendant, as an under- 
 writer, was bound to know the situation of ports known to underwriters in general, or 
 in the trade generally, he was not presumed to know the situation or existence, or dangerous 
 character, of such a place as this (per Kelly, C.B., at pp. 592, 593, deHvering the judgment 
 of himself, Channell and Pigott, BB., and Byles and Brett, JJ.). See also Laing v. 
 Union Marine Insuranxie Co. (1895), 1 Com. Cas. 11, per Mathew, J., at pp. 17, 18, as to 
 the underwriter in that case not being affected with presumptive notice of the dangers and 
 difficulties of the port of Hongay in Japan. 
 
 (h) See Nicholson v. Power (1869), 20 L. T. 580, Exch. Ch. (where Cockbubn, C.J., at 
 p. 580, points out that, assuming that the underwriter had constructive notice of whatever 
 was shown by the announcement in Lloyd's Lists, all he could have learned from it was 
 that " a British barque with copper ore " was aground ; no knowledge could be imputed 
 to him of the identity of that barque with the " Pedro Eerrar," whose freight was 
 the subject of the pohcy, since the information required to enable this identification to 
 be made ought to have, but had not, been supphed by the assured) ; Leigh v. Adams 
 (1871), 25 L. T. 566, where the plaintiff's practice was to insure at Lloyd's cargoes of 
 cochineal shipped by him from the Canaries on floating policies, and to declare the name 
 of the ship upon receipt of each bill of lading. When effecting a policy on one of these 
 shipments he knew two facts, neither of which he disclosed, first, the existence of an 
 anonymous letter stating that the owners intended to lose a vessel called the " Candida " 
 on her next voyage, and secondly, that a cargo was to be shipped for him on board the 
 " Candida," though " he did not at that time know that this policy would apply to, or that 
 he should be able to declare the policy upon, the ' Candida ' " (per Cockbuen-, C.J., at 
 p. 569). The anonymous letter was posted up on a board at Lloyd's, but it was held that, 
 assuming the underwriter to have had presumptive knowledge of the contents of the letter 
 from the announcement so made, which was evidently thought a matter of considerable 
 doubt in the case of " a notice of this extraordinary and exceptional nature," such know- 
 ledge was utterly meaningless and valueless to him without the disclosure of the second 
 of the two undisclosed facts above mentioned ; and he was therefore held to have had no 
 presumptive knowledge of the material circumstances, and succeeded in his defence (per 
 Cockbuen-, C.J., at the same page). Cp. Laing v. Union Marine Insurance Co. (1895), 
 1 Comm. Cas. 11 (per Mathew, J., at p. 18, as to a statement in Lloyd's Shipping Index 
 that two vessels had sailed to Hongay, in Japan, not affecting the underwriter with 
 constructive knowledge of the character of that port). 
 
 (I) See § 646, post, as to the misleading character of these elliptical maxims and formulae. 
 
28 CH. II, SECT. 3, SUB-S. (4). 
 
 knowledge of the agent is tte knowledge of tte principal. This means that, 
 with certain qualifications and exceptions to be discussed presently (m), the 
 law imputes to any party to a contract or transaction knowledge of all facts 
 and circumstances of which any agent of his /or that purpose (n), and in that 
 contract or transaction (o), is actually or presumptively cognizant. The same 
 rule of course applies to partnership which is mutual agency (p). 
 
 45. Every legal presumption of the existence of a thing which is not 
 proved as a fact demands justification. The presumption now under dis- 
 cussion is based upon, and justified by, three theories, viz. (1) fairness as 
 between the parties, (2) public necessity and convenience, and (3) the strong 
 probability that, in the great majority of cases, the presumption is in accord- 
 ance with the fact. 
 
 46. In the iirst place, the imputation of the agent's knowledge to the 
 principal is said to be just and reasonable as between the parties, because 
 the principal selects the agent, and, for his own convenience and advantage, 
 puts his alter ego in a position to perform acts which may afiect the interests 
 of third parties. Qui sentit cominodum, sentire debet et onus. " It would be 
 a monstrous injustice," in any such case, " that I should have the advantage 
 of what he knows without the disadvantage " {q). 
 
 47. The second justification for the presumption is public policy, both 
 in the sense of mercantile convenience amounting almost to an absolute 
 necessity, and also in the sense of public morality. " Mankind," said Lord 
 Hatheeley, L.C, " would not be safe if it was held that, under such circum- 
 stances, a man had not notice of that which his agent has actual notice of . . . . 
 It cannot be left to the possibility or impossibility of the man who seeks to 
 afiect you with notice being able to prove that your solicitor " — the agent 
 in the case which elicited the proposition happened to be a solicitor — " did 
 his duty in communicating that which, according to the terms of your employ- 
 ment of him, was the very thing which you employed him to ascertain " (r). 
 
 (to) In § 57, jiost. 
 
 (») See §§ 49, 50, post. 
 
 (o) See §§ 53-56, post. 
 
 ip) See Sadler v. Lee (1843), 6 Beav. 324, 351 (the passage cited ia note (r), infra), 
 and Williamson v. Barber (1877), 9 C. D. 529 (per Jbssel, M.R., at p. 535). The rule is 
 codified, as regards partnership, in s. 16 of the Partnership Act, 1890 (53 & 54 Vict. o. 39) : 
 " notice to any partner who habitually acts in the partnership business of any matter 
 relating to the partnership affairs, operates as notice to the firm, except in the case of a 
 fraud on the firm committed by, or with the consent of, that partner." 
 
 (q) Boursot v. Savage (1866), L. B. 2 Eq. 134, per Kindbrslby, V.C, at p. 142. Cp. 
 Barioick v. English Joint Stock Bank (1867), L. R. 2 Exch. 259, 266, Exch. Ch. 
 
 (r) Bolland v. Hart (1871), 6 Ch. App. 678, at pp. 681, 682. Lord BKOtfGHAM, L.C, 
 also rests the doctrine on the ground of pubHo policy at p. 719 of Kennedy v. Green (1834), 
 3 My. & K. 699 (" policy, and the safety of the public, forbids a person to deny knowledge 
 while he is so dealing as to keep himself ignorant, . . . and yet aU the while let his agent 
 know, and himself perhaps profit by that knowledge "). Cp. Sadler v. Lee, sup., per 
 Lord Langdale, M.R., at p. 351 (" courts of justice, for the protection of those who deal 
 with partnerships, must impute the knowledge which the partners, acting in their interests 
 and in the discharge of their plain duty, might and ought to have obtained " ; Sharps 
 V. ^02/(1868), 4 Ch. App. 35, where Pagb-Wood, L.J., at p. 40, speaks of " the rule of 
 notice " as having been " established for the safety of mankind "). See also, in illustration 
 of the similar rule and theory in the law of misrepresentation, the cases cited in note (k) to 
 § 163 of the author's Law of Actionable Misrepresentation. 
 
§§ 44-49 (presumptive knowledge). 29 
 
 On the other hand, the requirements of public policy, in the strict sense 
 of public morals, are also insisted upon in certain weighty judgments, where 
 it is pointed out that, if the presumption in question be not made, and made 
 irrebuttably, the law would pander to perjury and fraud, and its ministers 
 would be continually engaged in the onerous and odious operation of un- 
 ravelling it by evidence (s). Public policy, however, in the latter sense does 
 not seem so convincing a foundation of the doctrine, as it does in the former ; 
 and, indeed, some of the forms which this ethical justification (i) has 
 assumed may appear a little strained and grotesque (u). 
 
 48. The third ground on which the rule is based is that the conditions 
 " beget a presumption so strong of actual knowledge, that the law holds the 
 knowledge to exist, because it is highly improbable it should not " (v), or, as 
 it has otherwise been expressed, that " the Court imputes " the knowledge 
 " to a party upon a presumption, so strong that it cannot be allowed to be 
 rebutted, that the knowledge must have been communicated " (w). 
 
 48. The presumption is made against either the party to whom the duty 
 of disclosure is owed {x), or to the party who owes the duty (y), as the case 
 
 (s) See Kennedy v. Green, sup., per Lord Bkotjoham, L.C, at p. 719 : " in such a case 
 it would be most iniq^uitous, and most dangerous, and give shelter and encouragement to 
 all kinds of fraud, were the law not to consider the knowledge of one as common to both, 
 whether it be so in -fact or not." So Fky, J., at p. 705 of KettleweU v. Watson (1882), 
 21 C. D. 685, said that where it is the duty of an agent to communicate a fact to his princi- 
 pal, " the Court always holds that he did communicate it, not because, in many cases he 
 did communicate it, but because, as I understand it, it would be too dangerous to inquire 
 whether the communication was really made ; it would open the door to perjury." 
 
 (t) See the language used by Lord Ellbnboeotjgh, C.J., at p. 38 of Gladstone v. King 
 (1813), 1 M. & S. 35 (" if the captain might be permitted to wiiik at these circumstances 
 without hazard to the owners, the latter would in all such cases instruct their captain to 
 remain silent ; by which means the underwriter, at the time of subscribing the poUcy, 
 would incur a certainty of being liable ") ; by the Court of Q. B. at p. 522 of Provdfoot v. 
 Montefiore (1847), L. R. 2 Q. B. 511 (" by thus holding, we shall prevent the tendency to 
 fraudulent concealment on the part of masters of vessels and agents at a distance, in 
 matters on which they ought to communicate information to their principals, as also any 
 tendency on the part of principals to encourage their servants and agents so to act ") ; 
 and by Ldtdley, L.J., at p. 576, and Lopbs, L.J., at p. 584, of Blackburn, Low <b Co. v. 
 Vigors (1886), 17 Q. B. D. 553, C. A. 
 
 {u) And they were emphatically repudiated by Lord Eshee, M.R., at pp. 570, 571, 
 of Blackburn, Low & Co. v. Vigors, sup., ui a judgment which was approved by the H. L., 
 (1887), 12 App. Cas. 531, H. L. (see, particularly, the observations of Lord Macnaghtbn 
 at p. 543), reversing the decision of the majority of the C. A. 
 
 (v) Per Lord Bbotjgham, L.C, at p. 719 of Kennedy v. Green (1834), 3 My. & K. 699. 
 (ttf) Per TuBNEB, V.C., at p. 455 of Hewitt v. Loosemoore (1851), 9 Hare, 449. Cp. 
 Kestdbrsley, V.C, at p. 142 of Boursot v. Savage (1866), L. R. 2 Eq. 134. 
 
 (x) Out of many illustrations, the following may be selected : Insurance : — Maynard v. 
 Rhodes (1824), 5 Dowl. & Ry. 266 ; 27 R. R. 526 ; Wing v. Harvey (1854), 5 De G. M. & G. 
 265 (per Knteght-Bbijcb, L.J., at p. 270, and Ttibnbb, L.J., at p. 271) ; Bawden v. London, 
 Edinburgh and Glasgow Assurance Co., [1893] 2 Q. B. 534, C. A. ; Hough v. Guardian Fire dt 
 Life Assurance Co. (1902), 18 T. L. R. 273 ; Holdsworth v. Lancashire d: Yorkshire In- 
 surance Co. (1907), 23 T. L. R. 521 [per Bbay, J., at pp. 523, 524) ; Thornton-Smith v. 
 Motor Union Insurance Co. (1913), 30 T. L. R. 139 : Transactions relating to 
 land : — Brotherton v. Hatt (1706), 2 Vern. 574 ; Toulmin v. Steere (1817), 3 Mer. 210 (per 
 Grant, M.R., at pp. 222, 224) ; Conveyancing Act, 1882 (45 & 46 Vict. o. 39), as cited 
 in § 66, post. Generally, see the cases cited in the notes to this Subsection. 
 
 (2/)'see, for illustrations — m marine insurance, Foley v. Tabor (1861), 2 F. & P. 663 
 (per Erlb, C. J., at p. 673, where knowledge was imputed to a partner) ; Proudfoot v. 
 Montefiore (1867), L. R. 2 Q. B. 511 ; Morrison v. Universal Marine Insurance Co. (1873), 
 
30 CH. II, SECT. 3, SUB-S. (4). 
 
 may require ; provided tliat the agent througli wlioni the knowledge is 
 imparted be an " agent to know," that is to say, an agent to communicate to 
 his principal such information as he either acquires or receives on his behalf 
 in the discharge of the duties of the agency (z). It is in this sense that, 
 notwithitanding Lord Esher's objection to the expression in any sense, it 
 is correct to say that the knowledge of the agent is the knowledge of the 
 principal (a) : but, in the case of a person who is not an agent to receive and 
 impart information, but merely to make the contract for his principal, the 
 phrase is not scientifically exact, since the doctrine of presumptive know- 
 ledge does not strictly apply to this class of agency, as such, at all. The 
 result, it is true, is precisely the same : that is to say, the party who is under 
 an obligation to disclose all material facts, is held to have failed in his duty 
 when the agent to whom he has committed the negotiation of the contract 
 has not made due disclosure, as much as when he has himself omitted to 
 disclose material facts within the knowledge of one who is his " agent to 
 know " : but the liability in the former case arises from the application of the 
 
 L. K. 8 Exoh. 197, Exoh. Ch. ; — in life insurance, Everett v. Desborough (1829), 5 Bing. 503 
 {per Best, C.J., at pp. 515, 516, and Pabke, J., at p. 518) ; — in sales and mortgages of 
 land, Gibson v. D'Este (1843), 2 Y. & C. (ch.) 542 (per Kniqht-Befce, V.C, at pp. 570, 
 571) ; Hepworth v. Pickles, [1900] 1 Ch. 108 (presumptive knowledge of solicitor through 
 possession of title-deeds deemed the knowledge of his client, per Eaewell, J., at p. Ill) ; 
 Dixon V. Winch, [1900] 1 Ch. 736, C. A. {per Lindlby, M.R., at p. 745). And, generally, 
 see the cases cited in the notes to this Sub-section. 
 
 {z) Eor illustrations of this class of agent, and of the imputation of his knowledge to 
 the principal, see Brotherton v. Halt (1706), 2 Vern. 574 (" all the securities being transacted 
 at the shop of . . . the scriveners, who were ... in the nature of agents to all the several 
 lenders ; notice to the agent is good notice to the party, and consequently they that lend 
 last must come last, having notice of what was before lent : " per Lord Keeper Nobth, at 
 pp. 573, 574) ; and the marine insurance cases of Fitzherhert v. Mather (1785), 1 Term Bep. 
 12 (consignor and shipper of goods) ; Gladstone v. King (1813), 1 M. & S. 35 (captain of 
 the vessel) ; Proudfoot v. Montejlore (1867), L. R. 2 Q. B. 511 (local business representative 
 of the assured). At pp. 537, 538 of Blackburn, Low dh Co. v. Vigors (1887), 12 App. Cas. 531, 
 Lord Halsbtjby, L.C., referring to the above illustrations, observes : " I cannot but think 
 that the somewhat vague use of the word ' agent ' leads to confusion. Some agents 
 so far represent the principal that in all respects their acts and their intentions and their 
 knowledge may be said to be the acts, intentions, and knowledge of the principal. Other 
 agents may have so limited and narrow an authority both in fact and in the common 
 understanding of their form of employment that it would be quite inaccurate to say that 
 such an agent's knowledge or intentions are the knowledge or intentions of his principal." 
 For examples of failure to prove an agency of the former kind, and therefore to establish 
 presumptive knowledge,see Saffron Walden Second Benefit Building Society v. Bayner (1880), 
 14 C. D. 406, C. A. (where it was held that the solicitor of trustees for certain purposes 
 is not the kind of agent whose knowledge of general matters wiU affect such trustees) ; 
 Tate & Sons v. Hyshp (1885), 15 Q. B. D. 368, C. A. (per Brett, M.R., at p. 374 : "a 
 solicitor is not a standing agent for one who has been, or may be, his client, to receive a 
 mercantile notice in respect of mercantile business ") ; Wilson v. Salamandra Assurance Co. 
 of St. Petersburg (1903), 8 Comm. Cas. 129 (an action by underwriters at Lloyd's on a 
 policy of reinsurance of a cargo of sugar with the defendants, where the actual knowledge 
 of Lloyd's agents at Gibraltar that the sugar was damaged was in vain sought to be im- 
 puted to the plaintiffs). Cp. the life insurance case of Levy v. Scottish Employers' Insur- 
 ance Co. (1901), 17 T. L. R. 229, Biv. Ct. 
 
 (a) Lord Esher's criticism is to be found at pp. 556-560 of Blackburn, Low <fc Co. v. 
 Vigors (1886), 17 Q. B. D. 553, C. A., and the observations of Lord Halsbuby, L. C.,are 
 at p. 537 of the same case in the H. L. ( 1887), 12 App. Cas. 531 ( " I am unable to accept the 
 criticism of the Master of the Rolls upon the proposition that the knowledge of the agent 
 is the knowledge of the principal. 'iVhere a person is the agent to know, his knowledge doee 
 bind the principal "). 
 
§§ 49, 50 (presumptive knowledge). 31 
 
 rule ' that a man cannot by delegating to an agent to do what he might do him- 
 self, obtain greater rights than if he did the thing himself " (b), rather than 
 from any theory of constructive notice. The distinction between the two 
 classes of case has nowhere been more lucidly explained than by Lord 
 Macnaghten in relation to marine insurance (c). " There is," he says, 
 " nothing unreasonable in imputing to a shipowner who effects an insurance 
 on his vessel the information with regard to his own property which the agent 
 to whom the management of that property is committed possessed at the 
 time, and might in the ordinary course of things have communicated to his 
 employer. In such a case it may be said without impropriety that the know- 
 ledge of the agent is the knowledge of the principal. But the case is difierent 
 when the agent whose knowledge it is sought to impute to the principal 
 is not the agent to whom the principal looked for information, but an agent 
 employed for the special purpose of effecting the insurance. It is quite true 
 that the insurance would be vitiated by concealment on the part of such an 
 agent, just as it would be by concealment on the part of the principal. But 
 that is not because the knowledge of the agent is to be imputed to the prin- 
 cipal, but because the agent of the assured is bound, as the principal is bound, 
 to communicate to the underwriters all material facts within his knowledge. 
 Concealment of these facts is a breach of duty on his part to those with whom 
 his principal has placed him in communication." 
 
 50. Por the purposes of the rule relating to presumptive knowledge through 
 agents, a sub-agent, if acting as such with the assent of the ultimate principal, 
 may be an " agent to know " (d). For the like purpose, there may also be 
 an agency by adoption and ratification (e). In the case of statutory corpora- 
 
 (6) Per Lord Esheb, M.R., at p. 559 of Blaclcburn, Low & Co. v. Vigors (1886), 17 Q. B. D. 
 553, C. A. In relation to marine insurance the rule is codified in s. 19 of the Marine 
 Insurance Act, 1906 (" the agent must disclose to the insurer . . . every material circum- 
 stance which the assured is bound to disclose "). Cp. Arnot v. Biscoe (1748), 1 Ves. Sr. 94 
 (where Lord Habdwicke, L.C, said that the agent or attorney of the vendor has the same 
 duty of disclosure to the purchaser as the vendor himself) ; Stevens v. Adamson (1818), 
 2 Stark. 422 (another vendor and purchaser case where Abbott, C.J., at pp. 422, 423, 
 lays down, and apphes, the same rule — " the vendor, or his agent, was bound to communi- 
 cate to the vendee "...); Berwick & Co. v. Price, [1905] 1 Ch. 632 (per Joyce, J. 
 at p. 639 : " no one, by delegating his authority to an agent, can put himself in a better 
 position than he would be in himself. If this were the rule, anyone could escape by em- 
 ploying agents "). 
 
 (c) At pp. 542, 543 of Blaclcburn, Low & Co. v. Vigors (1887), 12 App. Cas. 631, H. L. 
 To these observations, add those of Lord Watson in the same case, who, after stating, 
 at p. 539, that, in the case of agents to effect the insurance, " the ordinary rule of law 
 applies, and non-disclosure of material facts will affect the principal, and give the insurer 
 good ground for avoiding the contract," proceeds, at p. 541, to distinguish this class of 
 agency from the other : " the decisions which relate to captains and ship-agents ... do 
 not appear to me to have any analogy to the case of agents employed to eifect a policy 
 
 . . . The one class is specially employed for the purpose of communicating to him " 
 
 the employer — " the very facts which the law requires him " — the employer — " to divulge 
 to his insurer ; the other is employed, not to procure or furnish information respecting 
 the ship, but to effect an insurance. ... It cannot reasonably be supposed that the 
 insurer relies to any extent upon the private information possessed by persons of whose 
 existence he presumably knows nothing." 
 
 {i) Brewin v. Briscoe (1859), 2 E. & E. 116 {per Cbompton, J., at p. 132). In a later 
 case of Be AsUon, Ex. p. McOowan (1891), 64 L. T. 28, the above principle was recognized, 
 but the necessary facts were not proved (per Cave, J., at p. 29). 
 
 (e) Jennings v. Moore (1708), 2 Vern. 609 (per Lord Cowpek, L.C). 
 
32 CH. II, SECT. 3, SUB-S. (4). 
 
 tions, the particular statute and tte statutory instrument of constitution 
 must be carefully examined in order to ascertain who are the officials whose 
 knowledge can properly be said to be that of the corporation : since no such 
 knowledge can be imputed through any other persons. Where it is the 
 case of a limited company, such company is ordinarily deemed to have know- 
 ledge or notice of those matters only of which its directors, sitting together 
 as a board, have knowledge or notice. Any other person, though he may be 
 the company's agent for other purposes, such as a secretary or auditor, or 
 an individual director acting unofficially, is not a person whose knowledge, 
 affects the company with notice (/). 
 
 51. One of the grounds, already indicated (g), on which the presumption 
 in question has been based, is the strong probability, amounting to a practical 
 certainty, that the agent will in the ordinary course communicate to his prin- 
 cipal the knowledge which the law imputes to the latter. The same reasoning, 
 where there is the like probability, justifies the converse proposition that the 
 knowledge of the principal is the presumed knowledge of the agent (h). 
 It also justifies, in certain cases, the imputation of knowledge to one person 
 from the actual knowledge of another who is not, in the fullest sense of the 
 word, or for all purposes, either his principal or agent. Thus notice to a 
 husband has been deemed notice to the wife {i) ; infants may be afEected 
 by notice to their ancestor (j) : and it has been decided that a cestui que 
 trust has no better equity, and is in no better position, as regards the 
 doctrine of constructive notice, than his trustee {h). 
 
 52. It has already been stated (I) that it is not only the actual, but the 
 presumptive, knowledge of the agent which may be imputed to the principal. 
 Thus, an agent may, in virtue of his actual notice of a fact or document, 
 be afiected with presumptive notice of another fact or document to which, 
 if the proper inquiries were made, the first fact or document would point (m), 
 and in that event, as much as if the agent had direct and express notice, his 
 presumptive notice is, by a fxirther presumption, imputed to his principal (n) . 
 
 ( / ) Metropolitan Bank v. Heiron (1880), 5 Ex. D. 319, C. A. {per Bkett, L.J., at p. 325, 
 and Cotton, L.J., at p. 326) ; Sociiti OinArak de Paris v. Tramways Union Go. (1884), 14 
 Q. B. D. 424, C. A. (per Letdley, L.J., at p. 450) ; Swah v. Ipswich Tannery, Ltd. (1906), 
 11 Comm. Cas. 88 (per Kennedy, J., at p. 96). Cp. the cases cited in the notes to § 393, 
 post. 
 
 (g) See § 48, ante. 
 
 (h) Mayhew v. Eames (1825), 3 B. & C. 601 ; Willis v. Bank of England (1835), 4 
 A. & E. 21 (per Lord Denmak, C.J., delivering the judgment of the Court, at p. 39 : " the- 
 general rule of law is that notice to the principal is notice to all his agents ; at any rate if 
 there be reasonable time, as there was here, for the principal to communicate that know- 
 ledge to his agents before the event which raises the question happens "). 
 
 (i) Le Neve v. Le Neve (1747), Ambl. 436 (per Lord Habdwicke, L.C.). 
 
 (j) Toulmin v. Steere (1817), 3 Mer. 210 (per Gbaut, M.R., at pp. 222, 223 : " were it 
 otherwise a man would only have to purchase on behalf of infants to free an estate from 
 all equitable incumbrances to which it might be subject "). 
 
 (k) Lloyds Banking Co. v. Jones (1885), 29 0. D. 221 (per Peabson, J., at pp. 227, 228) ; 
 Walker v. Lynom, [1907] 2 Ch. 104 (per Parkee, J., at pp. 115-119). On the other hand, 
 notice to one of several trustees is not presumptive notice to the others : Low v. Bouverie , 
 [1891] 3 Ch. 82, 0. A. (per Lindley, L.J., at p. 104). 
 
 (I) See § 44, anU. 
 
 (m) This is the class of presumptive knowledge discussed in the next Sub-section. 
 
 (n) In Kennedy v. Green (1834), 3 My. & K. 699, Lord Bedtjgham, L.C, after expressing 
 
§§ 50-54 (presumptive knowledge), 33 
 
 53. It has been laid down that the agent's knowledge is only deemed that 
 of the principal " if the agent comes to the knowledge of the fact while he is 
 concerned for the principal, and in the course of the very transaction which 
 becomes the subject of the suit " (o). This statement involves three pro- 
 positions : (i) that the knowledge of the agent afiects with constructive 
 notice no other person than the particular principal for whom he is acting ; 
 (ii) that it affects the principal with notice of no other matters than those 
 of which the agent acquires knowledge when acting in his character as an 
 agent of the particular kind alleged ; (iii) that it affects the principal with 
 notice of no other matters than those of which the agent acquires knowledge 
 when acting in the particular transaction alleged, or, as it is frequently 
 expressed, in hdc re. 
 
 54. It results from the first of the above propositions that, where a solicitor 
 or other agent is acting for A., in a transaction between A. and B., and B. 
 chooses not to employ any solicitor or agent, it cannot be presumed from that 
 fact alone that the knowledge of the solicitor or agent is the knowledge of B., 
 as well as of A., as regards any matters coming to the solicitor's or agent's 
 notice in the course of his agency for the latter (p) ; and that, where there 
 is a common officer of two companies, the knowledge acquired by him as 
 oificer of company A. will not be imputed to company B., unless it was his 
 duty, as the of6.cer of company A. to communicate it to company B., and also 
 his duty, as officer of company B., to receive such a communication (q). In 
 former times there was a curious and subtle theory that, where a solicitor 
 is acting for both parties to a transaction, the constructive notice which he 
 acquires as solicitor for the one party is somehow imputable to the other party 
 for whom he is also acting : that is to say, that the latter party, as principal, 
 is fixed with constructive possession of the knowledge which the solicitor 
 
 his disagreement with Leach, M.R., as to the possibility of imputing the sohcitor's know- 
 ledge to the client, on the assumption that the solicitor was intending to commit a fraud 
 on his client — see note ( / ) to § 57, post — proceeds, at pp. 720-724, to point out that, on 
 the hypothesis of the solicitor's innocence, the client would still be affected with notice, 
 because the former, in virtue of a number of " suspicious appearances " on the face of a 
 certain deed, had been put upon ioquiry which, if pursued, would have led to the discovery 
 •of further documents and facts, and that the latter was, in contemplation of law, put upon 
 the same inquiry, and affected by the same presumptive knowledge as the former. A 
 similar opinion on somewhat similar facte was expressed by Lord St. Legn'ABDS, when 
 SirEnw. STrGDBN,L.C. (Ir.),atp. 22ofiBo(i(;j/v. Williams (1845), 3 Jo. &La,t. 1 ; 72 R.R.I. 
 See also Hepworth v. Pickles, [1900] 1 Ch. 108, where the constructive knowledge of the 
 solicitor in virtue of his possession or control of documents of title — he admittedly 
 had no actual knowledge — was imputed to the client {per Eaewbll, J., at p. Ill) ; 
 Berwick & Co. v. Price, [1905] 1 Ch. 632 [per Joyce, J., at p. 639, who imputed 
 to the client the constructive knowledge of his solicitor as to the existence of a 
 ■sub-mortgage). 
 
 (o) Per Eeskine, L.C, at p. 120 of Hiern v. Mill (1806), 13 Ves. 114. 
 
 (p) Kennedy v. Green (1834), 3 My. & K. 699 {per Leach, M.R., at pp. 712, 713, and 
 Lord Beottgham, L.C, at pp. 720-724) ; Espin v. Pemberton (1859), 3 De G. & J. 547 
 ■{per Lord Chelmsfobd, L.C, at pp. 554, 555) ; Perry v. Holl (1860), 2 De G. P. & J. 
 
 38 
 
 ' (o) Be Hampshire Land Co., [1896] 2 Ch. 743 ; Ee Fenwick, Stobart & Co., Ltd., [1902] 
 1 Ch. 507; Re David Payne & Co., Ltd., [1904] 2 Ch. 608, C. A. {per Vaughan 
 Williams, L.J., at pp. 616, 617, Romeb, L.J., at pp. 618, 619, and Cozens-Habdy, L.J., 
 at p. 620).' 
 
 B.N.D. D 
 
34 CH. 11, SECT. 3, SUB-S. (4). 
 
 presumptively acquired as agent for the former party (r). This doctrine is 
 now exploded by an express provision of the Conveyancing Act, 1882 (s). 
 
 55. The second proposition is equally well established, viz. that, where 
 the person through whom it is sought to impute knowledge to another, though 
 proved to have been the agent for certain purposes of that other, is yet not 
 proved to have been acting in his capacity as such agent, and for those 
 purposes (t), at the precise time (m) when he received the notice or obtained 
 the information, the principal is not afiected with such notice. 
 
 56. Lastly, notwithstanding that the agent be proved to have been acting at 
 the material date in his capacity as agent, and as an agent of the particular kind, 
 and for the particular purposes, alleged, his knowledge is still not imputable 
 to the principal, unless it was acquired in the course of the identical transaction 
 or business which gives rise to the question of notice {v) ; and, further, the 
 
 (r) Nixon v. Hamilton (1838), 2 Dr. & WaU. 364 ; 56 R. R. 246 ; Roddy v. Williams 
 (1845), 3 Jo. & Lat. 1, per Stjgden, L.C. (Ir.), at p. 16 ; Spencer v. Topham (1856), 22 Beav. 
 573. 
 
 (s) See s. 3, sub-s. (1), (ii). That the enactment in question, which is set out in § 66, 
 post, has superseded the old rule, if indeed that rule was ever good law, is clear from Me 
 Cousins (1886), 31 C. D. 671 {per Chitty, J., at pp. 676, 677), and Taylor v. London & County 
 Banking Co., [1901] 2 Ch. 231, C. A. {per Chitty, L.J., at pp. 258, 259). 
 
 (J) Wilde. V. Oibson (1848), 1 H. L. C. 605 (knowledge acquired by agent otherwise 
 than as agent for sale not imputed to the principal, in a vendor and purchaser case : per 
 Lord COTTKNHAM, L.C, at pp. 624, 625, and Lord Campbell, at pp. 634, 635) ; Saffron 
 Walden Second Benefit Building Society v. Bayner (1880), 14 C. D. 406, C. A., where it was 
 held that notice to solicitors employed by trustees merely for the purpose of effecting a 
 particular investment of the trust funds upon mortgage could not be imputed to the 
 trustees {per James, L.J., at pp. 409, 410, and Bbamwell, L.J., at pp. 414-416), nor 
 could personal notice given to them at the close of a meeting called upon other business 
 {per Jambs, L.J., at pp. 410-412, Baggallay, L.J., at p. 414, and Beamwbll, L.J., at 
 pp. 417, 418) ; SociMg Ginirak de Paris v. Tramways Union Co. (1884), 14 Q. B. D. 424, 
 C. A. (per LiNDLEY, L.J., at p. 450 : " the secretary was in no way representing the com- 
 pany at the funeral : no notice was given to him as the agent of the company ; nor did 
 he acquire any knowledge of the defendant's security whilst transacting the company's 
 business, or in any way for or on behalf of the company ") ; Lagunas Nitrate Co. v. 
 Lagunas Syndicate, [1899] 2 Ch. 392, C. A. {per Lindley, M.R., at p. 431 : " to impute to- 
 the Nitrate Company the knowledge which the directors had acquired in another capacity, 
 and which knowledge they did not disclose to any one, is neither law nor sense "). 
 
 {u) Mountford v. Scott (1818), 3 Madd. 34 {per Leach, V.-C, at p. 40 : "the agent 
 stands in place of the principal, and notice, therefore, to the agent is notice to the principal ; 
 but he cannot stand in place of the principal until the relation of principal and agent is 
 constituted ") ; Williamson v. Barber (1877), 9 C. D. 529 {per Jbssbl, M.R., at p. 535 j 
 " as I understand the doctrine of partnership, which for this purpose is a branch of the 
 law of agency, notice to a partner in a partnership matter during the continuance of the 
 partnership is as a general rule notice to the firm. It has not, so far as 1 know, been held 
 that notice to a man who afterwards becomes a partner is notice to the firm "). See, now^ 
 s. 16 of the Partnership Act, 1890. 
 
 (v) Hiern v. Mill (1806), 13 Ves. 114 {per Lord Eeskinb, L.C, at p. 120) ; Kennedy v. 
 Green (1834), 3 My. & K. 699 {per Lord Brottgham, L.C, at p. 720) ; Nixon v. Hamilton 
 (1838), 2 Drew. & Wall. 364 {per Lord Plttnket, L.C. (Jr.), at p. 392) ; Thompson v. 
 Cartwright (1863), 33 Beav. 178 {per Romilly, M.R., at p. 185) ; Wyllie v. Pollen (1863),. 
 3 De G. J. & S. 596, 601 ; Williamson v. Barber, sup. {per Jessel, M.R., at p. 635) ; 
 Bradley v. Riches (1878), 9 C D. 189 {per Try, J., at p. 195) ; Saffron Walden Second 
 Benefit Building Society v. Rayner (1880), 14 C. D. 406, C. A. (as to which see note (<), sup.) ;. 
 Blackburn, Low <fc Co. v. Vigors (1887), 12 App. Cas. 531, H. L. {per Lord Halsbuhy, L.C,. 
 at p. 535 : " neither the plaintiff, nor the agent through whom the poUcy was effected, had 
 any knowledge of the material fact, the concealment or non-disclosure of which is reUed 
 upon as vitiating the policy ; but an agent, who did not effect the policy, at an earlier 
 period received information admitted to be material, while he was acting as agent to effect 
 an insurance " — i.e. another insurance, and a different transaction — " for the plaintiff,"' 
 
§§ 54-56 (presumptive knowledge). 35 
 
 knowledge possessed is, even tten, only a knowledge ot such matters as are 
 material, and which, therefore, it was the duty of the agent to communicate 
 to his principal (w). Again, there is no sufficient ground for presuming 
 knowledge, if the alleged agent who had notice in the course of the transaction, 
 turns out to have been introduced into the business merely for the purposes 
 of some isolated step or ceremony or act, and not to have been employed 
 throughout the transaction and for all its purposes (x). Conversely, however, 
 if the alleged agent is shown to have been employed for the general purposes 
 of the transaction in question, the knowledge coming to him in the execution 
 of such agenc}'- will not the less be imputed to his principal, merely because the 
 latter, whether with a fraudulent object or not, chose to employ a stranger 
 to the business to perform some single act or formality in connection with 
 it (y). It has been occasionally suggested by such high authorities as Lord 
 Eldon, L.C, and Jessel, M.R., that the principal is presumed to have 
 notice of facts of which the agent was apprised when acting in alid re, if the 
 alia res was so closely bound up with the haec res as to suggest that the agent 
 must have had the facts present to his miad when acting in Mc re, or, in 
 other words, had presumptive, though not actual, notice of them, when so 
 acting, and that his presumptive notice may thereupon be imputed to the 
 principal (s). But the doctrine seems a loose and dangerous one, since the 
 
 and, again, at p. 538 : " where the employment of the agent is such that in respect of the 
 particular matter in question, he really does represent the principal, the formula that the 
 knowledge of the agent is his knowledge, is, I think, correct ") ; Taylor v. Yorkshire In- 
 surance Co., [1913] 2 Ir. R. 1 {per Fat.t.es, C.B., at pp. 20-24, a case of insurance of a 
 horse, where the agent of the company acquired the knowledge previously to the com- 
 mencement of his agency, when acting for another company). See also the Conveyancing 
 Act, 1881, s. 3, sub-ss. (1), (i) and (ii), and § 66, post, and, as to partnership, s. 16 of the 
 Partnership Act, 1890. 
 
 (w) Wyllie v. Pollen, sup. (per Lord Westbuey, L.C, at p. 601). 
 
 (x) Huchman v. Fernie (1838), 3 M. & W. 505 (a life insurance case, in which it was 
 pointed out by Lord Abhstgek, C.B., delivering the judgment of the Court of Exchequer, 
 at pp. 517, 518, that the defendants had not even pleaded, much less proved, that the 
 deceased was the agent of the plaintiff for the purposes of the entire transaction, but only 
 that he was the agent of the plaintiff for the purpose of answering certain specific questions, 
 none of which bore upon the matters alleged to have been concealed, and, therefore, the 
 knowledge of the deceased was not the knowledge of the plaintiff) ; Kettlewell v. Watson 
 (1882), 21 C. D. 685, in which a purchaser's solicitor, as a matter of convenience, prepared 
 a conveyance from such purchaser to a sub-purchaser, but was not otherwise the agent 
 of the sub-purchaser, and Fry, J., at pp. 707, 708, contrasting the case of Brotherton v. 
 Hatt — vid. note (z) to § 49, ante — ^held that the knowledge of certain facts which the soUcitor 
 had acquired when acting for the original purchaser could not be imputed to the sub- 
 purchaser. 
 
 {y) Holland v. Hart (1871), 6 Ch. App. 678 (per Lord Hathbelby, L.C, at p. 683). 
 
 (z) Mountford v. -Sco« (1823), T. & Russ. 274, where Lord Eldon, L.C, at pp. 279, 
 280, criticized, as too broad, the view of Leach, V.-C, in the Court below — at p. 40 of 
 (1818), 3 Madd. 34, as to which see note (u), sup. — that there never could be an imputation 
 of knowledge to the principal, unless the transaction in question was the very transaction 
 in which the agent acquired the knowledge, for a soUcitor could not be allowed to say that 
 he had forgotten in the evening what he knew in the morning ; Nixon v. Hamilton (1838), 
 2 Dr. & Wall. 364, where Lord Plunket, L.C (Ir.), at pp. 392-394, pointed out that, in 
 the case last cited. Lord Eldon, L.C, had no intention of frittering away the in Tide re rule, 
 but merely wished to correct the too absolute form in which Leach, V.-C, had expressed 
 it, and to admit, as a possible exception, the case of a transaction so closely, in point of 
 time and subject-matter, connected with the transaction in question, as to lead to the 
 inference that, though not literally identical, it was substantially one with it) ; Boursot v. 
 
36 CH. 11, SECT. 3, SUB-S. (4). 
 
 so-called presumptive notice of the agent is not really based upon any warrant- 
 able presumption of law, but on an assumption of fact, wMch ought not to 
 be made without evidence ; and, when evidence is imported, all questions of 
 presumption disappear. It is quite clear, however, that the theory except 
 in a rigidly qualified sense, has now been put an end to by express statutory 
 enactment (a). 
 
 57. The presumption in question, as it requires no evidence of actual 
 knowledge to support it, so also does not admit of any evidence of absence 
 of actual knowledge to negative it. To this extent, and in this sense, it is 
 irrebuttable (6). Indeed, it would be of very little practical value, were this 
 not so. The imputation which the law makes " assumes a [knowledge], 
 if you had it not " ; consequently it is no answer to say " I had it not," 
 when the assumption starts with this very hypothesis. But, though the 
 mere allegation or proof of actual ignorance is wholly inefficacious, the pre- 
 sumption may still be rebutted by allegation and proof of such ignorance 
 in fact, and also of matters calculated to destroy any of the foundations on 
 which the presumption rests : cessante raiione cessat lex. Now, as has been 
 indicated, one of these foundations is the strong probability that the agent 
 will, pursuant to his duty, and in the ordinary course of business, impart his 
 knowledge to his principal (c) : and another is the justice and fairness, as 
 between the parties, that he who resorts to an agent and selects him, and 
 benefits by his knowledge, should suffer the burdensome, as well as enjoy 
 the beneficial, consequences of so doing {d). Where, therefore, neither of 
 these conditions is present, as, for instance, where it can be established by 
 evidence not only that the principal was in fact ignorant of the matters of 
 which knowledge is sought to be imputed to him, but also that at the material 
 date his agent was perpetrating a fraud upon him, the presumption is not 
 made, because, on the one hand, it is displaced by the much stronger pre- 
 sumption that, in the particular circumstances of the case, there is no proba- 
 bility that the agent will communicate the matter to his principal, but on the 
 contrary a probability, amounting to a moral certainty, that he will not : and, 
 
 Savage (1866), L. R. 2 Eq. 134 (per Kindbesley, V.-C, at p. 142) ; Williamson v. Barber 
 (1877), 9 C. D. 529 {per Jessel, M.R., at p. 535 : " notice to a solicitor in the same trans- 
 action, or in any connected transaction, wlule he ia acting for the same client, is also notice 
 to the client, but notice to him, even prior to Ms acting for the client, may be constructive 
 notice to the client, when it is clear he must have had it present to his mind, that is, he could 
 not be supposed to have forgotten it when he was transacting the business of the client "). 
 
 (a) See s. 3, sub-s. (1), (ii), of the Conveyancing Act, 1882 (45 & 46 Vict. c. 49), as 
 set out in § 66, post, and Be Cousins (1886), 31 C. D. 671 {per Chuty, J., at p. 674). The 
 rule, as laid down by Lord Eldon, L.C, and Lord Pltjnkbt, L.C. (Jr.), in the first two 
 of the cases cited in the last note, may possibly be unaffected by the above enactment, 
 for a transaction of the kind there mentioned might perhaps be deemed part and parcel 
 of the haec res, and not an alia res at all, but the ruling of Kindeesley, V.-C, and the 
 itaKoized observations of Jessel, M.R., in the other two cases cited in the same note, 
 certainly cannot be now regarded as law. 
 
 (b) Bradley v. Biches (1878), 9 C. D. 189 {per Eey, J., at p. 196 : " it appears to me to 
 be clear that that presumption or imputation is a thing which the client cannot be allowed 
 to rebut. If it could be rebutted, it was amply rebutted in Le Neve v. Le Neve. If it 
 could be rebutted, the language of Lord Hatheeley in Bolland v. Hart could not be up- 
 held ") ; Berwick cfc Co. v. Price, [1905] 1 Ch. 632 {per Joyce, J., at p. 639). 
 
 (c) See § 48, ante, 
 {d) See § 46, ante. 
 
§§ 56, 57 (PEEsuMPTivE knowledge). 37 
 
 on the other hand, it must yield to the further legal presumption that, in 
 selecting and employing his agent, the principal did not select or employ him 
 to commit a fraud upon himself (e). This exception to the general rule, 
 or rather to the irrebuttability of the general rule, as to the presumptive 
 knowledge of a principal, has been laid down and recognized in a series of 
 authorities from 1834 downwards (/). Similarly, the ordinary presumption 
 may be rebutted by proof of the expressed intention of the agent not to com- 
 municate the facts in question to his principal, with the complicity and collu- 
 sion of the party invoking the aid of the general rule (g). Whether the 
 
 (e) Espin V. Pemberton (1859), 3 De G. & J. 547, where Lord Chelmsford, L.C, 
 mentions the two grounds on which the exception may be justified, viz. (i) that the agent 
 " was committing a fraud in the transaction which he could not be presumed to com- 
 municate," and (ii) " that the commission of the fraud broke off the relation of principal 
 and agent, or was beyond the scope of his authority," at the same time expressing his 
 preference for the latter theory. So, at pp. 642, 643 of Cave v. Cave (1880), 15 C. D. 639, 
 Fey, J., observes : " there is undoubtedly an exception to the construction or imputation 
 of notice from the agent to the principal, that exception arising in the case of such conduct 
 by the agent as raises a conclusive presumption that he would not communicate the fact 
 in controversy. This exception has been put in two ways. ... In the one view, notice is 
 not imputed because the circumstances are such as not to raise the conclusion of law which 
 does ordinarily arise from the mere existence of notice to the agent ; in the other view — 
 that of Lord Chelmsford and Lord Hatherlby — the act done by the agent is such as 
 cannot be said to be done by him in his character of agent, but is done by him in the 
 character of a party to an independent fraud on the principal, and that is not to be imputed 
 to the principal as an act done by his agent." 
 
 ( / ) Kennedy v. Gfreen (1834), 3 My. & K. 699 (per Lord Brougham, L.C, at p. 720,— 
 the leading decision on the exception in question) ; Hewitt v. Loosemoore (1851), 9 Hare 
 449 [per Ttjenee, V.-C, who, at pp. 455, 456, refers to " the well-founded and wholesome 
 limitation upon the doctrine of constructive notice established by Kennedy v. Green ") ; 
 Thompson v. Cartwright (1863), 33 Beav. 178 {per Romilly, M.R., at p. 185 : "in this 
 state of things, is it to be presumed that Mr. Montriou miist have concealed the fact of 
 that mortgage from his client Mr. Downes ? The case of Kennedy v. Qreen, which is 
 always cited on these occasions, establishes a very important principle, but one which 
 must be very cautiously appKed to the case of notice of facts given to the solicitor employed 
 by the client. ... I take the rule to be, generally, that the client must be treated as 
 having had notice of all the facts which in the same transaction have come to the know- 
 ledge of the solicitor, and that the burden of proof hes on him (the client) to show that 
 there is a probability, amounting almost to a moral certainty, that the solicitor would not 
 have communicated those facts to his client ") ; Rolland v. Hart (1871), 6 Ch. App. 678 
 {per Lord Hatherlby, L.C, at p. 683) ; Waldy v. Gray (1875), L. R. 20 Eq. 238 {per 
 Bacon, V.-C, at pp. 251, 252; at p. 251 he says that "Kennedy v. Green lays down a 
 principle which must commend itself to everybody's sense of justice ") ; Cave v. Cave, 
 sup. (see the passage cited in the last note) ; Kettkwell v. Watson (1882), 21 C D. 685 
 {per Fry, J., who, at p. 707, recognizing the exception established by Kennedy v. Green, 
 points out at the same time its limitations) ; -Re Fitzroy Bessemer Steel Co. (1884), 50 L. T. 
 144 ; Berwick & Co. v. Price, [1905] 1 Ch. 632 {per Joyce, J., at pp. 640, 641). 
 
 {g) Sharp v. Foy (1868), 4 Ch. App. 35, where a solicitor acted for the mortgagors 
 (husband and wife) and also for the mortgagee in respect of a mortgage. The mortgagors 
 informed the mortgagee that there was a marriage settlement, and the solicitor thereupon, 
 with the silent acquiescence and concurrence of the mortgagors, announced to them that 
 he should not reveal the existence of the marriage settlement to the mortgagee, " because 
 it might make him nervous about his security." Held that no knowledge of the settlement 
 could be imputed to the mortgagee, per Page-Wood, L.J., at p. 40 ("it would be an 
 encouragement of fraud to apply the rule of notice, which was established for the safety of 
 mankind, to a transaction like this ; it would be sanctioning a scheme to rob a man by 
 colluding with his solicitor "), and Selwyn, L.J., at pp. 41, 42. Cp. Biggar v. Boch Life 
 Assurance Co., [1902] 1 K. B. 516, where Weight, J., held that no knowledge could be 
 imputed to the insurance company by reason of the personal knowledge of their agent who, 
 in collusion with the assured, had fraudulently " invented " untrue answers to the questions 
 in the proposal form. 
 
38 CH. 11, SECT. 3, SUB-SS. (4), (5). 
 
 circumstances exist whicli are necessary to rebut the presumption is a question 
 of fact, and the burden of proving them lies on the party who seeks to escape 
 from the operation of the rule, and bring his case within the exception (h). 
 Mere proof of the agent's having had an interest in not making the communica- 
 tion which he was under a duty to make is not sufficient of itself to negative 
 the presumption where no actual fraud by the agent is proved, or at least is 
 not conclusively or necessarily so (t). The agent's fraud must be shown to 
 have been directed against the principal : it is of no avail to establish mere 
 general dishonesty on his part whereby other persons are defrauded {j). 
 Further, to bring the case within the exception, it must be shown that the 
 agent's fraud was committed at the time of, and in relation to, the very 
 transaction which raises the question of notice (k). 
 
 Subs. (5). Knowledge of Facts or Documents presumed from Actual Know- 
 ledge of other Facts or Documents. 
 
 58. Besides imputing to one person the knowledge of facts actually possessed 
 by another under the conditions already discussed, the law presumes from 
 proved actual notice of any fact or document knowledge of connected facts 
 or documents in all cases where the former, would have inevitably led to the 
 latter, knowledge if such further steps had been taken by the party to whom 
 the knowledge is imputed as, under the circumstances of the case, ought 
 
 (h) See Thompson y. CartwrigU (1863), 33 Beav. 178, per Romilly, M.E., who at 
 p. 185, after stating the rule as to burden of proof — see the end of the citation from his 
 judgment in note (/), sup. — ^proceeds as follows: "the question here is, whether the 
 applicant, Mr. Downes, discharges the burden so imposed on him. Upon the whole, I 
 think that he does." So, in Gave v. Cave (1880), 15 C. D. 369, Fky, J., after stating the 
 rule and theory of the exception — see the passage cited in note (e), sup. — continues, at 
 p. 644 : " these being the principles applicable, ... I must ask myself what are the 
 circumstances," and, at p. 645, after reviewing these circumstances, finds that the burden 
 of establishing that they brought the case outside the rule, and within the exception, had 
 been abundantly discharged. Similarly most of the other cases cited in note (/), sup., 
 were brought within the exception. On the other hand, the burden was not sustained, and 
 the rule accordingly prevailed, in Spaight v. Cowne, (1863), 1 H. & M. 359 {per Wood, 
 V.-C, at pp. 365, 366), and in Holland v. Hart (1871), 6 Ch. App. 678 (per Lord 
 Hathbblby, L.C, at p. 683, for the agent in that case, a solicitor, "does not," he said, 
 " appear to have been concerned in any fraud which would render concealment 
 necessary, so as to bring the case within Kennedy v. Green "). 
 
 (j) So Fey, J., held at p. 196 of Bradley v. Riches (1878), 9 C. D. 189 (" I wiU not lay 
 down as a rule that where a soHcitor owes a duty on the one side, and has an interest on the 
 other side, the presumption arises that he follows his interest, and not his duty. I shall 
 on the contrary presume that in this case he performed his duty, though it was against hia 
 interest "), and was followed by Joyce, J., at pp. 640, 641 of Berwick & Co. v. Price, 
 [1905] 1 Ch. 632. 
 
 (j) Boursot V. Savage (1866), L. R. 2 Eq. 134, per Kdjdbesley, V-C, at p. 142. On 
 this ground the general rule prevailed, and not the exception, in Atterbury v. Wallis (1856), 
 8 De 6. M. & G. 454 {per Knight-Bbtjce and Tuenee, LL.JJ.) ; and in Spencer v. 
 Topham (1856), 22 Beav. 573 {per Romilly, M.R., at p. 575). 
 
 {k) Bolland v. Hart, sup., per Lord Hatheblby, L.C, at p. 683 : " I was anxious to 
 ascertain whether there was any evidence that Robinson was at the time in a position in 
 which he could be fixed with any such fraud. But I cannot find evidence of anything 
 of the kind at that time. . . . The circumstance that, six months after he had improperly 
 borrowed money for Hall, he feU into difficulties and fled the country, cannot affect the 
 state of things at the time of these transactions "). 
 
§§ 57-59 (presumptive knowledge). 39 
 
 reasonably to have been taken by him (I). No catalogue of cases falling 
 witbin, or without, the rule can be drawn up a priori, for what will afiect 
 with constructive notice one man, situated in one way, and under one set of 
 circumstances, will not so afiect another man, under a difierent set of circum- 
 stances, and difierently situated (II) ; but the above may be taken to be an 
 accurate, though a very broad and general, description of the species of 
 presumptive knowledge now to be considered. It has sometimes been said 
 that the abstention from inquiry must amount to a " fraudulent blindness," 
 or a " wilful shutting of the eyes to the truth," or to " diligence in ignorance," 
 or again that it must be accompanied by such gross negligence as ought to 
 be considered tantamount to fraud, or evidence of fraud ; and the above have 
 often been contradistinguished from one another, as two separate species of 
 presumptive notice. But neither a fraudulent motive, nor a remissness or 
 want of care, is in the least necessary as a condition precedent to the pre- 
 sumption, as will be abundantly shown hereafter (m) ; nor, therefore, can 
 there be two such species as above suggested. The law is absolutely uncon- 
 cerned with the reasons or motives (if any) which actuated the party not to 
 acquire the knowledge which he might have acquired : it is enough that it 
 assumes the fact that it was not acquired actually, and then presumes, on 
 grounds of general convenience, that it existed nevertheless. To impose 
 on the Courts the troublesome and delicate duty of sifting the motives, and 
 searching the conscience, of the party, before the presumption can be made, 
 would destroy its utility altogether, and defeat the very object with which 
 the rule has been established ; for the inquiry embarked upon would involve 
 an issue of fact quite as difficult to determine as, and in most cases a great 
 deal more so than, the issue of fact which would be involved if there were 
 no presumption at all, viz. whether or not the party had actual knowledge. 
 The rule, as above stated, independently of, and unhampered by, any such 
 condition or qualifications as above mentioned, has been applied in the form 
 of a variety of subordinate rules, adapted to the nature of the respective 
 subject-matters, which it is now proposed to examine. 
 
 59. From the proved actual knowledge of the existence of a document, 
 or of a part of its contents, the law in general presumes notice of the contents, 
 or of the residue of the contents, as the case may be, of that document (n) 
 
 (l) " Where a person has actual notice of any matter of fact, there can be no danger 
 of doing injustice if he is held to be bound by all the consequences of that which he knows 
 to exist " • per Lord Ckahwobth, L.C, at p. 473 of Ware v. Lord Egmont (1854), 4 De G. M. 
 & G. 460. 
 
 (il) Jones V. Smith (1841), 1 Hare 43 (per Wigbam, V.-C, at p. 55). 
 
 (m) See App. A, Sect. 2, Sub-ss. (2) and (3), post. 
 
 (n) Hill V. Sampson (1801), 7 Ves. 152 (bankers, to whom part of estate of deceased was 
 transferred by his executors to secure a loan, having actual notice from one of the executors 
 of the existence of a will, held to have constructive notice of the contents of such will, and 
 of the rights of legatees thereunder) ; Eyre v. Dolphin (1813), 2 Ball. & B. 290 ; 12 B. R. 
 94 (mortgagee, having express notice of a settlement by the mortgagor, held to have pre- 
 sumptive notice of its contents and provisions) ; Taylor v. Baker (1818), 5 Price 306 ; 
 Penny v. Watts (1849), 1 Macn. & G. 150 {per Lord Cottenham, L.C, at pp. 166, 167) ; 
 Smith V. Gapron (1849), 7 Hare 185 (per Wigbam, V.-C, at pp. 192, 193 : " in this case 
 Mr. Capron saw the indorsement on the lease, and by that indorsement it appeared that 
 the licence to assign was necessary. It is also admitted that he looked into the body of 
 
40 CH. II, SECT. 3, SUB-S. (5). 
 
 If tlie document is in a foreign language, the law presumes that tlie party is 
 acquainted with its English meaning, or has provided himself with a transla- 
 tion (o). But possession of a security lodged with a bank, such as a debenture, 
 by one customer, is not constructive notice on the part of the bank, as against 
 another customer, of the terms and contents of such security {p). Where 
 a man is entering upon a transaction which necessarily involves the existence 
 of an instrument at the back of it, and therefore his knowledge of that exist- 
 ence, as, for instance, where he proposes to purchase or accept from another a 
 sublease of property, which of course presupposes the existence of an original 
 or head lease, or where, in contracts of marine insurance, the subject of the 
 insurance is chartered freight, or profit on charter, or the policy is one .of 
 reinsurance subject to the terms of the original policy, or where the party 
 is engaging in a transaction in relation to a company which, to his know- 
 ledge, has issued debentures, the person in question is presumed to have 
 knowledge of all the usual, ordinary, and typical terms, conditions, and 
 clauses of such superior lease (q), charter (r), original policy (s), or deben- 
 tures (t) respectively : but not of any unusual or extraordinary restriction, 
 condition, clause, or stipulation therein (u), unless and until, having been 
 
 the lease, and therefore he had actual notice of . . . such parts of the contents as he 
 thought it useful or material to read. The presumption therefore would be that he had 
 made himself acquainted with the whole of the instrument. I do not think that I ought 
 to allow the presumption to be rebutted by the averment of the defendant that he looked 
 into the other parts of the lease, and did not observe the covenants upon which his 
 objection is founded ") ; New Brunswick & Canada Railway 60 Land Co. v. Conyheare (1862), 
 9 H. L. 711 (per Lord Westbtjky, L.C, at p. 734, — presumed notice of contents of a 
 company's deed of association) ; Farrant v. Blanchford (1863), 32 L. J. (CH.) 237 {per Lord 
 WESTBtTBY, L.C, at p. 239 : actual receipt, and immediate deposit with bankers, of a 
 bundle of deeds, without opening the bundle ; held that the party had presumptive 
 knowledge of the contents of all the deeds). 
 
 (0) lonides v. Pender (1874), L. R. 9 Q. B. 531 {per Cur., at p. 537). 
 
 {p) Re Gastell & Brown, Ltd., [1898] 1 Ch. 315 ; Re Valletort Sanitary Steam Laundry 
 Co., [1903] 2 Ch. 654 {per SwiireEisr Eady, J., at pp. 659-662). 
 
 {q) This was either stated (as in Cesser v. Collinge, inf., by Leach, M.R., at p. 287 - 
 " primA facie a man who agrees to take an underlease must know that he is bound by the 
 covenants contained in the original lease "), or assumed, in all the cases relating to sub- 
 leases which are cited in note {u), inf. 
 
 {r) The Bedouin, [1894] P. 1, C. A. (where it was proved by evidence that the " 24 
 hours' clause " in a time-charter was in common use : per Goebll Baenes, J., at p. 7, and 
 Lord ESHER, M.K., at pp. 12, 13) ; Asjar <b Co. v. Blundell, [1896] 1 Q. B. 123, C. A., where 
 also the clause in question was considered a usual one in a charter-party : per Kay, L. J., 
 at pp. 133, 134). 
 
 («) Charlesworth v. Fdber (1900), 5 Comm. Cas. 408 (where one of " the Elder Dempster 
 & Co.'s clauses " was proved by evidence to be a usual term in a policy of insurance : per 
 BiGHAM, J., at pp. 411, 412). 
 
 (i) This was assumed in the cases relating to debenture transactions cited in the 
 next note. 
 
 {u) In the following cases relating to subleases, the restrictive and onerous conditions 
 in the head lease were held unusual, and such, therefore, as to raise no presumption of 
 knowledge against the party complaining : Cosser v. Collinge (1832), 3 My. & K. 283 ; 
 Wilbraham v. Livesey, (1854), 18 Beav. 206 {per Eomilly, M.R., at pp. 209, 210) ; Hyde v. 
 Warden (1877), 3 Ex. D. 72, C. A. {per Cur., at pp. 80, 81) ; Reeve v. Berridge (1888), 20 
 Q. B. D. 523, C. A. (per Cur., at pp. 527, 528) ; Re White and Smith's Contract, [1896] 1 Ch. 
 637 {per STrntmo, J., at p. 643) ; Re JHcedicke and Lipski's Contract, [1901] 2 Ch. 666 {per 
 Bybnb, J., at p. 668) ; Molyneux v. Hantrey, [1903] 2 K. B. 487, C. A. {per Colims, M.R., 
 at pp. 491-494, and Cozens-Habdy, L.J., at p. 497). In the following cases, clauses and 
 conditions in debentures were considered unusual, and the Court refused to impute know- 
 ledge of them to the party complaining : English tb Scottish Mercantile Investment Co. v. 
 
§ 59 (presumptive icnowledge). 41 
 
 given " a fair opportunity " of inspecting the instrument, lie has neglected 
 to avail himself of it, in which event the presumption, which down to the 
 date of such neglected opportunity has not operated, immediately arises (v). 
 Notice of the existence of a document, which expressly refers to, and incor- 
 porates provisions in, a second document, which again has the like reference 
 to, and incorporation of, a third, is presumptive notice of the existence and 
 contents of both the two latter instruments (w). So also, notice of a memorial 
 of a deed, is constructive notice of the contents of such deeds {x). But a 
 mere reference in a bill of lading to a charterparty does not afiect the holder 
 with presumptive notice of all the terms of such charterparty {y). Possession 
 by a solicitor of the title-deeds generally relating to a property is presumptive 
 notice of the existence and contents of a deed to which a predecessor in title 
 was a party containing covenants restrictive of the user of the property («). 
 Notice of one of several incumbrances on a property is not necessarily notice 
 of others, at all events where there has been a definite misrepresentation (a) ; 
 though, ordinarily, from notice of specified incumbrances the party is not 
 entitled to infer that they are the sole incumbrances (b). An intending 
 purchaser or mortgagee of, or other person contemplating a transaction 
 with reference to, land or any estate or interest therein, who is entitled to 
 delivery, or to production, as the case may be, of title deeds, is bound to 
 insist on such delivery, or production, and in case of non-delivery, or non- 
 production, to demand an explanation ; and if he neglects either to insist 
 on the delivery, or production, as the case may be, in the first instance, or to 
 prosecute further inquiries, if the documents are withheld, he does so at the 
 peril of notice of their contents being imputed to him, either in a question of 
 non-disclosure, or (where the point, as regards land, is most frequently raised) 
 
 Brunton, [1892] 2 Q. B. 700, C. A. ; Re Valletort Sanitary Steam Laundry Co., [1903] 2 Ch. 
 054 {per Swinfen Eady, J., at pp. 659, 660). Por an example of an unusual term in an 
 original policy, subject to which a marine re-insurance contract was made, see Property 
 Insurance Co. v. National Protector Insurance Co. (1913), 108 L. T. 104 ; and for the like 
 in a charter-party, where the insurance was on chartered freight, see Mercantile S.S. Co. v. 
 Tyser (1881), 7 Q. B. D. 73 (at p. 77). 
 
 (v) See the cases as to subleases cited in the preceding note. In none of them was 
 " the fair opportunity of inspection " established, except in Cosser v. Collinge, sup. As to 
 whether actual knowledge of similarly onerous restrictions in leases of adjoining properties 
 in the same estate would be a ground for imputing knowledge of the restrictions com- 
 plained of in the lease the subject of the action, see § 64, note (w), post. 
 
 (w) Davies v. Thomas (1836), 2 Y. & C. (Eq. Exch.) 234, per Aldeeson, B., at p. 244, 
 in the case of one who had actual notice of a marriage settlement which recited a convey- 
 ance, which again referred to a wiU) ; Be Childe and Hodgson's Contract (1906), 54 W. R. 
 234, where a contract for sale provided that the sale was to be subject to the conditions 
 contained in deed A., which in its turn provided that it was to be subject to conditions 
 contained in deed B., and Waerdtoton, J., held that the party had presumptive know- 
 ledge of the contents of both deeds. 
 
 {x) Rocliard v. Fulton (1844), 1 Jo. & Lat. 413 ; 68 R. R. 265, per Sugden, L.C. (Ir.), 
 at pp. 441-444. 
 
 (y) Manchester Trust v. Furness, [1895] 2 Q. B. 539, C. A. (per Lindley, L.J., at pp. 544- 
 546, Lopes, L.J., at p. 547, and Rigby, L.J., at p. 549). 
 
 (z) Hepworth v. Pickles, [1900] 1 Ch. 108 (per Pabwell, J., at p. 111). 
 
 (a) Jones v. Smith (1841), 1 Hare 43 (per Wigram, V.-C, at pp. 68-70). 
 
 (b) Ibid., per Wigram, V.C, at pp. 66, 67 : see also Jones v. Williams (1857), 24 Beav. 
 47 (per Romilly, M.R., at pp. 57, 58). 
 
42 OH. II, SECT. 3, SUB-S. (5). 
 
 in a question of priorities (c). Where lie has no right to such production or 
 delivery, he is under no such obligation to inquire : thus, the purchaser of a 
 sublease, though afiected with notice of the existence and contents of the 
 superior lease on the principle of another rule (already stated), is under no 
 duty to inquire " what has become of the original lease," or in whose custody 
 or possession it is, and " there is no imputation on him for not so inquiring," 
 since " such an inquiry is not usual in transactions of this nature " {oc). And, 
 in any case, the party is only afiected with presumptive notice of such instru- 
 ments or facts as reasonable and proper inquiries under the circumstances 
 would have revealed, not of instruments or facts which such inquiries would 
 not have elicited, or, as it has been otherwise expressed, the knowledge 
 imputed to him is the knowledge which a sensible man — neither over-suspicious 
 nor foolishly sanguine — ought to have acquired, starting from the instrument 
 or fact of which he has express notice and pursuing a rational course of investi- 
 gation on that basis, but not the knowledge which he might, or might not, 
 have so acquired (cZ). "When it is said that a person is put on inquiry, 
 
 (c) Birch v. EUames (1794), 2 Anstr. 427 ; Hiern v. Mill (1806), 13 Ves. 114 (per Lord 
 Ebskine, L.C, at p. 122 : actual knowledge by purchaser that title-deeds are in possession 
 of equitable mortgagee is constructive notice of the incumbrance) ; Dryden v. Frost 
 (1838), 3 My. & Cr. 670, 673 (the like, as to a third person's interest) ; Jones v. Smith 
 (1841), 1 Hare 43 (per Wigkam, V.-C.),and (1843), 1 Ph. 244 (per Lord Lyndhurst, L.C, 
 who held that a purchaser having notice of the existence of a deed, instrument, or fact 
 afEeoting his property, is fixed with constructive notice of the contents of such deed, or 
 the nature and details o/ such incumbrances or facts as reasonable inquiry would have 
 revealed) ; Worthington v. Morgan (1849), 6 Sim. 547, 551 (unpaid vendor's Hen) ; Jones v. 
 Williams (1857), 24 Beav. 47, 57, 58 ; Peto v. Hammond (1861), 30 Beav. 495 (per RoMitLy, 
 M.R., at p. 510 : " if the purchaser had inquired for the deed, he would have found that 
 it was not in the vendor's possession, and, if he had inquired why it was not, he would have 
 ascertained that it was not in his possession because the purchase money had not been 
 paid ") ; Wilson v. Hart (1886), 1 Ch. App. 463 (where Tuknbr, L.J., held that the rule 
 applies to the purchase of a yearly tenancy as much as to that of a larger interest) ; Max- 
 field V. Burton (1873), L. R. 17 Eq. 15 (per Jessel, M.R., at pp. 18, 19 : a case of a marriage 
 settlement) ; Northern Counties of England Fire Insurance Co. v. Whipp (1884), 26 C. D. 
 482, C. A. (per ITky, L.J., delivering the judgment of the Court, at pp. 491, 492, as to 
 absence of inquiry for title-deeds, and leaving such deeds in the hands of a mortgagor 
 to raise money) ; Gainsborough (Earl of) v. Watcombe Terra Cotta Clay Co. (1885), 54 L. J. 
 (OH.) 991 (per North, J., at pp. 994, 995) ; Berwick & Co. v. Price, [1905] 1 Ch. 632 (per 
 Joyce, J., at p. 639) ; Walker v. Lynom, [1907] 2 Ch. 104 (per Parker, J., at pp. 110-114) ; 
 Re Greer, [1907] 1 It. R. 57 ; Re Weniger's Policy, [1910] 2 Ch. 291 (per Parker, J., at 
 pp. 295, 296). The rule is codified in s. 3, (1), (i) of the Conveyancing Act, 1882 (45 
 & 46 Vict. c. 39), which is set out in § 66, post. 
 
 (cc) Per Leach, V.-C, at p. 40 of Mountford v. Scott (1818), 3 Madd. 34. 
 
 (a!) Jones v. Smith, sup. (per Wiqbam, V.-C, at pp. 60, 61 : a purchaser from an heir at 
 law, with actual notice of a will by the ancestor under whom the heir claims, is not neces- 
 sarily affected with notice of the contents of the will : it depends on the circumstances ; 
 and, in any case — at p. 61, the V.-C. adds — " it would by no means foUow that the same 
 reasoning would apply to a marriage settlement. A will imports the disposition by the 
 testator of his property. I am not aware of any legal or equitable presumption that a 
 man makes a settlement of his landed estate upon his marriage ") ; West v. Reid (1843), 
 2 Hare 249, where, at p. 259, Wigram, V.-C, speaks of a " disregard of some facts known 
 to a purchaser, which at least indicated the existence of these facts notice of which the 
 Court imputes to the purchaser," as an essential element in the doctrine, and adds at 
 pp. 260, 261 : "a purchaser may be presumed to investigate the title of the property he 
 purchases, and may therefore be presumed to have examined every instrument forming 
 a link, directly or by inference, in that title, and that presumption I take to be the founda- 
 tion of the whole doctrine. But it is impossible to presume that a purchaser examines 
 instruments not directly nor presumptively connected with the title, only because they may 
 
§§ 59, 60 (presumptive knowledge). 43 
 
 the result in point of law is that lie is deemed to know the facts which he 
 would have ascertained if he had made inquiry. He cannot better his position 
 by abstaining from so doing. On the other hand, his position cannot be 
 worse than it would have been had he made inquiry and been in possession 
 of the result ot it " (e). 
 
 60. If the deeds or instruments in respect of which it is suggested that 
 the party ought to have made inquiry, or further or more diligent inquiry, 
 are of such a character that they viay, or may not, relate to the property which 
 IS the subject of the transaction, no imputation of knowledge is made against 
 him, whether any statement has or has not been made to him by the opposite 
 party as to the contents of such deeds ; a fortiori is the party free of any such 
 imputation where a positive misrepresentation has been made to him, whether 
 m words, or by acts and conduct (such as the delivery of part only of the 
 title-deeds, as and for the whole), with the object and result of misleading 
 him : but, if the instrument is one that must relate to the property, the 
 imputation is made, even though he has been deceived by a direct falsehood 
 as to its provisions and terms (/). On the other hand, where the instrument 
 in question forms no part of the title which is the subject of the transaction, 
 no presumption can possibly be made against ? party abstaining from 
 investigation, since the instrument obviously cannot relate to the 
 property {g). 
 
 hy 'possibility affect it ") ; Sadkr v. Lee (1843), 6 Beav. 324 {per Lord Langdalb, M.R., 
 at pp. 350, 351 — " might, and rmist, have discovered," &c.) ; Barnhart v. GreensMelds 
 (1853), 9 Moore P. C. 18, 32, 33 ; Ware v. Lord Egmont (1854), 4 De G. M. & G. 460 (per Lord 
 Ceanwoeth, L.C, at p. 473 : " he ought not to be treated as if he had notice, unless the 
 circumstances are such as to enable the Court to say, not only that he might have acquired, 
 but also that he ought to have acquired, the notice with which it is sought to affect him ") ; 
 Gainsborough (Earl of) v. Watcombe Terra Gotta Clay Co. (1885), 54 L. J. (oh.) 991 (per 
 NoETH, J., at pp. 994, 995 : a purchaser or mortgagee who takes without investigation of 
 title is not affected with notice of such matters as he could not have ascertained without 
 going behind the documents of title, but only of such facts as the usual investigation 
 of title would disclose) ; Lloyds Banking Co. v. Jones (1885), 29 C. D. 221 (per Peaeson, J., 
 at p. 230 : notice of mere fact of marriage of mortgagor is not notice of the existence 
 or contents of a marriage settlement ; cp. Jones v. Smith, sup.) ; Bailey v. Barnes, [1894] 
 
 1 Ch. 25, C. A. (per Our. at pp. 34, 35) ; Hunt v. Luck, [1902] 1 Ch. 428, C. A. (per Vaughan 
 Williams, L.J., who, at p. 434, points out that the inquiries which it was contended that 
 the mortgagee ought to have made of the tenants would have revealed nothing as to the 
 equitable title notice of which was sought to be imputed to him). The opinion to the 
 contrary of the above rulings expressed by Romilly, M.R., at p. 62 of Jones v. Williams, 
 (1857), 24 Beav. 47, is clearly erroneous. 
 
 (e) Per Lord Herschell, at p. 220 of London Joint Stock Bank v. Siinmons, [1892] 
 .4. C. 201, H. L., an estoppel case. 
 
 (/) Jones V. Smith (1841), 1 Hare 43, per Wigeam, V.-C, at pp. 68-70, and per Lord 
 Lyndhukst, L.C, on appeal (1843), 1 Ph. 244, at pp. 253, 254 ; Hunt v. Elmes (1860), 
 
 2 De G. F. & J. 578 ; Wilson v. Hart (1866), 1 Ch. App. 463 (per Ttonee, L.J., at p. 468) ; 
 Ratcliffe v. Barnard (1871), 6 Ch. App. 652 (per James, L.J., at p. 654) ; Batman v. Harland 
 (1881), 17 C. D. 353 (pe?- Jessel, M.R., at pp. 356-358) ; Northern Counties, &c., Co. v. Whipp 
 (1884), 26 C. D. 482, C. A. (per Cur. at p. 492) ; English & Scottish Mercantile Investment 
 Co. V. Brunton, [1892] 2 Q. B. 700, C. A. (per Lord Eshee, M.R., at p. 711, and Bowen, L.J., 
 at p. 717, who there point out that there is no presumptive notice, whether a misstatement 
 is made to the party or not, of the contents of an indorsement which may or may not 
 relate to the property) ; Be Valletort Sanitary Steam Laundry Co., [1903] 2 Ch. 654 (per 
 Swinfen Eady, J., at pp. 659, 660). 
 
 (g) Wilkes v. Spooner, [1911] 2 K. B. 473, C. A. (where the party was held not to have 
 constructive notice of an instrument which formed no part of the title of the surrenderor 
 
44 CH. II, SECT. 3, SUB-S. (5). 
 
 61. In sucli transactions and circumstances as are above referred to, the 
 party to whom notice would otherwise be imputed, is free from such imputa- 
 tion, if, having duly made his demand for the delivery or production, as the 
 case may be, of the deed or other instrument, he is met with a reasonable 
 excuse for non-delivery or non-production, and he honestly believes that the 
 excuse is based on facts truly stated (h) ; but not of course if the statement 
 made by way of excuse is obviously frivolous or fraudulent, or if, without 
 being so, the party does not in fact believe in its truth or bona fides, or if it 
 takes such a form as to suggest and invite further inquiry, capable of being 
 at once and easily set on foot, in which case the party may still be afiected 
 with notice, if he fails to prosecute such further inquiry, and if the inquiry 
 would have revealed the falsity of the representation as to the nature of the 
 instrument [lih), or as to the purpose for which it was lodged or deposited 
 with a third person (i). And when a party is put on inquiry, the question 
 of whether the answer he receives from the person of whom he inquires is one 
 with which he might reasonably be satisfied depends in some cases on the 
 question whether he made the proper kind of inquiry. Thus, where a party 
 entitled to production of a document demands, not production, but delivery, 
 and receives a statement which would constitute a reasonable excuse for 
 withholding delivery, but not for withholding production, he may be afiected 
 with constructive notice of the contents of the document (j). 
 
 62. In the case of sales of real property, a purchaser who has actual notice 
 that a tenant is in possession or occupation of the property is presumed, 
 as against that tenant or occupier, to have notice of his title and rights (A;), 
 
 to the particular surrendered lease which was in question, and therefore not to be charge- 
 able with having failed to make " such reasonable inquiries as ought to have been made " ■- 
 -per Vaughan Williams, L.J., at pp. 484, 485, and Pabwell, L.J., at pp. 486, 487). 
 
 (A) Hewitt V. Loosemoore (1851), 9 Hare 449 {per TtrRNBE, V.-C, at p. 458) ; Barnhart v. 
 OreensUelds (1853), 9 Moore P. C. 18 (at pp. 33 sqq.) ; Jones v. Williams (1857), 24Beav. 
 47 {per RomLLy, M.R., whose statement of the law, at p. 62, is correct, if the addition 
 referred to in note {d), sup., be eliminated) ; Espin v. Pemherton (1859), 3 De G. & J. 547 
 {per Lord Chblmsfobd, L.C, at p. 556) ; Agra Bank, Ltd. v. Barry (1874), L. B. 7 H. L. 
 135 (per Lord CAmifS, L.C, at pp. 147, 149, and Lord Hatheeley at pp. 154, 155) ; 
 Northern Counties of England Fire Insurance Co. v. Whipp (1884), 26 C. D. 482, C. A. {per 
 Cur. at p. 492). 
 
 (M) Taylor v. Baker (1818), 5 Price 306. 
 
 (i) Maxfield v. Burton. (1873), L. B. 17 Eq. 15 {per Jessel, M.B., at pp. 18, 19 : "a 
 man on his marriage has a freehold estate ; he tells the solicitor for the lady with whom he 
 is about to be married, on being asked for his deeds, ' they are deposited at my bankers' 
 for safe custody.' The solicitor does nothing more, and it turns out that they are pledged 
 to the bankers. I hold that it was the duty of the solicitor to make further inquiry of 
 the bankers, and to ask for the deeds. If he had done so, he would have been told that the 
 representation made to him of their being deposited for safe custody, which of course means 
 safe custody only, was incorrect ; inasmuch as they were deposited by way of mortgage, 
 and on that mortgage a considerable sum of money was then due. I consider that that 
 was constructive notice, and bound the lady who was about to be married ") ; Spencer v. 
 Clarke (1878), 9 C. D. 137 {per Hall, V.-C, at pp. 141, 142, following the case last cited); 
 Hunt V. Luck, vhi inf. 
 
 {j) Per BiGBY, L.J., at pp. 275, 276 of Oliver v. Hinton, [1899] 2 Ch. 264, C. A. See 
 also Hunt v. Luck, [1902] 1 Ch. 428, C. A. {per Vaughan Wiluams, L. J., at p. 434). 
 
 (k) Taylor v. Stibbert (1794), 2 Ves. 437 {per Lord Lottgheoeotjgh, L.C, at p. 440) ; 
 Daniels v. Davison (1811), 16 Ves. 249 {per Lord Eldon, L.C, at p. 254) ; Allen v. Anthony 
 (1816), 1 Mer. 282 {per Lord Eldcw, L.C, at pp. 284, 285) ; Bailey v. Richardson (1852), 
 9 Hare 734 ; Barnhart v. Greenshields (1853), 9 Moore P. C. 18, at pp. 32, 33 ; Knight v. 
 Bowyer (1858), 2 De 6. & J. 421 ; Hunt v. Luck, sup. {per Faewell, J., at p. 51). 
 
§§ 61-63 (presumptive knowledge). 45 
 
 but not, as against the vendor, to have notice of his title and rights or of any 
 limitation thereon created by snch tenancy. " There is no pretence," as is 
 clearly laid down by James, L.J. (though at one time it seems to have been 
 thought otherwise), for the doctrine " that a person who wants to buy such 
 property, and has notice of the occupation of a tenant, is bound to inquire 
 of the tenant what is the nature of his tenancy. For this purpose James v. 
 Litchfield was cited as an authority. In that case there were certainly some 
 dicta which nearly go to that extent, and which support the notion that the 
 doctrine of Daniels v. Davison applies as between vendor and purchaser, 
 and whilst the matter still rests in contract. It is not necessary now to 
 deal with that case, but I am not prepared to assent to any such proposition. 
 The doctrine in question seems to me to refer to equities between the purchaser 
 and the tenant, when the legal estate has passed, and to have nothing to do 
 with the rights and liabilities of vendors and purchasers. If there is anything 
 in the nature of the tenancies which afiects the property sold, the vendor is 
 bound to tell the purchaser, and to let him know what it is which is being 
 sold, and the vendor cannot afterwards say to the purchaser, ' If you had 
 gone to the tenant and inquired, you would have found out all about it ' " (Z). 
 But actual knowledge that the rents of the property are paid to, and received 
 by, a person whose receipts are inconsistent with the vendor's title is presumptive 
 knowledge of that person's right, though no such knowledge is presumed 
 from the mere fact that the party had actual notice that the rent was paid 
 to local agents, and nothing more, where, if he had inquired of those agents, 
 he would have discovered nothing as to the inconsistent right of any such 
 third person {U). Where the property, though not in possession of the vendor, 
 is not in the possession of any other person either, the purchaser is not 
 put on inquiry as to the title of the last occupier of the vacant land, nor 
 fixed with notice of his title, if he refrains from such inquiry (m). 
 
 63. A person dealing with a limited company, though not a shareholder, 
 is boimd to take notice of what Lord Hatheeley called its " external posi- 
 tion," that is to say, he has presumptive knowledge of the contents of all 
 such constitutive and other instruments relating to its status and powers 
 as are accessible to the public {n). A fortiori is such notice imputed to him, 
 
 {I) CahalUro v. Henty (1874), 9 Ch. App. 447 (per Jambs, L.J., at pp. 449, 450). The 
 opinion there expressed was adopted in Hunt v. Luch, [1902] 1 Ch. 428, C. A., by Par- 
 well, J., at the trial, and, on appeal, by Vaughan Williams, L.J., at pp. 432, 433, and 
 Cozbns-Habdy, L.J., at p. 435, emphatically disapproving the incautious expression 
 used by Jbssel, M.R., at p. 562 of Mumford v. Stohwasser (1874), L. R. 18 Eq. 556, which 
 seems to imply a contrary view. The dicta in James v. Litchfield (1869), L. R. 9 Eq. 51, 
 which were disapproved of by James, L. J., in the passage from his judgment which is cited 
 in the text, are those of Romtt.t.y, M.R., at pp. 54, 55. Daniels v. Davison is cited in 
 the last note. 
 
 (II) Hunt V. Luch, sup., per Eabwell, J., at the trial, and Vaughan Williams, L.J., 
 at p. 434, on appeal. 
 
 (to) Miles V. Langley (1831), 2 Russ. & M. 626. 
 
 (n) Mahony v. East Holyford Mining Go. (1875), L. R. 7 H. L. 869 (per Lord Hatheeley 
 at p. 893 : " those who deal with joint stock companies are bound to take notice of that 
 which I may caU the external position of the company. Every joint stock company has 
 its memorandum and articles of association ... or ... its partnership deed under 
 
46 CH. II, SECT. 3, SUB-S. (5). 
 
 ■where lie has become a member of the company (o) : indeed, s. 14 (1) of 
 the Companies (Consolidation) Act, 1908 (which is a reproduction of corre- 
 sponding sections in a succession of previous Companies Acts) expressly 
 provides that " the memorandum and articles shaU, when registered, bind 
 the company and the members thereof to the same extent as if they 
 respectively had been signed and sealed by each member, and contained 
 covenants on the part of each member, his heirs, executors, and adminis- 
 trators, to observe all the provisions of the memorandum and of the 
 articles, subject to the provisions of this Act." But a stranger entering 
 into a transaction with a company is not deemed to have notice of the " indoor 
 management " of the company, or of anything beyond what may be gleaned 
 from instruments of the type above mentioned, or from statutes relating to 
 companies in general. Thus, where the articles of a company provided 
 that the board of directors might by resolution fix the number who were to 
 constitute a quorum, the party was held not to be fixed with notice of the 
 fact that the directors had exercised their power by resolving that three 
 should constitute a quorum, or of the fact that the instruction to enter into 
 the mortgage of which he was seeking foreclosure had been given at a meeting 
 of two directors only (p) ; and a bond fide holder of a debenture in the form 
 prescribed by the constitution of the company was similarly deemed free 
 from the imputation of knowledge of the fact that no directors had ever 
 been appointed, and no resolution, therefore, to issue debentures had ever 
 been passed {q). 
 
 64. Miscellaneous illustrations of presumptive knowledge are the following. 
 Where a solicitor, knowing that an order for an injunction is about to be 
 pronounced on the hearing of a motion, goes out of court for the purpose of 
 qualifying himself to assert afterwards with literal accuracy that he had no 
 actual knowledge of the terms of the order, he is nevertheless presumed to 
 have had all such knowledge thereof as he would have acquired if he had 
 stayed to hear it made (r). It was said, in another case is), of a partner in 
 a business who set up actual ignorance of certain facts, that " if he had used 
 
 which it acts. Those articles of association and that partnership deed are open to all 
 who are minded to have any dealings whatsoever with the company, and those who 
 so deal with them must be affected with notice of aU that is contained in those two docu- 
 ments "). 
 
 (o) New Brunswick & Canada Railway <fc Land Co. v. Conybeare (1862), 9 H. L. C. 
 711 (per Lord Westbuby, L.C, at p. 734). For this reason it was always held, and with 
 particular insistence and emphasis by Lord Caiens, L.J., that it is for the shareholder 
 seeking revocation of his contract to take shares, on the ground of misrepresentation of 
 the objects of the company, to move with more than ordinary promptitude, if he wishes 
 to protect himself against a plea of presumptive knowledge and affirmation : see his 
 observations at pp. 423, 424 of Lawrence's Case (1867), 2 Ch. App. 412 ; pp. 426, 427 of 
 Kincaid's Case (1867), 2 Ch. App. 420 ; pp. 540, 541 of Wilkinson's Case (1867), 2 Ch. 
 App. 536 ; and p. 684 of Peel's Case (1867), 2 Ch. App. 674. 
 
 ip) County of Gloucester Bank v. Rudry Merthyr Steam & House Coal Colliery Co., 
 [1895] 1 Ch. 629, C. A. (per Lord Halsbuey at pp. 632, 633, and Ldtoley, L.J., at pp. 635, 
 636). 
 
 (q) Duck V. Tower Galvanizing Co., [1901] 2 K. B. 314 (per Lord Alvbestone, C.J., 
 at p. 318). 
 
 (r) Hearn v. Thomas (1807), 14 Ves. 136. 
 
 (s) Sadler v. Lee (1843), 6 Beav. 324. 
 
§§ 63, 64 (presumptive knowledge). 47 
 
 ordinary diligence and attention in the management of his business, he might 
 and must have discovered all the facts which are material to this case ; the 
 means of knowledge appear to have been in his power ; he would, with very 
 little trouble, have found confusion and irregularity in the accoimts, and a 
 proper investigation of the sources of such confusion and irregularity would 
 have led to the discovery of all that had been done. In such a case as this, 
 and under such circumstances, Courts of Justice . . . must impute the 
 knowledge which the partners, acting in their interests and in the plain 
 discharge of their duty, might and ought to have obtained " (t). A party 
 seeking to set aside a deed whereby he had compromised his liability under 
 a previous deed of suretyship, on the ground that, imknown to him, certain 
 events had happened between the dates of the two deeds in virtue of which he 
 had become discharged from his guarantee under the earlier deed, was held 
 disentitled to relief, inasmuch as, the burden being on him of proving ignorance 
 of the above-mentioned events at the date of the compromise, he had failed 
 to sustain the burden, it being proved that, three years previously to that 
 date, he had made inquiries as to the circumstances in question, and had 
 been furnished with the names and addresses of all the persons who could 
 and would have informed him, if asked (and who in fact eventually did so), 
 and yet took no steps whatever to ascertain the truth from any of those 
 persons till after the compromise ; and the party was accordingly deemed 
 affected with constructive notice of the whole of the facts (u). It has been 
 laid down that " when a person purchases property where a visible state of 
 things exists which could not legally exist "• — or even which is " very unlikely 
 to exist " — " without the property being subject to some burden, he is taken 
 to have notice of that burden;" but the conditions stated are not present 
 when the only " visible state of things " is the existence of windows in an 
 adjoining house, from which no knowledge of an agreement giving a right to 
 access of light to them can be imputed to the purchaser (v). In cases of 
 purchasing, or taking, subleases, it has been thrown out, as a suggestion, 
 that the party so purchasing or taking may possibly be affected with pre- 
 sumptive knowledge of unusual restrictive covenants in the head lease if he 
 has acquired actual knowledge of similar covenants in leases of adjoining 
 portions of the same estate ; but the precise point has never been actually 
 decided (w). 
 
 (0 aadler Y. Lee (1843), 6 Beav. 324, per Lord Lastgdale, M.R., at pp. 350, 351. 
 
 \u) Wason v. Wareing (1852), 15 Beav. 151 (per Romilly, M.R., at p. 155). 
 
 (v) Alien V. Seckham (1879), 11 C. D. 790, C. A., per Brett, L.J., at pp. 795, 796. 
 
 (tc) Re White and Smith's Contract, [1896] 1 Ch. 637 (per Stirlino, J., at pp. 642, 643 : 
 " I can imagine cases in which the Court might hold that a purchaser had failed to take 
 reasonable precautions if he did not avail himself of an opportunity, or even a possible 
 opportunity, of examining a lease ; as, for example, where knowledge was brought home 
 to him of the existence of similar covenants in leases of adjoining portions of the same 
 estate "). In this case, however, that which Stirling, J., " imagined," as a possible 
 ground for the inference of the knowledge referred to, was not proved, or even alleged. 
 In Molyneux v. Hawtrey, [1903] 2 K. B. 487, C. A., the plaintiff, excusing himself 
 from producing the head lease itself, had tendered for inspection a document which he 
 stated to be a copy of a lease of some adjoining property with the same kind of covenants, 
 but which the defendant's solicitor was unable to, and did not in fact, peruse, by reason 
 of the pressure of other engagements ; and it was contended for the plaintiff that this 
 
48 CH. II, SECT. 3, SUB-S. (6). 
 
 Suh-s. (6). Statutory Presumjitions of Knowledge. 
 
 65. There are various statutes and enactments wtereby, in different 
 branches of the law, it is provided that certain presumptions of knowledge 
 shall, or shall not, be made in the circumstances and under the conditions 
 respectively prescribed. These may be divided into two maia classes : the 
 one consistuig of those codifying statutes or enactments, the principal object 
 of which is merely to declare, in a succinct and summary form, with or without 
 extensions or restrictions in this or that particular, the substance of the 
 existing common law rules relating to constructive notice ; and the other 
 comprising all those statutory provisions which abolish or curtail old, or 
 introduce new, presumptions of notice. 
 
 66. By far the most important example of the former class of enactment 
 ias. 3, sub-s. (1) of the Conveyancing Act, 1882 (a;), which is in the following 
 terms : — 
 
 " A purchaser shall n ot be prejudicially affected by n otice of any instrument, 
 fact, or thing unless — 
 
 (i) It is within his own knowledge, or would have come to his knowledge, 
 if such inquiries or inspections had been made as ought reasonably 
 to have been made by him ; or 
 
 (ii) In the same transaction with respect to which a question of notice 
 to the purchaser arises, it has come to the knowledge of his counsel, 
 as such, or of his solicitor or other agent, as such, or would have 
 come to the knowledge of his solicitor or other agent, as such, if 
 such inquiries and inspections had been made as ought reasonably 
 to have been made by the solicitor or other agent." 
 
 67. The scope of the above statutory rules is, by force of the statute 
 itself, extended far beyond that which would appear to be indicated by the 
 literal language of the section, or the short title of the Act : that is to say, 
 it is not confuaed to sales of real property, or to conveyanciog transactions 
 in their strictest sense (though these, no doubt, are the kind of transactions 
 which are most fertile in illustrations of the doctrine of presumptive know- 
 ledge), for by the interpretation clause of the statute the term " purchaser " 
 is defined as incluaing " a lessee, a mortgagee, or an intending purchaser, 
 lessee, or mortgagee, or other jierson wJio, for valuable consideration, takes or 
 deals for froperty " (y), whilst" 'property 'includes real and personal property, 
 
 constituted " a fair opportunity " to the defendant's solicitor to acquaint himself with the 
 nature of the onerous restrictions there in question, and that the defendant consequently 
 had presumptive knowledge of those restrictions ; but the C. A., aflSrming Wbight, J., 
 considered that " fair opportunity " was a question of fact, and that the plaintiff had not 
 discharged the burden on him of proving this fact {per CoLUnsrs, M.R., at pp. 491, 492 ; 
 Mathew, L.J., at p. 496 ; Cozens-Haedy, L. J., at p. 497). The case, therefore, suggested 
 by Stirling, J., did not arise. It would have arisen if the defendant's solicitor had in 
 fact perused the document produced to him, but admittedly he had not, and consequently 
 no " knowledge was brought home to him of the existence of similar covenants," 
 such as would be required to raise the question. 
 
 (x) 45 & 46 Vict. c. 39. 
 
 {y) Ibid., s. 1, sub-s. (4), (ii). See also s. 1, (2),of theMoney-Lenders Act, 1911, cited 
 at the end of § 72, post, for a further statutory application of the term " purchaser." 
 
§§ 65-68 (presumptive knowledge). 49 
 
 and any debt, and any thing in action, and any other right or interest in the 
 natui-e of property, whether in possession or not" (2). In other words the 
 rules ia question are to be applied to every species of transaction for valuable 
 consideration in relation to property of every description known to the law, 
 and, in the light of the above statutory definitions, the section would run as 
 follows : " A person taking, or dealing for, or intending to take, or deal for, 
 property of any description whatever, for valuable consideration, shall not 
 be prejudicially affected by notice of any instrument, fact, or thing unless — 
 (i) it is within his own knowledge, or would have come to his knowledge, 
 if such inquiries or inspections had been made as ought reasonably to have 
 been made by him ; or (ii) in the same transaction with regard to which a 
 question of notice to such person arises, it has come to the knowledge of his 
 agent, as such, or would have come to the knowledge of his agent, as such, 
 if such inquiries and inspections had been made as ought reasonably to have 
 been made by the agent." 
 
 68. It wiU be seen that the doctrine, as so stated, is a substantial repro- 
 duction and declaration, in most lucid and apt phraseology, of the pre-existing 
 judicially declared rules as to the knowledge imputed to a person from the 
 actual knowledge of his agent, or from his own actual knowledge of an instru- 
 ment or fact putting him upon inquiry as to other instruments or facts (a). 
 It is true that there is no reference in the section to the supposed requirements 
 of " fraud," or " gross negligence," in cases where knowledge of one fact is 
 imputed to a person from his proved actual knowledge of another ; but neither 
 is there, in general, any such condition precedent to the presumption at 
 common law, as will be hereafter explained (b) ; at all events, if and in so 
 far as any judicial expositions of the doctrine may be deemed to have lent 
 countenance to such a view, they are now replaced by the clear and precise 
 provisions of this enactment (c). In fact, generally, as has been pointed out 
 in more than one case (d), it is clear from the strictly negative form in which 
 it is expressed (e) that the section was intended to operate rather by way 
 
 (z) Conveyancing Act, 1882, s. 1, sub-s. (4), (i). 
 
 (a) Being the rules discussed in Sub-ss. (4) and (5) of this Section, ante. Several 
 references are made in those Sub-sections to the enactment in question : see note (a;) to 
 § 49, note (s) to § 54, notes (v) and (a) to § 56, and note (c) to § 59. Eminent authorities 
 have always regarded the statutory provision as reflecting common law principles, and, 
 further, as expressing those principles in more terse, definite, and correct language 
 than that which had been used by some of the judges : see the observations of Ldstdlby, 
 L. J., delivering the judgment of the Court, at p. 35 of Bailey v. Barnes, [1894] 1 Ch. 25, C. A. ; 
 of RoMBE, J., at p. 269 of Oliver v. Hinton, [1899] 2 Ch. 264, C. A. ; of Vatjghan WmLiAMS, 
 L.J., at p. 435 of Hunt v. iMck, [1902] 1 Ch. 428, C. A. ; of Collins, M.R., at p. 493, 
 MATHEW,Li.J.,atpp.495,496,andCozBNS-HABDy,L.J.,at p. 497, of Molyneux v. Hawtrey, 
 [1903] 2 K. B. 487, C. A., in which last case the preference of the Court for the plain and 
 direct language of the statute over previous judicial refinements was most marked. 
 
 (6) See App. A, Sect. 2, Sub-ss. (3), (4), post. 
 
 (c) See the passages from Molyneux v. Hawtrey, cited in note (a), sup. 
 
 (d) See Bailey v. Barnes, sup., per Cur., at p. 35: "the Conveyancing Act, 1882, 
 really does no more than state the law as it was before, but its negative form shows that a 
 restriction rather than an extension of the doctrine of notice was intended by the legis- 
 lature." To the same effect Swdjebn' Eady, J., at p. 663 of Re Valletort Sanitary Steam 
 Laundry Co., [1903] 2 Ch. 654, and Joyce, J., at pp. 640, 641 of Berwick & Co. v. Price, 
 [1905] 1 Ch. 632. 
 
 (e) See the opening words of s. 3, sub-s. (1), (i), as cited in § 66, ante : " a purchaser 
 
 B.N.D. E 
 
50 CH. II, SECT. 3, SUB-S. (6). 
 
 of restrictioD on, than extension of, the existing rules of law. Thus it has 
 given the quietus, as has already been indicated, to at least two propositions 
 of a somewhat heretical character, which, but for the intervention of the 
 legislature, might possibly by this time have been accepted as sound doc- 
 trine (/). 
 
 69. Other declaratory or codifying enactments, with reference to pre- 
 sumptive knowledge, which have already been noticed, are s. 16 of the Partner- 
 ship Act, 1890 {g), and ss. 18, 19 of the Marine Insurance Act, 1906 (h). 
 
 70. Besides the above, there are various statutes and statutory provisions 
 which, without purporting to declare or codify any of the established rules 
 of common law as to presumptive knowledge, relate to " notice " of certain 
 facts in such a way as to presuppose and incorporate such rules. How far, 
 in each case, the term "notice" includes knowledge other than actual, must 
 depend upon the language and intention of the particular statute. Thus 
 (to take a few examples only out of many) in the various enactments 
 providing that " notice of an act of bankruptcy " shall entail certain con- 
 sequences on the position of any person having such notice, it has been held 
 that " notice " means knowledge (notitia), and is not confined to its popular 
 meaning as a formal document " giving notice," and that it includes that 
 species of knowledge which is presumed from wilful and fraudulent blindness 
 and abstention from inquiry, but not that which is presumed from mere 
 abstention in fact, unaccompanied by any want of good faith {i). So also 
 in enactments relating to the " holder in due course " of a negotiable instru- 
 ment, the same meaning is given to the " notice of a defect in the title " of a 
 previous party to the instrument which invalidates the claim of any person to 
 be considered such a holder (j). A like limited construction has been placed 
 upon the expression in question as used in s. 55 (1) of the Conveyancing and 
 Law of Property Act, 1881 (44 & 45 Vict. c. 41), which provides that " a 
 receipt for consideration money or other consideration in the body of a deed, 
 or endorsed thereon, shall in favour of a subsequent purchaser, not having 
 notice that the money or other consideration thereby acknowledged to be 
 
 shaU not be prejudicially affected . . . unless ..." (not — "a purchaser steM be preju- 
 dicially affected, ... i/ ..." ), and, in order that there might be no possible mistake 
 about the meaning and object of the enactment, the further restrictive provision in sub-s. (3) 
 that " a purchaser shall not by reason of anything in this section be affected by notice in 
 any case where he would not have been so affected if this section had not been 
 enacted." 
 
 ( / ) See § 54, note (s), and § 56, note (a), ante. 
 
 (g) See § 44, note («), § 55, note (m), and § 56, note (u), ante. 
 
 Ih) See § 38, note {g), § 39, note (A), § 42, note {x), and § 49, note (6), ante. 
 
 (i) As to notice of an act of bankruptcy within the meaning of 2 & 3 Vict. u. 29, see 
 Bird V. Bass ( 1843), 6 M. & G. 143, at pp. 147, 148. As to such notice within the meaning 
 of a similar provision in the Bankruptcy Act, 1869, s. 20, see Ex p. Snowhall (1872), 7 
 Ch. App. 534, per Cur., at p. 549 (" he is not allowed to escape from the effects of having 
 had notice by saying he has not read it, when he ought to have read it," or " by saying 
 that he did not draw the natural inference from the fact "). The corresponding sections 
 of the Bankruptcy Act, 1883, are ss. 45, 49, as to which, generally, see Lord Halsbury's 
 Laws of England, title Bankruptcy and Insolvency, vol. ii, pp. 288-291. 
 
 (j) See s. 29 of the Bills of Exchange Act, 1882 (45 &. 46 Vict. c. 61), and the cases- on 
 the meaning of " notice " in that section which are cited in the notes thereto in Chalmers' 
 Digest. 
 
§§ 68-72 (presumptive knowledge). 51 
 
 received was not in fact paid or given, wliolly or in part, be sufficient evidence 
 of the payment or giving of the whole amount thereof " (jj). Again, witli 
 reference to notice of the existence or determination of the authority of a mer- 
 cantile agent to make a disposition of goods, within the meaning of ss. 2 and 4 
 of 6 Geo. i, c. 94, s. 4 of 5 & 6 Vict. c. 39, and s. 2 of the Factors Act, 
 1877 (40 & 41 Vict. c. 39), all of which sections are now reproduced in s. 2 
 of the Factors Act, 1889 (52 & 53 Vict. c. 45), it has been held by Lord St. 
 Leonaeds, dealing with the Act of 1842, that a pledgee, if his title is to be 
 invalidated, must be fixed with actual knowledge that the agent pledging 
 the goods was acting maid fide, and beyond his authority, in so doing, and 
 that mere suspicion is not enough ; and by Lord Herschell, with reference 
 to the Factors Acts generally, that their effect is "to attach some of the 
 elements of negotiability to documents of title to goods, and render the mere 
 possession of them evidence of aiuthority to deal with them in the ordinary 
 course of business, and to preclude the necessity of any further inquiry " (jjj). 
 The meaning of " knowingly issuing," and " notice of contracts," in company 
 legislation, will be dealt with hereaftter in its proper place (^). It is very 
 rarely indeed that an enactment distinguishes between " actual " and 
 " constructive notice "in express terms, but there is at least one instance of 
 this being done : and, when it is, the expressions in question must of course 
 be taken in their established technical meanings (Z). 
 
 71. The second class of enactments has now to be considered, viz. 
 those which either curtail the efiect and range of common law presump- 
 tions of knowledge — this is by far the more common case — or ordain new 
 presumptions which the common law would not, or might not, otherwise 
 make. 
 
 72. Of the former species, examples are to be found in (besides those 
 just mentioned) the enactments which expressly relieve certain classes of 
 personsfromthenecessity of making inquiry as to certain facts (which means 
 of course that Imowledge of those facts is not to be imputed to them if they 
 omit to make such inquiry), such as the provision, with reference to settled 
 lands, that " a person dealing in good faith with the tenant for life is not 
 concerned to inquire respecting the giving of any such notice as is required 
 by this section " (to) ; the provision, with reference to conveyancing trans- 
 actions, that upon a sale made in professed exercise of the power conferred 
 on mortgagees by the Conveyancing and Law of Property Act, 1881, " a 
 purchaser is not, and never has been, concerned to see or inquire whether a case 
 has arisen to authorize the sale, or due notice has been given, or the power 
 
 (jj) See Lloyds Bank v. Bulloch, [1896] 2 Ch. 192, per Chitty, J., at p. 197 ; Powell v. 
 Browne (1907), 97 L. T. 854, C. A., per Cozens-Hakdy, M.E., and Moitlton, L.J., at 
 p. 856 ; Gapell v. Winter, [1907] 2 Ch. 376, per Parkbe, J., at p. 392. 
 
 (jjj) The caaes containing the opinions of Lord St. Leonabds and Lord Herschell, 
 referred to in the text, are respectively Navulshaw v. Brownrigg (1852), 2 De G. M. & G. 
 441, 451, and London Joint Stock Bank v. Simmons, [1892] A. C. 201, 218, H. L. 
 
 (k) In Ch. VL § 556, post. 
 
 (l) See note (z) to § 73, post. 
 
 (m) Settled Land Act, 1882 (45 & 46 Vict. c. 38), s. 45. As to " dealing in good faith," 
 :see Mogridge v. Clapp, [1892] 3 Ch. 382, 395, 399, C.A. 
 
62 CH. II, SECT. 3, SUB-S. (6). 
 
 is otherwise properly and regularly exercised " (n) ; and tlie provision of 
 the Moneylenders Act, 1911, in relation to moneylenders, that "a person 
 shall not be deemed to have had notice of a defect in an agreement or security 
 by reason only that a search in the register established imder the Money- 
 lenders Act, 1900, would have disclosed the defect or shown that the agreement 
 or security was efiected with a moneylender ; and, for the purposes of this 
 Act and the Moneylenders Act, 1900, the provisions of section three of the 
 Conveyancing Act, 1882, shall apply and be deemed always to have applied 
 as if the expression ' purchaser ' included a person making any such payment 
 or transfer as aforesaid," i.e. "any payment or transfer of money or property 
 made bond fide by any person, whether acting in a fiduciary capacity or 
 otherwise, on the faith of the validity of any agreement with, or security 
 taken by a moneylender " (o), 
 
 73. The second species of this class finds illustration in a variety of 
 miscellaneous enactments {oo), but principally in those which provide for 
 compulsory registration of the matters therein mentioned. Of these, the 
 most important, in the sense that they have given rise to the greatest number 
 of decisions on the canons of interpretation to be applied to the legislative 
 creation or restriction of presumptions of knowledge, are the Acts requiring 
 registration of titles to, and incumbrances upon, estates and interests in land, 
 in Middlesex (p), Yorkshire {q), Ireland (r), Scotland (s), and certain of the 
 
 (n) Conveyancing Act, 1911 (1 & 2 Geo. 5, c. 37), ». 5 (1), which has now replaced, and 
 enlarged, s. 21 (2) of the Conveyancing Act, 1881, as to the construction of which see 
 Baiky v. Barnes, [1894] 1 Ch. 25, C. A. (at pp. 30, 34, 36). 
 
 (o) Moneylenders Act, 1911 (1 & 2 Geo. 5, c. 38), a. 1, sub-s. (2). Tor an instance of 
 an enactment which renders void any condition purporting to fix a party with notice, 
 see s. 81 (4) of the Companies (Consolidation) Act, 1908, which is the subject of § 562, post. 
 
 {oo) These are scattered over the whole field of the statute law. Useful illustrations 
 may be gleaned from legislative repression or restriction of dangerous trades and occupa- 
 tions, e.g. 3. 2, sub-s. (2), and s. 3, of the Betting and Loans (Infants) Act, 1892 (55 Vict, 
 c. 4), and s. 3 of the Moneylenders Act, 1900 (63 & 64 Vict. c. 51), where primd facie 
 presumptions are made in certain cases against money-lenders of knowledge of the minority 
 of persons solicited and circularized by them. 
 
 (p) The statute here is the Middlesex Registry Act, 1708 (7 Anne, c. 20), by s. 1 of 
 which it is provided that the deed or conveyance " shall be adjudged fraudulent and void 
 against any subsequent purchaser or mortgagee for valuable consideration, unless such 
 memorial thereof be registered as by this Act is directed before the registering of the 
 memorial of the deed or conveyance under which such subsequent purchaser or mortgagee 
 shall claim." For decisions on this section, see Hine v. Dodd (1741), 2 Atk. 275 ; Le Neve v. 
 Le Neve (1747), Ambl. 436, 3 Atk. 346, 1 Ves. 64 ; Jolkmd v. Stainbridge (1797), 3 Ves. 478 j 
 Wyatt V. BarweU(1815), 19 Ves. 345 ; Swmpter v. Cooper (1831), 2 B. & Ad. 223 ; Robinson 
 V. Woodward (1851), 4 De G. & Sm. 562 ; Rolland v. Hart (1871), 6 Ch. App. 678. 
 
 (q) The statutes as to Yorkshire are the following : 2 & 3 Aime, c. 4, and 6 Aime, c. 2 
 (as to the West Biding) ; 6 Anne, c. 35, 6 Anne, c. 62, and 8 Geo. 2, c. 6 (as to the East 
 Riding) ; and the Yorkshire Registries Act, 1884 (47 & 48 Vict. c. 54), and the Yorkshire 
 Registries Amendment Act, 1885 (48 & 49 Vict. c. 26), on which see note (2), post (as to 
 the North, East, and West Ridings). For the construction of the earlier statutes, now 
 repealed, see Ghadwick v. Turner (1866), 1 Ch. App. 310 ; Kettlewell v. Watson (1882), 21 
 C. D. 685 : for that of the Acts of 1884 and 1885, see Battison v. Hohson, [1896] 2 Ch. 403 ; 
 Manks v. WUteley, [1912] 1 Ch. 735, C. A. 
 
 (r) The Irish registry statute was 6 Anne, c. 2, now repealed. See the following: 
 decisions thereon : Nixon v. Hamilton (1838), 2 1)r. & Wall. 364 ; 56 R. E. 246 ; Rochard v. 
 Fulton (1844), 1 Jo. & Lat. 413 ; 68 R. R. 265 ; Agra Bank, Ltd. v. Barry (1874), L. R. 7 
 H. L. 135. 
 
 (s) See, as to the effect of registration in the Register of Sasines, Qordon-Gumming v. 
 HouUswm-ih, [1901] A. C. 537, H. L. 
 
§§ 72, 73 (presumptive knowledge). 53 
 
 colonies (t), and providing that unregistered deeds and conveyances stall 
 be deemed fraudulent and void against subsequent purcliasers or mortgagees 
 for valuable consideration. This involves two things : (i) the creation of a 
 statutory presumption of knowledge on the part of every one of what is 
 entered on the register, for compulsory registration is peremptory notice to 
 all the world of all matters so recorded (u), in the absence of any express 
 proviso in the statute to the contrary (mm) ; and (ii) a statutory dispensation 
 to all parties having transactions relating to registered lands from instituting 
 those inquiries and investigations as to matters not on the register which 
 otherwise they would be expected to institute, and of which, in the absence 
 of such inquiry, they would be afiected with constructive notice. That is 
 to say, a person who has duly registered his deed is not to be fixed with 
 presumptive knowledge of the existence or contents of, or submit to have 
 his deed postponed to, a prior unregistered deed by reason only of his 
 having such notice of related facts as would, but for the statute, have raised 
 a presumption agaiast him of the knowledge in question. This, however, 
 does not mean that, if he has actual notice of the unregistered conveyance, 
 he is protected by the registration. It was, indeed, at one time " much 
 doubted whether the Courts ought ever to have suffered the question of 
 notice " — that is, any kind of notice — " to be agitated against a party who 
 has duly registered his conveyance : but they have said ' we cannot permit 
 fraud to prevail; audit shall only be in cases where the notice is so clearly 
 proved as to make it fraudulent in the purchaser to take and register a con- 
 veyance in prejudice to the known title of another, that we will suffer the 
 registered deed to be afiected ' " (»;). Bad faith cannot be allowed to shelter 
 itself under the protection of even the most express and uncompromising 
 statutory language, or, putting it on another ground, the one object of the 
 statute is to secure notoriety of titles, and, in the case of proved know- 
 ledge in fact, that purpose is effected in the particular case, though by other 
 means : but, whichever theory be adopted, it is well established that 
 only the clearest and most incontrovertible proof of express and direct notice 
 is sufficient to deprive a party of his statutory right to rely upon his registra- 
 tion (iv). Mere suspicion — even strong suspicion — that the party had actual 
 knowledge, or wilfully shut his eyes to the truth, will not, as it might in 
 ordinary cases, suffice for this purpose (x). On the other hand, if the actual 
 
 (0 See Crowly v. Bergtheil, [1899] A. C. 374, P.O. (Natal). 
 
 (tt) Hine v. Dodd, sup., per Lord Hahdwicke, L.C, at p. 275. 
 
 (uu) Aa there is in s. 1 (2) of the Moneylenders Act, 1911, cited in § 72, ante. 
 
 (v) Wyatt V. Barwell, sup., per Gbant, M.R., at p. 438. 
 
 {w) Sine v. Dodd, sup., where Lord Haedwicke, L.C, at p. 276, says that either clear 
 and undoubted notice, or fraud, must be shown ; Le Neve t. Le Neve (1747), Ambl. 436 
 (per Lord Haedwioke, L.C, at pp. 441-447) ; Jolland v. Siainbridge, sup. {per Aeden, M.R., 
 at p. 485) ; Nixon v. Hamilton, sup. {per Lord Plitnkbt, L.C (Ir.), at pp. 390, 391) ; 
 Holland v. Hart, sup. {per Lord Hathbelby, L.C, at p. 681). 
 
 (x) Hine v. Dodd, sup. {per Lord Haedwicke, L.C., at p. 276 : " suspicion of notice, 
 though a strong suspicion, is not sufficient to justify the Court in breaking in upon the 
 Act of Parliament ") ; Bohin^on v. Woodward, sup. ; Chadwich v. Turner, sup. {per 
 Ttjbnee, L.J., at p. 319 : " that the facts . . . raise a strong suspicion of notice cannot 
 be denied, but I think they fall short of what is required to aifect a registered title, for 
 
54 CH. 11, SECT. 3, SUB-SS. (6), (7). 
 
 knowledge be clearly proved, it does not signify whether it was the knowledge 
 of the party himself, or his agent, for where fraud is proved principal and 
 agent are, for this purpose, one {y). In one of the Kegistry Acts, the legisla- 
 ture has ex abundanti cauteld, gone so far as to enact that no notice, even 
 " actual notice," shall deprive a party of the benefit of registration, unless 
 there has been also " actual fraud " (2). 
 
 74. The statutory presumption of knowledge of course only operates 
 upon such instruments as are required by the particular statute to be, and 
 are, registered, and those of which the existence is implied by such registration. 
 Thus, on the one hand, it has been held that a memorial of a deed which 
 purported, on the face of the memorial, to relate to all the estate of the grantor 
 in the lands thereby conveyed, was notice of an assignment of a partial interest 
 in the same lands made in trust for the same grantee by the same deed, sufficient 
 to avoid the efEect of a subsequent registered assignment of such partial 
 interest (a) : but, on the other hand, the ordinary type of registry enactment, 
 which relates only to transactions contained in deeds or other instruments 
 in writing, has been held not to apply to equitable mortgages by deposit 
 unaccompanied by a memorandum (&), or to a vendor's lien for unpaid purchase 
 
 which purpose the notice must be clear and distinct, and amounting in fact to fraud ") ; 
 Bolland V. Hart, sup. {per Lord Hatheblby, L.C, at p. 681 : there must be " actual notice 
 implying fraud ") ; Agra Bank, Ltd. v. Barry, sup. {per Lord Cairns, L.C, at pp. 148-150, 
 — the whole of this passage deserves careful perusal, — ^Lord Hathebley at pp. 155, 156, 
 and Lord Selbobne at p. 158 ; at p. 149 Lord Caibns expresses some doubt whether even 
 wilful blindness, or, as it has elsewhere been called, " fraudulent ignorance," would be 
 sufficient to get rid of the effect of registration) ; Kettlewell v. Watson, sup. {per Pey, J., 
 at p. 704) ; Crowly v. Bergtheil, sup. (at p. 382). 
 
 (y) Le Neve v. Le Neve (1747), Ambl. 436 {per Lord Haedwicke, L.C, at p. 447 : 
 " fraud, or mala fides, is the true ground on which the Court is governed in cases of notice, 
 and it ia in consequence of the decision of the former question that notice to the agent 
 ia sufScient ; for if the ground is the fraud or mala fides of the party, then it is all one 
 whether by the party himself or his agent ; still it is a m^ichinatio ad circumveniendum ") ; 
 Nixon V. Hamilton (1838), 2 Dr. & Wall. 364, per Lord PLtrifKET, L.C (Jr.), at pp. 391, 
 392 (" notice to the agent, if in the same transaction, clearly affects the principal, and for 
 this reason, because in such cases it is a fraud in the agent, and his fraud makes the prin- 
 cipal cease to be a purchaser for valuable consideration, within the meaning of the Registry 
 Act ; and this is the ground on which Lord Haedwicke founds his opinion in Le Neve v. 
 Le Neve ") ; Agra Bank, Ltd. v. Barry (1874), L. R. 7 H. L. 135 {per Lord Caiens, L.C, at 
 p. 148 : " these cases depend, and depend entirely, upon the question of actual notice, 
 either to the principal, or to the agent, whose knowledge is that of the principal "). 
 
 {z) The Yorkshire Registries Act, 1884 (47 & 48 Vict. c. 54), which, in s. 14, provides 
 that " all priorities given by this Act shall have full effect in all Courts, except in cases of 
 actual fraud, and all persons claiming thereunder any legal or equitable interests shall be 
 entitled to corresponding priorities, and no such person shall lose any such priority merely 
 in consequence of his Imving been affected with actual or constructive notice, except in cases of 
 actual fraud." This is reinforced by s. 15. One would have supposed that the above 
 language was absolutely proof against any possible misconstruction, but we are favoured 
 with the report of a case — Battison v. Hdbson, [1896] 2 Ch. 403, in which STiRLmo, J., was 
 invited to, and did, at p. 412, solemnly pronounce that the statute meant what it had 
 so clearly said. See also Whiteley r. Delaney, [1914] A. C 132, H. L. {per Lord Haldanb, 
 L.C, at p. 147, as to s. 15 of this Act). 
 
 (a) Rochard v. Fulton (1844), 1 Jo. & Lat. 413 ; 68 R. R. 265 {per Sugden, L.C (Ir.), 
 at pp. 441-444). 
 
 ^^ (6) Sumpster v. Cooper (1831), 2 B. & Ad. 223 {per Lord Tenteeden, C.J., at p. 225 : 
 " it cannot be held to apply to the case of an equitable mortgage. It refers only to the 
 registration of deeds ; and where there is only a legal or equitable mortgage executed by 
 deposit of deeds, there is no instrument to be registered "). 
 
§§ 73-77 (presumptive knowledge). 55 
 
 money (c). Secyus, in the case of any enactment — there appears to be only 
 one— which expressly provides otherwise (d). 
 
 75. It is provided by the statutes enabling (not requiring) registration of 
 patents, designs, and trade marks that the person for the time being entered 
 on the register as the proprietor shall, subject to any rights appearing from 
 such register to be vested in any other person, have power to assign the 
 same, and give efiectual receipts for any consideration for such assignment, 
 but this is followed by a proviso (which, like that contained in s. 57 of the 
 Merchant Shipping Act, 1894, with reference to the registry of ships, has 
 the effect of almost neutralizing the statutory protection) that any equities 
 m respect of such patent, design, or trade mark, may be enforced in like 
 manner as in respect of any other personal property. This proviso has been 
 held to cover unregistered, as well as registered, equities, because the latter 
 are already provided for in the earlier part of the enactment : so that a 
 person who registers with notice of an unregistered equity derives no benefit 
 by his registration as against the person entitled to enforce the equity : but 
 it has also been held, in analogy to the decisions on the statutes relating to the 
 registration of title to land, that the statutory registration of a patent, design, 
 or trade mark is of value to the registered proprietor to the extent that the 
 notice of such equity must be actual notice, so as to render it unconscionable 
 and fraudulent in the party to rely upon his registration as against the 
 known rights of another (e). 
 
 76. There are a variety of other statutes and enactments requiring 
 registration of instruments and facts, or insertion or entry of matters in 
 books or documents accessible to the public, to some of which the rules 
 above indicated as to statutory presumptions of notice have been, or may be, 
 applied (/) : but it is sufficient, perhaps, for purposes of illustration, to 
 have selected the two types of enactment which have been already discussed. 
 
 Subs. (7). Judicial Observations on the Doctrine of Presumptive Knowledge. 
 
 77. For upwards of half a century, indeed almost from the time when the 
 rules as to presumptive knowledge began to assume a definite shape and 
 form, the judges who had invented and established these rules began to 
 
 (c) Kettlewell v. Watson (1882), 21 C. D. 685 {per Pby, J., at p. 702). 
 
 (d) By s. 7 of the Yorkshire Registries Act, 1884 (47 & 48 Vict. c. 54), it is enacted that 
 " where any lien or charge on any lands within any of the three Ridings is claimed in 
 respect of any unpaid purchase money, or by reason of any deposit of title deeds, a 
 memorandum of such Hen or charge may be registered." Effect was given to this provision 
 in Battison v. Hdbson, sup. {per Stirling, J., at pp. 411, 412). 
 
 (e) The section which was the subject of the decision referred to in the text is s. 87 
 of the Patents Designs and Trade Marks Act, 1883, reproduced, as regards patents and 
 designs, in s. 71 (3) of the Patents and Designs Act, 1907 (7 Edw. 7, c. 29), and, as regards 
 trademarks, in s. 38 of the Trade Marks Act, 1905 (5 Edw. 7, o. 15). The decision is 
 New Ixion Tyre & Cycle Go. v. Spilsbury, [1898] 2 Ch. 484, C. A., at pp. 488, 490 as to the 
 first, and p. 489 as to the second, point mentioned in the text. 
 
 (/) See (but only as illustrations selected from an enormous number of such statutes) 
 the Acts providing for the registration of bills of sale, judgments, Crown debts, lites 
 pendenies, and mortgages and charges on the property of limited companies ; trade 
 unions, friendly and building societies, and their rules ; moneylenders, &c. ; and see the 
 various treatises on these respective branches of the law. 
 
56 CH. II, SECT. 3, SUB-S. (7). 
 
 discern their perilous possibilities and potency. Though here and there we 
 find intermittent protests agaiast any attempt to emasculate them (g), the 
 main current of judicial authority soon set in favour of an attitude of vigilance 
 and jealous restriction ; and reiterated wamings have been thrown out by 
 a series of eminent judges {h) against the slightest extension of a doctrine 
 which, even admitting it to be " based on good sense " (i), is now recognized 
 as beiag, to say the least of it, " subtle and difficult " (j), " very refined " (k), 
 and to be applied with the utmost caution. 
 
 78. Particularly has this distrust and revolt been manifested by that 
 unbendiag oppon ent of everything in the nature of a " fiction," or an " oracular 
 phrase," Lord Eshee (I), in relation to all kinds of transactions, whether 
 
 (g) Thus Ttoneb, L.J., at p. 467 of Wilson r. Hart (1866), 1 Ch. App. 463, says : " I 
 am not by any means inclined to extend the doctrine of constructive notice ; but, on the 
 other hand, I am as little inclined to fritter away the principles of the Court by refusing to 
 apply them to cases to which they properly extend." To the same effect are the observa- 
 tions of Kekewich, J., at p. 361 of Davis v. Hutchings, [1907] 2 Ch. 356 (" non-extension 
 is quite a different thing from frittering away "). And see those of Lindlby, L.J., in 
 Bailey v. Barnes, as cited in the next note. 
 
 (h) Such as Lord St Leonards, when Sir Edw. Sugden, L.C. (Ir.), at p. 29 of Boddy v. 
 Williams (1845), 3 Jo. & Lat. 1 ; 72 B. R. 1 ; Lord Cbanwobth, L.C, at p. 473 of Ware v. 
 Lord Egmont ( 1854), 4 De G. M. & G. 460 ("I must not part with this case without expressing 
 my entire concurrence in what has on many occasions of late years fallen from Judges of 
 great eminence on the subject of constructive notice, namely, that it is highly inexpedient 
 for Courts of equity to extend this doctrine, and to attempt to apply it to cases to which it 
 has not hitherto been held applicable ") ; Lord Westeuby, L.C, who, at p. 601 of Wyllie 
 V. Pollen (1863), 3 De G. J. & S. 596, " said that he concurred with those Judges who 
 thought that the doctrine of constructive notice ought not to be extended, but ought to be 
 reduced within clear and definite principles." Cp. Allen v. Sedcham ( 1879), 11 C. X>. 790, C A. 
 {per Bkett, L.J., at p. 795 : " the doctrine of constructive notice ought to be narrowly 
 watched, and not eiJarged. Indeed anything ' constructive ' ought to be narrowly 
 watched, because it depends on a fiction ") ; Be Ashton, Ex p. McGowan (1891), 64 L. T. 
 28, 29 ; English <fc Scottish Mercantile Investment Co. v. Brunton, [1892] 2 Q. B. 700, C A. 
 (per Lord Eshbr, M.R., at p. 708 : " of late years, after the doctrine had been invented 
 and put into form, the Chancery Judges saw that it was being carried much further than 
 had been intended, and they declined to carry it further. In a series of cases Lords Cotten- 
 HAM, Lyndhtjest, and Cbauwobth, Lord Justice Ttjbnee, and the late Master of the 
 Rolls, Sir Geobge Jessbl, have said that the doctrine ought not to be extended one bit 
 further ; all the Judges seem to have agreed upon that. In Allen v. Seckham, I pointed 
 out that the doctrine is a dangerous one ..." &c.); Baifet/ v. Sorrees, [1894] 1 Ch. 25, C A. 
 {per Cur., at p. 34 : " the doctrine of constructive notice is based on good sense, and is 
 designed to prevent frauds on owners of property ; but the doctrine must not be carried 
 to such an extent as to defeat honest purchasers ; and although this limitation has some- 
 times been lost sight of, still the limitation is as important and as well known as the 
 doctrine itself ") ; Molyneux v. Hawtrey, [1903] 2 K. B. 487, C A. ; Powell v. Browne 
 (1908), 97 L. T. 854, C A. {per Eabwbll, L.J., at p. 856 : " the Courts have of late years 
 refused to extend the doctrine of constructive notice which has been put forward here — ^a 
 doctrine which rests on imputing to a person knowledge which it is admitted he never had. 
 I am speaking of constructive notice of the sort which is suggested here, where there is no 
 imputation of want of good faith "). 
 
 (i) See the passage cited in the last note from Bailey v. Barnes, sup. 
 
 {,j) By Fby, J., at p. 704 of Kettlewell v. Watson (1882), 21 C. D. 685. 
 
 {k) By Chitty, J., at p. 676 of Be Cousins (1886), 31 C D. 671, where he says that 
 a. 3 of the Conveyancing Act, 1882, was " clearly intended for the protection of pur- 
 chasers to some extent — the question is to what extent — against that refined doctrine of 
 imputed notice which was found to work very grievous injustice to honest men, the notice 
 being implied in a very refined manner, and brought home to a man who knew nothing 
 about the matter, and who found that, though he had acted perfectly honestly, he was 
 postponed by reason of the doctrine of the Court." See also the observations of Cave, J., 
 at p. 29 of Re Ashton, Ex p. McGowan (1891), 64 L. T. 28. 
 
 [1) See hia observations, cited in note (A), sup., in Allen v. Seckham, sup., and his still 
 
§§ 77-79 (presumptive knowledge). 57 
 
 mercantile or not, though the attempts made to extend the doctrine to the 
 principles of commercial law moved his especial abhorrence. Indeed, not 
 he only, but the Comts generally, for a reason given by Lord Lindley (m), 
 which will be readily appreciated, have shown themselves more disinclined to 
 extend the presumptions in question to mercantile contracts than to others (w) . 
 79. It is needless to add that the natural repugnance of judges to impute 
 knowledge by a fiction to a person who admittedly has none, only operates 
 where that person's ignorance is honest ; and that the very same motive which 
 encourages, in such a case, a tendency to confine the rules within the narrowest 
 limits, promotes a contrary desire to enlarge them to the most liberal extent, 
 where the party's actual ignorance is proved to have been fraudulent (o). 
 
 more vigorous and trenchant language, at a later date, at p. 707 of English dh Scottish 
 Mercantile Investment Go. v. Brunton, [1892] 2 Q. B. 700, C. A., where he contemptuously 
 repudiates any kinship between this theory and the principles of common law, and 
 fathers it entirely upon equity ("the doctrine of constructive notice is wholly equitable ; 
 it is not kmnvn to the common, law "), and then, after mentioning the common law rule as 
 to wilful blindness for a fraudulent purpose, and stating that such rule is really not 
 one of constructive notice at all — see note (o), inf. — he proceeds, in the passage cited in 
 note (h), sup., to show how even the Chancery Prankensteins have become afraid of their 
 artificial creation. 
 
 (m) In Manchester Trust v. Furness, [1895] 2 Q. B. 539, C.A., where, after citing 
 authorities against the extension of the doctrine to commercial transactions, he concludes, 
 at p. 545 : " the Courts have always set their faces resolutely against it," and adds (later 
 on the same page) : " in dealing with estates in land, title is everything, and it can be 
 leisurely investigated ; in commercial transactions possession is everything, and there is no 
 time to investigate title ; and, if we were to extend the doctrine of constructive notice to' 
 commercial transactions, we should be doing infinite mischief, and paralyzing the trade 
 of the country." 
 
 (m) Por instance, this special disinclination has been manifested in relation to the 
 following transactions and instruments : — ^marine insurance, as in Blackburn, Low <& Co, 
 V. Vigors (1887), 12 App. Cas. 531, H. L. (where, at p. 542, after stating that the doctrine 
 of constructive notice is one which " eminent judges have frequently said ought not to be 
 extended," Lord Macnaghten goes on to show that " the decision under appeal involves 
 a great and dangerous extension of that doctrine ") ; debentures, as in English & 
 Scottish Mercantile Investment Go. v. Brunton, sup., Manchester Trust v. Furness, sup., and 
 Re VaUetort Sanitary Steam Laundry Go., [1903] 2 Ch. 654 (where Swinfek" Eady, J., at 
 p. 662, observes : " it has frequently been said that the doctrine of constructive notice is 
 not to be extended, and, in my opinion it would be extending it to hold that the banks were 
 affected with notice, and that their security was postponed to that of the debenture 
 holders ") ; negotiable securities, as in London Joint Stock Bank v. Simmons, [1892] A. C. 
 201, H. L. (per Lord Hbbschell, at p. 221 : " I should be very sorry to see the doctrine 
 of constructive notice introduced into the law of negotiable instruments ") ; admiralty trans- 
 actions as in The Birnam Wood, [1907] P. 1, C. A., where Cozens-Hakdy, L.J., at p. 13, 
 says : " I think that really would be carrying the doctrine of impUed notice to an extent 
 which would be quite shocking, and must interfere with honest and legitimate business 
 dealings," and Parwbll, L.J., at p. 14 : " the Courts have of late years been unwilling 
 to apply the principle of constructive notice so as to fix companies and persons with 
 knowledge of facts of which they had no knowledge whatever "). 
 
 (o) Thus Lord Eshee, M.R., at pp. 707, 708 of English & Scottish Mercantile Invest- 
 ment Co. V. Brunton, [1892] 2 Q. B. 700, C. A., is careful to explain how readily and liberally, 
 though he refuses to allow that " constructive notice " is the right term to be applied to 
 the process, an inference of knowledge may be drawn from proved fraudulent abstention 
 from inquiry. " There is," he there says, " an inference of fact known to common lawyers 
 which comes somewhat near to it. When a man has statements made to him of something 
 which is against him, and he abstains from making further inquiry because he knows what 
 the result would be — or, as the phrase is, he ' wilfully shuts his eyes ' — then judges are 
 in the habit of telling juries that they may infer that he did know what was against him. 
 . . . There is no question of constructive notice, or constructive knowledge in that 
 inference ; it is actual knowledge which is inferred." Cp. the similar distinction drawn 
 by Faewbll, L. J., at p. 856 of Powell v. Browne (1908), 97 L. T. 854, C. A., in the passage 
 cited in note [h) to § 77, ante. 
 
58 CH. Ill, SECT. 1. 
 
 CHAPTER III. 
 
 THE DUTY OF DISCLOSURE IN NEGOTIATIONS FOR CERTAIN 
 CONTRACTS TERMED VBERRIMM FIDEL 
 
 80. The iirst main class of transactions in respect of whicli a duty of disclosuie 
 arises comprises all those contracts in tlie negotiation for wticli one of the 
 parties must, from the very nature of the. transaction, have either actual or 
 presumptive knowledge of circumstances which ordinarily are not within 
 the actual or presumptive knowledge of the other party, and the knowledge 
 of which is, or may be^ of importance to that other party to enable him to 
 judge of the expediency of entering into the particular contract proposed. 
 Such contracts (of which the typical, or " prerogative example," as Bacon 
 would term it, is the contract of insurance, though there are several others) 
 are usually, whether with strict accuracy or not {p), described as contracts 
 uherrimcB fidei. 
 
 Sect. 1. General Statement and Theory. 
 
 81. The governing proposition or rule, ia the class of case now beiQg 
 dealt with, is as follows : where two parties are negotiating with reference 
 to a contemplated contract of the above description, the party who has the 
 private or special knowledge must disclose (in the sense and to the extent 
 mentioned in Ch. II, Sect. 1) to the party who, from the nature of the case, 
 must necessarily depend upon him for information and instruction, all such 
 facts as are material (in the sense described in Ch. II, Sect. 2) to the particular 
 contract or transaction, and are within his actual or presumed knowledge 
 (see Ch. II, Sect. 3), except such as the law presumes, and he, therefore, has 
 a right to presume, that the other party is acquainted with, or such as he is 
 in a position to prove by evidence that the other party was cognizant of 
 in fact. The duty of voluntary disclosure, in the present class of case, endures 
 no longer than the conclusion of the contract, and only relates to such matters 
 as come to his actual or constructive notice before that date (fp). Any 
 obligation of disclosure, as between the parties to a concluded contract, must 
 arise, if at all, from the express or implied terms of the contract itself, or 
 from the relation (such as that of principal and agent, partnership, trustee- 
 ship, and the like) thereby constituted {q), and does not fall within the scope 
 of the particular kind of duty now being considered. 
 
 (p) See § 1, and note (e) thereto, ante. 
 Ipp) See §§ 181, 189, post, 
 iq) See Chapter IV, post. 
 
§§ 80-83 (CONTEACTS UBERBIMJE FIDEl). 59 
 
 82. It is now firmly established that this duty of disclosure before the 
 conclusion of the contract is special to contracts of the nature indicated, 
 and of which the several species are dealt with in the present chapter, and 
 does not exist in relation to other contracts, though here and there, no doubt, 
 there are to be found incautious judicial pronouncements (r) which, luiless 
 taken in a more restricted sense than the language used would by itself justify, 
 or unless qualified by reference to the context or subject-matter, would seem 
 to be in conflict with this proposition. 
 
 83. The rule is founded on the necessitas rei, the nature of the contract 
 which is in course of negotiation, and the relation to one another of the 
 parties negotiating, where the one must Imow, and the other must confide (s). 
 Where two persons are treating with one another in contemplation of contracts 
 not uherrimcB fidei, there is no such necessity : there is no certainty or proba- 
 bility, inherent in the nature of the case, that either party Icnows more than 
 the other, or that either is specially dependent on the other : the conditions, 
 so far as the law can predict, are equal : and each of the parties must suffer 
 for his own ignorance, and is entitled to profit by his own knowledge, assuming 
 of course that the one is not produced, and the other is not acquired, by 
 fraud. But, where the contract is one uberrimce fdei, the rule in question is 
 a peremptory demand of elementary justice, since, without such a rule, the 
 parties cannot be placed upon equal terms, that is to say (for, in one sense of 
 the word, the terms can never be equal) upon such a parity as the law has 
 the power, and is under the duty, to secure. It is the province of jurisprudence 
 to see that a confidence which the circumstances of the case, and not his 
 own want of care or caution, have forced upon one of the parties, shall not 
 be defeated, and that for this purpose the knowledge which these circum- 
 stances have in the first instance placed within the exclusive possession of 
 the other party shall be made common to both. It is in this aspect of the 
 matter that disclosure has been often judicially characterized as a condition 
 essential or precedent to the validity of the contract or transaction itself (i), 
 
 (r) AsJnBUsset v. Daniel (1853), 10 Hare 493 {per Tuenee, V.-C, at p. 522 : "good faith 
 is unquestionably of the essence of all contracts. . . . The Court presupposes in every 
 contract, and if there can be a difference, more especially in every contract of partnership, 
 a basis of good faith "), and in British Equitable Insurance Co. v. Oreat Western Bailway Co. 
 (1868), 38 L. J. (oh.) 132 (per Malins, V.-C, at p. 135 : " in all matters of contract, it is 
 the duty of either one of two contracting parties to communicate to the other all material 
 facts within his knowledge relating to the subject-matter of the contract ; and, if any such 
 material facts be concealed, the opposite party wiU not be bound "). The proposition of 
 TuRNBE, V. -C. , though somewhat unguarded and misleading, may, if construed in a certain 
 sense, be sound enough : but that of Malins, V.-C, is radically and hopelessly erroneous. 
 Indeed it would be difficult to pack within the compass of a single sentence a richer collec- 
 tion of mistakes — see the three italicized expressions, in each of which the absence of quali- 
 fication is quite contrary to both principle and authority. 
 
 (s) See Wainwright v. Bland (1836), 1 M. & W. 32, a life insurance case, per Pakke, B., 
 at p. 35 : " from the nature of the contract, a suppression of any material fact . . . must 
 avoid the policy ") ; cp., as to marine insurance, Robinson v. Mollett (1875), L. R. 7 H. L. 
 802 (per Beett, J., one of the judges summoned to assist the House, at p. 817 : " when 
 shipowners and underwriters disputed upon the effect of concealing certain facts, the 
 Courts, finding that the contract of maritime insurance must he one of confidence, because 
 the knowledge of many material facta mtist of necessity be confined to the shipowner, applied 
 the principle of uberrima fides "). 
 
 (t) Moens v. Heyworih (1842), 10 M. & W. 147, per Paeke, B., at pp. 157, 158 ; see 
 
60 CH. Ill, SECT. 2, SUB-SS. (1), (2). 
 
 and, in pHlosopliy, as amounting even to a necessity of social life. " Some 
 may imagine," says a very acute moralist, "ttat, if this obligation were 
 suspended, a general caution and mutual distrust would ensue which might 
 do as well ; but this is imagined without considering how every hour of our 
 lives we trust to, and depend upon others ; and how impossible it is to stir 
 a step or, which is worse, to sit still a moment without some trust and 
 dependence " (u). 
 
 Sect. 2. The Various Species of Conteacts and Teansactions to 
 WHICH THE Rule applies. 
 
 Subs. (1). General Description. 
 
 84. The kinds of contract in the negotiation for which a duty of disclosure 
 arises of the nature already indicated are those relating to insurance (in all 
 its branches), sales and purchases, suretyship, releases and compromises, 
 partnership, marriage, and the like. In all of these there are some material 
 matters which must ordinarily be within the exclusive knowledge of one of 
 the negotiating parties, and as to which the other must necessarily trust to 
 the former, and to all of them, therefore, the duty applies alike. There is, 
 of course, in the case of these different species of contract, the widest possible 
 variety both as regards the quantity and kind of matters deemed to be within 
 the exclusive cognizance of the parties aSected, and also as regards the quantity 
 and kind of matters deemed material to be disclosed ; but this does not 
 negative the proposition that the rule, as above stated, which operates on this 
 varying material is one and the same rule, nor (it is submitted) does it justify 
 the views which have occasionally been expressed that some of the contracts 
 enumerated, such as those of vendor and purchaser, or of suretyship, are not 
 strictly subject to the doctrine (uu), any more than the fact that a physical 
 law operates upon different materials in a difEerent manner (" limus ut hsec 
 durescit, et heec ut cera liquescit Uno eodemque igni") prevents that law from 
 being identically the same. The electrical energy which expresses itself at 
 
 the citation in note (c) to § 87, post ; Blaclcburn, Low & Co. v. Vigors (1886), 17 Q. B. D. 
 553, C. A., per Lord Eshee, M.R., at pp. 560-562, citing and approving PhiUips's treatise, 
 and (1887), 12 App. Gas. 531, H. L., per Lord Watson at p. 539 (" it is, in my opinion, 
 a condition precedent of every contract of marine insurance, that the insured shall make 
 a full disclosure of all facts materially affecting the risk which are within his personal 
 knowledge when the contract is made ") ; William Pickersgill dk Sons, Ltd. v. London <k 
 Provincial Marine & General Insurance Co., [1912] 3 K. B. 614 {per Hamilton, J., at 
 p. 621 : " an imphed condition contained in the contract itself, precedent to the liability 
 of the underwriter to pay." Similarly, Cookeuen, C.J., at pp. 802, 803, of Beachey v. 
 Brown (1860), E. B. & E. 796, observed, in the case of a contract to marry, " where it 
 turns out that a woman is of unchaste conduct, which goes to the very root of the contract 
 of marriage, theie from tlie . . . meces«%o/fte case, the man is released from the contract." 
 At p. 663 of Mkin v. Janson (1845), 13 M. & W. 655, Pahkb, B., says that the duty rests 
 " either upon the principle that every policy is based upon the supposed existence of a 
 certain state of facts, or on the ground that insurance" (the case happened to be one of 
 insm-ance) " is a contract -uberrimcB fidei." 
 
 (u) Paley's Principles of Moral and Political Philosophy, Book III, Part I, Ch. v. 
 
 {uu) See §§ 106-109, and §§ 120, 121, post. 
 
§§ 83-86 (contracts uberrima fidei). 61 
 
 one moment as light, at another as heat, at another as sound, at another as 
 power, is not, in these various manifestations, a different, but the same 
 force. It is the same Nasmyth's hammer which beats out a ton of metal, 
 or puts a head on a pin. 
 
 85. It is probably the use, or rather the misuse, of the perhaps unfortu- 
 nately chosen term "uberrimse fidei," which has encouraged these dubious 
 forms of expression, as it has imdoubtedly encouraged barren logomachies 
 as to whether a particular transaction should be labelled thus or thus, with 
 the underlying suggestion that, if one of two possible designations is correct, 
 it falls withia the uberrimce fidei class, and, if the other is correct, does not ; 
 the true view being, as has lately been held {v), that the sole questions to 
 be asked and solved in every case are whether the nature and circumstances of 
 the particular contract or transaction are such as (by reason of the necessarily 
 or probably exclusive knowledge of one of the parties) to call for the applica- 
 tion of the doctrine ; and, if they are, whether the withheld facts are such as, 
 having regard again to the nature of the particular contract, are material 
 to be disclosed. Each of these iaquiries is essential ; facts of the utmost 
 importance for one of the parties to know, if not of the kind deemed to be 
 within the private knowledge of the other, and, conversely, facts within 
 the exclusive cognizance of that other, if not material to the transaction, 
 are alike exempt from the duty of disclosure. But both inquiries may be 
 successfully pursued without aflS.xing any name or title whatever to the 
 contract imder consideration, or dediding whether it is, or is not, proper to 
 call it a contract uberrimoB fidei, or whether it has, or has not, been so denomi- 
 nated in the past. In the development of mercantile afiairs, new types of 
 agreement between business men are daily being invented, which it may 
 be difficult to bring under any one of the hitherto recognized denominations ; 
 and the application of the rule to these new types might be seriously hampered 
 by any attempt to impart an artificial rigidity to the flexible Lesbian rule of 
 the law, or to canton out the territory on which that rule operates into defined 
 and named provinces. 
 
 Subs. (2). Insurance. 
 
 86. More obviously and clearly than in the case of any other of the species 
 to be considered, the contract of insurance invites the application of the 
 doctrine now under consideration. " In insurances, in which the under- 
 writer computes his risk entirely from the accoimt given by the person 
 insured, it is absolutely necessary to the justice and validity of the contract 
 that this account be exact and complete " (w). The contract, indeed, is a 
 kind of wager, or a " contract of hazard," as it has been called by moralists (x), 
 
 {v) Seaton v. Heath, [1899] 1 Q. B. 782, C. A. {per Eomer, L.J., at p. 792 : " whether 
 the contract be one requiring uberrima fides or not, must depend upon ita substantial 
 character, and how it came to be effected " ). 
 
 (w) Paley, Principles of Moral and Political Philosophy, Book III, Part I, Ch. viii. 
 
 {x) Thus Paley begins his chapter on " Contracts of Hazard " (Principles of Moral and 
 Political Philosophy, Book III, Part I, Ch. viii) by announcing that " by contracts of hazard 
 
62 CH. Ill, SECT. 2, SUB-S. (2). 
 
 or a " contract upon speculation " («/), or an " aleatory contract " (z), to 
 use the language of judges and jurists ; and, in such transactions, it lias 
 always been considered by the world that " betting on a certainty " renders 
 the wager invalid. 
 
 87. Notwithstanding certain expressions made use of by Lord Mans- 
 field, C.J. (a), and Lord Abinger, C.B. (b), which, unless duly qualified, 
 would seem to indicate a difierent view, contracts of insurance (and, 
 generally, the various types of contract to be considered in this Chapter) 
 are distinctly marked ofi from all other contracts, in respect of the duty of 
 disclosure during the negotiations preceding the conclusion of the contract (c). 
 It is not a case of good faith being required in all contracts, and an extra or 
 special degree of good faith being required in the contracts imder discussion : 
 the law is that, whereas one duty of good faith, namely veracity, is required 
 in negotiation for all contracts, this, and another duty of good faith, viz. 
 candid disclosure of material facts, is demanded in negotiating for contracts 
 of insurance, and the like. 
 
 I mean gaming and insurance," and then proceeds to illustrate the exact analogy between 
 wagers and insurance policies in respect of the matters which ought to be, and need not 
 be, disclosed respectively. 
 
 (y) See the observations of Lord Mansfield, C.J.,at pp. 1909, 1910 of Carter v. Boehm 
 (1766), 3 Burr. 1905 : " Insurance is a contract upon speculation. The special facts upon 
 which the contingent chance is to be computed lie most commonly in the knowledge of 
 the insured only ; the underwriter trusts to his representation, and proceeds upon con- 
 fidence that he does not keep back any circumstance in his knowledge to mislead the 
 underwriter into the belief that the circumstance does not exist." So Romer, L.J., at 
 p. 793 of Seaton v. Heath, [1899] 1 Q. B. 782, C. A. (" contracts of insurance are generally 
 matters of speculation, where the person desiring to be insured has means of knowledge 
 as to the risk, and the insurer has not the means, or not the same means "). 
 
 (z) Bunyon's Law of Life Assurance, pp. 3, 4, in reference to one kind of life insurance 
 ("a wager, or mere aleatory contract, the premium being put at hazard upon the chance 
 of the contingency happening or, according to Johnson's definition of a wager, ' a thing 
 pledged upon a chance ' "). 
 
 (o) In Carter v. Boehm, sup., where, shortly after the passage cited in note (y), sup., 
 he says : " the governing principle is applicable to all contracts and dealings. Good 
 faith forbids either party, by concealing what he privately knows, to draw the other into 
 a bargain from his ignorance of that fact and his believing the contrary." This propo- 
 sition, however, — obviously too wide as it stands, — is immediately qualified by his reference 
 to the Ciceronian definition of culpable reticence (" aUud est oelare," &o. ; see § 675, post), 
 and his further observation that " this definition of concealment, restrained to the efficient 
 motives and precise subject of any contract, will generally hold to make it void, in favour 
 of the party misled by his ignorance of the thing concealed." 
 
 (5) In Cornfoot v. Fowke (1840), 6 M. & W. 358, at p. 379 : "a policy of insurance is 
 a contract, and is to be governed by the same principles as govern other contracts. When 
 it is said to be a contract vberrimcefidei, this only means that the good faith, which is the 
 basis of other contracts, is more especially required in that species of contract in which 
 one of the parties is necessarily less acquainted with the details of the subject of the con- 
 tract than the other." This is a clearly defective statement, in that it makes the dis- 
 tinction between the class of contract referred to and all other classes to depend solely 
 on a difference in the degree of good faith which is required ; whereas the difference is in 
 kind, the borux fides essential to ordinary contracts being limited to abstention from direct 
 and implied misrepresentation, whUst, in contracts of insurance, good faith includes 
 fuU voluntary disclosure, and its requirements in such cases are not satisfied by mere 
 veracity. 
 
 (c) Per Pabkb, B., at pp. 157, 158, of Moens v. Heyworth (1842), 10 M. & W. 147 : 
 " the case of a policy of insurance does not seem to me analogous to the present " (which 
 was a case of a contract for the sale of goods alleged to have been induced by misrepre- 
 sentation) ; " those instruments are made upon an impUed contract between the parties, 
 that everything material known to the assured shall be disclosed by them. That is the 
 
§§ 86-89 (insurance). 63 
 
 88. On the other hand, it is now well settled that the duty of disclosure 
 equally arises whether the insurance be mariae, life and health, fire, accident, 
 or any of the innumerable varieties which the growing intricacy of human 
 afEairs and risks are continually adding to the list(^); and, again, as was 
 pointed out by Jessel, M.R. (e), the obvious fact that what is material in 
 one class of insurance may not be of importance in another, and that the 
 duty attaches to difierent subject-matters in the several cases, does not in the 
 least negative the fact that the rule is the same, and the duty the same, in 
 all of them. 
 
 89. Though the rule is commonly stated in a form which assumes that 
 the assured must always be the party on whom the duty of disclosure lies, 
 and not the insurer, and though this mode of expressing the proposition 
 works no harm in practice, since it is almost invariably the assured who 
 has the exclusive knowledge, yet it must not be forgotten that, in theory 
 and strictness, the rule is that the party who has this exclusive knowledge, 
 whichever party it may he, is subject to the duty, and that party, as has ' 
 been judicially recognized, may, in quite conceivable circumstances, be the 
 insurer, and not the assured (/). 
 
 basis upon which the contract proceeds ; ... In this case the plaintiff must prove a 
 representation by words or acts ..." So Blackbukn, J., deUvering the judgment 
 of the Q.B., says, at p. 537 of lonides v. Pender (1874), L. R. 9 Q. B. 531 : " it is perfectly 
 well established that the law as to a contract of insurance differs from that as to other 
 contracts " — a statement which, as Lord Blaoketjbn', he repeated at p. 954 of Broumlie v. 
 Campbell (1880), 5 App. Cas. 925, H. L. 
 
 (i) Newcastle Fire Insurance Co. v. Macmorran & Co. (1815), 3 Dow. App. Cas. 255 
 (per Lord Eldon, L.C, at p. 262) ; Lindenau v. Desborough (1828), 8 B. & C. 580 (per 
 Bayley, J., at p. 592 : " in all cases of insurance, whether on ship, houses, or lives, the 
 underwriter should be informed of every material circumstance within the knowledge of 
 the assured ") ; Jorees v. Provincial Insurance Co. (1857), 3 C. B. (n.s.) 65 (per Cur., at p. 86) ; 
 Wheelton v. Hardisty (1858), 8 E. & B. 232, Exch. Ch. (per Lord Campbell, C.J., at pp. 269, 
 270) ; Brovmlie v. Campbell, sup. (per Lord BLACKBtTKN at p. 954 : "in policies of insur- 
 ance, whether marine insurance or life insurance ") ; TJiomson v. Weems (1884), 9 App. 
 Cas. 671, H. L. (per Lord Blackbtxen at p. 684 : "I think that on the balance of authority 
 the same principles of insurance law apply to aU insurances, whether marine, life, or fire ") ; 
 Seaton v. Heath, [1899] 1 Q. B. 782, C. A. (per Rombr, L.J., at p. 792). And see the 
 citations in the next note. 
 
 (e) In London Assurance Co. v. Mansel (1879), 11 C. D. 363, at p. 367 : " As regards 
 the general principle, I am not prepared to lay down the law as making any difference 
 in substance between one contract of insurance and another. Whether it is life, or fire, 
 or marine assurance, I take it good faith is required in all cases, and though there may 
 be certain circumstances from the pecuhar nature of marine insurance which require 
 to be disclosed, and which do not apply to other contracts of insurance, that is rather 
 in my opinion an illustration of the application of the principle than a distinction in 
 principle." To the same effect are the observations of Vatjghan Williams, L. J., at pp. 878- 
 880 of Joel V. Law Union cfc Crown Insurance Co., [1908] 2 K. B. 863, C. A. Por an example 
 of the above-mentioned difference in the application of the rule, see the observations of 
 ScBUTTON, J., at p. 257 of Glasgow Assurance Corporation v. William Symondson tfc Co. 
 (1911), 104 L. T. 254, where he points out that the question whether the assured has 
 previously been insured, and with whom, which is so vital in life insurance cases, has 
 no importance in marine insurance, and need not be disclosed. 
 
 (/) Lord Mansmbld, C.J., at p. 1909 of Carter v. Boehm (1766), 3 Burr. 1905, is careful 
 to point out that " the policy would be equally void against the underwriter, if he con- 
 cealed ; as if he insured a ship on her voyage, which he privately knew to be arrived, 
 and an action would lie to recover the premium." In Bradford v. Symondaon (1881), 
 7 Q. B. D. 456, C. A., where the vessel insured had arrived before the policy was effected 
 it was fuUy recognized that, if the underwriter had been aware of the arrival, the assured 
 
64 CH. Ill, SECT. 2, SUB-S. (2). 
 
 90. In cases of insurance, the right to have the contract treated as void 
 by reason of non-disclosure, where it exists, is for obvious practical reasons 
 usually asserted by way of defence to an action for recovery of the assured 
 sum : but, in theory, it may be, and in a few cases has been, asserted by the 
 insurer in the form of active proceedings for rescission ((/). 
 
 91. The most important branch of insurance, from a juridical point of 
 ■view, and the richest in illustrations of the principles of disclosure, is marine 
 insurance. A contract of marine insurance is now defined by enac-Jiments 
 codifying the common law of the subject (h). So also are the rules as to what 
 must, and what need not, be disclosed, but in such exceedingly general and 
 abstract terms as to be of little practical use (i). For the purpose of ascertain- 
 ing the particular topics as to which disclosure is, or is not, essential, resort 
 mast stUl be had to the authorities. From these may be extracted materials 
 for the rough classification which follows. 
 
 92. In the first place, the assured must communicate to the underwriter 
 all such actual or presumptive knowledge (see Ch, II, Sect. 3, ante) as he has 
 with reference to the condition and history of the vessel insured, as, for 
 instance, the fact — ^this is the most obvious illustration — ^that she is lost, 
 wrecked, stranded, or aground, or that she is " missing," or the date of her 
 sailing and the time which has elapsed since that date, or the storms, bad 
 weather, accidents, or injuries she has encountered during the voyage, or 
 while in port, or the receipt of intelligence, whether true or false, as to any of 
 such matters {j) : but such facts as the condition of goods insured, when put 
 
 would not have been bound, and no exception was taken by the Court to this proposition 
 when advanced in argument, at p. 459, on the authority of Garter v. Boehm, sup., and the 
 leading treatises on marine insurance. It was only because admittedly the underwriter 
 had no such knowledge that, following Natusch v. Henderson (1871), 7 Q. B. D. 460 n., it 
 was held otherwise. The statement in the text is involved in s. 17 of the Marine Insurance 
 Act, 1906 (6 Edw. 7, u. 41) : " if the utmost good faith be not observed by either party, 
 the contract may be avoided by the other party." 
 
 (gr) See § 249, post. 
 
 {h) See ss. 1, 2, 3 of the Marine Insurance Act, 1906, which define " a contract of 
 marine insurance," " mixed sea and land risks," and " maritime adventure " and 
 " maritime perils," respectively. Carter v. Boehm, sup., though regarded by Lord 
 Mansfield, C. J., and dealt with in his judgment, as a case of marine insurance, was hardly 
 even " a mixed sea and land risk," since the subject of insurance was not a vessel at all, 
 but a fort in the island of Sumatra, though no doubt it was exposed to, and insured against, 
 capture by naval forces. 
 
 (i) Marine Insurance Act, 1906, ss. 17, 18, 19, 21. 
 
 (j) See the following oases, in each of which the undisclosed fact is stated within 
 brackets after the reference to the report : Fitzherhert v. Mather (1785), 1 Term Eep. 12 
 (loss of ship) ; WilUs v. Glover (1804), 1 B. & P. (N. R.) 14 ; 8 K. R. 739 (letter received 
 by the assured from shipper of goods : " I think the captain will sail to-morrow, but if the 
 ship has not arrived when you receive this, insure as low as possible ") ; Lynch v. Durnfmd 
 (1811), 14 East 494 (intelligence that a vessel had fallen in with the vessel insured, and had 
 parted company with her, she being then in a leaky and perilous condition : it was held 
 here by Lord EiiLBNBOBOtrGH, C.J., at p. 497, that it made no difference to the materiality 
 of this item of inteUigenoe that in fact it was afterwards shown to have been false) ; 
 Bridges v. Hunter (1813), 1 M. & S. 15 (date of sailing with convoy, and arrival of convoy 
 without the ship : per Lord ELLENBOEOuaH, C.J., at p. 18, and Lb Blawc, J., at p. 19 
 " it has always been considered that the time of the ship's sailing, if known to the assured, 
 is a material fact to be communicated to the underwriter ") ; Gladstone v. King (1813), 
 1 M. & S. 35 (fact that the ship had been driven from her moorings by a storm In the 
 harbour, and had struck on a rock, though she had got oif again without substantial 
 
§§ 90-93 (insurance). 65 
 
 on board, or the date of the ship's sailing, if it has no bearing on the question 
 whether she is missing, or out of time, are not material (k). Where, however, 
 machinery is insured against breakage by perils of the sea, it may be material 
 to disclose the fact that the machinery is second-hand (M). 
 
 93. Secondly, the assured must reveal all such matters within his exclusive 
 knowledge (actual or presumed) as bear upon the war risks of the subject of 
 the insurance, as, for example, facts showing the probability, or reasonable 
 apprehension, of the capture of a vessel, or the recapture of a prize, or orders 
 of foreign States affecting the safety of the ship, or the prevalence of rumours 
 and reports as to the activity of foreign naval forces and captures of other 
 vessels, or the identity of a dismantled and refitted vessel with a cruiser 
 liable to capture, or the fact that the vessel insured is carrying articles which 
 are contraband of war, and the like (/) ; but not such matters as a past and 
 
 damage : bat see, as to this curious case, § 249, post) ; Sawtell v. Loudon (1814), 5 Tauut. 
 359 (fact that the insured vessel was at sea without a convoy) ; Friere v. WoodJiouse (1816), 
 Holt N. P. 572 ; 17 R. R. 679 (fact that other vessels which had sailed in company with 
 the ship insured had arrived at their destination before her, but in this case the under- 
 writer failed, because he was presumed to have had knowledge of the fact through Lloyd's 
 Lists) ; Kirby v. Smith (1818), 1 B. & Aid. 672 (fact that the assured, who was the owner 
 of the vessel, had sailed six hours after her in another vessel, and had arrived first, after 
 experiencing rough weather) ; Richards v. Murdock (1830), 10 B. & C. 627 (instructions in 
 letter to wait 30 days to give the ship a chance of arriving, and then, if not arrived, to 
 insure, and the date when the letter was received, though the dates when the letter was 
 sent, and when the ship sailed, were disclosed) ; Westbury v. Aberdein (1837), 2 M. & W. 
 267 (fact that another ship had seen the insured vessel off Oporto in a gale, having sailed 
 from Malaga one day before her, and had parted company with her) ; Elhin v. Janson 
 (1845), 13 M. & W. 655 (date, far back, of ship's saiUng, and fact that, when policy effected, 
 she was a missing ship) ; Anderson v. Thornton (1853), 8 Exch. 425 (true date of sailing) ; 
 Russell V. Thornton (1859), 4 H. & N. 788 (letter from the captain of the ship that she had 
 been aground, had received some very heavy blows, and had made her way in a sinking 
 condition to the port where she then lay) ; Proudfoot v. Montefiore (1867), L. R. 2 Q. B. 
 511 (stranding and wreck of vessel) ; Nicholson v. Power (1869), 20 L. T. 580, Exch. Ch. 
 (vessel reported by another ship to be aground) ; Gory v. Patton (1872), L. R. 7 Q. B. 304 
 (accident to ship, with insured goods on board, on voyage) ; Morrison v. Universal Marine 
 Insurance Co. (1873), L. R. 8 Exch. 197, EJxch. Ch. (intelligence that vessel aground) ; 
 Stribley v. Imperial Marine Insurance Co. (1876), 1 Q. B. D. 507 (letter from the captain 
 stating that ship had arrived at a certain port, and that he was loading, but could not say 
 when he would be able to finish, the weather being very bad on the coast : and the date 
 of this letter, and the fact that it was the last letter from the ship) ; Blackburn, Low S Co. 
 V. Vigors (1887), 12 App. Cas. 531, H. L., and Same v. Haslam (1888), 21 Q. B. D. 144 (fact, 
 common to both cases, that a certain steamer had seen a vessel having on board some of 
 the shipwrecked crew of the vessel insured : in the former case, however, the party com- 
 plaining failed, because presumptive knowledge of the undisclosed fact was not brought 
 home to the party charged ; in the latter, he succeeded, because it was). See as to the 
 materiality of facts affecting the condition of the vessel, Cantiniere Meccanico Brindisino v. 
 Janson, [1912] 3 K. B. 452, C. A., per Vattghan Wilijams, L.J., at p. 461. 
 
 (k) As to the condition of gooii, see Boyd v. Dubois (1811), 3 Camb. 132, where Lord 
 EiiENBOEOtTGH, C.J., directed the jury that the assured was emphatically not bound to 
 disclose the damaged state of the cargo of hemp insured, and its liability in consequence 
 to ferment and take fire. As to the date of ship's saUing, see Littledale v. Kenyan (1805), 
 1 B. & P. (N. R.) 151 ; Beckwith v. Stjdebotham (1807), 1 Campb. 115 ; Foley v. Moline 
 (1814), 5 Taunt. 430. 
 
 (kk) Hewitt Bros. v. Wilson (1914), 30 T. L. R. 619. 
 
 f(2) In Court r. Martineau (1782), 3 Dougl. (k.b.) 161, it was not doubted that it was the 
 duty of the assured to communicate to the underwriter the fact that, of two prizes insured, 
 a brig and a ship, the brig had arrived without the ship, and that he entertained, and had 
 expressed to his agent in London, a fear that the ship might have been recaptured ; but 
 the party complaining failed, because in this case he was shown to have presumptive 
 knowledge of the undisclosed fact. In Bell v. Bell (1810), 2 Campb. 475, where the 
 B.N.D. F 
 
66 CH. Ill, SECT. 2, SUB-S. (2). 
 
 abandoned design of the enemy, or an edict of a foreign State which has 
 never been acted on, and has always been treated as a dead letter (m). 
 
 94. Next, exclusive knowledge of facts relating to places of loading or 
 discharge must be commujicated ; as, for example, that the vessel insured 
 is proceeding to a place which is not known as a port, or to a port of a specially 
 dangerous character (w). 
 
 95. Further, the assured must divulge any " over-insurance, so large as 
 to be material to be considered by a prudent underwriter " (ww) ; and, in 
 cases of valued policies, he must disclose the real value of the subject of 
 the iusurance, where such real value is so greatly below the agreed value 
 as to lead to a reasonable suspicion in the mind of the underwriter that the 
 insurance was intended as a mere cloak for illegal gaining, or was part of a 
 fraudulent design, but not otherwise (o). 
 
 plaintiff had effected a policy on ship and freight from Riga to the United Kingdom, the 
 alleged undisclosed facts, which had been communicated to him in a letter from his Riga 
 correspondent, were (i) that there had been an order to send the ship's papers to 
 Petersburg, (ii) that the ship's papers had been so sent, and (iii) that the order had 
 created a great sensation at Riga, and the writer himself entertained grave apprehensions 
 as to the ship's safety. No one doubted the materiality of facts (i) and (ii), but 
 they were shown to have been both duly disclosed, and in view of the disclosure of 
 these two, which were the really important matters. Lord Ellenbobough, C.J., invited 
 the jury not to pay much regard to the non- disclosure of (iii). In Durrell v. Bederky (1816), 
 Holt N. P. 283 ; 17 R. R. 639, where the policy was on a ship having letters of marque 
 as a privateer, the material undisclosed fact was the prevalence in Jersey, for some weeks 
 past, of reports that a French frigate had been seen about the coast, and had effected a 
 capture. Bates v. Hewitt (1867), L. R. 2 Q. B. 695, was a case of non-disclosure of the 
 fact that the vessel insured, lately dismantled and turned into a merchant vessel, had 
 originally been a Confederate cruiser, and, as such, was liable to capture by the United 
 States. In London <fc Provincial Insurance Co. v. Seymour (1873), L. R. 17 Eq. 85, the 
 fact withheld, and the suppression of which Bacon, V.C., at p. 89, characterized as grossly 
 fraudulent, was " that the shippers had contracted with the Confederate Government to 
 send articles contraband of war in the ship which was insured." 
 
 (m) Thus, in Carter v. Boehm (1766), 3 Burr. 1905, Lord Maksfield, C.J., held that 
 there was no duty on the assured to disclose the fact that, a year previously, a design of 
 the French upon Fort Marlborough, the subject of the insurance, had been entertained, 
 and abandoned ; and in Fracis, Times 6a Co. v. Sea Insurance Go. (1898), 79 L. T. 28, where 
 the action was brought in respect of r, total loss of arms and ammunition by capture, 
 BiGHAM, J., considered that the assured was not bound to communicate the fact that by 
 an edict of the Persian Government in 1881, which had never been acted upon, and had 
 ever since been generally regarded as a brutumfulmen, the importation of arms and ammuni- 
 tion into Persia had been prohibited. 
 
 (n) narrower v. Hutchison (1870), L. R. 5 Q. B. 584, Exch. Ch., where the undisclosed 
 fact was that the vessel was going to Laguna de Los Padres, in the Province of Buenos 
 Ayres, a place not known or recognized as a port of loading or discharge ; Laing v. Union 
 Marine Insurance Co. (1895), 1 Comm. Cas. 11, where the assured withheld the fact that a 
 certain port in Japan was one of special difficulty and danger. 
 
 (»re) William Pickersgill & Sons, Ltd. v. London & Provincial Marine Insurance Co., 
 [1912] 3 K. B. 614 (per Hamilton, J., atp. 619). Cp. Gooding v. White (1913), 29 T. L. B. 312. 
 
 (o) Herring v. Jackson (1895), 1 Comm. Cas. 177, an action on a valued policy at £5000 
 on the plaintiff's yacht " Mohican," to which the defendant pleaded (i) fraudulent con- 
 cealment of the real cost and value of the yacht, which was much less than £5000, and 
 alternatively (ii) innocent non-disclosure of the above. The jury negatived (i), and as to 
 (ii), Mathew, J., at pp. 178, 179, laid down the rule as stated in the text, relying for this 
 purpose on the opinion expressed by Willes, J., in his " Memorandum on Over Insurance, 
 Valued Policy, &o." (1867), used by the Commission on Unsea worthy Ships which sat in 
 1874, and on PhiUips's Law of Insurance (Boston, 1853), § 1183, cited and approved by 
 Willes, J., in this Memorandum. The jury found, in answer to two questions directed to 
 the point, and applying the principles laid down by Mathew, J., that the valuation in 
 this case was not " excessive," and that it was not " material to the underwriters to know 
 
§§ 93-97 (insurance). 67 
 
 96. Where tlie insurance is on chartered freight, or is a reinsurance on 
 the terms of the original poHcy, it is the duty of the assured to communicate 
 to the underwriter any unusual clause or condition in the charter-party, or 
 in the original policy, as the case may be (p) ; but not any terms or clauses 
 which are in common use and established, for of these the underwriter has 
 presumptive notice {q). 
 
 97. Where there are two facts within the knowledge of the assured, one 
 of which is wholly meaningless and unimportant to the imderwriter except 
 in the light of the other, the assured does not discharge his duty of disclosure 
 by revealing the first, without the second, or excuse his non-performance of 
 such duty by proof that the underwriter had notice of the first fact only (r). 
 
 what the vessel had cost the insured." On the other hand, in lonides v. Pender (1874), 
 L. R. 9 Q. B. 531, where the assured had not revealed to the underwriters the fact that 
 " insurances were made by him, and others in concert with him, on interests aDeged to be 
 at risk in the vessel, at values greatly exceeding the actual values of those interests " 
 {per Cur., at p. 533), " so that the assured stood to receive a very large profit it their 
 venture was lost " (pp. 534, 535), the jury in answer to questions left to them by Hannbk, J., 
 at the trial, of the same character as those addressed to the jury in the case last cited, 
 found that the valuations were excessive, and that, whether fraudulent or not (as to which 
 they could not agree), it was material to the underwriters to know that they were ; and 
 the Court refused to disturb these findings, pointing out (pp. 538, 539) that " the excessive 
 valuation . . . may lead to the suspicion of foul play," which was of itself sufficient to 
 render over -valuation conceivably material, and to support the " distinct and uncontra- 
 dicted evidence " (p. 539) which underwriters had given at the trial that it was so in fact 
 in this case. So, in Thames di Mersey Marine Insurance Go. v. Gunford Ship Co., [1911] 
 A. C. 529, H. L., it was held by the House of Lords, reversing the Court of Session, that a 
 double insurance of freight, wages, &c., to the extent of £35,000, whereas the risk was only 
 £14,000, amounted to an over-valuation which, in the circumstances, was a direct incentive 
 and temptation to nefarious conduct, being, in fact, " an insurance ^or loss, and mot 
 against loss," as one of the witnesses had pithily expressed it, and, therefore, a matter 
 essential to be disclosed (Lord Alverstone at pp. 534-540 ; Lord Shaw at pp. 542-547, 
 and Lord Robson at pp. 550, 551). 
 
 (j)) Mercantile, Steamship Go. v. Tyser (1881), 7 Q. B. D. 73, where the policy was on 
 chartered freight, and there was a clause in the charter-party giving the charterers an option 
 to cancel it if the vessel did not arrive at New York by a specified date, and where, after 
 evidence on the point. Lord Coleridge, C.J. (see p. 77), expressed the view that this 
 clause was " of recent introduction," as to which there was no uniform practice, and 
 therefore constituted " a fact which the assured was bound to disclose to the underwriter." 
 Cp. Property Insurance Go. v. National Protector Insuratwe Go. (1913), 108 L. T. 104. 
 
 (q) The following were considered to be usual clauses and provisions, and, as such, 
 not subject to the duty of disclosure : — the " 24 hours " clause in a time-charter, in The 
 Bedouin, [1894] P. 1, C. A. (per Gorell Barnes, J., at p. 9, and Lord Eshbr, M.R., at 
 pp. 12, 13) ; a condition in a charter-party for a lump sum that all freight earned by the 
 ship should be for the account of the charterers, in Asjar & Go. v. Blundell, [1896] 1 Q. B. 
 123, 0. A. (per Kay, L.J., at pp. 133, 134) ; a clause in an original policy — the action being 
 on a policy of reinsurance — ^that " should the vessel be at sea or abroad on the expiration 
 of this policy, it is agreed to hold her covered till her arrival at her final port of destination 
 . . . aA a. pro raid daily premium," in OfeH-iesiwori^ v. J'aier (1900), 5 Comm. Cas. 408 (per 
 BiGHAM, J., who, after hearing evidence, at pp. 411, 412, came to the conclusion that the 
 clause, which was one of those known as " Elder Dempster & Co.'s clauses," was in common 
 knowledge and use). 
 
 (r) Thus, in Lynch v. Dunsford (1811), 14 East 494, which was an action on a valued 
 policy on goods on board a ship or ships, at and from the Canary Islands to London, the 
 defendants had presumptive knowledge, through a notice stuck up on a board at Lloyd's, 
 that a certain ship had fallen in with a vessel called " The President " from Lanzarette, 
 and had left her in a distressed and leaky condition, but this announcement conveyed 
 nothing whatever to them without the knowledge, which the plaintiff omitted to impart 
 to them, that " The President " was one of the unnamed " ships " referred to in the policy, 
 and Lord Ellbnborottgh, C.J., at p. 497, who was affirmed by the Exchequer Chamber, 
 held that the plaintiff, having failed in his duty to disclose the fact which alone gave 
 
68 CH. Ill, SECT. 2, SUB-S. (2). 
 
 98. The following are miscellaneous examples, not strictly falling tmder 
 any of the foregoing heads, of matters which jm-ies, or judges sitting without 
 juries, have found to be material, and, as such, subject to the duty of dis- 
 closure, unless the underwriter is presumed in law to be cognizant of them. 
 Where policies had been efiected on sugar on boats and lighters, while loading 
 and unloading, and until finally delivered at the assured's sugar refinery, 
 the jury found that an agreement made by the assured with a certain lighter- 
 man whereby the latter was to be liable for negligence only, and to that 
 extent was to be exempt from his common law liability as a common carrier, 
 was a fact material to be disclosed (s). In the case of a policy upon the freight 
 of {inter alia) frozen apples, it was considered that an agreement whereby 
 the freight on these apples was liable to be lost if the steamer did not arrive 
 at Hobart by a certain date was material, and ought to have been disclosed (i). 
 Where four open policies had been underwritten at successive dates for 
 certain sums on fruit and produce from Greece to London or Liverpool 
 by any steamers on which such goods might be shipped from time to time, 
 which shipments were to be declared and valued as interest might appear, 
 it was held, in an action on the later policies, that the non-disclosure of the 
 full value of the shipments imder the earlier policies was such a concealment 
 as was sufficient to avoid the policies sued upon {tt). So, also, as to the con- 
 cealment of the fact that the policy sued upon was intended as a mere bet 
 on the arrival of the vessel at a certain place within a certain time (ttt). In 
 other cases, the materiality of such circumstances as an agreement for the 
 detention of the vessel insured or her employment at other places and times 
 
 significance to the known fact, falLed in his action also. Similarly, in Leigh v. Adams (1871), 
 25 L. T. 566, where the plaintifE having insured quantities of cochineal shipped from the 
 Canaries on a floating policy, on terms of declaring the name of the ship upon receipt of 
 each bill of lading, failed to communicate either of the following facts, — (i) an anonymous 
 letter stating that the owners intended to lose a certain vessel called " The Candida " on her 
 next voyage, (ii) the fact that a cargo of cochineal was to be shipped for him on board this 
 vessel. It was assumed by the Court of Queen's Bench (CoCKBuiiir, C.J. , and LtrsH and 
 Hannbn, JJ.)., though CocKBTiRif, C.J., appears to have been of a different opinion, that 
 the defendants had constructive notice of (i), the letter having been posted up at Lloyd's, 
 but it was held that, the plaintiff, not having disclosed (ii), had failed to reveal the fact 
 in conjunction with and in the light of which alone the defendants' knowledge of the other 
 fact could have been of any use to them. 
 
 («) Tate cfc Sons v. Hyslop (1885), 15 Q. B. D. 368, C.A. 
 
 (t) Scottish Shire Line, Ltd. y. London dh Provincial Marine dh General Insurance Co., 
 [1912] 3 K. B. 51. At pp. 70, 71, Hamilton, J., explains how, on the evidence before him, 
 the materiality is made out to his satisfaction : " the risk, if there was no date in this 
 contract, would merely be that when the vessel arrived at Hobart there would be no 
 apples, in which case she could not earn freight by carrying them, and that she might be 
 prevented from arriving at Hobart while there were apples to ship by perils of the sea. 
 Considering that she was about to leave English waters at the end of the year, and con- 
 sidering that the apple season at Hobart appears to extend for about two months, the 
 underwriter would have a very considerable time in which the vessel might arrive and save 
 her freight. If the time is to be about the 20th March, the risk is materially altered, and 
 the likelihood of the underwriter being called upon to pay in the event of accident is 
 considerably increased." 
 
 {U) Eivaz V. Oevussi Bros. & Go. (1880), 6 Q. B. D. 222, C. A. 
 
 (ttt) Gedge v. Royal Exchange Assurance Gorpn., [1900] 2 Q. B. 214, per Kennedy, J., 
 at pp. 222, 223, who there so held, independently of the other ground of his decision, 
 which was that the policy was illegal (p. 219). 
 
§§ 98, 99 (insurance). 69 
 
 and for other purposes than those which were immediately contemplated, 
 or an unusual mode or place of taking in, or loading, or stowing, her cargo, 
 has been judicially recognized, though the xinderwriter in each case failed to 
 make good his defence by reason of his presumptive knowledge of the 
 imdisclosed facts (m). 
 
 99. Generally, it may be stated that it is not all matters even of import- 
 ance, or which would affect the mind of some underwriters, which must be 
 disclosed ; but only those which have a direct relation to, and bearing upon, 
 the subject-matter of a marine policy (^'), or which, whether strictly so related 
 or not, " would affect the judgment of a rational imderwriter governing 
 himself by the principles and calculations on which underwriters do in practice 
 act " (vv). Whenever one or other of these conditions has not been present, 
 the underwriter has failed in his defence of non-disclosure (w). 
 
 (m) See Salvador r. Hopkins (1765), 3 Burr. 1707 (an agreement to detain the insured 
 vessel — an East India sHp — ^for a year longer in India than the enlarged time provided 
 for by the charter-party) ; Ougier v. Jennings ( 1800), 1 Campb. 504 n. (trip of insured 
 vessel to Sydney in ballast to take in a cargo of coals, the insurance being on fish at and 
 from Newfoundland to a port in Portugal); Vallance v. Dewar (1808), 1 Campb. 503 
 (employment of ship in " banking " or fishing on the " bank " of Newfoundland, whereby 
 the voyage home was, it was urged, turned from a summer voyage into a winter one) ; 
 Kingston v. Knibbs (1809), 1 Campb. 508 n. (fact that the ship took in part of her cargo 
 inside, and part outside the bar of Oporto) ; Da Costa v. Edwards (1815), 4 Campb. 142 
 (the fact that the 40 carboys of vitriol, the subject of the insurance, were carried on deck, 
 and loaded and stored in a manner alleged to be dangerous). In none of the above cases 
 was it suggested that the undisclosed facts were not material : but in all of them it was 
 decided that the several facts were in accordance with well-known practices and usages 
 of the trade or locality to which the insurance related, and that consequently the under- 
 writers had presumptive notice thereof. 
 
 (v) Per ScBTTTTOM', J., at p. 257 of Glasgow Assurance Corporation v. William Symondson 
 cD Co. (1911), 104 L. T. 254. 
 
 (m) lonides v. Pender (1874), L. R. 9 Q. B. 531, per Cur., at p. 539. It was here 
 considered that over- valuation, though in one sense extraneous to the risk, comes within 
 this second principle. Cp. the American fire insurance case cited in note (w) to § 104, 
 post. 
 
 (ti)) In Gandy v. Adelaide Marine Insurance Co. (1871), L. R. 6 Q. B. 746, where the 
 policy, the slip of which was initialled in November, 1869, was on a bark which had been 
 classed Al in Lloyd's Register for 7 years in November, 1865, the assured omitted to 
 communicate to the underwriter the fact that, when the vessel was due for the usual " halt- 
 time survey " in the 4th year, he had expressed his intention of not undergoing the survey, 
 the effect of which would be that she would be struck off the register. Bkett, J., at the 
 trial, left to the jury the q[uestion whether this fact was material or not. They answered the 
 question in the negative, and the Court of Q. B. discharged the rule which had been 
 obtained for a new trial. In Lebon cfc Co. v. Straits Insurance Co. (1894), 10 T. L. R. 
 517, C. A., the C. A. agreed with Chaelbs, J., as to the immateriality of the undisclosed 
 fact that the plaintiff, having previously insured goods on board the same vessel with the 
 Globe Insurance Co., had been told by their representative three or four months after- 
 wards that " they would like to be off the risk," Lord Eshbe, M.R., observing at p. 518 : 
 " it was admitted that, as a rule, the assured was not bound to state what another under- 
 writer had said, as that he had refused to take the risk ; or even that, a week after he 
 had accepted the insurance, he had expressed a wish to be released ; but it was suggested 
 that, where an underwriter had expressed a wish three or four months after he had taken 
 the risk, this was a fact that the assured was bound to disclose, because it indicated a 
 belief that some evil had happened to the ship. It was clear, however, that it did not 
 sbmount to a statement that the ship had probably sustained some injury, but it merely 
 showed that the underwriter, perhaps because he had been insuring too much, did not 
 wish to run the particular risk any longer." In Thames cfc Mersey Marine Insurance Co. 
 V. Gunford Ship Co., [1911] A. C. 529, H. L., one of the alleged undisclosed facts, viz. 
 the master's very bad record, — he had not been to sea for 22 years, had lost his last ship, 
 and his certificate had been suspended for six months, — was held both by the Court of 
 
70 CH. Ill, SECT. 2, SUB-S. (2). 
 
 100. Second only in importance to contracts of marine insurance are 
 life and health policies. A contract of life insurance has been defined as a 
 contract " in which one party agrees to pay a given sum upon the happening 
 of a particular event contingent upon the duration of human life, in con- 
 sideration of the immediate payment of a smaller sum, or certain equivalent 
 periodical payments, by another " {x) ; but, having regard to the modern 
 endowment policies, and innumerable other new forms of assurance, the 
 introduction of which is mainly due to the business ingenuity and inventive- 
 ness of the United States, it cannot be said that the above definition is now 
 adequate. Its connotation is too wide, and its denotation too narrow. It 
 is submitted that every agreement by one person to pay a sum, or series of 
 sums, of money to another person on the happening of an event contingent 
 upon the duration of human life in consideration of the payment by the 
 other person of a sum, or series of sums, certain, at a date or dates prior to 
 the happening of such event, is a contract of life assurance. For the purposes 
 of a modem statute dealing with assurance business of various kinds, a 
 " policy upon human life " means " any instrument by which the payment 
 of money is assured on death (except death by accident only) or the happening 
 of any contingency dependent on human life, or any instrument evidencing 
 a contract which is subject to the payment of premiums for a term dependent 
 upon human life " (y). 
 
 101. Whichever of the above may be taken as the correct defmition of a 
 contract of life insurance, it is clear that the uncertain event upon which 
 the wager is made is the duration of the life which is the subject of the insur- 
 ance, and, therefore, that in every such contract, and also in contracts of 
 insurance against disease, the matters to be disclosed by the assured must 
 be all those, but those only, which, being within his exclusive knowledge, 
 have a bearing upon the assured person's chances of life or health. This is 
 the efiect of the authorities, though the number of actual cases decided on 
 the pure question of what amount and kind of disclosure is suflBcient to satisfy 
 the common law duty is exceedingly small, for the simple reason that it has 
 long become the almost imiversal practice of insurance companies for their 
 
 Session and the House of Lords (somewhat strangely, it may be thought, — indeed, at p. 541, 
 Lord Shaw expressed grave doubts) to be immaterial. In Glasgow Assurance Corporation 
 V. William Symondson & Co. (1911), 104 L. T. 254, the plaintiffs, who had by a general 
 " treaty " with the defendants undertaken to reinsure marine risks to be selected by them, 
 sued for rescission of this " treaty," and also of certaiti poUcies which, pursuant thereto, 
 they had underwritten by way of reinsurance, when tendered to them by the defendants 
 for that purpose, on the ground (amongst others) that the defendants had not disclosed 
 the following facts : (i) that similar " treaties " to the above had previously resulted in 
 loss to the underwriters, (ii) that the defendants knew that this " treaty " must so result 
 in loss to the plaintiffs, and (iii) that the defendants had a system whereby some of the 
 risks selected and tendered for reinsurance were risks which they themselves undertook. 
 ScBTJTTOir, J., at pp. 257, 258, expressed his opinion that none of the above facts were 
 material. He had some little doubt as to (iii), but, after noting that the defendants had 
 called no evidence of underwriters on the point, which, if capable of being adduced, would 
 obviously have been of the utmost importance, concluded (p. 258) : " I find that the 
 intention of the broker to declare his own underwriting partners as assured, who would 
 make a profit by difference of premiums, was not a fact material to be disclosed." 
 
 (x) Bunyon's Law of Life Assurance, p. 1. 
 
 {y) Assurance Companies Act, 1909 (9 Edw. 7, c. 49), s. 30. 
 
§§ 100, 101 (insurance). 71 
 
 own supposed protection— thougli whether they have derived any real 
 advantage from so doing, is extremely doubtful (z)— to exact " contracts for 
 the truth " by asking a number of specific questions, and making the accuracy 
 of the answers to these questions, and also the complete disclosure of every- 
 thing material as to which no specific inquiry has been made, the " basis " 
 and foundation of the contract itself. From this it results that nearly all 
 the authorities on life insurance law are merely so many decisions on the 
 construction of these express warranties, conditions, or contracts for dis- 
 closure, the only question in each case being whether the contract, properly 
 construed, has been performed or not. No question of the obligation of the 
 assured to communicate material facts which are not the subject of his 
 agreement usually arises, though in contemplation of law that obligation still 
 exists («), because, in most of such cases the attention of the Court is naturally 
 diverted to, and concentrated upon, the contract itself ; and, as regards the 
 materiality of facts which are the subject of the specific inquiries, and of the 
 warranted answers and declarations, there can be no discussion whatever, 
 siace it is the very office and effect of a warranty or condition to preclude 
 the possibility of any such discussion (6). Still, after excluding all reported 
 cases relating solely to non-compliance with a term or warranty in a 
 contract which expressly provides that such non-compliance shall render it 
 void, there remains a small fasciculus of authorities in which are to be found 
 either decisions, or judicial propositions (other than mere obiter dicta), as to 
 the non-contractual obligation of disclosure, and the classes of facts required 
 by the law, apart from any agreement between the parties, to be divulged in 
 order to comply with- such obligation. Amongst these may be included 
 decisions as to the truth of an affirmative answer to a completely general 
 question, such as — " Do you know of any other circumstances which the 
 directors ought to be acquainted with ? " (c), or as to whether there has 
 been a satisfaction of some equally general condition in the contract, such as 
 a condition that " if any . . . information necessary to be made known, to 
 the company has been withheld, . . . the assurance shall be absolutely null 
 and void " (d) ; because the only effect of such a question is to inquire whether 
 the common law duty of disclosure has been performed, and the only effect 
 
 (z) As to this, see § 171, post. 
 
 (a) Joel V. Law Union & Crown Insurance Co., f 1908] 2 K. B. 863, C. A., -per Vattghan 
 Williams, L.J., at pp. 876-878, and Moulton, L.J., at pp. 892, 893. 
 (6) See § 170, post. 
 
 (c) As in Lindenau v. Desborough (1828), 8 B. & C. 586 (per Lord Tentbrden, C.J., 
 at pp. 591, 592 : " admitting this not to faU within any of the specific questions, stiU the 
 general question put by the office requires information of every fact which any reasonable 
 man would think material "), and in Hutton v. Watwloo Life Assurance Co. (1859), 1 F. & F. 
 735. In Jones v. Provincial Insurance Co. (1857), 3 C. B. (n.s.) 65, the general question 
 was — " are you aware of any disorder or circumstance tending to shorten life, or to render 
 an insurance on your [his] life more than ordinarily hazardous ? " So also in Swete v. 
 Fairlie (1833), 6 C. & P. 1. In a horse insurance case of Taylor v. YorlcsJiire Insurance Co., 
 [1910] 2 Ir. R. 1, there was a warranty that no " important information " had been with- 
 held. 
 
 (d) See Thomson v. Weems (1884), 9 App. Cas. 671, at p. 680. Cp. the similar condition 
 in the fire insurance case of Pimm v. Lewis (1862), 2 T. & P. 778, cited in note (w) to 
 § 104, post. I 
 
72 CH, in, SECT. 2, suB-s. (2). 
 
 of such a condition is to stipulate that the common law duty shall be per- 
 formed ; whence it follows that any decision that the question has not been 
 truthfully answered, or the condition not duly complied with, must necessarily 
 be a decision that the party has not revealed some material fact within his 
 knowledge that it was " necessary " for the insurers to know, and " ought " 
 not to have been withheld from them, — ^in other words, has failed to discharge 
 the obligation of disclosure which, without such question or express condition, 
 would have been incumbent on him, and would have been a condition in law 
 of the vaHdity of the contract. And where a specific question is not answered 
 at all, the case becomes of course one of non -disclosure, pure and simple (e). 
 Further, some of the cases as to misrepresentation inducing a contract of 
 life insurance, other than cases of misrepresentation in answer to a question 
 where the truth of the answer is warranted, are relevant in so far as it was 
 either decided, or assumed on the basis of the decision, that the facts alleged 
 to have been misrepresented were material ; for any fact of which a mis- 
 representation is material may also (though it need not necessarily) be a fact 
 which it is material to disclose (/). 
 
 102. It being well established, as has already been pointed out {g), that 
 the assured is under a duty of disclosure in life assurances as much as in 
 marine, or in any other, the difierence being only in the application of the 
 rules and the kind of matters deemed material in the several branches, it 
 only remains to give illustrations of the circumstances which have been 
 found or held or assumed to be necessary and proper subjects of disclosure in 
 the branch now imder discussion. These comprise the following : — existing 
 or past disease, if of such a character as substantially to affect the expectation 
 of life (A), but not otherwise (i), and if known to the person whose life is insured 
 both to exist and to answer to the above description, which is often not the 
 case {]) ; the habits and manner of living of the assured, or other person 
 
 (e) See London Assurance Co. v. Mansel (1879), 11 C. D. 363, per Jessbl, M.R., at 
 p. 369. Cp. Re General Provincial lAfe Assurance Co., Ex •p. Dainiree (1870), 18 W. R. 396. 
 
 (/ ) See generally, for these cases. Lord Halsbury's Laws of England, title " Insurance," 
 vol. xvii, pp. 550-554. 
 
 (g) In § 88, and notes (d) and (e) thereto, ante. 
 
 (h) Maynard v. Rhodes (1824), 5 Dowl. & Ry. 266 ; 27 R. R. 526 (disorder of long 
 standing) ; Morrison v. Muspratt (1827), 4 Bing. 60 (severe pulmonary complaint) ; 
 Lindenau v. DeshorougJi, sup. (tumour in brain, and impairment of mental faculties, &o.) ; 
 Duchett V. Williams (1834), 2 C. & K. 348 (" a disease which tended to shorten life " — not 
 stated what — per Cur., at p. 350) ; Foster v. Mentor Life Assurance Co. (1854), 3 E. & B. 
 48 ; Joel v. Law Union db Crown Insurance Co., inf. (mental and nervous breakdown). 
 
 (i) Thus in Watson v. Mainwaring (1813), 4 Taunt. 763, it was held that a disease which 
 does not generally result in shortening life is not one which " tends " to do so, though 
 in fact the assured died of it. This was assumed also in Oeach v. Ingall (1845), 14 M. & W. 
 95, but the insurers succeeded in that case because, in addition to general questions they 
 had framed a specific question — " have you had any spitting of blood ? " — which was 
 falsely answered in the negative, and it was held that the question and answer were directed 
 to the fact, and not the disease, because the fact might, to the expert, though not to the 
 assured, be sjrmptomatic of disease. Even here, however, it was pointed out that only 
 such " spitting of blood " was material to be disclosed as was capable of being regarded 
 by a medical man as a sj^nptom, not every spitting of blood, such as {e.g.) would follow 
 the extraction of a tooth. 
 
 (j) Per MouLTOiT, L. J., at pp. 884, 885, of Joel v. Law Union <fe Crown Insurance Co., 
 [1908] 2 K. B. 863, C. A. For illustrations of questions put to the jury in such a form as 
 to leave it open to them to find for the plaintiff, if they thought that the assured bond fide 
 
§§ 101, 102 (insueance). 73 
 
 whose life is the subject of the insurance, in so far as those habits tend to 
 injure health (k) ; the fact of " the life " having been previously insured by 
 other offices (I) ; the person for whose benefit the insurance is efiected (to) ; 
 and other matters " tending to hicrease the hazard, or to affect the question 
 of the life being an eligible or proper object of insurance " (mtn), and which 
 the prudent insurer would take into consideration before accepting the risk (w). 
 As to the name of the usual family doctor, or the most recent medical attend- 
 ant, of " the life," it may be doubted whether it would be considered a duty 
 on the part of the assured to communicate such facts in the absence of contract 
 or express inquiry, though of course a misrepresentation as to the matter in 
 answer to a specific question, where the truth of every answer is warranted, 
 would render the policy void (o) : and, even when there is no such warranty, 
 the concealment of the name of the physician or surgeon who treated or 
 operated on " the life " for a serious disorder or injury, where that disorder 
 or injury has also been concealed, may be considered the suppression of a 
 material fact (p). 
 
 did not realize that his experiences constituted a disease, see Swete v. Fairlie (1833), 6 C. & P. 
 1 (at p. 8) ; Jones v. Provincial Insurance Co. (1857), 3 C. B. (n.s.) 65 (at p. 86) ; Fowhes v. 
 Manchester & London Life Insurance Co., No. 1 (1862), 3 F. & P. 440 {per Cookbitrn, C.J., 
 at pp. 443, 444). In all the above, the jury found that the " life " was not aware of the 
 disease in the sense indicated. On the other hand, in Button v. Waterloo Life Assurance Co. 
 (1859), 1 F. & F. 735, they found that he was so aware. 
 
 (i) Everett v. Desborough (1829), 5 Bing. 503 (habits of intoxication) ; Hutton v. Waterloo 
 Life Assurance Co., sup. (the like, followed by delirium tremens) ; Thomson v. Weems 
 (1884), 9 App. Cas. 671, H. L. (habitual and heavy drinking, followed by hepatitis). 
 
 (l) Wainvyright v. Bland (1836), 1 M. & W. 32 (where the jury found, in answer to 
 questions left to them by the judge, that certain representations as to insurances with other 
 offices, and also as to the person for whose benefit the policy sued upon had been effected, 
 were material) ; London Assurance Co. v. Mansel (1879), 11 C. D. 363 (per Jessel, M.R., 
 who, at pp. 369-372, expressed a very decided opinion as to the materiality of the un- 
 disclosed fact that the life of the assured had been declined by other offices). The view 
 of Maudsts, V.-C, to the contrary, at p. 307 of Re General Provincial Life Assurance Co., 
 Ex p. Daintree (1870), 18 W. R. 396, is incorrect. 
 (to) Wainwright v. Bland, sup. 
 
 (mm) Per Lord Denman, C.J., at p. 333 of Rawlins v. Desborough (1840), 2 M. & Rob. 
 328. 
 
 (n) In Huguenin v. Rayley (1815), 6 Taunt. 186, the fact suppressed was that the 
 woman whose life was insured had been confined in the county gaol for debt, and the 
 Court considered that, as this fact may have affected her health, it was capable of being 
 found material by the jury, though they held that the trial judge was quite wrong in 
 taking upon himself to hold, as matter of law, that the fact must be material, and in non- 
 suiting the plaintiff on that view. In Traill v. Baring (1864), 4 De G. J. & S. 318, one hfe 
 assurance society successfully sued another for rescission of a policy of reinsurance on 
 a certain life, on the ground of (inter alia) non-disclosure by the defendant society of the 
 fact that, before the policy was effected, they had abandoned their professed intention, 
 upon the basis of which the negotiations had been instituted, to join with the plaintiffs 
 and a third society in the transaction on the terms of the three societies taking the risk 
 in equal shares (per Knioht-Bbuce, L.J., at p. 326, and Ttjbnbe,, L.J., at pp. 329, 330). 
 See also Rawlins v. Desborough, sup. (non-disclosure of certificate as to health by medical 
 officer of insurance company whose risk the plaintiffs were reinsuring). 
 
 (o) As in Everett v. Desborough (1829), 5 Bing. 503. See also Hutton y. Waterloo Life 
 Assurance Co. (1859), 1 F. & F. 735. 
 
 (p) It was held by the Court of C. P. in Morrison v. Muspratt (1827), 4 Bing. 60, that 
 a circumstance so withheld might weU be thought by the jury, and probably was, material, 
 and the judge at the trial having ignored the question of non-disclosure, directing the 
 jury to find merely whether there had been misrepresentation or not, a new trial was 
 ordered (per Best, C.J., at p. 62 : " whether or not it was material for the defendants 
 to have been made acquainted with the fact which has been withheld from their knowledge. 
 
74 CH. Ill, SECT. 2, SUB-S. (2). 
 
 103. Insurances against destruction of, or injury to, property by fire, 
 lightning, hail, tempest, or otherwise arising from the action of the elements, 
 are, like marine insurances, contracts of indemnity (q), differing herein from 
 life insurances (r), and most forms of insurance against disease, or loss of 
 or injury to a limb by accident, and the like, in which the contract is to pay 
 a specific sum of money, whether the payment of such sum operates as more, 
 or less, than full compensation to the assured in the circumstances of the 
 case. On the other hand, they have this feature in common with life 
 msurances, that the contract is usually expressed to be for a year, but 
 automatically renewable for further terms of one year, so long as the annual 
 premiums are paid at the stipulated dates, or within the agreed or customary 
 period " of grace " (s). 
 
 104. To fire and the other insurances above enumerated, and indeed to 
 all the many different forms of insurance which mercantile prudence has 
 sought for, and speculative ingenuity has offered, the same rule of uberrima 
 fide-t is applied which obtains in marine and life assurances ; though the facts 
 considered material are of course relative in each case to the character and 
 subject-matter of the contract in question. But, here again, the required 
 disclosure is so habitually provided for by the contract itself, or made the 
 subject of question and answer, or complicated with issues of misrepresentation, 
 that these last-mentioned branches of insurance are even more unproductive 
 
 is a question for the jury. It is probable, however, it would be esteemed material, because 
 all insurance ofSces are desirous to consult with the medical man who has been last in 
 attendance on the life insured "). In Cazenove v. British Equitable Assurance Co. (1860), 
 29 L. J. (c.P.) 160, Exch. Ch., it was recognized that it was quite open to the jury to 
 find, if they thought iit to do so, that the names of the doctors specially consulted as to 
 a grave malady were material to be disclosed, but in this case the jury found otherwise, 
 and their verdict could not be disturbed : it is true that the Exchequer Chamber 
 held that the insurance company was entitled to succeed, but this was solely on the 
 separate and distinct ground of non-compliance with an express condition as to the truth 
 of answers to questions. In British Equitable Insurance Co. v. G. W. By. Co. (1869), 38 
 L. J. (oh.) 314, it was decided that the suppression of a grave disorder, and the fact that 
 the assured had consulted a specialist for it, was fraudulent. In Joel v. Law Union & 
 Crown Insurance Co., [1908] 2 K. B. 863, C. A., it was found by the jury {inter alia) that 
 the fact that the deceased had consulted a certain doctor for a nervous breakdown in the 
 year 1894 was material for the company to know in considering whether they could insure 
 her lite ; and it was not attempted in the Court of Appeal to disturb this finding, though 
 a new trial was ordered on other grounds. And, since the C. A. had held that, on the true 
 construction af the documents, there was no term that the answers of the assured should 
 be the basis of the contract, this, like the former case, was one of pure non-disclosure. 
 As to matters considered material in miscellaneous cases of insurance, see cases cited in 
 note (t), inf. (refusal to renew insurance, malformation of animal, &c.). 
 
 (q) Dolby v. India & London Life Assurance Co. (1854), 15 C. B. 365, per Pabke, B., 
 at p. 387 : " pohcies of assurance against fire and against marine risks are both properly 
 contracts of indemnity." 
 
 (r) Ibid., fcr Pabke, B., at the same page : " this species of insurance " — ^he is dealing 
 with life insurance — "in no way resembles a contract of indemnity." 
 
 («) Unless, it is expressly, or, as in Stolcell v. Heywood, [1897] 1 Ch. 459, impliedly 
 agreed otherwise, and it is made clear that only one contract for one year is intended, 
 with liberty to the parties to make a fresh contract on the expiration of that year for 
 a further year, or a succession of yearly contracts at the expiration of each succeeding 
 year. But, even in the ordinary type of contract, it seems to have been thought by 
 Cbbsswell, J. — see p. 25 of Pirn tfc Sogers v. Beid (1843), 6 M. & G. 1 — that each renewal 
 by payment of the premium, though no fresh proposal is required, may possibly be re- 
 garded as constituting a new contract. 
 
§§ 103, 104 (msuEANCE). 75 
 
 than life insurances have been shown to be (i), of authority m illustration 
 of the pure non-contractual duty of disclosure. After elimmating all cases 
 of breach of contractual liability to give information of specified kinds of 
 circumstances before the conclusion of the contract, or of altered circum- 
 stances during the ciu^rency of the policy (w), and all cases amounting to 
 neither more nor less than misrepresentation (v), there scarcely remains a 
 single decision on the question of what is, or is not, considered material to 
 be disclosed by the assured to the insurer, pursuant solely to the general duty 
 of disclosure, in cases of insurances other than marine and life insurance {iv). 
 
 {t) See § 101, ante. Miscellaneous cases of this class are Taylor v. Yorkshire Insurance 
 Co., [1913] 2 Jr. R. 1 (a stallion) ; Thornton-Smith v. Motor Union Insurance Co. (1913), 30 
 T. L. R. 139 (a motor-car). 
 
 {u) Such as Pirn A Sogers v. Reid, sup., and Sillem v. Thornton (1854), 3 E. & B. 
 868, according to the view of that case taken by Pollock, C.B., at p. 337 of StoJces v. 
 Cox (1856), 1 H. & N. 320. 
 
 (v) Such as Dobson y. Sothehy (1827), M. & M. 90 (alleged misdescription of the character 
 of the building insured). 
 
 (w) The writer has only been able to discover the following (that is, amongst British 
 authorities). In Bufe v. Turner (1815), 6 Taunt. 338, the plaintiff was the owner of two 
 warehouses, one of which was next but one to a boat- builder's shop. On the 11th July, 
 1814, a fire broke out in this shop, but was extinguished in half an hour, and the plaintiff, 
 in his capacity of magistrate in that district, employed men to watch and guard these 
 premises. On the same day, he sent instructions by special conveyance (the mail having 
 left) to his London agent to insure that one of his two warehouses which was near the boat- 
 builder's shop, but not the other. The letter reached London on the 24th, and the policy 
 was effected on the 25th. On the morning of the 13th, another fire broke out in the boat- 
 builder's shop, and the plaintiff's insured warehouse was burnt down. At the trial of an 
 action on the policy, to which the defendants pleaded non-disclosure of the above facts in 
 relation to the boat-builder's shop, " the jury acquitted the plaintiff of any fraud or 
 dishonest design, but thought that the circumstance of the fire on the 11th ought to have 
 been communicated to the defendants who, without this information, did not engage on 
 fair grounds with the plaintiff, and for whom under those circumstances they gave their 
 verdict " (p. 340), and this verdict the Court declined to disturb. In Pimm v. Lewis (1862), 
 2 E. & P. 778, which was an action on a fire policy on the stock-in-trade in a water corn- 
 mill, there was, it is true, an express condition that if the assured should {inter alia) " omit 
 to communicate any matter material to be made known to the company in order to enable 
 them to judge of the risk, the policy should be void " : but, inasmuch as this condition 
 was nothing but an exact and complete expression of the duty of disclosure imposed by the 
 general law, and of the consequences of violating it, the case may be properly cited as an 
 illustration of that general law. Of several defences, the only one which MAETrN,'B., at 
 the trial, considered of any substance was the non-disclosure by the plaintiff of the fact 
 that he was in the habit of grinding rice-chaff in his mill, which substance was said to 
 increase the danger of fire. The plaintiff succeeded, but solely on the ground that the defen- 
 dants were proved to have had presumptive, if not actual, knowledge of the fact alleged 
 to have been suppressed, it not being disputed that the fact was one which it was 
 material to disclose. Lastly, in Yager v. Chmrdian Assurance Co. (1912), 108 L. T. 38, 
 where an arbitrator having found that the refusal of another oifice to renew their insurance 
 of certain premises of the assured was a material fact to be disclosed, the Court declined to 
 disturb the finding. Besides the above, there are American cases on the duty of dis- 
 closure in iire insurances, irrespective of contract ; but of these it is only necessary to 
 cite one, viz. New York Bowery Fire Insurance Co. v. New York Fire Insurance (1837), 
 17 Wend (N. Y.) 359, which was referred to with approval by BLACKBtTEN, J., delivering 
 the judgment of the Court, at p. 538 of lonides v. Pender (1874), L. R. 9 Q. B. 531. " In 
 that case," it is there said, " the plaintiffs had insured certain property against fire, and 
 the president of the company heard that the person insuring with them, or at least some 
 one of the same name, had been so unlucky as to have had several fires, in each of which he 
 was heavily insured. The plaintiffs reinsured with the defendants, but did not inform 
 them of this. A fire did take place, the insured came upon the plaintiffs, who came upon 
 the defendants. The judge directed the jury that if this information given to the president 
 of the plaintiffs was intentionally kept back, it would vitiate the policy of reinsurance. 
 
76 CH. Ill, SECT. 2, SUB-SS. (2), (3). 
 
 105. All questions in insurance cases as to the burden of proof on "the 
 party complaining," and the aflaimation defences available to "the party 
 charged " (x), as to relief and remedy, as to matters of law and issues of 
 fact, and as to parties (whether parties to the duty of disclosure, or to pro- 
 ceedings instituted in respect of the omission of such duty), are left over 
 for discussion in their proper places (y). 
 
 Subs. (3). Contracts between Vendor and Purchaser. 
 
 106. If a student of our jurisprudence were suddenly let loose amongst 
 the reports of cases on the law of vendor and purchaser, without any guiding 
 hand, and without any clear direction as to the meaning and limits of that 
 somewhat delusive phrase, uberrima fdes, and were then asked to find out 
 from the authorities whether the relation in question is, or is not, one in which 
 the law requires from the parties disclosure of material facts, he would find 
 it impossible to give a clear, or at any rate a confident, answer, for he would 
 hear " the sages of the law " speaking to him in two voices, which, without 
 the means of harmonizing their discord, would greatly puzzle his unschooled 
 ear. He would learn from Lord Campbell, L.C, in the plainest terms, 
 that there is " wo fiduciary relation between vendor and purchaser in the 
 negotiation " (2) ; but Abbott, C.J., would tell him that " in such transactions 
 good faith is most essential " (a). Turner and Cairns, LL.JJ., that " the 
 Court requires good faith in conditions of sale " (b), and Kindersley, V.-C, 
 " that it is the obvious duty of a vendor ... to describe everything which 
 it is material to know of the nature and value of the property " (c) ; whilst 
 Lord Hatherley, L.C, would instruct him, in still more unqualified and 
 imcompromising language, that " this Coiirt requires the utmost good faith 
 between buyer and seller " {d). And if our ingenuous student were then to 
 apply his (again unassisted) intelligence to the question of what is deemed to 
 be comprised in the expressions, " everything which it is material to know," 
 and " the nature and value of the property," he would meet with further 
 bewildering divergences of judicial statement. 
 
 107. The above discrepancies will vanish on closer examination, or will 
 be seen to be no more than variations in expression, arising from the fact 
 that in using these apparently discordant forms of words, the several judges 
 were applying their minds and observations in each case to some particular 
 
 The jury found for the plaintiffs, but the Court, on appeal, directed a new trial on the ground 
 that the concealment was of a material fact, and, whether intentional or not, it vitiated 
 the insurance." 
 
 {x) For the meaning intended to be placed on the expressions " the party complaining," 
 and " the party charged," whenever they are used, in this work, and the reasons for using 
 them, see § 12, ante. 
 
 (y) Namely, in Sections 3, 4, 5, 6, and 7 of this Chapter respectively. 
 
 (z) Walters v. Morgan (1861), 3 De G. J. & P. 718, at p. 723. Leaoh, M.R., at pp. 71, 72 
 of Adamson v. Evitt (1830), 2 Russ. & M. 66, had previously made use of similar expressions. 
 
 {a) Stevens v. Adamson (1818), 2 Stark. 422, at p. 423. 
 
 (6) Dimmock v. Halktt (1866), 2 Ch. App. 21, at pp. 28 and 31. 
 
 (c) Brandling v. Plummer (1854), 2 Drew. 427, at p. 430. 
 
 {d) Phillips V. Homfray, No. 1 (1871), 6 Ch. App. 770, at p. 778. 
 
§§ 105-108 (vendor and purchaser). 77 
 
 feature ia the general proposition as to disclosure in negotiations preliminary 
 to a contract between vendor and pxirchaser, to the exclusion, for the moment, 
 of other features. 
 
 108. The general proposition referred to is no other than the general 
 proposition which has already been stated (e), and the theory on which it 
 IS applied to contracts of the species now under consideration is precisely 
 the same as that on which it is applied to insurance and all the other species 
 dealt with in this Chapter. That is to say, here, as there, one of the parties 
 to the negotiation must ordinarily be supposed to have exclusive cognizance 
 of certaia matters material to the contract (/), this person being usually 
 the vendor or lessor. For information on these matters the other party must 
 therefore ordioarily trust to him. It follows, almost as a matter of course, 
 that the law must impose on the first party the duty of communicating to 
 the other all such material matters as are, or come within, his actual or pre- 
 sumptive knowledge before the conclusion of the contract {g), and are not, 
 or do not before that date, come within the actual or presumptive know- 
 ledge (h) of the other party. The imposition of this obligation has been 
 based sometimes upon " a principle of conscience " {i), sometimes, and far 
 more frequently, upon a principle of convenience, — convenience so obvious 
 as to amount almost to a necessity, — or, in other words, policy and practical 
 reasonableness {j). If the former aspect of the matter be regarded by itself, 
 it justifies the above judicial conception of the relation of vendor and purchaser 
 as one of good faith : if the latter be regarded alone, it is easy to imderstand 
 how the seemingly contrary statement that the relation is not a fiduciary 
 one came to be made. The difficulty in basing the doctrine entirely " upon 
 a principle of conscience " is that, on that view, there is no intelligible reason 
 
 (e) See § 81, ante. 
 
 ( / ) See the cases cited in note (j), inf. 
 
 (g) As to the time during which the duty exists, see §§ 181, 182, post. 
 
 (h) As to " actual " and " presumptive knowledge," see Ch. II, Sect. 3, ante. 
 
 (i) As by Lord Eldon, L.C, at p. 655 of Jenkins v. Hales (1802), 6 Ves. 646 : " the 
 rule is founded upon a principle of conscience, and requiring all possible security to be 
 given to a purchaser." 
 
 (j) This was the view expressed in the following : — Re Banister (1879), 12 C. T>. 131, 
 C. A. (per Pky, J., whose decision was upheld in the C. A., at p. 136 : " one of the main 
 reasons why the Courts have treated conditions of sale in this way is, that the vendor is a 
 person who knows, and he is stipulating with a purchaser, a person who does not know ") ; 
 lie Marsh and Earl Oranville (1882), 24 CD. 11 (per Pry, J., again, who adds a second 
 reason which, however, seems to be only an amplification of the first, at pp. 17, 18 : 
 "in the first place, as I observed in In re Banister, the vendor knows the condition 
 of the title, and the purchaser does not, ... In the next place, the descriptions 
 in the contract, or conditions of sale, are the only materials which the purchaser 
 has for deliberating upon before he enters into the purchase. He knows as much 
 as is told him, and no more, and, therefore, he ought to be put into possession of 
 everything, so far as it is touched upon by the conditions of sale, which is likely to in- 
 fluence his mind in determining whether he wiU buy or not ") ; Reeve v. Berridge (1888), 
 20 Q. B. D. 523, C. A. (per I^y, L.J., delivering the judgment of Lord Esher, M.R., 
 himself, and Lopes, L.J., at p. 528 : " we cannot but observe that there is great practical 
 convenience in requiring the vendor, who knows his own title, to disclose aU that is 
 necessary to protect himseU, rather than in requiring the purchaser to demand an inspection 
 of the vendor's title-deeds, before entering into the contract, a demand which the owners of 
 property will in many cases be unwiUing to concede, and which is not, in our opinion, in 
 accordance with the usual course of business in sales by private contract "). 
 
78 CH. in, SECT. 2, SUB-S. (3). 
 
 for stopping short of the ethical rules laid down by such moralists as Paley (h) 
 in relation to the duty of disclosure, which far transcend the limits within 
 which, on the other basis of policy and practicability, jurisprudence is com- 
 pelled to confine herself. The true view may, perhaps, be stated thus. On 
 grounds of " convenience," the law declares the duty ; and then, having 
 declared it, operates upon the " conscience " of the party subject to it, and 
 makes it a matter of " good faith " with him to observe it. Policy is the 
 origin and motive of the rule, and " good faith " is the name by which obedience 
 to that rule is characterized. 
 
 109. Another explanation of the apparent discrepancy in the two forms 
 of expression is that the area of material upon which the doctrine operates 
 is, in cases of vendor and purchaser, unlike cases of insurance, and particularly 
 marine insurance (where the ratio is the other way), much smaller than that 
 of the material to which it has no application, inasmuch as the facts and 
 circumstances which are within the exclusive and private cognizance of the 
 vendor or lessor are much less than the numerous other facts and circum- 
 stances which, not being within his exclusive knowledge, though material 
 in one sense (viz. that they might, if disclosed, affect the judgment of a 
 reasonable purchaser or lessee), need not be communicated ; and, when 
 observing that the relation of the negotiating parties is not fiduciary, the 
 authors of the proposition must have been directing their attention to this 
 larger domaia with which the rule has no concern, whilst those judges who have 
 laid down that the relation is fiduciary, must have had present to their 
 minds, — indeed they have in most cases said so, — the more restricted area in 
 which alone the principle comes into play (Z). 
 
 110. The transactions, often roughly classed as " vendor and purchaser " 
 cases, in the negotiations leading to which a duty of disclosure arises, are 
 by no means confined to contracts for the sale and purchase of land. They 
 include not only contracts for the sale of land, or any estate or interest in, 
 or right or claim in relation to, real property or chattels real, of any descrip- 
 tion (m), but also contracts for the demise, surrender, exchange, or settlement, 
 of any such property (n), and contracts for the assignment of, or otherwise 
 dealing with, choses in action (o) : the above being the kind of transactions 
 
 (Ic) Who goes the length of assigning to a vendor's non-disclosure of the known faults 
 and defects, the same degree of moral culpability, in all cases, as attaches to a fraudulent 
 misrepresentation of the merits and qualities, of the property which is the subject of the 
 sale. See the passage cited in note (u) to § 667, post. 
 
 (I) The limits of this restricted area are defined in §§ 112-118, 'post. 
 
 Im) See, generally, the oases cited in the notes to this Sub-section, for illustrations of 
 the ordinary type of contract for the sale of land, or the sale of a leasehold interest in land. 
 As to others, the subject of the contract was an exchange, by mutual surrenders, of land 
 in Ellard v. Lord Llandaff (1810), 1 Ball & B. 241 ; a sale of an advowson, in Edwards- 
 Woods V. MajoribanJcs (1860), 7 H. L. C. 806 ; a grant of a right to dig for and get clay, 
 with an option of a lease, in Walters v. Morgan (1861), 3 De 6. F. & J. 718 ; a life-interest 
 in a trust fund, in Coalcs v. Boswell (1886), 11 App. Cas. 232, H. L. 
 
 (n) The rule was applied in cases where a lessee complained of the lessor's non-disclosure 
 in Cosser v. GolUnge (1832), 3 My. & K. 283 ; Keates v. Gadogan (1851), 10 B. & C. 591 ; 
 Mostyn {Lord) v. West Mostyn Coke dk Iron Co. (1876), 1 C. P. D. 145. 
 
 (o) See Maddeford v. Austwick (1826), 1 Sim. 89 (sale of a share in a partnership) ; 
 Law Y. Law, [1905] 1 Ch. 140, C. A. (the like). For illustrations of contracts for the sale 
 
§§ 108-112 (vendor and purchaser). 79 
 
 in wMch title is everything, and possession counts for very little (p), and in 
 which the facts relating to such title must ordinarily be within the know- 
 ledge of the vendor or lessor, and not within that of the purchaser or lessee (q). 
 In sales of chattels, where possession counts for much more than title, there 
 is now, by statute, deemed to be an implied condition that the seller has a 
 good title, and an implied warranty that the thing sold is free from incum- 
 brances (r). These, and certain other statutory provisions (s), being in 
 ordinary cases quite adequate protection to the buyer, there is now no 
 occasion to invoke the application of any common law rule of disclosure 
 during the negotiations for the contract. 
 
 111. The rule of disclosure in this class of case, which (it may be noted) 
 applies to sales by private treaty as much as to sales by public auction (t), 
 and to sales by order or direction of the Court no less than to other sales (u), 
 is that the party who presumably alone knows the facts relating to his title 
 to the subject of the sale, or lease, or other transaction, — such person being 
 usually the vendor, or lessor (»), though circumstances are conceivable in 
 which the purchaser or lessee may be the party having the exclusive know- 
 ledge (to) — must disclose such facts fully (w), and clearly (x), to the other 
 party. And this duty is either the same duty as, or, if not, must be deemed 
 additional to, and independent of, the vendor's agreement to make a good 
 title which is, in one view, to be implied in the contract itself (y), and, in 
 another, is assumed by the law to exist, as somethiag outside the contract, 
 but collateral to it («). 
 
 112. The facts which have been considered to have a bearing, direct or 
 indirect, on the question of title, and which, as such, the vendor, lessor, or 
 
 of an annmty, see Coverley v. Burrdl (1821), 5 B. & Aid. 257, and Adamson v. ^otM (1830), 
 2 Russ. & M. 66. 
 
 (p) See the observations of Lindlby, L.J., at p. 545 of Manchester Triist v. Furness, 
 [1895] 2 Q. B. 539, C. A. 
 
 (q) See the cases cited in note (j) to § 108, ante. 
 
 (r) Sale of Goods Act, 1893 (56 & 57 Vict. c. 71), s. 12. 
 
 (s) Ibid., s. 21, and the Factors Acts therein referred to. 
 
 (i) Ee White and Smith's Contract (1896), 1 Ch. 637, per Stibling, J., at p. 641 ; Re 
 Hcedicke and Lipski's Contract, [1901] 2 Ch. 666, per Bybnb, J., at pp. 668, 669. 
 
 (u) See § 252, post. 
 
 Iv) See Goaks v. Boswdl (1886), 11 App. Cas. 232, H. L. (per Lord Sblbobnb, L.C, 
 at pp. 235, 236 (" a purchaser is generally speaking under no obligation to communicate to 
 his vendor" . . . &c.) ; and op. what is said by Lord Campbell, L.C, to the same effect 
 at p. 723 of WalUrs v. Morgan ( 1861 ), 3 De G. F. & J. 718. 
 
 (vv) No such case has yet come up for decision ; in all those cases in which a vendor 
 has succeeded against a non-disclosing purchaser, referred to in § 154 and § 156, post, the 
 circumstances were very special, and fraud, as well as the mere fact of non-disclosure, was 
 estabhshed. 
 
 (w) See §§ 20-23, ante. 
 
 \x) See § 24, ante. 
 
 (y) This was the view expressed by Parke, B., at p. 701 of Gray v. Stanion (1836), 
 1 M. & W. 695, and implied in the observations of Jbssbl, M.R., at p. 891 of Ungley v. 
 Ungley (1877), 5 C. D. 887, C. A. (" it is clear that if you once prove that a man has made 
 an agreement to sell a house, it must be taken that he means to sell it free from incum- 
 brances, without his saying so. So, if a man agrees to settle a house in consideration of 
 marriage, he must be taken to mean free from incumbrances "). 
 
 (2) This, and the view referred to in the last note, were mentioned by Cotton, L.J. 
 (without expressing any preference for either), at pp. 670, 671 of Ellis v. Rogers (1885), 
 29 C. D. 661, C. A. 
 
80 CH. Ill, SECT. 2, SUB-S. (3). 
 
 other person in the like position, is required to divulge, may be classified as 
 follows. 
 
 113. The first, and most obvious, kind of matter to be disclosed is the 
 absence, or circumstances indicating the absence, or grave doubts as to the 
 existence, of any title at all to the property sold (a), or to some particular 
 portion of it (b). 
 
 114. Next, disclosure is demanded of all facts showiag that the title is 
 of a different nature in any material respect to that which the purchaser or 
 lessee was entitled from the terms or conditions of the contract to expect (c). 
 
 115. Thirdly, the vendor or lessor must communicate to the purchaser 
 or lessee the existence and the nature of all mortgages, charges, liens, ease- 
 ments, and incumbrances of every sort on the property sold (d) ; also of 
 any previous deeds or instruments bindiag the property, and restricting 
 
 (a) Edwards v. M'Leay (1815), G. Cooper 308, a decision by Grant, M.R., affirmed 
 by Lord Eldon, L.C. (1818), 2 Swanst. 287, was a case of this description. 
 
 (6) As in Mostyn {Lord) v. West Mostyn Colee & Iron Co. (1876), 1 C. P. D. 145. See 
 Be Brewer and HanJcin's Contract (1899), 80 L. T. 127, C. A. 
 
 (c) Goverley v. Burrell (1821), 5 B. & Aid. 257 (where the undisclosed fact was the 
 liability of the annuity purchased, to redemption in five years) ; James v. Litchfield (1869), 
 L. R. 9 Eq. 51, as to which see note {g) to § 115, post ; Be Banister (1879), 12 C. D. 131, 
 C. A. (where the suppressed fact was that the vendor was not seised in fee, but was " a 
 mortgagee remaining in possession after the mortgaged estate had come to an end," and 
 " simply and solely as a person whose title was not challenged by the true owner, whoever 
 he was " • Jessel, M.R., at p. 144) ; Be Marsh and Marl Granville (1882), 24 C. D. 11, 
 C. A. (where the vendor had omitted to disclose the fact that the instrument constituting 
 the root of title, quoad the freehold lands, was a voluntary one, and that power was reserved 
 thereby to the grantor to revoke the trusts therein declared, which would include the trust 
 for sale : see the observations of Cotton, L.J., at p. 25 : " in my opinion it is most material 
 for enabling a purchaser to decide whether he wiU enter into such a contract that he 
 should know whether the deed was upon a transaction in which ordinarily there would be 
 an investigation of the title, and if the vendor knows that the deed was on a transaction 
 where there would be no investigation, and does not disclose that fact, the purchaser, in 
 my opinion, has a right to complain that this fact was not disclosed in the contract ") ; 
 Nottingham Patent Brick dk Tile Co. v. Butler (IS86), 16 Q. B. D. 778, C. A. (where the 
 vendor had suppressed not only the restrictive covenants in a predecessor's deed of title, 
 as mentioned in note (e), ire/., but also the fact that, though without notice of these restric- 
 tions when he purchased, he knew of them when he sold, and to that extent had a title 
 which might be questioned afterwards) ; Be Ward and Jordan^ s Contract, [1902] 1 Ir. R. 73 
 (where, on the sale of a licensed pubUc house, the purchaser complained that the vendor 
 had suppressed the fact that a conviction of the vendor had been endorsed on the licence, 
 and it was recognized by the Court that if the indorsement had been such as to imperil the 
 qualification of the premises for a Hcence, it would have been material to be disclosed ; but 
 it was held that, on the true construction of the licensing statute applicable to the case, 
 the indorsement would not have this effect : pp. 76-78). 
 
 (d) Eor illustrations generally, see the following decisions (the undisclosed incumbrance 
 in each case being stated within brackets after the citation) : — Arnot v. Biscoe (1748), 
 1 Ves. Sr. 94 (a mortgage, and decree of foreclosure) ; Martin v. Cooper (1846), 3 Jo. & 
 Lat. 496 ; 72 R. R. 100 (property subject to certain reservations of rights to limestone, 
 and of turbary) ; Shackleton v. Sutdiffe (1847), 1 De G. & Sm. 609 (numerous easements 
 and water-rights in favour of lower lands) ; Wilde v. Gibson (1848), 1 H. L. C. 605 (a public 
 right of way, or footpath; though ultimately the party complaining failed on other 
 grounds, which are discussed in Sect. 8, Sub-s. (2), post) ; Smith v. Harrison (1857), 26 
 L. J. (CH.) 412 (claims of creditors largely in excess of the value of the chattel interest of a 
 certain bankrupt in a lease and partnership effects of his late firm then being sold by 
 auction); Torrance v. Bolton (1872), L. R. 14 Eq. 124 (mortgages); Jones v. Bimmer 
 (1880), 14 C. D. 588, C. A. (ground rent) ; Heywood v. Mallalieu (1883), 25 C. D. 357 (right 
 of owner of adjoining premises to use for certain purposes the kitchen of the house which 
 was the subject of the sale) ; Mahomed Kola Mea v. Harperinh ( 1908), 25 T. L. R.180, P. C. 
 (incumbrances to an amount in excess of the utmost value of the land). 
 
§§ 112-115 (vendor and pukchaser). 81 
 
 its user in the hands of successors in title (e), and wliere he is an intending 
 assignor of a lease, or an intending sub-lessor, any and every unusual 
 covenant contaiued ia the original or superior lease which operates as a 
 burden on the property or a restriction upon its use for either general purposes, 
 or the particular purposes declared ia the contract, or, to his knowledge, in 
 fact contemplated by the intended assignee or sub-lessee (/). He must 
 also divulge the exact nature of any tenancy which afiects the property (g), 
 
 (e) See Andrew v. Aithen (1883), 31 W. R. 425 (unusually restrictive covenants and 
 provisoes in previous deed of conveyance) ; Ellis v. Sogers {1SS5), 29 C. D. 661, C. A. (where 
 the vendor of an interest in a building agreement was held to have been wrong in not 
 disclosing restrictive covenants therein) ; Nottingham Patent Brick <& Tile Go. v. Butler 
 (1886), 16 Q. B. D. 778, C. A. (suppression of covenants against brick-making contained 
 in a previous conveyance of the land) ; He Cox and Neve's Contract, [1891] 2 Ch. 109 
 (non-disclosure of a deed of exchange between the vendor and a third person, containing 
 covenants restrictive of building : per North, J., at pp. 116, 117) ; Hepworth v. Pickles, 
 [1900] 1 Ch. 108 (non-disclosures of a deed of 1874 whereby the land was conveyed to the 
 vendor's predecessor in title, containing restrictions against the use of any houses built 
 thereon as an inn, tavern, or beerhouse, for which purpose the purchaser, to the knowledge 
 of the vendor, was taking the premises : per Paewell, J., at p. 112. The party com- 
 plaining, however, failed here on another ground). 
 
 (/ ) Gosser v. Collinge (1832), 3 My. & K. 283 (a case of a contract to grant an under- 
 lease, where it was held by Leach, M.R., that the party charged had failed in his duty of 
 disclosure in that he had not communicated covenants in the head lease which prohibited 
 the carrying on of certain trades on the demised premises, though the party complaining 
 failed in the action because he was proved to have had a " fair opportunity " of inspecting 
 this head lease, and so was fixed with constructive notice of its contents) ; Flight v. Bootli 
 (1834), 1 Bing. (N.C.) 370 (non-disclosure of covenants in the original lease prohibiting 
 the use of the premises for the purposes of certain inoffensive trades) ; Smith v. Capron 
 ( 1849), 7 Hare 185 (non-disclosure of covenant in original lease against assignment without 
 consent of landlord held to be non-compliance on part of the vendor of the leasehold 
 premises, but the purchaser failed here, because he had constructive notice ; see note (o) 
 to § 59, ante) ; Wilbraham v. Livesey (1854), 18 Beav. 206 (where the plaintiff sued for 
 specific performance of an agreement to sell to the defendant leasehold premises in the 
 Strand, and which, therefore, he must have known would be required for some trade 
 purposes — ^in fact, the defendant required them for printing and pubHshing a newspaper — 
 and RomiijLY, M.R., refused to order specific performance, at all events until after further 
 inquiries which he directed, on the ground that the plaintiff had not divulged covenants 
 in the head lease restrictive of the user of the premises for trade purposes — pp. 209, 210) ; 
 Hyde v. Warden (1877), 3 Ch. D. 72, C. A. (a case of a contract to accept a sub-lease, where 
 the intending sub-lessor had not disclosed the existence of covenants in the original lease 
 empowering the owner to re-enter if the lessor should become insolvent, or have an execu- 
 tion levied against him) ; Reeve v. Berj-idje (1888), 20 Q. B. D. 523, C. A. (non-disclosure of 
 covenant in the original lease against trade user of the leasehold premises which were the 
 subject of the sale) ; Re Davis and Gavey (1888), 40 C. D. 601 (where the circumstances 
 were similar) ; Be White and Smith's Contract, [1898] 1 Ch. 637 (non-disclosure of ad- 
 mittedly onerous and unusual covenants, the nature of which the report does not state) ; 
 Re Summerson, [1900] 1 Ch. 112 n. (covenants in head lease prohibiting the use of the 
 leasehold premises as an alehouse or spirit shop, though here the party complaining failed 
 on other grounds) ; Re Hoedicke and Lipski's Contract, [1901] 2 Ch. 666 (covenants against 
 erecting or altering buildings without the Ucence of the lessor, and against carrying on 
 trades, with proviso for re-entry, &c.); Molyneux v. Hawtrey, [1903] 2 K. B. 487, C. A. 
 <an action for damages for breach of a contract to purchase leasehold premises, in which 
 Wright, J., whose decision was affirmed by the C. A., gave judgment for the defendant 
 on the ground that the plaintiff had not disclosed to the defendant, or given her a " fair 
 opportunity " of making herself acquainted with, certain specially onerous and unusual 
 covenants in the head lease, obliging the lessee to submit to interference with the access 
 of light during and after the building of Westminster Cathedral, and the ringing of bells for 
 divine service at any hour, and not to exercise a number of innocent and inoffensive 
 professions, or to keep any animals, or play music, &c., &c.). 
 
 (g) Brandling v. Plummer (1854), 2 Drew. 447, where, amongst other lots sold by auction 
 by direction of the Court, was a certain lot consisting of 88 cottages, and described as 
 
 B.N.D. G 
 
82 CH. Ill, SECT. 2, SUB-S. (3). 
 
 though the purchaser may have actual notice of the occupation of the tenant, 
 for the old heresy that such actual notice is constructive notice to a pur- 
 chaser, as between him and a vendor, of all the terms and conditions of the 
 tenancy, is now completely exploded (h). 
 
 116. Lastly, if any notice or order has been served upon the vendor, 
 pursuant to lawfiil authority, which, if not complied with, will affect the 
 title to the property, and will in any case constitute a burden on it, the 
 vendor must communicate this circumstance. The rule of disclosure has been 
 appUed in this way to the case of a sale of leasehold premises in a very dilapi- 
 dated condition, where the vendor's landlord had, only a day before the 
 conclusion of the contract, served a notice of re-entry, unless the necessary 
 repairs should be executed in three months, and " Abbott, C.J., was of opinion 
 that a person putting up premises for sale was bound to know how the 
 premises were circumstanced; and whether notice of re-entry had been 
 given by the landlord, in case the premises should not be put into repair. 
 In such transactions good faith was most essential, and the vendor, or his 
 agent, was bound to communicate to the vendee the fact of such notice " (i). 
 So, in the case of a notice served by the local authority to pave the street 
 facing the premises, it has been held that such a fact might be material to 
 the title (j) ; and a prohibition by a local authority, under its bye-laws, of 
 any building on the land sold until all the refuse with which certain excava- 
 tions had been filled up should have been removed (h), as also a party-wall 
 statutory award, made two days before the contract, ordering the vendors 
 to contribute a portion of the cost of certain works to be executed by the 
 adjoining owner (Z), have been held facts material to be disclosed. 
 
 being " in the occupation of the owners of Sedghill Colliery, or their undertenants or work- 
 men," and the fact which was held to have been improperly suppressed by the vendor was 
 the peculiar nature of the tenancy referred to, in that none of the 88 cottages paid any 
 rent, and, further, the owners " had a right to build cottages for the use of their workmen, 
 and not to a limited number, but as many as they liked ; and not to pay any rent for them, 
 but merely to pay for the damage done to the tenants of the soil " : per Kjndbbsley, V.-C, 
 at pp. 431, 432 ; Dimmook v. Hallett (1866), 2 Ch. App. 21, where the tenants of certain 
 farms had given notice to quit, and the vendor omitted to disclose this fact, an " omission " 
 which Caikns, L.J., at p. 20 pronounced to be " very material " : see also Tubneb, L.J., 
 at pp. 28, 29 ; James v. Litchfield (1869), L. E. 9 Eq. 51, where the vendor, having sold five 
 houses and some vacant adjoining land for building purposes, withheld the fact that one of 
 the houses and most of the adjoining land was in the occupation of a certain person not as 
 a yearly tenant merely (as, to his knowledge, the purchaser supposed), but under a lease 
 for 21 years ; Gaballero v. ffewJj/ (1874), 9 Ch. App. 447, a case of a contract to sell a pubUo 
 house, the purchasers being brewers who, to the knowledge of the vendor, intended to sell 
 their own beer on the premises, where the vendor was held not to have complied with his 
 duty of disclosure, in that he had omitted to divulge the fact that the premises were in the 
 occupation of another brewer under a lease from the plaintiff which still had eight years 
 to run. 
 
 (A) See § 62 and note (I) thereto, ante. 
 
 (i) At pp. 423, 433 of Stevens v. Adamson (1818), 2 Stark. 422. 
 
 (j) lie Leyla-nd and Taylcn-'s Contract, [1900] 2 Ch. 625, C. A., where Lord ALVBESTOifE, 
 M.E,., at p. 630, and Rigby, L. J., at p. 632, expressed an opinion that the undisclosed fact 
 might very well have been material to a case of rescission : since, however, the purchaser 
 did not ask for rescission, but on the contrary had elected to affirm the contract, and 
 prayed compensation only, he failed, the circumstance in question not being considered by 
 the C. A. to have any substantial bearing on that issue. 
 
 (k) Baker v. Moss (1902), 66 J. P. 360 (per Joyce, J.). 
 
 (I) Carlish v. Salt, [1906] 1 Ch. 335 (per Joyce, J., at p. 340 : " I hold that the party 
 
§§ 115-118 (vendor and purchaser). 83 
 
 117. All the above species of facts, it will be seen, immediately and 
 obviously in some cases, and indirectly and inferentially in others, affect the 
 title to the property sold. It is probably correct to say that no circumstances 
 need be disclosed which relate solely to matters having no bearing, direct or 
 indirect, on the question of title ; for such matters cannot be supposed to 
 be necessarily within the exclusive knowledge of the vendor or lessor, or 
 material to be disclosed in the sense that they have a vital bearing on the 
 contract, though they may be of the most obvious materiality in another 
 sense, and though, consequently, any misrepresentation of such circumstances 
 would clearly be actionable. Thus, to take first a few typical illustrations 
 about which there has never been any doubt or controversy, there is no 
 obligation to divulge the ruinous or unsafe condition of a lessor's pre- 
 mises (m), or the fact that the grantor of an annuity offered for sale is in 
 embarrassed circumstances (n), or a deed acknowledging that the vendor 
 is not entitled, as against an adjoining owner, to access of light over his 
 land (o), or the indorsement of a conviction on the licence of the vendor 
 of a public house, not being of a nature to imperil the qualification of 
 the premises for a renewal of the licence (p), or, in the absence of any such 
 relation between the parties as that which is the subject of investigation in 
 the next Chapter {q), the price which the vendor gave for the property which 
 he is contracting to sell (r). And it is further to be observed that in order 
 to establish a breach of a duty to disclose, it must be shown that the undis- 
 closed fact not only afiects title, but aSeots the title to the particular property 
 which is the subject of the contract. Thus, in the case of a contract for the 
 sale of an advowson, the vendor is not required to reveal the existence of a 
 charge on the living (s). 
 
 118. It is frequently stated, or assumed, that the duty of disclosure is 
 not limited, as above submitted, to matters afiecting title, but extends to 
 matters affecting the quality, condition, or value of the property which is 
 the subject of the contract : but, on examination of the authorities which are 
 
 wall notice, and the award, constituted a material fact affecting the price to be paid, and 
 in so far as they imposed a liability of uncertain amount at some future time on the owner 
 of the premises, I am of opinion that they constituted a latent defect, not in the quality of, 
 but in the title to the property, and ought to have been disclosed "). In this case the award 
 was made under s. 98 of the London Building Act, 1894, s. 99 whereof vests the entire 
 ownership of the party wall in the party to whom the contribution awarded is to be paid, 
 until the payment is duly made. 
 
 (m) Keates v. Cadogan (1851), 10 B. & C. 591 ; Byall v. Kidwell, [1914] 3 K. B. 135. 
 
 (n) Adamson v. Eviti (1830), 2 Russ. & M. 66. Nor would the grantor himself have 
 come under any such obligation {per Leach, M.R., at pp. 71, 72). 
 
 (o) GreenTudgh v. Brindley. [1901] 2 Ch. 324, per Fabwell, J., at p. 328 ; Smith v. Col- 
 bowrne, [1914] 2 Ch. 533, 539, 542, 545, C.A. 
 
 (p) Se Ward and Jordan's Contract, [1902] 1 Ir. R. 73, at pp. 77, 78. 
 
 (q) Which deals with the obligations of trustees, promoters, and agents to disclose all 
 profits, benefits, advantages, &c., derived from any transaction in which they may be 
 engaged during the continuance of the relationship. 
 
 (r) Per Lord Hathbrley at p. 1244 of Erlanger v. New Sombrero Go. (1878), 3 App. Cas. 
 1218, H. L. ("a vendor need not do what at one time was asserted by this bill, namely, 
 disclose what he has paid in effecting his own anterior purchase before asking an enhanced 
 price from him to whom he seeks to sell the property "). 
 
 (s) Edwards-Woods v. Majoribanks (1860), 7 H. L. C 806. 
 
84 CH. Ill, SECT. 2, SUB-SS. (3), (4). 
 
 supposed to support this proposition, it will be found that in all of them, 
 either title was involved, though indirectly, or the cause of action was express 
 or implied misrepresentation, and not n on -disclosure, except as contributing 
 to establish a case of misrepresentation. Thus the "latent defect" cases 
 are said to presuppose a duty on the part of the vendor to disclose to the 
 purchaser the existence of drains, culverts, and the like, running under the 
 property, which constitute defects in its quality or condition ; but such matters 
 are also defects ia title, and, wherever the party complaining has succeeded, 
 his right to succeed has been put on this ground, though expressions may 
 have also been used indicating that (as was the fact) the physical quality 
 of the property was at the same time afiected (t), or else on the ground 
 that there had been an express or implied misdescription of the property (m). 
 Where neither of these conditions was present, the party complaining has 
 always failed (v), unless he has succeeded in bringing his case within some 
 
 {t) In Ashburner v. Sewdl, [1891] 3 Ch. 405, Chitty, J., at p. 408, distinctly held that a 
 purchaser's objection that the vendor had not disclosed a right of way over a road in the 
 property enjoyed by owners and servants of adjoining lands was an objection to title, and 
 not merely an omission in the description of the property, though it was that as well. In 
 Ee Puckett and Smith's Contract, [1902] 2 Ch. 258, C. A., the purchaser of land sold to him 
 by private treaty incorporating the conditions of a previous abortive auction sale, com- 
 plained of the non- disclosure of the fact that a culvert ran underneath what, until after 
 the execution of the contract, he supposed, not unreasonably, to be a dry ditch. The 
 vendors thereupon took out a summons under the Vendor and Purchaser Act, 1874, 
 asking for a declaration that they had made out a good title, the purchaser contending 
 that his objections to tide, and his requisition on the vendors to divert the culvert, or pay 
 compensation, had not been sufficiently answered. Kekewich, J., dismissed the vendors' 
 application, and agreed with the purchaser's contention, and the C. A. affirmed his decision. 
 This case, therefore, clearly proceeded on the ground of non-disclosure of a circumstance 
 affecting title ; and, though Stirung, L. J., at p. 265, expresses his personal view that 
 " the question which remains is not really one of title," he goes on to say that it is rather 
 " whether the case faUs within the rule laid down by Tindal, C. J., in Flight v. Booth," 
 and founds his judgment on that case. Now Flight v. Booth (1834), 1 Bing. (N.C.) 370 — 
 see note (/) to § 115, ante — was certainly either a case of non-disclosure of a matter 
 affecting title, as was thought in Shepherd v. Croft, cited in note (v), inf., or else it was not 
 a case of non-disclosure at all, but rather of misrepresentation. See also Be Brewer and 
 Hankins' Contract, cited in note (v), inf. 
 
 (u) Re Puckett and Smith's Contract, sup., may be regarded as a case of misrepresenta- 
 tion of the nature and character of the premises as fit for building, since the vendor knew 
 that the purchaser was buying the land solely for that purpose, and the negotiations, as' 
 Collins, M.R., points out at p. 263, and also Stikling, L. J., at p. 265, proceeded upon 
 that basis ; and further, the vendor had described the property as having " a valuable 
 prospective building element," and being " suitable for development," and with " no 
 restrictions as to the class of houses to be erected " {per Collins, M.R., at p. 264). More- 
 over, the above-mentioned references — see the last note — to Flight v. Booth, which is 
 usually regarded and cited as a case of implied misrepresentation by omission of quahf3dng 
 facts, as it certainly was, though it may be regarded as involving non-disclosure as well, 
 suggest that the C. A. considered the case from that point of view, as well as from the 
 other, and so far as Stirling, L.J., was concerned, in preference to it. 
 
 («) See Be Brewer and Hankins' Contract (1899), 80 L. T. 127, C. A., where the undis- 
 closed matters were the existence of a public sewer running underground at the rear of the 
 estate, and the fact that under the Public Health Act, 1875, the corporation of Bristol was 
 entitled to enter upon the land, whenever they thought fit, for purposes of repairing and 
 cleaning the sewer, which was not discoverable except by excavation. Here Stirling, J., 
 and the C. A., affirming him, held that, as the land had not been sold for building purposes, 
 and as there was no substantial difference in character between what was promised and 
 what was tendered, the purchaser was not entitled to rehef. So far, it would seem that 
 the case was regarded as one of misdescription, where, however, the proof of the alleged 
 representation failed. At p. 265 of Be Puckett and Smith's Contract, sup., Stirling, L. J., 
 points to this as constituting the essential distinction between the two cases : " there," 
 
§§ 118-120 (suretyship). 85 
 
 otlier rule of disclosure, such as the " fraudulent silence " principle dis- 
 cussed hereafter {w). So also, there are judicial observations, in some of 
 the cases, as to the undisclosed facts being such as would impair the value of 
 the property : but the true ground of the decision in each of them was that 
 the matters withheld were such as had a bearing on the question of title ; 
 though, in prejudicially afiecting the title, they would also necessarily depre- 
 ciate the value of the property (x). 
 
 119. The topics of the burden of proof on the party complaining, the 
 affirmative pleas available to the party charged, the proper relief and 
 remedy, matters of law and fact, parties, &c., in relation to negotiations for 
 transactions of the character indicated in this Sub-section, are examined in 
 detail hereafter (y). 
 
 Subs. (4). Contracts of Suretyship. 
 
 120. It is now agreed that contracts of suretyship or guarantee belong to 
 the class of transactions in the negotiation of which a duty of disclosure 
 arises, whatever the extent of that duty may be (which is another question, 
 
 he says — that is, in the earlier case — " it was quite clear that the property was not ofiered 
 for building purposes," whereas in the later case it was equally clear that it was. The earlier 
 case was, however, also put as one of omission to disclose a want of title to a part of the 
 premises (per Stirling, J., at p. 128), but the complaint, put in this way, failed by reason of 
 the express terms of certain of the conditions of sale. In Shepherd v. Croft, [1911] 1 Ch. 
 52 1 , where the property sold was described in the particulars of sale as ' ' desirable residential 
 property " with " building advantages," &c., the purchaser refused to complete on the 
 ground of the vendor's non-disclosure of a natural underground watercourse in a culvert 
 or piping constructed by the owners of the various properties, and Pakkeb, J., at p. 528, 
 held that the case was within the principle of Be Brewer and Hanhins' Contract, and not 
 within Re Puckett and Smith's Contract, sup., and that the purchaser was getting a property 
 not differing in character from that which it had been represented to be, since it was still 
 " desirable residential property," and had " building advantages " : in other words, that 
 there had been no misdescription of the premises, or no such substantial misdescription 
 as, having regard to the conditions of sale, would entitle her to reUef. 
 
 {w) See Sub-s. (8), post. 
 
 {x) Thus, in Ee Ward and Jordan's Contract, [1902] 1 Ir. R. 73, which is cited in note {p) 
 to § 117, ante, as an illustration of non-disclosure of matters affecting title, the M.R. (Ir.) 
 at p. 76, observes that " the omission to disclose a material circumstance, affectirtg the 
 value of the property, known to the vendor, and not known to the purchaser . . would 
 in this Court entitle the plaintiff to rehef," where the dictum must be taken to be limited 
 to the circumstances of that case, in which it was obvious that the undisclosed fact 
 affected the value by affecting the title. So in Carlish v. Salt, [1906] 1 Ch. 335, cited in 
 note (I) to § 116, ante, as a case of non-disclosure of an award and order of a competent 
 authority affecting the title, it will be seen that Joyce, J., at p. 340, in the passage from 
 his judgment which is transcribed in that note, speaks of the above as " a material fact 
 affecting the price to he paid," and again, at p. 341, as " a fact . . . which was material 
 to the value of the properly," but what he means by this is clear from his definite statement 
 that the making of the award and order " constituted a latent defect " — the phrase seems 
 more than usually inept in this connection — " not in the quality of, but in the title to the 
 property." It must be admitted, however, that Jooyb, J., does not seem very sure of his 
 ground in this case. At p. 341, he seems by the use of the phrase " material defect in 
 the title, or in the subject of the sale," to be still halting between two opinions ; whilst, 
 at pp. 340, 341, he cites in support of his conclusion several of the " fraudulent silence " 
 cases, — see Sub-s. (8), post, — a resort to which is only necessary when the case is not 
 within any of those recognized types in which the duty of disclosure arises by reason 
 only of the transaction being what it is. 
 
 {y) See Sects. 3-7, post. 
 
86 CH. Ill, SECT. 2, SUB-S. (4). 
 
 to be considered presently), and whether such, contracts are, or are not, 
 properly and strictly styled uherrinuB fidei (z). It has, indeed, from tirae to 
 time been asserted, or expressions have been used which clearly imply, that, 
 for purposes of the rules relating to disclosure, there is a vital and essential 
 distinction between contracts of guarantee and the other species of contract 
 which form the subject of this Chapter, particularly policies of insurance. 
 Thus, the view has been taken that, unlike a policy of insurance, a contract 
 of suretyship is " one in which there is no universal obligation to make dis- 
 closure "(a); and again, still more pointedly, that non-disclosure will not 
 vitiate a guarantee unless the undisclosed circumstance was " fraudulently 
 kept back " (6), or " unless there be," in the course of the negotiation, either 
 " fraud or misrepresentation," it being understood that " misrepresentation 
 might undoubtedly be made by concealment" (c). But, imless the above 
 propositions be understood in the sense that the duty of disclosure operates 
 in cases of suretyship within far narrower limits than in other cases, and, 
 in particular, than in those of insurance {d), or unless the " fraud " which is 
 there stated to be essential be taken to mean no more than the non-performance 
 of a duty to disclose, on which supposition the existence of such a duty is 
 plainly recognized (e), it seems clear on principle, supported by authority (/), 
 
 (z) See § 1, note (e), ante, as to the unsatisfactory nature of this expression : and, as to 
 the comparative unimportance of the particular designation of the transaction, see Beaton v. 
 Heath, [1899] 1 Q. B. 782, C. A., -per Romer, L.J., at p. 792. 
 
 (a) Per Sir, J., at p. 475 of Davies v. London dk Provincial Marine Insurance Go. (1878), 
 8 C. D. 469. See also what Is said by Lord Chelmssobd, L.C, at pp. 608-610 of Wythes v. 
 Labouchere (1859), 3 De G. & J. 593. 
 
 (5) Per PoLiiOCK, C.B., delivering the judgment of the Court of Exchequer, at p. 535 
 oiNortk British InsuranceOo.v.LloycHlSSi), lOExoh. 523. See also Wythesy. Labouchere, 
 sup., per Lord Chblmspobd, L.C, at p. 609. 
 
 (c) Per E.OMEB, L.J., at p. 792 of Seaton v. Heath, sup. 
 
 {d) Thus, in North British Insurance Co. v. Lloyd, sup., Aldebson, B., during the 
 argument, at p. 529, recognizes, on the authority of Smith v. Bank of Scotland — see note (yy) 
 to § 126, post — ^that " a case may exist where a bond of suretyship may be invalidated by 
 the mere non-communication of existing facts." 
 
 (e) This appears to have been the view of Pabke, B. : see p. 527 of North British In- 
 surance Go. V. Lloyd, sup., where, in the argument, he observes : " if a fact ought to be 
 mentioned by the creditor to the surety, the omission to communicate it may amount to 
 a fraud." Cp. the observations of Fry, J., in Davies v. London & Provincial Marine 
 Insurance Go., sup., who, at p. 475, after drawing the distinction between contracts of 
 suretyship and others which has been already referred to — see note (o), sup. — is careful 
 to add : " but I do think that the contract of suretyship is, as expressed by Lord Westbuby, 
 . . . one which should be based upon the free and voluntary agency of the individual 
 who enters into it. . . . I think, to use the language of LordELDON ... it is a contract 
 in respect of which a very little is suf&cient. Very Uttle said which ought not to have been 
 said, and very little not said which ought to have been said, will be sufficient to prevent the 
 contract being valid." 
 
 ( / ) For instance, Vauohan Williams, L. J., at p. 80 of London General Omnibus Go. v. 
 Holloway, [1912] 2 K. B. 72, C. A., says : " I think it right to say that I find it difficult to 
 understand what Pollock, C.B., in North British Insurance Go. v. Lloyd means when he 
 . . . concludes his judgment with these words : " — he then cites the passage in which the 
 necessity of fraud being established is insisted on, and which is referred to in note (6), sup. 
 And the whole of the Lord Justice's judgment (pp. 76-80) is a careful and clear exposition 
 (with reference to the authorities which at first sight seem to suggest the contrary) of the 
 true doctrine that innocent non-disclosure of material facts in suretyship cases may be 
 actionable, though the facts deemed material are of a much more limited character than 
 in other cases. Cp. the passage from the judgment of Fabwell, L. J., which is cited in 
 note (h), inf. 
 
§§ 120, 121 (SUKETYSHIP). 87 
 
 tliab these propositions are incorrect, and that the true view is that expressed 
 oy Lord Truro, L.C, in one of the earlier decisions {g), and by the Court of 
 Appeal in a very recent case (h), viz. that the same rule of disclosure governs 
 suretyship transactions as governs those of insurance or any other type of 
 transaction belonging to the class now under consideration, but that the 
 application of the rule difiers widely according to the character of the particular 
 species of transaction on which it operates. The principle is identical, but, 
 like the leaden rule of the Lesbians, it is flexible and plastic, and bends itself 
 into a variety of shapes so as to conform to the angles and curves of the 
 material to which for the moment it is being applied, as has already been 
 observed in discussing its application to contracts between vendor and 
 purchaser (t). That priaciple is, that where the nature of the contract or 
 transaction is such that, as to certain material facts, one of the parties must 
 necessarily have exclusive knowledge, and such material facts are not amongst 
 those which the other party, having regard again to the essence and object 
 of the transaction, must necessarily be supposed to take the risk of not knowing, 
 the first party is required to divulge to the other those facts, be they many 
 or few, and- those facts only (J). 
 
 121. Now, keeping again to the supposed distinction between guarantees 
 and insurance policies, it is manifest, on close examination, that, for the 
 purposes of the duty of disclosure, there is no such distinction in principle 
 at all, and that the only difierence is in the kind of matters of the existence 
 of which the insurer in the one class of case, and the surety, in the other, 
 is supposed to take the risk. It is obvious — so much, indeed, is declared by 
 the very terms " insurance " and " suretyship " — that the pmpose of the 
 transaction in each case is to make a person "sure," or secure, against the 
 chance of loss from some defined contingency : and it is quite immaterial 
 to the question of the object of the contract what the contingency is in the 
 particular case. There is no reason, as has been pointed out (k), " why, 
 
 (g) At pp. 396, 397 of Owen v. Homan (1851), 3 Maon. & G. 378, where he points out 
 the want of a distinct definition of the nature of the creditor's obligation of disclosure to the 
 surety (p. 396), and (at p. 397) concludes that, at all events, " where communication does 
 take place between the creditor and the surety, the duty of the creditor cannot be better 
 illustrated than by the case of the assured,"' and that " the same principle," i.e. as that which 
 governs insurances, " is applicable to the case of sureties." 
 
 (h) London General Omnibus Co. v. Holloway, sup., where Fabwbll, L.J., at p. 81 says 
 that " although the doctrine by which uberrima fides is required in insurance oases is not 
 applicable to the same extent in suretyship cases, still the surety is entitled to relief on the 
 ground of non-disclosure of matters which ought to have been communicated to him, 
 whether the non-eommunioation was or was not innocent," and where Vaughan Wiluams, 
 L. J., convincingly establishes that in all the previous cases in which expressions had been 
 used indicating that non-disclosure in suretyship cases amounts to fraudulent misrepresen- 
 tation or concealment, it so happened that in the arguments, or the judgments, or both, 
 it was put in this way, dishonesty being in fact established in all of them, as well as a 
 mere violation of the duty of disclosure ; but that in none of them, except North British 
 Insurance Co. v. Lloyd, sup., was it necessary for the Court to pronounce, nor did any 
 Court pronounce, the opinion that, in all cases of suretyship, disclosure is not obligatory, 
 as such, that is to say, is not required unless it constitutes, or contributes to constitute, 
 misrepresentation or fraud (pp. 76-80). 
 
 (i) See § 109, ante, For the Lesbian rule, see § 649, post, and note ( / ) thereto. 
 
 (j) See §§ 84, 85, oreie. 
 
 (k) Per A. L. Smith, L.J., at p. 790 of Seaton v. Heath, [1899] 1 Q. B. 782, C. A. See 
 
88 
 
 CH. Ill, SECT. 2, SUB-S. (4). 
 
 when a person insures liis ship, or liis house, or his life, he should be bound to 
 disclose material facts of which he is cognizant and the underwriter is not, 
 and yet not be bound to disclose such facts when an underwriter is asked 
 to take a risk upon, say, the soundness of a racehorse," and, on the same 
 reasoning, there is no reason why a creditor " should not be under the same 
 obligation when a surety is asked to take a risk upon the financial soundness 
 of a debtor : indeed, in some kinds of suretyship, those to which the name of 
 " guarantee policy " is now commonly applied, the contract, as the name itself 
 indicates, not only has the same purpose and eSect as, but is identical with, 
 a contract of insurance. " The difference between these two classes of con- 
 tract does not depend upon any essential difference between the word ' insur- 
 ance ' and the word ' guarantee.' There is no magic in the use of those 
 words. The words, to a great extent, have the same meaning and effect ; 
 and many contracts . . . may with equal propriety be called contracts of 
 insurance or contracts of guarantee. Whether the contract be one requiring 
 uberrima fides or not must depend upon its substantial character and how it 
 came to be effected " (l). 
 
 122. But, though the governing rule is the same, its application to the 
 two species of bransaction necessarily results in a much less heavy burden of 
 disclosure being imposed on the creditor, employer, or other person to whom 
 a gua,rantee is given, than on an assured person. For, in the first place, the 
 " exclusive knowledge " of the material facts, which is one of the conditions 
 essential to the existence of the duty, is ordinarily not possessed by the 
 person to whom a guarantee is given, whereas, in contracts of insurance, 
 " in general, the assured knows, and the vmderwriter does not Icnow, the 
 circumstances of the voyage, or the state of health '' (m). But " in general, 
 contracts of guarantee are between persons who occupy, or ultimately assume, 
 the positions of creditor, debtor, and surety, and thereby the surety becomes 
 bound to pay the debt or make good the default of the debtor. In general, 
 the creditor does not himself go to the surety, or represent or explain to the 
 surety the risk to be run. The surety often takes the position from motives 
 of friendship to the debtor, and generally not as the result of any direct 
 bargaining between him and the creditor, or in consideration of any remunera- 
 tion passing to him from the creditor. The risk undertaken is generally 
 known to the surety, and the circumstances generally point to the view that, 
 
 Dane v. Mortgage Insurance Corporation, [1894] 1 Q. B. 54, C. A. {per Lord Eshee, M.R., 
 at p. 60), and Be Law Guarantee Trust & Accident Society (1914), 30 T. L. B. 616, C. A., 
 as to the difference between suretyship and insurance for other purposes. 
 
 (I) Per RoMBB, L. J., at p. 792 of Seaton v. Heath, sup. The contract in that case was 
 pronounced to be one of those which could equally be described by either name. The 
 decision of the C. A. was reversed by the House of Lords, sub nom., Seaton v. Burnand, 
 [1900] A. C. 135, on certain grounds, but without the slightest expression of dissent from 
 the above view, or from any view of the Lords Justices as to the nature of the two 
 classes of contracts, or the duty of disclosure existing in the respective cases. Neville, J., 
 at pp. 611, 612 of Re Law Guarantee Trust and Accidental Society, [1913] 2 Ch. 604, took 
 one view of the nature of the transaction in that case, and the Court of Appeal, ubi 
 supra cit. — see the last note — took the other, but both Courts dealt with the question as 
 one of substance and fact, and not of names. 
 
 (m) North British Insurance Co. v. Lloyd (1854), 10 Exch. 523, per Cur. at p. 533. 
 
§§ 121-123 (suretyship). 89 
 
 as between the creditor and the surety, it was contemplated and intended that 
 the siu-ety should take upon himself to ascertain exactly what risk he was 
 taking upon himself " (w). Secondly, the general rule being that the party 
 having exclusive knowledge of facts which are material in one sense is still 
 not bound to divulge any fact of the existence or non-existence of which the 
 other party is, by the very nature of the contract, professiag to undertake 
 the risk, it follows that a creditor or other guaranteed person is under no 
 obligation to disclose such financial dif&culties in the debtor's afiairs as 
 the surety ought to assume to exist in one shape or another, since their exist- 
 ence is the whole foundation and motive of the suretyship which he is invited 
 to take upon himself (nn). The surety must be intending to xmdertake 
 smne i;isk ; and, if such matters as are above indicated have to be fully revealed 
 to him, he would be converting a speculation into a certainty, and insuring 
 against loss, not the party supposed to be protected, but himself. " I think," 
 said Blackburn, J., in the Exchequer Chamber, "that great practical 
 mischief would ensue if the creditor were by law required to disclose every- 
 thing material known to him. ... If it were so, no creditor could rely on a 
 contract of guarantie, unless he communicated to the proposed sureties 
 everything relating to his dealings with the principal, to an extent which 
 would in the ordinary course of things be so vexatious and annoying to the 
 principal and his friends, the intended sureties, that such a rule of law would 
 practically prohibit the obtaining of contracts of suretyship in matters of 
 business " (o). 
 
 123. On the other hand, where the undisclosed matters within the exclu- 
 sive knowledge of the party to whom the guarantee is given are not such as 
 also form part of the normal risk of the surety, they must be disclosed. For this 
 purpose the nature of the contract, — for there are several well-defined types 
 of suretyship, — must be examined in each individual case. And, on such 
 examination, " the criterion whether the disclosure ought to be made volun- 
 tarily " has been laid down by Lord Campbell, in a celebrated passage which 
 has always been considered the locus classicus on this topic {p), as being 
 " whether there is anything that might not naturally be expected to take 
 
 (re) Per Rombk, L.J., at p. 793 of iSeaton v. Heath, sup. Cp. the observations of 
 Blackbuen, J., to the same effect at p. 503 of Lee r. Jones (1864), 17 C. B. (n.s.) 482, 
 Esch. Ch. 
 
 (mm) At p. 120 of Hamilton v. Watson, inf.. Lord Campbell points out a variety of 
 circumstances which are " extremely material for the surety to know " — that is, in the 
 sense that a knowledge of them would affect his judgment — and points out that they are 
 nevertheless not required to be disclosed, or material in that sense, 
 
 (o) At pp. 503, 504 of Lee v. Jones, sup. 
 
 ip) At p. 119 of Hamilton v. Watson (1845), 12 CI. & P. 109. The proposition may be 
 expressed a little more broadly, as is pointed out by Vaughak Williams, L.J., at p. 79 
 of London General Omnibus Co. v. Holloway, [1912] 2 K. B. 72, C. A. : " Lord Campbell, 
 it is true, takes as his example' of what might not naturally be expected an unusual contract 
 between creditor and debtor whose debt the surety guarantees, but I take it this is only 
 an example of the general proposition that a creditor must reveal to the surety every fact 
 which under the circumstances the surety would expect not to exist, for the omission to 
 mention that such a fact does exist is an implied representation that it does not." Cp. 
 National Provincial Bank of England v. Olanush, [1913] 3 K. B. 335 {per Hokeidge, J., at 
 p. 338). 
 
90 CH. Ill, SECT. 2, SUB-S. (4). 
 
 place between the parties wlio are concerned in tlie transaction ; " and it is 
 on this theory that the suppression of such circumstances has been regarded 
 as an imphed misrepresentation (q), at all events, in all cases where there 
 has been direct bargaiaing or communication between the creditor and the 
 surety (r). 
 
 124. The existence of a duty of disclosure in the negotiation preliminary 
 to a contract of suretyship, but limited and varying as above stated according 
 to the nature of the particular kind of guarantee which raises the question, 
 is best established by examining the several modes in which the doctrine has 
 been applied to the respective classes of suretyship, of which there may be 
 said to be three main types : first, where the surety guarantees a debt or an 
 indebtedness to be incurred for money lent, goods supplied, or other con- 
 sideration ; secondly, where he guarantees the future honesty or fidelity of 
 a persou employed, or to be employed, by the person to whom the guarantee 
 is given : lastly, where he guarantees the due performance of a particular 
 transaction or the carrying out of a particular enterprise or adventure by a 
 person with whom the party to whom the guarantee is given has contracted 
 or is associated. The first two classes embrace normal and ordinary cases of 
 suretyship : the last includes contracts of a kind which, in many instances, 
 are scarcely distinguished from contracts of insurance (s). 
 
 125. In contracts of the first type, that is, where a person's credit is guaran- 
 teea, the creditor, when treating with the proposed surety, must reveal to 
 him such material circumstances in relation to the past conduct of the prin- 
 cipal debtor as are within his knowledge, and are not within either the actual 
 or presumptive knowledge of the surety, and a circumstance is not deemed 
 to be within the surety's presumptive knowledge unless it is one of the exist- 
 ence or possibility of which he is invited by the nature of the transaction 
 itself to take notice. Thus, in the case of a guarantee of the debtor's liability 
 to the intending creditors for iron to be supplied, the creditors were held to 
 be under a duty to disclose to the surety the fact that the debtor had applied 
 to them to supply him with the iron on credit, on the terms that he was to 
 pay them 10s. on every ton of iron sold in liquidation of an old debt (() ; 
 and, in the case of a guarantee given to coal merchants of the future liability 
 of their agent for the sale of coal on commission, the creditors, in suppressing 
 the fact that in the course of his past duties as recited in the agreement of 
 suretyship the agent had been a heavy defaulter, and was then indebted to 
 them in a very large aggregate sum in respect of those defaults, were held to have 
 
 {q) As it was by the majority of the Exchequer Chamber in Lee v. Jones, sup. {per 
 Shbb, J., at p. 500, and Elackbubn, J., at pp. 503, 504). Cp. the observations of Black- 
 BUEN, J., at p. 679 of Phillips v. Foxall (1872), L. E. 7 Q. B. 666 (" I still adhere to the 
 opinion that I expressed in Lee v. Jones, that if such a transaction as is alleged in the plea 
 had taken place before the defendant entered into the contract of suretyship, and had been 
 concealed from him, it would have furnished evidence of a false representation to the surety 
 that no such thing existed "), and those of Vaxtghan Williams, L.J., cited at the end of 
 the last note. 
 
 (r) See the view expressed by Lord Thtteo, L.C, as cited in note (g) to § 120, ante. 
 
 (s) See § 121, ante. 
 
 {t) Pidcock V. Bishop (1825), 3 B. & C. 605. 
 
§§ 123-126 (suretyship). 91 
 
 violated a plain duty of disclosure, and, in the circumstances, to have also 
 been guilty of gross fraud (m). On the other hand, where the undisclosed 
 fact is, unlike those in the above illustrations, incidental to, and a natural 
 feature of, the situation which calls for the protection of a suretyship con- 
 tract, and therefore one which the surety is bound to contemplate as not only 
 possible, but highly probable, the creditor is under no liability for not volun- 
 teering information ; for instance, to take the typical case of a guarantee 
 given to a bank of a customer's overdraft, the bank is not bound to disclose 
 the condition of the customer's old account, or any matters tending to show 
 his existing or previous embarrassment («), because the person who has 
 assumed the character of guarantor must know that the customer's bad 
 credit was the only reason of his being asked to do so (w) ; nor are bankers 
 required to communicate the existence of a mere intention on their part, 
 before the conclusion of the contract of suretyship, to employ the cash credit 
 to be given to the customer in paying ofi an old debt due from him to them- 
 selves (a;), though, in the authority for this illustration, it was acknowledged 
 that, if there had been an agreement to the effect stated, as distinguished from 
 a mere purpose (even if afterwards accomplished), the fact would have been 
 a proper subject of disclosure («/). Nor, in this class of guarantee, as dis- 
 tinguished from that next to be discussed, is the previous misconduct, or 
 strongly suspected criminality even, of the customer, a fact which the bank 
 is under any obligation to disclose to the surety (yy). 
 
 126. In the second class of suretyship contract, consisting of what are 
 commonly called " fidelity bonds," the burden of disclosure is heavier than 
 in either of the two other classes, for the area of relevant matters of which the 
 surety in this class cannot be expected to have either knowledge or suspicion 
 obviously extends further. Where the surety guarantees merely the credit of a 
 person who is about to be trusted, he knows that his financial record must have 
 become dubious, for otherwise there would be no necessity to resort to the credit 
 of another person : but where he is guaranteeing the future honesty or fidelity 
 of a servant, official, or agent, he is not in the least bound to suspect that he is 
 
 (m) Lee V. Jones (1864), 17 C. B. {s.s.\ 482, Exch. Ch. 
 
 (v) Wyihes v. Lahouchere (1859), 3 De G. & J. 593, per Lord Chelmsford, L.C, at 
 pp. 608-610. 
 
 (w) Hamilton v. Watson, sup., per Lord Campbell at p. 120 ; and London General 
 Omnibus Go. v. Holloway, sup., per Pabwbll, L.J., at p. 82 : " guarantees for overdrafts 
 are required for the purpose, and not on the chance, of being used ... it is perfectly 
 legitimate and usual for a man to carry on his business on borrowed money, including 
 money borrowed from his bankers by way of overdraft, and the surety knows this, and 
 becomes surety for the very purpose of enabhng him to do so. There is nothing in such a 
 case which the surety does not know as well as any other member of the community," and 
 again at p. 83 (after citing the passage above referred to from Lord Campbbli.'s speech in 
 Hamilton v. Watson) : "no surety asked to guarantee a banking account is entitled to 
 assume that the customer of the bank has not been in the habit of overdrawing ; the 
 proper presumption in most instances is that he has been doing so, and wishes to do so 
 again." 
 
 (x) Hamilton v. Watson, sup., per Lord LYNDHtrRST, L.C, at p. 118, and Lord Camp- 
 bell, at pp. 119, 120. 
 
 (y) Ibid., per Lord Lyndhurst, L.C, at p. 118, and Lord Campbell, at p. 119. 
 
 (yy) Bank of Scotland v. Morrison, [1911] Ct. of Sess. Cas. 593 ; National Provincial 
 Bank of England v. Glanusk, [1913] 3 K. B. 335 {per Horridgb, J., at pp. 338, 339). 
 
92 CH. in, SECT. 2, SUB-S. (4). 
 
 being asked to make himself liable for tbe future defaults and delinqueacies 
 of one who is already a professed or proved knave, since it is not an unusual, 
 but a natural thing, and quite in the normal course of business, for an intend- 
 ing employer, and particularly if he is a public officer or authority, and the 
 proposed servant is to be entrusted with public moneys, to insure himself 
 against loss from the contingency of a man of good reputation yielding to 
 temptation : whereas it is positively fraudulent (2), and therefore presumably 
 unusual, to invite another to take the like risk in respect of one whose past 
 conduct is known to the employer, or even suspected by him, to have been 
 dishonest or criminal : and no surety is bound to presume that either the 
 employer lias a dishonest intention in proposing the suretyship, or that the 
 servant whose future conduct is to be guaranteed has a dishonest past (22). 
 In accordance with this principle, it has been held that the duty of the 
 employer, in the case of fidelity bonds, is to divulge, during the treaty for the 
 suretyship, even facts tending to raise a strong suspicion of previous mis- 
 conduct on the part of a person employed as agent to a bank (a) ; a fortiori, 
 facts positively establishing previous irregularity and misconduct on the part 
 of a person whilst acting in partnership with another as commission agents for 
 the employers, in a case where this person's future individual conduct in the 
 same capacity (the partnership having been dissolved) was guaranteed (&) ; and 
 facts establishing previous embezzlements on the part of a tea-merchant's 
 van-man (c), or previous defalcations and embezzlements on the part of a 
 
 (z) This was the view expressed by Lord Eldon, L.C, at p. 292 of Smith v. Bank of 
 Scotland (1813), 1 Dow. App. Cas. 272 : " if a man found that his agent had betrayed his 
 trust, that he owed him a sum of money, or that it was likely he was in his debt ; if under 
 such circumstances he required sureties for his fideUty, holding him out as a trustworthy 
 person, knowing, or having ground to believe, that he was not so : then it was agreeable to 
 the doctrines of equity, at least in England, that no one should be permitted to take 
 advantage of such conduct, even with a view to security against future transactions of the 
 agent." 
 
 {zz) See London General Omnibus Co. v. Holloway, sup., per Eaewell, L.J., at p. 82 : 
 " a surety may well be willing to guarantee an employer against defalcations by a servant 
 believed to be honest : it is quite another matter, if the servant has already been found 
 guilty of defalcations. The surety believes that he is making himself answerable for a 
 presumably honest man, not for a known thief." And, later on the same page, in ex- 
 plaining the essential distinction between fideUty and other guarantees, he observes : 
 " the surety may well complain ' I did not know that your servant was a thief ' ; but he 
 cannot be heard to complain ' I did not know your customer had been overdrawing his 
 account or what the nature of his business was.' " This vital difference between the two 
 types of case is also insisted on by the Lord Justice Clerk at p. 602 of Bank of Scotland v. 
 Morrison, sup., as it had been in the Court below by Lord Mackenzie (at p. 601 n.), who 
 also points out that, when guaranteeing honesty and fidehty, the surety is helpless : 
 he cannot make the guaranteed person be honest, or rid himself of his Uabihty ; whereas, 
 where he is only guaranteeing a debt, he can at any moment pay the debt, with recourse 
 against the debtor. The Lord Ordinary puts this forward as an additional ground for 
 requiring a further measure of disclosure in the former case. 
 
 (a) Smith v. Bank of Scotland, sup., per Lord Eldon, L.C, at pp. 291-295, and Lord 
 Rbdesdale at p. 297. 
 
 (6) Railton v. Mathews & Leonard (1844), 10 CI. & F. 934, per Lord Cottenham, L.C, 
 at pp. 940, 941, and Lord Campbell at p. 943. 
 
 (c) Phillips V. Foxall (1872), L. K. 7 Q. B. 666. This was a case, not of non-disclosure 
 of the servant's misconduct during the proposals for the suretyship, but of suppression of 
 that fact during the currency of a continuing guarantee, and, therefore, the actual decision 
 belongs to the class of cases referred to in § 129, note (I), post, as not strictly relevant to the 
 subject now being considered. The joint judgment, however, of Cockbuen, C.J., and 
 
§§ 126, 127 (suretyship). 93 
 
 clerk to an omnibus company (d). On the other hand, there is no obligation 
 to communicate any circumstances not showing, or giving rise to a reason- 
 able suspicion of, moral delinquency, such as the mere fact that the collector 
 of a municipal corporation has been in the habit, during his past service, of 
 rendering his accounts at irregular intervals, contrary to an express resolution 
 of the corporation, where there is no suggestion or suspicion of dishonesty (e). 
 
 127. In the third type of suretyship, where the surety assumes a secondary 
 liability in the event of the person primarily liable making default in the 
 performance of a particular bargain or transaction, the nature both of this 
 bargain or transaction, and of the contract of suretyship, must first be exam- 
 ined, and then the governing rule must be applied; the question being whether, 
 in the individual case, the undisclosed fact was such as would reasonably be 
 within the contemplation of the surety as part of the risk which he was under- 
 taking, or whether, on the contrary, it was something that he would not 
 naturally expect to exist, or to have taken place. The application of this 
 rule has resulted in the following illustrative decisions. Where the surety 
 guaranteed the due execution by another person of a contract whereby that 
 person covenanted with the party to whom the guarantee was given for the 
 payment to him of certain annuities in consideration of the conveyance of 
 property described as being subject to certain charges, the last-named party 
 Avas held to have failed in his duty of disclosure in suppressing the fact that 
 there was a mortgage on the property apart from the specified charges (/). 
 So, where certain persons became sureties for the due performance by another 
 person of his obligations under a contract for sewerage which he had entered 
 into with a local authority, whereby he was to be paid on the certificate of a 
 named fijm, described as the local authority's surveyors, it was held that the 
 fact that the local authority had entered into an agreement with the land- 
 owner that the work was to be done under the joint superintendence and 
 control of the local authority's named surveyors and the landowner's surveyor, 
 was a fact which ought to have been communicated to the sureties (g). On 
 the other hand, where the surety had guaranteed a certain loan, it was held 
 that the fact that there had been a previous guarantor of the same loan, 
 and that, at his request, and on the terms of his finding another guarantor, 
 he had been released by the lenders, was not a fact which was necessarily 
 material to be disclosed, and the jury having found that in that case it was 
 not, the Court refused to disturb their finding (h). So, where two persons had 
 joined as sureties with a third person as principal in a bond for the repayment 
 
 LtrsH and Qttain, JJ., is prefaced by a discussion of what would have been the legal 
 consequences if the non-disclosure in question had been a non-disclosure before the 
 execution of the contract of suretyship (p. 674), and the conclusion arrived at is that the 
 contract would clearly have been vitiated. 
 
 {d) London General Omnibus Co. v. Holloway, [1912] 2 K. B. 72, C. A. 
 
 (e) Durham Corporation v. Fowler (1889), 22 Q. B. D. 394, per Chables, J., at p. 404, 
 and per Denman and Stephen, JJ., affirming him, at p. 415. It was recognized by the 
 Court that, if the irregularity there had amounted to dishonesty, the result would have 
 been different. 
 
 (/) Willis V. Willis (1850), 17 Sim. 218 {per Shadwbll, V.-C). 
 
 (g) Stiff V. Local Board of Eastbourne (1868), 19 L. T. 408 (per STtfABi, V.-C). 
 
 (ft) North British Insurance Co. v. Lloyd (1854), 10 Exch. 523. per Cur. at pp. 532, 533. 
 
94 CH. in, SECT. 2, SUB-S. (4). 
 
 of a certain loan to a life insurance company, it was lield that there was no 
 obligation on one of the two sureties to disclose to his co-surety (because there 
 would have been none on either of the sureties to disclose to the creditor) 
 the fact that the first surety had agreed with the prbcipal debtor that the 
 latter, out of the money to be lent by the insurance company, should pay to 
 the former a certain sum in discharge of an old debt ; and it was said that 
 to hold otherwise would be " to invent new equities to enable people to 
 escape from mercantile obligations " (t). And where certain underwriters 
 at Lloyd's had entered into an agreement with a lady who had lent money 
 to one B., in respect of which she held his promissory note for £15,000, by 
 which agreement they guaranteed, not the repayment of the note, but the 
 solvency of one H. in respect of a guarantee which he had given to the lady 
 for the repayment of it, it was held by the House of Lords, in this respect 
 reversing the C. A., that, whether this curious contract (which was in the 
 form of a policy, but contained stipulations proper to a transaction of surety- 
 ship) was to be regarded as one of insurance or guarantee, there was no duty 
 on the lady to disclose to the underwriters the fact that £2625 of the £15,000 
 represented interest, or the fact that she had refused to lend any money to B. 
 at less than 40 per cent, interest, and that neither of these facts was in the 
 least material, or could, as the Court of Appeal thought possible, be properly 
 so found by a jury (j). They might have been material to the risk of the 
 non-payment of the note by B., but this was not the risk which the under- 
 writers imdertook, whether as insurers or guarantors, which was solely the 
 risk of H.'s insolvency, and to this the facts in question obviously had no 
 sort of relevance. 
 
 128. It should be added that in negotiating for contracts of suretyship, 
 it has been laid down by Lord St. Leonards, L.C, that a creditor may be 
 under a duty of investigation, even though he is not in direct treaty with 
 the surety, imder certain circumstances which he describes as follows : 
 " without saying that in every case a creditor is bound to inquire imder what 
 circumstances his debtor has obtained the concurrence of a surety, it may 
 
 (i) Mackreth v. WaJmsUy (1884), 51 L. T. 19 {per Kay, J.). 
 
 (j) Beaton v. Burnand, [1900] A. C. 135, H. L. This case, sub nom. Beaton v. Heath, 
 was tried before Bigham, J., and a jury, the lady being the plaintiff, and the defendants, 
 the underwriters, setting up (inter alia) non-diselosure of the facts stated in the text. 
 On the jury answering in the negative a general question left to them by the judge, 
 " whether the transaction was one of exceptional risk," Bigham, J., entered judgment for 
 the plaintiff. The C. A. (A. L. SmiTH, Collins, and Romer, LL.JJ.) directed a new 
 trial — Beaton v. Heath, [1899] 1 Q. B. 782, 0. A. — on the ground that the minds of the jury 
 had not been directed to the real issues, and that the undisclosed facts were at least 
 capable of being considered material by the jury, if asked specifically whether they were 
 or were not, which Bigham, J., had not done. The House of Lords, without disagreeing 
 with any of the rules and propositions of law laid down by the Court of Appeal, reversed 
 their decision, and restored the judgment of Bigham, J., solely on the ground stated in the 
 text, namely, that the particular withheld facts were not capable of being considered 
 material to the particular risk undertaken (per Lord Halsbtjry, L.C, at p. 139, and Lord 
 Bkampton at p. 148); or, putting it another way, there was no evidence of any withholding 
 of any fact which was material to the risk, that is, of any fact having a bearing on the 
 solvency of H. (per Lord Halsbuky, L.C, at pp. 139, 140, and Lord Robbetson at p. 149) ; 
 the result being that the defendants had not established that anything undisclosed was 
 material, or that anything material was undisclosed. 
 
§§ 127-129 (suretyship). 95 
 
 safely be stated that if the dealings are such as fairly to lead a reasonable man 
 to believe that fraud must have been used in order to obtain such concurreDce, 
 he is bound to make inquiry, and cannot shelter himself under the plea that 
 he was not called on to ask, and did not ask, any question on the subject " (fc). 
 129. It is to be observed that the duty of disclosure with which alone 
 this Chapter is concerned is a duty which, as such, comes to an end on the 
 conclusion of the contract. In the case of contiauiag guarantees, the creditor 
 stUl owes a duty to the surety after this date, but a contractual duty only, 
 arising imder and out of the suretyship itself, and such that mere disclosiure 
 is not a discharge of, or strictly speaking, relevant to, such duty. The obliga- 
 tion of the creditor, in aU such cases, is to abstain during the currency of the 
 suretyship, from varying in the slightest degree (whether a normal person 
 would consider the variation material or immaterial, for not he, but the 
 surety is to be judge of this matter) the contractual relations which existed 
 between himself and the principal debtor at the date of the commencement 
 of the suretyship, without the consent of the surety. If the creditor violates 
 this contractual obligation, the surety has a good contractual defence to 
 any action on the guarantee, for he never agreed to make good the default 
 of the principal debtor in respect of such altered relation, be it in ever so 
 minute a particular, but only in respect of the relation which existed when 
 he gave the guarantee, and to which alone that guarantee was expressed to 
 apply. He is entitled to set up the plea of non hcec in fcedera veni ; or, in 
 other words, the law discharges him altogether from the liability as surety 
 to which he would otherwise have been subject [l). If, however, the creditor 
 can establish the assent of the surety to the alteration in the principal contract, 
 he establishes at the same time his implied assent to a corresponding modifica- 
 tion of the suretyship contract, and an enlargement to that extent of his 
 liability thereunder. But nothing short of consent will suffice (m) : and, 
 
 {k) Owen v. Homan {1853), 4 H. L. C. 997, at pp. 1034, 1035. 
 
 {l) It follows, therefore, that the authorities on this topic are, strictly considered, 
 irrelevant to this treatise. It will be sufficient to give here the references to the principal 
 decisions (some of which, however, wUl be again cited in the notes immediately following, 
 for the purpose of discriminating the two kinds of obligation). They are as follows : — 
 Whitcher v. Hall (1826), 5 B. & C. 269 ; Mactaggart v. Wilson (1835), 3 CI. & P. 525 ; 
 Bonar v. Macdonald (1850), 3 H. L. C. 226 ; Dawson v. Lawes (1854), 23 L. J. (CH.) 434 ; 
 Small V. Ourrie (1854), 23 L. J. (oh.) 746 ; North Western Railway Go. v. Whinray (1854), 
 10 Bxch. 77 ; Stewart v. M'Kean (1855), 10 Exch. 655 ; Berwick Corporation v. Oswald 
 (1855), 5 H. L. C. 856 ; Pyhus v. Oihb (1856), 6 E. & B. 902 ; Blest v. Brown (1862), 4 
 r>e G. P. & J. 367 ; Tayleur v. Wildin (1868), L. R. 3 Exch. 303 ; Phillips v. Foxall {1812) 
 L. R. 7 Q. B. 666 ; Polak v. Everett (1876), 1 Q. B. D. 669; Holme v. Brunskill (1878), 
 3 Q. B. D. 495, C. A. {per Chablbs, J., at p. 394, and Denman and Stephen, JJ., at pp. 
 421-423, as to variation of the contract between the employer and the servant during 
 the currency of the suretyship : there was also a defence of non-disclosure before the 
 suretyship was entered upon, as to which see § 126, note (c), ante) ; Caxton and Accrington 
 UnionY. Dew (1899), 68 L. J. (Q.b.) 380; Snaddon v. London, Edinburgh <fc Glasgow 
 Assurance Co. (1902), 5 P. 182. 
 
 {m) At p. 239 of Bonar v. Macdonald, sup., a Scotch case, the following passage from 
 BeE's " Principles " was cited and approved by the House of Lords as being a correct 
 statement of both the Scottish and the English law on the question : " the cautioner is 
 freed by any essential change, consented to by the creditor, in the principal obligation or 
 transaction, without the knowledge or assent of the cautioner." So, in Phillips v. Foxall, 
 sup., after stating the effect of non-disclosure before the conclusion of the contract of 
 suretyship, as to which see note (c) to § 126, ante, the joint judgment of Cockbtjrn, C.J., 
 
96 CH. Ill, SECT. 2, SUB-SS. (4), (5). 
 
 tliough of course coBsent is inefficacious without full and exact knowledge 
 of that which is consented to, and such knowledge, if established at all, is 
 usually made out by proof of direct disclosure on the part of the creditor to 
 the surety, this only means that communication and consultation with the 
 surety is ordinarily an essential preliminary to the obtaining of the consent. 
 But, if no consent results from this communication and consultation, the 
 creditor has no answer to the surety's claim to be discharged ; the latter is 
 entitled, if he pleases, to stand still and mutely watch the process of striking 
 ofE his shackles ; and the fullest knowledge, by disclosure or otherwise, of 
 all the facts which, unless he gives his assent, will effect his liberation, is not 
 a substitute for, or the equivalent, of such assent (w) : which shews that, 
 per se, disclosure is immaterial to the question of the creditor's obligations 
 to the surety after the conclusion of the contract of suretyship. 
 
 130. The questions of the burden of proof on the party complaining 
 (the surety), the affirmative pleas available to the party charged (the creditor, 
 employer, or other person to whom the guarantee is given), the appropriate 
 remedy and relief, matters of law and fact, and parties, are discussed in other 
 sections of this Chapter (o). 
 
 Suh-s. (5). Beleases, Waivers, Comfromises, and Compositions. 
 
 131 . Where parties are in treaty with one another with a view to a release or 
 waiver on one side, or a compromise on both sides, of rights or claims, the rules 
 of good faith, in the matter of disclosure, apply : but the application, as will be 
 seen, varies according to the nature of the transaction contemplated, that is to 
 say, accordingly as it is a release or waiver of a particular specified right, or of 
 all rights and claims, or a compromise of disputed claims, and, if a compromise, 
 accordingly as it is, or is not, of the character of a family arrangement. 
 
 132. First, as to releases and waivers. A release or waiver may either 
 be of a particular defined right or claim, or it may be expressed in general 
 terms so as to purport to surrender all claims of every sort or kind in relation 
 to a certain subject-matter. In the former case, the party obtaining the 
 
 and Lush and Qtjain, JJ., proceeds (at p. 674) : " we think that in the case of a continuing 
 guarantee a similar concealment made during the progress of the contract ought to have 
 a similar effect as regards the future liability of the surety unless his assent has been 
 obtained, after knowledge of the dishonesty, that his guarantee shall hold good during the 
 subsequent service," and, at p. 677, the necessity of obtaining the surety's " assent " is 
 insisted upon. And, at pp. 505, 506 of Holme v. Brunskill, sup., Cotton, L. J., states " the 
 true rule " to be " that if there is any agreement between the principals with reference to 
 the matter guaranteed, the surety ought to be consulted, and that, if he has not consented 
 to the alteration, . . . the Court will . . . hold that in such a case the surety himself 
 must be the sole judge whether he will consent to remain liable notwithstanding the altera- 
 tion, and that, if he has never consented, he wiU be discharged." 
 
 (n) This was clearly and emphatically laid down by Blackbttbn, J., at p. 673 of Polak 
 V. Everett, sup., as follows : " we must take it to be the fact that though the defendant 
 was well aware of the release being executed, he was not an assenting party to it. Then it 
 is argued that knowledge on the part of the surety that there is going to be a release of a 
 part of the security is enough without assent. I cannot see any authority for that. . . . 
 To say that a person who, being a surety, becomes aware that a creditor is going to give 
 time, or do something else which, if done without his assent, may discharge Mm, is bound 
 to warn the creditor against doing it, is a thing for which no authority whatever has been 
 cited." 
 
 (o) See Sects. 3-7 respectively, post. 
 
§§ 129-132 (releases, compromises, &c.). 97 
 
 release or waiver, must disclose during the negotiation all such matters 
 affecting the specified right or claim as are within his knowledge, and of 
 which, to his knowledge, the other party is ignorant (ji). In the latter case, 
 his duty of disclosure is much wider : the party in whose favour the general 
 release or waiver is made must divulge to the other party any particular 
 right of the class purportmg to be released or waived which he knows, 
 but the other party does not Icnow, to be enforceable against himself by that 
 other, — every right, in fact, the renunciation of which, as being literally within 
 the general terms, he intends afterwards to assert and rely upon, but which 
 the other party does not know that he possesses, and does not believe, 
 therefore, to be included in such general terms, or to be the subject of the 
 release or waiver. This rule has been rigidly applied not only to releases, 
 strictly so called (q), but to " catching conditions of sale " (r), and " tricky " 
 waiver clauses in prospectuses of companies (s). 
 
 ip) Thus, in M'Garthy v. Deraix (1831), 2 Russ. & M. 614, an action brought by the 
 personal representative of one T. against the personal representatives of T.'s wife for 
 arrears of an annuity to which T. had become entitled under a marriage settlement, to 
 which the defendants pleaded a renunciation by T. of his rights under the settlement in 
 favour of his wife's family, and the plaintiff replied that the renunciation was of no effect 
 on the ground of the suppression from T. of {inter alia) the true amount and value of his 
 wife's property when she died, T. being, in the absence of information as to these matters, 
 under the impression that his wife had died a pauper, Lord Bbottgham, L.C, reversing 
 Leach, V.-C, held that the " renunciation " could not stand, and gave judgment for the 
 plaintiff. 
 
 {q) See Hylton v. Hylton (1754), 2 Ves. Sr. 547, where the plaintiff sued to set aside 
 various grants which he had made to the defendant by way of gift, and, inter alia, the grant 
 of a certain release in general terms, and Lord Hahdwicke, L.C, held, as to this release, 
 that it could not stand, for the reason, amongst others, that no account had been rendered 
 to the plaintiff of the matters which, in general terms, he had purported to release. Cp. 
 Bowles V. Stewart (1803), 1 Sch. & Lefr. 209, an action for a similar purpose, where Lord 
 Redesdalb, L.C. (Ir.), set aside a release given by the plaintiff, framed in the most general 
 terms, and extending far beyond the matters in contest, on the ground that the nature and 
 extent of the rights which the plaintiff was purporting to renounce had never been 
 explained to him, and an opinion of counsel as to these matters, and various deeds and 
 facts indicating that the value of these rights was much larger than he supposed, had been 
 withheld from him, and that there had been an absence of " full and fair disclosure " 
 (p. 226), and the release had been " unfairly obtained under a suppression of the plaintiff's 
 rights" (p. 227); Lloyd v. Attwood (1859), 3 De G. & J. 614 {ver Tukker, L.J., at 
 p. 649 : general release of trustees) ; Farrant v. Blanchford (1863), 32 L. J. (CH.) 237 {per 
 Lord Westbtjky, L.C, at p. 240 : the like). Cp. Lyall v. Edwards (1861), 6 H. & N. 337 
 {per Pollock, C.B., and Martin, B., at p. 347), and the observations of Lord Wbstbury 
 at p. 623 of London & South Western Railway Co. v. Blackmore (1870), L. R. 4 H. L. 610, 
 and of SwiNFEN Eady, J., in Re Joint Stock Trust d: Finance Corporation (1912), 56 Sol. 
 J. 272. And see, further, the observations as to general releases cited in note (s), inf. 
 
 {r) In Nottingham Patent Brick cfc Tile Co. v. Butler (1886), 16 Q. B. D. 778, C. A., there 
 was a condition of sale that " the property is sold subject to . . . any matter or thing 
 affecting the same, whether disclosed at the time of sale or not," and it was held that, 
 the vendor not having divulged the facts that in a predecessor's deed of title there were 
 restrictions against brickmaking, and that, though he purchased without notice of those 
 restrictions, he sold with notice of them, so that he was conferring a title which might 
 conceivably be impeached afterwards, the general waiver sought to be put upon the 
 purchaser by the above condition was entirely inefficacious, Lindley, L.J., observing, at 
 p. 789 : " assuming that he was a bond fide purchaser for value without notice, but at the 
 time of the sale to the plaintiffs he was aware of the restrictions, if he intended to cover 
 that blot in his title, and to say to a purchaser, You must take such title as I have got ; 
 I am a bond fide purchaser for value, without notice of any restrictions ; you must buy 
 upon this condition ; — ^he ought to have used a condition pointing to the blot much more 
 specifically than the actual conditions have done." Cp. the judicial expressions as to 
 " catching conditions of sale " which are cited in the next note. 
 
 (s) See Greenwood V. Leather Shod Wheel Co., [1900] 1 Ch. 421, C. A., yer Lindley, M.R., 
 
 B.N.D. H 
 
98 CH. Ill, SECT. 2, SUB-S. (5). 
 
 133. Compromises and settlements of disputed claims, which form the 
 other of the two above-mentioned classes of transaction whereby rights 
 are surrendered, stand on a very different footing from releases and waivers ; 
 though, as will be shewn presently, it is going too far to say that no duty 
 of disclosure in the former type of case exists at all imless the circum- 
 stances amount to or suggest something more than a mere omission to 
 convey information. A party giving a release in general terms has a right 
 to complain if he is not fully informed as to specific rights which, known 
 to the other party, but imknown to himself, are supposed to be included in 
 the comprehensive formula to which he has subscribed : whereas, in cases of 
 compromise, as the name itself imports, the very consideration and essence 
 of the transaction is a mutual surrender of claims bond fide asserted, however 
 ill-founded they may subsequently prove to have been (t), as to the validity, 
 value, and details of which neither party has, or desires to have, any exact 
 knowledge or information ; the object on both sides being to put an end to 
 past, and still more to avoid the possibility of future, contest or litigation, 
 and, by striking a rough guesswork balance once for all, on the principle of 
 " give and take," to escape the time, worry, and expense involved in pro- 
 duction, inspection, calculation, and verification of accounts, vouchers, and 
 other documentary evidence, and in the elucidation of facts by means of 
 
 at p. 4.37 : " if a company's prospectus is fraudulent . . . , and an applicant for shares 
 signs a contract which is intended to deprive him of redress, he is not bound in equity by 
 what he signs unless his attention is called to the existence of facts which render the prospectiis 
 fraudulent. The introduction of a stipulation that an applicant for shares is to be deemed 
 to have notice of what is in fact concealed from him, is simply part of the trick. . . . 
 The principle of refusing to give effect to parts of documents so as to prevent successful 
 deception by means of them is quite familiar in its application to general words in releases, 
 and to catching conditions of sale," and again, at pp. 437, 438 : " general waiver clauses 
 in prospectuses, applications for shares, articles of association, or other documents 
 addressed to large numbers of persons are always suspicious, and require careful scrutiny " ; 
 Cackett v. Keswick, [1902] 2 Ch. 456, C. A., per Faewbll, J., whose decision was affirmed 
 by the C. A., at pp. 467, 468 (" a man who desires to take advantage of a waiver clause 
 must state the facts fairly ... if the element of unfairness is requisite, it is found when 
 he insists that its effect is to make the other contracting party give up something of the 
 existence of which the asserter knew, and the other contracting party was ignorant. As 
 I read the judgments in Greenwood v. Leather Shod Wheel Co., the decision, and the reasons 
 given for it, involve the proposition that . . . the person said to have waived must have 
 sufficient information of what he was waiving ; and that, apart from fraud, the same 
 principles apply to waiver clauses as are applicable to ambiguous and misleading state- 
 ments in conditions of sale or releases "), per Rombe, L. J., at p. 476 (" no fair or sufficient 
 notice "), and per Stiblinq, L. J., at p. 477 (such as . . . fairly to convey to the mind of 
 the intending shareholder the nature of the contracts which have been excluded ") ; 
 Watts V. Bucknall, [1903] 1 Ch. 766, C. A., per Coluns, M.R., at p. 776, citing and adopting 
 the above statement of Pabwbll, J., in Cackett v. Keswick, sup., and at pp. 776, 777, citing 
 and approving similar language used by the same judge in the Court below in the case then 
 under appeal (" it is a true statement of the law to say that no protection can be afforded 
 to those responsible for the issue of a prospectus, under a waiver clause which they invite 
 subscribers to submit themselves to, unless they fairly disclose what is the nature of the 
 rights which they ask should he released or waived "), and per Cozbns-Haedy, L. J., at p. 780 
 ("I doubt whether a waiver clause of this nature ought ever to be allowed to operate, 
 except under such conditions as would enable the defendant " — who in that case was the 
 party relying upon the waiver — " to rely upon a release in general terms." Waiver 
 clauses in prospectuses of companies are now, as to a large number of matters, rendered 
 absolutely void by statute (see § 562, post), but this fact is no way affects the relevancy of 
 the above propositions in their application to releases and waivers in general. 
 (t) See § 138, post, and note (a;) thereto. 
 
§ 133 (releases, compromises, &o.). 99 
 
 difficult and tedious researclies amongst persons, and in places, perhaps not 
 easily accessible. Neither party, therefore, starts with the intention of giving, 
 or with the expectation of receiving, any precise disclosure : for it is the basis 
 of the transaction that neither has any precise knowledge to impart to the 
 other (m). On this principle, whenever the party charged has been guilty of 
 no such active concealment or obliquity of conduct or other breach of duty 
 as is mentioned below (v), the compromise has been supported, and the 
 party complaining has failed {iv). And, where litigated claims are the subject 
 
 («) Per Lord Manners, L.C. (Ir.), at p. 180 of Leonard v. Leonard (1812), 2 Ball & B. 
 171 (" between a mere release and a deed of compromise . . . there is this distinction ; 
 that in the former, the parties know their respective rights, and the one surrenders his 
 right to the other : in the latter, both parties are ignorant of their rights, and the agree- 
 ment is founded on that ignorance "). See also the observations of Lord Cottenham, L.C, 
 at p. 970 of Stewart v. Stewart (1839), 6 CI. & P. 911 ; and of the C. A. (Lord Halsbuky, 
 L.C, and Vatighan Williams and Stirling, LL.JJ.) at p. 710 of Re Roberts ; Roberts v. 
 Roberts, [1905] 1 Ch. 704, C. A. (" generally, the very object of the compromise is to avoid 
 the necessity of having the exact relative legal rights determined by Utigatiou "). 
 (v) See § 136-138, post. 
 
 (w) As in Naylor v. Winch (1824), 1 Sim. & St. 555 ; Watt v. Assets Co., [1905] A. C. 
 317, H. L. (as to which see note (r) to § 137, post), and Law v. iaw, [1905] 1 Ch. 140, C. A. 
 In the last cited case, which is a very useful illustration of the principles on which the Courts 
 will uphold a compromise, and reject a plea of non-disclosure, the facts were these. It 
 was agreed between two brothers, James and WiUiam Law, partners in a certain business, 
 that WiUiam should sell his share in the business to James for £21,000, which sum was to be 
 paid as to £10,500 at once, and as to the remaining £10,500, in six months' time, the latter 
 payment being secured by James's bond. William afterwards discovered that, in the 
 course of the negotiations for the above sale, James had concealed the existence of partner- 
 ship assets to a very considerable amount, which concealment of course gave him a right 
 to relief by way of rescission — see § 149, and note (d) thereto, post, — and, if the conceal- 
 ment amounted to fraud, damages. He elected to sue for damages in the K. B. D. for 
 fraudulent misrepresentation. After the issue of the writ, he discovered still further 
 suppression of assets on the part of James, and suspected (not without reason, as appeared 
 afterwards) that he had not yet got to the bottom of James's concealments. With that 
 knowledge and suspicion, however, during the progress of the action, he agreed to a com- 
 promise, embodied in a written agreement, followed by a consent order, whereby he, 
 withdrawing all charges of fraud, was to receive £3550 from James " in discharge of every 
 claim relating to any matter whatever between the plaintiff and the defendant, and to be 
 accepted in full satisfaction thereof." After this compromise, WiUiam discovered, as he 
 anticipated he would, that James had suppressed yet further partnership assets, to the 
 amount of no less than £80,000, and thereupon sued (inter alios) the executors of James 
 (who had died in the meantime) for rescission of the compromise, and for taking of the 
 partnership accounts. Pending suit, William died, and the action was continued by 
 WiUiam's executors. Kekbwich, J., held, and was affirmed by the C A. in so doing, that, 
 under these circumstances, the case set up of non-disclosure failed, and that the compromise 
 could not be disturbed, observing, at p. 147, that " with that knowledge, and with the 
 knowledge that he could obtain fuU discovery in the action, he chose to take £3550 in 
 settlement of aU claims. He was prepared to take that sum to settle the litigation, put 
 an end to disputes, and avoid the troublesome taking of accounts, and going into all the 
 matters in question," and, therefore, "it would be against common sense and common 
 honesty that the plaintiff should be allowed to say that he accepted that sum only in 
 settlement of his claim in respect of the non-disclosure of certain assets, and now to claim 
 to go into the question of the non-disclosure of other assets." The C A. (per Cozens- 
 Habdy, L. J.), at p. 158, expressed their agreement with this view in these terms : " before 
 this settlement was arrived at, WiUiam had ascertained that there were stiU further 
 partnership assets not disclosed by James, and he surmised and beUeved that there might 
 be others, though he was not aware of their particulars or amount. Under these circum- 
 stances it was, of course, open to WiUiam, if he chose, not to insist on his fuU rights, and, 
 in particular, not to obtain disclosure of what the assets consisted, and to come to a settle- 
 ment or compromise with James on that footing. And this is what he did. What his 
 reasons were for so doing concerned himself alone, and it would be idle to speculate whether 
 he was influenced by fraternal affection, ... or by some other reason. But after the 
 
100 CH. Ill, SECT. 2, SUB-S. (5). 
 
 of settlement, however seriously the party charged may have violated some 
 other duty of disclosure ia respect of which violation the litigation is instituted, 
 that duty, as such, ceases on the commencement of the proceedings, when 
 the parties are at arm's length, and thenceforth is superseded by such duty 
 of disclosure, if any, as under the circumstances may be incumbent on them 
 as parties to a negotiation for a compromise {x). More especially, of course, 
 are the Courts disposed to uphold a compromise where the party seeking to 
 set it aside is shown to have entered into it, not merely with that general 
 intention to waive all exact information which characterizes the ordinary 
 type of compromise, but with a strong inkling or suspicion of all or some of 
 the facts of the suppression of which he afterwards complains, and with the 
 secret and unconscientious design of first taking the present benefit of the 
 compromise, and then, at a convenient subsequent date, seeking relief in 
 respect of the alleged non-disclosure of facts which at the time he suspected, 
 or vaguely believed, to exist («/). 
 
 134. It must be remembered that, as in other departments of law (z), 
 the Court looks to the substance, object, and efiect of the transaction, rather 
 than to the phraseology employed by the parties, or appearing on the face 
 of the instrument itself, for the purpose of determining whether it is a release 
 or a compromise, and which, accordingly, of the above difierent degrees of 
 disclosure should be required in the particular case {a). 
 
 settlement so come to, in our opinion it was not possible for WiUiam to reopen the trans- 
 action." 
 
 (r) Law T. Law, sup., per Cur., at p. 159 (" it has been strenuously argued that the 
 duty resting on the purchasing partner continued in full force and effect up to and after 
 the settlement of the action, so that James could not rely on a binding election by William 
 unless and until a full disclosure had been made. We know of no authority which supports 
 this proposition, and it seems to us to be contrary to principle "). 
 
 {y) Law V. Law, sup., per Cur., at p. 150, where, after referring to the facts proved in 
 evidence, which they stated to be highly important, that WiUiam had assigned James's 
 bond for the second £10,500 — see note {w), sup. — to trustees, and had joined with those 
 trustees in suing for, and obtaining in the action, that amount with interest and costs, 
 pursuant to a consent order, the Court observes : " this was four days before the writ 
 in the action " — that is the action for damages in the K. B. D. — " was issued. In point of 
 fact, William, with knowledge that the sale might be upset or damages recovered, de- 
 liberately postponed proceedings with that view until after he had obtained payment of 
 the balance of the purchase money, to which he had no title except upon the footing that 
 the sale was not to be set aside. It is now too late for William to repudiate the contract 
 of which he has thus deliberately secured the benefits." 
 
 (z) For instance, what is called a " warranty " may be treated as a " condition," and 
 vice versd, in contracts of sale, if the real nature of the transaction has been misdescribed 
 or mislabelled by the parties : and similarly, as to " penalties " and " liquidated damages "; 
 and as to insurances and guarantees — see §§ 120, 121, ante. So also the character in law 
 of a particular society, e.g. whether it is a " trade union " or not, does not depend on the 
 name given to it in its constitution or rules. And there are numerous other illustrations. 
 
 (a) Thus, in Leonard v. Leonard (1812), 1 Ball & B. 171, where the plaintiff sued to set 
 aside a deed " by which he conveyed and released all his right and interest as heir at law, 
 and one of the next of kin, of Samuel Leonard, in consideration of an annuity of £100 to 
 be paid to him by the defendant, during his, the plaintiff's, life " (p. 176), Lord Mahnebs, 
 L.C. (Ir.), at p. 180, said : " this deed has been treated as a release : now that is not the 
 precise description of it," and he then proceeds to deal with it as a compromise, and he 
 emphasizes the importance of so doing by a careful discrimination between " a mere 
 release and a, deed of compromise of this nature " : see note (u) to § 133, ante. So also 
 Lord Macclesfield, L.C, in Cann v. Cann (1721), 1 P. Wms. 723, seems to have treated 
 the question before him as one of compromise, rather than release, though the parties 
 
§§ 133-135 (releases, compromises, &c.).\,___: lOl 
 
 135. If, on the principle of interest reipubUcce ut sit finis litium, it is the 
 practice of the Courts to support and effectaate all honest compromises, of 
 whatever kind, the object of which is to settle litigation, or to adjust dis 
 puted claims before resort to litigation, and so efiect the " prevention " 
 which is proverbially " better than cure," still more cordially is this judicial 
 favour extended, in the absence of any counterbalancing considerations, 
 to the particular kind of compromise which is usually denominated a " family 
 arrangemem.," i.e. an agreement between kindred for the compromise of 
 domestic differences, or the settlement or division of family estates, which 
 is calculated to prevent the institution, or the recurrence, of family litigation, 
 or to preserve the family property, peace, security, or honour (6). In such 
 
 had described the transaction as a release, and, indeed, the Lord Chancellor himself freely 
 uses that term. But the propositions which he enunciates, and the reasoning by which 
 they are supported, at p. 727, are such as to show that he is directing his attention to 
 agreements of compromise, and not to releases except so far as they are entered into for 
 the purpose of effecting such an agreement ; and it is evident from the language subse- 
 quently used by Lord Hakdwiokb, L.C, at p. 10 of Stapilton v. Stapilton (1739), 1 Atk. 2, 
 when referring to and adopting the above propositions, that he so understood his pre- 
 decessor. And Plitmbe, M.R., at pp. 151, 152 of Dunnage v. White (1818), 1 Swanst. 137 ; 
 18 R. R. 33, takes the same view of Lord Macclesfield's meaning. 
 
 (6) This leaning of the Courts in favour of family arrangements is recognized in the 
 following : Leonard v. Leonard, sup., per Lord Manners, L.C. (Ir.), at p. 179 (" to avoid 
 litigation, the expenses and the uncertainty of it, was, according to the evidence . . . the 
 object of the arrangement . . . and it would be to defeat an object, in itself perfectly 
 rational and just, and the more so, as between two brothers, an object which this Court 
 would be disposed rather to promote than discountenance, were the Court to set aside a 
 fair dealing upon a doubtful right, because it should afterwards appear that one of the 
 parties had not got full value ") ; StocMey v. Stockley (1812), 1 V. & B. 23 (per Lord 
 Eldon, L.C, at pp. 30, 31) ; Dunnage v. White, sup., per Plumek, M.R., at pp. 151, 152 
 (" it is then insisted that the deed may be supported as a family arrangement, according 
 to the doctrine of Stapilton v. Stapilton, and Cann v. Cann. Undoubtedly parties entitled 
 in different events may, while the uncertainty exists, effect a valid compromise. In 
 Stapilton v. Stapilton, the legitimacy of the eldest son was doubtful ; that was a question 
 proper to be settled," &c.); Gordons. Gordon (\82l), 3 Swanst. 400; 19 B. R. 230, which was 
 also a case of doubtful legitimacy (per Lord Eldon, L.C, at pp. 463, 470, 476, 477 : see 
 the passages cited verbatim in the discussion of this case in Sect. 8, Sub-s. (3), §§ 307, 308, 
 post); Hoghton v. Hoghton (1852), 15 Beav. 278 {per Romilly, M.R., who, at p. 298, 
 discriminates between two classes of domestic influence, one " where one person, by undue 
 influence, obtains an advantage over another," and the other " when arrangements are 
 entered into for the peace of famiUes and the security of the family property," in which 
 latter class there is, as he explains at pp. 301-304, a judicial presumption not against, but 
 in favour of, the domestic influence, as being, in such circumstances, proper and praise- 
 worthy) ; Williams v. Williams (1867), 2 Ch. App. 294 {per Tdenee, L.J., at p. 304, who 
 there says that the doctrine applies " not merely to cases in which arrangements are made 
 between members of a family for the preservation of its peace, but to cases in which arrange- 
 ments are made between them for the preservation of its property ") ; Fane v. Fane (1875), 
 L. R. 20 Eq. 689 {per Hall, V.-C, who, at p. 706, speaking of re-settlements by father and 
 son, observes that " they are not to be interfered with lightly . . . for the Court has 
 thought such re-settlements desirable, and has favoured them ") ; Hohlyn v. Hoblyn 
 (1889), 41 C D. 200, another " re-settlement " case {per Kekewioh, J., at p. 204 : " this 
 settlement belongs to that class of settlements usually styled family arrangements. . . . 
 In regarding settlements of this character, claims to upset them, and the rights of the 
 parties thereunder, the Court gives weight to considerations which on other occasions 
 would scarcely be allowed in the scale. The duty to preserve in the family property 
 hitherto held by it is recognized, so is also the duty of providing for those members of the 
 family who are not intended to succeed to the property, and the harmony which may thus 
 be expected to be established is respected. There are frequently other considerations, 
 such as the preservation of the honour of the family "). It so happens that, though in all 
 the above oases the judicial leaning in favour of family arrangements is declared, in none 
 of them was this leaning given effect to (by reason of countervailing and neutralizing 
 
102 CH. Ill, SECT. 2, SUB-S. (5). 
 
 cases, the law will not be " extreme to mark what is done amiss," and cir- 
 cumstances ia the conduct of the parties which might imperil the validity of 
 an ordinary compromise, may be overlooked in consideration of the higher 
 general good to be achieved by encouraging transactions of the class in 
 question. But, in order to lay claim to this favourable consideration, it must 
 appear beyond doubt that the sole object of the transaction was as above 
 stated, and not some other and sinister object, such as the obtaining by one 
 party of an advantage to himself by the exercise of improper domestic influence, 
 without surrendering anythiag to the other party (c). The objects or inten- 
 tions of the parties may be obvious from the nature of the transaction, or 
 they may be proved by evidence (d). Further, whatever the intention may 
 have been, the Court must be convinced that the result will in all probability 
 be as stated, and that the transaction is really calculated to preclude future 
 disputes, and not rather to invite them (e). It should also be remembered 
 that compromises and settlements between members of a family, when one 
 of them is in a position of domination and superiority as regards the others, 
 are not only not regarded with the leniency and favour shown to other family 
 arrangements, but are subjected to a specially vigilant and critical investiga- 
 tion, with the view of determining whether they are obnoxious to the doctrine 
 (to be discussed hereafter in its proper place) of undue influence : and the 
 very kiaship which ordiaarily is the reason for encouraging the arrangement 
 is, in such cases, the ground on which it may be impeached (/). 
 
 considerations, suoh as misrepresentation or suppression of facts, or undue influence), except 
 in Hdblyn v. Hohlyn, sup., and then only on the party charged giving up the objectionable 
 parts of the instrument on which he rehed. 
 
 (c) For an illustration of this kind of case, where the alleged " family settlement " was 
 held not to fall within that description at all, see Turner v. Collins (1871), 7 Ch. App. 329 
 (per Lord Hatherley.L.C, reversingMALiNS,V.-C.,atpp. 338, 339 : " theVice-Chancellor 
 seems to have been struck with the expressions about re-settlements and family arrange- 
 ments, and with the cases on that subject. . . . This case does not in the least partake of 
 the character of a re-settlement of family estates or family property. The son is giving 
 back to the father what had come from the father, but he also gives his mother's property ; 
 and as the deed now stands, if there should be a third marriage, the son may take no 
 interest whatever in that property. It is not a re-settlement, but an absolute sweeping 
 of it away from the son, and handing it over to the st^p-mother and half sister. . . . This 
 is not a re-settlement, and the question is, under what circumstances it was made "). 
 
 (d) As it was in Leonard v. Leonard (1812), 1 Ball & B. 171 ('per Lord Mannees, L.C. 
 (Ir.), at p. 179, where he finds that " the object of the arrangement " was, " according to 
 the evidence, . . . to avoid litigation,'' &c.). 
 
 (e) In Dunnage v. White (1818), 1 Swaust. 137 ; 18 R. R. 33, Pltjmee, M.R., was not 
 so satisfied, and accordingly declined to treat the transaction as a family arrangement, the 
 reason for upholding such arrangements being conspicuously absent in that case. At 
 p. 152, he observes : " by this instrument he covenants that two-sixths of the personalty 
 shall belong to Dunnage and Atwell and their wives ; but under the will their children 
 had fixed interests in the event of survivorship. What power had the parents to dispose 
 of the property in their own favour ? . . . Instead of ending litigation, the deed creates it : 
 as soon as the children become of age, they must be advised to assert the rights of which 
 it sought to deprive them." 
 
 _(/) This topic belongs, not to this Chapter, but to Chapter V, Sect. 2, Sub-s. (1), 
 which deals with domestic relations raising a presumption of ' ' influence." See accordingly 
 § 410, post, and the cases cited in the notes thereto, and particularly Hoghton v. Hoghton, 
 Fane v. Fane, Hdblyn v. Hdblyn, which are also referred to in note (6), sup., and Turner v. 
 Collins, which is also cited in note (c), sup. In Tennent v. Tennent (1870), L. R. 2 H. L. 
 (Sc.) 6, Lord Westbttky, L.C. (p. 10), speaks of family arrangements of any kind as 
 requiring " uberrima fides on all sides." 
 
§§ 135-137 (releases, compromises, &c.). 103 
 
 136. But wtilst it is true to say that family arrangements, where no 
 breach of duty on either side is established, have always, and even more readily 
 than ordiaary agreements of compromise, been supported (g), it is equally 
 true that neither compromises, nor even family arrangements, will stand in 
 any case in which such a breach is alleged and proved. The question at once 
 arises, — what is this duty ? What is the theory of it, and what are its limits ? 
 It is no easy matter to reconcile the conflicting opinions expressed at various 
 times and by various courts on this topic, or to assign a definite meaning to 
 the vague and unscientific phrases (such as " fairness " and " equality ") 
 most unfortunately applied to conceptions which above all stand in need of 
 precision in statement and clarity in exposition, or, therefore, to formulate 
 with any confidence an answer to the question propounded which shall be 
 at once comprehensive and exact. It has never been doubted that where 
 either of the parties to a compromise (whether family arrangement or not) 
 has been guilty of actual fraud (h), or of misrepresentation {i), even when 
 innocent (j), or of suppression, or wilful and industrious concealment of 
 material facts, amounting to what has been called " fraudulent silence " (k), 
 the compromise will be upset, or treated as a nullity. The question is whether, 
 when there has been no misconduct of any of the above kinds on either side, 
 an agreement for compromise can be successfully impeached on the ground 
 of mere honest non-disclosure, and, if so, of what nature must that non- 
 disclosure be, in order to constitute an invalidating cause. 
 
 137. Two extreme views have been advanced ; one, that any innocent 
 n on -disclosure will invalidate even a family arrangement, and a fortiori a 
 compromise which does not partake of this nature (l) : the other, that no 
 
 (g) As in Cann v. Cann (1721). 1 P. Wms. 723 ; Stapilton v. Stapilton (1739), 1 Atk. 2 ;. 
 Stewart v. Stewart (1839), 6 CI. & F. 911 ; Bellamy v. Sabine (1847), 2 Ph. 425 (as to ono 
 of the two agreements there in question) ; Tennent v. Tennent, sup. 
 
 (h) See Lloyd v. Passingham (1815), G. Cooper, 152 ; 14 R. R. 228 (fraudulent tamper- 
 ing with the Fleet-book of marriages, and register of baptisms, whereby compromise of 
 certain proceedings in ejectment was procured) ; Bellamy v. Sabine, sup. (as to one of the 
 two transactions impeached, but not the other, which was upheld, — see the last note) ; 
 Moxon V. Payne (1873), 8 Ch. App. 881. 
 
 (i) As in Leonard v. Leonard, sup. (incorrect statement of the efEect of counsel's opinion 
 that there had been a severance of a certain joint tenancy) : Be Boberts, [1905] 1 Ch. 704, 
 C. A. (a similar case). 
 
 (j) As in Fane v. Fane (1875), L. R. 20 Eq. 698. 
 
 (k) " Fraudulent silence " was the expression used in the argument for the defendant 
 in Turner v. Green, [1895] 2 Ch. 205 (at p. 206) ; in many of the cases cited in the 
 following notes the non-disclosure was variously described as " concealment," " active 
 concealment," "suppression," or "industrious " reticence. 
 
 (I) There are some scattered dicta in Leonard v. Leonard, inf. — see note (s), inf. — and 
 also in the judgment, or rather in the series of judgments, dehvered by Lord Eldok", L.C, 
 in Gordon v. Gordon (1821), 3 Swanst. 400 ; 19 R. R. 230, which, if taken by themselves, 
 might seem to point in this direction ; but, if the whole of the judgments in these oases 
 are carefully considered — see § 307, post, for a close examination of the latter authority — 
 it will be seen that Lord Eldon's final opinion, after long deliberation, was as stated in the 
 text. In Gibbons v. Gaunt (1199), 4 Ves. 839, Lord Alvanby, M.R., at p. 848a, undoubtedly 
 commits himself to the wholly unqualified proposition " that this Court will never hold 
 parties " to a compromise of doubtful rights " to be bound, unless they act with full 
 knowledge of all the doubts and differences that arise," — but this statement is evidently 
 dissented from by Lord Cottenham, L.C, at p. 970 of Stewart v. Stewart (1839), 6 CI. & P. 
 911. See also some observations of the like dubious generality in the judgment of Lord 
 Manners, L.C. (Ir.), at pp. 180, and 182, of Leonard v. Leonard (1812), 1 BaU & B. 171. 
 
104 CH. Ill, SECT. 2, SUB-S. (5). 
 
 species or amount of mere non-disclosure can vitiate even an ordinary agreement 
 of compromise, — much less a family arrangement (m). It is submitted 
 that each of these absolute propositions is incorrect (n), and that the true 
 rule which emerges from the mists of oracular phraseology {" inequality," 
 "unfairness," "hardship," "mistake," and the like) behind which judges 
 have veiled their curious disiuclination to state any proposition on this 
 subject in clear and direct terms, may be stated thus. There is undoubtedly 
 a duty of disclosure on parties nogotiating for a compromise, even where the 
 compromise comes within the class of " family arrangements " : any com- 
 promise, whatever its nature, may be set aside, or treated as void, on proof 
 . of the breach of that duty, without establishing fraud, misrepresentation, 
 "fraudulent silence," or other obliqmty of conduct, except in the sense that 
 any breach of an equitable rule is often called misconduct by equity lawyers (o) : 
 and, in order to establish a breach of such duty, or, in other words, actionable 
 non-disclosure, it is on the one hand necessary for the party complaining to 
 prove as much as, but, on the other hand, it is su£6cient for him to prove no 
 more than, the following : — (i) the existence of a fact which, besides being 
 material in the sense that, if divulged to the party complaining, it would 
 have iufluenced his judgment in determining whether to agree to the com- 
 promise or not, was also material to be disclosed in the sense that it was a 
 fact which the party charged had no right to assume, from the nature of the 
 transaction or the other circumstance of the case, that the party complaining is 
 taking the risk of not knowing, and has no desire to know {p), and is impliedly 
 waiving information about {q) ; (ii) knowledge by the party charged, during 
 the negotiation, of such fact ; (iii) ignorance thereof, duiing the like period, 
 on the part of the party complaining ; and, perhaps also (iv), knowledge on 
 the part of the party charged that the party complaining is ignorant of the 
 fact, and is compromising in the belief, and on the basis, of its non-existence, 
 and not irrespective and regardless of the question whether or not the fact 
 exists, or the event has happened. It will be seen that the above proposition 
 represents, with the exception of the fourth (possible) requirement, merely 
 an application to agreements of compromise of the general rules of disclosure 
 applicable to the negotiation of all contracts where such a duty exists at all. 
 
 (m) There are expressions used by Lord Eldon, L.C, in Gordon v. Gordon, sup., which 
 (isolated from the context) verge upon this other extreme view, so much so, indeed, that 
 those who argued for the party charged in Fane v. Fane, sup., felt themselves encouraged 
 thereby, as Hall, V.-C, notes with some surprise, to cite Gordon v. Gordon as an authority 
 in their favour, not recognizing that, taken as a whole, the series of judgments in that case 
 constituted the most weighty authority that could possibly be cited against their contention 
 that family arrangements could never be upset for mere non-disclosure. 
 
 («) The former of the two propositions need only be mentioned to be put aside. It is 
 obvious that non-disclosure of anything in the world, or even of any material fact, unless 
 materiality is understood with the limitation indicated in the text, will not do. The latter 
 would appear to, but really does not, derive countenance from Turner v. Green, sup. 
 The grounds on which the author has ventured to challenge the soundness of that decision 
 (for the purposes of which it was assumed without argument that no duty of disclosure 
 exists at all in the ilrst instance) are set forth in detail in Sect. 8, Sub-s. (3), post, 
 
 (o) See the cases cited in notes (r) and (s), inf. 
 
 (p) See Sub-s. (4) of this Section, ante. 
 
 (q) See § 99, and the cases cited in notes (v) and (w) thereto, ante. 
 
§ 137 (releases, compromises, &c.). 105 
 
 The authority for the proposition that all the above are necessary elements 
 in the burden of proof incumbent on a party who seeks to have a compromise 
 set aside or disregarded on the ground of non-disclosure, and also for the 
 statement that nothing more need be shown in order to establish this right, 
 is to be found not only in the decided cases in which the party setting up 
 the non-disclosure succeeded , contrasted with those in which he failed, relating 
 to ordinary compromises (r), but also, and even more clearly, on a like 
 
 (r) The following are cases of compromise between strangers, in which it was held, 
 on the principles stated in the text, that a duty of disclosure existed, and had not been 
 discharged, and in which the compromise was accordingly invalidated, or would have been 
 so but for the establishment of some affirmative answer : Wason v. Wareing (1852), 15 
 Beav. 151 (per Romilly, M.R., at p. 155 : here the plaintiff compromised certain claims 
 which the defendant apparently had against him as a surety, the defendant not disclosing 
 to the plaintiff the fact that, by certain transactions between himself and the principal 
 debtor, the plaintiff had been released from his suretyship obligations : the action, however, 
 failed, but only because the plaintiff had presumptive knowledge of the fact withheld) ; 
 Moxon V. Payne (1873), 8 Ch. App. 881 (where, amongst other things, it was held that a 
 certain compromise set up by the defendant was ineffectual, because the plaintiff withheld 
 the fact that the rights he was supposed to be compromising had themselves been obtained 
 by fraud, and where Jambs, L. J., at p. 885, lays down in the most general terms, — ^perhaps 
 a little too general, as applied to compromises, — that " to make a confirmation or com- 
 promise of any value in this Court the parties must be at arm's length, on equal terms, 
 ■wJiA egaaZ ireowZedje, and with sufficient advice and protection ") ; Gilberts. Endean (\?>19i), 
 9 C. D. 259, C. A. (where the plaintiff agreed with ths defendant, in the course of the trial 
 of an action between them, to compromise the matters in dispute, which agreement was 
 embodied in a consent decree, whereby the defendant was ordered to give a bond to the 
 plaintiff for payment of the agreed sum. Thereupon, the defendant neglecting either 
 to pay this sum or give the bond, being absolutely penniless, and it being supposed by 
 all parties, and indeed represented by the defendant's soUcitor, that the father of the 
 defendant, a man of reputed means, had refused to assist the defendant in any way, a 
 second compromise was entered into by the solicitors to the parties, whereby the plaintiff 
 agreed to reduce his claims to a considerable extent. During the imparlance leading to 
 tMs second arrangement, the defendant's father died intestate, leaving a widow and the 
 defendant to share his estate, and putting the latter in a position of ample abiHty to 
 satisfy the terms of the first compromise. This fact was known to tht defendant's solicitor, 
 and not communicated to the plaintiff, or his solicitor, and, though the other members of 
 the Court thought that the concealment of the supervening fact amounted to positive, 
 though impUed, misrepresentation, Jessel, M.R., puts the decision plainly on the ground 
 of a violated duty of disclosure, the breach of that duty consisting in the knowledge of the 
 fact on the part of the defendant's solicitor, the ignorance of it on the part of the plaintiff's 
 solicitor, and the former's knowledge of, and trading on, the latter's ignorance : " the 
 real question," he says at p. 267, " appears to be whether the death of the father was so 
 obviously a material circumstance that the defendant's sohcitor ought to have com- 
 municated it to the other side. It appears to me that the fact was material, and ought to 
 have been known by Mr. Gregory to have been material to be communicated, and that the 
 compromise was allowed to be signed when Mr. Gregory knew, or ought to have known, 
 that Mr. Greenip was ignorant of the fact of the death of the father ; and it appears to 
 me that the compromise cannot be supported "). It is submitted that the above authori- 
 ties, and particularly the last cited passage from the judgment of Jessel, M.R. — which 
 was not a mere passing reflection, but a statement of " the real question," and indeed 
 constituted the whole of his judgment on what he describes as " the merits " — justify 
 every part of the proposition in the text. And there is nothing in any of the cases in which 
 compromises between strangers have been supported which in the slightest degree con- 
 troverts that proposition, not even, for the reasons stated in Sect. 8, Sub-s. (3), post, 
 excepting Turner v. Oreen, [1905] 2 Ch. 205. It will be noticed that in all the above cases 
 the undisclosed fact was regarded as one which it could not be supposed that the party 
 complaining was not concerned in knowing, or took the risk of not knowing. In Law v. 
 Law, [1905] 1 Ch. 140, C. A., which, though brothers were the disputants, was a case of a 
 compromise of business, and not of domestic, disputes, there were, as in Moxon v. Payne, 
 sup., two " imparlances " and two successive transactions, first, an arrangement by which 
 William agreed to sell his share in the partnership to James for £2] ,000, and then an action 
 by William in respect of assets undisclosed by James at the time of the former arrangement. 
 
106 CH. Ill, SECT. 2, SUB-S. (5). 
 
 comparison and contrast, in the cases whicli are concerned with family 
 arrangements (s). 
 
 which action was itself compromised by terms embodied in a consent order, and this latter 
 compromise the C. A. refused to disturb, not on the ground that there is no duty of dis- 
 closure in negotiations for compromises, but solely on the grounds stated fully in notes (w) 
 and (y) to § 133, ante, i.e. affirmation, estoppel, election, and a not very conscientious course 
 of conduct on the part of William, completely disentitling him to that relief which there 
 is nothing in the case to suggest that he would not have otherwise obtained. So also, in 
 Watt V. Assets Co., [1905] A. C. 317, H. L., in the first place, the company failed to prove 
 non-disclosure of any kind ; secondly, there was an express agreement between the parties 
 that, in effect, only concealment of certain facts known or beheved by the contributory 
 to exist should vitiate the compromise, which of course at once put the burden on the 
 company of proving, in that case, fraud, a burden which they utterly failed in sustaining ; 
 and, lastly, the company had waited for over twenty years, until all the persons were dead 
 who could have thrown light on the transaction {per Lord Haisbtjby, L.C., at pp. 329, 330, 
 333) : it was on these grounds that the House refused to rescind the compromise, and not 
 on the ground that, apart from the above circumstances, there was no duty to communicate 
 the facts : on the contrary, the first of the three grounds indicated presupposes that there 
 is in such cases generally, and was even in that case, a primd facie obligation of disclosure. 
 («) In the following cases " family arrangements " were successfully impeached on the 
 principles stated in the text : Leonard v. Leonard (1812), 2 Ball & B. 171 — see note (a) to 
 § 132, ante — where the undisclosed fact was that there had been circumstances which, 
 as counsel had advised, operated as a severance of a joint tenancy, and where Lord 
 Manners, L.C. (Ir.), at p. 182, held that " the compromise is deficient in that which is 
 essential to its validity, that both parties were in equal ignorance," having previously 
 recognized, at p. 180, that " if both parties are in the same ignorance, the fairness of the 
 compromise cannot be affected by a subsequent investigation and result " ; Gordon v. 
 Gordon (1821), 3 Swanst. 400 ; 19 R. R. 230, where, in an arrangement between two 
 brothers, the legitimacy of whom was doubtful, James (the defendant) had innocently 
 (as, for the purposes of his final opinion. Lord Eldon, L.O., assumed) withheld from Harry 
 (the plaintiff) the fact that he had been informed that a private ceremony of marriage 
 had taken place before the birth of the children, though (as was again assumed) he did not 
 believe that any vahd marriage was constituted thereby ; and on the ground of this 
 innocent non-disclosure, the arrangement, though a family one, and though 19 years 
 had elapsed before it was challenged, was set aside (see § 307, post, where it is shown, by 
 citations from Lord Eldon's successive judgments that, without fraud or imposition, 
 though those terms are freely used in the earlier expressions of his views, the mere omission 
 to communicate a material fact of which, to the knowledge of the party charged, the party 
 complaining is ignorant, is sufficient of itself to invalidate even a family arrangement) ; 
 Greenwood v. Greenwood (1863), 2 De G. J. & S. 28, where Knight-Betjce and Tuknbe, 
 LL.JJ., affirmed the decision of Kindbrsley, V.-C, who had set aside an agreement, 
 a deed, an award, and other instruments constituting, or carrying into effect, a family 
 arrangement of disputed claims under a will, on the ground that one of the parties had 
 failed to disclose facts relating to the testator's property and business in New Zealand which 
 were within his exclusive knowledge, he having been partner with the testator in the 
 colony, and the other parties being in England ; Ttjrneb., L.J., at p. 42, distinctly stating 
 " the rule of law to be that in order to support a transaction not otherwise valid, upon the 
 footing of a family arrangement, the parties must be on an equal footing, and there must be 
 a full and fair communication of all the circumstances affecting the question which forms the 
 subject of the arrangement," and the meaning of " full and fair communication " being, 
 in his opinion (p. 43), a communication of everything which " would, or at least might, have 
 materially influenced the other parties in determining the question whether they would 
 have entered into the agreement " ; Re Roberts, [1905] 1 Ch. 704, C. A., where the full 
 effect of counsel's opinion was not disclosed or explained, or (as it was also put) was 
 " inaccurately stated " by the family solicitor to one of the parties. The above, and 
 particularly Gordon v. Gordon, sup., and Greenwood v. Greenwood, sup., bear out, and even 
 go beyond, the proposition in the text. It wiU be observed that in none of them was the 
 undisclosed fact held to be one which the party charged had any right to assume that the 
 party complaining was content to be ignorant of ; indeed it was not so pretended in any 
 of them, except in Re Roberts, where, after it had been recognized that in compromises 
 there are usually a number of facts which the parties deHberately take the risk of not 
 knowing, and as to which, therefore, no disclosure is to be expected — see note («) to § 133, 
 ante, — the contention was thus disposed of by the C. A. (per VAtroHAN Williams, L.J.), 
 at p. 711 : " we find it, however, very difficult to draw the inference in this case that Mrs. 
 
§§ 137, 138 (releases, compromises, &c.). 107 
 
 138. Since the persistent, and most misleading, terminology already 
 referred to has undoubtedly encouraged, at least in earlier times, the notion 
 that something less than non-disclosure might, under such conveniently 
 ambiguous phrases as " inequality," " unfairness," " hardship," " mistake," 
 and the like, suffice to undo a compromise, it becomes (what it otherwise 
 would scarcely be) necessary to point out here that the only " inequality " 
 and " imfairness " which is adequate for that purpose is the " inequality " 
 which results from the party charged not having observed such duty of 
 disclosure, if any, as in the circumstances of the case, and in conformity with 
 the rules stated, was incumbent on him ; that the only "hardship " recognized 
 by the law as a relevant element in the discussion of such cases is that which 
 consists in the " hard " conduct of the party charged, and that, again, the 
 only hard conduct which is entitled to any judicial consideration in this 
 connection is non-disolosuie of the nature already indicated (i) ; lastly, that 
 the only " mistake " — or, rather, the only unilateral mistake — which can 
 upset a compromise is a mistake induced by a misrepresentation or actionable 
 non-disclosure of the party charged, or to which he is otherwise accessory (m). 
 
 Roberts intended to make the agreement of compromise irrespective of her legal rights. 
 That Mrs. Roberts wished to avoid litigation we beUeve ; but that she was wiUing to 
 compromise irrespective of her legal rights, if the solicitor advised her that such a com- 
 promise would be a good thing, we do not believe. The very object of taking counsel's 
 opinion was to ascertain what the respective rights of herself and William Roberts and 
 the pecuniary legatees were." There is nothing in any of the cases cited in note (x), inf., 
 where the family arrangement was supported, which miUtates in any way against the 
 proposition that, in family arrangements as well as in compromises between strangers, a 
 duty of disclosure arises during the " imparlance " under the conditions, within the limits, 
 and of the nature, stated in the text : for in all those cases non-disclosure was not even 
 alleged, but merely " hardship," " inequality," misconception of rights, or disappointing 
 results ; so that it was quite unnecessary to pronounce whether, and under what conditions, 
 the parties are bound to communicate material facts to one another, though in many of 
 them the Court went out of its way to express an opinion that such an obligation exists, 
 and to a wider extent even than has been suggested in the text. There is one case, indeed, 
 Brooke v. Lord Mostyn (1865), 33 Beav. 457 (Romilly, M.R.), (1865), 2 De G. J. & S. 373 
 (KOTGHT-BEtrcE and Turner, LL.JJ.), and, in the House of Lords, sub nom. Mostyn 
 (Lord) V. Brooke (1866), L. R. 4 H. L. 304, where the House of Lords reversed the decision 
 of the Lords Justices that a family compromise, sanctioned by the Court, was invalidated 
 by the non-disclosure to the Court of a certain material valuation, and restored that of 
 RoMTLLY, M.R., who had upheld the compromise ; but it appears from the short note of 
 the House of Lords decision — there is no report of the judgments, or any report at all in 
 the proper sense of the word — that the sole ground of that decision was that non-disclosure 
 had not been proved, and no disagreement whatever was expressed with the view of the 
 Lords Justices that a duty to disclose the document rested on the party charged. 
 
 (t) Of course, the " hardship," " inequality," and " unfairness " which may be said to 
 characterize transactions in which an unconscientious advantage is taken of another's 
 distress, or the influence presumed from certain relations is abused, as to which see Ch. V, 
 post, is another matter altogether, and is not now under consideration. 
 
 («) In Gordon v. Gordon (1821), 3 Swanst. 400, at p. 467, Lord Eldon, L.C, speaks of 
 the party charged being " accessory to the mistake of the other," — an expression used in 
 some other of the cases. An excellent statement of the necessary elements in conduct 
 " accessory to the mistake " is to be found in Smith v. Hughes (1871), L. R. 6 Q. B. 
 597, where the plaintiff was suing on a contract for the sale of oats by sample, which he 
 knew to be new oats, and which the defendant, to the plaintiff's knowledge, beUeved to 
 be old oats, and where, the oats being according to the sample, and the plaintiff having 
 made no representation of any kind to the defendant, the Court refused to relieve the 
 defendant, for (as was said by Hannen, J., at p. 611) " in order to relieve the defendant, 
 it was necessary to find not merely that the plaintiff beUeved the defendant to believe 
 that he was buying old oats, but that he believed the defendant to believe that he, the 
 plaintiff, was contracting to sell old oats." 
 
108 CH. Ill, SECT. 2, SUB-S. (5). 
 
 It is only because the expressions in question are ancipitis sensus, having 
 (like other phrases taken from the vulgare eloquium, and fathered by juris- 
 prudence) both a popular and a scientific meaning, that it has been possible 
 to raise, with some show of plausibility, the contention that " inequality " 
 of a natiue to invalidate a compromise may include that sort of inequality 
 which subsequent events prove to have existed at the time of the negotiation ; 
 that " unfairness '' may reasonably comprehend conduct which in foro 
 eonscientice would be considered indelicate, or would not be approved by the 
 arbitrium boni viri (v) ; that " hardship " may mean no more than " hard 
 luck " ; and that " mistake " may be predicated of a compromising party 
 who has merely misconceived the nature of the doubtful and contested right 
 which, by the settlement, he has agreed to surrender, acquire, exchange, or 
 define. These and similar contentions have always failed. It is well estab- 
 lished that the abandonment of a claim honestly asserted is a good considera- 
 tion for an agreement of compromise, though a judicial decision, or subsequent 
 discovery or investigation, may show that at the date of the compromise 
 there was, in fact and in law, no sort of foundation for the claim {w) : and it 
 is quite hopeless, therefore, in the absence of any suggestion of such non- 
 disclosure as the law declares to be actionable, or of dishonesty, for a party 
 to a compromise, "wise after the event," to invoke the assistance of the 
 Court on no other ground than that he was not wise before it. At that rate, 
 no compromise would be possible, or at least none would have any certainty, 
 or even probability, of enduring, since its existence and validity would be 
 at the mercy of the belated resipiscence of any party to it who might be 
 able to show that the bargain had turned out a disastrous one for him, and 
 that supervening events had given him great cause for repenting of it {x). 
 
 («) As to the similar havoc and confusion created in another department of juris- 
 prudence, viz. defamation, by the use of the same word " fair " as applied to comment, see 
 the author's Code of the Law of Actionable Defamation, App. XXI, Sect. 4. 
 
 (w) Frank v. Frank (1668), 1 Ch. Cas. 84 ; Gann v. Cann (1721), 1 P. Wms. 723 (see 
 the next note) ; Stockley v. Stockley (1812), 1 V. & B. 23 ; CookY. Wright (1861), 1 B. & S. 
 559 (per Blaoketjrn, J., delivering the judgment of the Court of Q. B., at pp. 568-570) ; 
 Callisher v. Bischoffsheim (1870), L. B. 5 Q. B. 449 (per CooKBtTBN, C.J., at pp. 451, 452, 
 and Blackbtjkn, J., at p. 452) ; Ockford v. Barrett (1871), 20 W. R. 116 {per Channell, B., 
 delivering the judgment of the Court of Exchequer, at p. 117) ; Miles v. New Zealand 
 Alford Estate Co. (1886), 32 C. D. 226, C. A. (per Cotton, L. J., at pp. 283, 284, Bowbn, L. J., 
 at pp. 291, 292, and Fey, L.J., at pp. 297, 298). 
 
 (x) In Frank v. Frank, sup., the Court acceded to the argument for the defendant that 
 " hereisenoughto justify and execute " (in modern language, " consideration to support ") 
 " the agreement," which was one of compromise of litigated claims in respect of certain 
 estates, " and thereupon the bill of review was dismissed with costs ; for modus et conventio 
 vincunt legem. So that in this case the agreement of the party, upon conceit he had not 
 (when in truth he had) a title to permit another to enjoy lands, shall for ever bind him ; 
 and yet this agreement doth appear to be upon no valuable consideration " (that is to say, 
 there is consideration sufficient to support such an agreement, though there is no valuable 
 consideration in the narrowest sense of that term, i.e. no delivery or promise of anything 
 of then ascertained cash value). Other illustrations are : Cann v. Cann (1721), 1 P. Wms. 
 723 (per Lord Macclesfield, L.C, at p. 727 : " nothing like this had ever been attempted 
 by any person " — the Court was here asked to ignore a release and compromise without 
 any suggestion even of non-disclosure or ignorance, much less of fraud : — " where two 
 parties are contending in this Court, and one releases his pretensions to the other, there 
 can be no colour to set this release aside, because the man that made it had a right ; . . • 
 every release supposes the party making it to have a right ; but this can be no reason for 
 
§§ 138-140 (releases, compromises, &c.). 109 
 
 139. There is a class of arrangements, viz. compositions made by an 
 insolvent with his creditors, which would fall to be considered here but 
 for the fact that, in such cases, the person entitled to complain of the non- 
 disclosure is, ordinarily, not one of the parties to the arrangement sought to 
 be avoided or treated as void. It seems preferable, therefore, to discuss 
 this type of compromise, and the duty of disclosure which arises in relation 
 to it, in the Chapter devoted to the topic of Concealment from Third Persons {y). 
 
 140. In the subsequent Sections of this Chapter (a), the questions of 
 burden of proof, affirmative defences, remedy and relief, matters of law and 
 fact, and parties, are discussed in relation to releases and compromises, 
 as well as the other types of transaction which form the subject of this Chapter, 
 except in so far as questions of burden of proof in respect of the last-named 
 species have already been dealt with (a) . 
 
 its being set aside, for then every release might be avoided : . . . solemn conveyances, 
 releases, and agreements made by the parties are not slightly to be blown off and set aside) ; 
 Stapilton V. Stapilton (1739), 1 Atk. 2 {per Lord Hardwioke, L.C, at p. 10 : " in the case 
 of Cann v. Cann, it was laid down by Lord Macclesfield that an agreement entered into 
 upon a supposition of a right, or of a doubtful right, though it after comes out that the 
 right was on the other side, shall be binding, and the right shall not prevail against the 
 agreement of the parties, for the right must always be on one side or the other, and there- 
 fore the compromise of a doubtful right is a sufficient foundation of an agreement ") ; 
 Pullen V. Beady (1743), 2 Atk. 587 {per Lord Haedwioke, L.C, at p. 591, again citing and 
 applying Cann v. Cann) ; Gibbons v. Cauni (1799), 4 Ves. 839 {per Lord Alvanley, M.R., 
 at p. 848a) ; Stockley v. StocUey (1812), 1 V. & B. 23 (where Lord Eldon, L.C, adopts 
 the principle laid down in Cann v. Cann, and Stapilton v. Stapilton, to its fuU extent, and, 
 though he confesses to having entertained at first some doubts as to whether in the former 
 case Lord Macclesfield, L.C, intended to go as far as he appeared to have gone, those 
 doubts, he says at p. 13, had been removed : " I had a doubt whether what is in Stapilton v. 
 Stapilton represented as falling from Lord Macclesfield in Cann v. Cann could have been 
 his language. If a doubt is raised between parties as to their rights, and adverting to that 
 doubt they come to an agreement ... in family matters, the Court goes a long way to 
 carry it into execution : but my difficulty was that there might be a supposition of right 
 without a doubt upon it ; that it would be too much to execute an agreement entered into 
 upon such a supposition, if unfounded ; and the words of Lord Macclesfield, instead of 
 ' a supposition of right ' might have been ' a doubtful right ' : but I observe, in a manu- 
 script note that I have, the same words are represented as those of Lord Macclesfield." 
 It will be observed that, as in so many other cases where " the Chancellor said, ' I doubt,' " 
 Lord Eldon's difficulty was self-created : that is to say, it would never have arisen if he 
 had not allowed his reason to be cheated by his own ambiguous phraseology, for obviously 
 the expression " a supposition of a right without a doubt upon it " may mean either that 
 the party asserting the right had no doubt in his own mind that he had no such right, or 
 that he honestly thought there was some doubt about the matter, though in law, and in 
 the judgment of any skilled professional adviser, there was absolutely none. In the 
 former case, the compromise clearly cannot stand, being vitiated by fraud : in the latter, 
 it is equally clear that it cannot be disturbed) ; Leonard v. Leonard (1812), 1 Ball & B. 
 171 {per Lord Manneks, L.C. (Ir.), at p. 179 : " if the validity of a deed of compromise is 
 to depend on a subsequent decision on those rights which were the subject of the agreement, 
 no disputed or disputable title could be compromised " ; and, at p. 180, " the party 
 surrendering may in truth have nothing to surrender," but " if both parties are in the 
 same ignorance, the fairness of the compromise cannot be affected by a subsequent in- 
 vestigation and result ") ; Gordon v. Gordon (1821), 3 Swanst. 400 {per Lord Eldon, L.C, 
 at p. 476 : see § 307, post, as to this case) ; Naylor v. Winch (1824), 1 Sim. & St. 555 {per 
 Leach, V.-C, at pp. 565, 566) ; Stewart v. Stewart {18Z9), 6 CI. & F. 911 {per LordCoTTEN- 
 HAM, L.C, at p. 970) ; Law v. Law, [1905] 1 Ch. 140, C A. {per Cur., at p. 156 : " it cannot 
 be sufficient to allege and prove that, if the action had been fought out, the plaintiff would 
 have recovered damages greatly in excess of £3550," which was the sum he had com- 
 promised for). , , 
 
 {y) See Ch. VII, §§ 587-602, post. 
 
 (z) Sects. 3-7, post, respectively. 
 
 {a) See § 138, ante. 
 
110 CH. Ill, SECT. 2, SUB-S. (6). 
 
 Subs. (6). Contracts for Partnership. 
 
 141. When parties are in treaty with one another with a view to the 
 formation of a partnership between them, or to the purchase or sale of a share 
 or interest in, or the dissolution or termination of, a subsisting partnership, 
 and where one of such parties is already carrying on the business which is 
 the subject of the proposed partnership, or is the active or managing partner 
 in the conduct of it, and the other party is either an entire stranger to the 
 business which he is invited to join, or is a mere dormant member of, or a 
 successor by operation of law to an interest in, an established firm his partner- 
 ship share in which is the subject of the negotiation, it is obvious that the 
 first-named of the above parties, in the ordinary course of things and in 
 every normal type of case, must have not only knowledge, but exclusive 
 knowledge, of all or most of the facts on a consideration of which the other 
 party is to exercise his judgment as to the policy of acquiring, purchasing, 
 selling, or extinguishing (as the case may be), on the terms proposed, the 
 share or interest in the partnership which is the subject of the dealing ; and 
 that this other party is therefore dependent upon the first for information 
 as to all such facts, and can in no sense be said to take upon himself the 
 risk of whether they exist or not. If so, all the conditions already indicated (6) 
 as conditions required to constitute a fiduciary relation between two 
 persons negotiating with a view to a contract or transaction, are present in 
 this class of case ; and there is accordingly a duty on the party who pre- 
 sumably has the exclusive knowledge to communicate to the party who 
 presumably has none, or not so much, all such matters as are actually or 
 constructively within his cognizance, and, in their nature, must have a bearing 
 upon the contemplated transaction. 
 
 142. Thus, to take first the simplest case, a person carrying on a business 
 who proposes to a stranger to join him as a partner in that business on certain 
 terms is bound to impart to him all information which he has, or ought to 
 have, acquired as to the property, income, outgoings, and dealings of the 
 business, its books and other commercial documents, and, generally, the 
 past and existing conduct and state of its affairs (c). Further, where persons 
 who are already partners are negotiating for the sale and purchase of the 
 share of one of them to the other, if one of them has exclusive or superior 
 knowledge of the affairs of the partnership, the other being either a dormant 
 partner, or the " outdoor " partner who does not keep the books or accounts, 
 or has not access to all of them, a like duty is incumbent on the first to 
 communicate to the second, before the conclusion of the contract, aU the 
 private information which he possesses, and which, to his knowledge, the other 
 does not possess {d). " It is clear law that in a transaction between co-partners 
 
 (6) Vid. Sect. 1, ante. 
 
 (c) There is no reported case of pure non-disclosure in this particular species of negotia- 
 tion, unless it be Andrewss v. Garstin (1861), 10 C. B. (n.s.) 444, where the party complain- 
 ing failed for the reasons stated in note [h) to § 143, post. But the principle is assumed 
 in all the authorities, and stated in all the treatises on partnership, and is obviously an 
 a fortiori application of the rule laid down in the authorities cited in the next four notes. 
 
 (d) Maddeford r. Austwick (1826), 1 Sim. 89, where Lbach, V.-C, afBrmed (1833), 2 
 
§§ 141-143 (contracts for partnership). Ill 
 
 for a sale by one to the other of a share in the partnership business, there is 
 a duty resting upon the purchaser (e) who Imows, and is aware that he knows, 
 more about the partnership accoimts than the vendor, to put the vendor 
 into possession of all material facts with reference to the partnership assets, 
 and not to conceal what he alone knows ; and that, unless such information 
 has been furnished, the sale is voidable and may be set aside " (/). Lastly, 
 where one of two partners dies, and his representative accordingly becomes 
 entitled, if the survivor continues to carry on the business, to elect whether 
 to take the deceased's share of profits, and be treated as a partner, or to 
 charge the survivor with interest on the capital of the deceased retained or 
 used by him, it is the duty of the survivor, who has the exclusive knowledge 
 of the partnership affairs, when in treaty with the deceased's representa- 
 tive, who presumably has little or no Imowledge of them, "to disclose 
 uherrimd fide every fact which may enable the representative to exercise a 
 sound discretion as to the comse he ought to pursue " (g). 
 
 143. It must be remembered that, as in all the other classes of negotiation 
 mentioned in this Chapter, the duty of disclosure lies on the party who has the 
 exclusive or superior acquaintance with the facts. There is no duty on the 
 other party. This is so obvious that the caution being given may seem some- 
 what superfluous : but it has been interjected because at least one attempt 
 
 My. & K. 279, by Lord Bkotjgham, L.C, rescinded an agreement whereby the plaintiff 
 had agreed to accept £1000 in fuU discharge of his share (down to 1817) of the profits of the 
 business of carriers which he and the defendant had been carrying on in partnership, on 
 the ground of the non-disclosure by the defendant of entries in his private book (he being 
 the partner who attended to the accounts, and the plaintiff being the " outdoor " partner) 
 showing that this sum was many hundred pounds less than a fair price to pay ; and where, 
 at p. 96, Leach, V.-C, concluded: "the defendant, being the partner whose business it was 
 to keep the whole accounts of the concern, could not, in fairness, deal with the plaintiff 
 for his share of the profits of the concern, without putting him into possession of all the 
 information which he himself had with respect to the state of the accounts between them. 
 The defendant knew, from the accounts in his possession, that the £1000 was not an 
 adequate consideration for the plaintiff's share of the profits. The supposed account . . . 
 up to the end of 1817 necessarily formed the basis of the plaintiff's calculation of profits 
 for the ensuing three years ; and, being misled in that respect, he is entitled to avoid the 
 whole agreement," &c. In Law v. Law, [1905] 1 Ch. 140, C. A., where, in negotiating for 
 the sale by one partner of his share to the other, the purchasing party, who knew a great 
 deal more about the accounts and the business than the selling party, had concealed from 
 him the existence of assets to a very large amount, the C. A., whose joint judgment was 
 delivered by CozEifS-HAKDy, L.J., adopted the principle oi Maddeford v. Austwick, sup. , 
 and would on that principle have set aside the agreement, but for the fact that the plain- 
 tiff had chosen, with fuU knowledge, to compromise his claim (as to which see note {w) 
 to § 133, ante). 
 
 (e) It so happened that in this case, as well as in Maddeford v. Austwick, sup., the 
 party charged was the purchaser. But of course the same principle would apply to a 
 vendor withholding information as to the losses in a business as applies to a purchaser 
 withholding information as to its assets and profits. 
 
 ( / ) Law V. Law, sup., at p. 157. 
 
 (g) Per Lord Cbanwobth, L.C, at p. 188 of Clements v. Hall (1858), 2 De G. & J. 173. 
 The epithet "sound" is not weU chosen. What was meant was an "informed" or "in- 
 structed " judgment. The partnership interest which was the subject of the decision was 
 an interest in the lease of a mine, and it was established to the satisfaction of the Court 
 (per Lord Cbaitworth, L.C., on the same page) that " Alfred " — the survivor — " up to a 
 period long subsequent to the renewed lease, refused to furnish her " — the representative 
 of the deceased partner — " with any accounts of the mine, and so kept her in ignorance 
 of all which might be necessary to enable her to decide on the propriety of her insisting 
 on her equitable right to be treated as a partner." 
 
112 CH. Ill, SECT. 2, SUB-SS. (6), (7). 
 
 has been gravely made, ttougli it failed, to establish, under cover of hazy 
 generalizations as to the fiduciary element in the jural concept of societas, 
 the existence of an obligation of unlimited disclosure on both sides, irrespec - 
 tive of the relative knowledge of the parties, in any negotiation whatsoever for 
 a contract of partnership {h). 
 
 144. It should also be borne in mind that the duty of disclosure now being 
 dealt with is the duty which arises during a treaty for a contract of partner- 
 ship, and must not be confused with the other and quite distinct duty which 
 is incidental to the contract itself, and to the relation thereby established, 
 and which lasts during the subsistence of such relation (i). This latter is 
 dealt with hereafter in its proper place (j). 
 
 Subs. (7). Contracts to Marry and Separation Deeds. 
 
 145. Mutual promises of two persons to marry one another involve an 
 obligation on each of the parties to reveal to the other during the treaty or • 
 communications leadiag up to the contract all matters which (1) may be 
 presumed to be within his, or her, exclusive knowledge, and (2) are material 
 to be disclosed : and " material to be disclosed " means, in this as in the other 
 classes of case which form the subject of this Chapter, that which, having 
 regard to its peculiar nature and objects (h), has a vital bearing on the 
 matrimonial relation contracted for, and which the promisee cannot be 
 expected to take the risk of not knowing. 
 
 146. Krst among the facts which are undoubtedly and obviously vital, 
 and which must therefore be disclosed, is unohastity or incontinence on the 
 part of the woman, for this " goes to the very root of the contract of marriage," 
 and where, therefore, this fact is not communicated, "from the excess" 
 [sic, qy. " stress " 1] " and necessity of the case, the man is released from the 
 contract " (Q. 
 
 (h) This attempt was made in Andrmves v. Garstin (1861), 10 C. B. (n.s.) 444, whore, 
 to an action for damages for breach of his agreement to take the plaintiff into partnership, 
 as a jobmaster, which business the defendant was then carrying on, the defendant set up 
 that the plaintiff who, so far as appears knew nothing of the defendant's business, or even 
 of that class of business, had failed to divulge his past misconduct when in partnership 
 with another person in another business (that of iron and tinplate workers). The strange 
 " argument urged so emphatically by Mr. Manisty," as Eele, C. J., said at p. 452, was 
 founded on a supposed analogy between contracts of partnership and contracts of marriage 
 — though not much support was added to the contention by this analogy, as was pointed 
 out by the Court, even supposing it to exist — and on » confusion between relations of 
 marriage or partnership and negotiations with a view to contracts for marriage or 
 partnership, followed by a fallacious application to the latter of the general principles 
 correctly apphed by the civiUans, and in such treatises as CoUier on Partnership, to the 
 former (see the argument of Manisty, Q.C., at pp. 450-452). 
 
 (i) This confusion vitiated the argument for the defendant in the case last cited. It 
 may be said that, in some of the illustrations given in § 142, sup., the parties were already 
 partners. This is true, but the duty of non-disclosure which is stated in the text in respect 
 to such parties is not a duty incumbent on them qud partners, but qu& negotiators for a 
 fresh contract altering their pre-existing partnership relations. 
 
 (j) See § 341, in Chap. IV, Sect. 2, Sub-s. (3), post. 
 
 (Ic) Andrewes v. Oarstin {1S61), 10 C. B. (n.s.) 444, per Eble, C.J., at p. 449. 
 
 (I) Per Lord Campbell, C.J., at p. 759 of Hall v. Wright (1858), E. B. & E. 746, CoCK- 
 BUEN, C. J., at pp. 802, 803, and Hill, J., at p. 805, of Beachey v. Srown (1860), E. B. & E. 
 
§§ 143-148 (CONTEACTS TO MARRY, &C.). 113 
 
 147. On the other hand, it has been decided that a previous attack of in- 
 sanity, and confinement in a lunatic asylum, need not be divulged (m) : also that 
 a previovs engagement of the woman to another person is not a matter which 
 goes to the very root of the contract, or such that the concealment of it will 
 release the man from his promise, for (putting it in another way) it cannot be 
 said that in such cases " there is an implied warranty of the virginity, not 
 only of the person, but of the affections " (w). It has also been judicially 
 suggested, though there is no actual decision to that effect, that the mere fact 
 that a woman habitually resorts to the appliances of art, to supplement the 
 deficiencies or repair the ravages of nature, is not material to be disclosed (o) ; 
 and, generally, it has been stated by Cockburn, C.J., that " there are many 
 things which a man might desire to have communicated to him, if they 
 existed, at the time of making the contract, such as that the plaintifi is in 
 debt, or subject to other liabilities, or some circumstances relating to her 
 person, her temper, her disposition, the discovery of which would yet not 
 entitle the defendant to refuse to fulfil his engagement. It might be right 
 to disclose such things ; and yet it has never been held that the discovery 
 of them justified a party in breaking his contract " (p). In other words, 
 there are many things which an affianced man or woman cannot claim as 
 of right to be disclosed to him or her before the contract, though he or she 
 may well expect such a disclosure as a matter of honour, delicacy, or decency, 
 — many aleatory hazards which, when venturing upon what proverbial 
 cynicism has styled " the lottery of marriage," he or she must be supposed to 
 take upon himself or herself. But even a gamester is entitled to expect that 
 the gaming be fair, that the dice be not clogged, that the lots be drawn 
 honestly, and that nothing shall be hidden from him tending to show the 
 contrary, or that the proposed prize or stake is something totally difierent 
 in character from that which it purported to be. It is on this principle that 
 the decisions above referred to, on the one side or the other, have been founded ; 
 and it is this principle which must guide the decision of the many conceivable 
 cases which may arise in the future, and which are untouched as yet in the 
 very scanty field of express authority available. 
 
 148. There is undoubtedly a very large debateable territory intermediate 
 between the class of case where disclosure is clearly obligatory, and that in 
 
 796, and Eri.b, C.J., at p. 127 of Baker v. Cartwright (1861), 10 C. B. (n.s.) 124. See also 
 the nisi prius cases of Irving v. Oreenwood (1824), 1 C. & P. 350 (Abbott, G.J.), and 
 Bench v. Merrick (1844), 1 C. cfe K. 463. 
 
 (to) Baker v. Cartwright, sup. 
 
 (n) Beachey v. Brown, sup., per Cockburn, C.J., at p. 800. 
 
 (o) Per Ceompton, J., who, at p. 803 of Beachey v. Brown, sup., says, by way oireiuctio 
 ad absurdum, that, on the theory contended for, a man " might complain that what he 
 took to be a beautiful head of hair turned out to be a wig." 
 
 (p) At p. 802 of Beachey v. Brown, sup. So also (though, before the passing of the 
 Married Women's Property Acts, non-disclosure of property on the part of the wife would 
 have been held a fraud on the jus mariti) there is now no longer any duty on either spouse 
 to communicate to the other his or her pecuniary position or circumstances. But of 
 course if he or she chooses to make a statement on such or similar matters which is false, 
 or not completely true, he or she at once becomes liable for misrepresentation, for the 
 purposes of which the fact misstated is material, though not material to be disclosed. 
 See Wharton v. Lewis (1824), 1 C. & P. 529 ; Foofe v. Hayne (1824), 1 G & P. 545. 
 
 B.N.D. I 
 
114 CH. Ill, SECT. 2, SUB-S. (7). 
 
 whicli it clearly is not : and the opinion of Eele, C.J., who, in denying that 
 any fact need be disclosed except unchastity on the part of the woman (q), 
 would exclude the possibility of any such debateable territory, is manifestly 
 unsound in principle, and, to some extent, is also in conflict with other judicial 
 pronouncements. There are direct decisions and dicta that other matters 
 than actual incontiaence and positive acts of misconduct on the part of 
 the woman must be divulged, such as a permanent and serious disease or 
 physical infirmity on the part of either of the parties (r), or a general loose 
 character or reputation on the part of the woman (s), or alcoholic intemper- 
 ance on the part of either party (ss), or dishonest and criminal behaviour on 
 the part of the man {t), or " moral turpitude, or an incompetency for the 
 purposes of the marriage " on the part of either (m), oi permanent intellectual 
 disease (v) ; and the very authority on which Eele, C. J., relied for the state- 
 ment which he incautiously made does not in the least support it, but, on the 
 contrary, contains judicial observations distinctly at variance with it, 
 including, strange to say, those of the learned Chief Justice himself, then 
 Erle, J., who had there cited and approved all the decisions above men- 
 tioned (w) . Many other illustration s are conceivable. It can hardly be doubted 
 
 (j) At p. 127 of Baker v. Cartwright, sup. ("the general doctrine laid down by the 
 Exchequer Chamber in the case referred to is that the contract binds, and that want of 
 chastity is the only exception "). 
 
 (r) Aitchison v. Baker (1797), 1 Peake 103, where Lord Kbnyon, C.J., held that 
 non-disclosure of a cancer by a man suing for breach of promise of marriage constituted 
 a good defence to the action, and (at p. 105), in reference to an unreported case in which 
 Lord Mansfield, C.J., had held that bad character on the part of either party, if con- 
 cealed, was a valid answer, observed that " whether the infirmity was bodily or mental, 
 the reason was the same." 
 
 (s) See the case before Lord Mansfield, C. J., referred to in the last note, and Foulhes 
 V. SeUway (1800), 3 Esp. 235, where Lord Kenyon, C.J., admitted evidence of the lady's 
 bad character and reputation, for " character here was the only point in issue. That 
 was public opinion founded on the conduct of the party." There was also, however, 
 in this case, evidence of one act of gross misconduct on the woman's part. See also Irving v. 
 Greenwood, and Bench v. Merrick, cited in note (l), sup. Even a past lapse from virtue, 
 according to Bench v. Merrick, notwithstanding the intervention of a considerable period 
 of uninterrupted good conduct, may be material to be disclosed. But this view would 
 perhaps not be adopted, at all events universally, at the present day. It would depend 
 upon all the circumstances. 
 
 (ss) Herbert v. Edgington (1844), 1 C. & K. 464 n., where Parke, B., considered that 
 concealment of drunkenness on the woman's part would be a good defence, for he left 
 this issue to the jury, who, however, found that it was not established. 
 
 (t) Baddeley v. Mortlock (1816), Holt N. P. 151, per Gibbs, C.J., who, at p. 152, directed 
 the jury that " if a woman improvidently promises to marry a man who turns out upon 
 inquiry to be of bad character, she is not bound to perform her promise. But it must 
 appear that the plaintifi is of bad character. The accusation is not enough. . . . The 
 existence of the rumour is not suf&oient to discharge her from her promise. Without 
 proof that the charges were well founded, she is not absolved from her contract. But 
 it affects the damages." In this case the charges (viz. of dishonesty and perjury in certain 
 business transactions) were not proved to the satisfaction of the jury, but acting on the 
 hint thrown out at the end of the judge's summing up, they awarded the plaintiff nominal 
 damages only. 
 
 (u) Per Cbompton, J., at p. 803 of Beachey v. Brown (1860), E. B. & E. 796. 
 
 (v) Per Eelb, J., at p. 755 of Hall v. Wright (1858), E. B. & E. 746, Exch. Ch. 
 
 {w) Hallv. IFrtjAi, sttp., is the authority relied upon by Eble, C. J., in his observations 
 cited in note (q), sup. The defence raised by the man there was that, after the conclusion 
 of the contract, he had contracted a severe pulmonary disease, which rendered the per- 
 formance of his marital obligations impossible without danger to life, and it was contended 
 
§ 148 (contracts to marry, &c.). 115 
 
 that, at the present day, if either of the parties were to complain of the suppres- 
 sion by the other, before the making of the contract, of any permanent disease 
 or physical disability which would endanger his or her life or health, or, by 
 reason of its contagious character, the life or health of both, or any pernicious 
 habit which had so enslaved and enfeebled the victim's will and resolution as 
 to destroy all reasonable hope of emancipation or cure, such as the morphia 
 or like drug habit, effect would be given to the complaint, and the contract 
 held voidable. It would be otherwise if, at the time of the contract, the 
 disease had been cured, or was curable, or if the habit and tendency had 
 been overcome. So also even the case put, " pour rire," by Ceompton, J., 
 of a lady's concealment of the fact that her tresses are borrowed (x) is not, 
 or, with other concealments, would not be, so ridiculous as he seems to have 
 thought. It is a question of degree, and also of the relative situation of the 
 parties. Assume the matrimonial proposal to emanate from some gross pluto- 
 crat, whose object in offering marriage, to the knowledge of the lady when 
 accepting the offer, was to buy a wife at a heavy price for the mere gratification 
 of his sensual propensities, or love of display : and assume that, after the 
 contract, some accident, or the treachery of some confidant of his fiancee, 
 reveals to him, not merely the innocent secrets of the toilet, but the falsity 
 of all the features and seemingly natural attractions of her person, so that 
 the entire outward form of his divinity is shown to be the mere product of 
 "the adulteries of art," and a whited sepulchre, — would not such a person, 
 if he chose to invoke the jurisdiction of the Courts, have a right to be relieved 
 of his contract ? Would he not be in the position, if the expression be not 
 considered too ungallant, of the purchaser of land or goods who complains of 
 the vendor not having disclosed matters negativing or prejudicing his title, 
 and who insists that he is being asked to take a conveyance of property differing 
 in substance and nature from that which it purported to be, or of the 
 
 (though unsuccessfully) that this being a fact supervening, without the fault of either 
 party, each of them was excused thenceforth from any further obligation under the 
 contract. The case, therefore, was not strictly one of non-disclosure at all. But 
 the principles upon which the decision was grounded are precisely the same as those 
 which regulate the duty of disclosure in such cases : for, obviously, any fact which, if 
 arising after the contract, would excuse either party from further performance would be of 
 sufficient materiality to entitle either party to have it divulged, if arising, and known to 
 the other party, hefore the contract. The point, however, which distinguishes, and vitally 
 distinguishes, this authority (treating it as tantamount to a non-disclosure case) from 
 all other non-disolosure cases of this description is that the party complaining was the 
 person who had, contracted the disease, and not the lad}' who, if it had been a non-disclosure 
 case, would have been the person to elect whether she would or would not exercise her 
 right to avoid the contract. She, however, elected to insist on the performance of the 
 contract. It was this pecuhar feature in the case which principally influenced the decision 
 of the majority in the Exchequer Chamber, and, indeed, is the only ground on which 
 at the present day that much canvassed decision would be supported or applied. Neither 
 the Q. B., nor the Exchequer Chamber, said a word to indicate that " want of chastity 
 is the only exception," and Sir William Ekle, then Eblb, J., in the course of his powerful 
 dissentient judgment, at pp. 764, 765, took pains to show, by reference to the non- 
 disclosure authorities referred to in the text, in what a number and variety of cases 
 promises to marry had been held unenforceable, where information as to matters other 
 than incontinence, but of a nature to frustrate one of tho purposes of matrimony, viz. 
 " comfort in cohabitation," had been withheld. 
 (x) See note (o), sup. 
 
116 CH. Ill, SECT. 2, SUB-S. (7). 
 
 purchaser of a chattel, the defects in which had been covered up or hidden 
 away by fraudulent devices or positive means ? (xx). On the other hand, 
 this reasoning would not apply to a case where the relative position of the 
 betrothed persons, instead of being, as in the illustration given, such that 
 the one party is not expected to anticipate the undisclosed facts, is, on the 
 contrary, one in which, as in the case of the betrothal of an actor to an actress, 
 each party has presumptive knowledge of their probable existence, or takes 
 the risk of ignorance, and cannot affect to be surprised or disappointed by 
 subsequent revelations of " beauty " not quite " unadorned." The test 
 would seem to be whether the suppressed moral, mental, or physical defects 
 are, or are not, of such a permanent and substantial character as to preclude 
 the reasonable possibility and expectation of safety, decency, or comfort in 
 cohabitation («/). 
 
 148. The rules of disclosure under consideration are of course applied 
 only to contracts to marry, not to any contracts of marriage, as the matri- 
 monium itself is frequently, though very inaptly, called. Marriage is a relation 
 or a status, not a contract (yy) : and the ceremony of marriage is the act of 
 conveyance, or traditio, whereby the betrothal, which, in modern times at 
 least (z), has the only real title to the name of " contract," is completed or 
 satisfied {a). By terming the act of marriage a contract, a misnomer has been 
 perpetrated, to which Jeune, P., has said that " the English Courts have not 
 taken a pedantic objection " {aa). It is submitted, however, that the objection, 
 if taken, as it ought to have been, is by no means pedantic, but substantial. 
 Could an objection to call by the name of contract a conveyance of land, 
 or the delivery of a horse, be deemed pedantic ? This terminological error, 
 like most others, has had results. It has not only led to the invention of 
 cumbrous forms of language by which to distinguish from marriage the 
 promise to marry, such as " not a contract of marriage, but a promise to make 
 such a contract" (&), quod est absurdum,iov no such promise is enforceable by 
 
 (xx) These acts might indeed be regarded as not mere non-disclosure, but as so many 
 fraudulent falsehoods by silent impersonation. TertiiUian took this view, when he de- 
 nounced the feminine practices of his day — " ooulos ciroumducto nigrore fucare, et genas 
 mendacio ruboris inficere, et mutare adulterinis coloribus crinem, et expugnare omnem oris 
 et capitis veritatem." 
 
 iy) Stm further cases suggest themselves. Ordinarily neither of the spouses could 
 be expected to reveal to the other, unless interrogated on the subject, the nature of his 
 or her religious belief : but would not a minister of the Established Church be entitled 
 to be relieved of his promise to marry a lady who at the time of the contract was secretly 
 a Roman Catholic, or a deist, or an atheist ? Or a statesman (say, a royalist in the time 
 of Charles I), who should discover that his fiancee had never divulged to him that she was 
 an influential adherent and supporter of the Parhament against the King ? 
 
 (yy) Per Hannen, P., at p. 101 of Sottomayer v. De Barros (1879), 5 P. D. 94. 
 
 (?) In our early history, that is, from the reign of Edw. VI to Geo. II, the betrothal, 
 or " pre-contract," as it was then styled, had ths same effect as the actual marriage in 
 facie ecclesice. This state of the law was impliedly abolished by 26 Geo. 2, c. 33, s. 13, 
 and 4 Geo. 4, c. 76, s. 27. See the observations of Cockbxien, C. J., at p. 802, and Hill, J., 
 at p. 805, of Beachey v. Brown (1860), E. B. & E. 796. 
 
 (a) The reason for matrimonium having acquired the name of contract is probably 
 that all the formal declaracions made by the spouses in the marriage ceremony are based 
 upon the sponsiones and responsiones of the Roman contract of stipulatio, as is clearly 
 shown by Dr. W. E. Ball, at pp. 46-49 of his St. Paul and the Soman Law. 
 
 {aa) At p. 268 of Moss v. Moss, inf. 
 
 (6) The expression of Ceompton, J., at p. 804 of Beachey v. Brown, sup. 
 
§§ 148, 149 (contracts to marry, &c.). 117 
 
 the law of England (c), but it has also, within recent times, encouraged grave 
 heresies in the substance of the law. It is now, however, well established that 
 DO amount of misrepresentation, much less non-disclosure or suppression, 
 however fraudulent, of facts, however material, will render a marriage void- 
 able at the option of the party deceived. The marriage may, indeed, be the 
 subject of statutory annulment in the Divorce Court if it was procured by 
 misrepresentation or concealment of such a character, and relating to such 
 matters (e.g. the identity of the spouses, or the nature of the ceremony), as 
 is sufficient to show that, in the so-called marriage, there was the mere appear- 
 ance without the reality of consent, and that, notwithstanding the outward 
 forms of solemnization, there never was, in truth or in law, any marriage at 
 all [d) ; but for no other cause is marriage dissoluble in the Divorce Court, 
 or elsewhere (e). Nor can a marriage settlement, any more than the marriage 
 which is its consideration, be nullified for any non-disclosure, or other cause, 
 or in any event (/), except of the character above stated, as, for instance, 
 in a case where the party relying upon the settlement is proved to have 
 procured it by the fraudulent suppression of the fact that the marriage was 
 illegal {g). And, where any licence is required to validate a marriage accord- 
 ing to the ecclesiastical law of the country where it is solemnized, there is no 
 more jurisdiction to set aside or ignore such licence, on the mere groimd of 
 
 (c) See Lojtus v. Roberts (1902), 18 T. L. E. 582, C. A. 
 
 (d) As in Ford v. Stier, [1896] P. 1, and Hall v. Hall (1908), 24 T. L. R. 756, where 
 Jeune, p., and G-oebll Babnbs, P., rcapeotively decreed nullity, on the ground that the 
 woman had been kept in ignorance of the fact that the ceremony was one of marriage. 
 
 (e) Swift V. Kelly (1835), 3 Knapp 257 ; 40 R. B. 22 ; Ford v. Slier, [1896] P. 1 ; Moss 
 V. Moss, [1897] P. 263. The caution in the text may seem rather unnecessary, but 
 is not so, having regard to the fact that in a quite modern case, Sebright v. Sebright (1886), 
 12 P. D. 21, we have the solemnly recorded opinion of Butt, J., to the contrary (at pp. 23, 
 24). The gross inaccuracy of this dictum is, though in very delicate terms, exposed by 
 Jbune, J., at pp. 270, 271 of Moss v. Moss, sup. Indeed Sir Charles Bittt himself, when 
 President, apparently unconscious of his heresy of two years back, stated the true 
 proposition in unimpeachable terms, at p. 15 of Andrews v. Boss (1888), 14 P. D. 15 
 (" the principles prevaUing in contracts of marriage differ from those prevailing in other 
 contracts known to the law " •- he had in the earUer case said that they were " precisely 
 the same "). 
 
 (/) Evans v. Garrington (1860), 2 De G. P. & J. 481, which was an action brought 
 to set aside both a marriage settlement on the ground of the wife's misconduct before the 
 marriage, and a subsequent separation deed, on the grounds stated in note (o) to § 150, jiost. 
 Wood, V.-C, refused relief as to both deeds. Lord Campbell, L.C, as to the former, 
 affirmed this decision, on the ground that the settlement could no more be impeached 
 than the marriage itself could, in a court of equity (pp. 488, 489), and that whatever rehef 
 the plaintiff might be entitled to he must obtain in the only Court which, according to 
 the then recent legislation, could dissolve the marriage itself (pp. 489-491). See also 
 J. V. J. (1884), 53 L. J. (CH.) 1014, per Pearson, J., at pp. 1015, 1016. 
 
 (g) Coulson v. Allison (1860), 2 De G. F. & J. 521, where a widower, having married 
 his deceased wife's sister (at that time an illegal marriage), claimed the benefit of a marriage 
 settlement made on him by the lady, without having " fuUy and duly and truly informed 
 her of all the circumstances of the case, and of the possible consequences of what she was 
 about to do " (p. 524), and Lord Campbell, L.C, on that ground affirmed the decision 
 of Sttjabt, V.-C., who had set aside the deed of settlement, holding (p. 525) that it was 
 the husband's duty to have made the most clear and ample disclosure of the iUegahty, 
 and that the burden was on him of adducing evidence establishing that he had done so, 
 and that, there being " an entire absence " of such evidence, though there was " no proof 
 of threats, or pressure, or solicitation having been used," the plaintiff was entitled to the 
 relief prayed. 
 
118 CH. Ill, SECT. 2, SUB-S. (7). 
 
 misrepresentation to, or suppression from, the ecclesiastical authority em- 
 powered to grant it, than there is to annul the marriage itself (h). 
 
 150. But, though a marriage settlement is in the same position as the 
 marriage with respect to non-voidability for non-disclosure, or any fraud or 
 coercion whatsoever, inducing a real consent, a deed of separation, on the other 
 hand, is voidable for material non-disclosure, just as much as any promise 
 to marry, for the object and effect of such a deed is, not to destroy or aSect 
 the matrimonial relation or status of the parties, but merely to terminate or 
 suspend cohabitation, and the exercise of certain other mutual rights derived 
 from the relation, on specified conditions ; and such a deed may be likened 
 to a contract for the termination or readjustment of partnership interests, 
 which, as we have seen, involves a duty on the parties to disclose material 
 facts before the conclusion of the contract, just as much, and on the same 
 principle, as a contract to enter into partnership (i). It follows that parties 
 negotiating for a deed of separation, as in the case of any other special type 
 of contract dealt with in this Chapter (j), are entitled to assume that no 
 circumstances exist which would tend to show that the object and office of 
 the contemplated contract is different from its normal and usual purpose ; 
 and the normal purpose of deeds of separation is to provide, on equitable 
 terms, facilities for the spouses living apart, and avoiding the misery which, 
 owing to " unhappy differences " and to those alone, they are both agreed 
 in foreseeing will be the inevitable result of continued cohabitation. 
 Accordingly, if there be any circumstances, to the knowledge of one of the 
 spouses, indicating that the deed has a wholly difierent character and purpose, 
 the other has a right to a full disclosure of them before the contract is con- 
 cluded. Now every deed of separation, or at any rate every deed which 
 contains provisions for the maintenance of the wife, is based on the assump- 
 tion that the husband is liable to maintain her, which of course he is 
 not, if she has broken her marriage vows. Consequently an adulterous 
 intercourse carried on by the wife before the execution of the deed, 
 being a fact which the husband certainly " would not naturally expect " 
 to have taken place {k), having regard to the nature of the contract contem- 
 plated, is a fact which must be disclosed, and the suppression of which will 
 entitle the husband to have the deed rescinded or treated as a nullity {I). 
 
 (h) See Swift v. Kelly (1835), 3 Knapp 257, where, to a suit for restitution of conjugal 
 rights, one of the pleas was that the licence for the marriage — which was a Roman Catholic 
 one — had been obtained by " a fraud upon the Holy See " {per Parke, B., at p. 282), and 
 the plea was held bad, Lord Bbotjgham, who delivered the judgment of the Privy Council, 
 at p. 293, observing, first, that the marriage itself could not be dissolved on the ground 
 set up, and proceeding : — " if such be the law touching consent to the marriage itself, 
 and the fraud whereby true consent was obtained, it would be extraordinary indeed if 
 another rule were allowed to govern the case where fraud has been practised upon a third 
 party." 
 
 (») See § 142, ante. 
 
 ij) Yid. ante, § 99 (marine insurance), § 101 (life insurance), § 117 (vendor and pur- 
 chaser), §§ 120, 122, 123 (suretyship), § 137 (compromise), and§ Ml (partnership). 
 
 (4) Lord Campbell's criterion, applied to a suretyship case, for determining whether 
 a fact is material to be disclosed, or not : see § 122, and notes (n) and (p) thereto, ante. 
 
 (l) Evans v. Edmonds (1853), 13 C. B. 777, where the trustee of the separation deed 
 sued the husband fox arrears of an annuity payable by him thereunder, to which the 
 
§§ 149, 150 (contracts to marry, &c). 119 
 
 And, further, even if the evidence only goes to prove misconduct on the part 
 of the wife after the conclusion of the contract, and there is no strict proof 
 of infidelity before that date, in which event ordinarily the party complaining 
 would not be entitled to relief (m), yet, if it can be shown that, before the 
 above material date, the wife had the then present intention — and iatention 
 is " a fact " in contemplation of law (n) — of renewing her former liaison, 
 and of using the deed as an instrument imder cover of which she would enjoy 
 greater facilities for so doing in secrecy and security, the non -disclosure of 
 such intention will invalidate the deed (o). 
 
 husband pleaded two separate pleas, one of fraudulent misrepresentation, and the other 
 a plea which the Court construed as a separate and distinct defence of fraudulent non- 
 disclosure, and he succeeded on both. The observations as to the plea of non-disclosure, 
 dealt with separately from the other (which does not concern the present discussion), 
 are those of Jbbvis, C.J., at p. 784 ("if there had been criminal intercourse between 
 the plaintiff and the defendant's wife before the separation " — for it so happened that 
 "1' autre " in this case was actually the trustee of the deed — '" and the plaintiff at the 
 time of such intercourse knew that she was the defendant's wife, and concealed her crimi- 
 nality from the defendant, with a view to induce him to execute the deed — all which 
 the jury must be assumed to have found — that was such a suppression of a material 
 fact as will support a general plea of fraud "), and those of Matjlb, J., at pp. 786, 787, 
 and Obesswbll, J., at p. 787. 
 
 (m) See Sect. 3, Sub-s. (2), §§ 180, 181, post. 
 
 (n) As explained in § 28, ante. 
 
 (o) Evans v. Carrington (1860), 2 De G. F. & J. 481, a very curious and interesting 
 case, which neatly illustrates the distinction adverted to in the text between marriage 
 settlements and deeds of separation. The action there was brought by the husband against 
 the wife in her maiden name of Carrington (she having been divorced), and the trustees 
 of the respective deeds, for rescission both of a settlement in contemplation of marriage, 
 and also of a subsequent deed of separation, and Lord Campbell, L.C, whilst agree- 
 ing with Wood, V.-C, as stated in note ( / ) to § 149, ante, that there was jurisdiction to set 
 aside the settlement, on the ground of the undisclosed liaison of the lady with one Robinson 
 before the execution of such settlement, disagreed with him in his view that the Court 
 had no power to set aside the deed of separation. It was established to the satisfaction 
 of the Court that the lady had misconducted herself with Robinson, unknown to the 
 plaintiff, before the execution of the marriage settlement, which was on the 12th November, 
 
 1850, followed by her marriage to the plaintiff two days afterwards. There was no 
 proof, though a very strong suspicion, that the lady had committed adultery with Robinson 
 after the marriage, and before the separation deed which was executed on the 10th May, 
 
 1851, but it was proved that she executed such deed with the secret intention stated 
 in the text. After the separation deed, she committed adultery with Robinson, whom 
 the plaintiff sued for criminal conversation in 1854, recovering against him, on a second 
 trial (the verdict given for Robinson on the first trial having been set aside) £500 damages. 
 In January, 1859, the plaintiff took advantage of the then recently introduced divorce 
 legislation, and obtained a decree of divorce. On the 20th October of the same year, 
 the trustees of the separation deed sued the plaintiff at law for arrears of annuity under 
 the separation deed, whereupon the plaintiff filed his bill for the purposes above stated. 
 In these circumstances Lord Campbell, L.C, whilst agreeing with Wood, V.-C, that 
 proof of the wife's actual adultery after the marriage, but before the separation deed, 
 unknown to the plaintiff, would have been clearly enough to invalidate that instrument 
 (pp. 491, 492), and also that such adultery had not been strictly proved (p. 492), and 
 that, in order to avoid the deed it was necessary that the principle of Evans v. Edmonds — 
 see note (I), sup. — should be extended, or rather applied to a fresh subject-matter, dissented 
 from the decision under appeal, the difference between the two views being that the 
 V.-C. was not, and Lord Campbell was, prepared to make this fresh application, for the 
 reasons stated by him at pp. 492, 493 : " I am of opinion that the deed of separation 
 was fraudulent and void in its inception, on the ground that the wife, having before the 
 marriage had illicit intercourse with Robinson, induced the plaintiff to execute the deed 
 in contemplation of a renewal of that illicit intercourse, and that she might carry it on 
 with more facility. If there be evidence reasonably to support such inferences, I cannot 
 doubt that the deed ought to be set aside. Evans v. Edmonds is not an exact authority 
 
120 CH. Ill, SECT. 2, SUB-S. (8). 
 
 Subs. (8). Cases, not within any of the foregoing Classes, where nevertheless 
 one of the negotiating parties may be, or become, subject to a duty of disclosure. 
 
 151 . Putting aside entirely all cases of concealment, suppression, or omission 
 of qualifying facts or conditions whereby a statement made is rendered 
 false and fallacious, and whicli, except in that character, are not action- 
 able at all — for these belong solely to the province of misrepresentation (f), 
 and ia no way concern that of non-disclosure — ^there are a large number of 
 cases, not falling withia any of the classes hitherto discussed, in which 
 nevertheless one of the negotiating parties is, or becomes, during the negotia- 
 tion under a duty to divulge material facts to the other party. It is necessary 
 now to examine closely the principles upon which such a duty may be created 
 by the circumstances, though not ordiaarily existing at all, or not ordinarily 
 existing at the commencement of the negotiation, and to classify the conditions 
 under which the duty arises. 
 
 152. Broadly, there are three, and only three, classes of cases in which 
 an obligation of disclosure which does not ordinarily arise at all, or which 
 does not origioally arise, may be created by circumstances occurring before 
 or during the negotiation. These are as follows : — 
 
 (A) Where one of the negotiating parties enters upon the negotiation 
 
 laden with the duty of revealing his own previous fraud in relation 
 to the subject of the contemplated contract or transaction : 
 
 (B) Where, during the negotiation, one of the negotiating parties says 
 
 or does something, or something happens which, having regard 
 to his previous declarations or acts, requires him to speak, in order 
 to correct or remove a delusion in the mind of the other party for 
 the creation of which he is responsible : 
 
 (C) Where one of such parties is in the course of negotiation asked a 
 
 question by the other party in respect of any matter, whereupon a 
 duty is incumbent on the first party, if he answers the question 
 at all, to answer it truthfully and fully. 
 It is proposed to consider these three classes seriatim (q), and then to estab- 
 lish (r) that, except in any case falling within some one or more of them, 
 no duty of disclosure whatever can either exist originally, or arise incidentally, 
 in negotiations for contracts other than contracts of the six types already 
 dealt with (s). 
 
 153. Most of the illustrations of the first of the above classes are to be 
 found in cases of vendor and purchaser. When contemplating a transaction 
 of this description, the vendor, as has been already stated {t), ordinarily 
 
 for this position, as here there is no sufficient evidence of an act of adultery having been 
 committed prior to the execution of the deed of separation. But I think that both cases 
 rest upon the same principles of morality, justice and expediency." 
 
 {p) And, as such, form the subject of Ch. IV, Sect. 4, Sub-s. (2), §§ 83-86 of the author's 
 Law of Actionable Misrepresentation, where all the authorities are coUeoted. 
 
 (g) Class (A) is the subject of §§ 153, 154; Class (B), of §§ 155-158; Qass (C), of 
 §§ 159-161, post 
 
 {r) See §§ 163-167, post. 
 
 (s) In Sub-s. (2)-{'7), respectively, ante. 
 
 (t) See ^m, ante. 
 
§§ 151-153 (incidental duties of disclosure). 121 
 
 enters upon the negotiation with no duty whatever to reveal any defects in 
 the quality of the thing sold (whether land or a chattel) which have no relation, 
 direct or indirect, to any question of title. But if the property which he is 
 oSering for sale has a defect which, before the negotiation, he has carefully 
 covered up or hidden away by means of positive devices, he is under a duty 
 at the outset to reveal the defect, for not to do so would be to perpetuate his 
 dishonesty. Fraus est celare fraudem (u). He commences the bargaiaing, 
 therefore, laden with a duty which his own misconduct has placed on his 
 shoulders, and of which he would otherwise be free. Examples of the applica- 
 tion of this doctrine to negotiations for the sale and purchase of chattels 
 are abundant (w). Similarly, in a curious case where the party charged, 
 being manager for a firm of publishers, acquired by dishonest means a large 
 partnership interest in the busiaess and its copyrights, then sold this interest 
 for a dishonest consideration to his partners, and, lastly, arranged a compromise 
 of his rights under the sale, based on an admission that the price was excessive, 
 it was held that he had violated the duty of honest disclosure which,, by reason 
 of his previous fraudulent acquisition of the property sold, lay upon him at 
 the outset of the negotiations for the sale, and also the further and double 
 duty of disclosure which both the fraudulent acquisition and the fraudulent 
 sale had imposed on him, and with which he was saddled at the threshold of 
 the subsequent negotiations for the compromise (w). And not only is full 
 disclosure incumbent on a vendor under such circumstances, so as to entitle 
 the party complaining to avoid the sale, but, inasmuch as a past fraud created 
 the duty, and another fraud, or a perpetuation of the first, is constituted by 
 the violation of that duty, the party complainiog is entitled to all the additional 
 relief (such as the right to recover damages) which is available in any action 
 of deceit, and the party charged is subject to all those additional disabilities 
 to which, if it were a question of mere non-disclosure, he would not be subject, 
 such as, for instance, an incapacity to take advantage of an express agreement or 
 condition to purchase " at all risks " or " with all faults " (x), or of an agreement 
 
 (m) a felicitous adaptation by Dr. Story {Eq. Jurispr., vol. i. §§ 384, 390) of a well- 
 known artistic canon. 
 
 («) See Jones v. Bowden (1813), 4 Taunt. 847 (concealment of sea damage to pimento 
 by repacking, and so preventing the purchaser from discovering the damage, as he would 
 have done on seeing the stained bags in which they had originally been packed ; the jury 
 expressly found that the defendant ought to have communicated the fact, and the Court 
 refused to disturb the finding); Ormrod v. Huth (1845), 14 M. & W. 651 (" false packing 
 of cotton ") ; Horsfall v. Thomas (1862), 1 H. & C. 90 (covering up defects in a cannon). 
 In the two last cases the party charged escaped, because the facts proved were not sufficient 
 to bring home to him the fraudulent stratagem alleged. But the duty was recognized 
 in all the cases. Cp. the common devices of salted mines, or faked furniture. 
 
 (w) Moxonv.Payne (1873), 8Ch. App. 881. The situation is caustically summed up at 
 p. 885 by James, L.J., in these terms : — " A man fraudulently appropriates another man's 
 property. He then sells it to him for a fraudulent price. He then agrees that there was a 
 mistake as to the price, and that the real value should be ascertained and the property taken 
 at that ascertained value, and then says to a court of equity : ' now I can hold fast what 
 I so got. Giving up the benefit of the second fraud in the sale, I have had my first fraud 
 in the acquisition of the property condoned, and my right confirmed and established, so 
 that you cannot deprive me of it.' " Cp. Crowe v. Ballard (1790), 1 Ves. Jr. 215 {per 
 Lord Thuelow, L.C., at pp. 219, 220 : a similar attempt "to double-hatch the fraud"). 
 
 {x) An express agreement to sell with all faults protects the seller from liability, even 
 for any fault known to him, but is no protection whatever in the circumstances stated in 
 
122 CH. Ill, SECT. 2, SUB-S. (8). 
 
 to accept compensation in lieu of rescission for omissions in tte particulars of 
 sale (y), and, generally, an incapacity to take the benefit of any express or 
 implied contract of waiver (z), or of the fact that the sale has been completed 
 by conveyance (a). 
 
 154. Conversely, if a purchaser who is not ordinarily subject to any duty 
 of disclosure whatever (h), paves the way for a cheap purchase by fraudulent 
 manoeuvres designed to conceal or depreciate the merits or value of that 
 which is the matter of the negotiation, he enters upon that negotiation subject 
 to the like duty, and, if he violates it, to the like disabilities, as a vendor who 
 has employed similar stratagems and artifices for the purpose of hidiag the 
 defects and worthlessness of that which he offers for sale. The principle has 
 been applied to purchasers in such cases as the following: — the case of an 
 intending buyer of shares who, previously to the negotiation, had manipulated 
 certain accounts over which he had control so as to make it appear that the 
 shares were of much less than their real value (c) ; the case of two solvent 
 partners ia the business of working a certain colliery who, before negotiating 
 for the purchase from the sheriff of their insolvent partner's interest in the 
 colliery which had been taken in execution, removed the gear, and prevented 
 access to the coal-mine through the shaft, and hid away a quantity of iron- 
 stone recently raised, as so to conceal from the vendor the fact that the seam 
 of coal had nearly been reached (d) ; and the case of a mine-owner who, 
 before treating for the purchase of an adjoining mine, had for some time past 
 been surreptitiously abstracting coal from it, where it was held that this 
 conduct cast upon the purchaser a duty of disclosure to the vendor which 
 otherwise would not have arisen (s), and this though the vendor, being 
 
 the text, as was held in BagkhoU v. Walters (1811), 3 Campb. 154 {per LordEnENBOBOUQH, 
 C. J., at p. 157 : " unless the seller by positive means renders it impossible for the purchaser 
 to detect secret faults ") ; Schneider v. Healh (1813), 3 Campb. 506 (where the vendor 
 had removed the vessel which was to be taken with all faults from the ways in which she 
 lay, so that, throughout the negotiation, her bottom and keel were concealed, and their 
 defective condition was only discovered when the vessel was delivered) ; and Ward v. 
 Hobis (1878), i App. Cas. 13, H. L. (where, at p. 27, Lord O'Haqan refers to, and adopts, 
 the proposition of Lord Ellenbobotjqh, C.J., cited sup.). In the first and third of the 
 above cases, the resort to contrivances to disguise or cover up defects was not proved, or, 
 in the third case, even alleged. In the second, it was proved, 
 
 {y) See §§ 206-208, post. 
 
 (s) See § 202, post. 
 
 ia) See § 230, post. 
 
 (6) Vid. note {v) to ^111, ante. Cp. also the latter part of § 165, posf. 
 
 (c) Walsham v. Stainton (1863), 1 De G. J. & S. 678 {per Tubneb, L. J., at pp. 689, 
 690). 
 
 id) Perens v. Johnson (1857), 3 Sm. & G. 419 {per Stuabt, V.-C, at p. 425). 
 
 (e) Phillips V. Homjray (1871), 6 Ch. App. 770, where Lord Hathbbley, L.C., grounds 
 his decision on the fact that the purchaser was under a duty to divulge facts having a 
 bearing on the value of the property which, besides being within his own exclusive know- 
 ledge — this alone would clearly not give rise to any duty — ^were also the issue of his 
 own vohtiou and wrongful conduct. " If a man," he says at p. 779, " knows that he has 
 committed a trespass of a very serious character upon his own neighbour's property, and 
 finding it convenient to screen himself from the consequences, makes a proposal for the 
 purchase of that property, he certainly ought to communicate to the person with whom 
 he is dealing the exact state of the case. . . . The proposal which he makes is not in reality 
 a simple proposal for the purchase of the property ; it involves a buying up of rights which 
 the owner has acquired against him, and of which the owner is not aware. He is therefore 
 
§§ 153-155 (incidental duties of disclosuee). 123 
 
 ignorant of these trespasses, was selling at a price based on tlie assumption 
 that no coal had been taken : the reason being that the trespasses gave the 
 adjommg landowner rights against the trespasser of a different nature from, 
 and of a larger pecuniary value than, a mere vendor's right to the price of 
 the coal (/). 
 
 155. The second of the three classes above mentioned comprises all those 
 cases in which the party starts the negotiation with a clean bill of health, 
 there being no duty of disclosure laid upon him by reason of the nature of 
 the transaction contemplated, and either no representation at all having been 
 made by him beforehand, or none which was false ; but where, during the 
 progress of the negotiation, he says or does something, or something happens, 
 which immediately casts upon him the duty of breaking the silence which till 
 then he has legitimately observed, and which otherwise he need never have 
 broken (g). So acutely does our jurisprudence appreciate the importance and 
 desirability of "justifying its ways" to the moral sense of the community, 
 whenever it is possible, that it habitually casts a powerful searchlight over 
 the entire res gestcs of a case to see whether anything is to be found in them 
 indicating that the limits of excusable reticence have been exceeded. After 
 laying down the general principle that silence is not actionable where there 
 is no duty to disclose. Lord Eldo^t, L.C, is careful to add : " but a very little 
 is sufficient to affect the application of that principle. If a word, if a single 
 word, is dropped which tends to mislead . . ., the principle will not be 
 allowed to operate " (A). And to this " single word " Lord Campbell, L.C, 
 in a later case, adds " a nod, or a wink, or a shake of the head, or a smile " {i), 
 as facts which may make all the difference. A third Lord Chancellor, Lord 
 Selborne, L.C, in a case which related (as did also the two cases before 
 Lord Eldon and Lord Campbell) to the duties of a purchaser, puts the 
 proposition thus : " inasmuch as a purchaser is (generally speaking) under 
 
 . . . not at liberty to enter into a contract without disclosing his commission of an act 
 which has rendered him liable to certain consequences, and of which act the person with 
 whom he is dealing has the right to be informed, in order to know what course to adopt." 
 
 ( / ) Ihid., per Lord Hathebley, L.C, at pp. 780, who there points out the distinction 
 between the purchase price of a coal mine which would be based on the value of the coal 
 ungotten, or (which is the same thing) its market price at the pit's head, less the cost of 
 severing and raising it, and the measure of damages against a trespasser, which would be 
 the value of the coal gotten without any deduction whatever for the expense of severing 
 and raising it, because, as against the trespasser, those acts are in law simply part of the 
 trespass. So that the analogy suggested in argument on behalf of the purchaser, at p. 777 
 (viz, " buying a box of gold from which the purchaser, unknown to the vendor, has sub- 
 tracted some pieces. The vendor puts his price upon it on the footing that all the gold 
 is there, so he cannot be damnified ") is no analogy at all. 
 
 (g) " In ordinary contracts," i.e. contracts other than those described in the foregoing 
 Sub-sections, which, from their nature, involve a duty of disclosure, " the duty may arise 
 from circumstances which occur during the negotiation " : per Fry, J., at p. 475 of 
 Davies v. London and Provincial Marine Insurance. Co. (1878), 8 C. D. 469. Cp. the 
 observations of the same authority at pp. 310, 311 of Arkwright v. Newhold (1881), 17 
 C. D. 301, C. A. ("a question has been considerably argued before me with regard to the 
 question how far silence is fraudulent. Undoubtedly, as a general rule, when there are 
 two contracting parties, each may hold his tongue, but, if one says something, it may 
 create an obligation to say something more "). 
 
 (li) At p. 178 of Turner v. Hariey (1821), Jacob 169 ; 23 R. E. 15. 
 
 H) Walters v. Morgan (1861), 3 De Q. F. & J. 718, at p, 724. 
 
124 CH. Ill, SECT. 2, SUB-S. (8). 
 
 no antecedent obligation to comnaunicate to his vendor facts wticli may 
 influence his own conduct or judgment when bargaining for his own interest, 
 no deceit can be implied from his mere silence as to such facts, unless he 
 undertakes or proposes to communicate them. This, however, he may be 
 held to do, if he makes some other communication which, without the addition 
 of those facts would be necessarily, or naturally and probably, misleading " (j). 
 In short, though the party need not say anything at all, if he does say any- 
 thing, he must say everything, that is, everything material to the topic in 
 question : by breaking silence he impliedly " undertakes " a duty which 
 otherwise the law would not have prescribed. 
 
 156. Thus, a purchaser, who ordinarily enters upon the negotiation in 
 absolute freedom from any duty of disclosure whatever (k), may never- 
 theless by deceptive acts and conduct during the bargaining become 
 subject to such an obligation (I) ; and, if he obtains knowledge of a material 
 event happening in the course of the negotiation which the vendor is 
 ignorant of, though he is still entitled to keep this knowledge to himself, he 
 ceases to be so if, and as soon as, he uses ambidextrous language with the 
 express object and result of quieting the vendor, putting him ofi inquiry, 
 and Inlling him into a false security, or lets fall something which, whether he 
 so intended or not at the moment, he soon perceives to be having a delusive 
 efiect on the mind of the vendor, whereupon he becomes bound at once to 
 remove the delusion by full revelation of the truth [m). So also, the vendor 
 of a patented invention, who ordinarily is not deemed to warrant its com- 
 mercial value, and is not therefore under any duty to disclose circumstances 
 which may afiect such value, puts himself in a very different position if, in 
 the progress of the negotiation, he voluntarily exhibits to the proposed pur- 
 chaser, and allows him to make, " fallacious experiments " under special 
 conditions secretly arranged beforehand so as to make the invention appear 
 
 ij) Coals V. Boswdl (1886), 11 App. Cas. 252, H. L., at pp. 235, 236. 
 
 (k) See the citation in the last note, and § 165, post. 
 
 (l) See Walters v. Morgan, sup., where the purchaser failed in his suit for specifio 
 performance on the ground {per Lord Campbell, L.C, at p. 723) that " by the contrivance 
 of the plaintiff the defendant was surprised and induced to sign the agreement in ignorance 
 of the vahie of his property." 
 
 (m) In Turner v. Harvey, sup., the vendor sued for rescission of a contract for the sale 
 of certain property, on the ground that the purchaser knew of the death of a certain person 
 (a circumstance which greatly increased the value of the property), and kept the knowledge 
 of it to himself, knowing and trading on the vendor's ignorance. On these grounds alone 
 Lord Eldon, L.C, would not have granted the relief prayed, but did grant it on proof 
 that at the outset the purchaser had by designed ambiguity of language encouraged a 
 delusion in the vendors' minds as to the nature of the interest in the property held by the 
 bankrupt whose assignees they were, speaking of it as " a supposed interest," when to his 
 knowledge it was an absolute interest subject to the life-interest of his wife, and 
 afterwards, hearing of the wife's death, did nothing to remove, but everything to 
 foster, the vendors' delusion, carefuUy suppressing both the fact of the death, and 
 the vital bearing of that fact on the value of the bankrupt's interest in the property. 
 Cp. Thompson v. Lambert (1868), 17 W. R. Ill, where it was held that one who was in 
 treaty with another for the purchase of a policy on the life of a third person, and during 
 the negotiation was apprised of an accident to that person, was entitled to keep silence as 
 to the fact, but that, if he had in any manner insinuated afterwards that the health of the 
 assured remained as before, his continued silence from that point would have been wholly 
 unjustifiable {per Walsh, M.R. (Tr.), at p. 113). 
 
§§ 155-157 (incidental duties oe disclosure). 125 
 
 to accomplisli that which under the conditions named in the specification 
 it is, to the vendor's knowledge, quite incapable of accomplishing (n). And, 
 in cases of marine insurance, the party proposing to insure his vessel, though 
 he may be entitled to observe silence as to certain matters which are presumed 
 to lie within the common knowledge of both parties, is not entitled to main- 
 tain that silence after he has once broken it by positive, though indirect, 
 suggestion of the non-existence of any such matter which is known by him 
 to exist (o). 
 
 157. Similarly, where A. and B. are the negotiating parties, and, in the 
 course of the bargaining, A. perceives that B. is labouring under a mistake 
 as to some matter vital to the contract or transaction, he may come imder 
 an obligation to correct the mistake, at all events if the circumstances are 
 such that his omission to do so must inevitably foster and perpetuate the 
 delusion. In such cases silence is actionable, for it is in effect a misrepresenta- 
 tion, and has m many of the authorities been so regarded ard dealt with. 
 This state of things arises when B., or a third person in his presence or to 
 his knowledge, states or does something which indicates to A. that B. is being, 
 or will be, misled, unless the necessary correction be made. Silence on the 
 part of A. may, in such circumstances, amount either to a tacit adoption 
 of another's incorrect statement as his own, or a tacit confirmation of another's 
 error as truth. Thus, where the plaintifi called for orders at the office of a 
 firm of Gandell & Co., packers, and one Edward Gandell, who was managing 
 the business as clerk to Thomas Gandell, the sole member of that firm, pre- 
 sented himself in answer to his inquiry, and handed to him a card of " Thomas 
 Gandell & Co.," and then ordered goods to be invoiced and sent to " Edward 
 Gandell & Co.," knowing that the firm with which the plaintifi was desirous 
 of, and thought he was, doing business, was the Gandell & Co. at whose ofiice 
 the interview was taking place, and withheld the fact that he was carrying 
 on a separate and distinct business with one Todd at another place, where he 
 and Todd intended to obtain delivery and possession of the goods ordered, 
 this suppression was held to constitute fraud, and (since it induced error 
 personce) fraud of such a vital character as to render the alleged contract 
 not merely voidable but void (p). And so also was the conduct of a party 
 
 (») Lovell V. Hicks (1836), 2 Y. & C. (Exoh.) 46, per Alderson, B., who, after finding 
 that " this invention purported to be one for obtaining spirits by means of a patent 
 apparatus for baking bread of the ordinary description fermented in the ordinary method " 
 (p. 53), and recognizing that, if the bread actually baked had really been ordinary bread, 
 or if the attention of the purchaser had been called to the fact of its not being prepared in the 
 ordinary way, either before or during the early experiments " (p. 56), the defendant would 
 have violated no duty : but, this not having been done, " every experiment became of itself 
 a fraudulent misrepresentation " (p. 55), and the agreement was accordingly set aside. 
 
 (o) Harrower v. Hutchinson (1870), L. R. 5 Q. B. 584, Exch. Ch., per Cleasby, B., at 
 p. 595 : " this rule" — i.e. the rule that the assured need not disclose any fact which is in 
 the presumptive knowledge of the underwriter — " would, however, I think, be subject to 
 the qualification, that the assured had not by any contrivance in the wording of the pro- 
 posal or polioy intentionally hid from the underwriters what was the real risk intended to 
 be covered. . . . Silence as to certain material particulars is one thing ; but hiding and 
 covering them up is another ; and in such a contract as this, . . . avoids the policy." 
 Mabtin", B., at p. 594, uses more vigorous language : " that is a concealment at the best. 
 I should say it is something more ; in my judgment it is a fraud." 
 
 (p) Hardman v. Booth (1863), 1 H. & C. 803. 
 
126 CH. in, SECT. 2, SUB-S. (8). 
 
 in leaving uncorrected the form in which letters were addressed to him, as 
 and for a person of somewhat similar name to his own in the same street, 
 for whom he knew he was being mistaken by the party on whom, by means 
 of this fraudulent reticence, he was seeking to foist the contract {q). The 
 above may be regarded as cases of personation by silence. But the rule is 
 not confined to error personce. Thus, where proposals were being made for 
 a policy of marine insurance on a cargo on board a vessel " at and from Buenos 
 Ayies and port or ports of loading in the province of Buenos Ayres to port 
 or ports of call and discharge in the United Kingdom," and the underwriters, 
 by making out the policy as " at and from Buenos Ayres " only, made it 
 clear to the assured, if it was not clear to him before (as it was, or ought to 
 have been), that they knew of no other port in the Province of Buenos Ayres 
 than the port of Buenos Ayres, it became, from that moment at any rate, 
 the duty of the assured to break silence by revealing the fact that there was 
 a certain dangerous place, not regarded generally as a port at all, which 
 he was nevertheless in his own secret mind meaning by the general expres- 
 sion " port or ports of loading in the Province of Buenos Ayres," and so to 
 dispel the underwriters' delusion (r). And when, in the course of negotiations 
 for the purchase of land, the purchaser's solicitors made a note on the margin 
 of the draft agreement that they assumed that the covenants referred to 
 " contained nothing unusually restrictive," it was held that it was the vendor's 
 duty to immediately correct this false assumption, and that having failed 
 to discharge it, he was not only disentitled to specific performance, but was 
 also subject to a counter-claim for rescission (s). Further, where one of the 
 parties to the negotiation stands by and allows in silence an erroneous state- 
 ment made by a third person to, or in the presence or hearing of, the other 
 party, he may be violating a duty of disclosure created by the circumstances (t). 
 
 {q) Gundy v. Lindsay (1878), 3 App. Cas. 459, H. L., per Lord Caiens, L.C, at p. 465 : 
 " they " — the jurors — " have found that by the form of the signatures which were written 
 by Blenkarn . . . and by the way in which he left uncorrected the mode and form in which, 
 in turn, he was addressed by the respondents ; that by all these means he led and intended 
 the respondents to believe that the person with whom they were communicating was not 
 Blenkarn, the dishonest and irresponsible man, but was a well-known and solvent house 
 of Blenkiron & Co., doing business in the same street." 
 
 (r) Harrower v. Hutchinson, sup., per Cleasby, B., at pp. 595, 596. 
 
 (s) Andrew v. AitJcen (1883), 31 W. R. 425 (per Fry, J., at p. 426). 
 
 (t) For illustrations of this contingent and incidental duty to correct a third person's 
 misleading statement addressed to the other party to the negotiation, see Pilmore v. Hood 
 (1838), 5 Bing. (n.c.) 97 {per Tindal, C.J., and Vaughan, J., at p. 107) ; Nottingham 
 Patent Brick and Tile Co. v. BvMer (1886), 16 Q. B. D. 778, C. A. (per Lord Eshbr, M.R., 
 at p. 788 : a case of a party confirming by his silence his sohoitor's false correction of his 
 own accurate statement, in the presence and hearing of the other party) ; Marnham v. 
 Weaver (1899), 80 L. T. 412. The existence of the duty is recognized by Aldeeson, B., 
 at p. 529 of North British Insurance Go. v. Lloyd (1854), 10 Exch. 523, and by Joyce, J., 
 at pp. 334, 335 of Seddon v. North Eastern Salt Go., [1905] 1 Ch. 326. Cp. Story's Equity 
 Jurispr., vol. i, §§ 384, 385, 389, 390. The doctrine is further illustrated by the analogous 
 cases of partnership by estoppel (as to which see Lord Lindley's and Sir Frederick 
 Pollock's treatises). See also the observations of Blackbtjen, J., at p. 673 of Polak v. 
 Everett (1876), 1 Q. B. D. 669, in relation to the estoppel rule that " if a man stands by 
 and allows another to act without objecting when, from the usage of trade or otherwise, 
 there is a duty to speak, his silence would preclude him as much as if he proposed the act 
 himself." The rule enunciated in the Digest is the same : qui facet, consentire videtur ; 
 qui potest et debet vetare, jubet si non vetat. This answers to the moral canon stated in 
 
§§ 157, 158 (incidental duties of disclosure). 127 
 
 158. A very important t3^e of case in which a duty of disclosure springs 
 into being in the course of the negotiations is where, the party charged having 
 made a representation in the first instance, facts supervene before the con- 
 clusion of the contract which have an effect on either the veracity, or the 
 verity, of the original statement. During the above-mentioned intervening 
 period the situation may be altered in two ways : and, in both cases, a duty 
 of disclosure is created by the change. The rule, as to both, is well stated 
 by Fry, J., in a memorable judgment, where, after dealing with the initial 
 and absolute duty of disclosure in contracts and relations uberriinw fidei, 
 he proceeds : " again, in ordinary contracts, the duty may arise from circum- 
 stances which occur during the negotiations. Thus, for instance, if one of 
 the negotiating parties has made a statement which is false in fact, but which 
 he believes to be true, and which is material to the contract, and during the 
 course of the negotiations he discovers the falsity of that statement, he is 
 under an obligation to correct his erroneous statement ; although, if he had 
 said nothing, he very likely might have been entitled to hold his tongue 
 throughout. So, again, if a statement has been made which was true at the 
 time, but which in the course of the negotiations becomes untrue, then the 
 person who knows that it has become untrue is under an obligation to disclose 
 to the other the change of circumstances " (u). In the former type of case, 
 the duty is obvious (■«) : what was originally false remains false, but the 
 
 Arist. Eth. iv. 8. 8 (" & y&,p inofievei aKouaiv, ravra Kal iroiuv SoKet "), and to the 
 proverbial " silence gives consent." Of course, where there never was any duty to 
 speak in the first instance, and none has arisen out of supervening circumstances, reticence 
 constitutes neither an actionable breach of duty, nor an estoppel, and is therefore absolutely 
 innocuous in law, whatever it may be in morals. See Russell v. Thornton (1859), 4 H. & N. 
 788, per Bramwell, B., at p. 798 (" Mr. Honyman says silence gives consent. In some 
 cases it may ; for instance, where there is a duty to speak, and the party does not, an assent 
 may be inferred from his silence " -• he then goes on to show that in that case there was 
 no such duty, and therefore no such implied assent) ; Marnham v. Weaver, sup., per 
 RoMEB, J. (" though a person may be deceived by another with the knowledge of a third 
 person, if that third personisnota party to the deceit, and owes no legal duty or obligation 
 to the party deceived, and does nothing but preserve silence, however morally blameworthy 
 . . he cannot be held liable ... at the instance of the party deceived," but where the 
 party is, as he was held to be in that case, not a more " passive spectator," but one who 
 " actively assists in the deceit " by silenoe under circumstances creating a duty to speak, 
 heis liable) ; British Linen Co. v. Cowan (1906), 8 F. 704 (where a party was held not to 
 be estopped from denying the genuineness of his signature to a bill of exchange, merely 
 because he had observed an unbroken silenoe on receipt of letters from the party setting 
 up the estoppel, in which it was alleged or assumed that he was the acceptor : for there 
 was no duty to answer such letters, or to assert the true facts. On the same principle it 
 has been held that no admission of a promise is to be inferred from the mere fact of not 
 answering a communication from the supposed promisee in which such promise is asserted 
 or implied : Richards v. Gdlatly (1872), L. R. 7 C. P. 127 (per Willes, J., at p. 131), and 
 Wiedemann v. WalpoU, [1891] 2 Q. B. 534, C. A. 
 
 (u) Dames v. London and Provincial Marine Insurance Co. (1878), 8 C. D. 469, at p. 475. 
 
 (v) See Edwards v. M'Leay (1815), G. Cooper 308 (Geant, M.R.), affirmed by Lord 
 Eldon, L.C. (1818), 2Swanst. 287(whereit was held that a vendor who, having represented 
 himself to be an owner in fee simple, subsequently received information which showed that 
 his representation was inaccurate, and yet allowed the purchaser to complete in ignorance 
 of the information, was liable to have the sale set aside as a fraudulent concealment, even 
 after completion); Jarrett v. Kennedy (1848), 6 C. B. 319, per Wilde, C.J., at p. 323 
 (where directors of a company, having discovered, before allotment, that all the statements 
 in the prospectus were false when made, withheld this fact from the allottees, and were 
 accordingly held guilty of a fraudulent suppression and misrepresentation, entitling the 
 
128 CH. ni, SECT. 2, SUB-S. (8). 
 
 importance of any failure to observe the plain duty of correcting an innocent 
 misrepresentation immediately on discovery tliat it was false when made 
 is that from that point what has hitherto been innocent becomes fraudulent ; 
 and the non-disclosing party becomes liable not only to rescission and analogous 
 relief, on the theory of a mere breach of a duty to disclose, but to damages 
 also, on the theory of fraud, which alone justifies the granting of that form 
 of relief {w). In the latter type of case, where the statement made in the 
 first instance was in fact true when made, that is to say, in substantial accord 
 with the material facts then existing, but, by reason of supervening events 
 becomes false before the contract is concluded, that is to say, becomes in 
 substantial disaccord with the complete facts existing at the later date, it is 
 no less clear and well established that the party charged, if and when he 
 acquires knowledge of the supervening facts, comes at once under an obliga- 
 tion to reveal them to the other party, by way of correction or modification 
 of his original statement, and, if he fails to discharge this obligation, is liable 
 at least to the extent to which a non-disclosing party is ordinarily liable (x), 
 
 plaintiff to damages) ; SeyndlY. Sprye, (1852), 1 De G. M. & G. &&0,per Lord Cbanwoeth, 
 L. J., at p. 709 (" this, from the date of the discovery " — i.e. of the fact that the plaintiff's 
 interest under a will was much larger than the defendant had originally represented or 
 supposed — " becomes, in the contemplation of this Court, a fraudulent misrepresentation, 
 even though it was not so originally ") ; Arnison v. Smith (1888), 41 C. D. 358, C. A., a 
 prospectus case of the same type as Jarrett v. Kennedy, sup., and with the same result of 
 rendering the defendant liable in damages on the footing of fraud. Contrast with the 
 above the case of Golding v. Royal London Auxiliary Insurance Co. (1914), 30 T. L. R. 350, 
 where the accused, having incorrectly stated, in answer to a question, that he had never 
 had a fire before, realized his mistake and corrected it almost immediately, and was 
 accordingly held entitled to succeed in his claim for the insurance moneys {per Bailhache, 
 J., at p. 351). 
 
 (w) See the cases cited in the last note, and the first part of the passage cited in note (z), 
 inf., from the speech of Lord BLACKBtrBN at p. 950 of Brownlie v. Campbell (1880), 5 App. 
 Gas. 925, H. L. 
 
 (x) See the following illustrations. In Turner v. Harvey (1821), Jac. 109 ; 23 R. R. 15, 
 a purchaser of a bankrupt's interest in certain property at the outset described it (so far, 
 with literal accuracy) as then subject to the life interests of the bankrupt's parents and of 
 his wife : before the completion of the contract the wife died, and the purchaser was 
 apprised of this fact, and kept it secret from the vendors, the bankrupt's assignees. It was 
 held by Lord Eldon, L. C. (p. 1 74) that the language which he had originally used, assuming 
 it to have been true at the time, " he could not use when the wife was dead," and that, 
 having violated the duty of disclosure which attached immediately on his acquiring know- 
 ledge of the supervening fact which made his original statement false, he was liable in a 
 suit by the vendors for rescission (p. 178). In Adamson v. Jervis (1827), 4 Ring. 66, an 
 auctioneer had stated before the auction sale had commenced that he had the authority 
 of the owner to sell. This statement was true when made, but at the time of the sale it had 
 ceased to be so. In an action for damages ioi fraudulent misrepresentation, not for mere 
 breach of warranty of authority, it was held by Best, C.J., at p. 74, deUvering the judg- 
 ment of the Court of C. P., that " for this injury the plaintiff is entitled to compensation, 
 whether the affirmation was false or true at the time it was made. It the defendant had 
 authority to sell at the time he employed the plaintiff, but ceased to have that authority 
 at the time of the sale, he should have informed the plaintiff of this change in his situation," 
 and his silence under the circumstances was not only actionable, but fraudulent, for only 
 on the hypothesis of fraud could he have been made to pay damages, having regard to the 
 iorm of action. Similar omissions to correct a statement, true in fact when made, but 
 rendered untrue by supervening circumstances, were considered not only breaches of duty 
 but tantamount to fraudulent concealment, in Denton v. Great Northern Railway Co. (1866), 
 5 E. & B. 860 (failure to correct a time-table), per Lord Campbell, C. J., at pp. 866, 867, 
 and WiGHTMAN, J., at p. 867 ; Traill v. Baring (1864), 4 De G. J. & S. 318 (concealment 
 of subsequent change of intention truly represented to exist in the first instance) ; British 
 
§ 158 (incidental duties op disclosure). 129 
 
 that is, to have the contract avoided, or, if he sues upon it, treated as void (y). 
 
 It seems also that on principle, and in accordance with the general current of 
 
 authority, this second species of concealment, though not morally as censurable, 
 
 is deemed in law to be equally fraudulent with the first species, and renders 
 
 the party guilty of it equally liable to an action of deceit, and to all other 
 
 civil consequences of any proceeding where fraud is alleged and proved (z). Of 
 
 Equitable Insurance Co. v. Great Western Railway Co. (1869), 38 L. J. (oh.) 314 (where the 
 assured, having correctly stated in answer to a question, when signing the proposal form, 
 that he had no medical adviser, subsequently, and before the polioy was effected, consulted 
 a specialist, who diagnosed his case as one of Bright's disease, without divulging this fact 
 to the insurance company, and it was held that the policy was void {per Gifeabd, L. J., 
 at p. 316 : " there cannot be a doubt that the suppression of that fact -was fraudulent ") ; 
 Oilhert v. Endean (1878), 9 C. D. 259, C. A. (representation by the solicitor of animpe- 
 cunious person negotiating for the compromise of litigation that this person's father, though 
 a man of property, refused to assist him, followed by death of the father intestate, leaving 
 his estate to be shared between his widow and son, which fact, known to the party charged 
 before the compromise was effected, was suppressed : per Beett, L. J., at p. 268) ; Davies v. 
 London <fc Provincial Marine Insurance Co. (1878), 8 C. D. 469 (where one of the parties 
 had, impliedly at least, represented to the other that a certain person was liable to a 
 criminal prosecution; at a subsequent interview, no disclosure was made of the fact 
 that in the meantime the advice of counsel had been obtained to the effect that the success 
 of criminal proceedings was very doubtful, and Fky, J., accordingly ordered the contract 
 of compromise entered into on the faith of the original and uncorrected statement to be 
 set aside) ; Se Scottish Petroleum Co., Anderson's Case (1881), 17 C. T>. 373 {per Malins, 
 V.-C at p. 377), and Be Same, Wallace's Case (1883), 23 C. D. 413, C. A. {per Baggallay, 
 L. J., at p. 432, LiNDLEY, L. J., at p. 435, and Fby, L. J., at p. 438), cases as to retirement 
 of directors (truly described in the prospectus as being so at that date) after the issue 
 of the prospectus, and before allotment ; Me Marshall and Scottish Employers 
 Liability and General Insurance Co. (1902), 85 L. T. 757 (statement by assured, true when 
 made, that he was not insured in any other office, rendered false, before the policy was 
 granted, by his subsequently effecting such an insurance) ; Whurr v. Devenish (1904), 20 
 T. L. R. 385 (where the vendor of a horse by auction correctly described it as his property, 
 before the sale commenced. While it was proceeding, however, the horse was sold 
 privately, and the vendor authorized the sale to continue, without divulging the super- 
 vening fact. The sale was rescinded) ; Harrington v. Pearl Life Assurance Co. (1914), 
 30 T. L. T. 613, C. A. (alteration in state of assured's health). Cp. the authorities on the 
 liability, as a partner by estoppel, of a person who retires from a firm without notifying 
 his retirement, which are collected in the various treatises on partnership, and particularly 
 Goode and Bennion v. Harrison (1821), 5 B. & Aid. 147, a case of an infant partner omitting 
 to give notice of his retirement from the firm on his becoming of age {per Baylby, J., at 
 p. 158, who speaks of the partner " having done nothing to correct the mistake," and of his 
 " suffering that delusion to continue," and points out his duty and interest, if he wished 
 to prevent the operation of estoppel, to " protect himself from the consequences of that 
 misrepresentation by giving notice "). 
 
 {y) See Sect. 5, post. 
 
 (z) At p. 950 of Brownlie v. Campbell (1880), 5 App. Cas. 925, H. L., Lord Blackburn 
 seems to be of opinion that each of the two species of omission to disclose supervening facts 
 which are discussed in the text constitutes fraud, for, after first dealing with the case of a 
 direct lie, he proceeds : " I further agree in this " — which is the first of the above two 
 propositions — " that when a statement or representation has been made in the bond fide 
 belief that it is true, and the party who has made it afterwards comes to find out that it 
 is untrue, and discovers what he should have said, he can no longer honestly keep up that 
 silence on the subject after that has come to his knowledge. That would be fraud, too, 
 I should say, as at present advised. And I go on further still to say, which is perhaps 
 not so clear, but certainly it is my opinion" — and here he is dealing with the second, or a 
 class which includes the second, of the above types of omission, viz. omission to correct 
 a statement which, when made, was believed to be true, and was true in fact, but which 
 subsequent events have rendered false — " where there is a duty and an obligation to 
 speak, and a man in breach of that duty or obligation, holds his tongue and does not speak, 
 and does not say the thing he was bound to say, if that was done with the intention of 
 inducing the other party to act upon the belief that the reason why he did not speak was 
 because he had nothing to say, I should be inclined myself to hold that that was fraud also." 
 It is true that in the following year, James, L.J., at p. ?i'2,^oiArlcv}rightY.Newbold{l%%V), 
 B.N.D. K 
 
130 CH. Ill, SECT. 2, SUB-S. (8). 
 
 course, it is vital for the party complaining to make out that tlie party charged 
 has made a representation of some kind in the first instan ce : unlessthis is shown, 
 it is idle to prove a change of circumstances, of however material a nature (a), 
 for under such conditions the party is free " to hold his tongue throughout." 
 On the other hand, when once the fact of the original statement is established 
 against him, and the fact that such statement was false when made, or became 
 false before the contract was concluded, the burden lies heavily on the party 
 charged to establish that he has observed the duty of disclosure referred to, 
 and this burden he discharges, not by pointing to some ambidextrous and sub- 
 dolous commimication, designed to disguise the truth under a vesture of words 
 which may be afterwards claimed as a revelation of it (b), but only by proof 
 of having made a correction at once timely, complete, and unambiguous (c). 
 
 17 C. D. 301, C. A., in a supplementary statement made by him after the judgments of 
 himseU and the other members of the Court had been delivered, takes upon himself to 
 express his personal view (quite unnecessary to the decision, which was in favour 
 of the defendant on other grounds) that persons issuing a prospectus would not 
 be liable to an action of deceit, though they would be to proceedings for rescission, 
 merely " because they do not mention a fact coming to their knowledge before the 
 allotment of shares, which falsifies a statement in the prospectus " (meaning, of course, 
 a statement which was in fact true when made). This dictum, however, for it is only a 
 dictum, is not only opposed to all principle (Jambs, L. J., himself gives no reasons whatever 
 for his opinion), but is inconsistent with at least the first five of the authorities cited in 
 note (x), sup., two of which were common law actions of deceit, and in the other three of 
 which the equity judges who decided them went out of their way to characterize the silence 
 of the party as fraudulent suppression ; and, further, it was impliedly, but emphatically, 
 repudiated and dissented from, five years later, by Lindley, L. J., at p. 733 of Canning v. 
 Farquhar (1886), 16 Q. B. D. 727, C. A. : " if he had paid the money without disclosing to 
 the office the fact that his statements, which were true when he made them, were so no longer, 
 he would have done that which would have heen plainly dishonest." 
 
 (a) Thompson v. Lambert (1868), 17 W. R. Ill, is a good illustration of this. In that 
 case, where a vendor of a policy of assurance on the life of a certain person sued the pur- 
 chaser for rescission, there had been no initial misrepresentation, and no insinuation of a 
 falsehood, or any positive fraud, in the course of the negotiations, on the part of the 
 defendant, and though, to his knowledge, a very important change in the health of the 
 assured person occurred before the contract was entered into, Walsh, M.R. (Jr.), held, 
 at p. 1 12, that there was no principle on which the defendant could be held liable by reason 
 of this fact alone, though he is careful to observe (p. 113) that, if the defendant had been 
 guilty of any of the above acts, the concealment would have been fraudulent, and relief 
 would have been given to the plaintiff. 
 
 (6) As was the ambiguous circular issued by the directors of a company, on ascertaining 
 the falsity of the prospectus, in Arnison v. Smith (1888), 41 C. D. 358, C. A., which was so 
 framed as " to avoid bringing to the mind of the plaintiffs the real facts of the case, whilst 
 stating enough to enable the defendant to say that the plaintiffs were informed of those 
 facts (per Lord Halsbuby, L.C, at p. 370, after laying down that " it obviously lies on those 
 who rely on a subsequent explanation to show that such explanation was quite clear "). 
 (c) See §§ 19-24, amis. For instances of proper corrections of previous misstatements 
 in the particulars of sale made orally during the progress of the auction sale, see Edumrds 
 to Daniel Syhes & Co., Ltd. (1890), 62 L. T. 445, and Re Hare and CMore's Contract, [1901] 
 1 Ch. 93. The party charged must establish not only the expHcit character of such oral 
 correction, but also the fact that the party complaining heard and understood it. In 
 the former of the two cases cited, Chitty, J., found that the purchaser (or rather his 
 manager, who attended the sale) had heard the correction ; in the latter Joyce, J., seems 
 not to have been saitisfied on the point, since he granted the purchaser rescission, though he 
 refused the particular form of reUef prayed, which was specific performance with compensa- 
 tion. Torrance v. Bolton (1872), 8 Ch. App. 118, was a case in which the reversion offered 
 for sale was misdescribed in newspaper advertisements as "absolute," when in fact it 
 was subject to three mortgages : the necessary correction was made, not in the particulars 
 of sale (which was the proper place for it), but in one of the conditions. The vendor never 
 circulated any printed or written copies of the conditions, but they were read from a 
 manuscript at the sale. In those circumstances, the onus was held to be on the vendor of 
 
§§ 158, 159 (incidental duties of disclosure). 131 
 
 159. The third and last class of case in which a qualified duty of disclosure 
 may be incidentally created by special circumstances is where, in the course of 
 the negotiation, one of the parties asks a direct question of the other as to some 
 fact or matter of which that other was never under any obligation to make 
 any voluntary and unsolicited communication. Of course, where such a duty 
 exists ah initio, the party on whom it lies is not allowed to wait till an inquiry is 
 made, and cannot excuse himself by pointing to the absence of such inquiry((^): 
 but, where there is either no such original duty at all, or none in relation to the 
 particular matter in question, the party who seeks to render the other liable 
 must, if he is to establish such liability, begin by putting a question as to the 
 existence, or non-existence, or the circumstances, of the particular fact, event, 
 or matter. Several other conditions must then be fulfilled before he can make 
 out his right to redress : but this first step must at least be taken ; otherwise 
 he fails in limine. The duty, on the one side, to inquire, where there is no 
 duty of voluntary disclosure on the other, is insisted upon in a large number 
 of the authorities, particularly those relating to marine insurance (e), life in- 
 surance (/ ), contracts between vendor and purchaser {g), and suretyship (h). 
 
 proving that the correction was in this way brought to the actual notice of the purchaser. 
 Not only did the vendor not discharge this onus, but the purchaser established that, being 
 very deaf, he did not hear what was read out, and rescission was accordingly decreed 
 {per Jambs, L.J., at pp. 123, 124). 
 
 (d) See Turner v. Harvey (1821), Jac. 169; 23 R. R. 15, where Lord Eldon, L.C, at 
 p. 177, refers to the carelessness of the plaintifE in not making any inquiry of the defendant 
 whether the bankrupt's wife was alive or dead, but adds (p. 178) that this was no answer 
 to the claim, for it was the duty of the defendant to give the information without waiting 
 to be asked, and " the Court would not permit the party to take advantage of that 
 negligence." So, at pp. 42, 43 of Greenwood v. Greenwood (1863), 2 De G. J. & S. 28, 
 TuBKBB, L.J., disposes of the contention " that it was competent to the other parties to 
 have asked for the particulars not communicated, and that they didnot do so," by pointing 
 out that " this Court does not deal with cases of family arrangement on any such footing. 
 It expects and requires, as I think, in such cases, a full and complete disclosure . . . 
 whether inquiries he made or not. It expects and requires, in such cases, the most perfect 
 hona fides, and it is not in my opinion consistent with bona fides that partial and imperfect 
 statements should be made on the one side, the party making them taking the chance whether 
 a full and perfect explanation will be required on the other side." 
 
 (e)SeeCarierv.£oeAm(1766),3Burr.l905(pe)-LordMANSFiBLD, C.J.,atpp. 1918, 1919); 
 Haywood v. Bogers (1804:), 4 East 590 (per Lord Ellenbobough, C. J., at p. 596) ; Harrower 
 V. Hutchinson (1870), L. B. 5 Q. B. 584, Exch. Ch. {per Cleasby, B., at p. 594) ; The Bedouin, 
 [1894] P. 1, C. A. (per Lord Eshbk, M.R., at p. 12) : Glasgow Assurance Corporation v. 
 William Symondson dk Co. (1911), 104 L. T. 254 {per Scrutton, J., at p. 257 : " if the under- 
 writer wants to know who is the assured" — this was a case of re-insurance — "he must 
 ask ") ; Cantiniere Meccanico Brindisino V. Janson, [1912] 3 K. B. 452, C. A. (perVAUOHAN 
 Williams, L.J., at p. 462, citing s. 18, sub-s. (3) of the Marine Insurance Act, 1906). 
 
 (f) Re General Provincial Life Assurance Co., Ltd., Exp. Daintree (1870), 18 W. R. 396 
 {per Malins, V.-C, who, at p. 397, after stating that " he did not think that this Court 
 would oblige a person to say, without being questioned, by what offices he had been 
 refused," points out that, in that case, there had been a question, and a false answer, which 
 made all the difference). And see the cases cited in the notes to §§ 101, 102, ante. 
 
 (g) Adamson v. Evitt{\8Z0), 2 Russ. & M. 66 {per Leach, M.R., at pp. 71, 72) ; Jones v. 
 Keene(lS4l), 2 M. & Rob. 348 (where the party charged had made a positive misrepresenta- 
 tion in answer to a question, and was held liable on this ground, apart from non-disclosure) ; 
 Nelthorpe v. Holgate (1844), 1 Coll. 203 {per Knight-Beuce, V.-C, at pp. 220, 221) • 
 Ex p. Burrell, Re Robinson (1875), 1 C. D. 537, C. A. {per Baggallay, L. J., at p. 553 : " it 
 was perfectly competent to any of the creditors who were present to have inquired of 
 him whether there was any charge affecting the assets," and, having failed to do so, they 
 could not complain of the bankrupt's non-disclosure, there being no duty on him to make 
 such disclosure except in answer to a question) ; Coaks v. Boswell (1886), 11 App. Cas. 232, 
 H. L. {per Lord Sblbobnb at p. 240). 
 
 (h) Hamilton v. Watson ( 1845), 12 CI. & F. 109 ; Wythes v. Labouchere (1859), 3 De G. & 
 
132 CH. in, SECT. 2, SUB-S. (8). 
 
 160. Having put the question, assuming it to be a proper one {i), the 
 party who seeks to make the other responsible, and who (since there is ex 
 hypothesi no original duty of disclosure on that other) can only do so on the 
 basis of misrepresentation, must get an answer to this inquiry. If he receives 
 none, he is not in a position to establish any failure of duty, either to divulge 
 the facts (for tlie other party has never come under any such obligation), 
 or to state them truly (for he has made no statement at all). Having no right 
 to an answer, he has no ground of complaint. There are no doubt, here and 
 there, loose dicta to be found containing an assertion, or involving an assump- 
 tion, of the existence of such a right (j) : but these dicta are demonstrably 
 erroneous : for at that rate a party to whom no duty of disclosure is owed 
 could at his own will and pleasure, as if he were a statutory or official inquisitor 
 armed with special authority for that purpose, impose a duty on the other 
 party, and confer a right upon himself, which is wholly unrecognized by the 
 law. The true rule is that the party interrogated is entitled to use his dis- 
 cretion as to whether he will answer the question or not (h). He is under no 
 duty to answer at all, and no inference can be drawn from his refusal or neglect 
 to do so (Z) : but, if he elects to answer, assuming again that the question is a 
 proper one {i), he is under a duty to answer truthfully, honestly, and fully (m), 
 
 J. 593 {per Lord Chelmsford, L.C, at p. 610 : " if he meant to act cautiously and 
 prudently, he should, according to the case of Hamilton v. Watson, have put the questions 
 and obtained the information which he required ") ; Mackreth v. Walmsley (1884), 51 
 L. T. 19 {per Kay, J.) ; Seaton v. Bmnand, [1900] A. C. 135, H. L. {per Lord Halsbuey, 
 L.C, at pp. 141, 142, and Lord Shand at pp. 146, 147). 
 
 (i) In the sense mentioned in § 161, and note {p) thereto, inf. 
 
 {j) Several of the expressions used in Cantiniere Meccanico Brindisino v. Janson, sup., 
 to the effect that there is no duty to disclose " till asked " or " without his " — i.e. the 
 underwriter's — " asking for it " (see p. 462, per Vatjchan Williams, L. J. ), as also the first 
 words of s. 18, suh-s. (3) of the Marine Insurance Act, 1906 (" in the absence of inquiry "), 
 would seem to suggest that, when asked the question, the duty does arise : though this is 
 not really a legitimate inference. It was, however, undoubtedly said in plain terms by 
 that singularly inaccurate judge (particularly in marine insurance law). Lord Ellbn- 
 BOBOITGH, C. J., at p. 596 of Haywood v. Rogers (1804), 4 East 590, that if, in the case of a 
 marine poUcy, a question is put which " may be very proper and convenient for an under- 
 writer to be informed of before he undertakes the risk," and which therefore " may be 
 asked of the assured," and if, thereupon, the assured ' ' should withhold, on being asked 
 for it, any material part of such required information, his policy could not be sustained 
 for a moment." 
 
 {k) Coalcs V. Boswell (1886), 11 App. Cas. 232, H. L. {per Lord Sblbobne at p. 240 : 
 " he " — ^the respondent — " asked no question on that subject ; if he had done so, it would 
 then have been for Mr. Coalcs to exercise his discretion as to answering or not "). 
 
 {I) Except, of course, in a case where the truth and completeness of answers to specific 
 questions are made the basis of the contract, as in most life insurance transactions, and 
 where, therefore, the assured cannot escape by leaving the space for the answer blank : see 
 the observations of Jessbl, M.E,., at p. 369 of London Assurance Co. v. Mansd (1879), 11 
 0. D. 363. 
 
 (m) Harrower v. Hutchinson (1870), L. R. 5 Q. B. 584, Exch. Ch. {per Clbasby, B., at 
 p. 594 : " it was for them " — the underwriters — " to ask such questions as they deemed 
 material, and then they would have been entitled to true answers ") ; The Bedouin, [1894J 
 P. 1, 0. A. {per Lord Esheb, M.R., at p. 12 : " his other obligation " — the first being the 
 original duty to communicate facts material to be disclosed — " is this, that if he is asked 
 a question ... he must answer truly. If he answers it falsely with intent to deceive, 
 though it may not be a material fact, it will vitiate the poMcy. The underwriter has a 
 right to have his question truly answered "). The above are marine insurance cases. An 
 instance of the application of the same rule to a case of life insurance is to be found in 
 
§§ 160, 161 (incidental duties op disclosure). 133 
 
 and any violation of this duty exposes liim at once to all the consequences 
 of misrepresentation. But, though he is under no legal obligation to reply 
 to the inquiry, he has an obvious interest in doing so, and in this highly 
 metaphorical sense, but in no other, he may be said to be "bound" to 
 answer (n) : for silence, imder such conditions, must almost inevitably have 
 the efltect of closing the negotiations at once, and killing the business (o), 
 the assumption being that no statement in response to the invitation can 
 truthfully be made which would not have a deterrent operation upon the 
 mind of the person inviting it. 
 
 161. Assuming that the questioner has elicited an answer, and that the 
 answer is false, he is still not in a position to fix responsibility upon the 
 answerer, unless he can establish the other elements of proof necessary to 
 constitute a good cause of action for misrepresentation. These other elements 
 are inducement and materiality. In most cases, there is no dif6.culty what- 
 ever in proving the former : but it is not always so easy to prove materiality, 
 by which is meant, not materiality to be disclosed (for the discussion begins 
 with the assumption that the fact about which the inquiry s made is not 
 a fact required to be disclosed), but materiality in the sense in which that 
 term is applied to a misrepresentation of a nature to induce a person to act 
 on the faith of it (p). This latter kind of materiality he must prove (q), 
 though, no doubt, the mere fact that the question is asked at all goes a long 
 
 Re General Provincial Life Assurance Co., Exp. Daintree (1870), 18 W. R. 396 (yerMAUNS, 
 V.-C, at p. 397), and of its application to a suretyship C3.se,in Maclcreih^. Walmsley (1884), 
 51 L. T. 19. 
 
 (n) A similar use, or misuse, of the word " duty " is made in connection with the 
 doctrine of presumptive knowledge, whenever it is said that a person " put upon inquiry " 
 is " bound " to investigate, nothing more being meant than that, in his own interest, he 
 must do so. See App. A, § 638, post. 
 
 (o) This was well put by Knight-Betjce, V.-C, at p. 221 of Nelthorpe v. Holgate (ISii), 
 1 Coll. 203 : " the answer to which " — i.e. the question which the vendor ought to have 
 asked of the purchaser, but did not — " if false, might possibly have given a defence against 
 the contract ; if true or evasive might possibly have stopped the progress of the trans- 
 action." It will be observed that the V.-C. applies the word "possibly " to both the 
 events which he is contemplating, instead of "inevitably" or "probably," which, as 
 stated in the text, would be the term applicable to the normal type of case : but this was 
 because the inquiry in the particular case before him would have related to a fact of 
 extremely doubtful materiality even in the narrower sense of the term : see note («), inf. 
 It must also be remembered that if, on a question being left unanswered {e.g. in a proposal 
 form for insurance), the insurer goes on with the negotiations and ultimately issues the 
 policy, this fact alone may be some evidence that he never thought the question of any 
 importance, or will at all events strengthen any other evidence there may be that he knew 
 the facts aliundi, as in Thornton-Smith v. Motor Union Insurance Co. (1913), 30 T. L. R. 
 139. 
 
 {p) As to what materiality means for the purposes of the law of misrepresentation, see 
 Ch. VI, Sect. 2 of the author's Law of Actionable Misrepresentation. For illustrations of 
 circumstances which, though material in the sense that any misstatement of them might 
 give a cause of action to a person in fact induced thereby to alter his position, are yet not 
 material to be disclosed, see ante, § 85 (general), § 99 (marine insurance), § 101 (life 
 insurance), § 117 (vendor and purchaser), §§ 120, 122, 123 (suretyship), § 137 (compromises), 
 § 141 (partnership), §§ 147, 148 (contracts to marry), § 150 (deeds of separation), and the 
 cases cited in the notes thereto respectively. 
 
 (q) When, at p. 12 of The Bedouin, [1894] P. 1, C. A, Lord Esheb, M.R.— see the 
 citation in note (m), sup. — says, " though it may not be a material fact," he must mean 
 that it is not necessary to show that the fact was material to be disclosed. If he meant 
 anything else, the statement is quite contrary to all the authorities. 
 
134 CH. Ill, SECT. 2, SUB-S. (8). 
 
 way to prove ttat the questioner at least regarded it as material (r), and 
 tliat the party of whom the question is asked knew that the questioner so 
 regarded it, and thus to establish materiality as between the parties, or 
 " materiality to the inducement " (as it has been called), which is enough (s) : 
 just as, conversely, the fact that the party complaining has made no inquiry 
 as to a particular point, especially if he has prosecuted diligent researches in 
 some other and distinct direction, is almost conclusive evidence that he never 
 considered it of any importance or materiality (t). If, however, it appears that, 
 though a question was put as to a certain fact, it was nevertheless not regarded 
 by the questioner as of any importance, or was so obviously unimportant 
 that it could not have been so regarded, but must have been put in mere 
 idleness, there may be much difficulty in obtaining relief on the basis of 
 actionable misrepresentation (u) : whilst, if the question is wholly officious 
 and improper {v), the party putting it not only is not entitled to have an 
 answer — to that he has no right in any case — but he has not even a right to 
 a truthful answer (w). 
 
 162. To sum up : — ^the party who asks a question as to a matter which 
 there was no duty on the other party to reveal voluntarily, has no ground 
 of complaint, unless his inquiry elicits an answer. He has no ground of 
 complaint in respect of this answer, unless it is false. And he has no cause 
 of action in respect of a false answer, unless it induced him to enter into the 
 contract or transaction contemplated, and was such that its tendency, or 
 its natural and probable result, was to so induce him. 
 
 163. Except under the conditions already stated, no duty of disclosure 
 whatever exists or can arise during negotiations preliminary to contracts 
 and transactions other than those already specified (x). Put shortly, where 
 the contract contemplated by the negotiating parties is not such as to raise 
 an original duty of disclosure, no such duty can be created afterwards, except 
 by circumstances which make non-disclosure a " fraudulent silence," as it 
 has been termed (y), or which constitute fraudident misrepresentation, or 
 
 (r) As was observed by Jbssel, M.R., at p. 371 of London Assurance Co. v. Mansel 
 (1879), 11 C. D. 363, and by Bailhache, J., at p. 351 of Golding v. Royal London Auxiliary 
 Insurance Co. (1914), 30 T. L. R. 350. 
 
 (s) See § 129 of the author's Law of Actionable Misrepresentation. 
 
 (t) This was the case in Beaton v. Burnand, [1900] A. C. 135, H. L., where Lord Hals- 
 BUEY, L.C., at p. 139, and Lord Bbampton at p. 148, point out that though persistent 
 inquiries were made as to a certain person's solvency, which was what the defendants had 
 guaranteed or insured, none were instituted as to the circumstances of the loan made 
 by the plaintiff which the defendants were held not to have guaranteed. 
 
 (u) See Ndthorpev. Holgate (1844), 1 Coll. 203, where a vendor suing for specific per- 
 formance, complained that the purchaser had not divulged to him that he had an arrange- 
 ment to resell to a third party, and where Kntght-Brtjoe, V.-C, thinking that, even if a 
 question had been put by the vendor, which it was not, and had elicited a false answer, 
 the misrepresentation would have been of very doubtful materiality, used the cautious 
 expression " possibly " referred to in note (o), sup. 
 
 (v) As was the requisition made in Ford v. Hill (1879), 10 C. D. 365, C. A. 
 
 (w) This is discussed in § 1 19 of the author's Law of Actionable Misrepresentation. See 
 the cases cited in the notes thereto. 
 
 (a;) See Sub-s. (2)-(7) of this Section, ante. 
 
 {y) " Fraudulent silence " is the expression used by Fey, J., at pp. 310,311 otArkwright 
 V. Newbold (1881), 17 C. D. 301 , C. A., as cited in note (g) to § 155, ante, and pertinaciously 
 
§§ 161-163 (incidental duties of disclosure). 135 
 
 otherwise establish an intention to deceive. The proposition, in its widest 
 application, as laid down by the Exchequer Chamber (2), is that " if dolus 
 . . . can exist independently of evil intention, it cannot so exist without 
 either the violation of some duty independent of contract, or the breach of 
 a contract, express or implied, between the parties (a). To recognize in a 
 Court of justice dolus, or wrong, or misconduct, as a ground of action or 
 defence, apart from these conditions, would be to confound all certainty in 
 the law." It may now be said to be firmly established that silence as to 
 matters which there is no duty, original or supervening, to divulge, however 
 actionable a positive misrepresentation of such matters may be (b), and 
 however censurable in foro conscientice even the withholding of them may 
 be (c), subjects the party observing silence to no legal liability whatever : 
 and the Courts have, on the whole, steadily refused to accede to the invitations, 
 again and again addressed to them, to pronounce that reticence, except under 
 the conditions stated, can, under the seductive designations of " fraudulent 
 silence," " sharp practice," " hardship," " oppression," and the like, ever, 
 be deemed equivalent to fraud or even misrepresentation {d). " Conceal- 
 ment " or suppressio veri, which is often said to be actionable, imports the 
 existence of a duty. A man cannot be said to conceal what he is not bound 
 to reveal, suppress what he need not express, or keep back what he is not 
 bound to put forward. No doubt there are scattered dicta to be found in 
 the reports (e), and even one or two actual decisions (/), which may be said 
 
 clung to in the argument for the defendant in Turner v. Green, [1895] 2 Oh. 205, as to which 
 case see Sect. 8, Sub-s. (3), post. Cp. the expression " fraudulent blindness " (in relation 
 to presumptive knowledge) which is discussed in § 634, post. 
 
 (z) At p. 1049 of Thompson v. Hopper (1858), E. B. & E. 1038, Exch. Ch. A similar 
 rule applies in cases of estoppel by " omission " to speak, which only arises " where there 
 is a duty cast upon a person, by usage of trade or otherwise, to disclose the truth," per 
 Parke, B., at p. 663 oi Freeman v. Cooke (1848), 2 Exch. 654. 
 
 (a) See Sub-s. (9) of this Section, post, as to "contracts for the truth." 
 
 (6) See the illustrations given of matters which there is no obligation to disclose, in 
 §§ 92, 93, 95, 96, 99, ante (marine insurance); § 117, ante, and § 165, post (vendor and 
 purchaser) ; §§ 120, 122, 123, ante (suretyship) ; § 141, ante (agreements for partnership) ; 
 § 147, and note (p) thereto, ante (promises to marry) ; § 150, post (deeds of separation) ; 
 § 167, and note (o) thereto, post (infancy) ; § 167, and notes (q), (r), (s), (t), («) thereto, 
 post (miscellaneous). It is clear that misrepresentation of these matters, as is pointed out 
 in the several places cited, would be actionable. 
 
 (c) See App. B, § 667, post. 
 
 {d) Horsfall v. Thomas (1862), 1 H. & C. 90 (per Bramwbll, B., at p. 100 : " there 
 must be . . . the suppression of that which is true, and which it was his duty to communi- 
 cate ") ; Walters v. Morgan (1861), 3 De G. F. & J. 718 {per Lord Campbell, L.C, at 
 pp. 723, 724 : " simple reticence does not amount to legal fraud, however it may be viewed 
 by moralists ") ; Davies v. London Provincial Marine Insurance Co. (1878), 8 C. D. 469 
 {per Fey, J., at p. 474 : " where parties are negotiating with one another, each may, 
 unless there is a duty to disclose, observe silence," &c.) ; Brownlie v. Campbell {IS&d), 5 App. 
 Cas. 925, H. L. {per Lord Blackburn at p. 950 : " where there is a duty and an obligation 
 to speak, and a man in breach of that duty or obligation holds his tongue and does not 
 speak," &c.) ; Seddon v. Ncnih Eastern Salt Co., [1905] 1 Ch. 326 {per Joyce, J., at p. 335 : 
 " as far as I know, silence has never yet been held to amount to misrepresentation," — 
 meaning, of course, mere silence). 
 
 (c) See, for instance, the amazing deliverance of Btjllee, J. (sitting in Chancery for 
 
 (/) These are Ellard v. Lord Llaiidaff (1810), 1 BaU & B. 241 ; 12 R. R. 22, a case 
 which is abstracted and fully discussed in Sect. 8, Sub-s. (4), post, and Hill v. Cray (1816), 
 1 Stark. 434. 
 
136 CH. Ill, SECT. 2, SUB-S. (8). 
 
 to have adopted, or encouiaged, tlie heresy in question : but the dicta must 
 now be regarded as quite unsound {g), and the decisions, if not in terms 
 overruled, have been so plainly dissented from in later judicial deliverances (h) 
 as to divest them entirely of any authority they may have ever possessed. 
 
 164. The most attractive form in which this erroneous doctrine has been 
 presented is the following. It has been frequently urged that, assuming 
 a negotiation between A. and B. in contemplation of some contract or transac- 
 tion not falling within any of the special classes already indicated, and 
 admitting that in any such case the mere knowledge by A. of some fact 
 having an important bearing on the subject of the negotiation, coupled with 
 B.'s ignorance of that fact, raises no duty of disclosure on the part of A., — 
 indeed, it would be hopeless to contend otherwise (i), — ^yet, if the additional 
 
 Lord Thuklow), which is cited in § 1, note (5), ante ; also that portion of Rolpb, B.'s 
 direction to the jury in Jones v. Keene ( 1841), 2 M. & Rob. 348, in which he laid down that, 
 apart from the misrepresentation there proved, it was open to the jury to find for the 
 plaintiff on the mere ground that the defendant had not communicated a certain fact, which 
 <it being a case of vendor and purchaser, and the fact in question not being one relating to 
 title) there was no duty to disclose ; and, lastly, a pious suggestion, rather tha;n a definite 
 expression of opinion emanating from Fry, J., at p. 311 oi Arkwright v. Nevibold, sup., 
 as to the duty of prospeotus-framers extending so far as to comprise an obligation to make 
 f uU disclosure to the public of material facts, in addition to the obligation not to expressly 
 or impliedly misrepresent them, following some similarly wide observations at pp. 381, 382 
 of New Brunswick & Canada Railway & Land Co. v. Muggeridge (1860), 1 Dr. & Sm. 363. 
 Sir Frakcis Builee, above referred to, though an excellent common law judge, and so 
 much in Lord Mansfield's confidence that during the last few years of the latter's judicial 
 life he practically presided over the Ring's Bench, was not very successful when called away 
 from his normal sphere to intermittent exercises in Chancery, and of his " knowledge of 
 equity, Lord Thurlow," as Hamzltost, L.J., observes at p. 139 of Baylis v. Bishop of 
 London, [1913] 1 Ch. 127, C. A., " spoke disrespectfully." 
 
 (g) See notes (2) and (d), sup., and Turner v. Green, [1895] 2 Ch. 205, where, though 
 reasons are given in Sect. 8, Sub-s. (3), post, for considering the decision itself to be in- 
 correct, the principles laid down which repudiate the errors mentioned in the text are 
 quite sound. 
 
 (h) The decision of Lord Manners, L.C. (Ir.), in Ellard v. Llandajf (1810), 1 Ball & B. 
 241, in so far as it proceeded on the impugned doctrine, cannot be supported : see Sect. 8, 
 Sub-s. (4), post. The summing up of Lord Ellenborouqh, C.J., in Hill v. Cfray, sup., 
 which contains stiU more extraordinary views of the duty of disclosure, was distinctly 
 disapproved of, if not formally overruled, by Jervis, C. J., at p. 600 of Keates v. Cadogan 
 (1851), 10 C. B. 591, and by Lord Chelmseobd, L.C, at pp. 390, 391 of Peek v. Ourney 
 (1873), L. R. 6 H. L. 377. A fuU abstract and criticism of Hill v. Gray is to be found 
 in § 92 of the author's Law of Actionable Misrepresentation. 
 
 (i) See the passage which is cited in § 165, post, from the judgment of Lord Thurlow, 
 L.C, in Fox v. Mackreth (1788), 2 Cox 320 ; also the judgment of Knight-Brttcb, V.-C, 
 in Stikeman v. Dawson (1847), 1 De G. & Sm. 90, a case in which the plaintiff propounded 
 " the notion of charging a man in equity after his majority upon a . . . contract made 
 during his minority, merely because, without any false assertion by him, the other party 
 believed he was not a minor " (p. 116), or, put more in detail, " the contention . . . that, 
 on the assumption of the young man's acquaintance with his minority, . . . and also of 
 the brokers' belief, during their dealings with him, that he was not a minor, as well as of 
 his omission to communicate to them the fact that he was a minor, there was a fraud on his 
 part, for which he became or was after his majority, and is, answerable in a court of equity " 
 (pp. 108, 109). This "contention," and "general proposition" (p. 113), the V.-C, at 
 p. 116, pronounces to be " contrary to principle, of dangerous consequence, and not 
 established by authority." So Williams, J., at p. 780 of Smith v. Scott (1859), 
 6 C B. (n.s.) 771 (" the allegation of knowledge in the plaintiff, and absence of 
 knowledge in the defendant, does not amount to an allegation of fraud"), and 
 Walsh, M.R. (Jr.), at p. 112 of Thompson v. Lambert (1868), 17 W. R. HI (" I cannot hold 
 that the mere knowledge of a fact which had some influence on the conduct of the one 
 
§§ 163, 164 (incidental duties of disclosure). 137 
 
 element be present that A. knows or believes that B. is ignorant of the fact 
 and is negotiating in that ignorance, A. at once comes under an obligation of 
 disclosmre to which, but for the presence of this additional element, he would 
 admittedly never have been subject. This contention, though it derives 
 some encouragement from a careful selection, and detachment from their 
 context, of passages containing individual expressions of judicial opinion or 
 suggestions thrown out en passant (j), is utterly and obviously imsound 
 in principle. One starts with the hypothesis that A. is under no duty to 
 divulge what he knows to B., who has no knowledge. How can the added 
 fact that A. knows that B. is ignorant create an obligation on A.'s part which 
 did not previously exist ? If under the conditions stated (viz. his own know- 
 ledge and B.'s ignorance) A. has a legal right to observe silence, that right 
 cannot possibly be extinguished or affected by the mere circumstance that 
 A. is conscious of the existence of these conditions, any more than any other 
 legal right ceases to be so merely because it is exercised in a spirit of personal 
 malevolence, hostility, or oppression towards the person over whom the right 
 exists (k). The dicta referred to will be found either in cases where the 
 actual decision was against the party complaining, and where, therefore, 
 they can only be regarded as gratuitous and supererogatory suggestions of 
 elements which, if established, might conceivably, in the view of the particular 
 judge at the moment, have constituted a ground of complaint (I), or in cases 
 where, though the judgment containing the dictum was in favour of the 
 party complaining, it was not based on the contention in question, but on 
 some other ground (m), or where (as in one case which, so far as the decision 
 
 party, and which the other was ignorant of, is sufficient to invalidate a contract ") ; and 
 see Smith v. Hughes (1871), L. R. 6 Q. B. 597, where it was held to be no defence to an 
 action for the price of new oats sold by sample that the purchaser beheved them to be old 
 oats, and, as such, commanding a higher price, whereas the seller knew that they were not. 
 
 (j ) See the language used by Lord Mastners, L.C. (Ir.), at p. 250 of Ellard v. Lord 
 Llandaff, sup. (" the plaintiff must not be allowed to deal on a lease as a good and sub- 
 sisting one, when at the time he was conscious that it was worth nothing, and that the other 
 party was ignorant of that fact") ; by Lord Eldon, L.C, at pp. 463, 464 of Gordon v. 
 Gordon (1821), 3 Swaust. 400 (" I suppose the most prominent mode of putting the fact 
 of imposition is this : that James Gordon knew that there had been a marriage de facto 
 ■ . . and knew that Harry was not aware of it, and kept from him the knowledge of that 
 fact "), and, again, at p. 178 of Turner v. Harvey (1821), Jac. 169 (" this case goes further ; 
 for it is a case where the defendant knew the fact of the wife's death, and where he must have 
 known, before he could get the contract completed, that they" — the assignees — "did not 
 know it"); by Bylbs, J., at p. 783 of Smith v. Scott, sup. ( " the plea omits to add that the 
 plaintifi was aware of the defendant's want of knowledge "), implying that, if this addition 
 had been made, the plea would have been good; by Jervis, C.J., at p. 784 of Evans v. 
 Edmonds (1853), 13 C. B. 777 ; by Hill, J., at p. 797 of Beachey v. Brown (IHQQ), B. B. & E. 
 796 (" it is not averred that the plaintiff knew that the defendant did not know of the first 
 contract ") ; and by Hanneit, J., at p. 611 of Smith v. Hughes, sup., who there lays down 
 that if the seller believed that the purchaser beheved that the oats were old, and that he 
 (the seller) was contracting to sell them as old, there would have been a defence to the 
 action. 
 
 (k) Allen v. Flood, [1898] A. C. 1, H. L. 
 
 (l) This was the case in Smith v. Scott, Beachey v. Brown, and Smith v. Hughes, sup. 
 
 (m) As in Gordon v. Gordon, sup., where the decision was based on the duty of disclosure 
 arising out of negotiations for a compromise; Turner v. Harvey, sup., where the real 
 ground of the judgment was fraud and misrepresentation ; Evans v. Edmonds, sup., as to 
 which see note (l) to § 150, ante. 
 
138 CH. Ill, SECT. 2, SUB-S. (8). 
 
 rests upon such contention, is now regarded as of no authority) the judgment 
 proceeded upon two distinct lines of reasoning, one of which (not being the 
 heresy now under discussion) was quite sound, and sufficient to support the 
 decision (n). Wherever the point has been definitely raised as a proposition 
 necessary, or conceived by the party advancing it to be necessary, to success 
 in the action, it has failed (o). 
 
 165. Illustrations of the rigid application of the above principles, and 
 of the steady refusal of the courts to invent, or to countenance the introduc- 
 tion of, new equities or new common law duties, in the province of disclosure, 
 are abundant. Thus, it has been held that the owner of land who is pro- 
 posing to sell or demise it to another may, without entailing any legal conse- 
 quences, observe and maintain absolute silence as to its physical condition 
 or defects (p) ; the vendor of a chattel need not, in the absence of any express 
 or implied warranty, reveal, though he must not by positive contrivances 
 cover up or hide away, any of its imperfections {q), or divulge the absence of a 
 quality which the buyer beUeved it to possess, for " even if the vendor was 
 aware that the purchaser thought that the article possessed that quality, 
 and would not have entered into the contract unless he had so thought, 
 still the purchaser is bound, unless the vendor was guilty of some fraud or 
 deceit upon him, and ... a mere abstinence from disabusing the purchaser 
 of that impression is not fraud or deceit, for, whatever may be the case in 
 a court of morals, there is no legal obligation to inform the purchaser that 
 he is under a mistake not induced by the misrepresentation of the vendor " (r), 
 and " the passive acquiescence of the seller in the self-deception of the buyer " 
 willnot " entitlethelattertoavoidthecontract " (s) ; there-seller of property, 
 as such, need not disclose to the purchaser what he paid to acquire it, or 
 what profit he is making on the re-sale (t) ; nor is a patentee who is negotiating 
 for the grant of a licence to work the patented invention bound to com- 
 municate to the intending licensee the fact that the patent has no value, or 
 even validity (u) ; and a director of a company, when in treaty with an 
 
 (n) This was Ellard v. Lord Llandajf (1810), 1 Ball & B. 241, as to which case see 
 Sect. 8, Sub-s. (4), post 
 
 (o) See, especially, Turner v. Green, [1895] 2 Ch. 205 (as to so much of the judgment of 
 Chitty, J., as deals with, and disposes of, the contention in question), and the discussion 
 of this case in Sect. 8, Sub-s. (3), post. 
 
 (p) See, as to a lease of premises known by the lessor, and not known by the lessee, 
 to be ruinous or unsafe, Keates v. Cadogan (1851), 10 C. B. 591 ; Cavalier v. Pope, [1906] 
 A. C. 428, H. L. {per Lord Macnaghtbn at p. 430) ; Byall v. Kidwell <b Son, [1914] 3 
 K. B. 135. And see, generally, the cases cited in the notes to § 117, ante. 
 
 iq) Horsfall v. Thomas (1862), 1 H. & C. 90. 
 
 (r) Smith v. Hughes (1871), L. R. 6 Q. B. 597 (the oats case referred to in note (i) to 
 § 164, sup.), per Blackbuen, J., at p. 607. 
 
 (s) Ibid., per Cockbtjrn, C.J., at p. 603. 
 
 (i) Per Lord Hatheeley, L.C, at p. 1244 of Erlanger v. New Sombrero Co. (1878), 
 3 App. Cas. 1218, H. L., as cited in note (r) to § 117, ante. Secus, if the vendor is not 
 merely a vendor, but stands also in some relation to the purchaser other than that of mere 
 vendor, such as is described in Chapters IV and V, post. In the case cited, the vendor 
 was also promoter of the company to whom he was reselling, and there was therefore, in 
 virtue of this added relation, a duty of disclosure which would not have been incumbent 
 on him as a vendor and nothing else. As to this distinction, see § 330, post. 
 
 (u) Smith V. Scott (1859), 6 C. B. (n.s.) 771 (at pp. 780, 782, 783). 
 
§§ 164, 165 (incidental duties of disclosure). 139 
 
 individual shareliolder (r), a fortiori wlien he is dealing with a member of the 
 outside public, is free from any obligation to communicate any knowledge 
 he may have acquired in his office as to losses incurred by the company in the 
 ordinary course of management. Conversely, the negotiating purchaser is 
 under no legal duty to communicate facts, unknown to the vendor, which are 
 calculated to enhance the value of the property. The typical case selected 
 by judges to illustrate this side of the proposition is the case of a mine known 
 to the intending buyer to exist under the property, but of which the vendor 
 has no knowledge or suspicion. " Let me put this case," says Lord Thublow, 
 L.C., in a famous judgment (w) : — " Suppose A., knowing of a mine on 
 the estate of B., and knowing at the same time that B. was ignorant 
 of it, should treat an.d contract with B. for the purchase of that estate 
 at only half its real value, can a court of equity Set aside this bargain ? 
 No ; but why is it impossible ? Not because the one party is not aware of 
 the unreasonable advantage taken by the other of this knowledge, but because 
 there is no contract existing between them by which the one party is bound 
 to disclose to the other the circumstances which had come within his know- 
 ledge. ... It is therefore not only necessary that great advantage should be 
 taken in such a contract, and that such an advantage should arise from a 
 superiority of skill or information ; but it is also necessary to show some 
 obligation binding the party to make such a disclosure. Therefore, the 
 question is, not whether the transaction be such as a man of honour would 
 disclaim and disdain, but it must fall within some settled definition of wrong 
 recognized by this Court." Similarly, Lord Eldon, L.C, in a later case, 
 in order to enforce his proposition that " the purchaser may use his own 
 knowledge, and is not bound to give the vendor information of the value of 
 his property," employs the same illustration : " if an estate is offered for 
 sale, and I treat for it, knowing that there is a mine under it, and the other 
 party makes no inquiry, I am not bound to give him any information of it : 
 he acts for himself, and exercises his own sense and loiowledge " (x). To 
 the same effect, Cockburn, C.J., observes that " the question is not what a 
 man of scrupulous morality or nice honour would do under such circum- 
 stances. The case put of a purchaser of an estate, in which there is a mine 
 under the surface, but the fact is unknown to the seller, is one in which a man 
 of tender conscience or high honour would be unwilling to take advantage 
 of the ignorance of the seller ; but there can be no doubt that the contract 
 for the sale of the estate would be binding " (y). It is scarcely necessary, 
 except ex ahundanti cauteld, to enter a caveat here against the application of 
 the above illustrations to any case in which the intended purchaser of the 
 
 {v) For though he stands in a certain fiduciary relation to the company, he stands in 
 none towards any of the shareholders, as explained by Swinfen Eady, J., at p. 426 of 
 Percival v. Wright, [1902] 2 Ch. 421, in the absence of special circumstances, such as 
 existed in, for instance, Allen v. Hyatt (1914), 30 T. L. R. 444, P. C. ; and this, whether 
 he is proposing to seU, or to purchase : see note ( / ), inf. 
 
 (w) Fox V. Maclcreth (1788), 2 Cox 320, at p. 322. 
 
 (x) At p. 178 of Twner v. Harvey (1821), Jac. 169 ; 23 R. R. 15. 
 
 {y) At pp. 603, 604 of Smith v. Hughes (1871), L. R. 6 Q. B. 597. 
 
140 CH. Ill, SECT. 2, SUB-S. (8). 
 
 mine is something more ttan a negotiator for such purchase, that is to say, 
 stands to the other party in a relation which disables him from contracting 
 at all -with such party except under very stringent conditions, one of which is 
 full disclosure (z), or to any case of the type already discussed in which the 
 purchaser has been guilby of active fraud in the course of the negotiations 
 or before their commencement (a). Another familiar example is the case 
 of a purchase of a valuable picture by a skilled person from one who thinks 
 it rubbish, and sells it as such. After observing that " it would be an error 
 to say generally that you cannot enforce a contract in this court where the 
 one party knows more of the value than the other does," Lord Hatheeley, 
 L.C., adds — ' it happens frequently in the purchase of pictures, for instance, 
 that one party knows more of the value than the other, yet the bargain is 
 perfectly good " (6). But here, again, there is an exception which proves 
 the rule, viz. when the party proposing the pmchase has acquired his peculiar 
 and exclusive knowledge in the course and exercise of fiduciary duties ; to 
 take the instance put by Lord Hatherley himself in the very passage above 
 cited, — if " a picture-dealer, employed to clean a picture, scrapes ofi a 
 part of the picture to see if he can discover a mark which will tell him who is 
 the artist, and then finds a mark showing it to be the mark of a great artist ; 
 that would not be a legitimate mode of acquiring knowledge for the purpose 
 of enabling him to buy the picture at a lower price than the owner would 
 have sold it for had he known it to be the work of that artist " (c) : and 
 so, if the party charged makes the discovery when agent for the sale of the 
 picture (c[). Similarly, an intending purchaser is not required by any rule 
 of law to commimioate to the proposed vendor the fact, previously ascertained 
 by him, that a railway authorized by Parliament is intended to pass through 
 the property proposed to be bought, or (even if he is also the vendor's solicitor) 
 the speculative possibility that a railway known to be in contemplation will 
 improve the value of such property (e) ; or, if he is a director of a company 
 proposing to buy shares from a shareholder, " a large casual profit, the dis- 
 covery of a new vein, or the prospect of a good dividend in the immediate 
 future " {/) ; or any of the motives or considerations which " may influence 
 
 (z) See the distinction which is drawn between the two classes of case, in reference to 
 this illustration of undisclosed mines, in note (6) to § 318, post. 
 
 (a) See the cases cited in notes (d), (e), and ( / ) to § 154, ante. 
 
 (b) At p. 779 oi Phillips v. Homfray (1871), 6 Ch. App. 770. 
 
 (c) Ibid., p. 780. 
 
 (d) Lowther *•. Lord Lowther (1806), 13 Ves. 95, where the agent to sell a "Mars and 
 Venus " found out, in the course of his agency, that it was a Titian, and as such worth 
 about £5000, and at once proceeded to negotiate and effect a purchase of the picture from 
 his principal for £300 (per Lord Eeskine, L.C, at p. 103). This case may have been in 
 Lord Hathebley's mind when he gave the illustration mentioned in the text. 
 
 (c) Edwards v. Meyrick (1842), 2 Hare 60 (per Wigbam, V.-G, at pp. 73-75). 
 
 ( / ) Per SwiNFEN Eady, J., at p. 426 of Percival v. Wright, [1902] 2 Ch. 421, in the same 
 passage — see note (v), sup. — in which he insists on the like absence of duty to disclose 
 information as to circumstances likely to depreciate the shares in the converse case of the 
 director proposing to sell. Still less is such a director called upon to divulge the receipt 
 of news from the seat of the company's operations to Stock Exchange brokers who im- 
 properly pester him with questions and seek to worm confidential secrets out of him for 
 their own purposes : see Tachey v. McBain, [1912] A. C. 186, 192, P. C. 
 
§§ 165, 166 (incidental duties of disclosueb). 141 
 
 his own conduct or judgment wlien bargaining for liis own interest " (g), 
 e.g. a contract to resell the property, when acquired, to a third person at a 
 profit (h), or the use to which he intends to put the property after com- 
 pletion of his purchase {i), or the fact that he is buying for a principal, or, 
 if he is so buying, the name of such priQcipal (j) : though, if any of the above 
 matters be actually misrepresented, in answer to an inquiry or otherwise, 
 such misrepresentation may be " material to the inducement," if not to the 
 contract, and so become actionable (k), unless it is a mere case of general 
 belittUng and depreciation, which is no more actionable than the laudatory 
 generalities and exaggerations of the vendor ; for, as has been said, " a stranger 
 bargaining for himself . . . might say. Your house is not a good one ; he 
 might say it was valueless. . . . Such has been the course of business for at 
 least 3000 years; 'It is naught, it is naught, saith the buyer, but when 
 he has gone his way, then he boasteth ' " (kk). So also, the silence of one 
 who is purchasing the services of another as to the difficulties which may be 
 encountered by the contractor in the execution of the specific work is quite 
 innocuous (I), though an express or implied denial of their existence, or 
 misdescription of their nature, is clearly actionable (m). 
 
 166. In all the above instances, assuming that no single word has been 
 let fall which might mislead, and no device of any sort employed, and further 
 that the parties, when negotiating, stand in no other relation to one another 
 than that of persons so negotiating, reticence is unamenable to the law. It 
 is often simply a case of one man bringiug his knowledge, experience, skill, 
 or sagacity (native or trained), to bear upon the transaction, and so using 
 
 (?) Per Lord Selbobnb at pp. 235, 236 of Goaks y. Boswdl (1886), 11 App. Cas. 232, 
 H. L. To the same effect, Romilly, M.B., observed at p. 407 of Dolman v. Nohe3, inf. : 
 " it is not generally the duty of a purchaser to inform a vendor of any of the circumstances 
 he may be acquainted with which may make it desirable for him to purchase any property. ' ' 
 
 (h) Ndthorpe v. Holgate (1844), 1 Coll. 203 ; Dolman v. Nokes (1855), 22 Beav. 402. 
 
 (i) JExp. Burrdl, lie Bdbinson (1875), 1 C. D. 537, C. A. (per Jambs, L.J., at p. 551). 
 
 (j ) Ndthorpe v. Holgate, sup. {per Knight-Bbttcb, V.-C, at p. 220) ; Nash v. Dix 
 (1898), 78 L. T. 445. 
 
 (k) AU the cases in which a misrepresentation of these and other like matters has been 
 held material, and the oases in which it has not been so held, are abstracted and fully 
 discussed in the author's Law of Actionable Misrepresentation, § 129. See, particularly, 
 as to the identity or personality of the purchaser's principal, S^mifA v. Wheatcroft (1878), 
 9 C. D. 223, and Archer v. Stone (1898), 78 L. T. 34 ; as to the personahty of the vendor's 
 principal, Fdlowes v. Lord Ovydyr (1829), 1 Russ. & M. 83 ; as to the identity of a money- 
 lender, Gordon v. Street, [1899] 2 Q. B. 641, C. A. ; as to the ownership of property sold 
 (wines, pictures, horses, &c.), Bexwdl v. Christie (1776), Cowp. 395, R. v. Kenrick (1843), 
 5 Q. B. 49, Arkwright v. Newbold (1881), 17 C. D. 301, C. A. {per Jambs, L.J., at p. 314), 
 and Whurr v. Devenish (1904), 20 T. L. R. 385. 
 
 {kk) Per Lord Blackbuei^ at pp. 275, 276 of McPherson v. Watt (1877), 3 App. Cas. 
 254, H. L. Lord Blackburn's citation is from Prov. xx. 14. 
 
 (I) Ranger Y. Great Western Railway Co. (1854), 5 H. L. C. 72, yer Lord Cbanwokth, L.C, 
 at pp. 86, 87 (no duty to disclose diflSculties occasioned by the nature of the soil to be 
 excavated). Cp. Thorn v. Corporation of the City of London (1876), 1 App. Cas. 120, H. L., 
 where it was held that there was no implied warranty against difficulties precluding 
 the execution of the specified work at a profit, which assumes that the contractor would 
 have had no right to complain of the non-disclosure of those difficulties. 
 
 (m) Boyd & Forrest y. Glasgow <fe 8. W. Railway Co., [1911] Sc. Ct. of Sess. Cas. 33, 
 where the principles of law laid down by the Court of Session were not dissented from 
 on appeal, sub nom., Glasgow & S. W. Railway Co. v. Boyd & Forrest, [1913] A. C. 404, 
 H. L., though the finding of fraud, as a fact, was reversed. 
 
142 CH. Ill, SECT. 2, SUB-S. (8). 
 
 tlie weapons with wliicli, perhaps at a great cost of time, labour and raoney, 
 he has equipped himself for the business of life. No doubt, such reserve and 
 secrecy would be repugnant to a man of high honour and delicacy, who 
 might recognize that it is not always right to exercise a right, that know- 
 ledge, like wealth, is power, which may be abused, and that minimum 
 libere cui multum lied,. Into these considerations, however, it is obvious 
 that the law cannot enter. The only concern of jurisprudence must always 
 be to declare under what circumstances, and ia whom, a right is vested, 
 without inquiriag whether the enforcement of that right is conformable to 
 the higher standards of refined ethics (w). 
 
 167. A few further illustrations, of a general and miscellaneous character, 
 suggest themselves. It is quite clear that there is no obligation on one of 
 two negotiating parties to reveal to the other any legal status which may 
 incapacitate him or her from contracting, either at all or except under certain 
 conditions and within certain limits, such as infancy, or coverture (o) ; though 
 a positive and fraudulent misrepresentation by a minor that he is of full 
 age, or by a married woman that she is a spinster or widow, may, unless 
 the fraud is directly connected with the contract, and enters into it, and 
 is part and parcel of the entire transaction, give ground for an action of 
 deceit at common law, and, under certain special conditions, may be the 
 subject of indirect equitable relief {p). Nor, in general, need one who is 
 contemplating a contract with another, reveal his past misfortunes, or mis- 
 conduct (q), or his present impecuniosity (r), or, conversely, where it is a 
 
 (m) As to this, see App. B, Sect. 2, § 667, post. 
 
 (o) As to infancy, see Stikeman v. Dawson (1847), 1 Be G. & Sm. 90 (per Knight- 
 Bettce, V.-C, at pp. 113-116) ; Re Jones, Ex p. Jones (1881), 18 C. D. 109, C. A. (per 
 Jessel, M.R., at p. 120, and Baggallay, L.J., at 123). Evroy v. Nicholas (1731), 2 
 Eq. Cas. Abr. 488, is of no authority whatever if, and in so far as, it decided that the non- 
 revelation by a minor of his own infancy, without any misrepresentation, is actionable. 
 See the observations of Knight-Beuce, V.-C, on this case at p. 115 oi Stikeman v. Dawson, 
 sup. As to coverture, see Fletcher v. Krdl, cited in note (q), inf. 
 
 (p) This question is discussed in § 1 30 of the author's Law of Actionable Misrepresentation. 
 
 Iq) See Fletcher v. Krdl (1873), 42 L. J. (q.b.) 55, where it was held that a lady, on 
 being engaged as a governess, is under no duty to reveal to her intending employer the 
 fact that she has previously been married and divorced. At pp. 449, 450 of Andrewes v. 
 Garstin (1861), 10 C. B. (N.s.) 444 (where it was held that there is no duty on a person 
 negotiating for partnership with another to divulge his dishonesty in a previous partner- 
 ship with another person), Mellish, Q.C., in argument for the plaintiff, observed — and his 
 observations were obviously acceptable to the Court — " Take the case of a returned 
 convict, ticket of leave man, or a drunken servant. ... It would be monstrous to hold 
 that every man who enters into a contract is bound to disclose against himself some 
 circumstance of his former life which has no affinity to the contract, and as to which no 
 inquiry is made." And to this passage the reporter, in a note, appends a reference to a 
 case which had then recently been decided in France, where one of the parties had con- 
 cealed from the other the fact that he was a " forgat," and the Cour de Cassation, reversing 
 the Cour de Premier Instance, held that this non-disclosure was not actionable. As to the 
 matters of the past which need not be disclosed, even when marriage is contemplated, such 
 as previous insanity, or a former engagement, see § 147, ante. As to past misconduct 
 of the person to be guaranteed in suretyship cases, see § 125, note (yy), ante. 
 
 (r) CooKBtrBN, C.J., at p. 802 of Beachey v. Brown (1860), E. B. & E. 796, mentions 
 such a fact as that the party "is in debt or subject to other liabilities " as one of the 
 circumstances the non-disclosure of which, in the case of proposals of marriage, would 
 not entitle the other party to be relieved of his engagement. Even when a contract of 
 suretyship is in contemplation, there is no obligation on the creditor to disclose to the 
 
§§ 166-168 (incidental duties op disclosure). 143 
 
 question of obtaining favouiable terms from the compassion of the other 
 party, his wealth and prosperity (s) : though he must not, whether of his 
 own accord or in answer to inquiry, make any false statement with regard 
 to any of such matters (J). Nor is the creator of a security, on receiving 
 notice of its assignment to a third person, bound to volunteer information to 
 such assignee of any collateral equities affecting it, unless the notice discloses, 
 on the face of it, that which induces the belief that the assignee has been 
 deceived in accepting the assignment (m). 
 
 168. It must not be assumed that in every case where no legal duty of 
 disclosure either existed originally, or arose from supervening circumstances, 
 and where nothing amounting to actual fraud or misrepresentation has been 
 proved, the party charged necessarily escapes scot free, or that, where obliquity 
 of conduct, though not sufficient to ground a cause of action or affirmative 
 plea, is established against him, the Court is altogether powerless to mark 
 its sense of that conduct in a practical and efiectual manner. In the first 
 place, though the Court may be compelled to withhold from the party com- 
 plaining any form of relief which presupposes his absolute right to have the 
 impeached contract avoided, or treated as void (v), it by no means follows 
 
 proposed surety the existing or past financial embarrassments of the debtor : see notes 
 {v) and {w) to § 125, ante. 
 
 (s) Instances will readily occur to any one, from ordinary life and social history, of 
 professional men or tradesmen rashly drawing inferences from external indications of 
 penury in the case of wealthy customers, clients, or patients, who, by display of such 
 outward and visible signs, and by withholding the real state of their finances, whilst not 
 making any positive misstatements, obtain reductions in fees or charges, prolongation 
 of credit, or favourable settlements of disputed claims. Despicably mean as such conduct 
 may be, no cause of action could be founded upon it. 
 
 (<) As, for instance, was made by one of the par ndbile fratrum who were the litigants 
 in Montefiori r. Montefiori (1762), 1 W. Bl. 362, with the connivance of the other, in order 
 to enable the former to contract a favourable marriage, and as was alleged to have been 
 made by the plaintiff in Wharton v. Lewis (1824), 1 C. & P. 529, and Foote v. Hayne (1824), 
 1 G. & P. 545 (two actions for damages for breach of promise of marriage, though on 
 various grounds the party charged succeeded in each case, falsity not being proved in the 
 one, and the defendant's knowledge of the truth being established in the other). But there 
 must have been a positive misrepresentation addressed to the party complaining. A mere 
 general simulation of wealth by " keeping up appearances " will not do, any more than 
 the general pretence of straitened circumstances aUuded to in the last note. When 
 Bassanio, not without an eye to the fair Portia, and before he had entered the lists, was 
 " showing a more sweUing port Thau his faint means would give continuance," he was 
 making no representation to the lady. When the moment came for declaring his suit, he 
 stated the truth (" Gentle lady. When I did first impart my love to you, I freely told you, 
 all the wealth I had Ran in my veins, I was a gentleman ; And then I told you true "), 
 but not quite the whole truth (" when I told you My state was nothing, I should then have 
 told you That I was worse than nothing ; for, indeed, I have engaged myself to a dear 
 friend. Engaged my friend to his mere enemy. To feed my means ") : that is to say, he 
 had stated his want of means, but not his contingent liability as a surety for Antonio : but, 
 never having come under any legal duty to divulge either the one or the other fact, his 
 conduct was irreproachable in point of law. So Lord Brougham, at pp. 532, 533 of 
 Burnes v. PenneU (1849), 2 H. L. C. 497, puts the case of an owner of an estate making a 
 pretence of its general prosperity by frequent remission of rent to his tenants, and ridicides 
 the notion of any purchaser on the faith of these " appearances " claiming that this coidd 
 have constituted a misrepresentation to himself. 
 
 (tt) Per Lord St. Lbohabds, L.C, at pp. 782, 783 of Mangles v. Dixon (1852), 3 
 
 H. L. C. 762. 
 
 (v) That is to say, rescission or analogous rehef on the one hand, or a defence to an 
 action to enforce the contract otherwise than in specie, on the other. See, as to these 
 respective remedies. Sect. 5, Sub-ss. (1) and (2), post. 
 
144 CH. Ill, SECT. 2, SUB-SS. (8), (9). 
 
 that it will not give effect to a defence raised by him to any action for 
 the specific performance of such contract which may be brought against him 
 by the party charged ; for this is not to assert the legal right of the former 
 party, but to decline the exercise of a discretionary jurisdiction in 
 favour of the latter, and to deny him, not all remedy, but the particular and 
 special remedy which he is soliciting (w). Secondly, a judge when sitting 
 without a jury, can give fiscal expression to his view of the general behaviour 
 of the party charged, as shown by the whole circumstances of the case, in 
 judiciously moulded orders as to costs (x), and, " for good cause " he can do so, 
 even when assisted by a jury {y). And, lastly, where the alleged non-disclosure 
 is raised by way of defence to an action for unliquidated damages, the tribunal 
 (whether a judge, or a jury under the direction of a judge) is entitled and 
 bound to take such circumstances and conduct into consideration in estimat- 
 ing the sum to be awarded (z). 
 
 Subs. (9). The Effect of Warranties and Conditions as to Disclosure. 
 
 169. Before concluding this Section, it seems desirable to consider a 
 topic which from time to time emerges prominently in the law relating to 
 disclosure, and is not without considerable importance. It frequently 
 happens, particularly where the contract is one of life insurance, that the 
 
 (w) Thus in Walters v. Morgan (1861), 3 De G. F. & J. 718, a case which was very near 
 the border line, it was evidently considered by Lord CAMPBEii, L.C., that the party com- 
 plaining, whom he held entitled to succeed in his defence to the action for specific per- 
 formance, might not necessarily have been entitled to judgment if he had been suing for 
 rescission, or defending himself against an action to enforce the contract otherwise than 
 specifically. Conversely, in Thompson v. Lambert (1868), 17 W. E. Ill, where the party 
 complaining failed to obtain rescission, Walsh, M.R. (Ir.), at p. 112, is careful to point out 
 that it was not a case of a defence to a suit for specific performance, implying that, if it 
 had been, he might have succeeded. And see, generally, § 245, post. 
 
 {x) Thus, one of the parties charged (the undoubtedly dishonest infant), though the 
 judgment was in his favour, was deprived of his costs in Stikeman v. Dawson (1847), 
 1 De G. & Sm. 90 (per Knight-Bktjce, V.-C, at p. 117). And a similar order was made in 
 Walters v. Morgan, sup. (in this ease, both as to the costs of the hearing, and of the appeal 
 also), and in Thompson v. Lambert, sup. See, generally, on costs, Ch. VIII, Sect. 2, 
 Sub-s. (4), § 619, post. 
 
 (y) See 0. 65, r. 1, of the E. S. C, and the cases on " good cause " cited in the notes 
 thereto in the practice books, and particularly Roberts v. Jones ; Willey v. G. N. By. Co., 
 [1891] 2 Q. B. 194. 
 
 (z) In Baddeley v. Mortloch (1816), Holt N. P. 151, Gibbs, C. J., directed the jury that, 
 though the defendant (who had set up the plaintiff's non-disclosure of previous dishonesty 
 and crime as a defence to his action against her for damages for breach of promise of 
 marriage) had not proved enough to absolve her from the contract, added significantly : 
 " but it afieots the damages," on which hint the jury gave the plaintiff a shilling. Bench v. 
 Merrich (1844) 1 C. & K. 463, was a similar action where a similar direction was given 
 (pp. 407,408), which, however, it was unnecessary for the jury to act upon, as they returned 
 a verdict for the defendant. In Beachey v. Brown (1860), E. B. & E. 796, where a demurrer 
 was allowed to a plea of non-disclosure of a previous engagement in an action of the hke 
 nature. Hill, J., at p. 805, observed : " such circumstances may have a very material 
 effect with the jury as to the amount of damages." So, in And/rewes v. Garstin (1861), 
 10 C. B. (n.s.) 444, an action for damages for breach of an agreement to take the plaintiff 
 into partnership, to which the plaintiff's concealment of previous misconduct in another 
 partnership was pleaded as a defence, which plea was successfully demurred to, Willbs, J., 
 at p. 452, whilst pronouncing that the case set up afforded no answer to the action, also 
 observed that " if the allegations in the plea be true, the consequence may be that the 
 plaintiff will recover but small damages." 
 
§§ 168-170 (warranties and conditions). 145 
 
 parties expressly warrant, or make it an express condition of the contract, 
 not only tliat certain questions specifically put have been, or shall be, truth- 
 fully answered, but also that nothing has been, or shall be, withheld by the 
 one party, either relating to some specified subject-matter, or, generally, 
 which it is important or material for the other party to Imow (a) ; the former may 
 be called " contracts for the truth " (b) : the latter, " contracts for disclosure." 
 There are other transactions, of which a policy of marine insurance is the 
 typical example, in which there are expressed, or from which there are implied, 
 warranties, not of the truth of any statement, or of the fact that full dis- 
 closure has been made, but of the existence of a certain fact or thing. In 
 either case, it makes no difierence for the present purpose what expression 
 is used, — whether "warranty,'' "condition," "term," or "stipulation," — 
 provided that the thiag warranted or promised or undertaken is made the 
 basis of the contract, in the sense that unless the thing is, or (in the case of 
 a promissory warranty) is made or procured to be, as warranted, the party 
 warranting shall have no rights whatever under the contract of which the 
 warranty or condition is a part or term (6). The question which now arises 
 for consideration is as to the efiect of these warranties and conditions on the 
 principles of the law of disclosure, and on the rights and duties which would 
 otherwise belong to, and lie upon, the negotiating parties respectively. 
 
 170. In the first place, the effect of an express or implied warranty of the 
 existence of a specified thing, or state of things, is, on the one hand, to 
 release the party complaining of the burden of establishing that any duty of 
 disclosure was owed to him in respect of circumstances material to the thing 
 warranted, or that such duty has been violated (c), and, on the other hand, 
 to render it superfluous on the part of the party charged to make disclosure 
 of any matter covered by the warranty (c^). As to matters not so covered, 
 
 (a) See the oases cited in notes (c) and (d) to § 101, ante. 
 
 (6) See HambrougJi v. Mutual Life Insurance Co. of New York, cited in the next note. 
 
 (c) For it is the very object and office of a warranty or condition to make it impossible 
 for either party to raise any such question thereafter. See the citation from Seymour v. 
 London dh Provincial Marine Insurance Co. in note {h), post. Similarly, and on the same 
 principle, neither falsity, nor fraud, nor inducement, nor materiahty, all of which are 
 vital elements in any proceedings founded on misrepresentation, has the shghtest relevance 
 to any issue in an action or defence founded on breach of warranty, or non-compliance 
 with a condition, for the parties themselves have made that question of no importance : 
 see Pawson v. Watson (1778), Cowp. 789 [per Lord Mansfield, C.J., at pp. 788-790) ; 
 Newcastle Fire Insurance Co. v. Macmorran & Co. (1815), 3 Dow. H. L. 255 (per Lord 
 Eldon, L.C., at pp. 262, 265) ; Attwood v. Small (1838), 6 CI. & E. 232 (per Lord Bkougham 
 at p. 444) ; Anderson v. Fitzgerald (1853), 4 H. L. C. 484 (per Lord Cranwoeth, L.C, at 
 pp. 503-505) ; Towle v. National Guardian Assurance Co. (1861), 30 L. J. (oh.) 900 ; 
 Thomson v. Weems (1884), 9 App. Cas. 671, H. L. (per Lord Blackbubit at pp. 683, 684, 
 and Lord Watson at p. 689) ; Hambrough v. Mutual Life Insurance Co. (1895), 72 L. T. 
 140, C. A. Cp., as to marine insurance, s. 33 (3) of the Marine Insurance Act, 1906. 
 Though called a warranty, the thing of which the non-fulfilment avoids the transaction 
 must be, in substance and eifect, a condition precedent : see the observations of Channbll, 
 B., at p. 302 of Wheelton v. Hardisty (1858), 8 E. & B. 232, Exch. Ch. 
 
 (d) The department of law which principally calls for the application of this rule, and 
 suppHea the most illustrations of it, is that of marine insurance. See the observations 
 of Lord Mansfield, C.J., in Shoolbred v. Nutt, as cited in Park on Insurance, vol. i, 
 p. 493 : " there should be a representation of everything relating to the risk which the 
 underwriter has to run, except it be covered by a warranty. It is a condition or an impHed 
 warranty in every policy that the ship is seaworthy, and therefore there need be no 
 
 B.N.D. L 
 
146 CH. Ill, SECT. 2, SUB-S. (9). 
 
 the duty of disclosure, though the specific warranty has been complied with (e), 
 or discharged, or admitted to have been discharged (/), remains entirely 
 unaffected. And, even as to the subject-matter of the warranty, it must 
 not be supposed that the common law duty of disclosure is extinguished by, 
 or even merged in, the contractual obligation which the warranty imposes. 
 Both duties exist separately and independently, though the same facts are 
 necessary to prove compliance with either of them. If and when, however, 
 the party complaining insists on the performance of the contractual duty, 
 as such, the other duty is in abeyance, because it is " superfluous " to discharge 
 it, which presupposes that it still subsists ; just as, conversely, if and when the 
 party complaining insists on his common law right, as such, the contractual 
 duty is in abeyance. Bub it is open to the party complaining (and, being 
 obviously to his advantage, this course is commonly adopted) to assert both 
 rights simultaneously, but alternatively. If he fails to prove the express or 
 implied warranty or condition, or the violation of it, he may fall back on his 
 
 representation as to that. If she sail without being so, there is no valid policy." To the 
 same effect. Lord Ellbnbobotiqh, C.J., at p. 597 of Haywood v. Bogers (1804), 4 East 590. 
 The rule is now declared and codified in s. 18 (3) of the Marine Insurance Act, 1906 (6 Edw. 
 7, 0. 41) : — " In the absence of inquiry the following circumstances need not be disclosed, 
 namely : — . . . any circumstance which it is superfluous to disclose by reason of any 
 express or implied warranty." In s. 33 of the same statute a warranty is defined, 
 s. 35 relates to express warranties, s. 36 to express warranties of neutrality, and ss. 37, 
 39, 40, and 41 declare what matters are, and what are not, deemed to be imphedly 
 warranted. All these marine insurance warranties are in the nature of conditions, such 
 as are described in the text. As to the sale of goods, and what are express or impUed 
 warranties, giving a right to damages only, and what, on the other hand, operate as 
 express or implied conditions, see the codifying provisions of the Sale of Goods Act, 1893 
 (56 & 57 Vict. 0. 71), ss. 10-15, and (for the definition of " warranty " therein) s. 33 (1). 
 
 (e) See Bussdl v. Thornton (1859), 4 H. & N. 788, where the defence to an action on a 
 policy of marine insurance was the non-disclosure by the plaintiff of information in a letter 
 from the captain of the vessel that she had been aground, and had received very heavy 
 blows, and was making her way in a sinking condition to a certain port, and, at p. 797, 
 Bkamwell, B., points out that the above undisclosed letter " would have been all-im- 
 portant, even if there had been a warranty of seaworthiness," — which there was not, it 
 being a case of a time policy. " The underwriters might well say, ' You may patch her up, 
 and render her seaworthy, but she wiU never be as good a ship as she was before this 
 calamity.' It was therefore obviously a letter that ought to have been communicated 
 to the defendants." In other words, the implied warranty — ^if it had existed — would have 
 rendered it superfluous for the party charged to communicate any fact tending to show that 
 the vessel was unseaworthy, but not any fact tending to show that, though seaworthy, 
 she was vitally damaged. So, in Jod v. Law Union cfc Grown Insurance Co., [1908] 
 2 K. B. 863, C. A., a life insurance case, Vatjghah- Williams, L. J., at p. 878, and Motjlton, 
 L. J., at pp. 892, 893, expressed a clear opinion that the mere fact that the party complain- 
 ing fails— as the defendants in that case had faEed — ^to establish that the alleged express 
 condition precedent existed, or had been broken, does not deprive him of all his right to 
 disclosure, though it may, in one sense, " partially relieve " the party charged. 
 
 ( / ) In Cantiniere Meccanico Brindisino v. Janson, [1912] 3 K. B. 452, C. A., seaworthi- 
 ness was admitted on the face of the policy, which discharged the assured from their 
 implied warranty of seaworthiness of the floating dock insured. This, however, as was 
 held by Vatjghan Williams, L.J., at pp. 461, 463, Moulton, L. J., at p. 467, and BircK- 
 LEY, L.J., at p. 471, would still leave the assured under a duty to disclose any special 
 circumstances (such as corroded plates, or a leak, or a surveyor's unfavourable report 
 as to the unfitness of the floating dock to go to sea without some strengthening being 
 added, &o.) which would render the structure more unseaworthy than any floating dock 
 must necessarily be. The only facts which the assured was relieved from divulging were 
 facts connected with the nature of a floating dock which render all floating docks un- 
 seaworthy. 
 
§ 170 (warranties and conditions). 147 
 
 riglit, independently of contract, to disclosure of any matter negativing or 
 afiecting the thing warranted. Conversely, if he fails to establish any common 
 law duty of disclosure, he may still insist that in fact the party charged 
 has expressly or impliedly contracted for the existence of the thing the 
 absence of which would have been revealed by the disclosure of that which 
 was not disclosed, and which, on the hypothesis, there was no duty to dis- 
 close (g). Further, he may ask for and obtain judgment on both causes 
 of action, or on both pleas, as the case may be, where it becomes of importance 
 (by reason of the rules relating to costs of issues, or otherwise) to do so (h), — 
 which establishes conclusively that the one right and duty is not merged in, 
 or converted into, the other right and duty, or (if the right be regarded as 
 ODe and the same right, and the correlative duty as one and the same duty, 
 but springing from different sources), that the contractual character of the 
 right and the duty may co-exist with their non-contractual character, 
 and that the party to whom the duty is owed may rely on either, or both, 
 of its two aspects, as may suit his convenience (i). 
 
 (g) See the extracts in note (e), sap., from the authorities there cited. Both rights 
 were in this way asserted by way of alternative and independent pleas, which were 
 separately and successively treated as such by the Court, in Thames and Mersey 
 Marine Insurance Co. v. Gunford Ship Co., [1911] A. C. 529, H. L. (where the insurance 
 company contended, first, that the master's record — he had not been to sea for 22 years, 
 had lost his last ship, and his certificate had been suspended — was such as to render the 
 vessel uuseaworthy, and so constituted a breach of the assured's implied warranty, and, 
 secondly, that, if there had been no such breach, there had been at all events a violation 
 of the assured's duty to disclose the above facts, and the H. L. separately discussed the 
 two pleas, and having first decided against the one, proceeded then to consider in detail, 
 and reject, the other), and in Joel v. Law Union & Crown Insurance Co., [1908] 2 K. B. 
 863, C. A. (where, having first held that the truth in fact of the answers of the deceased to 
 certain questions was not made a condition precedent to the validity of the poUcy, the 
 Court of Appeal distinctly expressed their opinion, that it was still competent to the 
 insurance company to resort to their second line of defence, viz. breach by the deceased of 
 her duty, independently of condition or contract, to disclose all material circumstances 
 of the nature of those to which the questions were directed (per VAtroHAN Williams, L. J., 
 at p. 878, intimating his entire dissent from the contention " that we ought to exclude from 
 this contract the imphed contract by an applicant for a policy to make full disclosure of all 
 facts material to the risk," and per MotrLTON, L. J., who, at pp. 892, 893, observes : " over 
 and above the two documents signed by the appHcant, and in my opinion unaffected by 
 them, there remained the common law obligation of disclosure of all knowledge possessed by 
 the applicant material to the risk about to be undertaken by the company "). 
 
 (h) In Seymour v. London dh Provincial Marine Insurance Co. (1872), 41 L. J. (c.p.) 
 193, where the cargo insured was expressly warranted " no contraband of war," the Court 
 of Common Pleas, whose judgment was delivered by Willes, J., after coming to the con- 
 elusion that the cargo, part of which had been condemned by the U. S. Courts, was clearly 
 contraband of war (pp. 194-198), proceeded to refer to the separate plea which had been 
 pleaded of non-disclosure, in the following terms : — " We need not enter upon the other 
 points of the case. It is enough to say that if there was contraband, it was concealed 
 contraband from the underwriters, and though it is true that concealment of facts leading 
 up to a breach of warranty is immaterial, certainly it has never been held that a concealment 
 of what actually falls within a warranty is not a concealment which would avoid the insurance 
 apart from the warranty. This may not be considered material with reference to the main 
 question to be decided, but it is material for the purpose of explaining why we give judgment 
 for the defendants on the seventh plea, which deals with the concealment, as well as on the ninth 
 plea, which is founded on the warranty." 
 
 (i) Many obligations, such as that of a carrier, spring both from contract and from 
 circumstances independent of contract. In all such cases, it is open to the injured party 
 to assert the duty in either, or both, of its two characters. Where a question of the right 
 to High Court costs arises, under s. 116 of the County Courts Act, 1888(51 & 52 Vict. c. 43), 
 
148 CH. Ill, SECT. 2, SUB-S. (9) ; SECT. 3. 
 
 171. Where the warranty or condition which is made the basis of the 
 contract is not of the foregoing type, but is expressed in a perfectly general 
 form, as, for instance, that if the assured should {inter alia) " omit to com- 
 municate any matter material to be made known to the company in order 
 to enable them to judge of the risk " (j), or that " if any information necessary 
 to be made known to the company is withheld " (Jc), the policy is to be void, 
 it is difficult to see what possible advantage is gained by the party who exacts 
 such a covenant or proviso, since he is only stipulating for the performance 
 of the precise duty, neither more nor less, which the law imposes on the 
 opposite party. One might as profitably insist on a general engagement to 
 abstain from assault, defamation, or fraud (Jch). And the attempt to fortify 
 by contractual engagements the solid and impregnable fortresses of the 
 common law, besides being " wasteful and ridiculous excess," is subject to 
 special perils of its own. T-i his anxiety to define and particularize that 
 which the common law has left indefinite and general, and to substitute a 
 rigid for a Lesbian and flexible canon (l), the party may find that, instead of 
 defining and particularizing, he has limited and curtailed, his rights. His 
 confidence in the adequacy of contractual amplification to do for himself 
 what the law has already done for him is wholly misplaced. Mistaking 
 the universality or generality of a principle of jurisprudence for vagueness or 
 obscurity, he foolishly attempts to improve upon it by language of his own 
 which he puts into the mouth of the opposite party, the only result in many 
 cases being to invite the Court to examine closely the precise contractual 
 limits which the parties would appear to have assigned to an otherwise 
 perfectly general obligation, and to encourage a severe application of the 
 expressio unius exclusio alterius canon of construction, which otherwise would 
 be entirely out of place («■). This attempb to " make assurance doubly sure " 
 
 this principle becomes of some practical importance. It was successfully invoked in 
 Kelly V. Metropolitan Bailway Co., [1895] 1 Q. B. 944, C. A., Turner v. StalUbrass, [1898] 
 1 Q. B. 56, C. A., and Edwards v. Mallan, [1908] 1 K. B. 1002, C. A., in all of wMcli it was 
 held that the plaintiff was entitled to have his action of negligence treated as one of tort, 
 notwithstanding that the defendant's duty could also have been, and may in fact have been, 
 pleaded by the plaintiff to have arisen out of contract. Cp. the case cited in the last note, 
 where it was obviously of importance to the plaintiff, in accordance with the practice 
 prevaiUng in 1872 with reference to the costs of separate pleas, to obtain judgment (as he 
 did) on both the plea of concealment and the plea of breach of warranty. 
 
 {j) Pimm v. Lewis (1862), 2 F. & F. 778 (a fire insurance case). 
 
 {k) Thomson v. Weems (1884), 9 App. Gas. 671, H. L. (a life insurance case); the 
 condition is set out at p. 680. 
 
 {kk) For this reason, an express condition in a contract for the observance of good 
 faith was held nugatory in the Roman law : see § 688, post. 
 
 {I) The Lesbian rule is cited, and the convenience and justice of its adoption in the 
 law of disclosure (as, indeed, in most departments of our jurisprudence, to the genius 
 of which it is entirely suitable) is discussed in § 649, post. 
 
 (m) Thus, in Jones v. Provincial Insurance Co. (1857), 3 C. B. (n.s.) 65, the " contract 
 for the truth " entered into by the assured, and made the " basis " of the insurance, was 
 that he " was not aware of any disorder or circumstance tending to shorten his life, or to 
 render an insurance on his life more than ordinarily hazardous," and, in reference to this 
 condition, the Court {per Cresswbll, J., at p. 86), after referring to " the proposition, 
 which as a general rule " — meaning, a rule of the common law of insurance, independently 
 of contract— "is indisputable, that it is the duty of a party effecting an insurance on life or 
 property to communicate to the underwriter or other insurer all material facts within his 
 
§§ 171, 172 (bueden of proof). 149 
 
 in a literal sense, and to " take a bond of " the assured, is habitual in life 
 insurance, but its utter inutility and absurdity, if not impropriety, in such 
 cases, has been more than once judicially commented upon (m) : and for 
 this, amongst other reasons, the party relying upon any such "contract for 
 the truth," if the suggestion can plausibly be made that he has obtained 
 something more by it than the ordinary principles of the law would give 
 him (which is quite the exceptional case), is put to the severest and strictest 
 proof that the warranty or condition is expressed in such clear and explicit 
 terms as to entitle him to that " something more," and, further, that it has 
 been made a condition precedent to the validity of the entire transaction (o). 
 
 Sect. 3. Nature and Extent of the Burden of Proof on the Party 
 
 comi'laining. 
 
 172. In respect of alleged non-disclosure of any of the kinds which form 
 the subject of this Chapter, the party complaiaing, in order to establish his 
 
 knowledge " — that is, facta within his knowledge which are material, whether the party- 
 believes them to be so or not — " touching the subject-matter of the insurance," proceeds 
 to lay down that " it is, however, equally clear that the underwriters may in any particular 
 case limit their rights in this respect to that of being informed of what is in the knowledge 
 of the assured, not only as to its existence in point of fact, but also as to its materiality : 
 and in our opinion that is the effect of the limited declaration required in the present case. . . . 
 Therefore, upon the construction of that clause which was alone rehed upon at the trial, 
 we are of opinion that the direction of the learned judge was right, and that the rule for a 
 new trial ought to be discharged." Cp. the proviso contained in the life insurance policy 
 which was the subject of Armstrong v. Turquand (1857), 9 Ir. C. L. Rep. 32. Similarly, in 
 Watt V. Assets Co., [1905] A. C. 317, H. L., a compromise case, in which a contributory in 
 the liquidation of the City of Glasgow Bank was discharged from all UabUity as such, 
 " on the basis of the truth, accuracy, and completeness of his answers to certain questions 
 contained in a written statement, which answers he was required by the liquidators to 
 verify in a statutory affidavit affirming that such answers were true and correct to the best 
 of his knowledge and belief " and the result was that,in their blind confidence in the supposed 
 saving virtues of a contract for the truth, and their insensibility to the advantages of the 
 superior elasticity and comprehensiveness of the common law rule, the liquidators defeated 
 their own object : see the observations of Lord Halsbury, L.C, at pp. 329, 330. The 
 life insurance cases of Wood v. Dwarris (1856), 11 Exch. 593, Fowkes v. Manchester 6a 
 London Life Assurance <fc Loan Association, No. 2 (1863), 3 B. & S. 917, and Hemmings v. 
 Sceptre Life Association, [1905] 1 Ch. 365, are illustrations of the application of precisely 
 the same principle to misrepresentation. On the other hand, in the misrepresentation 
 (Ufe insurance) cases of Duckett v. Williams (1834), 2 C. & M. 348, 350, 351, and Geach v. 
 Ingall (1845), 14 M. & W. 95, 100, the insurers did succeed in enlarging materially the rights 
 to the truth which they would have had independently of contract. 
 
 (n) Notably by Moulton, L. J., at pp. 885, 886, of Jod v. Law Union & Crown Insurance 
 Co., [1908] 2 K. B. 863, 0. A., who there points out, in some very weighty observations, the 
 unwisdom, to put it at its lowest, and the possible trickery, to put it at its highest, of these 
 " contracts for the truth." It is curious to find that, in marine insurance business, 
 insurers are as habitually free from this particular form of unwisdom, as, in the case of 
 other kinds of insurance, they are habitually guilty of it. They know when they are well 
 off, and are content with the general and unparticularized rules of the common law in 
 relation to the assured's duty of disclosure, and in the equally general and unparticularized 
 declarations of those rules in the codifying statute of 1906 (Marine Insurance Act, 1906). 
 
 (o) Whedton v. Hardisty (1858), 8 E. & B. 232, Exch. Ch. (per Maktin, B., at pp. 296, 
 297, Cbowdbb, J., at p. 298, Willbs, J., at p. 299, Bkamwbll, B., at pp. 299-301, and 
 Channbll, B., at p. 302) ; Fowkes v. Manchester, die. Association, No. 2, sup. (per 
 CocKBUBN, C. J., at p. 925, and Blackburn, J., at pp. 929, 930) ; Hemmings v. Sceptre 
 Life Association, sup. (per Kekewich, J., at p. 369) ; Jod v. Law Union <Ss Crown 
 Insurance Co., sup. (per Moulton, L.J., at pp. 886, 887). 
 
150 CH. Ill, SECT. 3, SUB-SS. (1), (2). 
 
 right to relief, must, whether he be plaintiS or defecdant, and whatever be the 
 form of proceeding in which the question is raised {p), allege and, having so 
 alleged, prove each and every of the following matters, except in so far as 
 any of them may be expressly or impliedly admitted before or at the trial 
 by the party charged (q) : — 
 
 (A) That the party charged was under a duty to the party complaining 
 
 to disclose to him the particular fact of which non-disclosure is 
 alleged : 
 
 (B) That the alleged undisclosed fact was a fact at the material date : 
 
 (C) That the party charged did not disclose to the party complaining 
 
 the alleged imdisclosed fact at the time when he was under a duty 
 to do so : 
 
 (D) That the party charged had knowledge of the alleged undisclosed 
 
 fact at the time when it was his duty to disclose it : 
 
 (E) That the party complaining had no such knowledge at the above- 
 
 mentioned material date (r). 
 
 173. Proof of the above matters, though on the one hand essential to 
 
 relief, is, on the other, sufficient. If the party complaining establishes all 
 
 of them, he cannot be called upon to satisfy the tribunal as to any further or 
 
 other issue, nor can judgment be given against him if he fails to do so (s). 
 
 {p) See Sect. 5, post. 
 
 {q) In most of the reported oases only some of the issues enumerated were contested. 
 There is scarcely one, unless it be Elkin v. Janson, inf., in which all of them were. As to 
 the sense in which the abbreviated expressions " the party complaining," and " the party 
 charged," are used in this book, and the reasons for selecting those expressions in preference 
 to others which might be suggested, see § 12, ante. 
 
 (r) For the reason given in the last note, it is almost impossible to find a judgment, or 
 passage from a judgment, which comprises all the elements stated in the text, for judges 
 do not profess to deliver exhaustive lectures on the whole branch of law which affects the 
 particular case before them, but only to enunciate propositions sufficiently comprehensive 
 to cover the matters which the parties have brought into debate. The nearer approach 
 to a complete judicial exposition of the main constituent elements of a title to relief for 
 non-disclosure in the course of negotiation for a contract of the character of those discussed 
 in this Chapter is that contained in the judgment of Alderson, B., at p. 664 of Elkin v. 
 Janson (1845), 13 M. & W. 655 (where to a declaration on a marine policy the defendants 
 pleaded non-disclosure of the facts that the captain of the insured ship had drawn a bill 
 for her disbursements at Seville, and that she had sailed thence, long before the date of 
 the execution of the policy, and was therefore a missing ship) : " I take the plea to amount 
 ... to four propositions : — first, that the facts rehed on existed ; secondly, that the 
 knowledge of them was material to the underwriters . . . ; thirdly, that those facts were 
 known to the plaintiff ; and, fourthly, that they were not communicated to the defendant. 
 The defendant must make out every one of those propositions.'" It will be observed that the 
 first of the above propositions corresponds to (B) in the text, the second to one of the 
 constituents of (A) — see Sub-s. (1), — the third to (D), and the fourth to (C). There was 
 no reference to ( E), it not being disputed that the party complaining was ignorant of 
 the undisclosed fact. 
 
 (s) Thus in Stribley v. Imperial Marine Insurance Co. (1876), 1 Q. B. D. 507, where the 
 defence to an action on a policy of marine insurance was non-disclosure by the plaintiff of 
 the receipt of a letter from the captain of the vessel, stating that he had arrived at the port 
 several days previously, and had begun loading, but did not know when he would finish, 
 and that there was very bad weather on the coast, and the jury (misled by the direction of 
 Geovb, J., at the trial) found that the vessel was not " a missing ship " when the insurance 
 was effected, the Court granted a new trial, on the ground that the defendants by their 
 plea undertook no more than to prove that the plaintiffs received the letter, and the other 
 facts alleged to have been withheld, and that those facts were known to the plaintiffs, were 
 
§§ 172-175 (bueden op proof). 151 
 
 Still less can he be required to sustain a burden of proof which would be only 
 incumbent on him if he were relying upon a diSerent, though somewhat 
 similar, ground for relief, such as misrepresentation (t). 
 
 Subs. (1). The Duty to Disclose {Materiality, dc). 
 
 174. It may seem a somewhat self-evident and elementary proposition 
 that the party complaining of a violation of duty, and who cannot succeed 
 in obtaining relief without proving such violation, must begin by establishing 
 that the duty existed («). But it must be remembered that this probandum 
 which, when stated nakedly and generally, seems so obvious, comprehends 
 and involves several subordinate and particular 'probanda. The party com- 
 plaining, in order to prove the existence of the duty, must proceed by steps, 
 and, if challenged, must, one by one, make good those steps. He must 
 show, (i) that the relation between himself and the party charged was, or 
 that the circumstances were, such as to give rise to a duty to divulge all facts 
 material to be disclosed, (ii) that the party charged was the person, or a 
 person, who owed that duty, (iii) that he (the party complaining) was the 
 person, or a person, to whom the duty was owed, and (iv) that the particular 
 fact alleged to have been undisclosed was a fact which, having regard to 
 the particular class of contract which was the subject of the negotiation, 
 or the special circumstances of the case, was material to be disclosed (v). 
 
 Sub-s. (2). The Existence or Occurrence of the Alleged Undisclosed Fact. 
 
 175. Having established the duty to disclose, the next step, in logical 
 order, is to show (unless admitted) that the alleged undisclosed fact was a 
 fact at the material date. For it is obviously of no avail to prove that the 
 party charged was bound at a certain time, or during a certain period, to 
 
 material, and were not oommunioated, and did not undertake to prove the fact that the 
 ship was a missing ship, or non-disclosure of tJiat fact {per Blackbtjek, J., at p. 511 : 
 " what the judge left to the jury was simply the question whether the ship was what is 
 called ' a missing ship,' ao that there was a presumption that she was lost when the 
 insurance was effected. I think that was not the real question. The real question was, 
 whether the contents of the letter, the dates at which it was written and received, and the 
 time which had elapsed since anything was heard of the vessel, were not facts which might 
 properly have influenced the underwriter in accepting the risk." To the same effect 
 Ltjsh, J., at p. 514, and Qttain, J., at pp. 514, 515). 
 
 (i) An illustration of this is the case of Morrison v. Musprait (1828), 4 Bing. 60, where, 
 the defence to a claim on a poUcy of life insurance being non-disclosure of a grave pulmonary 
 disease,ABBOTT, C. J., at the trial, in directing the jury, treated the case as if the defendants 
 had undertaken to prove misrepresentation, and the jury having negatived this, directed 
 the verdict to be entered for the plaintiff ; and the Court (see the judgment of Best, C. J., 
 at p. 62) held that this was quite wrong, and granted a new trial. 
 
 (u) It has, however, been occasionally found necessary by judges to remind litigants 
 of this obvious proposition : e.g. Fby, J., at p. 474 of Davies v. London & Provincial Marine 
 Insurance Co. (1878), 8 C. D. 469 (" it rests upon those who say that there was a duty to 
 disclose to show that the duty existed "). 
 
 (v) See Sect. 2 of this Chapter, ante, as to (i) and (iv), and Sect. 7, post, as to (ii) and (iii), 
 of these seY&cah. probanda. As to the meaning of materiality, see Ch. II, Sect. 2, Sub-s. (2), 
 ante. From the cases cited in the notes to those parts of this work, it will be abundantly 
 clear that the burden of establishing the several matters indicated is on the party com- 
 plaining. 
 
152 CH. Ill, SECT. 3, SUB-S. (2). 
 
 reveal a fact of the particular character alleged, unless it be shown that 
 there did exist at that time, or during that period, in rerum naturd, a fact of 
 the alleged character. Failure at this stage of the proof necessarily involves 
 failure at the remaining stages : if the supposed fact never existed, or did 
 not come into being until after the termination of the period dming which 
 the duty existed, there can be no question of the party charged having with- 
 held it, or of his having wrongfully withheld it ; nor can he possibly have 
 been cognizant of it. 
 
 176. In order to make good the existence or occurrence of the alleged 
 undisclosed matter, the party complaining must b^ prepared, if challenged, 
 to establish two things (though the former of these is scarcely ever in dispute, 
 and the latter not often), viz. (i) that what is alleged to have been undis- 
 closed is something which comes within the legal definition of a fact or circum- 
 stance, and (ii) that it existed, or (if a past event) had occurred, at the time 
 when the party charged was subject to the duty of disclosure. 
 
 177. The question of what " fact " or " circumstance " means and includes 
 in law has been closely examined in a previous portion of this work (w), and 
 it is unnecessary to repeat here what has already been said there. 
 
 178. Assuming that what is alleged to have been withheld is, in con- 
 templation of law, a "fact" or "circumstance," the party complaining 
 must next prove (if put to the proof by the pleadings) that the precise 
 matter alleged to have been withheld existed, or (as the case may be) had 
 happen ed, at the material date. Thus, in a marine insuran ce case, if it is alleged 
 that the assured omitted to communicate to the underwriters, for instance, 
 the receipt of information from the captain of the vessel, or the putting on 
 board of goods on which an excessive valuation had been efiected, or a system 
 of " treaties " for re-insurance with other underwriters similar to the treaty 
 between the parties, on which loss had resulted to those underwriters pointing 
 to the probability of a like loss on the treaty in question, the onus is on the 
 party complaining to show, respectively, that the party charged had in 
 fact received the alleged information from the ship (a;) ; or that he had in 
 fact put the goods on board, and had in fact efiected the alleged insurances 
 thereon, and that such insurances were excessive {y) ; or that there had in 
 
 {w) See Ch. II, Sect. 2, Sub-s. (1), ante. 
 
 {x) Elkin V. Janson, sup. — see note (r) to § 172, ante — where the jury found that the 
 captain had in fact drawn the biU of disbursements, as alleged ; Morrison t. Universal 
 Marine Insurance Co. (1873), L. R. 8 Exch. 197, Exch. Ch., where, again, the first question 
 put to the jury by Blackbubst, J., at the trial was whether the plaintiff received the 
 telegram alleged to have been sent to him by the master of the vessel, and to this the jury 
 gave a negative answer, which, if no other fact had been alleged to have been undisclosed, 
 would have entitled the plaintiff to a verdict, but there were other material facts ad- 
 mittedly undisclosed in respect of which the defendants were ultimately held entitled to 
 judgment. 
 
 (V) See lonides v. Pender (1874), L. R. 3 Q. B. 531. The alleged undisclosed fact there 
 was a complex one, and involved the following : (1) the putting of the goods on board, 
 (2) the effecting of insurances thereon for certain amounts, and (3) the " excessiveness " 
 of such insurances. At the trial, Hannbn", J., made (1) and (3) the subject of the first two 
 of the seven questions which he put to the jury, (2) not being disputed, and the answer to 
 both was in the afiirmative, after the judge had directed the jury as to what, in law, 
 constituted an " excessive valuation." 
 
§§ 175-178 (burden of peoop). 153 
 
 fact been " treaties " of the nature alleged witli other underwriters, that 
 such treaties had in fact resulted in loss to those underwriters, and that 
 the treaty " in dispute would probably result in a like loss to the party 
 complaining (s) ; and similarly in cases of insurance generally (22). Again, 
 if it be alleged, in cases of vendor and purchaser, that the party charged has 
 omitted to communicate the fact that the property is subject to incumbrances, 
 such as a right of way, or if it be alleged, in such cases or in cases of marine 
 insurance, that there has been no disclosure of some unusually restrictive 
 covenants in a head lease or other instrument afiecting the property, or of 
 some unusual clause or condition in a maritime instrument which afiects 
 the underwriter's risk, it is for the party complaining to show, imless it be 
 expressly or tacitly admitted by the party charged, that the right of way in 
 fact existed (a), or that such covenant, clause, or condition not only in fact 
 existed, but also was in fact an unusual covenant, clause, or condition (6) . 
 To take one further type of illustration, where one of the parties to a contract 
 of marriage complains that the other has withheld his or her previous bad 
 character or conduct from her or him during the negotiation, it must be 
 proved that the party charged in fact had the bad character or was guilty 
 of the evil conduct alleged (c). 
 
 (2) See Glasgow Assurance Corporation v. Symondson & Co. (1911), 104 L. T. 254. 
 Here again the alleged undisclosed fact was a complex fact, subdivisible into the three 
 facts stated in the text. Scbutton, J., who tried the case without a jury, found that none 
 of the above alleged facts were facts, and on that ground, besides the ground that none of 
 them were material, gave judgment for the defendant firm (the party charged, for the 
 action was to set aside " the treaty " in question). There was another alleged undisclosed 
 fact, which Sobtttton, J., found to be a fact, but, as this too he held to be an immaterial 
 one, the, result was not affected. 
 
 {zz) See the " fidehty bond " case of Allis Chalmers Co. v. Fidelity & Deposit Co. of 
 Maryland (1913), 29 T. L. R. 506, where the defalcations of the manager, the non-disclosure 
 of which was complained of, occurred before what was held by the Court of Appeal, 
 reversing Phillimokb, J., to be the date of the conclusion of the contract. 
 
 (a) See Wilde v. Cfibson (l8iS), 1 H. L. C. 605, where, at p. 625, Lord Cottenham, L.C, 
 as one of his reasons for holding that the party complaining was not entitled to the relief 
 prayed, stated that the plaintiff had failed to prove the fact that there was a public right 
 of way over the property sold, which was the fact alleged to have been undisclosed. On 
 this much-discussed case, see the detailed observations in Sect. 8, Sub-s. (2), post. 
 
 (b) Whether a restrictive covenant, in cases of the sale or demise of land, is, or is not, 
 an unusual one at the particular time in question (for what is unusual at one period may be 
 usual at another), is an issue of fact (see § 269, note (A), post), the burden of establishing 
 which is clearly on the party complaining, if he is challenged ; though, in almost all the 
 reported cases on the subject of non-disclosure of restrictive and unusual covenants in 
 oases of vendor and purchaser, — see those cited in note (/) to § 1 1 5, ante, — the issue seems, 
 not to have been contested. In marine insurance cases, on the contrary, the question 
 whether the alleged undisclosed clauses or conditions contained in maritime instruments, 
 and affecting the underwriter's risk, were or were not in common use at the date of the 
 alleged duty to disclose, has nearly always been the subject of contest and evidence, the 
 onus being on the party complaining, as may be seen by a comparison of the cases cited in 
 note (p) to § 96, ante, where the onus was sustained, with those cited in note (q) thereto, 
 where it was not. 
 
 (c) See Badddey v. Mortloch (1816), Holt N. P. 151 {per Gibbs, C.J., at p. 152 : "if 
 a woman improvidently promises to marry a man who turns out upon inquiry to be of bad 
 character, she is not bound to perform her promise. But she must show that the plaintiff 
 is of bad character ") ; Irving v. Cfreenwood (1824), 1 C. & P. 350 (where Abbott, C.J., 
 directed the jury, at pp. 350, 351, that the defendant was entitled to the verdict, if, after 
 the contract, he discovered the plaintiff to be a loose or immoral woman, but that it was 
 for the defendant to satisfy them that in fact she was of that character). 
 
154 CH. Ill, SECT. 3, SUB-S. (2). 
 
 179. It is not sufficient to establish that the alleged undisclosed fact was 
 in its literal sense a fact, if it was not so as regards that particular feature 
 in it which made it material to be disclosed. Thus, where a purchaser com- 
 plains of the non-disclosure of a restrictive covenant afEecting the property 
 sold, the feature in such alleged fact which makes it material to be disclosed 
 is that he will be hampered in the enjoyment of the property : consequently, 
 though he may establish the bare fact that the restrictive covenant exists, 
 yet if in the course of the evidence facts are elicited which show clearly that 
 the party who otherwise would be entitled to enforce the covenant has by 
 his conduct or inaction long since forfeited his right to do so, the complaining 
 purchaser fails to show the existence of the only element in the undisclosed 
 matter which affects his interests, and, consequently, his title to relief {d). 
 So, if it be a case of compromise, whereby a contributory in the liquidation 
 of a company is to be released on disclosure of all the property of which he 
 is possessed, and the liquidator sues to set aside the compromise on the 
 ground of non-disclosure of (infer alia) certain shares in a shipping company, 
 it is of no avail for the liquidator to establish that at the material date 
 the contributory was the holder of the shares in question, for this is merely to 
 show the existence of property in the literal and legal sense, but he must 
 go on to prove that the shares constituted " property " in the only sense 
 in which disclosure or non-disclosure of property can have the slightest 
 importance, that is to say, that they had some value : and, if it is not 
 pretended that they had any, he fails to sustain the burden of establishing 
 that the alleged fact was a fact in its only substantial or material aspect (e). 
 
 180. On the other hand, whilst it is necessary, it is also sufficient, to 
 prove the precise substantial fact alleged to have been withheld. For this pur- 
 pose, the exact allegation made in each case must be critically examined (/). 
 It has already been seen that the " fact " or " circumstance " may be, for 
 instance, intelligence, information, or rumour ; or a person's state of mind 
 or will ; his opinion, intentions, anticipations, or apprehensions ; or an 
 agreement between two persons ; in all which cases, that which is to be 
 proved is the possession of the information or the entertaining of the opinion, 
 intention, hope, or fear, by the person to whom it is attributed, or the exist- 
 ence of the agreement, — but not the truth of the matters forming the subject of 
 the information, or the correctness of the opinion, or the realization of the 
 intention, expectation, or apprehension, or the validity of the agreement {g). 
 A like caution is required in the analogous province of misrepresentation, where 
 the representee can never be called upon to prove more than the existence 
 of the precise fact which he avers to have been denied or falsely stated (h). 
 
 {d) This was the case in Hepworth v. Pickles, [1900] 1 Ch. 108, in which Farwbll, J., 
 followed the similar decision of Rombb, J., against the party complaining, under similar 
 circumstances, in Be Summerson, [1900] 1 Ch. 112 n. 
 
 (e) Watt V. Assets Co., [1905] A. C. 317, H. L. {per Lord Halsbuky, L.C, at pp. 331, 
 332). 
 
 ( / ) See the case cited in note (s) to § 173, ante. 
 
 (g) See §§ 27, 28, 29, ante, and the cases cited in the notes thereto. 
 
 {h) See Duchett v. Williams (1834), 2 C. & M. 348, the history of which case is rather 
 peculiar. One insurance company sued another (the parties named on the record being 
 
§§ 179-181 (burden of proof). 155 
 
 181. It must not be forgotten that tlie duty of disclosure is strictly con- 
 temporaneous with the negotiation which gives rise to it. As there is no 
 such duty before the parties are in treaty with one another, so there is none 
 after the treaty has matured into agreement. The party charged is under 
 no obligation to divulge any fact of which he acquires knowledge after the 
 conclusion of the contract, and it is incumbent on the party complaining, 
 therefore, as will be seen hereafter (i), to show that the party charged had 
 such knowledge before that date. It follows, a fortiori, that, in proving the 
 existence of the alleged undisclosed fact, he must prove that it existed before 
 the conclusion of the contract, because if it did not then even exist, it is idle 
 to attempt to show that the party charged then had knowledge of it (j). 
 If it is sought to impose a duty on the party charged to reveal material 
 facts supervening after the conclusion of the contract, but during its currency 
 
 their respective public officers) on a policy of insurance on the life of one Stephenson. The 
 defendant company pleaded misrepresentation by the plaintiffs that Stephenson was free 
 from disease. The defendants proved the misrepresentation alleged ; the j ury found 
 accordingly that " the life was not insurable," and the verdict was thereupon entered for 
 the defendants, which, on appeal, the Courts of Exchequer refused to disturb, but, on the 
 plaintiffs then contending (for the first time) that they were entitled to a return of the 
 premiums paid by them, the parties (somewhat strangely) agreed that there should be a 
 second trial to determine this particular subsidiary issue, and no other. On the second 
 trial, the defendants (again very unaccountably) allowed the jury to consider the question 
 which had already been decided on the first trial in a manner satisfactory to the Court, 
 viz. whether the life was insurable, and the second jury said that it was. There was 
 thereupon a deadlock, from which the parties extricated themselves by agreeing that the 
 Court of Exchequer, on appeal, should be at liberty to look into the evidence, and form 
 their own conclusions on all points. This they did with the result (which might have been 
 achieved at an earlier, stage) that the real issue was discussed, and it was found that " at 
 the time when the pohcy was effected, Mr. Stephenson had upon him a disease which 
 tended to shorten life," and held (in effect) that it was not incumbent on the defendants to 
 prove more than, in the opinion of the Court, they had proved, viz. the making of the 
 representation, and its falsity and materiaUty {per Lord Lyndhubst, C.B., deUvering 
 the judgment by the Court, at pp. 350, 351). 
 
 (i) See § 189, post. 
 
 (j) An illustration of failure to establish that the alleged fact came into being before the 
 conclusion of the contract is the case of Pirn tfc Sogers v. Beid, (1843), 6 M. & G. 1, where 
 to an action on a policy of fire insurance the defendants pleaded non-disclosure of the fact 
 that the plaintiffs had changed their business from that of paper-makers to that of dyers 
 of cotton- wash, had accumulated large quantities of such cotton- wash on the insured pre- 
 mises, and had introduced a new furnace, but did not even allege that these admittedly 
 undisclosed facts took place until after the execution of the policy, and the Court accord- 
 ingly held that the insurance company's defence failed on the ground that the pohcy was 
 not so clearly worded as to impose a contractual obligation to disclose supervening 
 material facts, and also (and this is the only ground which concerns the present discussion) 
 on the express ground that there was no such duty independently of contract {per Tindal, 
 C.J., at p. 19, CoLTMAN, J., at p. 21, Maule, J., at p. 22, and Cbesswell, J., at p. 24). 
 On the other hand, where the party charged had begun to make alterations to his premises 
 before the issuing of the fire insurance policy, it was held that the party complaining had 
 established that the alleged undisclosed fact became a fact before the conclusion of the 
 contract, and had sustained the onus which was upon him in this respect : Sillem v. 
 Thornton (1854), 3 E. & B. 868, at pp. 881, 882. At least, this was one ground of the 
 decision, which was enough to support it ; but, at pp. 882, sqq., the Court ventured 
 on another, viz. that there was an implied warranty on the part of the plaintiff that no 
 alterations would be made in the premises during the currency of the policy. This was 
 held to be a clearly bad ground in Thompson v. Hopper (1858), E. B. & E. 1038 {per 
 WiLLES, J., at p. 1049). As regards marine insurance, the rule is stated in a codified form 
 in s. 18 (1) of the Marine Insurance Act, 1906 (6 Edw. 7, u. 41) : " the assured must disclose 
 to the insurer, hefore the contract is concluded, any material circumstance which is known 
 to the assured." 
 
156 CH. Ill, SECT. 3, SUB-SS. (2), (3). 
 
 or operation, or pending its completion, this must be done by tbe exprest 
 agreement of tbe parties, as is usually the case in contracts of fire insur- 
 ance (h), or else such a duty must be shown to arise out of some warranty or 
 condition to be implied from the special character of the contract, as, for 
 instance, in the case of guarantees (l), and, perhaps, contracts to marry (m). 
 182. The " conclusion of the contract," for the purpose of the rule now 
 under discussion, and generally in relation to the duty of disclosure which 
 exists during negotiation (w), in the act which, according to the prbciples 
 regulating contracts in general or the species of contract which is in question 
 in the particular case, efiectually, finally, and unconditionally binds the 
 parties to one another in law, or, as in the case of contracts of marine insurance 
 (where the initialling of the slip is the contract, and not the policy subsequently 
 issued), that which binds the parties according to rules of mercantile practice 
 and good faith recognized by the law (o). 
 
 (k) See § 104, ante. In Pirn & Rogers v. Reid, sup., the attempt to create the con- 
 tractual obligatiou failed, because the language used was not, as in such cases it always 
 should be, precise and unambiguous. 
 
 (I) For the theory on which the duty is impUed in the case of suretyship contracts, and 
 the extent and nature of the duty, see § 129, anU. 
 
 (m) Lord Campbell, C. J., at p. 759 of Hall v. WrigU (1858), E. B. & E. 746, expressed 
 the view that " this contract of marriage likewise has peculiar incidents, by reason of 
 which the performance of it may be excused. If, subsequently to the contract, the woman 
 has been guilty of incontinence, the man at his choice is excused from the performance 
 of his promise which was given under the imphed condition that the woman should con- 
 tinue chaste." 
 
 (») See Sub-ss. (4) and (5), post, as to the knowledge of the party charged, and the 
 ignorance of the party complaining, respectively, in relation to which the question of the 
 " conclusion of the contract " is of considerable importance. 
 
 (o) See Morrison v. Universal Marine Insurance Go. (1873), L. E. 8 Exch. 197, Exch. 
 Ch., where the dissentient opinion of Cleasby, B., on this question, in the Court of 
 Exchequer (1872), L. R. 8 Exch. 40, at pp. 59-61, was a£6rmed by the Exchequer Chamber. 
 See also the cases cited in the notes to § 189, and in those to § 195, post. The mercantile 
 rule of good faith was always supported to the fullest possible extent, short of defeating 
 the claims of the revenue, and has now, to the same extent and within the same limits, 
 received statutory recognition. See ss. 21, 22 of the Marine Insurance Act, 1906, the 
 former of which provides that " a contract of marine insurance is deemed to be concluded 
 when the proposal of the assured is accepted by the insurer, whether the policy be then 
 issued or not ; and for the purpose of showing when the proposal was accepted, reference 
 may be made to the slip or covering note or other customary memorandum of the contract, 
 although it be unstamped " ; whilst the latter safeguards the fiscal requirements of the 
 State by enacting that " subject to the provisions of any statute, a contract of marine 
 insurance is inadmissible in evidence unless it is embodied in a marine policy in accordance 
 with this Act. The poUcy may be executed and issued either at the time when the contract 
 is concluded, or afterwards." The same principle would doubtless be applied, wherever 
 the same reason exists for its apphcation, to any other mercantile document which binds 
 the parties, though for revenue or other statutory purposes, the contract, concluded as 
 between them, may have to be expressed in a more formal instrument. A fortiori is this 
 the case where no requirement of the revenue stands in the way, as (e.g.) where a contract 
 of fire insurance is constituted by a slip, as happens where a Lloyd's polioy form is adopted, 
 and where therefore there is no statutory reason why, for all purposes, the shp should not 
 be deemed the concluded contract, j ust as much as a contract for the sale of land, though 
 it requires to be completed by conveyance : see Thompson v. Adams (1889), 23 Q. B. D. 
 361. So, in Yager v. Guardian Assurance Co. (1912), 29 T. L. R. 53 (another fire-insurance 
 case), the " document," which was a memorandum or note of much the same nature as the 
 slip in the case last cited, would probably have been held to be the concluded contract 
 between the parties, but for a clause or notice on the face of it that it should not have this 
 effect until payment of the premium and the giving of a receipt therefor from the office, 
 which clause, therefore, was in effect, by the express agreement of the parties, a postpone- 
 ment of the otherwise immediate binding operation of the document. Eor instances of 
 
§§ 181-183 (burden of PRoor). 157 
 
 Suh-s. (3). The N on- Disclosure. 
 
 183. Though absence of disclosure is a negative, and, ordinarily, ei 
 incumhit probatio qui affirmat, non qui negat, yet (as in the case of a similar 
 prohandum in actions of malicious prosecution, viz. absence of reasonable and 
 probable cause) it is for the party complaining to establish this negative 
 element in the burden of proof, and he must accordingly tender some evidence 
 that the party charged did not in fact disclose to him, or to all the parties 
 complaining (if more than one), the particular matter which he alleges to 
 have been withheld. This means that while, on the one hand, it is enough to 
 prove absence of full and clear disclosure {p), it is, on the other, necessary to 
 prove that such disclosure was withheld on all the occasions (if more than 
 one) at which it might reasonably have been xaade{pp). In most of the 
 reported cases, the party charged appears not to have denied the alleged non- 
 disclosure, so that the question of where the burden of proof ought to fall, 
 became of no importancewhatever, and was not discussed. But in one case (q), 
 the question did become a vital one, and was carefully considered by the Court 
 of Exchequer, with the result that the rule as above stated was solemnly 
 laid down (r), though it was at the same time observed that the slightest 
 possible evidence would always be su£B.cient to throw the burden on to the 
 other side, if not to conclude the issue altogether ; and that a very strong 
 prima facie, if not irrebuttable, inference of fact that the alleged undisclosed 
 circumstance was not commrmicated arises from mere proof that the 
 contract was entered into, where the undisclosed circumstance, and the 
 contract, respectively, are of such a nature as to render it inconceivable 
 that the latter would have been made if the former had first been divulged (s). 
 
 other insurance cases in which it became necessary to consider whether the express or 
 implied intention of the parties was that the risk should commence only with the payment 
 of the premium, or immediately on the issue of the policy, see Canning v. Farquhar (1886), 
 16 Q. B. D. 727, C. A. ; Roberts v. Security Co., [1897] 1 Q. B. Ill, C. A. ; Allis Chalmers Co. 
 V. Fidelity & Deposit Go. of Maryland (1913), 30 T. L. E.. 445, C. A. ; Harrington v. Pearl 
 Life Assurance Go. (1914), 30 T. L. R. 613, C. A. 
 
 (p) As to what in law is meant by this, and particularly as to the essential requirements 
 of completeness and freedom from ambiguity, see Ch. II, Sect. 1, ante, and the cases cited 
 in the notes thereto. 
 
 (pp) See note («), post, and the case of Watt v. Assets Co., cited in note {w), post. 
 
 (q) This was Elkin v. Janson (1845), 13 M. & W. 655, for the facts of which, and the 
 rules as to burden of proof declared therein, see note (r) to § 1 72, ante. 
 
 (r) Ibid., per Aldeeson, B., at p. 664 (see the passage cited in note (r) to § 172, ante, in 
 which the last of the four propositions, " every one of which " he holds must be made out 
 by the party complaining, is that " they " — the facts rehed on — " were not communicated 
 to the defendant," who was there the party complaining), Pakke, B., at pp. 662, 663, 
 and Platt, B., at pp. 666, 667. Pollock, C.B., at p. 667, expressed some doubt, but 
 did not dissent. See also Greenwood v. Greenwood (1863), 2 De G. J. & S. 28 (at pp. 38, 39, 
 41, 42), and Jod v. Law Union & Crown Insurance Co., [1908] 2 K. B. 863, C. A. {per 
 VAtrGHAN Williams, L. J., at p. 880). 
 
 (s) Elkin V. Janson, sup., per Parke, B., at pp. 662, 663 : " the burden of proof lay 
 on the defendant, and he was bound to give some evidence of the non-communication, at 
 the time he effected the pohoy, of the fact which the jury has found to be a material one 
 for him to know ; for although this allegation is negative in its terms, still, as it was the 
 duty of the assured to make this communication, ... I think some evidence ought to have 
 been given by the defendant, to show that that material communication was not made to 
 him. Generally speaking, the mere fact of subscribing the policy would be sufficient evidence ; 
 in a case like the present, no prudent man with such information as the plaintiff was 
 possessed of, namely, that the ship which it was proposed to insure had sailed from the 
 
158 CH. Ill, SECT. 3, SUB-S. (3). 
 
 This decision has been adopted and acted upon in subsequent cases of 
 marine, life, and other insurance (t), vendor and purchaser (?/), com- 
 port for so long a period as to be a missing ship, would have executed a poHoy of insurance 
 on her. In the present case, no doubt can exist that no such communication was made to 
 the underwriter, for the natural channel for it to come through would be the broker, who 
 swore that he himself was ignorant of the date of this biU. That was enough to cast the 
 burden on the other side." So Aldbrsoit, B., at pp. 665, 666 : " in a case Kke the present, 
 slender evidence of a material communication not having been made is all that can be 
 required from a defendant " — the party complaining being here, as in nearly all the marine 
 insurance cases, a defendant to an action on the poUcy — : " suppose the case to be that 
 a ship about to be insured was burnt, and the plaintiff knew of it at the time he effected 
 the insurance " . . . &c. " So here, it is almost impossible to beh'eve that the defendant 
 would have insured this ship, had he known that she had sailed from Seville so long before. 
 . . ." &c. Cp. what is said as to this onus by Knight-Bbtjce, V.-C, at pp. 105, 106 of 
 Stikemanv. Dawson (1847), 1 De G. & Sm. 90. It should be remembered that these decisions 
 weresome years prior to the passing of the Evidence Act, 1851 (14& 15Vict. c. 99), whereby 
 (s. 2) parties litigant and interested were for the first time allowed to give oral evidence; 
 and it may have then seemed somewhat harsh, under such conditions, to require the party 
 complaining to give any, even the slenderest, evidence of non-disclosure: but no such 
 hardship can now be suggested as a ground for criticizing, or hesitating to enforce, the 
 rule, when the party complaining has only to go into the witness-box and give a simple 
 denial on oath to any suggestion of disclosure which may be made by the party charged 
 in his pleading, whether directly, or indirectly by a traverse of the allegation of non- 
 disclosure in the pleading of the party complaining. In Joel v. Law Union & Crown 
 Insurance Co., inf., Vaughan Williams, L.J., at p. 881, expressed the view that in the 
 circumstances of that case the onus had not been shifted. 
 
 (t) As in Elhin v. Janson, sup., where it was held that the question was not put to the 
 jury at the trial in such a form as to make it quite clear to them that the onus of proving 
 non-disclosure was on the party complaining — see note (a), post; lonides v. Pender (1874), 
 L. R. 9 Q. B. 531, where the fifth of the seven questions left by Hannen, J., to the jury 
 was, whether the fact of the excessive valuation was concealed from the underwriters, 
 which the jury answered in the affirmative (p. 537) ; Tate & Sons v. Hyslop (1885), 15 
 Q. B. D. 368, C. A., where (see pp. 371, 372), Manisty, J., left two questions to the jury 
 on this point, (1) whether the fact there in question had been communicated to the under- 
 writers, and (2) whether it had been concealed from them, and the jury having answered 
 (1) by saying " not directly, but to the defendants' solicitors," and (2) in the negative, it 
 was held on appeal (per Brett, M.R., at p. 374) that the disclosure to the solicitors 
 mentioned in the answer to (1) was, in law, no disclosure at all, — see § 49, and note (2) 
 thereto, ante, — and (per Brett, M.R., at p. 378) that, therefore, there was no evidence to 
 justify the answer to (2), which probably arose from the jury understanding the expression 
 " concealed " — a most misleading one — to import fraud ; The Bedouin, [1894] P. 1, C. A., 
 where, affirming the decision of Goeell Barnes, J., the C. A. held that the burden was 
 on the underwriters to prove non-disclosure, and they had failed to sustain it (per Lord 
 EsHER, M.R., at pp. 12, 13) ; Laing v. Union Marine Insurance Co. (1895), 1 Comm. Cas. 
 11, where Mathew, J., at pp. 15, 16, found as a fact that the non-disclosure alleged by 
 the party complaining had been proved. The above are all cases of marine insurance. 
 For lite insurance cases, see Joel v. Law Union & Crown Insurance Co., [1908] 2 K. B. 863, 
 C. A., where, besides other defences based on an alleged " contract for disclosure " — see 
 Sect. 2, Sub-s. (9), ante — which do not concern the present discussion, the defendants 
 pleaded non-disclosure, independently of contract, of a fact which the jury found to be 
 material, viz. that the assured had consulted a certain doctor, eight years previously, 
 for a nervous breakdown, and it was held (inter alia) by the C. A. that the insurance com- 
 pany had failed to discharge the onus, which was on them, of establishing non-disclosure 
 of this fact, and that it was not enough to show, as they did, that the fact had not been 
 divulged in a particular document, or on a particular occasion, when the disclosure might 
 reasonably be expected to be made, but that evidence ought also to have been given, which 
 it was not (though the persons who could have given it were in court at the trial), as to 
 other documents, or other occasions, where the disclosure might, or might not, have been 
 made : in short, that to establish non-disclosure the evidence must deal with all reasonably 
 possible occasions of disclosure, and exhaustively negative communication on any of 
 them (per Vaitghan Williams, L.J., at p. 874, and Moitltob^, L.J., at p. 892). Cp. 
 Thornton-Smith v. Motor Union Insurance Co. (1913), 30 T. L. R. 139. 
 
 (u) See Coalcs v. Boswdl (1886), 11 App. Cas. 232, H. L., which is an excellent 
 
§ 183 (burden of proof). 159 
 
 promises (t)), and others (w), whenever, as the result of the contentions of 
 the parties, or in the opinion of the judge, it became necessary for the Court 
 
 illustration of the distinction, in respect of the rules as to the burden of proof of disclosure, 
 between cases of the class discussed in the present Chapter, and those of the types forming 
 the subject of Chapters IV and V. The action was tried by Fry, J., sub nom., Boswell v. 
 Coaks (1881), 23 C. D. 302, who took the view that the relation between the parties was 
 that of solicitor and cUent, and that there was therefore, in the first instance, a disability 
 on the solicitor precluding him from purchasing at all from the client without having 
 made full disclosure, or from sustaining the purchase, when impeached, without proving 
 such full disclosure (see §§ 337, 338, post). The C. A. (1884), 27 C. D. 424, took the 
 same view of the transaction, but differed from Fey, J., on the question whether this 
 original disability had come to an end. The H. L., whilst agreeing that if the relation 
 between the parties had been what both the Courts below supposed it to have been, 
 the onus would have been on the party charged to show the fullest disclosure in the 
 clearest possible manner, held that the relation was not that of solicitor and client, but 
 purely and simply that of purchaser and vendor, and that, this being so, it was not for 
 the party charged to prove disclosure, but for the party complaining to establish the 
 absence of it, and (in the special circumstances of that case) fraudulent suppression as 
 well : and, after a critical examination of the evidence, it was held that the party com- 
 plaining, so far from having shown dishonest concealment, had failed to prove any non- 
 disclosure in fact (per Lord Sblboene, at p. 239). And see also Nottingham Patent 
 Brick and Tile Go. v. Butler (1886), 16 Q. B. D. 778, C. A. 
 
 (v) See Greenwood v. Greenwood (1863), 2 De G. J. & S. 28, 39, 38, 41, 42. In Mostyn 
 (Lord) V. Brooke (1866), L. R. 4 H. L. 304, a case of a famUy compromise, which had been 
 sanctioned by the Master in the chambers of Lord Romilly, M.R., a bill was filed by one 
 of the parties to set aside the compromise, on the ground of non-disclosure by the other 
 parties of certain material documents. Lord Romilly, M.R., dismissed the bill, Brooke v. 
 Lord Mostyn (1865), 33 Beav. 457, on the ground that non-disclosure had not been shown 
 with sufficient clearness to justify the upsetting of a family arrangement. The Lords 
 Justices, however, on the plaintiff adducing fresh evidence before them of the non- 
 production of the documents referred to, considered the proof sufficient, (1865), 2 De 
 G. J. & S. 373 (per TtrBNEB, L. J., at pp. 422-444, and Knight- Brtjce, L. J., at pp. 424, 
 425), and on this ground reversed the decision of Lord Romilly, M.R. But the H. L., 
 being of opinion that the complaining party's evidence, even as supplemented, was not 
 sufficient to establish the non-disclosure, and on this ground alone, disagreed with the 
 Lords Justices' decree, and restored the judgment of Lord Romilly, M.R. In Watt v. 
 Assets Co., [1905] A. C. 317, H. L., which was a case of an agreement of compromise between 
 the liquidators of a bank and a contributory, whereby, on payment of certain moneys, 
 and a declaration of aU his property in a document referred to in the arguments and the 
 judgments as " the statement," the contributory was released from all further hability 
 to contribution. The Assets Co., the successors in title (by purchase) of the Uquidators, 
 sued the trustees, executors, and beneficiaries of the deceased contributory for " reduction " 
 of the compromise on the ground of non-disclosure of certain property by the contributory. 
 The House of Lords reversed the Court of Session who had granted the reUef prayed, and 
 restored the interlocutor of the Lord Ordinary who had refused it, on the ground (amongst 
 others) that the burden of proving that the deceased contributory had not divulged the 
 existence of the assets alleged was on the Assets Co., and that this burden was not dis- 
 charged by evidence that the assets were not included in the " statement," and that 
 the only survivor of the liquidators, one Haldane, did not remember any communi 
 cation (he could not swear that there had been none), which was all that the party 
 complaining attempted to prove : since, for aught that appeared, oral disclosure might 
 have been made to any of the deceased liquidators, other than Haldane, if not to Haldane 
 himself, and particularly might have been made to Cameron, who drew up the questions 
 contained in the " statement," and the agreement which was based on it (per Lord 
 Halsbtjey, L.C, at pp. 329, 330). A stronger illustration of the rule stated in the text 
 could not well arise : for, if the burden had been on the representatives of the party charged 
 to prove disclosure, the deaths of all the liquidators, except one (who remembered little 
 or nothing of the facts), and of the party charged himself, must have been fatal to their 
 case : whereas it was the Assets Co. whose case suffered from these circumstances. Cp. 
 the case cited in note (u), ante, as to the duty on the party complaining of exhausting all 
 possible means and sources of disclosure. 
 
 (w) For instance, Stikeman v. Dawson (1847), 1 De G. & Sm. 90, at pp. 105-107. 
 
160 CH, III, SECT. 3, SUB-S. (3). 
 
 to give direction to the jury on the subject (x), or to lay down a rule for its 
 own guidance (y). 
 
 184. It may be thought that the negative referred to is, like most nega- 
 tives, capable of expression in some affirmative form, so as to render a rule 
 which requires a man to prove that something did not happen more palatable 
 to the normal intelligence of the jury box : for instance, that a jury may 
 usefully be told that it is for the party complaining to prove that the party 
 charged "neglected" to communicate, or "withheld," or "concealed," the 
 fact in question. Attempts have been made in this direction, but they have 
 usually led to trouble: because jurymen, not unnaturally, think (unless 
 very carefully warned against so doing) that such positive terms must indicate 
 some positive misconduct, and, in particular, that the expression " con- 
 cealment " connotes a guilty and fraudulent hiding away, or covering up, 
 or obscuring, of the thing undisclosed (z), and so their minds are diverted 
 from the real issue, and concentrated on a false one : whilst they readily 
 recognize the justice of the rule that he who alleges " concealment " or " keep- 
 ing back " must prove it, they only do so in the persuasion that these terms 
 necessarily involve deceit, or secretiveness, or other obliquity of conduct. 
 On the other hand, if the question left to the jury is simply whether the fact 
 was communicated, there is danger (unless the accompanying direction be very 
 clear and precise) that the jury may infer that the burden is wholly on the 
 party charged to prove the communication (a). The only safe rule, it would 
 appear, for a judge to lay down for the guidance of the jury or for his own 
 (as the case may be), where the matter becomes of serious importance, is 
 
 {x) The insurance cases of Elhin v. Janson, lonides v. Pender, Tate <Se Sons v. Eyslop, 
 and Jod v. Law Union tSs Crown Insurance Co., cited in note (t), ante, were cases tried 
 before a judge and jury. 
 
 (y) The Bedouin, and Laing v. Union Marine Insurance Co., cited in note (t), ante, and 
 all the cases cited in notes (u), (v), and (w), ante, were heard before a judge alone. 
 
 (z) Hannbn, J., left it to the jury to say whether there had been " concealment " in 
 lonides v. Pender, cited in note {t), ante, and so did Manisty, J., in Tate & Sons v. Hyslop, 
 cited in the same note. No evil consequences resulted in the former case, because the 
 jury answered the question in the affirmative : but, in the latter, where the jury negatived 
 the " concealment," having previously answered another question in a manner which in 
 law was equivalent to a finding of non-disclosure, it was held that the finding which 
 negatived concealment could not stand, and that the jury had been misled by this 
 inexact and inappropriate expression : see, again, note (t), ante. As to the ambiguity and 
 inconvenience, generally, of the terms " concealment," and " withholding," see § 629, 
 post, and note {nn) thereto. 
 
 (o) This, it was held by the Court of Exchequer, might possibly have been the case in 
 Elhiny. Janson(lS^S), 13M. & W. 655, where the jury, having first found a general verdict 
 for the defendant, and then having been asked specifically whether in their view the alleged 
 undisclosed fact was communicated to the defendant, professed themselves unable to 
 answer that question, whereupon Pollock, B., directed the verdict to be entered for the 
 plaintifi. But the question which the Court had to consider on appeal was whether the 
 case was put to the jury in such a form as to make it quite clear on which party the burden 
 lay in the first instance, and what amount of evidence would shift it from one to the other 
 — see notes (r) and (s), ante — and, thinking that this had not been done, they granted a 
 new trial without costs (per Paeke, B., at p. 663, who, after stating that there was 
 abundant, if not conclusive, evidence of non- disclosure, and of the burden having been 
 by this evidence thrown on to the plaintiff of showing the affirmative, concluded : "I 
 however entertain some doubt whether my Lord Chief Baron, by the mode in which he 
 1-eft the case to the jury, did not cast the onus prdbandi on the wrong party "). 
 
§§ 183-188 (burden op proof). 161 
 
 the rule propounded by the Court of Exchequer, with its qualification, as 
 above stated. 
 
 Subs. (4). Knowledge of the Party charged. 
 
 185. Having established that the party charged did not disclose a certain 
 fact which he was under a duty to disclose, if known to him, the party com- 
 plaining musb proceed to make good the next step in his proof, and show 
 that the fact in question was known to the party charged at the time or 
 during the period when it was his duty to disclose it : for, obviously, there 
 can be no duty on any one, because it is an impossibility, to communicate or 
 impart to another a knowledge which he does not possess himself (h). 
 
 186. The knowledge which must be proved is that which is deemed such 
 in law. It is, therefore, on the one hand necessary, but, on the other, it is 
 sufficient, to establish either actual or presumptive knowledge, and, if the 
 latter is relied upon, to point to such circumstances in evidence as will justify 
 a legal inference therefrom of notice or knowledge on some one or more 
 of the several principles which in a previous Chapter have been examined 
 and dealt with once for all (c). 
 
 187. Where actual knowledge is ascribed to the party charged, the onus 
 is satisfied by proof that the undisclosed fact was within his cognizance, 
 though it may not have been present to his mind at the actual moment, or 
 during the actual period, when the duty of disclosure existed. Thus, in a 
 suretyship case, where the surety complained of the non-disclosure by the 
 creditor of a certain mortgage on the property which was the consideration 
 for the guaranteed debt, it was held that the surety had established the fact 
 of the creditor's knowledge as soon as the latter had admitted (which he 
 did) that he had forgotten it (d). On the same principle, in the law of mis- 
 representation, or statement from which, owing to pure forgetfulness, a 
 qualifjdng circumstance is omitted, is thereby rendered false and, as such, 
 amenable to proceedings for rescission, though not fraudulent or, as such, 
 the subject of an action for damages (dd). 
 
 188. It must always be remembered that where the undisclosed fact is a 
 complex one, as it not infrequently is, consisting of (1) circumstances capable 
 of being apprehended by the senses or retained by the memory, and also 
 (2) some thing, or state of things, to which those circumstances point, the 
 
 (6) This is the third of the four propositions mentioned by the Court of Exchequer in 
 Elkin Y. Janson, — see note (r), § 172, ante, — as required to be established by the party 
 complaining. See also Greenwood v. Greenwood (1863), 2 De G. J. & S. 28, 38, 39, 41, 42. 
 In both those cases it was established. But it was not established in the marine insurance 
 cases of Bradford v. Symondson (1881), 7 Q. B. D. 456, C. A., and Blackburn, Low & Co. v. 
 Vigors (1887), 12 App. Cas. 531, H. L. (with which may be usefully contrasted the 
 other case between the same assured and underwriters, but on another pohcy, Blackburn, 
 Low & Go. V. Hadam (1888), 21 Q. B. D. 184, where the knowledge of the fact by the 
 assured's agents at the material date was shown) ; nor was it established in any of the 
 life insurance cases cited in notes (e) and (/), inf., nor in the vendor and purchaser 
 case of Wilde v. Gibson (ISiS), 1 H. L. C. 605. 
 
 (c) See Ch. II, Sect. 3, ante. 
 
 (d) Willis V. WiUis (1850), 17 Sim. 218, 220. Cp. the observations of Lord Campbell 
 at p. 944 oiBailton v. Mathews & Leonard (1844), 10 CI. & Pin. 934. 
 
 (dd) See § 112 of the author's Law of Actionable Misrepresentation. 
 
 B.N.D. M 
 
162 CH. Ill, SECT. 3, SUB-S. (4). 
 
 party complaining must prove not only that the party charged had knowledge 
 of those circumstances, but also that he fully appreciated their significance 
 as indicating the presence of that thing, or state of things. Similarly, if the 
 undisclosed fact, in one of its aspects, is not necessarily of any importance 
 whatever, but, io another, is of vital materiality to the contract or transaction 
 which is the subject of the negotiation, it must be shown that the party charged 
 recognized not only the naked existence of the fact, but the existence of 
 that aspect of it which invests it with importance. These observations, 
 which it is difficult to express in an abstract formula, are best illustrated by 
 cases of life insurance, where the person proposing to efEect the insurance 
 of his own or another's life is under an obligation to disclose to the insurer 
 the existence of any present or past disease of a nature to afEect the duration 
 of the life insured. In any such case where the insurer complains of the non- 
 disclosure of a disease, it is of no avail for him to prove that the assured 
 was, during the period of negotiation, aware of some incident or circumstance 
 in his physical history or condition indicative of a departure from normal 
 health, unless he is also in a position to prove that the assured realized, or 
 must, evea with the normal intelligence of an inexpert mind, have realized, 
 that this incident or circumstance was symptomatic of existing, or premonitory 
 of approaching, mischief of a character to endanger or shorten life (e). An 
 assured may, for instance, be shown to have had occasional, or even constant, 
 headaches, and therefore to have been aware of them, and these may have 
 been of such a nature as to indicate to the trained professional intellect the 
 probable or certain existence or imminence of brain disease : but, unless the 
 insurer can satisfy the tribunal that the assured person inferred, or ought 
 to have inferred, from the phenomena what the physician would infer, or 
 (in other words) ought to have diagnosed his symptoms secundum artem, 
 he fails to establish the assured's knowledge of the undisclosed disease, which 
 means not only the actual phenomena, but all that is scientifically involved 
 in them (/). If it is desired to obviate this difficulty, the insurance com- 
 pany should frame specific questions directed not to particular diseases, but 
 to particular physical occurrences which they may be advised to have signifi- 
 cance from a medical point of view, such as the question which was put in 
 one case where the insurance company established non-disclosure, — " have 
 you ever had blood-spitting ? " (g) ; though, even here, it was pointed out 
 in the direction to the jury that it would not be sufficient to show merely 
 that the assured knew that he had on occasions spat blood, because this 
 might happen after the extraction of a tooth, or from a collision, or fall, or 
 assault, but it must be proved that he was aware of having spat blood other- 
 wise than as the result of some immediate external cause, or in technical 
 language, that the blood-spitting was idiopathic, and amounted to what a 
 doctor would designate haematoptysis. The same principle, as will be seen 
 
 (e) Swete v. Fairlie (1833), 6 C. & P. 1 (at p. 8) ; Fowkes y. Manchester and London Life 
 Assurance Co., No. 1 (1862), 3 P. & F. 440 (at pp. 443, 444). 
 
 ( / ) Joel V. Law Union & Crown Insurance Co., [1908] 2 K. B. 863, C. A. (per Moulton, 
 L.J., at pp. 884, 885). 
 
 (?) Geach v. Ingall (1845), 14 M. & W. 95. 
 
§§ 188, 189 (burden of proof). 163 
 
 presently, applies to the burden which, is also on the party complaining 
 of proving his own ignorance of the undisclosed fact (h). 
 
 189. It is on the one hand necessary, but, on the other, it is sufficient, 
 to fix the party charged with knowledge. It is not necessary to prove know- 
 ledge on the part of a person for whose benefit the party charged is suing, 
 for instance, as trustee for that person (M). Further, the knowledge which 
 must be brought home to the party charged is a knowledge which existed 
 during the negotiation. It is of no avail to prove his acquisition of the 
 knowledge after the conclusion of the contract. What the conclusion of 
 the contract for this purpose means has already been explained, in re- 
 lation to both contracts in general (i), and contracts of marine insurance 
 in particular, where the initialling of the slip, or other like note or memoran- 
 dum, and not the policy, is, for all purposes which concern the parties, the 
 act which operates as the " conclusion " (j). It has also been made clear 
 that the party complaining must show that the alleged undisclosed fact 
 existed or came into being before the conclusion of the contract (h). But, 
 if challenged, he must do more than this : he must establish that, whether 
 it existed or came into being before that date or not, the party charged 
 acquired knowledge of it before that date. Thus, in cases of marine insurance, 
 it has been held that, where underwriters pleaded non-disclosure of an accident 
 to the insured vessel, and knowledge of that fact by the assured, as well as 
 ignorance thereof on their own part, a rephcation by the assured was good 
 which (without denying the accident or the happening of it before the con- 
 clusion of the contract) averred that "the plaintiff had no knowledge of 
 the said fact before the initialling of the slip which the defendants were 
 bound in honour, conscience, and good faith to embody in a policy," and 
 that " the plaintiff relying upon the defendants' said obligation did in good 
 faith abstain from communicating the said fact before the issue of the 
 policy " (J). Similarly, where a person made a proposal for an insurance on 
 freight, which the underwriters accepted on a certain date, the assured was 
 held entitled to demand (as he did) the issue of a stamped policy to 
 him at a later date, though between the two dates he had ascertained the 
 fact that the ship had been lost (m). On the other hand, where by the agree- 
 ment of the parties a later date is substituted for the date at which the 
 contract would otherwise be deemed to have been concluded, the duty of the 
 party charged continues, or is revived, as the case may be, and it is enough 
 for the party complaining to prove that the party charged had knowledge of 
 the undisclosed fact at any time before the termination of such extended, 
 or renewed, period of duty. Thus, where a policy of marine insurance was 
 
 (k) See § 194, post. 
 
 (hh) See, Evans v. Edmonds (1853), 13 C. B. 777. 
 (i) In § 182, ante, 
 (j) See note (o) to § 182, ante, 
 {k) In § 181, and note (j) thereto, ante. 
 
 (l) Cory V. Patton (1872), L. R. 7 Q. B. 304, per Blackbton, J., deKvering the judgment 
 of the Court, at pp. 308-310. 
 
 (to) Lishman v. Northern Maritime Insurance Co. (1875) L. R. 10 C. P. 179, Exoh. Ch. 
 
164 CH. in, SECT. 3, SUB-SS. (4), (5). 
 
 by mistake efiected on the ship, instead of on the cargo, as intended, and, 
 on the error being pointed out, it was put right by a corrective memorandiun 
 on the margin of the policy, it was held that it was enough for the underwriters 
 to prove that the assured had knowledge of the undisclosed fact between 
 the date of the issue of the original policy and the date at which the correc- 
 tion was made (ji) ; and where, in a fire insurance case, the insurance com- 
 pany had, in a document which for that purpose was assumed to 
 be analogous to the slip in a policy of marine insurance, inserted a note to 
 the efiect that no insurance was to be in force tiU the premium should have 
 been paid, and a printed receipt issued from the office, it was held that the 
 insurance company sustained the onus of establishing the knowledge of the 
 assured during the existence of the duty by proof that after the delivery of 
 the above document, but before the issue of the printed receipt, the assured 
 had been apprised of the imdisclosed fact (o). 
 
 190. Where the non-disclosure assumes the form of an omission to qualify 
 facts stated absolutely, with the result of rendering the unqualified statement 
 a misrepresentation, and the party complaining elects to rely upon this 
 misrepresentation as his cause of action, and not on non-disclosure sirrvpliciier, 
 then, provided that he is only asking the Court to set aside the contract, 
 or to treat it as a nulhty, and is not seeking damages in an action of deceit, 
 there is of course no obligation on him to prove any knowledge or belief 
 whatsoever on the part of the person alleged to have (in the manner supposed) 
 made the implied misrepresentation {p). 
 
 Subs. (5). Ignorance of the Party complaining. 
 
 191. This, like non-disclosure, is a negative, but nevertheless, like it, is 
 an essential element in the proof of the party complaining, who must aver, 
 and, if denied, adduce ab least some prima facie evidence of, the fact that he 
 had no knowledge of the particular matter in question either by means of a 
 commimication from the party charged, or from any other source. And this 
 is a quite reasonable requirement, when the nature of the breach of duty 
 which must be alleged by him is considered. No duty is violated by the 
 party charged merely because he observes silence as to something which he 
 knows, or merely because he keeps to himself something which the party 
 complaining does not know. The duty is only broken when he fails to disclose 
 a material fact which is within his special or exclusive knowledge (q), that is 
 
 (m) Sawtell V. Loudon (1814), 5 Taunt. 359. 
 
 (o) Yager v. Guardian Assurance Co. (1912), 108 L. T. 38, Div Ct. 
 
 {p) See most of the cases cited in notes (<), («), and', v), to § 118, ante. 
 
 {q) The duty is " not to conceal what he alone knows," as was said by the C. A. in their 
 joint judgment, deb'vered by Cozbns-Habdy, L.J., at p. 157 of Law v. Law, [1905] 1 Ch. 
 140, C. A. That it is only matters within the presumed special or exclusive knowledge of 
 the party charged which are required to be disclosed, has been insisted upon in several 
 places in Sect. 2, ante : see §§ 84, 85 (generally), §§ 92, 93, 95, 96, 99 (illustrations from 
 marine insurance cases), § 117 (vendor and purchaser cases), §§ 120, 122, 123 (suretyship), 
 § 137 (compromises), § 141 (agreements for partnership), § 147, note (p), and § 148 (contracts- 
 to marry), and § 150 (deeds of separation), ante. 
 
§§ 189-191 (burden of proof). 165 
 
 to say, wHcli is both known (actually or presumptively) to himself, and is 
 not known (actually or presumptively) to the party complaining, who, 
 therefore, unless he alleges, and (if challenged) proves, both the one and 
 the other, alleges, or (as the case may be) establishes, no breach of duty 
 whatsoever (»•). At any rate, whatever its justification may be, and 
 whether it is abstractedly justifiable or not (s), the rule has been definitely 
 and unmistakably laid down (t), and, if it ever could have been, certainly 
 
 (r) The rules as to burden of proof in the law of misrepresentation, with regard to the 
 knowledge or ignorance of the representee, may usefuUy be contrasted here. When the 
 representee has alleged and proved the misrepresentation (innocent, or fraudulent, as 
 the case may be), and also materiality, inducement, and, where fraud is charged, 
 damages, he has, though not saying a word about his ignorance of the truth, alleged and 
 proved a good cause of action : the representor is from that point a convicted wrong- doer, 
 and the burden then hes heavily upon him to show affirmatively some reason why the 
 representee should not obtain the appropriate rehef, and one of such possible reasons is that, 
 though the intention was to deceive him, yet in fact the representee was not deceived, 
 because he actually and personally knew the whole truth at every material date : see 
 Mackintosh and Dreyer v. Marshall (1843), 11 M. & W. 116 {per Lord Abinoeb, C.B., and 
 Alderson, B., at p. 127), and the other cases cited in the notes to §§ 206-209 of the author's 
 Law of Actionable Misrepresentation. In a case of non-disclosure, on the contrary, if the 
 statement of claim, or the evidence, of the party complaining, terminates without any 
 averment, in the one case, or proof, in the other, of his own ignorance of the undisclosed 
 fact, he has not alleged, or established, a complete cause of action, and the party charged 
 is not an alleged, or (as the case may be) a proved, wrong-doer. 
 
 (s) Lord Mansfield, C. J., though he does not expressly say anything as to the burden 
 of proof, leaves no room for doubt as to what he would consider to be the correct rule, in 
 his observations on the foundation of the entire doctrine, and as to the fraudulent 
 character of a claim to reUef on the ground of non-disclosure put forward by a person who 
 has (even presumptive) knowledge of the undisclosed fact, at pp. 1918, 1919 of Garter v. 
 Boehm (1766), 3 Burr. 1905. " The reason of the rule against concealment is to prevent 
 fraud, and encourage good faith. If the defendant's objection " — which was non- 
 disclosure set up by an underwriter who had not established, even it he had alleged, 
 that he had no presumed notice of the undisclosed fact — " were to prevail in the present 
 case, the rule would be turned into an instrument of fraud. ... If the objection ' that 
 he was not told ' is sufficient to vacate it, he took the premium, knowing it to be void, in 
 order to gain, if the alternative turned out in one way, and to make no satisfaction, if it 
 turned out the other. ... If he thought that omission an objection at the time, he ought 
 not to have signed the policy with a secret reserve in his own mind to make it void ; if 
 he dispensed with the information, and did not think that silence was an objection, then 
 he cannot take it up now, after the event. What has often been said of the Statute of 
 Frauds may, with more propriety, be apphed to every rule of law drawn from the principle 
 of natural equity, that it should never be so turned, construed, or used, as to protect or be 
 a means of fraud." With this exposition should be compared that of Cockbtjbn, C.J., 
 who, at p. 605 of Bates v. HewiU (1867), L. R. 2 Q. B. 595, takes up precisely the same 
 ground : "it will not lie in the mouth of the underwriter to say that a material fact was 
 not communicated to him which he had present to his mind at the time he accepted the 
 insurance ; the law will not lend itself to a defence based upon fraud ; it wiU not allow 
 the underwriter to say, ' I have taken the premium with knowledge of the particulai fact, 
 but because the assured has not communicated it to me,I wiU not make good the loss.' " 
 Cp. Farrant v. Blackford (1863), 32 L. J. (oH.) 237 {per Lord Westbuby, L.C, at p. 240). 
 
 (i) For instance, Knight- Betjcb, V.-C, in his famous judgment in Stikeman v. Dawson 
 <1847), 1 De G. & Sm. 90, at pp. 105-108, said that not only non-disclosure, but also his 
 own ignorance from any other source, must be proved by the party complaining, and 
 that, of the two, the latter should be estabHshed first, for, not until this is done, does the 
 question of disclosure become of any importance ; Eblb, C.J., directed the jury, at p. 672 
 of Foley v. Tabor (1861), 2 F. & F. 663, a marine insurance case, in these terms — " did the 
 assured neglect to communicate to the insurer any fact known to the assured, and not known 
 to the insurer, material for his guidance, in respect of the premium to be demanded ? 
 Both parts of the question must be answered. The material fact must have been known to 
 the assured, and unknown to the insurer" and at p. 673, after intimating to the jury that 
 it was obvious that the assured had knowledge of the fact, he told them to consider whether 
 
166 CH. Ill, SECT. 3, SUB-S. (5). 
 
 cannot now be, controverted. No doubt, there are one or two 
 judicial pronouncements wbich, at the first blush, may appear to point 
 in the opposite direction, and to throw on the party charged the onus of 
 proving the knowledge aliunde of the party complaining, as soon as the 
 latter has established non-disclosure : but on closer examination of such 
 cases it will be seen that, in all of them, either the alleged ignorance of the 
 party complaining was not disputed, or the burden of proving his Icnow- 
 ledge was only thrown on the party charged at a stage in the trial of the 
 case when the party complaining had already given some 'prima facie evidence 
 of his own ignorance, and the onus had so become shifted (m). For, as in 
 the case of proof of non-disclosure (w), the allegation of ignorance in the 
 pleading of the party complaining, which must certainly in any event be 
 made (w), may be admitted, or at all events not disputed, in which case no 
 proof is necessary : and, even where the averment is denied, very slight 
 'primd facie evidence indeed, if non-disclosure has already been either admitted 
 or proved, is sufficient to cast on the party charged from that point onwards 
 the burden of establishing that the party complaining had acquired know- 
 ledge of the undisclosed fact through other channels than a direct communica- 
 tion from the party charged himself (a). 
 
 192. In accordance with the rule so established, it will be found, on 
 reference to the authorities, that, wherever the party complaining has 
 either (i) failed to give satisfactory primd facie evidence of his own ignorance 
 of the undisclosed fact, or (ii), having given such evidence, has been met by 
 coimter-evidence adduced by the party charged sufficient to sustain the 
 
 the other " part of the question " should be answered in favour of the underwriter. At 
 p. 383 of Caxton and Accrington Vnionv. Dew (1899), 68 L. J. ((}.e.)380, Bruce, J., applied 
 the same rule to the case of a fidelity guarantee ; and Lord Halsbtjey, L.C, at p. 332 of 
 Watt V. Assets Co., [1903] A. C. 317, H. L., to the case of a compromise. 
 
 {u) Thus, in Elkin v. Janson (1845), 13 M. & W. 655, the ignorance of the party com- 
 plainingwas not stated to be one of the facts which.in the opinion of the Court of Exchequer, 
 are required to be established by him : but in that case it was not disputed that the under- 
 writer had no knowledge of the material fact, if he did not acquire it from the assured ; it 
 was not necessary, therefore, to debate the question. In Bates v. Hewitt (1867), L. B. 2 
 Q. B. 595, CocKBTTKN, C.J., undoubtedly put a question to the jury at the trial (viz. 
 whether the underwriters had a then present knowledge of the identity of the insured 
 vessel with a late Confederate cruiser of the same name, which was the undisclosed fact) 
 in such a form as to indicate that he considered the onus of proving the knowledge of the 
 party complaining to be on the party charged, and, on the jury intimating that they were 
 not satisfied as to this point, he directed the verdict to be entered for the underwriters 
 (pp. 598, 599), which again presupposed the same view, and his ruling was affirmed by 
 the Court (pp. 605 and 608), but this course was adopted at a stage of the pro- 
 ceedings when, primd facie evidence of ignorance having been given by the under- 
 writers (see p. 598), the burden had been shifted on to the shoulders of the assured of prov- 
 ing affirmatively the underwriters' knowledge, and (in the circumstances of that case) 
 their actual then present knowledge. 
 
 (v) In Sub-s. (3), ante. 
 
 (w) See, generally, the various pleas, answers, and defences (where relief was sought 
 by way of defence), and the declarations, bills, statements of claim and counterclaims 
 (where rescission was the reUef claimed), set out in the reports of the cases cited in the 
 notes to Sect. 2, ante. 
 
 (x) See the observations of Knight-Bbtjce, V.-C, at pp. 105-107 of Stikeman v. 
 Dawson (1847), 1 De G. & Sm. 90, where he points out that, though slight evidence 
 might be sufficieijt, the party complaining was not justified in his refusal or omission to 
 give any at aU. 
 
§§ 191-193 (burden of proof). 167 
 
 onus, wliicli would then be on his shoulders, of affirmatively proving the 
 knowledge (actual or presumptive) of the party complaining, all relief has 
 been denied (y) : and that whenever, on the contrary, the party complaining 
 has given evidence of his own ignorance which the party charged has either 
 not attempted to refute, or has not succeeded in refuting, by countervailing 
 evidence of knowledge (presumptive or actual), relief has been granted, or, 
 where withheld, has been withheld on some other ground (2). 
 
 193. It must always be remembered that the complete burden of proof, 
 in relation to this topic, is not sustained by merely showing that the 
 party complaining had no actual or personal cognizance of the undisclosed 
 fact. It must also be established, if disputed, that he had no presumptive 
 knowledge (a) . On the other hand, whilst it is necessary, it is at the same time 
 sufficient, to prove the absence of either of these forms of knowledge : the 
 party complaining is not required to go further, or to allege and establish that 
 no means of knowledge were available to him, not being such means of which 
 the mere presence and availability is tantamount to presumptive knowledge : 
 nor does the most conclusive proof, on the other side, of the existence of such 
 means of knowledge in the least degree afiect the claim of the party com- 
 plaining to relief if otherwise well founded (6). 
 
 (y) One of the two things mentioned in the text happened, with the consequence that 
 the party complaining failed to obtain relief, in the marine insurance cases of Carter v. 
 Boehm (1766), 3 Burr. 1905, Court v. Martineau (1782), 3 DougL (k.b.) 161, Foley v. 
 Tabor (1861), 2 P. & F. 663, and (as regards some of the underwriters) Cantiniere 
 Meccanico Brindisino v. Janson, [1912] 3 K. B. 452, C. A., amongst others ; in the fire 
 insurance case of Pimm v. Lewis (1862), 2 F. & F. 778 ; in the vendor and purchaser case 
 of Bowles V. Round (1800), 5 Vea. 508 ; in the compromise cases of Wason v. Wareing (1852), 
 15 Beav. 151, Law v. Law, [1905] 1 Ch. 140, C. A., and Watt v. Assets Co., [1905] A. C. 
 317, H. L. ; and in the promise of marriage case of Irving v. Greenwood (1824), 1 C. & P. 
 350. 
 
 (2) This was what happened at the trial of the marine insurance cases of Bates v. Hewitt 
 (1867), L. R. 2 Q. B. 595, Narrower v. Hutchinson (1870), L. R. 5 Q. B. 584, Exch. Ch., 
 Tate & Sons v. Hyslop (1885), 15 Q. B. D. 368, C. A., and (as regards some of the under- 
 writers who, however, were deprived of relief on other grounds) Cantiniere Meccanico 
 Brindisino v. Janson, sup. ; the horse insurance case of Taylor v. Yorkshire Insurance Co., 
 [1913] 2 Ir. R. 1 ; the vendor and purchaser cases of Brandling v. Plummer (1854), 2 
 Drewry 427, Phillips v. Homfray (1871), 6 Ch. App. 770, Cahallero v. Henty (1874), 
 9 Ch. App. 447, Ellis v. Rogers (1885), 29 C. D. 661, C. A., Re Hosdicke and Upski's 
 Contract, [1901] 2 Ch. 666, a,nA Re Puckett and Smith's Contract, [1902] 2 Ch. 258, C. A. ; 
 the compromise cases of Gordon v. Gordon (1821), 3 Swanst. 400, and Greenwood v. 
 Greenwood (1863), 2 De G. J. & S. 28 ; and the promise of marriage case of Bench v. 
 Merrick (1844), 1 C. & K. 463. 
 
 (a) The party complaining in the following cases failed to establish absence of pre- 
 sumptive knowledge, and it was accordingly held that on this ground alone, apart from 
 others, he was disentitled to relief : Carter v. Boehm (1766), 3 Burr. 1905 (see note (s) to 
 § 191, ante); Stikeman v. Dawson (1847), 1 De G. & Sm. 90 {per Knight-Bkuob, V.-C, 
 at pp 105-108) ; Foley v Tahor (1861), 2 P. & F. 663 (where the underwriters failed to 
 show that they had no constructive notice through Lloyd's Shipping Lists). As to what 
 is " presumptive knowledge," and the various species and forms of it, see Ch. II, Sect. 3, 
 Sub-ss. (2)-(6), ante. 
 
 (6) See Bates v. Heviitt, sup., where, in answer to a question put for the express purpose 
 of raising the point for the Court, the jury, though not satisfied as to the defendant's 
 actual knowledge of the identity of the vessel, found that he " had abundant means of 
 identifying the ships " (p. 599), and the Court held this finding to be irrelevant {per 
 CocKBUBN, C.J., at pp. 606-608) ; Brandling v. Plummer, sup. (per Kindeesley, V.-G, 
 at p. 432) ; Cahallero v. Henty, sup. ; Re Puckett and Smith's Contract, sup. {per Collins, 
 
168 CH. Ill, SECT. 3, SUB-S. (5). 
 
 194. It has already been pointed out that, in order to establish that the 
 party charged had knowledge of the undisclosed fact, the party complaining 
 must show that he had cognizance of all those elements and features of the 
 " fact " which made it material to be disclosed (c). Conversely, and on the 
 same principle, in order to establish his own ignorance, it is sufficient for the 
 party complaining to show that he was unaware of some one particular 
 circumstance in the assemblage of undisclosed circumstances which gave 
 significance to the others, though he may have been cognizant of those 
 others ; or, where the fact is a complex one, that he had no knowledge or 
 suspicion of the coimection between two circumstances, or of the identity 
 of two things, which rendered the non-disclosure of the entire " fact " of 
 importance to him, notwithstanding that he was aware of the two circum- 
 stances, or of the two things, in their supposed disconnection. For this 
 reason, it is in every case essential to inquire closely what element it is in 
 the totality of the withheld matter which is the substantial ground of the 
 complaint. Thus, in an action on a valued policy of marine insurance on 
 goods on board a ship or ships at and from all or any of the Canary Islands 
 to London, one of the ships on which the goods were laden having been 
 wrecked, the underwriters pleaded non-disclosure of intelligence that such 
 ship was in difficulties. Now the undisclosed fact here obviously involved 
 two facts : (1) the receipt of the news that a certain vessel was in distress, 
 and (2) the identity of that vessel with a "' ship " or one of " the ships " on 
 which the goods were in fact laden which were the subject of the insurance. 
 They did not pretend that they were ignorant of the intelligence as to a 
 ship called " The President," for this had been posted up at Lloyd's before the 
 conclusion of the contract, but they proved that they had no knowledge or 
 suspicion that " The President " was a " ship," or one of the " ships," protected 
 by the policy, and their defence accordingly succeeded {d). So, where under- 
 writers had issued a policy on the S.S. " Georgia," and one of these imder- 
 writers, being sued on the pohcy in respect of the capture of that vessel by 
 a frigate of the United States, set up non-disclosure, he did not attempt to 
 establish that he was ignorant of the fact that a steamship of that name had 
 been a notorious Confederate cruiser, and that she had been sold at Liver- 
 pool, but he did allege, and prove, — and this was held to be sufficient, — that 
 the identity of the insured vessel with this cruiser was not present to hia 
 mind when the insurance was efiected, and that he did not know that he 
 was asked to insure, and was insuring, the Confederate " Georgia " (e). Again, 
 in another marine insurance case, where the assured sued on a policy on the 
 
 M.R., at pp. 263, 264) ; Nocton v. Lord Ashbmton, [1914] A. C. 932, H. L. (per Lord 
 DuNEDiN, at p. 962). Cp. the misrepresentation cases cited in the notes to § 209 of the 
 author's Law of Actionable Misrepresentation, where a fortiori (since — see note (r) to § 191, 
 ante — there is no duty on the representee to prove ignorance of the truth) mere proof of 
 means of knowledge available to the representee afiords the representor ho defence. 
 
 (c) See § 188, ante. 
 
 (d) Lynch v. Dunsford (1811), 14 East 494, Exch. Ch. (per Lord Ellbnborough, C.J., 
 at p 497). 
 
 (e) Bates v. Hewitt, sup., at p. 598 (see the judgment of Cockbtjen, C. J., at p. 605). 
 
§§ 194, 195 (burden op proof). 169 
 
 freight of tlie " Pedro Ferrar " from St. lago in Cuba to the United Kingdom, 
 the imderwriters were, for bhe purposes of the judgment of the Exchequer 
 Chamber, assumed to have had presumptive knowledge of the fact that at 
 a material date " a British barque with copper ore was aground " at a certain 
 place, this information having been published at Lloyd's : but they alleged, and 
 proved, that they had not, and could not be expected to have, any knowledge 
 or belief that this British barque was the "Pedro Ferrar " from any source 
 other than information supplied by the assured, which information had been 
 studiously withheld by him, though he had in his possession a letter from 
 the captain stating that he was loading the ship wUh coffer, that there was 
 no other vessel in the flace, and that he expected to sail on the 20th of a certain 
 month ; if, therefore, the assured had disclosed the contents of this letter, 
 the underwriters, having regard to the fact that on the 25th of that month 
 it was known at Lloyd's that a British barque ivith coffer ore was aground 
 at Iraqua, would have been able to put two and two together, and would 
 not then have been in a position, as they were held to be in the absence of this 
 information, to prove that they were presimiptively ignorant of the only 
 fact which gave the annoimcement at Lloyd's any significance to them (/). 
 Similarly, where the plaintifi in an action on a policy of marine insurance, 
 whose practice it was to insure at Lloyd's quantities of cochineal shipped by 
 him from the Canaries on floating policies, knew, at the time of eSecting the 
 floating pohcy sued upon, and failed to disclose, two facts, (1) the publication 
 of an anonymous letter stating that the owners of a vessel called the "Candida" 
 intended to lose her on her next voyage, (2) that a cargo was to be shipped 
 for him on board a vessel called the "Candida," the imderwriters, without 
 suggesting that they were ignorant of (1), because the letter was posted up 
 at Lloyd's, alleged and proved their entire ignorance of (2) ; and it was held 
 that this was enough, since obviously neither (1) nor (2) were of the slightest 
 importance in themselves, and it was only the conjunction of the two facts, 
 and their application to one another, which it was material for them to 
 know (g). 
 
 195. Here too, as in the case of other elements in the burden of proof 
 incumbent on the party complaining, the date of the conclusion of the con- 
 tract may be of importance {h) ; for though, on the one hand, it is necessary, 
 on the other, it is sufficient, to prove ignorance of the unaisclosed fact before 
 that date. Thus, in a case already referred to for another point, it was one 
 of the contentions of the assured that the underwriters had elected to affirm 
 the contract by issuing the policy with presumptive knowledge of the vessel 
 being aground, but, the underwriters having proved that they had no know- 
 ledge (actual or presumptive) of this fact before the initialling of the slip 
 {which, as between the parties, is the date of the conclusion of the contract), 
 
 { / ) Nicholson v. Power (1869), 20 L. T. 580, Exoh. Ch. (per Cockbubn, 0. J., at p. 580). 
 
 (g) Leigh v. Adams (1871), 25 L. T. 566 (per Cockbttkn, C. J., at p. 569). 
 
 (h) As to what " conclusion of the contract " means, see § 182, ante, and, in relation to 
 marine insurance in particular, note (o) thereto. As to the necessity of establishing that 
 the alleged undisclosed fact was a fact, and that the party charged had knowledge of it, 
 before the conclusion of the contract, see § 181, note (j), and § 189, ante, respectively. 
 
170 CH. Ill, SECT. 3, SUB-SS. (5), (6). 
 
 it was held that they had established all that they were bound to establish 
 on this head, and that the fact that they acquired knowledge afterwards, 
 though before the actual issue of the policy, was wholly immaterial {i). 
 
 Subs. (6). Matters which it is not incumbent on the Party Complaining to 
 
 196. Except as above stated, there is no onus on the party complaining. 
 In particular, he is not bound to prove either that the party charged was 
 actuated by fraud, or that he (the party complaining) was induced by the 
 non-disclosure, or rather by his belief in the non-existence of that which was 
 not disclosed, to enter into the contract sought to be avoided or treated as 
 void. And not only is he not bound to prove either of these facts in the 
 first instance, but he is not required to prove either of them at all, oi at any 
 stage of the proceedings : in other words, the question is in each case wholly 
 immaterial, and, if non-disclosuie be established, no amount of proof of the 
 innocence of the party charged, or of the party complaining having been 
 induced to contract by other considerations, will render the contract vaUd. 
 It is true that it so happens that non-disclosure is usually in fact nothing 
 less than fraudulent suppression, and that in fact the party complaining is 
 generally deceived and induced thereby, but this, for the purposes of the 
 present proposition, is a mere accident. 
 
 197. First, as to fraud. It is now firmly established that, except in 
 that artificial sense in which some equity lawyers, and also some writers on 
 marine insurance, have spoken of the non-disclosure itself as " fraud " {j), 
 it is quite useless and irrelevant to allege or prove fraud on the one side, 
 or innocence on the other. If the party complaining discharges the whole 
 of his burden of proof, as above set forth, it is quite immaterial whether 
 the breach of duty so established arose from a fraudulent or other guilty 
 intention, or was the result of mere indiiierence, inadvertence, or mistake, 
 or whether the party charged was consciously violating a known rule of law, 
 or principle of honour, or, on the other hand, was ignorant of the very existence 
 of any such rule or principle, and so was, in a sense, an unwitting trespasser 
 upon the rights of others {h). The above proposition must of course be 
 
 (i) Nicholson v. Power, cited in note (/), ante (per Cockbtjbn, C. J., at p. 581). 
 
 (j) This misuse, or misleading use, of the term " fraud " is discussed and criticized 
 in App. A, Sect. 2, Sub-s. (1), post. 
 
 (k) The proposition stated in the text has been stated, and reiterated, in a large number 
 of authorities. The principal marine insurance cases are : Carter v. Boehm (1766), 3 Burr. 
 1905 (per Lord Mansfield, C.J., at p. 1909 : " although the suppression should happen 
 through mistake, mthout any fraudtUent intention, yet still the underwriter is deceived, and 
 thepolicyis void ": and, again, at p. 1912 : " a concealment ; fraudulent, if designed ; or, 
 though not designed, varying materially the object of the policy, and changing the risk 
 understood to be run ") ; Bridges v. Hunter (1815), 1 M. & S. 15 (per Lord Ellbnboeouqh, 
 C.J., at p. 18 ; " although no fraud is imputed to the plaiutifis, still that will not help 
 them, provided they were bound to make the disclosure," and Gkose, J., at p. 19 : " it 
 is not the less a concealment because made without any view to fraud ") ; Oladstone v. 
 King (1813), 1 M. & S. 35 (per Lord Ellbnboeotigh, C. J., at p. 38) ; Anderson v. Thornton 
 (1853), 8 Exch. 425 (per Parke, B., at p. 427) ; Bates v. Hewitt (1867), L. E. 2 Q. B. 595 
 (per CocKBUBM', C. J., at p. 607 : " it is immaterial whether an omission to communicate a 
 
§§ 195-197 (burden of proof). 171 
 
 understood as applying only to cases where a duty of disclosure arises from 
 the mere relation of the parties as negotiators for a contract or transaction 
 of one of the recognized types already indicated : it has no application to 
 those cases where, there being no original duty to disclose anything, an 
 obligation is created by, and solely by, special circumstances existing at the 
 commencement, or supervening during the course, of the negotiation (?) ; 
 for the " special circumstances " in question are nearly always such as indicate 
 fraud, or such as, from the moment of their occurrence, or of their coming 
 within the knowledge of the party charged, render the suppression by him 
 of material facts dishonest. In such cases it is obvious that, in being required 
 (as he is) to prove these special circumstances, the party complaining is in 
 effect required to prove fraud. Moreover, it may be necessary for the party 
 complaining to establish fraud in order to destroy certain affirmative answers 
 which the party charged may set up, as will be seen hereafter, such as a 
 plea of an agreement to waive the right of disclosure (m), or to dispense with 
 
 material fact arose from intention, or from indifference, or from a mistake, or from its 
 not being present to the mind of the assured that the fact was one which it was material 
 to make known ") ; lonides v. Pender (1874), L. R. 9 Q. B. 531 (per Blackburn, J., at 
 p. 537), and the American case there cited which is abstracted in note (w) to § 104, ante ; 
 Tate dk Sons v. Hyslop (1885), 15 Q. B. D. 368, C. A. [per Bbett, M.R., at p. 378) ; Scottish 
 Shire Line, Ltd. v. London <5a Provincial Marine & General Insurance Co., [1912] 3 K. B. 51 
 (per Hamilton, J., at p. 70) ,• Gooding v. White (1913), 29 T. L. R. 312. For statements 
 of the same proposition in life insurance cases, see Lindenau v. Desborough (1828), 8 B. & C. 
 586 (per Bayley, J., at p. 592) ; Everett v. Desborough (1829), 5 Bing. 503 (per Best, C. J., 
 at pp. 515, 516) ; Traill y. Baring (1864), 4 De G. J. & S. 318 (per Knight-Britob, L.J., 
 at p. 327, and Tuknek, L. J., at p. 328) ; Joel v. Law Union S Crown Insurance Co., [1908] 
 2 K. B. 863, C. A. (per Moulton, L. J., at pp. 883, 884). See also the fire insurance case of 
 Bufe V. Turner (1815), 6 Taunt. 338. Thevendorand purchaser cases to be referred to on 
 this point are Flight v. Booth (1834), 1 Bing. N. C. 370 (per Tindal, C. J., delivering the judg- 
 ment of the Court of C. P., at p. 376) ; Dimmoch v. Hallett (1866), 2 Ch. App. 21 (per Titenee, 
 L. J., at p. 29, and Cairns, L.J., at p. 30) ; Mostyn (Lord) v. West Mostyn Coke & Iron 
 Go. (1876), 1 C. P. D. 145 (per Brett, J., at p. 151) ; Heywood v. Mallalieu (1883), 25 C. D. 
 357 (per Bacon, V.-C, at p. 365) ; Carlish v. Salt, [1906] 1 Ch. 335 (yer Joyce, J., at p. 351). 
 And, lastly, see the following suretyship cases : Eailton v. Mathews and Leonard (1844), 
 10 CI. & Pin. 934 (per Lord Campbell, who, at p. 944, explains that it was quite irrelevant 
 that the party charged did not know of his legal duty to disclose) ; Willis v. Willis (1850), 
 17 Sim. 218 (per Shadwell, V.-C, at p. 220) ; London General Omnibus Go. v. Holloway, 
 [1912] 2 K. B. 72, C. A. (per Vauohan Williams, L.J., at pp. 79, 80, Farwell, L.J., 
 at pp. 81, 82, and Kennedy, L.J., at pp. 84, 85). The two soHtary instances of any 
 statement interrupting this steady current of authority are, first, an expression of personal 
 opinion on the part of Lopes, L. J., which is to be found at p. 141 of Hambrough v. Mutual 
 Life Insurance Go. of New York (1895), 72 L. T. 140, C. A. : " in policies of insurance on 
 life," he there says (limiting the proposition apparently to this particular species of a 
 particular class of contract), " mere silence respecting a material fact, in the absence of 
 any fraudulent intention, does not avoid the policy," an amazing heresy, which was 
 disposed of by the judgment of Lord Alvbrstonb, C.J., at p. 439 of Joel v. Law Union <Ss 
 Grown Insurance Co., [1908] 2 K. B. 431 (trial of the action) ; and, secondly, a Uke dictum 
 at the end of the judgment of Pollock, C.B., at p. 535 of North British Insurance Co. v. 
 Lloyd (1854), 10 Exch. 523 ("the non-disclosure . . . would not have vitiated the 
 guarantee unless it had been fraudulently kept back "), which observation Vaughan 
 Williams, L.J., at p. 80 of London General Omnibus Co. v. Holloway, sup., found it 
 impossible to understand, and quite inconsistent with the authorities. The proposition 
 is often expressed in another form, viz. that disclosure is an imphed condition of the validity 
 of the contract ; see § 83, and the cases cited in note (t) thereto. 
 
 (i!) See Sect. 2, Sub-s. (8), ante. 
 
 (m) See § 202, post. 
 
172 CH. Ill, SECT. 3, SUB-S. (6) ; SECT. 4. 
 
 a particular form of relief (m) ; and, in some cases, it may be essential to 
 show fraud in order to obtain the annulment of a contract after completion (o), 
 or to get rid of the liability (to which otherwise the party complaining would 
 be subject) of restoring to the party charged moneys which he has paid 
 under the contract rescinded (such as, e.g., premiums under a policy of insur- 
 ance) as a condition of the rescission {f). The same rules, and for the same 
 reason, apply to those cases of misrepresentation where the representee is 
 not suing for damages in an action of deceit, but is merely claiming rescission 
 of a contract induced by the misrepresentation, or is setting up the mis- 
 representation as a defence to an action on the contract [q) ; and both in 
 the one class of case, and in the other, the irrelevancy of fraud is illustrated 
 in a very striking manner by reference to the practical consequences, as 
 regards costs and otherwise, with which the Courts have visited those litigants 
 who, though establishing everything necessary for the purpose of the relief 
 claimed, have unnecessarily, and therefore (having regard to the gravity 
 of the charge) improperly, introduced accusations of dishonesty against their 
 opponents which they have failed to prove (r). 
 
 198. Next, as to inducement. In cases of misrepresentation, the repre- 
 sentee must not only establish the materiality of the falsehood, that is to 
 say, its tendency to induce, but also the fact (which is a quite separate and 
 distinct one) that he was in the particular case induced by his belief in its 
 truth to alter his position to his detriment in the manner alleged. However 
 likely the misrepresentation may have been to influence a normal person to 
 act upon it, however inconceivable even it may appear that such a person 
 could have remained insensible to the allurement held out, yet if the particular 
 representee is not in a position to allege, or, having alleged, to establish, that 
 he was in fact so induced, he has no cause of action (s). It is otherwise in 
 cases of non-disclosure. When the party complaining has once proved that 
 the imdisclosed fact was material to be disclosed in the sense that, if it had been 
 communicated to him, it might have influenced a person situated as he was, 
 or belonging to the profession or business class to which he belonged, to 
 enter into the contract in question on the agreed terms, it is quite imnecessary 
 to institute the further inquiry (which is essential ia a case of misrepresenta- 
 tiou) as to whether he was actually so influenced in point of fact if). Any 
 evidence on this head would be unnecessary and irrelevant. It is quite true 
 that evidence is always admissible, and often is essential, to prove the fact 
 of materiality : but, as will be seen hereafter (u), such evidence must be 
 
 (») See §§ 207, 208, post. 
 
 (o) This question is discussed in § 230, post. 
 
 (p) See § 232, post. 
 
 (q) See § 250, and § 341, note (I), of the author's Law of Actionable Misrepresentation. 
 
 (r) For a statement of these consequences, see Ch. VIII, Sect. 2, Sub-s. (4), post. 
 
 (s) Ch. VI, Sect. 1, of the author's Law o/ Actionable Misrepresentation deals with 
 this topic. 
 
 (t) See Ch. II, Sect. 2, Sub-s. (2), ante, as to what is meant by materiality for the 
 purposes of the law of non-disclosure : and, as to the sufficiency of establishing no more 
 than that a communication of the undisclosed fact might have had a deterrent influence, 
 see §§ 31, 32, ante, and the cases cited in the notes thereto. 
 
 (k) In Sect. 6, Sub-s. (1), post. 
 
§§ 197-200 (affirmative answers). 173 
 
 confiiied to the testimony of persona engaged in the business in question as 
 to the efEect which would be produced upon their minds, as a class, by a 
 communication of the undisclosed circumstance, and must not include the 
 personal and individual impressions of the party complaining in relation to 
 the particular contract. On the other hand, if the party complaining fails 
 to establish materiality, it is of no avail whatever to allege, or to prove, 
 that, if the fact in question had been divulged to him, he would never have 
 entered into the contract at all (»,'). 
 
 199. Where the non-disclosure amounts to, or forms part of, or is preceded 
 or followed by, a misrepresentation, then, in so far as the party complaining 
 either elects, or is compelled, to treat it as misrepresentation, and to foimd 
 his title to relief upon it in that character, and not as non-disclosure simfliciter, 
 he is subject to the same burden of proof in all respects as a representee in 
 proceedings for misrepresentation, whether fraudulent or innocent, and must 
 therefore prove ioducement as well as materiality (w). 
 
 Sect. 4. ArFiEMATiVE Answebs available to the Party chaeged. 
 
 200. Assuming the party complaining to have established, or to be in a 
 position to establish, each and every of the constituents of his burden of 
 proof, as stated in the last Section, and assuming the party charged to be 
 unable to resist, by way of direct negative, the case so made against him, 
 there are yet certain affirmative answers open to him whereby that case may 
 be displaced. These — apart from the answers and bars, whether statutory 
 or non-statutory, which are available to a party litigant in proceedings 
 relating to the enforcement or avoidance of contracts in general {x) — are 
 substantially two : first, waiver by the party complaining, whether express 
 or implied, of his right to disclosure, or of his right to insist on some particular 
 remedy in respect of non-disclosure ; and, secondly, affirmation by him of the 
 contract or transaction which he is seeking to have rescinded, or treated as 
 
 (v) See Hamilton v. Watson (1845), 12 CI. & Fin. 109, a suretyship case, in whicli Lord 
 Brougham, at p. 120, observes that "it is quite immaterial" whether "the cautioner 
 would have acted differently if he had known of the matter said to be concealed " ; North 
 British Insurance Go. v. Lloyd (1854), 10 Exch. 523, another suretyship case, where the 
 surety complained of the concealment from him of the fact that he was a substitute for a 
 former surety who had been released, and the Court of Exchequer upheld the finding of 
 the jury that this fact was not material, and (per Pollock, C.B., at pp. 532, 533) expressed 
 the opinion that it made no difference that the surety " swore that he would not have given 
 his guarantee had he been informed of the substitution." 
 
 (w) Be Roberts, [1905] 1 Ch. 704, C. A., was such a case. There the defendant resisted 
 an action to enforce a family compromise on the ground of conduct which was described 
 (at p. 708) by Lord Halsbtjby, L.C, as non-disclosure, or incomplete explanation, of a 
 certain opinion of counsel, but which Vaughan Williams, L. J., delivering the judgment 
 of the Court of Appeal in favour of the defendant, treated as an " inaccurate statement," 
 and positive " misrepresentation " (p. 710), and, from that point of view, was careful to 
 point out the necessity of proving inducement in fact. No reference, of course, is made in 
 the text to cases of statutory non- disclosure, which are regulated by the special terms of 
 the enactments themselves, and in many of which it is essential to prove inducement. 
 These cases receive separate treatment in Ch. VI, Sect. 1, post. 
 
 (x) Such as the various Statutes of Limitation, on the one hand, or estoppel, accord 
 and satisfaction, and the like, on the other. With these the present treatise is not 
 immediately concerned. 
 
174 CH. in, SECT. 4, SUB-S. (1). 
 
 a nullity («/). The turden of allegation and proof, in tlie case of eacli of 
 these, is of course on the party charged ; though that burden may be satisfied, 
 in whole or in part, by admissions expressly or impliedly made by the party 
 complaining at or before the trial, or may in the course of the proceedings 
 be shifted backwards and forwards (z). 
 
 Subs. (1). Waiver. 
 
 201. Modus et conventio vincunt legem. If the party charged is in a 
 position to prove either an express or an implied agreement, term, or con- 
 dition, whereby the party complaining undertook to waive such right to 
 disclosure as he otherwise would have had in respect of a class of facts to 
 which the undisclosed fact belongs, the claim or defence, as the case may be, 
 of the party complaining is defeated (a), just as, ia cases of misrepresentation, 
 the representee's right to the truth is defeated by a proved agreement on his 
 part to waive that right (6). 
 
 202. First, as to express agreements to waive disclosure. There is no 
 objection, on the ground of public policy, or otherwise, to such an agree- 
 ment (c), any more than there is to an agreement not to take advantage of 
 any misrepresentation (d), provided that no statutory prohibition stands in 
 
 iy) The former of these two affirmative answers is the subject of Sub-s. (1), the latter, 
 of Sub-s (2). It may be asked why proof that the party complaining had knowledge 
 aliunde of the undisclosed fact is not mentioned as one of the affirmative answers available 
 to the party charged. The reason is, as pointed out in Sect. 3, Sub-s. (5), ante, that there 
 is no burden on the party charged to prove his opponent's knowledge unless and until 
 some primd facie evidence of the ignorance of the party complaining has been adduced on 
 the other side : if and when this is done, the party charged may be said to assume the 
 onus of establishing an af&rmative case ; but it is a transferred, not an initial, onus. The 
 same may be said of the fact of disclosure which, at a very early stage of the proceedings, 
 the party charged may be called upon to prove : but in strictness, he is, in so doing, 
 negativing, by affirmative evidence, the negative which it is incumbent on the party 
 complaining to make out : see Sect. 3, Sub-s. (3), ante. 
 
 («) Illustrations of this tossing to and fro of the burden of proof wiU be found in several 
 of the cases cited in the notes to Sub-ss. ( 1) and (2), post. 
 
 {a) A plea of waiver is thus the antithesis of a plea of knowledge. In the latter case 
 no wrong is done to the party complaining, because he was aware (though not from the 
 party charged) of the undisclosed fact : in the former, no wrong is done to him, because he 
 was not, and did not want to be, aware of it, but was so eager to bind the party charged 
 to a contract which promised profit and advantage to himself that he was content to run 
 all risks, and dispense with all information. Obviously a plea of waiver is the more 
 meritorious of the two : for the party setting up that plea is only insisting on effect being 
 given to the contractual protection which he had stipulated for : whereas the other 
 plea starts with the assumption that the party charged has not done his duty. 
 
 (b) See § 213 of the author's Law of Actionable Misrepresentation, and the oases cited 
 in notes («/), (z), (a), (6), and (c) thereto. Here also there is the same antithesis between 
 a plea of the representee's knowledge of the truth, and a plea of his agreement to waive such 
 knowledge. The mutually exclusive character of the two defences in misrepresentation 
 cases is touched upon by Jbssel, M.R., at p. 21 of Redgrave v. Hard (1881), 20 0. D. 1, 
 C. A., and by Lord Halsbuby, L.O., at p. 369 of Arnison v. Smith (1888), 41 C. D. 348, 
 C. A. 
 
 (c) For a good illustration of an express waiver, see the marine insurance case of 
 Property Insurance Co. v. National Protector Insurance Co. (1913), 108 L. T. 104 (per 
 SoEUTTON, J., at p. 106). There are abundant illustrations of such terms or conditions, 
 and of their being held valid and enforceable, in cases of life insurance : see several of the 
 cases cited in note (to) to § 171, ante. 
 
 (d) See, for examples of conditions, again in life-insurance cases, which have been 
 
§§ 200-202 (affirmative answers). 175 
 
 tte way (dd), and that there is no stipulation that the contract shall not be 
 impeached even for fraud (e) : and, if the language used is aptly framed so 
 as to apply to or include the particular undisclosed matter, it is a frima 
 fcuiie answer to the case of the party complaining, but not otherwise (/). 
 
 held to contain or imply an undertaking by the insurance company to waive or abnegate, 
 either absolutely, or after the lapse of a specified period, the right to rely upon any mis- 
 representation other than fraudulent, Wood v. Dwarris (1856), 11 Exch. 593 (per 
 Aldekson, B., at p. 503 : " before the policy was entered into, the defendants issued a 
 prospectus, by which they represented that all poUcies effected by them would be indis- 
 putable, except in cases of fraud. That was holding out to all the world that they would 
 require no proof of the truth of the matters stated in the proposal, but would only dispute 
 the claim on the ground of fraud. So that the defendants . . . cannot now set up as a 
 defence that the statement in this proposal was untrue, unless they add that it was fraudu- 
 lently untrue, for they have, in fact, said that they wfll never make any other defence ") ; 
 Whedton v. Hardisty (1857), 8 E. & B. 232, Exch. Ch. (a similar case, where, however, the 
 representee failed to prove that the company's public announcement had come to his 
 notice, and therefore failed to prove that he was a party to the alleged contract) ; Hemmings 
 v. Sceptre Life Association, [1905] 1 Ch. 365 (where the condition was that the pohcy 
 should not be avoided except for wilful misrepresentation) ; Anstey v. British Natural 
 Premium Life Association (1908), 99 L. T. 765 (policy to be indisputable after a certain 
 time, except for fraud). So, where one of the articles of association of a company pro- 
 vided that no director should be Uable for any loss or damage which might happen in the 
 execution of the duties of his office, or in relation thereto, unless the same should happen 
 through his own dishonesty, it was held that it is " not illegal for a company to engage 
 its directors upon such terms " ■- Be Brazilian Rubber Plantations and Estates, Ltd., [1911] 
 1 Ch. 425 (per Neville, J., at p. 440). For similar conditions in contracts for the sale 
 of land, see several of the cases cited in note ( / ), inf. 
 
 (dd) As in the case of " waiver clauses " in prospectuses of companies : see § 562, post. 
 (e) For such a stipulation is probably void. It was a principle of Roman jurisprudence 
 that any promise that a contract should not be impeached for fraud was wholly inefilcacious, 
 — see § 688, in App. C, post, — and there is weighty authority in favour of the existence of 
 such a principle in English law : see S. Pearson dk Son, Ltd. v. Dublin Corporation, [1907] 
 A. C. 351, H. L., per Lord James at p. 362 (" as a general principle, I incline to the view 
 that an express term that fraud shaU not vitiate the contract would be bad in law "), and 
 Lord Atkinsos" at p. 365. The foundation of this rule is that the interests of the com- 
 munity, and of mercantile morality, imperatively demand it. Consequently where no 
 such reasons of public pohcy exist, as for instance, in the case of an agreement not to 
 attempt to set aside the award of an arbitrator even for fraud or collusion, it has been held 
 that the agreement is enforceable : TvMis v. Jacson, [1892] 3 Ch. 440. 
 
 ( / ) The general rule as to the absolute necessity of plain and clear language has been 
 judicially stated over and over again : notably by Lord Eldon, L.C, at p. 655 oi Jenkins v. 
 Hales (1802), 6 Ves. 646, by Romilly, M.R., at p. 94 of Bousfidd v. Hodges (1863), 33 Beav. 
 90, by Fry, J., at p. 136 of Re Banister (1879), 12 C. D. 131, C. A. (" the vendor who means 
 to exclude the purchaser from his common law right to have a good title shown, must do 
 so by expHoit and clear words "), by Fby, J., Baggallay, L. J., and Cotton, L.J., in 
 Re Marsh and Earl Granville, as cited iji/., in this note, and by Bybnb, J., at pp. 669, 670 
 of Re Hosdicke and Lipski's Contract, [1901] 2 Ch. 666. Accordingly, whenever the 
 expressions used were not such as (expressly, or by necessary imphcatiou) to indicate, or 
 to cover, the fact or class of fact in respect of which the waiver of disclosure was alleged, 
 the party charged has always failed in making good his answer. Thus, in cases of contracts 
 between vendor and purchaser, a mere statement that " the title " is, or shall be in certain 
 events, " accepted," or " deemed to be accepted," is not, per se, a, waiver of the right to 
 disclosure of material facts, known to the party charged (such as incumbrances, unusual 
 restrictions, and the like), of a nature to affect or qualify such title : Bousfidd v. Hodges, 
 sup. (at p. 94 : "a purchaser is only bound by his acceptance of the title so far as he is 
 made cognizant of it, and ... if anything is kept back by the vendor, he is not, as to 
 that, bound by his acceptance ") ; Nottingham Patent Brick & Tile Co. v. Butler (1886), 
 16 Q. B. D. 778, C. A., as to which, see note (r) to § 132, ante ; Re Cox and Neve's Contract, 
 [1891] 2 Ch. 109 (perNoBTH, J., at pp. 118, 119, — a case in which there was a condition of 
 sale that the purchaser was to send in his objections and requisitions within 14 days of 
 the deKvery of the abstract, and, subject thereto, the title was to be deemed accepted, 
 and all objections and requisitions not sent in within the time hmited were to be deemed 
 to have been waived. Held that this condition operated as a waiver only in respect of 
 
176 CH, III, SECT. 4, SUB-S. (1). 
 
 The party charged must show that he notified in clear and unambiguous 
 terms to the party complaining, not indeed the specific fact which is the 
 
 what was revealed in the abstract, when delivered, and was not, as the vendor contended, 
 so expressed as to relieve him of his ordinary duty of disclosure in that abstract, or other- 
 wise, of deeds and covenants restrictive of the user of the premises) ; Be Hosdicke and 
 I/ipski's Contract, sup. (where, in reference to a clause in the contract, stating nakedly 
 that " the vendor's title is accepted by the purchasers," Bybne, J., held, at p. 669, that 
 this was no waiver of the right to disclosure of onerous and unusual covenants in a lease, 
 for " it requires more than a condition couched in such general terms ... to bind the 
 purchaser to take the title "). On the other hand, a covenant, clause, condition, or 
 stipiilation, binding the purchaser to accept a conveyance of such right or title as the 
 purchaser may have {Early v. Garrett (1829), 9 B. & C. 928), or to take land " with all 
 risks as to errors " {BrownXie v. Campbell (1880), 5 App. Cas. 925, H. L.), or to take a 
 chattel " with all faults " (Baglehole v. Walters (1811), 3 Campb. 154, Pickering v. Dowson 
 (1813), 4 Taunt. 779, Schneider v. Heath (1813), 3 Campb. 506, and Ward v. HMs (1878), 
 4 App. Cas. 13, H. L.), operates as a clear waiver of disclosure of any fault, defect, or cir- 
 cumstance affecting title. And it makes no difference, unless some fraudulent device be 
 used, whether the fact of which disclosure is waived is known to the vendor or not : see 
 the observations of Lord Ellbneoeough, C. J., at pp. 156, 157 of Baglehole v. Walters, sup. 
 (" where an article is sold with all faults I think it is quite immaterial how many belonged 
 to it within the knowledge of the seller. The very object of introducing such a stipulation 
 is to put the purchaser on his guard, and throw upon him the burden of examining all 
 faults, both secret and apparent," which passage is cited and approved by Lord O'Hagan, 
 at p. 27 of Ward v. Hobbs, sup.), and those of Paekeb, J., at pp. 530, 531 of Shepherd v. 
 Croft, [1911] 1 Ch. 521. Accordingly, in aU the cases last cited, the condition was held 
 a good answer to the complaint of non-disclosure, except in Schneider v. Heath, sup., and 
 there the ground of the vendor's failure was, not that the condition was not expressed 
 in terms apt for the purpose, but that he was proved to have been guilty of a 
 fraudulent device of the nature above indicated : see note (i), inf. The vital distinction 
 between the two types of condition referred to is insisted upon with lucidity and force by 
 LiNDLEY, L. J., in the passage from his judgment in Nottingham Patent Brick <fc THe Co. v. 
 Butler, sup., which is cited in note (r) to § 132, ante, and by Byenb, J., at p. 669 of Re 
 Hoedicke and Lipski's Contract, sup. The double decision in Ee Marsh and Earl Granville 
 (1882), 24 C. D. 11, C. A., is an excellent illustration of what an obscurely expressed con- 
 dition does, and what it does not, cover. There a clause in the contract provided that the 
 title to the freehold portion of the estate sold should commence with a certain indenture of 
 the year 1845, and that " the earlier title, whether appearing by recital, covenant for 
 production, or otherwise, or not appearing at all, shall not be investigated or objected to." 
 From the abstract of title it appeared that the deed in question, quoad the freehold parcels, 
 was without consideration, and that there was power in the grantor to revoke the trusts 
 (including a trust for sale) thereby declared. Thereupon the piu'chaser made two objec- 
 tions, (1) that the deed in questionwasnotagoodroot of title at all, and (2) that, for aught 
 that appeared, the deed might have been avoided by a subsequent conveyance for value, 
 or might have been revoked pursuant to the above power. The vendor relied on the 
 clause referred to as disentitling the purchaser to raise either of these objections. It was 
 held that the clause was expressed in terms adequate to show a contract to waive disclosure 
 of such matters as those to which objection (2) related, but not of such as formed the subject 
 of objection (1) : for, so far as regards the suggested waiver of information as to facts 
 affecting the question whether a good root of title had been shown, the condition was not 
 " expressed in clear and explicit terms " {per Baggallay, L. J., at p. 23), and " the Court 
 will not compel a purchaser to take an estate with less than the ordinary title which the 
 law gives him, unless the stipulation on which the vendor relies is fair and explicit " {per 
 Cotton, L.J., at p. 24, repeating, in effect, what Fry, J., had said in the Court below — 
 see p. 17 — " a vendor who desires to limit the rights of a purchaser must do so by expUcit 
 and plain conditions "). So, in a marine insurance case, Ganiiniere Meccanico Brindisino 
 V. Janson, [1912] 3 K. B. 452, C. A., where the poUcy, which was on a floating dock in 
 tow of two tugs from Avonmouth to Brindisi, contained the clause " seaworthiness 
 admitted," a nice discrimination was made between the kind of fact which this clause did, 
 and the kind of fact which it did not, waive the disclosure of ; it being held that it operated 
 to reheve the assured from divulging anything in the nature or condition of the dock which 
 would render all floating docks unseaworthy, but not any " peculiar defect not usual in 
 docks of this construction," such as corroded plates, a leak, or an unfavourable report from 
 a surveyor as to its unfitness to go to sea without additional strengthening, and the like 
 
§ 202 (affirmative answers). 177 
 
 subject of the dispute, for this would be a suicidal absurdity (,g), but the 
 class or type of fact of which the party complaining is required to assume 
 the existence, and of which he is to dispense with further evidence (h). But, 
 though conforming to all requirements of the above nature, any condition 
 purporting to waive disclosure is wholly defeated by proof (the burden of 
 which, however, is in that event transferred to the party complaining) that 
 it was characterized by fraud or dishonesty, or was otherwise misleading, 
 " tricky," " catching," or unfair («), or, where the party complaining is 
 reqidred to assume, without evidence or information, the existence of a 
 specified fact, by proof that the party charged was aware of the non-existence 
 of that fact ; for stipulations of this nature can only have eiiect where the 
 party charged believes, or at least does not disbelieve, the truth or reality 
 of that which the other party is to take for granted, and is merely seeking 
 to protect himself from difficult and expensive researches in procuring the 
 necessary legal proof (j). Where, however, the party complaining has not 
 
 {per Vaughan Wiluams, L.J., at pp. 461-463, Moulton L.J., at p. 467, and Buckley, 
 L.J., at pp. 470, 471). Cp. Heioitt Bros. v. Wilson (1914), 30 T. L. R. 619, another marine 
 insurance case, where Bailhaohb, J., was of opinion that the " held covered " clause in a 
 poUoy (" in the event of any incorrect definition of the interest insured it is agreed to 
 hold the assured covered at a premium, if any, to be arranged ") protects innocently 
 mistaken non-disclosure of material elements in the description, but not intentional 
 concealments. 
 
 (g) Re Sandbach and Edmondson's Contract, [1891] 1 Ch. 99, C. A., per Lord Halsbuby, 
 L.C., at p. 104, who there points out that if a waiver condition " could only be supported 
 when the specific objection to the title was pointed out," the result would be that "no 
 dealings with the estate would be possible in the future," — to which it may be added that, 
 as soon as the " specific objection," that is, the fact giving rise to the objection, is pointed 
 out, disclosure is made, and it becomes ludicrous to ask the purchaser to waive information 
 as to that of which, in making the request, the vendor informs him. 
 
 (h) See § 132, and all the cases and judicial observations cited in notes (q), (r), and (s) 
 thereto, ante, where this topic is fully discussed, and it is explained that contracts to waive 
 disclosure are themselves subj ect to a duty of disclosure to the extent stated in the text. 
 
 (»') For illustrations of a waiver condition being defeated by proof of fraud on the part 
 of the party charged, see Schneider v. Heath (1813), 3 Campb. 506 (where the plaintiff 
 succeeded, on proof that the defendant had removed the vessel, which was to be taken 
 "with all faults," from the ways in which she lay, and had kept her continuously afloat, 
 so that her keel and bottom were always concealed, until the moment when the plaintiff 
 was given possession of her). In the following cases, though the fraud alleged was not 
 proved, it was distinctly held that, if it had been proved, the waiver condition which was 
 clearly expressed, and otherwise valid, would have been defeated : Baglehole v. Walters 
 (1811), 3 Campb. 154 (yer Lord Ellenboeotjgh, C. J., in the case of a sale of a vessel "with 
 all faults," at p. 157 : " unless the seller by positive means renders it impossible for the 
 purchaser to detect secret faults ") ; Early v. Garrett (1829), 9 B. & C. 928 (sale of land 
 " with all faults " ? per Paeke, J., at p. 952, " the purchaser cannot recover unless he 
 prove fraud on the part of the seller ") ; Ward v. Hobhs (1878), 4 App. Cas. 13, H. L., a 
 case of the sale of diseased pigs (where, at p. 27, Lord O'Hagan cites and approves Lord 
 Ellbnbobottgh's above statement, and concedes that if the defendant had been proved, 
 as he was not — ^in fact it had not even been so alleged, — " guilty of any contrivance " to 
 conceal or disguise the disease from which the pigs were suffering, the condition as to taking 
 them " with all faults " would have gone for nothing). The above cases all show that the 
 burden of estabhshing the fraud which is to defeat an otherwise good waiver condition 
 is shifted on to the shoulders of the party complaining, as soon as the condition itself, and 
 its applicability to the particular undisclosed fact, is proved. As to the misleading, 
 " catching," " tricky," and unfair waiver conditions referred to in the text, see again 
 the citations contained in notes (q), (r), and («) to § 132, ante. 
 
 (j) See Re Banister (1879), 12 C. D. 131, C. A., where there was a condition that the 
 purchaser was to assume that a certain person was, in the year 1835, entitled in fee simple 
 to the property which was the subject of the sale, and this condition was held to be defeated 
 B.N.D. N 
 
178 CH. Ill, SECT. 4, SUB-S. (1), 
 
 been made to assume the existence of any particular fact, or class of facts, 
 but tbe agreement is to take property " with all faults," or " at all risks," 
 the case is wholly difierent, and the validity of the condition is in no way 
 afiected by the fact that the party charged is aware of a fault or defect the 
 disclosure of which is dispensed with. The reason is plain. In the former 
 type of case, the party charged, in exacting the condition, makes an implied 
 representation that he knows of nothing which negatives the fact required 
 to be assumed, though, since it would be very troublesome to prove it by 
 strict evidence, and for no other reason, he must ask the party complaining 
 to relieve him of this obligation, and except on those terms he is not disposed 
 to contract. Accordingly, if he does know of anything negativing the fact 
 required to be assumed, he is guilty of a fraudulent misrepresentation {h). 
 In the other class of case, the implied representation which the party 
 charged makes is of an exactly opposite character. The seller of land or a 
 
 by proof that the vendor knew that the fact was not what he had required the purchaser to 
 assume that it was, per Jbssel, M.R., at pp. 142, 143 : " it is said, as regards this assump- 
 tion, that the vendor knew well that Esther Banister was not, in the year 1835, entitled 
 to the entire property in fee simple, and that, knowing that well, he ought not to have 
 put in a condition asking a purchaser to assume that it was true ; because it inferentially 
 amounts to a statement that so far as he knew anything to the contrary, she was so seised 
 and entitled in fee simple. It appears to me this objection is well founded. I do not think 
 a vendor is entitled to say that the purchaser shall assume that which he knows not to be 
 true. The utmost that can be asked of a purchaser is to assume something of which the 
 vendor knows nothing." To the same efEect Bkett, L.J., at pp. 146-148, who also 
 expressed the view that the condition was an implied representation, which the evidence 
 showed to be inaccurate, though not, in his opinion, designedly so ; and Cotton, L. J., who, 
 at pp. 149, 150, describes the condition as " unfair," and as " misleading." Cp. the 
 misrepresentation case of 8. Pearson & Son, Ltd. v. Dublin Corporation, [1907] A. C. 351, 
 H. L., where it was a term of the contract, which was for the execution of works, that the 
 contractors were to satisfy themselves of the accuracy of the information, drawings, and 
 specifications supplied by the corporation's engineer, and where, on proof that the corpora- 
 tion knew of the inaccuracies complained of, the condition was held no bar to the con- 
 tractors' claim for damages in an action of deceit (per Lord Loeebubn, L.C, at pp. 353, 
 354, Lord Halsbttry, at p. 356, Lord Ashbotjene at pp. 359, 360, Lord James at p. 362, 
 and Lord Atkinson at pp. 364-366). On the other hand, where the party complaining 
 -faUs to establish this guilty knowledge on the part of the party charged, — and it is for 
 him to do so, as much as in the cases of fraud cited in the last note, — the condition has 
 always been enforced, as, for instance, in the vendor and purchaser cases of Nicoll v. 
 Vhambers (1852), 11 C. B. 996 ; Oordingley v. Cheeseborough (1862), 3 Giff. 496 ; 4 De G. F. 
 & J. 379 ; Be Sandbach and Edmondson's Contract, [1891] 1 Ch. 99, C. A., where the 
 purchaser was required to assume that a certain person died intestate and without an 
 heir before the year 1870, and where Lord Halsbuey, L.G, at p. 103, notices that no proof 
 had been given that " the vendor knew that the assumption required to be made was 
 dfalse," which proof was necessary to defeat the condition, and, this being so, the condition 
 was held to be enforceable, since it " was aptly and properly framed to prevent the pur- 
 chaser insisting on proof of what was then and. is now beUeved to be the fact, but which 
 the vendor is not in a position to estabUsh by legal proof " ; Blaiberg v. Keeves, [1906] 
 2 Ch. 175, where a similar condition was supported, it being stated that the property had 
 been assigned free from rent in 1828, and that the vendor had never paid rent, and that 
 the purchaser was "required to assume that the said rent has been released," and the 
 vendor having, in the particulars of sale, described the property as of freehold tenure {per 
 Waebington, J., at p. 183 : " aU that the vendor has done is to describe the property as 
 being held on a particular tenure, which he believed, and reasonably believed, on sufficient 
 grounds, might be the true tenure on which it was held. Then, knowing that he might 
 have a difficulty in proving the fact of freehold tenure, in the proper part of the document, 
 i.e. the conditions, which show how he is going to establish his title, he throws upon the 
 purchaser the burden of assuming the facts the proof of which might have been difficult "). 
 {k) See the observations of Jessel, M.E., in ife Banister, sup., cited in the last note. 
 
§§ 202, 203 (affiemative answers). 179 
 
 chattel " with all faults " does not ask the purchaser to assume anything in 
 favour of the title or quality of the thing sold : on the contrary, he inf erentially 
 declares to him that there are faults, and that he (the seller) may know of 
 them, but will not sell except upon the terms that he is to be free of any 
 duty to disclose any of them, and that the buyer must find them out for 
 himself (t). Such a declaration is not rendered even false, much less fraudu- 
 lent, by the mere fact that he is cognizant of any number of faults or defects 
 in the quality, or blots on the title, of that which he is selling, or by anything 
 short of the use of dishonest manoeuvres to cover up, or hide away, any fault 
 or blot of which he has knowledge (m) ; and it would be manifestly unjust, 
 on this ground alone, to deprive him of the benefit of a condition, plainly 
 expressed and honestly relied upon, which, to the knowledge of the purchaser, 
 may probably have been the sole consideration for a reduction in the price 
 otherwise obtainable for the property. 
 
 203. An agreement or undertaking to waive disclosure may, like other 
 agreements, be implied from acts and conduct, or from inaction, as weU as 
 expressed in words spoken or written. But, whilst it is by no means easy to 
 establish even an express condition to this effect, the difiiculties in the way 
 of inferring such a condition from mere conduct, and still more from mere 
 inaction (mm), are well-nigh insuperable, and it may be doubted whether 
 there is any genuine example to be found in the authorities of a successful 
 attempt in this direction. Many of the decisions which are cited for this 
 purpose are really cases where presumptive knowledge, judicially misdescribed 
 as waiver of information, has been implied from neglect to inquire as to the 
 matters which ought to have been divulged («) . Others are cases of affirmation, 
 which, as will be seen (o), stand on a totally different footing from waiver. 
 A third class consists of those decisions in which it has been held that the 
 
 {I) See the cases and judicial observations cited in the latter part of note (/) to this 
 paragraph, ante. 
 
 (m) See the cases cited in note (i), ante. 
 
 (mm) At p. 284 of Sdwyn v. Oarfit (1888), 38 C. D. 273, C. A., Bowen, L.J., says : 
 " delay is not waiver. Inaction is not waiver, though it may be evidence of waiver." 
 
 (n) If the party charged is under a duty of voluntary disclosure, it is obvious that the 
 party complaining cannot be supposed to waive the performance of that duty merely 
 because he asks no questions about the matters to be so communicated, any more than in a 
 case of misrepresentation the representee can be said to have " waived the truth," 
 merely because he abstained from the use of means of knowledge : see § 209 of the author's 
 Law of Actionable Misrepresentation. It is neither incumbent on him, nor for his interest, 
 to do so. Indeed, exaggerated activity in such inquiries would, if anything, be more 
 suggestive of, or consistent with, waiver than total abstention from them : see note (s) to 
 § 204, post. When it is said, therefore, as it was by Lord Mansfield, C.J., in Carter v. 
 Boehm (1766), 3 Burr. 1905, at pp. 1918, 1919 — see the passage cited in note («) to § 191, 
 ante — that the party complaining " dispenses with the information," in virtue of his 
 omission to put questions, all that is really meant by this somewhat loose expression is 
 that he has presumptive knowledge, and that therefore the party charged has no private or 
 exclusive knowledge, of the fact, and so need not disclose it, but not that, on the assumption 
 of a duty to disclose (and this assumption must be made, for otherwise there is no occasion 
 for this, or any, affirmative answer), abstention from inquiry would constitute or indicate 
 an absolution from that duty. It was vainly urged in Laing v. Union Marine Insurance 
 Co. (1895), 1 Comm. Cas. 11, that conduct of this kind amounted to an implied waiver 
 {per Mathbw, J., at p. 16) : and so also in Thames dh Mersey Marine Insurance Co. v. 
 Gunford Ship Co., [1911] A. C. 529, H. L. {per Lord Alvebstohe, at p. 538). 
 
 (o) See Sub-s. (2), post. 
 
180 CH. Ill, SECT. 4, SUB-S. (1). 
 
 neglect to ask a question as to the alleged undisclosed fact, ttere being no 
 duty to disclose, is fatal to the case of the party complaining ; but these are 
 not cases of an implied waiver of the right to disclosure, because ex Jiypothesi 
 no such right Exists, but of an omission to do that which alone would create 
 such a right, or rather a right to a truthful answer (f). 
 
 204. The kind of conduct from which in these cases waiver is vainly 
 sought to be implied is negative. It is suggested, first, that inaction means 
 indifference, and, secondly, that indifference amounts to waiver ; neither 
 suggestion, as above pointed out, having any substance or foundation. There 
 is, however, another type of case in which from an exactly contrary state of 
 things the same inference is attempted to be deduced. It is sometimes con- 
 tended that by active inquiries as to particular matters the party complaining 
 has assumed the burden and responsibility of finding out for himself all that 
 he desires to know, and has in this manner relieved the party charged of his 
 common law duty of disclosure, either entirely, or at all events as to all 
 facts outside the range of the specific investigation (q). Such a contention, 
 raised in this extreme form, is of course grotesque, and has never prevailed (»•). 
 But, confined within more moderate limits, the argument may, in certain 
 cases, present a more attractive and plausible appearance : for instance, 
 if its application is restricted to the precise matters which form the subject 
 of the express inquiries, where the answers to those inquiries are made the 
 basis of the contract, as in most of the life insurance cases : for, under such 
 conditions, it has been said that " the insurance office may, by requisitions 
 of a specific sort which it makes of the proposer, relieve him partially from 
 the obligation to disclose by an election to make inquiries as to certain facts 
 
 (•p) This class of case is examined closely in §§ 159-162, ante. See also Carter v. Boehm, 
 sup. 
 
 (g) The suggestion in the one case is that the party's inordinate and unsohcited 
 diKgenoe points to a total indifference to the acquisition of information from the other 
 side, and a fixed intention to distrust it, if tendered, whatever it may be. In the other case, 
 the argument is that, on the expressio unius exclusio alterins principle, his active investiga- 
 tion in certain directions imphes absolute indifference to disclosure in aU others. 
 
 (r) As in Maynard v. Rhodes (1824), 5 Dowl. & Ky. 266 ; 27 R. E. 526 (where, in an 
 action on a poUcy of life insurance, one of the points raised by the plaintiff who was 
 charged with the non-disclosure was that the defendant insurers had made such inquiries 
 as they thought necessary, and " took upon themselves the burden " of investigating and 
 ascertaining the facts, and both Abbott, C. J., at the trial, and the Court of K. B., on 
 appeal, thought the contention a hopeless one), and again in Everett v. Desborough (1829), 
 5 Bing. 503 (another life policy case, in which the plaintiff before the Court of C. P. — see 
 Serj. WiliDB's argument at p. 510 — raised the same point, and with the same result : per 
 Park, J., at p. 519, and Gaselbb, J., at pp. 520, 521, who there point out that it should 
 have been alleged and proved that the insurance company had dispensed with some 
 specified condition of the policy, but that, so far from this being proved, it had not even 
 been so averred in the declaration, which is set out at p. 506). The above were cases in 
 which it was urged that a total waiver was to be implied from the conduct of the party 
 complaining. In this form the contention does not seem to have been raised since 1829, 
 but it has been from time to time suggested that a dispensation from disclosure as to the 
 matters not specifically inquired into might be inferred, — a suggestion which, though not 
 quite so ludicrous as the other, is equally vain. Indeed, even in the case of an express 
 waiver, the corresponding contention has been held to be untenable : see the citation 
 from Cantiniere Meccanico Brindisino v. Janson, [1912] 3 K. B. 452, C. A., at the end of 
 note (/) to §202, ante. 
 
§§ 203-206 (affirmative answers). 181 
 
 material to the risk to be incurred, against itself " (s). This, however, is 
 only put as a possibility : that is to say, the whole circumstances of the 
 case may be such as to show that the specific requisitions were intended by 
 the parties to operate as a waiver or dispensation : and, even if such an 
 intention be proved, the relief is only " partial," i.e. confined to the particular 
 matters which form the subject of the express inquiries. 
 
 205. It is to be observed that, as in the case of any other contract or 
 condition, it must be shown that the alleged contract or condition to waive 
 disclosure was assented to by both parties. It is not enough for the party 
 charged to show that the party complaining proposed the waiver : he must 
 establish that he himself accepted and relied upon that proposal. In ordinary 
 cases no difiiculty arises on this score, because the condition which is suggested 
 to constitute the waiver is contained in the contract which is sought to be 
 set aside or treated as void, and the parties to the contract are therefore 
 also parties to the condition : but, where the alleged proposal to waive is 
 said to be contained in some instrument or document other than that which 
 is sought to be avoided, the party charged must show that the proposal was 
 addressed to himself, or to the public or a class of which he was a member, 
 and that he acted upon it : otherwise he proves no concluded agreement to 
 waive, and his plea or answer accordingly fails (i). In this connexion, it is 
 worth while to notice that, where an express waiver condition is relied upon, 
 it is more likely to be established if it appears in the kind of instrument, 
 or in that part of the instrument, in which such a condition would naturally 
 be found, than if it is shown to have been inserted in some document, or 
 part of a document, which is not the usual or normal place for it (m). 
 
 206. There may be on the part of the party complaining a waiver, not 
 of his right to disclosure (which is the class of waiver hitherto discussed), but 
 of his right to some specified form of relief in respect of non-disclosure. If 
 the party charged can, for instance, show that the party complaining has 
 undertaken not to exercise his right to avoid the contract by rescission or 
 analogous proceedings, with or without the reservation of a substituted 
 
 (s) Per Vatjghan Williams, L.J., at p. 878 of Jod v. Law Union & Crown Insurance 
 Co., [1908] 2 K. B. 863, C. A. 
 
 (t) In Whedton v. Hardisty (1857), 8 E. & B. 232, Exoh. Ch., a life insurance case, 
 the plaintiff in his replication relied upon a pubKc announcement by the company that 
 no policy would be disputed except for fraud ; but, though he proved the announcement, 
 he failed to prove that it had come to his notice before the execution of the poMcy, and his 
 attempted answer to the defendant's plea was accordingly held bad. The replication here 
 was in the same form as that in Wood v. Dwarris (1856), 1 1 Exch. 593 (which averred the 
 issue by the insurance company of a prospectus containing a similar undertaking, and that 
 the plaintiff had notice of it, and reKed upon it) and was held good on demurrer, but, here 
 again, the facts were not proved. 
 
 (u) See Blaiherg v. Keeves, [1906] 2 Ch. 165, where Wakbington, J., in a vendor and 
 purchaser case, points out at p. 184 that " it is not the function of the particulars to deal 
 with title at all ; that has to be dealt with on evidence, and it is the function of the con- 
 ditions to say what evidence of title the purchaser is to have," or, in other words, what 
 disclosure of facts relating to title the purchaser is to waive. Conversely, descriptive 
 matter shoiild be in the particulars, and not in the conditions : per Malins, V.-C, 
 at pp. 131, 132, of Torrance v. Bolton (1872), L. R. 14 Eq. 124, who also strongly repro- 
 bated a suggested custom to the contrary. 
 
182 CH. Ill, SECT. 4, SUB-S. (1). 
 
 right to pecuniary compensation, it is obvious that he has a primd facie 
 affirmative answer to any case of non-disclosure which may be made against 
 him, whether in proceedings to obtain an annulment of the contract, or by 
 way of defence to an action upon it (v). Here, in contrast with an agree- 
 ment to waive disclosure, which may, in theory at all events, be implied 
 from acts and conduct, as well as expressed in terms (w), the undertaking 
 relied upon must be found, if at all, in the contract itself. The party charged 
 must be in a position to point to some clause or condition in which the re- 
 nunciation of the particular form of relief is expressly declared. The question 
 usually arises in contracts for the sale of land, a common condition of which 
 is that the sale shall not be vitiated or annulled for any omission or error in 
 the particulars of sale, but shall be the subject of compensation, abatement, 
 or allowance, as the case may be, in money, and of that alone, or, in some cases, 
 shall neither be avoided nor be the subject of compensation. Where such a 
 condition forms part of the bargain between the parties, the party charged 
 is entitled to succeed (a;), unless the party complaining, on whom the burden 
 of proof thereupon rests, can bring the case within one or other of the two 
 recognized exceptions to the rule. 
 
 207. These two exceptions are the outcome of the principles of interpre- 
 tation applied by the Courts to clauses and conditions of the character in 
 question. It has been found necessary to put some reasonable limitation 
 upon the generality of the expressions, " error," " mistake," " omissions," 
 " defects," and the like. In the first place, a deliberate and fraudulent 
 concealment or misdescription has been held not to come within the pro- 
 tection of such a term or condition in the contract, the " errors " and 
 " omissions " therein referred to being confined to such non-disclosure and 
 misdescription as is purely innocent and accidental : secondly, all non- 
 disclosure or misdescription which produces error in substantialibus is 
 equally deemed to be outside the limits of what is covered by the expressions 
 mentioned (y). In accordance with these rules, the waiver condition has 
 
 {v) There may be a similar waiver of the right to rescind the contract, or to treat it as 
 void, on the ground of misrepresentation, or, indeed, upon any ground which would render 
 a contract voidable. For the purposes of this type of waiver, it is immaterial what is the 
 invalidating cause. The misrepresentation cases are, therefore, as much in point here 
 as the non- disclosure cases, and are accordingly cited in the ensuing notes. 
 
 (to) See §§ 203, 204, sup. 
 
 {x) The waiver was established, and the party charged succeeded in resisting on this 
 ground proceedings for rescission or analogous reUef, and in Hmiting his liability to 
 pecuniary compensation, in Leslie v. Thompson (1851), 9 Hare 268 ; Nicoll v. Chambers 
 (1852), 11 C. B. 996 (per Jbkvis, C.J., at p. 1010); WhiUemore v. Whittemore (1869), 
 L. R. 8 Eq. 603, 605, 606 ; Debenham v. Sawhridge, [1901] 2 Ch. 98. In the following 
 cases the waiver, being proved, operated as a good answer to an affirmative objection or 
 defence : White v. Gudden (1842), 8 CI. & Kn. 766 ; Aylee v. Oox (1852), 16 Beav. 23 ; 
 Price V. MaxMulay (1852), 2 De G. M. & G. 339 (where the condition relied upon by the 
 plaintiff was held sufficient to defeat the defence as to one of the two lots therein question, 
 but not as to the other) ; Re Fawceit and Holmes (1889), 42 C. D. 150, C. A. ; Re Brewer and 
 Hanhin's Contract (1899), 80 L. T. 127, C. A. It should be noted that, if the case is not 
 brought within either of the two exceptions, the mere fact that the party charged had 
 knowledge of the undisclosed fact does not render the condition inoperative : see note ( / ) 
 to § 202, ante. 
 
 (y) See, for a statement of both these exceptions, the judgment of the Court of C. P. 
 
§§ 206, 207 (appiemative answers). 183 
 
 always been inefficacious as an answer to a proved case of non-disclosure or 
 misrepresentation, and the contract has been rescinded or treated as void 
 notwithstanding the condition, whenever fraud, or a wilful and calculated, 
 as distinguished from an accidental and mistaken, omission has been 
 established (z). Also, where the thing tendered in discharge of the con- 
 tract materially differs in quality, character, substance, or title, from that 
 which it was impliedly by non-disclosure, represented to be (a), or, if it is a 
 case of express misrepresentation, " where the misdescription ... is in a 
 material or substantial point, so far affecting the subject-matter of the con- 
 tract that it may reasonably be supposed that, but for such misdescription, 
 the purchaser might never have entered into the contract at all, in such case 
 the contract is avoided altogether, and the purchaser is not bound to resort 
 to the clause of compensation " (6), This does not mean that the " material 
 and substantial point " referred to must necessarily be a question of figures (c). 
 
 in Flight v. Booth (1834), 1 Bing. N. C. 370 (at pp. 366, 367) ; Ee Terry and White's Contract 
 (1886), 32 C. D. 14, C. A. {per Lord Eshek, M.R., at p. 22, and Lindley, L.J., at pp. 28-30) ; 
 Debenham v. Sawbridge, [1901] 2 Ch. 98 {per Byenb, J., at p. 109). 
 
 (z) As it was in Dimmock y. Hallett (1866), 2 Ch. App. 21, where the vendor had 
 ■wilfully, and against good faith, though without express fraudulent intent, suppressed the 
 fact that each of the tenants of certain farms forming part of the property had given notice 
 to quit, and was therefore not allowed to take advantage of the condition, as against the 
 purchaser who was seeking — it being a case of sale by direction of the Court — to be 
 discharged from his contract {per Turner, L. J., at pp. 26-29, and Cairns, L.J., at pp. 30, 
 31) ; Nottingham Patent Brick & Tile Co. v. Butler (1886), 16 Q. B. D. 778, C. A., where the 
 purchaser sued for the return of his deposit on the ground of non-disclosure of certain 
 restrictive covenants, and the vendor relied upon a very stringent waiver condition, which, 
 however, was held wholly inoperative, on proof that the non-disclosure amounted to a 
 grossly fraudulent suppression {per Lord Eshee, M.R., at pp. 787, 788, Lindley, L.J., at 
 p. 790, and Lopes, L.J., at p. 791), apart from the additional ground that the condition 
 was not framed in sufficiently clear and expUoit terms to bind the purchaser, as to which 
 see note {r) to § 132, ante. 
 
 {a) As in Flight v. Booth, sup. {per Cur., at pp. 377, 378), where the purchaser, on this 
 ground, was held entitled to a return of the deposit, notwithstanding the condition pleaded 
 by the vendor ; Ddbell v. Hutchinson (1835), 3 A. & E. 355 (a similar case) ; Maddey v. 
 Booth (1849), 2 De G. & Sm. 718, a very strong case, but which, though depreciated by 
 Jbssel, M.R., at pp. 760, 761 of Gamherwdl and South London Building Society v. Holloway 
 (1879), 13 C. D. 754, met afterwards with the approval of Bowen, L.J., who, at p. 115 of 
 Be Beyfus and Masters's Contract {\9,%8), 39 C. D. 110, C. A., expressed disagreement with 
 the adverse criticism of Jessel, M.R. ; Stanton v. Tattersall (1853), 1 Sm. & G. 529 ; Re 
 Davis and Cavey (1888), 40 C. D. 601 {per Stirling, L.J., at pp. 608, 609) ; Be Cox and 
 Neve's Contract, [1891] 2 Ch. 109 (per North, J., at pp. 119, 120) ; Jacobs v. Revdl, [1900] 
 2 Ch. 858. In all the above, the purchaser was the actor, either in a suit for rescisson, 
 or in an action for the return of the deposit, or in an application under the Vendor and 
 Purchaser Act, 1874. In Shackleton v. Sutdiffe (1847), 1 De G. & Sm. 609 {per Kniqht- 
 Bruce, V.-C, at pp. 619-623), and Be Puckett and Smith's Contract, [1902] 2 Ch. 258, C. A., 
 the purchaser was resisting the vendor's proceedings on the ground of non-disclosure or 
 misrepresentation, to which the vendor set up the condition, and the purchaser thereupon 
 made good his right to have the condition ignored on the ground of discrepancy in quality 
 and substance. So also in Price v. Macaulay (1852), 2 De G. M. & G. 339 {per Knioht- 
 Bruce, L. J., at pp. 345-347, as to one of the lots there in question, but not as to the other, 
 where the essential discrepancy was not made out, nor any fraud : per Knight- Bruce, 
 L.J., at p. 344). Cp. Portman v. Mill (1826), 2 Russ. 570, per Lord Eldon, L.C, at 
 pp. 574, 575. 
 
 (6) Flight v. Booth, sup., at p. 377. 
 
 (c) Be Terry and White's Contract (1886), 32 C. D. 14, C. A. {per Lindley, L.J., at 
 p. 28); Be Fawcett and Holmes (1889), 42 C, D. 150, C. A. {per Lord Esher, M.R., at 
 p. 156); Jacobs v. Revdl, sup., per Buckley, J., at p 865. 
 
184 CH. Ill, SECT. 4, SUB-SS. (1), (2). 
 
 The party complaining, if able to establish that he would not have entered 
 into the contract at all but for the suppression or misdescription, is entitled 
 to insist that the condition be ignored, though the difierence in mere 
 pecuniary value may be problematical, or even demonstrably insignificant (d) . 
 Conversely, where it is a question of compensation only, the question of 
 difEerence in character is immaterial (e). 
 
 208. A much more stringent form of waiver of relief, as has already been 
 hinted, is occasionally to be found in conditions of sale whereby it is stipulated 
 that any error or omission shall neither vitiate the sale, nor be a ground for 
 compensation. This type of condition is almost, but not quite, an agreement 
 not to set up non-disclosure for the purpose of disputing or impeaching the 
 sale in any form of proceeding whatever (/), which is much the same thing, 
 or at least has much the same efEect, as a total waiver of the right to dis- 
 closure (^r). To any such case the same rule, with the same two exceptions, 
 applies mutatis mutandis. That is to say, where the case is within the rule, 
 and not within either of the exceptions, the condition is a bar to any form of 
 relief which necessarily involves the annulment of the contract, or the treat- 
 ment of it as a nullity, or the payment or allowance of pecuniary compensa- 
 tion (h). Where, however, the party complaining can establish either fraud, 
 or error in suhstantialibus, he is entitled to rescission or analogous relief, no 
 
 {d) See Flight v. Booth, sup., at pp. 378, 379 ; MadeUy v. Booth, sup., where the 
 difEerence in value between the residue of the term, as described, and an underlease for such 
 residue, less three days, had actually been assessed by the arbitrator at the nominal figure 
 of five shillings, and yet the difEerence in character between the two interests was held by 
 Knioht-Bettce, V.-C, to be sufl&oiently vital to justify a disregard of the condition, and a 
 decision that the purchaser was entitled to a return of the deposit, as well as to maintain 
 his defence to the vendor's action for specific performance. 
 
 (e) See White v. Cuddon (1842), 8 CI. & Fin. 766 {per Lord Brougham, at pp. 785, 786, 
 and Lord Cottenham, at p. 792) ; Cordingley v. Oheeseborough (1852), 3 GifE. 496 ; 4 De 
 6. J. & P. 379 ; Ee Leyland and Taylor's Contract, [1900] 2 Ch. 625 (at pp. 630-632) ; 
 Shepherd v. Crojt, [1911] 1 Ch. 621 {per Pabkbb, J., at p. 529). 
 
 ( / ) It is not quite a waiver of all remedies : for instance, it would not debar the party 
 complaining from setting up the non-disclosure as an answer to a claim for specific per- 
 formance which, being a peculiar and discretionary form of relief,- — see § 245, post, — may 
 be refused notwithstanding the validity of the agreement. This was pointed out by 
 Pabkeb, J., at p. 531 of Shepherd v. Croft, sup. 
 
 (g) As to the class of case (mainly life insurance) in which the party complaining 
 agrees not to dispute or question a policy on any ground other than fraud, see § 202, and 
 notes (c) and {d) thereto, ante. 
 
 (h) In the following cases, a double-barrelled condition of the nature in question was 
 successfully set up by the party charged, and the party complaining failed in his attempt 
 to bring the case within either of the two exceptions : Re Terry and White's Contract (1886), 
 32 C. D. 14, C. A. ; Be Simpson and Thomas Moy, Ltd. (1909), 53 Sol. J. 376 ; Shepherd v. 
 Croft, sup. In Whittemore v. Whittemore (1869), L. E. 8 Eq. 603, there were two conditions, 
 one of the ordinary type, and the other in the more stringent form : as to the former, 
 Maiins, V.-C. — sec note {x) to § 206, ante — held that it was a bar to rescission, and that, 
 under this condition, the purchaser was entitled only to the alternative remedy of compensa- 
 tion. It was then objected that, having regard to the other condition, he was not entitled 
 to compensation either : but the Vice-ChanoeUor held that this latter was not enforceable 
 against the purchaser, because of the vendor's " reckless and careless statements," — a 
 hopelessly illogical decision, for if the " recklessness " amounted to fraud, the first con- 
 dition was as much invalidated as the second ; if it did not, the second was as little in- 
 validated as the first. This seems to have been the opinion of Lord Esheb, M.R., judging 
 from his observations on this case at pp. 26, 27 of Be Terry and White's Contract, 
 sup. 
 
§§ 207-211 (affirmative answers). 185 
 
 less than if the conditioD had been in the more usual form (i). It should 
 also be remembered that " it is obviously easier to arrive at the conclusion 
 that the purchaser shall be compellable to take the land, and have money 
 for the deficiency, than that he is to take less than he bargained for, and have 
 no compensation " (j). 
 
 Suh-s. (2). Affirmation of the Contract. 
 
 209. The second answer to a case of non-disclosure which is available to 
 the party charged is of a totally diSerent nature to that just discussed, which 
 depends on some stipulation prior to, or forming part of, the contract itself ; 
 whereas " affirmation " is concerned solely with the conduct of the party 
 complaining after the contract, and after it has become voidable. In either 
 case it must be assumed that non-disclosure has been established, but in the 
 one case the party charged undertakes to show that the party complaining 
 has agreed beforehand to surrender all or some of the rights which he would 
 otherwise have had in respect of the non-disclosure : in the other, he sets 
 out to prove that, though there was no such condition of waiver in the first 
 instance, and though, therefore, the party complaining, on discovery of the 
 undisclosed facts, became entitled bo avoid the contract or to adhere to it, 
 he has, since he became so entitled, deliberately chosen to adhere to it. 
 
 210. As will be shown hereafter, in discussing the nature and conditions 
 of relief in respect of non-disclosure {h), the right of the party complaining 
 is the right to choose whether he will affirm or disaffirm the contract during 
 the negotiation for which the fact in question was withheld from him, and 
 this option, when once exercised, is exhausted, so that he can never after- 
 wards resile from it. It follows that if, with full and exact knowledge of all 
 the facts which gave him a title to avoid the contract (I), the party complaining 
 can be shown to have definitely and unequivocally elected to affirm it, the 
 party charged has a valid answer to any case of non-disclosure set up against 
 him, whether in proceedings for rescission or analogous relief, or by way of 
 defence to an action on the contract. 
 
 211. It is incumbent on the party charged to make out two things : 
 first, language, or acts and conduct, amounting to a clear and unequivocal 
 election to affirm : secondly, that the party complaining had precise cognizance 
 
 (i) See Nottingham Patent Brick <fc Tile Co. v. Butler, cited in note (z) to § 207, ante, 
 where fraud was proved ; and the following, in which substantial discrepancy was estab- 
 lished : Portman v. Mill (1826), 2 Russ. 570 ; Be Davis and Cavey (1888), 40 C. D. 601 ; 
 Jacobs T. Bevdl, [1900] 2 Ch. 858 ; Be Puckett and Smith's Contract, [1902] 2 Ch. 258, C. A. 
 {per Stirling, L. J., at p. 265). In aU the above, the " double condition " was disregarded, 
 and the purchaser was held entitled to rescission, or to a return of his deposit, or to a 
 declaration in his favour on an application under the Vendor and Purchaser Act, 1874. 
 
 (j) Per Buckley, J., at p. 864 of Jacobs v. Bevell, sup. 
 
 {k) See §§ 225, 226, post. 
 
 (I) Whether the contract is sought to be avoided on the ground of non-disclosure, or 
 misrepresentation, or for any other cause. Obviously questions as to the affirmance or 
 repudiation of a voidable contract are entirely independent of the particular ground on 
 which that contract has become voidable. Accordingly, the rules stated in this Sub- 
 section will be illustrated by references to misrepresentation oases as well as strictly non- 
 disclosure decisions. 
 
186 CH. Ill, SECT. 4, SUB-S. (2). 
 
 of the full extent of the non-disclosure in respect of which his aUeged election 
 was exercised. 
 
 212. The election may he indicated not only by express and direct language, 
 but also by acts and conduct (to). In either case, however, it must be shown 
 that the words used, or the acts and conduct, as the case may be, were incon- 
 sistent with any attitude of mind except that of a deliberate intention to 
 adhere to the contract, or at all events were more consistent with such an 
 intention than with an intention to repudiate it (n). Where this is not 
 established, the party charged fails (o). It is idle to point to indecisive or 
 equivocal acts or language which may evince no more than a state of doubt, 
 suspicion, or suspended judgment ; in that case the party charged proves, 
 not an election, but an abstention from election, which not only does not 
 support his plea, but negatives it (p). 
 
 213. Further, the party charged, though proving conduct on the part 
 of the party complaining which prima facie would amount to affirmation, 
 must be prepared to show, if challenged on this point, that the party com- 
 plaining had complete knowledge of all the material undisclosed facts, and 
 not merely such a partial knowledge of some of them as might, perhaps, be 
 sufficient to engender a suspicion as to the whole. This is only an applica- 
 tion of the general principle of jurisprudence — a principle by no means con- 
 fined to the present, or to any particular, subject-matter — that there can 
 be no election where there is no precise cognizance of the facts, including 
 the rights arising out of those facts, upon which the election is supposed 
 to have operated, and from which alone it could have derived vitality and 
 significance. This principle has been applied to cases of release and surrender 
 
 (m) Com. Dig. Election, C. 1 ; Clough v. London & Northwestern Railway Co. (1871), 
 L. R. 7 Exch. 26, Exch. Ch., per Cur., at p .34. 
 
 (») In the case of contracts for the sale of goods, this is the rule expressed in s. 35 of the 
 Sale of Goods Act, 1893. 
 
 (o) Thus, where an agreement to affirm the contract is set up, a proposal and acceptance 
 must be shown, and it is not enough to prove the proposal, followed by the silence of the 
 other party : Russdl v. Thornton { 1 859), 4 H. & N. 788 ( a marine insurance case, where the 
 assured contended in vain that a mere unaccepted and unanswered proposal by the under- 
 writers to insure the vessel again after she had been surveyed and repaired was an affirma- 
 tion : per Beamwell, B., at pp. 797-800, Watson, B., at pp. 801, 802, Channell, B., at 
 pp. 803, 804). So in Morrison v. Universal Marine Insurance Co. (1873), L. R. 8 Exch. 
 197, Exch. Ch., also a marine insurance case, the Exchequer Chamber, reversing the Court 
 of Exchequer, held that the issuing by the underwriters of the policy after knowledge of 
 the undisclosed fact was not an unequivocal election to treat the contract as subsisting, the 
 knowledge not having come to the underwriters before the initiaUing of the slip, since this 
 was the usual course for underwriters to take in order to enable the assured to sue, and 
 the act in question was at least as consistent with their intention to adopt that usual 
 course as with an intention to affirm the insurance : there was no conclusive election in 
 law, and the verdict of the jury that there had been no such election in fact was one which 
 it was competent for them to return, and could not be disturbed (per Cur., at pp. 203-207). 
 For illustrations o acts and conduct held or found not to amount to a positive and qlear 
 exercise of an election to affirm, or to have amounted, on the contrary, to clear exercise 
 of an election to disaffirm, see the following misrepresentation cases : Wontner v. Shairp 
 (1847), 4 C. B. 404 ; Clough v. London & Northwestern Railway Co., sup. (at pp. 33-35) ; 
 Torrance v. Bolton (1872), 8 Ch. App. 118 (per Jambs, L.J., at p. 124) ; Re Metropolitan 
 Coal Consumers Association, Ex p. Edwards (1891), 64 L. T. 651 ; Re Same, Karberg's 
 Case, [1892] 3 Ch. 1. 
 
 (p) See §§ 216-218, post. 
 
§§ 211-215 (affirmative answers). 187 
 
 of property and rights (q), and to cases of affirmation of contracts voidable for 
 misrepresentation (r), or of impeachable transactions generally (s), as well as 
 to cases of affirmation of contracts voidable on the ground of non-disclosure (i). 
 
 214. Where, however, the acts and conduct relied upon indicate with 
 reasonable clearness a definite and unequivocal election on the part of the 
 party complaining to affirm the contract, founded on an adequate knowledge 
 of the material undisclosed facts, the party charged establishes a valid answer 
 to any case of non-disclosure made against him (u). 
 
 215. It follows from what has been already said that the affirmation of 
 a contract after discovery of one of two separate and distinct undisclosed 
 
 (g) Leeis (Duke) v. Amherst {Earl) (1846), 2 Ph. 117 (per Lord Cottenham, L.C, at 
 p. 123 : " for that purpose " — i.e. to establish a case of release — " it is not only necessary 
 to show that the plaintiff knew of the acts of waste having been committed, but that he 
 knew of the rights which they gave him . . . and that, having such knowledge, he did 
 some act amounting to a release of that right ") ; Wilson v. Thornbury (1876), 10 Ch. App. 
 239 {per Jambs, L.J., at p. 248 ; " election by conduct must be by a person who has 
 positive information as to his rights to the property, and, with that knowledge, really 
 means to give that property up," and Mbllish, L. J., at p. 249 : " we have to see whether 
 the plaintiff knew what his rights were, and what the material facts on which they depended 
 were, and whether, knowing them, he determined to elect" . . . &c.). And see § 132, 
 ante. 
 
 {r) For illustrations of cases where the representor failed to make out his plea, because 
 he failed to establish complete knowledge on the part of the representee, see Jarrett v. 
 Kennedy (1848), 6 C. B. 319, 326 ; LacMan v. Reynolds (1853), Kay 52 ; 101 R. R. 523 ; 
 Oloughv. London & Northwestern Railway Co. (1871), L. R. 7 Exch. 26, Ex. Ch. {per 
 Cur., at pp. 29, 30, 31) ; Wakefield v. NormarUon Local Board ( 1881), 44 L. T. 697, C. A. 
 On the other hand, the representor proved the complete knowledge of the representee, 
 and accordingly established his plea of aflSrmation, in Ogilvie v. Currie (1868), 37 L. J. 
 (CH.) 541, and in Sharpley v. Louth & Host Coast Railway Co. (1876), 2 C. D. 663 C. A. 
 {per Jambs, L. J., at p. 685 : " the plaintiff, after he knew what the company had done, 
 what it was doing, and what it was able to do . . . for months continued to act as a 
 shareholder, with full knowledge of every circumstance which entitled him, if he ever 
 was so entitled, to be reUeved from his shares "). 
 
 {s) Murray v. Palmer (1805), 2 Soh. & Lefr. 472, per Lord Redbsdale, L.C. (Ir.), at 
 p. 485. 
 
 (<) See Maddeford v. Austwick {1826), 1 Sim. 89 {per Leach, V.-C, at p. 96) ; Clements v. 
 Hall (1858), 2 De G. & J. 173 {per Lord Ceanworth, L.C, at pp. 187, 188). 
 
 {u) As in Armstrong v. Turquand (1857), 9 Ir. C. L. R. 32 (a life insurance case, where 
 to a plea of fraudulent concealment the plaintiff pleaded a replication that the company, 
 after knowledge of the concealed fact accepted a further premium, and thereby affirmed 
 the contract of insurance, and, on demurrer, the replication was held good). The 
 question, however, arises most frequently in cases of contracts voidable for misrepresenta- 
 tion, particularly contracts to take shares in companies, in the following of which the 
 representor proved a clear affirmation, in virtue of acts and conduct, by the representee, 
 with full knowledge of the truth : — Campbell v. Fleming (1834), 1 A. & E. 40 ; Pulsford v. 
 Richards (1853), 17 Beav. 87 ; Re Royal British Bank, Mixer's Case (1859), 4 De G. & J. 
 575, 586, 587 ; Re Hop and Malt Exchange Warehouse Co., Briggs' Case (1866), L. R. 1 Eq. 
 483, 487; Re Cachar Co., Lawrence's Case (1867), 2 Ch. App. 412, 423, 424 ; Re Russian 
 {Vyksounsky) Ironworks Co., Kincaid's Case (1867), 2 Ch. App. 420, 426, 427 ; Re Same, 
 Whitehouse's Case (1867), L. R. 3 Eq. 790 ; Re Same, Taite's Case (1867), L. R. 3 Eq. 795; 
 Scholey v. Central Railway Co. of Venezuela (1868), L. R. 8 Eq. 266 n., 267 n. ; Ogilvie v. 
 Currie, sup. ; Re Bank of Hindustan, China, and Japan, Campbell's and Hippisley's Cases 
 (1872), 9 Ch. App. 7 ; Sharpley v. Louth & East Coast Railway Co., sup. ; Cargill v. Bower 
 (1878), 10 C. D. 502, 508, 509 ; Re Wheal Unity Wood Mining Co., Chynoweth's Case (1880), 
 15 C. D. 13, 0. A. ; Reid v. London and Staffordshire Fire Insurance Co. (1883), 63 L. J. 
 (oH.) 351 ; Re Dunlop-Truffault Cycle and Tube Manufacturing Co., Ex p. Shearman {ISQfi), 
 66 L. J. (cH.) 26 ; Be Metal Constituents, Ltd., Lord Lurgan's Case, [1902] 1 Ch. 707 ; 
 Seddon y. North Eastern Salt Co., [1905] 1 Ch. 326 ; Hemmings v. Sceptre Life Association, 
 [1905] 1 Ch. 365, 369, 370 ; United Shoe Machinery Co. of Canada v. Brunei, [1909] A. C. 
 330, 339, P. C. ; Re Christineville Rubber Estates, Ltd. (1911), 81 L. J. (ch.) 63. 
 
188 CH. IIIj SECT. 2, SUB-SS. (2), (3). 
 
 facts, is no bar to tte right of tte party complaining to avoid the contract 
 •on discovery of the other (v). 
 
 Subs. (3). Matters which, per se, constitute no Answer to the Case of the 
 
 Party Complaining. 
 
 216. Delay, laches, and acquiescence are constantly referred to in con- 
 nection with contracts which have become voidable, whether by reason of 
 non-disclosure, misrepresentation, or other cause (w), in such terms as to 
 imply that, of themselves, they constitute a bar to the right to avoid any 
 such contract. This is quite a mistake. And it is a still graver mistake to 
 use these expressions (as the term " laches " in particular is frequently used) 
 with an underlying suggestion that the party entitled to avoid the contract 
 owes a duty to the party whose conduct has rendered it voidable, the failure 
 to discharge which renders him " guilty " of a wrong, and creates a personal 
 equity against him, apart from anything else. The truth is that, in this, 
 as in every case where a contract is rendered, not void, but voidable by the 
 acts or omissions of one of the parties (x), the only legal result which can 
 flow from the inaction or delay of the party complaining in availing himself 
 of the remedies open to him is either to furnish evidence, with other facts,, 
 tending to negative some element in his burden of proof, such as the fact of 
 non-disclosure, or the fact of his own ignorance (if either of these is in serious 
 dispute) ; or to support a plea of waiver or affirmation raised by the party 
 charged ; or else to give scope and opportunity for the intervention of the jus 
 tertii, or for the alteration of the character of the subject-matter of the con- 
 tract in such a way as to enable the party charged to insist that on this ground 
 one of the essential conditions of avoidance has disappeared. But where the 
 inaction, for however long a period, is not sufficient to constitute such evidence, 
 or where, notwithstanding the lapse of time, no innocent person has in fact 
 acquired rights or interests under the contract, and the property (if it is a 
 case of sale) to be restored as the condition of rescission can be so restored 
 in the same plight as that in which it was received, the delay, laches, or 
 
 (v) There is no direct authority for this proposition as applied to non- disclosure, but, 
 in relation to a contract voidable for misrepresentation, it has been held that, where the 
 representee has affirmed the contract on discovering the falsity of one of two separate 
 and distinct representations, though made in one and the same document, or at one and 
 the same time, he may still sue for rescission on discovery of the falsity of the other repre- 
 sentation : Be London and Provincial Electric LigMing and Power Co., Exp. Hale (1887), 
 55 L. T. 670. But where only one misrepresentation is complained of, which is false in 
 two or more particulars, the representee who has affirmed the contract with knowledge 
 of one of such discrepancies is precluded from afterwards obtaining rescission on discovery 
 of a fresh point of falsity in the same representation : Campbell v. Fleming ( 1 834), 1 A. & E. 
 40 ; -Be Russian [Vyhsounshy) Ironworks Co., Whitehouse's Case (1867), L. R. 3 Eq. 790. 
 The same principles woiild, without doubt, be applied, mutatis mutandis, to oases of non- 
 disclosure. 
 
 (w) Here again, for the purposes of this, as well as the two preceding Sub-sections, 
 the ground of the voidability of the contract being quite immaterial, misrepresentation 
 cases are in point, and will be cited in the following notes. 
 
 {x) Which is the position in cases of non-disclosure : see §§ 225, 226, post. 
 
§§ 215-217 (affirmative answers). 189 
 
 so-called acquiescence, go for nothing, — which is tantamount to saying that, 
 •per se, these matters constitute no answer [xx). 
 
 217. To take first the expressions " delay " and " laches," which in 
 substance mean the same thing. " Delay " indicates, either (like the French 
 delai) the mere lapse of time, in which sense it is obviously ridiculous to 
 impute it to any one as a fault, or an omission or neglect to avoid the contract 
 within a reasonable time (and this is what the expression " laches " also 
 means), which again cannot properly be described as a default on the part of 
 him who so omits or neglects unless it can be shown (which it cannot) that 
 he was under any duty to the other party in that respect. The party com- 
 plaining is neither punished for, nor prejudiced by, delay in itself ; though 
 he may be seriously prejudiced by the rights which, during his inertia and 
 supineness, he has allowed third parties to acquire against him. " I take it 
 to be a settled doctrine of equity," said Jessel, M.R. («/), " not only as regards 
 specific performance, but also as regards rescission, that this " — i.e. delay — 
 " is not an answer, unless there is such delay as constitutes a defence under 
 the Statute of Limitations. That, of course, is quite a different thing." 
 And the period during which the lapse of time counts against the party com- 
 plaining does not even begin to rrm until the right of election accrues, that 
 is, until he has knowledge of all the facts giving him that right (z) ; and 
 then only in the sense, and to the extent, already indicated. Indeed, if he 
 asserts himself before he has acquired such complete knowledge, he may be 
 exposed to the opposite objection that he is striking too soon (a). There 
 may be cases, however, where, after full consciousness of all such rights 
 as he ever had, the party's passivity was so pronounced and prolonged 
 as to lend colour to the suggestion that from the first he never had any 
 such rights as he pretends to have had, and that he was not ignorant of 
 the facts which he alleges were suppressed or misrepresented (o), or that 
 
 (xx) See the observations of Kotght-Bkucb, V.-C, at p. 579 of Gibson v. D'Este, 
 inf. 
 
 (y) At p. 13 of Redgrave v. Hurd (1881), 20 C. D. 1, C. A. This is what Lord Davby 
 meant when he said that delay or mora is not a plea in law : see the passage cited in not& 
 (m) to § 218, post. 
 
 (z) Clements v. Hall (1858), 2 De G. & J. 173 (per Lord Cbanwobth, L.C, at pp. 187, 
 188) ; Rawlins v. Wichham (1858), 3 De G. & J. 304 (per Knight- Bkuce, L.J., at p. 314, 
 and Ttjbneb, L. J., at pp. 318-321) ; Lindsay Petroleum Co. v. Hurd (1874), L. R. 5 P. C. 
 221, at p. 241 ("in order that the remedy should be lost by laches or delay, ... it is 
 necessary that there should be sufficient knowledge of the facts constituting the title to 
 reUef "). Cp. the observation of Tubnee, L. J., as to acquiescence, at p. 74 of Life 
 Association of Scotland v. Siddall (1861), 3 De G. F. & J. 58, which is cited in note (q) to 
 § 219, post. 
 
 (a) An objection of this sort was raised, though unsuccessfully (see the judgment of 
 Gbant, M.R., at p. 318) in Edwards v. M'Leay (1815), G. Cooper 318, it being suggested 
 that the plaintiff's action was premature, since he brought it before he knew that he would 
 ever be evicted from the premises which were the subject of the contract sought to be 
 rescinded on the ground of non- disclosure of the fact that such eviction was legally possible. 
 This case, and the danger of premature, no less than of belated action, is alluded to by 
 Kotght-Bbtjce, V.-C, at p. 578 of Oibson v. D'Este (1843), 2 Y. & C. (cH.) 542, as to 
 which authority see Sect. 8, Sub-s. (2), post, for a detailed discussion. In that case the 
 V.-C, held that the plaintiff had neither come too early (p. 578), nor too late (p. 579). 
 
 (b) See Sect. 3, Sub-s. (5), of this Chapter, ante. 
 
190 CH. Ill, SECT. 4, SUB-S. (3). 
 
 he agreed to waive disclosure (c), or that, without having so agreed in the 
 first instance, he afterwards deliberately elected to affirm the contract which, 
 if so minded, he might have avoided (d) : or again, the delay, without furnish- 
 ing, or contributing to, evidence of anything, may give " room and verge " 
 for the intervention of the jms tertii, or an alteration of the subject-matter of 
 the contract, or, in company cases, the winding-up of the company (e) ; and, 
 whether any of these events supervene or not in any particular case, it is 
 manifest that, the longer the delay, the greater must be the peril and proba- 
 bility of their so doing. " We think," said the Exchequer Chamber in a 
 famous judgment which is always appealed to as the locus classicus on this 
 topic, "that so long as he" — the person entitled to avoid the contract — 
 " makes no election, he retains the right to determine it either way, subject 
 to this, that, if in the interval while he is still deliberating, an innocent third 
 party has acquired an interest in the property, or if, in consequence of his 
 delay, the position even of the wrongdoer is afiected, it will preclude him from 
 exercising his right to rescind" (/). To the same effect, dealing with the 
 second of the above contingencies, the Privy Council has held that " the doctrine 
 of laches in courts of equity is not an arbitrary or technical doctrine. Where 
 it would be practically unjust to give a remedy, either because the party has, 
 by his conduct, done that which might fairly be regarded as equivalent to a 
 waiver of it, or where, by his conduct and neglect, he has, though perhaps not 
 waiving that remedy, yet put the other party in a situation in which it would 
 not be reasonable to place him, if the remedy was afterwards to be asserted, 
 in either of these cases, lapse of time and delay are most material. But in 
 every case, if an argument against relief, which would otherwise be just, is 
 founded upon mere delay, that delay, of course, not amounting to a bar to 
 
 (c) See Sub-s. (1) of this Section, ante. 
 
 {d) See Sub-s. (2) of this Section, ante,and §§ 374, 484, post, and the cases cited in the 
 notes thereto, with which cp. the following, where the contract was voidable on the ground 
 of misrepresentation : Clough v. L. & N. W. Railway Co. (1871), L. R. 7 Exch. 26, Exch. 
 Ch. (per Cur., at p. 34 — " we think the party defrauded may keep the question open so long 
 as he does nothing to afiBrm the contract " — and, at p. 35 : " lapse of time without rescind- 
 ing will furnish evidence that he had determined to afSrm the contract, and when the lapse 
 of time is great, it probably would in practice be treated as conclusive evidence that he 
 had so determined ") ; Aaron's Reefs, Ltd. v. Twiss, [1896] A. C. 273, H. L. (perliord Davby 
 at p. 294 : "lapse of time, without rescinding, may furnish evidence of an intention to affirm 
 the contract. But the cogency of this evidence depends upon the particular circumstances 
 of the case, and the nature of the contract in question) ; Mutual Reserve Life Insurance Co. 
 V. Foster (1904), 20 T. L. R. 715, H. L. ; Cross v. Mutual Reserve Life Insurance Co. (1904), 
 21 T. L. R. 15 (Buckley, J.) ; Merino v. Same (1904), 21 T. L. R. 167 ; MoUoy v. Same 
 (1905), 22 T. L. R. 59 (Swinfbn Eady, J.), in which last four cases it was held that the 
 delay, though great, did not show affirmation ; Re ChristineviUe Rubber Estates, Ltd. (1911), 
 81 L. J. (cH.) 63 (per Eve, J., at pp. 64-66, who held that, with the other circumstances of 
 that case, the delay was fatal to the applicant). 
 
 (e) As to these bars to rehef, see § 231, 233, post. 
 
 (/) Clough V. London dk Northwestern Railway Co., sup., per Cur., at p. 35. This 
 was a misrepresentation case ; but the principles there enunciated by the Exchequer 
 Chamber have always been held to govern every branch of law which is concerned with a 
 voidable contract, on whatever ground it is voidable : and, in particular, they were after- 
 wards expressly applied to a case of non- disclosure by the Exchequer Chamber in Morrison 
 V. Universal Marine Insurance Co. (1873), L. R. 8 Exch. 197, Exch. Ch. (per Cur., at 
 pp. 203-205). Cp. the judgment of Chitty, J. (as to the intervention of the jus tertii) in 
 Re Murray, Dickson, and Murray (1887), 57 L. T. 223, and, generally, §§ 374, 484, post. 
 
§§ 217-218 (affirmative answers). 191 
 
 any statute of limitations, the validity of tliat defence must be tried upon 
 principles substantially equitable " (g). 
 
 218. It would appear, therefore, that where the party complaining is 
 said to have been " guilty" of delay and laches, what is meant is that his 
 delay and laches have amounted to waiver or affirmation, or have given 
 occasion for the supervening of facts constituting a bar to relief. Unless 
 this is meant, the expressions in question, since they point to nothing which 
 constitutes an answer at all to his right to have the contract rescinded or 
 treated as a nullity, are wholly meaningless, except in the highly meta- 
 phorical sense in which a man may be said to have been guilty of a breach 
 of duty to himself, or of a neglect of that regard for his own interests which 
 is dictated by worldly wisdom and ordinary business sagacity (h). Very 
 frequently, indeed, as may be seen on reference to the language used arguendo 
 in the authorities, " laches " and " delay," like many other terms of equally 
 convenient ambiguity in meaning and laxity in use (i), are mere disguises 
 to veil a jejune contention. They would seem to indicate a consciousness 
 on the part of the advocate that he cannot support a case of confirmation or 
 waiver, or whatever may be the affirmative answer suggested, and must 
 escape from rescission, if at all, like Venus in a mist, under cover of some 
 such large and generous terminology, for the application of which to the case 
 in question he may find specious warrant in not a few incautious deliverances 
 of equity judges. Nor will he be without assistance from that unfailing 
 resource of unsound reasoning, the " maxims of the law " {j). Vigilantibus, 
 non dormientihus, jus subvenit, is extensively relied upon in this connection 
 by those who fail to see that this, like other maxims, is only true with the 
 proper restrictions and qualifications, and, when extended beyond these 
 limits, is demonstrably false. It is true when limited to acquiescence in the 
 proper sense of the word, or to those cases of " equitable estoppel," as it is 
 sometimes called, in which inaction and standing by is deemed equivalent 
 either to a representation which induces another to alter his position for the 
 worse, or to a licence or encouragement to another to adopt or to persevere in 
 
 {g) Lindsay Petroleum Co. v. Hurd (1874), L. R. 5 C. P. 221, at pp. 239, 240. The test 
 of " practical injustice" was applied by Knight- Bruce, V.-C., to the circumstances of 
 Gibson v. D'Este (1843), 2 Y. & C. (oh.) 542, at p. 578, with the result that, no injury 
 having in his opinion been caused to the vendor by the purchaser's delay, he held that 
 such delay did not affect the latter's right to rehef. 
 
 (h) Embodied in such proverbial philosophy as " strike while the iron is hot," or lago's 
 " dull not device by coldness and delay." Of course these " yvaixai," like the maxims 
 of the law — see note (J), inf. — only represent one side of the question, and may be set off 
 by some equally absolute aphorism bringing out the other side ; in this case " more haste, 
 less speed "is the antitheton, and Friar Lawrence's " too swift arrives as tardy as too slow" 
 {Borneo and Juliet, Act 2, So. 6) : see the cases cited in note (a) to § 217, ante, for illustra- 
 tions of this possibility. The cautious Bacon steers a middle course between these extremes 
 when he counsels that " generally it ia good to commit the beginnings of all great actions 
 to Argus with his hundred eyes, and the ends to Briareus with his hundred hands ; first to 
 watch, and then to speed." 
 
 (i) Such as " arrangement," a term always resorted to when it becomes necessary to 
 dress up in the guise of a contract something which is not so in law. 
 
 (j) Of such " maxims " an anthology might easily be settled, exhibiting a series of 
 direct antinomies in parallel columns, on any question. For further illustrations of these 
 misleading and one-sided regulce juris, see App. A, § 646, post. 
 
192 CH. Ill, SECT. 4, SUB-S. (3). 
 
 a certain course of conduct, such inducement, licence, or encouragement 
 being implied from tte party's abstention from exercising a riglit which he 
 knows is his, and knows is being violated by a person who is expending 
 money in the honest belief either that there is no such right, or that it is 
 being waived. The maxim, however, has no application to cases where there 
 has been no such inducement, licence, or encouragement. The law does 
 not, and cannot, refuse its aid and countenance to the dormiens, if he wakes 
 up and demands it before either the other party, or any third person, has 
 acquired the right to insist that it shall be refused. He may have slept as 
 long as Rip Van Winkle, but, if nothing has happened during his slumber 
 which affects his title to relief, that relief is not to be granted or withheld 
 accordingly as he has slept for a short or a long time. On the other hand, 
 if something has happened which affects his title, it does not signify how 
 brief his nap may have been. If Achilles wakes up in time to beat the tortoise 
 at the winning post, neither the tortoise nor the law has any business to 
 enquire how long it was before he woke up. No doubt, lapse of time, without 
 any attempt to assert known rights, besides being a peril to the party com- 
 plaining to the extent and in the manner above indicated, is also calculated 
 to inspire a judicial leaning in favour of the party charged, at all events in 
 the absence of any proof of fraud on his part, and a correspondingly critical 
 attitude towards the slackness and laxity (which is the etymological meaning 
 of " laches ") exhibited by the party complaining in nursing a claim till it 
 is stale. " It has beautifully been remarked," said Lord Campbell, L.C. (k), 
 " with respect to the emblem of Time, who is depicted as carrying a scythe 
 and an hour-glass, that while with the one hand he cuts down the evidence 
 which protects innocence, with the other he metes out the period when 
 innocence can no longer be assailed." There is a strong and most justifiable 
 disposition in gremio judicis to uphold, if possible, the position of one who, 
 after many years, is charged, even on prima facie plausible grounds, with non- 
 disclosure or misrepresentation, where, in the course of that period, the 
 persons and documents by which, if the accusation had been made dum 
 fervebat opus, he could have established his defence, may have perished or 
 been lost or destroyed, and in such cases the idea of an ethical period of 
 limitation presents great attractions to the sternest and most unbending 
 judicial mind, in this sense that, though mere delay is still no answer in itseK, 
 the fact of delay will invite, and indeed constrain, the Court to make every 
 intendment in favour of the legality and validity of all the proceedings of 
 the party charged, and to lay the burden of proving the contrary more heavily 
 on the party complaining than if there had been no such delay (l), and, 
 
 {k) At p. 617 of Bright v. Legerton (1860), 2 De G. F. & J. 606. 
 
 {I) Thus, in Watt v. Assets Co., [1905] A. C. 317, H. L., Lord Halsbtjky, L.C, at the 
 outset of his speech, declared that the questions in debate rested " especially upon these 
 two principles — ^that at this distance of time every intendment should be made in favour 
 of what has been done as being lawfully and properly done, and that the persons who are 
 now insisting on these rights have lain asleep upon their rights so long that as a matter of 
 fact we know that witnesses have perished, and the opportunities which might have been 
 had if the question had been earlier raised have passed away. We are asked at a distance. 
 
§ 218 (affirmative answers). 193 
 
 finally, it will make a serious difEerence in the way the whole case of the 
 party complaining is regarded and investigated, and may damage and shake 
 that case, even if otherwise strong, whilst, if otherwise doubtful or weak, it 
 may serve to give it the couf de grace (m) : and it may always afiect the 
 question of costs (w). But the effect of delay not amounting to, or affording 
 evidence of, or scope for, any of the answers or objections referred to cannot 
 be put higher than this, even where the non-disclosure or misrepresentation 
 is not proved to have been dishonest (o) : and in any case where, on the con- 
 trary, such dishonesty is established, and where, therefore, the party charged is 
 
 in the one case of 20 years, and in the other case of 22 years, to rip up a transaction which 
 has apparently been completely disposed of." And, at p. 333, he concludes his judgment 
 by insisting again, and in equally emphatic terms, on the application of the above " two 
 principles." See also the citation in note (p), inf., from Coaks v. Boswell (1886), 11 App. 
 Cas. 232, H. L. 
 
 (m) In Lawrance v. Lord Norreys (1880), 15 App. Cas. 210, H. L., where the action was 
 dismissed on the ground that it was an abuse of the process of the Court, delay was a 
 prominent feature in the considerations which moved the decision that the plaintiff had 
 no case which was even fit to be tried, Lord Hebschell observing, on this aspect of the 
 case, at p. 213 : " where an action is thus brought, on a title which accrued more than 
 70 years ago, to dispossess those who, or whose predecessors have been, in possession during 
 that length of years, it is obvious that the allegations by which it is sought to prevent the 
 statute being a bar " — these were allegations of concealed fraud — " need to be closely 
 scrutinised " ; and, again, at p. 219 : " this is not the first but the third edition of a 
 statement of claim delivered with the object of recovering the Towneley estate ; and when 
 we review the history of the litigation there is much to lead to the beUef that important 
 allegations now made were an afterthought, the result of criticisms of the earlier form in 
 which the charges of fraud were presented, and that the charges thus raised against persons 
 longdeadarewhoUy incapable of proof." SoLord Watson, at p. 221 : " when a plaintiff, 
 in order to escape from the Statute of Limitations, brings charges of concealed fraud, for 
 the first time, at a distance of 70 years, it appears to me that the duty of making a full 
 and candid statement is specially incumbent on him." Cp. the observations of Lord 
 Davby at p. 334 of Watt v. Assets Co., sup. . " in coming to this conclusion, I am not 
 treating mora or delay as a plea in law. I do not think it is a plea in law ; but I think the 
 lapse of time is a circumstance which ought to be taken into account and ought largely 
 to influence our estimate of and the conclusion we come to upon the facts of the case." 
 On the same principle, as is pointed out in § 247, post, the party complaining who waits 
 to be sued on the voidable contract is generally in a worse position than he who, without 
 so waiting, takes active proceedings for rescission. Cp. §§ 374, 484, post. 
 
 {%) In either of two ways : on the one hand, a party complaining who succeeds in 
 obtaining rehef may be deprived of his costs on the ground of delay, and, on the other 
 hand, when he fails, but the conduct of the party charged has been so dubious and equivocal 
 as to justify an order upon him to pay his own costs, the delay of the party complaining 
 may be sufficient to prevent the Court from exercising this discretion in his favour, as 
 it otherwise would have done. An instance of this latter effect of delay is Coaks v. Boswdl 
 (1886), 11 App. Cas. 232, H. L. (per Lord Selbornb, at p. 242 : " as to costs, there are 
 some things in this case which might have made me hesitate, if the action had been brought 
 when the purchase was recent, and before what was then an uncertain, had turned out a 
 profitable, speculation. But, as it was not brought until after a delay of more than eight 
 years, and after the risk had been decided in the purchaser's favour, I think the costs ought 
 to follow the event ; . . The substitution of creditors who know nothing about the 
 facts for those creditors by whom the sale had been conducted, and who, knowing all the 
 facts, did not complain, is certainly no reason why the respondents should be exonerated 
 
 from costs "). , , ., ■ -,.,,, 
 
 (o) In Gordon v. Gordon (1821), 3 Swanst. 400, a family compromise case, in which the 
 party charged had probably been guilty of wilful, and not very honest, suppression, it was 
 held that even on the assumption of innocent non-disclosure, a delay of 19 years was not, 
 of itself, a ground for refusing rehef (per Lord Eldon, L.C, at pp. 474, 475 : " in that view, 
 taking the case, as I wish to take it, as a case of mere non-disclosure, the Court, even at this 
 late hour, wiU give rehef "). 
 
 B.N.D. ° 
 
194 CH. in, SECT. 4, SUB-S. (3). 
 
 shown to have enjoyed for the period of delay a wholly unmerited spell of good 
 fortune, perhaps as the fruit of continued dishonesty, then, so far from being 
 an object of legitimate commiseration, he comes before the Court in the 
 character of one against whom, and not in whose favour, every presumption 
 will be created by the delay. " No time will assure " such persons " in the 
 enjoyment of their plunder, but their children's children will be compelled 
 in this Court to restore it " (p). 
 
 219. "Acquiescence," in the sense of "laches" or "delay," for which 
 expressions it is often loosely used as a mere synonym, is equally inefficacious 
 as an affirmative answer to the right, if it otherwise exists, to avoid the 
 contract. The true meaning of this term, however, has been well stated by 
 Lord CoTTENHAM, L.C., thus : " if a party, having a right, stands by and 
 sees another dealing with the property in a manner inconsistent with this 
 right, and makes no objection while the act is in progress, he cannot after- 
 wards complain. This is the proper sense of the word "acquiescence" (g). 
 Acquiescence, in fact, is much more than " quiescence," which is all that is 
 connoted by " laches " or " delay " : it is a quiescence under such circum- 
 stances as indicate an assent to, and an encouragement of, a course of con- 
 duct on the part of the party charged. In any other circumstances, quiescence 
 " amounts " to no more than " mere lapse of time " (r), and mere lapse of 
 time amounts to nothing. Manifestly " acquiescence " has no possible mean- 
 ing in relation to the right to avoid a contract, except where the term is used 
 as the equivalent for affirmation, as it sometimes is (s). 
 
 220. It is no affirmative answer to a case of non-disclosure to allege or 
 prove that the party charged honestly believed the undisclosed fact to be 
 immaterial, for (as has already been pointed out) his belief on this question 
 
 {p) Per Lord Lyndhukst, L.C., at p. 741 of Charter v. Trevelyan (1844), 11 CI. & Fin. 
 714. The lapse of time here was no less than 37 years. At p. 235 of Coaks v. Boswell, 
 sup.. Lord Selboene prefaces his speech by observing that " the time which had elapsed 
 between the purchase sought to be set aside and the commencement of this suit might 
 have been a serious obstacle to the relief sought, if rested on any other ground than that 
 of fraud ; but, if fraud were proved " — which in that case it was not—" that difficulty 
 would be overcome." 
 
 (q) At p. 123 of Leeds (Duke) v. Amherst (Earl) (1846), 2 Ph. 117. Cp. the observations 
 of Ttjrneb, L. J., at p. 74, and Lord Campbell, L.C, at p. 77, of Life Association of Scotland 
 V. Siddall (1861), 3 De G. P. & J. 58, and the exhaustive and luminous analysis of the 
 doctrine by the Court of Appeal at pp. 314, 315 of De Bussche v. Alt (1877), 8 C. D. 286, 
 C. A. Of course it must be shown that the party said to have acquiesced had full know- 
 ledge of his rights : per Tttrnek, L.J., ubi supracit. (" acquiescence, as I conceive, imports 
 knowledge, for I do not know how a man can be said to have acquiesced in what he did not 
 know, and in cases of this sort I think that acquiescence imports fuU knowledge "). 
 
 (r) Murray v. Palmer (1805), 2 Sch. & Lefr. 472, per Lord Redesdale, L.C. (Ir.), at 
 pp. 486, 487. 
 
 (s) In Sharpley v. Louth and East Coast Railway Co. (1876), 2 C. D. 663, C. A., Mauns, 
 V.-C, in the Court appealed from, though the C. A. studiously refrained from doing so, 
 used the term " acquiescence " to describe conduct which was evidence of an election on 
 the part of the representee to affirm the contract, and of nothing else. It should be noted 
 that it is possible for the party complaining to rely upon the doctrine of acquiescence, in 
 its proper sense, as a means of defeating the objection that by his acts and conduct he has 
 altered the character of that which is the subject of the contract, and so cannot restore 
 it in specie to the party charged. As to this, see § 231, and the case cited in note (i) thereto, 
 post. 
 
§§ 218-221 (afpikmative answers). 195 
 
 has no relevance whatever (t). Nor is it of any avail to set up that the party 
 charged had no intention to deceive or mislead the party complaining, or 
 acted in ignorance of the equitable principles of disclosure, for neither (as has 
 been seen) is it any part of the onus frohandi incumbent on the party com- 
 plaining to show what motive actuated the party charged, or how far (if at all) 
 he was conscious of his legal obhgations in the matter (m). 
 
 221. Lastly, since the relative advantages or disadvantages of adhering 
 to, or of repudiating, the voidable contract are the exclusive concern of the 
 party complaining, it follows that his right, if otherwise good, to adopt the 
 latter course, is in no way defeated or afiected by the most irrefragable evidence 
 or argument that the contract, if abided by, would have worked out rather 
 to his benefit than to that of the party charged, or to the common advantage 
 of both. The party complaining is to be the sole judge of the expediency or 
 propriety of getting rid of the contractual relation between himself and the 
 party charged. It may be a matter of honour, and not of interest, with him. 
 Having seen cause to regret his association with an undesirable individual, 
 company, or enterprise, and finding subsequently that the circumstances 
 are such as to provide him with a means of escape, he may be anxious to 
 avail himself of his rights irrespective of any immediate or tangible gain or 
 loss. Or it may be a case of mere caprice. The rationality of his motives 
 for insisting on avoidance is wholly immaterial. He is always entitled to 
 say, with Shylock, " it is my humour." If the right to avoid cannot be 
 estabhshed, cadit quwstio : but, if it is established, the law no more concerns 
 itself with the reasons which move the party complaining to exercise that 
 right than it concerns itself with the motives influencing a litigant to insist 
 on any other right of property or action to which he may be entitled. 
 When once his wrongdoing has been proved, the wrongdoer can neither 
 be heard to speculate, nor invite the Court to speculate, on the supposed 
 inadequacy or insagacity of such reasons or motives (v). 
 
 («) See § 33, ante. 
 
 (m) See § 197, ante. 
 
 {v) See Aberaman Ironworks, Ltd. v. Wichens (1868), 4 Ch. App. 101, a misrepresenta- 
 tion case (per Lord CAiRsrs, L.C., at p. 108 : " the argument that the company would have 
 bought with equal readiness had they known it to consist of less than 1100 acres, and that 
 •the real reason for rescinding was want of money to complete, appears to me hardly to 
 require an answer. If the deficiency is one that entitles them to rescind (and no one 
 disputes that it is) they are entitled to rescind even though they might have been willing 
 to pay an equal sum for the smaller quantity, and even although rescission may, in a 
 financial point of view, have been convem'eut to them "). Cp. the following misrepresenta- 
 tion cases where the party complaining was the defendant, and not the plaintiff, and where 
 it was held that there is no more right to criticize or investigate his motives for resisting 
 an attempt to enforce the contract than his motives for taking active measures to avoid it ; 
 Knatchbull v. Krueger (1815), 1 Madd. 153 (per Plumeb, V.-C, at p. 167), and, on appeal 
 {1817), 3 Mer. 121 (per Lord Eldon, L.C, at p. 146) ; Flight v. Booth (1834), 1 Bing. N. C. 
 370 (at pp. 378, 379) ; Broohe (Lord) v. Eounthwaite (1846), 5 Hare 298 (per Wigram, V.-C, 
 at pp. 302, 303) ; Madeley v. Booth (1849), 2 De G. & Sm. 718 (per Knight- Bbtjce, V.-C, 
 at p. 722) ; Ayles v. Cox (1852), 16 Beav. 23 (per Romilly, M.R., at pp. 24, 25) ; Denny v. 
 Hancock (1870), 6 Ch. App. 1 (per James, L.J., at p. 10). So, generally, in actions of 
 contract, the party who has contracted for one thing is not bound to accept another, and a 
 different, thing, merely because most people might think the latter more valuable, or merely 
 because it may have involved greater expense to the other party : Forman & Go. Pro- 
 prietary, Ltd. V. S. S. Lidderdale, [1900] A. C. 190, P. C. (at pp. 197, 201). 
 
196 CH. Ill, SECT. 5, SUB-S. (1). 
 
 Sect. 5. Eelief and Remedies. 
 
 222. Wtere the party complaining has discharged the burden of proof 
 which lies upon him (iv), and the case so primd facie established has not been 
 displaced by any affirmative plea or answer on the other side (x), he is entitled 
 to be relieved of his obligations under the contract in the negotiation for which 
 the non-disclosure is proved to have occurred. It now becomes important 
 to examine the nature of the remedies by which this relief is efiected, and 
 the principles upon which it is judicially granted or withheld. 
 
 223. In substance, the right of any party complaining who elects to 
 avoid a contract in the negotiation for which material facts have been with- 
 held from him is to have the contract judicially annulled, or judicially treated 
 as a nulHty. And this is his only right. He is not entitled to recover damages 
 against the party charged {y), unless the non-disclosure assumes the character 
 of fraudulent concealment («), or amounts to fraudulent misrepresentation (a), 
 or is otherwise founded on, or characterized and accompanied by, fraud (&), 
 and his case is so put (whether alternatively or not), and proved : in any 
 of which events, however, the damages are recoverable for the fraud, and not 
 for the non-disclosure as such (c). 
 
 224. For the above purpose, the law puts into the hands of the party 
 complaining both a sword and a shield. The non-disclosure is regarded 
 both as a dissolvent, and an absolvent. On the one hand, it constitutes a 
 ground for rescission or analogous relief at the instance of the party com- 
 plaining : on the other, it absolves him from liability under the contract, 
 if it is put in suit against him. Both offensive and defensive proceedings 
 
 (w) See Sect. 3, ante, 
 (x) See Sect. 4, ante. 
 
 {y) Per Sorutton, J., at p. 258 of Glasgow Assurance Corporation v. Symondson & Co. 
 (1911), 104 L. T. 254, to take one of the most recent statements of a very familiar and welll 
 established rule, as apphed to contracts of insurance. There is no exception to the rule 
 for the cases of fraud mentioned in the text are only exceptions which prove it. And the 
 " compensation " provided for in most contracts for the sale of land is not damages, but 
 an agreed pecuniary substitute for avoidance (see § 206, ante), whilst the " compensation " 
 sometimes exacted by the Court in cases of specific performance is only imposed as » 
 condition of this particular form of discretionary reUef (see § 245, post). The indemnity 
 again, which the party charged must give to the party complaining against liabiLities under 
 the contract set aside is not an indemnity against " losses arising out of the contract 
 generally," and, therefore, not damages, as is explained in § 239, note (y), post. Statutory 
 damages of course stand on a footing of their own. These are discussed in Ch. VI, § 667, 
 post. 
 
 (z) As in Wilson v. Fuller ( 1842), 3 Q. B. 1009, Exch. Ch., where the declaration charged 
 both fraudulent misrepresentation and fraudulent concealment, the object of the action 
 being to recover damages ; and the Exchequer Chamber, whose judgment was delivered 
 by TiNDAL, C. J., examined each head of complaint separately and successively, without 
 expressing or implying the sUghtest doubt that proof of either would entitle the plaintifi 
 to damages. The first is discussed at pp. 1009, 1010, and thereupon consideration of 
 
 the second (which occupies pp. 1010-1012) is entered upon, prefaced by " As to the 
 
 statement in the declaration of the second gravamen, the fraudulent concealment ..." &c. 
 
 (a) This class of case forms the subject of Ch. IV, Sect. 4, Sub-s. (2), of the author's 
 Law of Actionable Misrepresentation. 
 
 (h) As in most of the cases cited in Sect. 2, Sub-s. (8), ante. 
 
 (c) The same rule as that stated in the text applies to cases of innocent misrepresenta- 
 tion, where damages are equally not recoverable. 
 
§§ 222-225 (relief). 197 
 
 are open to him. It is proposed to consider separately the remedies thus 
 placed at his disposal under these two main heads (d). 
 
 Subs. (1). Offensive Proceedings for the Avoidance of the Contract. Rescission 
 and Analogous Relief. 
 
 225. It is now well established that any contract in the negotiation for 
 which the party charged has broken his duty of disclosure is valid unless 
 and until disaffirmed by the party complaining : in other words, it is not, 
 hy reason only of the nan-disclosure, void (for, of course, it may happen to 
 be in any particular case void for some other reason, such as statutory or 
 common law illegality, or immorality, or injury to the public weal), but only 
 voidable at the sole option of the party complaining (e). To hold otherwise 
 would lead to the ridiculous and shocking result that the party charged, or 
 (in cases of contracts induced by misrepresentation) the misrepresentor, 
 or (in the case of any other invalidating cause) the wrongdoer, would be in 
 the position, if he should find that the contract is profiting the party he has 
 wronged rather than himself, to take advantage of his own wrong, and to 
 insist that the other party shall not enjoy the benefit which he has involun- 
 tarily, by that wrong, conferred upon him (/). The Courts have been so 
 
 (d) la the remainder of this Section, there will be frequent references to oases 
 of misrepresentation inducing contracts which the representee elected to avoid ; for 
 these are obviously in point, it being quite immaterial to the question of the procedure by, 
 and form in which, relief against a contract may be obtained, whether the title to that 
 relief arose from non-disclosure, or misrepresentation, or any other invaUdating cause, 
 and, if from non-disclosure, whether the breach was of duties forming the subject of 
 
 ' this Chapter, or of duties dealt with in either of the next two Chapters. Consequently 
 the present discussion of the general nature and conditions of rescission and analogous 
 relief, and of the relief available by way of defence, is entered upon once for all, and will 
 not be repeated in Ch. IV, Sect. 5, or in Ch. V, Sect. 5, post. 
 
 (e) See, as to marine insurance cases, Morrison v. Universal Marine Insurance Co. (1873), 
 L. R. 8 Exch. 197, Exch. Ch. (at pp. 203-205) ; as to life insurance, Armstrong v. Turquand 
 (1857), 9 Ir. C. L. R. 32 ; as to contracts to marry. Hall v. Wright (1858), E. B. & E. 746 
 (per Lord Campbell, C. J., at p. 759). It is, however, in misrepresentation cases that it 
 has been found most necessary to insist upon, and reiterate, the principle : all these 
 authorities are cited in note (u) to § 253 of the author's Law of Actionable Misrepresentation. 
 The most important of them are Stevenson v. Newnham (1853), 13 C. B. 285, Exch. Ch. 
 (per Cur., at pp. 302, 303 : " the effect of this, as of ordinary frauds, is not absolutely to 
 avoid the contract or transfer which has been caused by that fraud, but to render it void- 
 able at the option of the party defrauded. ... It must be considered, therefore, as estab- 
 lished, that fraud only gives a right to rescind the contract or purchase ; that the property 
 rests until avoided ; and that all mesne dispositions to persons not party to, or at least 
 not cognizant of, the fraud are valid ") ; Clough v. L. tb N. W. Railway Co. (1871), L. R. 7 
 Exch. Ch. 26, Exch. Ch. (per Cur., at p. 34 — a passage, with others on the subject of elec- 
 tion, cited and applied by the Exch. Ch. to cases of non-disclosure in Morrison v. Universal 
 Marine Insurance Co., sup. : — " the fact that the contract was induced by fraud did not 
 render the contract void, or prevent the property from passing, but merely gave the party 
 defrauded a right, on discovering the fraud, to elect whether he would continue to treat 
 the contract as binding, or would disaffirm the contract, . . . and we further agree that 
 the contract continued valid until the party defrauded had determined his election by 
 avoiding it ") ; United Shoe Machinery Co. of Canada v. Brunei, [1909] A. C. 330, P. C. 
 (at p. 339 : "a contract into which a person may have been induced to enter by false and 
 fraudulent representation is not void, but merely voidable at the election of the party 
 defrauded, after he has notice of the fraud. Unless and until he makes his election, and by 
 word or act repudiates the contract . . ., the contract remains as valid and binding as if 
 it had not been tainted with fraud at all "). 
 
 ( / ) See the cases cited in note (i), inf. And cp. the estoppel case of Goode & Bennion 
 
198 CH. Ill, SECT. 5, SUB-S. (1). 
 
 deeply impressed with, the absurdity and injustice of such a result that, 
 even in cases where, not without encouragement from frequent examples of 
 the misuse of the term in question by judges (g), and by the legislature (h), 
 it has been expressly stipulated that in the event of non-disclosure, 
 or fraud, or other breach of duty, the contract is to be " void," they 
 have always held that, in using this expression, the parties must be 
 taken to have meant no more than " void when the party wronged elects 
 so to treat it," or, in other words, " voidable " at his option {i). There 
 are other manifest absurdities which would flow from any doctrine that 
 such contracts are void : for, on the one hand, the party complaining would 
 be for ever precluded from taking active proceedings for relief, since the 
 Courts will not ordinarily avoid what is void already {j) ; on the other hand, 
 
 V. Harrison (1821), 5 B. & Aid. 147, as to the contracts of an infant {per Best, C.J., at 
 p. 159 : " the fallacy of Mr. Littledale's argument, I think, arises from this circumstance : 
 he considers the contract of an infant as absolutely void. But it is not void, for, if void, 
 the infant himself could take no advantage of it "). 
 
 {g) In the earlier stages of our jurisprudence, the enormous importance of the distinc- 
 tion between voidability and ipso facto invalidity was either not fully appreciated, or not 
 adequately expressed. Thus Lord Ellenbokough, C.J., in Duffel v. Wilson (1808), 
 1 Campb. 401, distinctly described a contract induced by misrepresentation as " void," 
 by which he may — as suggested by Sir Gobell Babnbs at p. 548 of KetUewell v. Eefuge 
 Assurance Co., [1908] 1KB. 545, C. A. — ^have meant " voidable " : but he could not have 
 so meant, and the same excuse cannot be made for his actual decision (a hopelessly bad 
 one) in Hill v. Gray (1816), 1 Stark. 434. In NoUe v. Adams (1816), 7 Taunt. 59, the 
 same terminological (if not substantial) error is traceable ; and the verbal slip appears 
 twice in the otherwise admirable judgment of the C. P. in Flight v. Booth (1834), 1 Bing. 
 (n.c.i 370 (" fraud avoids the contract altogether," p. 376 : " in such cases the con- 
 tract is avoided altogether," p. 377). 
 
 (A) For instance, in the Infants Belief Act, 1874 (37 & 38 Vict. c. 62), s. 1, as to which 
 see Lord Halsbury's Laws of England, title Infants and Children, vol. xvii, p. 67, note {k), 
 the unfortunate use of the term " void " might, if literaUy construed, deprive the infant 
 of his remedy against the adult, and thus encourage and revive the fallacy put forward in 
 Ooode & Bennion v. Harrison, sup. 
 
 (i) As in the life insurance case of Armstrong v. Turquand (1857), 9 Ir. 0. L. E.. 32, and 
 the lease cases (containing conditions that the lease should be void on failure to perform 
 covenants therein) of Eede v. Farr (1817), 6 M. & S. 121 {per Cur., at pp. 124, 125) ; Doe d. 
 Bryan v. Bancks (1821), 4 B. & Aid. 401 {per Abbott, C J., at pp. 405, 406) ; Doe d. Nash v. 
 Birch {1836), 1 M. & W. 402 {per Lord Abingee, C.B., at p. 408). In Hyde v. Watt (1843), 
 12 M. & W. 254, a covenant in a composition deed that, if the debtor neglected to keep 
 alive an insurance on his life, the deed should be void, was construed to mean that the 
 indenture was only to be " void against the plaintiff if he chooses to treat it as such " 
 (p. 270), and Pabke, B., dehvering the judgment of the Court of Exchequer, pointed 
 (at pp. 268, 269) to " the absurd consequences which would follow if the defendant, against 
 the consent of the other parties who had aU an interest in the continuance of the indenture 
 and to whom it gave benefit as well as to the defendant, could avail himself of his own 
 wrong, and absolve himself and his trustees from liability on their respective covenants." 
 In Sparenborg v. Edinburgh Life Insurance Co., [1912] 1 K. B. 195, a life policy case, 
 where there was a condition that, if the assured travelled outside certain geographical 
 limits, the policy was to be void, it was strenuously contended by the plaintiff that " void " 
 meant what it said, and that he having broken the condition, and the company having 
 asserted that, strictly speaking, the policy was void on that account, he was entitled to a 
 return of the premiums paid : but, inasmuch as it was expressly provided that, in 
 that event, the premiums should not be recoverable, Bbay, J., decided in favour of the 
 defendants without finding it necessary to express any opinion on the meaning of " void " 
 as used in the policy (p. 204), or on the company's argument that to construe the word 
 otherwise than as " voidable " would enable the assured to take advantage of his own 
 wrong. In Taylor v. Yorkshire Insurance Co., [1913] 2 Ir. R. 1 (insurance of a stallion), 
 " void " was treated as meaning " voidable " {per PiiiES, C.B., at p. 19). 
 
 {j) See §§ 232, 238, post. The Courts will not make unnecessary orders, or slay the slain. 
 
§§ 225-228 (relief). 199 
 
 even the party charged would be subjected to grave injustice, since he could 
 never set up waiver, or affirmation, or (in the proper sense) acquiescence (k), 
 as an affirmative answer to any case made against him, nor could he insist 
 on the impossibility of mutual restoration in sfecie as a ground for with- 
 holding relief from the party complaining Q). 
 
 226. It follows from the proposition above stated that, at the outset, 
 the right of the party complaining is simply and solely a right of option, 
 whether to affirm or disaffirm the contract (m). He is not bound to make 
 any election at all, or he may postpone the exercise of his right for any period 
 he pleases, though such omission or delay exposes him to serious perils of a 
 nature already indicated (w). But the right, when exercised, is exhausted. 
 Quod in electionibus semel placuit amplius displicere non potest. He may 
 keep the sword of Damocles suspended over the contract as long as he 
 pleases ; but if he takes the sword from its place, he can never put it back 
 again, and, if he cuts the thread and lets it fall, whether he destroys the 
 contract or not, he loses the sword. If he once affirms, he can never after- 
 wards avoid : and, if he once avoids he can never afterwards affirm for his 
 own purposes, nor, at the suggestion of the party charged, be held to have so 
 affirmed (o). There is no locus pcenitenticB in either case. 
 
 227. If the party complaining elects to avoid the contract, and the refusal 
 of the party charged to submit to the avoidance compels him to resort to the 
 Court to have it judicially adjudged to be void, or treated as void, it must 
 be remembered that, even though a case of actionable non-disclosure has 
 been fully established, there are still certain conditions subject to which 
 alone the relief can be granted. 
 
 228. In the first place, it must appear, if the question is raised by the 
 Court (for obviously, except in very special cases, the party charged is not 
 interested in raising it), that there is something on which a judgment or 
 order can operate, and for the undoing of which judicial intervention is 
 requisite. That is to say, there must be a subsisting contract which, unless 
 and until set aside by the Court, is, and will continue to be, valid and binding 
 on the parties. In strictness the Court, which is reluctant to make un- 
 necessary orders (p), may decline to interfere when its aid is invoked to 
 rescind that which in fact, or in contemplation of law, does not exist, as, for 
 
 (h) See Sect. 4, ante. Obviously no one can affirm, waive, or acquiesce in, what was 
 void ab initio, or resuscitate that which was stillborn. 
 
 (1) See § 239, post, as to such mutual restitutio ad integrum being a condition of rescission. 
 But there can be no restoration of a status quo which never existed in law. 
 
 (m) Com. Dig. Election, C. 2 ; Clough v. L. <fc N. W. Railway Go. (1871), L. E. 7 Exch. 
 26, Exch. Ch., a misrepresentation case, per Cur., at p. 34 ; Law v. Law, [1905] 1 Ch. 140, 
 C. A., a non-disclosure case, per Cozens-Habdy, L. J., dehvering the judgment of the Court, 
 at p. 159 (" he deliberately made his election, and by that he is bound. See Clough v. 
 London ofe North Western Railway Co."). 
 
 {n) See §§ 216, 217, 218, ante. 
 
 (o) Clough V. L. dh N. W. Railway Co., sup., per Cur., at pp. 34, 36 ; Be Thomas 
 Edward Brinsmead & Sons, Ltd., Tomline's Case, [1908] 1 Ch. 104, a misrepresentation 
 case, peir Wright J., at p. 109 (" election once made is made for ever, and cannot be 
 revoked even if the party wishes "). 
 
 (p) Reeve v. GKhson, [1891] 1 Q. B. 652, per Vaughan Williams, J., at p. 657, and 
 Wills, J., at p. 659. 
 
200 CH. Ill, SECT. 5, SUB-S. (1). 
 
 instance, an alleged contract wMch was never " concluded " {q), or was not 
 made by a person having the requisite authority in that behalf (r) ; or a 
 contract which, having been made, was determined by the parties before the 
 application for relief (s) ; or a contract which was a nullity ah initio, by 
 reason of its object or consideration having been illegal, or immoral, or against 
 public policy (t) ; or a contract which, though not indictable or illegal, is 
 rendered absolutely void, and not merely voidable, by statute (m). In many 
 of such cases, however, relief is granted ex abundanti cautela, if the matter is 
 not perfectly clear, or is not forced upon the attention of the Court {v) : 
 and it will always be granted ex debito justitice where any entry in a statutory 
 register, or other public document over which the Court has statutory 
 jurisdiction, stands on record as primd facie evidence against the party com- 
 plaining, and where, therefore, it is just as necessary to get the entry expunged 
 or rectified in the case of a void or non-existent contract as in the case of 
 one which is voidable only, the relief being given not against the contract, 
 which does not exist in fact, or in contemplation of law, as the case may be, 
 but against the statutory register or other public document which declares 
 that it does (w). 
 
 229. Not only where it is less, but also where it is more, than a contract in 
 law, e.g. when it confers a permanent status upon the parties, besides establish- 
 ing a contractual relation between them, the impeached transaction is 
 incapable of being set aside, or treated as a nullity, except upon the grounds 
 
 (g) As in Re Etna Insurance Co., Slattery's Case (1873), Ir. R. 7 Eq. 245. On the other 
 hand, a concluded contract was proved in Se Scottish Petroleum Co., Wallace's Case (1883), 
 23 C. D. 413, C. A., but it was recognized by the Court of Appeal (see pp. 431, 432, 438) 
 that, had it been otherwise, the applicant's right to have his name removed from the 
 register would have rested on the voidness, or' rather non-existence, of the contract, and 
 not on its voidability for misrepresentation. 
 
 (»■) See Scottish Petroleum Co., Wallace's Case, sup., where it was also recognized that, 
 if it had appeared (which it did not) that the allotment had not been made by the requisite 
 number of directors, it would have been a case of no contract at all, and not a case of a sub- 
 sisting, but voidable, contract. 
 
 («) As, for instance, by forfeiture of shares, pursuant to articles of association : Be 
 Home Counties and General Life Insurance Co., Ex p. Woollaston (1859), 7 W. B. 645 ; Be 
 London dk Mediterranean Bank, Wright's Case, No. 1 (1871), L. R. 12 Eq. 334 n. ; Be Same, 
 Wright's Case, No. 2 (1871), 7 Ch. App. 55 ; Aaron's Beefs, Ltd. v. Twiss, [1896J A. C. 273, 
 H. L. (at p. 293). The i-ule of course assumes that the forfeiture was bond fide. Where it 
 was a fraudulent device of the shareholder, in collusion with the company's secretary, 
 the contract was held not to have been put an end to : Be London and Provincial Starch 
 Co., Corners' Case (1868), L. B. 7 Eq. 77, 81. As to the means of checkmating a similar 
 manoeuvre on the part of a company, see § 240, and note (d) thereto, post. 
 
 (t) See Lord Halsbm^y's Laws of England, title Contract, vol. vii, pp. 391-403. 
 
 (u) Ibid., pp. 403-405. Further, any contract or transaction embodied in an instru- 
 ment of which the class, quality, character, or nature has been wholly misdescribed, and 
 any contract induced by error persona!, is void. This topic is fully discussed in §§ 256-259 
 of the author's Law of Actionable Misrepresentation. 
 
 (v) Thus a contract which was clearly void, by reason of misrepresentation of the 
 nature of the instrument, was nevertheless set aside in Kennedy v. Green (1834), 3 My. & K. 
 699 ; Lewellin v. Cobbold (1853), 1 Sm. & G. 376 ; Vorley v. Cooke (1857), 1 GifE. 230 ; 
 Lee V. Angas (1806), 7 Ch. App. 79 n. 
 
 (w) See, as to rectification of the register of members of a company. Lord Halsbury's 
 Laws of England, vol. v, pp. 153-156, and as to variation of the list of contributories, 
 ibid., pp. 496-500, 502 ; from some of the cases there cited it will appear that such rectifica- 
 tion, or variation, has been ordered where the contract to take shares was not voidable, but 
 void. 
 
§§ 228-230 (belief). 201 
 
 on which such status can be dissolved. Marriage, and marriage settlements, 
 as distinct from agreements to marry, furnish illustrations of this principle, 
 as has already been explained (x). 
 
 230. Another condition of relief is that the contract must be executory 
 on one side or the other. If it has been completed by conveyance, or other- 
 wise fully executed and exhausted on both sides, the Court will peremptorily 
 refuse to interfere («/), unless the non-disclosure, or (if it be a case of misrepre- 
 sentation) the misrepresentation, was characterized by fraud, or unless it 
 led to error in substantialibus, that is, a state of things in which, if the relief 
 were refused, the party complaining would be compelled to keep something 
 totally difierent in substance and nature from that which the contract pur- 
 ported to give him. The first of these two exceptions, since fraud not only 
 vacates and vitiates every transaction known to the law, but denies even 
 to conveyance, completion, and long fruition the immunity which would 
 otherwise attach to them, has never been in doubt. Eecognized in cases 
 where the facts were not sufficient to establish the fraud alleged (z), the 
 rule has always been rigorously applied wherever they were (a). The 
 second exception has been, from the earliest times, recognized in all the 
 Scottish institutional treatises, such as Bell's Principles, the relevant passage 
 from which has been cited and adopted in the House of Lords as representing 
 not merely the law of Scotland, but that of England and Ireland as well (&), 
 and it is now firmly established, though it was not perhaps always so, in our 
 jurisprudence (c). It should, however, be remembered that where, by a 
 
 (x) In § 149, ante. 
 
 (y) On this ground rescission was refused in the following cases (in which it so happened 
 that misrepresentation was the ground on which the contract was sought to be set aside, 
 but the ground of voidabihty, as aheady stated, is immaterial) : Attwood v. Small (1838), 
 6 CL & Pin. 232 ; Wilde v. Gibson (1848), 1 H. L. C. 605 ; Brownlie v. Campbell (1880), 
 5 App. Cas. 925, H. L. ; Soper v. Armld (1887), 37 C. D. 96, C. A., affirmed (1889), 14 
 App. Cas. 429, H. L. ; May v. Piatt, [1900] 1 Ch. 616 ; Debenham v. Sawbridge, [1901] 
 2 Ch. 98 ; Se Metal Constituents, Ltd., Lord Lurgan's Case, [1902] 1 Ch. 707, 709 ; Seddon v. 
 North Eastern Salt Co., [1905] 1 Ch. 326 ; Milch v. Coburn (1910), 27 T. L. R. 170 ; Angel v. 
 Jay, [1911] 1 K. B. 666 (where it was vainly sought to distinguish a lease from a convey- 
 ance). It should be noted that the mere fact that one of the parties, during the currency 
 of the contract, has become entitled to benefits in certain events which have not happened, 
 whilst the other has been at a corresponding risk, does not make the contract an executed 
 one : Kettlewell v. Refuge Assurance Co., [1908] 1 K. B. 545, C. A. (at pp. 549-551). 
 
 (z) For instance, by Lord Cottbnham, L.C., at pp. 349-352 of Attwood v. Small, sup., 
 and at pp. 616, 617 of Wilde v. Gibson, sup. ; by Lord Campbell, at pp. 632, 633 of the 
 last case ; by Lord Selboene, L.C., at p. 937 of Brownlie v. Campbell, sup. ; by Cotton, 
 L..I., at pp. 101, 102 of Soper v. Arnold, sup., in the C. A. ; by Faewell, J., at p. 623 of 
 May Y. Piatt, sup. 
 
 (a) Instances are : Edwards v. M'Leay (1815), G. Cooper 308, affirmed by Lord 
 Eldon, L.C. (1818), 2 Swanst. 287 ; Charter v. Trevdyan (1844), 11 CI. & Fin. 714. These 
 were non-disclosTire cases. Illustrations from misrepresentation cases are plentiful : see 
 Sturge v. Sturge (1849), 12 Beav. 229 ,• Reynell v. Sprye (1852), 1 De G. M. & G. 660 
 Oarraud v. Frankel (1862), 30 Beav. 445 ; Harris v. Pepperel (1867), L. R. 5 Eq. 1 
 Lindsay Petroleum Co. v. Hurd (1874), L. R. 5 P. C. 221 ; Hart v. Swaine (1877), 7 C. D. 
 42 ; Paget v. Marshall (1884), 28 C. D. 255. 
 
 (6) See Brownlie v. Campbell, sup., where, at p. 937, Lord Selboene, L.C, after citing 
 the proposition in Bell's Principles as to both the exceptions mentioned, observes : " it 
 appears to me that the cases which have been decided in this country and in Ireland are 
 to the same effect." 
 
 (c) See Bingham v. Bingham (1748), 1 Ves. Sr. 126 ; Cooper v. Phibbs (1867), L. R. 2 
 
202 CH. Ill, SECT. 5, SUB-S. (1). 
 
 term or condition of the contract, it has been agreed that compensation is 
 to take the place of rescission, and the period within which such compensation 
 is payable is not expressly limited, the exception last mentioned is not 
 admissible, it being deemed immaterial to the question of monetary relief 
 whether the contract has been completed or not. In any such case, accord- 
 ingly, compensation cannot be denied to the party complaining, if his right 
 to it is established in all other respects, even after conveyance or full execution 
 on both sides, and at any time thereafter which is not beyond some period of 
 statutory limitation. This doctrine was for some time doubted, on the 
 ground that the same rule ought to be applied to the substituted form of 
 relief as to the form for which it is substituted, and that the pecuniary equiva- 
 lent of rescission ought to be payable within the same limits of time as those 
 within which the party complaining could have avoided the contract if he 
 had not agreed to take such equivalent instead : but it has now been definitely 
 declared to be law (d). 
 
 231 . A third condition of rescission or analogous relief is complete restitutio 
 in integrum on both sides, and (where the property is specific) in specie. 
 It follows that where the party complaining, having received under the 
 contract something other than money, or securities, or goods incapable of 
 an individual character, has disabled himself from giving it back to the 
 party charged in the same plight as that in which he received it, he is unable 
 to satisfy this condition ; in which case it would plainly be inequitable, as 
 between the parties, to deprive the party charged, however grievous a wrong- 
 doer, of all rights and benefits, past and future, accruing to him under the 
 contract on the terms of receiving back, not the specific thing which he 
 delivered under the contract, but something of a difierent nature, quality, 
 or substance (e). Thus where, through the acts or omissions of the party 
 complaining, the property acquired by him under the contract, such as a 
 mine, a colliery, or a business, has been worked out or exhausted, or so dealt 
 with as to result in an entire destruction or alteration of its physical or com- 
 mercial character (/), or where shares or securities so acquired have, owing 
 
 H. L. 149 {per Lord Cranwoeth, at p. 164, expressly approving the decision in the last- 
 cited case) ; Jones v. Clifford (1876), 3 C. D. 779 {per Hall, V.-C, at pp. 791, 792) ; 
 Dehenkam v. Sawbridge, [1901] 2 Ch. 98 (per Bbyne, J., who, at p. 109, after referring to 
 the previous authorities, draws the unhesitating conclusion that " this " — i.e. rescission — 
 " is relief which may undoubtedly be granted in a proper case, even after conveyance, 
 although there has been nothing in the nature of fraud "). 
 
 (d) Bos V. Helsham (1866), L. R. 2 Exch. 72 ; Palmer v. Johnson (1884), 13 Q. B. D. 
 351, C. A., in which Bos v. Helsham was distinctly approved and followed, whilst three 
 intei-vening decisions of Maldis, V.-C, were overruled, and the opinion of Watkin 
 WiLLLiMS, J., in Joliffe v. Baher (1883), 11 Q. B. D. 255, Div. Ct., if intended in any way 
 to contravene the principle of Bos v. Helsham, was dissented from. 
 
 (e) Clmigh v. London and Northwestern Railway Co. (1871), L. R. 7 Exch. 26, Exch. 
 ph., per Cur., at p. 35 (" if, in consequence of his delay, the position even of the wrongdoer 
 is affected, it will preclude him from exercising his right to rescind "). 
 
 ( / ) As inAttwood v. Small (1838), 6 CI. & Ein. 232 (collieries, and ironworks and mines, 
 described by Lord Cottenham, L.C, at p. 537, as " a property . . . varying from day 
 to day," and, therefore, as pecuharly the subject of the rule in its most stringent apphca- 
 tion) ; Vigers v. Pike (1842), 8 Cl. & Fin. 562 {per Lord Cottenham, L.C., at p. 651, a case 
 of mines worked out and exhaasted) ; Clarke v. Dickson (1858), E. B. & E. 148 (the like, 
 where, at p. 153, Eble, J., likens the case to that of a man offering to return a lottery ticket 
 
§§ 230-232 (relief). 203 
 
 to the like conduct or default of the party complaining, become shares or 
 securities of a difierent legal quality, and with difierent legal incidents (g), 
 rescission will be refused. But mere depreciation or deterioration of the 
 property which arises in the ordinary course of events, or from natural decay 
 or inherent defects, and is in nowise attributable to the party complaining, 
 is no bar to the grant of relief (h). IvTor, even where the party complaining 
 is responsible for the impossibility of restoring the property in specie, will 
 the remedy be withheld if he can prove that the party charged has deliberately 
 stood by and silently encouraged the acts which are alleged to have caused 
 the alteration or extinction of the property, with full consciousness of his 
 own wrongdoing, and for the sole purpose of providing himself with materials 
 for raising the objection if and when proceedings should be taken against 
 him (i). Where there is a doubt whether the party complaining will, or will 
 not, eventually be able to make, or procure to be made, efiective restoration 
 in specie, the judgment may be framed in an alternative form, ordering 
 rescission if the restoration be effected within a stated time, and, if not, 
 dismissal of the action (j). 
 
 232. Where the party complaining has received nothing under the con- 
 tract but money, e.g. premiums under a policy of insurance, or deposits on 
 a contract of sale, or dividends on shares, no difficulty of the nature just 
 referred to arises : the money, with or without interest (Jc), must be repaid, 
 or brought into Court, or offered to be repaid, as a condition of rescission (l) ; 
 
 which had turned up a blanlv, and, at p. 155, Crompton, J., to that of a butcher who had 
 bought a beast from a grazier offering to return the carcase) ; Sheffield Nichel and Silver 
 Plating Co. v. Unwin (1877), 2 Q. B. D. 215, 223, 224 ; Ladywell Mining Co. v. Brookes 
 (1887), 35 C. D. 400, 0. A. {per Ijndley, L. J ., at p. 414 : " rescission is not possible because 
 the property acquired by the company does not belong to the company any longer. The 
 landlord has taken possession, and rescission is out of the question) ; Lagunas Nitrate Co. 
 V. Lagunas Syndicate, [1899] 2 Ch. 392, C. A. (where, at p. 433, Lindley, M.E., says that 
 " the real difficulty in the way of rescission hes in the impossibihty of restoring the parties 
 to their original position," and, at pp. 433, 434, enumerates the circumstances which 
 resulted in this impossibility). 
 
 (g) Clarke v. Dickson, sup. (per Eelb, J., at pp. 153, 154, and Crompton, J., at p. 155, 
 where, besides the working out of the mines, the additional fact is relied upon that the 
 plaintiff, having been instrumental in getting the cost-book mining company converted 
 into a joint stock company, had disabled himself from returning the shares in the same 
 plight as that in which he had received them) ; Western Banlc of Scotland v. Addie (1867), 
 L. R. 1 H. L. (Sc.) 145(wherea3imilarstateof things was held a fatal objection to rescission, 
 apart from the liquidation of the company before repudiation, which was a bar in itself ; 
 see the observations of Lord Chelmsford, L.C, at p. 160, and Lord Cranwoeth, at 
 pp. 165, 166). On the other hand,'in Odkers v. Ellis, [1914] 2 K. B. 139, where the party 
 complaining had never in fact become a shareholder in the company which had gone into 
 liquidation, there was no force in the plea raised against him, because he had never been 
 put into possession at aU of the shares which, it was urged, he could not restore (per 
 HOKEIDGE, J., at p. 152). 
 
 (h) Western Bank of Scotland v. Addie, sup. (per Lord Ceanwoeth, at p. 166) ; 
 Adam v. Newbigging (1888), 13 App. Cas. 309, H. L. (per Lord Watson, at p. 323, and Lord 
 Hekschbll, at pp. 330, 331). 
 
 (i) Maturin v. Tredennick (1864), 12 W. R. 740. 
 
 (j) See the form of the decree set out at p. 245 of Lindsay Petroleum Co. v. Hurd (1874), 
 L. R. 5 P. C. 221, where there was a possibiMty that the company, though dissolved, might 
 eventually, through other parties, procure the property to be reconvey ed to the defendants. 
 
 (k) See § 241, note (o), post. 
 
 (l) Thus, in Fitzhefrhert v. Mather (1785), 1 Term. Rep. 12 (marine insurance), the 
 
204 CH. Ill, SECT. 5, SUB-S. (1) 
 
 and, if tiie party charged tas concurred in the avoidance of the contract by 
 the party complaining, so that there has heen no necessity for judicial annul- 
 ment, then the party complaining, if he fails to refund the money, is liable 
 to the party charged in an action for money had and received (m). This 
 general rule, however, is subject to two exceptions : first, where the non- 
 disclosure or other breach of duty has been characterized or accompanied by 
 fraud (n), and, secondly, where the parties have agreed to the contrary^ 
 which is almost universally the case as to premiums in contracts of insurance, 
 other than marine (o), and is very commonly the case as to deposits on 
 
 underwriters paid the premium into court; in Stainbank v. Fernley (1839), 9 Sim. 656 
 (a case of a share transaction), the plaintiff by his bUl offered to repay the dividends which 
 he had received in respect of the shares ; in Anderson v. Thornton (1853), 8 Exoh. 425 
 {per Paeke, B., at p. 428), and in Russell v. Thornton (1859), 4 H. & N. 788 (per Bbamwbll, 
 B., at p. 797), which were both cases of marine insurance, it was held that the underwriters 
 were bound to return the premium, there being no fraud on the part of the assured. So, 
 in the life insurance case of London Assurance Co. v. Mansel (1879), 11 C. D. 363, the 
 insurance company before action, and when repudiating the poUoy, had tendered the 
 amount of the one premium which they had received from the assured ; and in Joel v. 
 Law Union & Crown Insurance Co., [1908] 2 K. B. 431, another hfe insurance case, the 
 judgment in which was set aside by the Couit of Appeal, [1908] 2 K. B. 863, C. A., but not 
 on any ground which affected the soundness of the observations now cited. Lord Alvee- 
 STONE, CI., held in a considered judgment, after the jury had returned certain answers 
 to specific questions, that " in order to entitle the defendants to revocation of the policy — 
 this not being a case of fraud — they ought to have tendered, or expressed their wiUingness 
 to repay the premium . . . ; in my judgment, fraud having been negatived, they were 
 bound to repay the premium " (p. 440), and he thereupon dii'eeted the judgment to be 
 prefaced (as the judgment in London Assurance Co. v. Manuel, sup. — see p. 372 of the 
 report of that case — had been) by a recital of the fact that the insurance company were 
 " wilUng and thereby offered to return the premium." 
 
 (m) Everett v. Desborough, cited in note (o), inf. ; British Workman's and General 
 Assurance Co. v. Cunliffe (1902), 18 T. L. R. 502, C. A. 
 
 (n) See the observations of Paeke, B., at p. 427 of Anderson v. Thornton, sup. ("in 
 cases of insurance . . . concealment vitiate? the policy, and whether it be fraudulently 
 made or not is a matter which is wholly immaterial, except with reference to the return of the 
 premium "), and again, at p. 428 (" with reference to the return of the premium, there is 
 no doubt in my mind that the plaintiff would be entitled to recover it, as there was no 
 fraud in the representation ; if there had been, the case would have been different "), and 
 those of BKAMWEii, B., at p. 797 of Russdl v. Thornton, sup., and of Lord Alvekstonb, 
 C.J., at p. 440 of Joel v. Law Union & Crown Insurance Co., as cited in note (I), sup. The 
 rules as to the return of premiums in cases of marine insurance are codified in ss. 82, 83, 
 84 of the Marine Insurance Act, 1906 (6 Edw. 7, c. 41). 
 
 (o) In Everett v. Desborough (1829), 5 Bing. 503, there was an express condition that, 
 if the assured's answers to the company's questions were untrue, the premiums should be 
 forfeited, as well as the policy rendered void. The assured had an alternative claim for 
 the return of the premiums, in case his principal claim to the pohoy moneys should fail, 
 as it did. There can be no doubt that, according to the later decisions, this alternative 
 claim would equally have failed, but it did not become necessary to decide the point in 
 that case, because the insurers had paid the amount of the premiums into court. Five 
 years afterwards, however, in Du/^kett v. Williams (1834), 2 C. & M. 348, where there was a 
 similar condition, the point was distinctly raised, and decided in favour of the insurers : 
 and in Thomson v. Weems (1884), 9 App. Cas. 671, H. L., Lord Blackbuen, at p. 682, said 
 that " it became usual, I do not know when, but at least for the last fifty years, to insert 
 a term in the contract " — he is speaking of life insurance contracts only- — " that, if the 
 statements were untrue, the premiums should be forfeited. That, no doubt, is a hard 
 bargain for the assured, if he has innocently warranted what is not accurate, but if he 
 has warranted it, ' untruth,' without any moral guilt, avoids the insurance, and in 
 Duckett V. Williams, in 1834, it was held, on reasoning to my mind irresistible, that in a 
 declaration substantially as far as regards this point the same as this, what was untrue 
 so as to have the effect of avoiding the insurance, was also untrue so as to cause the 
 forfeiture of the premium." 
 
§§ 232, 233 (relief). 205 
 
 contracts for the sale of land (p). Wtere, on the other hand, the contract is 
 not one which, being voidable only in the first instance, the party com- 
 plaining elects to avoid, but is one which either the parties have agreed in 
 certain events shall be, or the law deems to be, void ab initio, the general 
 rule is directly contrary. In such cases, the money is prima facie not return- 
 able. Of the former species of void contracts, it may be doubted whether 
 there is a single illustration to be found in the authorities ; for, as has already 
 been shown, in every reported case where the parties have provided that the 
 contract shall be void in the event of non-disclosure, misrepresentation, or 
 breach of covenant, the term "void" has, for obvious reasons, been con- 
 strued as "voidable" {q). It has been held, however, that if, in agreeing 
 that the contract shall be void (even on the assumption that voidness, and 
 not mere voidability, was really intended), the parties have also agreed that 
 the money (e.g. a premium) shall not be returned, they have, whilst 
 contracting for voidness, contracted themselves out of its normal conse- 
 quences (r). As to the other species of void contract, the kind of contract 
 which is void for illegality, the money is never returnable except in the event 
 of the contract having been induced by a fraudulent misrepresentation on 
 the one side, and an innocent belief on the other, that the contract was 
 legal (s). Where both parties were honestly ignorant of the illegality, the 
 general rule prevails (t) ; and so also, where both parties were guiltily conscious 
 of the illegahty (u). 
 
 233. Nor will rescission be granted even when complete restitution is 
 practicable as between the immediate parties, if the undoing of the contract 
 would prejudicially affect the rights or interests which any third party has 
 acquired under it, in good faith and for value, whilst it was still unavoided : 
 for this would constitute an obvious injustice to the third party who would 
 thus be punished for no fault of his own, and for the benefit of the person by 
 whose conduct and inaction he was encouraged to acquire those rights and 
 interests (v). The refusal of relief in such a case, whilst operating as an act 
 
 (p) The stipulation may be express, or, in the case of deposits, implied from the mere 
 use of the term " deposit," which has now, from long usage, acquired a definite business 
 connotation, as a sum paid on the understanding that it is not to be returned if the pur- 
 chaser makes default, but is to be absolutely forfeited : see Howe v. Smith (1884), 27 C. D. 
 89, C. A. (at pp. 89, 95, 100-102). 
 
 (g) See § 225, and note (i) thereto, ante. 
 
 (r) Sparenhorg v. Edinburgh Life Insurance Co., [1912] 1 K. B. 195, per Bbay, J., at 
 p. 204. This was not a case of non-disclosure, or even of misrepresentation, but of breach 
 of a condition not to travel beyond specified limits, but the question discussed in the text 
 is independent of the particular event agreed to be a ground of forfeiture. 
 
 (s) As in British Workman's and General Assurance Co. v. Cunliffe (1902), 18 T. L. R. 
 502, C. A. (per Vatjghan Wiluams, L.J., at p. 503) ; Tofts v. Pearl Life Assurance Co. 
 (1913), 30 T. L. R. 212, Div. Ct. {per Bkay, J., at p. 213), affd. (1914), 31 T. L. R. 29, C. A. 
 
 (t) This was the case in Earse v. Pearl Life Assurance Co., [1904] 1 K. B. 558, C. A. ; 
 Phillips V. Royal London MutuMl Insurance Co. (1911), 105 L. T. 136, Div. Ct. ; Evanson v. 
 Croolces (1912), 106 L. T. 264 (Hamilton, J.). 
 
 (u) As in Elson v. Croolces (1912), 106 L. T. 462, Div. Ct. ; Howarth v. Pioneer Life 
 Association (1912), 107 L. T. 155, Div. Ct. 
 
 (v) Glough V. L. <Sc N. W. Railway Co. (1871), L. R. 7 Exoh. 26, Exch. Ch., per Cur., 
 at p. 35 : " if, in the interval while he is deliberating, an innocent third party has acquired 
 an interest in the property . . . , it will preclude him from exercising his right to rescind." 
 
206 CH, m, SECT. 5, SUB-S. (1). 
 
 of bare justice to the third party, cannot be deemed unjust to the party 
 complaining who, though he has actively done no injury to such third party, 
 has at least enabled, if not induced, him to enter into transactions, make 
 payments, incur liabilities, give credit, or otherwise alter his position to his 
 detriment, on the faith of the continued subsistence and validity of the 
 contract which it is sought to annul. The party complaining is, as has been 
 pointed out (w), under no obligation to make his election whether to affirm 
 or avoid the contract within any specified time, or at all : he may sit on the 
 fence and adopt a waiting policy for as long as he pleases, but he does so 
 at his own risk, and cannot complain if in the meantime rights have been 
 acquired by others which must be respected, and which cannot be respected 
 without deipriving him of remedies which otherwise he would have been entitled 
 to enforce against the party charged {x). 
 
 234. Lastly, the rescission must be in toto, or not at all (y), where the 
 contract is one entire and homogeneous thing. In such cases the Court cannot 
 permit itself the generous delicacy of the curate in the story, or afEect to 
 distinguish between the good and bad parts of the egg. Where, however, 
 there are separate and severable covenants or stipulations to be considered, 
 or there are several parties or interests to be dealt with, or the instrument 
 sought to be avoided has more than one object, and may be put in suit in 
 more than one character, the Court may, if the other circumstances of the 
 case justify such an order, rescind one of such covenants or stipulations, 
 without interfering with any other (2), or set aside the contract against one 
 of such parties in respect of some partial or severable interest of the party 
 complaining, without affecting the position of the others or requiring them 
 to be joined (a), or allow the instrument to stand in one of its characters, 
 whilst rescinding it in the character in which it is put forward (b). 
 
 (w) In §§ 216, 217, 218, ante. 
 
 {x) The question is most frequently raised where the contract sought to be rescinded 
 is a contract to take shares in a company which has been induced by misrepresentation. 
 This class of case is fully discussed, with reference to the authorities (which are numerous), 
 in § 310 of the author's Law of Actionable Misrepresentation. 
 
 (y) Myddleton v. Lord Kenyan (1794), 2 Ves. 391 {per Lord Eldon, L.C, at p. 408) ; 
 Beaumont v. Dukes (1822), Jac. 422 ; 23 R. R. 110, a case of defence to specific per- 
 formance {per Pltjmbb, M.R., at p. 426 : " it must stand or fall to the full extent ") ; 
 Clarke y. Dickson (1858), E. B. & E. 148 {per Ceompton, J., at p. 155 : " the plaintiff must 
 rescind in toto or not at aU ") ; Mostyn (Lord) v. West Mostyn Coke & Iron Go. (1876), 1 
 C. P. D. 145, another defence case (per Lindley, J., at p. 154) ; United Shoe Machinery 
 Co. of Canada v. Brunet, [1900] A. C. 330, P. C. (at p. 340). 
 
 (z) As to a deed containing several covenants, which for that purpose may be regarded 
 as two deeds written on one parchment, see Com. Dig. Fait, B. 2, on the authority of which 
 passage Swdwen Eady, J., in Bagot v. Chapman, [1907] 2 Ch. 222, held that the mortgage- 
 deed there in question might be regarded as good quoad one of the covenants, and " ah 
 initio void for the residue " (pp. 227, 228). In Howatson v. Webb, [1908] 1 Ch. 1, C. A., 
 though it was doubted whether the apphoation of the principle to the facts of Bagot v. 
 Chapman was justified, no doubt was thrown on the correctness of the principle itself. 
 
 (a) See the opinion to this effect of Lord Langdale, M.R., at pp. 356, 357 of Barley v. 
 Stone (1840), 3 Beav. 355. 
 
 (6) Thus in Haygarth v. Wearing (1871), L. R. 12 Eq. 320, Wickbns, V.-C, made a 
 declaration that the deed there in question was void as a conveyance, but good as a security. 
 So also, in Re Gomersall (1875), 1 C. D. 137, C. A., affirmed sub nom. Jones v. Gordon (1877), 
 2 App. Gas. 616, H. L., the bills of exchange which were the subject of the proceedings were 
 held to be good as securities for certain portions of their face value, but void as to the residue. 
 
§§ 233-237 (eblief). 207 
 
 235. The above are tke fundamental principles on wkich relief by way of 
 avoidance is granted, or refused, in wHcliever of tte various forms of active 
 proceeding that relief may be sougbt. It remains to consider tbese several 
 forms in order. Tbey comprise, (1) the ordinary action (including counter- 
 claim) for rescission, (2) the action (or counterclaim) for money bad and 
 received, (3) in cases of vendor and purchaser, proceedings under the Vendor 
 and Purchaser Act, 1874, (4) in the like cases, where the sale is by the direc- 
 tion of the Court, applications to be discharged from the contract by way of 
 motion to the Com't directing the sale. 
 
 236. The object of the action (or counterclaim) for rescission being to 
 avoid both the contract itself and also the consequences which have flowed 
 and, but for its avoidance, may flow from it, it follows that the rehef granted 
 will comprise or involve, first, a decision, if not a declaration, that the contract 
 is void, and must be deemed to have been so ab initio (c) ; secondly, an order 
 for the setting aside or cancellation of the contract, and, in certain cases, 
 the physical surrender of the instrument of contract to the party complain- 
 ing (d) ; thirdly, provisions for repayment or retransfer to the party com- 
 plaining of aU moneys, property, or benefits, if any, which the party charged 
 has received under the contract, on the terms of the hke restitution to the 
 party charged of all moneys, property, or benefits, if any, which the party 
 complaining has received thereunder (e) ; and, lastly, such terms, if any, as 
 may reasonably be required in order to protect the parties from future enforce- 
 ment by either of them against the other of any rights derived therefrom (/). 
 
 237. Though not strictly necessary, it is not unusual to prefix to the order 
 for rescission a formal or express declaration that the contract is void (g), 
 the meaning and effect of which is that the contract, though voidable only 
 till that date (A), is, when once declared or adjudged void by the Court, treated 
 as having beeai void from the commencement, so as to nullify all mesne 
 dispositions of property and acts consequential upon the contract which 
 have taken place since it was concluded («). This intervening period may be 
 likened to the " period of relation back " on adjudication of insolvency (j), 
 and, on the other hand, contrasted with the period which elapses between 
 the making of a contract and the date at which, without default of either 
 party, the performance of it in the manner intended becomes impossible by 
 reason of some event which destroys that which was contemplated as its 
 
 (c) See § 237, inf. 
 
 (d) See § 238, inf. 
 
 (e) See § 239, inf. 
 if) Seel 2^10, inf. 
 
 (g) This was done in most of the rescission cases cited in this Chapter. 
 
 (h) See §§ 225, 226, ante. 
 
 (i) Reese River Mining Co. r. Smith (1869), L. R. 4 H. L. 64, per Lord Hatheeley, L.C., 
 at pp. 73, 74, Lord Wbstbuey at pp. 77, 78, and Lord Cairns at p. 8L The same rule 
 applies to the restitution which the party complaining has to make as a condition of relief : 
 e.g. if he has received from the party charged both principal moneys and interest under 
 the contract, he must restore the whole of both, which are treated as making one principal 
 sum, and must pay interest to the party charged on the principal sum so constituted : see 
 Murray v. Palmer (1805), 2 Sch. & Lefr. 472 (at p. 488). 
 
 (;■) See the various treatises on bankruptcy, and the liquidation of companies. 
 
208 CH. Ill, SECT. 5, SUB-S. (1). 
 
 foundation, where the law regards what is past as irrevocably past, and gives 
 neither party any right of recovery or otherwise against the other in respect 
 of any payment, act, or liability, made, done, or incurred during such 
 period (/c). Such declarations are convenient prefaces to, and the logical 
 justifications of, the judicial orders and directions which foUow. Like the 
 preamble to a statute which in strictness incipit a jussione (I), a preface 
 of this kind may be dispensed with, since the order for rescission presupposes 
 a judicial determination to the same efEeot as that which is expressed in a 
 declaration : but, for the prevention of subsequent disputes as to the meaning 
 and grounds of the judgment (if, for instance, res judicata should be set up), 
 it may serve a useful purpose (m), just as a preamble may, in cases of doubt- 
 ful construction, be used as a key to the interpretation of the enactive pro- 
 visions of the statute. And there may even be cases where a declaration 
 is substantially the sole remedy which for the moment is required (m). 
 
 238. Where the contract consists of, or is contained in, more than one 
 document, every one of such documents is the subject of the order for rescis- 
 sion ; and in certain cases, as has already been pointed out, conveyances 
 or other instruments executed for the purpose of completing, or otherwise 
 consequential upon, the contract may be set aside, as well as the contract 
 itself (o). The " tearing up," which is the literal meaning of rescission, is 
 ordinarily understood only in a symbolical sense. But, where the instru- 
 ment is in the physical possession or control of the party charged, he will be 
 directed by the Court to physically deliver it up to be destroyed or can- 
 celled (p), unless its defect or invalidity appears on the face of it, and even 
 
 (k) As in Taylor v. Caldwell (1863), 3 B. & S. 826, and the cases arising out of the post- 
 poned Coronation of King Edward VII., particularly Krdl v. Henry, [1903] 2 K. B. 740, 
 C. A., and Chandler v. Webster, [1904] 1 K. B. 493, C. A. 
 
 {I) Jurists and political philosophers are not at one on the question of the utility of 
 " prologues " or "proems " in legislation : see Plato, Legg. iv, 722, 723, Seneca, Up. 95, 
 Bacon, Dc Angm. Sc, Bk. viii. Aphorisms 65, 69, 70, 71. Modern jurisprudence is (many 
 think, unwisely) hostile to preambles, even to the extent of periodically massacring these 
 innocents in successive Statute Law Revision Acts. 
 
 (m) At p. 478 of Gordon v. Gordon (1821), 3 Swanst. 400 (a family compromise case). 
 Lord ELDOif, L.C., said : "I think the defendant is entitled to have a declaration inserted 
 in the decree of the ground on which I proceed in holding the deeds void. Such declara- 
 tions on the record are always useful, enabling the parties to deal with them as they think 
 right." It took 22 months to settle the decree, which is set out verbatim from the Register 
 Book at pp. 478^82 of the report. Of these five pages, two and a half are occupied with 
 the declarations. It will be observed that Lord Eldon was in this case insisting on the 
 right of the party charged (who was the defendant) to have the declaration, quite irrespec- 
 tively of the right of the party complaining. 
 
 (n) An example of such a case is Brooke v. Lord Mostyn (1865), 3 De G. J. & S. 373, 
 where Tctenee and Knight-Bbucb, LL. JJ., reversing Romilly, M.R., made a declaration 
 that the compromise of a suit for the recovery of a legacy, and the order of the Court 
 approving it, were not binding on the plaintiff, to whom they gave liberty to prosecute 
 such further proceedings as he might be advised. And see Clements v. Hall (1858), 2 
 De G. & J. 173 (where it was a question only of a chief clerk's certificate). Cp. also the 
 case which is cited in note (r) to § 138, inf. 
 
 (o) See the cases cited in the notes to § 230, ante, and also Seynell v. Sprye (1852), 
 1 De G. M. & G. 660 (per Knight-Bbttcb, L. J., at pp. 682, 683, and Lord Ceanwoeth, L. J., 
 at pp. 710, 711), where a contract which would not have been made but for the deed 
 immediately impeached was set aside, as well as the deed itself. 
 
 (p) See, for instance, Eivaz v. Gerussi Bros, dk Go. (1880), 6 Q. B. D. 222, C. A., one of 
 the few cases of marine insurance in which the party complaining was the actor : Traill v. 
 
§§ 237-239 (eelief). 209 
 
 then lie will be required to do so if his conduct is proved to have been of such 
 a character as to render it probable that he may in the future make an un- 
 conscionable use of the instrument by harassing and vexatious (even though 
 hopeless) litigation, or if in any way it may, in his hands, or in the hands of 
 third parties to whom he may transfer it, constitute a " cloud upon the title " 
 of the party complaining, or otherwise hamper him in the enjoyment of his 
 rights (q). And there may even be cases where, though the instrument has 
 been delivered up to, or is in the possession of, the party complaining, such 
 party will still be deemed entitled to an order of the Court for its cancella- 
 tion (r). 
 
 239. Having decreed rescission, the next step in the remedial procedure 
 of the Court is to provide for the undoing of the past on both sides by directions 
 for mutual restoration in specie of all benefits received under the rescinded 
 contract (s). The party charged must repay all moneys (t), and (unless the 
 circumstances are exceptional) with interest (m), and reconvey or retransfer 
 
 Baring (1864), 4 De G. J. & S. 318, and London Assurance Co. v. Mansel (1879), 11 C. D. 
 363 (at p. 372), two of the equally rare instances in life assurance cases of the party com- 
 plaining suing for rescission ; and the vendor and purchaser cases of Gibson v. lyEste 
 (1843), 2 Y. & C. (CH.) 542, and Smith v. Harrison (1857), 26 L. J. (oh.) 412. 
 
 {q) The principal oases in which this topic is debated are : Bromley v. Holland (1802), 
 7 Ves. 3 (per Lord Eldon, L.C, at p. 21) ; Ryan v. Macmath (1819), 3 Brown C. C. 15 {per 
 Lord Thtolow, L.C, at p. 16) ; Duncan v. Worrall (1822), 10 Price 31 (at p. 42) ; Simpson 
 V. Lord Howden (1837), 3 My. & Or. 97 (per Lord Cottenham, L.C, at p. 102) ; Cooper v. 
 Joel (1859), 1 De G. P. & J. 240 {per Lord Campbell, L.C, at pp. 245, 246, differing from 
 R.nMTTT.Y, M.R., in the coiu-t below, reported 27 Beav. 313, on this point, though affirming 
 the decision itself) ; Onions v. Cohen (1865), 2 H. & M. 354 {per Page-Wood, V.-C, at 
 p. 360) ; Hoare v. Bemhridge (1872), 8 Ch. App. 22 {per Lord Selbobne, L.C, at p. 26) ; 
 Brooking v. Maudslay (1888), 38 C D. 636 {per Stikling, J., at pp. 643, 644, 646). The 
 rules stated in the text are now well settled, though in early times equity judges seem to have 
 been somewhat chary of exercising their jurisdiction in this matter, hesitating, as Portia did 
 in a memorable suretyship case {Shylock v. Antonio, reported sub nom. The Merchant of 
 Venice by William Shakespeare, Act IV., So. 1), to lay profane hands on a solemnly 
 executed instrument, or to " tear the bond," except with the consent of the parties. 
 Indeed in that case, even after the declaration of the court that the bond was void for 
 illegality, it does not appear from the narrative of the gifted reporter that it was ordered 
 to be delivered up to the defendant, or that it was in fact destroyed by the learned Nerissa, 
 the acting associate, or any other officer of the Venetian Court. 
 
 {r) As in London & Provincial Marine Insurance Co. v. Seymour (1873), L. R. 17 Eq. 
 85, where the insurance company sued for rescission of two marine policies obtained 
 from them by fraudulent concealment and misrepresentation, and, notwithstanding that 
 they had by the date of the hearing succeeded in two actions brought against them at law 
 on the poUeies, which decisions had been affirmed by the Exchequer Chamber, and not- 
 withstanding, further, that the policies had been given up to them, and were then in their 
 possession, so that no physical cancellation was required. Bacon, V.-G, decreed cancel- 
 lation, observing at pp. 90, 91 : " I cannot hesitate for a moment in making the only 
 decree I am asked for now, viz. that the pohcies which have been dehvered up shall now 
 be cancelled. The plaintiffs to whom the policies have been dehvered are entitled not 
 only to retain possession ol them, but to a decree of the Court that they be now cancelled." 
 (s) If the party charged has received nothing, this element in the relief is not required. 
 On the other hand, if the party complaining has received nothing, the remedy by way of 
 money had and received, or analogous form of action — see § 241, inf. — is open to him, and is 
 often the more appropriate procedure. 
 
 (i) No difficulty ever arises as to this. See, generally, the rescission cases cited in 
 this Section. 
 
 (m) Such interest is regarded as restitution, not damages : Be Metropolitan Coal 
 Consumers Association, Karberg's Case, [1892] 3 Ch. 1, C A., at p. 17. As to the rate of 
 interest, the practice has not been uniform. Where fraud or misconduct is shown, the 
 rate now usually allowed is 5 per cent, : see Capel <Ss Co. v. Sim's Ships Composition Co. 
 
 B.N.D. P 
 
210 CH. Ill, SECT. 5, SUB-S. (1). 
 
 or redeliver (by appropriate instruments, where necessary) all property and 
 rights, whether in possession or in action, which he has received (v), on the 
 terms that the party complaining do on his part make a corresponding 
 restoration or allowance in account (w). For this purpose, all necessary 
 accounts and inquiries will be directed (a;). The party charged must in- 
 demnify the party complaining against all payments made or liabilities 
 incurred under the contract, but he is under no obligation to make good 
 to him any loss or liability not strictly incurred under, though arising " out 
 of," the contract, for the latter expression, if construed literally, would 
 be wide enough to include damages in the ordinary sense, which are clearly 
 not recoverable in rescission proceedings (y). In certain vendor and 
 
 (1888), 58 L. T. 807 (per Kbkewich, J., at p. 811) ; Greenwood v. Leather Shod Wheel Co., 
 [1900] 1 Ch. 421, C. A. On the other hand, in Rawlins y. Wichham (1853), 3 De G. & J. 
 304, Aheraman Ironworks, Ltd. v. Wickens (1868), 4 Ch. App. 101, and Nev^igging v. Adam 
 (1886), 34 C. D. 582, C. A., 4 per cent, only was given. And this is the usual rate where 
 the deposit is ordered to be returned on the rescission of a contract for the sale of land : 
 Jacobs V. Revell, [1900] 2 Ch. 858. In Henderson v. Lacon (1868), L. B. 5 Eq. 249, Page- 
 Wood, V.-C, for some reason (not stated) disallowed interest altogether (pp. 263, 264). 
 
 (v) This also is ordinary practice. See generally the rescission cases cited in this 
 Section. 
 
 (w) To take the most common examples : where the contract set aside is a contract 
 to buy or take shares, the party complaining, if a purchaser, must retransfer the shares, 
 and repay, or allow in account, any dividends he has received in respect of them, and 
 indemnify the party charged against future liability thereunder, as in Stainiank v. Fernley 
 (1839), 9 Sim. 556. Where the contract is one of insurance, the insurer is required, in 
 the absence of fraud or illegality, or express agreement to the contrary (see § 232, ante), 
 to return the premiums. Where the contract is one of sale, the party complaining, if he is 
 the vendor, must return the purchase-money, or any instalment thereof which he has 
 received (see the oases cited in the notes to § 259, post), but not, as a rule, the deposit (for 
 the reasons given in § 232, note (p), ante), and must allow the costs of repairs or work done 
 by the party charged to or on the property, if a chattel, or of permanent improvements 
 thereto, if land: see Chesterfield (Earl) v. Harding (1911), "Times," 2nd March (per 
 Wabeington, J.) as to chattels, and Addis v. Campbell (1841), 4 Beav. 401, and Haygarth 
 V. Wearing (1871), L. R. 12 Eq. 320, as to land. If a purchaser, the party complaining 
 must retransfer all property of which he is in possession under the rescinded contract. 
 Where the party complaining has to restore money received under the contract, he must 
 do so with interest, even where the party charged has been guilty of fraud : see Chesterfield 
 (Earl) V. Harding, sup. (where Waebdigton, J., fixed the rate of interest at 5 per cent., 
 even in the case of a grossly defrauded vendor) : and, where he has received principal and 
 interest under the contract, the two are massed together as one new principal sum, on 
 which, and not merely on the original principal, he is required to pay interest to the party 
 charged, as the condition of rescission : Murray v. Palmer (1805), 2 Sch. & Lefr. 472 (at 
 p. 488). Where the property received under the contract is not money, and the party 
 complaining finds himself unable to restore it in specie, he is without remedy altogether, 
 as has already been explained : see § 231, ante. 
 
 (x) &&e Addis Y. Campbell, sup., Haygarth y. TTfionrejr, sap., and generally, the rescission 
 oases cited in this Section. 
 
 (y) In Newbigging v. Adam (1886), 34 C. D. 582, C. A., this question was elaborately 
 discussed. The qualified proposition stated in the text represents the view of Bowen, L. J. 
 Some of the expressions used by Cotton, L. J. (at pp. 588-590), possibly, and the observa- 
 tions of Fry, L.J. (at p. 596), are of a wider and more unqualified character. In the 
 House of Lords, this case, suh nom. Adam v. Newbigging (1888), 13 App. Cas. 309, H. L., 
 was so dealt with that it became unnecessary to decide the point in question, and Lord 
 Watson (p. 324), and Lord Hbeschell (p. 341), expressly declined to deliver any opinion 
 upon it. In Whittington v. Seale-Hayne (1900), 82 L. T. 49, Farwell, J., after calling 
 attention to the divergent language of the judgments delivered in the C. A. in Newbigging 
 V. Adam, sup., expressed his preference for that of Bowbn, L.J., and held accordingly 
 that the plaintiffs, who had been induced to take a lease of premises by misrepresentation, 
 and on that ground were entitled to rescission and consequential relief, had a right, as 
 
§§ 239, 240 (relief). 211 
 
 purchaser cases, the purchaser may be allowed the costs of investigating the 
 title, and, where the purchase has been completed, the costs, charges and 
 expenses to which he has been put in consequence of, or incidental to, the 
 purchase and the conveyance (2). 
 
 240. Where the party complaining requires protection from possible 
 attempts in the future on the part of the party charged to enforce against 
 him any term of the rescinded contract, or to deal with property acquired 
 by him thereunder as if there had been no rescission, a perpetual injunction 
 may be granted at the trial in terms adequate to meet the particular mischief 
 apprehended ; as, for instance, to restrain the party charged from trans- 
 ferring shares (a), or making calls (h), in cases of purchase of, or subscription 
 for, shares in companies, or from parting with furniture of which possession 
 has been obtained under a lease which has been set aside (c). Further the 
 party complaining is entitled, on proper terms, to an interlocutory injunction 
 restraining the party charged until the trial of the action from forfeiting 
 property of the party complaining under powers conferred by the contract 
 sought to be rescinded, which contract the party complaining has repudiated, 
 and therefore cannot consistently with the attitude he has taken up recognize. 
 By such an order an ingenious manoeuvre of companies, when sued by a 
 shareholder for rescission of a contract to take shares on the ground of fraud, 
 may now be frustrated. The device is of this nature. As soon as the share- 
 holder repudiates his contract, which involves the necessity of refusing 
 to pay calls, since such payment would be evidence of affirmation, 
 the company, pursuant to the contract contained in its articles of associa- 
 tion, purports to forfeit the shares with the view of doubly entrenching 
 itself ; the idea being that, even if the party complaining succeeds, it 
 will be no worse of! by reason of the forfeiture, whilst, if he should fail, and 
 then claim to retain the benefits and exercise the rights secured to him under 
 the contract which in that event would be held to be vaUd, it will be in a 
 position to retort upon him that the contract has been determined pursuant 
 to its terms. To meet this stratagem, it has now been held that an inter- 
 locutory injunction may be granted to a plaintifi in such circumstances, on 
 his paying the amount of the calls into court, and undertaking in damages ; 
 so that, if he be unable to establish a case for rescission at the trial, neither 
 
 part of such consequential relief, to an indemnity against the costs incurred by them in 
 connection with the requirements of the local authority that the premises should be put 
 into a sanitary state of repair, and against rent, rates, and taxes, and expenses of repairs 
 generally, but not to payment of the value of stock lost during their occupation of the 
 premises (which they had taken for breeding priz3 poultry), or of their loss of profit on 
 the sale of such stock, loss of breeding season, &c., the latter being " losses arising out of 
 the contract " generally, in other words damages, rather than a mere indemnity against 
 payments and liabilities " so far as regards the rights and obligations which had been 
 created by tha contract." That damages, as distinct from indemnity and restitution, 
 are not recoverable in any proceedings for rescission, which means that they are not 
 recoverable at all where the ground of rescission is non-disclosure, has never been doubted t 
 see § 22.S, note (y), ante. 
 
 (z) See § 250, and note (b) thereto, post. 
 
 (a) Walsham v. Stainfon (1863), 1 De G. J. & S. 678. 
 
 (6) Henderson v. Lacon (1868), L. R. 5 Eq. 249. 
 
 (c) Lempriere v. Lange (1879), 12 C. D. 675. 
 
212 CH. Ill, SECT. 5, SUB-S. (1). 
 
 party is prejudiced : the sharetolder still holds his unforfeited shares, and 
 the company has, ready to be paid out to it, the amount of the calls, and also 
 an imdertaking to satisfy any damage it may have sustained {<!). 
 
 241. The second form of active proceedings which may be instituted by 
 the party complaining is the action (or counterclaim) for money had and 
 received, or for the delivery of property, without asking for rescission of the 
 contract. This form of proceeding is properly resorted to where the party 
 complaining has received nothing under the contract, and has nothing there- 
 fore to restore to the party charged as the condition of relief, but has paid 
 money or transferred property thereunder, and where the only concern of 
 the party complaining is to get back his money or property, and no judicial 
 rescission is necessary (e) ; or where the party charged is not attempting 
 or intending to enforce the contract (/), or has abandoned it (g), in which 
 circumstances again a formal order to set aside the contract is not needed. 
 In any such proceeding, whether by way of action or counterclaim, or, 
 where authorized by statute (as in certain cases of life insurance), in the 
 form of a claim before a court of summary jurisdiction {h), relief is given 
 
 {d) This was the decision of Neville, J., in Lanib v. Sambas Rvhher and Outla Percha 
 Co., [1908] 1 Ch. 845, and of the C. A. in Jones v. Pacaya Mubber & Produce Co., [1911] 
 1 K. B. 455, C. A. (see the observations of Buckley, L.J., at pp. 457, 458), overruhng 
 Ripley v. Paper Bottle Co. (1887), 57 L. J. (oh.) 327. 
 
 (e) See Re Ruby Consolidated Mining Co., Askew's Case (1874), 9 Ch. App. 664, where 
 relief in the nature of rescission, under s. 32 of the Companies Consolidation Act, 1908 
 (6 Edw. 7, c. 69), was refused on the ground that, the shares having been fully paid, 
 rectification of the register was out of the question, the proper remedy being an action for 
 money had and received. In London and Provincial Marine Insurance Co. v. Seymour 
 (1873), L. R. 17 Eq. 85 — as to which see note (r) to § 238, ante — canceUatiou was decreed, 
 though the plaintiff had succeeded when sued at law, and the poUcies had been 
 deUvered up to them. But the circumstances of this case were somewhat exceptional. 
 In Oelkers v. EUis, [1914] 2 K. B. 139, though rescission was formally claimed, it was quite 
 unnecessary to ask for it at the trial, the contract not having been performed, and return 
 of the money being sufficient rehef. 
 
 (/) As in Flight v. Booth (1834), 1 Bing. (n.o.) 370, where before the arbitrator the 
 defendant had put forward no claim under the contract (see p. 373). 
 
 {g) As in Garlish v. Salt, [1906] 1 Ch. 335, where the defendants had themselves treated 
 the contract as abandoned, and had pulled down the premises the subject of the sale. 
 
 {h) By s. 7 of the Collecting Societies and Industrial Assurance Companies Act, 1896 
 (59 & 60 Vict. 0. 26), it is provided that " in all disputes between ... an industrial 
 assurance company and any member or person insured, or any person claiming through a 
 member or person insured, or under the rules, that member or person may, notwithstanding 
 any provisions of the rules of the society to the contrary, apply to . . . the court of 
 summary jurisdiction for the place where that member or other person resides, and the 
 court may settle that dispute," &c. An "industrial assurance company" is defined 
 by s. 1 (b) as including " every such . . . person or body of persons, whether corporate or 
 nnincorporate, granting insurances on any one life for a less sum than twenty pounds . . . 
 as receives contributions or premiums by means of collectors at a greater distance than 
 ten miles from the . . . principal place of business of the . . . company, and ... at 
 less periodical intervals than two months." This has been construed to mean, though 
 the section does not say so in terms, that a company, though answering to the statutory 
 description, is only subject to the jurisdiction of the magistrates where the poUcy in 
 respect of which the jurisdiction is invoked is for less than £20 : Cowling v. Topping, 
 [1906] 1 K. B. 466, Div. Ct. "Disputes" under this provision would obviously include a 
 claim for return of premiums, as well as a claim for the policy moneys, and such claims 
 were the subject of appUcations to a court of summary jurisdiction in British Workman's 
 and General Assurance Co. v. Cunliffe (1902), 18 T. L. R. 502, C. A., and in Phillips v. 
 Royal London Mutual Insurance Co. (1911), 105 L. T. 136, Div. Ct. It wiU be observed 
 that the assured obtains at least two advantages by resorting to the statutory procedure : 
 
§§ 240-242 (relief). 213 
 
 or witkLeld on precisely the same principles as in an ordinary action (or 
 counterclaim) for rescission (i) ; for obviously the question of the title to 
 relief can in no way be affected by the mere circumstance that in the one 
 class of case the judicial treatment of the contract as vitiated and vacated 
 by the non-disclosure, or misrepresentation, or whatever the invalidating 
 cause may be, results in bilateral restitution, and, in the other, results in 
 unilateral rescission only. Where it is sought to recover money only, as, for 
 instance, sums paid by way of deposit, or on account of purchase-money, 
 in contracts of sale and purchase (j), or premiums under insurance policies (h), 
 or application and allotment moneys in respect of shares in companies (I), 
 or other moneys (m), the claim, or counterclaim (w), is for money had and 
 received, which is recoverable with interest if the money was both " obtained 
 by fraud, and retained by fraud," but otherwise without interest (o). Where 
 it is sought to recover property other than money, e.g. goods, which the party 
 complaining has parted with under the contract, without having received 
 anything in exchange, and therefore without having anything to restore, 
 the remedy is trover or detinue (p), or other like form of proceeding (5'). 
 
 242. The third and fourth kinds of active proceeding which, as above- 
 mentioned, are available to the party complaining, viz. an application under 
 the Vendor and Purchaser Act, 1874, and an application by a purchaser of 
 property sold by direction of a court in any cause or matter to the court 
 directing the sale for an order discharging him from the purchase, are special 
 
 in the first place, he can apply to the court nearest to his, and not the company's, 
 residence or place of business, and secondly, he cannot be excluded by the rules from his 
 right to apply to this tribunal. 
 
 (i) See Flight v. Booth, sup. (per Ttndal, C.J., dehvering the judgment of the Court, 
 at pp. 375, 376) ; Stone v. City & County Bank (1877), 3 C. P. D. 282, C. A. (per Brett, 
 L.J., at pp. 309, 310, and Cottgit, L.J., at p. 312, affirming the views of Lindley, J., 
 in the court below, at p. 294) ; Manners v. Whitehead (1898), 1 T. 171. 
 0') See §§ 250, 251, post. 
 
 (Jc) There is no reported case of an assured suing for a return of premium on the ground 
 of non-disclosure by the insurer, because, ordinarily, no duty of disclosure lies upon 
 the latter : but, as Lord Mansfield, C.J., pointed out — see § 89, and note (/) thereto, 
 ante, — there might very well be special circumstances which woidd cast such a duty upon 
 him, in which case the remedy of the assured would be an action for money had and received, 
 as it is where the assured claims a return of the premiums on the ground of the insurer's 
 fraudulent misrepresentation of the vahdity of the policy, or of the right of the assured to a 
 free policy at the expiration of a certain period : see British Workman's and General 
 Assurance Co. v. Cunliffe, sup., and Kettlewell v. Refuge Assurance Co., [1908] 1 K. B. 545, 
 C. A., " silently aifirmed " in Dom. Proc, sub nom., Refuge Assurance Co. v. Kettlewell, 
 [1909] A. 0. 243, H. L. 
 
 (l) Stone V. City & County Bank, sup. ; Be Ruby Consolidated Mining Co., Askew's 
 Case, sup. 
 
 (m) See the following miscellaneous cases, where the ground on which the money was 
 returnable was misrepresentation : Duffel v. Wilson (1808), 1 Campb. 401 (money paid 
 to insure the plaintiff against being drawn for the mihtia) ; Blair v. Bromley (1847), 
 2 Ph. 354 (a sum paid for investment in a mortgage) ; Moss & Co. v. Swansea Corporation 
 (1910), 74 J. P. 367 (a deposit paid to secure the performance of a contract); Burdett 
 V. Home et ux. (1911), 28 T. L. R. 83, C. A. (subscriptions to various schemes). 
 (n) Heywood v. Mallalien (1883), 25 C. D. 357, was a case of counterclaim. 
 (0) Johnson v. Regem, [1904] A. C. 817, P. C, at pp. 821, 822. 
 Ip) Jones V. Keene (1841), 2 M. & Bob. 348 ; 62 R. R. 804 (trover for a life policy). 
 (q) Moorhouse v. Woolfe (1882), 46 L. T. 374 (where the plaintiff sued a moneylender 
 for delivery up of a bill of sale obtained by misrepresentation, he having repaid the whole 
 of the money due with interest at the rate represented to be the rate charged). 
 
214 CH. Ill, SECT. 5, SUB-SS. (1), (2). 
 
 to contracts of sale and purchase, and will be dealt witk hereafter when the 
 nature of the remedies for non-disclosure in relation to this particular species 
 of contract is separately considered (r). 
 
 Subs. (2). Defensive Proceedings availaUe to the Party Complaining. 
 
 243. Subject to the qualifications mentioned below (s), it may be stated 
 broadly that, whenever the party complaining is in a position to obtain 
 rescission of any contract on the ground of non-disclosure, he is equally in a 
 position to establish a valid defence or answer on the same ground to any 
 proceeding instituted against him by the party charged under or in respect 
 of such contract, whether the proceeding be for specific performance (t), 
 or for the direct, though not the specific, enforcement of the contract by 
 recovery of a debt due thereunder (m), or for the indirect enforcement of it by 
 recovery of damages for breach (v). The non-disclosure in such cases may 
 be set up not only as a defence to any action brought, but also as a reply 
 or answer to any counterclaim pleaded, or affirmative case set up, by the party 
 charged (w). It may be insisted on as an answer to applications as well 
 as actions (x). It is immaterial whether the party complaining does, or 
 does not, add to his defence or answer a counterclaim for rescission or analo- 
 gous relief. He may, if he pleases (y), but he is not in the least bound to 
 do so (2). 
 
 (r) See §§ 251, 252, post. 
 
 (s) See §§ 245, 246, inf. 
 
 (f) For examples of successful defences on the ground of non-disclosure to actions for 
 specific performance, see the compromise case of Re Boberis, [1905] 1 Ch. 704, C. A., and 
 the vendor and purchaser cases cited in the notes to § 245, post. 
 
 {u) Where the party complaining has succeeded in insurance or suretyship cases, he has 
 almost invariably done so by way of defence to an action for the policy moneys, or to an 
 action on the guarantee : see §§ 249, 254, post. Mostyn (Lord) v. West Mostyn Coke <b 
 Iron Co. (1876), 1 C. P. D. 145, is an instance of a successful defence to an action for 
 rent. In Evans v. Edmonds (1853), 13 C. B. 777, the party complaining set up and made 
 good a defence to a claim for arrears of annuity under a separation deed. In AUis 
 Chalmers Co. v. Fidelity and Deposit Co. of Maryland (1913), 30 T. L. R. 445, C. A., and in 
 Thornton-Smith -V. Motor Union Insurance Go. (1913), 30 T. L. R. 139, the defence was to 
 an action claiming a declaration that the policy was valid and subsisting. 
 
 (v) Instances of defences to actions for damages are the vendor and purchaser cases of 
 Ellis V. Hogers (1885), 29 C. D. 661, C. A., and Molyneux v. Hawtrey, [1903] 2 K. B. 487, 
 C A., and the breach of contract to marry oases cited in note (/) to § 257, post. 
 
 (w) As in the vendor and purchaser cases of Fothergill v. Phillips (1871), 6 Ch. App. 
 770, and Nottingham Patent Brick cfc Tile Co. v. Butler (1886), 16 Q. B. D. 778, C. A. : also 
 in the release or compromise cases of M'Carthy v. Decaix (1831), 2 Russ. & M. 614, and 
 Gilbert v. Endean (1878), 9 C. D. 259, C. A. 
 
 (x) As, for example, to applications under the Vendor and Purchaser Act, 1874 (see 
 § 251, post), or to proceedings under 0. XIV : see Se General Railway Syndicate, Whitdey's 
 Case, [1900] 1 Ch. 365. 
 
 (y) A counterclaim for the return of the deposit, with interest, was added to the 
 defence to an action of specific performance in Heywood v. Mallalieu (1883), 25 C. D. 357, 
 and Re Roberts, [1905] 1 Ch. 704, C. A. ; and in each case the party complaining succeeded 
 both in defence and counterclaim. So also in Shepherd v. Croft, [1911] 1 Ch. 521, though 
 there both defence and counterclaim failed. Cp. the misrepresentation cases of Redgrave 
 V. Hurd (1881), 20 C. D. 1, C. A ; Smith v. Land and House Property Corporation (1884), 
 27 C. D. 7, C. A. ; Components Tube Co. v. Naylor, [1900] 2 Ir. R. 1, where both defence 
 and counterclaim were made good. 
 
 (z) In marine insurance actions, for example, it is not the practice to do so, for obviously 
 it would serve no useful purpose in such cases. 
 
§§ 242-245 (relief). 215 
 
 244. With the two exceptions mentioned below (a), the party com- 
 plaining who rehes upon non-disclosure as a defence or answer must allege 
 and establish precisely the same facts and matters as those which the party 
 complaining who relies upon non-disclosure as a ground for rescission is 
 required to allege and establish (6), and the evidence which is necessary and 
 sufficient for the latter purpose is necessary and sufficient for the former (c). 
 Further, all such evidence as is essential and adequate to sustain any of the 
 recognized affirmative pleas to active proceedings for relief ((Z), is equally 
 essential and adequate to support an affirmative reply or answer to any case 
 of non-disclosure raised by way of defence to an action on the contract (e). 
 
 245. The first of the above-mentioned exceptions arises where non-disclo- 
 sure is set up by the party complaining as an answer to a claim for specific 
 performance. In such cases it is not always necessary to prove as much as 
 would be required if the party complaining were suing for rescission (/). 
 The reason for this divergence in practice will be apparent from a considera- 
 tion of the essential distinction between proceedings for the specific perform- 
 ance of a contract and proceedings for its enforcement otherwise than in 
 specie. In the latter case, the party is entitled, if his cause of action is estab- 
 lished, to the relief he claims ex dehito justitice, and the other party can only 
 invalidate this absolute title by strict proof of all facts required to negative 
 the validity of the contract itself, — in other words, by proof of everything 
 which it would be incumbent on him to establish in an action to rescind the 
 contract ; whereas, specific performance being a particular form of equitable 
 remedy which it is within the discretion of the Court to grant or to refuse, 
 either wholly or upon such terms and conditions as may appear in the 
 circumstances of the particular case just and convenient, less evidence of 
 questionable or unfair dealing will induce the Court to decline the exercise 
 of the discretionary jurisdiction thus invoked, and to withhold from the 
 party charged a form of remedy which is, in a sense, almost an indulgence, 
 than will induce it to adjudge and declare, at the instance of the party 
 
 {a) Which are dealt with in §§ 245, 246, inf. 
 
 (b) These are the subject of Sect. 3, ante. 
 
 (c) The cases cited in the notes to Sect. 3, ante, as authorities for the rules there stated 
 as to the burden of proof which rests on the party complaining, include cases of defence, 
 as well as oases of active proceedings. 
 
 (d) See Sect. 4, ante. 
 
 (e) See the cases, generally, cited in the notes to Sect. 4, ante, which are quite as often 
 cases of affirmative answers to defences setting up non-disclosui-e, as defences to actions 
 claiming rescission on that ground. In note {x) to § 206, and note (a) to § 207, ante, the two 
 species of case are separately classified. Illustrations of the same identity of rules in 
 cases of misrepresentation are given in note (n) to § 341 of the author's Law of Actionable 
 Misrepresentation. 
 
 if) Be Banister (1879), 12 C. D. 131, G A. (per Jbssbl, M.R., at p. 142 : " the con- 
 siderations which induce a court to rescind any contract, and the considerations which 
 induce a court of equity to decline to enforce specific performance, are by no means the 
 same ") ; Be Terry and White's Contract (1886), 32 C. D. 14, C. A. (per Lindley, L.J., at 
 p. 27 : " in all applications to the court involving the exercise of that discretion which the 
 court invariably does exercise in ordering or refusing specific performance, it is necessary 
 not to confound the principles or rules by which contracts are interpreted with the 
 principles or rules which guide the court in enforcing or declining to eirforce specific 
 performance "). 
 
216 CH. Ill, SECT. 5, SUB-S. (2). 
 
 complaining, that tte contract is wtoUy and for all purposes unenforceable. 
 Or, inverting the proposition, more evidence of fair dealing on the part of 
 the party charged is required to entitle him to this special relief, where unfair 
 dealing or want of candour is suggested by the party complaining, than where 
 the ordinary remedies only are in question {g). It cannot be said that this 
 rule is in the slightest degree unjust to the party charged, since he is not 
 being deprived of all possible relief for ever, as he is when rescission is decreed 
 against him : he is still at liberty to proceed against the party complaining 
 by way of alternative claim for damages (h), from which claim the party 
 complaining cannot escape by proving less than what is essential to prove in 
 proceedings for rescission ; and thus the party complaining, though his 
 burden of proof may be less when resisting specific performance than when 
 resisting any other mode of enforcing the contract, obtains a correspondingly 
 less complete and final measure of relief when he has discharged that burden. 
 Moreover, it is always open to the Court, in a proper case, instead of absolutely 
 refusing specific performance, to refuse it only in the event of the party 
 charged declining to make pecuniary compensation or allowance to the party 
 complaining, or to submit to any other terms which in the circimastances 
 may be deemed equitable (i). The party charged in such cases is given an 
 option of obtaining equity on doing equity, which is the fundamental con- 
 dition of all discretionary relief (j). 
 
 (g) Cadman v. Horner (1810), 18 Ves. 10, per Grant, M.E., at pp. 11, 12 : " if upon the 
 evidence the plaintiff " — ^in a suit for specific performance — " has been guilty of a degree 
 of misrepresentation, operating to a certain, though a small, extent, that misrepresentation 
 disqualifies him from caUing for the aid of a court of equity. . . . He must, to entitle him 
 to relief, be liable to no imputation in the transaction " ; and such a case is to be sharply 
 distinguished from " a case where the court is called upon to rescind an agreement . . . 
 which would admit of a different consideration "). In accordance with these views, the 
 House of Lords in Wildev. Gibson (1848), 1 H. L. C. 605, whilst refusing rescission, conceded 
 that the party complaining might have succeeded if he had been merely resisting specific 
 performance (per Lord Cottenham, L.O., at pp. 616, 617 : " the contract of purchase is 
 perfected by a conveyance. To be relieved against that, fraudulent concealment must 
 be shown. This is differentfrom a bill by the vendor for specific performance of the contract "). 
 The relief given to the party complaining in Ellard v. Lord Llandaff (1810), 1 BaU & B. 
 241, and in Walters v. Morgan (1861), 3 Be G. P. & J. 718, was put upon the ground that 
 he was a defendant to a suit for specific performance, and, in the former case at any rate, 
 can only be justified on that ground : see Sect. 8, Sub-s. (4), post. 
 
 (h) The Court has now power to give damages not only in lieu of, or in addition to, 
 specific performance, where there is a case for such latter form of reUef, but also as an 
 alternative thereto, where there is no such case. See Fry's Specific Performance, § 1306. 
 In earUer times, the party was remitted to his remedy at law. 
 
 (j) Thus specific performance was only granted on such terms in Scott v. Hanson (1829), 
 1 Russ. & M. 128 (Lord Eldon, L.C); King v. Wilson (1843), 6 Beav. 124 {per Lord 
 Langdale, M.R., at pp. 128, 129) ; Hughes v. Jones (1861), 3 Be G. F. & J. 307 {per 
 Knioht-Bbtjoe and Turner, LL.JJ.). Of course no reference is intended to be made in 
 the text to the class of case dealt with in §§ 206, 207, ante, where compensation is a term 
 of the contract, to which wholly different considerations apply. 
 
 {j) It must not be supposed, however, that the party charged has an absolute right to 
 specific performance with an abatement or an allowance in the absence of an express con- 
 dition in the contract to that effect, nor on the other hand, that the party complaining, 
 in the absence of such a condition, or if there is a condition excluding him from compensa- 
 tion, can claim as his right an order for specific performance with an abatement of price, 
 though he may be in a position to resist an application for specific performancs without 
 abatement, or to obtain rescission, if he asks for it : see Cordingley v. Cheeseborough (1862), 
 3 Giff. 496 ; 4 De G. F. & J. 379 ; He Terry and White's Contract (1886), 32 C. D. 14, C. A. 
 
§§ 245-247 (relief). 217 
 
 246. Tke second of the exceptions referred to concerns pleading, rather 
 than substance. It has been held that, where the party complaining is the actor 
 in proceedings for rescission, it is not, but, where he is on the defensive, it 
 IS, incumbent on him to allege in his pleading that from the time when he 
 first acquired knowledge of the undisclosed fact, he has taken no benefit, 
 exercised no right, made no claim, and recognized no interest or liability, 
 under or in respect of the contract on which he is being sued (k). 
 
 247. It should be noted that though, if not sued at once on the contract (Z), 
 it may be justifiable and prudent to remain on the defensive where there is 
 a doubt whether the evidence in the possession of the party complaining is 
 sufficient to obtain rescission, it is by no means wise to do so where there 
 IS no such doubt ; for, generally speaking, the party complaining who comes 
 promptly to the Court to annul the contract before the actual accrual of 
 any liability thereunder has a better equity to relief than he who waits to be 
 sued on such accrual (to). 
 
 (per^ LiNDLEY, L.J., at pp. 30, 31) ; Re Hare and O'More's Contract, [1901] 1 Ch. 93 ; 
 Ery's Specific Performance, §§ 1213-1238. And, where it appears to the court that it is 
 impossible to estimate the compensation or allowance, or that for any other reason the 
 case is not one for a qualified refusal or a conditional grant, specific performance is refused 
 absolutely, or granted absolutely, as the case may be, and the decree of the court is that of 
 Portia in Shylock t. Antonio : " Thou shalt have nothing but the forfeiture, To be so taken 
 at thy peril, Jew." See KnatchbuU t. Krueger (1815), 1 Madd. 153 ; Beaumont v. Dukea 
 (1822), Jac. 422 ; 23 R. R. 110 {per Plumbr, M.R., at p. 426) ; White v. Cuddon (1842), 
 8 CI. & Pin. 766 (at pp. 786, 792-794) ; Brooke (Lord) v. Rounthwaite (1846), 5 Hare 298 
 {per WiGRAM, V.-C, at pp. 303-305). 
 
 {k) The mere allegation in the plea that the party complaining is then and thereby 
 electing to avoid the contract is a sufficient act of repudiation : Clough, v. L. dh N. W. 
 Railway Co. (1871), L. R. 7 Exch. 26, 36, Exch. Ch. But it appears to have been held that 
 this allegation is not enough without going on to make the additional averments referred 
 to in the text. A plea containing these additional averments was held good in Bwlch-y- 
 Plwm Lead Mining Co. v. Baynes (1867), L. R. 2 Exch. 324. Pleas omitting them were 
 held bad in Deposit Life Assurance Co. v. Ayscough (1856), 6 E. & B. 761 {per Lord Camp- 
 bell, C.J., at p. 763, Coleridge, J., at pp. 763, 764, and Cbompton, J., at p. 764) ; 
 Meldon v. Lawless (1870), 18 W. R. 261 ; Anderson v. Costello (1871), 19 W. R. 628. In 
 Dawes v. Harness (1875), L. R. 10 C. P. 166, it was held that, after verdict, the plea must 
 be taken to have included these averments, because otherwise it would have been bad. So in 
 the non-disclosure ease (the preceding being all misrepresentation cases) of Mostyn (Lord) v. 
 West Mostyn Coke c& Iron Co. (1876), 1 C. P. D. 145, Lindley, J., at p. 154, though doubting 
 whether the plea was not defective, expressed the opinion that it was to be taken as if the 
 necessary averments had been made. In Aaron's Reefs, Ltd. v. Twiss, [1896] A. C. 273, 
 H. L., where the allegations in question had been omitted from the defence, which did not, 
 moreover, even allege repudiation, the contract had been put an end to by forfeiture of the 
 shares, so that from that time, there being nothing to repudiate, repudiation would have 
 been an idle and illogical proceeding, and " there was no evidence, or contention, that the 
 defendant had adhered to the contract " ■- no valid objection, therefore, could be raised 
 to the plea under these special circumstances, though otherwise there might have been 
 {per Lord Halsbtjey, L.C., at pp. 277-279, who refers to the decision in Deposit Life 
 Assurance Co. v. Ayscough, sup., without any disapproval). 
 
 {I) As from the nature of the case he invariably is, in certain classes of contract, 
 e.g., marine insurance. 
 
 (m) Fenn v. Craig (1838), 3 Y. & C. (Eq. Exch.) 216 {per Alderson, B., at p. 222 : 
 " it seems to me that, if the allegations in the bin are taken to be true, the contract ought 
 to be rescinded ; and that, with reference to that rehef, the plaintiffs stand in a better 
 position now than they would have done after the death of the party had occurred "). 
 The observations in the text are, of course, inapphcable to a case where the contract has 
 been put an end to by the party charged : Aaron's Reefs, Ltd. v. Twiss, sup. {per Lord 
 MACJTAGHTEisr at p. 293). In any such case, indeed, it would seem illogical to ask for 
 rescission of that which ex hypothesi does not exist : see § 228, ante. 
 
218 CH. Ill, SECT. 5, SUB-S. (3). 
 
 Subs. (3). What Remedies are Respectively Appropriate to the Several Classes 
 of Case mentioned in this Chapter. 
 
 248. The general nature of the proceedings available to the party com- 
 plaining, whether by way of ofEence or defence, having been described, it 
 remains to discuss the suitability of these various remedies to the seven 
 classes of transaction with which the present Chapter is concerned {n). 
 
 249. For obvious reasons of mercantile convenience, in cases of insurance, 
 whether marine (a), or life (p), the party complaining almost invariably 
 asserts his rights by way of defence to an action on the policy. It is never- 
 theless in theory open to the insurer to sue for rescission, or (if the loss has been 
 paid) for recovery of the sums so paid as money had and received ; and 
 in a very few exceptional cases this procedure has been adopted both by 
 underwriters (q) and by life insurance companies (r) ; whilst, in the rare, but 
 conceivable, event of the assured being in a position to set up non-disclosure 
 against the insurer, it is obvious that his remedy must be by way of active 
 proceedings (>«). A very curious form of halting or partial relief in cases of 
 marine insurance, devised by Lord Ellenboeough, C.J., in the year 1813, 
 which failed to survive the deadly criticism passed upon it in judicial obser- 
 vations of a later date, may be mentioned here, as having at least some 
 historical interest. The theory referred to was that an injury to a vessel 
 may be a fact not so material as that the non-communication of it to the 
 underwriter will render the policy void, but yet sufficiently material to justify 
 a decision that such injury may be deemed " excepted out of the policy," 
 tliat is to say, something which in contemplation of law the underwriters 
 must be supposed not to have insured against (t). The result of this amazing 
 decision would be that the assured would be worse off in the case of a partially 
 or doubtfully material concealment, than in the case of one which is proved 
 
 (ji) Which form the subject of Sub-s. (2)-(8), respectively, of Sect. 2, ante. 
 
 (o) All the marine insm-ance cases cited in the notes to §§ 99-101, ante, are cases of 
 defence, except those mentioned in note {q), inf. 
 
 (p) The life and fire and other insurance cases cited in the notes to §§ 102-104, ante, 
 are all cases of defence, except those mentioned in note (r), inf. 
 
 (q) As in Court v. Martineau (1782), 3 Dougl. (k.b.) 161 (action for return of money 
 paid as loss under the policy) ; London and Provincial Marine Insurance Co. v. Seymour 
 (1873), L. R. 17 Bq. 85 (action for rescission); Mivaz v. Gerussi Bros. & Go. (1880), 6 
 Q. B. D. 222, C. A. (the hke) ; Glasgow Assurance Corporation v. William Symondson & Go. 
 (1911), 104 L. T. 254 (the Uke). 
 
 (r) As in Fenn v. Craig, sup. ; Traill v. Baring (1864), 4 De G. J. & S. 318 (reinsurance) ; 
 Hoare v. Bembridge (1872), 8 Ch. App. 22 ; London Assurance Go. v. Mansel (1879), 11 
 C. D. 363. 
 
 (s) Carter v. Boehm (1766), 3 Burr. 1905, per Lord Mansfield, C.J., at p. 1909 : " the 
 policy would be equally void against the underwriter, if he concealed ; as if he insured a 
 ship on her voyage, which he privately knew to be arrived ; and an action would lie to 
 recover the premium." 
 
 {t) Gladstone v. King (1813), 1 M. & S. 35, where the underwriters complained of the 
 non-disclosure of damage to the keel of the insured vessel to the extent of 15 per cent. 
 At the trial Lord Ellbnbobouqh, C.J., and afterwards the Covirt of King's Bench, pre- 
 sided over by him, distinctly held, on the one hand, that the policy was not rendered void 
 by the non-disclosure, but that, on the other, " no mischief will ensue from holding in this 
 case that the antecedent damage was an implied exception out of the poUoy," and that 
 " if the principle be new, it is consistent with justice and convenience " {per Lord Ellen- 
 boeough, C.J., at p. 38 ; to the same effect Le Blanc, J., at pp. 38, 39). 
 
§§ 248-250 (relief). 219 
 
 to have been wholly and plainly so : for, in the former case, the policy not 
 being avoided, he would not be entitled to a return of the premium (m), 
 whereas, in the latter, unless fraud were proved against him, he would be 
 so entitled (v). It is not surprising that this decision does not seem to have 
 been relied upon or referred to in any judgment for upwards of half a century ; 
 or that, when it was first exhumed from its long and merited sepulture, it 
 was doubted " whether this case will hereafter be maintained " (w) ; or that, 
 at a still later date, it was ridiculed and discountenanced, if not expressly 
 overruled, in the House of Lords (x). 
 
 250. In the second of the groups of transactions which form the subject 
 of this Chapter, that relating to sales and purchases, the remedies resorted 
 to by the party complaining are of a more diversified character than in any 
 other group. They consist of actions for rescission («/), with the preliminary 
 declarations and consequential accounts, inquiries, orders, and directions 
 already described as incidental to the relief in question (2) ; actions (where 
 the party complaining is a purchaser, not where he is a vendor) for specific 
 performance with an abatement or allowance (zz) ; actions or counterclaims 
 for the return of deposits or instalments of purchase-money paid under 
 the contract (a), together with, in some cases, the costs of investigating 
 
 (u) And this in fact was part of the decision in Gladstone v. King, sup. It was argued for 
 the plaintiff (see p. 36) with unanswerable logic, but without effect, that the policy was 
 either void, or not : if it was not void, the assured was entitled to be paid the amount of 
 the loss or damage ; if it was, no fraud being suggested, he was entitled to have back his 
 premium : to which Lord Ellenboegugh, C. J., (at p. 38) observed : " I do not remember 
 that the point respecting the return of the premium was made at the trial ; and if it was, 
 the answer to it must have been that this is not a case of a void insurance, but an exception 
 out of the policy," and Le Blano, J. (at p. 39) : " the opinion which my Lord expressed 
 at the trial must have precluded the plaintiff from demanding the premium." 
 
 (v) See § 232, ante. 
 
 {w) Stribky v. Imperial Marine Insurance Co. (1876), 1 Q. B. D. 507, per Lush, J., at 
 pp. 513, 514. There is an odd mistake on the part of some one at p. 513, where Lush, J., 
 is reported as having said that " they " — i.e. the Court in Gladstone v. King — " did not 
 hold the policy to be void, for they recognized the right of the assured to recover back his 
 premium " ; whereas what the learned judge must have said, or meant, was " they did 
 not hold the policy to be void, for they did not allow the assured to recover back his 
 premium, which they recognized to be his right if, and only if, the policy was void." 
 
 {x) Blackburn, Low & Co. v. Vigors (1887), 12 App. Cas. 531, H. L., where Lord 
 Halsbuev, L.C, at p. 536, after making a sHghtly contemptuous allusion in a parenthesis 
 to Gladstone v. King, sup. (" whatever may be thought of the logic of that case "), cites 
 (pp. 536, 537) the extract from the judgment of Lord Ellenbokouqh, C.J., which is 
 given in note (t), sup., to which he appends the caustic comment : " unfortunately his 
 Lordship does not state what is the principle which he apparently admits to be new." 
 
 (y) As in Edwards v. M'Leay (1815), G. Cooper 308 ; Turner v. Harvey (1821), Jac. 
 Z69 ; 23 R. R. 15 ; Gibson v. D'Este (1843), 2 Y. & C. (cH.) 542 ; Smith v. Harrison (1857), 
 26 L. J. (cH.) 412; Torrance v. Bolton (1872), 8 Ch. App. 118; Re Banister (1879), 12 
 C. D. 131, C. A. ; Baker v. Moss (1902), 66 J. P. 360 ; Mahomed Kala Mea v. Harperink 
 (1908), 25 T. L. R. 180, P. C. See the terms of the judgment in the several cases, for the 
 consequential orders and directions deemed appropriate in the respective circumstances, 
 and particularly Gibson v. D'Este, sup., where the form of decree was speoiaEy minute and 
 elaborate. 
 
 (z) See §§ 237, 238, ante. 
 
 {zz) See Fry's Specific Performance, §§ 1257-1286, and James v. Litchfield (1869), L. R. 
 9 Bq. 51 (where, however, the claim failed on the ground of the purchaser's presumptive 
 knowledge of the undisclosed fact). 
 
 (a) As in Arnot v. Biscoe (1748), 1 Ves. Sr. 94 ; Stevens v. Adamson (1818), 2 Stark. 
 422; Coverley v. Burrell (1821), 5 B. & Aid. 257; Flight v. Booth (1834), 1 Bing. (n.o.) 
 
220 CH. Ill, SECT. 5, SUB-S. (3). 
 
 title (&) ; defences to actions or counterclaims for specific performance (c), 
 or answers to afiirmative pleas relying upon the contract as subsisting and 
 valid (d), or defences to actions for a debt alleged to be due under tie 
 contract (e), or to actions for damages for breach thereof (/) ; and certain 
 special remedies. 
 
 251. The first of these special remedies is the creation of the Vendor and 
 Purchaser Act, 1874 (37 & 38 Vict., c. 78), s. 9 of which provides that " a 
 vendor or purchaser of rent or leasehold estates in England, or their repre- 
 sentatives respectively, may at any time or times and from time to time 
 apply in a summary way to a Judge of the Court of Chancery in England in 
 chambers, in respect of any requisitions or objections, or any claim to com- 
 pensation, or any other question arising out of or connected with the contract 
 (not being a question affecting the existence or validity of the contract), 
 and the Judge shall make such order upon the application as to him shall 
 appear just, and shall order how and by whom all or any of the costs of and 
 incident to the application shall be borne and paid"(5f). The words in 
 parenthesis would seem, at first sight, to exclude from the ^benefits of the 
 statutory procedure any vendor or purchaser who bases his application on 
 the alleged invalidity of the contract by reason of non-disclosure : and it 
 has been held that it is not possible to obtain relief by way of rescission, or 
 a return of the deposit, where a question of the validity of the contract on 
 that or any other ground is raised expressly and eo nomine (h) : but, inas- 
 much as nearly all cases of non-disclosure may be asserted by the party, 
 and dealt with by the Court, as cases of failure to show title under a con- 
 dition impliedly inherent in the contract itself (i), it follows that the Court 
 has generally seen its way to grant the party complaining all such reUef 
 
 370 ; Heywood v. MaUalieu (1883), 25 C. D. 357 (here the return of the deposit was the 
 subject of a counterclaim) ; Nottingham Patent Brick & Tile Co. v. Butler (1886), 16 Q. B. D. 
 778, C. A. ; Carlish v. Salt, [1906] 1 Ch. 335. 
 
 (6) See Edwards v. M'Leay, sup. ; Be Hare and O'More's Contract, [1901] 1 Ch. 93 ; 
 Carlish v. Salt, sup. 
 
 (c) As in Ellard v. Lord Llandaff (1810), 1 Ball. & B. 241 ; 12 B. R. 22 ; Shackleton v. 
 Sutcliffe (1847), 1 De G. & Sm. 609 ; Wilbraham v. Livesey (1854), 18 Beav. 206 ; Walters v. 
 Morgan (1861), 3 De G. F. & J. 718; Phillips v. Homfray (1871), 6 Ch. App. 770; 
 Cahalkro v. Henty (1874), 9 Ch. App. 447 ; Hyde v. Warden (1877), 3 Ex. D. 72, C. A. ; 
 Jones V. Simmer (1880), 14 C. D. 588, C. A. ; Heywood v. Mallalieu, sup. ; Nottingham 
 Patent Brick tb Tile Co. v. Butler, sup. (where the defence was to a counterclaim for specific 
 performance). 
 
 (d) See Fothergill v. Phillips (1871), 6 Ch. App. 770, which was a cross action to, and 
 was tried together with, Phillips v. Homfray, sup., and where the party charged set up 
 as a defence the contract of which he claimed specific performance in Phillips v. Homfray. 
 This affirmative defence the party complaining successfully defeated on the same grounds 
 as those on which his defence in Phillips v. Homfray succeeded. 
 
 (e) As in Mostyn (Lord) v. West Mostyn Coke & Iron Co. (1876), 1 C. P. D. 145. 
 
 (/) As in Ellis v. Rogers (1885), 29 C. D. 661, C. A. ; Molyneux v. Hawtrey, [1903] 
 2 K. B. 487, C. A. 
 
 (g) In the remainder of the section, similar provisions follow as to real and leasehold 
 estates in Ireland. 
 
 (h) BySTEBLiNO, J., at p. 609 oi Be Davis and Cavey (1888), 4:0 C. B. 601. It is curious, 
 however, to note that in a later case. Be White and Smith's Contract, inf., the same judge, 
 on a similar statutory application, made no difficulty about ordering rescission. 
 
 (i) See § 111, and notes (y) and (z) thereto, ante. 
 
§§ 250-252 (relief). 221 
 
 by way of tlie summary procedure in respect of non-disclosure as it would 
 have granted him if he had been plaintiff or defendant in an ordinary action ; 
 and, even in the case in which jurisdiction was declined to the extent above- 
 mentioned, a declaration was made in favour of the party complaining, 
 with liberty to him to sue for the return of the deposit, and for con- 
 sequential relief, which was sufficient for all practical purposes (j). It must 
 be remembered, however, that as in all cases where jurisdiction is conferred 
 upon the Court to proceed hrevi manu, the jurisdiction will not be 
 exercised if in the discretion of the Court the case appears too complicated 
 or serious to be disposed of summarily, and the party will be remitted 
 to his common law remedies, or the summons may be set down and heard 
 as an action (A:). The relief under the summary jurisdiction has, in some 
 cases, assumed the form of a declaration, rescission, return of the deposit, 
 costs of investigating title, and the like (l) ; whilst, in other cases, the relief 
 has been obtained in the form of a successful resistance to the application of 
 the party charged for a declaration that he has made a good title, or that 
 the party complaining is not entitled to insist on certain objections or 
 requisitions, or is precluded by the contract from refusing to accept the title 
 made, or other like declaration (m). 
 
 252. Another form of relief which may be called special, in the sense that 
 the purchaser who avails himself of it is not asserting his right to complain 
 of non-disclosure in an action to which he is a party, is the following. Where 
 property is sold under the direction of the Court, in the course of administering 
 a trust, partnership, or insolvent estate, or in any other cause or matter, a 
 purchaser of such property who alleges non-disclosure on the part of the 
 vendor, instead of suing or waiting to be sued in an ordinary action, may 
 come to that Court, and apply, in that cause or matter, to be discharged from 
 his purchase ; and an order will be made for that purpose, or for such other 
 like relief as the nature of the case may admit of, on proof of the facts which 
 
 (j) See -Re Davis and Cavey, sup. 
 
 (h) The latter course was adopted by Joyce, J., in Ee Hare and O'Mor^s Contract, 
 [1901] 1 Ch. 93. 
 
 (Z) As in -Re Davis and Cavey, sup. (where, as above stated, the purchaser obtained a 
 declaration, with costs, but no other relief) ; Re White and Smith's Contract, [1896] 1 Ch. 
 637 (where the purchaser obtained an order for rescission) ; .Re Hxdicke and LipsTci's 
 Contract, [1901] 2 Ch. 666 (the Hke) ; Re Ward and Jordan's Contract, [1902] 1 Ir. R. 73 
 (where the purchaser apphed for a declaration that the vendor had not made out a good 
 title, but unsuccessfully in this case, the undisclosed fact being held immaterial). 
 
 (to) As in -Re Marsh and Earl Granville (1882), 24 C. D. 11, C. A. (where the purchaser 
 successfully resisted, on the ground of non-diselosure, the vendor's summons for a declara- 
 tion that he, the purchaser, was precluded by the contract from insisting on certain 
 objections and requisitions) ; Re Brewer and Hanhins's Contract (1899), 80 L. T. 127, 
 C. A., where the purchaser resisted (but unsuccessfully, owing to an express condition 
 in the contract) the vendor's summons for a declaration that he had made out 
 a good title ; -Re Leyland and Taylor's Contract, [1900] 2 Ch. 625, C. A. (resistance, 
 though again unsuccessful, to the vendor's summons for a declaration that the purchaser 
 was not entitled to compensation under a certain condition in the contract) ; Re Puchett 
 and Smith's Contract, [1902] 2 Ch. 258, C. A. (where the purchaser successfully resisted the 
 vendor's summons for a declaration that he had made a good title, and that the purchaser 
 was not entitled to insist on certain requisitions, and where the purchaser further obtained 
 a declaration in his favour negativing the above). 
 
222 CH. Ill, SECT. 5, SUB-S. (3). 
 
 it would be necessary to establish, in an action for rescission (n). But, though 
 this summary procedure is open to him under the conditions stated, and 
 (being far less expensive and more convenient) is almost invariably resorted 
 to in preference to the ordinary procedure, the purchaser is apparently not 
 compelled to adopt it (o). And, in cases of gravity or intricacy, the Court 
 will not permit him to do so (p). The fact that the sale is, in a sense, by 
 the Court, and that the officers of the Court are responsible, in a sense, for 
 the non-disclosure, does not in the slightest degree weaken the purchaser's 
 title to relief. It is the clear duty of the Court to see that its ministers are 
 at least as honest as other people, and the no less clear right of the purchaser 
 to rely with absolute confidence on the discharge of this judicial duty (q). 
 Indeed, the fact in question ought, if anything, to render the contract more 
 readily impeachable than if the sale had no judicial sanction or authority (r). 
 253. It happens occasionally that the vendor and purchaser provide in 
 the contract itself for the relief which is to be available to either party, in 
 
 {n) Such orders were made in Martin v. Cooper (1846), 3 Jo. & Lat. 496 ; 72 R. R. 100 : 
 Brandling v. Plummer (1854), 2 Drew. 427 ; 100 R. R. 209 (here the rehef asked for by the 
 petition, and given by the Court, was compensation) ; Dimmock v. HalUtt (1866), 2 Ch. 
 App. 21 ; Re Banister (1879), 12 C. D. 131, C. A. In the case of Be Summerson, [1900] 
 1 Ch. 112 n., the purchaser's summons failed, but only because of his failure to establish 
 one of the necessary elements in the burden of proof incumbent on the party complaining, 
 whatever the nature of the proceedings may be. The above are all non-disclosuie cases. 
 Cases in which the purchaser was discharged on the ground of misrepresentation are ; 
 Laehlan v. Reynolds (1853), Kay 52 ; Whittemore v. Whittemore (1869), L. R. 8 Eq. 603 ; 
 Re Arnold (1880), 14 C. D. 270, C. A. 
 
 (o) Thus, in Jones v. Bimmer (1880), 14 C. D. 588, C. A., the purchaser waited until 
 he was sued in an ordinary action for specific performance, and successfully set up the 
 non-disclosure as a defence to the action. 
 
 (p) As happened in Mahomed Kala Mea v. Harperinh (1908), 25 T. L. R. 180, P. C, 
 where the purchaser, on applying to the Court, was, after the proceedings had gone far 
 enough to reveal the serious nature of the charges made against judicial oflScers, directed 
 to bring his action. 
 
 (q) " In my view," said Lord CAiaifS, L. J., at p. 29 of Dimmoeh v. Hallett, sup., " the 
 Court ought not to be less strict as to sales under its own order than as to sales out of 
 Court." Indeed, it would be monstrous if the Court which, according to Lord Sblbokne's 
 view, expressed at p. 236 of Coalcs v. Boswell (1886), 11 App. Cas. 232, H. L., ought to be 
 " strict even to jealousy " in enacting the fullest disclosure and the utmost good faith 
 from the purchaser, were to be content with less from its own officers as vendors. In 
 Roman law, the rules were different : sales made by the authority of the State were not 
 impeachable for anything except fraud, and then only if the purchaser would not have 
 purchased at any price, had he known the truth : D. 21. 1. 1. 3. In French law (Code 
 Civil, Art. 1649), no action for rescission will lie, " clans les ventes faites par autorit^ de 
 justice." 
 
 (r) " The Coiirt," said Lord St. Leonards, when Sir Edw. Sxtgden and L.C. (Ir.), at 
 p. 505 of Martin v. Cooper, sup., " expects from vendors, and particularly from officers of 
 the Court, a clear and express statement." So Page-Wood, V.-C, at p. 55 of Laehlan v. 
 Beynolds, sup. : " it would be strange indeed if in sales made by the direction of the Court 
 this rule" — i.e. the rule of good faith — "should be less stringent." There should be, 
 in such cases, as Jessel, M.R., insisted, at p. 141 otBe Banister, sup., " at least as much 
 good faith towards the purchaser as, and perhaps a little more than, is required by 
 ordinary vendors out of court," for " the conveyancing counsel, though in one sense the 
 officer of the Court, is the conveyancing counsel of the vendor," and " if there has been a 
 mistake, ... as between vendor and purchaser, the vendor is no better off than if the 
 mistake had been made by a conveyancing counsel not appointed by the Court " ; with 
 which op. his similar observations at pp. 273, 274, 277 of Be Arnold, sup., and those of 
 Byknb, J., at p. 107 of Debenham v. Sawbridge, [1901] 2 Ch. 98, and the strong anim- 
 adversion by the Privy Council on the conduct of the officials of the Indian court in 
 Mahomed Kala Mea v. Harperinh, sup. 
 
§§ 252-255 (relief). 223 
 
 the shape of fixed and liquidated payments, in which case this conventional 
 relief, to the exclusion jiro tanto of the ordinary remedies, is granted, if the 
 party complaining establishes such facts as would entitle him to those 
 remedies in an ordinary case («). 
 
 254. Where non-disclosure is established in the course of negotiations for 
 a contract of suretyship (t), the remedy usually resorted to, as in cases of 
 insurance, and for the same reason, is defence (u), or (what, before the Judica- 
 ture Acts, was equivalent thereto) an action to restrain or stay proceedings 
 at law instituted by the party charged (v). In one or two cases only has the 
 party complaining sought his remedy in rescission (w). 
 
 255. Where the contract impeached is a contract of release or compromise 
 or waiver (x), both rescission (y), with its accompanying accounts, inquiries, 
 directions, and other incidental and consequential relief (2), and also defence (a), 
 
 {s) See Reeve v. Berridge (1888), 20 Q. B. D. 523, C. A., where, in an agreement for the 
 sale of leasehold premises, one of the terms was that either party making default should 
 pay to the other £100. The purchaser paid a deposit of £20, and also £50 on account of the 
 purchase money, but refused to pay more, or to complete, on the ground of the vendor's 
 non-disclosure of onerous and unusual covenants in the head lease. The vendor, alleging 
 that the purchaser had made default, sued to recover the agreed penalty of £100, less the 
 £50 paid on account. The purchaser, alleging that the default was the vendor's, by reason 
 of the above non- disclosure and his inability to make a good title, besides defending the 
 action, counterclaimed for recovery of the £100 penalty from him, and also for the return 
 of the £20 deposit, and the £50 paid on account of purchase-money. Stephen, J., whose 
 decision was affirmed by the C. A., gave judgment for the defendant both on the claim, 
 and on the counterclaim for the £170. 
 
 (t) These are the subject of Sect. 2, Sub-s. (4), ante. 
 
 (u) AE the cases cited in the notes to Sect. 2, Sub-s. (4), ante, were cases of defence, 
 or its equivalent, except those cited in note (w), inf. 
 
 (u) In such cases " what the one claims as his right in equity would constitute his defence 
 in law," as Lord Selbobne, L.C, said, at p. 27 of Hoare v. Bembridge (1872), 8 Ch. App. 
 22. This was the procedure adopted in Hamilton v. Watson (1845), 12 CI. & Kn. 109 ; 
 Willis V. Willis (1850), 17 Sim. 218 ; Stiff v. Eastbourne Local Board (1868), 19 L. T. 408. 
 
 (w) As in Railton v. Mathews dh Leonard (1844), 10 CI. & Pin. 934 (in which the surety 
 sued for " reduction " of the suretyship bond, besides defending an action e contra for 
 its enforcement) ; Wythes v. Labouchere (1859), 3 De G. & J. 593 (where, however, the 
 action failed). 
 
 (x) This class of case is the subject of Sect. 2, Sub-s. (5), ante. 
 
 (y) As in Bowles v. Stewart (1803), 1 Sch. & Lefr. 209 ; Leonard v. Leonard (1812), 
 
 2 Ball& B. 171 ; Gordonr. Gordon (1821), 3 Swanst. 400; Maddeford v. Austwick (1826), 
 1 Sim. 89, affirmed (1833), 2 My. & K. 279 ; Smith v. Pincombe (1852), 2 Macn. & G. 653 ; 
 Wason V. Wareing (1852), 15 Beav. 151 (where, however, the action failed, on the ground 
 of the presumptive knowledge of the party complaining) ; Greenwood v. Greenwood (1863), 
 
 3 De G. J. & S. 28 ; Brooke v. Lord Mostyn (1865), 33 Beav. 457 (where a declaration 
 was the only relief necessary) ; Law v. Law, [1905] 1 Ch. 140, C. A. (where the party com- 
 plaining failed, having by his acts and conduct affirmed the contract) ; Re Roberts, [1905] 
 1 Ch. 704, C. A. (by counterclaim) ; Watt v. Assets Co., [1905] A. C. 317, H. L. (where, 
 again, on various grounds, the party complaining failed). 
 
 (2) Such as are described in §§ 237, 238, ante. For examples of these incidental and 
 consequential orders and directions, worked out in considerable detail, see the form of 
 decree in Maddeford v. Austwick, sup. ; Gordon v. Gordon, sup. ; Smith v. Pincombe, sup. 
 
 (a) Under the general term " defence " is included any answer or reply to an affirmative 
 case of release compromise or waiver set up by the party charged by way of defence to an 
 action brought by the party complaining ; see § 243, and note (x) thereto, ante. The 
 following are examples : McCarthy v. Decaix (1831), 2 Russ. & M. 614 (reply to defence 
 of renunciation or release) ; Moxon v. Payne (1873), 8 Ch. App. 881 (answer to case of 
 compromise set up by party charged as defence to action to set aside certain deeds) ; 
 Gilbert v. Endean (1878), 9 C. D. 259, C. A. (reply to a case of compromise set up by the 
 party charged in answer to a motion to enforce a decree) ; Be Roberts, [1905] 1 Ch. 704, 
 C. A. (defence to action for specific performance, with counterclaim for rescission added). 
 
224 CH. Ill, SECT. 5, SUB-S. (3) ; sect. 6, SUB-S. (1). 
 
 are resorted to by tte party complaining, but more commonly the former. 
 The question of the remedies available in cases of compositions with creditors 
 and the question of the parties to and against whom they are respectively 
 available in such cases, are discussed in another Chapter (b). 
 
 256. In the few reported cases of contracts to enter into partnership, 
 or to alter existing partnership arrangements (c), the procedure adopted by 
 the party complaining was a suit for rescission or analogous relief (d), except 
 in one case, where non-disclosuie was set up as a defence to an action by the 
 party charged for damages for breach of the contract (e). 
 
 257. Where the contract sought to be avoided, or treated as void, has 
 been a contract to marry, the party complaining, whether from considerations 
 of prudence, or from motives of delicacy, has always awaited the onset of the 
 rejecta Lydia, or (it may be) the jilted Corydon. Though, in theory, there is 
 nothing to debar him or her from asking the Court to break off the engagement 
 on the ground of concealment of any such fact as is deemed material, if the 
 other party will not consent to do so, there is no recorded instance of such 
 heroic remedy having been adopted, or of the non-disclosure having ever been 
 set up otherwise than as a defence to an action for damages (/), whether 
 with or without success — generally without (g). Of the two cases of separa- 
 tion deeds mentioned in this connection (A), in both of which the party com- 
 plaining succeeded, one was a case of defence to an action for arrears of 
 annuity under the deed (i), and the other a case of rescission (J). 
 
 258. In the last of the seven classes of case which form the subject of this 
 Chapter (that, namely, in which, there being no duty of disclosure arising 
 from the mere nature of the contract negotiated for, such a duty is neverthe- 
 less created by special circumstances antecedent to, or occurring in the course 
 of, the negotiation) the question of the remedies available to the party com- 
 plaining obviously depends upon the nature of the circumstances, and the 
 conduct of the party charged, giving rise to the duty {k). Where, as 
 is usual in this group of case, the circumstances and conduct in question are 
 such as to render the non-disclosure tantamount to fraudulent misrepresenta- 
 tion or concealment, or fraud of any kind, the party complaining is entitled 
 
 (6) See Ch. VII, Sect. 3, Sub-s. (2), post. 
 
 (c) Sect. 2, Sub-s. (6), ante, deals with this class of case. 
 
 Id) As in Maddeford v. Austvnck (1826), 1 Sim. 89 ; Clements v. HaU (1858), 2 De G. & 
 J. 173 (where the relief was given indirectly in the form of a variation of a certificate 
 made in chambers in the administration of an estate). 
 
 (e) Andrewes v. Oarstin (1861), 10 C. B. (n.s.) 444. 
 
 ( / ) See AitcUson v. Baker (1797), 1 Peake 103 ; Foulkes v. Sellway (1800), 3 Esp. 235 ; 
 Sadddey v. Mortlock (1816), Holt N. P. 151 ; Heirbert v. Edgington (1844), 1 C. & K. 464n. ; 
 Beachey v. Brotvn (1860), E. B. & E. 796 ; Baker v. Cartwright (1861), 10 0. B. (n.s.) 124. 
 
 (g) In the two earliest of the cases cited in the last note, the plea of the party com- 
 plaining succeeded ; in all the others, it failed. 
 
 (h) These, together with cases of contracts to marry, are dealt with, as one class, in 
 Sect. 2, Sub-s. (7), ante. 
 
 {i) Bvans v. Edmonds (1853), 13 C. B. 777. 
 
 (j) Evans v. Garrington (1860), 2 De G. P. & J. 481. 
 
 (k) This class of case, and its various species, form the subject of Sect. 2, Sub-s. (8), 
 ante. For the remedies applicable to the respective circumstances, see the oases cited in 
 the notes thereto. 
 
§§ 255-260 (questions op law and pact). 225 
 
 not only to the relief granted in ordinary cases of non-disclosure, but also to 
 the remedy in damages available to a plaintifi in an action of deceit (I). 
 
 Sect. 6. Questions of Law and Fact. 
 
 259. The facts and matters required to be established by the party com- 
 plaining in order to make out a case of actionable non-disclosure (m), and 
 those which it is incumbent on the party charged to establish in order to 
 make good any of the recognized affirmative answers to such a case (n), 
 have already been considered. It now becomes necessary to inquire which 
 of the questions arising on the judicial examination of these facts and matters, 
 and of the evidence and arguments in relation to them, in the course of the 
 proceedings, are questions of law, and which are questions of fact : for every 
 matter which is not a question of law must be a question of fact, and vice 
 versa. When a question is loosely described as " a mixed question of law 
 and fact," what is meant is that the question is a complex one, divisible 
 into two or more contributory questions ; but each of these contributory 
 questions, taken singly, must be either wholly of fact, or wholly of law. 
 It is proposed to deal with this subject in relation to the following topics 
 separately and seriatim (o) : (1) materiality, (2) existence of the alleged 
 imdisclosed fact, (3) non-disclosure, (4) knowledge of either party as to 
 the alleged undisclosed fact, (5) waiver, (6) affirmation and election. This 
 detailed inquiry, however, should be prefaced by a statement of the two 
 elementary rules of evidence which are of general applicability to all the 
 above subject-matters, and indeed to every department of our jurisprudence, 
 viz., first, that it is always a question of law whether a suggested legal in- 
 ference should or should not be drawn from a proved or admitted state of 
 facts, and, secondly, that it is always a question of law whether there is any 
 evidence to support, or any evidence to negative, an averment of fact. 
 
 Sub-s. (1). As to Materiality. 
 
 260. It has been explained (j?) that the first thing to be established by 
 one who complains of the violation of a duty of disclosure by another is 
 that such a duty was at the material dates owed to himself by the party 
 charged, which involves proof not only that the relation between the parties, 
 or the circumstances existing or occurring, at that time were such as to give 
 rise to the duty (q), but also that the alleged undisclosed fact was material 
 to be disclosed, for there is no duty to reveal any other. The exact meaning 
 
 (I) This remedy, as has been pointed out, is not available in cases of pure non- disclosure : 
 see § 223, ante. 
 
 (m) See Sect. 3, ante. 
 
 (») See Sect. 4, ante. 
 
 (o) The subject is considered in relation to these topics in the six Sub-sections respec- 
 tively of this Section. 
 
 (p) See § 174, ante. 
 
 (q) It is a question of fact what the circumstances alleged to have created the relation 
 or duty were, but it is a question of law whether the relation was constituted by, or the 
 
 B.N.D. Q 
 
226 CH. Ill, SECT. 6, SUB-S. (1). 
 
 of " material to be disclosed " has been fully examined (r). That, in the sense 
 indicated, materiality is a question of fact whenever the question is raised 
 at all (for in a large proportion of the cases it is not in issue), has been judicially 
 declared in a series of decisions dating from the earliest times (s), relating 
 to contracts of insurance, whether marine (i), life (m) or fire (v), sales and 
 
 duty arose out of, the proved or admitted circumstances : e.g. in Keates v. Cadogan (1851), 
 10 B. & C. 591, it was held, on demurrer, that the facts alleged gave rise to no duty of 
 disclosure. 
 
 (r) See §§ 30-33, ante. 
 
 (s) Particularly those relating to marine insurance — see the next note — ^in which 
 department of mercantile law, of all others, the subject has been most frequently debated. 
 (t) See, for decisions and rulings before the passing of the Marine Insurance Act, 1906 
 (6 Edw. 7, c. 41), the following : Littledale v. Kenyan (1805), 1 B. & P. (n.e.) 161 {per 
 RoOKE, J., at p. 153) ; Bridges v. Hunter (1813), 1 M. cfe S. 15 (per Lord ELLENBOBOtTGH, 
 C.J., at p. 19 : " it was a question certainly for the jury, and left to them as such ") — 
 see, however, note (r) to § 266, post, as to how the Court dealt with the verdict in this case ; 
 Durrell v. Bederley (1816), Holt N. P. 283 (per Gibes, C.J., at p. 285 : " the materiality 
 of the facts known and suppressed is for the jury ") ; Richards v. Murdoch (1830), 10 
 B. & C. 527 ; Elton v. Larking (1832), 8 Bing. 198 (left to jury) ; Westbury v. Aberdein 
 (1837), 2 M. & W. 267 (left to jury) ; Elkin v. Jan^on (1845), 3 M. & W. 655 (left to jury, 
 as a specific question) ; Foky v. Tabor (1861), 2 F. & F. 663 (left to the jury by Eele, 
 C.J. : see p. 673) ; Gandy v. Adelaide Marine Insurance Co. (1871), L. R. 6 Q. B. 746 (per 
 Mbllok, J., delivering the judgment of himself and Hannen and Lush, JJ., at pp. 754, 
 755) ; lonides v. Pender (1874), L. R. 9 Q. B. 531 (question specifically left to the jury : 
 see p. 535, and the judgment of the Court, per Blackbtjbn, J., at p. 537) ; Tate dk Sons v. 
 Hyslop (1885), 15 Q. B. D. 368, C. A. ; Herring v. Jackson (1895), 1 Comm. Cas. 177 (left 
 specifically by Mathew, J., to the jiu:y) ; Fracis, Times dk Co. v. Sea Insurance Co. (1898), 
 79 L. T. 28 (where Bigham, J., sitting without a jury, treated the issue as one of fact). 
 The cases subsequent to the passing of the statute above mentioned are : Thames & 
 Mersey Marine Insurance Co. v. Chinford Ship Co., [1911] A. C 629, H. L. (per Lord 
 Alvebstone, at p. 533, and Lord Robson, at p. 550) ; Glasgow Assurance Corporation v. 
 William Symondson cfc Co. (1911), 104 L. T. 254 (where Scbtttton, J., treated and decided 
 the issue as one of fact) ; Scottish Shire Line, Ltd. v. London & Provincial Marine <6 General 
 Insurance Co., [1912] 3 K. B. 51 (where Hamilton, J., at pp. 70, 71, found the materiality 
 to be established as a fact on the evidence). 
 
 (u) See Huguenin v. Rayley (1815), 6 Taunt. 186 (per Cur., at p. 189 : "it ought to 
 have been submitted to the jury, whether the omission of the fact relied upon was or was 
 not a material omission ") ; Morrison v. Muspratt (1827), 4 Bing. 60 (per Best, C.J., at 
 p. 62 : " whether or not it was material for the defendants to have been made acquainted 
 with the fact which has been withheld from their knowledge is a question for the jury ") ; 
 Lindenau v. Desborough (1828), 8 B. & C. 586 (per Littledale, J., at p. 593) ; Swete v. 
 Fairlie (1833), 6 C. & P. 1 (per Denman, C.J., at p. 7, in summing up : " you will have to 
 say whether the communication was or was not material ") ; Wainivright v. Bland (1836), 
 1 M. & W. 32 (specifically left to the jury) ; Rawlins v. Desborough (1840), 2 M. & Rob. 
 328 (Lord Dbnman, C.J., left the question to the jury : see p. 333) ; Jones v. Provincial 
 Inswrance Co. (1857), 3 C. B. (n.s.) 65 (per Cresswell, J., delivering the judgment of the 
 Court, at p. 86 : " it is a question for the jury whether the particular fact was or was not 
 material to be communicated ") ; London Assurance Co. v. Mansel (1879), 11 C. D. 363 
 (where Jessel, M.R., in deciding that the undisclosed fact was material, evidently 
 intended to find this as a fact, for he fortifies himself by the reflection that " any decent 
 special juryman " would so find : see p. 369) ; Joel v. Law Union dk Crown Insurance Co., 
 [1908] 2 K. B. 863, C. A. (per Moflton, L.J., at p. 893 : " such materiality being a 
 matter to be judged of by the jury, and not by the Court "). 
 
 (v) Bufe V. Turner (1818), 6 Taunt. 338 (where, though it does not appear that the 
 question was left to them specifically, we are told that " the jury acquitted the plaintiff 
 of any fraud, but thought that the circumstance of the fire on the llth ought to have 
 been communicated to the defendants, who without this communication did not engage 
 on fair grounds with the plaintiff, and for whom imder those circumstances they find their 
 verdict," which finding the Court refused to disturb) ; Yager v. Guardian Assurance Co. 
 (1912), 29 T. L. R. 53, Div. Ct. (where, an arbitrator having found materiality as a fact, 
 the Court held that this finding was conclusive). 
 
§§ 260, 261 (questions op law and pact). 227 
 
 purcliases (w), and guarantees (x), wtich are the more important of the 
 contracts discussed in tke present Chapter {y). In the case of marine in- 
 surance, the rule is now part of the statutory law of the land (2). 
 
 261. At one time it seems to have been doubted whether evidence of 
 materiality is admissible in the form of declared opinions of those conversant 
 with the class of business or transaction to which the matter giving rise to 
 the dispute belongs {a). It is strange that such doubts should ever have 
 existed, since, in determining that materiality is a question of fact, the Courts 
 by necessary implication, and, as it were, in the same breath, determined 
 that evidence may be given to establish, or negative, the fact, no fact being 
 capable of proof except by evidence of some sort, though the character of 
 the evidence will in each case depend upon, and have relation to, the class of 
 fact alleged on the one side and denied on the other. A reluctance to recog- 
 nize materiality as a question of fact at all would be intelligible : but no such 
 hesitation can be traced in the deliverances of any of the masters of mercantile 
 law since the time of Lord Mansfield. "What is not intelligible is that, having 
 accepted the rule, the Courts rebelled for a time against its inevitable corollary 
 and consequence. One cannot but suspect that those who opposed the 
 reception of evidence as to materiality were, in so doing, unconsciously 
 expressing their regret that they had ever assented to the question being 
 treated as one of fact at all, and had failed to foresee the formidable con- 
 sequences which would logically flow from that assent. Be this as it may, 
 the undoubted fact is that, for a century or more past, evidence of materiahty 
 has been, and still is, particularly in cases of marine insurance (6), and life 
 
 {w) See Gibson v. D'Esie (1843), 2 Y. & C. (cH.) 542 (where Knioht-Bettoe, V.-C, at 
 pp. 550, 551, found the materiality of the existence of the public footpath, as a fact). 
 
 {x) See Smith v. Ban!: of /Scotland (1813), 1 Dow App. Cas. 272 ; 14 R. R. 67 (where the 
 Houae of Lords, reversing an interlocutor of the Court below, allowed a proof of the 
 alleged undisclosed circumstances, as "relevant": in other words, held that their 
 materiality was a question of fact, and not a question of law) ; North British Insurance Co. 
 V. Lloyd (1854), 10 Exoh. 523 (per Pollock, C.B., dehvering the judgment of the Court, 
 at pp. 532, 533). 
 
 (y) There are no cases relating to the other classes of contract discussed in which the 
 point as to whether materiality is a question of fact has definitely and precisely arisen. 
 
 (z) See s. 18 (4) of the Marine Insurance Act, 1906, (6 Edw. 7, c. 41) : " whether any 
 particular circumstance, which is not disclosed, be material or not is, in each case, a 
 question of fact." 
 
 (a) See the observations of Lord Mansfield, C.J., cited in note (/) to § 263, inf., 
 which, however, as there explained, may admit of a construction consistent with a recogni- 
 tion of the admissibility of proper evidence under certain conditions. In Campbell v. 
 Richards (1833), 5 B. & Ad. 840, however, the judges of the King's Bench, disagreeing 
 with the observations of the same court three years previously — see the next note, — which 
 they said were not necessary to the decision in that case, were uncompromisingly against 
 the admissibility. 
 
 (6) In Richards v. Murdoch (1830), 10 B. & C. 527, the question, whether necessary to 
 the decision or not, was carefully considered, and the Court of K.B. {per Lord Tenteeden, 
 C.J.) was distinctly of opinion that evidence must be received, if tendered, as to materiality 
 (" I know not how the materiality of any matter is to be ascertained but by the evidence 
 of persons concerned with the subject-matter of the inquiry " : pp. 540, 541). This view, 
 it is true, was dissented from in Campbell v. Richards, sup. (an action brought by the 
 principal of the unsuccessful plaintiff in the former case for neghgence) but it ultimately 
 prevailed, and evidence as to materiality has been received without objection in a series 
 of oases both before and after the year 1830, and down to the present time : see, for 
 
228 CH. Ill, SECT. 6, SUB-S. (1). 
 
 insurance (c), received as a matter of course, wherever it is tendered ; and it 
 generally is so tendered when a question first arises as to the materiality of 
 some novel class of fact whicli, from time to time, the growing volume and 
 intricacy of mercantile practice and usages bring into prominence. 
 
 262. It must be remembered, however, that the now firmly established 
 rule that evidence of materiality may be received does not mean that this 
 evidence is always required or expected, or that, without it, the issues of 
 materiality can never be established. There are some cases where evidence 
 certainly is not required, as where the alleged materiality of the undisclosed 
 fact is so obvious on the face of it, or has so repeatedly been found by a suc- 
 cession of mercantile verdicts or judgments, that to adduce evidence in support 
 of it would be like calling a witness to testify to an axiom in Euclid, or to 
 the operation of an elementary law of nature (cc). On the other hand, there 
 is an opposite class of case where the suggested materiality is so little apparent 
 to the normal mind by the light of nature that (since de non apparentibus 
 et de non existentibus eadem est ratio) expert evidence is not only useful but 
 essential, if the party complaining is to have this issue found in his favour (d). 
 Intermediate between these two extreme types, is the far larger group of 
 cases where the evidence, if tendered, must be received, and, when received, 
 
 examples : Haywood v. Rogers (1804), 4 East 590 ; Durrell v. Bederley (1816), Holt N. P. 
 283 ; Berthon v. Loughman (1817), 2 Stark. 258 (per Holboyd, J., at p. 259 : " whether 
 particular facts if disclosed to an underwriter would, in the opinion of a witness, or as a 
 matter of judgment, make a difference as to the amount of the premium is, I think, 
 admissible evidence ") ; lonides v. Pender (1874), L. E,. 9 Q. B. 531 (see pp. 535, 539) ; 
 Stribley v. Imperial Marine Insurance Co. (1876), 1 Q. B. D. 507 (at p. 508 : " evidence was 
 called to show that it would have induced an underwriter to suspect that some casualty 
 had happened to the vessel ") ; Fracis, Times & Go. v. Sea Insurance Co. (1898), 79 L. T. 
 28 (whore Biqham, J., admitted the evidence, but was not convinced by it that the fact 
 there in question was material) ; Thames & Mersey Marine Insurance Co. v. Gunford 
 Ship Co., [1911] A. C. 529, H. L. (where " a great many witnesses were called . . . who 
 stated that in their opinion it was material to the underwiiters that they should be informed 
 of the circumstances connected with the captain's experience " : per Lord Alverstonb, 
 at p. 533. This evidence, however, was ultimately held insufficient to establish the alleged 
 materiality. Further evidence was tendered on both sides, and received, as to the 
 materiality of another undisclosed fact, viz. the over-valuation : per Lord Axvebstonb, 
 at pp. 638, 539, and Lord Robson at p. 550) ; Scottish Shire Line, Ltd. v. London cfc 
 Provincial Marine <fc General Insurance Co., [1912] 3 K. B. 51 (per Hamilton, J., at pp. 
 70, 71). 
 
 (c) See Lindenau v. Deshorough (1828), 8 B. & C. 586 (where physicians were called, 
 without objection, to prove that certain symptoms and disorders were of such importance 
 that they ought to have been communicated to the insurers) ; Swete v. Fairlie (1833), 
 6 C. & P. 1 (per Denman, C. J., who, at p. 7, directed the particular attention of the jury 
 to the medical evidence for, and against, the alleged materiality of the pathological facts 
 there in question). 
 
 (cc) Thus, at p. 550 of Thames & Mersey Marine, Insurance Co. v. Gunford Ship Co., 
 sup.. Lord EoBSON says : " this is a question of fact, and there was evidence about it 
 both ways in the form of underwriters' opinions on the point. Without depreciating the 
 value of those opinions, I think a jury, or a Court of law acting as a jury, when once made 
 acq uainted with the general conditions of marine insurance, can easily decide for themselves 
 how far any particular circumstance would influence the judgment of a prudent insurer." 
 
 (d) Thus, in Glasgow Assurance Corporation v. William Symondson & Co. (1911), 104 
 L. T. 254, SoBUTTON, J., at p. 257, made a pointed reference to the fact that the defendants 
 had not adduced any evidence whatever in support of their suggestion that the undisclosed 
 circumstance in that case was material, and this absence of evidence clearly fortified him 
 in the conclusion at which he arrived that it had no materiality whatever. 
 
§§ 261-263 (questions op law and fact). 229 
 
 may or may not have weight, but where, if no evidence is tendered, the 
 tribunal must determine the issue of fact, as best it can, without the assistance 
 of witnesses, and the party charged has no right to say that no case of materi- 
 ality has been made against him (e). 
 
 263. When it is said that evidence of materiality is receivable, it must be 
 remembered that by " evidence " is meant the particular kind of evidence 
 which is proper to the circumstances of the individual case. The rule does not 
 mean that any sort of evidence will do, or that any person from anywhere, 
 or of any trade or calling, can be allowed to testify with authority as to 
 the materiality of the fact in question. Indeed, there are cases where, 
 the individual fact being of such a nature as not to involve any consideration 
 of precedent or current usages or practices of any business or locality, it has 
 been considered by high authority that any declaration of opinion by a witness 
 is inadmissible altogether as evidence (/), or, if technically admissible, is a 
 mere display of " wisdom after the event," and, as such, entitled to no weight 
 whatever (9). If the undisclosed fact be, on the contrary, of such a character 
 as to depend for its materiality upon the proved effect of its non-disclosure 
 upon the judgment and conduct of men in a particular business, the only 
 appropriate and admissible evidence is that of witnesses who can speak as 
 to the effect of the non-disclosm-e upon such men as a class, and not that 
 of a witness who only purports to testify to its effect upon his own mind (li). 
 
 (e) Richards v. Murdoch (1830), 10 B. & C. 527 (per Our., at p. 541 : " if .such evidence 
 is rejected " — equally, of course, if not tendered — " the Court and jury must decide the 
 point according to their own judgment unassisted by that of others "). 
 
 (/) This was the view expressed by Lord Mansfield, C.J., at p. 1918 of Carter v. 
 Boehm (1766), 3 Burr. 1905 : " great stress was laid upon the opinion of the broker. But 
 we all think the jury ought not to pay the least regard to it. It is mere opinion which is 
 not evidence. It is opinion after an event. It is opinion vnthmit tJie hast foundation from 
 any previous precedent or usage. It is an opinion which, if rightly formed, could only he 
 dravm from the same premises from which the Court and jury were to determine the cause : 
 and therefore it is improper and irrelevant in the mouth of a witness." This is the passage 
 which is usually cited as establishing Lord Mansfield's objection to any evidence what- 
 ever on the question — see note (a) to § 261, ante — and certainly some of the expressions 
 used point in this direction. In so far as they do, they are not now law. But, taking the 
 passage as a whole, he seems to limit his objection (and, so far as thus limited, his observa- 
 tions are vab'd and sound) to the class of case mentioned in the text, where there is no 
 established course of conduct or business on which the witness can express any opinion 
 which will in the least assist the jury, or be of any more value than that which they are 
 to form, or (for the matter of that) of any independent value at aU. The fact alleged not 
 to have been disclosed in that case was the fact that designs had been formed by the French 
 upon the insured fort a year previously, and abandoned, together with the supposed 
 probability of their renewal, — a fact of such an isolated and unclassifiable a character that 
 no marine instu-anoe broker could speak with the slightest authority as to its effect on 
 underwriters as a class. 
 
 (g) See Traill v. Baring (1864), 4 De G. J. & S. 318 (per Tubneb, L.J., at p. 330, on the 
 inutility of calling witnesses as to what in their opinion would have affected the plaintiff's 
 mind, the undisclosed fact being the abandonment of an intention to take part of a certain 
 life insurance risk) ; Fracis, Times <Ss Co. v. Sea Insurance Go. (1898), 79 L. T. 28 (where 
 BlQHAM, J., though he admitted evidence of underwriters in support of the alleged 
 materiality of an obsolete edict of the Persian Government, prohibiting the importation 
 of arms into Persia, disregarded it altogether in arriving at his decision, thinking, as Lord 
 Mansfield, C.J., thought in Carter v. Boehm, sup., that it was merely a case of being 
 wise after the event). 
 
 (h) Berthon v.Loughman (1817), 2 Stark. 258 (jjer Holeoy D, J. , at p. 259: "the question 
 
230 
 
 CH. m, SECT. 6, SUB-S. (1). 
 
 264. It is, to say tte least, extremely doubtful whether any evidence is 
 adnaissible to establish, or to negative, the materiality of undisclosed facts 
 which indicate a course of illegal conduct (i). 
 
 265. The rule that materiality is a question of fact is of course subject 
 to the overriding and fundamental rule that there must be some evidence, 
 or some capability (whether evidence is tendered or not), of the suggested 
 materiality, which is a question of law. No Court can be deprived of its 
 right, or rather can abnegate its duty, to pronounce that in law the undis- 
 closed fact is wholly incapable of being deemed material, any more than it 
 can renounce its function of declaring, in a case of defamation, whether the 
 published matter is capable of the suggested, or of any, defamatory meaning. 
 Even where evidence has been adduced as to the materiality of an undis- 
 closed fact, it is still open to the judge to hold, as matter of law, that it cannot 
 be material, as is impliedly recognized, even in those judgments where the 
 fact has been held to be material, by prefatory judicial declarations that the 
 particular case is not one in which this authority and duty of the Court can 
 be exercised (j). And there are several instances of an alleged undisclosed 
 fact being held on demurrer {k), and of a proved undisclosed fact being held 
 on appeal (Z), incapable of materiality. 
 
 266. Theoretically, one would suppose that it must also be a question of 
 law whether the undisclosed fact is capable of being deemed otherwise than 
 material, just as (invoking, again, the analogy of the law of defamation) 
 it is open to the Court to rule that the published matter is incapable of a 
 non-defamatory meaning, no less than it is to rule that it is incapable of a 
 defamatory one. But, in cases of non-disclosure (as, indeed, also in cases of 
 defamation), the Court has always been extremely reluctant to make such 
 declarations, though by no means averse to ruling in the contrary sense. 
 The cases in which juries have been directed, or advised by judges in such 
 terms as to amount almost to a direction, that the fact in question is material, 
 and ought to be so found, are mainly cases where no objection was taken to 
 
 is not what the private opinion of the individual may be as to the probable course 
 of his conduct in a particular case, but what in his judgment the general opinion would 
 be amongst those conversant with such matters "). In cases of marine insurance, it is 
 the opinion of " the prudent insurer " referred to in s. 18 (2) of the Marine Insurance Act, 
 1906 (6 Edw. 7, o. 41), which is of importance, and of which evidence is admissible, and not 
 the opinion of particular insurers, or even a large body of them, wUHng to take an 
 " excessive or speculative risk," for " that opinion cannot bind others of more prudent 
 temperament " (Thames, <Ssc., Co. v. Gunford Ship Co., inf., per Lord Robson at p. 650), 
 nor the opinion of the general public {Glasgow Assurance Corporation v. William Symond- 
 son & Co. (1911), 104 L. T. 254, per SoRtTTTON, J., at p. 257). 
 
 (i) Thames iSn Mersey Marine Insurance Co. v. Ounford Ship Co., [1911] A. C. 529, 
 H. L. {per Lord Alveestone at p. 538). 
 
 (.)■) Gandy v. Adelaide Marine Insurance Co. (1871), L. R. 6 Q. B. 746 (at p. 754) ; 
 lonides v. Pender (1874), L. R. 9 Q. B. 531 {per Cm., at p. 537) ; Scottish Shire Line-, Ltd. 
 V. Provincial Marine Insurance Co., [1912] 3 K. B. 51 {per Hamilton, J., at p. 70). 
 
 {k) As in Beaehey v. Brown (1860), E. B. & E. 796 (successful demurrer to plea in a 
 case of a contract to marry) ; Andrewes v. Garstin (1861), 10 C. B. (N.s.) 444 (the like, 
 in a case of a contract to enter into partnership). 
 
 {I) Seaton v. Burnand, [1900] A. C. 135, H. L. {per Lord Halsbuey, L.C, at p. 139, 
 and Lord Beampton, at p. 148). 
 
§§ 264-266 (questions of law and pact). 231 
 
 the summing up, or to the verdict (?>?), or where the materiality had previously- 
 been admitted (n). But, though a judicial ruling in a particular case that the 
 suppressed matter cannot be immaterial may be incorrect, and not justified by 
 the circumstances, in which event a new trial will be granted (o), and though 
 there is no right in any case to so rule unless there is " enough in the facts to 
 enable the judge " to adopt this course (p), it ha? never been decided that, 
 in a proper case, the Court has no power to hold, as matter of law, that the 
 undisclosed fact must be material ; and in one case, after a finding in the 
 Court below of immateriality, based, moreover, on strong evidence, it was so 
 held on appeal (5') . Further, the Court has always retained its control (though 
 much relaxed in modern times) over the verdicts of juries on this, as on any 
 other, question of fact, to the extent of ordering a new trial in the event of 
 a thoroughly irrational or perverse verdict, and this cautious mode of dealing 
 with the strange verdicts, negativing materiality, which juries from quite in- 
 telligible motives have from time immemorial been very prone to return 
 against insurers seeking to nullify their policies, has been freely resorted to in 
 preference to the bolder and more summary course of entering judgment for 
 the party complaining, even in cases where it is obvious that the Court 
 entertained the strongest possible belief in the materiality alleged {r). Where, 
 however, the case has been tried without a jury, the appellate Court is less 
 reluctant to act upon its own opinion (rr). 
 
 (m) As in Boyd v. Dubois (1811), 3 Campb. 132. 
 
 (n) As in Bates v. Hemtt (1867), L. R. 2 Q. B. 595 (where— see p. 598— Cockeurn, C. J., 
 directed the jury that the fact was material, but from his judgment in banco it appears 
 that the materiality had previously been admitted : see p. 603). 
 
 (o) As in Huguenin v. Eayley (1815), 6 Taunt. 186 (where Dampibk, J., having held 
 that the withheld fact must be material, and having therefore non-suited the plaintiff, 
 the Court of Common Pleas, at p. 189, though evidently thinking that the fact probably 
 was material to be disclosed, said that " it ought to have been submitted to the jury, 
 whether the omission of the fact reUed upon was or was not a material omission," and, 
 therefore, they ordered a new trial. 
 
 (p) Gandy v. Adelaide Marine- Insurance Co. (1871), L. R. 6 Q. B. 746 (per Mellob, J., 
 delivering the judgment of himself and Hannen and Ltjsh, JJ., at p. 753 : " without 
 putting it to the jury to draw the proper inference from the facts proved, there was not 
 in the facts themselves enough to enable the judge to say "aye" or "no" that there 
 had been the concealment of a material fact "). 
 
 (q) See Thames ds Mersey Marine Insurance Co. v. Ounford Ship Co., sup., where the 
 H. L. held that the secret double insurance which was one of the two undisclosed facts 
 in that case was material not only in fact, but in law, reversing the finding of the Court 
 below, after hearing evidence, that it was not (per Lord Alveestone at pp. 538, 539, Lord 
 Shaw at pp. 542-545, and Lord Eobson at p. 550). 
 
 (r) See the following marine insurance cases, where, the jury having found that the 
 undisclosed fact was not material, the Court ordered a new trial : Willes v. Glover (1804), 
 1 B. & P. (iT.K.) 14 (per Sir Jambs Mansfield, C.J., at p. 16) ; Bridges v. Hunter (1813), 
 1 M. & S. 15 (per Lord Ellenborouoh, C.J., at p. 19 ; " it was a question certainly for 
 the jury, . . . but stiU if this Court has reason to think that they come to a wrong con- 
 clusion upon it, we may set it right ; as was done in Willes v. Glover, by sending the case 
 down to another inquiry ") ; Sawtell v. Loudon (1814), 5 Taunt. 359 (per Heath, J., al 
 p. 364) ; Kirhy v. Smith (1818), 1 B. & Aid. 672 ; Stribley v. Imperial Marine Insurance 
 Co. (1876), 1 Q. B. D. 507 (per Blackburn, J., at p. 511). ' 
 
 (rr) See Thames & Mersey Marine Iwiurance Go. v. Gunford Ship Co., sup., where one 
 of the two findings of immateriahty by the Lord Ordinary and the Court of Session was 
 unhesitatingly reversed (^er Lord Alveestone at pp. 538,539, Lord Shaw at pp. 544, 545, 
 and LordBoBSON at p. 550). 
 
232 CH. Ill, SECT. 6, SUB-SS. (2), (3), (4), 
 
 Subs. (2). As to the Occurrence or Existence of the Alleged Undisclosed Fac i 
 
 267. It has been already explained that it is for the party complainins^ 
 to establish, if either question should be in controversy, both that the fact 
 alleged to have been undisclosed belongs to the class of matters which the 
 law regards as " facts," and not to some other class, and that the alleged fact 
 existed or occurred during the period in which the party charged was under 
 an obligation to divulge it (s). It is manifest that, ex vi terminorum, the 
 former of these is a question of law (t), and the latter (subject to the " previous 
 question " whether there is any evidence in support of the allegation, which 
 is for the Court) is a question of fact (m). 
 
 Suh-s. (3). As to the Non-Disclosure. 
 
 268. It has been seen that the burden is on the party complaining of 
 establishing the fact (though a negative) of non-disclosure (v) ; but that 
 very slight evidence indeed, and, in some cases, the dumb testimony of the 
 res ipsa, that is to say, the mere fact that the contract was entered into in 
 circumstances utterly inconsistent with any rational hypothesis of disclosure, 
 will shift the burden on to the shoulders of the party charged of proving 
 affirmatively that such disclosure was in fact made (w). Here again it is 
 obvious that any issue as to whether the communication was or was not 
 made must necessarily be one of fact (x), subject of course to the above- 
 mentioned " previous question," and subject also to other questions of law 
 which may incidentally arise, as, for instance, whether disclosure to any 
 
 («) Sect. 3, Sub-s. (2), ante. 
 
 (t) See Ch. II, Sect. 2, Sub-a. (I), ante, and aU the cases cited in the notes thereto. 
 
 (tt) See all the cases cited in the notes to §§ 178-182, ante. 
 
 (v) Sect. 3, Sub-s. (3), ante. 
 
 {w) See § 183, and note {/>) thereto, ante. As to what " disclosure " means, see Ch. IT, 
 Sect. 1, ante. 
 
 (re) See, generally, the cases cited in the notes to Sect. 3, Sub-s. (3), ante, in all of which 
 the question of disclosure or no disclosure was left to the jury, or (where there was no 
 jury) treated by the judge as a question of fact. To these may be added the following 
 (which are not cited in the notes referred to because they contain nothing which bears upon 
 the question there discussed, viz. the burden of proof) : Arnot v. Biscoe (1748), 1 Ves. Sr. 
 94 (a vendor and purchaser case, in which Lord Habdwicke, L.C., directed three issues 
 of fact to be tried at law, the first of them being whether the party charged bad given 
 notice to the party complaining of the incumbrance on the estate sold) ; Rawlins v. 
 Desborough (1840), 2 M. & Rob. 328 (a life insurance case, in which Denman, C.J., in his 
 summing up — see p. 333 — told the jury that it was for them to say whether the disclosure 
 had, or had not been made) ; lonides v. Pender (1874), L. R. 9 Q. B. 531, a marine insurance 
 case (per Blackbtjen, J., delivering the judgment of the Court, at p. 537 : " the jury 
 must be taken to have found that it was no disclosure, and we cannot say that they were 
 wrong "). And nota that in Joel^. Law Union and Grown Insurance Co., [1908] 2 K. B. 
 863, C. A., a life insurance case, ths Court of Appeal, whilst holding that the facts supposed 
 in the Court below to be evidence of non-disclosure constituted in law no evidence at all, 
 were of opinion that there were, or might be, other materials on which a jury could properly, 
 and might possibly, find that there had been no disclosure, and on this ground they ordered 
 a new trial, instead of entering judgment for the plaintiff, as they otherwise would have 
 done, and as Buckley, L. J., was strongly disposed to think ought to have been done, even 
 as it was (per Vattohan Williams, L. J., at p. 883, MotrLTON, L. J., at p. 893, and Buckley, 
 L.J., at pp. 897, 898). 
 
§§ 267-269 (questions or law and fact). 233 
 
 person not being the party complaining can be deemed equivalent in law to a 
 disclosure to that party himself {y). 
 
 Suh-s. (4). As to Knowledge of the Undisclosed Fact possessed by, or 
 imputed to, Either Party. 
 
 269. It being incumbent on the party complaining to show that, during 
 the material period, the party charged had (z), and he himself had not (a), 
 cognizance of the undisclosed fact, the state of mind of both parties is obviously 
 a vital issue, whenever it is a subject of controversy. Knowledge, as has 
 been fully explained, may be either actual or presumptive (b), and there are 
 various classes and sub-classes of the latter (c). Ignorance is the absence of 
 both actual knowledge, and of any of these classes or species of presumptive 
 knowledge. Obviously, any question as to whether either of the parties to 
 whom it is being attributed had, or had not, actual knowledge of the undis- 
 closed fact, if there is any evidence of the affirmative (which is a question of 
 law), must be a question of fact (d). But, in the case of presumptive know- 
 ledge, it is a matter of more difficulty and nicety to determine which of the 
 controverted matters are issues or inferences of fact, and which are questions 
 or presumptions of law. That is to say, it often requires very careful dis- 
 crimination to decide which of the general rules of evidence should govern, 
 and how it, or they, should be applied to, the circumstances of any individual 
 case : the principles themselves, however, are well established and clear. 
 They are these : first, the rules as to the presumption of knowledge from 
 certain classes of fact are rules of law : secondly, any question as to whether 
 given circumstances (that is, admitted, or undisputed, or proved) come within 
 any of the specified classes is a question of law ; but, thirdly, any question 
 as to whether the facts are or are not as alleged is, ex vi termini, an issue 
 of fact, subject to the question of law whether there is any evidence in support, 
 or (as the case may be) to the contrary, of the allegation. Thus, to take a 
 
 (2/) See Tate <S> Sons v. Hyshp (1885), 15 Q. B. D. 368, C. A., a marine insurance case 
 in which, the jury having found, in answer to a specific question, that the fact alleged not 
 to have been disclosed had been oommunioated to the underwriters, " not directly, but to 
 their solicitors," it was held on appeal that the disclosure to the solicitors was in law no 
 disclosure at aU (per Bbett, M.R., at p. 374), and, therefore, that there was no evidence 
 to support a further finding of the jury that there had been no concealment of the fact in 
 question {per Brett, M.R-., at p. 378). This case is a good example of the apphcation of 
 the two primary conditions, subject to which alone any question can be treated as one of 
 fact, as pointed out in the general observations prefi.Kcd to this Section in § 259, ante. 
 
 (z) See Sect. 3, Sub-s. (4), ante, 
 
 (a) See Sect. 3, Sub-s. (6), ante. 
 
 (h) See Ch. II, Sect. 3, Sub-s. (1;, ante. 
 
 (c) The five main classes of presumptive knowledge, and their various species, are 
 fuUy discussed in Sub-ss. (2), (3), (4), (5), and (6), respectively, of Ch. II, Sect. 3, ante. 
 
 (d) No authority is needed for this self-evident proposition : but reference may be 
 made to Arnot v. Biscoe (1748), 1 Ves. Sr. 94 (where Lord Habdwickb, L.C. — see p. 96 — 
 directed, amongst others, an issue to be tried at law whether the purchaser was cognizant 
 of the undisclosed incumbrance or not) ; Bates v. Hewitt (1867), L. R. 2 Q. B. 595 (per 
 CocKBUBN, C.J., at pp. 606-608) ; Cockhurn v. Edwards (1881), 18 C. D. 449, C. A. (per 
 Jessel, M.B., at p. 455) ; Be White and Smith's Contract, [1896] 1 Ch. 637, 642. 
 
234 CH, III, SECT, 6, SUB-S. (4). 
 
 few examples out of many whicli present themselves (e), an underwriter of 
 a marine insurance policy (as lias been already indicated) is deemed, as matter 
 of law, to be acquainted, whether he is so in fact or not, with all the usual and 
 established customs, of the trade which he insures, or of particular ports, and 
 all the usual and established forms and clauses in commercial instruments 
 used for the purpose of marine adventures, and the rules and practices of 
 underwriters generally, together with all such information as is derivable 
 from the books and registers in ordinary use in an underwriter's business (/) ; 
 as matter of law, he is not deemed to be cognizant of any unusual, or recent, 
 or doubtful, practice, usage, custom, form, or clause (g). Now, in case of 
 dispute, all questions as to whether the particular custom, practice, or clause 
 which is the subject of the dispute is usual or unusual, established or recent, 
 clear or ambiguous, are questions of fact, to be determined as such on the 
 evidence (h). But if the allegation of fact is not in dispute or, having been 
 disputed, is proved, it then becomes a question for the Court whether know- 
 ledge of the facts so established ought in law to be imputed to the party said 
 to have been cognizant of them (t). 
 
 270. To take another species of presumptive knowledge, the actual 
 knowledge of an agent, if he is " an agent to know," is imputed to his prin- 
 cipal, with certain exceptions (j). This is a presumption of law (k). It is 
 also a question of law whether, given the position occupied by the supposed 
 agent in fact, such position amounted to an agency " to know," or to an 
 agency at all {I). But all questions as to the position actually occupied by the 
 alleged agent are questions of fact (m), if there is any evidence for, or against, 
 
 (e) See, generally, the cases cited in the notes to Ch. II, Sect. 3, Sub-ss. (2)-(6), ante. 
 
 (/) ^4:2, ante. 
 
 {g) § 43, ante. 
 
 (h) Accordingly such questions were the subject of evidence, and were left to the jury 
 in Ougier v. VaMance (1800), 1 Campb. 504 n. (custom of Newfoundland fishing trade) ; 
 Vallance v. Dewar (1808), 1 Campb. 503 (the like) ; Kingston v. Knibbs (1809), 1 Campb. 
 508 n. (custom of port) ; Da Oosia v. Edwards (1815), 4 Campb. 142 (practice as to loading). 
 In the following, a judge sitting without a jury received evidence, and otherwise treated 
 the question as one of fact : Mercantile Steamship Co. v. Tyser (1881), 7 Q. B. D. 73 {per 
 CoLEEiDGB, C.J., at p. 77 : "the evidence showed that this provision as to a cancelling 
 option was of comparatively recent introduction into charterparties ") ; The Bedouin, 
 [1894] P. 1, C. A. (clause in a time-charter) ; Charlesworth v. Jfaber (1900), 5 Comm. Cas. 
 408 (clause in original policy, per Bigham, J., at pp. 411, 412). 
 
 (i) See Tate <b Sons v. Hyslop (1885), 15 Q. B. D. 368, C. A. {per Bbbtt, M.R., at 
 p. 378) ; Laing v. Union Marine Insurance Co. (1895), 1 Comm. Caa. 11 {per Mathevv, J., 
 at p. 18) ; Wilson cfc Others v. Salamandra Assurance Go. (1903), 8 Comm. Cas. 129 {per 
 Betjce, J., at p. 132) ; and, generally, the cases cited in the notes to §§ 42, 43, anle, 
 except those referred to in note {K), sup. 
 
 {}) See Ch. II, Sect. 3, Sub-s. (4), ante. 
 
 (ic) Which, however, may be rebutted on proof of facts bringing the case within any of 
 the exceptions, but not otherwise : see § 57, ante. 
 
 {I) And was so treated by the Court of Appeal in Tate cfc Sons v. Hyslop, sup. {per 
 Bbbtt, M.R., at p. 374 : " a solicitor is not the standing agent for one who has been, or 
 may be, his client, to receive a mercantile notice in respect of mercantile business." This 
 being held as a matter of law, the finding of the jury that in fact the underwriters had 
 knowledge by this means was disregarded), by the House of Lords in Blackburn, Low & Co. 
 V. Vigors {18S7), 12 App. Cas. 531, H. L., and by the Court of King's Bench in Ireland, in 
 Taylor v. Yorkshire Insurance Co., [19131 2 Ir. E. 1. 
 
 (m) See, generally, the oases cited in the notes to Ch. II, Sect. 3, Sub-s. (4), ante. 
 
§§ 269-271 (questions of law and fact). 235 
 
 the allegations made as to such position, wUoL. is a question of law («). It 
 IS also a question of law, whether any proved, or admitted, or assumed cir- 
 cumstances are such as to bring the case within any of the recognized excep- 
 tions (o) ; but it is a question oi fact what those circumstances actually 
 were in the particular case (p), subject, again, to the preliminary question 
 of law whether there is any evidence of their existence as alleged (q). 
 
 271. A third presumption of knowledge, also fully discussed in an earlier 
 part of this work (r), is that by which, on proof of a party's actual knowledge 
 of some fact or document, a knowledge of other facts or documents which 
 would have inevitably followed from this actual knowledge, if reasonable 
 inquiry had been made, is imputed to such party. This is a presumption 
 of law, when once the facts are ascertained or admitted (s). One of the sub- 
 rules subordinate to the main rule, or one of the applications of the main 
 rule, is this. A party who, in any transaction for the sale or demise of 
 land, has actual notice of the existence of a deed or document which may 
 probably affect the property, has constructive notice of its normal contents, 
 but not of any unusual restriction, condition, covenant, or clause which 
 would not naturally be expected to find a place in the particular deed or 
 document, unless, having been given a " fair opportunity " of inspection, 
 he has neglected to avail himself of it, from which date the legal presumption, 
 till then suspended, comes again into operation (t). This, again, given the 
 facts, is a question of law (m) : but, if disputed, it is a question of fact whether 
 the restriction, condition, covenant, or clause in question is usual, or unusual, 
 unless there is no evidence in support of the allegation of normality or 
 abnormality, as the case may be, which is a question of law {v). And 
 
 (n) See the same oases, generally, and especially those cited in the notes to §§ 50, 5), 
 ante. 
 
 (o) These exceptions are discussed in §§ 54, 55, 56, ante. See the cases cited in the 
 notes thereto. 
 
 (p) See § 57, and note (h) thereto, ante. 
 
 iq) See, generally, the cases cited in the notes to §§ 54-57, ante. 
 
 (r) Ch. II, Sect. 3, Sub-s. (5), ante. 
 
 (s) See, generally, the cases cited in the notes to Ch. II, Sect. 3, Sub-s. (5), ante. 
 
 (t) § 59, ante. 
 
 (u) It was so treated in Hyde v. Warden (1877), 3 Ex. D. 72, C. A., and in many of the 
 other cases cited in the notes to § 59, ante. 
 
 (v) See Wilbraham y. Livesey (I85i), 18 Bcav. 206 {per Bomilly, M.R., at pp. 209, 210) ; 
 CocJcburn v. Edwards (1881), 18 C. D. 449, C. A. (per Jessbl, M.R., at p. 455, and Cotton, 
 L.J., at p. 462). In Hampshire v. Wickens (1878), 7 C. B. 555, Jessel, M.R., at pp. 559- 
 562, went into the matter closely. He clearly intended to deal with the question as one of 
 fact, for he observes (p. 560) that " usual covenants may vary in different generations. 
 The law declares what are usual covenants according to the knowledge of mankind," That 
 is to say, the law declares to be " unusual " that which is found as a fact by evidence to 
 be " unusual " at the time when the question arises. The proper kind of evidence of the 
 contemporaneous " knowledge of mankind " would, in strictness, be the testimony of con- 
 veyancers, land agents, or other persons familiar with transactions in real property, just as 
 foreign law is strictly proved as a fact by the evidence of those who practise it. But, just 
 as in the latter class of case the Court will often receive as evidence of the fact references to 
 statutes, or to works of authority, if the law to be ascertained is American or colonial, so it 
 would seem to be justifiable to refer to the latest edition of some accepted treatise on 
 conveyancing, at all events if neither side proposes to call evidence of experts, to determine 
 the issue whether a particular covenant is " usual " or " unusual." And this was the 
 course adopted by Jessbl, M.R., in the case last cited. But he was not thereby intending 
 to treat the question as one of law, but was referring to the books merely as records of 
 
236 CH. an, SECT. 6, SUB-SS. (4), (5), (6), 
 
 as to the question of whether a " fair opportunity " was, or was not, 
 given (w), and all the other questions which, as has been pointed out, may 
 arise in cases belonging to this extensive branch of presumptive knowledge, 
 the same general rules apply {x). 
 
 272. Instead of directing the juiy (where there is one) to find the facts, 
 and then ruling what inference in law ought to be drawn from them, it is 
 open to the Court (and this course has been occasionally adopted) to leave 
 the whole matter to the jury, with a proper and full direction as to what 
 knowledge must in law be presumed from what facts, trusting to them to 
 discriminate between their right to pronounce on the facts, and their duty, 
 having so pronounced, to return a verdict which shall not contradict or 
 disregard the direction given to them as to the legal consequences of the 
 facts so found («/). 
 
 Subs. (5). As to Waiver. 
 
 273. It has been pointed out that one of the affirmative answers to a 
 case of non-disclosure is waiver (?) ; which is established by proof that the 
 party complaining agreed, either in express terms or by acts and conduct, to 
 waive his right to disclosme, or his right to some specified remedy for non- 
 disclosure (a). Where such agreement is alleged to have been express, it is 
 a question of fact, in case of dispute (which, however, is an extreme rarity), 
 
 " the then knowledge of mankind," or as, in the earlier part of the last century, the 
 Annual Register was not infrequently cited without objection, by and to the courts, as 
 evidence of modern or contemporary events. There is some danger, however, in allowing 
 a departure from the strict rule, for the tendency of successive editions of text-books is to 
 alter nothing except under the strong compulsion of a definite decision ; to take an 
 example, if the question should ever be seriously put in controversy, as it never has been 
 yet, whether the covenant prohibiting assignment of a lease without the consent of the 
 lessor, which is stiU stated in the treatises to be " unusual," is or is not so in fact according 
 to the existing " knowledge of mankind," and the Court were to insist on that fact being 
 proved in the proper way by the evidence of experts, it seems very difficult to suppose that 
 such evidence would establish it to be "unusual." 
 
 (w) See Re White and Smith's Contract, [1896] 1 Ch. 637 (per Stirlino, J., at p. 642), 
 and Molynevx v. Hawlreij, [1903] 2 K. B. 487, C. A. {per CoixiNS, M.R., at p. 492, and 
 Mathew, L..J., at p. 496), as to " fair opportunity " being an issue of fact. 
 
 (x) See the notes, generallj', to Ch. II, Sect. 3, Sub-s. (5), ante. 
 
 (y) This seems to have been the course adopted in Friere v. Woodhouse (1816), Holt 
 N. P. 572 ; 17 R. R. 679 ; Gandy v. Adelaide Marine Insurance Co. (1871), L. R. 6 Q. B. 
 746 (see the second of the two questions left to the jury by Bkett, J., as set out at p. 752, 
 and the decision of the Court, at pp. 755, and 759, that this question had been properly 
 so left) ; Morrison v. Universal Marine Insurance Co. (1872), L. R. 8 Exch. 40 (where it 
 appears — see p. 48 — ^that one of the questions which Blackbtjbn, J., put to the jury was : 
 " had the broker a right to suppose that the underwriters were acquainted with Lloyd's 
 lists ? " The Court of Exchequer thought that this question had been rightly left as 
 one of fact, with the proper direction, to the jury, per Martin, B., at pp. 52, 53. The 
 Exchequer Chamber did not deal with this point at all : it was on other grounds that they 
 reversed the decision of the Court of Exchequer). The same procedure is not uncommon in 
 cases of defamation, where the judge, after advising the jury as to what facts in law give 
 rise to immunity in respect of a defamatory publication, leaves to them the question, as a 
 whole, whether the occasion was privileged or not, instead of getting a finding of the facts 
 from them, and then declaring, as law, the consequences of the facts so found. See 
 Article 36, note (g), of the author's Code of the Law of Actionable Defamation. 
 
 (z) This topic is fully discussed in Sect. 4, Sub-s. (J), ante. 
 
 (a) The former species of waiver is the subject of §§ 202-205, ante, and the latter of 
 §§ 206-208, ante. 
 
§§ 271-274 (questions op law and pact). 237 
 
 whether it was made or not ; but when, as is usually the case, the alleged 
 agreement is in writing, whether in the form of a condition of the written 
 contract itself which is impeached, or as the subject of an independent docu- 
 ment, it is a question of construction for the Court (assuming that the docu- 
 ment is entirely self-contained and self-luminous, and does not require or 
 admit of interpretation by the light of surrounding circumstances) whether 
 or not the language used amounts in law to a contract to waive (6). When 
 the alleged agreement is sought to be implied from acts and conduct, then, 
 assuming that there is any evidence at all, or any admissible evidence (c), 
 which is a question of law, it is for the jury, or the Court acting as a jury, 
 to determine, as a fact, what the acts and conduct were, and whether, in 
 virtue of the acts and conduct so found, the party complaining did or did not 
 intend to waive all, or any, and (if so) which, of his rights against the party 
 charged ((Z). 
 
 Svb-s. (6). As to Affirmation and Election. 
 
 274. Another ground of affirmative answer which is open to the party 
 charged is established by proof that the party complaining, being in a position 
 either to repudiate or to adhere to the contract at his option, has unequivocally 
 elected to affirm it, and has signified such election, either by express language, 
 or by acts and omissions inconsistent with any other view than that he 
 meant thereby to exercise his option, and to exercise it in favour of adherence, 
 and not avoidance. This plea or answer has already been dealt with (e), 
 and it has also been shown that any such election must have been exercised 
 with full and precise knowledge of the undisclosed facts, otherwise it is no 
 election at all (/), and that mere delay, laches, inaction, or quiescence do 
 not, of themselves, amount to, or indicate, either affirmation, election, waiver, 
 or acquiescence (q). The questions here involved are as to states of the 
 mind and will, and the existence of any of those states, if controverted is a 
 question of fact (A), subject to the quahfications above referred to in the case 
 
 (6) See § 205, ante, and the oases cited in note (t) thereto, where it was decided, as 
 matter of law, whether the alleged contract to waive was a, concluded contract, or not ; 
 and also those cited in the notes to §§ 206-208, ante, where questions as to whether a 
 condition in the contract amounted to a waiver of rescission, or came within either of the 
 two exceptions therein referred to, were dealt with as questions of law. 
 
 (c) Thus, at p. 538 of Thames & Mersey Marine Insurance Co. v. Gunford Ship Co., 
 [1911] A. C. 529, H. L., Lord Alvbestone observed, with reference to the evidence adduced 
 before the Lord Ordinary as to disclosure of the double insurances being impliedly waived : 
 " the practice of underwriters as to accepting risks or not making inquiries on particular 
 points cannot, in my opinion, affect the duty as defined by statute, and cannot properly 
 be received as evidence of waiver in any particular case." 
 
 {d) Th.\ia,m Laingv. Union Marine Insurance Co. (1895), 1 Comm. Gas. 11,Mathbw, J., 
 found as a fact that there had been no waiver of further information, and that such waiver 
 was not to be implied from what the underwriters had said, done, or omitted. 
 
 (e) In Sect. 4, Sub-s. (2), ante. 
 
 If) In § 213, ante. 
 
 (g) See Sect. 4, Sub-3. (3), ante. 
 
 (h) See, generally, the cases cited in the notes to Sect. 4, Sub-s. (2), ante, for examples. 
 As to belief, intention, and other states of the mind, being "facts " for the purposes of 
 the rule as to the duty of disclosing material facts, see § 28, ante. 
 
238 CH. Ill, SECT. 6, suB-s. (6); sect. 7, sub-s. (1). 
 
 of waiver. How far knowledge is a question of fact, and how far a question 
 of law, lias been discussed in an earlier part of this Section (i). Election, or 
 choice, is a matter of intention, and presupposes a state of the will, as know- 
 ledge presupposes a state of the mind in its receptive or purely intellectual 
 character : but the former no less than the latter is a fact, in the sense that 
 it is for a jury, or judge acting as a jury, to find whether the alleged intention 
 to elect in favour of affirmance did or did not exist, and whether such an 
 intention ought in the particular case to be inferred from the language or 
 acts and omissions proved (j), and, if disputed, what the alleged language 
 acts or omissions, if any, were, subject, again, to the " previous question " 
 of law, so often adverted to in the preceding Sub-sections, whether there is 
 any evidence at all of such language acts or omissions, or whether the proved 
 and admitted facts amount in law to an unequivocal election, or are such 
 
 (i) See Sub-s. (4) of this Section, ante. 
 
 (j) See pajtioularly (besides other cases cited in the notes to §§ 212-215, ante) the marine 
 insurance case of Morrison v. Universal Marine Insurance Co. (1873), L. R. 8 Exch. 40 
 (trial, and decision of Court of Q. B.), and 197 (decision of the Exchequer Chamber). 
 Here it was contended by the assured that the underwriters by issuing the policy after 
 discovery of the undisclosed fact, though they were ignorant of it when initialling the slip, 
 had elected to adhere to the contract. BLjiCKBURN, J., (see p. 48) left a specific question 
 to the jury on this point, which was : " did the defendant company, after knowledge that 
 the broker had not disclosed this fact, elect to treat the policy as subsisting ? " The 
 judge's direction to the jury in his summing up (see pp. 47, 48) was very explicit and 
 complete. He told the jury that it was open to the defendants either to return the premium 
 and make the contract a nullity, or to say that, having a right to get rid of the contract, they 
 would nevertheless keep the premium, and go on. They could not do both. Then, after 
 closely reviewing the evidence (somewhat too favourably to the plaintiff, in so far as he 
 laid down that the election must be made within a reasonable time — which is not 
 the law : see §§ 217, 218, ante), he concluded : "do you think that the defendants, having 
 the opportunity (taking into account that they should make the electio n within a reasonable 
 time), had elected to go on with the contract ? On this I express no opinion at aU. / leave 
 this entirely to you." It was obviously impossible for the plaintiff to escape from the 
 consequences of the adverse finding of the jury on this point, except by establishing that 
 the question was not one of fact at all, and that it was the duty of the judge to have ruled 
 that the acts and omissions relied upon (viz. issuing the policy, debiting the plaintiff in 
 their books with the premium, and not protesting till afterwards) constituted, of themselves, 
 a concliusive election in law to affirm the contract. This contention prevailed with the 
 majority of the Court of Exchequer, Mabtin, B., at p. 53, expressing the view that it was 
 a case of estoppel, and Bbamwbll, B., at pp. 54-58, that it was for the defendants to 
 explain away their conduct which, unexplained as it was, amounted to an election in 
 law, and should have been so held by the judge. Clbasby, B., in his dissentient judgment 
 (see pp. 59-61) pointed out that the real contract was the slip, and that the issue of the 
 policy was the merest formality (this has now for a long time been established as to law — 
 see § 182, and note (o) thereto, ante), and of itself constituted no evidence, or no necessary 
 evidence, of any election at all, whether with or without protest, or of anything except an 
 intention to conform to the honourable practice of giving the assured that on which alone 
 he could (by reason of the revenue legislation) legally sue, and so putting the dispute in 
 train for decision. The Exchequer Chamber agreed with the dissentient judgment of 
 Clbasby, B., reversed the decision of the majority of the Court of Exchequer, and restored 
 the judgment for the defendants which Blackbubn, J., had entered on the findings of the 
 jury. They entirely approved the summing up of Blackburn, J., except that they con- 
 sidered it too favourable to the plaintiff (p. 205) : they totally dissented from the idea of 
 estoppel (p. 206), and from the viewthat the facts constituted any conclusive election in law 
 (pp. 206, 207). Indeed, it would rather seem from the general tone of their exposition of 
 the principles of election that, if they had considered the question to be one of law at all. 
 they would have held that, in the circumstances before them, it ought to have been decided 
 in favour of the plaintiff, on the ground that those circumstances constituted no evidence 
 in law of the alleged election, as Cleasby, B., had evidently thought. 
 
§§ 274r-277 (parties). 239 
 
 that an inference of an intention to affirm can possibly be drawn from 
 tbem (k). 
 
 Sect. 7. Parties. 
 
 275. It remains to consider what persons may assert a title to relief by 
 reason of non-disclosure, and against what persons such title may be asserted, 
 in any of the various forms of proceeding which are available for this purpose (l). 
 
 Suh-s. (1). Who are entitled to assert the Right to Relief. 
 
 276. First, as to the persons entitled to assert the right to relief. These 
 comprise the person with whom the party charged made the contract in 
 the negotiation for which he is alleged to have neglected the duty of dis- 
 closure, and the principal, or partner, of such person, or, if the party charged 
 made the contract with two or more persons acting jointly, all such persons, 
 and, if he made it with two or more persons acting severally, any of such 
 persons (m). A second class consists of all such persons as by operation of 
 law, or by voluntary assignment, are, or become, entitled to stand in the 
 place of the person with whom the contract was so made (n). 
 
 277. The first of the above classes represents those to whom the duty of 
 disclosure is due in the first instance. That the principal or partner of a 
 negotiating party to whom disclosure is due can assert the same rights in 
 respect of non-disclosure as that party himself could, if he had no principal, 
 or none who chooses to intervene, is a consequence of the elementary rules 
 of the law of agency (o). That all or any of a number of joint contractors 
 can claim in respect of non-disclosure to any of them, but that, where the 
 party charged contracts severally with a number of persons, each of such 
 persons can only assert his separate and individual rights in respect of the 
 particular contract negotiated and made with himself, is a well-established 
 principle of the general law of contracts (p), and needs no special observations 
 in this place, beyond a reference to certain questions which have arisen in 
 the application of this rule to contracts of marine insurance. It is now 
 undoubtedly the law, and declared to be so by a codifying statute, that 
 where a policy of marine insurance is (as is nearly always the case) " sub- 
 scribed by or on behalf of two or more insurers, each subscription, unless 
 the contrary be expressed, constitutes a distinct contract with the assured " (q); 
 
 (I:) See the concluding observations of the last note, and most of the cases cited in the 
 notes to §§ 212, 21;!, ante. 
 
 (l) As described in Sect. 5, ante. 
 
 (ot) See § 277, inf. 
 
 (re) See §§ 278, 279, inf. 
 
 (o) See the various treatises on agency and partnership. Partnership ia of course 
 mutual agency, amongst other things. Por examples of a principal complaining of the 
 withholding of a fact from the solicitor who had negotiated the contract on his behalf, see 
 the two compromise cases of Gilbert v. Endean (1878), 9 C. D. 259, C. A., and Turner v. 
 Green, [189.5] 2 Ch. 205. 
 
 (p) See any of the text- books on contracts. 
 
 (q) Marine Insurance Act, 1906 (6 Edw. 7, c. 41), s. 24 (2). 
 
240 CH. Ill, SECT. 7, SUB-S. (1). 
 
 that is to say, that each underwriter so subscribing, though his name appears 
 with others at the foot of one and the same document, enters into a several 
 contract with the assured to indemnify him in the event of loss to the extent 
 of the amount set opposite his name, and does not contract jointly with the 
 others to pay, in such event, the aggregate sum for which the policy is under- 
 written in solido. On one or two occasions, where special stipulations or 
 expressions in the policy have seemed to lend plausibility to the contention, 
 attempts have been made to fix the underwriters with a joint liability on 
 the ground that, in the particular case, " the contrary " was " expressed" ; 
 as, for instance, where a number of underwriters, each subscribing the policy 
 for a fixed fraction of the whole, had described themselves as a syndicate, 
 and, further, had contracted to reinsure the risk, and give the assured a 
 charge upon such reinsurance : but it was held that conditions of this character 
 did not even raise an implication of joint liability (r) ; and, therefore, still less 
 could they constitute, in the statutory phrase, an " expression " of it (s). The 
 consequences of such a policy of marine insurance being regarded as so many 
 separate and distinct contracts, no less than if they had been recorded in 
 separate and distinct instruments, are that one of the underwriters so subscrib- 
 ing does not, by mere proof of all the elements necessary to constitute a case 
 of non- disclosure to himself, thereby relieve the others from the necessity of 
 establishing the bke elements as regards themselves : nor, on the other hand, 
 does the failure of any one of them to prove non-disclosure, or the success of 
 any affirmative answer set up against any one of them, prejudice in the slightest 
 degree the case of any of the others. It is true that, in cases of misrepresen- 
 tation, it was at one time thought that, though a false statement made to 
 a subscriber of a policy cannot be deemed to have been made to one who 
 underwrites at a later date, yet a misrepresentation made to the underwriter 
 whose name appears first among the names of the subscribers to one and the 
 same policy is deemed to have been made to all the underwriters whose 
 names appear beneath his : but this absurdly illogical distinction cannot be 
 maintained, consistently with the clear and plain rule now established (t). 
 
 (r) Tyser v. SMpovmers Syndicate (Reassured), [1896] 1 Q. B. 135 {per Mathew, J., at 
 pp. 138, 139) ; General Insurance Co. of Trieste v. Miller, and Leo Steamship Co. v. Corderoy 
 (1896), 1 Comm. Cas. 379, C. A. (per Lord Eshek, M.R., and A. L. Smith and Rioby, LL. JJ., 
 affirming the decision of Mathew, J., reported at p. 300 of the same volume). In these 
 cases, the policy, though otherwise in the ordinary form, was headed by the names of the 
 syndicate and its manager, which names were repeated in the margin under the named 
 aggregate amount of the insurance : but it was held that these merely descriptive expres- 
 sions were quite nugatory and meaningless, qvoad the rights and liabilities of the parties, 
 and could not control the operative part of the policy. It was then contended that the 
 covenant to reinsure and give a charge on the reinsurance to the assured made a difference, 
 because this must have been the joint contract of the syndicate, as such : but the obvious 
 answer was that this stipulation carried the matter no further : if the primary pro- 
 mises were several, the accessory promises, whereby the assured obtained protection 
 against the bankruptcy of each promisor, must be regarded as several also. 
 
 («) Thisterm is noticeable : thesection cited does not say — "unless a contrary intention 
 is expressed or imyZied," but — "unless the contrary is ea;pre«4-ed," which words may have 
 been intended to confine the exception within closer limits than, previously to 1906, the 
 common law of marine insurance might have permitted. 
 
 (() It seems to have always been recognized that one who comes in after the date of 
 the subscription of the policy cannot take advantage of any misrepresentation made to such 
 
§§ 277-279 (PARTIES). 241 
 
 It is also true that, in practice, the principles above stated are seldom invoked, 
 because there is scarcely ever a suggestion of any distinction between the 
 cases of the difierent underwriters (u) : but, on the rare occasions when such 
 a distinction is shown, these principles become of importance, and they are 
 both invoked and applied (v). 
 
 278. The second class of persons who are entitled to set up a case of non- 
 disclosure, whether by way of offensive or defensive proceedings, consists of 
 those to whom personally no duty of disclosure was owed, but who are, or 
 become, whether by operation of law or by voluntary assignment, entitled to 
 stand in the place of, or to represent, the persons to whom the duty was so 
 owed. As regards the former kind of transmission which ensues upon 
 the death, or disability (from insolvency, infancy, lunacy, or otherwise), 
 of the party complaining, no special observations are required in this place. 
 In all such cases, the right of the party complaining to claim in respect of, 
 or to set up by way of defence, the failure of the party charged to fulfil his 
 duty of disclosure devolves, upon the same persons, in the same events, 
 and subject to the same conditions, as in the case of any other proceedings 
 for the enforcement or avoidance of contracts (w). 
 
 279. As regards cases of transmission otherwise than by mere operation 
 of law, that is to say, cases of assignment inter vivos, or of devise or bequest, 
 there are two rules which require to be examined. In the first place, it is 
 well settled that, where specific property is devised or conveyed or assigned 
 from one to another, there pass with it all such equities to rescission, on 
 
 subscriber, or any of such subscribers ; but as regards the list of subscribers themselves, 
 it cannot be denied that no less an authority than Lord Mansfield, C.J., at p. 306 of 
 Barber v. Fletcher (1779), 1 Dougl. 305, committed himself to the statement that "a 
 representation to the first underwriter extends to the others," which was followed in 
 MarsdenY. Meid (1803), 3 East 571, where, at p. 573, we are told that " the Court intimated 
 upon the general question that if it had appeared that a material fact had been represented 
 to the first underwriter to induce him to subscribe the policy, it should be taken to have 
 been made to all the rest without the necessity of repeating it to each." But then dicta 
 plainly contradict the theory of distinct contracts, which, if a sound theory (as it 
 undoubtedly is), cannot depend for its validity upon the question whether the several con- 
 tractors underwrote at the same time, or at different times. At a very early date Lord 
 Ellbnbobotjgh, C.J., at pp. 13, 14, of Forrester v. Pigou (1813), 1 M. & S. 9, expressed the 
 gravest doubts on this question, which is now finally disposed of by the enactment cited. 
 
 (u) And for that reason the procedure in marine insurance cases which is described in 
 § 614, post, is habitually resorted to without objection. 
 
 (v) Thus, in Cantiniere Meccanico Brindisino v. Janson, [1912] 3 K. B. 452, C. A., there 
 was clear evidence that some of the underwriters had, through a report addressed to them, 
 complete cognizance of the fact aUeged to have been undisclosed, and therefore were not 
 in a position to establish one of the necessary ingredients in the burden of proof in- 
 cumbent on them — see Sect. 3, Sub-s. (5), ante, — but it was pointed out by Moulton, L. J., 
 at p. 468, that this circumstance in no way affected the case of the other subscribers to 
 whom the report was not communicated, and who were in a position to establish the 
 ingredient in question. 
 
 (w) See, generally, the treatises on contracts, parties, bankruptcy, companies (liquida- 
 tion), infancy, and lunacy. For examples of transmission, on death, of the right to complain 
 of non-disclosure, see the release and compromise cases of McCarthy v. Decaix (1831), 
 2 Buss. & M. 614 (where both parties to the litigation were representatives of the deceased 
 parties to the negotiation) ; Law v. Law, [1905] 1 Ch. 140, C. A. (the like). Eor an illus- 
 tration of transmission on insolvency, see the life insurance case of Re General Provincial 
 Life Assurance Co., Ltd., Ex p. Daintree (1870), 18 W. K. 396 (where the liquidator of the 
 company resisted the claim of an assured in the liquidation). 
 
 B.N.D. K 
 
242 CH. Ill, SECT. 7, SUB-SS. (1), (2). 
 
 whatever ground, as tte person devising, conveying, or assigning was previously 
 entitled to (x). Secondly, it is no less firmly established, on grounds of 
 public policy, that a bare right or equity to rescind, divorced from any specific 
 property or fund, is not saleable or assignable ; for all such sales and assign- 
 ments of litigated titles and claims savour of, if not actually constituting, 
 champerty in the one case, and maintenance in the other (y). But the 
 assignment of a claim, based on non- disclosure (or on any matter justifying 
 avoidance of the contract), to recover a specific fund which is earmarked 
 and can be traced, and which may properly be described as in equity the 
 money of the claimant, or as an equitable debt, is not exceptionable on this 
 ground (2), the fund in question being regarded as specific property within 
 the meaning of the first rule. Hence it is that misfeasance claims against 
 the delinquent directors and officers of a company have been held the proper 
 subject of assignment and sale, whether by private treaty (a), or public 
 auction (&), and this is so even where the purchaser is the agent of the very 
 persons whose conduct is impeached (c). 
 
 {x) For, ao long as the right is coupled with possession, physical or constructive (as by- 
 receipt of rents), the mere initiation or naaintenance of an action in relation to the 'property, 
 though proceedings for rescission may be involved in such litigation, is in no way obnoxious 
 to the objections of champerty or maintenance : see Prosser v. Edmonds (1835), 1 Y. & C. 
 (Eq. Bxoh.) 481 (per Lord Abistgeb, C.B., at pp. 486, 487) ; Cochell v. Taylm (1852), 
 15 Beav. 103 (at pp. 116, 117); Dickinson v. Burrell (1866), L. R. 1 Eq. 337 
 {per Lord Komilly, M.R., who, in a passage which has repeatedly been cited and approved, 
 at p. 342, laid down that " the right of suit is a right incidental to the property conveyed," 
 and " to each interest cairved out of it," and, applying this doctrine to the facts with which 
 he was dealing, " any interest which, but for the previous deeds, would have been sufficient 
 to enable a person interested to ask this court to secure this property for the benefit of the 
 persons interested therein, would, in my opinion, enable that person to ask this court to 
 set aside the deed obtained by fraud, which, if valid would have prejudiced or destroyed 
 his interest in the property purporting to be conveyed ") ; Dawson v. Great Northern and 
 City Railway Go., [1905] 1 K. B. 260, C. A. (per Collins, M.E., at p. 271 : " an assignment 
 of property is valid, even although that property may be incapable of being recovered 
 without litigation"). Accordingly, in Clements v. Hall (1858), 2 De 6. <fc J. 173, 
 the suit was brought by the purchasers of the interest of a person under a wiU, to which 
 person alone in the first instance the duty of disclosure was owed, and in Watt v. Assets Co., 
 [1905] A. C. 317, H. L., the pursuers in an action for "reduction" were a company who 
 had bought the assets of the insolvent City of Glasgow Bank from the liquidator, and, with 
 them, the right of the liquidator to sue in respect of the alleged withholding of certain 
 material facts from him by a contributory with whom a compromise had been effected. 
 
 (y) Wood V. Downes (1811), 18 Ves. 120 (per Lord Eldon, L.C, at p. 125) ; Prosser v. 
 Edmonds, sup. (per Lord Abingeb, C.B., at pp. 496, 500) ; Dawson v. Great Northern and 
 City Railway Co., sup. (per Collins, M.R., at pp. 270, 271 : " a court of equity is as much 
 bound as a court of common law by the rules relating to champerty and maintenance, and 
 if an assignment of a chose in action is obnoxious to those rules, it is bad in equity no less 
 than in law. An assignment of a mere right of litigation is bad ") ; Fitzroy v. Cave, [1905] 
 2 K. B. 364, C. A. (per Coeens-Haedy, L.J., at p. 371). 
 
 [z) See Coclcell v. Taylor, swp., where the distinction is drawn between an assignment of 
 a mere right to sue, or of a bare litigated claim, which would be bad, and (as was the case 
 there) the assignment of a claim to an interest in a specific fund which was actually lodged 
 in court. 
 
 (a) As in Re Parle Gate Waggon Works Co. (1881), 17 C. D. 234, C. A. ; Re Anglo- 
 Aiistrian Printing and Publishing Union, [1895] 2 Ch. 891 n. 
 
 (6) As in Wood v. Woodhouse dk Rawson, United, [1896] W. N. 4. 
 
 (c) This was the case in Re Park Gate Waggons Works Co., sup., where the liquidator of 
 the company who sold all the company's property to the agent of the delinquents was 
 held to have, in so doing, sold the misfeasance claim to those delinquents, who accordingly 
 
§§ 279-281 (PAETIES). 243 
 
 Subs. (2). Against whom the Right to Relief may be asserted. 
 
 280. The persons against whom the right to relief in respect of non- 
 disclosure may be asserted, whether by way of active proceedings or defence, 
 may be classified under two heads, corresponding to those under which the 
 persons entitled to relief have been classified. That is to say, the person 
 called upon to answer for, or take the consequences of, non-disclosure may 
 be, either (1) the person who in negotiating for the contract failed to comply 
 with the duty of disclosure incumbent on him, or whose agent to effect 
 the contract so failed, or (2) any person who, whether by operation of law 
 in certain events, or by voluntary assignment, is required to stand in his 
 place. Of these in their order. 
 
 281. If one of two persons contemplating a contract of any of the kinds 
 described in this Chapter, being under a duty of disclosure to the other, 
 chooses to delegate the negotiation for, and the making of the contract, to 
 an agent, he cannot rely upon this fact as an excuse for the breach of the 
 duty. If he has not himself performed that duty, he cannot be heard to 
 say that he was personally ignorant of the fact required to be divulged, and 
 that it was his deputy who was alone cognizant of it, and, therefore, alone 
 responsible for not revealing it (d) . The fact remains that there has been no dis- 
 closure to the party entitled to it, and that this element in the burden of proof 
 which lies on such party is accordingly established (e). It makes no difference 
 that the agent of the party charged was also the agent of the party com- 
 plaining (/), or that he was also an officer of the Court in cases of sales 
 pursuant to judicial order (g). The agent who omits to divulge material 
 matters known to him, being an agent employed to make the contract, is 
 
 obtained an injunction restraining the liquidator from attempting to enforce the claim; 
 the order, however, was expressed to be without prejudice to any application which the 
 liquidator might make to set aside the sale. So a man may under the conditions stated 
 in the text devise, so as to defeat his heir, an equity to sot aside a conveyance on the 
 ground even of fraud to the very person guilty of it, just as he can devise away from his 
 heir any other equitable and devisable interest attaching to specific property : Stump v. 
 Gabey (1852), 2 De G. M. & G. 632 (yerLord St. Leonards, L.C, at pp. 630, 631). 
 
 (d) See § 49, and notes (6) and (c) thereto, ante, where also the distinction between 
 " an agent to effect the contract," and " an agent to know " (the two characters being, 
 however, usually united in the same person) is explained. 
 
 (e) Brokers are commonly employed to negotiate or make the contract in cases of 
 marine insurance : see the authorities cited in the notes to §§ 91-99, ante, for illustrations of 
 such brokers having failed in their duty. Laud agents and solicitors are similarly employed 
 in most vendor and purchaser cases, and their neglect to communicate material facts 
 within their knowledge to the party complaining rendered their principals liable in many 
 of the cases cited in Sect. 2, Sub-s. (3) of this Chapter, ante. Solicitors are usually employed 
 in negotiating a family arrangement, or a compromise of litigation, and it has never been 
 disputed that suppression by them of facts within their knowledge which it is material to 
 disclose affects the client : see Bowks v. Stewart, cited in note (i), inf. ; Gilbert v. Endean 
 (1878), 9 C. D. 259, C. A. ; Turner v. Green, [1895] 2 Ch. 205 (though, whether rightly or 
 wrongly, it was held in that case that there was no duty of disclosure on any one) ; Re 
 Roberts, [1905] I Ch. 704, C. A. 
 
 (/) Stewart Y. Stewart (1&Z9), 6 CI. & Pin. 911 (j3er Lord Cottbnham, L.C, at p. 970); 
 Re Roberts, sup. Both these were cases of a family arrangement ; a Scotch law agent in 
 the former, and a solicitor in the latter, acted for all parties. 
 
 (?) See § 252, and notes (q) and [r) thereto, ante. 
 
244 CH. Ill, SECT. 7, SUB-S. (2), 
 
 not only liable to tis principal for the violation of his duty to him (h), but is 
 also responsible to the party complaining to whom he equally owes a duty (i). 
 
 282. The first species of the second of the two classes above-mentioned 
 demands no special observations. It is sufficient to say that, in case of the 
 death or disability (whether by reason of insolvency, infancy, lunacy, or 
 otherwise) of the party owing the duty of disclosure, the liability to proceedings 
 for the breach of that duty devolves upon, or is transmissible to, the same 
 persons, in accordance with the same rules, and subject to the same conditions, 
 as in the case of any other proceedings to enforce or avoid contracts (j). 
 
 283. As regards the other species of the class of persons required to 
 stand in the place of the party originally responsible, viz. that which com- 
 prises assignees from any such party otherwise than by mere operation 
 of law, a distinction must in the first instance be drawn between an assignee 
 of a chose in action, whether negotiable or non-negotiable, and an assignee 
 of property in possession. The general principle applicable to assignments 
 of these several kinds of property is that the assignor transfers what he has 
 acquired, and no more : if he has only a limited or defeasible interest, he can 
 only transfer an interest subject to the same limitations, or liable to be 
 defeated by the same events : if he has no title at all, he can confer none. 
 Nemo dot quod non habet. 
 
 284. Where any person has assigned a mere chose in action under a 
 contract (not being a negotiable instrument) voidable at the instance of the 
 other party to it, whether for non-disclosure or any other invalidating cause, 
 his assignee, though taking in good faith, for value, and without notice, 
 
 {Ji) Thus, in Campbell v. Richards (1833), 5 B. & Ad. 840, the plaintiff was suing for 
 negligence his marine insurance broker who, by reason of proved non-disclosure, had 
 failed in his action against the underwriters of the policy in Richards v. Murdoch (1830), 
 10 B. & C. 527. 
 
 (i) Thus, in relation to a case of marine insurance, at p. 543 of Bhchbvrn, Low <Si Co. v. 
 7sVo™ (1887), 12 App. Cas. 531, H. L., Lord Maonaghten observes that " the agent of the 
 assured is bound, as the principal is bound, to communicate to the underwriters all material 
 facts within his knowledge. Concealment of those facts is a breach of duty on his part to 
 those with whom his principal has placed him in communication." On this theory, the 
 solicitor of the other party to the contract was made a defendant, as well as that party 
 himself, in the vendor and purchaser case of Arnot v. Biscoe{n4&), 1 Ves. Sr. 94, and Lord 
 Habdwicke, L.C, having first expressed his view that the second defendant, the vendor, 
 was clearly liable (p. 95), proceeded (p. 96) to hold that the agent or attorney of the vendor 
 had the same duty of disclosure to the purchaser as the vendor himself had, and " this, 
 therefore," he added, " is a good equity for the plaintiff against Biscoe " — the attorney — 
 " in default of the other defendant, if it comes out so." The same course was adopted in the 
 release case of Bowles v. Stewart (1803), 1 Sch. & Lefr. 209, where Lord Redesdale, L.C. 
 (Tr.), after holding that his client was liable, though he had no personal knowledge of the 
 concealed deeds (p. 222), said, at p. 227, with reference to the solicitor defendant, " his duty 
 as a solicitor did not bind him to assist his client in an act of injustice ... he has properly 
 been made a party . . . and ought to be chargeable with the costs so far as they relate to 
 the release, in case they cannot be recovered from Richard Bowles," his client, of whom the 
 defendants Stewart and another were devisees. 
 
 ij) See the various text-books on contracts, parties, bankruptcy, companies (liquida- 
 tion), infancy, lunacy, &c. In M'Carthy v. Decaix (1831), 2 Russ. & M. 614, and Law v. 
 Law, [1905] 1 Ch. 140, C. A., the persons against whom relief was sought were the repre- 
 sentatives of a deceased party to the negotiation and making of the contract impeached 
 for non-disclosure. In Bowles v. Stewart, sup., two of the defendants were devisees, as 
 stated in the last note, of the vendor who had in his lifetime failed to make the necessary 
 diaclosure. 
 
§§ 281-284 (PAKTiEs). 245 
 
 stands in no better position after the assignment than the assignor did before 
 it. No rule is better established, or more inflexibly applied, than the ancient 
 equitable rule, now made part of the statutory law of the land {k), that the 
 assignee of a chose in action takes subject to all equities which before the 
 assignment were, and but for the assignment would continue to be, enforceable 
 against his assignor ; and amongst such recognized equities is the equity to 
 avoid (1). Desperate attempts have been made from time to time, on the 
 appearance of any enactment which merely declares, or codifies, or recognizes 
 this rule, to infer from some slight difierence between the statutory language 
 and that used in the authorities and text-books an intention on the part of the 
 legislature to alter the existing law in favour of the assignee. Such attempts 
 have always failed. Thus, immediately after the passing of the Policies of 
 Assurance Act, 1867 (m), and, again, shortly after the Marine Insurance 
 Act, 1906 (n), it was vainly urged that s. 1 of the former statute, and s. 50 
 of the latter, conferred immunities upon the assignees of life and marine 
 policies respectively to which the assignees of other choses in action are not 
 entitled (o). There is, however, one well-established exception to the rule 
 just stated. In the case of negotiable instruments, whether made so or 
 
 (k) Judicature Act, 1873 (36 & 37 Vict. c. 66), s. 25, sub-s. (6). 
 
 (Z) As to what " chose in action " means, see Lord Halsbury's Laws of England, 
 vol. iv, pp. 360-365. See, for examples of the application of the rule stated in the text, 
 Oory V. Gertcken (1810), 2 Madd. 40 {per Pltimer, V.-C, at p. 51), a misrepresentation case ; 
 Davis V. Chester (1855), 3 W. R. 321, where a compromise between five children. A., B., 
 C, D., and E., was set aside not only as against B., by whose fraud it had been brought 
 about, but also as against the innocent C, and D., and a purchaser without notice from E. ; 
 British EquihMe Insurance Co. v. Great Western Mailway Co. {ISdS), 38 L. J. (CH.) 132, 
 affirmed, ibid., 314, where a policy of lite insurance was avoided for non-disclosuxe 
 against the assignees ; William Pickersgill & Sons, Ltd. v. London and Provincial Marine 
 and General Insurance Co., [1912] 3 K. B. 614, where a policy of marine insurance was 
 treated as void against the assignees who were suing thereon. It should be noted, however, 
 that the party complaining may so conduct himself in relation to the assignee after the 
 assignment as to give him an independent affirmative answer to the claim for relief : see 
 what is said by Lush, L.J., at p. 700 of Wakefield <fc Burnley Banking Co. v. Normanton 
 Local Board (1881), 44 L. T. 697, C. A. 
 (m) 30 & 31 Vict. c. 144. 
 (re) 6 Edw. 7, c. 41. 
 
 (o) In British Equitable Insurance Co. v. Great Western Railway Co., sup., the contention 
 was raised before Malins, V.-C, (who rejected it, and was affirmed in so doing on appeal), 
 that s. 1 of the Act of 1867 exempts assignees of life policies from equities to which they 
 would otherwise be subject : but it was pointed out that this section merely enables an 
 assignee to sue in his own name, and in no way affects the equities to which such assignee 
 is subject, whilst s. 2 expressly preserves those equities. In William Pickersgill & Sons, 
 Ltd. V. London & Provincial Marine & General Insurance Co., sup., a. similar suggestion 
 was made with reference to s. 50, sub-s. (2) of the Act of 1906, which provides that " where 
 a marine policy has been assigned so as to pass the benefioial interest in such policy, the 
 assignee of the policy is entitled to sue thereon in his own name ; and the defendant is 
 entitled to make any defence arising out of the contract which he would have been entitled 
 to make if the action had been brought in the name of the person by or on behalf of whom 
 the policy is effected." It was urged that, by the words " arising out of the contract," the 
 legislature (notwithstanding that the statute is expressed " to codify the law relating to 
 marine insurance ") intended to limit the equitable rights of the underwriter against the 
 assignee, and in particular to deprive him of his equity to avoid the policy against him for 
 non-disclosure. But it was held by Hamilton, J., at p. 62] , that this phrase was intended 
 to describe, or was at least wide enough to include, " an implied condition, contained in the 
 contract itself, precedent to the liability of the underwriter to pay," ' and the duty of dis- 
 closure is such a condition : see § 83, and note (t) thereto, ante. 
 
246 CH. m, SECT. 7, SUB-S. (2). 
 
 recognized as suet by statute {])), — ^for instance, the Bills of Exchange Act, 
 1882 (q), and the Bills of Lading Act, 1855 (r), — or by the custom of mer- 
 chants (s), the assignee is prima facie free from all personal .equities existing 
 as between his assignor and the party complaining, and is presumed, until 
 the contrary be shown, to have acquired and to hold the instrument " in due 
 course," that is to say, for value and without notice and in good faith, and 
 the onus is on the party complaining to show, not only the facts which would 
 have entitled him to relief against the assignor, but also the fact that the 
 assignee acquired his alleged title to the instrument otherwise than in due 
 course (t), subject to the statutory proviso, with reference to bills of exchange, 
 that " if in an action on a bill it is admitted or proved that the acceptance, 
 issue, or subsequent negotiation of the bill is affected with duress, or force, 
 and fear, or illegality, the burden is shifted unless and until the holder proves 
 that, subsequent to the alleged fraud or illegality, value has in good faith 
 been given for the bill " (u), which means that both value and good faith 
 must be established, so that value without bona fides is as inefficacious to 
 discharge the full bm'den imposed on the holder as bona fides without value (v). 
 285. On the other hand, where property in possession, physical or con- 
 structive (as by receipt of rents of profits), passes under the assignment to 
 one who acquires it for value, without notice, and in good faith, no election 
 to avoid the transaction which would have been available against the assignor 
 will be in the slightest degree effectual to take the property out of the hands 
 of the assignee. Such election to avoid must have been in fact exercised by 
 the party complaining before the assignment, either in the form of a notice 
 of repudiation, and that " resumption of the property " (in a legal sense) 
 which is implied therefrom, or by the institution of proceedings for rescission, 
 in either of which events the assignee is simply put in the possession of 
 something which is nothing, since it was not in the power of the assignor to 
 bestow it (w). But where there has been no such avoidance before the 
 
 (j)) See Lord Halsbury's Laws of England, vol. iv, pp. 393-397. 
 
 (q) 45 & 46 Vict. c. 61. See Chalmers on Bills of Exchange. 
 
 {r) 18 & 19 Vict. u. 111. See Carver's Carriage of Goods hy Sea. 
 
 (s) There are two marks of an instrument recognized as negotiable by the law merchant : 
 (1) it must pass from hand to hand by delivery, (2) with the intention and effect of con- 
 ferring a right to sue thereon : see Grouchy. Credit Fancier of England (181Z),Ij. E. 8 Q. B. 
 374 (at pp. 381, 382). As to what documents are comprised within the class of instruments 
 negotiable by mercantile custom, see Lord Halsbmy's Laws of England, vol. ii, pp. 564- 
 570 ; Sheffield (Earl) v. London Joint Stock Bank (1888), 13 App. Cas. 333, H. L. ; London 
 Joint Stock Bank v. Simmons, [1892] A. C. 201, H. L. 
 
 (i) See, as regards bUls of exchange, &c., ss. 29, 30, and 38 (2) of the Bills of Exchange 
 Act, 1882. 
 
 (k) See s. 30 (2) of the last cited Act. 
 
 (v) Tatam v. Haslar (1889), 23 Q. 15. D. 345, Div. Ct. The above provisions are applied 
 by sa. 73 and 89 of the Act to cheques and promissory notes respectively (with the 
 necessary modifications). If the instrument comes to the hands of the holder when 
 overdue, or after dishonour, or in a form which shows irregularity on its face, the rules 
 stated in the text have no application, and the holder is in the position of any other assignee 
 of a chose in action : see s. 36 of the Act. 
 
 (w) Thus in White v. Garden (1851), 10 C. B. 919, and Pease v. Gloahec (1866), 
 L. R. 1 P. C. 219, which were both cases of misrepresentation, there had been no such 
 avoidance before assignment, and the representee's defence accordingly failed. 
 
§§ 284-287 (parties). 247 
 
 assignment, the assignee cannot be deprived of tte property unless his acqui- 
 sition of it was wanting in some one or more of the elements necessary to 
 constitute that which (borrowing a phrase from the Bills of Exchange Act, 
 1882) may be termed " due course," that is to say, unless (1) he gave no value, 
 and was a mere donee or volunteer, or (2) took with notice, or (3) in bad faith. 
 
 286. That the property may be taken out of the hands of an assignee 
 who is a mere volunteer or the recipient of bounty, whether he acted in good 
 faith, or without notice, or not, has been established from the earliest times (x). 
 It is to be observed that for this purpose any person on whom property 
 devolves by mere operation of law, such as an execution creditor, or a trustee 
 in banljruptcy, is not a purchaser for value, and a party complaining may 
 exercise against him any right of avoidance (thereby recovering property 
 otherwise deliverable to the execution creditor, or distributable amongst 
 the creditors) which he might have exercised against the execution debtor 
 or the bankrupt (y). Secondly, if the assignee had notice of the fact which 
 gave the party complaining his equity to avoid the contract and resume the 
 property, he cannot retain such property, though he gave value, and though 
 he was not guilty of any personal dishonesty or bad faith (z). Lastly, though 
 the assignee gave value and in fact had no express notice of the cir- 
 cumstances which rendered the contract voidable, yet, if he acted in bad 
 faith, that is to say, if with fraudulent deliberation he escaped notice of 
 that which he had abundant reason to suspect, again he is not permitted 
 to retain the property (a). In the first of the above three cases, the assignee 
 has purchased no right to consideration, and therefore will suffer no damnum 
 which the law can recognize in handing over that which came to him as a 
 mere gift or windfall : in the other two of them, he will suffer a damnum 
 but no injuria, because he wiU thereby be most righteously punished for 
 direct or constructive complicity in the very breach of duty which is the 
 subject of relief. 
 
 287. The burden of establishing that the assignee was not an assignee 
 " in due coiHse " is on the party complaining : there is no onus on the assignee 
 to prove that he was. It has never, indeed, been doubted that, in the class 
 of case now under consideration, it is incumbent on the party complaining 
 to show that the assignee gave no value for the property, or had notice of 
 
 (x) See the cases cited in the notes to § 506, in Ch. V, Sect. 7, Sub-s. (2), 'post, where the 
 application of the rule becomes of more practical importance than in the class of case 
 which ia the subject of the present Chapter, and cp. the misrepresentation cases of Vaughan 
 V. Vandersiegen, Oates^a Case (1854), 2 Drew. 363; Same v. Same, Otkwaite's Case (1854), 
 2 Drew. 408 ; Haygarth v. Wearing (1871), L. R. 12 Eq. 320 ; Babcock v. Lawson (1880), 
 5 Q. B. D. 284, C. A. Contrast Lloyd v. Passingliam (1815), G. Cooper, 152 ; 14 R. R. 228 
 (per Lord Eldon, L.C, at p. 155). 
 
 iy) Kennedy v. Green (1834), 3 My. & K. 699 ; Load v. Qreen (1846), 15 M. & W. 216 ; 
 Madell v. Thomas, [1891] 1 Q. B. 230, C. A. (per Kay, L.J., at p. 238) ; Re Eastgate, Ex p. 
 Ward, [1905] 1 K. B. 645 ; Tilley v. Bowman, [1910] I K. B. 745, 750. 
 
 (z) See Sheffield (Earl of) v. London Joint Stock Bank (1888), 13 App. Cas. 333, H. L. ; 
 London Joint Stock Bank v. Simmons, [1892] A. C. 201, H. L. In the former it was, and 
 in the latter it was not, proved that the assignee had notice. 
 
 (a) Clough y. L. d: N. W. Bailway Co. (1871), L. R. 7 Exch. 26, Exch. Ch., where, 
 though value had been given, the alleged bad faith was proved ; Whitehorn Bros, v. 
 Davison, [1911] 1 K. B. 463, C. A., where the alleged mala fides was not made out. 
 
248 
 
 CH. Ill, SECT. 7, SUB-S. (2); SECT. 8, SUB-S. (1). 
 
 the facts in virtue of whicli tte contract had become voidable : but until 
 recently there seems to have been some conflict of judicial opinion as to 
 whether the onus of establishing good faith is not on the assignee. It has 
 now, however, been decided by the Court of Appeal that this is not so, and 
 that the party complaining must prove the assignee's absence of good faith, 
 if he intends to rely on it, just as much as he must prove the absence of each 
 of the two other elements which are required to constitute " due course " (b). 
 Whenever the party complaining has either not alleged, or, having alleged, 
 has failed to prove, the absence of some one of these three elements, his 
 claim against the assignee has been dismissed (c), unless he has been in a 
 position to rely upon some estoppel against the assignee {d), or has been 
 able to show that there had never been any contract at all under which any 
 property could have passed to him (e). 
 
 (6) Whitehorn Bros. v. Davison, sup., where the rule, and the reason for it, are stated in 
 the lucid judgment of Vaughan-Williams, L. J., at pp. 476, 477 : " where you have a 
 contract of sale which is voidable on the ground of fraud, or for any other reason, and before 
 it is avoided by the seller, the buyer, as against whom it could have been avoided, has 
 transferred the subject-matter of the contract to an innocent third person who has given 
 value and has accepted the transfer without either knowledge of anything wrong, or any 
 knowledge of such circumstances as might lead him to wish not to make further inquiry 
 lest he should find that there was something wrong, the contract cannot be avoided as 
 against that person ; and I am of opinion that the onus of proving that there are such 
 circumstances as prevent the third person so purchasing from being such an innocent 
 purchaser rests on the plaintiff who seeks to recover the subject-matter of the contract 
 from him, and not on the defendant. . . . The very statement which occurs again and 
 again that in such cases the contract is a voidable and not a void contract, i.e. that it is 
 valid tUl avoided, seems to me to indicate that the onus for the purpose of avoiding it 
 against the third person must lie upon the person who is seeking to impeach that which up 
 to that time is a valid contract. Common sense appears to me to point to the same con- 
 clusion." See also the observations of Buckley, L.J., in the same case, who, at pp. 481, 
 482, insists that a man in possession of property mxist be presumed to be in lawful and 
 innocent possession of it until the contrary is shown, and that the form in which the proviso 
 to s. 23 of the Sale of Goods Act, 1893 (56 & 57 Vict. c. 71) is expressed, though at first sight 
 lending some countenance to the opposite contention, could not have been intended to 
 evolutionize plain principles of evidence applicable to such cases. So also Kennedy, L. J., 
 at p. 487. 
 
 (c) As in London Joint Stock Bank v. Simmons, sup. (where the plaintiff failed to 
 prove notice) ; Truman v. Attenhorough (1910), 103 L. T. 218 (where neither absence of 
 value, nor notice, nor bad faith was even alleged, estoppel alone being relied upon) ; White- 
 horn Bros. V. Davison, sup. (where, again, no allegation of, or attempt to prove, any of 
 the above facts was made, it being insisted, wrongly as the C. A. held — see the last note — 
 that it was for the assignee to prove his good faith. 
 
 (d) See Mangles v. Dixon (1852), 3 H. L. C. 762 {per Lord St. Leonaehs, L.C, at pp. 
 732, 733) ; Truman v. Attenhorough., sup. (where, however, the estoppel was not made out). 
 
 (e) That is to say, where the contract must be deemed never to have existed at all, 
 by reason of having been induced by misdescription of its character or class, or by error 
 personos, which type of case is discussed minutely in §§ 256-259, and in § 349, of the author's 
 Law of Actionable Misrepresentation ; or where the contract is void ab initio, and not merely 
 voidable, by reason of statutory or common law illegality. It may be mentioned here, 
 before leaving the subject, that one who acquires the subject-matter of the contract without 
 notice of the circumstances which would render it voidable can (except in the class of 
 case mentioned by Jbssel, M.R., in his observations cited below) confer a good title on 
 another, even though that other had such notice : see Lowther v. Carlton (1741), 2 Atk. 
 242 ; Sweet v. Southcote (1786), 2 Brown C. C. 26 ; Tie Stapleford Colliery Co., Barrow's Case 
 (1880), 14 C. D. 432 {per Jbssel, M.E.., at p. 445 : " the only exception, and the well-known 
 exception, to the riile which protects a, purchaser with notice taking from a purchaser 
 without notice, is that which prevents a trustee from buying back property which he has 
 sold, or a fraudulent man who has acquired property by fraud saying he sold it to a bona 
 
§§ 287-290 (criticism of certain authorities). 24.9 
 
 Sect. 8. Critical Observations on Certain Debateable Decisions 
 relating to matters dealt with in this chapter. 
 
 288. There are certain decisions from time to time referred to in foregoing 
 portions of this Chapter which would seem to invite a closer and more detailed 
 examination than it was then possible or convenient to embody either in the 
 text or in the appended notes. These decisions consist of : (1) the two 
 " geometrical progression " cases (as they may be called) of Jatnes v. Morgan, 
 and Thornhorow v. Whitcicre, (2) the vendor and purchaser case of Wilde 
 V. Gibson, (3) the compromise case of Turner v. Green, and (4) the anomalous 
 case of Ellard v. Lord Llandaff. It is proposed now to examine these cases 
 m the above order, and to consider how far, if at all, the propositions of law 
 enunciated in them are sound. 
 
 Subs. (1). TJie Cases q/" James v. Morgan, and Thornborow v. Whitacre. 
 
 289. These two cases, decided (if there can be said to have been in strict- 
 ness any decision at all of either of them) in 1674, and in 1705, respectively, 
 are really almost lusus jurisprudentice. They can hardly be regarded as 
 serious authorities. Each of them ended in, if not " a lame and impotent 
 conclusion," at all events a solvuntur risu tabulce. They were actions brought 
 to recover damages for breach of contracts to deliver huge quantities of 
 barley or rye calculated according to a stipulated scale of " geometrical 
 progression," of the nature and consequences of which mathematical law 
 the plaintifE in each case was presumably cognizant (though oi/ft/ta^jjs) , 
 and the defendant presumably ignorant. We are not told in the report of 
 either case what station in life the parties occupied, but we may suppose that 
 they were farmers, and that, except ad hoc, they were not on intimate terms 
 with any but the most elementary rules of arithmetic. In neither case does 
 the Court seem to have been conscious of the serious nature of the questions 
 of non-disclosure which were involved, and consequently there was no ruling 
 which is of the slightest juridical value. Nevertheless these two " geometrical 
 progression " oases raise problems which may conceivably have to be solved 
 hereafter, and invite consideration of the principles on which any such question 
 ought to be determined. From that point of view, apart from the interest 
 attaching to them as curiosities in the annals of om' jurisprudence, they are 
 perhaps not undeserving of examination. 
 
 290. There are two reports of James v. Morgan (f). One of them is as 
 follows (a) : " Assumpsit to pay for a horse a barleycorn a nail, doubling 
 it every nail, and avers that there were 32 nails in the shoes of the horse, 
 which being doubled every nail, came to 500 quarters of barley : And on 
 
 fide purchaser without notice, and Las got it back again ") ; Nottinyham Patent Brick & 
 Tile Co. V. Butler (1886), 16 Q. B. D. 778, C. A. (per Lindlev, L.J., at p. 789) ; Wilkes v. 
 Spooner, [1911J 2 K. B. 473, C. A. (per Vatjghan Williams, L.J., at p. 483, and Fakwbll, 
 L.J., at pp. 487, 488). An illustration of the exception pointed out, vhi sup., by 
 Jessbl, M.R., is the partnership case of Gordon v. Holland (1913), 82 L. J. (P.O.) 81. 
 
 (/) (1674), 1 Lev. Ill ; 1 Keb. 569. 
 
 (g) That in 1 Lev. Ill, the whole of which ia transcribed verbatim in the text. 
 
250 CH. Ill, SECT. 8, SUB-S. (1). 
 
 non assumpsit pleaded, the cause being tried before Hyde at Hereford, 
 be directed tbe jury to give tbe value of the borse in damages, being £8, 
 and so tbey did. And it was afterwards moved in arrest of judgment for 
 a small fault in tbe declaration, wbicb was overruled, and judgment given 
 for tbe plaintifE " (h). 
 
 291. It appears, therefore, that "Hyde at Hereford" took a short 
 way with the jury and the situation, and that by his blunt direction, 
 worthy of the summary and sub-ficulnal administration of a Cadi, 
 brushed aside, or forestalled, the actual or potential suggestion of 
 subtleties. In those days, and in such cases, juries found as they were told 
 to find. The measure of damages was hopelessly unsound : but no one 
 seems to have been shocked or surprised by the judge's direction on that 
 score, for the simple reason that damages were then awarded in an entirely 
 haphazard fashion, and without any application or appreciation of the 
 systematized body of rules which now govern the assessment of pecuniary 
 compensation for breaches of contract (i). When moving to arrest the 
 judgment, the defendant's counsel could think of nothing better than " the 
 smaU fault in the declaration " above mentioned : any notion of fraud, or 
 mistake, or non-disclosure was obviously not dreamed of in his philosophy (k). 
 
 292. Thornborow v. WMtacre was a similar case, except that the plaintiff 
 was not, as in the former case, a vendor of a chattel for the stipulated number 
 of grains, or rather an exchanger of goods for other goods to the stipulated 
 amount, but the purchaser of the stipulated quantity of grains for a fixed 
 price in money. The treatment, however, of the later case, both in argument 
 and judgmtcnt, was entirely difierent. There are two reports of it (?). Putting 
 
 (K) The nature of the " small fault in the declaration,'' which was not allowed to have 
 any effect " after verdict," appears from the report in 1 Keb. 569, the whole of which runs 
 thus : " In action upon the Case on colloquium, on the sale of a Gelding, the defendant 
 promised that the said horse should have four shoes, and in each eight nails : and so for the 
 first, the defendant was to give a barleycorn, for the second two, and four for the third, 
 and so double to every nail, proximo, whereas it should have been proximo prsecedenti. 
 Sed non allocatur after Verdict." 
 
 (*) Of course the proper measure was not £8, the value of the horse, but the value of 
 the stipulated number of barleycorns, less £8, the (apparently agreed) value of the horse, 
 if the horse had not been delivered, and without any deduction, if it had. See the observa- 
 tions of Vatjghan Williams, L.J., at p. 792 of Chaplin v. Hicks, [1911] 2 K. B. 786, C. A., 
 as to the haphazard way in which damages were left to the jury in former days, without 
 any rules or principles being laid down by judges for their guidance. 
 
 (k) In neither report is the sum in geometrical progression exactly worked out, though 
 Levinz estimates the result roughly at " 500 quarters of barley," and, in the margin, cites 
 a then well-known mathematical treatise: "vide Mathesin Wallisii, cap. 31." The 
 allusion is to the Mathesis Universalis (Oxford, 1657) of John WaUis, a very celebrated 
 mathematician, man of science, and scholar, who was in 1649 appointed by Cromwell 
 SaviUan Professor of Geometry in the University of Oxford, and was one of the founders 
 of the Royal Society. The work in question " embodied the substance of his professional 
 lectures " {Diet, of Nat. Biogr., sub nom., where we are also told that " in Dnnton's Life and 
 Errors (Nichols), ii. 658, is a copy of verses on Wallis's funeral, beginning : ' I'B have the 
 solemn pomp and stately show In geometrical progression go.' " The precise figures are 
 as foUows : the last doubling of the barleycorn gives 2, 147, 483, 648 barleycorns : and the 
 addition of the 32 sums, successively doubled, beginning with 1, and ending with the 
 above figure, results in 4,294,966,395 barleycorns, a huge amount, but not nearly approach- 
 ing the colossal result of the 52 doublings in Thornhorow v. WMtacre. 
 
 (I) (1705), 6 Mod. 305 ; 2 Ld. Eaym. 1164. 
 
§§ 290-292 (criticism of certain authorities). 251 
 
 aside the skorter and far less satisfactory of the two (m), we learn from Lord 
 Raymond (w) that it was an " action upon the case, in which the plaintiff 
 declares upon an agreement between the plaintiff and the defendant, that 
 the defendant in consideration of 2s. Qd. in hand paid, and of U. 17s. 6d. 
 to be paid upon the defendant performing the agreement of his part, deUberaret 
 to the plaintiff two grains of rye corn on Monday, the 29th of March, and 
 four grains of rye corn on Monday then next following, and eight grains of 
 rye corn on Monday next after the Monday last mentioned, and sixteen 
 grains of rye corn on Monday next after the said third Monday, and double 
 the number of grains of rye corn, viz. thirty-two grains of rye corn on Monday 
 next after, being the fifth Monday, et progressu sic deUberaret quolibet alio 
 die LancB successive infra unum annum ab eodem 29 Martii bis tot granafecalis 
 quot die Lunm proximo prwcedente (o) respective deliberanda forent." To this 
 declaration the defendant demurred (p). It was felt that on some ground 
 or other the Court ought to intervene at the earliest stage to prevent even 
 the possibility of an outrageous result : but still it did not occur to the 
 defendant's counsel to suggest any ground for the demurrer except im- 
 possibility (q), which, for obvious reasons, the Court (consisting of Holt, C.J., 
 Powell, J., and others) held to be an invalid ground (r). Thereupon 
 
 (m) Viz. the report in 6 Mod. 305, the whole of which (verbatim) is as follows : 
 " Assumpsit, that in consideration of half a crown by the plaintiff in hand paid to the 
 defendant, he promised to pay two grains of rye upon Monday the 29th March in such a 
 year, four grains the next Monday after, and so on by progressional arithmetic every 
 Monday for a year : and non assumpsit pleaded. Per Curiam, upon motion : Let them 
 go to trial, and though this may amount to a vast quantity, yet the jury will consider of 
 the foUy of the defendant, and give but reasonable damages against him." The "pro- 
 gressional arithmetic" mentioned is what is now called "geometrical progression" 
 (1, 2, 4, 8, 16, &c.), as distinct from " arithmetical progression " (1, 3, 5, 7, 9, &c.). The 
 " motion " referred to was, as we are told by Lord Raymond, a demurrer. The statement 
 that the consideration was half a crown is inaccurate. It was, as again we find in Lord 
 Raymond's fuller report, £5, whereof 2*. 6d. was paid down, and the remaining £4 17«. Gd. 
 was payable on the completion of the defendant's 52 weekly dehveries of the successively 
 doubled amounts of grain. The observation of the Court as to what a jury would probably 
 do with the case, which is not to be found in Lord Raymond's report, seems to indicate 
 an intelligent anticipation of a repetition at the trial of the summary methods of Hyde, J., 
 in James v. Morgan, sup., which case (as we are told by Lord Raymond) was cited to, and 
 discussed by, the Court : see note (s), inf. 
 
 (n) (1705), 2 Ld. Raym. 1164. 
 
 (o) Observe that the cautious pleader, by using the jihiaiSe proximo prsecedente, steered 
 clear of " the small fault in the declaration " which imperilled the plaintiff's success on the 
 trial of James v. Morgan, sup., and, but for the fact that the objection was taken after 
 verdict, might have vitiated it. 
 
 (p) His counsel was the eminent Salkeld, who was not willing to take the chance of 
 a judge at the trial following Hyde, J.'s direction in James v. Morgan, sup., and telling 
 the jury to give the plaintiff £5 as damages. He evidently thought it quite possible that 
 the jury might be directed, or at all courts left free, to award as damages the value of the 
 stipulated number of grains. 
 
 (q) At pp. 1164, 1165 of the report in 2 Ld. Raym. 1164, Salkeld's contention to this 
 effect is stated. He said that there were three kinds of impossibility, (i) impossibilitas 
 legis, (ii) impossibilitas rei, and (iii) impossibility in fact. He admitted that the case did 
 not faU within (i), but urged that it came within (iii), if not within (ii), " as all the rye in the 
 world did not come to so much," and that the contract was therefore void. 
 
 {r) Ibid., p. 1 16-5 : " Holt, C.J. Suppose A. for money paid him by R. will undertake 
 to do an impossible thing, shall not an action lie against him for not performing it ? . . . 
 though it cannot be performed, yet he shall answer damages. Per Curiam. And as to the 
 impossibility, the Court said it was only impossible with respect to the defendant's ability, 
 
252 
 
 CH. Ill, SECT. 8, SUB-S. (1). 
 
 tte counsel for the defendant, perceiving the opinion of the Court to be 
 against his client, ofiered the plaintiff his half-crown and his costs ; which 
 was accepted of, and so no judgment was given in the case " (s). 
 
 293. The result, therefore, of this action was as inconclusive as that of 
 Jmnes v. Morgan, and is, moreover, far less comprehensible. On the one hand. 
 Holt, C.J., seems to have been much troubled by the extraordinary and 
 unforeseen consequences which would result from upholding the validity of 
 the contract («), and, with this in his mind, put an unnatural and impossible 
 construction upon it which would at all events mitigate its absurdity (m) . 
 Yet Powell, J., undoubtedly stated in plain terms that the contract " would 
 hold in law " (v), and the rest of the Court must have agreed with him, since 
 they were unanimous in considering the only ground assigned for the demurrer 
 to be bad, and must therefore have been prepared, but for the compromise 
 arrived at between the parties, to hold the declaration good, and the claim 
 to its full extent enforceable. But then the very judge who expressed his 
 view that the contract would hold in law observed in the same breath that 
 " the defendant ought to pay," not the full stipulated sum, but " something 
 for his folly " (w), and the Court, according to the shorter report, thought 
 it probable that " the jury would give but reasonable damages against 
 him " (x), which observations are totally inconsistent with the theory that 
 
 which was not such an impossibility as would make the contract void. And the Chief 
 Justice said, the words, quolibet alio die Lunce, must be construed what we say in Knglish, 
 every other Monday, that is, every next Monday but one, and that would bring the contract 
 nearer to the defendant's ability of performance. Powell said, that though the contract 
 was a foolish one, yet it would hold in law, and that the defendant ought to pay something 
 for his folly." 
 
 (s) Ibid., p. 1166. We are told, at p. 1165, that "upon this occasion . . . James v. 
 Morgan was remembered," and, at p. 1166, that this case " was admitted of all hands to 
 be good law, and did, as the plaintiff urged, rule this. And Mr. Salkeld said that differed 
 from this because that was possible to be performed, though an ill bargain, but this im- 
 possible." What was meant by its being " admitted of all hands " that James v. Morgan 
 was good law, it is impossible to imagine, because, if one thing is more clear than another 
 about that case, it is that no question of law whatsoever was decided in it. 
 
 (t) Here, as in James v. Morgan, the sum is not worked out. We merely get a hint of 
 its enormous magnitude by Salkeld's statement that " all the rye in the world would not 
 come to so much." The amount is of course hugely in excess of that arrived at in the 
 earlier case, since there are 52 doublings here, as against 32 there, and each additional 
 doubling vires acquirit eundo. The last duplication of the 2 grains, with which 
 the series of 52 commences, results in the figure 2,251,799,813,663,248, or 'nearly 2252 
 biUions of grains. What the defendant, therefore, contracted to deliver (being the 
 aggregate of the 52 sums, beginning with 2, and ending with the above) was no less than 
 4,503,599,627,326,494, or about 4503i billions, of grains. 
 
 (u) See note (r), sup. The suggestion thrown out by Hoi.T, C.J., that quolibet alio 
 die Lunce might, — indeed, as he said, must, — be construed as meaning every alternate 
 Monday, is quite grotesque. It sins against both decent Latinity and good sense. In 
 the first place, " alio," though perhaps not very good Latin for " every remaining Monday 
 in the year (" csetero " being more appropriate), could by no possibility be taken to indicate 
 alternate weeks. Secondly, from the declaration, which carefully sets out the successive 
 weekly duplications — 2, 4, 8, 16, 32 — for the first five Mondays, and proceeds, " et 
 progressu sic deliberaret quolibet aliodie Lunse successive infr^ unum annum," it is 
 manifest that weekly doubhngs throughout the year, like the first five specified weekly 
 doublings, were intended : for, otherwise, the word " sic " would have no meaning at all. 
 
 (v) See note (r), sup. 
 
 (lo) See, again, note (r), sup. 
 
 (x) See note (m), sup. 
 
§§ 292-294 (criticism op certain authorities). 253 
 
 the agreement was enforceable, and the stipulated sum recoverable according 
 to its tenor. And, more than anything else, the defendant's offer, and the 
 plaintifj's acceptance of it, absolutely contradict every pronouncement which 
 is stated to have emanated from Holt, C.J., and Powell, J. For, if " the 
 counsel for the defendant perceived the opinion of the Court to be against 
 his client" to the extent of holding the declaration good (which was the 
 only subject of the motion), it is inconceivable that this perception should 
 have moved him to make, and still more inconceivable that the plaintiff 
 (who presumably perceived the Court to be with him to the above extent) 
 should have accepted, so ridiculously inadequate an offer as the return of 
 the half-crown in hand paid ; indeed, a settlement on these terms is not only 
 inconsistent with the hypothesis that the contract was valid and enforceable, 
 but consistent with no other theory than that it was voidable and unen- 
 forceable (y). 
 
 294. The real problem in these cases was ignored or shirked : and it 
 is no doubt for that reason that they have scarcely ever been cited as authori- 
 ties, or regarded in any other light than as " flies in amber." But none the 
 less they donnent furieusement d, penser, and, like some of the apparently 
 trivial discussions in the case-books of the Jesuits, they raise questions of 
 principle. Let it be granted that a contract of the nature in question be 
 made at the present day between two persons each of whom is of normal 
 intelligence and education. On what principle, if any, could the party who 
 promised to pay the sum calculable according to the law of geometrical 
 progression be relieved of his promise ? Whether the party seeking to 
 enforce the contract be a vendor, as in James v. Morgan, or a purchaser, as 
 in Thornborow v. Whitacre, there is ordinarily no obligation on him to instruct 
 the other party in the simple rules of arithmetic (2). And, generally, whatever 
 be the nature of the contract in course of negotiation, each of the negotiating 
 parties is presumed to be acquainted with, and neither of them need ex- 
 pound to the other, such rudimentary principles of science as form the subject 
 of an ordinary education (a), unless there is independent evidence of 
 fraud (6), or of oppression (c), when it may become incumbent on the party 
 
 {y) For, except as to the costs, this is just what would have happened if the defendant 
 had insisted, and the Court had determined, that the contract was voidable at his option, 
 or, if the defendant had been suing for rescission, and such rescission had been granted, 
 in either of which cases he would have had to return the half-crown as the condition of 
 relief. 
 
 (z) There is ordinarily no duty on a vendor to disclose matters not affecting title (see 
 § 117, 118, ante), and there is no duty, except in very special circumstances, on a purchaser 
 to disclose anything at aU (see note (v) to § 111, and the latter part of § 165, ante). 
 
 {a) See § 40, ante. 
 
 (b) As in many of the cases cited in the notes to Sect. 2, Sub-s. (8), ante. 
 
 (c) Thus, in Howley v. Cooh (1873), Ir. R. 8 Eq. 370, one of the elements in the uncon- 
 soionability of the bargain was that the money-lender had introduced into the mortgage 
 deeds unprecedented and oppressive clauses without any attempt to explain their effect 
 to the borrower. Another case, still more in point, is Harris v. Clarson ( 1910), 27 T. L. R. 30 
 an action by a moneylender, where, the defence being that the contract was " harsh and 
 unconsciable " within the meaning of a. 1 of the Moneylenders Act, 1900, by reason of a 
 clause that on failure to pay any one instalment the whole amount was to become due 
 at once, it was held by Channell, J., that such a clause is harsh and unconscionable primd 
 
254 CH. Ill, SECT. 8, SUB-SS. (1), (2). 
 
 guilty of such, conduct to explain tlie practical effect of even the simplest 
 mathematical formula on the interests of the other negotiating party. The 
 hypothesis, however, on which this discussion is based, excludes any such 
 special circumstances : and the question is, — as between two persons of 
 normal education and inteUigenoe, or assumed to be so (for either party 
 has the right to make this assumption with respect to the other), could the 
 Court refuse to enforce a contract of the nature in question ? And, if so, 
 on what theory ? Certainly not on the theory of impossibility {d), nor on 
 that of common mistake, because in the case supposed there would have 
 been no bilateral mistake, if, indeed, there can be said in strictness to have 
 been any mistake of fact at all on the part even of the party complaining. 
 If it could be shown that one of the parties, A., realized the serious practical 
 consequences of the application of the law of geometrical progression in 
 calctdatiag the sum to be paid, and knew that B. did not realize them, and 
 was contracting with himself in the belief, and on the basis, that no such 
 serious consequences existed, it could plausibly be argued that the coexistence 
 of these facts might of itseK suffice to establish fraud on the part of 
 A., that is, a fraudulent intention to trade on the known ignorance of B. 
 for his own advantage, and to the damage of B. But reasons have already 
 been given for concluding that such an argument, however attractive, is 
 fundamentally unsound (e). And it would at any rate have no application 
 to a case in which, instead of A. contracting to sell property of fixed value, 
 or pay a fixed sum, in consideration of the delivery to him by B. of a com- 
 modity to an amount to be calculated in accordance with the mathematical 
 rule, A. and B. are each contracting with the other for payment of sums so 
 calculable in accordance with a law of which neither of them realizes the 
 importance. It may be said that such a case is never likely to arise. But 
 
 facie, or, in other words, that the insertion of it in the agreement casts upon the money- 
 lender the duty of making its effect clear to the borrower : " what was harsh and un- 
 conscionable was the way moneylenders took advantage of such clauses. They knew, 
 if they inserted a clause to the effect that the whole amount for which the note was given 
 became due if one instalment was unpaid, that the result might be, as in the present case, 
 to increase the rate of interest from 140 to 600 per cent. Not only did they know that, 
 but they put in words which they thought a borrower would agree to, because he would 
 think that he was asked to pay so much interest upon a loan which was to be for a certain 
 period. They knew equally well that the borrower would not see that the putting in of 
 such a default clause made the interest payable, for example, in the case before him, not 
 £35 for 12 months, but possibly £35 for one month " (p. 30) ; accordingly, " he should 
 decide that the case was one in which the defendant ought to have relief on the ground 
 that this default clause, which was an unfair one unless it was very carefully explained, 
 was put in for the purpose of being acted upon " (p. 31). 
 
 {d) This was disposed of in Thornborow v. Whitacre, sup., being the only point of law 
 which was decided, or raised, in that case. 
 
 (e) See § 164, ante. Lord Habdwiokb, L.C, however, makes a passing reference to 
 James v. Morgan, at pp. 155, 156 of Chesterfield (Earl) v. Jannsen (1761), 2 Ves. Sr. 125, 
 in such terms as to indicate that in his view fraud was, or ought to have been, inferred in 
 that case from the very nature of the transaction, without more. Fraud, he there says, 
 " may be apparent from the intrinsic nature and subject of the bargain itself; such as 
 no man in his senses and not under delusion would make on the one hand, and as no 
 honest and fair man would accept on the other ; which are inequitable and unconscientious 
 bargains ; and of such even the common law has taken notice ; for which, if it would not 
 look a little ludicrous, might be cited 1 Lev. Ill, James v. Morgan." To this observation 
 EoMiLLY, M.R., draws attention, at p. 115 of Cochell v. Taylor (1852), 15 Beav. 103. 
 
§§ 294-295 (criticism op certain authorities). 255 
 
 it is conceivable (/). And, if a contract of this character should hereafter 
 be made under the conditions stated, it is difficult to see on what principle 
 any Court to whom either of the parties should apply to enforce it could 
 refuse its aid. 
 
 Suh-s. (2). The Case of Wilde v. Gibson. 
 
 295. This much-discussed case occupied the attention of the Courts 
 for nearly a decade in the middle of the last century. The party complaining 
 was one Magnus Gibson, who had purchased by auction from Mdlle. Augusta 
 Emma D'Bste (a daughter of Augustus Frederick, Duke of Sussex, by a mor- 
 ganatic marriage) an estate in Ramsgate. He filed his bill against the lady 
 for rescission of the contract, and consequential relief, on the ground of non- 
 disclosure of a serious incumbrance, viz. a public footpath or right of way, 
 known as " the Liberty Way," over the property. The contract had been 
 completed by conveyance before the plaintiff was apprised of the undisclosed 
 fact. The suit came on for hearing before Knight-Beuce, V.-C, who granted 
 the relief prayed (g). Five years later, the defendant, who had in the mean- 
 time (August, 1845) intermarried with Sir Thomas Wilde (afterwards Lord 
 Teuro, L.C), joined with her husband in seeking, and eventually obtaining, 
 from the House of Lords a reversal of this decree (h). 
 
 ( / ) If contracts of gaming and wagering were, as they used to be in the time of Lord 
 MAiSrsHBLn, enforceable, a case of this description might well arise at any moment, under 
 such circumstances, for instance, as those described in the newspapers of the 4th April, 
 1912. "A curious incident " (the report is taken from the issue of the Daily Mail of 
 that date) " occurred in a bridge game on board the Olympia on her last voyage from New 
 York to Plymouth. The players— two Americans, an Australian, and an Englishman — 
 were friends. They were playing five cent {2^£?.) points, or a little more than a sovereign 
 a hundred, and they were all fairly matched. They played freely — i.e. they were calling 
 on light hands and doubling the declaration with the smallest justification. The Australian 
 had one of the Americans for his partner, the Englishman the other. The last-named made 
 a heart caU (for which each trick counts eight). This was promptly doubled by hia 
 Australian opponent. A redouble was again doubled by the Australian, and then the 
 English partner of the American who had made the original call, raised the game still 
 higher. This redoubling did not finish until, according to an onlooker keeping tally, the 
 value had multiplied eighteen times. The game was played, and resulted in the loss of the 
 odd trick by the man who had called hearts. When, however, the players calculated what 
 the points were, they found that they had multiplied to 2,097,152, and that each trick was 
 worth over £20,000 " (in fact the value was £21,846 lis. Bd.). " The losers said this was 
 absurd, that no one realized what he was doing, and eventually it was agreed that the 
 losers should each pay £100 for the odd trick." Now, assume that no gaming statutes 
 were now in force, and assume the absence of any rule of the game itself prohibiting 
 doubling beyond a certain point, or an agreement of the parties not to be bound by such 
 rule : if either of the winners, instead of arranging the matter in a sportsmanlike fashion, 
 had chosen to sue either of the losers for £21,846 lis. 8d., what answer could there have 
 been in principle to the action ? Each was equally ignorant of the magnitude of the 
 figure resulting from eighteen doublings of eight points : each was equally ignorant of the 
 other's icnorauce : neither knew in whose favour the unexpected result of the application 
 of the mathematical rule would operate. There could be no suggestion, therefore, of 
 either player scheming to overreach the other. Equally there could be no breach of a 
 duty to disclose, because there is never any duty to disclose anything except that of which 
 the party under the supposed obligation has, or is presumed to have, exclusive knowledge : 
 and here, ex hypothesi, each party knew what the other knew, no more and no less. 
 
 (g) Gibson v. D'Este (1843), 2 Y. & C. (cH.) 542. 
 
 {h) Sub nom., Wilde v. Gibson (1848), 1 H. L. 0. 605. 
 
256 CH. Ill, SECT. 8, SUB-S. (2). 
 
 296. The difficulties in dealing with the judgments delivered in the House 
 of Lords, which have deservedly met with so much severe criticism, are in 
 painful contrast with the ease and facility with which one is enabled to 
 appreciate and accept the singularly lucid exposition of the law given by 
 Knight-Beuce, V.-C, in the judgment appealed from. There were three 
 members of the appellate tribunal : Lord Cottenham, L.C, Lord Brougham, 
 and Lord Campbell. The speeches of the two latter were extremely hazy 
 just where precision was most needed, and that of Lord Cottenham, L.C, 
 certainly did not exhibit his usual clearness of expression. All of them 
 present at times a confused medley of findings of fact with questions of law, 
 of propositions necessary to the decision with propositions not so necessary, 
 and of principles with pleadings. In the ensuing observations an attempt 
 is made to disentangle this confusion, and to ascertain how far the decision 
 of the House of Lords was based upon their view of the facts, and, therefore, 
 is of no juridical importance, and how far it was founded upon propositions 
 of law, and which of these latter were absolutely required to justify the 
 reversal of the Vice-Chancellor's decree, and which were not ; the former of 
 course being, and the latter not being, authoritative. 
 
 297. All the facts which it was incumbent on the plaintiff as the party 
 complaining to establish (i) were proved to the satisfaction of Knight- 
 Bbuce, V.-C. That is to say, he found (i) that the alleged undisclosed fact, 
 viz. the public right of way, existed (j) ; (ii) that this fact was material to 
 be disclosed (h) ; (iii) that there had been non- disclosure of this fact, as 
 alleged (l) ; (iv) that the plaintifi had no knowledge of the undisclosed fact, 
 either actual or presumptive (m) ; (v) that the defendant had presumptive, 
 if not actual, knowledge thereof (w) ; (vi) that the position of the defendant 
 was in no way prejudiced by such delay on the part of the plaintiff as 
 there had been after discovery of the undisclosed fact (o). The House of 
 Lords did not dissent from any of these findings of fact, except the finding 
 that the defendant had knowledge of the incumbrance (j>), though Lord 
 Cottenham, L.C, did also undoubtedly express his personal opinion that 
 the alleged public right of way, and therefore the existence of the alleged 
 undisclosed fact, was not proved (g"). In so far as these views of the facts 
 difiered from those of the Vice-Chancellor, they were probably wrong (r) : 
 
 (i) See Sect. 3, ante. 
 
 (j) 2 Y. & C. (cH.) 542. at pp. 549, 550. 
 
 (k) Ibid., at pp. 550, 551. 
 
 (1) Ibid., at p. 558. 
 
 (m) Ibid., at pp. 558-560. 
 
 (») Ibid., at pp. 560-570. 
 
 (o) Ibid., at p. 579. 
 
 Ip) 1 H. L. C. 605, per Lord Campbell at pp. 634, 635 (" there is no evidence to which 
 we are at liberty to pay attention that. . . Wightwiok was the agent of Lady Wilde, and 
 if he was the agent, there is no evidence whatever that he in the course of his agency acquired 
 any knowledge, or at any time had any knowledge, of the direction of the road, and on 
 that the whole turns "). 
 
 (?) Ibid., at p. 625 (" if, therefore, the right of way complained of by the plaintiff had 
 been proved — which it was not" . . . Sec). 
 
 (r) Lord St. Leonabd's detailed criticism of these views is summarily stated in § 301, 
 post. 
 
§§ 296-298 (cEiTicisM op certain authorities). 257 
 
 and the above-mentioned personal conclusion of Lord Cottenham, L.C, 
 was most certainly so (s). But it is of no interest to discuss these findings, 
 wliicli are not binding on any one, and they are only mentioned to be put 
 aside and disentangled from the propositions of law which it is now proposed 
 to consider. 
 
 298. The propositions of law enunciated in, or which lay at the root of, the 
 Vice-Chancellor's judgment, were these : — (A) given the facts found by him as 
 above stated (t), there was a proved case of a breach by the defendant of her 
 duty of disclosure, in respect of which the plaintifi was entitled to rehef : 
 (B) it was immaterial that the defendant had no actual or personal knowledge 
 of the undisclosed fact, if her solicitor and agent for that purpose was cognizant 
 of it, for his knowledge must be imputed to her (m) : (C) the mere fact that 
 the plaintifi had means of knowledge was not evidence that he had such 
 knowledge, either actual or constructive (v) : (D) it was immaterial that 
 neither the defendant, nor her agent, had any intention to deceive or injure 
 the plaintifi, or to benefit themselves, or either of them, and that her solicitor 
 honestly thought that silence was permissible under the circumstances, and 
 was a duty which he owed to his client (w) : (E) where, as the Vice-Chancellor 
 found to be the fact in this case, the position of the party charged is not altered 
 for the worse by the delay (if any) of the party complaining, such delay is 
 wholly inefficacious as a bar to relief (x). All the above propositions or 
 conclusions of law were undoubtedly sound in principle, and supported by 
 a steady volume of authority, as has already been seen(»/). Nor did the 
 House of Lords express the slightest disagreement with any of them : indeed. 
 Lord Campbell made a point of re-stating in his own language, and confirm- 
 ing, one of them (2). But new ground was broken on the appeal, and great 
 
 (s) The observation of Lord Cottenham, L.C, was parenthetical, but express. He 
 gives no reasons, and refers to no evidence, in support of his view. Both Lord BrotrcHAM 
 and Lord Campbell abstain from expressing any concurrence. 
 
 (t) See § 297, sup. 
 
 («) 2 Y. & C. (OH.) 542, at pp. 570, 571. 
 
 (v) Ibid., at p. 571 (" that he might have inquired, and learnt the truth by inquiry, 
 is nothing, if there was not, as I think that there was not, any circumstance which, con- 
 sidering what he was told by the party contracting with him, was sufficient to apprize 
 or warn him of the propriety of any such inquiry "). 
 
 (w) Ibid., at pp. 571-577. 
 
 (x) Ibid., at p. 579 (" it is not suggested, at least it is not proved, that the defendant, 
 by reason of that delay, has in respect of the property in question . . . sustained any 
 damage, or that the property in question has been treated or dealt with by the plaintifi 
 at any time since April, 1839 " — the date when he first discovered the existence of the 
 pubUe right of way — " in a manner, relatively or otherwise, improper or unreasonable, or 
 that the defendant has done, or omitted to do, anything . . . which, had she known earher 
 that the plaintiff would complain, or meant to make a claim against her, she would not 
 have done, or would not have omitted to do ; nor ... is it proved that the plaintiff ever 
 intended to submit to the wrong done him, to acquiesce in it, or to waive his right to 
 redress, or to accept compensation "). 
 
 (y) As to (A), see Sect. 3, ante : as to (B), see Ch. II, Sect. 3, Sub-s. (4), ante : as to 
 <C), see § 193, ante: as to (D), see §§ 3,3, 197, 220, cmic ; as to (E), see §§ 216-219, 
 ant-e. 
 
 (z) 1 H. L. C. 605, at pp. 633, 634. The proposition of Kmght-Bbuce, V.-C, so 
 restated was proposition (D) referred to in the text, as to the immateriahty of absence of 
 intention in the party charged to deceive the party complaining, or to injure him, or to 
 benefit himself. 
 
 B.N.D. S 
 
258 CH. m, SECT. 8, SUB-S. (2). 
 
 importance was then for tte first time attacted to certain principles of law, 
 as governing the case, which, it was said, the Vice-Chancellor should not 
 have ignored, as he had. 
 
 299. The first of the principles so enunciated by the House of Lords was 
 that, where the contract impeached has been completed by conveyance, it 
 cannot be rescinded except for fraud, and that innocent non-disclosure, as 
 distinguished from fraudulent concealment, is a ground for compensation 
 (which in this case had been ofiered and "refused) at most, and for no other 
 relief (a). Now there is no doubt that this aspect of the matter was not 
 present to the mind of Knight-Beuce, V.-C, who treated the case as one in 
 which the most that could be said against the plaintifi was that there had 
 been some delay (&), entirely overlooking the highly important facts that (1) 
 the contract had been completed, and (2) the party complaining was asserting 
 his right to rescission, and not to pecuniary compensation, and was not 
 merely defending himself against a claim to enforce an executory contract. 
 There is also no doubt that, as a general rule, a contract completely exe- 
 cuted on both sides cannot, in the absence of fraud, be annulled (c). But it 
 is not true to say that fraud is the only exception, for there is a second, which 
 consists in proof of a total or substantial difEerence in character between 
 that which was transferred and that which was contracted to be transferred, 
 so that, unless the contract be undone, the party complaining wiU be forced 
 to retain that for which compensation will be no remedy at all (d). To 
 this extent the main proposition on which the House of Lords based 
 its reversal of the Vice-Chancellor's decision is incomplete, and, therefore, 
 inaccurate (e). It would, however, in all probability, have made no difEerence 
 to the result, if the proposition had been correctly and completely stated, 
 because it is evident from numerous observations in the course of the judgments 
 that the learned Lords considered the case as one that could be adequately 
 met by compensation, and therefore no more came within the second excep- 
 tion than within the first (/). The case of Wilde v. Gibson is an authority, 
 
 (o) 1 H. L. C. 605, per Lord Cottenham, L.C, at pp. 616, 617 ( " the contract of purchase 
 is perfected by a conveyance. To be relieved against that, fraudulent concealment must 
 be shown. This is different from a bill by the vendor for specific performance "). 
 
 (6) Which delay, not having affected the position of the defendant in any way, was in 
 his opinion no bar to relief : see note (x), sup. And, so far, the House of Lords did not 
 disagree : that is to say, they did not suggest that, if it had been a mere question of delay, 
 without circumstances indicating affirmation or waiver, the plaintifi would on this account 
 alone have been disentitled to relief. 
 
 (c) See § 230, and notes {z) and (o) thereto, ante. 
 
 (d) See § 230, and notes (6) and (c) thereto, ante. 
 
 (e) It is quite open to the critic to suggest that a proposition formulated even by thb 
 tribunal of ultimate resort is unsound and devoid of authority, if (as in this case) it can 
 be shown that in later decisions the House itself has laid down the law " en sens contraire." 
 See, for instance. Cooper v. Phibbs (1867), L. R. 2 H. L. 149 {per Lord Ceanwobth, L.C, 
 at p. 164) ; Brownlie v. Campbell (1880), 5 App. Cas. 925, H. L. (per Lord Sblborne, L.C, 
 at p. 537). 
 
 ( / ) As to the first, they expressly found that no fraudulent concealment, or fraud of 
 any kind, had been proved. And, if invited to do so by the course of the argument, 
 they would doubtless have also found that there was no difference in svhstantialibus, 
 i.e. no difference which could not be compensated for in money, between the property 
 encumbered by the " Liberty Way," and the property free of such incumbrance. 
 
§§ 298-300 (criticism of certain authorities). 259 
 
 therefore, for at least one branch or part of the rule which prohibits rescission 
 of completed contracts, and the application by the House of Lords of that 
 branch or part of the rule to the facts as they found them (whether correctly 
 or not, is immaterial) properly and necessarily resulted in the refusal of relief 
 to the plaintiff, and the setting aside of the Vice-Chancellor's decree. The 
 question now arises whether the case is an authority for all or any of the other 
 propositions or dicta contained in it {g). 
 
 300. These other propositions and dicta, which have occasioned so many 
 difficulties, doubts, and debates, and to which either the House, or individual 
 members of it, undoubtedly committed themselves, are the following : that 
 the fraudulent concealment required to constitute an exception to the rule 
 against rescinding a completed contract must be an actually or personally 
 fraudulent concealment, as distinguished from a mere non-disclosure of 
 facts of which the party charged has only constructive or presumptive know- 
 ledge through an agent (h) : that the mere constructive knowledge of an 
 agent for sale, or for some purposes connected with the sale, or the know- 
 ledge acquired by such an agent otherwise than as agent, or before his agency 
 commenced, can never be imputed to the principal (i) : that when personal 
 fraud is alleged, and not proved, the party complaining is debarred from 
 relief on any other ground, such as constructive fraud or knowledge (j) : and 
 (this was the individual suggestion, during the argument, of Lord Campbell 
 only) that, in an action of deceit, a principal is not responsible for the misrepre- 
 sentation or concealment of his agent (k). Of these four propositions, the first 
 two require considerable qualification to render them completely accurate (?) : 
 
 {g) Having found a principle on which the decision can properly be based, that is to 
 say, a principle which is not at variance with the current of authority or with sound 
 reasoning, one is at liberty to reject other propositions, enunciated as contributory to 
 the result, which are so at variance. Where a decision of the House of Lords is arrived at by 
 one process of reasoning, and one only, in accepting the destination, as we must, we neces- 
 sarily accept the only road by which it can be reached : but where we are given a map on 
 which the destination is marked as approachable by several routes, we are not, in accept- 
 ing the destination, compelled to accept more than one of those routes : we may accept 
 a direct and good road, and reject those which are devious or foundrous. 
 
 (A) 1 H. L. C. 605, per Lord Campbell, at pp. 632, 633 : " if there be in any way what- 
 soever, misrepresentation or concealment, which is material to the purchaser, a Court 
 of Equity will not compel him to complete the purchase ; but where the conveyance has 
 been executed, I apprehend, my Lords, that a Court of Equity will set aside the conveyance 
 only on the ground of actual fraud. And there will be no safety for the transactions 
 of mankind if, upon a discovery being made at any distance of time of a material fact 
 not disclosed to the purchaser, of which the vendor had merely constructive notice, a 
 conveyance which had been executed could be set aside." 
 
 (i) Ibid., per Lord Cottbnham, L.C, at pp. 624, 625, and Lord Campbell, at pp. 634, 
 635. 
 
 (j) Ibid., per Lord Cottenham, L.C, at pp. 620-622, and p. 627, Lord Brougham, 
 at p. 628, and Lord Campbell, at p. 634. 
 
 (k) It is not fair to impute this egregious dictum, even as a dictum, to the House of 
 Lords. It was merely the personal observation of Lord Campbell, interjected during 
 the argument (see p. 615 of the report) : "in an action upon contract," he there says, 
 " the representation of the agent is the representation of the principal ; but in an action 
 on the case for deceit, the misrepresentation or concealment must be proved against the 
 principal." 
 
 (l) If by " actual fraud " Lord Campbell meant the concealment of a fact personally 
 known to the party charged, as distinguished from the non-disclosure of a fact known to 
 
260 CH. Ill, SECT. 8, SUB-S. (2). 
 
 the tliird, as stated, is now universally regarded as untenable (m) : whilst the 
 fourth is ludicrously and hopelessly unsound («). 
 
 301 . Lord St. Leonards, in one of his treatises (o), has criticized adversely, 
 and with some severity, the decision of the House of Lords in the case under 
 discussion : but the criticism is not quite as valuable as one would have 
 
 his agent, the iirst of the four propositions stated in the text is not in accordance with 
 the authorities. Even in an action of deceit, the principal is liable in damages for the 
 fraud of his agent : see note («), inf. A fortiori, he is responsible for the like fraud of his 
 agent, when sued for rescission. Lord Campbell himself admits (see p. 633 of the report) 
 that fraudulent intention need not be proved, it being enough to establish the scienter : 
 and it is now beyond question that principal and agent are one, and therefore to establish 
 the scienter against the agent is to estabUsh it against the principal. The second pro- 
 position, viz. that constructive knowledge of the agent, or knowledge acquired by him 
 otherwise than as agent in the particular matter, can never be imputed to the principal, 
 is also somewhat too absolutely expressed : see § 56, and note (z) thereto, ante, and the 
 observations of Lord St. Leonaeds referred to in note (t), inf. 
 
 (to) Lord CoTTBKHAM, L.C., himself afterwards protested that he had never meant 
 what he certainly is reported to have said in Wilde v. Gibson on this topic. See his obser- 
 vations at pp. 459, 460 of Archhold v. Commissioners of Charitaile Bequests in Ireland 
 (1849), 2 H. L. C. 440 (" if fraud be imputed, and other matters alleged which would give 
 the Court jurisdiction as the foundation of a decree, then the proper course is to dismiss 
 so much of the bill as is not proved, and to give so much reUef as under the circumstances 
 the plaintiff is entitled to "). And it is quite clear that there no longer exists any rule 
 that a bill or statement of claim containing averments of fraud necessarily involves an 
 undertaking to prove them, though not required for the purpose of making good a title 
 to relief, and that, failing compUance with such imphed undertaking, the whole action 
 must be dismissed, or that the party complaining is affected otherwise than in the matter of 
 costs : see the observations of Tukneb, V.-C, at pp. 264, 265 of Espey v. Lake (1852), 
 10 Hare 260 ; of Pabke, B., at p. 428 of Anderson v. Thornton (1853), 8 Exch. 425 ; of 
 Kniqht-Brttce, L.J., at p. 750 of Small v. Gurrie (1854), 23 L. J. (cH.) 746; of Page- 
 Wood, V.-C, at pp. 673, 674 of Parr v. Jewell (1855), 1 Kay & J. 671 ; of the Court of 
 Exchequer at pp. 920, 92 1 of Swinfen v. Lord Ghelmsford ( 1 860), 5 H. & N. 890 ; of Tdenbr, 
 L.J., at pp. 323, 331, of TraiZZv. ^arjK^ (1864), 4 De G. J. & S. 318 ; of Lord Chelms- 
 roBD, L.C., at p. 331 otHickson v. Lombard {1866}, L. R. 1 H. L. 324 ; of the Privy Council 
 at p. 597 of London Chartered Bank of Australia v. Lempriere (1873), L. R. 4 P. C. 572 ; 
 of Lord Shaw, at pp. 967, 968 of Nocton v. Lord Ashburton, [1914] A. C. 932, H. L. 
 Where, however, the case pleaded is so bound up with fraud that, if the averments re- 
 lating to it be struck out of the pleading, no intelUgible cause of action remains, it is stiU 
 the rule that, on faiUng to prove the fraud, the party complaining is not allowed to fall 
 back on some other cause of action, such as negligence, which is independent of the question 
 of good or bad faith (see Tliom v. Bigland (1853), 8 Exch. 725, at pp. 730-732, and Con- 
 necticut Fire Insurance Co. v. Kavanagh, [1892] A. C. 473, P. C, at p. 479), or, in an appel- 
 late court, rely upon admissions extracted from the party charged and his witnesses in the 
 Court below which might estabUsh such cause of action, because, if the claim had been 
 so framed in the first instance, it might have been met by evidence of a very different 
 character to that which was adduced on the supposition that fraud, and fraud only, was 
 what the party charged was called upon to rebut : see Hickson v. Lombard, sup. (per Lord 
 Cbanwobth, at p. 336) ; Connecticut Fire Insurance Co. v. Kavanagh, sup. (at p. 480). 
 
 (n) In Udell v. Atherton (1861), 7 H. & N. 172, at pp. 181, 182, Wilde, B. (afterwards 
 Lord Penzance and, it so happened, the nephew of the successful appellant in the 
 case under discussion), in delivering the judgment of Pollock, C.B., and himself, said : 
 " the only dictum in favour of it " — i.e. the notion that vicarious fraud will not sup- 
 port an action of deceit — "is, I beheve, that of Lord Campbell, in the course of the 
 argument in Wilde v. Gibson. It may be doubted if it is correctly reported ; at any rate 
 it is to be taken, in my opinion, in reference only to the point then under argument." 
 That the dictum was merely a suggestion thrown out during the argument, and not forming 
 part of the judgment, and was personal to Lord Campbell, and in any case is utterly 
 erroneous, is shown by reference to a long course of authority, before and since 1848, in 
 § 162 of the author's Law of Actionable Misrepresentation. 
 
 (o) " A Treatise on the Law of Real Property as administered by the House of Lords," 
 by Sir Edward Sugden. 
 
§§ 300, 301 (criticism of certain authorities). 261 
 
 expected in the case of so eminent an authority, inasmuch as it is largely 
 occupied with an exhaustive analysis of the allegations and evidence in the 
 case, and with an exposition of his reasons for dissenting from the Lords' 
 inferences of fact therefrom, — an exposition which, though most convincing, is 
 of no assistance in an investigation of the principles of law involved (p). 
 The main difierence between his views and those of the House of Lords 
 relates to the question of the defendant's knowledge of the public right of 
 way. The House considered that there was no evidence that Lady Wilde 
 had actual knowledge of this fact : further, that though the solicitor, Mr. 
 Wightwick, had at one time personal knowledge that there was some right 
 of way in respect of which an annual payment was made, this knowledge 
 was acquired long before he became Lady Wilde's agent for the sale of the 
 property, and that he did not at any time become her agent for aU 
 purposes of the sale, and that, therefore, his knowledge was at most of a 
 merely constructive, or presumptive, nature ; and that any such knowledge 
 cannot be, even if an agent's actual knowledge can ever be, imputed to a 
 principal charged with personal knowledge and personal fraud in an action 
 which Lord Brougham and Lord Campbell persisted in treating, and even 
 describing, as an action ex delicto, founded upon deceit or fraudulent conceal- 
 ment, rather than an action ex contractu, founded upon non-disclosure of a 
 material fact within the knowledge of the party charged. Lord St. Leonards 
 shows in the most conclusive manner, by copious references to the evidence, 
 that all these views and inferences were utterly erroneous. In the first place, he 
 points to the uncontradicted evidence of Mr. Wightwick himself, a witness 
 for the defendant, as establishing beyond all reasonable doubt not only that 
 he had actual knowledge of the undisclosed fact {q), but that his cUent also 
 had such actual knowledge (r). Secondly, he shows quite clearly and con- 
 vincingly that Mr. Wightwick was the sohcitor and agent for all purposes 
 of the sale under such circumstances that the knowledge possessed by him 
 during, and for the purpose of, such agency, however long previously it may 
 have been acquired, was in law the knowledge of his client and principal {s), and 
 that, even if such knowledge had been obtained altogether in alia re, it would 
 still be a question whether or not it had passed from his mind at the time [t), 
 but in this case it clearly had been obtained in hoc re, he having been employed 
 to know matters afiecting the title, that is to say, to acquire the knowledge, 
 if he did not already possess it, and, if he did, to give his chent the full benefit 
 of it, which he could not do without at the same time charging her with 
 
 (p) The case is dealt with in Ch. VI ( " Of Purchases "). The learned author commences 
 with a summary of the facts (pp. 614-618), followed by an abstract of the allegations 
 in the biU (pp. 618-621). He then deals closely with the evidence (pp. 621-626) ; after 
 which he summarizes, first, the judgment of Knight-Bbitce, V.-C. (at pp. 626-628), and 
 then those delivered in the House of Lords (pp. 628-634). His criticisms, on fact and 
 law (but mostly on fact), occupy the rest of the space (pp. 634-660) devoted to the 
 discussion of this case. 
 
 iq) See pp. 645-648 of the " Treatise." 
 
 (r) Ibid., at pp. 636-640. 
 
 (s) Ibid., at pp. 640-643. 
 
 (t) Ibid., at p. 641, and see § 56, and note (z) thereto, ante. 
 
262 CH. in, SECT. 8, SUB-SS. (2), (3). 
 
 the full burden of it (m). Thirdly, even on the view (which he obviously 
 disagrees with) that the bill was so framed as to put upon the plaintiff the 
 onus of establishing the defendant's personal deceit and dishonesty, and 
 that such onus had not been discharged, a case of non- disclosure only 
 having been made, he expresses the opinion that this circumstance ought 
 not to have influenced anything but the costs (y). Lastly, he demon- 
 strates with the utmost clearness that the authority (w) relied upon by 
 Knight-Beuce, V.-C, as governing the case, which the House of Lords 
 thought inapplicable, was absolutely in point and undistinguishable (a;) ; 
 whilst that which the House of Lords regarded as undistinguishable, and as 
 an authority for the decision at which they arrived {y), was, in all essentials, 
 not only a different, but an opposite, type of case (z). It is noticeable, 
 however, that Lord St. Leonaeds does not combat, or deal with, the rule 
 of law which alone of those propounded by the House of Lords may be thought 
 to justify their decision, in connection with the facts as found by them 
 (whether rightly or wrongly), — the rule, namely, that prima facie a contract 
 completed by conveyance cannot be rescinded, but that, where fraud is 
 alleged, this form of relief may be granted if, but not unless, such fraud is 
 strictly proved by the party complaining. 
 
 302. On the whole, it is submitted that Wilde v. Gibson is an authority 
 for the proposition last stated, but is not an authority which can safely be 
 accepted for anything else. 
 
 Subs. (3). The Case of Turner v. Green. 
 
 303. It is proposed to submit reasons for questioning the correctness of 
 the decision of Chitty, J., in this case (a). It is not suggested that on the 
 
 {u) See p. 641 of the "Treatise" : "it was the duty of Wightwick, as the family 
 solicitor, to make himself master of the real nature of the rights claimed, and his knowledge 
 must in dealings between hiscHentand third persons bedeemed theknowledgeof his client." 
 
 (v) Ibid., at pp. 648, 649. 
 
 (w) Edwards v. M'Lmy (1815), G. Cooper 308 (Geant, M.R.), afSrmed (1818), 2 Swanst. 
 287 (Lord Eldon, L.C). 
 
 {x) See pp. 649-656 of the " Treatise." 
 
 (y) Legge v. Croker (1811), 1 Ball & B. 506 ; 12 R. E. 49. 
 
 (z) See pp. 656-660 of the " Treatise." In Legge v. Croker, the party charged had 
 made disclosure of the fact that at one time certain public rights had existed, or had been 
 claimed, over the property in question, and had stated (erroneously, but quite innocently) 
 that those rights could no longer be efiectuaUy asserted for certain reasons which he gave, 
 and which there was no proof that he did not believe to be reasons justifying his 
 representation. In Wilde v. Gibson, there had been no disclosure at all. It is impossible 
 to conceive two oases more dissimilar in the essential point. To estabhsh any sort of 
 parallel between the two, one would have to suppose that in the latter case, Lady Wilde, 
 or her solicitor, had revealed to the purchaser all that they knew as to the past history 
 of " Liberty Way," the recognition of the right of the public by payment of an annual sum, 
 and the legal possibility of these dormant rights being actively revived in the future, 
 together with a statement that there seemed little probability of such a revival. In that 
 case, the only cause of complaint which the purchaser would have had would have been 
 that which the purchaser had in Legge v. Croker, viz. fraudulent misrepresentation, and 
 the decision of the House of Lords against him on that state of facts would have been as 
 correct as the similar decision in the earlier case. As it was, there was nothing to justify 
 any reliance upon, or reference to, the authority in question, except the delusion under 
 which the House of Lords were labouring at the very onset, and throughout the hearing, 
 viz. that the case before them was practically an action of deceit. 
 
 (a) [1895] 2 Gh. 205. There are references to this case (with an intimation that it is 
 
§§ 301-305 (CEITICISM OF CERTAIN AUTHORITIES). 263 
 
 assumption made by all concerned in the case the result was other than what 
 was properly to be expected, or that the judgment did not flow from a sound 
 and logical application of well-established principles of law to the state of 
 things so assumed. What is contended is, that this assumption which under- 
 lay the decision was utterly erroneous, and thereby rendered the decision 
 itself of no efEect as an authority. 
 
 304. The party complaining was the defendant in an action for an account, 
 which, after proceeding for a time, and passing through several of the pre- 
 liminary stages in chambers, was compromised. The defendant, however, 
 for the reason stated below, refused to perform his part, whereupon the 
 plaintiff applied to the Court by summons for a stay of proceedings on the 
 agreed terms. This application was treated, for the purposes of the argument 
 and judgment, as though it were the trial of an action for specific per- 
 formance of the agreement of compromise (b). The claim was resisted by 
 the defendant on the ground of non-disclosure by the plaintifi's solicitor to 
 the defendant's country solicitor, when negotiating the compromise with 
 him at Portsmouth, of the fact (which the former had just learnt by a 
 telegram from London) that an important interlocutory application on be- 
 half of the plaintifi had been dismissed by the judge's chief clerk, or rather 
 had been met with an adverse expression of opinion on his part which, unless 
 the judge to whom the summons had been adjourned should take a different 
 view, would operate as an adverse order (c). The non-disclosure, the know- 
 ledge of the undisclosed fact by the party charged, and the ignorance thereof 
 by the party complaining, were clearly proved, and, indeed, hardly disputed, 
 but the decision was against the party complaining, who, in the view of 
 Chitty, J., had shown no ground on which he coidd even resist the specific 
 performance claimed by the party charged. 
 
 305. Now, the above being a case of compromise, it is quite clear on the 
 authorities, which have been already discussed in the proper place (d), that 
 there was a duty on each of the parties, in the course of the negotiation, to 
 disclose to the other any material fact of which he may have acquired private 
 and exclusive cognizance : and it is equally clear that any incident in the 
 course of the litigation being compromised which would alter or affect the 
 pre-existing relation to one another of the parties, and the chances of success 
 or failure on the one side or the other, such as the fact above mentioned, 
 would be a material one to be disclosed. Nor can it be doubted that if this 
 (somewhat obvious) aspect of the case had been pressed upon Chitty, J., his 
 judgment would have been in favour of the party complaining. Yet, incredible 
 as it may seem, this view was not only not urged upon the Court, but it was 
 not even presented or mentioned in argument : and (what is still more strange) 
 
 to receive separate and detailed treatment later) in notes (n) and (r) to § 137, notes (y) 
 and (g) to § 163, and note (o) to § 164, ante. 
 
 (6) Ibid., at p. 206. 
 
 (c) Ibid., at p. 208. Though, as there pointed out by Chuty, J.,the chief clerk's opinion 
 is not absolutely the same thing as the order of the judge in person, it becomes his order 
 unless adjourned into Court, and, on the adjourned hearing, dissented from by him. 
 
 {d) See §§ 133, 137, ante. 
 
264 CH. Ill, SECT. 8, SUB-S. (3). 
 
 it did not occur to tlie very learned and accomplislied judge, to whom one 
 might suppose that, independently of all argument, it would have inevitably 
 suggested itself at some stage or other of the hearing. Everybody con- 
 cerned ignored, from first to last, the nature of the contract which was the 
 subject of the negotiation ; and the case was treated throughout as one in 
 which neither party was under any initial duty of disclosure whatsoever 
 by reason of the relation in which they stood to one another. This tacit 
 assumption is made the foundation of the judgment : "it cannot be con- 
 tended," says Chitty, J. (e), " that Fowler " — the plaintifE's solicitor — " was 
 under any obligation to disclose the result of the telegram." Obviously the 
 judge was here merely inferring that this contention could not be raised 
 because, if it could, it would have been, whereas it was not. Yet this was 
 just the argument, and the only argument, which could have been presented, 
 and to which, if it had been, there would have been no valid answer. Not 
 relying upon or mentioning the only doctrine on which it was possible to 
 claim relief, the party complaining was in a hopeless position. The broken 
 reeds to which he was forced to resort, having left behind him the only sound 
 and eSectual weapon in his armoury, came to pieces, one after the other. First, 
 the case was boldly put as one of fraud, that is to say, since it was not pre- 
 tended that there had been any positive representation, " fraudulent silence," 
 or a dishonest trading on his known ignorance of a material fact within 
 the other party's private and exclusive cognizance (/). Then, it was 
 suggested (but faintly) that the conduct of the party charged amounted to 
 a breach of duty arising in the course of the negotiation out of something 
 said or done by him which made it from that point dishonest in him not to 
 exhibit the candour which — this being assumed throughout, as already 
 stated (g) — was not incumbent on him in the first instance (h). Lastly, 
 abandoning the theory of " fraud " altogether (which was to abandon every- 
 thing), it was contended that it was enough to establish " sharp practice," 
 or a " shabby trick " (t), or that the case invited the application of such 
 terms as " hardship," " unfairness," " inequality," " oppression," or any 
 other of the misty and meaningless phrases coined in the cloisters of equity 
 for the purpose of extending a paternal jurisdiction beyond the limits of 
 sound and scientific principle (j). All these arguments were of course un- 
 availing : the first, because the principle invoked, though it has from time 
 to time proved attractive, and has received some apparent judicial countenance, 
 
 (e) [1895] 2 Ch. 205, at p. 208. 
 
 ( / ) Ibid; at p. 206, in the argument for the defendant. 
 
 {g) See note (e), sup. 
 
 (h) [1895] 2 Ch. 205, at p. 207. 
 
 (i) Ibid., at p. 207, in the argument for the defendant, and at p. 208, in the judgment, 
 where CHmr, J., observes that the defendant's counsel was driven to contend that it was. 
 " a shabby trick " on the part of the plaintifE's solicitor to keep the information to himself, 
 and not such conduct as one would expect from a high-minded practitioner, and adds — 
 " the question thus raised is not one of fraud " (the original theory of " fraudulent silence " 
 having been by that time definitely jettisoned). 
 
 [j] Ibid., at p. 207, where, in support of this contention, the case discussed in Sub-s. (4), 
 post, and that alone, was relied upon. 
 
§§ 305-307 (CEITICISM OF CERTAIN AUTHORITIES). 265 
 
 is, as has already been explained, radically unsound (k) : the second, 
 because there was no evidence of any circumstance to bring the case within 
 the proposition relied upon (I) : the third, which was really an argument of 
 despair, because conduct which ex hypothesi is not a subject of legal liability 
 on the ground of fraud, or otherwise, cannot be made so by proof that it is 
 not conformable to ethical standards, or is morally censurable (m). The 
 criticism, therefore, pronounced by Chitty, J., on all the contentions presented 
 to him on behalf of the party complaining, was perfectly correct. 
 
 306. If, however, instead of admitting that there was no duty of disclosure 
 in the first instance, and only relying upon " fraudulent silence," and " unfair " 
 conduct (w), the defendant had pointed out, or it had independently occurred, 
 to the Court that the case belonged to a class where there is an initial duty of 
 disclosure, and if the appropriate line of cases had been referred to and 
 relied upon, the result must have been the opposite of what it was. The 
 slightest allusion to either of the two cases now to be discussed (o) would 
 have sufficed. But none was made, either by the defendant who failed to 
 appreciate the strength of his position, or by the plaintifi who was obviously 
 not concerned in correcting his opponent's omission. 
 
 307. Gordon v. Gordon (p) was the earlier of the two cases referred to. 
 It is an authority of the utmost importance from several points of view, and 
 it was handled by Lord Eldon, L.C, with even more than his usual patient 
 care and discrimination (q). The elder of two brothers (Harry) sued the 
 
 (k) See §§ 138, 163, 164, 165, 166, ante. 
 
 (l) The principle itself is quite sound : see §§ 155-158, ante, and the cases cited in the 
 notes thereto, particularly the observations of Lord Eldon, L.C, and Lord Campbell, L.C, 
 cited in notes {h) and (i), respectively, to § 155, ante. But Chitty, J., at p. 208 of the 
 report, points out that there was no evidence before him of any " misleading conversation " 
 as to what had taken place before the chief clerk, or of any " single word," or even " nod, 
 wink, or smile," to bring the case within the exceptions mentioned, or the expressions 
 used, by the two Lords Chancellors, or to create a supervening duty to break a silence 
 which till then was assumed to be justifiable, 
 (m) See § 163, ante. 
 
 (m) The argument for the defendant rested, for authority, on Ellard v. Lord Llan- 
 daff, discussed in Sub-s. (4), inf., a very shaky reed, and gave the go-by to all the " com- 
 promise" authorities. Of course the plaintiff was not concerned to invite attention to 
 these latter authorities, which were in point, but to rely (as he did) solely on certain 
 vendor and purchaser cases, which were not. Accordingly Chitty, J., founded his 
 judgment (see pp. 208-211) upon such authorities, on one side and the other, as (though 
 wholly irrelevant) the parties had apparently agreed in considering to be alone relevant, 
 and upon no others. 
 
 (o) See §§ 307, and 309, post, respectively. 
 
 (p) (1821), 3 Swanst. 400 ; 19 R. R. 230. In notes [l) and (s) to § 137, and in note 
 (z) to § 138, ante, reference is made to the present place for a, fuUer discussion of this 
 decision than was there convenient. 
 
 (q) As will be gathered from the following account of the proceedings. On the 
 17th December, 1816, the cause came before Gbant, M.R., for trial, when an issue at 
 law was directed to try the question of the elder brother's legitimacy. On the 27th Febru- 
 ary, 1818, the issue was tried and the jury found in favour of the legitimacy, and a motion 
 to Grant, M.R., for a new trial was refused. On the 18th January, 1819, the case was 
 before Lord Eldon, L.C, on a motion for further directions, when he made several prelimi- 
 nary observations, suggested the lines on which further investigation should be conducted, 
 and required the case to be reargued before him at a later date (see the report in 3 Swanst. 
 400, at pp. 457-465). It appears, however, that the case had already been under his 
 examination for a considerable time, for he prefaces his observations by a reference to 
 
266 CH. in, SECT. 8, sub-s, (3). 
 
 younger (James) for rescission of an agreement made between them 19 
 years previously for a division of family estates on tte basis that Harry's 
 legitimacy was doubtful. The ground on whicb it was sought to set aside 
 the agreement was the non-disclosure by James of information which he 
 had received, and rumours which had reached him, that a private ceremony 
 of marriage had taken place which, if valid, would establish Harry's legiti- 
 macy (r). This fact was only discovered by Harry shortly before the com- 
 mencement of the proceedings. Lord Eldon, L.C, set aside the agreement. 
 The grounds on which he proceeded were expressed somewhat differently at 
 the various successive stages and rehearings of the case. At the outset, 
 he draws particular attention to the circumstance that the compromise was 
 of that special character known as a " family arrangement," and that such 
 arrangements are less liable to be disturbed than ordinary compromises (s) : 
 indeed, he makes use of expressions which would seem to indicate that in 
 his view nothing short of " imposition," " concealment," " suppression," or 
 other unfair or fraudulent conduct, wiU avail to vitiate a family arrangement (i), 
 which, if the matter were left there, would be tantamount to saying that 
 there is no duty of disclosure in such cases : but his observations do not 
 end there, for he immediately goes on to say that the fact of " imposition " 
 would be clearly made out by proof of James's knowledge that there had 
 been a marriage de facte, Harry's ignorance of that fact, and James's know- 
 ledge of Harry's ignorance (m), or in other words, that James was under 
 
 his " long indisposition," during which he had " considered this case with much atten- 
 tion " (p. 457). On the 29th June, 1819, the case was reargued, the argument being both 
 preceded and followed by some further observations from Lord Eldon, L.C, which were, 
 however, not intended to represent his final opinion and decision (pp. 466-475). His 
 ultimate judgment was delivered on the 16th August, 1819 (pp. 475—478), and the decree, 
 dated the 26th June, 1821, is set out at pp. 478-482. And not only did the case, as is 
 apparent from the above dates, receive the prolonged and patient attention of Lord 
 Eldon, but it also occasioned him great anxiety, as may be judged from his striking 
 remark on one of the above-mentioned occasions : — " I have never known a case in which 
 it was more the duty of the Judge to make a covenant with himself not to suffer his f eeUngs 
 to influence his judgment " (p. 468). A decision arrived at after such protracted delibera- 
 tion, and with such a keen vigilance against the distracting allurements of emotion, 
 obviously commands a special degree of respect. 
 
 (r) And in fact, as stated in the last note, the legitimacy was established eventually 
 by the verdict of a jury. 
 
 (a) (1821), 3 Swanst. 400, at p. 463, — a distinction which is drawn by him again in the 
 later stages of the hearing, at pp. 470, 477. See § 135, and the notes thereto, ante, 
 for the other authorities in which this leaning of the courts in favour of family arrange- 
 ments is declared and illustrated. 
 
 (i) Ibid., at p. 463 : " where family agreements have been /airZy, entered into without 
 concealment or imposition on either side, with no suppression of what is true, or suggestion 
 of what is false, then, although the parties may have greatly misunderstood their situation 
 and mistaken their rights, a court of equity wiU not disturb the quiet which is the conse- 
 quence of that agreement ; but where the transaction has been unfair, and founded upon 
 'alsehood and misrepresentaiion, a court of equity would have very great difficulty in 
 permitting such a contract to bind the parties." Again, at p. 464 : " before the Court 
 declares a contract like this void, it ought to be f uUy satisfied that the contract was entered 
 into under circumstances of wilful concealment." 
 
 (tt) Ibid., at pp. 463, 464 : " I suppose the most prominent mode of putting the fact 
 of imposition is this : that James Gordon knew that there had been a marriage de facto ; 
 not that he knew the marriage was a legal marriage, but that a ceremony of marriage, 
 whether valid or not, had been performed previous to the public marriage, and previous 
 to the birth of Harry ; that James Gordon was aware of this fact, and knew that Harry 
 
§ 307 (criticism of certain authorities). 267 
 
 a duty of disclosure, the breach of which would render him liable to Harry (v). 
 On the next occasion, when the matter was before him for re-argument, 
 he no longer insists on " misrepresentation," " suppression," or " imposition," 
 but states roundly and plainly that if one of the parties to a compromise, 
 even when it is a family arrangement, is " accessory to the mistake " of 
 the other, though acting in perfect good faith, the arrangement will be set 
 aside at the instance of that other (w). No clearer declaration could be 
 made of the absolute duty of disclosure, independently of all question of 
 honesty or fraud, than the perfectly general proposition enunciated by him 
 in the course of his observations on this occasion that " in contracts of this 
 sort, full and complete communication of all material circumstances is what 
 the Court must insist on " (k). When the stage of final judgment is reached 
 (to which alone, when all is said and done, we must look for authority), Lord 
 Eldon reiterates, in even clearer and more emphatic language than he had 
 used on any previous occasion, the inflexible principle that any non-disclosure 
 of a material fact o/" ?ise^ vitiates not only any compromise of an ordinary 
 nature, but even a family arrangement, and that it is no answer whatever 
 
 was not aware of it, and kept from him the knowledge of that fact. It was his duty to 
 communicate the fact of the private marriage." 
 
 (v) Though this result is arrived at with unnecessary circuity, and by taking two bites 
 at the cherry. The reasoning appears to be : — " imposition " is necessary to vitiate the 
 agreement, but this " imposition " is to be inferred from the mere fact of non-disclosure. 
 It is obviously simpler to say, without introducing any such needless middle term as 
 " imposition," that non-disclosure, without imposition, or without other imposition, is 
 sufficient to vitiate the agreement. A similar circuity is observable in the law of mis- 
 representation, when it is said that it is necessary to prove an intention to deceive, but 
 that such intention is at once and peremptorily inferred from the making of a representa- 
 tion known to be false, or not believed to be true : see § 102, and note (p) thereto, of the 
 author's Law of Actionable Misrepresentation. So, in the law of defamation, when it is 
 stated that maUce is necessary to constitute defamation, and in the same breath that 
 maUce is irrebuttably presumed from the mere act of publication, this is tantamount to 
 saying that malice is not an essential constituent of defamation. The topic is discussed 
 in App. II. of the author's Law of Actionable Defamation. 
 
 {w) (1821), 3 Swanst. 400, at p. 467 : " my opinion is that if James Gordon, prior to 
 the agreement, knew that there had been a private ceremony of marriage, and con- 
 scientiously believing that it was not a legal marriage, omitted to communicate the fact 
 to his brother, the plaintiff would be entitled to relief; on the principle that, though 
 family agreements are to be supported, where there is no fraud or mistake on either side, 
 or none to which the other party is accessory, yet where there is mistake, though innocent, 
 and the other party is accessory to it, this Court will interfere." Again, at p. 470 : " in 
 every case it has been said, and it would be monstrous to hold otherwise, that if what one 
 knows has been concealed from the other, who has been misled by that concealment, the 
 Court wiU not sanction the agreement." At p. 472 the principle is appUed to the facts of 
 the case : " if he knew the fact of the ceremony and took on himself to determine its 
 validity, and dealt with the elder legitimate brother without disclosing that fact, knowing 
 that he was not otherwise apprised of it, he was wrong ; ... it was his duty, as an honest 
 man, to state the fact of that ceremony, and his opinion that it was not vaUd." At p. 474, 
 Lord Eldon, in summing up the position, makes a very definite pronouncement : " the 
 probability is that James Gordon knew, or had reason to beheve, that there had been «, 
 private marriage, and that the plaintiff possessed no such knowledge; and then the 
 parties did not meet on equal terms. In that view, taking the case, as I wish to take it, 
 as a case of mere non-disclosure, the Court even at this late hour wiU grant reUef." So, 
 at p. 475 : " if in this case, therefore, the Court refuses relief, the refusal will be grounded 
 on the fact that aU parties acted in knowledge ; if it grants relief, its interposition will 
 support proof that some material circumstance known to one party was not communicated 
 to the other." 
 
 (x) Ibid., at p. 475. 
 
268 CH. in, SECT. 8, SUB-SS. (3), (4). 
 
 to prove that the party charged acted with good faith and honest intention (y) . 
 Lastly, when the decree (as to the form of which Lord Eldon was very 
 solicitous, specially directing that it should be prefaced by a proper declara- 
 tion of the grounds on which it was made) saw the light after an incubation 
 of no less than 22 months, it was so worded as to put it beyond all doubt 
 that the ground, and the sole ground, of the rescission of the arrangement 
 was the breach by the defendant of his duty to disclose to the plaintifi a 
 material fact within his exclusive cognizance during the negotiation for such 
 arrangement (z). 
 
 308. It will readily be understood from the above analysis that every 
 principle and proposition of law which entitled the party complaining to 
 relief in Gordon v. Gordon must have equally entitled the party complaining 
 to relief in Turner v. Green : or, rather, must have a fortiori so entitled him, 
 because, putting aside the difierence between the admitted good faith of 
 the party charged in the one case and the at least indelicate conduct of the 
 solicitor of the party charged in the other (which distinction is, on strict 
 principle, an immaterial one), it must be remembered that in the former 
 case the compromise was, whereas in the latter it was not, of a kind 
 specially favoured by the law ; in the former, the party complaining was 
 suing for rescission, whilst, in the latter, he was merely resisting specific 
 performance ; and, lastly, in the former, the agreement impeached had been 
 not only concluded but completed and fully executed for no less than 19 
 years, whereas, in the latter, it was executory and only a few weeks old. 
 
 309. The second of the two cases referred to, as cases the citation of 
 which, or of either of them, must have resulted in a judgment for the party 
 complaining in Turner v. Green, is Gilbert v. Endean (a). As will be seen 
 on reference to the abstract of this decision given in the part of this 
 work which is concerned with compromises (&), the circumstances of the two 
 cases were almost exactly parallel. There, as here, the party complaining 
 was resisting specific performance of an agreement for compromise of litigation 
 between the parties : there, as here, the agreement was negotiated at an 
 interview between the respective solicitors : there, as here, the solicitor of 
 the party charged, shortly before the conclusion of the agreement, had been 
 
 iy) (1821), 3 Swanst. 400, at pp. 476, 477. At p. 477, Lord Eldon, L.C, lays down in 
 plain terms that " there must not only be good faith and honest intention, but full dis- 
 closure ; and without full disclosure honest intention is not suflScient." 
 
 {z) Ibid., at pp. 480, 481 (in the decree as transcribed from the Register Book at 
 pp. 478-482) : " inasmuch ... as it is established by the evidence in the cause that, 
 prior to the entering into the said agreement, the defendant James Gordon had been 
 informed and knew that a ceremony of marriage had previously taken place between his 
 father and mother before the birth of the plaintiff, . . . and the said agreement having been 
 entered into with such previous information on his part, and without such information being 
 imparted to the plaintiff," . . . &c. It appears from p. 478 of the report that, at the end 
 of his judgment. Lord Eldon, L.C, had expressly required " a declaration " to be " in- 
 serted in the decree of the ground on which I proceed in holding the deeds void," regarding 
 this as a matter of justice to the party charged {" I think the d^endant is entitled to have a 
 declaration," . . . &c.). 
 
 (a) (1878), 9 C. D. 259, C. A. 
 
 (6) In note (r) to § 137, ante. 
 
§§ 307-311 (CEITICISM OP CERTAIN AUTHORITIES). 269 
 
 apprised of a material fact whict, to tis knowledge, was unknown to the 
 solicitor of the party complaining. The Court of Appeal (affirming Malins, 
 V.-C.) in Gilbert v. Endean held that the contract was not enforceable, Jessel, 
 M.R. (c), expressing the grounds of his judgment in language of which every 
 word, with the necessary substitution of names, was applicable to the facts 
 of Turner v. Green. If, therefore, this case had been brought to the notice 
 of Chitty, J., it would have been impossible for him, without disregarding 
 the authority of the Court of Appeal, to have decided otherwise than in 
 favour of the defendant, the party complaining (d). 
 
 310. It is conceived, therefore, that the case of Turner v. Green is not an 
 authority for the proposition that there is no duty of disclosure incumbent 
 on parties negotiating for a compromise, because that proposition was assumed, 
 and not debated, and the assumption was wholly contrary to all principle 
 and authority. It is, however, undoubtedly an authority for the proposition 
 (which is a perfectly sound one) that, given an absence of any duty of dis- 
 closure arising from the relation between the parties, such a duty is not 
 created by the mere circumstance that one of the parties has exclusive 
 knowledge of some material and undisclosed fact, of which the other, to his 
 knowledge, is ignorant. 
 
 Subs. (4). The Case of EUard v. Lord Llandafi. 
 
 311. This case (e), in so far as the decision was based on the non-disclosure 
 of a fact which the party charged was under no initial obligation to divulge, 
 has created considerable difficulty. The facts were as follows. James 
 EUard was entitled to a leasehold interest in land for three lives, of which 
 his uncle Thomas EUard (then of the age of 70) was the sole survivor. The 
 plaintifi proposed to his lessor, the defendant, to treat for a new lease for 
 three lives in consideration of a surrender to the plaintiff of the existing lease. 
 The defendant consulted his agent, one Lanigan, who advised him that 
 Thomas EUard's expectation of life was about six or seven years. During 
 the negotiation, the plaintifi received private information that Thomas 
 EUard had just been seized with a strangury, and thereupon, after seeing the 
 surgeon and ascertaining from him that no recovery was possible, he wrote 
 an urgent letter to the defendant and Lanigan to meet him the next day 
 to execute the agreement for the new lease and receive a surrender of the 
 old, which they did, without any disclosure to them, or knowledge by them 
 aliunde, of the above-mentioned fact. The terms of the agreement were 
 settled entirely on the basis of Lanigan's estimate. It appeared in evidence 
 that Thomas EUard had died in the afternoon of the day on which the 
 agreement was signed, and that the defendant had immediately afterwards 
 
 (c) (1878), 9 C. D. 259, C. A., at p. 267. 
 
 (d) It might no doubt have been argued that the undisclosed fact in Turner v. Oreen 
 was not, as it undoubtedly was in the other cases, material : but no such question was 
 raised by the parties, or considered by the Court. 
 
 (e) (1810), 1 Ball & B. 241 ; 12 R. R. 22. The case is mentioned, as one to be examined 
 more closely at a later stage, in note {h) to § 163, and in note (j) to § 164, ante. 
 
270 CH. Ill, SECT. 8, SUB-S. (4). 
 
 boasted to the surgeon, that he had succeeded in getting the new lease, and 
 " had made a pretty thing of it." The defendant, on discovering the facts, 
 refused to abide by the agreement, and brought ejectment. The plaintiff 
 filed his bill to restrain the proceedings in ejectment, and for specific per- 
 formance of the agreement, to which the defendant pleaded two distinct 
 defences : first, fraudulent concealment of the above material fact (/), 
 secondly, that the agreement was void, as being a fraud on "the power which 
 had to be exercised for its performance." Lord Manners, L.C, on both 
 grounds, which he considered separately and successively (g), gave judgment 
 for the defendant. 
 
 312. It is quite clear that the second ground of itself justified the refusal 
 of a decree for specific performance (A), and, therefore, that the actual decision 
 was correct. The question is whether the other principle, on which also the 
 judgment of Lord Manners was undoubtedly founded, is good law, viz. 
 the principle that non-disclosure by A. of a material fact known to him of 
 which B., to his knowledge, is ignorant, gives B. a right to relief, there being 
 no duty of disclosure on A. arising from the nature of the contract contem- 
 plated. It is submitted that, in accordance with reasons and authorities 
 already stated (i), the supposed principle is without solid foundation ; that 
 non- disclosure under such circumstances does not amount to fraud (j), and 
 cannot be made actionable on the theory that, though not constituting 
 actual fraud, it may be properly described as " sharp practice " (k), 
 or " suppression " (I), or even on the theory of " unfairness " or " hard- 
 
 ( / ) This is how it was put by Pltjnkbt in his argument for the defendant (see p. 246 
 of the report) : " the performance is resisted on the ground of a gross fraud on Lord 
 Llandaff." 
 
 (g) (1810), 1 Ball & B. 241, at pp. 248-250, as to the first ground, and at p. 251, as to 
 the second. 
 
 {h) See the observations of Chitty, J., when dealing with this case, at pp. 209, 210 
 of Turner v. Oreen, [1895] 2 Ch. 205 : " but there was another ground fatal to the plaintiff's 
 case, which was, that the contract for a lease was void under the power which had to be 
 exercised for its performance. ... I may say, with regard to that latter ground, that it 
 could not be questioned at the present day that it was quite suflSoient for the decision of 
 the case ; but, as I have said, Lord Manneks makes the non- disclosure of the life being 
 in extremis the ground for refusing specific performance."- 
 
 (i) See §§ 138, 163, 164, ante. 
 
 (j) Lord Manners, though he does not actually use the word " fraud," seems in many 
 parts of his judgment to have so regarded the plaintiff's conduct (see pp. 248-250 of the 
 report). 
 
 {k) (1810), 1 Ball & B. 241, where, at p. 250, Lord Manners so puts the case : " the 
 principles on which deahngs of this description are to be carried on are now well understood ; 
 this is too sharp a practice to be countenanced here. The plaintiff must not be allowed to 
 deal on a lease, as a good and subsisting one, when at the time he was conscious that it 
 was worth nothing, and that the other party was ignorant of that fact." 
 
 {I) Ibid., at p. 251, where Lord Manners uses the expression referred to : " all 
 the material facts must be known to both parties, and is it not against all principles of 
 equity that a party, knowing a material ingredient in an agreement, should be permitted 
 to suppress it, and stiU call for a specific performance ? " It is quite uncertain whether 
 by the use of the word " suppression " here, and of the term " sharp practice " in the 
 passage cited in the last note. Lord Manners did, or did not, intend to impute fraud to the 
 plaintiff. Indeed nothing could be vaguer than his language in these two deUverances. 
 It is clear that, as Chitty, J., observed — see note (o) inf. — his feeUngs were deeply enlisted, 
 and that he had not, as Lord Eldon, L.C, did in Gordon v. Oordon,- — see note (?) to § 307, 
 ante — "made a covenant with himself" to resist them, the result being that he was 
 
§§ 311, 312 (criticism of certain authorities). 271 
 
 ship " (m) ; and that, in so far as Ellard v. Lord Llandaff is grounded on any 
 such theory, it has not survived either the mild scepticism of Sir Edward 
 Pry (w), or the more searching criticism of Chitty, J. (o). 
 
 forced to cast about for some liberal phraseology under cover of which he hoped to bring 
 a case of purely ethical misconduct within a juridical principle large enough to render it 
 amenable to a court of law as well as to the forum conscientice. 
 
 (m) This is the only ground on which, according to Sir Edwabd Fky, and Chitty, J. 
 (see the next two notes), the opinion of Lord Manners can be made to assume a plausible 
 aspect. But, if the views expressed in §§ 138, and 163, ante, are sound, the proposition in 
 question can no more be supported on the theory of " unfairness," or " hardship," than 
 on that of "fraud," or "sharp practice," or "suppression." 
 
 (re) In his treatise on Specific Performance, where Ellard v. Lord Llandaff is referred 
 to in two places, first, in Ch. V (" Of the Want of Fairness in the Contract "), and again 
 in Ch. XIV (" Fraud "). The passage in the former chapter (§ 402) is as follows : " Un- 
 fairness arising from misstatements is considered under the head of Misrepresentation : 
 and oases relating to the silence or suppression of a fact by one party are considered in 
 the chapter on Fraud. But it seems possible that there may be cases where silence is not 
 fraudulent, and yet creates such a case of hardship as prevents the interference of the 
 Court in specific performance. On this ground was put a case where a lessee obtained 
 the renewal of a lease on the surrender of an old one, knowing and suppressing the fact, 
 which was unknown to the lessor, that the person on whose life the old lease depended 
 was in extremis, and the Court decUned to aid the lessee." The other passage is from 
 § 717 in the Chapter on Fraud (Ch. XIV). The learned author (§ 713) states that " it has 
 never (it is believed) been held by our Courts that there is a general obUgation of disclosure " 
 — by which he means an obUgation extending beyond the limited duty of disclosing matters 
 affecting title — " on the part of a vendor or purchaser of chattels or realty, though the 
 person maintaining silence may know that the other party is acting under an erroneous 
 impression " : then, after citing authorities in support of the above (§§ 713, 714), and after 
 referring to the exceptional cases where fraud is estabhshed (§§ 715, 716), he alludes to 
 the case under discussion (§ 717) in these terms : " It is possible that silence which would 
 not constitute fraud may yet constitute such unfairness in a contract as to stay the hand 
 of the Court. The case of Ellard v. Lord Llandaff, if it is to be supported on the ground of 
 the silence of the lessee as to the fact that one of the lives in the surrendered lease was, 
 at the time of signing the contract, in extremis, rests upon this principle." It would seem 
 from this latter passage, though not, perhaps, from the first, that Sir Edward Fry doubted 
 very much whether innocent silence can be deemed actionable on the principle of " un- 
 fairness," any more than on any other principle. 
 
 (o) At pp. 209-211 of Turner v. Green, [1895] 2 Ch. 205, where, after a short statement 
 of the cause of action in Ellard v. Lord Llandaff (pp. 209, 210), and an observation that it 
 " was a trying case for any judge, and a case in which possibly a temptation might arise 
 to strain the law " (p. 210), he goes on (at pp. 210, 211) to say : " I have not been able 
 to discover . . . any special mention of Ellard v. Lord Llandaff, either approving or 
 disapproving it as it stands reported. But the learned editor of Fry on Specific Perform- 
 ance apparently questions the authority of the case," and he then cites the passage from 
 § 717 of that work (inverting the order of the sentences), without, however, making any 
 reference to the passage in § 402. He concludes (p. 211) that " if the case is looked upon 
 as one of great hardship upon the defendant in very special circumstances, and as one which 
 presented a contract which ought not, on that ground, to be enforced, .then the case 
 will stand Well upon the ground suggested by Sir Edward Fry." This concluding 
 observation seems much too generous. It is submitted that the case will not " stand " 
 better " upon the ground suggested by Sir Edward Fry " than upon any other ground. 
 
272 CH. IV, SECT. 1. 
 
 CHAPTER IV. 
 
 THE DUTY OF DISCLOSURE INCIDENTAL TO RELATIONS OF 
 
 CONFIDENCE. 
 
 313. The duty of disclosure which it is now proposed to examine arises 
 under conditions of a wholly difierent character from those which give rise 
 to the duty of disclosure discussed in the preceding Chapter. There, the 
 subject of consideration was the disclosure which uberrima fides requires to 
 be made before the conclusion of a contemplated contract belonging to one 
 or other of certain classes, in order that the parties may be on equal terms 
 during the negotiation. Here, there is no question of a contractual relation 
 being in treaty between the parties : a fiduciary relation (whether contractual, 
 or implied, or " resulting ") is assumed to be already established, which 
 relation involves an obligation, during its existence, of complete candour 
 and good faith on the part of him in whom confidence is placed towards him 
 who has placed it (f). In the one case, the duty begins and ends with the 
 negotiation [q) : in the other, it begins and ends with the relation (r). 
 
 314. Further, the class of case now to be discussed is distinguishable 
 from, though it has many features in common with, that which is to form 
 the subject of the next Chapter, where the relation to which the duty of 
 disclosure is incidental is the relation existing between two parties of whom 
 one is presumed or proved to exercise a dominating influence over the other, 
 and who is, for that reason, placed by the law under a severe obligation to 
 provide the party in subjection, not only with complete information, but 
 
 (p) The distinction between the two classes is emphasized by !Fiiy, J, at pp. 474, 475 
 of Davies v. London & Provincial Marine Insurance Co. (1878), 8 C. D. 469. He there 
 mentions three kinds of case in which a duty of disclosure exists or may arise, first, where 
 the relation already exists, whatever that relation be, whether fiduciary, or of the type 
 described in Chapter V, post ; secondly, where the parties are contemplating and nego- 
 tiating for a contract uberrimce fidei (the subject of Chapter III, Sect. 2, Sub-ss. (2)-(7), 
 ante) ; and, lastly, where a duty of disclosure is created by circumstances, though neither 
 the nature of the contract in contemplation, nor that of the existing relation, is such as 
 to impose any such duty in the first instance. The first type of case is described by him 
 at p. 474 : " in the first place, if there be a pre-existing relationship between the parties, 
 such as that of agent and principal, solicitor and client, guardian and ward, trustee and 
 cestui que trust, then, if the parties can contract at all, they can only contract after the most 
 ample disclosure of everything by the agent, by the sohoitor, by the guardian, or by the 
 trustee. The pre-existing relationship involves the duty of entire disclosure." He then 
 proceeds to describe and distinguish the wholly different characteristics and conditions 
 of the other two classes. 
 
 (q) See § 181, note (j), § 189, and § 195, ante. 
 
 (r) See § 353, post. 
 
§§ 313-316 (kelations of confidence). 273 
 
 with the means of exercising absolute freedom of will and action. It often 
 so happens that the two relations, and the two duties arising out of them, 
 coexist and coalesce (s) ; but this is accidental, and, even in such cases, 
 it is very necessary to bear in mind the essential distinction, in thought and 
 theory, between the two. In the cases of fiduciary relations discussed in this 
 Chapter, as such, there is no question of " influence," and in the cases of 
 " influence," as such, there is no question of a fiduciary relation (t) ; though 
 usually, no doubt, the fiduciary relation gives scope and occasion for the 
 " influence," whilst the " influence " leads to the establishment, or is exercised 
 and expressed in the form, of a fiduciary relationship. 
 
 Sect. 1. General Statement and Theory. 
 
 315. The general rule or principle (stated summarily) is that, where a 
 fiduciary relation exists between two persons, the person in whom confidence 
 is reposed in virtue of that relation owes to the person who has reposed it 
 a duty (which begins with the creation of the relationship and continues 
 until its dissolution) to place at his disposal all the knowledge, acquired or 
 possessed by himself in the course and by virtue of such relationship, which 
 has a bearing on any transaction, either between the parties themselves, 
 or between either of them and a third person, with reference to any matter 
 which is the subject of the confidence. 
 
 316. The "knowledge" referred to means not merely knowledge of 
 facts and circumstances (u), as in the class of case considered in the last 
 Chapter, but also knowledge in the sense of experience, skill, and judgment, 
 either in afiairs generally, where the fiduciary office is of a general character, 
 or as to professional or business transactions of a particular type, where the 
 party in whom confidence is placed is employed in a special character as a 
 person practising, or carrying on, or conversant with, a particular profession, 
 trade, or vocation. It is often said that the party confided in has two other 
 duties besides that of disclosure ; for instance, that an agent or trustee, 
 
 (s) Particularly in the case of such relations as that of solicitor and client. 
 
 (i) The observations of Lord Ckanwobth, at pp. 770, 771 of Smith v. Kay (1859), 
 7 H. L. C. 750, are very pertinent here : " there is, I take it, no branch of the jurisdiction 
 of the Court of Chancery which it is more ready to exercise than that which protects . . . 
 persons in a situation of dependence, as it were, upon others, from being imposed upon by 
 those upon whom they are so dependent. The familiar cases of the influence of a parent 
 over his child, of a guardian over his ward, of an attorney over his client, are but instances. 
 The principle is not confined to those cases. ... It is contended that it applies only to 
 persons who stand in what is called a fiduciary relation. I believe, if the principle is 
 examined, it will be found most frequently applied in such cases, for this simple reason, 
 that the fiduciary relation gives a power of influence : but I could suggest fifty cases of 
 fiduciary relation where the principle does not apply at all. If a man makes me trustee of 
 his estate, to pay certain securities, and then ultimately to stand possessed of it for him, 
 ... I have no influence upon him because I am his trustee. It is only a particular 
 sort of trusteeship which gives influence." It is suggested that the last sentence involves 
 a slight inaccuracy, since no " sort of trusteeship," as such, " gives influence." That is to 
 say, no trustee is presumed, from the mere fact of his trusteeship, to have a dominating 
 influence over his cestui que trust ; any more than one who has dominion and " influence " 
 over another is, from that fact alone, presumed to be his trustee. 
 
 («) As to what are " facts " and " circumstances " for this purpose, see Ch. II, Sect. 2, 
 Sub-s. (1), ante. 
 
 B.N.D. T 
 
274 
 
 CH. IV, SECT. 1. 
 
 when dealing with his principal or cestui que trust, must give him, or see that 
 he has, independent and honest advice [v), or, if purchasing property from 
 him, must pay full value (m), as a condition of the validity of the transaction. 
 But, if " knowledge " be understood in the full, and (it is submitted) there- 
 fore correct, sense of the word above indicated, the so-called additional duty 
 of honest advice is perhaps rather to be regarded as a case, or application, 
 or corollary of the one primary obligation which requires the party trusted 
 to inform and instruct the other party's mind with all the materials which 
 are in his own, — ^that is, to transfer to him the whole of his own intellectual 
 equipment so as to put that other in as good a position to exercise his judg- 
 ment on the matter in hand as he himself would be. For this purpose, 
 and in this sense, it is immaterial whether the equipment consists of known 
 facts, or known methods or instruments of using those facts, — of intellectual 
 material, or intellectual appliances and instruments. Thus, to take the 
 most prominent of the fiduciary relations as typical of the rest, when it is 
 said that a trustee who proposes to contract with his cestui que trust for the 
 purchase of, or other dealing with, the trust property must advise him against 
 himself, as if he were advising him against a stranger, it is not so much the 
 actual advice which is essential, as the placing before the cestui que trust of 
 both (1) all the material facts, and also (2) all arguments and considerations 
 which the trustee's experience and skill (whether general or special) may 
 suggest for the purpose of enabUng the cestui que trust to view those facts 
 in their true significance and bearing, whether they tell for or against the 
 proposed dealing. The cestui que tritst is then put in possession of all that 
 his trustee knows, and there is (so far) no objection to the transaction, whether 
 he has been actually and formally, advised or not. So also, as to the necessity 
 of proving full value in cases of purchases or other contracts, the duty of a 
 trustee under the circumstances described is to impart to the cestui que trust 
 all the facts of which he is cognizant which bear on the question, and also 
 the full benefit of his honest opinion and judgment on those facts. If he 
 fails in this duty, the transaction is voidable : if, however, he punctually 
 discharges it, there is, it is conceived, nothing to prevent him from buying 
 the property at an undervalue, that is, at a value less than that which results 
 from his honest estimate on a full disclosure. The violation of duty (if any) 
 consists, not so much in the mere fact of purchase at an undervalue as in 
 the suppression and concealment of some matter, whether fact or opinion, 
 which is essential to enable the cestui que trust to exercise a fully instructed 
 judgment ; just as, when it is said that a trustee, promoter, or agent must 
 not make a profit out of his trust, promotership, or agency, when deahng 
 with third persons, the meaning of this elliptical expression is, not that the 
 mere act of making the profit, but that the non-disclosure of it, renders the 
 recipient liable to disgorge (x). 
 
 {v) See § 324, post, and note (r) thereto. 
 {w) See § 323, and notes (o) and {p) thereto, post. 
 
 (x) See the promotership case of Omnium Electric Palaces, Ltd. v. Baines, [1914] 1 Ch. 
 332, C. A. (per Sakgant, J., at pp. 344, 347 : promoter not a trustee of disclosed profit 
 
§§ 316, 317 (relations of confidence). 275 
 
 317. There are two main theories upon which the above rule of disclosure 
 has been based : public policy, and private right of ownership. The first 
 of these theories has been stated, with more or less elaboration (more in the 
 time of Lord Eldon, L.C, and less in later times, when the doctrine came 
 to be accepted without question) in a long series of judicial deliverances. 
 It has been insisted over and over again that public policy, in the sense 
 of public advantage, utility, and convenience, imperatively demands the 
 establishment, and the strenuous and unflinching enforcement, of an absolute 
 and general rule of disclosure in the class of case now under consideration. 
 For, were there no such absolute and general rule, every person who places 
 trust in another by virtue of the relation would be insufficiently protected 
 against him, because the latter would always be exposed to the temptation 
 of preferring his interest to his duty whenever an occasion arises on which 
 the two come into conflict. It is not a question of the particular individual, 
 against whom there may be no proof, or even suggestion, of his having yielded 
 to the temptation, or having either sought or gained any actual advantage 
 to himself, in the particular case. It is the recognition and appreciation of 
 the general tendency and probable influence of a right of concealment in 
 such cases which justifies the doctrine, — a tendency and influence which 
 on many occasions it might be di£B.cult to resist, and the actual operation of 
 which in any individual case it would be almost impossible to detect. From 
 this onerous and odious task the courts can only exempt themselves by the 
 declaration of a rule in absolute terms that the necessary disclosure shall be 
 made, and that, if it be withheld, the transaction cannot stand, whatever the 
 personal motives of the party withholding it may be, or whatever may be 
 the actual pecuniary result of his so doing. By this rtteans alone the pro- 
 tection of a large class of the community whose confidence requires protection 
 is assured, and a public danger is averted («/). Incidentally, no doubt, public 
 
 for the company). Cp. Maxwell v. Port Tennant Patent Steam Fuel <Ss Coal Co. (1857), 
 24 Beav. 495 (per Romilly, M.R., at p. 497 : " as this was not communicated to the share- 
 holders, they cannot be bound by the contract," and, later, — "if, in their dealings on behalf 
 of the company . . . the directors gain a private advantage for themselves, it ought to 
 be communicated to the body of shareholders ") ; Cassels v. Stewart (1881), 6 App. Cas. 
 64, H. L. (per Lord Blackburk, at p. 69 : " if he, as an agent, makes a profit out of the 
 concerns of his principal, and as acting for him, he must communicate it to his principal) ; 
 Williamson v. Hine, [1891] 1 Ch. 390 (per Kbkewich, J., at p. 394 : " there must be no 
 secret arrangement and no secret profit," but there is no breach of duty " if it is fair and 
 above board ") ; Shipway v. Broaiwood, [1899] 1 Q. B. 369, C. A. (per Chitty, L.J., at 
 p. 373 : " the real evil is not the payment of the money, but the secrecy attending it ") ; 
 Swale V. Ipswich Tannery, Ltd, (1906), 11 Comm. Cas. 88 (per Kennedy, J., at p. 96 : 
 " I agree that the gist of the wrong lies in the secrecy "). 
 
 (y) In the following authorities, the various aspects of public policy referred to in the 
 text, are declared to be the foundation of the rule : Exp. Lacey (1802), 6 Ves. 625 (per 
 Lord Eldon, L.C, at pp. 626a, 627, as to the diflSoulty of detection, and at p. 629, as to 
 the conflict between interest and duty) ; Lister v. Lister (1802), 6 Ves. 641a (per Grant, 
 M.R., at p. 632 : " the rule is a rule of general poHoy, to prevent the possibility of fraud and 
 abuse ") ; Ex p. James (1803), 8 Ves. 337 (per Lord Eldon, L.C, at pp. 344-353, and 
 particularly at pp. 344, 345, where it is pointed out that " this doctrine . . . stands much 
 more upon general principle than upon the circumstances of any individual case. It rests 
 upon this that the purchase " — it was a case of an assignee of a bankrupt's estate pur- 
 chasing part of the estate when put up for sale under the commission — " is not permitted 
 in any case, however honest the circumstances ; the general interests of justice requiring it to 
 
276 CH. IV, SECT. 1. 
 
 morality is also advanced, because it is always for the moral well-being of 
 society that its members should be freed from the temptation to do wrong : 
 but the primary object and justification of the rule is public policy, in the 
 
 be destroyed in every instance ; as no Court is equal to the examination and ascertainment of 
 the truth in much the greater number of cases ") ; Exp. Bennett (1805), 10 Ves. 381 (per Lord 
 Eldon, L.C, at pp. 385, 386, as to the " rule being necessitated by the tendency and 
 temptation " of the conflict between interest and duty, apart altogether from the efiect in 
 the individual case, and by the difficulty in ascertaining motives) ; Ormond {Lady) v. 
 Hutchinson (1806), 13 Ves. 47 (where, at p. 51, Lord Eeskine, L.C, taking rather high 
 ground, says that "the jurisdiction is most beneficial," because "confidential relations 
 in Uf e " are matters " in respect of which this Court assumes o guardianship over mankind "); 
 Harris v. Tremenheere (1808), 15 Ves. 34 {per Lord Eldon, L.C., at p. 39 : " upon reasons 
 of public policy," and, again, at p. 42 : " upon principles of public utility ") ; Cook v. 
 CoUingridge (1823), Jac. 607 ; 23 R. R. 155 {per Lord Eldon, L.C, at p. 621 : temptation, 
 necessitating prohibitory rule) ; Rothschild y. Brookman {imX), 5Bligh (n.s.) 165(fie»- Lord 
 Wynfobd, L.C, at pp. 189, 190, 192, 196, 197, as to the temptation to evil-doing which 
 arises from the attempt to serve two masters, whether evil is done or contemplated in the 
 particular case, or not) ; Oillett v. Peppercwrne (1840), 3 Beav. 78 (per Lord Langdale, 
 M.R., at pp. 83, 84, as to the conflict between interest and duty ; at p. 84 : " against the 
 policy of the law ") ; Greenlaw v. King (1841), 9 L. J. (cH.) 377 (per Lord Langdale, M.R., 
 at p. 383 : difficulty of detection, requiring ahsoluterole "for the protection of mankind ") ; 
 Hamilton v. Wright(184:2),9Cl &Fin. Ill (j)e?- Lord Brougham, at pp. 121-124: tendency 
 and temptation : conflict between interest and duty) ; Benson v. Heathorn (1842), 1 
 y. & C. 326 (per Stuart, V.-C, at pp. 342, 343 : tendency and temptation — difficulty of 
 detection — ^protection of the public) ; Salmon v. Cutts (1850), 4 De 6. & Sm. 125 (per 
 Knight-Bruce, V.-C, at p. 129 : "in cases of this kind, there is a public as well as a 
 private interest to be considered ") ; BenUey v. Craven (1853), 18 Beav. 75 (per Romilly, 
 M.R., at pp. 76, 77) ; Aberdeen Railway Co. v. Blakie Bros. (1854), 1 Macq. H. L. 461 (per 
 Lord Cranwobth, L.C, at p. 471) ; Salomons v. Pender (1863), 3 H. & C. 639 (per Martin, 
 B., at pp. 643, 644, citing from Story on Agency, § 210, the following passage : "if then 
 the seller were permitted, as the agent of another, to become the purchaser, his duty to 
 the purchaser and his own interest would stand in direct opposition to each other ; and 
 thus a temptation, perhaps in many cases too strong for resistance by men of flexible morals, 
 or hackneyed in the common devices of worldly business, would be held out, which would 
 betray them into misconduct, and even into crime ") ; Turnbull v. Garden (1869), 20 L. T. 
 218 (per Jambs, V.-C, at p. 220) ; Panama & South Pacific Telegraph Co. v. India Rubber, 
 Gutta Pereha, & Telegraph Co. (1875), 10 Ch. App. 515 (per James, L.J., at p. 627 : " you 
 must act on general principles, without regard to the particular facts or the particular conduct 
 or misconduct of the parties in a particular case," because of " the impossibflity which the 
 Court finds itself in of ever ascertaining the real truth of the circumstances ") ; Robinson v. 
 Mollett ( 1875), L. R. 7 H. L. 802 (per Lord Chelmsford, L. C , at p. 838, adopting the opinions 
 of the judges summoned, e.g. those of Melloe, J., at pp. 815, 816, Brett, J., at p. 824, 
 Cleasby, B., at pp. 828, 829, Grove, J., at pp. 831, 832, with which cp. the judgment of 
 Welles, J., at pp. 655, 656 of the report of the case in the Court below (1870), L. R. 5 C P. 
 646, as to the danger to the community which would result from the absence of the rule) ; 
 Pearce y. Foster (1886), 17 Q. B. D. 536, C A. (per Lord Esher, M.R., at p. 540, and 
 LiNDLBY, L. J., at pp. 541, 542) ; Boston Deep Sea Fisheries db Ice Co. v. Ansell (1889), 39 
 C. D. 339, C. A. (per Cotton, L.J., at p. 357) ; Bray v. Ford, [1896] A. C 44, H. L. (per 
 Lord Hebschell, at p. 51 — conflict between interest and duty) ; Shipway v. Broadwood, 
 [1899] 1 Q. B. 369, C. A. (per Chitty, L.J., at p. 373 : " a contrary doctrine would be 
 most dangerous, for it would be almost impossible to ascertain what had been the efiect of 
 the bribe ") ; Costa Rica Railway Co. v. Forwood, [1901] 1 Ch. 746, C A. (per Rigby, L.J., 
 who, at p. 753, refers to the principle as " a most salutary one," the object and justifi- 
 cation of which is " to make sure that people will do their duty when they are acting 
 under circumstances of unusual difficulty," and per Vaughan Williams, L.J., at p. 761, 
 describing the " doctrine " as a " wholesome " one, its object being " to protect directors, 
 trustees, and others against the fallibiUty of human nature ") ; Re Haslam and Hier- 
 Evans, [1902] 1 Ch. 765, C. A. (yer Vaughan Williams, L.J., at p. 769, as to the conflict 
 between interest and duty, when the attempt is made " to serve two masters ") ; King, 
 Viall, & Benson v. Howell (1910), 27 T. L. R. 114, C A. (per Cozbns-Hardy, M.R., at 
 p. 115, as to the " conflict of duties ") ; Transvaal Lands Co. v. New Belgium (Transvaal) 
 Land and Development Co., [1914] 2 Ch. 488, C. A. (per Swinfen Eady, L. J., at p. 503 : 
 conflict of duties, again). 
 
§§ 317, 318 (relations op confidence). 277 
 
 sense of public utility, security, and convenience, as is shown by the fact 
 that, according to principles which are now thoroughly established (2), it 
 is no answer to a case of non-disclosure to allege or prove that the party 
 charged was not guilty of fraud on the party complaining, either in intention 
 or result, which allegation and proof would be of the most vital materiality 
 if the doctrine rested on a purely ethical foundation. 
 
 318. The other theoretical basis of the duty of disclosure in fiduciary 
 relations is the proprietary right of the person reposing confidence. Every 
 such person is regarded as having, in virtue of the relation (whether founded 
 on express contract, or arising from circumstances), acquired a title, whether 
 paid for (as in the case of most agencies), or not (as in the case of most trustee- 
 ships), to all the knowledge and information in the possession of the trustee 
 or agent, or other person in whom the confidence is placed, as to all material 
 facts. On this view, the latter's knowledge and information is not his own to 
 communicate or withhold as he pleases : if he keeps it to himself, he is pur- 
 loining, or converting to his own use, that which belongs to another (a). To 
 take two simple illustrations which are constantly used in the authorities, 
 an agent's or trustee's private knowledge of the existence of a mine under 
 an estate (6), or of the unsuspected value and history of a picture (c), 
 
 {z) See § 358,:pos(. Cp. Bray v. Ford, [1896] A. C. 44 H. L. 
 
 (a) Fox V. MackretJi (1788), 2 Cox 320 {per Lord THtrBLOW, L.C., at p. 326, " upon this 
 arises a question which I think material ; whether a trustee gaining a knowledge of the 
 subject in the execution of the trust, and at the expense of the cesto'g'ttefrMsi, . . . and that 
 knowledge consequently belonging to the cestui que trust, whether a trustee may not in this 
 respect have the hand of justice laid upon him if this knowledge is made use of by him to 
 circumvent his cestui que trust ") ; Ex p. Lacey (1802), 6 Ves. 625 (per Lord Eldon, L.C, 
 at p. 626) ; Ex p. James (1803), 8 Ves. 337 (per Lord Eldon, L.C, at p. 343 : "the 
 principle is that, as the trustee is bound to acquire aU the knowledge possible to enable 
 him to sell to the utmost advantage of the cestui que trust, the question, what knowledge 
 he has obtained, and whether he has fairly given the benefit of that knowledge 
 to the cestui que trust, ... no Court can discuss with competent sufficiency or safety 
 to the parties"); Coles v. Trecothick (1804), 9 Ves. 234 (where Lord Eldon, L.C, 
 at p. 247, adverts to " the danger that the trustee may buy with knowledge acquired at 
 the expense of the cestui que trust") ; Hamilton v. Wright (1842), 9 CI. & Fin. Ill (per 
 Lord Brougham, at p. 124) ; Luddy's Trustee v. Peard (1886), 33 C. D. ,500 (per Kay, J., 
 at pp. 515, 519, 520). See also the observations of Lord Eldon, L.C, at pp. 295, 296 of 
 Cane v. Lord Allen (1814), 2 Dow. H. L. 289, an " undue influence " case. 
 
 (b) Ex p. Lacey, sup. (per Lord Eldon, L.C, at p. 627 : " suppose a trustee buys an 
 estate ; and by the knowledge acquired in that character discovers a valuable coal mine 
 under it ; and locking that up in his own heart, enters into a contract with the cestui que 
 trust," &c., which class of case he then contrasts with that of a purchaser who stands in 
 no such fiduciary relation to the vendor, and whose knowledge therefore is his own to use 
 as he pleases, and keep as he pleases) ; Ex p. James, sup. (per Lord Eldon, L.C, at p. 343 : 
 ■" a person " — he means a trustee — " knowing not only the surface value, but that there 
 are minerals, buys upon the rent ; and gains all that advantage. How can that be found 
 out, if he chooses to deny it ? Therefore the Courts have said," &c.) ; Coles v. Trecothick, 
 sup. (per Lord Eldon, L.C, at p. 247, where he again illustrates the rule by " the case of 
 mines " of which a trustee acquires secret knowledge); Luddy's Trustee v. Peard, sup. (per 
 Kay, J., at p. 520 : " taking the familiar illustration, if the agent becomes from his employ- 
 ment aware of the existence of a coal mine under his employer's land, of which the 
 employer is ignorant, ... he could not purchase from the employer without disclosing 
 that "). 
 
 (c) Lowther v. Lord Lowther (1806), 13 Ves. 95, where an agent with whom a picture 
 had been deposited discovered, after cleaning it, that it was (in his opinion at least) a 
 Titian, worth £5000, and, without disclosing this discovery or opinion to his principal, 
 claimed to have bought it of him for 300 guineas, and Lord Beskine, L.C, at pp. 102, 103, 
 
278 CH. IV, SECTS. 1, 2, SUB-S. (1). 
 
 whicli is the subject of iis trusteeship or agency belongs to his principal or 
 cestui que trust, and cannot be kept from him, though, if there were no fiduciary 
 relation, that knowledge would be the party's own property, and, as has 
 already been explained (d), he would be legally entitled to make free use of it 
 for his own purposes and advantage, as he would of anything else belonging to 
 him. The same theory applies to " knowledge " in its other sense of " power." 
 This too belongs not to the agent or trustee, but to the principal or cestui 
 que trust, who is entitled to the ezolusive benefit of the unbiassed and dis- 
 interested skill, judgment, discretion, and experience, of the person in whom 
 he has confided (e) ; and, if the agent or trustee secretly uses his intellectual 
 armoury, no less than if he secretly uses his intellectual magazines, to under- 
 mine, instead of advancing, the service to which they have been devoted, or 
 if he surreptitiously alters the character with which the relation has invested 
 him, and turns himself from an agent into a merchant, from a protector 
 into a competitor, or from a watch-dog into a wolf, he is infringing, and con- 
 spiring against proprietary rights which, whether contractually or otherwise, 
 he has bound himself to respect and promote (/). 
 
 said that " the principle upon which a court of equity acts in these cases " is, that " an 
 agent to sell shall not convert himself into a principal, unless he can make it perfectly- 
 clear that he furnished his employer with all the knowledge that he himself possessed "). 
 See also the illustration given by Lord Hatheeley, L.C, at p. 780 of Phillips v. Eomfray 
 (1871), 6 Ch. App. 770, as cited in § 165, ante, note (c). 
 
 (d) Numerous examples of the right to keep to one's self information, knowledge, or 
 opinions which no other person can claim as his property, are given in § 165, ante : as 
 to mines, in particular, see notes {w), {x), and (y) to that paragraph ; and, as to pictures, 
 note (6) thereto. 
 
 (c) Whichcote v. Lawrence (1798), 3 Ves. 739 {per Lord LotJGHBOEOirGH, L.C, at p. 749 ; 
 " knowledge and abilities ") ; Sanderson v. Walker (1807), 13 Ves. 601 (per Lord Eldon, 
 L.C, at p. 602 : "bound to exert all Ms skill, and apply all his knowledge, with strict 
 integrity, for their benefit ") ; Clarke v. Tipping (1846), 9 Beav. 284 {per Lord Lanqdale, 
 M.B., at p. 292 : " among the most important duties of a factor are those which require 
 him to give to his principal the free and unbiassed use of his own discretion and judgment ") ; 
 Salomons v. Perwier (1865), 3 H. & C 639 {per Mastin, B., at p. 643, citing Story on Agency, 
 § 210 : " this rule is founded upon the plain and obvious consideration that the principal 
 bargains, in the employment, for the exercise of the disinterested skill, diligence, and zeal of 
 ■ the agent, for his own exclusive benefit ") ; Pearce v. Foster (1886), 17 Q. B. D. 536, C A. 
 (per Lopes, L.J., at p. 543). 
 
 (/) Crowe V Ballard (1790), 1 Ves. Jr. 215; 1 R. R. 122; Whichcote v. Lawrence, 
 sup. (per Lord Loughborotigh, L.C, at pp. 749, 750) ; Rothschild v. Brookman (1831), 
 5 BUgh (n.s.) 165 (per Lord Wynfobd, L.C, at p. 202 : " if one of the parties is in 
 a situation which is not fairly disclosed to the other," — he is deaUng with the case of 
 an agent to buy or sell secretly converting himself into a vendor or purchaser 
 respectively — " which, if the other had known, he would not have relied on his 
 judgment and advice, nor have acted upon or adopted any act of his, such a, trans- 
 action ought not to be allowed") ; Gillett v. Peppercorne (1840), 3 Beav. 78 (per Lord 
 Langdale, M.R., at pp. 83, 84, who there points out that the principal is betrayed by the 
 agent's secret change of character, since aU the time he expects, and has a right to expect, 
 that " the agent wiU act in the matter purely and disinterestedly for the benefit of his 
 employer ") ; Robinson v. Mollett (1875), L. R. 7 H. L. 802 (per Cleasby, B., at pp. 828, 
 829, in delivering his opinion, as one of the judges consulted by the House, and Lord 
 Chelmsford, L.C, at p. 838) ; Panama and South Pacific Telegraph Co. v. India Rubber, 
 Outta Percha, and Telegraph Co. (1875), 10 Ch. App. 515 (per James, L.J., at p. 526, and 
 Mellish, L.J., at pp. 528, 529; Jambs, L.J., says that the case of a " surreptitious " 
 transformation of persona, such as is described in the text, is just as " if a man hired a 
 vetturino to take him from one place to another, and . . . the vetturino, after he had 
 accepted the hiring, had conspired with his servant to rob him on the way ") ; Re North 
 Australian Territory Co., Archer's Case, [1892] 1 Ch. 322, C. A. (per Bowbn, L. J., at p. 341). 
 
§§ 318-320 (trusteeship). 279 
 
 Sect. 2. The Several Eelations to which the Peinciple is applied, 
 
 AND the NaTUEE OF THE DUTIES OF DiSCLOSUEE ARISING OUT OF SUCH 
 
 Relations respectively. 
 
 31 9. The fiduciary relations wtich give rise to the duty of disclosure may 
 be classified as follows : — the relation between trustee and cestui que trust ; 
 that between a promoter and the company promoted by him ; and that 
 between principal and agent (g). There are, as will be seen [h), several 
 species of the first and of the third class, whereas the second may be said to 
 be sui generis ; but the above represent the main divisions or types of what 
 it is convenient to term, and may with strict accuracy be described as, " rela- 
 tions of confidence," to distinguish them from those relations of " influence " 
 of which " confidence," though often in fact a concomitant or result, is not 
 a necessary characteristic {i). These three classes it is now proposed to 
 examine in the order above stated. 
 
 Suh-s. (1). Trustee and Cestui que Trust. 
 
 320. There are many species of trusts, and, therefore, of trustees. A 
 trustee may be declared such by the express terms of a deed, will, or other 
 instrument: or he may be a trustee by implication, or construction, or as 
 the " result " of certain circumstances and the legal situation which they 
 create ; for instance, in the discharge of certain offices, such as that of an 
 executor or administrator, or assignee of an insolvent estate, he may be deemed 
 in law subject to many of the obligations of trusteeship, though not expressly 
 declared to be a trustee by any instrument. Again, he may be a complete 
 trustee of property for all purposes, as its legal owner, or he may be a trustee 
 for certain specific or limited purposes, such as for sale, or for purchase (which 
 type of trusteeship is hardly distinguishable from agency to sell, or to purchase, 
 as the case may be), or for the mere execution of some term in a contract, 
 or otherwise " a trustee by metaphor," in Lord Westbury's phrase. But, 
 however essential it may be to bear in mind these distinctions when applying 
 the law of trusts in other directions (j), they have little significance for the 
 purposes of the present subject. In all cases alike where one person is entrusted 
 by another with the management, conduct, discharge, execution, or perform- 
 ance, of any property, business, office, service, duty, act, or matter respectively, 
 
 (g) These three form the subject of Sub-ss. (1), (2), and (3) respectively, post. Sub-s. (4) 
 deals with a class of relation in which there is ordinarily no absolute duty of disclosure, 
 but where, in the conduct of matters with which the relation is concerned, such a duty 
 may arise. 
 
 (h) As to the various forms of trusteeship, see § 320, inf. ; as to the peculiar nature of 
 promotership, see §§ 327, 328, post ; as to the different species of agency, see § 335, post. 
 
 (i) See § 314, ante. 
 
 ij) At p. 566 of Naylor v. Winch (1824), 1 Sim. & St. 555, Shabwell, V.-C, says that 
 an executor is " in an artificial sense a trustee for every legatee until the legacy is paid or 
 invested ") ; and at pp. 675, 676 of Ivnox v. Gye (1872), L. R. 5 H. L. 656, Lord Westbury 
 is at great pains to explain the vital distinction, for the purposes then under consideration, 
 between a trustee by express declaration, or a complete trustee of property for all purposes, 
 and "a trustee by metaphor," that is, a trustee by imphcation of law, and merely for 
 the execution of some particular purpose or contractual obligation. 
 
280 CH. IV, SECT. 2, SUB-S. (1). 
 
 by whatever name that person is called, and whatever may be the nature or 
 limits of that which is confided to him, and whether he is placed in that 
 position by express appointment under a deed, will, or contract, or by the 
 necessity of the circumstances, he owes the same duty of disclosure, because 
 there is in aU these cases the same " confidence," or (in the largest sense of 
 the word) " trust "(h); though, no doubt, the exact nature and limits of 
 the matters to be disclosed may vary according to the particular species of 
 trusteeship in which the duty of disclosure arises. 
 
 321. What, then, using the terms " trustee " and " cestui que trust " in 
 the above large and general sense, are the matters which, being (actually or 
 presumptively) within his knowledge, a trustee is bound to impart, and give 
 the benefit of, to his cestui que trust, in the case of any dealing with him during 
 the continuance of the relationship ? They come under two heads. In the 
 first place, he is of course prohibited from suppressing his identity in any 
 such transaction. He cannot secretly procure an agent or nominee or trustee 
 for himself to purchase the trust property from the cestui que trust, or other- 
 wise contract with him in relation to the subject-matter of the trust, or mask 
 his personality under an alias or prete-nom. He must make a clear com- 
 munication to the cestui que trust of the nature of the connection between 
 himself and the person so procured or nominated, and reveal the transaction 
 in its true light as a vicarious one, in which he is the real contracting party : 
 otherwise, on discovery, the cestui que trust is entitled to the appropriate 
 relief (I), without the necessity of considering any other breach of the trustee's 
 duty of disclosure. 
 
 (le) Gordon v. Holland (1913), 82 L. J. (p. o.) 81, 87. As to executors, and adminia- 
 trators, and assignees or trustees of an insolvent estate, who are in a fiduciary position to 
 the beneficiaries, the creditors, and the bankrupt, respectively, see some of the cases cited 
 in notes (/) — {r), inf. 
 
 {I) See Randall v. Errington (1805), 10 Ves. 423, which was a case of two trustees, the 
 defendant Errington and one LiddeU, having purchased at auction the trust property 
 by one Hodgson in trust for themselves. The cestui que trust was one Wilkinson, whose 
 next of kin sued Errington, the executors of LiddeU (who had died in the meantime), 
 and an assignee from them, for rescission of the sale, on the ground that these trustees were 
 under a duty to inform their cestui que trust that H. was not bidding for himself as a 
 stranger, but as the agent and trustee for (in the case of certain cottages) E., and (in the 
 case of certain shares) L. Gkant, M.R., granted the rehef prayed, holding that the 
 defendants had entirely faUed to prove that the trustees had ever disclosed to either W. 
 or the plaintiffs, or that any of these latter knew at any material date, the above fact : 
 " as to W. and these plaintiffs, it does not appear that they knew that E. had become the 
 purchaser " of the cottages (p. 426), and, as to the shares, " there is no evidence that W. 
 knew that L. had become the purchaser " (p. 427), and, again (at p. 429), " he did not know 
 that it was a sale to L." So, in Downes v. Grazelrook {lill), 3 Mer. 200, Lord Eldoit, L.C, 
 held that a trustee cannot purchase from his cestui que trust by an agent bidding and buying 
 on his behalf, without bringing the fact of the agency to the actual and personal notice of 
 the cestui que trust, and, further, obtaining his assent (pp. 208, 209). See also Baker v. 
 Read (1854), 18 Beav. 398 (Romilly, M.K.) ; 3 W. R. 118 (Knioht-Bktjob and Ttjkneb, 
 LL.JJ.), which was a case of an executor purchasing the estate from the beneficiaries by 
 a trustee or agent, without disclosing the fact that he was the real purchaser, and in which' 
 it was held that, for the purposes of the rule of disclosure, executors are in precisely the 
 same position as trustees : the executor, however, in this case escaped, on proving that 
 the beneficiaries were perfectly well aware from other sources that the purchase was made 
 on his behalf ; Dyson v. Lum (1866), 14 L. T. 588 (a case of a person concealing the fact that 
 in buying the property she was agent for her brother, one of the trustees under a will). 
 On the other hand, in Re Postleihwaite (1888), 60 L. T. 514, C. A., the alleged secret agency 
 
§§ 32Q-322 (trusteeship). 281 
 
 322. Tile otter, and tte more common, type of case is where the trustee 
 deals openly and professedly with his cestui que trust. It is now well estab- 
 lished (though in very early times it was much doubted) that such a dealing 
 is not absolutely prohibited (II), but it is only permissible under the most 
 stringent conditions : that is to say, the transaction will be invalidated at 
 the instance of the cestui que trust, unless the trustee can establish — and the 
 biirden of doing so lies heavily upon him, and is very seldom discharged — 
 the propriety of his conduct in all respects, or, in other words, that he has 
 taken no advantage of his exclusive or superior knowledge of the circum- 
 stances, that he has made a bargain as secure and advantageous for the 
 cestui que trust with himself as could be made for the cestui que trust with any 
 stranger, and that, generally, he has made a proper and fair use of the con- 
 fidence placed in him (m) ; or, unless he can prove a clear assent by the 
 
 was not proved by the mere fact that the trustee bought the property from the purchaser 
 shortly afterwards at a sUghtly increased price. It is of course in auction sales that the 
 opportunity for suppression of identity most frequently arises : see Sanderson v. Walker 
 (1807), 13 Ves. 601 {per Lord Eldon, L.C, at p. 602 : " there is no medium of sale that can 
 be made a wider inlet to fraud than sales by auction " — he is referring to the ridiculous sug- 
 gestion of a trustee that he was buying not from himself, but from the auctioneer, who, of 
 course, as Lord Eldon points out, is not an interposed third person, but the mere agent of 
 the trustee) ; Knight v. Marjoribanks (1849), 2 Macn. & G. 10 (per Lord Cottbnham, L.C, 
 at p. 12 : "he must not, . . . surreptitiously and without the knowledge of the castei jae 
 trust, bid at an auction either in his own name, or by anybody for him ; . . . This is the 
 rule in the case of a trustee ") ; Be Moore (1881), 51 L. J. (CH.) 72, with which contrast 
 Me Qallard, [1897] 2 Q. B. 8. 
 
 (II) See Coles v. Trecothick, and Luff v. Lord, cited in the next note : also WMcJicote v. 
 Lawrence (1798), 3 Ves. 739 (per Lord Eldon, L.C, at pp. 749, 750 : "it is stated as a 
 proposition, that a trustee can never buy of the cestui que trust. Certainly that proposition 
 is not correctly true." He then goes on to say the same of " an emanation " from that 
 proposition, viz. "that the sale, where the trustee to sell is the purchaser, is ipso jure nuU ; 
 that there is no sale, no contracting party. That is not the real sense of the proposition ; but 
 it is this ; which is very plain in point of equity, and a principle of clear reasoning ; that 
 he who undertakes to act for another in any matter shall not in the same matter act for 
 himself ") ; Sanderson v. Walker, sup. (per Lord Eldon, L.C, at p. 601), as cited in note 
 (mm), inf. ; Downes v. Grazebrook (1817), 3 Mer. 200 (per Lord Eldon, L.C, at p. 208) ; 
 Dover v. Buck (1865), 12 L. T. 136 (per Stuakt, V.-C, at p. 137). Such transactions, 
 however, though not ipso jure null, like a sale by a mortgagee to himself, which is regarded 
 as not being an exercise of the power of sale at all, — see § 347, post, — are, if recorded in a 
 formal instrument by a perfectly candid trustee, scarcely capable of expression in any 
 terms which will not make the whole thing appear, on the face of it, an utter absurdity, 
 as, for instance, in a case where the recitals of the deed made it clear that the trustee 
 purported to sell to a person who was actually declared to be his agent : Franks v. 
 Bollans (1867), 17 L. T. 309 (per Stuart, V.-C, at pp. 311, 312). See also Thomson v. 
 Eastwood (1877), 2 App. Cas. 215, H. L. (per Lord Caikns, L.C, at p. 236. 
 
 (m) Gibson v. Jeyes (1801), 6 Ves. 266 (per Lord Eldon, L.C, at p. 278 : " that great 
 rule of the Court that he who bargains in matters of advantage with a person placing 
 confidence in him is bound to show that a, reasonable use has been made of that con- 
 fidence ") ; Coles V. Trecothick (1804), 9 Ves. 234 (per Lord Eldon, L.C, at pp. 246, 247 ■- 
 " a trustee may buy from the cestui que trust, provided that there is a distinct and clear 
 contract, ascertained to be such after a jealous and scrupulous examination of aU the 
 circumstances, . . . and there is no fraud, no concealment, no advantage taken by the 
 trustee of information acquired by him in his character of trustee. I own it is a difficult 
 case to make out ") ; Denton v. i)orener (1856), 23 Beav. 285 (per Romilly, M.R., at p. 290 : 
 " the burden of proof Mes on the trustee to show that every possible security and advantage 
 was given to the cestui que trust, and that as much as possible was gained for him in the 
 transaction, and as could have been gained under any other circumstances ") ; Smedley v. 
 Varley (1857), 23 Beav. 358 (per Romilly, M.R., at p. 359) ; Luff v. Lord (1864), 34 Beav. 
 220 (per Romilly, M.R., at p. 227 ■- " a trustee may purchase from his cestui que trust, 
 when the cestui que trust chooses to sell him the property, though the burden of proof lies 
 
282 CH. IV, SECT, 2, SUB-S. (1). 
 
 cestui que trust to tte termination of the trusteesliip, and to the assumption 
 by the trustee of the character of independent purchaser or contractor {mm) ; 
 though this latter will not be an answer if the trustee has divested himself of 
 his trusteeship within such a recent date that he cannot be supposed to 
 have also divested himself of the exclusive or superior knowledge acquired 
 by him in that character, in which case he is under the same duty of communi- 
 cating his knowledge as if the relation had not been put an end to (m). 
 
 323. The knowledge which must be imparted to the cestui que trust is, in 
 the first place, all the knowledge and information as to material facts which 
 the trustee has acquired, or of which he has been in possession, in the course 
 of his trusteeship, and, secondly, all the knowledge of how to use and appreciate 
 those facts which he possessed before he entered upon his duties, and the 
 possession of which, if he be an expert or skilled person who spondet feritiam 
 
 on the trustee to establish the propriety of the transaction"). The "difficulty" of 
 " making out the case," which Lord Eldon acknowledges, was overcome by the trustee, 
 who accordingly succeeded, in Coles v. Trecothick, sup. ; Morse v. Royal (1806), 12 Ves. 
 355 (per Lord Eldon, L.C., at pp. 374, 375) ; Luff v. Lord, sup. ; Hickley v. Hickley (1876), 
 2 C. D. 190. On the other hand, in the vast majority of cases the trustee was unable to 
 " estabUsh the propriety of the transaction," such as Ati.-Gen. v. Lord Dudley (1815), 
 G. Cooper, 146 ; 14 R. R. 226 (trustees of property for Anabaptists, under an enrolled deed, 
 purchasing from the society) ; Cook v. ColUngridge (1823), Jac. 607 ; 23 R. R. 155 (purchase 
 by executors from co-executors of testator's share in partnership business) ; Williamson v. 
 Seaber (1839), 3 Y. & C. (Eq. Exch.) 717 ; Hamilton v. Wright (1842), 9 CI. & Fin. Ill (pur- 
 chase by trustees in insolvency of annuity from debtor) ; Denton v. Donner, sup. ; Smedhy 
 V. Varley, sup. ; Lloyd v. Attwood (1859), 3 De G. & J. 614 (release of trustees) ; Franks 
 V. Bollans, cited in the note (II), sup. ; Gray v. Warner (1873), 42 L. J. 556 (purchase of 
 a legacy by an executor) ; Be Pepperell (1879), 27 W. R. 410 (where an administratrix, 
 by her husband, purchased part of the estate from another administratrix) ; De Cordova v. 
 De Cordova (1879), 4 App. Cas. 692, P.C. (at pp. 702, 703 : executors compromising a 
 debt due from one of themselves) ; PlowrigU v. Lambert (1885), 62 L. T. 646 (purchase 
 of beneficiary's interest under a wiU by trustee of the wiU). 
 
 (mm) Coles v. Trecothick, sup. (see the earlier part of the passage from Lord Eldon's 
 judgment which is cited in the last note) ; Sanderson v. Walker (1807), 13 Ves. 601 (per 
 Lord Eldon, L.C., at p. 601 : " a trustee for sale may be the purchaser in this sense ; 
 that he may contract with his cestui que trust that, with reference to the contract of pur- 
 chase, they shall no longer stand in the relative situation of trustee and cestui que trust ; 
 and the trustee, having through the medium of that sort of bargain evidently, distinctly, 
 and honestly proved that he had removed himself from the character of trustee, his 
 purchase may be sustained "). Where the cestui que trustent are infants, there is no means 
 of estabhshing such a contract, or consent to the termination of the relationship ; for 
 infants cannot so contract or consent, and it is only the Court who can do so on their 
 behalf, and therefore it is only by obtaining judicial sanction that any dealing by the 
 trustee with the beneficiaries can in such a case be sustained : Mulvany v. Dillon (1810), 
 1 BaU & B. 409 ; 12 R. R. 43 (where an executor de son tort induced the executors named 
 in the wiU to surrender a leasehold interest bequeathed to infants, and give him a new 
 lease at a lower rent) ; Be New Haw Estate Trusts (1912), 107 L. T. 191, where Pabkbe, J., 
 held that, in this respect, the Public Trustee under the Public Trustee Act, 1906 (6 Edw. 7, 
 c. 55), is in no different position than that of any other trustee. 
 
 (n) Bobinsonv. Pett (1734), 3 P. Wms. 249 (yer Talbot, L.C, at p. 251 : " the defendant's 
 renouncing the executorship is not material ... if this were to make any difference, it 
 would be an art practised by executors to get themselves out of this rule ") ; Exp. James 
 (1803), 8 Ves. 337 (a case of the solicitor to the commission buying part of the bankrupt's 
 estate, in which, at p. 352, Lord Eldon, L.C, said : "if the principle is right that the 
 solicitor cannot buy, it would lead to all the mischief of acting up to the point of sale, 
 getting all the information that may be useful to him, then discharging himself from the 
 character of solicitor, and buying the property ") ; Spring v. Pride (1864), 12 W. R. 892 
 (a case of a trustee retiring from the trusteeship "formally or colourably . . . for the 
 purpose of ... a better appearance to be made " ■- per Knight-Bbuce, L.J., at p. 893). 
 
§§ 322, 323 (trusteeship). 283 
 
 arlis, may have been tlie reason for his appointment. As regards the first 
 species of knowledge, the principal matters required to be disclosed are those 
 facts and circumstances which have a bearing on the value of the trust 
 property, and of which the trustee has special or private cognizance (o). 
 The non-disclosure of such facts may obviously result in the trustee purchasing 
 at a price which, if he had been put in full possession of the truth, the cestui que 
 trust might not have been willing to accept. It has, indeed, been sometimes 
 said, and still more often assumed, that the mere fact of undervalue is enough 
 to vitiate a transaction between trustee and cestui que trust. Unless this 
 statement be taken to mean that any inadequate disclosure of facts bearing 
 on value which results in the acceptance by the cestui que trust of inadequate 
 value is such as to render the transaction voidable, or, unless it is confined 
 to cases where undue influence, as well as abuse of confidence, is shown, 
 it may be doubted whether it is strictly correct. To test whether, in its 
 literal sense, it is accurate, it must be assumed that the trustee has put at 
 the disposal of the cestui que trust every single piece of knowledge or informa- 
 tion which would tend to enhance the value, that he has placed him in com- 
 munication with independent experts of the greatest skill and repute, that 
 he has honestly given him the full benefit of his own experience and judgment, 
 and that the bargain was in all other respects fair and proper : and that the 
 cestui que trust thereupon chooses, from motives of unsolicited and uninfluenced 
 bounty, to seU the property at a price less than that which the knowledge 
 so communicated, and the advice so given, would show to be the true value. 
 Would the mere fact of " undervalue " in such a case vitiate the purchase ? 
 It is submitted that it would not ; any more than, e converse, the mere fact 
 
 (o) Illustrations are: — Forbes v. Ross (1788), 2 Cox 113 (trustee lends money at less 
 interest than, as he must have known, could have been obtained elsewhere) ; Fox v. 
 Mackreth (1788), 2 Cox 320 (trustee withholds information as to the real value of the estate 
 which he had acquired by secretly sending down a surveyor to report) ; Whichcote v. 
 Laiorence (1798), 3 Ves. 739 {per Lord Loughborough, L.C., at p. 750 : " Lawrence, being 
 a banker, entered into the trust probably from the advantage he might derive that the 
 money might lie long with him; and it might draw custom to his shop. From his 
 situation he was not likely to be unacquainted with the real value," and, again, at p. 751, 
 " having a farm in the neighbourhood, he must have been well acquainted with the 
 circumstances ") ; Fxp. Lacey (1802), 6 Ves. 625 {per Lord Eldon, L.C, at pp. 626, 627) ; 
 Ex p. James (1803), 8 Ves. 337 {per Lord Eldon, L.C, at p. 350 : " Billingley's valuation 
 stating it to be worth £12,000 at least was known to the assignee and some of the creditors. 
 Was not that material for the others to know ? " The case was that of an assignee of a bank- 
 rupt, and the solicitor to the commission, concealing this valuation, when purchasing part 
 of the bankrupt's estate) ; Gregory v. Gregory (1815), G. Cooper, 201 ; 14 R. R. 244 (where 
 a trustee purchased at a sum which he was peouharly qualified to know was grossly in- 
 adequate, having for 15 years been the acting trustee, during which period he " must 
 have acquired a complete knowledge of the situation and value of the estates " : per 
 Grant, M.R., at p. 204) ; Barton v. Hassard (1843), 3 Dr. & War. 461 (where an executor 
 had purchased legacies from legatees at less than their face value, suppressing the fact, of 
 which he had secret and exclusive knowledge, that the assets would be sufficient to dis- 
 charge the legacies in full after satisfying the creditors) ; Plowright v. Lambert (1885), 
 62 L. T. 646 (where a trustee under a wiU bought a beneficiary's share for £900, with 
 secret knowledge that it was worth about £4000 : per Field, J., at p. 652) ; Dougan v. 
 Macpherson, [1902] A. C. 197, H. L. (where a trustee of a marriage settlement purchased 
 a beneficiary's interest without disclosing a valuation in his possession which estimated 
 the value at a much higher figure : per Lord Halsbtjky, L.C, at pp. 202, 203, Lord 
 Maonaghten, at pp. 204, 205, and Lord Lindley, at p. 206). 
 
o 
 
 84 
 
 CH. rv, SECT. 2, SUB-SS. (1), (2), 
 
 of full value having been given and taken would validate a contract otherwise 
 voidable on the ground of non-disclosure. There is no case in which, all 
 the facts being as assumed in the above hypothesis, it has been so decided ; 
 and any absolute rule to the contrary would seem to be hardly in accordance 
 with sound theory or good sense (p). No doubt, there may be a proved 
 case of the offer and acceptance of undervalue so gross as to invite the sugges- 
 tion, or even compel the inference, that weighty matters must have been 
 suppressed in order to produce such a result, or that the whole transaction 
 nmst have been fraudulent. But this is a difierent proposition to that which 
 is now being criticized (q). 
 
 324. Not only must the trustee put the cestui que trust in as good a position 
 as himself in regard to the facts : he must put him in as good a position as 
 himself as regards capacity to deal with the facts. He must transfer to him, 
 for the purpose of the contemplated purchase or other dealing, all the judg- 
 ment, discretion and skill (whether expert, or otherwise) which he would 
 himself bring to bear upon the situation if he were not an interested 
 
 {p) It is quite clear, of course, that, in the absence of any relation between the parties 
 which oasts upon one of them the burden of establishing the righteousness of the trans- 
 action, the mere fact of inadequacy of price or consideration is wholly irrelevant and 
 inef6oacious as a ground of rescission, or even as a defence to specific performance : see 
 Coles V. Trecothick (1804), 9 Ves. 234 {per Lord Eldon, L.C, at p. 246) ; Abbott v. Sworder 
 (1852), 4 De 6. & Sm. 448 {per Lord St. Leonards, at p. 401). It is equally unquestion- 
 able that, where the relation of trustee and cestui que trust exists, and where, therefore, the 
 burden is on the former of proving, generally, the fairness and honesty of the transaction, — 
 see § 322, and note (m) thereto, ante, — one of the most effectual steps in sustaining that 
 burden is to show that full value has been given. But is this a separate probandum, 
 independent of and additional to all other evidence by which good faith may be estabhshed, 
 such as disclosure, and, particularly, disclosin:e of all facts relating to the question of 
 value ? It is not to be denied that Lord Caikns, L.C, at p. 236 of Thomson v. Eastwood 
 (1877), 2 App. Cas. 215, H. L., also Lord Haisbuby, L.C, at p. 202, and Lord Macnaghtbn 
 at p. 204, of Dougan v. Macpjierson, [1902] A. C 197, H. L., distinctly state the two things, 
 full disclosure of knowledge as to value, and full value, as necessary to be shown by a 
 trustee purchasing from his cestui que trust ; but, in the latter case, the acceptance of an 
 inadequate price was brought about by, and was inextricably mixed up with, grossly 
 inadequate disclosure. And, though there are cases in which relief has been granted to 
 the cestui que trust on no other ground, so far as appears from the report, than undervalue, 
 in none of these had the trustee estabhshed — in some of them he had not even attempted 
 to estabhsh — the propriety of the transaction, and of his conduct, in all other respects. 
 The correctness of the proposition canvassed in the text can only be made out by refer- 
 ence to some decision against a trustee under the above conditions (viz. proof of entire 
 discharge of every duty of good faith and honesty and candour on his part) on the mere 
 ground of inadequacy of price. It is believed that there is no such decision. It is true 
 that in Baker v. Bead (1854), 18 Beav. 398, Romilly, M.R., intimated that, but for the 
 cestui que trust's confirmation, he would have given relief against the trustee on the 
 mere ground of undervalue. No decision, however, was called for, either from him 
 or from the Lords Justices who affirmed him (1854), 3 W. R. 118. On the other hand, 
 there are expressions of high judicial authority which tend in the contrary direction ; 
 such as those of Lord Eldon, L.C, at pp. 273, 274, of Gibson v. Jeyes (1801), 6 Ves. 
 266 (who there distinctly said, when dealing with the question of undervalue, that 
 if the case of the plaintiff " stood upon that ground merely, it would be very hazardous to 
 rescind this transaction"), and of Lord Westbtjry, at p. 9 of Tennent v. Tennent (1870), 
 L. R. 2 H. L. (Sc.) 6 (" there is an equity which may be founded on gross inadequacy of 
 consideration. But it can only be where the inadequacy is such as to involve the conclusion 
 that the party either did not understand what he was about or was the victim of some 
 imposition "). 
 
 {q) As to the question of undervalue in cases of undue influence, see Ch. V, Sect. 4, 
 Sub-s. (2), post, and, in relation to bargains and deaUngs with reversioners, which are 
 governed by somewhat special rules in this respect, Ch. V, Sect. 2, Sub-s. (6), post. 
 
§§ 323-326 (PROMOTERSHIP). 285 
 
 party. In other words, lie is bound to use all his natural and trained 
 faculties in advising the cestui que trust against himself, as if he were a 
 stranger (r). 
 
 325. The discussion of the burden of proof which lies upon the cestui 
 que trust in any proceeding is reserved for its proper place hereafter (s) ; and 
 so also is the consideration of other topics, such as the affirmative defences 
 available to the trustee, the relief and remedy available to the cestui que 
 trust, questions of law and issues of fact, and the necessary parties to the 
 proceedings (t). 
 
 Sub-s. (2). Promoter and Company. 
 
 326. It is now well estabhshed that any person who " projects," " pro- 
 motes," or " floats," a company — to use the three phrases in popular accepta- 
 tion at successive stages in the history of joint stock enterprise (m) — stands- 
 in some sort of fiduciary relation to that company, and owes some duties to 
 it, of disclosure and otherwise, which would not be incumbent on him but 
 for the existence of that relation. But, as to the elements necessary to 
 constitute promotership (v), the exact nature and extent of the promoter's 
 
 (r) Whichcote v. Lawrence (1798), 3 Ves. 739 [per Lord LouGHBOROtrGH, L.C., at p. 749 : 
 " it is obvious that this estate has not been sold to that advantage which the knowledge 
 and abilities of Mr. L., the trustee, exerted towards this estate, wlwn his own, obtained for 
 himself ; and, if that knowledge and ability had been applied at the original sale, when the 
 estate was sold for the benefit of the creditors, it is obvious," &c. : again, at p. 751, he 
 speaks of having before him " absolute demonstration that, if he had acted with regard to 
 the trust with the same degree of vigilance and attention that he applied to his own affairs, 
 when he came to act for his own benefit with some part of the trust estate . . . more^ 
 somewhat considerably more, would have been got than was obtained upon the former 
 sale ") ; Gibson v. Jeyes (1801), 6 Ves. 266, where the attorney and agent of an old lady 
 in feeble health, in selling to her an annuity at an excessive price, withheld from her the 
 benefit of the disinterested advice which he could and ought to have given her. Th& 
 purchase was set aside, on the ground that the defendant, not having either given his 
 client his own, or procured for her another's, impartial advice, had failed to comply with 
 the duty which rested upon him, and with the rule of the Court which is that an agent 
 or tnistee (for afterwards Lord Eldon expressly applies the rule to the case of a trustee, 
 amongst others, which is the reason for citing the case in the present connection) " shall, 
 if the propriety of the contract comes in question, manifest that he has given [the cestui 
 que trust, principal, or client] all that reasonable advice against himself that he would have 
 given [him] against a third person " {per Lord Eldon, L.C, at p. 278). 
 
 (s) Sect. 3, post. 
 
 {t) Sects. 4, 5, 6, 7, respectively, post. 
 
 (u) During the earliest period, a period covering such oases as Hichens v. Congreve 
 (1831), 4 Sim. 420, Society of Practical Knowledge v. Abbott (1840), 2 Beav. 559, and 
 Maxwell v. Port Tennant, ofcc, Co. (1857), 24 Beav. 495, the phrase in common use was 
 " projector." Afterwards " promoter " came to be the accepted term, and it is used 
 (and defined) in the Joint Stock Companies Act, 1844 (7 & 8 Vict. c. 110). It finds no 
 place in the Companies Act, 1862, but reappears in the Companies Act, 1867, and in 
 subsequent company legislation, but without any attempt being made to define the 
 expression, even in the Companies (Consohdation) Act, 1908, for, obviously, s. 84 (5) of that 
 statute, which says that " promoter " for the purposes of the section shall mean one 
 particular species of the class, leaves the class itself undefined. The term "fioat" was 
 almost contemporaneous in origin with "promoter," but has not been advanced to the 
 dignity of statutory recognition. The horribly malformed and grotesque word " flotation " 
 is of comparatively recent growth. 
 
 (v) See § 327, inf. 
 
286 CH. IV, SECT. 2, SUB-S. (2j. 
 
 obligations to tte company (w), and the tteory on whicli those obliga- 
 tions rest (a;), the law has' not always spoken with so clear and certain a 
 voice. 
 
 327. First, as to the characteristics of promotership. This is not a relation 
 which is ordinarily, as in the case of trusteeship or agency, established by 
 instruments or express declarations. The promoter, in the majority of 
 instances which have come before the courts, has been restrained by a certain 
 prudential modesty from assuming or acknowledging the name and style, 
 and has preferred to be known, if he must be known at all, by his works. 
 It is a question of fact, therefore, in each of such cases, whether a particular 
 person was, or was not, a promoter of the company at the material date («/), 
 and it lies on the party complaining, that is, the company, to prove that he 
 was (z). As to what acts and proceedings are to be deemed indicia of pro- 
 motership, the courts, like the legislature (a), and for the same wise reason, 
 have steadily refused to lay down any universal rule. Any judicial catalogue 
 of such acts and proceedings would be efEusively welcomed by the astute and 
 versatile fraternity concerned in the genesis of the baser sort of public under- 
 takings, who would make haste to limit their activity to the uncatalogued 
 operations, and thus keep on the windy side of aU cast-iron definitions. 
 It is not only the dolosus, in the ordinary sense of the word, whose interest 
 it is versari in generalibus. There is a dolus bonus which, in the form of 
 judicial astuteness, is equally concerned in refusing to condescend to particu- 
 lars. It is probably for this reason of policy, quite as much as from the 
 intellectual difficulty inherent in the subject-matter, that all the descriptive 
 references in the authorities to the constitutive elements of promotership 
 are couched in language no less general, and in some cases even wider, than 
 the term itself. Indeed, not a few of them are as obviously, and (were it 
 not for our consciousness of the excellent object in view) as ludicrously, of 
 the idem per idem, or obscurum per obscurius, order as the famous definition 
 of a poet which Lyly, in his Endymion, puts in the mouth of Sir Tophas (6). 
 
 (w) Thus, at p. 1269 of Erlanger v. New Sombrero Phosphate Co. (1878), 3 App. Cas. 
 1218, H. L., Lord BLAOKBUiaf limits himself to the proposition that promoters "stand 
 with regard to the corporation, when formed, in what is called a fiduciary relation to some 
 extent," and must " pay some regard to its interests," and, again, " are in a situation of 
 confidence to some extent towards the company they form." With a like cautious indefinite- 
 ness, LiNDLBY, J., at p. 407 of Emma Silver Mining Co. v. Lewis (1879), 4 C. P. D. 396, 
 says that the word involves, amongst other things, "the idea of some duty towards the 
 company imposed by or arising out of the position which the so-called promoter assumes 
 towards it." Cp. the observations of Cotton, L.J., at p. 407 of BagnaU dh Sons, Ltd. v. 
 Carlton (1877), 6 C. D. 371, C. A., where he describes the relation as a fiduciary one, but 
 adds that the description " is open to this observation that they " — i.e. promoters — " are 
 not trustees as regards all matters nor at all times." 
 
 {x) See § 328, post. 
 
 (y) This is discussed in § 389, note («/), post. 
 
 (z) See § 352, post. 
 
 (a) See note («), sup. 
 
 (b) Act. I., Sc. 3 : " Dost thou not know what a poet is ? Why, fool, a poet is as 
 much as one should say — a poet ! " Of a piece with this is the bishop's description of an 
 archdeacon as " a person who goes about performing archidiaconal functions," or Bar- 
 dolph's heroic essay in lexicography in H. 4, Part II, Act 3, Sc. 2 : " Accommodated ; 
 
§§ 326-328 (PROMOTERSHIP). 287 
 
 Thus, CocKBURN, C.J., described a promoter as " one who undertakes to 
 orm a company with reference to a given project and to set it going, and 
 who takes the necessary steps to accomplish that purpose "(c). Lord 
 Blackburn considered the expression " a short and convenient way of desig- 
 nating those who set in motion the machinery by which the Act enables 
 them to create an incorporated company " (d). Intheviewof LordBowEN(e), 
 " the term ' promoter ' is a term not of law, but of business, usefully summing 
 up in a single word a number of business operations familiar to the com- 
 mercial world by which a company is generally brought into existence." 
 Lord LiNDLEY has characterized the expression as one that has " no very 
 definite meaning " (/), and, again, as " an ambiguous term " (g). Bacon, 
 V.-C, after citing the above observations, expresses his opinion that " not 
 much assistance is to be derived " from them, and that they are " not satis- 
 factory " (h), which is true in one sense, but not in another {{). Finally, 
 in a still later case, Cotton, L.J., boldly avowed his " dislike " of the term, 
 and, after this pronouncement, succeeded in delivering the rest of his judgment 
 without using it at all (j). Nothing could well be vaguer than the above 
 descriptions : but nothing could be more deliberate or desirable than this 
 vagueness. Quo teneam nodo mutantem Protea vultus ? The nodu.i which 
 is to accomplish this feat must be as supple and transformable as the Proteus 
 it is designed to imprison. 
 
 328. The next question is as to the principle on which a person proved, as 
 a fact, to have promoted a company is chargeable with duties of disclosure 
 to that company during his promotership. The inquiry admits of no 
 very precise answer. The relationship in question does not clearly and 
 unmistakably belong either to the species of confidential relationship already 
 discussed (k), or to that which remains to be considered (l). For, on the 
 one hand, a promoter is not a trustee for the company he is forming, or 
 
 that ia, when a man is, as they say, accommodated ; or when a man is, being, whereby a' 
 may be thought to be accommodated ; which is an excellent thing." 
 
 (c) At p. 541 of Twycross v. Grant (1877), 2 C. P. D. 469, C. A. 
 
 (fl!) At p. 1268 of Erlariger v. New Sombrero Phosphate Co. (1878), 3 App. Cas. 1218, 
 H. L. 
 
 (e) When BowBir, J., at p. Ill of Whaley Bridge Calico Printing Co. v. Oreen (1879), 
 5 Q. B. D. 109. 
 
 (/) This expression was used by him, when Lindley, J., at p. 407 of Emma Silver 
 Mining Co. v. Lewis (1879), 4 C. P. D. 396, in the passage in which he also says that the 
 term involves the idea of " some duty towards the company "■ — see the citation in note (w), 
 sup. — as well as " the idea of exertion for the purpose of getting up and starting a company 
 (or what is called floating it)." 
 
 (g) See Lydney and Wigpool Iron Ore Co. v. Bird (1886), 33 C. D. 85, C. A., at p. 93. 
 He was then Lindlby, L.J. 
 
 (h) At p. 46 of Re Great Wheal Polgooth Co. (1883), 53 L. J. (oH.) 42. 
 
 (i) If meant as synthetical definitions, they are certainly " not satisfactory," for they 
 are purely verbal and analytical : but if (as they were) intended as mere expUcations of the 
 concept, and designed for the express purpose of withholding such a synthetical description 
 as would convey information, and teach the promoter what to avoid, they are eminently 
 " satisfactory." 
 
 (j) See Ladywell Mining Co. v. Brookes (1887), 35 C. D. 400, C. A., at p. 411. 
 
 (k) In Sub-s. (1), ante. 
 
 {I) In Sub-s. (3), post. 
 
288 CH. IV, SECT. 2, SUB-S. (2). 
 
 proposing to form, in the complete and strict sellse of the term : lie can, at most, 
 be regarded as a " constructive trustee " for it (m), or what Lord Westbuey 
 called " a trustee by metaphor " (n) ; and the courts have, on the whole, 
 studiously refrained from calling him a trustee (o), though freely assigning to 
 him a " fiduciary position " of a somewhat indefinite character (p). Nor can he 
 be deemed for all purposes an agent of the company, though the term " fiduciary 
 agent " has occasionally been applied to him (q) : for, until the actual incor- 
 poration of the company, — and it is in the period which ends with that date 
 that his duties of disclosure assume the greatest importance, — he certainly 
 cannot be described with accuracy as its agent, for no man can have as his 
 principal a person which, whether natural or artificial, is unborn or non- 
 existent. And yet, as Lindley, L.J., has observed {r), " although not an 
 agent of the company, nor a trustee for it before its formation, the old familiar 
 principles of the law of agency and trusteeship have been extended, and 
 very properly extended, to meet such cases ; and ... it is perfectly well 
 settled that a promoter of a company is accountable to it for all moneys secretly 
 obtained by him from it, just as if the relationship of principal and agent, 
 or of trustee and cestui que trust, had really existed between him and the 
 company." We are not here, or elsewhere, told on what precise reasoning 
 or analogy the propriety of this extension is based. But some such theory as 
 this may be suggested. There are certain characteristics of the promoter's 
 position in reference to the company which would almost appear to justify 
 the inclusion of this relation in the class of those from which " influence,'' 
 rather than " confidence " merely, is presumed, and which form the subject 
 of the next Chapter. He is the creator of the company ; he dictates the 
 terms upon which it is to come into being as a legal entity ; he is thus in a 
 position of dominance and ascendancy towards his creature ; and it is not, 
 perhaps, too fanciful to suggest that the true theoretical justification and 
 basis of the body of rules which prescribe duties of disclosure to promoters 
 is the fact that promotership is a commercial parentage, involving the same 
 judicial presumption of influence as is involved in cases of natural parentage, 
 and the same burden on the parent of establishing that he has not abused 
 that influence. This doctrine has never been expressed in precisely the above 
 form : but there are abundant judicial expositions of the rules governing 
 promotership cases which necessarily presuppose such a theory as their 
 
 (m) This was the view expressed by Kay, J., at p. 147 of Be Fitzroy Bessemer Steel Co. 
 (1884), 50 L. T. 144, and it was solely on this ground that he did not think it right that 
 " vindictive damages," on a misfeasance summons, should be awarded against the pro- 
 moter in that case. Cp. the observations of Sakgant, J., at p. 347 of Omnium Electric 
 Palaces, Ltd. v. Baines, [1914] 1 Ch. 332. 
 
 («) See § 320, ante, and note {j) thereto. 
 
 (o) Occasionally, however, one finds the relation referred to unqualifiedly as one of 
 trusteeship. Thus, at p. 823 of Re Leeds and Hardey Theatre of Varieties, Ltd., [1902] 
 2 Ch. 809, C. A., Vatjghan Williams, L.J., refers to the company, and the "future 
 allottees of shares " therein, as the " cestuis que trustent " of the promoters. 
 
 (p) See note (w) to § 326, sup. 
 
 (q) As, e.g., by Lord Blackbubn, at p. 1277 of Erlanger v. New Sombrero Phosphate Co. 
 (1878), 3 App. Cas. 1218, H. L. 
 
 (r) At p. 94 of Lydney & Wigpool Iron Ore Co. v. Bird (1886), 33 C. D. 85, C. A. 
 
§§ 328-330 (PROMOTBRSHIP). 289 
 
 substructiire, and which, indeed, would otherwise be meaningless (s). The 
 result, therefore, is this. A promoter is a " constructive trustee," but not 
 a trustee in the strict sense of the word, for the company he promotes : he 
 is an agent for it, when formed, but not before its formation : he is in any 
 case the mercantile author of its being, and, as such, is presumed to have, and 
 to exercise, an " influence " over it, which it is for him to show has been duly 
 and properly exercised. It is by reason of this composite character of pro- 
 motership that it has been thought proper and convenient to deal with it 
 as a relation sui generis, rather than as a case of either trusteeship or agency, 
 or as a species of the class of " influence " relations. 
 
 329. There being, then, a relation between a promoter and the company 
 he promotes which, whatever be its proper name or nature, undoubtedly 
 involves a duty on the promoter's part of good faith and candid disclosure 
 of all facts within his (actual or presumed) exclusive cognizance which are 
 material to be communicated to the company (it), it remains to consider 
 what classes of facts are the proper subject of the prescribed disclosure. 
 
 330. It must be remembered that the promoter is only called upon to 
 divulge during his promotership such matters, if any, as in the circumstances 
 of the particular case are material for the company to know. It may so 
 
 (s) Thus, to select a few examples out of many, at p. 1236 of Erkmger v. New Sombrero 
 Phosphate Co., sup.. Lord Cairns, L.C., says : " it is now necessary that I should state in 
 what position I understand the promoters to be placed with reference to the company 
 which they proposed to form. They stand, in my opinion, undoubtedly in a fiduciary 
 position. They have, in their hands, the creation and moulding of the company ; they have 
 the power o/ defining how, and when, and in what shape, and under what supervision, it shall 
 start into existence, and begin to act as a trading corporation." It is clear from this passage 
 that the doctrine of " the fiduciary position " of the promoter is based by Lord Caiens on 
 the fact that he is the author and designer of the company's being, and the only person 
 to whom, on its birth, it can look for information, guidance, and advice, just as the parent 
 or guardian is the only person to whom the infant individual can look for the same pur- 
 poses. Lord Blackburn, at p. 1269, expresses a similar view, though in somewhat 
 difiereut, and perhaps less forcible and convincing, language: "the promoters," he 
 observes, " can create such a corporation that the corporation, as soon as it comes into being, 
 may be bound by anything, not in itself illegal, which the promoters have chosen. And 
 I think that those who accept and use such extensive powers, which so greatly affect the 
 interests of the corporation when it comes into being, are not entitled to disregard the 
 interests of that corporation altogether. They must make a reasonable use of the powers 
 which they accept from the legislature with regard to the formation of the corporation, 
 and that requires them to pay some regard to its interests." In other words, the privileges 
 of mercantile parentage involve correlative duties which the parent is no more at liberty to 
 disregard than the natural parent is to leave his ofi^spring on the doorstep of a foundling 
 hospital; and the statutory "influence" and ascendancy which flows from the position 
 which the law enables promoters to assume involves an obligation not to make an unreason- 
 able or undue use of that influence and ascendancy. Cp. the observations of Collins, 
 L.J., at p. 181 of Re Olympia, Ltd., [1898] 2 Ch. 153, C. A., who says of the persons there 
 found to have promoted the company that " they did every act necessary to give it 
 existence, . . . and generally dictated the conditions of the company's existence." 
 
 (t) It is to the company that the duty is owed. Whether the company be a pubHc or 
 a " private " one, as defined in s. 121 of the Companies (Consolidation) Act, 1908, makes no 
 difference : see Omnium Electric Palaces, Ltd. v. Baines, [1914] 1 Ch. 332, C. A. {per 
 Sabgant, J., at pp. 347, 348). But the company, to whom alone the duty is owed, 
 may mean more than the then existing shareholders. Future allottees may be included. 
 For a detailed examination of this question, see § 393, post. The duty of disclosure in the 
 prospectus which the promoter owes to individual applicants for shares is entirely the 
 creature of statute. This topic is dealt with in Ch. VI, post. 
 
 B.N.D. U 
 
290 CH. IV, SECT. 2, SUB-S. (2). 
 
 happen that there are no such matters. For instance, if the promoter is 
 nothing but a promoter at an agreed remuneration for his services, and 
 enters into no direct dealings, as vendor of property or otherwise, with the 
 company, he is under no obligation of disclosure at all, at least in his character 
 of promoter (m), any more than, conversely, a vendor to the company who 
 is not its promoter is subject to any duty of communication other than that 
 which lies upon him in his character of vendor («). It is only where he 
 assumes the position of vendor or lessor to, or contractor with, the company, 
 concurrently with his position as its promoter, that the duty arises, for 
 in any such case he is uniting in his own person two inconsistent characters, 
 in one of which it is his interest to make the best bargain he canybr himself 
 out of the company, whilst in the other it is his duty to make the best bargain 
 he can for the company out of somebody else. The following observations 
 therefore are directed solely to cases of what, for brevity and convenience, 
 we may call vendor-promotership. 
 
 331. In the first place, as in the case of trustees (w), the vendor-promoter 
 is not allowed to keep from the company the fact that he is a vendor-promoter. 
 He must not mask his identity under an alias, or by means of secret agents or 
 nominees or associates, or by manipulation of names, conceal from the company 
 the fact that he is uniting in his own person two functions in which his interest 
 must necessarily conflict with his duty. If known to the company only as 
 a vendor, or as a person otherwise dealing directly with it, he must reveal 
 his promotership, or connection with the promoter or promoters ; and, 
 conversely, if known to the company only as a promoter, he must disclose 
 his vendorship, or his association, however indirect, with those who, as 
 vendors or otherwise, are contracting or treating direct with the company. 
 Whenever this duty has been violated, the company has succeeded in estab- 
 lishing its title to relief (x). 
 
 (u) He may, of course, be liable to the duty in his character of agent for the company 
 after its formation, or as trustee of property for the company when formed, if he should 
 in fact be so declared or constituted. 
 
 (v) As to the duties of disclosure which rest upon a vendor in an ordinary contract of 
 sale and purchase, see Ch. Ill, Sect. 2, Sub-s. (3), ante. As to the duties which are not 
 so incumbent on him in his mere character of ordinary vendor, though they would lie 
 upon him as a vendor-promoter, see the cases referred to in § 165, notes {p)-(u), ante, and 
 contrast them with those cited in note (x), inf. 
 
 (w) See § 321, ante. 
 
 \x) For illustrations, see Hichens v. Congreve (1831), 4 Sim. 420 (where the promoters 
 concealed the fact of their association with the vendor, who was willing to sell the property 
 to any one for £10,000, but was induced to pose as a vendor to the company who would not 
 take less than £25,000, which sum the company eventually paid in entire ignorance of 
 arrangements between the vendor and the promoters, whereby the latter were to, and did, 
 receive £15,000 from the vendor out of the £25,000) ; Atwool v. Merry weather (1867), L. R. 
 5 Eq. 464 n. (where two promoters, one of whom was ready to sell the property for £4000, 
 entered into a secret scheme, whereby the other was to pose as the sole vendor to the 
 company for £7000, of which £3000 was to go to the first-mentioned promoter) ; Lindsay 
 Petroleum Co. v. Hurd (1874), L. R. 5 P. C. 221 (a similar clandestine arrangement) ; 
 Erlanger v. New Sombrero Phosphate Co. (1878), 3 App. Cas. 1218, H. L. {per Lord Penzance 
 at p. 1229 : " there is no proof that they "—i.e. the two directors who could alone be 
 considered independent — "ever knew that the real vendors were all the promoters of 
 the company," and Lord Caibsts, L.C, at p. 1236; "if they" — the promoters — "are 
 
§§ 330-332 (PROMOTERSHIP). 291 
 
 332. In tlie next place, where the vendor-promoter deals with the com- 
 pany openly and avowedly in that double character, which course there is 
 no rule of law to prohibit him from adopting, if he chooses (y), he is bound 
 to make to the company (z) complete, precise, and unambiguous disclosure (a) 
 of every matter within his own exclusive knowledge, whether actually or 
 presumptively so, which it is material for the company to know. Such 
 matters comprise everything which bears upon the real value of the property 
 or business which the vendor-promoter is selling to the company ; the price 
 at which he acquired such property or business, and the profit which he is 
 making out of the company on the re-sale ; the commission or other advantages 
 which have been, or are to be, paid or secured to him by or through the original 
 owner or any intermediate vendor ; all facts tending to show that the property 
 or business might have been acquired from the owner or original vendor 
 for a less sum than the company is agreeing to pay ; and, generally, all 
 circumstances which, if communicated, would affect the company's judgment 
 in determining whether or not to purchase on the terms proposed, and which 
 any person honestly advising the company in a contemplated transaction 
 with a third person would bring before it. Whenever the vendor-promoter 
 has failed to establish disclosm'e of facts of the above character, the appro- 
 priate relief has been obtained against him (6) : in the rare cases when he 
 has succeeded in so doing, such relief has been refused (c). 
 
 doing all this " — i.e. the various acts referred to in the citation from this judgment 
 which is contained at the head of note (s), ante, — " in order that the company may, 
 as soon as it starts into life, become the purchaser of the property of themselves, the 
 promoters, it is, in my opinion, incumbent upon the promoters to taJce care that in forming 
 the company they provide it with an executive, that is to say, with a board of directors 
 who shall ... be aware that the property which they are asked to buy is the property 
 of the promoters, . and who are not left under the belief that the property belongs, not 
 to the promoter, but to some other person ") ; Se Leeds <& Hanley Theatre of Varieties, Ltd., 
 [1902] 2 Ch. 809, C. A. (where the promoters concealed the fact that they, and not the 
 ostensible vendors, were really selhng to the company) ; Re Darby, Ex p. Brougham, [1911] 
 1 K. B. 95 (where the promoters of the company disguised their identity under the mask 
 or alias of a corporation, and concealed the fact that this corporation, which sold to the 
 company, was not independent of themselves, but was in fact either themselves in another 
 name, or a mere piece of machinery devised and erected by themselves for the purposes of 
 the above concealment : per Phillimoee, J., at pp. 101-103). 
 
 [y) As Lord Cairns, L.C, is careful to concede, at p. 1236 of Srlanger v. New Sombrero 
 Phosphate Co., sup. : " I do not say that the owner of property may not promote and form 
 a joint stock company, and then sell his property to it, but I do say that if he does he is 
 bound," &c. [he then lays down the conditions under which alone this kind of transaction 
 can be supported]. Exactly the same principles obtain in the case of trustee and cestui 
 que triist, as has been explained in § 322, ante. 
 
 (z) As to the meaning of " the company " for this purpose, see § 393, post. 
 
 (a) As to what this means, see Ch. II, Sect. I, ante. 
 
 (b) As in Hichens v. Congreve (1831), 4 Sim. 420 (secret profit or commission out of 
 the vendor, who was made to sell at an enhanced price in order to provide for this payment 
 to the promoters) ; Society of Practical Knowledge v. Abbott (1840), 2 Beav. 559 (subscription 
 
 (c) Be Sale Hotel & Botanical Gardens, Ltd., Ex p. Hesketh (1898), 78 L. T. 368, C. A. 
 (where the alleged secret profit was fuUy disclosed, as part of the promotion expenses, both 
 in the agreement of purchase and in the prospectus) ; Attorney-General for the Dominion 
 of Canada v. Standard Trust Go. of New York, [1911] A. C. 498, P. C. (alleged secret profits 
 disclosed to a board which, though dependent on the promoter, was known to the company 
 to be so) ; Omnium Electric Palaces, Lid. v. Baines, [1914] 1 Ch. 332, C. A. (no secrecy even 
 alleged). 
 
292 CH. IV, SECT. 2, SUB-S. (2). 
 
 333. It has sometimea been said, or assumed, that there is a further duty 
 on the vendor-promoter, viz. to provide the company with an executive, or 
 board of directors, which shall be wholly independent of himself {d). By 
 this, however, is meant no more than that he is under an obligation to disclose 
 to the company the fact, if it be so, that the directors are his nominees and 
 creatures, or are under obligations to him for favours, received or promised, 
 in the shape of money or shares for qualification or otherwise, or are in any 
 way interested with him in either of his two characters of vendor and pro- 
 moter, and so are placed in a position of temptation and dif&culty as long as 
 any matters remain open between him and the company on which they may 
 be called upon to represent the latter as against the former. In short, such 
 a fact as this is one of those which are material to be divulged, with the utmost 
 candour and precision, by the vendor-promoter to the promoted and pur- 
 chasing company. The duty, therefore, is not independent of, or additional 
 to, the duty of disclosure, but a branch of it. For, in every case in which it 
 has been shown that the company was made fully aware of the subjection 
 of its executive to the will and interests of the promoter before entering into 
 
 for the whole share-capital of the company among the promoters on payment of much 
 less than the nominal value, and secret retention of the balance for themselves) ; Lindsay 
 Petroleum Go. v. Hurd (1874), L. R. 5 P. C. 221 (secret arrangements with vendors, and 
 secret profit) ; Be Hereford and South Wales Waggon & Engineering Go. (1876), 2 C. D. 
 621, C. A. (suppression of agreement whereby the promoters were to receive part of the 
 purchase money from the vendors) ; Phosphate Sewage Go. v. Hartmont (1877), 5 C. D. 
 394, C. A. (non-disolosure of tho fact that the concession sold to the company was forfeit- 
 able by the promoters' own default, of the names of the persons really interested, and of 
 the profits made by such persons) ; Erlanger v. New Sombrero Phosphate Go. (1878), 
 3 App. Gas. 1218, H. L. (clandestine arrangements with owner, profits, and dependence of 
 the directors upon the promoter) ; Emma Silver Mining Go. v. Grant (1879), 11 C. D. 919 
 (a secret sub-agreement whereby the promoter was entitled to 20 per cent, of the issued 
 capital of the company) ; Emma Silver Mining Go. v. Lewis & Son (1879), 4 C. P. D. 396 
 (secret receipt of shares from the vendor, afterwards converted into cash, and suppression 
 of facts detrimental to the prospects of the mine, &c.); Whaley Bridge Galico Printing 
 Go. V. Green (1879), 5 Q. B. D. 109 (secret arrangements with original and intermediate 
 vendor, and profits secured thereby) ; Be Fitzroy Bessemer Steel Co. (1884), 50 L. T. 144 
 (secret agreement with the vendors for shares) ; Lydney and Wigpool Iron Ore Go. v. Bird 
 (1886), 33 C. D. 85, C. A. (sub-agreement with vendors for payment of part of the purchase- 
 money) ; Lagunas Nitrate Go. v. Lagunas Syndicate, [1899] 2 Ch. 392, C. A. (as to " secret 
 profits," but the promoting syndicate escaped here, on the ground of the promoted 
 company's affirmation by conduct. As to the other matter alleged to have been concealed, 
 see note (e), inf.) ; Oluckstein v. Barnes, [1900] A. C. 240, H. L. (clandestine purchase of 
 debenture bonds of the vendor company at a discount, and of a mortgage for £10,000 at the 
 price of £500) ; Be Leeds & Hanley Theatre of Varieties, Ltd., [1902] 2 Ch. 809. C. A. 
 (concealment of the fact that the ostensible vendor was trustee for the promoting company, 
 who were the real vendors, and of the fact that this person had previously acquired the 
 property, as trustee for such promoting company, at a much less price than that which 
 the promoting company agreed to pay); Be Darby, Exp. Brougham, [1911] 1 K. B. 95 
 (concealment of profits made by promoters on re-sale to the company, and of identity of 
 promoters). 
 
 {d) " It is in my opinion," says Lord Cairns, L.C, at p. 1236 of Erlanger v. New 
 Sombrero Phosphate Go. (1878), 3 App. Cas. 1218, H. L., "incumbent upon the promoters 
 to take care that in forming the company they provide it with an executive, that is to say, 
 with a board of directors, who . . . shall be competent and impartial judges as to whether 
 the purchase ought or ought not to be made. I do not say that the owner of property may 
 not promote and form a joint stock company, and then sell his own property to it, but I 
 do say that, if he does, he is bound to take care that he sells it to the company through the 
 medium of a board of directors who can and do exercise an independent and intelUgent. 
 judgment on the transaction." 
 
§ 333 (PROMOTERSHIP). 293 
 
 the transaction impeaclied, it has been held to its bargain (e), which shows 
 that the vice is not in the thing itself, but in its secrecy {/). It is only 
 when the promoter has failed to establish disclosure of this class of fact that 
 the purchase is invalidated (g). No doubt, it is the interest of the promoter, 
 and (in the highly metaphorical sense that every man owes a duty to himself 
 to take care of his own interest) his duty also, to provide against any oppor- 
 tunity or suspicion of corruption in the relations between the directors and 
 himself (A). He is deeply concerned in so doing, for the following, if for no 
 other, reason : unless the board is impartial and independent, it will be 
 extremely dif&cult for him to estabhsh either disclosure by himself to the 
 company, or the company's knowledge aliunde, of other material facts which 
 he is bound to communicate ; since disclosure to, or the knowledge of, an execu- 
 tive whom he has seduced beforehand, is not in law disclosm^e to, or the 
 knowledge of, the company (i), as it is where the executive is independent ; 
 and to prove that the general body of shareholders, as distinct from the 
 directors, was cognizant of the facts alleged to have been undisclosed, is 
 
 (e) This happened in iajrarMW Nitrate Co. v. Lagunas Syndicate, [1899] 2 Ch. 392, C. A. {per 
 LiNDLEY, M.R., at pp. 425, 426, who, in this point, distinguishes Erlanger v. New Sombrero 
 PhosphaU Co., sup., where the company was told nothing of the dependence of the board) ; 
 also in Att.-Gen. for the Dominion of Canada v. Standard Trust Company of New York, sup. 
 (where the disclosure was made to the four persons who alone constituted the company 
 at the time : pp. 504, 505). 
 
 (/) Cp. the cases cited in note (x) to § 316, ante. 
 
 (g) In Lagunas Nitrate Go. v. Lagunas Syndicate, sup., though the company was 
 informed that the board was not independent, and, so far, the promoter was held not 
 hable — see note (e), sup. — ^it was not told of other facts material to be disclosed, and, as to 
 these, the promoting syndicate vainly rehed upon disclosure to the seven directors of the 
 company who, so far from representing the company for this purpose, had, in the interests 
 of the promoters, studiously concealed these facts from it : on this ground, but for the sub- 
 sequent deaUng with the property by the company which precluded it from obtaining relief, 
 the syndicate would have been held Kable. Other instances of the promoter's accountabihty 
 for concealment of the dependence of the directors upon himself are : Hichens v. Congreve 
 (1831), 4 Sim. 420, where the vendor-promoters actually appointed themselves to be the 
 directors ; York and North Midland Railway Co. v. Hudson (1853), 16 Beav. 485, where the 
 defendant, the notorious "railway king," suppressed the fact that he, being chairman of the 
 board of directors, as well as vendor-promoter, had used a large proportion of his shares in 
 corrupting his fellow-directors ; Maxwell v. Port Tennant Patent Steam Fuel and Goal Go. 
 (1857), 24 Beav. 495 (where " the projectors " had made a clandestine arrangement for 
 the corruption of the directors, the soUcitor, and the secretary of the company by gifts of 
 fully paid shares, and — per Romilly, M.R., at p. 497 — " as this was not communicated to 
 the shareholders, they caimot be bound by the contract," i.e. the contract of sale for the 
 specific performance of which the " projector " was suing the company. At p. 498, 
 Romilly, M.R., points out the natural result of these secret proceedings, viz. that the 
 directors took no " pains to examine into the value of the mine before they agreed to pay 
 this sum for its purchase") ; Re Madrid Bank, Ex p. Williams (1866), L. R. 2 Eq. 216, 
 where the promoters had similarly seduced the board of directors ; Erlanger v. New 
 Sombrero Phosphate Co. (1878), 3 App. Gas. 1218, H. L., where the vendor-promoter had 
 concealed from those directors who were independent of him the fact that the others were 
 in his pay and power. As to the position of the directors who are so " qualified " or 
 otherwise bribed by the promoter, see § 340, post. 
 
 (h) It was put somewhat in this way by Lord O'Haqan, at p. 1256 of Erlanger v. New 
 Sombrero Phosphate Co., sup. : " the promoters who so forgot their duty to the company 
 they formed as to give it a directorate without independence . . . must take the con- 
 sequences." And so Lord Penzance, at p. 1229 : "they were . . . bound . . ,, if they 
 wished to make a valid contract of sale to the company, to nonunate independent directors." 
 (i) Per LiNDLEY, M.R., at p. 431 of Lagunas Nitrate Co. v. Lagunas Syndicate, sup., and 
 per Sakgant, J., at p. 342 of Omnium Electric Palaces, Ltd. v. Baines, [1914] 1 Ch. 332, C. A. 
 
294 CH. IV, SECT. 2, SUB-SS. (2), (3). 
 
 by no means easy, and, when there is a possibility of future allotments and 
 allottees, well-nigh impossible (jf). 
 
 334. Such topics as the burden of proof incumbent on the respective 
 parties, the forms of relief and remedy available to the company, questions 
 of law and fact, and the persons who are respectively entitled, and liable, in 
 any proceedings for the purpose of asserting the invalidity of transactions 
 between promoter and company, are reserved for future discussion in the 
 severally appropriate places {h). 
 
 Siib-s. (3). Principal and Agent. 
 
 335. The relation of principal and agent is undoubtedly a fiduciary one, 
 and as such involves a duty on the part of the agent to impart to his principal, 
 on the occasion of any transaction during the existence of the agency, all 
 such matters within his actual or presumptive knowledge as are material 
 to be disclosed, whether the transaction be between the agent and his prin- 
 cipal, or between the agent and a third person. The species of this relation 
 are manifold, varying in range from what is called " universal agency," 
 which though conceivable in theory is almost unheard of in practice (Z), 
 to a mere mandate to perform a single act, such as to sign a document, or 
 deliver a message. Thus, in some cases, the agent is a general business 
 agent, or " homme d'affaires " ; in others, he is agent in a particular kind of 
 business, or in a particular market ; in others, again, he is appointed agent 
 in relation to a particular property of the principal, whether for sale or 
 purchase (m) ; or he may be a professional agent (w). But, however difiering 
 from one another in the nature and extent of the functions which they respec- 
 tively involve, these types of agency, including the various forms of sub- 
 agency (o), of partnership, which is mutual agency (p), and of company- 
 directorship, which, whatever else it may be, imports at least mercantile 
 
 ij) See § 393, post, on this important question of subsequent shareholders. 
 
 {k) See Sub-ss. (3)-(7), respectively, post. 
 
 (I) Probably no power of attorney ever known has made the attorney the alter ego 
 of the grantor of the power for all purposes whatever, without Umit as to space, time, 
 subject-matter, or otherwise. 
 
 (m) Such an agent is frequently called, though perhaps inexactly, " a trustee for sale," 
 or " a trustee for purchase." Having regard to this double designation, some of the cases 
 included in this Sub-section as examples of agency for sale, or for purchase, are, together 
 with other cases of trusteeship "by metaphor," cited in Sub-s. (1), ajite, though, on 
 strict principle, it may be doubted whether they ought to have been referred to anywhere 
 but in the present place. 
 
 (m) Such as a solicitor, in so far as he exercises the functions of a confidential agent. 
 But a solicitor has other and further duties of disclosure and good faith, arising from his 
 position of " influence " and ascendancy over the client. These are the subject of Ch. V, 
 Sect. 2, Sub-s. (2), post, where the cases which illustrate the solicitor's duty arising from 
 " influence " are collected ; though, inasmuch as the rehef given to the client is based in 
 some of these authorities on both aspects of the relation, a double citation of them in both 
 places is inevitable. 
 
 (o) See De BusscTie v. Alt (1878), 8 C. D. 286, C. A. ; Powell & Tlumas v. Evans, 
 Jones & Co., [1905] 1 K. B. 11, C. A. 
 
 (p) Erlanger v. New Sombrero Phosphate Co., sup. {per Lord Hatheelby, at p. 1244 : 
 " as regards partners, there is no doubt that every partner is bound to exercise uberrima fides 
 with regard to any transactions in which the partners may be engaged in common ") ; 
 Dean v. MacDowell (1878), 8 C. D. 369, C. A. (per James, L.J., at p. 350 : " it is quite 
 
§§ 333-336 (agency). 295 
 
 agency {q), possess tke one common featm-e and foundation of " confidence," 
 and, as sucli, are all alike subject to the general duties of disclosure which 
 attach to this kind of relationship, and which it is now proposed to examine. 
 336. In the first place, as in the case of the relation of trustee and cestui 
 que trust (r), an agent who is minded to buy from, or sell to, or otherwise deal 
 with, his principal must do so openly and directly : he must not disguise 
 his identity, or the character in which he is acting, under cover of a trustee, 
 nominee, or associate, or conceal the true nature of the transaction by any 
 device amounting to the assumption of an alias. Such non-disclosure is 
 of itself sufficient to vitiate the transaction, however fail it may have been 
 in all other respects; as has been invariably held in cases of both private 
 
 clear that in partnership matters there must be the utmost good faith, and there is to that 
 extent a fiduciary relation between the partners ") ; Oassds v. Stewart (1881), 6 App. Cas. 
 64, H. L. (p&r Lord Blackbttkn, at p. 79 : "a partner being an agent, for I think it is 
 because he is an agent that the fiduciary character arises, if he, as an agent, makes a profit 
 out of the concerns of his principal, and as acting for him, he must communicate it to his 
 principal ; . . . a partner is an agent, and the principle applying to him is a branch of that 
 general rule which applies to agents ") ; Helmore v. Smith (1887), 35 C. D. 436 (per Bacon, 
 V.-C, at p. 444 : " if fiduciary relation means anything, I cannot conceive a stronger case 
 of fiduciary relation than that which exists between partners. Their mutual confidence 
 is the hfe-blood of the concern. It is because they trust one another that they are partners 
 in the first instance ; it is because they continue to trust one another that the business goes on "). 
 A large number of the cases cited in the notes to this Sub-section are, as will be seen, 
 partnership cases. The duty of partners to one another during the subsistence of the 
 partnership is of course a different duty of disclosure (though both are based on confidence, 
 as is forcibly pointed out by Bacost, V.-C, in the last of the above citations) to that which 
 lies upon one who, being the owner of a business, is in treaty with another for the purpose 
 of admitting him to partnership therein, or who, being the active partner in a firm, pro- 
 poses to sell his share to his dormant partner, or to buy such dormant partner's share. 
 This latter duty belongs to another class altogether, and is discussed in Ch. Ill, Sect. 2, 
 Sub-s. (6), ante. 
 
 (q) RoMiLLY, M.R., at p. 491 of York & North Midland Railway Co. v. Hudson (1853), 
 16 Beav. 485, expresses the opinion that directorship is " an ofiice of trust," but the reason 
 which he gives for so thinking, viz. that " the directors are persons selected to manage the 
 affairs of the company for the benefit of the shareholders," shows that he did not consider 
 directors to be solely or for all purposes trustees. Cp. the language used by him at p. 497 
 of Maxwell v. PortTennant Steam Fuel and Coal Co. (1857), 24 Beav. 495 (" the directors 
 are persons who are entrusted to manage the affairs, and carry into effect the contracts, of 
 a company for the shareholders who place implicit reUanoe upon them "). The correct 
 description of their dual character as, on the one hand, " trustees of the company's money 
 and property," and, on the other, "agents in the transactions which they enter into on 
 behalf of the company," is given by Lord Selborne, L.C, at p. 152 of Oreat Eastern Railway 
 Co. V. Turner (1872), 8 Ch. App. 149. So Jessel, M.R., at pp. 451, 452 of Re Forest of 
 Dean Coal Mining Co. (1878), 10 C. D. 450, observes that " directors have sometimes been 
 called trustees, or commercial trustees, and sometimes they have been called managing 
 partners, it does not matter much what you call them so long as you understand what their 
 true position is, which is that they are really commercial men managing a trading concern 
 for the benefit of themselves and all the other shareholders in it," adding (at p. 453), " they 
 are no doubt trustees of assets which have come into their hands, or which are under their 
 control, but they are not trustees of a debt due to the company, . . . they are only the 
 managing partners." To the same effect, Lindley, L.J., at p. 631 of Re Lands Allotment 
 Co., [1894] 1 Ch. 616, C. A. (" directors are not, properly speaking, trustees," but, though 
 this is so, " they have always been considered trustees of money which comes to their 
 hands or is actually under their control "), and Swinfen Eady, J., at p. 425 of Percival v. 
 Wright, [1902] 2 Ch. 421. It is only in their character as " agents," or " managing 
 partners," that directors are considered in the present Sub-section. Many iUustratious 
 of their duty of disclosure to the company, as such agents, are contained in the notes 
 following. As to their statutory obligations of disclosure, see Ch. VI, post. 
 (r) See § 321, ante. 
 
296 CH. IV, SECT. 2, SUB-S. (3). 
 
 bargains (s), and (wkere the facilities for concealment are of course much 
 greater) market deaUngs (t). Further, where the agent or partner, though 
 not within the class just mentioned, is connected in any way with any person, 
 firm, or company doing business generally, or engaged in any particular 
 transaction, with his principal or partner, and has a pecuniary interest of 
 any sort, directly or indirectly, in that business, or transaction, he must 
 divulge the fact that he is so connected or interested (u) ; but this is not 
 
 («) As in Crowe v. Ballard (1790), 1 Ves. Jr. 215 (agent to sell legacy secretly buys); 
 Benson v. Heathorn (1842), 1 Y. & C. 326 (sale of a vessel "as from a stranger"); 
 Cluzrterv. Trevdyan (1844), 11 CI. & Fin. 714 (where a steward and agent to sell leasehold 
 property concealed the fact that the ostensible purchaser was his trustee) ; Murphy v. 
 O'Shea (1845), 2 Jo. & Lat. 422 ; 69 B. R. 337 (agent clandestinely purchases through a 
 nominee : per Sugden, L.C. (Ir.), at p. 429 : " the moment it appears, in a transaction 
 between principal and agent, that there has been any underhand deahng by the agent — 
 tliat he has made use of another person's name as a purchaser, instead of his own — however 
 fair the transaction may he in other respects, from that moment it has no vaUdity in this 
 Court ") ; Lewis t. HiUman (1852), 3 H. L. C. 607 (per Lord St. Leonards, L.C, at 
 p. 630, where solicitors and agents for sale of reversionary interests sold them to a person 
 who was a mere trustee for themselves) ; Oreat Luxembourg Railway Co. v. Magnay (1858), 
 25 Beav. 586 (agent for company to purchase a concession conceals the fact that he, through 
 a nominee, is the real owner and vendor) ; Kimber v. Barber (1872), 8 Ch. App. 56 (agent 
 to buy shares clandestinely sells his own) ; Williams v. Scott, [1900] A. C. 499, P. C. (agent 
 or trustee for sale of land becomes the real purchaser, disguising the truth of the transaction 
 by a pretended sale to, and subsequent purchase from, an interposed third party). 
 
 (t) As in Rothschild v. Brookman (1831), 5 BUgh (u.s.) 165 (bankers employed to seU 
 French rentes, and buy Prussian bonds, become the clandestine purchasers from, and ven- 
 dors to, their principal of such rentes and bonds respectively) ; Gillett v. Peppercorne (1840), 
 3 Beav. 78 (stockbroker employed to purchase shares in the market buys of one who is 
 merely a trustee for himself) ; Wilson v. Short (1847), 6 Hare 366 (brokers pretend to make 
 speculative purchases of iron in the market for their principal from a third person, sup- 
 pressing the fact that there was no such third person, or principal vendor, and that they 
 were therefore the real vendors) ; Edbinson v. MoUett (1875), L. B. 7 H. L. 802 (a similar 
 dealing by brokers in the tallow market) ; Odhers v. Ellis, [1914] 2 K. B. 139 (stockbroker 
 selling his own shares to his principal). 
 
 (u) The following are illustrations : Barker v. Harrison (1846), 2 Coll. 546 (concealment 
 by agent, buying from his principal, of a bargain for resale at a proiit to a third person) ; 
 Bentley v. Craven (1853), 18 Beav. 75, where a partner in a sugar refining firm concealed 
 the fact, not that he carried on a sugar- dealer's business of his own (for this the other 
 partners had expressly contracted to sanction), but that he had sold in that business his 
 own sugar to the firm in which he was a partner, and by whom he was deputed to make 
 the necessary purchases of sugar on their account ; Aberdeen Railway Co. v. Blakie Bros. 
 (1854), 1 Macq. H. L. 461 (where a director of the railway company concealed his interest, 
 as managing partner, in a firm of ironfounders who sold iron chairs to the company) ; 
 Hesse v. Briant (1856), 6 De G. M. & G. 623 (where a solicitor and agent to sell property 
 failed to disclose to his client and principal that the person to whom he sold it was another 
 cUent of his) ; Tyrrell v. Bank of London (1862), 10 H. L. C. 26, as to which case see note (A) 
 to § 339, post ; Salomons v. Pender (1865), 3 H. & C. 639 (where a surveyor, employed to 
 sell land, concealed from his principals the fact that the persons to whom he sold it were 
 the promoters of a company in which he was interested as a shareholder, and afterwards 
 as a director also) ; McPherson v. Watt (1877), 3 App. Cas. 254, H. L. (where an advocate 
 in Scotland, though not the law-agent of the party complaining, was employed by him as 
 agent to sell four houses, and before seUing them, as he did, to his brother, had made a 
 clandestine bargain with him to take two of the houses off his hands at the price given, 
 which two houses he resold at a profit to himself) ; King, Viall, <h Benson v. Howell 
 (1910), 27 T. L. B. 114, C. A. (which was a case of stockbrokers concealing from their 
 principal the fact that the authorized clerk of the jobbers with whom they did their 
 principal's business was, to their knowledge, the person employed by that principal as his 
 agent to speculate for him on the Stock Exchange) ; Re Republic of Bolivia Exploration 
 Syndicate, [1914] 1 Ch. 139 ( non-disclosure to company that a solicitor-director was receiv- 
 ing profit costs) ; Transvaal Lands Co. v. New Belgium (Transvaal) Land and Devdopment 
 Co., [1914] 2 Ch. 489, C. A. (a similar case to Aberdeen Railway Co. v. Blakie Bros., sup.). 
 
§§ 336-338 (agency). 297 
 
 all that is required of him : it is not enough merely to reveal the bare fact 
 of his interest, unless he at the same time declares fully and plainly the 
 precise nature and extent of that interest. Failure to perform the latter 
 obligation, though he may have discharged the former, entitles his principal 
 or partner to relief (v). 
 
 337. Secondly, on the assumption that the agent, without resorting to 
 any manoeuvre of the above-mentioned description, and without, therefore, 
 having failed in any duty of disclosure up to that point, enters openly into 
 a transaction with his priacipal^ — which in itself is not prohibited by the 
 law (w), — ^he thereupon takes upon himself the whole burden of establishing, 
 if and when called in question, the complete propriety, fairness, and righteous- 
 ness of that transaction, and of his own conduct in bringing it about, and 
 otherwise in relation to it ; and, as in the case of a trustee dealing openly 
 with his cestui que trust (x), unless he sustains this burden, he cannot sustain 
 the transaction either (?/). 
 
 338. Frank and full communication of all knowledge which the principal 
 is entitled to have, and which he legitimately relies upon his agent to impart, 
 
 (v) See Dunne v. English (1872), L. R. 18 Eq. 524 (a partnership case, where one of the 
 partners instructed to sell the firm's mine in England, revealed to the other partners the 
 fact that he was interested in the purchase, but not " all the material facts " as to the 
 nature and extent of that interest : per Jbssel, M.R., at pp. 533, 535, 536) ; Imperial 
 Mercantile Credit Association v. Coleman (1873), L. R. 6 H. L. 189 (a hke imperfect dis- 
 closure by a director of a company : the observations of Lord Cairns at p. 205, cited in 
 note (p) to § 21, ante, are of great weight on this question) ; Costa Rica Railway Co. v. 
 Forwood, [1901] 1 Ch. 746, C. A. (another director's case : see the views expressed by 
 Vaughan Williams, L. J., at p. 761, and Stibung, L. J., at p. 766. In this case, however, 
 the director was protected by an express term in the articles of association). 
 
 (w) Murphy v. O'Shea (1845), 2 Jo. & Lat. 422 ; 69 R. R. 337, per Lord St. Leonards, 
 then SnQDBiif, L.C. (Ir.), at p. 425 (" the rule of the Court . . . does not prevent an agent 
 from purchasing from his principal, but only requires that he shall deal witli him at arm's 
 length, and after a full disclosure of all that he knows with respect to the property ") ; 
 Dunne v. English (1872), L. R. 18 Eq. 524, where, at p. 534, Jbssel, M.R., cites the above 
 proposition, and applies it to a case of partnership, adding that Lord St. Leonabds' phrase, 
 " all that he knows," &c., " of course means everything material which he knows." So, 
 as to sohcitor and client. Lord Eldoit, L.C, at p. 276 of Gibson v. Jeyes, inf. : " it has 
 been truly said, an attorney is not incapable of contracting with his client." 
 (x) See § 322, ante. 
 
 {y) For statements of the general rule, and illustrations of failure on the part of the 
 agent to satisfy its requirements, see Gibson v. Jeyes (1801), 6 Ves. 266 (per Lord Eldon, 
 L.C, who, at pp. 278-280, expresses his conclusion that the attorney and agent in that case, 
 purchasing an annuity from his client and principal, had failed to discharge the burden of 
 showing that he had made " a reasonable use of the confidence " reposed in him (p. 278) : 
 see the citations from the judgment in note (m) to § 322, and note (r) to § 324, ante) ; Watt v. 
 Grove (1805), 2 Sch. & Lefr. 491 ; Harris v. Tremenheere (1808), 15 Ves. 34 (where a 
 steward, attorney, and agent failed to establish all that was required to sustain a purchase 
 by him from his client, master, and employer, as to one of the leases there in question : 
 per Lord Eldon, L.C, at pp. 42-44, the general nature of the burden incumbent on such 
 an agent being stated at p. 42 in a passage cited in note (6), inf.) ; Dunbar v. Tredennick 
 (1813), 2 Ball & B. 304 (per Lord Manners, L.C. (Ir.), at pp. 314^316 : land and law agent 
 fails to sustain the propriety of the purchase) ; Perens v. Johnson (1857), 3 8m. & G. 419 
 (a case of solvent partners purchasing the interest of their insolvent partner, in which 
 Stuart, V.-C, said, at p. 425, that " the purchase cannot stand if there appear the slightest 
 speck of unfairness in their " — the purchasing partners' — " conduct in regard to the sale," 
 and he found many such " specks ") ; Barnard v. Hunter (\B5&), 2 iuv. (n.s.) 1213; 106 
 R. R. 1014 (where a solicitor, employed to sell property for his client, omitted to advise and 
 protect him sufficiently or properly, and, therefore, could not sustain the transaction : per 
 Lord Cranwoeth, L.C., at p. 1216, afiirming Stttart, V.-C. : see note (b), inf.). 
 
298 CH. IV, SECT. 2, SUB-S. (3). 
 
 is tlie first, and most obvious, element in the requisite proof that tte agent 
 has not abused, but has made a fair use of, the confidence reposed in him. 
 Indeed, it may be said to comprehend all the particular obligations which he 
 assumes when dealing with his principal, if knowledge be understood in the 
 double sense already indicated during the discussion of the relation of trustee 
 and cestui que trust. For the agent is bound to inform and instruct the 
 mind of his principal, no less than the trustee is bound to inform and instrucb 
 the mind of his cestui que trust, in two respects. On the one hand, he must 
 put his principal in possession of all the facts, which means all the material 
 facts {z), within his own knowledge, that is to say, all circumstances relating 
 to the value of the property which is the subject of the transaction (a) ; 
 and, secondly, he must impart to him all such knowledge, in the sense of 
 power, capacity, skill, and judgment, as he himself possesses, and as he 
 would bring to bear on the negotiation if he were the principal dealing with 
 a stranger : he must fully and freely advise against himself (6). The latter 
 is, no doubt, a task of peculiar difficulty in the accomphshment, and it is even 
 more difficult to prove that accomphshment when the party is called upon 
 to do so, perhaps long after the event. But this is no hardship whatever on 
 the agent, being merely a condition of obtaining from the law what is, after 
 all, in the nature of an indulgence. 
 
 339. Lastly, in the course of his agency, the agent must not receive or 
 
 (z) See note (w), sup. 
 
 (a) See Fox v. Mackreth, and Ex p. James, as cited in note (o) to § 323, ante, in both of 
 which, as will be seen on reference to those citations, the non-disclosure of valuations and 
 reports as to, or facts bearing upon, the value of the property was held fatal to the pur- 
 chasing agent and trustee). And see further : Lowther v. Lord Lowther (1806), 13 Ves. 95, as 
 abstracted in note (c) to § 318, ante ; Sdsey (Lord) v. Mhoades (1827), 1 Bligh (n.s.) 1 
 {per Lord Eldon, L.C., at p. 8, differing on this point from Leach, V.-C. : a case where a 
 steward and solicitor did not divulge fully all facts which would tend to demonstrate the 
 value of the property, though he escaped on the ground of affirmation by the client and 
 principal) ; Molony v. Kernan (1842), 2 Dr. & Warr. 37 ; 59 R. R. 635 (per Sugdek, L.C. 
 (Ir.), at p. 40) ; Carter v. Palmer (1842), 8 CI. & Kn. 657 (suppression of valuable informa- 
 tion acquired in character of general manager : per Lord Cottenham, L.C, at pp. 703- 
 705); Charier v. Trevdyan (1844), 11 CI. & Fin. 714 (nou- disclosure of a valuation of 
 the property in two parts which had been procured by the purchasing steward and agent, 
 besides the concealment of his identity, as to which see note (s) to § 336, ante : per 
 Lord Lyndhtjest, L.C, at p. 732, and Lord Campbell at p. 740) ; Barker v. Harrison 
 (1846), 2 Coll. 546 (offers to purchase property, and arrangements for resale, not disclosed) ; 
 Patten v. Hamilton, [1911] 1 Ir. R. 40 (non-disclosure by agent of the mode in which he had 
 been dealing with certain moneys : see pp. 57, 60). 
 
 (6) Gibson v. Jeyes (1801), 6 Ves. 266 (per Lord Eldon, L.C, at pp. 271, 278-280 : see 
 the citation in note (r) to § 324, ante) ; Harris v. Tremenheere (1808), 15 Ves. 34 (per Lord 
 Eldon, L.C, at p. 42 : " the defendant must be prepared to show that he made as good a 
 bargain for his employer, as against himself as a provident, well-managing, honourable 
 steward, acting most adversely, in a fair sense, would ") ; Hesse v. Briant (1856), 6 De G. M. 
 & G. 623 (per Lord Cbanworth, L.C, at p. 628, adopting Lord Eldon's rule) ; Barnard v. 
 Hunter (1856), 2 Jur. N. S. 1213 (per Lord Ceanworth, L.C, again, at p. 1215 : " when 
 persons stand in confidential relations to one another, if the person whose duty it is to 
 protect takes upon himself to deal with the person whose interest he has to protect, the 
 onus is upon him to show that every sort of due caution was given to that person, and that 
 he had the means, independently of his natural protection, of dealing at arm's length "). 
 In all the above cases, the agent failed to show that he had given to his principal the full 
 benefit of all the skilled knowledge and advice which he was in a position to impart, or 
 that his principal had obtained the equivalent elsewhere; Lloyd v. Attwood (1859), 3 
 De G. & J. 614 (per Ttjbnbe, L.J., at p. 649). 
 
§§ 338, 339 (agency). 299 
 
 stipulate for any private advantage or profit out of any business which on 
 behalf of his principal he may transact with a third person, without first dis- 
 closing to that principal the exact nature and particulars of the advantage 
 or profit which it is intended or proposed that he shall receive. Here, 
 again, the breach of duty consists not in the mere fact of accepting the benefit, 
 or the promise of it, but in hiding the fact from the principal (c). The dis- 
 tinction is between a revealed and permitted gift, and a clandestine bribe : 
 what in the one case is an increment to his remuneration honestly earned 
 with the approbation, and, perhaps, for the benefit, or in relief, of the 
 principal, is, in the other, the wages of betrayal, or at least an act calculated, 
 if not intended, to seduce the agent from his allegiance, to the detriment 
 of the principal, and to the secret advantage both of the agent and the 
 contractor. Accordingly, in all cases where an agent, having received, or 
 contracted to receive, from a third person with whom he is dealing on 
 behalf of his principal any advantage or profit, whether money or money's 
 worth, fails to sustain the burden which lies upon him of proving that, before 
 the receipt, he had divulged all the circumstances, or that the principal had 
 actual or presumptive knowledge of them, that agent is liable to account to his 
 principal for the amount or value of what he has so received, and further the 
 third person is liable to the principal in damages or otherwise for the corruption 
 of the agent, besides being disabled from enforcing his contract (d). This 
 has been invariably so held, in whatever form the clandestine advantage 
 was received or promised, — ^whether in the more gross and obvious form 
 of lump-sum bribes, or bonuses, in money (e), commissions, brokerages, 
 
 (c) See the cases cited in note (x) to § 316, ante, the partnership cases cited in the notes 
 to § 341, post, and the following : Benson v. Heathorn (1842), 1 Y. & C. 326 (per Shadwell, 
 V.-C, at p. 343 : " if in the present case, Mr. Heathorn had openly and directly brought 
 forward the matter before the body of shareholders generally, I consider it possible, if not 
 probable, that he . . . would now have been entitled to retain all the sums in question 
 paid for commission. He has not elected to take that open and straightforward course ; 
 he has chosen that the matter should be undisclosed, and he must abide the inevitable 
 result ") ; Atwool v. Merryweather (1867), L. R. 5 Eq. 464 n. (per Wood, V.-C, at p. 467 n. : 
 " I do not in the least say that where persons with their eyes open know that the agent 
 who secures them the bargain is going to take money for it, that would not be all right 
 enough"). 
 
 (d) See Sect, 5, Sub-ss. (1), (2), post. 
 
 (e) See Fawcett v. Whitehouse (1829), 1 Russ. & M. 132 (where a partner, instructed to 
 negotiate the terms of a lease, secretly stipulated for, and secretly received, " a conditional 
 gift," as Lord Lyndhubst, L.C, called it, of £12,000 from the parties with whom 
 he treated) ; Beck v. Kantorowicz (1857), 3 K. & J. 230 (where one of five partners or 
 associates, employed to purchase a concession, stipulated for a bonus or bribe from the 
 vendors to himself in the event of the five persons purchasing at a certain figure : per 
 Wood, V.-C, at pp. 250, 251) ; Moriaon v. Thompson (1874), L. R. 9 Q. B. 480 (where an 
 agent to purchase a certain vessel, having ascertained that the owner had instructed his 
 broker to sell it for not less than £8500, with liberty to him to keep any excess for himself, 
 secretly arranged with this broker that he (the broker) should offer the vessel for £9250, 
 and out of the £750 which he would thus become entitled to should pay him (the agent) 
 £225) ; Metropolitan Bank v. Heiron{l8S0), 5 Ex. D. 319, C. A. (where a director received a 
 bribe of £250 from a debtor to the bank to use his influence with the banli; to obtain favour- 
 able terms for such debtor, but, by reason of the statute of limitations, and that alone, he 
 escaped) ; Andrews v. Ramsay & Co., [1903] 2 K. B. 635 (clandestine receipt by estate 
 agents of a sum or bribe, under the name of " commission," from the purchaser whom they 
 were instructed to procure) ; Bartram & Sons v. Lloyd (1904), 90 L. T. 357, C. A. (the 
 like, in the case of an agent to purchase a steamer). 
 
300 CH. IV, SECT. 2, SUB-S. (3). 
 
 and like percentages on the value of business done between the third person 
 and the principal (/), rebates and discounts (g), participation in the third 
 person's profits on his contract with the principal {h) ; or in other less direct 
 and more subtle shapes, as, for instance, where a member of a firm in course of 
 dissolution secretly obtained for his own benefit, a renewal of the lease of the 
 partnership premises {i) ; or where two of three partners in the business of 
 common carriers entered into a contract on their own behalf, to the exclusion 
 of the third, to carry bulUon for the Mint on certain roads other than that 
 which was the subject of the existing agreement between the three partners 
 and the Mint, the second agreement being regarded as connected with, and 
 a continuation of, the first (J) ; or where a chairman of the board of directors 
 of a railway company made clandestine sales for his own profit of a large 
 
 ( / ) As in BensouY. Heathorn (1842), 1 Y. & C. 326 ; Smith v. Sorby (1815), 3 Q. B. D. 
 552 n. ; Harrington v. Victoria Graving Dock Co. (1878), 3 Q. B. D. 549 ; Boston 
 Deep Sea Fishing & Ice Go. v. Ansell (1888), 39 C. D. 339, C. A. ; Lister & Oo. v. Stubbs 
 (1890), 45 C. D. 1, C. A. ; Williamson v. Hine Bros., [1891] 1 Ch. 390; Salford Cor- 
 poration V. Lever, [1891] 1 Q. B. 168, C. A. ; Orant v. Gold Exploration & Development 
 Syndicate, [1900] 1 Q. B. 233, C. A. ; Hovenden & Sons v. Millhoff (1900), 83 L. T. 41, 
 C. A. ; Powell & Thomas v. Evans, Jones <k Co., [1905] 1 K. B. 11, C. A. ; Swale v. Ipswich 
 Tannery, Ltd. (1906), 11 Comm. Cas. 88. 
 
 (g) As in Benson v. Heathorn, sup. (where Shadwell, V.-C, at p. 344, observes that 
 the secret receipt of discounts from tradesmen is morally worse than the receipt of secret 
 commissions) ; Turnbull v. Garden (1869), 20 L. T. 218 (discounts allowed to the agent by 
 tradesmen) ; Spain (Queen of) v. Parr (1870), 39 L. J. (cH.) 73 (discounts allowed by 
 insurance companies to the agent, on punctual payment of premiums, for introducing 
 the business) ; Hippisley v. Knee Bros., [1905] 1 K. B. 1, Div. Ct. (rebates allowed to 
 auctioneers by printers off printing charges, and by newspaper proprietors off advertising 
 charges ) ; Green (E.) & Son, Ltd. v. Tugham S Co. (1913), 30 T. L. R. 64 (rebates, &c., to 
 insurance brokers). 
 
 (h) As in Tyrrell y. Bank of London (1862), 10 H. L. C. 26, where a solicitor for the bank, 
 instructed by them to purchase certain premises in the City of London from one Read, 
 the bank's secretary, suppressed the fact that, before the purchase was effected, he had 
 entered into an agreement with Read to share with him the profits he was to make on his 
 sale to the bank, and had, in fact, become joint owner with him of (amongst other pro- 
 perties) the premises in question ; Williams v. Stevens (1866), L. R. 1 P. C. 352, where the 
 appellant, a creditor of a bankrupt in the Island of Jersey, was desirous of exercising her 
 rigbt (according to the law of Jersey) of taking over the estate, but, being herself insolvent, 
 could only do so by appointing a surrogate to take it over. She appointed one Snell. 
 The respondent was her " procureur gen^rale et special," and, as such, acted for her in the 
 transaction. He made a secret bargain with SneU to divide with him the estate so to be 
 acquired, and afterwards sold his own moiety to him for £578, for which sum he was 
 accordingly held accountable to the appellant ; Gordon v. Holland (1913), 82 L. J. (p.c.) 
 81 (secret profit on sale of property of partnership). 
 
 (i) Featherstonehaugh v. Femcick (1810), 17 Ves. 298 (per Lord Elbom-, L.C, at p. 310 : 
 " it ia clear that one partner cannot treat privately, and behind the backs of Ms copartners 
 for a lease of the premises where the joint trade is carried on, for his own individual 
 benefit," and at p. 312 : " this clandestine conduct was very unfair towards the plaiutiflf. 
 . . . The defendant ought first to have given him notice"). 
 
 (j) Russell V. Austwick (1826), 1 Sim. 52. Here the excluded partner, from whom 
 the second agreement was concealed, sued the two non-disclosing partners, Austwick and 
 Maddeford, who immediately afterwards had a dispute between themselves, involving 
 another point in the law of disclosure : see Maddeford v. Austioick, cited in note (d) to 
 § 142, ante. The original contract between the firm and the Mint was to carry coin from 
 London to Falmouth : it was contended for Austwick and Maddeford that they were 
 under no obHgation to divulge to the plaintiff the second agreement, because it was only 
 for the carriage of silver on " provincial roads," with which the first contract had nothing 
 to do ; but, at p. 62, Leach, V.-C, expresses the view that " the second agreement was 
 entered into by the oflScers of the Mint as connected with, and in continuation of the first 
 agreement, and in confidence of the responsibility of the parties to the first agreement." 
 
§ 339 (agency). 301 
 
 number of shares wLicli lie ostensibly held for the purpose of buying ofi the 
 opposition of landowners, and for " secret service " (A) ; or where directors 
 of a company, having entered into a contract, pursuant to a resolution of 
 the company, to sell to a certain person at a specified price all such shares 
 as should not be taken up by the existing shareholders, and having been 
 afterwards requested by the person in question to release him from his bargain, 
 instead of either accepting or declining this proposal, secretly bought the 
 shares back from him at the same price, and re-sold them at a profit, which 
 they put into their own pockets (l) ; or where, there being an agreement 
 between two telegraph companies that company B. should construct and 
 lay various submarine cables for company A. at a price payable, as to part, 
 on the receipt of the order, and, as to the residue, on the progress and final 
 certificates of company A.'s engineer, company B., without the knowledge 
 of company A., immediately afterwards entered into a sub-contract with 
 this engineer to construct one of the cables which was the subject of their 
 contract with company A. at a price payable by instalments at the very 
 dates on which company A. was to pay instalments to them under the 
 main contract, and on the certificate of the same engineer (m) ; or where, 
 a shipowner having placed a vessel in the hands of certain agents for 
 sale in Japan, and these agents having employed a sub-agent for 
 that purpose, the sub-agent bought the vessel from the agents at the 
 price named, and then re-sold it at a profit to a third person, pursuant 
 to a secret agreement made by him with that third person before he bought 
 from the agents (n) ; or where a merchant's clerk, employed in handling the 
 funds, securities, and investments of his employers, secretly gambled in 
 differences on the Stock Exchange on an enormous scale (o) ; or where a 
 
 (k) York & North Midland Railway Go. v. Hudson (1853), 6 Beav, 485. 
 (I) Parker v. McKenna (1874), 10 Ch. App. 96. This was an ingenious, but wholly 
 unsuccessful, attempt to accomplish indirectly what the directors knew they could not 
 do directly. " If Stock " — who was the person who made the bargain with the directors 
 of which, before the time for performance had arrived, he was anxious to be relieved — " had 
 bought these shares and paid for them, and become the absolute owner of them, the 
 directors were as free as any person in the market to go to Stock, and become the pur- 
 chasers from him of these shares. The agency in that case would have been over, and 
 there would no longer have been any conflict between interest and duty. Here the agency 
 had not been terminated " (Lord Cairns, L.C, at p. 118). If the directors had assented 
 to Stock's request, the shares would stiU have been the company's to dispose of to another 
 purchaser : if they had declined to do so, the company would still have had Stock's liability. 
 In either case, there would have been no cause for complaint on the company's part. But 
 the course adopted was neither more nor less than " a profit . . . made by an agent, MJi^otti 
 the knowledge of his principal, in the course and execution of his agency " (Lord Caibns, L.C, 
 ibid.). 
 
 (to) Panama and South Pacific Telegraph Co. v. India Rubber, Gutta Percha, and Tele- 
 graph Co. (1875), 10 Ch. App. 615. 
 
 (n) De Bussche v. Alt{l&lS,), 8 C. D. 286, C. A. Here the sub-agent had told his 
 principal (through the agents) that he was to be the purchaser of the vessel at the price 
 named, $90,000, but he had not told him, or his agents, of the secret agreement to resell 
 it to a Japanese prince for $160,000. Having disclosed the former fact, he was quite 
 free to buy from^the agents, and then contract to sell at a profit, but he was not at liberty, 
 whilst he was still " in the course and execution of his agency," as Lord Cairns, L.C, said 
 in Parker v. McKenna, sup., to enter into such an arrangement without the knowledge 
 of the principal. 
 
 (o) Pearce v. Foster (1886), 17 Q. B. D. 536, C. A. 
 
302 CH. IV, SECT. 2, SUB-S. (3). 
 
 person who held the fiduciary position of vice-chairman of a college, and was 
 also its solicitor, made " secret profits " in the latter character {p) ; or where 
 stockbrokers, being entitled to close their client's account, and to sell on the 
 market shares of a like amount to those previously open with him, clandes- 
 tinely arranged with the jobber to whom they sold the shares, as part of the same 
 transaction, that they would buy them back, the result of which, according to 
 the custom of the Stock Exchange, was that they would obtain an abatement 
 from the price payable if it were an original purchase (q) ; or where one of 
 two co-adventurers (who had made an improvident bargain for the supply 
 of coal to the Austrian navy, and were afterwards permitted to reduce their 
 loss by supplying cheaper coal), secretly provided the cheaper coal out of 
 stocks supplied to his own coal dep6t (qq) ; or where directors, without the 
 knowledge of the company, received " qualification " shares or money, or 
 other material favours, from the promoter. 
 
 340. The last-mentioned class of case is one which, since the introduction 
 of the Companies Acts, has constantly occupied the attention of the courts. 
 As has already been stated (r), the promoter who has by such devices corrupted 
 the executive of the company promoted by him is beyond doubt liable to the 
 company, if he suppresses the fact that the directors are thus rendered depen- 
 dent upon himself. It is no less clearly established that the directors, as 
 agents and officers of the company, are also liable for the concealment of 
 this fact (s). It is quite immaterial what form the transaction assumes, or 
 by what particular device " the watch-dog " is tempted " to take a sop from 
 a possible wolf " (t) : the bribe may be given for the express purpose of 
 enabling the promoter's impecunious nominee to qualify as a director, where 
 the articles of association require, as such qualification, the holding by him 
 of so many shares in his own right, and in that case the gift may be of the 
 shares themselves (m), or of the money necessary to acquire them («). Or it 
 may be a case of a naked present of shares (w) or debentures {x), without 
 
 (p) Bray v. Ford, [1896] A. C. 44, H. L. 
 
 (q) Erskine, Oxenford <b Co. v. Sachs, [1901] 2 K. B. 504, C. A. If the two transactions 
 had been independent of one another, there would have been no liability for non-disclosure : 
 but, since they were not so, the abatement represented a profit made in the course and 
 execution of the agency, and therefore should have been disclosed (per A. L. Sihth, M.R., 
 at pp. 511, 512; Vaughan Williams, L.J.,atpp. 512,513 ; Stieling, L.J., at pp. 516-518). 
 
 (qq) KuMiez v. Lambert Bros., Ltd. (1913), 108 L. T. 565. 
 
 (r) See § 333, ante. 
 
 (s) As to the form and measure of their UabiUty, see §§ 379, 380, %>ost. As to their 
 statutory habiUty, see §§ 566-572, post. 
 
 (t) Per BowEN, L.J., at p. 341 of Be North Australian Territory Co., Archer's Case, 
 [1892] 1 Ch. 322, C. A. 
 
 (m) As in Be Canadian Oil Works Corporation, Hay's Case (1875), 10 Ch. App. 593 ; 
 Be Carriage Co-operative Supply Association (1884), 27 C. D. 322 ; Be North Australian 
 Terrilmy Co., Archer's Case, sup. ; Be London & South Western Canal, Ltd., [1911] 
 1 Ch. 346. 
 
 («) As in Be Englefield Colliery Co. (1878), 8 C. D. 388, C. A. 
 
 (w) As in Maxwell v. Port Tennant Patent Steam Fud and Coal Co. (1857), 24 Beav. 
 495 ; Be Disderi & Co. (1870), L. E. 11 Eq. 242 ; Be Mormh Consols Tin Mining Co., 
 McKay's Case (1875), 2 C. D. 1, C. A. ; Be British Provident Life and Guarantee Association, 
 
 (x) As in Be Anglo-French Co-operative Society, Exp. Pelly (1882), 21 C. D. 492, C. A. 
 
§§ 339, 340 (agency). 303 
 
 any reference to qualification, or any otlier specific purpose. In all cases 
 alike, if the transaction is not disclosed witli the utnaost candour and particu- 
 larity to the company, the director is accountable. It is no answer to establish 
 that the corrupt agreement with the promoter was made before the party 
 charged became a director, if he received the fruits of it during his tenure of 
 the office («/) ; nor that, in point of form, the director paid for the shares 
 with his own cheque, if the cheque was paid against a cheque for the same 
 amount handed back to him by the promoter out of several making up the 
 purchase-money (2;), nor (if there was a secret arrangement that, on demand 
 at any time, the promoter would purchase them from the director at par) 
 that, afterwards, when the shares had become valueless, the promoter did 
 in fact, pursuant to this " private arrangement," as he had himself described 
 it, pay their face value to the director (a). It does not improve the director's 
 case, but on the contrary (for obvious reasons) make it much worse, to allege 
 and prove that he received his qualification shares from the promoter, not as 
 an absolute gift, but in trust for him (6) : " it is not only improper, but it is 
 misfeasance, to qualify by taking shares in trust for the promoter, and to 
 execute blank transfers for the promoter to fill up at his pleasure. Directors 
 so qualified hold office at the will of the promoter, and as long as they fulfil 
 his wishes. But as soon as they act contrary to the promoter's wishes, he 
 can fill up and lodge the transfers, and disqualify them " (c). Nor can a 
 director justify or excuse the bribe as a payment to him in the assumed 
 character of vendor to toe company, if in reality he had nothing to sell {d). 
 And it is equally immaterial that it was made a condition of the bribe that 
 the director should take, and pay for, other shares in the company (e). On 
 
 De Ruvigne's Case (1877), 5 C. D. 306, C. A. ; Re Caerphilly Colliery Co. (1877), 5 C. D. 
 306, C. A. (here no qualification was required by the articles) ; Nant-y-Glo and Blaina 
 Ironworks Co. v. Grave (1878), 12 C. D. 378 ; Be West Jewell Tin Mining Co., Weston's 
 Case (1879), 10 C. D. 579, C. A. (where, though some consideration passed, it was less than 
 the then value of the shares, and, to the extent of the difference, the transaction was 
 held to be a gift) ; Be Diamond Fuel Co., Mitcalfe's Case (1879), 13 C. D. 169, C. A. ; 
 Eden v. Ridsdale's Railway Lamp and Lighting Co. (1889), 23 Q. B. D. 368, C. A. ; Be 
 Postage Stamp Automatic Delivery Co., [1892] 3 Ch. 566 ; Be Westmoreland Green and 
 Slue Slate Co., Bland's Case, [1893] 2 Ch. 612, C. A. 
 
 (y) Re Morvah Consols Tin Mining Co., McKay's Case, sup., per Bbett, J., at pp. 7, 8. 
 
 (z) This was the childish manoeuvre resorted to in Re Canadian Oil Works Corporation, 
 Hay's Case (1875), 10 Ch. App. 593 (see the observations on it of Jambs, L.J., at p. 600, 
 and Mbllish, L. J., at p. 605). 
 
 (o) Be North Australian Territory Co., Archer's Case, [1892] 1 Ch. 322, C. A., where 
 it was vainly contended that the director had genuinely paid for his shares, and, in the 
 events which happened, had got nothing out of the company, and that the company had 
 suffered no loss {per Lindley, L.J., at pp. 336-338). 
 
 (6) This was the device employed in Re London & South Western Canal, Ltd., [1911] 
 1 Ch. 346. 
 
 (c) lUd., per Swinfbn Eady, J., at p. 350. In the one case the director is swayed 
 merely by a sense of gratitude for the past; in the other, he is subject to the continuous 
 bondage of apprehension as to the future. 
 
 (d) Re Westmoreland Green and Blue Slate Co., Bland's Case, [1893] 2 Ch. 612, C. A. 
 {per LnsTDLEY, L.J., at p. 617). 
 
 (e) Re Postage Stamp Automatic Delivery Co., [1892] 3 Ch. 566 (per Vaitghan Williams, 
 J. , at p. 577). Here each of the directors received (inter alia) 250 shares from the promoter, 
 on the terms of his subscribing for 100 other shares. For further illustrations, see § 532, 
 note (6), post, where the question of the statutory liability of directors and others to 
 
304 CH. IV, SECT. 2, SUB-S. (3). 
 
 the other hand, one who before becoming a director, or even a shareholder, 
 acquired knowledge, in the course of certain transactions with the company, 
 that the then directors had been corrupted by the promoter, but himself 
 derived no benefit therefrom, was held free from any duty to impart this 
 knowledge to the company on his subsequently joining the board (/). 
 
 341. Partnership, as has already been indicated {g), is a species of agency : 
 but it has this peculiar feature, that all the partners are mutually agents and 
 principals of one another : each member of the firm is acting not merely 
 for, but with, the other member or members, in a common business or adven- 
 ture. It follows that, to this extent, a partner is subject to certain special 
 duties of disclosure over and above those which are incumbent on other 
 agents. An ordinary agent, unless he has expressly or impliedly contracted 
 with his principal for exclusive service, is at liberty to act as agent for, or to 
 hold an interest in the business of, other persons, though they may be trading 
 in competition with his priacipal, without revealing such agency or interest, 
 provided that he is not deriving any private advantage from a transaction 
 between any of those persons and his principal. This is not so in the case 
 of partnership. No partner is allowed to conceal from the firm any interest 
 which he may have in any trade, adventure, or concern which is akin to, in 
 the sense that it is of a nature to compete with, the business of the partner- 
 ship. " One partner must not directly or indirectly use the partnership assets 
 for his own private benefit. He must not in anything connected with the 
 partnership take any profit clandestinely for himself, nor must he carry on 
 the business of the partnership, or any business similar to the business of the 
 partnershij), in his own or another name, separate from it, otherwise than for 
 the benefit of the partnership " (A). In these, as in all the other cases which 
 form the subject of this Chapter, the liability arises, not from the mere fact, 
 but from its being kept secret (i). The burden is on the partner who is 
 interested in the " similar " or rival undertaking, and whose conduct is 
 impeached, to establish that he made due and candid disclosure to the 
 firm, or that the firm was apprised aliunde, of both the existence and the 
 exact nature and extent of his interest (j) ; but this burden does not rest upon 
 him imtil the partners complaining have shown not only that he had the 
 
 disclose all material contracts in the prospectus Is discussed ; and where it will be seen 
 that a common type of such contracts is the kind of arrangement for the corruption of 
 the company's executive which is referred to in the text. 
 
 (J) Re Forest of Dean Coal Mining Co. (1878), 10 C. D. 450 (per Jbssbl, M.R.. at 
 pp. 456, 457). 
 
 (g) § 335, note (p), ante. 
 
 (h) Per Jambs, L.J., at pp. 350, 351 of Beanv. MacDowell (1878), 8 C. D. 345, C. A. 
 At p. 356, Thbsigeb, L.J., lays down, as the second of the three principles which he 
 considers applicable to this subject, that "a partner is not to derive any exclusive 
 advantage by engaging in transactions in rivalry with the firm." 
 
 (i) See note (x) to § 316, ante, and the cases there cited. And, for a further illustration 
 from the agency or partnership class of case, see Re Dover Coalfield Extension, Ltd., [1908] 
 1 Ch. 65, C. A., where it was held that there was nothing wrong in a director of company 
 A., who at the request of that company has become a director of company B., receiving 
 director's fees from company B., for, in the first place he is not receiving any property 
 of company A., to whom alone he is under a duty, and, secondly, there is no secrecy. 
 
 {j) See Sect. 4, Sub-s. (2), post. 
 
§§ 340, 341 (agency). 305 
 
 interest alleged {Jc}, but also ttat tlie business was of a " similar," in the sense 
 of a competitive, nature : and this means not merely that the two businesses 
 relate to the same commodity, or article of commerce, or subject-matter, 
 but that their profits are earned in the same mercantile character, and by 
 the same class of dealing. For instance, a partner in a firm of salt brokers 
 and merchants is imder no duty to disclose the fact that he is also engaged in 
 the business of a salt manufactxirer (I) : nor is a member of a firm of ship- 
 brokers bound to reveal to his partners the fact that he is assisting in the 
 formation of a shipbuilding company (m). Another special obligation of a 
 partner is to divulge to the firm of which he is a member any private or 
 exclusive profit which he is making by the use of information acquired by 
 him as a partner if, but only if, that information is " information to which 
 the partnership is entitled " (n). The limitation conveyed by the last words 
 must not be lost sight of ; for " it is not the source of the information but 
 the use to which it is applied, which is important in such matters. To hold 
 that a partner can never derive any private benefit from information which 
 he obtains as a partner would be manifestly absurd. Suppose a partner to 
 become, in the course of carrying on his business, well acquainted with a 
 partioidar branch of science or trade, and suppose him to write and publish 
 a book on the subject, could the firm claim the profits thereby obtained ? 
 Obviously not, unless, by publishing the book, he in fact competed with the 
 firm in their own line of business " (o). So, where three persons, under a 
 partnership arrangement, bought from an individual, with a view to re-sale, 
 certain plots of land or stands laid off for building, and also from a company 
 owning other plots of land in the locality a certain number of shares in their 
 imdertaking, and one of the three partners, separately from, and without 
 the knowledge of, the other two, bought certain other stands belonging to 
 the company, and re-sold them at a profit to himself, it was held that he was 
 not accountable in respect of this transaction, or bound to disclose it to his 
 partners ; for, though it was the knowledge which he obtained as partner 
 which put him in a position to make the purchase, this knowledge was not 
 used by him for the purpose of any business in competition with, or analogous 
 
 {k) See Sect. 3, Sub-s. (2), post. 
 
 {I) Dean v. MacDowell (1878), 8 C. D. 345, C. A. (per James, L.J., at p. 351, Cotton, 
 L.J., at pp. 353, 354, and Thesigeb, L.J., at pp. 356, 357). 
 
 (m) Aas V. Benlmm, [1891] 2 Ch. 244, C. A. (per Lindley, L. J., at pp. 255, 256, Bowen, 
 L.J., at p. 258, and Kay, L.J., at pp. 260, 261). And op. Trimble v. Goldberg, [1906] 
 A. C. 494, P. C, at p. 499 : see the citation in note (p), inf. 
 
 (n) Per Cotton, L.J., at p. 354 of Dean v. MacDowell, sup. 
 
 (o) Per Lindley, L. J., at p. 256 of Aa^ v. Benham, sup. In this case, reliance was 
 placed by the plaintiff on the third of the three principles enunciated by Thesigee, L.J., 
 at p. 356 of Dean v. MacDowell, sup. (viz. " that a partner is not allowed, in transacting the 
 partnership affairs, to carry on for his sole benefit any separate trade or business which, 
 were it not for his connection with the partnership, he would not have been in a position 
 to carry on "), but, for the reasons given by Lindley, L. J., in the passage cited in the text, 
 this statement of the proposition was thought much too broad, and the Court of Appeal 
 preferred, and adopted, the more guarded language of Cotton, L.J., in the earlier case, 
 BoWEN, L.J., observing, at pp. 277, 278, that, when read carefully, that language is 
 " perfectly precise and neat." 
 
 B.N.D, X 
 
306 
 
 CH. IV, SECT. 2, SUB-SS. (3), (4). 
 
 to, that of the firm (p). The rules above stated have now received legislative 
 recognition (q). 
 
 342. The topics of the burden of proof incumbent on the principal or 
 partner complaining, and on the agent or partner charged, respectively, 
 the forms of remedy and relief available, questions of law and fact, and 
 parties, are reserved for separate treatment hereafter (r). 
 
 Subs. (4). Examination of Certain Relations not deemed primfii facie of a 
 
 Fiduciary Character. 
 
 343. In any case where it is a matter of doubt and debate whether the 
 relation between the parties is such as to cast the burden of sustaining the 
 transaction upon the party charged, the courts will always put substance 
 before form, and will consider the principle of the rule rather than the rule 
 itself, the ratio legis rather than the lex. It is not a question of names. Many 
 relations have been treated and described as relations of trusteeship, for the 
 purposes of the doctrine discussed in this Chapter, which are not so in the 
 full acceptation of the word, or otherwise than " in an artificial sense," or " by 
 way of metaphor " (s). On the other hand, there are cases where the party 
 against whom relief is sought may be properly and strictly denominated a 
 trustee or agent, and yet the circumstances may be such that, as regards the 
 particular transaction impeached, it is impossible that any trust can have been 
 reposed in him, or impossible that he can have derived any private and 
 personal benefit, in either of which events he is not within the principle of the 
 rule. Cessante ratione cessat lex (t). The sole question in every case is whether 
 the parties were so situated towards one another as to raise a presumption 
 of confidence. If they were so situated, then, whatever be the correct 
 definition of the relationship which in fact existed between them, or, whether 
 such relationship admits of any defitnition or classification at all, the case 
 is within what Lord Eldon, L.C, describes as " that great rule of the Court, 
 that he who bargains in matters of advantage with a person placing confidence 
 
 [p) Trimble v. Goldberg, [1906] A. C. 494, P. C, at p. 499 (" the subject of the pur- 
 ■chase was not part of the business of the partnership, or an undertaking in rivalry with 
 the partnership, or indeed connected with it in any proper sense. Nor was the infor- 
 mation on which it seems Trimble acted acquired by reason of his position as partner "). 
 At p. 500, with reference to the " secrecy of the transaction " which had impressed 
 the court below, the Judicial Committee observed that " there was no legal obligation 
 on Trimble or Bennett to tell Goldberg what they were doing, unless he had a right to take 
 part in the speculation if he chose to do so." 
 
 (g) In the Partnership Act, 1890 (53 & 54 Vict. c. 39), which is mainly a declaratory 
 and codifying statute. See s. 29 (1) : " every partner must account to the firm for any 
 benefit derived by him without the consent o/ the other partners from any transaction concern- 
 ing the partnership, and from any use by him of the partnership property or business 
 connection." This is followed by s. 30 : "if a partner, without the consent of the 
 other partners, carries on any business of the same nature as, and competing with that 
 of the firm, he must account for and pay over to the firm aU profits made by him in that 
 business." 
 
 (r) See Sects. 3, 4, 5, 6, 7, post. 
 
 (s) See § 320, ante. 
 
 \t) For illustrations, see § 344, post. 
 
§§ 341-344 (non-fiduciary eelations). 307 
 
 in him is bound to show that a reasonable use has been made of that con- 
 fidence " (m). To this rule, as the fountain-head, or rather to its principle 
 and reason, all subordinate and derivative rules, and all particular questions, 
 must be referred for interpretation and solution {v). 
 
 344. There are several illustrations of transactions between parties who 
 stand towards one another in a relation falling strictly within some one or 
 more of the class denominations successively considered in the foregoing 
 portions of this Section, where, nevertheless, the circumstances are not 
 sufficient to bring the case within, or are sufficient to take it out of, the 
 " principle of the rule." For instance, where an executor, described as a 
 trustee " in an artificial sense," was also a residuary legatee, and, there being 
 no question of assets, entered into a compromise with the other legatees 
 solely in the latter character, it was held that there was no " confidence " 
 on the one side, or " advantage " on the other, and that the compromise 
 was unimpeachable {w). Similarly, a trustee of the estate of an insolvent, 
 who is under a fiduciary duty, as such, to the creditors, is under no duty to 
 the insolvent, where there is, and in the most favourable event can be, no sur- 
 plus ; or rather there is nothing upon which the trust can operate (ww). The 
 like view was taken ia the case of a trustee purchasing part of the trust property, 
 not for his own benefit, but solely for that of certain of the cesiuis que trustent, 
 as between whom and the other cestuis que trustent there is no fiduciary relation 
 or privity whatsoever [x) ; and in a case where an attorney and agent was 
 
 (u) Gibson v. Jeyes (1801), 6 Ves. 266, per Lord Eldon, L.C., at p. 278. 
 
 (v) Lord CoTTENHAM, L.C., at p. 130 of Greenlaw v. Kin^ (1841), 10 L. J. (CH.) 129, 
 protests in forcible language against a narrow and literal view of the extent and appH- 
 cabiUty of the doctrine : " some of the authorities referred to in the course of the arguments 
 might lead persons to suspect that there was an absolute rule of the Court apphcable 
 only to particular classes of persons, such as solicitors, guardians, and trustees in the 
 ordinary sense of that word, whereas the principle of the rule hes much deeper, and the 
 rule has reference to, and affects all persons coming within its 'principle, which is, that no 
 persons can be allowed to purchase interests where they have duties to discharge which 
 are inconsistent with their character of purchasers. It is not sufficient to say, a particular 
 person or class of persons is not within the rule : . . . the question not being, whether 
 a case is to be found in the books exactly similar to the present, but whether the transaction 
 before me comes within the principle." Similarly, at p. 342 of Benson v. Heathorn (1842), 
 1 y. & C. 326, Shadwell, V.-C, when applying the doctrine to the case of trustees, is 
 careful to add — " and all parties whose character and responsibihties are similar, for 
 there is no magic in the word." Cp. the observations of Lord Caibns, L.C, at pp. 362, 
 363 of McPherson v. Watt (1877), 3 App. Cas. 254, H. L., and those of Lord Hatheeley 
 at p. 1243 of Erlanger v. New Sombrero Phosphate Co. (1878), 3 App. Cas. 1218, H. L. 
 (" it is notorious that every mode which can well be conceived of deahng with contracts 
 which ought not to be maintained . . . has from time to time come before the Courts 
 of Equity, and there is scarcely any one which can be set on foot that is not struck at 
 by the general doctrines of the Courts of Equity, though the precise circumstances of 
 that case may never have yet come before the Court "). 
 
 (w) Naylor v. Winch (1824), 1 Sim. & St. 555, per Leach, V.-C, at p. 567 : " where 
 the policy of this Court prevents a trustee from deahng with his cestui que trust, it is upon 
 the principle that his situation as trustee gives him an advantage in such dealing. If 
 this executor could in any sense be called a trustee, yet, inasmuch as there was no question 
 of assets, and as the deahng proceeded entirely upon his character of residuary legatee, 
 it is impossible that he could derive any advantage in deahng with the plaintiff and her 
 trustees from his character of executor." 
 
 (ww) Dover v. BucTc (1865), 12 L. T. 136 (per Sttjart, V.-C, at p. 137). 
 
 (x) Harwell v. Barwell (1865), 34 Beav. 371 (per Eomilly, M.R., at pp. 374, 375). 
 
308 CH. IV, SECT. 2, SUB-S. (4). 
 
 also one of the judgment creditors of his client and principal, and attended 
 a sale by the sherifi of the client's efiects, and purchased part of them, solely 
 in his character of judgment creditor («/). 
 
 345. From the above it will be seen that there is no privity of a fiduciary, 
 any more than there is of a contractual, character between cestuis que trustent, 
 legatees, or beneficiaries inter se, merely because there is such a relation 
 between the trustee or executor, on the one hand, and each of such cestuis que 
 trustent, legatees, or beneficiaries, on the other. A similar confusion of thought 
 is responsible for the arguments from time to time " fondly invented," and 
 vainly advanced, as to the supposed general fiduciary duties urhi et orbi of a 
 director of a company. One would have thought it impossible to contend with 
 any appearance even of plausibility that, merely because the word " fiduciary " 
 is applied to the duties of this agency, anybody and everybody is entitled 
 to claim the discharge of such duties, regardless of the question whether 
 there is any privity or relation whatsoever between him and the directors, 
 or the particular director attacked. But it has been so contended, and in 
 each case the contention was treated seriously, and elicited solemn pro- 
 noxmcements of the law that there is no fiduciary relation between a director 
 and an individual shareholder (z), or between a director and a third person 
 to whom the company owes a fiduciary duty (a), or between a director and 
 stockbrokers and other members of the outside public (6). There is, on the 
 one hand, a relation of confidence between the director and the company, 
 and, on the other hand, there is a contractual, or, it may be, a fiduciary, 
 privity between the company and the shareholder or third person. It would, 
 however, be a most perverse logic, comparable only to the syllogism whereby 
 it was attempted to prove that the infant child of Themistocles ruled the 
 
 {y) Austin v. Chambers (1837), 6 CI. & Fin. 1, per Lord Bkotjgham, L.C, who at pp. 37, 
 38, points out that the respondent denies " that upon this transaction, with reference 
 to this sale, he was acting as Mr. Austin's attorney ; he says he was acting for himself ; 
 that he was a judgment creditor ; that he had a right to attend the sale, and had a right 
 to purchase, and that he was acting in the character of judgment creditor. If he was 
 not acting with a view to the interests of his cUent, who had been his cUent before, and 
 was his cUent afterwards, he had a right undoubtedly, to throw off his character of solicitor 
 at that particular time, and to exercise the right which belonged to him in another cha- 
 racter." The House of Lords considered that it was a question of fact whether this was 
 the true aspect of the transaction, and offered the parties the opportunity of having 
 this issue tried, which offer we are informed (at p. 40) was accepted. 
 
 (z) Percival v. Wright, [1902] 2 Ch. 421, ^er Swinfbn Eady, J., at pp. 425, 426. Contrast 
 AUen V. Hyatt (1914), 30 T. L. R. 444, P. C, where the circumstances were very special. 
 
 (a) Bath v. Standard Land Co., [1911] 1 Ch. 618, C. A., per Cozens-Hakdy, M.R., 
 at p. 625 : " the directors stand in a fiduciary relation to the company, but not to a 
 stranger with whom the company is deaUng," and to whom that company might be, 
 and in the circumstances of this case was held to be — (see the judgment of Cozens-Haedy, 
 M.B., at pp. 625, 626, and of Buckley, L. J., at pp. 642-647) — under a fiduciary obligation. 
 The " confidence " is placed by the third person in the company, and by the company 
 in the directors, but not by the third person in the directors. 
 
 (6) Taclcey v. McBain, [1912] A. C. 186, P. C, where it was held that a director and 
 general agent of a company was under no duty to communicate to shareholders, much 
 less to brokers soliciting the latest information, or to the general pubhc, the receipt of 
 favourable news by cable from the seat of the company's undertaking. Such a duty was 
 alleged in the first instance as one of the causes of action, but Uttle more was heard of 
 it, and it was not even seriously relied upon in the arguments on the appeal, which were 
 directed to the question of misrepresentation. 
 
§§ 344-346 (non-fiduciary relations). 309 
 
 world (c), whicli could infer from these two separate relations the existence 
 of a like relation between the director and the shareholder or the third person. 
 A similarly illogical, but much more plausible, saltus has been attempted, 
 in the case of the relation of partnership. It is undoubted law, as has been 
 already stated (d), that partnership, being mutual agency, involves a fiduciary 
 duty on the part of each member of the firm to the others to make no secret 
 use of the partnership property to his own private advantage. From this 
 duty another has been sought to be inferred, viz. a duty on any partner who 
 is buying the share of another partner, and on that other partner who is 
 selling it, to communicate this fact, and the circumstances attending the 
 purchase, to the rest of the firm. It has been held, however, that this view 
 (ignoring, as it does, the question of the matters which are the proper subject 
 of, the purpose for which, and the persons by and in whom, the confidence 
 is reposed) is fundamentally unsound (e). 
 
 346. Further illustrations of relations which do not, as such, involve 
 any " confidence," or, therefore, any duty of disclosure, are the following. 
 A tenant for life at whose request a trustee is empowered to sell settled pro- 
 perty is in no fiduciary relation to that trustee (/) ; nor is a purchaser 
 of property in any such relation to the vendor merely because he has an 
 option to become the trustee of the property when purchased {g). A solicitor 
 or banker to a company, or to its promoters, is not, as such, a promoter, or 
 subject to any duty of disclosure to the company (h) ; and an insurance 
 broker employed to eSect an insurance for, and who, as such, is under a 
 fiduciary duty to, his principal, does not thereby bring himself into any 
 fiduciary relation with the insurer (i). 
 
 (c) The pseudo-syllogism was this. Theiuistocles's baby rules his mother : his mother 
 rules Themistocles : Themistocles rules Athens : Athens rules Greece : Greece rules the 
 world. Therefore, Themistocles' s baby rules the world. 
 
 (d) In § 335, note (p), and § 341, ante. 
 
 (e) Cassels v. Stewart (1881), 6 App. Gas. 64, H. L., where it is pointed out that the share 
 of an individual partner is his own property, and not that of the partnership : per Lord 
 Selbobne, L.C., at pp. 73, 74, Lord Penzance, at p. 77, and Lord Blackburn, at pp. 79, 
 80. The kind of purchase now under consideration, where it is a question of the duty 
 of the purchasing and the selling partner to the other partners, must not be confounded 
 with the totally different class of case which is the subject of § 142, ante, where it is a 
 question of the duty of disclosure of the purchasing and seUing partners to one another, 
 when one of them has exclusive or superior knowledge of the concerns and dealings of 
 the partnership. 
 
 (/) Dicconson v. Talbot (1870), 6 Ch. App. 32, per James, L.J., at p. 37 ■- "when a 
 power of sale is given to trustees, to be exercised at the request or .with the consent of 
 the tenant for Ufe, the trustees may sell to him as they might to any one else. . . . The 
 ground of the rule is, that the power of consenting to or requesting an exercise of the 
 power of sale is given to the tenant for life for his own benefit, and that he is not 
 in a fiduciary position as to it. He has, therefore, the same right to buy from the trustees 
 that any one else has." 
 
 (g) Clark v. Clark (1884), 9 App. Gas. 733, P. C, at p. 737 : " their Lordships cannot 
 agree that a sale is to be avoided, merely because when entered upon the purchaser may, 
 at his option, become the trustee of the property purchased, though in point of fact he 
 never does become such. A man so placed might possibly use his power in such a way 
 as to raise a case for setting aside the transaction. . . . But that is a different thing 
 altogether from the absolute disability attaching to one who would at the same time be 
 a vendor in trust for others and a purchaser on his own account." 
 
 (h) Be Great Wheal Polgooth Co. (1883), 53 L. J. (oh.) 42, per Bacon, V.-C, at pp. 46-48. 
 
 (i) Empress AssuranceCorporationY. Bowring (1905), 11 Comm. Gas. 107 (^ej- Kennedy, 
 
310 CH. IV, SECT. 2, SUB-S. (4). 
 
 347. A debtor can never, merely as such, be deemed a trustee for bis 
 creditor, or liable to any of tbe duties which are incumbent on a trustee 
 towards his cestui que trust (j), whether he be secured or unsecured. Desperate 
 endeavotirs have from time to time been made to fix a mortgagee with some 
 sort of fiduciary duty to the mortgagor, at all events in relation to his power 
 of sale, but none of such attempts has succeeded. That is to say, it has 
 never been held that a mortgagee, merely as such, stands in any other position 
 than that of a secured creditor, with the rights, and (in the case of a sale of 
 the property) subject to the duties, of such a creditor when dealing with his 
 debtor's property ia the manner contracted for, but not subject to any duty 
 arising from confidence. He is not "trusted " to a,ct for the debtor : he is 
 entitled to act against him. He certainly has in the first instance no 
 fiduciary duties to the mortgagor in virtue of the contract (k). Nor is he a 
 trustee of the power of sale, even if the mortgage is in the form of a trust 
 for sale (I). It is true that if he sells openly to himself, the sale is a nullity ; 
 but this is not because he is violating any fiduciary obligation in so doing, 
 but because a sale to himself is no exercise of the power at all (m), and, 
 further, is an absurdity and a farce, because no man can contract with him- 
 self (w). It is also true that, if and when paid ofE, without any sale being 
 
 J., at p. 112 : " I know of no case or legal authority which can be cited to shew that the 
 broker who is instructed to effect a marine insurance . . . becomes, for any part of the 
 business of effecting the insurance, the agent also of the underwriter ") ; Glasgow Assur- 
 ance Corporation v. William Symondson & Go. (1911), 104 L. T. 254 (per Scetjttgn, J., 
 at pp. 254, 258). 
 
 (j) Waters v. Groom (1844), 11 CI. & Fin. 684; Re Diamond Fuel Co. (1880), 
 13 C. D. 815 (per Malins, V.-C, at pp. 819, 820). Moreover, where a party to whom a 
 fiduciary duty is owed by another, by his own action converts that other's equitable lia- 
 bility into a debt, he loses his fiduciary rights, and substitutes for them those of a creditor 
 only. See Re Thomas, [1912] 2 Ch. 348, C. A., where, in an administration suit, a certain 
 firm who were the only creditors of the estate, and between whom and the executor there 
 undoubtedly existed a fiduciary relation in the first instance, chose to commence an action 
 by originating summons against the executor for personal payment of the debt certified 
 by the Master to be due to them, and obtained an order for such personal payment, and 
 it was held that they had thereby made themselves judgment creditors only, and had 
 entirely put an end to the pre-existing fiduciary relation, and disabled themselves from 
 relying upon the third exception in s. 4 of the Debtors Act, 1869, or from invoking the 
 punitive jurisdiction of the Comrt against the defendant as " a trustee or person acting in 
 a fiduciary capacity " (per Cozbns-Habdy, M.R., at pp. 353, 354, Pabwbll, L.J., at 
 p. 354, and Kennedy, L.J., at p. 355). 
 
 (k) Cholmonddey v. Clinton (1820), 2 J. & W. 1 (per PLtrMEE, M.R., at pp. 183, 
 184) ; Jones v. Matthie (1847), 11 Jur. 504 (per Lord Cottbnham, L.C, at p. 505) ; Knight 
 V. Marjoribanks (1849), 2 Macn. & G. 10 (per Lord Cottenttam, L.C., who at pp. 12, 
 13, says that it would be " monstrous " to hold that a mortgagee cannot purchase from 
 his mortgagor, which is equivalent to saying that he is not a trustee for him, since, if 
 he were, he could not do so except on compUanoe with the fiduciary duties attaching 
 to that position) ; Davey v. Durrant (1857), 1 De G. & J. 535 (per Tuknee, L. J., at p. 558) ; 
 Robertson v. Mcyrris (1859), 1 Giff. 421 (per Stuabt, V.-C, at pp. 424, 425) ; Adams v. 
 Scott (1859), 7 W. R. 213 (per Wood, V.-C, at p. 214) ; Farrar v. Farrars, Ltd., inf. (per 
 Lindley, L.J., at pp. 410, 411) ; Nutt v. Fasten, [1899] 1 Ch. 873, at pp. 877, 888. 
 
 (I) Kirkwood v. Thompson (1865), 2 H. & M. 392; Locking v. Parker (1872), 8 Ch. 
 App. 30 ; Re Alison (1879), 11 C. D. 284, C. A. ; Warner v. Jacob (1882), 20 C. D. 220 ; 
 Haddington Island Quarry Co. v. Huson, [1911] A. C. 722, P. C. 
 
 (m) Martinson v. Clowes (1885), 52 L. T. 706, C. A. ; Farrar v. Farrars, Ltd. (1880), 
 40 C. D. 395, C. A. (per Lindley, L.J., at p. 409). 
 
 (n) Henderson v. Astwood, [1894] A. C. 160, P. C, at p. 158 : " the so-called sale 
 was of course inoperative. A man cannot contract with himself. A man cannot sell 
 
§ 347 (nON- FIDUCIARY RELATIONS). 311 
 
 necessary, lie is from that moment, by implication, or, as Lord Westbuey 
 would say, " by metaphor," a trustee of the estate for the mortgagor (o), 
 or, if the power of sale is resorted to, and a sum is realized which is more 
 than enough to satisfy what is due to him, he is again, in the same sense, 
 a trustee for the mortgagor of the balance (p). But, unless and until either 
 of these events happens, he is " a mere indifierent stakeholder " (q), and is 
 not, in any proper sense of the word, a trustee for the mortgagor of the power 
 of sale, or of any other right given to him by the contract (r). Of course, 
 in relation to his contractual obligation he owes the same duty of good faith, 
 and in the same sense of the word, that every contractor owes to his con- 
 tractee (s). That is to say, he must not only exercise his power of sale and 
 other powers, in the manner, and at the time, and for the purposes expressed 
 in the contract, but he must also perform all obligations which, though not 
 expressed in the contract, tacite insunt. When a man, by agreement of any 
 kind, imdertakes a duty, or stipulates for a right, he impliedly engages to 
 perform that duty, and to exercise that right, where such exercise afiects 
 the interests of the other party, with absolute honesty, and with reasonable 
 care and skill. A mortgagee, therefore, in the exercise of his power to sell, 
 and in his conduct of the sale, not only must refrain from contravening the 
 express covenants of the mortgage deed, as by openly selling to himself, 
 which would simply be a nugatory proceeding, but he must not secretly sell 
 to an agent or trustee for, or to a person otherwise connected or interested with, 
 
 to himself either in his own person or in the person of another." The same fatuity was 
 noted by Stttaet, V.-C, in the case of a sale of trust property by a trustee to a person 
 declared on the face of the instrument to be his agent : see Franks v. Bollans (1867), 17 
 L. T. 309 (at pp. 311, 312). 
 
 (o) Oholmondeley v. Clinton, sup., per Pltjmer, M.R., at p. 184. 
 
 (p) Per James, L.J., at p. 40 of Locking v. Parker, sup. In the same purely artificial 
 sense, an ordinary vendor is, after the conclusion of the contract, described as a trustee 
 of the property for the purchaser, and the purchaser as a trustee of the purchase money 
 for the vendor. 
 
 (q) The expression of Plttmer, M.R., at p. 184 of Ckolmondeley v. Clinton, sup. 
 
 {r) At pp. 424, 425, ot Robertson v. Morris (1859), 1 Giff. 421, Stuart, V.-C, observes 
 that Lord Eldon had undoubtedly committed himself — he is referring to Downes v. 
 Grazebrook (1817), 3 Mer. 200 — to the expression "that the mortgagee is a trustee for 
 the benefit of the mortgagor in the exercise of the power." But, the Vice-Chancellor 
 adds, " that expression is to be understood in this sense, that the power being given 
 him to enable him to recover the mortgage money, this Court requires that he shall exercise 
 the power in a provident way with a due regard to the rights and interests of the mortgagor 
 in the surplus money to be produced by the sale." In other words, the contractor is 
 to exercise his contractual rights against the contraotee with due regard to the rights 
 which the contraotee reciprocally has against him under the same contract, which is 
 no more than may be said of any contract in the world. So Plumer, M.R., at p. 183 
 of Oholmondeley v. Clinton, sup. : " it is only in a secondary point of view and under 
 certain circumstances, and for a particular purpose, that the character of a trustee con- 
 structively belongs to a mortgagee. No trtist is expressed in the contract ; it is only raised 
 bi/ implication, in subordination to the main purpose of it, and after that is fully satisfied : 
 its primary character is not fiduciary." Again at p. 293 of Re Alison, sup., Jessel, M.R., 
 during the argument, observes with emphasis : " a mortgagee cannot be a trustee for the 
 mortgagor," that is, as such, and in the proper sense of the word, and " no duty is imposed 
 on him." 
 
 (s) This is laid down distinctly by Lord Heeschell, at p. 185, and Lord Macnaghten, 
 at p. 192, of Kennedy v. De Trafford, [1897] A. C. 180, H. L., who add that, in order to 
 deterntine whether this general obligation of good faith has been discharged, the entire 
 circumstances of the individual case must be regarded. 
 
312 
 
 CH. IV, SECT. 2, SUB-S. (4) ; SECT. 3. 
 
 himself ; for in such a case that which, if done openly, would be a mere nullity, 
 becomes at once a badge of mala fides : he puts himself, by thus masking his 
 identity, in the position of one who has a clandestine design to acquire the 
 property at an undervalue under pretence of effecting the sale to an ostensibly 
 independent person (t) . This is fraud, and collusion. And the use of the power 
 given to the mortgagee by the contract to perpetrate this, or any other species 
 of fraud (m), or for purposes of oppression (v), or, generally, for any evil 
 purpose of his own which is " foreign to that for which " the exercise of the 
 power " was intended " (w), will vitiate the sale (a;). Even the fact that 
 the property was sold at a gross undervalue may be prima facie evidence of, 
 not merely a negligent and " improvident " exercise of the power in total 
 disregard of the mortgagor's contractual rights and interests, but positive 
 fraud : that is to say, this fact alone may be such as to indicate conduct 
 not explicable on the theory of simple negligence, and pointing unmistakably 
 to the alternative hypothesis of moral obliquity (y). But it is for the mort- 
 gagor to establish facts of the above nature ; nothing short of them will 
 
 (t) Farrar v. Farrars, Ltd. (1880), 40 C. D. 395, C. A. {per Likdley, L.J., delivering 
 the judgment of the Court, at pp. 410, 411, 415) ; Nutt v. Easion, [1899] 1 Ch. 873 [per 
 Cozens-Habdy, J., at pp. 877, 878) ; Hodson v. Deans, [1903] 2 Ch. 647 {per Joyce, J., 
 at pp. 652, 653). But " such a transaction is not necessarily a fraud, or evidence of 
 fraud. The thing may be done with or without a dishonest intent. It may be a cloak 
 for fraud, or it may be a mere blunder " •- Henderson v. Astwood, [1894] A. C. 150, P. C. 
 at p. 158. 
 
 {u) Jones V. Mattkie (1847), 11 Jur. 504 {per Lord Cottenham, L.C, at p. 505 : " if 
 the power is exercised for fraudulent purposes, this Court will interfere ") ; Davey v. 
 Durrant (1857), 1 De G. & J. 535 {per Tubneb, L.J., at p. 558 : " fraud and collusion ") ; 
 Adams v. Scott (1859), 7 W. R. 213 {per Wood, V.-C, at p. 214 : " the plaintiff was bound 
 to have shewn that the power . . . had been exercised improperly, . . . that there had 
 been some fraud attending the sale "). 
 
 (v) Jones V. Matthie, sup., per Lord Cottbnham, L.C, at p. 505 : " such a power as 
 this may no doubt be used for the purposes of oppression, but, when conferred, it must 
 be remembered that it is so by a bargain, . . . and it is for the party who borrows to 
 consider whether he is not giving too large a power to him with whom he is dealing." 
 That is to say, the power itself raises no presumption of oppression, or of undue influence, 
 as Lord Redbndalb erroneously thought in a case which is criticized in § 448, note (r), 
 post. The facts indicating such an abuse of the power as to raise that presumption must 
 be independently estabhshed. 
 
 {w) EoberUon v. Morris (1858), 1 Giff, 421, per Sttjabt, V.-C, at pp. 424, 425 : " the 
 legitimate purpose being to secure repayment of his mortgage money, if he uses the power 
 for another purpose — from any ill motive to effect other purposes of his own, or to serve 
 the purposes of other individuals — the Court considers that to be a fraud in the exercise 
 of the power, because it is using the power for purposes foreign to that for which 
 it was intended." 
 
 (x) As was the case in Hodson v. Deans, sup., where the mortgagees, the trustees of 
 a certain society, sold the property to a person who was a member of the investment 
 committee of the society, and who had, through a nominee, instructed the auctioneer 
 to sell. These proceedings, by means of which the society was in effect secretly selling 
 to itself, were sufficient, in the opinion of Joyce, J., to estabhsh a prima facie case of collu- 
 sion between the trustees of the society and the member of its committee who purchased, 
 and to throw the burden on to their shoulders of sustaining the transaction, which they 
 totally failed to do. 
 
 (y) Davey v. Durrant (1857), 1 De G. & J. 535, per Tubneb, L.J., at p. 558 : " the 
 case made by the bill ... is this, that . . . the price was grossly inadequate, so much 
 so indeed as to amount to evidence of fraud. ... Of course he could not maintain a pur- 
 chase made at a fraudulent undervalue." In Haddington Island Quarry Co. v. Huson, 
 cited in the next note, undervalue was proved, but, not having been alleged to constitute 
 or indicate fraud, it was held quite unavaiUng as a ground for relief. 
 
§§ 347-349 (burden of proof). 313 
 
 suffice (z). It is not for the mortgagee to establisli his good faith, until 
 on the other side some proof has been ofiered of his bad faith : which is tanta- 
 mount to saying that a mortgagee is not, hy virtue of the relation itself, imder 
 any fiduciary duty to the mortgagor. 
 
 348. Two general observations should be made here. On the one handi 
 there may be cases where, though the fiduciary relation is proved, and also 
 the transaction which is sought to be set aside, the connection between the 
 relation and the transaction is not established, either because the relation 
 did not operate in hdc re, or because the dealing was with some property or 
 matter which was not the subject of the trust, agency, or other " confi- 
 dence " (o). On the other hand, a relation which is not proved to be fiduciary 
 may yet be such as to raise a presumption of " undue influence," which may 
 subject the party to duties and liabilities of another character, to be discussed 
 hereafter (6) ; and a transaction between parties not bound to one another 
 at the outset by any relation of " confidence " may be accompanied by such 
 acts and conduct as to give rise to independent and supervening duties of 
 disclosure, on the one side, and rights to it, on the other (c). 
 
 Sect. 3. The Bubden op Allegation and Proof on the Party 
 
 Complaining. 
 
 349. The cestui que trust, company, agent, or other party complaining 
 (like any other person who, coming to the Court for civil relief, is required to 
 state and make out his cause of action) must establish against the trustee, 
 promoter, principal, or other party charged, first, a duty of disclosure, and, 
 secondly, its breach, or rather, a state of things sufficient to call upon the 
 party charged to establish that the duty has been observed. For this purpose 
 he must allege, and, having alleged, prove, or be prepared to prove, both 
 (1) that a fiduciary relationship existed between himself and the party charged 
 at the material date, and (2) that the impeached transaction in fact took 
 place, or that the alleged undisclosed fact was a fact. Having established 
 so much, and no more, he is entitled to call upon the party charged " to 
 sustain the transaction," by means of some one or more of the affirmative 
 
 (2) The mortgagor failed to obtain relief, because he did not discharge this burden 
 in (amongst others) the following cases : Davey v. Durrani, sup. ; Warner v. Jacob (1882), 
 20 C. D. 220 (per Kay, L., at p. 224 : " no case of undervalue was made out . . . there 
 was no evidence of mala fides or collusion. The sale . . . could not be set aside, nor 
 was there any case for damages in respect of the sale ") ; Nutt v. JEaston, [1899] 1 Ch. 873 
 {per Cozbns-Hardy, J., who, at p. 878, points out that the mortgagor had not established 
 that the ostensible purchaser was a mere trustee for the mortgagee, or that any other 
 fraudulent device had been resorted to, or even that the price was inadequate. This 
 decision was affirmed, [1900] 1 Ch. 21, C. A., on the ground of delay, without considering 
 any other question at all) ; Haddington Island Quarry Co. v. Huson, [1911] A. C. 722, 
 P. C, where no fraud, or collusion, or bad faith of any sort, was alleged in the pleadings, 
 the mortgagors relying solely on the mere fact of undervalue. On appeal, they sought 
 to rely on this undervalue (of which they had given some evidence, not substantially 
 contradicted at the trial) as evidence of fraud, but were not allowed to do so at that stage. 
 
 (a) See §§ 361-365, post. 
 
 (b) In Ch. V, post. 
 
 (c) Cp. the classes of case referred to in Ch. Ill, Sect. 2, Sub-s. (8), ante, where a duty 
 of disclosure may be raised by supervening circumstances and conduct in the course 
 of negotiation for contracts which do not, per se, involve any such duty in the first instance. 
 
314 CH. IV, SECT. 3, SUB-S. (1). 
 
 defences available to him, as hereafter stated (d). It is proposed to discuss 
 these alleganda et probanda in the order above given. 
 
 Suh-s. (1). The Existence of the Relation. 
 
 350. The party complaining must allege, and prove, at the outset that 
 a relation of " confidence " existed between himself and the party charged 
 at the date of the transaction sought to be set aside. That is to say, 
 he must prove, as facts (e), the contract or instrument whereby the relation 
 is alleged to have been declared, or defined, or the circumstances from 
 which it is said to be implied, and must further establish, if controverted, 
 that, in law (/), the relation is constituted by the contract, instrument, or 
 circumstances proved or admitted (as the case may be). 
 
 351. Thus, where the relation alleged is one of trusteeship, the cestui que 
 trust must, if challenged (which, however, is rarely the case), prove, as a fact, 
 the trust deed, wiU, or other instrument in which the party charged is declared 
 or appointed a trustee for himself, or a class which includes himself ; or, if 
 the trusteeship is alleged to result, or to be implied, from circumstances, he 
 must prove those circumstances (g). A question of law may then arise, as to 
 the character and extent of the trusteeship created by the proved or admitted 
 instrument, or as to whether a trusteeship in any sense (strict or metaphorical) 
 is constituted by the proved or admitted circumstances, in which event it is 
 for the cestui que trust to establish, as matter of law, that this question ought 
 to be answered in the affirmative {h). And, further, in case of dispute 
 he must show that the trustee entered into the transaction impeached for 
 his own private benefit, and in his character of trustee, and in relation to 
 some property or matter which was the subject of the trust («'). 
 
 352. Similarly, in cases of promotership, the company must prove, as 
 an issue of fact (j), if it is disputed, all such acts and proceedings as are alleged 
 to constitute the party charged a promoter (k), or the contract or other 
 
 (d) See Sect. 4, post. 
 
 (e) See § 389, post, 
 if) Ibid. 
 
 (?) Thus in Mulvany v. Dillon (1810), 1 Ball & B. 409 ; 12 R. R. 43, Lord Manners, 
 L.C. (Ir.), stated the question before him to be " whether Sir WiUiam Dillon has so far 
 interfered with the management of the assets as to charge him with a fiduciary character, 
 and to preclude him from taking a benefit to himself in the trust property " (p. 417). 
 He thereupon proceeds to treat this question of fact as one which it was for the party 
 complaining to prove, and, in the result, finds that it had been so proved : " he princi- 
 pally interfered in the management of this part of the property, and made himself a sort 
 of agent to the executors, and indeed acted as an executor " and, " by managing the 
 testator's estate in the manner he has done, has so far acted as to have disabled 
 himself . . . from retaining his purchase " (pp. 417, 418). Cp., generally, the cases 
 cited in the notes to Sect. 2, Sub-s. (1), ante, from an examination of which it wiU be seen 
 that, in scarcely any of them, except the above, was there any question as to the existence 
 of the instrument or facts alleged to constitute the relation. 
 
 (h) See the cases cited in notes ( / ), and (g), to § 346, anle, and in the notes to § 347, 
 ante. The propositions of law arising in all these cases were treated as propositions for 
 the alleged cestui que trust to estabUsh, and, on his faiUng to do so, he failed altogether. 
 
 (i) See § 344, notes (w), and (x), ante. 
 
 (j) Promotership is ordinarily a question of fact : see § 389, note {y), post. 
 
 (k) The company must shew that the party charged was engaged in all those " business 
 operations familiar to the commercial world by which a company is generally brought 
 
§§ 349-352 (bukden of proof). 315 
 
 document in whicli he is declared or expressed to be so (l) ; and, in tte rare 
 
 cases in whicli, the facts being agreed, the question becomes one of law, he 
 
 must be prepared to satisfy the Court that promotership is a proper inference 
 
 of law from those facts (m). Further, it must be made clear that the party 
 
 charged was at the precise material date the promoter of the particular 
 
 company seeking relief; and it is not enough to prove that he had been 
 
 previously, or that he afterwards became, a promoter, though such proof 
 
 may (or may not) be sufficient to establish the company's title to some 
 
 other form of remedy (w). And, in this connection, it should be remembered 
 
 that a man does not necessarily, or even usually, cease to be a promoter after 
 
 formal incorporation of the company (o). 
 
 into existence," which is the definition given by Bowen, J., of promotership at p. Ill 
 of Whcdey Bridge Calico Printing Co. v. Green (1879), 5 Q. B. D. 109. It is rarely disputed 
 in modern times that the alleged promoter was in fact a promoter, because he has generally 
 declared himself to be so in the prospectus or in the contracts of sale, or otherwise ; in 
 addition to which, a long series of decisions has shewn the people engaged in this class 
 of business the futility of contesting the point in the vast majority of case« : but in the 
 early history of the Companies Acts, before the frame of mind in which judges and juries 
 approach the subject had become fixed, and had assumed its present critical severity, 
 the issue was frequently and fiercely debated. The burden of proving it was always 
 held to be on the party complaining. The following are cases in which such acts and 
 conduct and " operations " on the part of the party charged were proved as were considered 
 by the tribunal to be sufficient to constitute the fact of promotership ; Nant-y-Qlo and 
 Blaina Ironworks Co. v. Grave (1878), 12 C. D. 738 (per Bacon, V.-C, at p. 744) ; Emma 
 Silver Mining Co. v. Grant (1879), 11 C. D. 919 (per Jessel, M.R., at p. 936) ; Gluckstein v. 
 Barnes, [1900] A. C. 240, H. L. (per Lord Robebtson, at p. 256) ; Be Leeds and Hanle^J 
 Theatre of Varieties, Ltd., [1902] 2 Ch. 809, C. A. (per Vatjghan Williams, L.,J., at p. 823) ; 
 Re Darby, Ex p. Broug'ham,[lQ\V\l'K.. B. 95 (fier Phillimoke, J., at pp. 101-103). Cp. the 
 oases in which promotership was proved by a shareholder suing under the statutory 
 provisions as to propectuses, such as Twyeross v. Grant (1877), 2 C. P. D. 469, C. A. (per 
 CocKBUKN, C. J., at p. 541) ; Glasier v. BoUs (1889), 42 C. D. 436, C. A. (per Kekewioh, J., 
 at p. 443). For a case in which the company failed to prove that the party charged 
 was a promoter at any time, see Re Great Wheal Polgooih Co. (1883), 53 L. J. (ch.) 42 
 (per Bacon, V.-C, at pp. 47-50). As to the cases in which the burden of proving that 
 the party charged was a promoter at the material date was insisted on, see note (»), inf. 
 (I) Which is now not infrequently the case : see the last note. 
 
 (m) There appears to be no illustration of such a case, for the simple reason that, 
 when the party charged is prepared to admit the " operations," he is not often inclined 
 to controvert their legal complexion. 
 
 (n) Thus, in Erlanger v. New Sombrero Phosphate Co. (1878), 3 App. Cas. 1218, H. L., 
 so much of the company's claim as prayed an account of the profits made by the appellant 
 on the resale of the island to the company was rejected, because the company had not 
 sustained the burden which was upon them of shewing that, at the time when he purchased 
 the property, he was intending to promote, or had in contemplation, the company suing, 
 though he undoubtedly contemplated a company to be formed as the future purchaser 
 (per Lord Cairns, L.C, at p. 1235, Lord Blackburn, at pp. 1267, 1268, and Lord Goedon, 
 at pp. 1283, 1284). Afterwards, however, the appellant did promote the company suing, and 
 from that moment his fiduciary duties commenced, for breach of which he was held liable 
 to the appropriate rehef, which was rescission : but the first-named head of relief which was 
 alternatively claimed could only be given by erroneously antedating the period of his 
 promotership. The same result, on the same ground, attended the company's claim 
 to an account of profits in LadyweU Mining Co. v. Brookes (1887), 35 C. D. 400, C. A, 
 (Cotton, L.J., observing, at p. 423, that the onus was on the company of proving facts 
 sufficient to enable them to say with truth to the promoter — " when you bought this 
 mine, you were acting for us : this purchase, although made by you, is one that must 
 be considered as having been made by you for the company which was afterwards formed 
 at your invitation ") ; also in Re Lady Forrest (Murchison) Gold Mine, Ltd., [1901] 1 Ch. 
 582 (per Wright, J., at pp. 588, 589) ; and in Burland v. Earle, [1902] A. C. 83, P. C. 
 (at pp. 98, 99). 
 
 (o) See Twyeross v. Grant (1877), 2 C. P. D. 469, C. A. (per Cookbdkn, C. J., at p. 541) ; 
 
316 CH. IV, SECT. 3, SUB-S. (1). 
 
 353. Lastly, and similarly, in cases of agency and partnership, it is incum- 
 bent on tlie principal or firm complaining of the agent's or partner's fiduciary 
 delinquency to establish the fact of the agency or partnership, either by proof 
 of a deed or contract constituting it, or by evidence of the circumstances 
 from which it is alleged to be implied (p). It is enough, however, to prove 
 that for the purposes of the particular transaction in question the party 
 charged was acting as agent for the party complaining, notwithstanding that 
 such agent may not have been his general agent for matters of the class 
 to which that transaction belongs (q). Next, the party complaining must 
 show an agency or partnership of the precise character and type alleged, 
 where such a question becomes material, and that its duties and functions 
 (whether customary, or expressly agreed) are such that the transaction 
 complained of must fall within them, and thus become material to be dis- 
 closed (r). Further, the agency must be shown to have existed at the time of, 
 and not to have commenced after (s), or to have terminated before (t), the trans- 
 
 Emma Silver Mining Co. v. Lems (1879), 4 C. P. D. 396 {per Lindley, J., at p. 407) ; 
 Lydney and Wigpool Iron Ore Co. v. Bird (1886), 33 C. D. 85, C. A. {per Lindley, L. J., 
 at pp. 93, 94) ; Ladywell Mining Co. v. Brookes, sup. (per Lindley, L.J., at p. 514, and 
 Lopes, L.J., at p. 515) ; Bden v. Ridsdale's Railway Lamp and Lighting Co. (1889), 23 
 Q. B. D. 368, C. A. (per Lindley, and Lopes, LL.JJ., at p. 372, as to the receipt by 
 directors of a bribe from the promoter, after the incorporation of the company, but before 
 the contract between it and the promoter, on which their unbiassed advice was required, 
 had been completed). 
 
 (p) In Morgan v. Elford (1876), 4 C. D. 352, C. A., the plaintiff wholly failed to prove the 
 alleged agency, or any fiduciary relationship whatsoever between himself and the defendant, 
 and on that ground judgment was given against him (per James, L. J., at pp. 384, 385). 
 In Oelkers v. Ellis, [1914] 2 K. B. 139, the plaintiff failed to prove, as to one of the 
 several transactions there in question, that the defendant had acted as his agent (p. 140). 
 
 (q) See McPherson v. Watt (1877), 3 App. Gas. 254, H. L., where the party complaining 
 failed to establish by evidence that the party charged was either his general agent, or his 
 law agent in trust matters, and, so far as his case depended on sustaining that allegation, 
 it would have failed (per Lord Cairns, L.C, at pp. 258, 259, Lord O'Hagan, at p. 267, 
 and Lord BLAOKBtruN, at p. 277) : but he nevertheless succeeded on proof that in the 
 particular transaction complained of the defendant did act, and was trusted in so acting, 
 as his agent and adviser (per Lord Cairns, L.C, at pp. 362, 363). 
 
 (r) Thus, in Garter v. Palmer (1842), 8 CI. & Fin. 657, the onus was on the principal 
 to shew that the agent acted not merely as his counsel, as was contended on the other 
 side, but also, and principally, as his agent in the management of his affairs. This onus 
 he discharged: "the evidence proves," said Lord Cottenham, L.C. (p. 703), "that the 
 employment was of a very different character," and (p. 705), "/row the evidence it is 
 clear that the appellant is not to be considered as having acted merely as counsel for the 
 respondent, but that he was so far his agent as to be affected with all the disabiHties which 
 attach to that character. Seealso Williamson v. HineBros., [1891] 1 Ch. 390, whereKEKE- 
 wicH, J., directed an inquiry as to the duties and functions attaching to the particular 
 type of agency there alleged, thinking it necessary for the party complaining to give 
 evidence as to this issue, and, on the certificate of the chief clerk that the duties of the 
 agency were of the character alleged, gave judgment for him (p. 394). 
 
 (s) In Be Forest of Dean Coal Mining Co. (1878), 10 C. D. 450, the transaction com- 
 plained of took place long before the party charged became a director of the company, 
 and the liquidator's summons accordingly failed (per Jessel, M.R., at pp. 456, 457). 
 The same result, and for the same reason (amongst others), attended the liquidator's 
 misfeasance summons in Bentinck v. Fenn (1887), 12 App. Cas. 562, H. L. (per Lord 
 Herschell, at p. 658, after stating that the burden was on the principal to prove the agency 
 at the time of the transaction in question : " here it is beyond question that, at the time 
 when the purchase was made, Mr. Fenn and his co-adventurers were none of them in any 
 sort of fiduciary relation to the company, the existence of which at that time was not 
 even contemplated "). 
 
 (t) See Erskine, Oxenford & Co. v. Sachs, [1901] 2 K. B. 504, C. A., where it was made 
 
§ 353 (bueden of proof). 317 
 
 action impeaclied. was entered into ; or at least that the confidence was 
 operative, though the agency may not have been literally or formally in 
 existence, at the material date : for so long as the reasons upon which the 
 fiduciary obligation is founded endure, the obligation continues, though the 
 relation itself may be at an end (u). If, for instance, the principal is claiming 
 relief against the agent in respect of a bribe, it is enough to establish the receipt 
 of the money during the agency, though the corrupt agreement pursuant to 
 which it was so received may have been made previously thereto, or (con- 
 versely) that the illicit commission or rebate became payable by reason of 
 something done by the agent during his agency, though the actual payment 
 was made after its termination : and, generally, it is enough to prove that the 
 act complained of, though done before or after the period of the actual sub- 
 sistence of the relation, was so interwoven with some act done within that period 
 as to form with it one entire transaction (v). Subject to these observations, the 
 onus is undoubtedly on the party complaining to establish not only the fact 
 of the agency, and (where this is put in issue) its character and extent, but 
 also, if challenged on this head, that the transaction impeached was entered 
 into, or the knowledge alleged to have been withheld was acquired, by the 
 agent " in the course and execution of his agency " (w), and by reason thereof. 
 When this onus is not sustained, the party complaining fails at the threshold(ci;). 
 
 quite clear that it was for the client to prove that his "brokers, when effecting the stock 
 exchange transaction complained of on closing his account, were still his agents. This 
 onus was sustained : see note (v), inf. 
 
 (tt) Carter v. Palmer, sitp., per Lord Cottenham.L.C, atp. 705 : " it is alsoproved that 
 he didnotactuallyact as counsel, or agent.for the respondentafterAugust,1831, but . . . if 
 his previous employment disqualified him from becoming the purchaser for his own benefit 
 of those charges upon his employer's estates, such disquahfication must continue so lon(f 
 as the reasons upon which it is founded continue to operate." He then(pp. 705-707) proceeds 
 to examine into the nature of these reasons (the special and exclusive information ac- 
 quired, etc.). 
 
 [v) Thus, in Be Morvah Consols Tin Mining Co., McKay s Case (1875), 2 C. D. 1, C. A., 
 it was held sufficient for the liquidator to prove that the director received the bribe from 
 the promoter during his directorate, though the arrangement pursuant to whi^-h he 
 received it was made before he became a director. So also, in Erskine, Oxenfori & Co. v> 
 Sachs, sup., the client succeeded, because he was able to show that the brokers, in closing 
 his account, and thereby terminating the agency, repurchased the very shares which they 
 had sold for him when the agency existed, and from the same jobber, and as part of the 
 same transaction, and it was only in virtue of the previous sale during the agency that they 
 were entitled by the custom of the Stock Exchange to the rebate in the price in respect 
 of which the plaintiff claimed relief {per A. L. Smith, M.R., at pp. 511, 512, Vatjghan 
 Williams, L.J., at pp. 512, 513, and Stirling, L.J., at pp. 516-518). It was recognized 
 by Jbssbl, M.R., at p. 457 of Be Forest of Dean Coal Mining Co. (1878), 10 C. D. 450, that 
 in any case where the two transactions, that before, and that during, the agency are so 
 connected as to form part of one entire scheme or " juggle," the whole will be deemed 
 to have taken place in the course and execution of the agency, though the first of them 
 was prior to its commencement. 
 
 (w) Per Lord Caikns, L.C, at p. 118 of Parker v. McKenna (1874), 10 Ch. App. 96. 
 (" aU that the Court can do is to examine whether a profit has been made by an agent, 
 without the knowledge of the principal, in the course and execution of his agency "). 
 
 (x) As in Austin v. Chambers (1837), 6 CI. & Fin. 1 (where the party charged, though 
 the attorney of the party complaining, was not proved to have acted in that character for 
 the purposes of the transaction impeached, or in any other capacity than that of judgment 
 creditor) ; Cfreat Western Insuram:e Co. v. Cunliffe (1874), 9 Ch. App. 526 (where the plain- 
 tiffs in proving no more than that their agents to effect reinsurances had received a 
 customary commission from underwriters, not on any particular transaction, but on the 
 
318 CH. IV, SECT. 3, SUB-SS. (2), (3). 
 
 Subs. (2). The Existence or Occurrence of the Undisclosed Fact or Transaction. 
 
 354. The next step in tte proof necessary to make out a title to relief is 
 to establish, by evidence the existence of the fact, or the happening of the 
 event, the concealment of which is complained of. Obviously, it is of no 
 more use to prove the trusteeship, promotership, agency, or partnership, 
 without also proving the existence or occurrence of the fact or transaction 
 which, in virtue of such relation, the party charged was bound to disclose, 
 than it is to prove the fact or transaction, without also proving the fiduciary 
 relation. In the majority of cases, the party complaining is relieved of the 
 burden of establishing this particular issue by the express or implied admission 
 of the party charged. But this is by no means always so : and in every 
 case, until so relieved, the party complaining must be prepared to sustain 
 the onus. 
 
 355. There are, as has been explained {y), two main classes of case in 
 which the withholding of knowledge from the cestui que trust, company, or 
 principal, constitutes a violation of fiduciary duty, — the one, where the 
 related parties are dealing directly with one another : the other, where the 
 trustee, promoter, or agent is dealing with third persons in the course and 
 execution of his trusteeship, promotership, or agency. In the former type 
 of case, relief is granted, whenever there has been either, if the dealing was 
 clandestine, non-disclosure by the trustee, promoter, or agent of the fact that he 
 was the real purchaser or dealer in the matter, and that the ostensible dealer 
 was merely the person under cover of whom he masked his identity, or, if the 
 dealing was open, non-disclosure by him of any material fact as to the value 
 of the property, or as to his previous transactions with reference to it, and the 
 profit he was making on the re-sale, and the like : accordingly, it is for the party 
 complaining to allege, and, having alleged, to establish by evidence, if secret 
 dealing is alleged, that the party charged did in fact so deal, and that the osten- 
 sible dealer was in fact his mere nominee or agent for that purpose, in virtue 
 of a corrupt pre-arrangement {z) ; or, if the dealing is acknowledged to have 
 been open, that the alleged undisclosed circumstance, transaction, or occurrence 
 
 net annual profits made by the underwriter out of all business introduced by the agents 
 during the year, were held to have failed in proving that the transaction complained of 
 occurred in the course and execution of the agency : per Jambs, L.J., at pp. 535-537). 
 
 (y) In Sect. 2, ante. 
 
 (z) Delves v. Delves (1875), L. B. 20 Eq. 77, a case in which the cestui que trust failed to 
 prove that the trustee for sale had made any bid at the auction, or taken any part in the 
 purchase. Be Posdethwaite (188S), 60 L. T. 514, C. A., was a case in which the beneficiaries 
 under a will failed to establish (though the circumstances were a little suspicious) that one 
 of the executors and trustees of the will, who had purchased part of the estate at a slight 
 advance of price from the purchaser at the auction, was the real purchaser by arrangement 
 with the first purchaser {per Cotton, L. J., at pp. 616-519, Lindley, L. J., at pp. 519, 520, 
 and BowBN, L. J., at p. 520). In Re Oallard, [1897] 2 Q. B. 8, the creditor of a bankrupt 
 was unable to show that the ostensible purchaser of part of the estate was purchasing on 
 behalf of a member of the committee of inspection who was alleged to have been the real 
 purchaser, notwithstanding that these two persons were partners in a firm of sohcitors 
 {per Vauqhan Williams, J., at pp. 12, 13). Accordingly in all these cases, the party 
 complaining was refused rehef, except in the last, where he was held entitled to damages 
 on a different ground altogether, viz. actual fraud. 
 
§§ 354-356 (burden of proof). 319 
 
 in fact existed or happened (a). In the latter type of case, it must be proved 
 by the party complaiaing, if it is not admitted, that the alleged secret bribe 
 was in fact received, or that the alleged profits were in fact made (&), or that 
 the trustee, promoter, or agent in fact entered into the exact transaction, or 
 class of transaction, the secrecy of which is alleged as the foundation of the pro- 
 ceedings instituted (c) ; for it is obviously idle to complain of a party having 
 concealed an alleged fact which never was a fact, or an alleged act of his 
 own which he never committed. 
 
 Subs. (3). Matters which it is not incumbent on the Party Complaining to 
 
 allege or prove. 
 
 356. There are no matters which the party complaining is required to 
 allege or prove in the first instance beyond those stated. There are certain 
 matters which, though he is not so required, he may yet find it necessary or 
 desirable, to substantiate at a later stage of the proceedings, if and when a 
 prima facie affirmative case has been made against him of full disclosure or 
 otherwise, and accordingly the onus is shifted back on to his shoulders of 
 suggesting some particular material circumstance which the party charged 
 has failed to communicate. But, unless and until such a case is made, he 
 
 (a) In all the oases, cited in the notes to §§ 323, 338, ante, of concealment of a 
 report, valuation, or other fact relating to the value of the property, the existence of the 
 fact appears to have been admitted. But, if denied, it is manifest that the party com- 
 plaining would be called upon to prove it. To take a simple illusti'ation from the hypo- 
 thetical case of a concealed mine which is put by Lord Eldon, L.C, at p. 626a of Ex p. 
 Lacey (1802), 6 Ves. 625 ("suppose a trustee buys an estate; and by the knowledge 
 acquired in that character discovers a valuable coal mine under it, and, locking that up 
 in his own breast, enters into a contract with the cestui que trust"), — if in such a case 
 the trustee does not admit that there ia or ever was in facta mine for him to "lock 
 up in his own breast," and the cestui- que trust adduces no evidence of the existence of such 
 a mine, or of its having any value, it is obvious that he would make out no title to relief. 
 Again, in the oases where an agent is said to have made secret profits on the resale of the 
 property to his principal, the burden would clearly be on the principal of establishing, if 
 the allegation be denied, that the agent did in fact acquire the property by purchase before 
 seUing it to the principal, and acquired it at a less price than that at which he sold. 
 
 (6) In the following cases, the party complaining failed to obtain relief because he did 
 not sustain the burden on him of showing that the party charged had in fact received, or 
 contracted to receive, any profit, as alleged : Me Ambrose Lake Tin & Copper Mining Co, 
 (1880), 14 C. D. 390, C. A. (per James, L.J., at p. 395, Brett, L.J., at pp. 396, 397, and 
 Cotton, L.J., at pp. 398, 399) ; Bentinck v. Venn (1887), 12 App. Cas. 652, H. L. (where the 
 contributory's misfeasance proceedings failed because, the alleged dehnquent being the 
 a^ent of the company to purchase in the market, it was never shown that the market value 
 was less than the price paid by the company : per Lord Hekschbll, at pp. 659, 660) ; 
 Bath V. Standard Land Co., [1911] 1 Ch. 618, C. A. (where the plaintiff could not prove that 
 the defendant company had received the alleged secret profits, but only that certain of the 
 directors had received them for their own individual benefit ; per Cozens-Haedy, M.R., 
 at p. 625 : " it " — the company — " cannot be charged with profits which in fact the com- 
 pany did not receive, and which were received by the directors ") ; Omnium Electric 
 Palaces, Ltd. v. Baines, [1914] 1 Ch. 332, C. A. 
 
 (c) When once the relation is proved, and a transaction during the period of the 
 subsistence of the relation, the burden is then on the party charged to allege, if he is 
 minded to do so, and, having alleged, to prove that the relation was not operative upon 
 the transaction, i.e. that some character other than, and in addition to, that which would 
 be inferred from such relation, and one not involving any fiduciary duty, belonged to 
 him at the time, and that he entered into the transaction solely in that character : see 
 Sect. 4, Sub-s. (1), post. 
 
320 CH. IV, SECT. 3, SUB-S. (3). 
 
 need allege and prove no more ttan the relation, and the transaction, and 
 he is thereupon entitled to call upon his opponent to justify the transaction, 
 and demonstrate its propriety by some one or more of the means available 
 to him (d). To take a simple illustration : A. alleges and proves that B. 
 was his agent, and dujing his agency received a sum of money from C. with 
 whom A. had entered into a contract which B. had negotiated for him. This 
 alone entitles A. to judgment, if B. ofEers no evidence. It is not for A. to 
 establish, in the first instance, that B. did not disclose the fact to him, or 
 that it was material to be disclosed : it is for B. to show full and precise 
 disclosure, or that the present was so trifling as to be immaterial, or that it 
 was made pursuant to a custom of trade of which A. knew, or must be pre- 
 sumed to have known, or that it had been waived, or confirmed, by A. It 
 may then be necessary for A. to go into evidence as to the want of completeness 
 or candour in the disclosure, or as to the real importance of the bribe however 
 trivial it may on the first blush appear to be, or as to his actual or presumptive 
 ignorance of the custom, or its dishonesty, or as to circumstances attending 
 the supposed waiver or confirmation which go to show that he was not told 
 the whole truth of the matter at the time when he is alleged to have so waived 
 and affirmed. Or A. may be a cestui que trust who alleges and proves that 
 B., whilst his trustee, purchased from him part of the trust estate. It is 
 then for B. to " sustain the transaction." A. need establish no more than 
 the above at the outset (e), but, if B. makes out a frimd facie case of full 
 disclosure of all material facts known to him, and honest advice either by 
 himself or an independent third person, it may then be incumbent on A. 
 to allege and prove some particular fact, not adverted to in B.'s general 
 evidence, which was concealed (a report or valuation, for instance, or the 
 existence of a mine under the property, or the mark of a celebrated artist 
 on a picture), or to point to some particular in which the advice was dis- 
 honest, or some reason for supposing that the third person was interested or 
 biassed. But, unlike the party complaining of non-disclosure in negotiation 
 for a contract uberrimcB fidei {/), the party complaining of non-disclosure 
 in the course of a fiduciary relation need not, in the first instance, allege 
 the withholding of any specific fact, known to the party charged, and 
 material to be communicated {g). 
 
 {d) Described in Sect. 4, post. 
 
 (e) See Dougan v. Macpherson, [1902] A. C. 197, H. L., which was a case of trustee and 
 cestui que trust, per Lord Halsbtjhy, L.C, who, at p. 202, lays down the clear duty of the 
 trustee " to show that he has given full information — that he has kept back nothing . . . ; 
 and when I say that, it is not for those impeaching the transaction to prove negatively : 
 it is for the trustee to prove affirmatively that the information was given." 
 
 (/) See Ch. Ill, Sect. 3, Sub-ss. (3), (4), and (5), where it is pointed out that, in that 
 class of case, the party complaining must give some evidence, however shght, of the non- 
 disclosure, the knowledge of the undisclosed fact possessed by the party charged, and the 
 ignorance of the party complaining. 
 
 (g) The reason for the difference in the rules governing the two types of case is pre- 
 sumably that, in the former, there is nothing wrongful in negotiating for the contract with 
 exclusive knowledge of a material fact, and the proceeding only becomes wrongful when 
 non-disolosure is shown ; whereas, in the latter, the law regards the transaction as wrong- 
 ful in itself, unless and until it is justified by evidence of its propriety. 
 
§§ 356-358 (burden of proof). 321 
 
 357. In addition to, and distinguishable from, the above is a class of 
 matters as to which not only does no onus rest at the outset on the party 
 complaining, but no onus rests on him at all, or at any stage of the proceedings, 
 because the matters in question are wholly irrevelant, and it is, therefore, 
 as idle for the one party to assert, as it is for the other to contradict, 
 their existence. The first species of this class has reference to the motive, 
 purpose, or intention by which the party charged was actuated : the 
 second, to the material results, actual or anticipated, of the impeached 
 transaction. 
 
 358. It has long since been established, in the present, as in the two 
 other classes of case giving rise to a duty of disclosure (h), — though, for 
 reasons given in another place (i), it has been found necessary to reiterate 
 the statement for more than a century past with the regularity of a recurring 
 decimal, — that it is wholly unnecessary, except for the purpose of defeating 
 by anticipation some statutory or non-statutory affirmative plea which can 
 only be displaced by proof of fraud (m), to allege that the breach of equit- 
 able duty complained of was animated or accompanied by actual and 
 personal dishonesty, and wholly useless for the party charged to prove that 
 his motives were honourable, that he intended no wrong or injury to the 
 party complaining, and that he acted throughout in perfect good faith. 
 The Court declines to enter into any such question. For the good of the 
 community, it has established a general rule that non-disclosure shall entitle 
 the party to whom the duty is owed to relief, and it will not go behind the 
 fact, or investigate the state of mind and conscience which produced the 
 violation of the rule, but wUl lend its assistance to the party invoking it, 
 on proof of such non-disclosure or breach of duty, though no fraud or moral 
 obliquity of any kind be imputed to, or proved against, the party held liable, 
 or even though, in the declared opinion of the tribunal, there has been positive 
 demonstration of the complete candour and bona fides of such party's con- 
 duct throughout (j) ; or the case was obviously one of honest inadvertence 
 
 (h) See § 197, note (h), ante, and § 461, post. 
 
 (i) In App. A, §§ 629-631, post. 
 
 (ii) As, for instance, a plea that the contract has been completed by conveyance, or 
 that disclosure has been waived; or a statutory plea, such as the Limitation Act, 1623 
 (21 Jac. 1, c. 16), on which, see Oelkers v. Ellis, [1914] 2 K. B. 139, and the cases there 
 reviewed. It was held that the above statute, which equity " applies by analogy," was a 
 bar to a case of mere non-disclosure, but as regards any case which could also be put as a 
 case of implied fraudulent misrepresentation, the period of limitation only commences 
 on discovery of the truth (per Hobeidqe, J., at pp. 147-151). 
 
 (j) Exp. James (1803), 8 Ves. 337 (per Lord Eldon, L.C, at p. 345 : "the purchase 
 is not permitted in any case, however honest the circumstances : the general interests 
 of justice requiring it to be destroyed in every instance ") ; Exp. Bennett (1805), 10 Ves. 
 381 (per Lord Eldon, L.C, at pp. 385, 386) ; Gooh v. Colli-ngridge (1823), Jac. 607 ; 23 R. R. 
 155 (per Lord Eldon, L.C, at p. 169 : " I should be sorry to be understood to impute any 
 wrong motive to any one, for / believe they all meant well ") ; Rothschild v. Brookman (1831), 
 5 Bligh (n.s.) 165 (per Lord Wynford, L.C, at p. 619 : " I do not mean to say that Mr. 
 Rothschild gave him that advice with any dishonest view whatever ; I have no doubt he 
 acted fairly and properly : . . . God forbid that I should say that these gentlemen, or any 
 of them, have taken advantage of the confidence that was reposed in them. . . . But the 
 law which your lordships have to administer is a law of jealousy ; it will not allow any man 
 to be trusted with power that will give him an opportunity of taking advantage of his 
 
 B.N.D. Y 
 
322 
 
 CH. IV, SECT. 3, SUB-S. (3). 
 
 or mistake, or ignorance of, and inattention to, the equitable doctrine (k), — 
 a doctrine which, it seems to have been judicially conceded from time to 
 time, may appear to the laity artificial, rigid, and somewhat " too good for 
 human nature's daily food"(Q. On the other hand, acts and conduct 
 showing a consciousness of the duty, and an attempt to evade it by disguising 
 the nature of the transaction, wiU operate against the party charged in case 
 
 employer") ; OillettTr. Peppercorne{l84:0),3'Be&y. 78(yerLordLANGliAi,E,M.R., atp. 84); 
 Hamilton v. Wright (1842), 9 CI. & Fin. Ill {per Lord Bbouqham, at p. 124 : " the conduct 
 of the trustee not being blamable in the purchase is nothing to the purpose, for the Comi; 
 must act upon the general principle ; ... it wiU be impossible for the Court to see in what 
 cases the transaction is morally unjust, and in what cases it is not ") ; Bentley v. Craven 
 (1853), 18 Beav. 75 (per RoMHiY, M.R., at p. 76) ; Imperial Mercantile Credit Association 
 V. Coleman (1873), L. R. 6 H. L. 189 (per Lord Caiens, L.C, at pp. 209, 210) ; Parker v. 
 McKenna (1874), 10 Ch. App. 96 (per Lard Cairns, L.C, at pp. 119, 120) ; McPherson 
 Y. Watt (1877), 3 App. Cas. 254, H. L. (per Lord O'Haoan, at p. 269) ; De Bussche v. Alt 
 (1878), 8 C. D. 286, C. A. (per Cur., at p. 317) ; Erlanger v. New Sombrero Phosphate Co. 
 (1878), 3 App. Cas. 1218, H. L. (per Lord O'Haoan, at pp. 1256, 1257 : not necessary to 
 show " evil purpose or conscious fraud," or " intention to do injustice," or " indirect and 
 improper motives ") ; Re Carriage Co-operative Supply Association (1884), 27 C. D. 322 
 (per Pbabsoit, J., at pp. 329, 331, in a case where the director's conduct was expressly 
 found to have been absolutely beyond reproach from first to last in its moral aspect) ; 
 Plowright v. Lambert (1885), 52 L. T. 646 (per Rceld, J., at p. 652) ; Sden v. Ridsdale's 
 Railway Lamp & lighting Co. (1889), 23 Q. B. D. 368, C. A. (per Lord Eshek, M.R., at pp. 
 370, 371, and Ltodley and Lopes, LL.JJ., at p. 372) ; Bray v. Ford, [1896] A. C. 44, 
 H. L. (per Lord Herscheh, at p. 51); Re Sale Hotel <fc Botanical Gardens, Ltd., Exp. 
 Hesheth (1898), 78 L. T. 368, C. A. (per Lindlby, M.R., at p. 370, this was a misfeasance 
 case) ; Grant v. Gold Exploration & Development Syndicate, [1900] 1 Q. B. 233, C. A. (per 
 CoiiiNS, L.J., at pp. 248-250) ; Hovenden & Sons v. Millhoff (1900), 83 L. T. 41, C. A. 
 (per RoMBB, L.J., at p. 45) ; Costa Rica Railway Co. v. Forwood, [1901] 1 Ch. 746, C. A. 
 (per RiGBY, L. J., at p. 753 : " it does not depend on fraud," and — " it does not in the 
 least follow that, with perfect honesty of purpose, he may have done something which, 
 without his being aware of it, was contrary to principle"); Kuhliez v. Lambert Bros., 
 Ltd. (1913), 108 L. T. 565 (per Scbutton, J., at p. 567). 
 
 (h) See the citations in the last note from Imperial Mercantile Credit Association v. 
 Coleman, McPherson v. Watt, Grant v. Gold Exploration Syndicate, and Costa Rica Railway 
 Co. V. Forwood, sup. ; also Hippisley v. Knee Bros., [1905] 1 K. B. 1, Div. Ct. (per Lord 
 Alvbestonb, C. J., at p. 7, and Kennedy, J., at p. 9) ; Patten v. Hamilton, [1911] I Ir. R. 
 40 (at pp. 53, 58). 
 
 (I) Greenlaw v. King (1841), 10 L. J. (cH.) 129 (per Lord Cottenham, L.C, at p. 129 : 
 " the bishop was not, at the time of the transaction, aware, nor had he his attention drawn 
 to, the rule of this Court relative to purchases made by persons holding confidential 
 situations ") ; Dougan v. Macpherson, [1902] A. C 197, H. L., where, as may be seen from 
 the report of his cross-examination, at p. 199, — a human document of singular interest, 
 which is set out and discussed from the ethical point of view in § 656, note (d), post, — the 
 Scotch trustee was not only unconscious of the equitable rule, but could not conceive the 
 possibiUty of its existence, or that " fairness had anything to do with " his purchase from 
 the cestui que trust. It is difficult, however, to understand why in the former case the 
 episcopal trustee, whose moral standard was presumably more refined than that of the 
 mercantile trustee in the latter, should have required the " equitable rule " to have been 
 brought to his notice, or why his conduct, in view of the facts stated in the narrative, 
 should have been palliated, if not approved, by Lord Cottenham, L.C, or, for that matter, 
 why Lord Wyneoed, L.C, should, in Rothschild v. Broolcman (1831), 5 Bligh (n.s.) 165, 
 have taken such a generous view of the conduct of "the many bankers and many 
 stockbrokers in London " who, he was convinced, had been with the most honourable 
 motives engaged in the pernicious practices which he invited the House to condemn, 
 unless the passage is to be read in the same sense as Mark Antony's appreciation of 
 Brutus and all " the honourable men whose daggers did slay Caesar." One is disposed to 
 prefer the vigorous language of Fey, L.J., at p. 369 of Boston Deep Sea Fishing & Ice 
 Co. V. Ansdl (1888), 39 C T>. 339, C A. : " we were invited to consider the state of mind 
 of Mr. Ansell ; whether he thought it wrong ; in other words, we are invited to take as 
 the standard for our decision the alleged conscience of a fraudulent servant." 
 
§§ 358, 359 (burden of proof). 323 
 
 of doubt {II). From the rule whicli lays down that it is irrelevant to allege 
 and prove actual fraud, it follows, as a necessary corollary, that to allege 
 it without proving it is worse than futile, and entails a heavy visitation in 
 the matter of costs, though such conduct is not a ground for denying relief 
 altogether, if enough has been established otherwise to constitute a foundation 
 for it (m). In such cases the honest infringer of a fiduciary duty may derive 
 to that extent some practical consolation from his honesty ; and, occasionally, 
 some slight tribute may be paid to his personal merits in the form of a reduc- 
 tion in the rate of interest otherwise payable by him on money to be re- 
 funded {n), or even a total remission of such interest, together with a lenient 
 application of the rules as to the measure of value in the case of property 
 to be handed over (o) ; but, otherwise, on proof that in fact he has not com- 
 plied with the fixed rules of equity, his honourable intentions will avail him 
 nothing : probitas laudatur et alget. 
 
 359. Equally irrelevant is any question of material loss or gain resulting, 
 or to be anticipated, from the transaction impeached. Thus it is quite un- 
 necessary for the party complaining to prove that he has sufiered tangible 
 loss by reason of the contract or other transaction against which he seeks 
 to be relieved, and quite useless for the party charged to establish that no 
 such loss has been sustained (p). Again, it is no answer to any claim for 
 relief to establish, and it is therefore not only unnecessary, but irrelevant 
 and improper, for the party complaining to ofier anticipatory evidence to 
 the contrary of, any of the following allegations : that the contract was in 
 
 (II) As in Watt v. Grove (1805), 2 Sch. & Lefr. 491 (at p. 503). 
 
 (m) This question, with others relating to costs, is discussed in Ch. VIII, Sect. 2, 
 Sub-s. (4), post. 
 
 (n) As in Imperial Mercantile Credit Association v. Coleman (1873), L. R. 6 H. L. 189 
 (per Lord Cairns, at pp. 209, 210, reducing the rate of interest decreed in the Court below 
 from 5 per cent, to 4 per cent, on the ground that the director had acted on a mere error 
 " honestly entertained "). 
 
 (o) As in Be Fitzroy Bessemer Steel Co. (1884), 50 L. T. 144 (per Kay, J., at p. 147). 
 In this case it was decided that the value of the shares which the director had received from 
 the promoter should be taken at less than a third of their nominal value (though, according 
 to the general run of the authorities — see § 380, post — they would have been valued at 
 par), it " not being a case for vindictive damages," in the opinion of the judge, nor a case 
 for interest at all. This is the largest concession which has ever been made to at 
 delinquent director. 
 
 (p) Hamilton v. Wright (1842), 9 CI. & Fin. Ill (per Lord Bkougham, at p. 123) ;: 
 Clarhe v. Tipping (1846), 9 Beav. 284 (where Lord Langdalb, M.B., at pp. 287, 288, 
 points out the irrelevance of the defendant's contention that his secret transactions were 
 beneficial to the plaintiff) ; Parker v. McKenna (1874), 10 Ch. App. 96 (per Lord Caiens, 
 L.C., at p. 118 : " the Court wiU not inquire and is not in a position to ascertain whether 
 the bank has lost or not lost by the acts of the directors " : and James, L.J., who, at 
 pp. 124, 125, expresses the emphatic view that the Court is " not entitled, in my judgment, 
 to receive evidence, or suggestion, or argument as to whether the principal did or did not 
 suffer any injury in fact by reason of the dealing of the agent ; for the safety of mankind 
 requires that no agent shall be able to put his principal to the danger of such an inquiry as 
 that ") ; Harrington v. Victoria Graving Dock Co., (1878) 3 Q. B. D. 549 (per Cookbitrn, 
 C.J., at p. 550, and Field, J., at p. 552) ; Pearce v. Foster (1886), 17 Q. B. D. 536, C. A. 
 (per LiNDLEY, L.J., at p. 542) ; Eden v. Bidsdale's Railway Lamp <fc Lighting Co. (1889) 
 23 Q. B. D. 368, C. A. (at pp. 370, 371, 372) ; Bray v. Ford, [1896] A. C. 44, H. L. ; Kuhliez 
 V. Lambert Bros., Ltd. (1913), 108 L. T. 565 (per Sghtjtton, J., at p. 567). The rule is other- 
 wise in the case of certain kinds of statutory non-disclosure, e.g. in relation to companies, 
 as to which see § 559, post. 
 
324 CH. IV, SECT. 3, SUB-S. (3). 
 
 a general sense, and abstracted from all considerations of tlie duties arising 
 from tlie relation between the parties, a fair mercantile bargain (q) ; or that 
 there is no reason, apart from such considerations, why the commission or 
 profit (if it is a case of a bribe) should not have been taken (r) ; or that the 
 party complaining was in such a position that he could not have earned the 
 commission or profit himself (s) ; or that the party complaining has received 
 the benefit of the agent's services (t) ; or, in a case of sale and purchase between 
 the related parties where full disclosure has not been made, that the price 
 was fair and adequate (u) ; or that the party charged made no profit, and 
 
 (q) Aberdeen Railway Co. v. Blahie Bros. (1854), 1 Macq. H. L. 461 (per Lord Cran- 
 WOBTH, L.C., at p. 472) ; Imperial Mercantile Credit Association v. Coleman (1873), L. R. 
 6 H. L. 189 (per Lord Cahins, L.C, at p. 201 : " it is not the practice of a court of 
 equity to inquire into the merits of a particular contract. The court does not permit 
 such a contract to be made") ; McPherson v. Watt (1877), 3 App. Cas. 254, H. L. (per 
 Lord Cairns, L.C., at p. 264) j Transvaal Lands Co. v. New Belgium, dhc, Co., [1914] 2 
 Ch. 488, 502, C. A. 
 
 (r) Hichens v. Congreve (1831), 4 Sim. 420 (per Shadwell, V.-C, at pp. 426, 427); 
 Costa Rica Railway Go. v. Forwood, [1901] 1 Ch. 746, C. A. (per Vatiohan Williams, L. J., 
 who, at p. 761, points out that the rule is one which must be universally apphed, though, in 
 the particular case, " there may seem to be no reason of fairness why the profits should 
 not go into the pockets of the trustees, and although the profits may be such that their 
 cestui que trust could not have earned them all "). 
 
 (s) Boston Deep Sea Fishing & Ice Co. v. Ansell (1888), 39 C. D. 339, C. A., where it 
 was held that it was no answer to contend, as the agent there did, that the company, his 
 principal, not being a shareholder in the fish-carrying or ice companies who contracted to 
 give bonuses to such shareholders on their orders, was not quaUfied to obtain the bonuses 
 the corrupt receipt of which by the agent was complained of (per Cotton, L. J., at pp. 354, 
 355). See also the passage from the judgment of Vatjghan Wilmams, L.J., in Costa Rica 
 Railway Co. v. Fonoood, sup., which is cited in the last note. 
 
 (t) Salomons v. Pender (1865), 3 H. & C. 639 (per Bkamwell, B., at p. 642). 
 
 (u) Randall v. Errington (1805), 10 Ves. 423 (per Lord Eldon, L.C, at pp. 427, 428) ; 
 Hichens v. Congreve (1831), 4 Sim. 420 (per Shadwell, V.-C, at p. 427) ; Rothschild v. 
 Brookman (1831), 5 Bligh (N.s.) 165 (per Lord Wynfobd, L.C, at pp. 194-196) ; Gillett v. 
 Peppercorne (1840), 3 Beav. 78 (per Lord Langdale, M.R., at p. 84) ; Murphy v. O'Shea 
 (1845), 2 Jo. & Lat. 422 ; 69 R. R. 337, per Suqden, L.C. (Ir.), at pp. 424, 429) ; Clarke v. 
 Tipping (1846), 9 Beav. 284 (per Lord Langdale, M.R., at pp. 288, 290); Lewis v. Hillman 
 (1852), 3 H. L. C 607 (jierLord St. Leonards, L.C, at p. 630) ; Bentley v. Craven (1853), 18 
 Beav. 75 (per Romilly, M.R., at p. 78) ; Beck v. Kantorowicz (1857), 3K. & J. 230 (yer Wood, 
 V.-C, at pp. 250, 251) ; Dyson v. Lum (1866), 14 L. T. 588 (per Stuart, V.-C.) ; McPherson 
 V. Watt, sup. (per Lord Caibns, L.C, at p. 264 : " assume, if you please, that in every 
 respect, as to price, and as to all other things connected with the sale, this was a sale which 
 might have been supported had the McPherson family been told that Watt was the 
 purchaser, in my opinion, it cannot be supported from the circumstance that that fact 
 was not disclosed to them" : so Lord O'Hagan, at p. 266) ; De Bussche v. Alt (1878), 
 8 C D. 286, C. A. (per Cur., at p. 316) ; Whaley Bridge Calico Printing Co. v. Green (1879), 
 5 Q. B. D. 109 (per Bowen, J., at p. Ill), Hovejiden & Sons v. Millhoff (1900), 83 L. T. 
 41, C. A. (per Romer, L.J., at p. 45). In Fox v. Mackreth (1788), 2 Cox 320, Lord 
 Thttrlow, L.C, at pp. 321, 322, committed himself to the proposition that " unless there 
 be great inadequacy of value the case comes to nothing ; the fraud or imposition of one 
 party affords no ground of rehef, unless damage be sustained by the other." As applied 
 to that form of equitable fraud which consists of non-disolosure by a trustee or 
 agent, this statement is hopelessly incorrect, as Lord Thtjrlow tacitly acknowledged 
 by his subsequent treatment of the case itself ; for, though stating at an early stage 
 that he should direct an inquiry as to value, we are told (at p. 330) that " his Lordship, 
 however, did not direct any such inquiries, but after the lapse of a considerable time, 
 affirmed the decree, saying only that he had considered the case very much, and that 
 he could not see that his Honour's decree was wrong." Moreover, Lord Eldon, L.C, in 
 several cases took the opportunity of stating that Lord Thurlow afterwards acknow- 
 ledged that the view in question had been expressed by him per incuriam, and " went 
 upon a clear mistake " ■- see the former's observations at p. 277 of Gibson v. Jeyes (1801), 
 
§ 359 (burden of proof). 325 
 
 that the bargain was a bad one for him (v), or that he took risks, and stood 
 to lose by it (w). Nor is it either requisite or relevant, in support of a prin- 
 cipal's claim for relief against the party who has made a corrupt agreement 
 with the agent, or as a ground for dismissal of such agent (x), to allege or 
 prove that the agent was in fact thereby influenced or biassed in the advice 
 which he gave to such principal (y), or even that the bribe was actually 
 received at all, if it be proved to have been promised (2) ; or that the party 
 charged was remunerated for his services by the party complaining (a) . 
 
 6 Yes. 266, p. 627 of Ex p. Lacey (1802), 6 Ves. 625, and p. 353 of Ex p. James (1803), 8 Ves. 
 337 ; and op. the observation of Grant, M.R., as to Lord Eldon's correction of his pre- 
 decessor's error, at p. 148 of Att.-Gen. v. Lord Dudley {1S15), G. Cooper, 146 ; 14 R. R. 226. 
 
 (u) Exp. Bennett (1805), 10 Ves. 381 {per Lord Eldon, L.C, at pp. 385, 386 : a case 
 in which the trustee derived no advantage from, and was not personally interested in, the 
 purchase) ; Hamilton v. Wright (1842), 9 CI. & Fin. Ill {per Lord Bkotjgham, at p. 124) ; 
 He Diamond Fuel Oc, Mitcalfe's Case (1879), 13 C. D. 169, C. A. {per Jessel, M.R., at 
 pp. 172, 173) ; Be North Australian Territory Co., Archer's Case, [1892] 1 Ch. 322, C. A. 
 {per LiNDLBY, L.J., at p. 336) ; Dougan v. Macpherson, [1902] A. C. 197, H. L. 
 {per Lord Halsbuky, L.C, at p. 201, during the argument : " what has the fact that the 
 trustee may have made a bad bargain to do with the question of unfair advantage on the 
 part of the trustee ? ") 
 
 (w) Williams v. Stevens (1866), L. R. 1 P. C. 352 (at p. 359 : " it is no answer to say 
 that in the course of acquiring the benefit which has been derived by the trustee or agent, 
 he incurred a possibUity of loss. That may well be ; but if the transaction has resulted 
 in gain . . . the consequence results that the whole benefit of the transaction belongs to 
 the person whom he must be considered to have represented throughout "). 
 
 (x) As to the principles on which the granting of relief against the contractee, as well 
 as against the agent, is justified, and the natmre of such relief, see Sect. 5, Sub-s. (2), 
 §§ 383-385, post. 
 
 (y) Harrington v. Victoria Graving Dock Co. (1878), 3 Q. B. D. 549 {per Cockburn, C.J., 
 at p. 550, and Mellor, J., at p. 552), the first definite decision on the point in question, 
 which had been left open in Smith v. Sorby (1875), ibid., 552 n., where it was only necessary 
 to declare the immateriality of an issue as to whether there was an intention to influence 
 or bias the agent ; Hovenden <fc Son^ v. Millhojf (1900), 83 L. T. 41, C. A. {per Romer, L. J., 
 at p. 45). The above are cases of claims for damages against the contractee for corrupting 
 the agent. The following are cases where the right to dismiss, or refuse payment to, the 
 agent was in question : — Pearce v. Foster (1886), 17 Q. B. D. 536, C. A. {per Lindley, L.J., 
 at p. 541) ; Swale v. Ipswich Tannery, Ltd. (1906), 11 Comm. Cas. 88 {per Kennedy, J., 
 at p. 98, who, whilst expressly finding that the agent had not in fact been biassed in the 
 slightest degree, held that in law this was whoUy immaterial). As to this species of relief, 
 see §§ 381, 382, post. 
 
 (z) Qrant v. Oold Exploration dh Development Syndicate, [1900] 1 Q. B. 233, C. A. {per 
 A. L. Smith, L.J., at pp. 242-244, Collins, L.J., at pp. 247, 248, and Vaughan Williams, 
 L.J., at pp. 253, 254) ; King, Viall, & Benson v. Howell (1910), 27 T. L. R. 114, C. A. {per 
 Cozens-Haudy, M.R., at p. 115). 
 
 {a) Oillett V. Peppercorne (1840), 3 Beav. 78 {per Lord Langdale, M.R., at p. 82 : " the 
 acting gratuitously makes no difference ") ; York and North Midland Railway Co. v. 
 Hudson (1853), 16 Beav. 485 {per RoMiLLy, M.R., at pp. 499, 500) ; McPherson v. Watt 
 (1877), 3 App. Cas. 254, H. L. {per Lord Cairns, L.C, at pp. 262, 263 : "I care not 
 whether this was done as a piece of business for which Mr. Watt might have charged as a 
 law agent, and sent in a bill of costs, or not " ■- and, again, " whether Watt was a gratuitous 
 adviser, or a paid adviser, of McPherson, he was not only an adviser, but the only adviser, 
 of McPherson with regard to the sale of these houses ") ; Lvddy's Trustee v. Peard (1886), 
 33 C. D. 500 (where Kay, J., at p. 515, points out that the fact that the soHoitor in that 
 case was acting for a bankrupt, and probably, therefore, would not be paid, in no way 
 negatived the fact that the bankrupt reposed confidence in him, and, therefore, was quite 
 irrelevant) ; Se Telescriptor Syndicate, Ltd., [1903] 2 Ch. 174 {per Buckley, J., at p. 197 : 
 " an argument was suggested before me, but dropped, that, because the directors received 
 no fees, it was not reasonable to suppose that they would be active. It is, I think, of the 
 first importance that it should be remembered that a director, whether paid or electing to 
 serve without payment, owes duties which he cannot, in honour and honesty and legal 
 
326 CH. IV, SECT. 3, SUB-S. (3) ; sect. 4, SUB-S. (1). 
 
 Still less relevant is any question as to the comparative advantages of adhering 
 to, or avoiding, the transaction impeaclied. That is a matter of which the 
 party complaining is to be the sole judge. The only function of judicature 
 is to determine whether the right to relief is made out. The practical wisdom 
 or unwisdom of asserting that right is no concern of the court, or of the party 
 charged (6). 
 
 Sect. 4. Affirmative Answers to the Case of the Party Complaining. 
 
 360. When once the party complaining has proved the matters as to 
 which the onus rests on him (c), it is incumbent on the party charged, unless 
 he can repel the case made against him by direct contradiction, to establish 
 some one or more of the affirmative answers available to him. Unless he 
 succeeds in so doing, he must submit to judgment. Apart from those answers 
 and bars, whether statutory or non-statutory, which are applicable to all 
 proceedings for the avoidance of contracts in general (d), the only affirmative 
 means by which the party charged can escape liability are these. He must 
 establish, — the burden of course being on any party who avers that his 
 opponent has in some way forfeited a prima facie right to relief to show how 
 and why he has so forfeited it (e), — either that the relation had terminated 
 before, or was in suspense at, the time of the particular transaction impeached ; 
 or that he fully discharged his duties of disclosure, and such other duties of 
 good faith as flow from, or are ancillary to, this main and predominant duty ; 
 or that the party complaining had complete and exact knowledge aliunde 
 of the undisclosed transaction or fact, or agreed to waive the performance 
 of the duty by consenting in advance to any transaction or fact of the natme 
 
 liability, disregard"); King, Viall, & Benson v. Howell (1910), 27 T. L. B. 114, C. A. 
 iper Cozbns-Hakdy, M.R., at p. 115 : " an agent to buy could not sell, whether he 
 was remunerated for the sale or not "). 
 
 (b) Dyson v. Lum (1886), 14 L. T. 588, where it was in vain contended that the litigation 
 ■would result in no benefit to the cestui que trust. And see § 221, ante, on this topic. 
 
 (c) As stated in Sect. 3, Sub-ss. (1) and (2), ante. 
 
 (d) Such as the non-statutory pleas of accord and satisfaction, raised in Salford 
 (Corporation v. Lever, [1891] 1 Q. B. 168, C. A. (at pp. 178-181) ; payment, raised in Be 
 Carriage Go-operative Association (1884), 27 C. D. 322, 330 ; set-off, raised in Be Anglo- 
 French Co-operative Society, Ex p. Felly (1882), 21 C. D. 492, C. A. (per Jbssei,, M.R., 
 at pp. 500-502, Brett, L.J., at pp. 505, 506, and Cotton, L.J., at pp. 508, 509), and in 
 Be Carriage Go-operative Association, sup. (where Peakson, J., followed Felly's Case) ; 
 champerty, raised against an assignee in Wilson v. Short (1847), 6 Hare 366 (per Wigeam, 
 V.-C, at p. 384). In all these cases it so happened that, for reasons stated at the pages 
 respectively indicated, the plea failed. For instances of a statutoiy plea, see Metropolitan 
 Bank v. Heirom (1880), 5 Ex. D. 319, C. A. (per James, L. J., at p. 323, Beett, L. J., at p. 324, 
 and Cotton, L.J., at pp. 325, 326), and Be Fitzroy Bessemer Steel Co. (1884), 50 L. T. 144 
 (per Kay, J., at p. 147), in which the Statute of Limitations was relied upon, — in the former 
 successfully, in the latter unsuccessfully, for the reasons stated in the references respec- 
 tively given. See also the very instructive case cited in § 358, note (ii), ante. As to the 
 Trustee Act, 1888 (51 & 52 Vict. c. 59), s. 8, see Re Lands Allotment Co., [1894] 1 Ch. 616, 
 C. A. (per LiNDLEY, L.J., at pp. 631, 632, and Kay, L.J., at pp. 638, 639). 
 
 (c) See Erlanger v. New Sombrero Phosphate Co. (1878), 3 App. Cas. 1218, H. L. (per 
 Lord Penzance, at p. 1230 : " it is for the vendors to show affirmatively that the company 
 have forfeited that right " ; so Lord BLAOKBtTKN, at p. 1283, points out that the burden was 
 on the promoters of showing " that the company have precluded themselves from the 
 relief to which they have a right "). 
 
§§ 359-361 (affirmative answers). 327 
 
 in question without the necessity for divulging it, or subsequently, with 
 full knowledge of the facts and of his right of avoidance and otherwise in 
 relation thereto, confirmed the transaction. These five affirmative pleas or 
 answers, any one of which is sufficient, but some one of which is absolutely 
 necessary, to entitle the party charged to succeed where he is unable to 
 deny, or if denying, to disprove, the primd facie case of the party complaining, 
 require separate consideration (/). 
 
 Subs. (1). The Termination, or Suspense, of the Relation at the time of the 
 
 Transaction. 
 
 361. In the case of a direct dealing between the parties, it is a good answer 
 to establish that the relation was not operative on the transaction, either 
 because it had come to an end in fact before the transaction was entered 
 into, or because there had been an agreement that it should be suspended 
 for the occasion. Lord Eldon was accustomed to use the latter form of 
 expression in enunciating this exception to the general rule. An attorney 
 or trustee, he said, is not absolutely incapacitated from dealing with his 
 client or cestui que trust, " but the relation must in some way be dissolved, 
 or, if not, the parties must be put so much at arm's length that they agree 
 to take the character of purchaser and vendor " {g) ; and, again, " a trustee 
 may buy from the cestui que trust, provided there is a distinct and clear con- 
 tract, ascertained to be such after a jealous and scrupulous examination of all 
 the circumstances " (h), and the cestui que trust has " clearly renounced the 
 right of objecting," so that the parties may be said to have thus " bargained 
 that the rule should be relaxed " {i). It is for the agent or trustee, he observes 
 in another case, to show that he has " shaken off " his character as such, not 
 only with the consent of the principal or cestui que trust, but as the result of 
 " a new contract " between the parties to that efiect (j). And, in still more 
 precise language, he lays down elsewhere that " a trustee for sale may be 
 the purchaser in this sense ; that he may contract with his cestui que trust 
 that, with reference to the contract of purchase, they shall no longer stand 
 in the relative situation of trustee and cestui que trust ; and the trustee, 
 having through the medium of that sort of bargain evidently, distinctly, 
 and honestly proved that he had removed himself from the character of 
 trustee, his purchase may be sustained" (Jc). This (again using Lord 
 Eldon's language) "is a difficult case to make out" (I) ; but it is not an 
 impossible one, and, in the very authority in which the observation was 
 made, it was so made out, it being there apparent from the evidence, and 
 
 ( / ) See the first five Sub-sections of this Section, respectively. 
 
 (g) At p. 277 of Gibson v. Jeyes (1801), 6 Ves. 266. 
 
 (h) Coles V. TrecotMck (1804), 9 Ves. 234, at p. 246. 
 
 (i) Ibid., at pp. 247, 248. 
 
 ij) Ex p. James (1803), 8 Ves. 337, at pp. 348, 352, 353. Lord Langdalb, M.R., 
 foUowed Lord Eldon's mode of putting the proposition : see Randall v. Srrington (1805), 
 10 Ves. 423, at p. 426. 
 
 {k) Sanderson v. Walker (1807), 13 Ves. 601. And to the same effect, at p. 208 of 
 Downes v. Grazebrooh (1817), 3 Mer. 200. 
 
 (I) Coles V. Trecothich, sup., at p. 247. 
 
328 CH. IV, SECT. 4, SUB-SS. (1), (2), 
 
 from the instrument itself, that " the whole execution of the trust devolved 
 upon the cestui que trust,-^a.nd he takes all upon himself, with the auctioneers 
 if not chosen, at least approved by him ; makes surveys, settles the plans, 
 mode of sale and price, and therefore has all knowledge what is the proper 
 price," so that. Lord Eldon concludes, " if any case can exist for relaxing 
 the rule by consent of the parties, this is that case " (m). By the " contract," 
 and " bargain " referred to, it must be supposed that Lord Eldon meant 
 merely such a contract or bargain as must be inferred from the conduct of 
 the parties : he cannot have meant an express and formal contract, because if 
 the circumstances be sufficient to show that the relation was inoperative at the 
 material date, it is not necessary for the party charged to prove a contract 
 in words to that effect ; if on the contrary, it cannot be shown that it was in- 
 operative at that date, an express bargain that the parties shall pretend, con- 
 trary to the fact, to be free from the relation, would be wholly ineffectual {n). 
 
 362. It follows from the above rule, as stated by Lord Eldon, that where, 
 as in the case of infants, it is impossible to obtain a " consent," or a " new 
 contract " or " bargain " to be implied from the circumstances, which will 
 be effectual in law, it is impossible to sustain the transaction at all on this 
 ground, except through the medium of the Court, who alone can sanction a 
 contract on the infant's behalf (o). 
 
 363. It should also be remembered that where, as may often be the case, 
 the reasons for the disability endure after the relation giving rise to it is 
 at an end, the party charged must prove that those reasons, as well as the 
 relation itself, have ceased to exist (p). 
 
 364. It is open to the party charged to allege that, though the relation 
 existed at the time, he entered into the transaction in another, not being a 
 fiduciary, relation which also happened to belong to him at that time : and, 
 if this allegation is established, the transaction is sustained (q). 
 
 (m) Coles V. Trecothick (1804), 9 Ves. 234, at pp. 247, 248. It will be noticed that 
 the circumstances here were very special. In none of the other cases cited in the last 
 five notes was the termination or suspension of the relation estabUshed. 
 
 (re) See § 322, and note (n) thereto, ante, as to the futiUty of a formal renunciation of the 
 character of trustee, or agent, for the mere colourable purpose of escaping the rule. The 
 proposition is not now usually stated in the formadopted byLordELDON and the judges of 
 his day. The modern way of expressing it is to insist on the necessity of the parties having 
 been in fact freed from the relation, and of their dealing with one another at arm's length : see 
 Murphy v. O'Shea (1845), 2 Jo. & Lat. 422, per Sugden, L.C. (Ir.), who, at p. 425, says that 
 " the rule of the Court . . . does not prevent an agent from purchasing from his principal, 
 but only requires that he shaU deal with him at arm's length." The same high authority, 
 when Lord St. Leonabds, L.C, afterwards used the same language in Cutts v. Salmon 
 (1852), 21 L. J. (cH.) 750 (at p. 750). And see the citation from Williams v. Scott, in note 
 (z) to § 366, post. 
 
 (o) Sanderson v. Walker (1807), 13 Ves. 601 {per Lord Eldon, L.C, at pp. 601, 602). 
 The Public Trustee, under the Pubho Trustee Act, 1906 (6 Edw. 7, c. 55), is in no 
 different position from any other trustee in this respect : He New Haw Estate. Trusts (1912), 
 107 L. T. 191. 
 
 {p) Oarter v. Palmer (1842), 8 CI. & Fin. 657 (per Lord Cottenham, L.C, at p. 705 : 
 " it is also proved that he did not actually act as counsel or agent for the respondent after 
 August, 1831, but ... if his previous employment disqualified him from becoming the 
 purchaser for his own benefit . . . , such disquahfication must continue so long as the 
 reasons upon which it is founded continue to operate "). 
 
 (q) See the cases cited in notes (w), (x), and {y), to § 344, ante. 
 
§§ 361-366 (affirmative answers). 329 
 
 365. Where the trustee or agent is charged with having taken a present 
 from a third party, it is a good answer to any claim for relief that his trustee- 
 ship or agency had come to an end before the date of the impeached transac- 
 tion (r). 
 
 Subs. (2). The Complete Discharge of the Duty of Disclosure and consequential 
 
 Duties. 
 
 366. If not in a position to make good the kind of case just discussed, 
 the party charged must be prepared with evidence sufficient to justify the 
 transaction. The conditions of disclosure, and otherwise, subject to which 
 alone the trustee, promoter, or agent can deal with the cestui que trust, com- 
 pany, or principal, or can acquire personal profit in the course and execution 
 of his trusteeship, promotership, or agency, have already been stated. It 
 has been seen that it is the duty of the party charged, when dealing direct 
 with the other related party, to impart to him all the knowledge which he 
 possesses, in both senses of the word (s), as to the nature of the transaction, 
 and his own share and part in it, if it is being done in other names (t), and 
 as to aU material facts within his knowledge affecting the value of, and other- 
 wise relating to, the subject-matter of the contract, together with impartial 
 and disinterested advice against himself, as to the expediency of entering into 
 it (m) : and that if, being an agent, he accepts in the course and execution 
 of his agency any personal profit or advantage from the opposite principal, 
 he is under an obligation to make full and precise disclosure of this fact to 
 his own principal (v). By these means, and, further, by insisting on the 
 intervention of an indifferent person to advise the party complaining, in the 
 case of a direct dealing with him (w), and, where the transaction assumes the 
 form of a contract, by giving full and fair value (x), — whether either of these 
 
 (r) Parker v. McKenna (1874), 10 Ch. App. 96 (per Lord Cairns, L.C, at p. 118); 
 De Bussche v. AU (1878), 8 C. D. 286, C. A. (per Cur., at pp. 311, 312) ; Eden v. RidsdaWs 
 Railway Lamp <fc Lighting Co. (1889), 23 Q. B. D. 368, C. A. (per Lindley and Lopes, 
 LL.JJ., at p. 372). In none of these cases was the termination of the confidential 
 relation established. 
 
 (s) As to these, see § 316, ante. See Ch. II, Sect. 1, ante, as to what disclosure means. 
 Oelkers v. Ellis, [1914] 2 K. B. 139, a principal and agent case, is a good instance of a 
 pretended and partial disclosure which in law is none at aU. 
 (t) See §§ 321, 331, 336, ante, 
 (u) See §§ 323, 324, 332, 333, 337, 338, ante, 
 (v) See §§ 339, 340, 341, ante. 
 
 (w) See § 316, and note (6) to § 318, ante, as to the duty to give impartial advice. As 
 to the other duty, see Gibson v. Jeyes (1801), 6 Ves. 266, where Lord Eldoh", L.C, at p. 278, 
 says that the attorney's obhgation in that case to the lady who was his client was either 
 to have told her to get the advice of some other person, or to have "given her all that 
 reasonable advice against himself that he would have given her against a third person." 
 In Harris v. Tremenheere (1808), 15 Ves. 34, there was no advice by a third person in 
 respect of such of the leases as were upheld : from which the inference is that Lord Eldon, 
 L.C, who decided this case also, did not consider it a necessity in all cases. 
 
 (x) See § 323, and note (p) thereto, ante, as to the absence of any case of a merefidiiciartf 
 relation in which, the propriety of the transaction being proved in every other respect, 
 the party charged has failed on the ground of undervalue alone. Conversely, where 
 the propriety is not established in other respects, full value will not entitle the party charged 
 to succeed : see § 359, note («), ante. But proof of adequate value having been paid is 
 undoubtedly of the greatest assistance in establishing the general fairness of the trans- 
 action, and the failure to prove it is correspondingly detrimental : indeed, undervalue, with 
 
330 CH. IV, SECT. 4, SUB-SS. (2), (3). 
 
 is absolutely necessary as a separate and independent probandum, or not, — 
 he puts himself in a position to establish that righteousness and propriety 
 of the transaction which is the primary and predominant condition of its 
 being " sustained," if and when it should be called in question. From the 
 fact that these duties are imposed upon the party charged at the time of 
 the transaction, it follows, as a necessary consequence, that, when the trans- 
 action is impeached, a corresponding burden rests upon him of proving that 
 he has punctually and fully complied with them. Indeed, the duties themselves 
 are only duties in the sense that the party owes it to himself; in his own 
 ultimate interest, to conduct the transaction under the conditions prescribed, 
 for there is nothing ipso jure void, illegal, or criminal in his doing other- 
 wise (y) : it is simply a case of his taking the risk of not being able to prove 
 what is incumbent on him to prove in order to justify the transaction, if 
 a time comes when it is challenged. The rule as to the burden of allegation 
 and proof which lies in this respect on the trustee, promoter, or agent, 
 has been expressly stated in numerous cases (2) ; but, apart from any formal 
 enunciation, it underlies, and is presupposed by, the actual decisions arrived 
 at in all the authorities on the subject (a). 
 
 other circumstances, may be sufficient to show positive fraud, where the party complaining 
 is driven to allege and rely upon that as a ground for relief, as in Be Gallard, [1897] 2 Q. B. 
 8. Even without other circumstances, it has been said that it may indicate fraud, if such 
 as "to shock the conscience"; though it may be doubted whether the proposition, 
 stated in this extreme form, is not more calculated to shock the conscience than any under- 
 value which could be the subject of it. 
 
 {y) See note (11) to § 322, ante. 
 
 (z) To take an early, and a late, illustration, two clear statements as to the general onus on 
 the party charged are to be found in Oibson v. Jeyes (1801), 6 Ves. 266 {per Lord Eldon, 
 L.C., at p. 276), andin Williams v. Scott, [1900] A. C. 499,P. C. (at p. 508 : " it ought not to 
 be assumed, in the absence of evidence to the contrary, that the transaction was a proper 
 one, and that the cestuis que trustent were informed of all necessary matters. The burden 
 of proof that the transaction was a righteous one rests upon the trustee, who is bound to 
 produce clear affirmative proof that the parties were at arm's length ; that the cestuis que 
 trustent had the fullest information upon all material facts ; and that, having this informa- 
 tion, they agreed to and adopted what was done"). For statements as to the onus of 
 proving disclosure of material facts with reference to the property, or its value, see Selsey 
 (Lord) V. MJwades (1824), 2 Sim. & St. 41 (per Leach, V.-C, at pp. 49, 50 : " the steward 
 is bound to make out that the employer was fully informed of every circumstance respecting 
 the property which was either within the knowledge of the steward, or ought to have been 
 within his knowledge, which could tend to demonstrate the value of the property ") 
 Charter v. Trevelyan (1844), 11 CI. & Fin. 714 (per Lord Lyndhurst, L.C, at p. 732) 
 Thomson v. Eastwood (1877), 2 App. Cas. 215, H. L. (per Lord Caisns, L.C, at p. 236) 
 Dougan v. Macpherson, [1902] A. C. 197, H. L. (per Lord Halsbuey, L.C, at p. 202, and 
 Lord MACNAaHTON, at p. 204). As to the onus of proving disclosure of the receipt of a 
 personal profit by the agent, see the statement of James, L. J., at p. 476 of Re British Seam- 
 less Box Co. (1881), 17 C D. 467, C A. : " the burden of proof is thrown on those who have 
 received it to satisfy the Court that it was intended to be, and was in fact, honestly 
 received." 
 
 (a) See, generally, the cases cited in the notes to Sect. 2, ante, of which those decided 
 against the trustee, promoter, or agent, were, for the most part, so decided because he failed, 
 or did not even attempt, to discharge the onus in question. The following are cases in 
 which he discharged such onus, and judgment was accordingly given in his favour : — 
 Coles V. Trecothick (1804), 9 Ves. 234 (per Lord Eldon, L.C, at pp. 247, 248) ; Harris 
 V. Tremenheere (1808), 15 Ves. 34 (as to such of the leases as were held to be pure gifts, 
 per Lord Eldon, L.C, at pp. 39, 40) ; Morse v. Boyal (1S06), 12 Ves. 355 (pee Lord Eldon, 
 L.C, at pp. 374, 375) ; Selsey (Lord) v. Rhoad.es (1824), 2 Sim. & St. 41 (per Leach, V.-C, 
 at pp. 49, 50); Warrant v. Blanchford (1863), 32 L. J. (ch.) 237; Re British Seamless 
 
§§ 366-369 (affiemative answebs). 331 
 
 367. In strictness, periaps, where it is a case of an agent receiving a 
 personal profit from the opposite principal, the onus is on the party charged 
 to establish not only disclosure of the fact on his own part, but the assent 
 of the paity complaining to his acceptance or retention of the profit (b) . 
 But, in substance, proof of the disclosure is enough. One can hardly imagine 
 a case in which, after such proof, the principal would be heard to say that 
 his agent is accountable merely because he has not formally expressed his 
 consent. His silence, under such circumstances, would be taken to imply 
 consent : otherwise, the Court would be lending countenance to the employ- 
 ment of discreditable strategy, and to the dishonest laying of traps, on the one 
 side, and would be discouraging candour on the other. 
 
 368. It shoidd be observed, that the above rules are not necessarily applic- 
 able in their integrity to the statutory procedure by misfeasance summons 
 in the case of promoters and directors of a company. For instance, in such 
 cases, as will be noted in the proper place (c), the burden being on the liqui- 
 dator, or other applicant, to prove misfeasance, and the non-disclosuie being 
 an element in such misfeasance, he must give some evidence of the non- 
 disclosure, however slight, before he can call on the party charged for an 
 answer. 
 
 Suh-s. (3). Knoivledge of the Party Complaining. 
 
 369. Though not in a position to show that he has made the full disclosure 
 required of him, the party charged is still entitled to set up that the party 
 complaining had in fact, though from other sources, complete and precise 
 knowledge of all the material circumstances ; and, if he establishes this 
 allegation by evidence, the burden being on him of so doing, he has a valid 
 answer to the case for relief which is made against him, though otherwise 
 unassailable {d). But, for this purpose, it is necessary to prove actual and 
 
 Box Co. (1881), 17 C. D. 467, C. A. (per Jessel, M.R., at pp. 473, 474, Jambs, L.J., at 
 pp. 476, 477, and Brett, L. J., at p. 478) ; lie Sale Hotel and Botanical Gardens, Ltd., 
 Exp. Heaketh (1898), 78 L. T. 368, C. A. ; Re Haslam and Hier-Evans, [1902] 1 Ch. 765, 
 C. A. ; StuUs V. Slater, [1910] 1 Ch. 632, C. A., at pp. 641-644, 648) ; Aston v. Kelsey, 
 [1913] 3 K. B. 314, C. A. ; Blaker y. Hawes di: Brown (1913), 109 L. T. 320; Omnium 
 Electric Palaces, Ltd. v. Baines, [1914] 1 Ch. 332, C. A. (per Cozens-Haedy, M.E., at 
 pp. 360, 361, SvnNFBN Eady, L.J., at pp. 354, 355, and Philumore, L.J., at p. 356). 
 
 (6) See Charter y. Trevelyan (1844), 11 Cl. & Fin. 714 (per Lord Lyndhuest, L.C., at 
 p. 732) ; Aas v. Benham, [1891] 2 Ch. 244, C. A. (per Lindley, L. J., at p. 255) ; Williams v. 
 Scott, [1900] A. C. 499, P. C. (at pp. 503-505). In the case of a direct dealing between the 
 related parties, of course the assent of the party complaining is essential : see Downes v. 
 Grazebrooh (1817), 3 Mer. 200. 
 
 (c) See § 616, note (»'), post. 
 
 (d) In the following, this onus was sustained : Coles v. Trecothick, sup. ; Farrant v. 
 Blanchford (1863), 32 L. J. (ch.) 237 (per Lord Westbuey, L.C, at p. 239) ; Lvff v. Lord 
 (1864), 34 Beav. 220 (per Eomlly, M.B., at pp. 229-232). In the foUowlng the burden 
 was not discharged: Rothschild v. Brookman (1831), 5 Bligh (n.s.) 161 (per Lord 
 WYNrOED, L.C, at p. 201) ; lAndsay Petroleum Company v. Hurd (1874), L. E. 5 P. C. 
 221 (at p. 241). Illustrations of cases in which the party charged proved the knowledge 
 of the party complaining as to some of the transactions impeached, but not as to the others, 
 are : Williamson y. Hine Bros., [1891] 1 Ch. 390 (per Kekbwioh, J., at pp. 391, 394, 395) ; 
 Hippisley v. Knee Bros., [1905] 1 K. B. 1, Div. Ct. (per Lord Alveestone, C. J., at p. 7, and 
 Kennedy, J., at p. 9). In all the above cases ahke, it was either expressly held, or 
 assumed, that the onus was on the party charged. 
 
332 CH. IV, SECT. 4, SUB-SS. (3), (4). 
 
 personal knowledge on tlie part of the cestui que trust, company, or principal, 
 as the case may be. The kind of knowledge which has been already discussed 
 under the designation of " presumptive knowledge " (e) will not be imputed 
 to the party complaining, so as to defeat his claim (/), however freely it 
 may be imputed to the party charged, when it is a question of whether he 
 has performed his duty of divulging all matters within his cognizance (g), 
 or however material such knowledge would be in a case where no fiduciary 
 relation exists between the parties (h). It is of no use, therefore, merely 
 to prove that the party complaining had the means of knowledge (i) ; for 
 instance, in a case of promoter and company, that the company was " put 
 upon inquiry " by the general state of its books or documents (J), or by vague 
 and dubious entries therein, such as an item under the heading " secret 
 service," which it was contended in one case was enough to fix the company 
 with notice of corrupt expenditure (k). Nor, in cases between principal and 
 agent, is it to the purpose to establish the existence of customs and practices, 
 however widely prevailing, as to the receipt of commissions, discounts, 
 rebates, and other bribes by the agent, which defeat and undermine the very 
 nature and essence of the relation, and are therefore dishonest, unless actual 
 and personal cognizance of the custom is established against the principal ; 
 for no knowledge of it will be presumed against him from its mere prevalence 
 and notoriety (l). Precisely the same strict rules as to the burden of proof 
 
 (e) In Ch. II, Sect. 3, Sub-s. (5), ante. 
 
 if) Downes v. Grazebrook (1817), 3 Mer. 200 (-per Lord Eldon, L.C, at pp. 208, 209). 
 
 (gr) Watts V. Bucknall, [1903] 1 Ch. 766, C. A., a company prospectus case, is a good 
 illustration of the court refusing to impute to the party complaining the kind of knowledge 
 which it will always readily, and in this same case did, presume against the non-disclosing 
 party. '' It will not suffice," says Collins, M.R., at p. 775, when dealing with the know- 
 ledge sought to be imputed to the party complaining, " to say merely that the party had 
 such constructive notice that he might have been put upon inquiry, and might have 
 searched the records which are not very easily accessible, and thus have arrived at a 
 conclusion." With these observations contrast those as to position of the directors alleged 
 to have "knowingly issued the prospectus " (pp. 771, 772). Cp. Nocton v. Lord AsKburton, 
 [1914] A. C. 932, 962, H. L. A shareholder, however, is fixed with knowledge of the con- 
 stitution of the company of which he is a member (see § 63, ante), and of the powers of its 
 directors : Percival v. Wright, [1902] 2 Ch. 421 (per Swinfen Eady, J., at p. 426). 
 
 (h) Dunne v. English (1872), L. K. 18 Eq. 524 (per Jessel, M.R., at p. 536 : " even 
 a statement which would in other oases be constructive notice . . . wiU not be sufficient 
 in cases of principal and agent "). 
 
 (i) Swale v. Ipsmch Tannery, Ltd. (1906), 11 Comm. Cas. 88 {per Kennedy, J., at 
 p. 96). 
 
 ij) York & North Midland Railway Co. v. Hudson (1853), 16 Beav. 485 {per RoMiLLy, 
 M.E., at pp. 500-502) ; Watts r. Bucknall, sup. 
 
 {k) York v. North Midland Railway Go. v. Hudson, sup. {per Eomilly, M.E., at 
 pp. 498, 499). 
 
 {I) Gillett V. Peppercorne (1840), 3 Beav. 78 {per Lord Lanodale, M.R., at p. 85 : 
 "the knowledge" — i.e. of the alleged practice of brokers to sell their own shares — "in 
 my opinion ought to have been brought home to the plaintiff," and merely to prove that 
 it is " every day practice in the city " — ^p. 83 — is not to bring it home to any one not 
 engaged in it) ; Turnbull v. Garden (1869), 20 L. T. 218 (a simflar case, per James, V.-C, 
 at p. 220 : " in answer to this the defendant depended upon what he alleged to be the 
 custom of the trade. It was not the first time the Court had heard of, and disapproved, 
 the custom of 'salting invoices ' ") ; Robinson v. Mollett (1875), L. R. 7 H. L. 802 (the 
 same point, in regards tallow-brokers : per Lord Chelmsfobd, L.C, at pp. 837, 838, and 
 see the opinion of Beett, J., advising the House, at pp. 816-819, 824, 825) ; De 
 Bu-ssche V. Alt (1878), 8 C. D. 286, C. A. {per Cur., at p. 317, as to " an alleged custom or 
 
§§ 369-371 (affirmative answers.) 333 
 
 where the wrongdoer sets up the knowledge of the injured party, and for the 
 same reasons, are applied to cases of misrepresentation (?«,). 
 
 370. It is of course essential that the knowledge (as, indeed, the dis- 
 closure, where the party is attempting to make out compliance with his duty 
 in this respect) should be brought home to the very person, or to all the 
 persons, existing or to come into being (such as possible future allottees in a 
 company case), to whom the fiduciary duty is owed ; and where the person 
 is an artificial one, the knowledge must be brought home to those officers 
 and agents by whom alone the corporation can in law be said to acquire or 
 possess knowledge. This topic (a not unimportant one) is dealt with fully 
 in the discussion of the question of parties (n). 
 
 Subs. (4). Contract to Waive Disclosure. 
 
 371. As in the class of non-disclosure which forms the subject of Chapter 
 III (o), waiver is a complete answer to the case of the party complaining. 
 If it can be shown that it was an express term of any contract between the 
 parties that the trustee, promoter, or agent should be free to enter into any 
 transaction of the nature of that which is impeached without making the 
 disclosure, or without making the full and exact disclosure, which the law 
 would otherwise require of him, the claim to relief is gone, or rather is shown 
 never to have existed, having been renounced in advance. For instance, 
 if a director of a company, charged with the receipt of secret profits, can 
 point to a provision in the articles of association which expressly or impliedly 
 excepts a certain class of matters from those of which disclosure is ordinarily 
 required, and can show that the matter in question comes within the 
 excepted class, he escapes liability (j>) . So also, a trustee under a will is 
 entitled to rely on a clause in the will which contemplates and expressly 
 sanctions the making of profits by him in his own business out of the business 
 of the testator which he is to carry on as trustee (g). But such articles, 
 terms, and clauses are subject to close scrutiny and criticism, and it must 
 clearly appear that, in plain and perspicuous language, and not merely by 
 
 practice in the porta in -which the defendant trades for an agent for sale, with a minimum 
 limit, himseK to take at that limit, and at his own option the thing he is employed to sell ") ; 
 Hippisky v. K-nee Bros., [1905] 1 K. B. 1, Div. Ct. {per Lord Alverstonb, C.J., at p. 7, 
 and Kennedy, J., at p. 9, as to an alleged custom of auctioneers to receive rebates or 
 discounts from newspaper proprietors on orders for advertisements). As to all these cases 
 in their ethical aspect, see §§ 656, 657, post. In Great Western Insurance Co. v. Cunliffe 
 (1874), 9 Ch. App. 525, which is sometimes cited in support of the view that the party 
 complaining may be fixed with presumptive knowledge of a custom to take illicit com- 
 missions, the plaintiffs had impliedly, if not expressly, waived all objection,. — see note (s), 
 inf., — and further, at a later stage, had acquired actual knowledge of the custom ; apart 
 from which, the commissions were not paid in respect of, or calculated upon, the particular 
 transaction between the two principals. And Baring v. Stanton (1876), 3 C. D. 502, 
 C. A., was a case of the same class. 
 
 (to) See § 209 of the author's Law of Actionable Misrepresentation. 
 
 \n) It forms the subject of §§ 392, 393, post. See also § 50, note ( / ), ante. 
 
 (o) See Ch. Ill, Sect. 4, Sub-s. (1), ante. 
 
 (p) As in Gosta Rica Co. v. Forwood, [1901] 1 Ch. 746, C. A. The conditions of the 
 exemption must be observed : Transvaal Lands Co. v. New Belgium, <Ssc., Co., [1914] 2 
 Ch. 488, 504, 505, C. A. 
 
 (q) Re Syhes, [1909] 2 Ch. 241, C. A. 
 
334 
 
 CH. IV, SECT. 3, SUB-SS. (4), (5). 
 
 what under other circumstances might be a reasonable implication, the 
 trustee, promoter, or agent was distinctly absolved from the duty of disclosure 
 by the very person, or by all the persons, if more than one, to whom the duty 
 was owed(r). It is possible, however, to infer an intention to waive dis- 
 closure from an instruction by a principal to an agent to conduct the agency 
 business in accordance with the usual customs and practices of that business, 
 whatever they may be (s) ; just as a party may be bound by an agreement 
 which he has not even read, on clear proof that he deliberately elected to 
 execute it, whatever its contents might be, and without desiring or caring 
 to know what in fact they were. So also, an intention to waive may be 
 inferred from acts and conduct, but, to justify such an inference, the evidence 
 adduced by the party charged must be of an extremely " clear and cogent " 
 character (t). And, difficult as it is to establish an express absolution ab 
 ante from a breach of fiduciary duty, it would seem all but impossible to 
 establish an implied one. In certain classes of case, to be discussed here- 
 after (m), the legislature has thought fit to invalidate waivers altogether. 
 
 Subs. (5). Confirmation of the Transaction. 
 
 372. Another means of resisting the claim to relief is, as in the case of 
 both the other two types of relation giving rise to a duty of disclosure {v), 
 proof that the party complaining, though not having beforehand dispensed 
 with the duty of disclosure, nevertheless elected to confirm the undisclosed 
 transaction afterwards, either in the view that it would be more in his interests 
 to adhere to it than to have it undone, or, where it is a case of an agent having 
 taken a bribe or secret profit, from motives of pure generosity. This plea 
 admits the breach of fiduciary duty, and the right originally acquired by the 
 party complaining to relief in respect of such breach, but asserts the subse- 
 quent loss of that right by the deliberate affirmance of that which he was free 
 to disaffirm. It is obvious that a case of this sort which depends on no merits 
 whatever on the part of him who sets it up, but on the contrary begins by 
 acknowledging his demerits, must always be a difficult one to make out, and 
 especially so when the alleged confirmation amounts to a gratuitous remission 
 of the consequences of the breach of duty, as in the case of the corruption of an 
 agent ( w) . It can only, therefore, be made out by the clearest proof, not merely 
 
 (r) Ee Syhes, [1909] 2 Ch. 241, C. A. (per Cozens-Hardy, M.R., at p. 247, and 
 Fabwell, L.J., at p. 230, recognizing the striotneas of proof required, though there it 
 was held suflScient). In the following, the proof was held insufficient : — Re West- 
 moreland Green & Blue Slate Co., Bland's Case, [1893] 2 Ch. 612, C. A. [per Lindley, L. J., at 
 p. 617) ; Oluckstein v. Barnes, [1900] A. C. 240, H. L. {per Lord Maonaghtbn, at p. 249) ; 
 Omnium Electric Palaces, Ltd. v. Baines, [1914] 1 Ch. 332, C. A. {per Sabgant, J., at p. 347, 
 though there the party complaining failed on other grounds). 
 
 (s) Great Western Insurance Co. v. Cunlijfe (1874), 9 Ch. App. 525 {per James, L.J., 
 at p. 537, referring to the evidence of the plaintiffs having said — " we meant it to be 
 according to the usual practice "). 
 
 (t) De Bussche v. Alt (1878), 8 C. D. 286, C. A. {per Cur., at p. 313). 
 
 {u) In § 562, post. 
 
 {v} See Ch. Ill, Sect. 4, Sub-s. (2), ante, and Ch. V, Sect. 4, Sub-s. (3), post. 
 
 {w) See the observations of Romer, L.J., referred to in note (a), inf. 
 
§§ 371-373 (afpikmative answers). 335 
 
 of the act itself, and the intention to affirm supposed to be indicated thereby, 
 but also of the fact that the party complaining, when so purporting to affirm, 
 had the fullest and most detailed knowledge of all the material circumstances, 
 and of all his rights in connection therewith, including the right to disaffirm, 
 for he may have confirmed the transaction simply because he thought he 
 could not help himself. There is very seldom much difficulty in proving 
 the former and far less important of these two probanda : it is the latter, — 
 the knowledge, in the absence of which there is nothing but the appearance, 
 without the reality, of affirmation, — which creates the difficulty in the way 
 of the party on whom the burden of proof lies. In the numerous cases in 
 which the party charged has not sustained the onus of proving this knowledge, 
 both of facts and of rights, on the part of the opposite party, the plea has 
 failed (x) : in the comparatively few instances in which he has so sustained 
 it, the plea has succeeded (y). 
 
 373. Difficult as it is to establish a case even of the most express affirma- 
 tion, — for the courts are often astute to detect, instead of the suggested 
 affirmation, a cunning design on the part of the trustee, promoter, or agent 
 to entrench and fortify himself against future attack, and a continuance 
 thereby of the very fraud or mala fides which is supposed to have been 
 absolved (2), — it is yet more difficult to imply a confirmation from mere 
 acts and conduct (a), and probably impossible to infer it from inactivity and 
 delay alone (6). And in any case where by reason of infancy or otherwise 
 
 (x) As in Dwibar v. Tredennich (1813), 2 Ball & B. 304 ; Walker v. Symonds (1818), 3 
 Swanst. 1 ; Rothschild v. Broohman (1831), 5 Bligh (n.s.) 165 (pee Lord Wynfoed, L.C, at 
 p. 201) ; Perens v. Johnson (1857), 3 Sm. & G. 419 {per Stuart, V.-C, at pp. 425, 426) ; 
 Lloyi V. Attwood (1859), 3 De G. & J. 614; Franks v. Bollans (1867), 17 L. T. 309 (per 
 Sttjaet, V.-C, at p. 311) ; De Bussche v. Alt, sup. (per Cur., at pp. 312-314) ; Swale v. 
 Ipswich Tannery, Ltd. (1906), 11 Comm. Cas. 88 {per Kennedy, J., at p. 97). 
 
 {y) Aa in Morse v. Boyal (1806), 12 Ves. 355 {per Lord Eldon, L.C, at pp. 373, 374, 
 376-378); Selsey {Lord) v. Bhoades (1827), 1 Bligh (n.s.) 1 {per Lord Eldon, LrC., at 
 p. 8) ; Salmon y. Cutts (1850), 4 De G. & Sm. 125 {per Knioht-Beucb, V.-C, at pp. 129, 
 130) ; Baker v. Bead (1854), 3 W. R. 118 ; Dover v. Buck (1865), 12 L. T. 136 {per Sttjaet, 
 V.-C, at p. 137) ; Nutt v. Easton, [1899] 1 Ch. 873 {per Cozens-Haedy, J., at pp. 878, 
 879) ; Omnium Electric Palaces, Ltd. v. Baines, [1914] 1 Ch. 332, C A. {per Saeqant, J., 
 at p. 343, and Cozens-Haedy, M.R., at p. 350). 
 
 (z) This was the view of the evidence taken by Lord Manners, L.C (Ir.), at pp. 316- 
 318 of Dunbar v. Tredennick, sup., where a trustee and agent, having failed to prove the 
 propriety of the transaction (a purchase from his cestui que trust and employer), urged 
 that the agreement had been confirmed by completion, but it was held that the conveyance 
 having been obtained from the cestui que trust whilst the relation, and the confidence 
 resulting from it, still existed, and without his being any more aware at the later date than 
 at the earlier of his rights in the matter, and particularly his right to impeach the trans- 
 action, it was simply a case of the so-called confirmation having been procured by the 
 same dishonest means aa the agreement which it purported to confirm. 
 
 (o) See Bartram & Sons v. Lloyd (1904), 90 L. T. 357, C A., where the Court of Appeal 
 disagreeing with theviewof BEUCB,L.J.,in the Court below (1903), 88 L. T. 286, held that 
 the agent's receipt of secret commission had not been confirmed by his principal's sub- 
 sequent conduct, and where Romee, J., at p. 360, enlarged on the utter improbability 
 of any employer, in his own interests, and as a matter of business, deliberately intending 
 to abandon his rights in respect of a proceeding by which he has been robbed, after 
 knowledge that he has been so robbed, without manifesting his intention by an express 
 instrument or declaration. 
 
 (b) See § 374, post. In Farrant v. Blanchford {1863), 32 L. J. (ch.) 237, confirmation 
 was inferred from long inactivity, with other circumstances {per Lord Wests uey, L.C, 
 at p. 240). 
 
336 CH. IV, SECT. 4, SUB-SS. (5), (6). 
 
 it is impossible in law, or impracticable in fact, to procure evidence of the 
 intention or the knowledge of the person, or all the persons or members of 
 the class, to whom the duty is owed, a plea of confirmation is out of the 
 question altogether (c). 
 
 Subs. (6). Matters which do not per se constitute Affirmative Answers. 
 
 374. It remains to consider certain matters which are not in themselves 
 affirmative answers to the case of the party complaining. Foremost amongst 
 these is delay. This question has abeady been fully discussed in relation 
 to the duty of disclosure which is incidental to the negotiation for contracts 
 of a certain kind [d). It has been seen, in the course of that discussion, that 
 lapse of time, unless it exceeds some statutory period of limitation, is of no 
 legal significance in itself, though, with other circumstances, it may furnish 
 evidence of a plea of affirmation, or acquiescence in the sense of affirmation, 
 or of waiver, and may give an opportunity for circumstances to arise which 
 may render it impossible to avoid the transaction complained of (such as a 
 change in the substance of the property which is the subject of the transac- 
 tion, or the intervention of the jus tertii), and though, where evidence is 
 lost, it may raise a presumption against the party to whose delay and inaction 
 «uch loss is to be attributed, and in any case may afEect the exercise of judicial 
 discretion in the matter of costs. All these principles, applicable to every 
 case alike in which a party is seeking to be relieved of a voidable transac- 
 tion (whether on the ground of non-disclosure, or misrepresentation, or any 
 other ground), having been stated once, need not be re-stated now. It is 
 sufficient to say that there are many illustrations of their application to the 
 particular class of non-disclosure which is the subject of the present Chapter (e). 
 
 (c) See §§ 392, 393, post. 
 
 (d) In §§ 216-219, ante. 
 
 (e) The best statements as to the significance of delay as evidence, with other circum- 
 stances, in support of certain aifirmative answers, or as a ground for making presumptions 
 against the case of the party whose inaction has caused the loss of testimony, and as to its 
 insignificance per se, in oases of fiduciary relationship, are to be found in the following : — 
 Morse v. Boyal (1806), 12 Ves. 355 {per Lord Eldon, L.C, at p. 374 : " as to the effect of 
 length of time, when there is no bar by the statute of limitations, a court of equity will never 
 lay down as a general proposition that . . . the party is too late ; . . . The true operation 
 of length of time is by way of evidence ; . . . Considered in this way, length of time may have 
 some operation : in what degree depends upon the circumstances of the case ") ; Srlanger v. 
 New Sombrero Plwsphate Co. (1878), 3 App. Cas. 1218, H. L. {per Lord Penzanoe, at p. 1231 : 
 ' ' delay, as it seems to me, has two aspects. Lapse of time may so change the condition 
 of the thing sold, or bring about such a state of things that justice cannot be done by 
 rescinding the contract subject to any amount of allowances and compensation. This is 
 •one aspect of delay, and it is in many cases particularly applicable to property of a mining 
 character. But delay may also imply acquiescence, and in this aspect it equally bars the 
 plaintiff's right, for such a contract as is now under consideration is only voidable and not 
 void. It conduces, I think, to clearness and to the exclusion of a certain vagueness which 
 is apt to hang about the doctrine of delay as a bar to relief, to keep these two different 
 aspects of it separate and distinct, when the consequences of delay come to be considered 
 in connection with the circumstances of the individual case ") ; Re Postkthwaite (1888), 
 60 L. T. 514, C. A. (per Bowen, L.J., at p. 520 : "we arc asked to displace a transaction 
 ■as impeachable which took place 34 years ago, and when all the parties who could give an 
 ■explanation are dead. ... It seems to me that we ought to bring to the consideration 
 of such a case this feeling, that if the correspondence and facts are capable of a reasonable 
 
§§ 373-375 (affirmative answers). 337 
 
 375. Other matters whicli are entirely irrelevant to any question between 
 tlie parties, and which it is as idle for the party charged to affirm, as it is for 
 the party complaining to contradict, have been incidentally dealt with in 
 the examination of the matters which it is not incumbent on the party com- 
 plaining to allege or prove (/). To these may be added the following mis- 
 cellaneous illustrations. When a case has been established against the party 
 complaining of failure to communicate knowledge which he in fact possessed 
 during the subsistence of the relation, it is of no avail for him to set up that 
 he acquired such knowledge before the relation commenced, or otherwise than 
 in the execution of the duties appertaining to it {g). It is equally ineffectual 
 for the purpose of an affirmative defence, or even for the purpose of influencing 
 costs, to rely upon an ofEer made before action, unless such offer comprises 
 all the relief claimed to which the party complaining is by the judgment of 
 the court declared to be entitled. Thus, where an administratrix, by her 
 husband, purchased part of the estate of the deceased under conditions 
 which rendered the transaction liable to be rescinded, it was held that an 
 ofier to reconvey the property at the price at which it was purchased, and the 
 refusal of such ofier, were irrelevant facts, inasmuch as, on such a re-purchase, 
 the position of the party complaining would be difierent from what it would 
 be on obtaining the relief to which he was entitled, though the immediate 
 pecuniary result might appear to be much the same : in the one case, he 
 would only hold the property under the title which the party charged could 
 give him, which was a bad one ex hypothesi, whereas, in the other, the original 
 sale being undone, he would continue to hold it under the same good title 
 as he formerly had Qi). 
 
 explanation consistent with the validity of the transaction, one ought not to draw 
 Inferences, which would really be guesses, ... in favour of the invalidity of the trans- 
 action. The general presumption which the law makes is in favour of the good faith and 
 validity of transactions, and not against them, and that presumption ought to acquire, 
 and does acquire, weight from the length of time during which a transaction has subsisted " ). 
 For further illustrations, see the following, in all of which the delay of the party complaining 
 was held to constitute no answer to his claim for relief, either because it did not amount to 
 confirmation, or acquiescence in the sense of confirmation, or because it had not resulted 
 in any change in the condition of the property, or in the acquisition of rights and interests 
 by innocent third persons for value, or in loss of evidence, or because it was otherwise 
 natural or excusable: Randall v. Erringion (1805), 10 Ves. 423 (per Gbaut, M.R., at 
 pp. 426, 429) ; Greenlaw v. King (1841), 10 L. J. (cH.) 129 (per Lord Cottenham, L.C, 
 at p. 130) ; Charter v. Trevelyan (1844), 11 CI. & Fin. 714 (per Lord Campbell, at p. 741) ; 
 Barker v. Harrison (1846), 2 Coll. 546 (per Kniqht-Bettce, V.-C, at p. 555); Lindsay 
 Petroleum Co. v. Hurd (1874), L. R. 5 P. C. 221 (at pp. 239, 240) ; De BusscJie v. Alt (1878), 
 8 0. D. 286, C. A. (per Cur.,a,t pp. 312-314, as to delay, and pp. 314, 315, as to acquiescence) ; 
 Ee Pepperell (1879), 27 W. R. 410 (per Fby, J., at p. 411, who held that the facts did not 
 amount to acquiescence, as defined by the C. A. in De Bussche v. Alt, sup.) ; Me Gallard, 
 [1897] 2 Q. B. 8 (per Vatjghau Williams, J., at pp. 13-15) ; Patten v. Hamilton, [19111 
 1 Ir. R. 40 (where, at pp. 58, 60, 61, it was pointed out that delay, resulting in loss of evi- 
 dence, operates against the party on whom the onus rests of producing the evidence, who 
 was in that case not the principal seeking relief, but the agent against whom it was sought). 
 
 (/) See Sect. 3, Sub-s. (3), ante. 
 
 (g) Dougan v. Macpherson, [1902] A. C. 197, H. L. (per Lord Macnaohten, at pp. 204, 
 205, and Lord Shand, at p. 205). 
 
 (h) Be Pepperell, sup. (per Fky, J., at p. 411 : " as to the offer by Chamberlain to resell 
 the brewery to the plaintiff on the terms on which he bought, I cannot see that there was 
 any obligation on the plaintiff to accept the offer, and take Chamberlain's infirm title "). 
 
 B.N.D. Z 
 
338 CH. IV, SECT. 5, SUB-S. (1). 
 
 Sect. 5. The Eelief available to the Party Complaining. 
 
 376. The remedies to whicli the cestui que trust, company, or principal is 
 entitled, on establishing a case for relief which is not displaced by any affir- 
 mative answer on the other side, are remedies, of an oSensive and defensive 
 character, against, on the one hand, the trustee, promoter, or agent, and, 
 on the other, the opposite principal or contractee (if any) who has entered 
 into a clandestine agreement or transaction with, and has thereby cor- 
 rupted, the agent of, or other person owing a fiduciary duty to, the party 
 complaining. These are two distinct classes of remedies which require 
 separate examination. 
 
 Sub-s. (1). Remedies against the Party Charged. 
 
 317. As against the party charged, the party complaining is, in the fixst 
 place, entitled to rescission of the transaction complained of, together with 
 consequential and analogous relief (i), subject to the conditions on which 
 alone this particular form of remedy is available. The nature of these con- 
 ditions has already been stated, once for all. It has been seen that transac- 
 tions in respect of which there has been actionable non-disclosure are not 
 void, but voidable at the option of the party coiriplaining, and that important 
 consequences follow from this leading principle (j) : that, with two exceptions 
 — exceptions, however, which in cases of breach of fiduciary duty, go far to 
 eat up the rule — ^rescission is only granted in the case of executory con- 
 tracts (k) : that the possibility of mutual restoration in specie is a condition 
 of the relief, and that, if the party complaining has by his own conduct dis- 
 abled himself from making such restitution, he is precluded from obtaining 
 
 ( j) The following are illustrations of rescission, with consequential relief (see the various 
 forms of decree which, in some cases, are extremely elaborate) : Fox v. Machreth (1788), 
 2 Cox 320 ; 2 R. R. 55 ; Ex p. James (1803), 8 Ves. 337 ; Exp. Bennett (1805), 10 Ves. 
 381 ; Randall v. Errington (19,Q5), 10 Ves. 423 ; Dovmes v. Grazebrooh (1817), 3 Mer. 200 ; 
 Motischild V. Broohman (1831), 5 BUgh (isr.s.) 165 ; Oillett v. Peppercorne (1840), 3 Beav. 
 78 ; Greenlaw v. King (1841), 10 L. J. (oh.) 129 ; Hamiltcm v. Wright (1842), 9 CL & Kn. 
 Ill (by cross-claim) ; Molony v. Kernan (1842), 2 Dr. & War. 37 ; 59 R. B. 635 ; Carter v. 
 Palmer (1842), 8 CI. & Fin. 657 ; Charter v. Trevelyan (1844), 11 CI. & Fin. 714 ; Murphy v. 
 ■O'Shea (1845), 2 Jo. k- Lat. 422 ; 69 R. R. 337 ; Wilson v. Short (1847), 6 Hare 366 ; 
 Barnard v. Hunter (1856), 2 Jur. (n.s.) 1213 ; 106 R. R. 1014 ; Denton v. Bonner (1856), 
 23 Beav. 285 ; Perens v. Johnson (1857), 3 Sm. & 6. 419 ; Smedley v. Varley (1857), 23 
 Beav. 358 ; Spring v. Pride (1864), 12 W. R. 892 ; Dyson v. Lam (1866), 14 L. T. 588 ; 
 Franks v. Bollans (1867), 17 L. T. 309 ; Atwool v. Merryweather (1867), L. R. 5 Eq. 464 n. ; 
 Lindsay Petroleum Co. Y.Hurd (1874), L. R. 5 P. C. 221 ; Bagnall {John) & Sons, Ltd. v. 
 ■Carlton (1877), 6 0. D. 371, C. A. ; McPherson v. Watt (1877), 3 App. Cas. 254, H. L. ; 
 Erlanger v. New Sombrero Phosphate Co. (1878), 3 App. Cas. 1218, H. L. ; Re Pepperell 
 <1879), 27 W. R. 410 ; Plowright v. Lambert (1885), 52 L. T. 646 ; Dougan v. Macpherson, 
 [1902] A. C. 197, H. L. ; Transvaal Lands Co. v. New Belgium, etc., Co., [1914] 2 Ch. 
 488, C. A. 
 
 (j) See §§ 225, 226, ante. The oases cited in note (p), inf., are striking illustrations of 
 the consequences of the transaction being voidable at the option of the party complaining. 
 So also are the cases cited in note (t) to § 378, post. 
 
 {h) See § 230, ante. In Dunbar v. Tredennick (1813), 2 Ball. & B. 304, no regard was 
 paid to the completion, it being merely a " continuation of the fraud " {per Lord Maimers, 
 L.C. (Ir.), at p. 318). So, alao,inLindsay PetroleumCo.r. Hurd,sup.,and Transvaal Lands 
 Co. V. New Belgium {Transvaal) Land and Development Co., sup. (see p. 505). 
 
§§ 376, 377 (relief). 339 
 
 rescission, whatever other forms of relief may still be open to him (l) : that 
 no contract or transaction can be set aside in which innocent third parties 
 have acquired rights and interests for value (m) : that, ordinarily a transac- 
 tion will be rescinded in toto, or not at all, but that, where covenants and 
 stipulations, or parties, are separate and severable, relief may be given in 
 respect of one part of, or against one party to, the transaction without 
 interfering with any other part, or with the rights of any other party, and 
 that an instrument possessing two characters may be set aside in one of 
 those characters, and left to stand in the other (w) : and, lastly, that, where 
 rescission is granted, the order is moulded in such a form as to comprise all 
 prefatory declarations, and consequential or ancillary directions, as to cancel- 
 lation (where necessary), repayment with interest, reconveyance or retransfer 
 by the party charged (subject to the like restitution on the part of the 
 party complaining), accounts, inquiries, injunctions, and otherwise, which may 
 be appropriate to the circumstances of the individual case, and required to 
 effect a complete restitutio ad integrum (o). One of such incidental directions, 
 in cases of purchases by trustees or agents in breach of fiduciary duty at 
 auction sales, is of a somewhat anomalous character, since it neither annuls, 
 
 {I) See § 231, ante ; and, for applications of the doctrine there stated to oases of non- 
 disclosure by persons in a position of confidence, see most of the authorities cited in note (i), 
 sup., where adequate provision was made for mutual restoration in specie as a condition 
 of the reUef granted, for illustrations of cases where, the party complaining having so 
 dealt with the property that it could not be restored in substantially the same plight and 
 condition, rescission was refused, either absolutely, or unless certain conditions could be 
 complied with, see Great Luxembourg Railway Go. v. Magnay (1858), 25 Beav. 586 ; 
 Lindsay Petroleum Co. v. Hiird (1874), L. R. 5 P. C. 221 (at p. 245, where the form of 
 decree is set out) ; Re Worssam (1882), 51 L. J. (CH.) 668 (where thedaughter of an intestate, 
 being otherwise entitled to rescission of the sale of her interest to the administrator, had 
 settled the purchase money on her marriage, and therefore could not restore it, and where, 
 at p. 671, Pry, J., laid down the rule, in general terms, that " those who come to set aside 
 a voidable transaction must show two things — ^first, that the transaction was voidable ; 
 and, secondly, that they arc in a position to avoid it ") ; Ladywell Mining Co. v. Brookes 
 (1887), 35 C. I). 400, C. A. (per LrNDLBY, L. J., at p. 414) ; Lagunas Nitrate Co. v. Lagunas 
 Syndicate, [1899] 2 Ch. 392, C. A. (per Lindlby, M.R., at pp. 432-434, and Collins, L.J., at 
 p. 463) ; Re Leeds & Hanley Theatre of Varieties, Ltd., [1902] 2 Ch. 809, C. A. (per Vaughan 
 Williams, L. J., at pp. 825, 826, pointing out that rescission was there impossible, because 
 the property was in the hands of mortgagees, though this did not preclude reHef of another 
 kind, viz. by way of damages, which was granted). An illustration of the rule that, where 
 the inabiUty to make specific restoration is not the fault of the party complaining, he is 
 not disabled from obtaining reHef, is Phosphate Sewage Co. v. Sartmont (1811), 5 C. D. 394, 
 C. A. (per Cur., at pp. 454, 455). Cp. Transvaal Lands Co. v. New Belgium, etc., Co., sup. 
 
 (m) See § 233, ante, and the following cases of fiduciary relationship in illustration 
 thereof : Featherstonehaugh v. Fenwiclc (1801), 17 Ves. 298 (where, at pp. 312, 313, Lord 
 Eldon, L.C, said that he would not have made the decree if it had been proved to his 
 satisfaction, which it had not, that it would work injustice to the owner of the partnership 
 premises, a renewal of the lease of which for the personal benefit of one of the partners 
 was the transaction impeached) ; Be Leeds & Hanley Theatre of Varieties, Ltd., sup. (the 
 passage referred to in the last note). 
 
 (») See § 239, ante, and, for further illustrations thereof taken from the class of case 
 now under consideration, Denton v. Z>om»er (1856), 23 Beav. 285 (where an instrument was 
 set aside so far as it purported to be an absolute conveyance, but allowed to stand as a 
 security only, which the plaintiff was to be at liberty to redeem). On the other hand, in 
 McPherson v. Watt (1877), 3 App. Cas. 254, H. L., two contracts were held to form part 
 of one entire transaction, though distinct from one another in point of form, and between 
 different parties (per Lord Caibns, L.C, at p. 265, and Lord Blackbtjen, at p. 276). 
 
 (o) See §§ 237-240, ante, and, for further illustrations, see the forms of decree or 
 judgment in the oases cited in note (i), sup. 
 
340 CH. IV, SECT. 5, SUB-S. (1). 
 
 nor affirms, the purchase, but leaves it to stand or fall according to a future 
 event. The procedure is this. The property is ordered to be put up for 
 sale hj auction again at the price at which it was knocked down to the pur- 
 chaser, with the addition of such sum as may represent the increase in value 
 due to permanent improvements and repairs executed by the purchaser 
 since he acquired the property, if there were any such ; and it is directed that, 
 if any higher bid is made on the second sale, the property is to go to the person 
 so bidding, and the original purchase is to be set aside, but, if no higher bid 
 is made, the original purchase is to stand. In other words, if the original 
 purchaser is shown by the event to have made a good bargain, he is to be 
 deprived of it ; if a bad one, he is to be fixed with it {p). This certainly seems a 
 somewhat unjust provision, and one which is hardly in accordance with the 
 fundamental principle on which a party is given his election to avoid or adhere 
 to a contract. Though it may be perfectly fair and reasonable that the 
 wrongdoer should be at the mercy of the injured party's option, it cannot 
 be right that he should still be at his mercy when that option has been exer- 
 cised. The party complaining comes to the Court to be relieved of the 
 contract, and must be supposed to have exercised, and therefore exhausted, 
 his right of election in favour of avoidance before doing so. The Court 
 thereupon, by the form of order in question, neither annuls nor affirms the 
 purchase, but permits the party complaining to keep the matter in suspense, 
 and encourages him in, and indeed itself practises, the vice of simultaneous 
 approbation and reprobation. " You have made your choice," it says to 
 him, " between two alternative and inconsistent courses ; but, nevertheless, 
 if it appears ex post facto that your choice was an injudicious one, you shall 
 be at liberty to recall it, and resort to the alternative course which the event 
 will show to be that which you should have originally adopted, and you shall 
 be deemed to have so adopted it from the beginning." It is not surprising 
 to find that Geant, M.E., was reluctant to follow the rule, and only did so in 
 deference to the high authority of Lord Eldon (q) ; or that Lord Eldon himself, 
 its inventor, in a later case expressed some misgivings as to its fairness (r) ; 
 
 ip) This practice was instituted by Lord Eldon, L.C, and formed part of his decree 
 in many cases decided by him against the purchaser at an auction sale, asinfep. Lacey 
 (1802), 6 Ves. 625 (see p. 630) ; Exp. James (1803), 8 Ves. 337, where, also, the solicitor was 
 prohibited from bidding on the resale by auction which had been ordered, for, though Lord 
 Eldon conceded that this might be unobjectionable if the consent of all the persons inter- 
 ested were first obtained, it would not be safe for the Court to give the soUoitor even a con- 
 ditional permission ab ante to do so : see pp. 351, 352) ; Exp. Bennett (1805), 10 Ves. 381. 
 In Exp. Hughes, SeDumbell (1802), 6 Ves. 616, the order made by Lord Eldon, L.C., was 
 that the property should be put up for sale again at a sum made up of the price at which 
 it was knocked down to the purchassr at the first sale, and the total value of the substantial 
 improvements and repairs effected by him whilst' in possession of the property, which 
 value the Master was to ascertain. The original purchase money was £2000, and the value 
 of the improvements was found to be no less than £6000. The property was accordingly 
 put up again at £8000, and no higher bid being made, the pvirchaser was held to his 
 purchase (see pp. 624, 025). 
 
 iq) In Lister v. Lister (1802), 6 Ves. 631a, at p. 632. 
 
 (rj Arden, M.E.., directed the Master to inquire whether a resale would be for the 
 benefit of the infant cestuis que trustent in Campbell v. Walker (1800), 5 Ves. 677, and the 
 Master having reported that, in the case of one of the purchases complained of, the real 
 value was nearly double what had been given, a resale was ordered, and the property 
 
§§ 377, 378 (relief). 341 
 
 though, half a century afterwards, it appears to have been still in force 
 as a rule of convenience (s). 
 
 378. The principle that the transaction is voidable at the option of the 
 party complaining involves the existence of the alternative right to adhere 
 to it by adoption, or ratification, or simply by taking no steps to avoid it. 
 In the latter event, the party complaining is not left without remedy against 
 the party charged ; but his remedy is of a different nature. It is a claim 
 for an order on the party charged to account for the amount or value 
 of the money or money's worth which he has received under the agreement 
 or transaction impeached. It is the right of the party complaining to elect 
 between the two forms of relief : the party charged cannot compel him to 
 resort to either in preference to the other. If called upon to account, the 
 party charged cannot set up that the party complaining might have, but 
 has not, rescinded (t), any more than, if the party complaining chooses to insist 
 that the transaction is a nullity, it is any answer to say that he might have 
 adopted it and sued for an account and payment or delivery of the money 
 or property improperly received thereunder (u). From time to time con- 
 tentions to the contrary, founded on a total misreading and misapprehension 
 of certain authorities (v), have been advanced : but it is now finally settled, 
 
 in question did in fact fetch nearly double the sum paid on the original sale by the trustee, 
 who was accordingly not allowed to hold his bargain. Seven years later, this case, 
 stib nom. {Sanderson v. Walker (1807), 13 Ves. 601, came before Lord Eldon, L.C, who, 
 at p. 603, refers to " the principle laid down by me, that if it is for the benefit of the infants 
 that the purchase shall not be disturbed, the Court will not disturb it, and will disturb it, 
 if that wiU be for their benefit," and " that principle, open to considerable objection, must 
 be admitted, if a better principle cannot be found." 
 
 (a) Dyson v. Lum (1866), 14 L. T. 588 (per Stttaet, V.-C, at p. 589 : " the property 
 must be put up for sale at the price at which it was purchased by the trustees, and if no 
 more is then offered, they must be held to their bargain "). 
 
 (0 See Hichens v. Gongreve (1831), 4 Sim. 420 {per Shadwbll, V.-C, at p. 428) ; 
 Bentley v. Craven (1853), 18 Beav. 75 {per Rosully, M.R., at p. 76) ; Kimber y. Barber 
 (1872), 8 Ch. App. 56 {per Lord Sblborne, L.C, at p. 59) ; Bagnall {John) dh Sons, Ltd. v. 
 Carlton (1877), 6 C. D. 371, C. A. {per James, L.J., at p. 399, and Baggallay, L.J., at 
 p. 404), where the separate and alternative nature of the two remedies was illustrated in a 
 rather striking manner ; the company having sued the representatives of the deceased 
 vendor for rescission of the purchase, and the promoters for repayment of secret profits, 
 it was held that they were entitled to elect either remedy in each of the two cases, 
 and that, therefore, the promoters who were held liable to pay over these secret profits 
 could not be heard to say that the sum for which the company had compromised its claim 
 to rescind against the vendor's representatives should be credited to them as against the 
 ■amount of the profits which they were ordered to disgorge ; Emma Silver Mining Co. v. 
 Orant (1879), 11 C. D. 919 {per Jessbl, M.R., at pp. 957, 958, where he points out by a 
 couple of forcible illustrations how independent of one another the two rights are) ; Emma 
 Silver Mining Go. v. Lewis & Son (1879), 4 C. P. D. 396 {per Gur., at p. 409) ; I/ydney and 
 Wigpool Iron Ore Co. v. Bird (1886), 33 C. D. 85, C. A. {per Cur., at p. 94 : " nor is it 
 necessary for the company to rescind the whole transaction of which the payment by the 
 company of the money in question is found to be a part ") ; Re Leeds & Hanley Theatre of 
 Varieties, Ltd., [1902] 2 Ch. 809, C. A. {per Vaitghan W^liams, L. J., at p. 826 : " although 
 the Theatres company cannot give back the property, and ask that their money should 
 be returned in toto, they are entitled to damages for this breach of duty "). 
 
 (tt) Be Hereford dh South Wales Waggon <fc Engineering Go. (1876), 2 C. D. 621, C. A. 
 {per Cur., at pp. 625, 626 : it was recognized here that it was open to the company to have 
 adopted the contract with the agents, ii stead of repudiating it as they did, and that, in the 
 former event, they would have been liable to pay for the agents' services, a claim for which 
 remuneration, having adopted the latter alternative, they were successfully resisting). 
 
 {v) Such aa Ladywell Mining Go. v. Brookes (1887), 37 C. D. 400, C. A. {per Cotton, L. J., 
 
342 CH. IV, SECT. 5, SUB-S. (1). 
 
 and, indeed, has been so since 1831, that, as in the analogous case of fraudulent 
 misrepresentation, both remedies are alternatively, but not cumulatively, 
 available to the party complaining against the party charged ; provided 
 that, where there is more than one party charged, there is a choice of remedies 
 against each, and rescission may be simultaneously claimed against one of 
 them, and an account against the other or others, without any objection 
 on the score of inconsistency (w). 
 
 379. Where the second of the above alternative remedies is pursued 
 against the trustee, promoter, or agent, the right (whether it be called a 
 claim for an account, or for money had and received, or for the recovery of 
 damages) is a right to compel the delinquent to disgorge the amount or value 
 of the secret profit or advantage which he has received under the transaction 
 impeached. This profit or advantage may have been taken in the form of 
 money, or of property other than money. In the former case, the cestui 
 que trust, company, or principal, is entitled to an order for an account of the 
 sums received, and payment over of such sums when so ascertained, or, in 
 case of a single specific sum or an agreed total, a simple order for the payment 
 thereof (x), with interest, which is usually fixed at 5 per cent, (y), but in a 
 
 at pp. 407-409, Lindley, L.J., at pp. 414, 415, and Lopes, Ij.J., at p. 415). It was not 
 held here that the two claims were dependent on one another, so that if rescission faUed, 
 the right to recover the profit also failed. Quite the contrary : each claim was in- 
 dependently examined on its merits, and on the evidence, and each failed. 
 
 (w) See the cases cited in note (i), sup., and Gluckstein v. Barnes, [1900] A. C. 240, 
 H. L. {per Lord Macnaghten, at p. 249 : " a third ground of defence was that the only 
 remedy was rescission. This defence, in the circumstances of the present case, seems to me 
 as contrary to common sense as it is to authority. The point was settled more than sixty 
 years ago in Hichens v. Congreve, and, so far as I know, that case has never been 
 questioned "). 
 
 (x) As in Russell v. Austwick (1826), 1 Sim. 52 (account of profits of secret agreement) ; 
 Fawcett v. Whitehouse (1829), 1 Russ. & M. 132 (declaration of trusteeship, and account) ; 
 Sothachild v. Brookman (1831), 5 Bhgh (n.s.) 165 (account of dealings in securities) ; 
 Hichens v. Congreve (1831), 4 Sim. 420 (payment of a certain sum already brought into 
 court) ; Barker v. Harrison (1846), 2 CoU. 546 (declaration of trusteeship) ; Clarke v. 
 Tipping (1846), 9 Beav. 284 (account of deaUngs) ; York tfc North Midland Railway Co. v. 
 Hudson (1853), 16 Beav. 485 (account of profits derived from sale and disposal of shares) ; 
 Bentley v. Craven (1853), 18 Beav. 75 (account of profits) ; Tyrrell v. Bank of London 
 (1862), 10 H. L. C. 26 (declaration, account, and payment) ; Williams v. Stevens (1866), 
 L. R. 1 P. 0. 362 (payment of a specific sum) ; Tmnbull v. Garden (1869), 20 L. T. 218 
 (account of secret discounts) ; Spain {Queen of) v. Parr (1870), 39 L. J. (oh.) 73 (account 
 of secret commissions) ; Dunne v. English (1872), L. R. 18 Eq. 524 (account against 
 partner of a moiety of the profits made on a secret transaction) ; Kimher v. Barber (1872), 
 8 Ch. App. 56 (payment of a specific sum) ; Imperial Mercantile Credit Association v. 
 Coleman (1873), L. R. 6 H. L. 189 (the like) ; Morison v. Thompson (1874), L. R. 9 Q. B. 
 480 (the hke) ; Parker v. McKenna (1874), 10 Ch. App. 96 (declaration of accountabihty, 
 inquiry, and account) ; Panama & South Pacific Telegraph Co. v. India Rvhher, Gutta 
 Percha, <fc Telegraph Co. (1875), 10 Ch. App. 515 (as against one of the defendants, payment 
 of the amount of the bribe) ; Phosphate Sewage Co. v. Hartmont (1877), 5 C. D. 394, C. A. 
 (payment of secret profit, as against some of the defendants); Bagnall {John) <b Sons, Lid. v. 
 Carlton (1877), 6 C. D. 371, C. A. (the like) ; De Bussche v. Alt (1878), 8 C. D. 286, C. A. 
 (account and payment) ; Be Englefield Colliery Co. (1878), 8 0. D. 388, C. A. (payment, 
 j ointly and severally, against directors, of amount of bribe received from promoters) ; Emma 
 Silver Mining Co. v. Grant (1879), 11 C. D. 919 (payment over of secret profits made by 
 
 {y) This rate of interest was ordered to be paid in several of the cases cited in the last 
 note, being regarded as a punitive one, or, at all events, as a proper rate to charge against 
 a trustee who had failed in his duty, which was the reason given by Romilly, M.R., in 
 York tfc North Midland Railway Co. v. Hudson, sup. 
 
§§ 378, 379 (reliep). 343 
 
 proper case, that is, where the party charged is shown to have been actuated 
 by personal good faith, may be reduced to a less penal rate (z). A declara- 
 tion is sometimes prefixed to the order (a). Only the net profits are recover- 
 able : that is to say, the party charged is to be credited with the amount of 
 all proper and legitimate expenditure incurred by him, and with remuneration 
 for all proper and legitimate services rendered by him, for the purpose of 
 entitling himself to the money which the party complaining is seeking to 
 recover from him under and by virtue of a transaction which, though com- 
 plained of, is not being repudiated, but adopted (b). It should be observed 
 here that, where the transaction impeached is the secret receipt of a pecuniary 
 bribe from the opposite principal or other third person, the money recoverable, 
 
 promoter) ; Emma Silver Mining Co. v. Lewis ofc Som (1879), 4 C. P. D. 396 (the like) ; Whaley 
 Bridge Calico Printing Co. v. ©reera (1879), 5 Q. B. D. 109 (the like) ; Metropolitan Bank v. 
 Heiron (1880), 5 Ex. D. 319, C. A. (recovery of bribe, but here the claim was held barred 
 by the statute of limitations) ; Lydney & Wigpool Iron Ore Go. v. Bird (1886), 33 C. D. 
 85, C. A. (payment of specific sum) ; Boston Deep Sea Fishing <fc Jee Co. v. Ansell (1888), 
 39 C. D. 339, C. A. (account and payment of secret commissions, &c.) ; Lister tfc Go. v. 
 Stvhhs (1890), 45 C. D. 1, C. A. (recovery of a specific amount) ; Williamson v. Sine Bros., 
 [1891] 1 Ch. 390 (account) ; Olnckstein v. Barnes, [1900] A. C. 240, H. L. (payment of 
 specific sum) ; ErsTcine, Oxenford & Co. v. Sachs, [1901] 2 K. B. 504, C. A. (account of 
 secret profits, on counterclaim) ; Re Leeds & Hanley Theatre of Varieties, Ltd., [1902] 
 2 Ch. 809, C. A. (payment of sum received by promoter as secret profit) ; Hippisley v. 
 Knee Bros., [1905] 1 K. B. 1, Div. Ct. (payment of specific sums) ; Powell & Thomas v. 
 Evans, Jones & Co. (the like, by counterclaim) ; Nitedals Taendstickfabrik v. Bruster, 
 [1906] 2 Ch. 671 (account and payment of secret commissions) ; Bath v. Standard Land Co. , 
 [1911] 1 Ch. 618, C. A. (declarations and accounts) ; Be Darby, Ex p. Brovgham, [1911] 
 1 K. B. 95 (proof in bankruptcy allowed for specific amount representing promoter- 
 vendor's secret profit) ; Green (E.) & Son, Ltd. v. Tugham & Go. (1913), 30 T. L. R. 64 
 (account and payment of rebates, discounts, and commissions) ; Kuhliez v. Lambert Bros., 
 Ltd. (1913), 108 L. T. 565 (account of profit). 
 
 (2) In Imperial Mercantile & Credit Association v. Coleman, sup.. Lord Cairns, at 
 pp. 209, 210, advised the House to reduce the rate of interest from the more or less penal 
 5 per cent, to 4 per cent., on the ground that the directors in that case had acted under an 
 honest mistake, and were not ordinary delinquents. The lower rate was ordered also in 
 Fawcett v. Whitehouse, Emma Silver Mining Go. v. Grant, Lydney dh Wigpool Iron Ore Go. v. 
 Bird, and Be Leeds tb Hanley Theatre of Varieties, Ltd., sup. 
 
 (a) From note {x), sup., it will be seen that in some of the cases there cited declarations 
 of trusteeship and accountabihty were prefaced to the mandatory part of the decree or 
 judgment. In Powell tSs Thomas v. Evans, Jones cfe Co., sup., a somewhat special form of 
 declaration was made on the counterclaim : see note (i^), inf. 
 
 (6) In York <Ss North Midland Railway Co. v. Hudson, Dunne v. English, Bagnall & 
 Sons, Ltd. V. Carlton, De Bussche v. Alt, Emma Silver Mining Co. v. Grant, Lydney and 
 Wigpool Iron Ore Go. v. Bird, and Re Darby, sup., the defaulting director, partner, agent, 
 or promoter was held entitled to deduct from the sums to be handed over his expenses, 
 and generally all just allowances, but not illegitimate expenditure, such as a payment 
 incurred by a promoter in guaranteeing the subscription of shares in the company, for 
 this would be " to make the company pay for the issue of its own shares," and so commit 
 an illegal act {per Cur., at p. 95 of Lydney & Wigpool Iron Ore Co. v. Bird, sup.) ; though, 
 in Emma Silver Mining Go. v. Grant, sup., Jbssbl, M.R., allowed the promoter his expenses 
 of procuring the directors, engaging brokers "to sustain the market," and getting the 
 concern written up in the papers (in other words, bribing the directors, rigging the market 
 and corrupting the press), because the promoters would not have incurred these expenses, 
 any more than he would have received the profits, but for the clandestine agreement 
 complained of (pp. 939-941). This generous view of the "just allowances " of corrupt 
 promotership has not been adopted in any other case. In Bagnall (John) <fe Sons, Ltd. v. 
 Carlton, sup., the company made an offer to allow the promoters a reasonable commission 
 for their services, and " by reason of this offer " (per James, L.J., at p. 403, and Cotton, 
 L.J., at pp. 408, 409, adding, " this is the only ground on which we do it ") a sum fixed by 
 the Court was allowed. Otherwise it would not have been. 
 
344 CH. IV, SECT. 5, SUB-S. (1). 
 
 whether regarded as money had and received, or an equitable debt, or, as 
 some judges have preferred to call it, damages (c), is not trust money, or to 
 be treated as such. It is merely the subject of an ordinary debt or pecuniary 
 liability, and at no stage in the history of the transaction can the party com- 
 plaining affirm that in equity it was his. In the majority of cases, this dis- 
 tinction is of no practical importance : but, where there is a question of a 
 statute of limitations, or of a declaration as to the rights and liabilities of 
 the parties in respect of future receipts by the agent under the agreement 
 complained of, or where the agent is made bankrupt, it obviously becomes of 
 the utmost moment and materiality (d). 
 
 380. Where the property sought to be recovered is other than money, 
 and the party complaining is in a position to say that it was in equity his 
 property when received by the trustee, promoter, or agent, but not other- 
 wise (e), he has the right either to have the thing itself delivered or trans- 
 
 (c) In Be Fitzroy Bessemer Steel Co. (1884), 50 L. T. 144, Kay, J., described a claim to 
 make the promoter of a company accountable as a claim for " damages " (p. 147) ; and, 
 at p. 825 of Be Leeds & Hanky Theatre of Varieties, Ltd., [19021 2 Ch. 809, C. A., Vattghan 
 Williams, L.J., said : " I am not sure that the Theatres Co. can, in reference to this 
 breach of fiduciary duty by the promoters, maintain an action for money had and received. 
 I think that the safer way of putting it is to say that the remedy is in damages." This 
 particular terminological question, however, is never of any practical importance, because 
 the measure of damage always works out in precisely the same way as if the claim were for 
 an account, or for money had and received, the sum ordered to be paid in either case 
 being the amount received, less " just allowances." And, in the very case last cited, the 
 Court announced, at the end of the judgments, " we are all of opinion that the true measure 
 of damages is the amount of the profit which was made by the promoting company " 
 (p. 833). 
 
 {d) See Metropolitan Bank v. Heiron (1880), 5 Ex. D. 319, C. A. (per Jambs, L.J., at 
 p. 323, Bbett, L.J., at p. 324, and Cotton, L.J., at pp. 325, 326 : here the claim of the 
 bank to recover the amount of the bribe received by a director was held to be barred by the 
 Statute of Limitations, on the express ground that it was a debt, and, though dishonestly 
 received, was never in contemplation of law the principal's money, in which case, of course, 
 the statute would have been no bar) ; Lister & Co. v. Siubbs (1890), 45 C. t>. 1, C. A. 
 (where the principal, in an action against the agent, to recover the amount of secret 
 commissions received by him, unsuccessfully moved the Court for an interlocutory 
 injunction to restrain the agent from dealing with real estate which he had purchased with 
 this money, it being held that the money was not a trust fund which could be followed 
 into investments, and identified as the principal's money, but only an ordinary debt : 
 per STiBLmo, J., at pp. 9-11, Cotton, L.J., at pp. 13, 14, and LnrDLEy, L.J., at p. 15) ; 
 Be North Australian Territory Co., Archer's Case, [1892] 1 Ch. 322, C. A. {per Lindley, L. J., 
 at p. 338 : "to say that" the illicit profit ia the money of the company "is to use 
 an ambiguous expression. In one sense it may be said to be the company's money — 
 that is to say, in the sense that the company are entitled to get it. In another sense it is 
 not the company's money — ^that is to say, the company cannot follow it into investments 
 of it, nor, in the event of Mr. Archer's bankruptcy, could they withdraw the money from 
 his assets, instead of ranking as creditors against his estate ") ; Powell & Thomas v. 
 Evans, Jones & Co., [1905] 1 K. B. 11, C. A. {per Couins, M.R., at pp. 19, 20, Stirling, 
 L.J., at p. 22, and Mathew, L.J., at pp. 23, 24, who, as regards any future sums to be 
 received by the agent under the secret agreement with the opposite principal, declared 
 that, when so received, they would constitute a debt to the principals, but refused the 
 more extended declaration pressed for, viz. that the agent was the trustee of the agree- 
 ment for them). With these cases contrast those in which the illicit profit was made 
 on a transaction between the related parties themselves, and where, as was pointed out by 
 Lord Wynfoed, L.C, at pp. 194-196 of Bothschild v. Broolcman (1831), 5 Bligh (n.s.) 
 165, the party complaining can say that the money is earmarked. 
 
 (e) Erlanger v. New Sombrero Phosphate Co. (1878), 3 App. Cas. 1218, H. L. (per Lord 
 Caiens, L.C, at p. 1235, Lord Hathbbley at pp. 1242, 1243, and Lord Blackbttrn at 
 pp. 1267, 1268). 
 
§§ 379, 380 (RELIEF). 345 
 
 f erred to him (unless it has disappeared, or has been parted with to a bond fide 
 purchaser for value), together with any proceeds or profits which may have 
 accrued in the meantime, or to be paid its value : the option is his to deter- 
 mine in what form he will take satisfaction, not that of the other party to 
 choose in what form he will give it (/). The former remedy is usually resorted 
 to where the property consists of land, or where there are difficulties in esti- 
 mating the value {g) ; the latter, in other cases, and, particularly, where the 
 property consists of shares in a company which a director or other agent of the 
 company has taken under a clandestine agreement with the promoter [h). In 
 the last-mentioned class of case, there are certain established rules as to the 
 measure of value, or of damages, which, on the principle of omnia prcBSumuntur 
 contra spoliatorem, are applied against the delinquent with greater severity 
 than in cases where the party liable is not connected with the other party by 
 any relation of " confidence," and has not been guilty of fiduciary miscon- 
 duct (i). The slightest frimd, facie evidence on behalf of the company, or 
 its liquidator, that the shares were treated by persons dealing with them at 
 the material date as being worth their face value, is enough to throw the 
 burden on the delinquent of showing cause why he should not pay that 
 fuU value (j). Such prima facie evidence may consist of no more than 
 proof of the fact that, at the date when the director or other officer of 
 the company received the shares, there were applications from the public 
 
 (f) Re Caerphilly GoUiery Co., Pearson'' s Case (1877), 5 C. D. 336, C. A. {per Jessel, 
 M.E.., at p. 341 : " liable at the option of the cestui que trust to account either for the value 
 at the time of the present he was receiving, or to account for the thing itself, and its pro- 
 ceeds it it has increased in value ") ; Naut-y-Olo ds Blaina Ironworks Co. v. Grave (1878), 
 12 C. D. 738 {per Bacon, V.-C, at pp. 747, 748) ; ^Eden v. Bidsdale's Railway Lamp dh 
 Lighting Go. (1889), 23 Q. B. D. 368, C. A. {per Lord Eshee, M.E., at p. 371 : "if that which 
 the agent has received is money, he must hand it over to his principal ; if it is not money, 
 but something else, the principal may insist on having it, or, if he chooses, the value of 
 it "). When the property has been parted with to a bond fide purchaser for value, the 
 party complaining must resort to his pecuniary claim, which he may elect to have measured 
 by the profit made by the party charged on the resale, as in Whichcote v. Lawrence (1798), 
 3 Ves. 739 ; York & North Midland Railway Co. v. Hudson (1853), 16 Beav. 485 (as to 
 some of the shares there in question) ; Barker v. Harrison (1846), 2 Coll. 546. 
 
 {g) As in Featherstonehaugh v. Fenwick (1810), 17 Ves. 298 (a lease); Att.-Oen. v. 
 Lord Dudley (1815), G. Cooper 146; 14 R. R. 226 (land); Carter v. Palmer (1842), 8 
 a. & Fin. 657 ; Tyrrell v. Bank of London (1862), 10 H. L. C. 26 (houses) ; Luddy's 
 Trustee v. Peard (1886), 33 C. D. 500 (advantages under a will). In Lowther v. Lord 
 Lowther (1806), 13 Ves. 95, the relief sought was delivery of a valuable picture. 
 
 {h) Aa in Society of Practical Knowledge v. Abbott (1840), 2 Beav. 559; Re Morvah 
 Consols Tin Mining Co., McKay's Case ( 1875), 2 C. D. 1, C. A. ; Re British Provident Life & 
 Ouarantee Association, De Buvigne's Case (1877), 5 C. D. 306, C. A. ; Re Caerphilly Colliery 
 Co., Pearson's Case, sup. ; Naut-y-Olo & Blaina Ironworks Co. v. Grave, sup. ; Re West 
 Jewell Tin Mining Co., Weston's Case (1879), 10 0. D. 579, C. A. ; Re Diamond Fuel Co., 
 Mitcalfe's Case (1879), 13 C. D. 169, 0. A. ; Re Fitzroy Bessemer Steel Co. (1884), 60 L. T. 
 144 ; Re Carriage Co-operative Supply Association (1884), 27 C. D. 322 ; Re Postage Stamp 
 Automatic Delivery Co., [1892] 3 Ch. 566 ; Re North Australian Territory Co., Archer's Case, 
 [1892] 1 Ch. 322, C.A. ; Re Westmoreland Green & Blue Slate Co., Bland's Case, [1893] 
 2 Ch. 612, C. A. ; Re London <S; South Western Canal Co., Ltd., [1911] 1 Ch. 346. 
 
 (i) Shaw V. Holland, [1900] 2 Ch. 305 {per Webster, M.R., at p. 310). 
 
 {j) See Weston's Case, sup. {per Jessel, M.R., at p. 584) ; Mitcalfe's Case, sup. {per 
 Fry, J., at p. 173 : " the obligation was on him to show that by reason of special circum- 
 stances he was not chargeable with the full value of any of the shares) ; Eden v. Ridsdale's 
 Jtailway Lamps tfe Lighting Co., sup. {per Lord Eshee, M.R., at p. 371). 
 
346 CH. IV, SECT. 5, SUB-S. (1). 
 
 wMcli tte company might have satisfied by allotting the shares in question 
 (which allotment of course could only be at par), or that shares of the descrip- 
 tion in question had been actually transferred at par, or had been treated 
 in the books of the company as worth their nominal value, or that the director 
 had himself purchased other shares than the shares in question, but of a 
 similar description, at par : and it is no answer to such evidence to prove 
 that the shares are at the date of the proceedings, or have been since they 
 were received, of less than their nominal value, or of no value at all (which, 
 indeed, is nearly always the case), or that the delinquent has sold them at a 
 sacrifice, the question not being whether he has gained by the transaction, but 
 whether and how much, the company has lost {k). It has been held in some 
 cases that, as against the wrongdoer, the shares may be presumed to have been 
 worth the highest price given for them at any date between the discovery 
 of the true facts relating to the bribe and the date of the institution of the 
 proceedings (l). To apply such a measure as this, however, can hardly be 
 equitable except under very special circumstances. On the other hand, the 
 Court is not bound to give the face value, even when proved to have been 
 the real value at the material date : it exercises its discretion with reference 
 to all the circumstances, and these may be such as to induce it, in a 
 particular case, to apply the rules as to the measure of damage less rigorously 
 than in the ordinary type of case (to). It happens sometimes that the value, 
 so to speak, liquidates itself, as when the party charged has himself received 
 a sum of money in exchange for, or as representing, the shares, which sum 
 the party complaining is willing to take as their value (w). Interest on the 
 ascertained value is usually charged against the party held liable at the penal 
 rate of 5 per cent., on the ground that the concealment of the transaction in 
 the majority of cases amounts to actual misconduct (o) ; but in some instances 
 interest at 4 per cent, only is charged (p), and, in others, none at all (q). 
 
 (k) See, generally, the oases cited in note (h), sup. 
 
 (l) As in Rr Morvah Consols Tin Mining Co., McKay's Case, sup. {per Melush, L.J., 
 at pp. 6, 7, and Beett, J., at p. 8) ; Naut-y-Glo & Blaina Ironworks Co. v. Grave (1878), 
 12 C. D. 378 {per Bacon, V.-C, at pp. 749, 750). The rule was also so stated by Lord 
 ESHEE, M.R., at p. 371 of Eden v. Ridsdale's Railway Lamp <fc Lighting Co., sup. Contrast 
 the observations of Jessbl, M.R., at pp. 584, 585 of Weston's Case, sup. : " when a 
 director or any person in a fiduciary position accepts a present of this kind, he is to be 
 charged with and compelled to make good the full possible value of the present or bribe at 
 the time. The full possible value — the Court is not to endeavour to reduce the value." 
 Here, it is conceived, the proposition receives its proper limitation. The " time " re- 
 ferred to is of course the time when the delinquent took the bribe. 
 
 (m) As in Re Fitzroy Bessemer Steel Co., sup. {per Kay, J., at p. 147, who said that 
 vindictive damages ought not to be given against a merely "constructive trustee," and 
 fixed the value of the £10 shares at £3 only ; further, he refused to order the promoter 
 to pay any interest at all on the curious ground that he had received no dividends, and the 
 company had lost none). This treatment seems as unduly lenient to the party charged 
 as that adopted by the Court in the cases cited in the last note was unduly severe. 
 
 {n) As in Re North Australian Territory Co., Archer's Case, [1892] 1 Ch. 322, C. A. {per 
 BowEN, L. J., at p. 340). Cp. the cases cited at the end of note ( / ), sup., where the party 
 complaining was content to take the profit which in fact the party charged made on his 
 own dealings with the property. 
 
 (o) As in De Ruvigne's Case (1877), 5 C. D. 306, C. A., and Archer's Case, sup. 
 
 {p) As in Naut-y-Olo & Blaina Ironworks Co. v. Grave, sup. 
 
 {q) See note {m), sup. 
 
§§ 380-382 (relief). 347 
 
 381. In addition to the active proceedings above described, the party 
 complaining has the right to defend himself on the ground of non-disclosure 
 against any proceedings instituted against him by the trustee, promoter, or 
 agent for the direct or indirect enforcement of the impeachable contract 
 or transaction ; for the breach of the fiduciary duty is as much an invalidating 
 cause, when raised by way of defence or answer, as it is when made the 
 foimdation of offensive proceedings. The substantial identity, with certain 
 exceptions, of the conditions under which a voidable transaction generally, 
 whatever the ground of its voidability, may be annulled, and the conditions 
 under which it may be treated as a nullity when sued upon, has already 
 been considered ; and, in the course of this examination, it has, in particular, 
 been pointed out that, for reasons there stated, the party complaining is in 
 a stronger position when resisting the claim of the party charged to the 
 discretionary assistance of the Court in the form of a judgment for specific 
 performance, than when resisting his claim to the enforcement of the con- 
 tract as of right ; though, on the other hand, he incurs some peril in neglecting 
 or delaying to exercise his right to take active measures for the judicial 
 undoing of the impeached transaction (r). 
 
 382. Subject to these observations, it is well established that every fact 
 which entitles the party complaining to rescission, or to other active relief, 
 equally entitles him to be absolved from any action or counterclaim instituted 
 against him by the party charged, whether for specific performance (s), or 
 for the direct performance otherwise than specifically (t), or for the indirect 
 performance in the shape of compensation in damages (m), of the contract 
 invalidated by the non-disclosure, or, in the case of an agent, the contract of 
 
 (r) In Chapter III, Sect. 5, Sub-s. (2), ante. 
 
 (s) See Watt v. Grove (1805), 2 Soh. & Lefr. 491 (coupled here with cross-biU for rescis- 
 sion); Cutts Y. Salmon (1850), 4 De G. & Sm. 130, affirmed (1852), 21 L. J. Ch. 750; Maxwell 
 V. Port Tennant Patent Steam Fuel & Coal Co. (1857), 24 Beav. 495. Cutts v. Salmon, sup., 
 is a good illustration of the stronger position of the party complaining, when resisting 
 specific performance, than when taking active proceedings : for in Salmon v. Cutts (1850), 
 4 De G. & Sm. 125, rescission was refused by Knight-Betjce, V.-C, who, however, at 
 p. 130, gave a very significant hint to the defendant as to what would happen, if he should 
 proceed with his cross-suit, which Cutts v. Salmon was, for specific performance. Nothing 
 daunted, the defendant did proceed with the cross-suit, with the result foretold by the 
 Vice- Chancellor, viz. dismissal with costs. 
 
 (t) As in Hamilton v. Wright {IS4:2), 9 CI. & Pin. Ill (defence to action for money due 
 under annuity bond, together with cross-claim to " reduce " the bond) ; Aberdeen Railway 
 Co. V. BJalcie Bros. (1854), 1 Macq. H. L. 467 (to action for price of goods sold, or alterna- 
 tively damages) ; Salomons v. Pender (1865), 3 H. & C. 639 (to surveyor's action for agreed 
 commission for services) ; Re Madrid Bank, Ex p. Williams (1866), L. R. 2 Eq. 216 (to 
 promoter's claim for balance of agreed remuneration) ; Robinson v. Mollett (1875), L. R. 7 
 H. L. 802 (to taUow-broker's claim for indemnity against differences) ; Re Hereford dh S. 
 Wales Waggon & Engineering Co. (1876), 2 C. D. 621, C. A. (to claim for services) ; Harring- 
 ton V. Victoria Graving Dock Co. (1878), 3 Q. B. D. 549 ; Boston Deep Sea Fishing <fc Ice Co. 
 V. Ansell (1888), 39 C. D. 339, C. A. (defence to agent's counterclaim for salary and com- 
 missions) ; Andrews v. Ramsay <Ss Co., [1903] 2 K. B. 635, Div. Ct. (which was a case of 
 a principal recovering from his agent the commission which he had allowed him to retain 
 for his services whilst in ignorance of the corrupt agreement impeached, on the ground 
 that, if the agent were making the claim, the principal would be entitled to resist it ; so 
 that this is really a " defence " case : per Wills, J., at p. 638). 
 
 (u) Aa in Aberdeen Railway Co. v. Blakie Bros., sup. {quoad the alternative claim for 
 damages) ; Swale v. Ipswich Tannery, Ltd. (1906), 11 Comm. Cas. 88 (defence to action 
 for damages for wrongful dismissal). 
 
348 CH. IV, SECT. 5, SUB-SS. (1), (2). 
 
 agency ; and this, whether he chooses, or not, to counterclaim in the pro- 
 ceeding either for rescission of the contract, or for an account, or damages, 
 or money had and received ; for all these last-named species of relief are 
 cumulative to the remedy by way of defence, and may be pursued simul- 
 taneously with it (v). 
 
 Subs. (2). Remedies against the Cordractee who has corrupted the Agent of 
 
 the Party Complaining. 
 
 383. In the case of an agent who has secretly taken or stipulated for a 
 bribe, commission, or other private advantage or profit, from the person 
 with whom he has negotiated a contract on behalf of his principal, the remedies 
 available to that principal are not limited to his above-mentioned rights 
 against the agent. He can also obtain relief against the contractee who has 
 secretly given or promised the bribe, and has thereby conspired with the 
 agent in the concealment and in the breach of fiduciary duty. And this 
 relief is of the same threefold character as the relief to which he is entitled 
 against the agent : that is to say, first, the conspiracy in the non-disclosuie of 
 the corrupt bargain is a vaUd answer to any action which the contractee may 
 institute against him to enforce the contract (w) ; secondly, he is entitled 
 to rescission of such -contract against the contractee (x) ; thirdly, he has a 
 valid claim against the contractee for the recovery of the damages he has 
 sustained by reason of the contraetee's procurement of, and complicity 
 in, the agent's fiduciary misconduct (y). 
 
 384. Where the principal recovers money from the contractee, he so 
 
 (v) Andrews v. Ramsay & Co., sv/p. {per Lord Alvbestonb, C. J., at pp. 636-638). 
 
 (w) As in Maxwell v. Port Tennant Patent Steam Fuel & Goal Co. (1857), 24 Beav. 495 
 {per RoMrLi-Y, M.R., at p. 497 : " there was a private arrangement between them " — i.e. 
 the plaintiff, who was suing the company for specific performance of a contract of sale, 
 and the company's directors — " that the directors should obtain a personal benefit by the 
 transaction, and, as this was not communicated to the shareholders, they cannot be bound 
 by the contract ") ; Smith v. SorJjy (1875), 3 Q. B. D. 552 n. (defence to action for damages 
 iox breach of agreement to supply coal, on ground of secret bargain between plaintiff and 
 defendant's agent for commission) ; Harrington v. Victoria Graving Dock Go. (1878), 3 
 Q. B. D. 549 (defence, on a similar ground, to a claim for agreed remuneration for services : 
 in this case the party prejudiced directly was not the defendant company, but another 
 company for whom the defendants were executing certain work) ; Shipway v. Broadwood, 
 {1899] 1 Q. B. 369, C. A. (defence to an action on a cheque for the price of a pair of horses, 
 on the ground that the plaintiff had secretly promised money to the defendant's veterinary 
 surgeon on his giving a certificate of soundness, subject to which the price was to be 
 payable ; per A. L. Smith, L. J., at p. 372 : " it was the plaintiff's duty to inform the 
 defendant of the promise made to P. " — ^the veterinary surgeon — " if he wished to escape 
 the consequences of having made it") ; Bartram & Sons v. Lloyd (1904), 90 L. T. 357, 
 C A. (the same kind of case : per Collins, M.R., at p. 359) ; King, Viall, ds Benson v. 
 Howell (1910), 27 T. L. R. 114, C. A. (defence to stockbroker's action for money paid and 
 commission, on the ground that the plaintiff had, without any disclosure having been 
 made of the fact, executed the transactions with a firm of jobbers whose authorized clerk 
 was the defendant's agent to speculate for him on the Stock Exchange). 
 
 {x) Aain Panama & S. Pacific Telegraph Go. v. India Rvhler, etc., Co. (1875), 10 Ch. 
 App. 515 ; Transvaal Lands Go. v. New Belgium,, etc.. Go., [1914] 2 Ch. 488, C. A. 
 
 {y) As in Whaley Bridge Calico Printing Go. v. Green (1879), 5 Q. B. D. 109 ; Salford 
 Corporation v. Lever, [1891] 1 Q. B. 168, C. A. ; Grant v. Gold Exploration & Development 
 Syndicate, [1900] 1 Q. B. 233, C. A. ; Hovenden & Sons v. MiUhofS{\QOO), 83 L. T. 41, C. A. 
 
§§ 382-385 (relief). 349 
 
 recovers it as damages, and not as money had and received (2), though, 
 inasmuch as the measure of damages is prima facie, if not irrebuttably, pre- 
 sumed to be at least the amount of the bribe, the result is practically the 
 same. This measure is adopted on the theory that the contract price or 
 consideration must have been augmented by at least that amount in order to 
 enable the contractee to pay it to the agent without any sacrifice of his normal 
 mercantile profit (a). It follows that, for this purpose, the question of 
 whether the stipulated bribe was actually received by the agent, though of 
 vital importance to any claim against such agent, is wholly immaterial to 
 the question of the principal's right to damages against the contractee, or 
 to the question of the quantum of such damages (6). 
 
 385. The above remedies against the contractee on the one hand, and the 
 agent on the other, are cumulative remedies (c) : they may be pursued succes- 
 sively, and in any order the principal pleases, or simultaneously in one and the 
 same proceeding ; and the money to which the principal is entitled as against 
 the agent is entirely distinct from, and therefore recoverable independently of, 
 the money to which he is entitled on compensation from the contractee, though 
 it so happens that the two sums are ordinarily equal to one another ; and 
 it is no answer to the principal's claim against the contractee to prove that 
 the former has agreed not to press, or has in fact omitted to press, his claim 
 against the agent, though, in estimating the damages recoverable against 
 the contractee, any sum which the principal has actually received from the 
 agent goes in reduction of damages (d). 
 
 (z) Chant v. Oold Exploration <Ss Devdopment Syndicate, sup., where the money recover- 
 able was regarded as damages, though quantified and liquidated by the application of the 
 measure stated in the text. 
 
 (a) Salford Corporation v. Lever, sup. {per Lord Eshee, M.R., at pp. 174, 175) ; Grant v. 
 Gold Exploration tk Development Syndicate, sup. (per A. L. Smith, L.J., at pp. 242-245, 
 Vatjohan WrLLiAMS, L.J., at pp. 253, 254, 256, and Collins, L.J., at pp. 247, 248, 250, 
 who also held that it was quite immaterial to the question of damage whether the bribe 
 was actually paid, or not, if it was promised to be paid) ; Hovenden dh Sons v. Millhoff, sup. 
 (per RoMEE, L.J., at p. 45, expressing the view that the presumption— probably an irre- 
 buttable one — against the contractee is that the contract price was enhanced by at least 
 the amount of the sum given or promised as a bribe to the agent. The jury in this case 
 had awarded nominal damages only, which the C. A. said was against all principle, and 
 gave judgment for the plaintiff for the amount of the secret commissions, as the minimum 
 damage recoverable). 
 
 (6) Gfrant v. Gold Exploration & Development Syndicate, sup. (passages cited in the last 
 note). And see Whaley Bridge Calico Printing Co. v. Green, inf. 
 
 (c) Lister & Co. v. Stubhs (1890), 45 C. B. 1, C. A., per Cotton L.J., at p. 12. 
 
 (d) The following cases, in which relief was obtained, or was held to be obtainable, 
 acainat both the contractee and the agent, illustrate the principles stated in the text r 
 Panama & S. Pacific Telegraph, Co. v. India Rubber, Outta Percha efc Telegraph Co. (1875), 
 10 Ch. App. 515, where the principal was held entitled to rescission and repayment 
 against the contractee, and alio to payment over of the amount of the bribe against the 
 acent (per James, L.J., at p. 526 : " any surreptitious dealing between one principal and 
 the agent of the other principal is a fraud on such other principal . . . ; if a man hired a 
 vetturino to take him from one place to another, and found that the vetturino, after 
 accepting the hiring, had conspired with his servant to rob him on the way, he would be 
 entitled to get rid both of the vetturino and the servant ") ; Whaley Bridge Calico Printing 
 Co. V. Green (181%), 5 Q. B. D. 109 (where the principal recovered from the agent the money 
 actually received by him, and from the opposite principal, as damages, certain other 
 moneys promised, but unpaid, by him to the agent under the corrupt agreement, and an 
 injunction restraining the negotiation of bills given to the agent in pursuance thereof) ; 
 
350 CH. IV, SECT. 5, SUB-S. (3). 
 
 Subs. (3). Miscellaneous Forms of Relief. 
 
 386. Apart from statutory reraedies, whether for statutory or common 
 law non-disclosure, which are dealt with separately elsewhere (e), there are 
 certain miscellaneous forms of relief which have been granted under special 
 circumstances, and to which some reference ought to be made before leaving 
 the topic. In one case, besides granting relief as to the past, a prospective 
 declaration was made on a principal's counterclaim against his agents and 
 the person employed by them as sub-agent, that any moneys which might 
 thereafter be received by such sub-agent in pursuance of the secret bargain 
 complained of would be payable over as a debt to the principal (/). In 
 another case, where an executor de son tort had obtained from the beneficiaries 
 a surrender of a leasehold interest and a grant to himself of a new lease at a 
 lower rent than had been paid by the testator, it was held that the beneficiaries 
 were entitled to have this new lease declared a trust for them, as a graft on 
 the surrendered lease {g). 
 
 387. Relief on the ground of non-disclosure in breach of a fiduciary duty 
 has often been given indirectly and incidentally in the course of proceedings 
 instituted with other objects, such, for instance, as the following : proceedings 
 under one of the Trustee Acts (h) ; a vendor and purchaser action, where 
 it has been held that a vendor who can show no better title than that of a 
 trustee who has purchased part of the trust estate shows none at all which 
 
 Salford Corporation v. I^ver, [1891] 1 Q. B. 168, C. A. (where the corporation recovered 
 damages against a coal merchant who had clandestinely promised the manager of the 
 corporation's gasworks a commission of a shilling per ton on all orders for coal given by 
 the plaintiffs to the defendant, and it was held that the defendant's liability was in no way 
 reduced or affected by the fact that the plaintiffs, having the right to make their manager 
 disgorge the commissions received by him, had agreed not to sue him on his giving them 
 certain information as to the persons who had corrupted him, and guaranteeing that the 
 sums to be recovered from such persons should amount to a specified aggregate sum : 
 the two rights being wholly distinct rights, and the moneys recoverable not being the 
 same moneys, though exactly equivalent, the principal was entitled to pursue the two 
 remedies successively, or in one and the same action, and, for this and other reasons, the 
 defendant's plea of accord and satisfaction was held wholly inadmissible : per Lord 
 EsHEE, M.R., at pp. 176-178, and Lindley, L.J., at pp. 179, 180) ; Grant v. Gold Explora- 
 tion & Development Syndicate, [1900] 1 Q. B. 233, 0. A. (where the company recovered 
 by counterclaim against the vendor, as da.mages, a sum equal to the amount of the bribe 
 which he had given to one of their directors for procuring the company to purchase, less 
 what they had previously, without the necessity of suing for it, extracted from the agent ; 
 it was here recognized that the two rights were distinct and cumulative, but that in 
 calculating the damages it was impossible to ignore the money and shares actually 
 received from the agent, the amount of which must go in reduction : per A. L. Smith, L. J., 
 at pp. 245, 246, Vaughah Wilmams, L.J., at p. 255, and Colliks, L.J., at p. 251). 
 
 (e) See Oh. VI, Sect. 7, and Ch. VHI, Sect. 2, Sub-s. (3), post. 
 
 ( / ) Powell & Thomas v. Evans, Jones <b Co., [1905] 1 K. B. 11, C. A. As to the reason 
 for this declaration, and for its limited form, see § 379, note (d), ante. 
 
 {g) Mulvany v. Dillon (1810), 1 BaU & B. 409 ; 12 B. B. 43. 
 
 (h) Re Bloye's Trusts (1849), 1 Macn. & 6. 488 (per Lord Cottbnham, L.C, at p. 498 : 
 " I am bound to make such an order as I should have made if there had been a bill filed 
 to set aside the deed"), affirmed, svb nom. Lewis v. Hillman (1852), 3 H. L. C. 607 (per 
 Lord St. Lbonaeds, L.C., at pp. 631, 632, to the same effect). This was a case in which a 
 petition, and cross petition, had been presented under the Trustee Belief Act then in 
 force, and where it became necessary to decide whether a certain sale was valid or, by 
 reason of non-disclosure of identity by the solicitors and agents purchasing from their 
 client and principal, invalid. 
 
§§ 386-388 (relief). 351 
 
 can be forced on a purchaser (i) ; an action for sale in lieu of partition, 
 where a question arising as to whether a certain charge on the property 
 had been paid ofi or not depended upon whether a fiduciary duty of dis- 
 closure had or had not been complied with (j) ; an action for libel, where 
 justification was pleaded of a defamatory charge against the plaintifi of 
 having taken " secret profit " when in a fiduciary position (k) ; and an 
 administration suit (l). 
 
 388. Eelief by way of rescission may be obtained in bankruptcy pro- 
 ceedings against a trustee in bankruptcy who has failed in his fiduciary duty 
 of disclosure to the creditors and to the bankrupt, on the motion of the 
 bankrupt himself (m), or of a creditor (w). Where it is sought to recover 
 from an insolvent promoter or agent the amount of secret profit made by 
 him, the non-disclosure is regarded, not as a tort, but as a breach of an implied 
 contract to perform the trust, and as giving rise to an equitable debt, and 
 the company or principal is accordingly entitled to a proof (o), but, for 
 reasons already given (p), is not entitled to relief on the footing that the 
 money can be segregated from the assets divisible among the creditors, and 
 set apart, as an earmarked trust fund, to answer the claim in full, unless it 
 can be truly said that the money or property was, when received or held by 
 the promoter or agent, the property or money of the company or principal. 
 Where a company in liquidation is entitled to relief in respect of non-disclosure 
 against any of its directors or officers, the relief may be given in any one of 
 three possible forms : in the fiist place, the liquidator, in the name of the 
 company, may sue the delinquent, or prove against him, if insolvent (q) ; 
 secondly, he may claim that the shares, if it be a case of a present of shares 
 from the promoter to the director, have not been paid for, and settle the 
 
 (i) Spencer v. Topham (1856), 22 Beav. 573 (where, however, the discharge of the 
 fiduciary duty waa proved, and the title accordingly held good) ; Williams v. Scott, [1900] 
 A. 0. 499, P. 0. (at p. 508 : "it would be inequitable to force such a title aa this " — ^the 
 title of one who, when trustee for sale, had purchased from himseU — " upon the appellant. 
 It is not merely that the purchaser would be running the risk of proceedings being taken 
 by the cestuis que trv^tent to reopen the transaction. The purchaser would be saddled with 
 a property which he would be unable for many years to put upon the market, unless 
 recourse was had to some special restrictive condition which might seriously reduce the 
 price a purchaser would be willing to pay for it "). 
 
 ij) Patten v. Hamilton, [1911] 1 Ir. R. ,40. 
 
 (i) Bray v. Ford, [1896] A. C. 44, H. L. 
 
 (l) As in Oray v. Warner (1873), 42 L. J. (ch.) 556, where a question arose whether the 
 defendant could properly exercise his right of retainer, as executor, in respect of a legacy 
 which he had purchased from a legatee, that is, whether he could sustain the propriety 
 of the transaction. 
 
 (to) A3 in Be Moore (1881), 51 L. J. (ch.) 72. Cp. Se Spink (1913), 108 L. T. 572 811 
 
 (m) As in Be Gallard, [1897] 2 Q. B. 8. 
 
 (o) Bmma Silver Mining Co. v. Grant (ISTQ), 17 C. D. 122 {per Jessel, M.R., at pp. 130, 
 131) ; Be Darby, Ex p. Brougham, [1911] 1 K. B. 95 [per Phillimobe, J., at p. 100). Where 
 however, after pajang money into court, the party charged becomes bankrupt, the party 
 complaining is entitled to have that money paid out to him in full, and is not remitted to a 
 mere right of proof. Hichens v. Oongreve (1831), 4 Sim. 420 {per Shadwell V -C at 
 p. 429). ■ " 
 
 {p) See § 379, and note {d), thereto, ante. 
 
 {q) As in Imperial Mercantile Credit Association v. Coleman (1873), L. R. 6 H. L. 189 • 
 Metropolitan Banh v. Heiron (1880), 5 Ex. D. 319, C. A. ; Be Darby, Ex p. Brougham sup. 
 (proof in bankruptcy). 
 
352 CH. IV, SECT. 5, SUB-S. (3) ; SECT. 6; SECT. 7, SUB-S. (1). 
 
 director's name on the Kst of contributories (r) ; and, lastly, he may resort 
 to the statutory misfeasance procedure (s). The choice between these modes 
 of asserting his claim to relief is the right of the liquidator (t). It should be 
 mentioned here that fiduciary misconduct on the part of the company's 
 officers is not only a ground for the compulsory winding up of an insolvent 
 company (u), but also a'ground for refusing a stay of proceedings in a pending 
 winding up, though the creditors are desirous that it should be granted {v). 
 
 Sect. 6. Questions of Law and Fact. 
 
 389. It is always a question of law whether any, and, if so, what, legal 
 rights or obligations result from a proved or admitted state of facts, and it is 
 equally a question of law whether any admissible evidence has been adduced 
 in support, or (as the case may be) in contradiction, of any material allega- 
 tion of fact. Subject, however, to these two cardinal rules, every matter in 
 dispute between the parties in any proceeding based upon alleged breach of 
 fiduciary duty, by non-disclosure or otherwise, is an issue of fact. Thus 
 to take seriatim the principal matters to be established in any such 
 proceeding, on one side or the other (w) : — where the existence of the relation- 
 ship is challenged, it is a question of law whether a relation of the precise 
 character alleged can properly be inferred from the instrument purporting 
 to create it, or from the proved facts, but it is a question of fact whether the 
 alleged circumstances existed or not ; that is to say, whether the course of 
 dealing between the parties, and the various acts said to constitute the party 
 a trustee {x), a promoter (y), or an agent (2), of the particular kind alleged, 
 
 (r) As in Be Disderi & Co. (1870), L. R. 11 Eq. 242 ; Re, CanaAian Oil Works Corpora- 
 tion, Hay's Case (1875), 10 Ch. App. 593. 
 
 («) As to this procedure, see § 616, post. 
 
 (t) See Hay's Case, sup. [per Meliish, L. J., at p. 605, who points out that the company- 
 has the option of asserting that the director has never paid for the shares at all, or of 
 treating him as if he had paid, and saying — " in that case you have paid with our money, 
 and we will have it back now ") ; Ee Carriage Co-operative Association (1884), 27 C. I). 
 322 (per Peaeson, J., at p. 332). 
 
 (u) See Lord Halsbuiy's Laws of England, title Companies, vol. v, pp. 397, 398. 
 
 (v) Re Telescriptor SyndicaU, Ltd., [1903] 2 Ch. 174. 
 
 (w) See Sects. 3, 4, anU. 
 
 [x) Muhany v. Dillon (1810), 1 Ball. & B. 409 ; 12 R. R. 43, where Lord MASifBES, L.C. 
 (Jr.) treated the question of whether the defendant had interfered with the assets and 
 management of the estate so far as to constitute himself an executor and trustee, as one 
 of fact (pp. 418, 419). And see, generally, the oases cited in the notes to Sect. 2, Sub-s. (1), 
 Sect. 3, Sub-s. (1), and Sect. 4, Sub-s. (1), ante. 
 
 (y) Lydney & Wigpoollron Ore Co. v. Bird (1886), 33 C. D. 85, C. A. (per LrNDLsy, L.J., 
 at p. 93 : " it is necessary in each case to see what the so-called promoter really did before 
 his legal liability can be accurately ascertained. In any case, it is better to look at the 
 facts and ascertain and describe them as they are "). Cp., generally, the cases cited in the 
 notes to Sect. 2, Sub-s. (2), Sect. 3, Sub-s. (1), and Sect. 4, Sub-s. (1), ante. 
 
 {z) Carter v. Palmer (1842), 8 CI. & Fin. 657 (where, as to the contention of the party 
 charged that he acted as counsel only, and not as general agent and manager, which was 
 the allegation on the other side. Lord Cottbnham, L.C, said, at p. 703 : " the evidence 
 proves that the employment was of a very different character ") ; Barker v. Harrison (1846), 
 2 Coll. 546 (where Knight-Bbttoe, V.-C, at p. 553, refers to the evidence as to the nature of 
 the employment alleged, which he finds to have been established thereby as a fact) ; Har- 
 rington V. Victoria Graving Dock Co. (1878), 3 Q. B. T>. 549 (where the question was left as 
 an issue of fact to the jury) ; Williamson v. Hine Bros., [1891] 1 Ch. 390 (where Kekewich, 
 
§§ 388-392 (parties). 353 
 
 did or did not exist or take place at the material date. So it is a question 
 of fact, if there is evidence both ways, whether disclosure was made or not (a), 
 and whether the party complaining had knowledge aliunde or not (&), of the 
 transaction or fact which is said to have been unrevealed to, and unknown 
 by, the party complaining ; whether the party complaining by his acts 
 and conduct affirmed the transaction impeached (c) ; and whether the transac- 
 tion or matter alleged to have been undisclosed was entered into, or existed, 
 as alleged {d). And any question of fair value which may arise is a question 
 of fact (e). 
 
 Sect. 7. Parties. 
 
 390. It remains to consider what persons may assert a right to relief of 
 any of the kinds already indicated (/), and against what persons, on the 
 ground of non-disclosure of material facts during the existence of a fiduciary 
 relation. 
 
 Subs. (1). Who are entitled to assert the Right to Relief. 
 
 391. The persons entitled to assert the right to relief comprise, (1) those 
 to whom the fiduciary duty was owed in the first instance, and (2) those who 
 by operation of law, or voluntary assignment, are, or have become, entitled 
 to stand in their place. 
 
 392. The fiduciary duty is owed to the person, whether natural or artificial, 
 or, in the case of a partnership (g) or class (h), to all the members of the firm 
 
 J., directed an inquiry as to the duties recognized in the mercantile world aa attaching to 
 the agency, though the G. A. thought the inquiry unnecessary, as it could only be answered 
 in one way). And see, generally, the cases cited in the notes to Sect. 2, Sub-s. (3), Sect. 3, 
 Sub-s. (1), and Sect. 4, Sub-s. (1), ante. 
 
 (a) As to what "disclosure" means, see Ch. II, Sect. 1, ante. In Harrington v. 
 Victoria Graving Dock Co., sup., this question also was left as one of fact to the jury. So, 
 in Be Postage Stamp Automatic Delivery Co., [1892] 3 Ch. 566, Vaughan Williams, J., 
 found, " aa a fact " (p. 576), that disclosure had been made with respect to certain of the 
 shares there in question, but, with respect to the others, had not been made to future 
 allottees, whom he also found " as a fact " that it was intended to deceive. As to questions 
 of disclosure to the precise person, and to all the persons, entitled to it, see § 392, 393, 
 inf. And, generally, cp. the cases cited in the notes to Sect. 4, Sub-s. (2), ante. Where the 
 disclosure is alleged to have been solely documentary, the question is for the Court : 
 Oelkers v. Ellis, [1914] 2 K. B. 139 [per Hoeridge, J., at p. 147). 
 
 (6) As to what " knowledge " means, see Ch. II, Sect. 3, ante. In Whaley Bridge Calico 
 Printing Co. v. Oreen (1879), 5 Q. B. D. 109, Bowen, J., left this question, amongst 
 others, to the jury (p. 110). See, generally, the cases cited in the notes to Sect. 4, Sub-s. (3), 
 ante. 
 
 (c) In Lowther v. Lord Lowther (1806), 13 Ves. 95, Lord Eeskine, L.C, at pp. 103, 
 104, offered to direct an issue as to what the exact nature of the transaction between the 
 parties was, if the agent desired it, which he did. See, generally, the cases cited in the 
 notes to Sect. 4, Sub-s. (3), ante. 
 
 (d) See the cases cited in the notes to Sect. 3, Sub-s. (2), ante. 
 
 (e) In Oibson v. Jeyes (1801), 6 Ves. 266, Lord Eldon, L.C, treated this question as 
 one of fact, depending on the evidence, and discussed the kind of evidence proper to be 
 adduced for the purpose of determining it (p. 274). 
 
 (/) See Sect. 5, ante. 
 
 (g) In Fawcett v. Whitehmse (1829), 1 Russ. & M. 132, the circumstances were such 
 as to render it proper to join an intending partner as a plaintiff entitled to the relief prayed. 
 (h) Such as creditors — see note (m), inf. — or a class of beneficiaries. 
 
 B.N.D. 2 A 
 
354 CH. IV, SECT. 7, SUB-S. (1). 
 
 or class, between whom and the party charged the relation of confidence 
 is proved to exist (i). The party charged may be a trustee for, though he 
 cannot be an agent of, a person not yet in existence, or not yet having a full 
 legal status, and in that event the person in question, when brought into 
 being, or on becoming sui juris, is a person to whom the duty is deemed to 
 have been owed in the first instance. Thus, if a person acquires property 
 with the intention of selling it to a particular company to be promoted by 
 him for the purpose of pmchasing it, he may be deemed to have acquired the 
 property as trustee (in a limited sense, not in the sense of " out-and-out 
 trusteeship ") for the unborn, but intended, company, which, therefore, 
 when incorporated has a right to relief against him in the event of any breach 
 of such fiduciary duty arising out of the quasi-trusteeship (j) : but if, when 
 acquiring the property, he did not contemplate any future sale at all, or any 
 future sale to a company, or, though intending a sale to a company to be formed 
 by him, did not contemplate the particular company in question, the com- 
 pany complaining has no right to say that he owed any duty to it when so 
 acquiring the property, though it may have a right to relief against him on 
 other grounds in respect of his subsequent acts {k). So, in the case of infants, 
 the duty is owed to those who are not yet sui juris ; for that reason, it is 
 extremely difficult to prove that the duty has been discharged, and, indeed, 
 it can only be so discharged by making the necessary disclosure to, and 
 obtaining the sanction of, the Court (1). Again, where a person is appointed 
 to discharge certain fiduciary duties in relation to the re-building of a rectory, 
 and fails to perform them, he is liable not only to the existing rector, but to 
 his successors, any one of whom may come to the Court for relief (m). 
 
 393. In the case of a class of persons, such as a general body of creditors, 
 the duty is owed to them all, and, for that reason, it is difficult to establish 
 a case of disclosure to, or knowledge or assent or acquiescence on the part 
 of, the entire body entitled to relief (n). Where the person to whom the duty 
 
 (i) For illustrations of oases in which the relation does not exist, or is not operative on 
 the transaction impeached, see Sect. 2, Sub-s. (4), and Sect. 3, Sub-s. (1), ante. 
 
 ij) Beck V. Kantorowicz (1857), 3 K. & J. 230 ; Gluckstein v. Barnes, [1900] A. C. 240, 
 H. L. {per Lord Halsbtjey, L.C, at p. 247). As to the distinction between a promoter's 
 limited trusteeship and the out-and-out trusteeship which gives rise to the obligation 
 of restoring property and profits to the cestui que trust, irrespectively of disclosure or non- 
 disclosure, see the valuable observations of Saegant, J., at p. 347 of Omnmm Electric 
 Palaces, Ltd. v. Baines, [1914] 1 Ch. 332, C. A. 
 
 (k) Erlanger v. New Sombrero Phosphate Co. (1878), 3 App. Cas. 1218, H. L. {per Lord 
 Cairns, L.C, at p. 1235) ; Bentinck v. Fenn (1887), 12 App. Cas. 652, H. L. {per Lord 
 Hbrsohbll, at p. 658) ; Ladywell Mining Co. v. Brookes (1887), 35 C. D. 400, C. A. {per 
 Cotton, L.J., at p. 413) ; Re Lady Forrest {Murchison) Gold Mine, Ltd., [1901] 1 Ch. 582 
 {per Wright, J., at pp. 588, 589) ; Burland v. Earh, [1902] A. C. 83, P. C. (at pp. 98, 99). 
 See note (») to § 352, ante, for the language used in some of these oases. 
 
 {I) Sanderson v. Walker (1807), 13 Ves. 601 {per Lord Eldon, L.C, at pp. 601, 602). 
 The statutory Pubhc Trustee is, in this respect, in precisely the same position as any other 
 trustee : Re New Haw Estate Trusts (1912), 107 L. T. 191 (Parker, J.). 
 
 (m) Oreenlaw v. King (1841), 10 L. J. (oh.) 129 {per Lord Cottenham, L.C, at p. 130 : 
 " the bishop was selected to take care of the interests of those who were not and could not 
 be present in the transaction, viz. of those who might thereafter be appointed rectors of 
 the living." 
 
 {n) Whichcote v. Lawrence (1798), 3 Ves. 739 {per Lord LoiTGHBOEOiraH, L.C, at p. 752 : 
 "you cannot argue upon the acquiescence, when there is a large body of creditors "). 
 
§§ 392, 393 (PAETiBs). 355 
 
 is owed is a juridical, and not a natural, person, nice questions frequently 
 arise as to whetlier the disclosure lias been made to the particular persons 
 on behalf of the corporation, or to all the persons constituting or representing 
 it, who are entitled to the disclosure. The question of the proper agents or 
 officers of a company, through whom alone under any circumstances it 
 can be deemed to have received the necessary information as to the material 
 facts, has been already discussed (o) . But where the directors, or other agents, 
 through whom under ordinary circumstances knowledge would be imputed 
 to the company, are parties charged, or are implicated in the misconduct 
 of the party charged, disclosure to them, or to their confederates, is of 
 course no disclosure at all to the company, that is, to the party entitled to 
 relief (jj). And, independently of all questions of the complicity of the 
 directors, the circumstances may be such that the fiduciary duty can only 
 be discharged by disclosure to the general body of shareholders, or to the 
 public : for instance, if it be proved in evidence that the shares are being 
 ofieredto the public, or that a further issue is expressly or impliedly contem- 
 plated, these probable or possible future allottees are deemed to be constituents 
 of the company which is entitled to the performance of the duty (q). It is 
 only when there is no such intention, or contemplation, that disclosure to 
 the directors, or to the actually existing members of the company, is deemed 
 disclosure to the company (r). On the other hand, the company being a 
 
 This was the case of one who, being trustee for sale of a debtor's property for the benefit 
 of the creditors, purchased part of the trust property. 
 
 (o) See § 50, and the cases cited in note ( / ) thereto, ante. 
 
 {p) Benson v. Heaihorn (1842), 1 Y. & C. 326 (per Shadwell, V.-C, at p. 343) ; Re 
 Fitzroy Bessemer Steel Co. (1884), 50 L. T. 144 (per Kay, J., at p. 147) ; Costa Rica Railway 
 Co. Y. Forwood, [1901] 1 Ch. 746, C. A. {per VAUGHAif Williams, L. J., at p. 761) ; Omnium 
 Electric Palaces, Ltd. v. Baines, [1914] 1 Ch. 332, C. A. (per Sakgaut, J., at p. 342). 
 
 (q) HichensY. Congreve(l%Zl),ikim.i20 (per Shadwbll, V.-C, at pp. 427, 428); 
 Society of Practical Knowledge y. Abbott (1840), 2 Beav. 559 ; Re Postage Stamp Automatic 
 Delivery Co., [1892] 3 Ch. 566 (per VAtJGHAif Wiluams, J., at p. 576 : " I find as a fact 
 that the intention was to get the public to subscribe. . . . The fact of the knowledge of 
 the actual members of the company will not in such a case avaO the du-ectors ") ; Oluckstein 
 Y. Barnes, [1900] A. C. 240, H. L. (per Lord Maonaohtbn, at p. 249 : " disclosure is not 
 the most appropriate word to use when a person who plays many parts announces to 
 himself in one character what he has done and is doing in another. To talk of disclosure 
 to the thing called a company, when as yet there were no shareholders, is a mere farce. 
 To the intended shareholders there was no disclosure at all." So Lord Halsbttry, L.C. 
 at p. 247) ; Re Leeds and Hanky Theatre of Varieties, Ltd., [1902] 2 Ch. 809, C. A. (per 
 Vattohan Wiluams, L.J., at p. 823, explaining that the fiduciary relation of promoters to 
 the company "does not mean that they stood in such a relation to these directors, and these- 
 seven signatories. It means that they stood in a fiduciary position to the future allottees 
 of shares — ^to the persons who were invited to come and take up the shares of the com- 
 pany . . . among their cestuis que trustent are included the future allottees of shares ") ; 
 Re Darby, Ex p. Brougham, [1911] 1 K. B. 95 (per Phillimoeb, J., at p. 103) ; Omnium 
 Electric Palaces, Ltd. v. Baines, sup. (per Saboant, J., at pp. 347, 348 : this was a case of a. 
 " private company "). 
 
 (r) As was the case in Re An^rose Lake Tin <fc Copper Mining Co., Exp. Taylor, 
 Ex p. Moss (1880), 14 C. D. 390, C. A. (per James, L. J., at p. 395 : " there was no fraud on 
 any future allottees of shares, because there could be, at the time the arrangements were 
 made and contemplated, no future allottees of shares," all the capital having been sub- 
 scribed) ; Re British Seamless Box Co. (1881), 17 0. D. 467, C. A. (per Jessel, M.R., who 
 distinguishes between the two types of case, the one, where future shareholders are ex- 
 pressed to be contemplated, or where it is clear from the facts, e.g. a further issue shortly 
 afterwards, that they must have been contemplated, and where therefore " it is intended 
 
356 CH. IV, SECT. 7, SUB-SS. (1), (2), 
 
 person in law, independently of its members, no shareholder can claim a 
 right to relief on the ground of non-disclosure to himself, as if he were the 
 company : the duty to the company, as a juridical entity, involves no personal 
 duty to any individual member of it (s). 
 
 394. The second class of persons entitled to set up a case of non-disclosure 
 against the party charged comprises those to whom personally no duty was 
 owed in the first instance, but who are, or become, entitled to stand in the 
 place of, or to represent, the persons to whom such duty was owed, whether 
 by operation of law (t), — as, for instance, on the death (u), insolvency (v), 
 infancy, lunacy, or other disability, of the party complaining, — or by voluntary 
 assignment. The conditions under, and the equities subject to, which an 
 assignment of a chose in possession, and of a chose in action, respectively, 
 may be made, and the application of the law on this subject to the case of a 
 voidable contract, have been fully considered in an earlier Chapter (w). 
 
 395. There is a class of case in which, though there has been no trans- 
 mission of the right to relief by operation of law or by voluntary assignment, 
 persons other than the party to whom the duty is owed are entitled to sue 
 in respect of a breach of fiduciary duty ; and that is, where the party charged 
 is under a duty of disclosure or otherwise to a corporation, which he has 
 failed to discharge, and the corporation, which alone (as has been seen) 
 is prima facie entitled to assert rights in respect of such breach of duty, 
 refuses to take proceedings, being under the control of a majority of share- 
 to cheat the future shareholders " — pp. 471, 472 — and the other, where no future allottees 
 are either expressly or impliedly contemplated, which was the case then before the Court : 
 " the company consisted of eight men, and it was not intended to consist of any more. 
 There was power of course to issue the remainder of the shares, but the intention of these 
 eight men was to carry on the company with these shares," — p. 473, — and though there 
 was in fact " a subsequent allotment of a portion of the shares," this was " not part of the 
 original scheme" — p. 475. And see the observations of Jambs, L.J., at pp. 476, 477, 
 Bbbtt, L.J., at p. 477, and Cotton, L.J., at p. 480, affirming the views of Jessbl, M.K.). 
 
 (s) Percival v. Wright, [1902] 2 Ch. 421 (per Swinfen Eady, J., at p. 426 : "it was 
 strenuously urged that, though incorporation affected the relations of the shareholders to 
 the external world, the company thereby becoming a distinct entity, the position of the 
 shareholders inter se was not affected, and was the same as that of partners or shareholders 
 in an unincorporated company. I am unable to adopt that view "). In Allen v. Hyatt 
 (1914), 30 T. L. R. 444, P. C, the duty to the shareholders arose from special 
 circumstances. 
 
 (t) In all such cases the right to relief for breach of the fiduciary duty is conferred, or 
 devolves, upon other persons in accordance with the same principles as in the case of any 
 other proceedings for the enforcement or avoidance of contracts. 
 
 (u) As in Bandall v. Erringlon (1805), 10 Ves. 423 (next of kin of cestui que trust); 
 Lowther v. Lord Lowther (1806), 13 Ves. 95 (beneficiaries under a will) ; Ormond {Lady) v. 
 Hutchinson (1806), 13 Ves. 47 (heiress at law of principal) ; Charter v. Trevelyan (1844), 11 
 CI. & Fin. 714 (devisee of principal) ; Barnard v. Hunter (1856), 2 Jur. (n.s.) 1213 
 (executors of principal) ; Turnbull v. Garden (1869), 20 L. T. 218 (widow of principal) ; 
 Plowright v. Lambert (1885), 52 L. T. 646 (widow of cestui que trust). 
 
 (v) Assignees or trustees of the estate of an insolvent individual asserted the rights 
 which the insolvent would otherwise have been entitled to assert, in Pitt v. Machreth (1788), 
 2 Cox 320 ; 2 R. R. 55 ; Luddy's Trustee v. Peard (1886), 33 C. D. 500. As to the liqui- 
 dator of an insolvent company, see § 388, note (t), ante, and, as to misfeasance proceedings, 
 § 616, post. 
 
 (w) See § 279, ante, as to what claims are, and what are not, obnoxious to the objections 
 of champerty or maintenance. For an illustration of an assignment of a contract which, 
 though it so happened that litigation became necessary to enforce it, was held not 
 champertous, see Wilson v. Short (1847), 6 Hare 366 (per Wiobam, V.-C, at p. 384). 
 
§§ 393-397 (PAiOTEs). 357 
 
 holders wto are themselves the persons against whom it is desired to proceed, 
 and who abuse their voting power to coerce and oppress the minority, and 
 prevent justice being done. In such a case the minority may obtain leave 
 from the Court, on establishing the facts, to use the name of the corporation 
 in an action against the delinquents, or (which is the modern practice, in 
 order to avoid circuity of proceedings) may sue on behalf of themselves and 
 all other shareholders adopting their view (x). In the latter form of proceeding, 
 although, as representing the company in a sense, the minority have no 
 less rights than the company would have had if the action were in its name, 
 on the other hand they have no greater rights, and if unable to make a case 
 for the company, are unable to make one for themselves {y). 
 
 Subs. (2). Against whom the Right to Relief may he Asserted. 
 
 396. The persons against whom the right to relief may be asserted are 
 classified under two heads corresponding to those under which the persons 
 entitled to relief have been classified. That is to say, the persons liable are, 
 (1) all those who have come under the fiduciary obligation in the first instance, 
 and (2) those who, either by operation of law, or in virtue of a voluntary 
 assignment, are called upon to stand in the place of the persons originally 
 liable, or to take the consequences of their breaches of duty. 
 
 397. As regards the first class, quifacit per aliumfacit per se is a general 
 principle which applies to breaches of the fiduciary duty of disclosure as 
 much as to other breaches of duty. If a man chooses to delegate the duty 
 of disclosure to another, he is responsible to the cestui que trust, company, or 
 principal, if the duty is not discharged by the person so delegated (z). Con- 
 versely, an agent who is acting for a person liable to the duty, still more if 
 he is also his professional adviser, cannot do what his principal is not allowed 
 to do. If the latter is under an obligation to disclose to the other related 
 party any personal advantage which he is acquiring in the course of the 
 relation, so also is the former bound to disclose to such related party any 
 private profit which in the comse and execution of his delegated functions 
 he may be so acquiring; and, generally, the agent is in no better position 
 than his principal (a). Further, a person who employs as his agent one whom 
 
 (x) Eichtns v.Ooreyrew (1828),4 Ruas. 562 (per Lord Lyndhubst, L.C, at pp. 575-577) 
 Atwool V. Merryweather (1867), L. R. 5 Eq. 464 n. {per Wood, V.-C, at p. 468 n.) ; Shaw v. 
 Holland, [1900] 2 Ch. 305, C. A. And, for judicial explanation of the principles of the 
 law on this subject, see the citations in the next note. 
 
 (y) Burland v. Earle, [1902] A. C. 83, P. C, at p. 93 ; Dominion Cotton Mills Co. v. 
 Amyot, [1912] A. C. 546, P. C. (at pp. 551-553). In both these cases the shareholders 
 failed, because the company itself would have failed, if they had been plaintiffs. 
 
 (z) As to when the knowledge of the agent is imputed to the principal, see Ch. II, 
 Sect. 3, Sub-s. (4), ante. 
 
 (a) See Ex p. Jcmies (1803), 8 Ves. 337, which was a case of an assignee in bankruptcy 
 purchasing part of the estate from the creditors, and the solicitor to the commission 
 entering into a like transaction, where Lord Eldon, L.C, after dealing with the assignee's 
 purchase, which was clearly invalid, proceeds to consider the case of the solicitor : " as 
 to the soUoitor," he says at pp. 346, 347, " if there is any utility in appljdng the principle 
 against the assignee, the application as against the aoUcitor is more loudly called for. He 
 is to do his duty to the assignees, enabling them to do their duty to the creditors, always 
 
358 CH. IV, SECT. 7, SUB-S. (2). 
 
 he knows to stand in a fiduciary relation to a third party takes upon himself 
 
 the same duties of good faith towards the third party as the person so employed 
 
 is under towards him (b). The same consequences result when he accepts 
 
 employment from one whom he knows to stand in such a position : for 
 
 instance, one who becomes the sub-agent of a person known by him to be 
 
 the agent of X., or known to be the agent of someone who afterwards turns 
 
 out to be X., places himself in direct privity with X., as regards all fiduciary 
 
 duties of disclosure, and otherwise ; and so also, if he purchases from an 
 
 agent of X., known to him to be such, he comes under the same liability to 
 
 X. as the agent (c). On the other hand, one who is bound by a relation of 
 
 confidence to another does not escape from his obligations by making himself 
 
 the agent of a person who is not so bound, and who actually efEects the 
 
 transaction complained of : his duties are neither diminished, nor increased, 
 
 by such a proceeding (d) ; nor is he excused by the mere fact that, as 
 
 trustee for another, he had no beneficial interest in the transaction ((i!ci). 
 
 It is, however, open to him to shew, if he can, that he was dealing directly 
 
 independently, and adversely, with some third person in respect of property 
 
 which the latter had validly, not being under any fiduciary duty to him, 
 
 acquired from the party complaining ; in that case the interposition of the 
 
 independent third person would result in each transaction having been 
 
 entered into by a pair of persons of whom neither was under any fiduciary 
 
 duty to the other (e). 
 
 remembering also their duty to the bankrupt. . . . Upon the same principle that requires 
 the assignees to make no benefit, the soUcitor who is to direct and inform them in the very 
 act by which they are to make no benefit, cannot possibly make any benefit ") ; Ex p. 
 Bennett (1805), 10 Ves. 381 {per Lord Eldon, L.C, at p. 383) ; Downes v. Qrazebrooh (1817), 
 3 Mer. 200 (per Lord Eldoit, L.C, at pp. 208, 209) ; Re Bloyfs Trusts (1849), 1 Macn. & 
 G. 488 (per Lord Cottenham, L.C., at p. 494 : " if the principal is incapacitated, can the 
 agent do what the principal could not ? ") ; McPherson v. Watt (1877), 3 App. Cas. 254, 
 H. L. (per Lord Caibns, L.C, at p. 265, and Lord Blackbitiin, at p. 276) ; Lydney & 
 Wigpool Iron Ore Co. v. Bird (1886), 33 C D. 85, C A. (per Cur., at pp. 94, 95) ; Hodeon 
 V. Deans [1903] 2 Ch. 647 (per Joyce, J., at pp. 652, 653). 
 
 (6) Watt V. Grove (1805), 2 Sch. & Lefr. 491, per Lord Kedbsdale, L.C. (Ir.), at p. 502. 
 It is partly on this theory that relief is given against the oontractee who has secretly 
 employed the agent of the party complaining for commission and reward, as stated in 
 Sect. 5, Sub-s. (2), ante. 
 
 (c) Molony v. Kernan (1842), 2 Dr. & W. 37 ; 59 K. R. 635 (per Sitodbn, L.C (Jr.), 
 at pp. 41, 42 : "a party who buys from an agent with distinct notice that the party with 
 whom he is dealing is an agent, has cast upon him the burden of sustaining the lease, just 
 as much as the agent himself, and, if the lease could not be upheld by the agent, neither 
 could it be supported by a purchaser from that agent, if he deals with him in his character 
 as agent") ; De Bussche v. Alt (1878), 8 C D. 286, C. A. (per Cur., at pp. 310, 311) ; 
 Powell & Thomas v. Evans, Jones & Co., [1905] 1 K. B. 11, C. A. (per CoixiNS, M.R., at 
 pp. 18, 19, Stxruug, L.J., at pp. 21, 22, and Mathew, L.J., at p. 23) ; King, Viall & 
 Benson v. Howell (1910), 27 T. L. R. 114, C A. 
 
 (d) See Coles v. Trecothick (1804), 9 Ves. 234 (per Lord Emon, L.C, at p. 248 : "if 
 the trustee is to be the agent of the buyer, there is as much hazard that the sale 
 may turn out to be that which may be fraudulent. . . . But the same ciroumtances 
 that would authorize the trustee to contract would authorize him to be the agent of 
 the buyer, and cannot be carried higher against the agent "). In that case the purchase, 
 if made by the trustee himself, would have been quite unimpeachable, and it was held 
 that his having acted as agent for the actual purchaser was equally so. 
 
 (dd) Transvaal Lands Co. v. New Belgium, etc., Co., [1914] 2 Ch. 488, 501, 0. A. 
 _ (e) Williams v. Scott, [1900] A. C. 499, P. C. (at pp. 505-508). Here the party charged 
 failed to sustain the burden, held to be incumbent on him, of proving the interposition of 
 
§§ 397-401 (PARTIES). 359 
 
 398. Where tlie duty of disclosure is owed by more than one person, 
 and these persona are associated as partners (/), or aa co-agents each of 
 whom with the knowledge of the others enters into an illicit transaction 
 with the same person at the same time, and all the transactions, though for 
 a separate consideration in the case of each co-agent, are part of one entire 
 scheme of corruption {g), the liability is joint and several : that is to say, 
 each is liable in solido for the entire aggregate of the separate bribes (where 
 it is a question of bribes) given to the persons in question, and not merely 
 for the amount of his own separate bribe. But in any case where it appears 
 on the evidence that none of the parties charged had any knowledge of the 
 corruption of his associates, though each was conscious of his own, the 
 liability is several, and not joint (h). 
 
 399. The person subject to the fiduciary obligations may be an artificial, 
 as well as a natural person (i) ; and, in that event, it may become of great 
 importance to remember that the corporation which owes the duty is a 
 distinct entity in contemplation of law from the individuals composing it, 
 who, as such, owe no duty to the party complaining (jf). 
 
 400. The second of the two above-mentioned classes of persons against 
 whom the right to relief may be asserted consists of those to whom, whether 
 by operation of law or by voluntary assignment, the liability for the conse- 
 quences of any breach of that duty is transmitted. 
 
 401. As regards the former species of the class, no special observations 
 
 the third party, his independence of himself, and the fact that the transaction with him 
 was completed, or intended to be completed, or was anything more than a device to conceal 
 identity by substitution and manipulation of names. 
 
 (/) Imperial Mercantile Credit Association v. Coleman and Knight (1873), L. R. H. L. 
 189 {per Lord Chelmsford, at pp. 202, 203, and Lord Caiens, at p. 208). 
 
 (gr) SeEnglefield Colliery Co. (1878), 8 C. D. 388, C. A. ; Be Carriage Co-operative Supply 
 Association (1884), 27 C. D. 322 (a case of five directors, each of whom had accepted a 
 present of 20 shares from the promoter : one of them. General Roberts, strenuously 
 contended that he was liable, if at all, for no more than the value of his 20 shares, viz. 
 £100, but it was held otherwise, per Peabson, J., at p. 331 : "there were four other 
 direotors, who accepted in the same way, and at the same time, and all in the presence of 
 each other and of General Roberts, a transfer to each of them of 20 shares in the same way 
 as General Roberts did " ; and, accordingly, he was held accountable for £500, the value 
 of the whole 100 shares) ; Oluckstein v. Barnes, [1900] A. C. 240, H. L. (a case of four 
 co-promoters of a company, who were held jointly and severally accountable for the whole 
 of a sum of £20,000 received by them as secret profit, with penal interest, though inasmuch 
 as, for some inconceivable reason, the liquidator had claimed relief against Gluckstein 
 alone, and had limited the amount of such claim to £6341, with 3 per cent, interest only, 
 it was impossible for the House of Lords, in dismissing the appeal, to give him more than 
 he had asked for and was content to accept in the court below : per Lord Halsbtjby, L.C, 
 at p. 247, and Lord Macnaqhtbn, at pp. 248, 255) ; Se Kent County Oas Light & Coke Co., 
 [1913] 1 Ch. 92 (co-promoters : per Neville, J., at p. 96). 
 
 (h) Re London <i! South Western Canal, Ltd., [1911] 1 Ch. 346 (per Swinfen Eady, J., 
 at pp. 350, 351 : "then comes the question of what each director ought to pay. ... It 
 is oily a several liability, as it is not established that the several direotors knew the terms 
 on which their co-directors were qualified. Bach director therefore is liable for £100 "). 
 
 (i) Thus, in Lagunas Nitrate Co. v. Lagunas Syndicate, [1899] 2 Ch. 392, C. A., and 
 Re Leeds <b Eanley Theatre of Varieties, Ltd., [1902] 2 Ch. 809, C. A., the party charged, 
 or one of the parties charged, as promoter, and in Bath v. Standard Land Co., [1911] 1 Ch. 
 618, C. A., the party charged as agent, was a limited company. 
 
 {}) See Both v. Standard Land Co., sup. (per Cozens-Hardy, M.R., at pp. 625, 626, and 
 BrrcBXEY, L.J., at pp. 642-647). 
 
360 CH. IV, SECT. 7, SUB-S. (2). 
 
 are necessary. It is sufficient to say that, in case of the death |( A;), or dis- 
 ability, whether by reason of insolvency (I), infancy, lunacy, or otherwise, 
 of the party owing the duty of disclosure, the liability to proceedings for 
 rescission or analogous relief devolves upon, or is transmitted to, the same 
 persons, in accordance with the same rules, and subject to the same conditions, 
 as in cases of contract generally ; and that the liability to damages, where 
 damages are sought as for a wrong, is transmissible, if at all, under the same 
 conditions as in any action of tort (m). 
 
 402. Where relief is sought against an assignee from a person who has 
 entered into a transaction with the cestui que trust, company, or principal, 
 which is impeachable on the ground of non-disclosure, the position of such 
 assignee is determined with reference to a well-settled code of principles, 
 equally applicable to any kind of contract which, on whatever ground, is 
 voidable at the option of one of the parties. These principles accordingly 
 are applied to the kind of non-disclosure which is the subject of the present 
 Chapter, as well as to those which are the subjects of Chapter III, and of 
 Chapter V, respectively. In connection with the former, they have already 
 been fully discussed (w), and, without discussing them again, they may be 
 summarily recapitulated as follows. Where the thing assigned is a chose in 
 
 {k) In the following oases, the proceedings were instituted, or, where the death occurred 
 pendente lite, were continued or revived, against persons in law required to stand in the 
 place of the party originally owing the duty : Randall v. Errington (1805), 10 Vea. 423 
 (executor of one of the trustees) ; Morse v. Royal (1806), 12 Ves. 355 (executors of the 
 trustee) ; Greenlaw v. King (1841), 10 L. J. (cH.) 129 (personal representatives of one of 
 the persons originally subject to the duty) ; Hamilton v. Wright (1842), 9 CI. & Fin. Ill 
 (trustees of will of trustee for sale); Charter v. Trevelyan (1844), 11 CI. & Fin. 714 
 (executor and heir at law of the agent, and, on his death during the proceedings, the 
 personal representatives of the executor) ; Bagnall (John) tfc Sons, Ltd. v. Carlton {ISll), 6 
 C. D. 371, C. A. (personal representatives of one of the promoters who died during the pro- 
 ceedings, and trustees of the estate of another, who died before action brought) ; Erlanger 
 V. New Sombrero Phosphate Co. (1878), 3 App. Cas. 1218, H. L. (executors of some of the 
 members of the promoting partnership : per Lord BLAOKBUEisr, at pp. 1265, 1266) ; Plow- 
 right V. Lambert (1885), 52 L. T. 446 (widow of one trustee, and executors of the other) ; 
 Lydney v. Wigpool Iron Ore Co. v. Bird (1886), 33 C. D. 85, C. A. (executors of one of the 
 promoters who died during action) ; Ladywdl Mining Co. v. Brookes, Same v. Hugging 
 (1887), 35 C. D. 400, C. A. (where the first action was against two living promoters, 
 and the second against the respective executors of the three others) ; Lagunas Nitrate 
 Co. V. Lagimas Syndicate, [1899] 2 Ch. 392, C. A. (respective executors of two of the 
 directors of the promoting sjmdicate, which was in liquidation. It was pointed out here 
 by LiNDLEY, L.J., at p. 438, that these executors might have been held liable for the 
 secret profits obtained by their respective testators, if the action had been brought for 
 that purpose, but were not liable for damages) ; Costa Rica Railway Co. v. Forwood, [1901] 
 1 Ch. 746, C. A. (executors of the agent who died during the proceedings). 
 
 (I) Where the act or omission of the party charged can properly be described as a. 
 breach of trust, the insolvency of such party is not a discharge from the liabiUty, being a. 
 case expressly excepted by the Bankruptcy Acts : see Emma Silver Mining Co. v. Grant 
 (1880), 17 C. D. 122 {per Jessbl, M.R., at pp. 128-130). For an instance of a claim in an 
 action against the trustee of the estate of an insolvent individual, see Erlanger v. New 
 Sombrero Phosphate Co., sup. (as regards some of the defendants) ; Re Kent County Gas 
 Light & Coke Co., [1913] 1 Ch. 92. As to the right to prove in bankruptcy, see § 388, 
 ante. In the following cases, the relief was sought against the liquidator of an insolvent 
 promoting company ; Lagunas Nitrate Co. v. Lagunas Syndicate, sup. ; Re Leeds & Hanley 
 Theatre of Varieties, Ltd., [1902] 2 Ch. 809, C. A. 
 
 (m) These conditions are stated in the cases cited in note (I) to § 246 of the author's 
 Law of Actionable Misrepresentation. 
 
 (n) See §§ 283-287, ante. 
 
§§ 401-403 (parties). 361 
 
 action, tte assignee takes it subject to all equities whicli before the assign- 
 ment were, and but for the assignment would continue to be, enforceable against 
 the assignor by the other party to the contract, including the equity to avoid 
 it (o) : but where the subject of assignment is property in possession which 
 the assignee takes for value, without notice, and in good faith, no right to 
 avoid the original contract which would have been available against the 
 assignor, at the suit of the other party to it, will be effectual to take the 
 property out of the hands of the assignee, unless that right has been actually 
 exercised before the date of the assignment {p) ; if, however, the assignee 
 takes without valuable consideration, though without notice (q), or with 
 notice, though for value (r), or both for value and without notice, but in 
 bad faith (s), he stands in no better position than his assignor ; the onus 
 being on the party asserting his right to relief against the assignee to establish 
 such absence of value, notice, or bad faith, as the case may be (i). 
 
 403. Questions as to the efiect on costs of any unnecessary or improper 
 joinder of parties not liable with those who are, and on the other hand of 
 joining persons properly added as formal parties, and for conformity, or 
 from whom, though eventually exculpated, it was reasonable to seek 
 relief in the first instance, are considered hereafter in their proper place {u). 
 
 (o) Greenlaw v. King, sup., where the assignee of an annuity was held responsible in 
 respect of his assignor's breach of fiduciary duty ; Barnard v. Hunter (1856), 2 Jur. (n.s.) 
 1213) where Sttjabt, V.-C, held that those defendants to whom a claim to a fund in Court 
 had been assigned, though they took for value and without notice, yet, since they were 
 " claiming under an assignment of an equity, must take as he " — the mortgagor — 
 " took," which was in that case nothing. Cp. the cases cited in note (I) to § 284, ante. 
 
 (p) See § 285, ante, and, for an application of the rule there stated to cases of the 
 description dealt with in this Chapter, see Randall v. Errington (1805), 10 Ves. 423, where 
 it was recognized that, if the assignee of the property from the trustees whose purchase 
 from the cestui que trust was impugned should turn out to have taken for value, without 
 notice, and in good faith, no relief could be obtained against him, and the relief 
 would in that event assume the form of an account against the trustees, and not of 
 rescission. As to a purchase with notice from one who has acquired property for value 
 and without notice, and as to when such a transaction confers a good title, and when 
 not, see § 287, ante, and the cases cited in note (e) thereto. 
 
 (q) See § 286, and notes (x) and (y) thereto, ante, and cp., for an instance of the applica- 
 tion of the rule to oases of the present description, McPherson v. Watt (1877), 3 App. Cas. 
 254, H. L. {per Lord Cairns, L.C, at p. 265, and Lord BiACKBirBN, at p. 276). 
 
 (r) See § 286, and note (2) thereto, ante ; and cp., as illustrations of the application of 
 the principle there stated to cases of the present class, Molony v. Kernan (1842), 2 Dr. & 
 Warr. 37 ; 59 R. R. 635 (per Sitgden, L.C. (Ir.), at pp. 40-42) ; Spencer v. Topham (1856), 
 22 Beav. 573. 
 
 (s) See § 286, and not© (a) thereto, ante. 
 
 it) See § 287, ante. 
 
 (u) In Ch. VIII, Sect. 2, Sub-s. (4), post. 
 
362 CH. V, SECT. 1. 
 
 CHAPTER V. 
 
 THE DUTY OF DISCLOSUEE AND OTHER DUTIES INCIDENTAL 
 TO RELATIONS OF INFLUENCE. 
 
 404. Theee are certain relations which are deemed to give rise to what the 
 law calls " influence ", that is to say, from the mere existence of which 
 the law presumes that one of the related parties, whom it may be convenient 
 to call " the dominant party " (v), is in a position of ascendancy or pre- 
 dominance over the other, who may be called "the servient party," such 
 that the former is placed under a duty of complete candour and good faith 
 towards the latter, as regards disclosure and otherwise, in respect of any 
 transaction which he may be minded to enter into with him while the relation, 
 and the influence springing therefrom, continues. These relations may 
 exist by nature, independently of human will, such as the parental or quasi- 
 parental relationship, or may be constituted by the voluntary action of the 
 parties, such as the professional relations of solicitor and client, spiritual 
 director and penitent, or medical man and patient, or may be created by circum- 
 stances and conduct generally. All these forms of relation wiU be classified 
 and examined seriatim, and in detail, presently (w). It is suflS.cient to note 
 here that their common feature, or differentia, is clearly distinguishable 
 from that of the class of relations considered in the last Chapter (x). Sub- 
 jection to the dominating influence of another is not the same thing as con- 
 fidence in that other : indeed, the two states of mind may be mutually 
 destructive, though it may frequently happen that, on the other hand, they 
 co-exist in the same person, and engender one another. An agent or trustee, 
 for instance, exerts, as such, no influence. On the other hand, a person 
 in mental servitude places no trust in his owner or oppressor. Antonio 
 reposes no confidence in Shylock, or the captive in his gaoler ; if he does, 
 it is only that spurious sort of confidence which is artificially induced by 
 
 («) On the analogy of the expressions " dominant tenement," and " servient tene- 
 ment," in the larW of easements. The terms " party complaining," and " party charged," 
 which have been used hitherto (see § 7, ante), will be abandoned for the purpose of this 
 Chapter, except where referring to the class of case in which the party sought to be made 
 liable is not iumaelf the party exerting the influence, but is utilizing and trading on it, 
 and where it therefore becomes necessary to make a distinction between the former, who 
 is the party charged, and the latter, who is the " dominant party." 
 
 {w) See Sect. 2, post. 
 
 {x) See Torrance v. Bolton (1872), 8 Ch. App. 118 {per James, L.J., who, at pp. 124, 
 125, mentions, as two separate classes, " contracts obtained by persons from others over 
 whom they have dominion," and " contracts obtained by persons in a fiduciary position." 
 Cp. § 314, ante, and note {t) thereto, where also the distinction is emphasized. 
 
§§ 404, 405 (relations of influence). 363 
 
 the hypnotism of the influence, and not that which, as in the case of a cestui 
 que trust or principal, is voluntarily bestowed. The two types of relation 
 are, it is true, often loosely classed together as " fiduciary relations " ; but, 
 except in the sense that fiduciary duties are incidental to each class, the 
 expression is not strictly accurate ; for in the one case it is the abuse of 
 confidence which the law forbids ; in the other, the abuse of influence. From 
 this point of view, it is only the former kind of relation which is properly 
 termed " fiduciary." The essential difference between " confidence " and 
 " influence " is forcibly illustrated by the fact that gifts which are regarded 
 with " almost invincible jealousy " when the result of influence, are quite 
 unobjectionable as between parties related to one another merely by a tie of 
 confidence ; whilst, on the other hand, a present from a third person which, 
 when made to an agent, for instance, is the subject of relief, when made to 
 a dominant party is quite free from objection. Nor is the distinction a purely 
 academical one ; for, though the same general considerations of public 
 policy {y) which move the Courts to throw their protection round those who 
 confide, whether they are influenced or not, move them also to protect those 
 who are in subjection and servitude of will, whether they confide or not, — 
 in the one case providing that the party shall not be cheated of his legitimate 
 expectations, in the other, that he shall not be coerced or cajoled, — the 
 duty cast upon a " dominant party " is, as will be seen (z), in some respects 
 of a different nature to, and of a larger scope and measure than, that which 
 is cast upon a trustee, promoter, agent, or other person in whom only 
 confidence is reposed. 
 
 Sect. 1. Geneeal Principles and Theory. 
 
 405. The general proposition and cardinal rule as to the rights of the 
 servient party on the one hand, and the duties of the dominant party on the 
 other, is as follows. Where a relation of the character indicated subsists 
 between two persons, and, during its subsistence, a transaction of any kind 
 takes place between them, the law presumes in favour of the servient party, 
 against the dominant party, (1) that the relation placed the dominant party 
 in a position to exercise influence and dominion over the servient party ; 
 (2) that such influence and dominion operated upon, and procured, the transac- 
 tion ; and (3), that the influence was an improper and unfair, or (to use the ac- 
 cepted phrase) an " undue influence " {a). Accordingly any such transaction, 
 
 (y) Cp. § 407, post, with Ch. IV, Sect. 1, ante. 
 
 (z) For instance, in the case of transactions other than gifts, it must be shown, as a 
 separate and independent probandum, that full value was given, if the transaction is to be 
 maintained : see § 475, post. In the case of relations of " confidence," this is at least 
 doubtful : see § 323, note (p), ante. Again, in the case of gifts at any rate, when the 
 relatien is one of influence, the independent advice of a third person must be shown, in 
 addition to and apart from all other matters, by the dominant party — see § 478, post : 
 but, in the case of "confidence" relations, this does not appear to be essential, if in 
 all other respects the transaction was proper and conscientious : see § 324, note (r), ante. 
 Lastly, the question of the receipt of bribes from a third party, which plays such an im- 
 portant part in the law relating to " confidential " relations, has no place at all in the 
 case of any relation in which influence alone is concerned. 
 
 (a) Per Lord Lanqdale, M.R., at pp. 558-560 of Archer v. Hudson (1844), 7 Beav. 551, 
 
364 CH. V, SECT. 1. 
 
 whether it be a contract for valuable consideration (b), or a gift (c), will be 
 undone, or otherwise relieved against, unless the dominant party is able to 
 show affirmatively — and the onus is on him to do so — either that, by 
 reason of the termination or suspension of the relation itself, or otherwise, 
 the influence in fact had no efEect upon the transaction, — proof of which, if 
 satisfactory, rebuts the first two of the above presumptions (d), — or that the 
 influence was not " undue ", in other words, that it was not abused, but 
 conscientiously used, and that the transaction resulting from such use was 
 in every respect fair, just, righteous, and reasonable (e), — ^proof of which will 
 rebut the last of the above presumptions. It will thus be seen that none of 
 the presumptions in question are irrebuttable ; and that the view which 
 appears to have been in early times frequently contended for, if not judicially 
 countenanced, that even transactions for value between the related parties 
 are absolutely prohibited by the law is a complete mistake (/). A more 
 widely prevalent and persistent, and a much more excusable, heresy — but a 
 heresy nevertheless — is the doctrine or suggestion that no gift made by the 
 servient to the dominant party can ever stand under any circumstances. 
 This is not so : the Courts have never held in modern times that it is absolutely 
 impossible to sustain such a gift ; indeed, the most they have ever said at any 
 time is that, particularly in the case of attorney and client, it is " almost, 
 impossible " to do so, and that any such transaction wiU be scrutinized " with 
 a jealousy that is almost invincible " (g). Gifts and contracts are now, how- 
 
 and per Lord Lyndhtjrst, L.O., at pp. 211-213 of the report of this case when affirmed 
 (1846), 15 L. J. (OH.) 211. See also Liles v. Terry, [1895] 2 Q. B. 679, C. A. {per Lord Eshee, 
 M.R., at p. 683, Lopes, L. J., at p. 684, and Kay, L. J., at pp. 685, 686) ; Powell v. Fmvell, 
 [1900] 1 Ch. 243 {per Faewbll, J., at p. 245) ; Wright v. Carter, [1903] 1 Ch. 27, C. A. {per 
 Vaughan Wilmams, L.J., at p. 50, and Sttrling, L.J., at p. 57). For applications of 
 the rule to the various types of relation, see, generally, the cases cited in the notes to 
 Sects. 3 and 4, post. 
 
 (6) Such as a purchase, sale, lease, mortgage, or any other transaction which a con- 
 veyancer would include under the term "purchase" ; a loan, security, &c., &c. See, 
 generally, the cases cited in the notes to Sect. 2, post. 
 
 (c) These include, besides donations or settlements of money, land, chattels, securities, 
 and the like, all transactions which, as between the servient and the dominant party, are 
 without valuable consideration, though not so as between either of such parties and the 
 creditor of the dominant party; such as, for instance, a guarantee of the dominant party's 
 debt, given by the servient party to such creditor, whether by express instrument of 
 suretyship, or by becoming joint acceptor or maker of a negotiable instrument, or 
 by joining as a party in any other contract between the dominant party and a third 
 person. Several examples of this latter class of case are to be found in the notes to 
 Sect. 2, post. 
 
 {d) See Sect. 4, Sub-s. (1), post. 
 
 (e) See Sect. 4, Sub-s. (2), post. 
 
 (/) In Cane v. Lord Allen (1814), 2 Dow. H. L. 289, it appeared not improbable that 
 the Court below had granted relief on the sole ground that a purchase by an attorney from 
 his client was in any circumstances unsustainable. The House of Lords, however, in 
 reversing the decree, held that there is " no such doctrine in our law " {per Lord Eldon, 
 L.C., at p. 294, and again at p. 299, and Lord Redesdale, at p. 296). See also Tomson v. 
 Judge (1855), 3 Drew. 306 {per Kindbesley, V.-C, at p. 313 : " a solicitor can purchase 
 his client's property even while the relation subsists ; but the onus Ues on the solicitor to 
 show that the transaction was perfectly fair ") ; Allison v. Clayhills (1907), 97 L. T. 109 
 {per Parkbe, J., at p. 711 : "a solicitor is not whoUy incapacitated from purchasing or 
 taking a lease from his client, but the onus is on him of upholding the transaction "). 
 
 {g) In Welles v. Middleton (1784), 1 Cox 112, it was undoubtedly said by Lord 
 Thuelow, L.C, at p. 125, that a gift from client to attorney cannot stand, though " once 
 
§§ 405, 406 (relations op influence). 365 
 
 ever, in the best and most carefully considered of the various judicial exposi- 
 tions of the doctrine, classed together as alike subject to the general and 
 fundamental rule that the primd facie presumption of impropriety may be 
 repelled by affirmative evidence of propriety in fact (/t) ; though the means 
 by which the propriety of the transaction is to be established are not quite 
 the same when the transaction was without, as when it was for, valuable 
 consideration (i). 
 
 406. When the dominant party is called upon " to sustain the transac- 
 tion," which is always the case unless he can show that the presumed influence 
 was in fact non-existent or inoperative at the material date, he must, in 
 order to do so, establish by evidence, in the case of both gifts and contracts, 
 that, before the transaction took place, he (1) made full disclosure to the 
 servient party of all material facts relating to the subject-matter of the 
 transaction, its legal and business character and complexion, and the servient 
 party's rights in respect of it, including his right to refuse to enter into it, 
 and his right, having entered into it, to revoke or avoid it ; and (2) gave the 
 servient party as honest and disinterested action against himself as he would 
 have given him against a stranger, and placed at his disposal for that purpose 
 the whole of his natural or acquired skill, judgment, and discretion. In 
 the case of gifts, probably, but not in the case of contracts, he must further 
 prove that the servient party, before making the gift, had the honest and 
 competent advice of a third person, entirely independent of himself. In 
 the case of contracts, but not of course in that of gifts, he must also show 
 that he gave full and fair value for that which was conveyed or transferred 
 to him under the contract. Under these conditions alone can the dominant 
 
 extricate him, and it may be otherwise." To the same effect Lord Eeskine, L.C, at p. 137 
 of Wright v. Frond {1806), 13 Ves. 136 ; Lord ELDOif, L.C, at pp. 312, 313 of Montesquieu v. 
 Sandys (1811), 18 Ves. 301, distinguishing for this purpose a gift from a purchase ; 
 KiNDEBSLBY, V.-C, at pp. 313-317 of Tomson v. Judge, sup. ; Bacon, V.-C, at p. 645 
 of Morgan v. Minett (1877), 6 C. D. 638, though, after stating the rule as without qualifica- 
 tion, he proceeds to mention two himself. On the other hand, with respect to gifts in the 
 case of other relations of " influence," Lord Eldon, L.C, at pp. 297, 298 of Hatch v. Hatch 
 (1804), 9 Vea. 292, limits himself to the statement that is " almost impossible " that a gift 
 can stand, and that such a case is watched by the Court with " a jealousy which is almost 
 invincible" ; whilst, with reference to gifts in general, Lord Bbougham, L.C, at p. 138 
 of Hunter v. Atkins (1834), 3 My. & K. 113, remarks that " the cases supposed to decide 
 that a gift can never stand, do not really decide this, but only that such cases should 
 be approached with great suspicion" ; and, even with reference to a gift from client to 
 attorney, Sttjabt, V.-C, at p. 345 of Ee Holmes's Estate, Sevan's Case (1861), 3 Giff. 337, 
 said that it is "almost impossible that the gift can prevail. The principle of influence 
 vitiates the gift ; but the presumption of influence may be rebutted by circumstances 
 short of the total dissolution of the relation of solicitor and client." See also Wright v. 
 Carter, [1903] 1 Ch. 27, C A. (at pp. 49-53, 56-58, and 61). 
 
 (h) Thus, in Grosvenor v. Sherratt (1860), 28 Beav. 659, Romilly, M.R., at p. 665, 
 expresses the view that both alike, without making the slightest distinction between them, 
 are " almost impossible " to sustain: " in these cases," he says, " the persons who take the 
 grant, whether it be by a gift or a sale, or a lease of the property, put themselves in a position 
 which, in a Court of Equity, makes it almost impossible for them to succeed. They must 
 show" . . . &c.). So, after mentioning various relations of " influence," Lord Penzance, 
 at p. 1230 of Erlanger v. New Sombrero Phosphate Co. (1878), 3 App. Cas. 1218, H. L. 
 observes that they " all furnish instances in which the Courts of Equity have given pro 
 tection and relief against the pressure of unfair advantage resulting from the relation and 
 mutual position of the parties, whether in matters of contract or gift." 
 
 (i) See § 406, inf. 
 
366 CH. V, SECT. 1. 
 
 party accept a gift from, or enter into a contract with, the servient party : 
 or rather, since the transaction is neither illegal nor void in itself, it is more 
 correct to say that he can only have any dealings with the servient party 
 at the risk of their being afterwards, if challenged, invalidated, unless he is 
 then in a position to prove a strict compliance with these conditions, which 
 (from lapse of time and consequent loss of evidence) he may find himself 
 uuahle to do, though in fact he did comply with them. It is a question, 
 therefore, not of what he did at the time, but what, after perhaps a long 
 interval, he can satisfy the Court by evidence that he then did, — ^which is 
 a very difierent thing. Accordingly the proper occasion for a detailed dis- 
 cussion of the obligations of the dominant party is when the question of the 
 affirmative answers available to him against a prima facie case of breach of 
 duty comes to be examined (j). 
 
 407. The theory upon which these rules are founded, and by which they 
 are justified, is much the same as in the case of relations of " confidence " {k) ; 
 that is to say, " public policy " in its proper sense of public utility, convenience, 
 and security (l). It may be — indeed, it has been, and by no less an authority 
 than Lord Eshee (m) — objected that the code of presumptions and principles 
 applied to relations of " influence " is an artificial and arbitrary code, inimical 
 to freedom of individual action, and not called for or necessitated by the 
 imperative requirements of the common weal. The objectors freely admit 
 that the principle of public pohcy justifies the framing of strict rules in 
 the case of any relation of " trust," and that there is no injustice in calling 
 upon a trustee, promoter, or agent, to account — in the intellectual, and, 
 if he cannot, in the fiscal, sense — for a bribe which he is discovered to have 
 taken, or in presuming its impropriety until the contrary is shown ; any 
 more than there is in calling upon one whose hand is in another's pocket, 
 or who is found on another's premises at dead of night, for an explanation 
 of conduct which is at least primd facie dubious. But they insist that, 
 whereas the receipt of personal profit by a trustee, promoter, or agent is 
 ipso facto wrongful, until shown to be rightful, no such presumption ought 
 to be made against acts which result merely from " influences," all of which 
 are, in themselves, negatively innocent, and even, as in the case of parental 
 or spiritual influence, positively praiseworthy (mm). To presume that an 
 influence which in its nature is " due " must have been " undue," unless 
 
 {j) Thia is the subject of Sect. 4, Sub-s. (2), post. 
 
 (k) See § 317, ante. 
 
 (l) As defined by Lord Haedwicke, L.C, at p. 156 of Chesterfield (Earl of) v. Jannaen 
 (1751), 2 Ves. Sr. 125 ; 1 Atk. 301. The passage ia cited in note (y) to § 646, post. 
 
 (m) At pp. 683, 684 of Liles v. Terry, [1895) 2 Q. B. 679, C. A. But, in the same case, 
 at pp. 684, 685, 687, both his colleagues expressed dissent from Lord Eshbr's adverse 
 criticism, and so did Lindlby, M.R., at pp. 131, 132 of Barron v. Willis, [1900] 2 Ch. 121, 
 C.A. 
 
 (mm) Thus Lord Thtjelow, L.C, at p. 125 of Welles y. Middleton (1784), 1 Cox 112, 
 describes parental influence as "the true, honest, and just influence, as it ia in itself," 
 and at pp. 299, 300, at Hoghton v. Boghton (1852), 15 Beav. 278, Romilly, M.R., speaking 
 of influence relations generally, says : " not that the influence itself, flowing from such 
 relations, is either blamed or discountenanced by the Court ; on the contrary, the due 
 exercise of it is considered useful and advantageous to society." 
 
§§ 406, 407 (relations of influence). 367 
 
 and until the contrary be shown, is, in the view of these critics, a flat con- 
 travention of the fundamental principle of our jurisprudence that every man 
 shall be deemed innocent of wrongdoing until his guilt be proved : usum non 
 tollit abusus, and accordingly every abuse of anything that admits of being 
 properly used should be established as a fact, and not inferred as a proposition 
 of law. To these objections — by no means unworthy of consideration — ^the 
 answer given by the great masters of equity, and given so frequently and 
 consistently for two centuries back, that, whether sound or not, it is now 
 too late in the day to disturb it, is that the presumptions and rules in question, 
 however unfair they may appear, if regarded without reference to the interests 
 of the community at large, have been found to be absolutely required by 
 that suprema lex, the solus reipuhlicm. Admitting that nothing less than 
 " pubHc utility " and the preservation and " safety of society " can justify 
 them, it has been held, over and over again, that this indispensable condition 
 of their validity, as shown by all past experience, undoubtedly ^ists (n). 
 The Court of Chancery, from the earliest times, has professed to be " the 
 guardian and protector of the weak and helpless of every denomination " (o) ; 
 and it has found that this guardianship and protection must be wholly 
 inefficacious unless supported by, and armed with, a set of presumptions and 
 principles which shall be entirely independent of any consideration of personal 
 
 (») Hylton V. Hylton (1754), 2 Ves. Sr. 547 {per Lord Habdwickb, L.C, at p. 549 : 
 " all depends upon public utility ; and therefore the Court wiU not suffer it, though 
 perhaps in a particular instance there may not be an actual unfairness ") ; Norton v. 
 Relly (1764), 2 Eden 286 {per Lord Noethingtoit, L.C, at p. 291 : " pubho concernment 
 and utility ") ; Welhs v. Middleton (1784), 1 Cox 112 {per Lord Thuelow, L.C, at p. 125 : 
 " general principles of pohoy ") ; Hatch, v. Hatch (1804), 9 Ves. 292 {per Lord Eldou, L.C, 
 at pp. 297, 298 : "public poMcy ") ; Huguenin v. Baseley (1807), 14 Ves. 273 {per Lord 
 Eldon, L.C, at p. 300: "principle of pubHo utility"); Griffiths v. Kohins (1818), 3 
 Madd. 191 {per Leach, V.-C, at p. 192 : " the policy of this Court ") ; Archer v. Hudson 
 (1846), 15 L. J. (CH.) 211 {per Lord Lyndhubst, L.C, at p. 211 : "the principle of general 
 policy ") ; Nottidge v. Prince (1860), 2 Giff. 246 {per Sttjabt, V.-C, at p. 270 : " public 
 utility which requires this Court to guard against such influences ") ; O'Brien v. Lewis 
 (1863), 32 L. J. (CH.) 569 {per Lord Westbttby, L.C, at p. 573 : " I am not going to return 
 him " — ^the client who had made his attorney a present — " this £300 on account of his own 
 merits, but because I must uphold the general rule, founded upon considerations of public 
 policy"); Broun v. Kennedy (1864), 4 De G. J. & S. 217 {per Kni&ht- Bruce, L.J., at 
 p. 222 — " public policy," — and Tuener, L. J., at p. 223 — " the best interests of society ") ; 
 Baker y. Monk (1864), 4 De G. J. & S. 388 {per Knioht-Bettcb, L.J., at p. 389 : "the 
 general good of society," — " society is as much interested as are individuals ") ; Morgan v. 
 Minett (1877), 6 C D. 638 {per Bacou, V.-C, at p. 645: "required for the safety of 
 society ") ; Alhard v. Skinner (1887), 36 C D. 145, C A. {per Bowen, L.J., at p. 190 : 
 " pubUc policy and fair play ") ; Idles v. Terry, [1895] 2 Q. B. 679, C A. {per Lopes, L.J., 
 at p. 684 : " founded on public policy,"— a " highly beneficial " rule. So Kay, L.J., at 
 p. 685 : " a rule of public policy of great importance," which for that reason, he adds 
 at p. 687, " commands my strongest respect and approval." As to Lord Esher's repug- 
 nance to this view of " public policy," see note (m), sup.) 
 
 (o) The phrase used by Lord Noethinqton, L.C, at p. 288 of Norton v. Selly, sup., 
 in which case, however, he permits himself certain extravagances in expression which are 
 not so acceptable, such as — " this Court can extend its hands of protection : it has a 
 conscience to relieve, and the constitution itself would be in danger, if it did not " (p. 288). 
 The same somewhat pontifical ground is taken by Lord Thtjrlow, L.C, when, at p. 125 
 of Welles V. Middleton, sup., he speaks of "the preservation of mankind," and by Lord 
 Eeskine, L.C, when, at p. 51 of Ormond {Lady) v. Hutchinson (1806), 13 Ves. 47, he claims 
 for the Court of Chancery " a guardianship over mankind." Not even the Pope, or an 
 CEcumenical Council, pretends to quite so extensive a jurisdiction and authority as this. 
 
368 CH. V, SECT. 1 ; SECT. 2. 
 
 merits or motives in the individual case (p). If the rules are to be of any 
 value, the Court must be relieved of the necessity of searching particular 
 consciences ; and must not be impeded by difficulties which would other- 
 wise arise in tracing the property to, and getting it out of the hands of, the 
 dominant party (q). The whole doctrine is based upon a recognition, and a 
 necessary distrust, of the infirmities of human nature (r). It is a question 
 of tendency and temptation, rather than of individual good or bad faith in 
 the particular instance : usum non tollit abusus, however true a saying, is 
 one that the law cannot afford to adopt or countenance : it must prohibit 
 the usus except under prescribed conditions, for fear of the possible, or, 
 rather, inevitable abusus which will result if it does not. It is forced, in 
 the interests of the community, to presume as against every person standing 
 to another in a relation of " influence," however unjustifiable and contrary 
 to the fact the presumption may be in any individual case, the existence of 
 those elements and possibilities in his character which Lady Macbeth foresaw 
 in that of her lord : 
 
 " What thou wouldst highly 
 That wouldst thou holily : wouldst not play false, 
 And yet wouldst wrongly win " (s). 
 
 Such a person cannot be allowed to call for proof that he has " played false," 
 or " wrongly won." The burden must be placed on his shoulders to establish 
 that in fact he did act " holily," did not " play false," and did " rightly 
 win." It is true that omnia prcBsumuntur rite esse acta: but it is no less true 
 that omnia prcesumuntur contra spoliatorem, and in cases of " influence " the 
 general good requires the further presumption that the dominant party, 
 being a potential spoliator, is actually so, until it be proved otherwise. And, 
 say the apologists for this system of presumptions, this is not an extravagant 
 burden to impose on a dominant party. In the first place, there is no compul- 
 sion on him to enter into any transaction at all with the servient party during 
 
 (p) See the passages cited in note (re), sup., from Hylton v. Hylion, sup. ; O'Brien v. 
 Lewis, sup. In Welles v. Middleton, sup., where, at p. 119, Lord Thtjelow, L.C, after 
 •observing that " this case was opened as a transaction of fraud," but that none had been 
 proved, and that, in his belief, " they " — ^the defendants — " stand very fair in the world," 
 proceeds to point out the utter irrelevance of these considerations. At pp. 646, 647 of 
 Morgan v. Minett (1877), 6 C. D. 638, Bacon, V.-C, observes that "these Courts have not 
 those golden scales which are said to be used in the mythological heaven to regulate the 
 destinies of mankind," and therefore will not attempt the delicate task of appraising the 
 merits or demerits of the individuals concerned, but will lay down, and act upon, a general 
 prohibitive rule. The possibiUty of abuse of the influence is enough to justify such a rule." 
 Cp. the cases cited in the notes to §§ 461 and 486, post. 
 
 (q) Hatch v. Hatch (1804), 9 Ves. 292 {per Lord Eldon, L.C, at pp. 297, 298). 
 
 (r) Morgan v. Minett, sup. (per Bacon, V.-C, at p. 647 : " suspicion is the basis of that 
 rule of influence"); Barron^. lf»7Z»>, [1900] 2 Ch.l8], C.A. (pej-LiNDLEY, M.R., at p. 132: 
 " I think the rule is based upon a knowledge of human nature "). Cp. the like opinion 
 of Lord Hebsohell, in reference to "confidence" relations, at p. 51 of Bray v. Ford, 
 ■[1896] A. C. 44, H. L. ; " it does not appear to me that this rule is, as has been said, 
 founded upon principles of morality. I regard it rather as based upon the consideration 
 that, human nature being what it is, there is danger, in such circumstances, that "... 
 &c., &c. 
 
 (s) Macbeth, Act 1, Sc. 5, 11. 21-23. 
 
§§ 407, 408 (relations of inpluence). 369 
 
 tlie existence of the relation : in the next place, any such transaction is not 
 illegal or void (t), any more than a wager is, and no Court can undo it, or 
 prohibit it, or punish for it, except on the initiative of the servient party, if 
 he is so minded, which in the vast majority of cases he is not : and, lastly, 
 even where it is impeached, the presumptions made against its validity are 
 not irrebuttable, and it is not demanding too much of a party who need 
 never have entered into the transaction at aU to require that, if challenged, 
 he shall establish its propriety, and must understand that, in entering into 
 it, as he may, he can only do bo at the risk of its being set aside if the servient 
 party should afterwards seek to be relieved of it, which he may never do, 
 and if in such event he (the dominant party) is not in a position, as, how- 
 ever, he may be, to sustain it by the proper evidence. From this point of 
 view, as has been justly observed (u), the doctrine, so far from infringing 
 freedom of alienation of property, " secures the full and ample and unin- 
 fluenced enjojonent of it." 
 
 Sect. 2. The Classes of Relation feom which Influence is 
 
 presumed. 
 
 408. The relations which give rise to the presumption of undue influence are, 
 — in the first place, the domestic relation of parentage, or quasi-parentage (v) ; 
 secondly, what may be called the professional relations, such as those which 
 exist between solicitor and client, between spiritual director and penitent 
 or disciple, and between medical adviser and patient (w), — all the above 
 being often classed together as the " recognized," or the " known " (x), or the 
 " suspected " (y), relations ; — thirdly, such relations as, not being within 
 either of the two above-mentioned classes, are constituted by the circum- 
 stances of the particular case (z), including the relation, to which somewhat 
 special rules are applicable, between purchasers or lenders and expectant 
 heirs or reversioners {a). All these it is proposed to examine seriatim and 
 in detail : but, in the meantime, it is necessary to make the general prefatory 
 observation that, just as in the case of fiduciary relations, in reference to 
 which a similar warning has been given (6), it is not a question of names, 
 
 (t) See § 488, note (i), post. 
 
 (u) By Sir S. Eomilly in his reply at p. 287 of Hagiienin v. Baseley (1807), 14 Ves. 273, 
 as to the reoognized quasi-judicial authority of which, see note (c) to § 408, inf. The 
 argument against the policy of restricting freedom of purchase has been urged with 
 greater plausibility, and with not a little judicial countenance, in the case of dealings 
 with " expectants " in reversions : see § 435, note (l), post. 
 
 (v) See Sub-s. (1), post. 
 
 (w) These relations are dealt with in Sub-ss. (2), (3) and (4), post, respectively. 
 
 (x) The expression of Lord Bkougham, L.C, at p. 135 of Hunter v. Atkins (1834), 
 3 My. &K. 113. 
 
 (y) So termed in the felicitous language of Sir Frederick PoUock, at p. 601 of hia 
 treatise on The Principles of Contract (7th ed.). See also, as justifying the expression, 
 the observation of Bacon, V.-C, cited in note (r), sup., that " suspicion is the basis " of 
 the rule. 
 
 (z) See Sub-s. (5), post. 
 
 (a) See Sub-s. (6), post. 
 
 (b) § 343, ante. 
 
 B.N.D. 2 B 
 
370 CH. V, SECT. 2. 
 
 but of tilings ; for, as was said by Sir Samuel EomUly, " the relief stands 
 upon a general principle applying to all the varieties of relations in which 
 dominion may be exercised by one person over another " (c). It is enough 
 that any such " variety " which may hereafter come before the Courts, 
 though its name and title be unknown to the reports, should be within 
 the principle of the rule, to justify its immediate admission to the circle 
 of " suspected relations." The only question is whether it is proper, in 
 the interests of the community, to presume the " influence " ; as, in cases of 
 "confidence," the only question is whether the relation necessarily in- 
 volves the " confidence." Many cases may be imagined of influences which, 
 though not yet " suspect," may at any moment become so : for instance, 
 the influence of a teacher or instructor (d) ; of a master in literature, science, 
 
 (c) In his reply in Huguenin v. Baseley (1807), 14 Ves. 273, at pp. 285, 286. The passage 
 in the text is cited, not as argument, but as authority, because it has been textually adopted 
 as such in more than one subsequent judgment. Indeed, the whole of this reply is, as 
 Sir Erederiok PoUock justly observes (p. vi. of his Preface to 9 E. B.), "perhaps the 
 only modern case in which a reported argument has acquired by later judicial approval 
 an authority equal to that of the judgment itself,"— which, considering that the judgment 
 was that of Lord Eldon, is a somewhat startling result. On reading the cold printed 
 page, it is difficult to see why this chorus of laudation should have followed the argument, 
 or in what respects it surpassed, or even equalled, the judgment, or, indeed, why Sir 
 Samuel Komilly's reply should be so favourably distinguished from his opening, as to 
 which the chroniclers have observed a conspiracy of silence. One can only suppose that 
 the effect produced by the effort was largely rhetorical, and depended upon a personal 
 ascendancy and authority which has evaporated in the record, and can no more be repro- 
 duced in a report, than the art of Betterton, Garriok, or Kean can be made to live again 
 in memoirs and critiques. Of the reality, however, of the impression made at the time, 
 and for many years afterwards, there can be no possible doubt. Twenty-seven years later. 
 Lord Bbougham, L.C, at pp. 139, 140 of Hunter v. Atkins (1834), 3 My. & K. 113, refers 
 to "the famous case of Huguenin v. Baseley, remarkable, amongst other things, for the 
 display of those transcendent talents, and that pure taste, by which among many other 
 accomplishments. Sir Samuel RomiUyelevatedand adorned the bar " ; and, five years later 
 still. Lord Oottbnham, L.C, who had heard the argument delivered, when citing the 
 passage which appears in the text, speaks of " Sir Samuel KomiUy's celebrated reply in 
 Huguenin v. Baseley, from hearing which I received so much pleasure that the recollection 
 of it has not been diminished by the lapse of more than 30 years " ■- Dent v. Bennett 
 (1839), 4 My. & Cr. 269, at p. 277. After this date, its merits of necessity became matter of 
 tradition only. But the tradition was faithfully preserved, and the argument has been 
 cited again and again, and always with the same laudatory description as " the celebrated 
 argument," or "the celebrated reply," by a long line of judges from Sttjaet, V.-C, in 
 Nottidge v. Prince (1860), 2 Giff. 246 (at p. 263), to Bybnb, J., in Cavendish v. Strutt (1903), 
 19 T. L. R. 483 (at p. 489). The only judicial reference to the case which is free from these 
 somewhat uncritical raptures, and exhibits a saner and more measured appreciation of the 
 respective merits and authority of the argument on the one hand, and the judgment on 
 the other, is to be found in Middleion v. Sherburne (1841), 4 Y. & C. (Exch. in Eq.) 358, 
 where Lord Abinobb, C.B., seems not to have been greatly impressed by the laudatory 
 allusion during the argument (p. 367) in the consecrated formula to " the celebrated 
 reply," and, at p. 391, points out, with merciless exactitude, that Lord Eldok's judgment 
 (which he, at least, it would appear, regarded as the only authority) carefully avoided 
 the adoption of the " spiritual influence " contention on which the greater part of the 
 reply was founded, and which earned for it its celebrity, and proceeded upon other 
 grounds, viz. the existence of a relation created by the actual " circumstances and condi- 
 tions," as described in Sub-s. (5), post. It is, however, the undoubted fact that certain 
 passages from " the celebrated reply " have been judicially adopted in ipaissimis verbis 
 as representing the law. These passages, therefore, and these only, will be cited in this 
 Chapter as authorities. 
 
 (d) Pothier, in his Traiti des Donations entre Vifs, Sect. 2, Art. 11 (vol. vii, p. 441 of 
 his (Humes, ed. Dupin, 1825), mentions the case of the master of a school. 
 
§ 408 (relations of influence). 371 
 
 theology, or any of the arts (e) ; or of a political leader (/). Any of these, 
 in the course of time, may be proved capable of perverting to the baser uses 
 of material and personal advantage that ascendancy which is justly due to 
 him in the sphere of intellect only. If and when the occasion arises, the 
 Courts will be no more debarred from adding a relation to the list of those 
 marked " dangerous," merely because no opportunity of doing so may have 
 previously presented itself, than, in 1764, Lord NoRTHmaTON, L.C., hesitated 
 to proclaim as if so facto suspect the theretofore unassailed relation of spiritual 
 director and disciple, or than, in 1839, Lord Cottenham, L.C, hesitated to 
 adopt the like course in the case of the previously unsuspected relation of 
 medical attendant and patient. It is, indeed, for the very reason that this 
 possibility exists of relations coming up for judicial investigation which, 
 though new in name, will of necessity involve and invite the application of 
 principles which are old, and because of the vital importance of any such 
 future investigation being wholly unfettered, that the law of this country 
 has steadily refused to draw up — for the sole benefit (as it would be) of persons 
 minded hereafter to abuse the influence springing from any unspecified 
 " variety " — a list or catalogue of proscribed relations {g). For a like reason, 
 the law makes no distinction between the degrees and limits of influence 
 to which the several types of relation give rise (h). From the point 
 of view of psychology, or ethics, or sociology, such distinctions are, no doubt, 
 of interest ; and certain judgments have enlarged upon the special features 
 in some particular variety of influence — at one time, the parent's, at another 
 the solicitor's, at another the priest's, at another, that of the dealer in 
 " eixpectancies " — which, in the opinion of the particular judge, constitute 
 
 (e) Prom the letters of Charlotte Bronte which have lately been deposited in the British 
 Museum, it appears that an almost unbounded dominion over her intellect and heart was 
 possessed by Professor Heger, — a dominion which he never used for any bad purpose, or, 
 indeed, for any purpose at aU. But it is not difficult to imagine the case of a great teacher 
 similarly situated exercising an influence so acquired over an adoring pupU for the purpose 
 of extracting from her, or him, benefits of a more material kind than the incense of mere 
 intellectual idolatry. A modern Abelard might conceivably exert pressmre upon a modern 
 Heloise in financial directions. 
 
 (/) Here, again, one can see the possibihty of abuse. Suppose that Fox, instead of 
 his gambling debts having been voluntarily paid by his political friends, had deliberately 
 used his political influence with the party of which he was the leader to induce them to 
 come to his relief, it might be that the Courts, it appealed to, would have considered 
 political leadership as one of the relations which ought to be " recognized," and from which 
 influence ought to be presumed. 
 
 (g) See De.nt v. Bennett (1839), 4 My. & Cr. 269 (yer Lord Cottenham, L.C, at pp. 276, 
 277 : "I win not narrow the rule, or run the risk of in any degree fettering the exercise of 
 the beneficial jurisdiction of this Court, by any enumeration of the description of persons 
 against whom it ought to be most freely exercised ") ; Smith v. Kay (1859), 7 H. L. C. 750 
 (per Lord Ceanworth, L.C, at p. 770 : " the familiar cases of the influence of a parent 
 over his child, of a guardian over his ward, of an attorney over his client, are but instances. 
 The principle is not confined to those cases ") ; Tate v. Williamson (1866), L. B. 1 Eq. 
 528 (per Wood, V.-C, at pp. 536, 537). 
 
 (h) " The degree of influence need not be inquired into. The fact of the influence is 
 enough if it be established," says Bacon, V.-C, at p. 646 of Morgan v. Minett (1877), 6 
 C D. 638 ; though, as Stitaet, V.-C, says, at p. 270 of Nottidge v. Prince (1860), 2 Giff. 
 246, it is true that " the same ground of public utility which requires the Court to guard 
 against such influences, has its most important application to that influence which is the 
 strongest." 
 
372 CH. V, SECT. 2, SUB-S. (1). 
 
 its characteristic strength and danger, and render it peculiarly the subject of 
 vigilance (hh). Further, such considerations are by no means irrelevant 
 to any contention which may be raised by a domiaant party that, in the 
 particular case, the influence was not operative on the transaction, or was 
 not in fact unduly exercised. But, for the purpose of the three prima facie 
 presumptions above-mentioned, viz. that the relation gave rise to the influence, 
 that the influence was operative upon the transaction, and that it was unduly 
 exercised, the law does not discriminate in any way — indeed to do so would 
 be highly dangerous, and would destroy all the utility of the presumptions — 
 between the nature and force of the influence arising from one class of relation, 
 and the nature and force of that which arises from any other. 
 
 Subs. (1). The Relation hetween Parent and Child, and Analogous Relations. 
 
 409. The domestic relation which exists between parent and child is 
 the relation which most obviously invites a presumption of influence, since, 
 long before jurisprudence had anything to say in the matter, human nature 
 itself had already created it. It is true that human nature also encourages 
 the presumption that the influence is likely to be exercised for the common 
 good of both child and parent; and this latter presumption has had its 
 effect upon the jurisprudence of the subject ; but, subject to the affirmative 
 defence of " family arrangement " which will be considered presently, the 
 relation in question gives rise to the three presumptions in favour of the 
 servient party which have already been mentioned (^), and casts upon the domi- 
 nant party the onus of sustaining, if and when impeached, any transaction 
 which was entered into during the existence of the relationship, or of the 
 influence arising from it, by such proof as is requisite for that purpose {j) ; 
 that is to say, proof that in fact the influence was not operative upon the 
 transaction impeached, or that in fact it was not abused, either because it 
 was proper under the circumstances (as in the case of a family arrangement), 
 or because it was righteously and conscientiously exercised, in that the 
 dominant party made full disclosure to the servient party, or that the servient 
 party was otherwise fully cognizant, of the exact nature and effect of the 
 transaction, and of his rights and interests in respect thereof, including his 
 right to reject or avoid it, and of all material facts as to its subject-matter, 
 and in that the servient party, in the case of a gift, had the competent and 
 honest advice of an independent third person, and, in the case of any other 
 transaction, received full value. Or the dominant party, notwithstanding his 
 inability to sustain the transaction in aU or any of the above respects, may 
 excuse himself by proof that the servient party, with full knowledge of all 
 material facts, and of his right to avoid the transaction, and when entirely 
 emancipated from the influence attending the relation, deliberately elected 
 
 (M) See §§ 409, 415, 421, 425, 435, post, as to the special oharaoteristioa of the influence 
 arising from the various relations respectively, 
 (i) See § 405, ante, 
 (j) Stated summarily in § 405, ante, and examined in detail in Sect. 4, post. 
 
§§ 408, 409 (parent and child). 373 
 
 to coniirm it. A long series of decisions has firmly established the above prin- 
 ciples in the case of parent and child (k) ; it being understood, of course, that 
 " child," for the purposes of the doctrine in question, does not mean an infant 
 in the legal sense (for infancy is protected under other heads of jurispru- 
 dence, both statutory and non-statutory), nor, on the other hand, a son or 
 daughter of mature age and no longer under the roof or protection or guardian- 
 ship of the parent, but one who is just emerging from infancy at the time 
 when the influence is brought to bear upon him (T), or who, though past 
 his majority, is still living with, and entirely dependent upon the parent for 
 protection and means of livelihood (m) ; for the governing principle of the 
 established rules exists in the one case as much as in the other. And it is 
 with strict regard to this governing principle that the law has refused to 
 limit the application of the doctrine to the simple case of parent and child, 
 but has extended it to all cases of what may be described as " domestic " 
 (to distinguish it from " professional ") relationship where the dominant 
 party, though not the parent of, is in loco parentis to, the servient party, and 
 the conditions are such as to indicate subjection, dependence, and pupilage 
 (in a popular sense) on the one side, and dominion, supremacy, or tutelage 
 (again in a popular sense) on the other (m). Where the same mischief exists, 
 the same relief against it will always be available to the servient party. 
 
 {k) Wycherhy v. Wycherhy (1763), 2 Eden 175 (son joins his father in a settlement 
 wMoh, however, was held to constitute a family arrangement : see note (j)), to § 410, fosi) ; 
 Bellamy v. SvJbine (1847), 2 Ph. 425 (disentailing deed) ; Thornber v. Sheard (1850), 12 
 Beav. 589 (release and conveyance of property by daughter to pay father's debts) ; 
 Hoghton y. Hoghton (1852), 15 Beav. 278 (son bars entail); Baker v. Bradley (1855), 
 7 De 6. M. & G. 597 (mortgage by sou as security for father) ; Dimsdale v. Dimsdale (1856), 
 3 Drew. 556 (resettlement of estates, but held to amount to "family arrangement" — 
 see note (p) to § 410, post — as to part, and as to the residue, confirmation and other answers 
 established) ; Savery v. King (1856), 5 H. L. 0. 627 (mortgage and other transactions by 
 son to pay off father's debt to solicitor) ; Hartopp v. Hartopp (1856), 25 L. J. (oh.) 471 
 (resettlement of estates : held, however, to be a " family arrangement " : see note (p) to 
 § 410, post) ; Wright v. Vanderplank (1856), 8 De G. M. & G. 133 (deed of gift of life estate 
 by daughter to father : but the father proved confirmation here) ; Jenner v. Jenner (1860), 
 2 De G. F. & J. 359 (resettlement of family estates: held, however, to be a "family 
 arrangement " — see note (p) to § 410, post — besides which, the father proved fuU knowledge 
 by son of all material facts) ; Berdoe v. Dawson (1865), 34 Beav. 603 (son gives securities for 
 father's debts) ; Potts v. Surr (1865), 34 Beav. 543 (settlement of estates : held, however, 
 a " family arrangement " — see note (j>) to § 410, post — and proved also that the son had 
 independent advice) ; Turner v. Collins (1871), 7 Ch. App. 329 (gifts of reversionary 
 interest and power of appointment) ; Bainbrigge v. Browne (1881), 18 C. D. 188 (daughter 
 gives charges to a creditor to secure payment of father's debts) ; Hohlyn v. Hoblyn (1889), 
 41 C. D. 200 (resettlement of family estates : held, however, a " family arrangement " : 
 see note {p) to § 410, post) ; De Witte v. Addison (1879), 80 L. T. 207, C. A. (a daughter 
 gives mortgage to secure her father's debt) ; London tSs Westminster Loan & Discount 
 Go. V. Bilton (1911), 27 T. L. R. 184 (a daughter grants bill of sale to, and charges a 
 legacy in favour of, her father's creditor, to secure his debts). 
 
 (I) Powell V. Powell, [1900] 1 Ch. 243 {per Earwbll, J., at pp. 245, 246). In nearly 
 all the cases cited in the last note, the servient party was just emerging from infancy, and 
 this fact was emphasized in some of the judgments as a necessary or, at all events, an 
 important feature. 
 
 (m) London tfc Westminster Loan db Discount Co. v. Bilton, sup., per Joyce, J., who, 
 at p. 185, points out that, though the lady had come of age for ten years, she had been 
 living under the parental roof for all that time, without any means of her own. 
 
 (re) Thus, in the following cases, proof of the following domestic relations, with the 
 other conditions mentioned in the text, was considered sufiicient to raise the presumption 
 
374 CH. V, SECT. 2, SUB-S. (1). 
 
 410. On the other hand, where the reason for the presumption is not 
 apparent, which happens when the presumption is met by a counter-pre- 
 sumption of equal strength, the doctrine has no application. Cessante 
 ratione, cessat lex ; and the raiio ceases to have any force, as soon as it is 
 shown by the dominant party — it is for him, probably, to do so — ^that he 
 dealt with the servient party solely in the character of the head of a family 
 m.aking necessary or desirable provision for the benefit of all its members, 
 or aU those materially interested in the family property, and not for his 
 own benefit, except as such member. This kind of dealing is known as " a 
 family arrangement." Obviously, on proof of any such arrangement, not even 
 a primd facie inference ought not to be made of any undue influence. Influence 
 there may have been, but not only is there no presumption that it was im- 
 proper, but every presumption that it was proper and commendable. To 
 all such transactions it is often said that the Court exhibits " favour " or 
 " leniency," or " indulgence," but these expressions are not very happily 
 chosen. It is not a question of "favour," "leniency," or "indulgence," 
 but of bare right. In any such case as supposed, it would be an act of 
 monstrous injustice to impute an abuse of influence, and there is no generosity 
 in refraining from doing so. Without, however, examining too nicely questions 
 of mere terminology, it may be stated that the rule is clear that, wherever 
 it is established to the satisfaction of the Court that the impeached transac- 
 tion was, or formed part of, "a family arrangement," such transaction will 
 be upheld, and the dominant party wiU be relieved from those duties of full 
 disclosure and otherwise to which, but for the " family arrangement," he 
 would have been subject ; just as, under the like conditions, in the case of 
 negotiations for releases and compromises discussed in an earlier Chapter, 
 
 of influence, and to cast the burden of " sustaining the transaction " on the dominant 
 party : Aylward v. Kearney (1814), 2 Ball & B. 463 (grandfather obtains lease from grand- 
 son, just of age, of whom he had been the guardian during his minority) ; Sercombe v. 
 Sanders (1865), 34 Beav. 282, was a case of two brothers influencing a third to give a 
 mortgage to their creditor to secure their indebtedness. In Sharp v. Leach (1862), 31 
 Beav. 491, the influence was by brother and sister (sale of reversionary interest, and 
 voluntary settlement). In Espey v. LaJee (1852), 10 Hare 260, and Kempson v. AsKbee 
 (1874), 10 Ch. App. 15, the influence was that of a stepfather over stepchildren (suretyship 
 and bonds to secure debts of stepfather). In Powell v. Powell, [1900] 1 Ch. 243, the 
 influence was by stepmother over stepdaughter (voluntary and irrevocable settlement). 
 In HyUon v. HyUon ( 1754), 2 Ves. Sr. 547, Dawson v. Massey (1809), 1 Ball & B. 219, Archer 
 v. Hudson (1846), 15 L. J. (ch.) 211, and Lloyd v. Attwood (1859), 3 De G. & J. 614, the 
 influence was that of an uncle over a nephew or niece under his care and protection 
 (annuity, release, and charges given in the first case, leases in the second, guarantee to 
 bank in the third, and release to trustees of breaches of trust in the fourth). In Toher v. 
 Toker (1863), 3 De G. J. & S. 487, the influence was that of a nephew over his aunt (gift of 
 real estate : the nephew, however, in this case, sustained the burden of proof cast upon 
 him by the presumption). In Hatch v. Hatch (1804), 9 Ves. 292, the influence was that of 
 a brother-in-law and late guardian over a sister-in-law and late ward, just emerging from 
 infancy (conveyance of advowson). In Wright v. Pound (1806), 13 Ves. 136, the influence 
 was that of a keeper of a private lunatic asylum, and so a guardian or quasi-guardian, 
 over an inmate (conveyance by the inmate of the whole of his property). In India, a 
 " pardanishin " woman is treated as constructively an infant in relation to any person 
 having dealings with her, to the extent of requiring a donee from her to establish sub- 
 stantially the same " propriety " in the transaction as in any case of parental influence : 
 see Kali Baksh Singh v. Ram Gopal Singh (1913), 30 T. L. R. 138, P. C. 
 
§ 410 (parent and child). 375 
 
 the party charged will be so relieved (o). The test is this. Was it the sole 
 object and effect of the transaction to make a settlement or redistribution of 
 family estates or interests in such a way as to confer benefits on the family 
 as a whole, and to preserve its common property, peace, or honour ? If so, 
 it will not be invalidated (p). Or, whether so intended or not, did the transac- 
 tion result in the parent obtaining an exclusive advantage for himself out of 
 the child's concession or bounty, for which no equivalent was given ? If it 
 did, the presumptions against the parent are not in the slightest degree dis- 
 turbed or shaken, and the transaction will be relieved against, unless the 
 parent can establish some one or more of the only affirmative answers which 
 are available to a dominant party in any ordinary case {q). 
 
 (o) See §§ 135, 136, ante. 
 
 (p) As in Wycherley v. WycJierley (1763), 2 Eden 175, where a son upon his marriage 
 joined with his father in settling the estate, and by a memorandum executed at the same 
 time agreed to secure a certain sum to each of his sisters, and this memorandum was held 
 to be unimpeachable (per Lord Noethengton, L.C, at p. 178 : " the Court will . . . 
 attend to slight considerations for confirming family settlements and modifications of 
 property. They pay a regard to reasonable motives and honourable intentions. In 
 these cases they will not weigh the value of the consideration. They consider the ease 
 and comfort and security of families aa a suificient consideration ") ; Bellamy v. Sabine 
 (1847), 2 Ph. 425 (per Pepys, M.R., at pp. 439-441, as to one of the two trans- 
 actions there impeached) ; Dimsdalev. Dimsdale (1856), 3 Drew. 556 (where part of the 
 transaction was upheld as a family arrangement, " which sort of arrangement," said 
 KiNDEBSLEY, V.-C, at p. 569, " whether it be entered into for the purpose of securing 
 the peace of a family, or for preventing litigation, or for preserving the property in the 
 family, the Court will look upon in a different light from ordinary transactions between 
 father and son while the parental influence continues"); Hartopp v. Hartopp (1856), 
 25 L. J. (oh.) 471 (per Romilly, M.R., at p. 479, — a clear and careful statement of the 
 criterion referred to in the text) ; Jenner v. Jenner (1860), 2 De G. E. & J. 359, per Lord 
 CAMPBEtL, L.C, who on the evidence, which he examined at pp. 369-374, found that the 
 father was deriving no exclusive advantage (p. 367), and that the transaction was a family 
 arrangement (p. 368) of a "laudable," and " natural " character (pp. 368, 369) ; Potts v. 
 8wrr (1865), 34 Beav. 543, where, though the father obtained an advantage, he gave 
 valuable consideration for it, and the transaction was for the benefit of the family as a 
 whole (per Romilly, M.R., at pp. 552-554) ; Hohlyn v. Hdblyn (1889), 41 C. D. 200, where 
 the transaction was, except as to a certain part of it which the father offered to abandon, 
 held to be a family arrangement (per Kekewich, J., who, at pp. 204-206, pointed out 
 that some degree of influence is natural and proper in such a case, rendering independent 
 advice not essential, though — pp. 206, 207 — when the father obtains a benefit to himself 
 from the arrangement, the jealousy of the Court is easily aroused). And see note (6) 
 to § 135, ante. 
 
 (q) As in Hoghton v. Hoghton (1852), 15 Beav. 278 (per Rojully, M.R., at pp. 305, 306 : 
 " if the settlement of the property be one in which the father acquires no benefit not 
 abeady possessed by him, and if the settlement be a reasonable and proper one, the Court 
 wiU support it, even though it may appear that some influence was exerted by him to 
 induce the son to execute it. . . . When, however, the son confers on the parent by the 
 transaction some advantages which he did not formerly possess, the principle which 
 prevails in the first class of cases interposes." The " first class of cases " is that discussed 
 by him at pp. 299, 300, where the influence is presumed, and there is no ground for the 
 plea of "family arrangement." At pp. 307, 308, he points to circumstances which satisfy 
 him that the case before him belongs to this first class, and not to the second) ; Baker v. 
 Bradley (1855), 7 De 6. M. & G. 597 (per Ttonbr, L.J., at pp. 620, 621 : "transactions 
 between parent and child may proceed upon arrangements between theiri for the settle- 
 ment of property. ... In such cases, the Court regards the transaction with favour. . . . 
 On the other hand, the transaction may be one of bounty from the child to the parent, 
 soon after the child has attained twenty-one. In such cases this Court views the transac- 
 tion with jealousy, and anxiously interposes its protection to guard the child from the exer- 
 cise of parental influence." The case before the Court was, in the proved circumstances, 
 held to belong to the latter class: "mother and son," says Knight- Beuce, L.J., at 
 p. 613, "seem merely to have been the father's instruments under the guidance of 
 
376 CH. V, SECT. 2, SUB-SS. (1), (2). 
 
 411. It is not only tie parent, or person in loco farentis, against wtom 
 the relief may be obtained. Any third person is equally liable who is proved 
 to have had actual or presumptive knowledge of the relation existing between 
 the servient and the dominant party, and to have utilized and traded on the 
 influence arising from it for the purpose of obtaining from the servient party 
 payment or a guarantee of, or a security for, a debt owed to him by the 
 dominant party (r). 
 
 412. The transaction impeached may be a gift or equivalent transac- 
 tion, or it may be a contract for valuable consideration. The presumptions 
 against it are the same, though the means of displacing those presumptions 
 somewhat difier, in the two cases. In nearly all the authorities on the 
 parental relation, the transaction before the Court was, as between the parties 
 to the relation, an actual donation, or a transaction tantamount thereto (s). 
 
 413. Putting aside cases of " family arrangement " (t), there are extremely 
 few recorded examples of the success of any affirmative plea to a jyrimd facie 
 case of abuse of the parental relation, that is, where the parent, or person 
 in loco parentis, was able to sustain the transaction by proof of disclosure 
 and compliance with his other duties, or to make out a case of subsequent 
 confirmation by the servient party with full knowledge of the facts, and 
 appreciation of his rights, after the relation, and the influence arising for 
 it, had entirely come to an end (m). 
 
 . . . the lawyer of the father's creditors ") ; Savery v. King (1856), 5 H. L. C. 627 (per 
 Lord Cbanwoeth, L.C, at p. 657 : family arrangements supported only where aU derive 
 benefit, not when the son gives up everything, and gets nothing) ; Turner v. Collins (1871), 
 7 Ch. App. 329 {per Lord Hathbeley, L.C, at pp. 338, 339) ; De Witte v. Addison (1899), 
 80 L. T. 207, C. A. (per Romee, J., at p. 209, and Lindlby, M.R., at p. 212). 
 
 (r) In the following cases relief was given against the creditor (usually a solicitor, 
 banker, or moneylender) who had used the parental influence, or knowingly allowed it to be 
 used, over the servient party, in his own interests : Archer v. Hudson (1846), 15 L. J. (CH.) 
 211 ; Thornher v. Sheard (1850), 12 Beav. 589 ; Espey v. Lahe (1852), 10 Hare 260 {per 
 Ttteneb, V.-C, at pp. 263, 264) ; Berdoe v. Dawson (1865), 34 Beav. 603 {per Bomilly, 
 M.R., at p. 608 : " where there is pressure used by a third person who by means of threats 
 against the father induces him to compel his sons to join in a security of which he derives 
 the sole benefit, the Court holds that neither he nor the third person can retain the benefit 
 of that security as against the sons") ; Sercombe v. Sanders (1865), 34 Beav. 382 {per 
 RoMiLLY, M.R., at p. 385 : " it is important that creditors should understand that they 
 cannot improve their security, taken from persons to whom they have given credit, by 
 inducing them, at the last moment, to compel near relations, or persons under their 
 influence, and not in a situation to resist their importunity, to pay their debts ") ; Kempson 
 V. Ashbee ( 1874), 10 Ch. App. 15 (per James, L.J., at p. 21); De Witte v, Addison, sup, 
 {per LnjDLEY, M.R., at p. 211). On the other hand, in Bainbrigge v. Browne (1881), 
 18 C. J>, 188, the creditors escaped, though the father did not, because it was not proved 
 against them that they had either actual or constructive notice of the influence, or knew 
 anything beyond the bare fact that the same solicitors acted for father and daughter, 
 which by itself was insufficient {per Fey, J., at p. 198). 
 
 («) The only cases of -contract, as between the servient and dominant party, amongst 
 those cited in the notes to this Sub-section are Dawson v. Massey (1809), 1 Ball & B. 219, 
 and Sharp v. Leach (1862), 31 Beav. 491 (as to one of the two transactions there in 
 question). 
 
 {t) See the oases cited in note (p) to § 410, ante. 
 
 (u) In Taker v. Toher (1863), 3 De G. J. & S. 487, full explanation to, and knowledge 
 by, the servient party of all her rights was proved {per Knioht-Betjce, L.J., at pp. 489, 
 490). In Potls V. /Swrr (1865), 34 Beav. 543, the servient party fully appreciated the effect 
 of the settlement, and had independent advice {per Romilly, M.R., at pp. 551, 552). In 
 the following cases, the dominant party succeeded in showing that though he had failed 
 
§§ 411-415 (SOLICITOE AND CLIENT). 377 
 
 414. The consideration of certain domestic relations which are not, per se, 
 deemed in law to raise any presumption of undue influence whatsoever is 
 reserved for another place («). 
 
 Subs. (2). The Relation hetiueen Solicitor, or other Legal Adviser, and Client. 
 
 415. This was the first of the "professional" relations to engage the 
 attention of the Courts, for the natural reason that the attorney in law, or 
 solicitor, exercises his functions in facie curim, and is at all times under the 
 immediate control and disciplinary jurisdiction of the judges. Though the 
 presumptions against the validity of any transaction between solicitor and 
 client during the ekistence of the relationship are precisely the same as in 
 the case of any other relation (iv), it is, nevertheless, the fact that there are 
 features in this relation which render it specially desirable that the equitable 
 doctrine of " influence " should be applied to it with the utmost alacrity and 
 rigour. In the first place, as was weightily observed of advisers in general 
 by Bacon (x), " the greatest trust between man and man is the trust of 
 giving counsel. For in other confidences men commit parts of their life : 
 their lands, their goods, their child, their credit, some particular afiair — 
 but to such as they make their counsellors, they commit the whole ; by how 
 much more they are obliged to all faith and integrity." A solicitor is in a 
 position to acquire the most intimate knowledge not only of his client's 
 property and afiairs, but of his character and disposition ; he is frequently 
 the custodian not merely of the money and securities, but of the secrets 
 and honour, of the client and his family. If minded to enter into a transac- 
 tion with him of any kind, he knows best " the seasons when to take occasion 
 by the hand," — the mollia tempora fandi when with most safety and 
 advantage to himself he may suggest, or entertain the suggestion of, a pur- 
 chase, a sale, or a gift. He approaches the matter with, in most cases, a 
 far more accurate appreciation of the title to, and the value and circum- 
 stances of, the property, or other subject-matter of the proposed transaction, 
 than the client has : added to which, the client is not infrequently in his 
 debt. In these various ways his personal ascendancy is of a remarkable, 
 and may be of an overwhelming, character (?/) ; and, where he is conducting 
 
 in his duty, the servient party had afterwards confirmed the transaction : Dimsdale v. 
 Dimsdah (1856), 3 Drew. 576 (as to parts of the transactions, the residue being upheld 
 on the ground of family arrangement : per Ejoideesley, V.-C, at pp. 575-578) ; Wright v. 
 Vanderplank (1856), 8 De G. M. & G. 133 {per Knight-Befob, L.J., at pp. 137, 138, and 
 Turner, L.J., at pp. 147-151); Turner v. Collins (1871), 7 Ch. App. 329 {per Lord 
 Hatherlby, L.C, at pp. 340-342, as to one of the two transactions there in question). 
 And see Sect. 4, Sub-s. (3), post, as to confirmation generally. 
 
 (a) See § 446, post. 
 
 (w) See § 408, sub fin., ante. 
 
 {x) Essay xx, " Of Counsel" (vol. vi, p. 423, in the edition of his Works by Sped- 
 ding, Ellis, and Heath). 
 
 (y) At p. 316 of Tomson v. J^idge (1855), 3 Drew. 306, Kindersley, V.-C, adopts the 
 anguage of Lord Thurlow, L.C, who, in Welles v. Middleton (1784), 1 Cox 112, at 
 p. 125, had spoken of " the crushing influence of the power of an attorney " ; whilst, at 
 p. 712 of Allison v. ClayUlls ( 1907), 97 L. T. 709, Parker, J., points out the twofold force 
 and durability of the influence, arising from the solicitor's special information as to his 
 client's affairs, and the personal ascendancy involved in the position of trusted adviser. 
 
378 CH. V, SECT. 2, SUB-S. (2). 
 
 litigation for his client over valuable estates or property, the temptation on 
 the one side to make, and on the other to accede to, proposals of a champertous 
 nature is of considerable force. A second reason for enforcing the rules 
 with special strictness against the solicitor is that, as an 6f&cer of the Court, 
 he is allowed several important privileges (z), and owes correlative duties 
 of disclosure and good faith to the Court by whom he is so trusted, apart 
 from those which he owes to his client (a). A third consideration which moves 
 the Court, not indeed to make any distinction between a solicitor and any 
 other dominant party, but to enforce its rules against the former with less 
 of that reluctance and consciousness of inflicting a hardship on the individual 
 which it feels, and sometimes expresses, in the case of a layman, is that a 
 lawyer, in contemplation of the law which he professes and serves, and which 
 he is presumed to know, enters into any transaction with his client with full 
 appreciation of its impeachability at any future time, and of the risks 
 which he is consequently incurring, and so, unlike many others who err 
 from mere ignorance, must always be sinning against the light (6). 
 
 416. In so far as a solicitor is acting merely as the agent for sale or pur- 
 chase, or as the land agent or steward, of his client, or is representing him 
 commercially in some particular transaction, his duties are of a purely fidu- 
 ciary character in the strict sense of the word, and, as such, have already 
 been considered in a previous portion of this work(c). It must also be 
 remembered that in every case a solicitor belongs to the class of agents, and 
 that he is accordingly under the obligation of not abusing the confidence 
 reposed in him as an agent, as well as that of not abusing the influence 
 which is imputed to him as a legal adviser : and it is in the character of 
 agent, rather than in his special character as solicitor, that the grave impro- 
 priety of his making secret arrangements for sharing profit costs with a 
 solicitor acting for one whose interest conflicts with that of his own client 
 has been recognized by the Court in its disciplinary jurisdiction (d). 
 
 417. It has been found convenient to describe the relation now under 
 discussion as the relation between solicitor and client ; but of course the 
 rule is applied whenever its principle is applicable, that is, to any species of 
 
 (z) See Newman v. Payne (1793), 2 Ves. 199 {per Lord Lottghborctjqh, L.C, at p. 201). 
 
 (a) Ooddard v. Carlisle (1821), 9 Price 169 {per Richabds, C.B., at p. 662, and Gabeow, 
 B., at pp. 665, 666) ; Be Four Solicitors, [1901] 1 Q. B. 187, Div. Ct. {per Cur., at pp. 189, 
 190). And, as to a solicitor's duty of disclosure to the Court, apart from that which he 
 owes to his client, see § 575, note (o), post. 
 
 (6) Ex p. James (1803), 8 Ves. 337 (where, at pp. 347, 346, Lord Eldon, L.C., points out 
 that the application of the equitable doctrine to the case of a trustee or agent in relation 
 to his cestui que trust or principal is " more loudly called for " in the case of that trustee's 
 or agent's solicitor, because of the latter's special position and duties in relation to his 
 own client, over whom he ought to exercise his restraining influence to prevent his making 
 a secret profit) ; Gresley v. MoinUy (18.59), 4 De G. & J. 78 (where, at p. 90, Knioht- 
 Beuoe, L.J., and, at pp. 94-99, Tubnbr, L. J., point out that an attorney, who ought to 
 know that the transaction may be impeached at any time, is the last person to com- 
 plain of delay) ; Lil^s v. Terry, [1895] 2 Q. B. 679, C. A. {per Kav, L.J., at p. 686, 
 observing that least of all on a solicitor is the rule a hardship). 
 
 (c) Accordingly, it will be found that some few of the cases cited in the notes to this 
 Sub-section find a place also in the notes to Ch. IV", Sect. 2, Sub-s. (3), omie. As to the 
 position of a solicitor who is also mortgagee, see § 449, note («)), post, 
 
 {d) This was the decision in Re Four Solicitors, sup. 
 
§§ 415, 419 (solicitor and client). 379 
 
 professional relation between parties whereby one of tbem undertakes to 
 give legal advice to the other, whatever be the name or the precise functions 
 attaching to the relationship. For instance, the doctrine has been applied 
 to counsel (e), to a certificated conveyancer (/), to a Scottish law-agent (g^), 
 and to a colonial advocate (h). 
 
 418. Against any solicitor, or other person occupying a similar position, 
 who enters into any transaction, whether gift or contract, with his client 
 during the subsistence of the relation, the law makes the same presumptions 
 and casts upon him the same duties of disclosure and otherwise, and the 
 same burden of proving that he fully discharged those duties in the event of 
 the transaction being impeached by the client, as in the case of any other 
 relation of influence (t). That is to say, when once the client has proved the 
 relation, and the transaction, alleged, and the fact that the transaction was 
 entered into at a time when the relation was subsisting — for unless and until 
 he does so, no onus rests upon the solicitor at all (j) — it is incumbent on the 
 solicitor, if he cannot show that the influence which is presumed from the 
 relation did not in fact operate on the particular transaction, to establish 
 the propriety of his conduct in all respects ; and the transaction is invalidated, 
 or otherwise relieved against, if he fails to sustain this onus, which is of 
 a somewhat different character, accordingly as the transaction is a gift, or 
 a contract for valuable consideration. 
 
 419. Any gift, or transaction equivalent to a gift, wUl be the subject of 
 relief at the instance of the client, if the solicitor is unable to establish that 
 he fully explained to the client the exact nature and meaning of the transac- 
 tion, and its legal efiect upon his rights and interests, and also — for this alone 
 is not enough — advised his client that he was at liberty to revoke or avoid 
 it at any time (h), and otherwise gave him all such cautious counsel and 
 
 (e) As in KingslaTid (Viscount) v. Barnewall (1706), 4 Brown P. C. 154; Carter v. 
 Palmer (1842), 8 01. & Fin. 657 (though it was there found that the defendant acted in 
 many other characters than that of counsel) ; Broun v. Kennedy (1864), 4 De G. J. & S. 
 217. 
 
 ( /) As in Rhodes v. Bate (1886), 1 Ch. App. 252 (though the decision proceeded on 
 the relation proved to have been constitnted by the circumstances, rather than on the 
 relation of legal adviser and client). 
 
 (g) As in McPherson v. Watt (1877), 3 App. Cas. 254, H. L. 
 
 (h) As in Pisani v. Att.-Geru. of Gibraltar (1874), L. R. 5 P. C. 516. 
 
 (i) See § 405, ante, and Sect. 4, post. 
 
 ()) See Sect. 3, Sub-ss. (1) and (2), post, and, particularly, such of the cases cited in the 
 notes thereto as are solicitor and client cases. 
 
 (h) As in BuUceleij v. Wilford (1834), 2 a. & Fin. 102 (where the jury found that the 
 solicitor had fraudulently omitted to explain to the client that the effect of the instrument 
 executed by him was to "revoke the will he had previously made in favour of his wife, and 
 to confer a benefit on the sohcitor, who was the heir-presumptive at law) ; Procter v. 
 Robinson (1867), 15 L. T. 431 (where the solicitor failed to explain to the cHent that he 
 need never have executed the deed at all, and that, after execution, it was not binding on 
 him : per Tuenee, L.J., at pp. 431, 432, and Caiens, L.J., at p. 433) ; Morgan v. Mineit 
 (1877), 6 C. D. 638 (a similar neglect of duty on the part of the solicitor : per BACOHf, V.-C, 
 at p. 648) ; Willis v. Barron, [1902] A. C. 271, H. L. (where it was held that the solicitor 
 had not fully discharged his duty to hia client by merely explaining to her— as he had — 
 the exact nature and extent of what she was giving up by the transaction, and what she 
 was receiving under it, — ^it was a case of the extinction of a power of appointment, — and 
 that he ought to have advised her, or seen that an independent person advised her, that no 
 one could compel her to consent to the abnegation of her rights, instead of leaving her to 
 
380 CH. V, SECT. 2, SUB-S. (2). 
 
 protection as he would have given him if the proposed donee had been a 
 stranger (I) ; and, further, that the client, before making the gift, had been 
 protected by the competent and honest advice of an independent third 
 person (m) ; and, generally, that the whole transaction was righteous and 
 conscientious, and characterized by absolute candour and good faith on the 
 part of the solicitor (n). It is doubtful whether a single case can be found 
 in which a solicitor has in fact been able to sustain the above onus in the case 
 of a gift, that is to say, the onus of showing that, during the existence of the 
 relation and the influence springing from it, he received the gift under the 
 conditions stated ; though there are one or two instances of a solicitor suc- 
 ceeding on proof that both the relation and influence had come to an end 
 before the gift was made (o), or that the gift was subsequently confirmed by 
 
 suppose that she was powerless in the matter, and that the sole object of the transaction 
 was to rectify a mistake or slip in a previous deed on which the deed in question was 
 consequential : per Lord Hai^bury, L.C, at p. 276, and Lord Macnaghten, at pp. 280, 
 281). 
 
 {I) See the cases cited in the last note, and the observations of BtrcKLBY, L. J., at p. 378 
 of Glare v. Joseph, [19071 2 K. B. 369, C. A., as to the common law duty — ^which, however, 
 as there explained has been in some respects modified by statute — " of the solicitor to 
 advise his client that it was contrary to his interests to pay more " than his taxed costs, 
 before obtaining from him any agreement to do so. And " further," he adds, "if there was 
 an agreement between them by which the client was to pay less, the solicitor . . . owed 
 the duty of advising him that he ought not to enter into such an agreement, if other 
 provisions in it were contrary to the client's interest." 
 
 (m) As in Ooddard v. Carlisle (1821), 9 Price 169 (where, though it was expressly found 
 that full disclosure and explanation had been made, the annuity deed executed by the 
 client in favour of the solicitor was held to be invalidated because the soUoitor was unable 
 to discharge the burden of establishing that the client had been independently advised 
 by some third person) ; Bulkeley v. Wilford (1834), 2 CI. & Fin. 102 (where Lord Eldon, 
 at pp. 177-182, and Lord Wynford, at p. 183, supported the decision of the Court below 
 on the ground of want of independent advice, apart from the non-disclosure which had 
 been found by the jury, as stated in note (k), sup.) ; Rhodes v. Bate (1866), 1 Ch. App. 
 252 (an extremely strong ease, because, though it was established to the satisfaction of 
 the Court that the defendant Bate had punctually and honourably complied with every 
 other duty towards his client, even to the extent of " cautioning her " as to the suretyship 
 which she undertook in order to secure the indebtedness to him of the defendant Codring- 
 ton, and that he " meant to give, and did give her honest advice," he was nevertheless held 
 liable on the sole ground that he had not insisted on his chent having, and she did not in 
 fact have, the advice of a third person independent of Bate : per Ttjrnek, L.J., at pp. 
 257, 259, 261, 262). The above decision has never been overruled, however distasteful 
 it may appear to some minds, and apparently did appear even to the Lords Justices 
 who yielded only to what they conceived to be an inexorable rule of equity in arriving 
 at it (" so far as she succeeds," said Turner, L.J., at p. 262, " she does so by force of 
 the law of the Court, and not by any merits of her own," and the assent of Knight-Brtjce, 
 L.J., was given with obvious hesitation). After this, it may seem superfluous to 
 cite the later decisions which follow it under conditions much less favourable to the 
 solicitor, such as Morgan v. Mineti (1877), 6 C. D. 638, 648 ; Idles v. Terry, [1895] 2 Q. B. 
 679, C. A. (per Lopes, L.J., at pp. 685, 686, and Kay, L.J., at pp. 686, 687 : Lord Esheb, 
 M.R., expressing, at pp. 683, 684, his antipathy to the doctrine, which he only followed 
 " under compulsion ") ; PoweU v. Powell, [1900] 1 Ch. 243 (per Eabwell, J., at pp. 246, 
 247) ; Willis v. Barron, [1902] A. C. 271, H. L. (at pp. 276, 280, 281). As to the meaning 
 of competent and honest independent advice, see § 477, post. 
 
 (n) As in Welles v. MiddleUm (1784), 1 Cox 112 ; Tomson v. Judge (1855), 3 Drew. 306 ; 
 Walker v. Smith (1861), 29 Beav. 394; Re Holmes's Estate, Bevan's Case (1861), 3 Giff. 
 337 ; O'Brien v. Lewis (1864), 32 L. J. (oh.) 569 ; Broun v. Kennedy (1864), 4 De G. J. & 
 S. 217 ; Wright v. Carter, [1903] 1 Ch. 27, C. A. (as to those of the deeds there in question 
 which were held to be in the nature of gifts : per VAtrGHAN Williams, L.J., at pp. 49-53, 
 STiRuue, L.J., at pp. 56-58, and Cozbns-Haedy, L.J., at p. 61). 
 
 (o) Oldham v. Hand (1751), 2 Ves. Sr. 259 (per Lord Hardwickb, L.C, at p. 260: 
 
§§ 419, 420 (solicitor and client). 381 
 
 the client with full knowledge of all material facts and rights, and when 
 entirely emancipated from the influence (p). 
 
 420. In the case of a purchase, or other transaction for valuable considera- 
 tion, the client is entitled to relief against the solicitor, if the latter fails to 
 establish any of the following : — full disclosure of all material facts (q), in- 
 cluding his own identity as the person actually purchasing, or otherwise deal- 
 ing in the matter, where the ostensible purchaser or dealer is another person, 
 acting as agent, nominee, or trustee for him (r) ; full explanation of the legal 
 character, effect, and incidents of the transaction, and of its bearing upon 
 the client's rights and interests (s) ; either all such advice against himself 
 as he would properly have given his client, if acting for him against a third 
 person (i), or the competent and honest advice of a person independent of 
 himself (u) ; and, lastly, payment of full and fair value (v). Where, however, 
 
 " this is a very large gratuity indeed, but, though there had not been that subsequent 
 ratification," — ^for this too was established — " I do not see how I could come at it, for it 
 is not obtained by the attorney during the course of the cause, or before it, but the whole 
 was over"). And see, generally. Sect. 4, Sub-s. (1), post. 
 
 ip) Lyddon v. Moss (1859), 4 De G. & J. 104 {per Tuenbb, L.J., at pp. 132-134, and 
 KNiGHT-BBtrCB, L.J., at pp. 134, 135). And see, generally, Sect. 4, Sub-s. (3), post. 
 
 iq) Wright v. Carter, [1903] 1 Ch. 27, C. A. (where, as to those of the transactions which 
 were for value, there had been no complete disclosure of aU the material facts, and parti- 
 cularly as to the degree of pressure which was being exercised by a certain bank on the 
 client : per Vaughan Williams, L.J., at pp. 51, 52, 54, 55, and Sheling, L.J., at p. 59). 
 
 (r) As in Wood v. Dowries (1811), 18 Ves. 120 ; McPherson v. Watt (1877), 3 App. Cas. 
 254, H. L. {per Lord Cairns, L.C, at p. 264, and Lord O'Hagan, at p. 266). 
 
 (s) As in Moore v. Prance (1851), 9 Hare 299 (where the solicitor had not even read 
 over the deed to his client : per Tubnbb, V.-C, at pp. 303, 304) ; Smith v. Kay (1859), 7 
 H. L. C. 750 (where the whole object and effect of the securities executed by the client was 
 concealed by the solicitor : per Lord Chblmsfobd, L.C, at pp. 761, 762, and Lord Cban- 
 woETH,atpp. 770-773) ; Oockbumv. Edwards {1881), 18 C. D. 449,455, 460, 462, C. A. (no 
 explanation of unusual covenant in deed) ; Lala Mahdbir Prasad v. Mussamat Taj Begum 
 (1914), " Times," 13th March (legal adviser procures mortgage without any explanation). 
 
 {t) Gibson v. Jeyes (1801), 6 Ves. 266 {per Lord Eldon, L.C, at p. 278, where he 
 states the two duties as alternative to one another : " he should have said, if he was to 
 deal with her for this, she must get another attorney to advise her as to the value : or, if 
 she would not, then out of that state of circumstances this clear duty arises from the rule 
 of this Court, and throws upon him the whole onus of the case ; that, if he will mix with 
 the character of attorney that of vendor, he shall, if the propriety of the contract comes in 
 question, manifest that he has given her all that reasonable advice against himself that 
 he would have given her against a third person ") ; Champion v. Rigby (1840), 9 L. J. (cH.) 
 211 ; Moore v. Prance, sup. {per Ttjbnbb, V.-C, at p. 303) ; Holman v. Loynes (1854), 
 4 De G M. & G. 270 {per Lord Ceanwobth, L.C, who, at p. 272, describes the attorney's 
 duty as" being to show " that no industry he was bound to exert could have got a better 
 bargain for " the client, and " that his diligence to do the best for his vendor had been as 
 great as if he were only an attorney dealing for that vendor with a stranger " : and this 
 " he must show to demonstration " : the matter " must not be left in doubt. In that 
 case the attorney bought property from his client with an annuity, without having made 
 the sUghtest inquby as to the price which could have been obtained) ; Savery v King 
 (1836) 5 H L C 627 {per Lord Cranwobth, L.C, at pp. 665, 666) ; Gresley v. Mousley 
 flS59i' 4 De G & J 78 (ver Knigiit-Bbucb, L.J., at pp. 88, 89, and Ttoner, L.J., at 
 pp 97.' 98) ; Vocio^ V. LordAsMurton, [1914] A. C 932, H. L. (j,.r Lord Shaw, at p 962). 
 
 (.t) As in Gibson v. J eyes, sup. {per Lord Eldon, L.C, at p. 278) i Barnard r. Hunter 
 (1856), 2 Jur. N. S. 1213 ; 106 B. R. 1014 {per Stitart, V.C, at p. 1215 ; the onus is 
 
 ,N A ■ r „ T7,o™/jo MS^71 2 Y. & C (Exch. in Eq.) 498 ; Champion r. Rigby, 
 »J" ^o^lTil;!^™". '' t4.=R, L.i., at p. 284)^; Wright v. cLer, sup. \pl 
 S^t^J , at p^60 'anf (^o^bns-Habby, L.J. at p. 61 m reference to such of the 
 tra^actions there impeached as were contracts, and not gifts). 
 
382 CH. V, SECT. 2, SUB-SS. (2), (3). 
 
 the solicitor has been in a position to prove all the above elements in the 
 burden of proof incumbent on him, or rather all such of them as have been 
 in question (for it is not always the case that every one of them is a matter 
 of controversy), he has always been held entitled to succeed, and the client 
 has been denied relief (w). 
 
 Suh-s. (3). The Sacerdotal Relation. 
 
 421. The spiritual relation has been frequently described, not only by 
 social philosophers and psychologists, but also by judges and jurists, as the 
 most powerful, comprehensive, and persistent of all the relations to which 
 " influence " is imputed. The priest or spiritual director, or the ecclesiastical 
 corporation or conventual establishment, exercises, it is said, a dominion 
 which endures from the cradle to the grave ; which is present, either in the 
 foreground, or in the backgroimd, at each of the most solemn acts of life, to 
 command, to forbid, or to advise ; which works upon the strongest feelings of 
 human nature, — ^faith, hope, and fear as to this life, and as to the life to come. 
 The priest holds the double keys : to him are confided the arcana of both 
 worlds. From the religious point of view, he must hold it to be not merely his 
 right, but his duty, to intermeddle with the temporal afiairs of each member 
 of his flock so far as to render them subservient to spiritual interests. He is 
 entrusted by Divine authority with a vicarious supremacy over the soul, 
 heart, mind, and worldly concerns, of the penitent or disciple : his jurisdic- 
 tion, therefore, extends to regions which are not ordinarily invaded by even 
 the legal, or the medical, adviser, or by the usurer, or trader " in the necessities 
 of mankind," to each of whom in turn jurisprudence and ethics have, from 
 different points of view, assigned the premiership amongst " influences " (x). 
 Though it is true that all this knowledge and power purports to be held on trust 
 
 upon him to show that every sort of due caution was given to that person, and that he 
 had the means, independently of his natural protection, of dealing at arm's length. . . . 
 What is meant . . . when it is said that parties are to have protection is, that they are to 
 have some person to look into the facts, and explain the matter to the client, in order that 
 the client, with that assistance, may exercise his judgment ") ; Smith v. Kay (1859), 
 7 H. L. C. 750 {per Lord Ghelmsfokd, L.C, at pp. 761, 762, and Lord Cbanwoeth, at 
 pp. 770-773) ; Wright v. Carter, [1903] 1 Ch. 27, C. A. (as to the purchase transactions, 
 per VAT7QHAU WruuAMS, L.J., at pp. 51-55, SuBiiiNG, L.J., at pp. 58, 59, and Cozens- 
 Habdy, L.J., at pp. 61, 62). As to what is meant by competent independent advice, 
 see § 477, post. 
 
 {w) Thus, the solicitor proved a fair bargain and full value, in Kingsland ( Viscount) v. 
 Barnewall (1706), 4 Brown P. C. 154 ; no abuse of influence or unfair advantage taken of 
 his exclusive knowledge, in Cane v. Lord AUen (1814), 2 Dow. H. L. 289 (per Lord Eldost, 
 L.C, at pp. 297, 298) ; full disclosure, and utmost value, in Edwards v. Meyrick (1842), 
 2 Hare 60 (per Wigram, V.-C, at pp. 71, 72) ; "that the sale was as advantageous to 
 the client as it would have been if the solicitor had used his utmost endeavours to sell the 
 property to a stranger," in Spencer v. Topha/m (1856), 22 Beav. 573 (per RoMiLLTr, M.E., 
 at pp. 577-583) ; " that he acted in perfect good faith," and that the bargain " was in 
 fact a fair one, and that he had not lost, for want of due diligence, better terms for his 
 client," in Pisani v. Att.-Gen. of Gibraltar (1874), L. R. 5 P. C. 516 (at pp. 538, 539) ; 
 knowledge and assent of the client, in Be Haslam and Hier-Evans, [1902] 1 Ch. 765, C A. 
 (per Vattghan Wiluams, L.J., at p. 769, and Stieung, L.J., at pp. 772, 773) ; fuU 
 (fisolosure and liberal value, in Allison v. Glayhills (1907), 97 L. T. 709 (per Pabkbb, J., 
 at p. 713). 
 
 (x) See § 409, ante (as to the special features in the parental relation) ; § 415, ante (the 
 
§§ 420, 422 (SACEEDOTAL RELATION). 383 
 
 for pious uses, the temptation to pervert "the good deposit" to the baser 
 uses of personal and temporal advantage is held by the law to justify a special 
 degree of vigilance in applying its presumptions and rules to this class of 
 relation, and, on the principle oicorruptio optimi pessima, a special feeling of 
 repugnance to any violation of those rules. But, as has been pointed out (y), 
 the presumptions and rules are in every case precisely the same, and there- 
 fore, without paying an exaggerated deference even to "the celebrated 
 reply " of Sir Samuel RomiQy in Huguenin v. Baseley (z), or any at all to 
 the violent, and slightly vulgar, tirade of Lord Noethington, L.C, at an 
 earlier date {a), with reference to the particular relation in question, it is 
 enough to say that it has been judicially declared in plain terms to constitute 
 one of the recognized or " suspected " relations (b). 
 
 422. There have been very few cases in which " spiritual " influence has 
 been brought before the Courts : the obvious explanation of this fact being, 
 
 like, as to the solicitor and client relation) ; § 425, post (aa to the medical profession) ; 
 and § 435, post (as to usurers and expectant heirs or reversioners). 
 
 {y) See § 408, svh fin., ante. And cp. the latter part of the citation from the judgment 
 of Stxjaet, V.-C, in the next note. 
 
 (z) (1807), 14 Ves. 273. See note (c) to § 408, ante, as to the extent to which this 
 argument is entitled to quasi-judicial authority, and as to the fact that Lord Eldon's 
 judgment gives the go-bye to so much of it as is directed specifically to the spiritual 
 relations. In Nottid^e v. Prince (1860), 2 GifE. 246, at p. 270, Stttabt, V.-C, expresses 
 his opinion, for which he gives reasons, that ' ' the strength of religion is far beyond that 
 of gratitude to a guardian, trustee, or attorney," but he adds — " the same ground of public 
 utility which requires this Court to guard against such influences, has its most important 
 application to that influence which is the strongest." 
 
 (a) In Norton v. Belly (1764), 2 Eden 286, where a maiden lady having granted an 
 annuity of £50, secured on certain estates, to a methodist or " independent " preacher, the 
 deed was decreed to be delivered up, and the defendant ordered to execute a release, on 
 the general ground of spiritual ascendancy and fraud : though it would appear from the 
 extremely racy and vehement tone of the judgment that Lord Nokthington, L.C., was 
 moved quite as much by his intense antipathy (political and reUgious) to the particular 
 sect as by a distrust of spiritual influence in general. " ShaE it be said," he asks, at p. 288, 
 " that it " — the Court — " cannot relieve against the glaring impositions of these men ? ", 
 and he declares that " the constitution itself would he in danger, if it did not." He then 
 denounces "these men" as "false pastors," who are working "to the destruction not 
 only of the temporal concerns of many of the subjects, hut to the endangering their eternal 
 welfare." Again, at p. 289, he characterizes the "independent " preacher as " a subtle 
 sectary who preys upon his deluded hearers, and robs them under the mask of rehgion ; 
 an itinerant who propagates his fanaticism even in the cold northern countries, where one 
 should scarcely suppose that it could enter," and concludes, at p. 291, with a ferocious 
 jocosity not unworthy of Jbffkeys, C. J., at the Bloody Assize : " one of his counsel . . . 
 tried to shelter him under the denomination of an independent preacher : I have tried, in 
 the decree I have made, to spoil his independency." Notwithstanding that Stuaut, V.-C, 
 at p. 263 of Nottidge v. Prince, sup., says that Norton v. Belly "is of unquestionable 
 authority," one cannot but be sensible how gravely that authority is impaired by ex- 
 pressions of animus such as those which are above cited, and which in the argument for the 
 dominant party in the later case were not unjustly described as " violent." 
 
 (6) See Allcard v. Skinner (1887), 36 C. D. 145, C. A. (per Cotton, L.J., at pp. 171 sqq., 
 LlKDLEY, L.J., at pp. 181 sqq., Bowbn, L.J., at pp. 189 sqq.) ; Morley v. Loughnan, [1893] 
 1 Ch. 736, C. A. (per Wbiqht, J., at p. 752). At p. 183 of the former case expressions are 
 to be found which show that Lindlby, L.J., could not resist the temptation to make 
 unnecessary comparisons between this and other influences : " of all influences religious 
 influence is the most dangerous and the most powerful." He does, however, at the same 
 time seem to recognize the harmlessness, and possible utility, of " enthusiasm " inspiring 
 and working upon "the enthusiast," but even here he excepts any enthusiasm which is 
 the outcome of " external influence." The meaning and scope of this qualification is 
 obscure. 
 
384 CH. V, SECT. 2, SUB-S. (3). 
 
 not, as has been judicially suggested on two occasions (c), the rarity in this 
 country of its abuse, but rather, on the contrary, its prevalence, power, 
 and persistence. For it must be remembered that any transaction entered 
 into under the influence is not illegal or void (d) : no policeman stands 
 by to forbid it, and no bureaucracy has as yet ordained a house to house 
 inspection of accounts between priest and penitent. No person can invite 
 the assistance of the Court to recall a gift once made, except the donor : and 
 in the enormous majority of the cases, the donor does nothing, for the simple 
 reason that the power which is strong enough to forge the fetters is strong 
 enough to prevent their being broken or relaxed. 
 
 423. The first of the " spiritual influence " cases was decided in 1764 (e). 
 In this, and the few which succeeded it (/), the doctrine was applied indifier- 
 ently to individuals, such as a nonconformist preacher (g), a Roman Catholic 
 
 (c) By Lord Nobthington, B.C., in Norton v. Belly, inf. ; and by SltTABT, V.-C, in 
 Nottidge v. Prince, inf., at p. 270 ("fortunately the excellent character of Christian 
 ministers in this country renders the occurrence of such questions extremely rare "). 
 
 (d) Re Metcalfe's Trusts (1864), 2 De G. J. & S. 122, is a striking illustration of the 
 elementary principle stated in the text. In that case a professed nun, having executed 
 a deed assigning all her property to the trustees of the Brompton Oratory, required her 
 own trustees to assign such property accordingly. Her trustees, instead of doing so, 
 brought the question, and paid the fund, into court. The lady petitioned to have the 
 fund paid out to her, or rather, according to her direction, to the trustees of the Brompton 
 Oratory. Her trustees raised the plea of " spiritual " influence : but the Lords Justices, 
 reversing Romtlly, M.R., held that, since the only person entitled to avoid the transaction 
 was not seeking to avoid it, but, on the contrary, insisted on its being carried out, the 
 order must be made as prayed {per Knight-Betjoe, L.J., at p. 126 : " this lady may be 
 about to deal with her property in a way which we should think inadvisable, but we have 
 no jurisdiction to take that into consideration. She comes heie asking for her own pro- 
 perty, and we have no power to refuse the apphoation. ' ' The lady's trustees were deprived 
 of costs : but, considering that they never had any right to raise the question at all, or 
 put their cestui que trust to expense in the matter, and, further, that, instead of adopting a 
 neutral attitude, they argued in Court against the petition being granted, it seems strange 
 that they were not ordered to pay the lady's costs, as well as bear their own. 
 
 (e) Norton v. Relly (1764), 2 Eden 286, where, at p. 287, Lord Nokthingtoit, L.C., 
 remarks : " this cause, as it has been very justly observed, is the first of the kind that 
 ever came before this Court, and, I may add, before any court of judicature in this king- 
 dom." Sir Samuel RomUly, in his opening argument, at p. 280 of Huguenin y. Baseley 
 (1807), 14 Ves. 273, states that " the EngUijh Courts of Justice do not afford an instance 
 of influence exercised by such means," from which it would appear that he was not aware 
 of Norton v. Relly, sup., which, though mentioned in a then published compilation, the 
 Collectanea Juridica, as we are told by Stuart, V.-C, at p. 263 of Nottidge v. Prince (1860), 
 2 Giff. 246, did not appear in any volume of professed reports until 1818, when it was 
 included in Eden's collection, in two volumes, " of cases argued and determined in the 
 High Court of Chancery from 1757 to 1766 from the original MSS. of Lord Chancellor 
 NoBTHiNOTON, collected and arranged, with notes and references to former and subsequent 
 determinations, and to the registrar's books." Eden was a near relative of Lord Nobthing- 
 ton, and in that way, as he tells us in his Preface, came "to be in possession of his law 
 MSS.," which "consisted of six volumes of notebooks, and a large quantity of loose papers," 
 the latter containing Lord Nobthington's judgments, which, in oases of difficulty, " had 
 been written out at length," and had probably been read in Court in the same state in 
 which they now appear." Presumably the report of the judgment in Norton v. Relly was 
 taken from one of these separate papers. 
 
 (/ ) Namely, those cited in notes (h)-{m), inf. From these it has been thought better 
 to exclude Huguenin v. Baseley, sup., where the dominant party, though he happened to 
 be a clergyman, and though, in " the celebrated reply," he was sought to be made liable 
 in that character principally, was not in fact held liable on that ground, but solely on the 
 ground of a relation of "influence" created by his conduct. The case therefore is dealt 
 with as one of the authorities relevant to the kind of relation discussed in Sub-s. (5), post. 
 
 (?) Norton v. Relly, sup. 
 
§§ 422-424 (sacerdotal kelation). 385 
 
 priest and confessor (h), and a Plymoutli brother (*) ; and to ecclesiastical 
 or conventual estabHslinients, such as a Koman Catholic convent (j), an 
 Agapenone (k), the Brompton Oratory (I), and a Protestant sister- 
 hood (m). 
 
 424. Against the dominant party in these cases the law makes the same 
 presumptions, and casts upon him the same burden of proof, as in all other 
 eases of a " suspected " relation (w), if any transaction entered into during the 
 continuance of the relation be afterwards called in question by the servient 
 party, but not if challenged by any other person, for nobody else has anything 
 to say in the matter (o). If and when, but not unless or until, the servient 
 party has established the existence of the relation, and the fact of a transac- 
 tion having taken place between the parties during its continuance (y), he 
 is entitled to relief on failure by the dominant party to prove, — where the 
 transaction was a gift, or in the nature of a gift, as it ordinarily is in a case of 
 sacerdotal influence {q), — either that the influence was not in fact operative 
 in hdc re (r), or that it was in fact properly used (s), and, in particular, for the 
 purpose of establishing such propriety, that the servient party was fully 
 informed as to the nature and eSect of what he was doing, and had the 
 
 {h) Middleton v. Sherburne (1841), 4 Y. & C. (Exch. in Eq.) 358. 
 
 (i) Morley v. Loughnan, [1893] 1 Ch. 736. 
 
 {}) White V. Meade (1840), 2 Ir. Eq. R. 420. 
 
 (k) Nottidge v. Prince, inf. 
 
 (l) Re Metcalfe's Trusts (1864), 2 De G. J. & S. 122. 
 
 (to) Allcard v. Skinner (1887), 36 C. D. 145, C. A. 
 
 (re) See § 405, ante, and Sect. 4, post. 
 
 (o) Which it was not in Re Metcalfe's Trusts, sup. : see note {d) to § 422, ante. 
 
 Ip) See Sect. 3, Sub-ss. (1) and (2), post. 
 
 {q) For a statement of the somewhat different kind of proof required in the case of 
 transactions for value, see, generally, §§ 456 and 478, post : as applied to parent and 
 child, see § 409, ante : as applied to solicitor and client, see § 420, ante. 
 
 (r) See Sect. 4, Sub-s. (1)> po"*. In AUcard v. Skinner — see note (t), inf. — ^the 
 dominant parties set up, but failed to establish, a case of cesser of relationship and 
 influence. 
 
 (s) As in Norton v. Relly (1764), 2 Eden 286 ; Nottidge v. Prince (1860), 2 Gift. 246 
 (per Sttjaet, V.-C, at pp. 269, 270 : no one " can accept a gift or benefit from the person 
 who is under the dominion of that influence, without the danger of having the gift set 
 aside," as it will be unless the donee prove "that a sufficient protection has been interposed," 
 which in that case he wholly failed to do). In Middleton v. Sherburne (1841), 4 Y. & C. 
 (Exch. inEq.) 358, both gifts by will, and gifts ireteri«wos, were impeached : after explaining 
 the different principles applicable to the two oases — see § 447, post, as to this question — 
 the Court directed an issue as to the former, and it was not thought necessary to deal with 
 the latter immediately : but it was intimated that it might afterwards become so (per 
 Lord Abinqbe, C.B., at pp. 392, 393) ; for, if the jury should decide that the wiU had not 
 been procured by that amount of undue influence which is necessary to upset a will, 
 this would not conclude the question whether the other gifts had not been obtained by the 
 much less degree of influence necessary to invalidate transactions inter vivos, and further 
 inquiry " might be essential " as to these ; but if the jury should find to the contrary, 
 then " further interference by the Court would be vain and profitless," because if the will 
 were invalidated, a fortiori the gifts inter vivos ought to be. At p. 392, he points out 
 some " very strong facts " for the consideration of the jury, and impliedly indicates that, 
 unless countervailed by evidence of complete propriety, they would operate even more 
 strongly against the dominant party in any investigation which might be required there- 
 after of the gifts inter vivos. No such investigation took place because, as we are informed 
 at p. 293, on the issue coming on for trial, it was compromised, together (presumably) 
 with aU other questions in the litigation. |*» 
 
 B.N.D. 2 C 
 
386 CH. V, SECT. 2, SUB-SS. (3), (4). 
 
 competent and honest advice of an independent third person (<), and made the 
 gift with a perfectly unfettered and instructed mind. It is, however, open 
 to the dominant party, even if he can prove none of these things, and cannot 
 therefore displace any of the presumptions which the law makes against 
 him in the first instance, to set up that, though he failed in his duty, yet 
 afterwards the servient party, with full knowledge of his rights, and when 
 emancipated from the influence, deliberately elected to confirm, instead of 
 avoiding, the transaction (m). 
 
 Subs. (4). The Relation between Physician and Patient. 
 
 425. The profession of medicine resembles the other two of the pro- 
 fessions commonly called " learned," as regards the kind of influence to 
 which it gives rise. It involves, on the part of the medical adviser, 
 such an intimate and exclusive knowledge of his patient's physical, 
 and sometimes his mental, life, habits, history, weaknesses, and perils, and, 
 on the part of the patient, such a dependence upon the doctor or surgeon 
 for health of body and mind, or, it may be, for life itself, that the law has 
 found itself constrained to make the same primd facie presumptions against 
 those who exercise it, as it makes against the solicitor or priest. Though 
 there are very few recorded instances of litigated questions of " influence " 
 between doctor and patient, and in many even of these few instances the 
 relation was not solely and entirely a professional one, but was partly 
 created by special " circumstances and conditions," such as are dealt with 
 at a later stage (v), it has been distinctly held that, of itself, and apart 
 from any such special conditions, the medical is one of the " suspected " 
 relations (w). To some minds, indeed, inclined to a more prosaic and practical 
 view of the meaning of " influence " in life than would be accepted by the 
 psychologist, it may seem that this influence is stronger than any other, even 
 than the sacerdotal ; though no such pre-eminence has been judicially imputed 
 to the medical relation as has been assigned to some of the other relations (x). 
 
 {t) As in White v. Meade (1840), 2 Ir. Eq. R. 420 ; Allcard v. Skinner (1887), 36 C. D. 
 145, C. A. {per Cotton, L. J., at pp. 171-173), Lindlby, L.J., at pp. 181 sqq., and Bowbn, 
 L.J., at pp. 189-191 : in that case, however, the dominant parties succeeded, solely on 
 the ground of the servient party's subsequent confirmation : see the next note) ; Morley v. 
 Loughnan, [1893] 1 Ch. 736 {per Weight, J., at pp. 752-757. Here the dominant party 
 was not only quite unable to show that the servient party had any independent advice, but 
 it was proved against him that he had taken active measures to remove or neutralize any 
 disturbing influences, and so preclude the possibility of the servient party listening to any 
 disinterested voice). 
 
 {u) Allcard v. Skinner, sup. {per Lindley, L.J., at pp. 186-189, and Bowbn, L.J., at 
 pp. 191-195), diss. Cotton, L. J., on this point for reasons which will commend themselves 
 to many minds). See, generally, as to confirmation, Sect. 4, Sub-s. (3), post. 
 
 (v) In Sub-3. (5), post, where accordingly are to be found several of the cases here 
 cited. 
 
 (w) Dent V. Bennett (1839), 4 My. & Co. 269 {per Lord Cottenham, L.C, at p. 276) ; 
 Ahearne v. Hogan (1844), Dru. 310 {per Sugden, L.C. (Ir.), at pp. 322, 325) ; Bilkige {or 
 Billing) v. Scmthee (1852), 9 Hare 534; 21 L. J. (oh.) 472 {per Turner, V.-C, at p. 540) ; 
 Mitchell V. Homfray (1881), 8 Q. B. D. 587, C. A. {per Lord Sblboene, L.C, at p. 591). 
 
 (x) See §§ 409, 415, 421, ante, and § 435, post. 
 
§§ 424-426 (medical relation). 387 
 
 Louis XI, it is remembered, feared tis confessor, but feared Lis barber- 
 surgeon more. Other views, however, may be put forward with just as 
 much plausibility, and just as little utility (y) ; for it must always be a 
 question of the individual temperament, which, in framing its general 
 presumptions and principles in the interests of society at large, jurisprudence 
 cannot take into account («). 
 
 426. Accordingly, the same presumptions are made against, and the 
 same burden of " sustaining the transaction," — neither more nor less, — is 
 cast upon, the dominant party in the case of the relation between medical 
 adviser and patient, as in the case of any other of his recognized relations (a). 
 That is to say, as soon as the servient party has established the relation and 
 the transaction (&), it lies upon the dominant party to prove, and relief will 
 be granted against him whenever he fails to prove, either that the influence 
 in fact did not aSect or operate upon the transaction (c), or that in fact it 
 was not abused, and that the transaction was in all respects righteous and 
 proper {d), — which means, in cases of both gifts and contracts, that he made 
 full and candid disclosure to the patient, before entering into the transaction, 
 of all material facts, and explained to him its exact nature and efEect (e) ; 
 further, in the case of a gift (/), and perhaps in the case of a contract 
 
 {y) See App. B, Sect. 2, Sub-g. (3), post. 
 
 (2) See § 408, sub fin., ante. 
 
 (a) See § 405, ante, and Sect. 4, post. 
 
 (5) See Sect. 3, Sub-ss. (1) and (2), post. 
 
 (0) See Sect. 4, Sub-s. (1), post. In Dent v. Bennett, inf., this contention was set up, 
 but not established {per Lord Cottenham, L.C, at p. 277). So, also, and with the same 
 result, in Ahearne v. Hogan, inf. (per Stjgdbn, L.C. (Ir.), at p. 323). In both cases, 
 however, it was recognized that the plea of non-existence or cesser of the relation (not 
 merely of acts proper to that relation, such as actual administration of remedies, or 
 attendances), if established, is a valid one. 
 
 (d) See Sect. 4, Sub-s. (2), post. 
 
 (e) As in Popham y. Brooke (1828), 5 Russ. 8 (where a surgeon was the recipient from 
 his patient of an annuity, for which there was no consideration suggested, except the 
 surgeon's promise to attend to him for the rest of his life : the instrument securing the 
 annuity was set aside on the ground that the surgeon had failed to disclose to the patient 
 the nature and effect of the deed, or the fact that, as he knew, and the patient did not 
 the latter had only a few weeks to live. If the transaction could be regarded as other than 
 a gift, then the surgeon, it was held, must equally fail, not having shown that he gave full, 
 or any, value : per Leach, M.R., at pp. 10, 11) ; Ahearne v. Hogan (1844), Dru. 310 (where 
 a medical man had not only failed to explain to his patient the nature and effect of the 
 transaction, which was the assignment of various policies of insurance, but had in various 
 ways, and on the face of the deed itself, grossly misrepresented it : per Stjoden, L.C. (Ir.), 
 at pp. 323-326) ; Billage v. Southee (1852), 9 Hare 534 (where a medical man obtained from 
 a poor patient a promissory note for £325 in pretended consideration of services rendered 
 but which, as to so much of the £325 as was in excess of the amount of his fees calculated 
 on a proper scale, was regarded as a gift. The promissory note was ordered to be set aside 
 as to this excess, and to stand as security for the residue, on the ground that the medical 
 attendant had failed to establish that he had made fuU, or any, disclosure or explanation 
 whatsoever as to the amount of his alleged charges, and as to how much of the £325 was 
 supposed to be due for his services, and how much to represent his patient's bounty : 
 per TuBNEK, V.-C, at p. 540). 
 
 (/) Dent V. Bennett (1839), 4 My. & Cr. 269, where an agreement by a patient, more 
 than 85 years old, to pay his medical attendant £25,000 in supposed gratitude for saving 
 his Ufe, and in consideration of the continuance of his services, was set aside by Lord 
 Cottenham. L.C., on the ground that not only was there no independent advice, but the 
 agreement had been " carefully concealed from his " — the patient's — " professional 
 
388 CH. V, SECT. 2, SUB-SS. (4), (5). 
 
 also (g), that he procured for the patient the competent and honest advice of a 
 third person ; and, further, in the case of a piurchase or sale, that he gave 
 no less, or received no more, as the case may be, than a fair and just price 
 or consideration (h). It is only where he succeeds in sustaining this onus 
 to its full extent (i), or where, though unable to do so, he is in a position to 
 prove that the servient party, with full knowledge and in entire freedom from 
 the influence, subsequently elected to affirm the transaction (j), that he is 
 protected, and that the presumptions made against him in the first instance 
 are rebutted. 
 
 Subs. (5). Relations created by the particular Circumstances and Conditions 
 
 of the Case. 
 
 I\ZI. Notwithstanding that there is no proof of the existence of any of 
 the recognized relations, domestic or professional, hitherto dealt with, the 
 conduct of the parties, and the other " circumstances and conditions " of 
 the individual case, may be such as to constitute a relation ad hoc, so to speak, 
 from which the law will make the same three presumptions of influence in 
 favour of the servient, and against the dominant, party, as it makes in the 
 case of any of the t-pecific relations {k) ; or, to put it more simply, the law 
 will presume from the proved existence of certain " circumstances and con- 
 advisers, and all other persons " (p. 277). This was on the theory of the transaction being 
 in substance a gift, as Lord Cottenham thought it was (p. 273). If, however, it was not, 
 then it was open to the further objection that he had sold his services at a grossly excessive 
 price (p. 272). Cp. Gibson v. Russell (1843), 2 Y. & C. 104 (where "the intimate 
 friend and medical attendant " of the servient party failed to establish, in respect 
 of a certain conveyance which he had obtained from his patient, and which was impeached, 
 that the patient " well understood the whole matter, and needed no other advice 
 or assistance respecting it than such as he had " : per Knioht-Beuce, V.-C, at pp. 115, 
 117-119) ; Mitchell v. Homfray (1881), 8 Q. B. D. 587, C. A. (where— per Lord 
 Selborne, L.C, at p. 591, and Bkamwell, L.J., at p. 593 — ^it was held that a gift by 
 patient to medical adviser was originally voidable on the ground that the patient ad- 
 mittedly received no independent advice, or explanation of her rights, and it would have 
 been avoided accordingly, had she not afterwards, when the influence was removed, 
 confirmed it). 
 
 {g) Ahearne v. Hogan (1844), Dru. 310 (per Sugden, L.C. (Ir.), at p. 322 : " while 
 such a relation continues, the Court is called upon to look at a coniract entered into, 
 without the intervention of a third party, with considerable jealousy "). 
 
 (h) Popham v. Brooke, sup. (see the view of Leach, M.E.., stated in note (e), sup., on 
 the transaction in that case, if regarded as not being a gift) ; Dent v. Bennett, sup. (see 
 the similar opinion of Lord Cottehham, L.C, as to the transaction in that case, if regarded 
 in the light of a sale, as stated in note ( / ), sup.). 
 
 (j) As in Pratt v. Barker (1826), 1 Sim. 1 (where the surgeon who had received a bounty 
 from his patient proved that the patient had had the honest and sound advice of his own 
 solicitors, and full explanation of the exact legal consequences of the voluntary settlement 
 which he deliberately executed, instead of leaving the property to the surgeon by his will, 
 for the purpose of saving legacy duty) ; Blackie v. Clark (1852), 15 Beav. 595 (where, in 
 the case of a transaction for value, the confidential medical attendant proved that the 
 patient had the separate advice of her own solicitor as to some of the deeds, and thoroughly 
 understood the effect of the others, and received fair terms : per Eomilly, M.B., at pp. 601- 
 604). 
 
 (j) As in Mitchell v. Homfray, sup. : see note (/ ), sup., and, generally, as to oonfirma' 
 tion. Sect. 4, Sub-s. (3), post. 
 
 {k) See § 405, ante. 
 
§§ 426, 427 (relation created by circumstances). 389 
 
 ditions " surrounding a transaction, that one of tlie parties exercised " an 
 undue influence " over the other in bringing it about, unless and until che 
 contrary be shown. The proposition is sometimes framed in this way, — 
 whereas, it is said, in the case of the " suspected " relations, undue influence 
 is presumed, in all other cases it must be proved as a fact : but this is not 
 a strictly accurate statement, for, since in every case of a prcBsumptio juris 
 from given facts there must first be evidence of those facts, so here there 
 must be proof of the existence of the " known " relation, where it is a case 
 of such a relation, just as much as there must be proof of the necessary 
 " circumstances and conditions," where it is not : and exactly the same 
 frimd facie inferences in law are drawn from the foundation of fact so 
 established, whatever be the nature of the foundation in the particular case. 
 Lord Hardwicke, L.C, in a case of established authority on the subject 
 now under consideration, distinctly states that undue influence is not a 
 matter for proof, but is always presumed in equity from proved " circumstances 
 and conditions of the kind which he describes." In enumerating various species 
 of undue influence (which he calls " fraud") he mentions, as a " third kind 
 of fraud," that " which may be f resumed from the circumstances and conditions 
 of the parties contracting ; and this goes further than the rule of law, which 
 is that it must be proved, and not presumed : but it is wisely established in 
 this Court to prevent taking surreptitious advantage of the weakness and 
 necessity of another: which knowingly to do is equally against conscience 
 as to take advantage of his ignorance : a person is equally unable to judge 
 for himself in one or the other " [l) : and, again, when dealing with his " last 
 head of fraud," viz. " catching bargains with heirs, reversioners, or expect- 
 ants," he insists that " that is always fraud presumed or inferred from the 
 circumstances and conditions of the parties contracting : weakness on the 
 one side, ... on the other, . . . advantage taken of that weakness " (m). 
 And, more than a century later, in another leading case on this topic, the 
 passages cited from Lord Hardwicke's judgment were adopted by Lord 
 Selborne, L.C, in ipsissimis verbis (n), and they have always been accepted 
 as an accurate and sound statement of the rules applicable, and of their 
 theoretical basis. So manifest, indeed, has it appeared to some judges that 
 a relation of some sort must be deemed to be established by these " circum- 
 stances and conditions," from which relation alone the presumptions can be 
 made, that they have described the position of the dominant party under 
 such circumstances and conditions as being constructively or metaphorically 
 tantamount or analogous to that of the dominant party in some one or 
 
 {I) Chesterfield (Earl of) v. Jannsen (1751), 2 Ves. Sr. 125, at pp. 155, 156. 
 
 (to) Ibid., at pp. 166, 157. 
 
 (») Aylesford (Earl of) v. Morris (1873), 8 Ch. App. 484, at pp. 489-491. At p. 491 he 
 observes that " the element of personal influence is here wanting. But it is sufficient for the 
 application of the principle, if the parties meet under such circumstances as, in the par- 
 ticular transaction, to give the stronger party dominion over the weaker " : which is as 
 much as to say that it is unnecessary to prove undue influence in fact, but that a 
 relation will be established by proof of the circumstances under which the parties meet, 
 from which relation the " prima facie presumption" to which he afterwards refers 
 will arise. 
 
390 CH. Vj SECT. 2, SUB-S. (5). 
 
 other of the " known " relations, — that of a parent (o), for instance, or an 
 attorney (p), or a guardian (q). 
 
 428. There must, then, as an essential condition precedent to the applica- 
 bility of the equitable doctrine, be an " inequality " between the parties in 
 the sense above indicated ; that is to say, in Lord Hardwicke's language, 
 there must be both " weakness on the one side," and " advantage taken of 
 that weakness, on the other." Inequality in any other sense is absolutely 
 irrelevant. A mere disparity in natural qualities, resources (r), or fortuitous 
 advantages, comes to nothing. The " inequality " must have been a factitious 
 one : a case must be shown of marked cards, loaded dice, or " a little shuffling " 
 of the rapiers ; it must appear that the dominant party either brought about 
 the unevenness in the conditions, or, finding it ready to his hand, utilized 
 and traded on it to extract from the servient party a gift or contract which 
 he would not otherwise have made. Nor is it to the purpose to establish 
 a case of " hardship," unless by " hardship " is understood a taking advantage, 
 that is, an unfair or unconscientious advantage, of the subjection of the 
 servient party (s). Wherever the servient party has been unable to establish 
 " circumstances and conditions " of the kind contemplated by Lord Haed- 
 WiCKE (t), he has been held disentitled to any relief (m) ; for he has not 
 
 (o) As in Murray v. Palmer (1805), 2 Soh. & Lefr. 472 {per Lord Redbsdale, L.C. (Ir.), 
 at p. 485 : " this young woman, evidently in great distress, is persuaded that, unless she 
 takes what Palmer chooses to give her, she shall get nothing ; he was formidably armed 
 against her ; . . . Palmer had put himself into the situation of the father, and made himself 
 a trustee for the children, as the father was ") ; Harvey v. Mount (1845), 8 Beav. 439 {per 
 EoMELLY, M.B., at p. 447). 
 
 (p) As in Taylor v. Obee (1816), 3 Price 83, where, at p. 93, Richabds, B., states his 
 comprehensive view that " any one possessing the confidence of a party must be regarded 
 as in the situation of attorney of that party, and shovdd not be allowed to take advantage 
 of that situation." 
 
 (?) See Revett v. Harvey (l?,2Z), 1 Sim. & St. 502, the facts of which are stated in note (a) 
 to § 429, post, where, at p. 507, Leach, V.-C, says : " this case must be governed by the 
 principles which apply to a guardian and his ward." 
 
 (r) Osmond v. Fitzroy (1731), 3 P. Wms. 129 (per Jekyll, M.R., at pp. 129, 130 : the 
 •Court " wiU not measure the size of people's understandings and capacities," unless 
 circumstances have first been shown making the question a relevant one. That is to say, 
 mere " inequaUty " of this description is not a fact from which, without more, a presump- 
 tion of improper influence wiU be drawn. 
 
 («) See Middleton v. Brown (1878), 47 L. J. (oh.) 411, C. A. {per Jessbl, M.R., at p. 413 : 
 ■" what is the meaning of the term ' hard bargain ' ? If it has any distinct meaning at all, 
 3,3 distinguished from a mere term of abuse, it means in equity an unconscientious bargain, 
 that is, a taking advantage of the position of one of the parties to the contract, and when 
 I say ' taking advantage,' I mean of course taking an unfair advantage. When you come 
 to that point and you have brought your proof up to that, there is a case in which equity 
 will relieve against such a bargain "). In that case the agreement impeached was held not 
 to be the subject of reUef. Sir George Jbssel's language is adopted by Waikeb, L.C. (Ir.), 
 at p. 510 of Roe v. Joyce (1892), 29 L. R. (Ir.) 500, having, at p. 509, pointed out how 
 " ambiguous " the expression is. 
 
 (<) See the citation from his judgment which is given in § 427, ante. 
 
 (u) Thus, no relation was held to have been constituted by the circumstances and 
 conditions proved, and therefore no presumption of undue influence was made against the 
 dominant party, in Fa/rmer v. Farmer (1848), 1 H. L. C. 724 ; Harrison v. Guest (1860), 
 8 H. L. C. 481 ; Haygarth v. Weari'ng (1871), L. R. 12 Eq. 320 {per Wickens, V.-C, at 
 p. 327) ; Armstrong v. Armstrong (1873), Ir. B. 8 Eq. 1 ; Henry v. Armstrong (1881), 18 
 C. D. 668 {per Ka-j, J., at p. 669) ; Howes v. Bishop, [1909] 2 K. B. 390, C. A. (per Lord 
 Alveestonb, C.J., at p. 398, and Motjlton, L.J., at p. 399) ; Re Ooomber, [1911] 1 Ch. 723, 
 C. A. In all the above cases relief was refused, except in Haygarth v. Wearing, sup., and 
 
§§ 427, 428 (relation ceeated by circumstances). 391 
 
 established any relation from which the Court can draw even a primd facie 
 inference against the servient party, or cast upon him any onus to displace such 
 an inference. It is of no more use to prove the transaction without proving the 
 relation, than it is to prove the relation without proving the transaction (v). If 
 and when, however, satisfactory evidence has been given of facts of a nature to 
 constitute the relation, the same presumption in favour of the servient party 
 is made, and the same burden of repelling it is at once cast upon the 
 dominant party, as in the case of any of the domestic or professional rela- 
 tions (w). The presumption is of " an unconscientious use of power arising 
 out of the circumstances and conditions of the parties contracting " ; and, 
 in the admirably precise phraseology of Lord Selboene, L.C, in the second 
 of the loci classici on this subject, " when the relative position of the parties 
 is such as primd facie to raise this presumption, the transaction cannot stand 
 unless the person claiming the benefit of it is able to repel the presumption 
 hj contrary evidence, proving it to have been in point of fact fair, just, and 
 reasonable " (x). " Fairness " here connotes both moral propriety, and 
 adequacy of value from a business point of view : " justice " involves princi- 
 pally the former element, and " reasonableness " the latter. The three 
 qualities of the transaction which the dominant party is called upon to make 
 out, if he is to escape liability, may be established, and can only be established, 
 by proof of the same matters as in the case of any other of the " influence " 
 relations (y), — namely, whether the transaction was a gift or a contract, 
 fuU disclosure of all material facts, and a clear explanation of the exact 
 nature of the transaction, and of the servient party's liabilities and rights 
 in respect of it, including his right to refuse to enter into it, and, when entered 
 into, his right to repudiate it : further, if the transaction was a gift, the honest 
 and competent advice of an independent third person (which fact is also of 
 great importance in considering the general propriety of any transaction 
 other than a gift, though it may not in all cases of the latter description be an 
 absolutely indispensable frdbandum), and, in the case of transactions for 
 valuable consideration, the fact that an adequate and just price was paid 
 by the dominant party, if a purchaser, and no more than a just price 
 paid to him, if a vendor. It should be observed here that, though in 
 the form in which the rule is stated it is assumed, as a theoretical possibility, 
 that a dominant party may be in a position to repel by affirmative evidence 
 the frima facie presumption raised against him, the possibility is practically 
 a very remote one : because, in proving a case sufficient to raise the pre- 
 sumption, — and until he does so, no answer is called for, — the servient party 
 must of necessity have already negatived that conscientiousness, righteous- 
 ness, and propriety which is the necessary foundation of any affirmative 
 
 then it was given solely on the ground, of misrepresentation. See generally, as to the 
 onus of proving the " relation," Sect. 3, Sub-s. (1), ^os<. 
 
 (w) See Sect. 3, Sub-s. (2), post. 
 
 (w) See § 405, ante, and Sect. 4, 'post. 
 
 \x) At p. 491 of Aylesford (EuiloJ) v. Mvrris (1873), 8 Ch. App. 484. 
 
 \y) See Sect. 4, Sub-s. (2), post. 
 
392 CH. V, SECT. 2, SUB-S. (5). 
 
 answer (z) ; or, putting it the other way, any evidence of such conscientious- 
 ness adduced by the dominant party is, if believed, not so much an affirma- 
 tive answer as an obstacle to the right of the servient party to require any 
 answer at all : it silences the adversary's guns by spiking them, rather than by 
 any answering fire of its own artillery. 
 
 429. It is not very easy to classify the " circumstances and conditions 
 of the parties contracting " which are deemed sufficient to constitute the 
 relation now in question, or the various acts and omissions by which the 
 one party has been held to have made an unconscientious use of the power 
 arising out of those circumstances and conditions, and to have taken an 
 unfair advantage of the other party's weakness, or the different forms of 
 that which the law recognizes as " weakness " : the reason being that, in 
 nearly all the reported cases, there has been a combination of several modes 
 of " taking advantage," and of several forms of " weakness." But a rough 
 attempt may be made in this direction. In the first place, on consulting 
 the authorities, it is noticeable at once that a common feature in many of 
 them, and a very important one in establishing both the advantage and the 
 unconscionable use of it, is that, the servient party being in financial distress^ 
 the dominant party constituted himself his manager, adviser, or agent, 
 professed friendship for him and an anxiety to serve him, officiously intervened 
 and intermeddled in his affairs, obtruded himself upon his notice, assumed 
 the office of " guide, philosopher, and friend," and, in his self-appointed 
 character, proffered his aid in extricating him from his difficulties and em- 
 barrassments ; and, then, having established and consolidated his dominion 
 over the servient party's will, judgment, and concerns, proceeded to take 
 unconscientious advantage of his distress by obtaining from him either gifts 
 or profitable contracts, the unconscientiousness being shown by concealment 
 of material facts as to the subject-matter of the transaction, the failure to 
 explain the effect of such transaction upon the servient party's rights and 
 interests, and, in the case of gifts, to see that the servient party obtained 
 honest advice from a disinterested third person, or, in the case of contracts, 
 to pay him full value on a purchase, or to exact no more from him than full 
 value on a sale (a). Another class of case is where a similarly self -constituted 
 
 (z) See Aylesford {Earl of) v. Morris, sup., per Lord Selboene, L.C., at p. 496 : " no 
 attempt has been made to show by any independent evidence (if such a thing could be 
 conceived possible) that the terms here imposed upon the plaintiff were fair and reasonable. ' ' 
 
 {a) As in Tmsleton v. Griffith (1716), 1 P. Wms. 309 (where the servient party was in 
 distress and debt, and the dominant party who bought his remainder in tail " took upon 
 himself to advise and direct the plaintiff in everything, and professed great friendship for 
 him " : per Lord Cowpee, L.C, at p. 310) ; Proof v. Hines (circ. 1740), Forr. Cas. temp. 
 Talbot, 111 ("the case of a tradesman who officially interfered " : so described by 
 Sir Samuel Romilly, at p. 284 of Huguenin v. Baseley, inf.); Murray v. Palmer 
 (1805), 2 Sch. & Lefr. 472 (see the citation in note (o) to § 427, ante) ; Huguenin v. Baseley 
 (1807), 14 Ves. 273 (where the dominant party, with the object and result of obtaining from 
 a widow a voluntary settlement of her estates, procured an introduction to her, ingratiated 
 himself with her, took upon himself to manage all her affairs, and to advise her, received 
 her rents, induced her to get rid of her solicitors, and employ as her agents in their stead 
 himself and his own solicitor and surveyor, concealed from her the real facts as to the 
 value of her property, failed to explain the nature and effect of the instrument, and 
 particularly a clause in it which made it irrevocable except in the presence of persons whom 
 
§§ 428, 429 (r:e;lation creat;ed by ciecumstances). 393 
 
 manager or adviser by similar means takes an unrigliteous advantage of 
 other infirmities or disabilities of the servient party, such as mental or 
 physical imbecility, ignorance or incapacity for business, or general help- 
 lessness, unaccompanied by pecuniary embarrassment, or even accompanied 
 by great affluence; or where, though neither in actual distress, nor even 
 labouring under any positive infirmity of body, the servient party has 3uddenly 
 come into property quite disproportionate to his previous possessions, or an 
 expectation of acquiring such a property whether by litigation or otherwise, 
 and, being quite unfitted by his previous mode of life to cope with the situa- 
 tion, is anxiously looking round for some one to give him the necessary 
 counsel and aid, and is entirely dependent on, and at the mercy of, the first 
 person who offers it, and the dominant party constitutes himself such a 
 person (6). In the two classes of case hitherto mentioned, by interfering 
 
 it might not be easy to get together, and not only failed to see that she had, but took active 
 steps to prevent her having, the independent advice of a third person : 'per Lord Eldon, 
 L.C., at pp. 293-300) ; Wooi v. Alrey (1818), 3 Madd. 417 (fir Leaoh, V.-C, at p. 424 : 
 " I consider . . . this plaintiff entitled to relief, . . . because the purchase was made at 
 an inadequate price from vendors who were in great distress, and without the intervention 
 of any other professional assistance than the purchaser's attorney ; and because these, 
 circumstances are evidence that in this purchase advantage was taken of the distress of the 
 vendors ") ; Revett v. Harvey (1823), 1 Sim. & St. 502 (where a solicitor, appealed to by 
 the mother of an infant in financial difficulties, professed great sympathy and anxiety to 
 render assistance, asked the mother to bring him to his chambers, and then, besides acting 
 as solicitor, entered upon a series of money-lending transactions, in respect of which he 
 obtained an acknowledgment from the infant, on his attaining his majority, of 
 indebtedness in a lump sum, without giving any information whatever as to the 
 figmres or the state of the accounts, or how the lump sum was made up, and without 
 the servient party having any independent advice: per Leach, V.-C., at p. 507: 
 " the defendant thought fit to place himself in a relation with this infant which 
 gave him great influence over his mind ; and he cannot be permitted to conclude the 
 infant by an acknowledgment signed by him, within a month after he came of age, and 
 without the intervention of any friend or adviser on his part ") : Davies v. Cooper (1840), 
 5 My. & Cr. 270 (where the dominant party bought certain reversionary interests and 
 an equity of redemption at an inadequate price from a drunkard and an imbecile, having 
 " assumed in a great degree the management of his affairs," and being a person who " from 
 his connection with the vendor, and from his interference with his affairs must have had 
 much influence over him " : per Lord Cottenham, L.C., at p. 277, who also points out, 
 at pp. 277-279, that there had been concealment of material facts as to the inadequacy 
 of the consideration, which was an annuity, the defendant knowing, and the plaintiff to 
 his knowledge being ignorant, that the life was an extremely bad one. An attempt to show 
 that an independent person had been called in as referee whoUy failed, — p. 278) ; Middleton 
 V. Sherburne (1841), 4 Y. & C. (Exch. in Eq.) 358 (per Lord Abingee, C.B., at p. 392, as to 
 the priest in that case who took advantage of his position as spiritual adviser to become 
 the self-constituted manager of the servient party's temporal affairs, and, in both capacities, 
 obtained unbounded influence over him, whereby he became the recipient of gifts by deed 
 as well as by will) ; Gockell v. Taylor (1852), 15 Beav. 103 (where the dominant party took 
 advantage of a poor person's distress and need of money in order to prosecute a claim against 
 the Crown to a fund in Court, and obtained from him conveyances and mortgages at an 
 undervalue) ; Tate v. Williamson (1866), L. R. 1 Eq. 528 (where the dominant party took 
 advantage of a young man's pecuniary embarrassments, intemperance, and weakness of 
 character, in making a purchase from him at an inadequate price, and without any 
 disclosure of a certain valuation of the property obtained by him, which clearly 
 indicated such inadequacy, and without the servient party having any independent advice, 
 it being especially noted by Wood, V.-C, at p. 540, that the dominant party " took upon 
 himself to advise the young man in reference to the arrangement of his difficulties," and 
 " professed to give him advice," &c., and express mention being made in the declaration 
 which prefaced the decree, set out at p. 541, of ''the duties which the defendant . . . had 
 undertaken of advising him with respect to the arrangement of the claims of his creditors "). 
 (6) As in MacGabe v. Hussey (1831), 5 BHgh (n.s.) 715 (where an Irish barrister 
 
394 
 
 CH. V, SECT. 2, SUB-S. (5). 
 
 in the concerns of the servient party without being invited to do so, it naay 
 ahnost be said that the dominant party at once raises a primd facie presump- 
 tion against himself, based upon that fact alone, since he voluntarily invests 
 himself with the position and duties attaching to any of the recognized 
 relations, just as an executor de son tort by intermeddling with the assets 
 puts himself in the same position as if he had been expressly appointed to 
 the office which he tortiously assumes. A third class consists of cases where, 
 though there is no such intrusion or voluntary assumption of protectorship 
 in the first instance, the domiuant party utilizes and trades on his knowledge 
 of the seivient party's infirmities of mind, character, will, judgment, or 
 otherwise, or his extreme youth and senility, — a knowledge acquired by long 
 personal attendance, in the case of a servant (c), or long personal intimacy, 
 
 quitted his profession for the express purpose of constituting himself the adviser and 
 assistant of a lady in certain matters, and manager of her affairs : which fact alone — 
 p. 728 — was held to be " singular and suspicious " enough to raise a presumption againsji 
 him. He obtained from the lady gifts and champertous agreements) ; Baker v. Loader 
 (1873), L. R. 16 Eq. 49 (where the dominant party thrust himself upon an old lady who 
 had suddenly come into a large property, and made himself manager of her affairs : no 
 advice, &c.) ; Morley v. Loughnan, [1893] 1 Ch. 736 (which was treated by Weight, 
 J., separately from both points of view, first, as a case of spiritual influence, at pp. 751, 
 752, and, then, as a case of the class now under discussion, at pp. 752-757. A " Plymouth 
 brother " in this case had taken advantage of the religious monomania and epileptic 
 morbidity of a wealthy man to despoil him of sums in the shape of gifts, which amounted 
 ultimately to £140,000. He " took absolute possession of " the servient party's mind, will, 
 and life, and constituted himself, to the careful exclusion of all others, his sole manager, 
 secretary, banker, doctor, and adviser) ; Reea v. Bernardy, [1896] 2 Ch. 437 (where a next- 
 of-kin agent, having ascertained that two women were the co-heiresses at law of a wealthy 
 intestate, forced his attention upon them, and procured for them an agreement to make 
 over to him a moiety of what might be recovered, and a charge on the property. The 
 women were, though not in actual distress, in humble circumstances, and iUiterate, and 
 generally helpless. The defendant never disclosed to them certain most material facts 
 as to the real value of the property. The women had no independent advice, though the 
 defendant had made a show of offering to procure it, — a perfectly illusory offer, since they 
 had not the means of paying for it, as the defendant well knew. The transaction was 
 hurried through. All these were considered abundantly sufficient " circumstances and 
 conditions " to raise the presumption : per Eomeb, J., at pp. 443-445) ; Curtis v. 
 Bottomley (1911), " Times," 1 Aug., C. A. (which was an action for fraudulent misrepresen- 
 tation, but which MouLTON and BtjckleYjLL. JJ.,in the Court of Appeal, treated aswhatit 
 ought to have been, an action for abuse of influence or confidence created by the defen- 
 dant's proffers of friendship and assistance to one who had lost money by his association 
 with the former's past speculations and schemes. Having obtruded himself upon the 
 plaintiff's notice, in the guise and under the profession of a sincere friend and adviser 
 anxious to recoup the losses of " one of my oldest and best supporters," the defendant 
 proceeded to build up a dominating influence over him, and obtain his financial support 
 to fresh schemes as (isastrous as the former, without disclosing to him their real perils, or 
 that his object in putting them before him was, not to get back his losses for him, but 
 to enrich himself at his expense). 
 
 (c) As in Osmond v. Fitzroy (1731), 3 P. Wms. 129 (where a servant engaged by the 
 parents of a lad of seventeen to attend the latter on his travels, and " to prevent his being 
 imposed upon " — ^the youth was of weak capacity and character — obtained an ascenda;ncy 
 over him in the course of ten years which was strong enough to extract from him a bond 
 for £1000, whereby, instead of " preventing his being imposed upon " by others, or con- 
 currently with such prevention, which was in his own interests, the servant " himself 
 imposed upon him" : per Lord Cowpeb, L.C, at p. 130); Bridgeman v. Green (1757), 
 Wihnot's Opinions and Judgments, 58, per Wiumot, C. J., and other Lords Commissioners 
 of the Great Seal, affirming the decision of Lord Haedwickb, L.C, (1755) 2 Ves. Sr. 626 
 (where a footman and valet acquired sufficient ascendancy over his master to obtain from 
 him, first, a conveyance of land, and then a gift of » large sum of money raised on a 
 mortgage of it). 
 
§ 429 (relation ceeated by circumstances). 395 
 
 in the case of a friend {d). Or the unconscientious advantage may be taken 
 by a moneylender in his transactions with the borrower (e), or by a mortgagee 
 in his dealings with the mortgagor (/), when there are other " conditions 
 and circumstances " present ; for neither of these relations, apart from 
 statute {g), of itself gives rise to any presumption of influence. In another 
 type of case, the parties stand to one another in a relation which, though not 
 one of the " suspected " domestic relations, and, therefore, not per se capable 
 of raising any presumption against the dominant party, is yet an important 
 factor, amongst other " circumstances and conditions," in determining 
 whether a presumption of influence should be made in the particular case : 
 as, for instance, where a husband takes unfair advantage of his wife's conjugal 
 devotion and submissiveness (h), or a wife, of her husband's weakness and 
 
 {d) As in Bennett v. Vade (1742), 2 Atk. 324 (weakness, amounting almost to idiocy, 
 on the one side, and, on the other, non-disolosure of the effect of a deed of gift of land, and 
 of the distinction between a deed and a wiU, as to revooabihty ; and omission even to read 
 over to the servient party the instrument, either when in draft, or when engrossed : per 
 Lord Habdwickb, L.C., at pp. 325-327) ; Purcellv. M'Namara (1807), 14 Ves. 90a (a case 
 of conveyances and assurances obtained from a foohsh and illiterate woman by one on 
 whom she absolutely depended for advice in the management of her affairs, having no 
 other friend or relation in the world to whom she could look for protection : per Grant, 
 M.R., at p. 108. No disclosure was made, or advice given, as to the effect of the deeds, 
 which contained false recitals, and terms and covenants of such an outrageous character, — 
 see pp. 109-120, — as, of themselves, to raise the presumption of " undue influence exerted 
 to obtain from these unprotected women that which the defendant had no right to demand, 
 and they had no rational motive to give " : p. 115) ; Griffiths v. Robins (1818), 3 Madd. 191 
 (per Leach, V.-C, at p. 192 : " it appears that Mary Morris " — the servient party — " was 
 upwards of 84 years of age ; and at the period in question blind, or nearly so, and altogether 
 dependent on the kindness and assistance of others. . . . She had entire trust and con- 
 fidence in them," — the dominant parties, — " and it may be stated that they were the 
 persons upon whose kindness and assistance she depended. They stood therefore in a 
 relation to her which so much exposed her to their iniluence that they can maintain no 
 deed of gift from her unless they can establish that it was the result of her own free will, 
 and effected by the intervention of some indifferent person " ^ and, later, he concludes 
 that " the defendants have not made out that case which the policy of this Court requires 
 from persons standing in that relation to the donor in which they had placed themselves ") ; 
 Cavendish v. Strutt (1903), 19 T. L. R. 483 (the case of a voluntary settlement made by a 
 young man of great expectations, prodigal, self-indulgent, and easily led, though obstinate 
 at times, in favour of a person with whom he lived as a sort of boarder, and between 
 whom and himself a great intimacy had grown up, and who attended to all his business 
 affairs, opened and suggested or wrote answers to his letters, and advised him as to his 
 investments : per Byene, J., at pp. 484, 485. No independent advice, — pp. 485, 487, 
 489, — and no explanation of the legal effect of the instrument, — ^pp. 488, 489). 
 
 (c) As in Crowe v. Ballard (1790), 1 Ves. Jr. 215 ; Howley v. Cook (1873), Ir. R. 8 Eq. 
 370 ; Nevill v. Snelling (1880), 15 C. D. 679 (oppressive and extortionate terms exacted 
 from a youth : transaction not explained, &c.) ; Baja Maneshar Bakhsh v. Shadi Lai 
 (1909), 25 T. L. R. 635 (oppressive terms and absence of independent advice, held 
 to constitute circumstances in which the lender " was in a position to dominate the 
 will " of the borrower, who was necessitous and improvident) ; Harris v. Clarson (1910), 
 27 T. L. R. 30 (unexplained clauses as to interest in a contract with a moneylender who, 
 being in a position of domination and superiority, was held by Channell, J., bound to 
 give such explanation to the borrower) ; J. King, Ltd. v. Hay Currie (1911), 28 T. L. R. 
 10 (where the rule was recognized, but the lender discharged the onus here) ; Stirling v. 
 Rose (1913), 30 T. L. B. 67 {per Avoby, J.) ; Lewis v. Mills (1914), 30 T. L. R. 438. 
 
 ( / ) See Sub-s. (7), § 448, post, as to the extent to which the relation of mortgagor and 
 mortgagee may, with other circumstances, give rise to a presumption of undue 
 influence. 
 
 (g) See § 508, post. 
 
 (h) The relation of husband and wife is not one of the parental or quasi-parental 
 relations which of themselves raise the presumption of influence : see § 446, post. But it is 
 
396 CH. V, SECT. 2, SUB-S. (5). 
 
 docility, or where other family influences, not being either parental or quasi- 
 parental, are unconscientiously used (i). It happens sometimes that there are 
 two co-existing relations between the parties, one being of the nature now under 
 discussion, and the other being one of the " professional influence " relations, 
 such as the legal (j), spiritual (k), or medical (l), or one of the " confidence " 
 
 a circumstance which, with others, may constitute " circumstances and conditions " of the 
 kind now being considered, as it did in Turnbull <b Co. v. Duval, [1902] A. C. 429, P. C. (see 
 p. 234 : " it " — i.e. the transaction impeached, which was a security given by a married 
 woman to her husband's creditors — "is open to the double objection of having been 
 obtained by a trustee from the cestui que trust by pressure through her husband, and 
 without independent advice, and of having been obtained by a husband from his wife by 
 pressure and concealment of material facts ") ; Chaplin & Co. v. Brammall, [1908] 1 K. B. 
 223, C. A. (a similar case : per Vattghan Wilmams, L. J., at p. 237) ; Banh of Montreal v. 
 Stuart, [1911] A. C. 120, P. C. (the like: seep. 137: "overpowering influence," — "the 
 transaction . . . immoderate and irrational," — "unfair advantage of Mrs. Stuart's 
 confidence in her husband was taken by Mr. Stuart, and also, it must be added, by Mr. 
 Bruce," the soUcitor to the bank, who were the husband's creditors, and to whom — p.l38 — 
 " the bank left everything "). 
 
 (i) As to the influence of wife over husband, see Groves v. Perkins (1834), 6 Sim. 676 
 (coupled with concealment of material facts as to value, distress and ignorance of the 
 husband, and absence of independent advice) ; Procter v. Robinson (1867), 15 L. T. 431 
 (coupled with pressure, and absence of independent advice, and no explanation of rights : 
 per TxTRNEK, L. J., at pp. 431, 432, and Caikns, L. J., at pp. 432, 433). Examples of other 
 such influences are : — the influence of elder sister over younger, coupled with absence of 
 proper protection and advice, as in Harvey v. Mount (1845), 8 Beav. 439 (per Romilly, 
 M.B.., at p. 452 ; quaere, however, whether the decision did not go too far, and whether it 
 was not founded on the view always entertained by Romilly, M.R., but now quite 
 exploded — see § 451, note (c), post — that all gifts require to be " sustained ") ; the influence 
 of younger brothers over the eldest, coupled with pecuniary pressure on the one side, and 
 advantage taken on the other, no fair disclosure, no independent advice, and inadequate 
 value, as in Sturge v. Sturge (1849), 12 Beav. 229 ; and, lastly, the influence of a family 
 generally over one of its members, coupled with undue advantage taken of his gross 
 ignorance, dissolute habits and weakness of character, want of professional advice, and 
 false recitals in the deed itself, as in Dunnage v. White (1818), 1 Swanst. 137 {per Plumbe, 
 M.R., at pp. 150, 151, who also, at pp. 151, 152, disposes of the rather impudent suggestion 
 that this was a family arrangement). As vdll hereafter be pointed out (see § 446, post), 
 none of the above relations are per se quasi-parental relations, and it was so recognized 
 in the cases themselves. As to the protection given by British Indian law to a " paida- 
 nishin " woman under the influence of her " mukhtar " (or man of business and general 
 manager of her affairs), particularly when illiterate, and estranged from her natural 
 advisers, or living with the mukhtar, see Tewarry v. Nawab 8yed Hossein Khan (1874), 
 L. R. 1 Ind. App. 192 ; Sudisht Lai v. Mussummat Sheobarat Kunwar (1881), L. R. 8 Ind. 
 App. 39 ; Shambati Koeri v. Jago Bibi (1902), L. R. 29 Ind. App. 127 ; Sajjad Husain v. 
 Wazir Ali Khan (1902), 39 Ind. App. 156 ; Kali Bahhsh Singh v. Ram Gopal Singh (1913), 
 30 T. L. R. 138, P. C. 
 
 (j) Thus in Revett v. Harvey (1823), 1 Sim. & St. 502, the dominant party, who was a 
 solicitor, gave legal advice, as well as financial assistance, to the young man whom he 
 professed to befriend : in Rhodes v. Bate (1866), 1 Ch. App. 252, one of the defendants. 
 Bate, was a certificated conveyancer, and the plaintiff's professional adviser ; in Procter v. 
 Robinson, sup., one of the defendants was not only solicitor to the wife, who obtained 
 from her husband the gratuitous settlement in question, but, as the Lords Justices 
 held, though not apparently Romilly, M.R., in the Court below, solicitor to the 
 husband also : per Tuenbe, L.J., at pp. 431, 432, and Caiens, L.J., at pp. 432, 433). 
 All the above cases are accordingly cited in Sub-s. (2), ante, as well as in this Sub- 
 section. 
 
 (k) As in Morley v. Loughnan, [1893] 1 Ch. 736, where, as stated in note (6), ante. 
 Weight, J., decided in favour of the plaintiff on both grounds separately. This case 
 accordingly finds a place also in the notes to Sub-s. (3), ante. 
 
 {1} As in Gibson v. Russell (1843), 2 Y. & C. 104 ; Ahearne v. Hogan (1844), Dru. 310. 
 Both these cases are dealt with in the notes to Sub-s. (4), ante. See also Allen v. Davis 
 (1850), 20 L. J. (CH.) 44 (the case of a dentist). 
 
§ 429, 430 (relation created by circumstances). 397 
 
 relations, such, as that of trusteeship {m), or agency (n), in which cases the 
 two are often separately considered and adjudicated upon, and the decision 
 against the dominant party is based upon each relation, independently of 
 the other. Occasionally imbecility is the sole " weakness " of the servient 
 party of which unconscientious advantage is shown to have been taken (o) ; 
 or the " weakness " of the servient party may have been, not constitutional, 
 but temporary, if it was created by the pressure, importunity, or imposition 
 of the dominant party at the critical time, or consisted in the servient party 
 being " rushed " or hurried into the transaction, without any opportunity 
 for deliberation or for taking counsel of his friends {p) . But whichever of these 
 various forms the " circumstances and conditions " may assume, they must go 
 to show each of the three prerequisites to the establishment of the relation, 
 viz. (1) weakness or disability of " mind, body, or estate " on the one side, 
 (2) advantage taken of that weakness or disability on the other side in the 
 transaction impeached, and (3) the use of unfair or unconscientious means to 
 procure that advantage. 
 
 430. There are certain extreme cases where res ipsa loquitur, and the 
 necessary " circumstances and conditions " are established by a mere reference 
 to the enormity of the transaction itself (q), the provisions and contents of 
 
 (m) As in Orosvenor y. Sherratt (1860), 28 Beav. 659 (where the dominant party was 
 also executor of the will under which the servient party derived an interest, and acted 
 as trustee for her, besides being a person on whom in fact she was absolutely dependent 
 for advice and protection. This was a case of a purchase at an undervalue, made with no 
 advice, or disclosure). 
 
 (m) See Dally v. WenJiam (1863), 33 Beav. 154 (where the dominant party was agent 
 and receiver for the servient party, though Romilly, M.R., did not put it as a principal 
 and agent case : there was non-communication of special knowledge as to the property 
 purchased, and undervalue). 
 
 (o) See WiUan v. Willan (1814), 2 Dow. H. L. 274 (advantage taken of an uncle's 
 bodily and mental imbecility : no independent advice, pressure, &c. ) ; Longmate v. 
 Ledger (1860), 2 Giff. 157 (piu:chase of cottages and land, at an undervalue, from an old 
 farm labourer, a " strange and eccentric creature " who " though not absolutely incom- 
 petent or incapable, was in such need of protection that whoever entered into any contract 
 with him would be bound to show that no unfair advantage had been taken of his weak- 
 ness, and that a fair price was given to him " ; neither of which was held to have been 
 proved : per SxtrABT, V.-C, at pp. 164, 165). We learn from p. 402 of Clarke v. Malpas 
 (1862), 4 De 6. F. & J. 401, that Longmate v. Ledger was affirmed in the H. L. 
 
 (p) This was an important element in the "circumstances and conditions" which 
 raised the presumption of undue influence in Evans v. Llewellin (1787), 1 Cox 333 (per 
 Lord Kenyoii, M.R., at p. 339 : "I lay great stress upon the situation of the parties to it " 
 — an agreement for sale at an inadequate price — ■" and the persons who compose the 
 drama. The plaintiff Thomas in mean circumstances, and totally ignorant of his rights 
 until the moment of the transaction taking place " •- not permitted to consult his friends, 
 and "undue advantage taken of his situation") ; Willan v. Willan, sup, ; Ahearne v. 
 Hogan, cited in note [1), sup. ; Addis v. Campbell (1841), 4 Beav. 401 (where there was 
 actual imposition and pressure, and no independent advice) ; Clarke v. Malpas, sup. 
 (where the transaction, a purchase of cottages from a poor, old, and illiterate man, was 
 rushed through without giving him any time for deUberation, or obtaining advice, at an 
 inadequate price : per Knight-Bbtjcb, L. J., at pp. 403^05) ; Procter v. Robinson (1866), 
 35 Beav. 329 [per Romilly, M.B., at pp. 332-335), affd. (1867), 15 L. T. 431 ; Lewis v. 
 Mills (1914), 30 T. L. R. 438 (moneylender's device to prevent discussion of terms 
 and investigation of methods). 
 
 (q) Lord Habdwickb, L.C, at p. 155 of Chesterfield (Earl of) v. Jannsen (1751), 2 Ves. 
 Sr. 125, mentions, as his second head of fraud, that which is " apparent from the intrinsic 
 nature and subject of the bargain itself ; such as no man in his senses and not under 
 delusion would make on the one hand, and as no honest and fair man would accept on the 
 other; which are inequitable and unconscientious bargains." Illustrations of such 
 
398 
 
 CH. V, SECT. 2, SUB-SS. (5), (6). 
 
 which may be so extravagant and oppressive ex facie as to raise a presumption 
 at once against the dominant party, without inquiring further. It is also a 
 material element in the consideration of the question whether such a pre- 
 sumption should be made, that the instrument embodying the transaction 
 contained, if such be the fact, false recitals or statements of its consideration, 
 or its object and effect, inserted by the dominant party ; such misrepresenta- 
 tions being regarded as betraying a consciousness on the part of the dominant 
 party that the transaction was unrighteous, and could not be justified, if 
 challenged, unless made by these means to appear other than in fact it was, 
 and so amounting to an attempt to mislead not only the servient party into 
 making the gift or contract, but the Court into upholding it, if a judicial 
 investigation should afterwards be demanded (r). Another important con- 
 sideration in this class of case is the fact, if it be so shown, that the dominant 
 party by misrepresentation, calumny, or other active measures, endeavoured 
 (whether successfully or not) to detach the servient party from his natural 
 protectors or advisers, or prevent his access to the relations, friends, or 
 agents (professional or mercantile) to whom he had always previously resorted 
 for guidance and counsel (s). 
 
 431. In certain cases it is shown that two persons, though in different 
 ways, derived advantage from the transaction : in that event, if each used 
 imconscientious means to obtain the advantage, or if one of them induced, 
 or knowingly left, the other to exert his influence over the servient party, 
 the presumption is made against each (t). 
 
 432. In all the instances — they are extremely few — in which the prima 
 facie case made by the servient party was repelled by proof on behalf of the 
 
 " bargains " are : Purcell v. McNamara — see the citation from this case in note (d) to 
 § 429, ante. ; Dunnage v. White (1818), 1 Swanst. 137 {per Pltjmeb, M.E;., at pp. 150, 151) ; 
 MacCabe v. Hussey (1831), 5 Bligh (rr.s.) 715 (at p. 729) ; Ahearne v. Hogan (1840), 
 Dru. 310 {per StroDBN, L.C. (Ir.), at p. 326 ; "the deed itself shows that the transaction 
 was an improper one "). 
 
 (r) As in Bridgeman v. Green (1757), Wilm. Opns. & Judgts., 58 (fictitious consideration 
 stated in the deed) ; Purcell v. McNamara, cited in note (d) to § 429, ante (false recitals) ; 
 Dunnage v. White, sup. {per Plthmek, M.R., at pp. 150, 151 : false recitals and misleading 
 statements) ; Ahearne v. Hogan, sup. (where Stigden, L.C. (Ir.), after noticing, at pp. 323- 
 326, the various false recitals in the deed which showed the dominant party's consciousness 
 of his liability to the equitable doctrine unless he could put an appearance upon the 
 transaction which would take it outside the rule, states emphatically, at p. 326 : " in any 
 case which may come before me ... in which one party may exercise influence over 
 the other, . . . whenever there is a dealing between two parties, one of whom is subject 
 to the influence of the other, I shall expect to find a fair and correct statement of the 
 transaction upon the face of the deed itseU "). 
 
 («) See Tvnsleton v. Griffiths (1716), 1 P. Wms. 309 (where the purchaser of the 
 reversion dissuaded the vendor from selling it to his father) ; Osmond v. Fitzroy (1731), 
 3 P. Wms. 129 (where " the secreting of the bond from the parents " was held to be " a 
 further evidence of fraud " : per Jekyli., M.R., at p. 131) ; Bridgeman v. Green, sup. (where 
 the valet induced his master to separate from his wife) ; Euguenin v. Baseley (1807), 14 
 Ves. 273 (where the dominant party induced the lady to get rid of her solicitors, and employ 
 his own, by false aspersions on their skill and competence) ; MacCabe v. Hussey (1831), 
 5 BUgh (n. s.) 715 (where the dominant party misrepresented and aspersed the conduct 
 of the servient party's son ; see p. 728) ; Middleton v. Sherburne (1841), 4 Y. & C. (Exch. 
 in Bq.) 358 (where the dominant party induced the servient party to expel his nieces from 
 his house). 
 
 (<) As in the cases cited in note {h) to § 429, ante, and also in Procter v. Bohinson (1867), 
 15 L. T. 431 (where the solicitor, as well as the wife, influenced the husband). 
 
§§ 430-434 (bakgains with " expectants "). 399 
 
 dominant party that, " in point of fact," the transaction was " fair, just 
 and reasonable," the latter has been held entitled to judgment (w). 
 
 433. Further, any other of the defences available to a dominant party 
 in the case of the " suspected " relations, is of course equally open to a domi- 
 nant party in the present type of relation, such as " confirmation," or " family 
 arrangement." Of the raising of the latter plea there is one example, though 
 the attempt — a rather ludicrous one under the circumstances of the case — 
 wholly failed (v). 
 
 Subs. (6). The Relation hetween an " Expectant " and a Person dealing with 
 him in respect of his Expectancy. 
 
 434. It has from the earliest times been established that any unconscion- 
 able dealing with an " expectant heir," or a reversioner, for the purchase 
 of, or otherwise in relation to, his expectancy or reversionary interest, gives 
 rise to a presumption against the person so dealing which, unless repelled by 
 affirmative evidence of the propriety of the transaction in all respects, will 
 entitle the expectant heir, or reversioner, to relief. As so stated, the rule 
 governing this type of case would seem to be the source as that which 
 governs any other relation constituted by the particular " circumstances 
 and conditions " ; but, inasmuch as the rule has been applied in a special 
 manner, as will be seen presently, to bargains with expectant heirs (w), 
 and such application has been based on a special theory of its own (x), and 
 has further been the subject of special statutory modification (y), it has been 
 thought proper to consider this type of case separately, and to assign to it 
 in this commentary the same exceptional position which has been assigned 
 to it in successive judicial expositions : for there can be no doubt that, whether 
 the description be correct or not {z), and whether, assuming it to be correct, 
 there is any rational justification for the doctrine or not (a), the Courts 
 
 (u) As it was in Kingsland (Viscount) v. Barnevnll (IIOQ), 4 Brown P. C. 154 ; Pratt v. 
 Barker (1826), 1 Sim. 1 ; Nicol v. Vaughan (1833), 1 CI. & Fin. 495 ; Hunter v. Athina 
 (1834), 3 My. & K. 113 ; Be Coomber, [1911] 1 Ch. 723, C. A. ; J. King, Ltd. v. Hay Ourrie 
 (1911), 28 T. L. B. 10. 
 
 (v) Dunnage v. White (1818), 1 Swanst. 137. See the citation in note (i), to § 429, ante. 
 For an instance of a successful plea of confirmation, see Cole v. Oibhons (1734), 3 P. Wms. 
 290 (per Lord Taibot, L.a, at p. 293). 
 
 (w) So Denman, J., seems to have considered, judging from his observations at pp. 702, 
 703 of Nevill v. SneUing (1880), 15 C. D. 679 (" the real question in every case seems to 
 me to be the same as that which arose in the case of expectant heirs and reversioners 
 before the special doctrine in their favour was established "). 
 
 (x) See § 435, post. 
 
 (y) See § 437, post. 
 
 (z) In the same way, and, perhaps, with no more justification, the Courts have per- 
 sistently described a surety as " a favoured debtor," and a prisoner as entitled to " the 
 benefit of the doubt." All these are extremely unfortunate phrases : jiirisprudence does 
 not distribute " favours " or " benefits " ; it enforces and secures " rights." It is not of 
 grace and favqur that the surety is held not liable on a contract that he never made, or 
 that the accused is held not guilty of that which has not been proved against him. And so, 
 it may be argued, an " expectant " is not, or at aU events ought not to be, set apart from 
 or placed above, any other servient party of whose weakness unconscientious advantage 
 has been taken. 
 
 (a) As to this, see § 435, post. 
 
400 CH. V, SECT. 2, SUB-S. (6). 
 
 have in fact expressly described expectant heirs, and reversioners, as the 
 objects of their peculiar favour (b). 
 
 435. The doctrine as to " catching " or " unconscionable " bargains with 
 " expectants " has, in the two leading cases on the subject, been stated 
 by Lord Hardwicke, L.C. (c), and Lord Selboene, L.C. (d), in language 
 which (save for the necessary substitution of specific terms for general) is 
 identical with that used in stating the general proposition applicable to all 
 relations constituted by " the circumstances and conditions of the parties 
 contracting " (e). That is to say : given the " expectancy," the " expectant," 
 the dealer, the " bargain " between the parties relative to the expectancy, 
 and circumstances and conditions indicating an unfair and unconscientious 
 advantage taken by the dealer of the expectant's distress, a primd facie 
 presumption is raised against the dealer which will entitle the expectant 
 to relief, unless the dealer can rebut the presumption by establishing that 
 in point of fact the bargain was, in Lord Selboene's phrase, " fair, just, and 
 reasonable." The theoretical foundation of the proposition is, broadly speak- 
 ing, the 'same "public policy," in the proper sense of the word (/), on which 
 the whole doctrine of abuse of influence is based. But, conscious, perhaps, 
 of the need for a more detailed justification of their somewhat special and 
 severe treatment of bargains with expectants, the equity judges of the 
 eighteenth century, and particularly Lord Haedwicke, were at great pains 
 to point out the precise particulars in which public interests are served and 
 safeguarded by that treatment. In the first place, it was said that, 
 i#the exercise of its duty to suppress and mitigate the most prominent evils 
 of the day, the Court is bound to use its best endeavours to restrain the follies, 
 extravagances, and moral imbecility of one of the two classes of persons who 
 become parties to these bargaius, the rapacity, extortion, and fraud of the 
 other, and the gambling in human lives which is the vice of both. Then, 
 from the point of view of the " expectant," it was stated to be for his good, 
 and indirectly for the good of the community, that he should not be 
 " devoured," and, particularly, should not be prevented from resorting to 
 the aid and advice of his natural guardians, protectors, and advisers, and 
 so deprived of all chance of either financial relief on reasonable terms, or 
 moral reformation. Again, the country is deeply concerned, — and this is the 
 point on which Lord Haedwicke laid special emphasis, — in the preservation 
 
 (6) As, for instance, in Chesterfield {Earl of) v. Jannsen (1751), 2 Ves. Sr. 125 (per Lord 
 Haedwicke, L.C, at pp. 156, 157, where he describes the class of case in question as his 
 " last head of fraud," separating it from his third " head," which is that dealt with in 
 Sub-s. (5), ante, but in such terms as to show no real difference between them) ; Oowland v. 
 De Faria (1810), 17 Ves. 20 (per Grant, M.R., at pp. 24, 25) ; Bromley v. Smith (1859), 26 
 Beav. 644 (per RoMiLLy, M.B., at p. 662) ; Bae v. Joyce (1892), 29 L. R. (Ir.), 500 (per 
 FiTZGiBBON, L.J., (Ir.) at p. 523). And note that this last case was after 1867, the date 
 of the statute referred to in § 437, post, which deprived the " expectant " of the only 
 privilege which he could be said to have ever enjoyed over other servient parties. 
 
 (c) See the reference to Chesterfield (Earl of) v. Jannsen, sup., in the last note. 
 
 (d) At p. 491 of Aylesford (Earl of) v. Morris (1873), 8 Ch. App. 484. 
 
 (e) For this proposition, see § 427, and § 429, atite. 
 
 ( f ) Viz. that which is ascribed to it by Lord Haedwicke, L.C, at p. 156 of Chesterfield 
 '{Earl of) V. Jannsen, sup. The passage is cited in note (y) to § 646, post. 
 
§§ 434, 435 (baegains with " expectants "). 401 
 
 of ancient family estates, which cannot be secured if the ancestor is allowed 
 to be deceived and defrauded by these clandestine transactions. This last 
 consideration may strike modern minds as a little extravagant and senti- 
 mental: the real injury to the ancestor, or other person from whom the 
 future benefit is " expected," is now described in more prosaic and practical 
 terms as consisting, not in the bargain being kept secret from him when it 
 is made, but rather in the probability of its being traded on by the usurer, 
 after being made, to extort payment from him under fear of exposure. All 
 these several views, or combinations of them, have been expressed in the 
 various expositions which from time to time have been given of the theoretical 
 basis of the doctrine (g). But the substance which underlies the different 
 
 (,g) Thus, in Chesterfield {Earl of) v. Jannsen (1751), 2 Ves. Sr. 125, Lord Haedwiokb, 
 L.C. (at p. 154), bases the doctrine, first, on the ground that " such bargains proceed 
 from excessive prodigality on the one hand, and extortation on the other ; which are 
 vitia temporis, and pernicious in their consequences ; and then it is the duty of the Court, 
 if it can, to restrain them," and (at p. 157) on the further, and distinct, ground to which 
 he, and other judges of his time, obviously attached the greatest importance, that " in 
 most of these cases have concurred deceit and illusion on other persons not privy to the 
 fraudulent agreement : the father, ancestor, or relation from whom comes the expectation 
 of the estate, has been kept in the dark : the heir or expectant has been kept from 
 disclosing his circumstances, and resorting to them for advice, which might have tended to 
 his relief and also reformation. This misleads the ancestor ; who has been seduced to leave 
 his estates not to his heir or family, but to a set of artful persons who have divided the spoil 
 beforehand." It is here that " public utiUty " comes in (see the passage, at p. 156, which 
 is cited in note (y) to § 646, post). Lord Selborne, L.C, in Aylesford {Earl of) v. Morris 
 (1873), 8 Ch. App. 484, follows Lord Habdwicke, L.C, closely in his exposition of the 
 three purposes for which relief is given, viz. suppression of the vitia temporis on both sides ; 
 protection of the expectant against being cut off from all chance of relief or reformation at 
 the hands of his natural advisers ; and protection of the ancestor from fraud, and the 
 family from ruin. At p. 491, he speaks of the presumption which is made against " those 
 who trade upon the follies and vices of unprotected youth, inexperience, and moral 
 imbecility," whilst, at pp. 491, 492, he points out that "the victim comes to the snare 
 . . . excluded, and known to be excluded, by the very motives and circumstances which 
 attract him, from the help and advice of his natural guardians and protectors, and from 
 that professional aid which would be accessible to him, if he did not feel compelled to 
 secrecy," and, at p. 492, he notices, without expressing any disagreement with it, the view 
 entertained by " great judges " of an earUer time that " there is a principle of public policy 
 in restraining this ; that this system of undermining and blasting, as it were, in the bud 
 the futures of families, is a public as well as a private mischief ; that it is a sort of indirect 
 fraud upon the heads of families from whom these transactions are concealed." Cp. 
 Cole V. Gibbons (1734), 3 P. Wms. 290, where Lord Talbot, L.C, at p. 292, enlarges upon 
 " the poUoy of the nation to prevent what was a growing mischief to ancient families, that 
 of seducing an heir apparent from a dependence on his ancestor, which would probably 
 have supported him, . . . this tended to the manifest ruin of famUies." In Twisleton 
 V. Griffith (1716), 1 P. Wms. 309, Lord Cowpbk, L.C, rests the doctrine on the duty of 
 the Court " to discourage a growing practice of devouring an heir," and to the objection 
 that " at this rate an heir without difficulty would not sell a reversion," replies that his 
 inability to do so is exactly what the policy of the Court requires, for " this might force 
 an heir to go home, and submit to his father, or to bite on the bridle, and endiu'e some 
 hardships ; and in the meantime he might grow wiser, and be reclaimed " (p. 312). In 
 dealing with the less objectionable form of bargain, where the dealer is not a purchaser 
 on obviously extortionate terms or a mortgagee of a reversion, but is gambling 
 on the event, and stands to lose heavily, if the event goes against him. Lord Habd- 
 wicke, L.C, at p. 135 of Barnardiston v. Lingood (1740), 2 Atk. 133, says that, even 
 in these cases, the relief is given " with the greatest justice in the world, for the sake of the 
 public, to prevent people's gaming, as it were, to the prejudice and damage of young 
 improvident persons, and the heads of families." Lastly, in Nevill v. Snelling (1880), 
 15 C. D. 679, if (which, however, seems doubtful) this case is to be regarded as an 
 " expectancy " case, the circumstances were such that Lord Haedwicke's theory 
 B.N.D. 2 D 
 
402 CH. V, SECT. 2, SUB-S. (6). 
 
 forms in which the theory has been stated is, that it is for the benefit of society 
 at large that a class of persons who, in the picturesque phraseology of Lord 
 Thuelow, L.C, are in a state of constructive infancy (h), and on whom the 
 circumstances of the cases impose a sort of diminutio capitis, should be 
 protected against the depredations of those whom the misanthrope 
 stigmatized as " bawds between gold and want," and equity judges, as " a 
 set of artful persons who have divided the spoil beforehand," " those who 
 trade upon the follies and vices of unprotected youth," or " common 
 and professed annuity-mongers who deal in the distresses of mankind" (i). 
 No one has put forward, as one of the elements in the " public utility " 
 involved, the possible peril to the life of the ancestor which is, in some cases, 
 the event on which the wager is to be won or lost ; though in Koman law 
 this was expressed to be the basis of the famous Senatus-consultum Mace- 
 donianum (j), and, in our own jurisprudence, was the avowed foundation of 
 the statutes rendering life insurances without any insurable interest illegal and 
 void. It should be observed here that, with reference to dealings in rever- 
 sions, as distinct from expectancies in the strict sense of the word, grave 
 doubts, notwithstanding the contrary opinion of Lord Cowpee {k), may well 
 be entertained, and in fact have on more than one occasion been judicially 
 expressed (I), as to whether there is any reason in public policy for the special 
 doctrine, or for its specially rigorous application to the cases in question, and 
 whether, on the contrary, both public policy and private justice do not tend 
 in the opposite direction. Nothing is more certain than that restrictive rules, 
 whether judicial or legislative, which are directed against a particular class 
 of the community, merely aggravate the oppression which they are intended 
 to curb ; for the extortioner is driven to add to the burden which he has 
 
 •of the fraud practised on the ancestor could have no application, but Denman, J., rested 
 his decision on a ground which may seem more sound, and less fanciful, to modern minds, 
 viz. the duty of the Court to protect the ancestor, not from concealment in the beginning, 
 but from being forced to pay by fear, or under threats, of exposure afterwards (see 
 pp. 687, 694, 695, 704). 
 
 (h) At p. 9 of Owynne v. Beaton (1778), 1 Brown C. C. 1 (" there is a policy in justice, 
 protecting the person who has the expectancy, and reducing him to the situation of an infant, 
 against the effects of his own conduct "). 
 
 (i) The expressions used by Lord Habdwicke, L.C, and Lord Selboene, L.C., in the 
 citations from their judgments contained in note (g), sup., and by Lord THrrBLOW, L.C, 
 at p. 324 of Fox v. Machreth (1788), 2 Cox 320, respectively. 
 
 (j) This S. C is discussed, together with the various judicial references to it, in App. C, 
 §§ 685, 698, post. 
 
 (h) Cited in note (g), sup. 
 
 (I) As in Davis v. Duhe of Marlborough (1818), 2 Swanst. 108 (per Lord Eldon, L.C, 
 at p. 139 : "in many cases those who have obtained relief from their annuities have really 
 taken as much advantage of the annuitants as those annuitants have taken of them ") ; 
 Shelly V. Nash (1818), 3 Madd. 232 (per Leach, V.-C, at p. 236 : " the principle and the 
 policy of the rule may be both equally questionable ") ; Wood v. Abrey (1818), 3 Madd. 417 
 (per Leach, V.-C, again, at p. 422 : " the poUoy of this rule, as to reversions, may be well 
 doubted ; and if the cases were looked into, it might be found that the rule was only 
 originally referred to expectant heirs, and not to reversioners," — which is a correct 
 surmise as to the application, but not as to the expression, of the rule — see note (t) to 
 § 438, post) ; Amorough (Earl of) v. Trye (1840), 7 CI. & Ein. 436 (per Lord Cotten- 
 ham, L.C, at p. 457) ; Jvdd v. Qreen (1875), 45 L. J. (oh.) 108 (per Bacon, V.-C, at p. 
 109). 
 
§§ 435-437 (baegains with " expectants "). 403 
 
 already laid on his victim a fuitter load sufficient to cover the extra risk (m). 
 The tooth of usury, says Bacon, must be " grinded, that it bite not too 
 much " : but the action of the legislative, if not of the judicial, grindstone 
 has usually been to sharpen, and not to blunt, the tooth of usury. 
 
 436. The history of the doctrine dates from very early times. The 
 jurisdiction was exercised as far back as the days of the Star Chamber (m), 
 that great censorian court of criminal equity, as it has been styled, the special 
 function of which was to deal with powerful offenders not easily reached, or 
 not adequately punishable, by the ordinary process of the Courts. It has, 
 
 ■ from time to time, been contended (quite unsuccessfully in the one case, and 
 with only partial success in the other) that this ancient jurisdiction has been 
 twice invaded or curtailed by the legislature, first in 1854, and again in 1867. 
 In the former year, the Usury Laws Eepeal Act, 1854 (o), was passed ; and it 
 was thereupon argued, in a series of cases, that this statute set the dealer in 
 expectancies free to make any bargains on any extortionate terms he 
 pleased, without interference by the Courts. This argument could only 
 succeed on the hypothesis that the sole rule of law which ever enabled 
 the Court to lay its restraining hand on the dealer was the rule contained 
 in the repealed statutes against usury. On the hypothesis being, as it was 
 in all the cases referred to (p), condemned as a sheer fallacy, the argument 
 necessarily fell with it. There had always existed the ancient doctrine of 
 equity, large and general in scope and flexible in nature, which at a later 
 stage was to a certain extent assisted by the more specific, defined, and 
 rigid provisions of the usury statutes, giving an entirely independent and 
 concurrent, and in some cases a more summary and effectual, remedy. The 
 only effect of the abolition of this partial and ancillary remedy was to leave the 
 more ancient and comprehensive jurisdiction exactly as it had originally stood : 
 so far from diminishing the need for its exercise, the Act of 1854 imposed 
 upon the Courts the duty of enforcing it with greater vigilance than ever. 
 
 437, The second of the statutes referred to is the Sales of Keversions 
 
 (m) This is acknowledged by RoMiLLy, M.B., at p. 665 of Bromley v. Smith (1859), 26 
 Beav. 644, but he says that it cannot be helped. The same result has attended the attempts 
 of the legislature to curb the usurer, such as the BiUs of Sale Acts, and the Moneylenders 
 Acts. 
 
 (n) As we are reminded by Lord Nottingham, L.C, in Berney v. Pitt (1680), 2 Swanst. 
 143 n. ("the Star Chamber used to punish it, and the Court did always relieve against it "). 
 (o) 17 & 18 Vict. c. 90. 
 
 (p) Croft V. Graham (1863), 2 De G. J. & S. 155 (per Tubnbe, L. J., at p. 161) ; Tyler v. 
 Yates (1871), 6 Ch. App. ,665 (per Lord Hatheely, L.C, at pp. 668, 669) ; Aylesford 
 (Earl of) V. Morris (1873), 8 Ch. App. 484 (per Lord Selbobnb, L.C, at p. 490) ; Benyon v. 
 Cook (1875), 10 Ch. App. 389 (per Jbssel, M.R., at pp. 391, 392) ; Nenill y. SneUing (1880), 
 15 C D. 679 (per Denman, J., at pp. 697, 698) ; Bae v. Joyce (1892), 29 L. R. (Ir.) 500 
 (per Walker, L.C. (Ir.), at pp. 514, 515, and Fitzgibbon, L.J., (Ir.) at pp. 524, 525). 
 In Chesterfield (Earl of) v. Jannsen (1751), 2 Ves. Sr. 125, Lord Haedwioke, L.C., speaking 
 of " the acts of parliament instanced," which were the Usury Acts then in force, says (at 
 p. 158) " that they will be found to be made (many of them) not for want of power in this 
 Court to give relief in many of these contracts, but to make them void in law, to give the 
 party a short remedy against them." Accordingly, when this short remedy was aboUshed, 
 " from that moment," says Sttjabt, V.-C, at p. 795 of Barrett v. Harbley (1866), L. R. 2 
 Eq. 789, " the jurisdiction of the Court which prevailed independently of the usury laws 
 was likely to be called into active operation," and " to a greater extent than formerly." 
 And to the same effect, Kay, J., at pp. 459, 460 of James v. Kerr (1888), 40 0. D. 449. 
 
i04 CH. V, SECT. 2, SUB-S. (6). 
 
 Act, 1867 {q), by s. 1 of wliicli it is enacted that " no purcliase, made bond 
 fide and without fraud or unfair dealing, of any reversionary interest in real 
 or personal estate, shall hereafter be opened or set aside merely on the ground 
 of undervalue," and, by s. 2, that " the word purchase shall include every 
 kind of contract, conveyance, or assignment, under or by which any beneficial 
 interest in property may be acquired." These provisions undoubtedly 
 effected a change in the law, to the extent of abolishing an extravagant sub- 
 rule which had grown out of the doctrine, and so removing what was after 
 all only an unhealthy excrescence, but they did not in the slightest degree 
 repeal the doctrine itself, and all the arguments to this effect which 
 have been persistently advanced since the passing of the Act have invariably 
 failed (r). 
 
 438. It so happened that the first class of persons who invoked the juris- 
 diction, and to whom the doctrine was therefore first applied, were heirs, 
 apparent or presumptive (s) : whereupon, in a manner very characteristic 
 of English terminological habits, the doctrine took its title from the earliest 
 subject of the experiment, instead of from its governing principle, with the 
 result that, for a time, it was thought inapplicable to any transactions 
 except " bargains with expectant heirs," that is to say, bargains with those 
 who, whatever the description of heirdom might be, were " heirs " in the 
 strict legal sense of the word (t). This limitation, however, was soon pro- 
 nounced to be unwarranted by the principle and reason of the rule, which 
 equally applies to remainderman or reversioner, whatever the exact nature 
 and extent of the remainder or reversionary interest may be, and, indeed, 
 to any person who has any sort of expectation of deriving benefit from the 
 death of an ancestor or relative, whether that expectation is based on the 
 express provisions of any instrument, or on the law of descent, or is merely 
 an expectation in the popular, and not the legal, sense of the term. As soon 
 as these successive applications of the doctrine were made, as they were 
 
 iq) 31 Vict. 0. 4. 
 
 (r) See Tyler v. Yates, sup. {per Lord Hatherley, L.C, at pp. 668, 669) ; Aylesford 
 {Earl of) V. Morris, sup. {per Lord Selboene, L.C, at p. 490) ; Fry v. Lane (1880), 40 C. D. 
 312 {per Kay, J., at p. 321) ; Eae v. Joyce, sup. {per Walker, L.C. (Ir.), at pp. 515-517). 
 As to the exact nature and extent of the alteration in the law which really was effected by 
 the statute, see § 442, post. 
 
 (s) As, for instance, in Berney v. Pitt (1680), 2 Swanst. 143 n., where the expectant 
 promised to pay the moneylenders " five to one," if he survived his father ; Wiseman v. 
 Beahe (1690), 2 Vern. 121, where the expectant bargained to pay the dealer " ten for one " 
 upon the death of his uncle, a tenant for hfe of real estate, in the event of the uncle dying 
 without issue before the expectant; Chesterfield {Earl of) v. Jannsen (1751), 2 Ves. Sr. 
 125, where John Spencer, having an expectation of a great increase of fortune on the 
 death of his grandmother, the Duchess of Marlborough — " she was a good old life, and 
 he but a bad young one " — agreed, in consideration of a loan of £5000, to pay the dealer 
 £10,000 on the death of the Duchess, but nothing if he predeceased her (p. 124). 
 
 («) Thus in Cole v. Gibbons (1734), 3 P. Wms. 290, Lord Talbot, L.C., at pp. 292, 293, 
 declined to apply the doctrine to the case of one who was not an heir, apparent or pre- 
 sumptive, but a reversioner only, and held that the case fell within the ordinary rules of 
 the Court, as described in Sub-s. (5), ante. A few years later, Lord Habdwicke, L.C, in 
 Freeman v. Bishop (1740), 2 Atk. 39, pointed out that it is immaterial whether the 
 expectancy comes to the expectant " as heir to his father, or by descent, or from any other 
 relation," and, later stiU (see the next note), he expressly included reversioners. 
 
§§ 437-439 (bargains with " expectants "). 405 
 
 in a variety of authorities (m), it became obvious how ridiculously incomplete 
 is the title — which, however, still survives — "catching or unconscionable 
 bargains with expectant heirs," inasmuch as reversioners and remaindermen, 
 who are certainly not expectant heirs, and, indeed, are strictly the very 
 antithesis of them, are undoubtedly within the doctrine, the feature which 
 lies at the root of that doctrine, viz. the fact that the subject of the bargain 
 is not a possession, but a chance, a hope, or an expectation of possession in 
 the future, being common to both classes of case. This discrepancy between 
 the label and the thing supposed to be designated by it has been noticed by 
 Jessel, M.R., in the course of an exhaustive definition of the persons to whom 
 the special protection of the Court is extended, as (1) any one who has a 
 remainder, vested or contingent ; (2) any reversioner ; (3) " every one who 
 has the hope of succession to property of an ancestor, ... by reason of his 
 being the heir apparent or presumptive " ; and (4) every one who has the 
 like hope " by reason merely of the expectation of a devise or legacy on 
 accoimt of the supposed or presumed afEection of the ancestor or relative " {v). 
 But the existence of this spes successionis, of whatever kind that spes may be, 
 though sufficient, is at the same time necessary, to justify the application of 
 the special doctrine. If the element of futurity and contingency is wanting, 
 that is, if the property in question is in possession, the alleged " expectant " 
 is no " expectant " at all, and his rights are regulated and determined by 
 the same considerations as the rights of any other servient party claiming 
 to be such in virtue of the " circumstances and conditions " of the case (w). 
 It will be noticed that the terms " expectant " and " expectancy " have been, 
 and they will continue to be, used in this discussion as generic terms to 
 include all the species enumerated in the above classification, for which use 
 there is some warrant in the language of Lord Haedwicke (x), and others. 
 
 439. The doctrine is said to be applicable to any unconscionable bargain 
 with an expectant " with respect to," or " relative to," his expectancy. 
 The expressions " with respect to," and " relative to," which are used in 
 several of the authorities, are of a designed generality. They are wide 
 enough, as has been held, to include not only the common case of a purchase 
 or mortgage of, or charge on, an expectancy, but also the following : — an 
 advance which the dealer in fact makes to the expectant on the credit or faith 
 of his expectancy, though there may be nothing which is, or perhaps can be, 
 
 {u) Tor instance, the expectant who obtained relief was a remainder-man in Barnard- 
 iston V. Lingood (1740), 2 Atk. 133, and in Aylesford {Earl of) v. Morris (1873), 8 Ch. 
 App. 484. He was a reversioner in Gwynne v. Heaton (1778), 1 Brown C. C. 1, in Neshitt 
 V. Btrridge (1863), 32 Beav. 282, in Benyon v. Cook (1875), 10 Ch. App. 389 n., and, 
 generally, in the great majority of the more modern cases. Even as early as the date of 
 Chesterfield (Sari of) v. Jannsen (1751), 2 Ves. Sr. 125, though that was not a reversioner's 
 case. Lord Habdwickb, L.C, includes " reversioners " as subjects of the relief (at p. 156 : 
 " catching bargains with heirs, reversioners, or expectants "). 
 
 (v) At p. 391 n. of Benyon v. Gooh (1875), 10 Ch. App. 389 n. 
 
 (w) See § 440, and notes (d) and (e) thereto, post. 
 
 (x) See the citation in note (u), sup. By the expression " heirs, reversioners, or 
 expectants " it was obviously meant, first, to name the two most important, and mutually 
 exclusive, species, and then to conclude with a reference to the genus " expectants," 
 which comprehends these, and other, species." 
 
406 CH. V, SECT. 2, SUB-S. (6). 
 
 the subject of an instrument of charge (?/), and whether " it is said so, or 
 not " (2) ; a transaction which is nothing but a wager on survivorship (a) ; 
 and even a series of sales of goods (sufficient to indicate a practice) by the 
 dealer to the expectant at exorbitant prices, on the (though unexpressed and 
 unavowed) faith of the expectancy (6). 
 
 440. To bring himself within the principle and (if it be so) the privilege 
 of the doctrine, the burden is on the servient party to establish that he was 
 an " expectant," within the meaning of that term above stated (c), at the 
 time of the bargain. If the property in question was not in reversion, or 
 " expected," but in possession, he must succeed, if at all, in some other 
 character than that of an expectant : he is not within the special class of 
 servient party now under consideration (d). It is enough, however, if a 
 substantial part of the property consisted of reversionary interests, and in 
 that case the " dealer " cannot escape on the mere ground that property in 
 possession was thrown in, and the bargain related to mixed and composite 
 interests (e). 
 
 441. Secondly, the expectant must prove that the alleged bargain was 
 of the character above indicated (/), and was made with him by the dealer 
 with respect to, or on the faith and credit (expressly or tacitly) of the expect- 
 ancy. If, or to the extent to which, he fails in establishing this, he fails to 
 bring himself within the doctrine (g). 
 
 442. Lastly, the necessary " circumstances and conditions " must be 
 
 iy) As in Croft v. Graham (1863), 2 De G. J. & S. 155 ; Aylesford {Earl of) v. Morris 
 (1873), 8 Ch. App. 484 {per Lord Selboene, L.C, who, at p. 497, points out the utter 
 immateriality of the fact that there was no direct dealing with the expectant's estate in 
 remainder, it being established that in truth the plaintiff " was trusted on the credit of his 
 expectations." Indeed, as he adds at pp. 497, 498, the tacit, but real, trust thus given 
 was far more dangerous, and a more fit subject for the application of the doctrine, than if 
 there had been an express charge) ; Nevill v. SnelUng (1880), 15 C. D. 679. 
 
 {z) The expression of Lord Hahdwicke, L.C., cited and adopted by Lord Selboene, 
 L.C., at p. 497 of Ayleaford {Earl of) v. Morris, sup. 
 
 (o) See the cases cited in note {s) to § 438, ante. 
 
 (6) These were the circumstances in Freeman v. Bishop (1740), 2 Atk. 39, decided by 
 Lord Hardwickb, L.C. See also Berney r. Pitt (1680), 2 Swanst. 143 n., which was a case 
 of combined loans and sales : that is to say, the dealer, having agreed to make the advances, 
 purported to implement his agreement by sales of wine, cambric, jewels, &c., at exorbitant 
 prices (more than four times the value of the goods). 
 
 (c) See § 438, ante. 
 
 {d) See Webster v. Cook (1867), 2 Ch. App. 542 {per Lord Chelmsfoed, L.C, at pp. 646, 
 547), where only property in possession was proved. In Wood v. Abrey (1818), 3 Madd. 
 417, the alleged "expectant" joined with his father, the tenant for life, in selling 
 the property, and it was held that he was not an " expectant," within the meaning and 
 mischief of the rule {per Leach, V.-C, at pp. 422, 423 : " the rule has no application here. 
 It proceeds upon the notion that he who has only a future interest to sell does not meet a 
 purchaser upon equal terms. But here the father, tenant for life, and his son, tenant in 
 tail by remainder, concurring together to sell the estates, form a vendor with a present 
 interest, and meet a purchaser with the same advantages as if a single person had the 
 whole power over the estate "). 
 
 (e) See Davis v. Duke of Marlborough (1818), 2 Swanst. 108 {per Lord Eldob-, L.C., at 
 p. 154) ; Portmore {Earl of) v. Taylor (1831), 4 Sim. 182 {per Shadwbix, V.-C, at pp. 208- 
 210) ; Nesbitt v. BerridMlSQZ), 32 Beav. 282 {per Romiixy, M.R., at pp. 286, 287). 
 
 (/) In§ 439, ante.^ 
 
 (g) Thus, in Tottenham v. Green (1863), 32 L. J. (cH.) 201, the plaintiff, as to such of the 
 securities there in question as were not post-obit bonds, was held not to be an " expectant " 
 {per Wood, V.-C, at p. 204). 
 
§§ 439-442 (bargains with " expectants "). 407 
 
 sliown, as in the case of any other relation of influence which is not one 
 of the " known " or " suspected " relations. In the present class of case, 
 these " circumstances and conditions " may be broadly described, in the 
 language of Lord Hardwicke, L.C, as " weakness on one side, usury on 
 the other, or extortion or advantage taken of that weakness " (A). The 
 " weakness " always takes the form of financial difficulties and distress, 
 coupled with, in nearly every case, youth, and the vices, follies, and extrava- 
 gances of youth, or moral imbecility generally ; and the " extortion " or 
 " advantage " is ordinarily established by proof that the usurer or other 
 dealer, being aware of the expectant's distress and other " weakness," and 
 also his expectancy, traded on such knowledge to obtain a contract at an 
 unjust or unfair price, or otherwise to extort exorbitant terms, without ex- 
 plaining to the expectant their effect, or permitting him to resort to his natural 
 protectors and advisers for aid or guidance, and without making candid dis- 
 closure, either to him or to them, of all material circumstances. Whenever 
 such facts as these are proved in evidence, a prima facie case is established 
 of an " unconscionable bargain " within the meaning of the rule, which, 
 unless rebutted, has always been held to entitle the expectant to relief (i). 
 
 {h) At p. 157 of Chesterfield {Earl of) v. Jannsen (1751), 2 Ves. Sr. 125. So, at p. 135 
 of Barnardiston v. Lingood (1740), 2 Atk. 133, lie had previously said that " what the 
 Court is guided by in all these oases is the taking of an undue advantage of an heir's being 
 in distressed and necessitous circumstances, and this is the principal ground of their 
 decrees." 
 
 (i) As in Berney v. Pitt (1680), 2 Swanst. 143 n. (where the expectant was " circum- 
 vented and beset," and the usurer forced upon him the dealings described in note (6) to 
 § 439, ante) ; Twisleton v. Griffith (1716), 1 P. Wms. 309 (where on the one side there was 
 distress and debt, and, on the other, a person who " took upon himself to advise and direct 
 the plaintiff in everything, and professed great friendship for him," and bought the 
 expectant's remainder, after dissuading him from selling it to his father) ; Barnardiston v. 
 Lingood, sup. (where the defendant " drew in the plaintiff," who was in " the utmost 
 distress " : per Lord Hardwicke, L.C, at pp. 134, 135) ; Gwynne v. Heaton (1778), 
 1 Brown C. C. 1 (where the terms were " very grossly unequal," and " the purchaser, 
 knowing the actual state of the lives for which he was bargaining, the inequality which 
 that introduced, and the indigence of the man with whom he was contracting," made an 
 " enormous " bargain with him at an inadequate price : per Lord Thtjblow, L.C, at 
 pp. 7, 10) ; Peacock v. Evans (1809), 16 Ves. 512 (" advantage taken " of " a distressed 
 man," and undervalue : per Grant, M.E., at pp. 515-517) ; Oowland v. De Faria (1810), 17 
 Ves. 20 (distress, inexperience, and undervalue) ; Portmore (Earlof) v. Taylor (1831), 4 Sim. 
 1 82 (" grinding distress," knowledge of that distress, and undervalue : per Shadwell, V.-C, 
 at pp. 207, 212) ; Edwards v. Browne (1845), 2 Coll. 100 (" straitened circumstances," and 
 undervalue : per Knight-Bruce, V.-C, at p. 106) ; Talbot v. Staniforih (1861), 1 J. & H. 
 484 (purchase at an undervalue from an expectant who " was under such extreme pressure 
 from his creditors as to be driven from the country, and to be in danger of arrest " : per 
 Page-Wood, V.-C, at p. 503) ; Croft v. Graham (1863), 2 De G. J. & S. 155 (loans at 
 exorbitant interest to an extravagant and embarrassed undergraduate) ; Tyler v. Yates 
 (1871), 6 Ch. App. 665 (on the one side, youth, ignorance, distress, and helplessness ; on 
 the other, usury on extortionate terms, and concealment and misrepresentation of material 
 facts, and of the expectant's rights and liabilities : per Lord Hatherley, L.C, at pp. 670, 
 671) ; Aylesford (Earl of) v. Morris (1873), 8 Ch. App. 484 (youth and distress on the one 
 side, and, on the other, usury of the most oppressive and extortionate character, and a 
 bargain unconscionable on the face of it : per Lord Selboene, L.C, at pp. 492-495) ; 
 Benyon v. Cook (1875), 10 Ch. App. 389 n. (where the circumstances were similar to those 
 in the last case) ; Fry v. Lane (1888), 40 C D. 312 (poverty and ignorance of the expectant, 
 and undervalue, and absence of independent advice: per Kay, J., at pp. 322-324); 
 Brenchky v. Higgins (1901), 70 L. J. (ch.) 788, C. A. (want of independent advice, con- 
 cealment from the plaintiff's trustees, gross undervalue, and want of good faith generally). 
 
408 CH. V, SECT. 2, SUB-S. (6). 
 
 Very slight extrinsic evidence, if any, is required to throw the burden on the 
 other side where, as is frequently the case, the intrinsic evidence is of 
 overwhelming stress ; for example, where the very nature and' terms of the 
 bargain are so outrageous as, of themselves, to constitute unconscionableness, 
 or where the instrument containing or recording it is so framed as to imply a 
 consciousness, and a tacit avowal or confession, of its impropriety (j). And 
 so strong and persistent is the jealousy, not to say prejudice, with which 
 the dealer in expectancies has been regarded by the law that, in the earliest 
 stages in the development of the doctrine, and continuously down to the 
 year 1867, mere proof that the dealer paid, or received, as the case might 
 be, a price or consideration which was shown afterwards to have been inade- 
 quate in the one case, or excessive in the other, was always held sufficient of 
 itself to establish a frirm facie case of unconscionableness and undue advan- 
 tage, and to cast upon the dealer the burden of sustaining the transaction, — 
 a burden, moreover, which could only be discharged by clear and cogent 
 counter-evidence that in point of fact the price or consideration was just, 
 and was not in the least discharged by any amount of evidence as to the 
 honesty, good faith, and candour, of the dealer, or as to his having given, 
 or received, a sum which to the best of his belief, after the fullest inquiry, 
 reasonably appeared to him to be righteous and proper, or as to his having 
 tendered, or the expectant having received from a third person, sound and 
 disinterested advice {h). All this was of no avail to rebut the presumption 
 
 In O'Sorhe v. Bolinghroke (1877), 2 App. Cas. 814, H. L., though the dominant party 
 succeeded in sustaining the onus cast upon him, it was held that the " circumstances and 
 conditions " there proved (a purchase from " a penniless, and, except for his father, 
 friendless lad," without any independent advice) were sufficient to cast this onus upon him : 
 per Lord BLACKBtrBN at p. 834. 
 
 (j) Chesterfield (Earl of) v. Jannsen (1751), 2 Ves. Sr. 125 (per Lord Habdwicke, L.C., 
 at p. 157 : " there has been always an appearance of fraud from the nature of the bargain, 
 . . . the intrinsic unconscionableness of the bargain"); Gwynne v. Heaton (1778), 1 
 Brown C. C. 1 (where, at p. 7, Lord Thtjelow, L.C, points to the manifest anxiety of the 
 purchaser to insert such statements in the " preamble " of the deed as would bring the 
 transaction outside the area of bargains with expectants, thereby showing a consciousness 
 on his parb of its impeachabiUty) ; Aylesford (Earl of) v. Morris (1873), 8 Ch. App. 484 
 (per Lord Selboene, L.C, at p. 495 : " the nature and terms of the bargains themselves," 
 which were " primA facie oppressive and extortionate"). In Barnardision y. Lingood 
 (1740), 2 Atk. 133 (per Lord Hakdwicke, L.C, at p. 135), and Portmore (Earl of) v. 
 Taylor (1831), 4 Sim. 182 (per Shadwell, V.-C, at p. 212), one of the elements in the 
 unconscionabiUty of the transaction, viz. the distress of the expectant, was inferred from 
 the character of the dealings, — frequent loans of very small sums. Cp. § 430, and the 
 cases cited in notes (q) and (r) thereto, ante, as to similar presumptions and inferences from 
 the nature and terms of the transaction itself, in cases falling within the class dealt with 
 in Sub-s. (5), ante. 
 
 (k) This was distinctly held to be the law in Gowland v. De Faria (1810), 17 Ves. 20, 
 by Gbant, M.E. (at pp. 24, 25) : " the doctrine of the Court " is " perfectly estabUshed, 
 that it is incumbent on those who have dealt with an expectant heir relative to his 
 reversionary interest, to make good the bargain : that is, to be able to show that a fuU 
 and adequate consideration was paid. That is undoubtedly a heavy burden upon a 
 purchaser : but in that particular case the burthen is imposed upon him, and that case is 
 an exception to the general rule that for mere inadequacy of value a contract is not to he set 
 aside." So Leach, V.-C, at pp. 235, 236 of Shelly v. Nash (1818), 3 Madd. 232, states 
 the rule in equally clear terms, and recognizes that it is firmly established, much as he 
 dislikes it. In accordance with these statements of the rule, than which nothing could bs 
 plainer, a series of decisions followed, between 1810 and 1867, in which relief was given to 
 
§ 442 (bargains with " expectants "). 409 
 
 against tim arising from the mere fact of a difierence between price and 
 value, tliougli that difierence might be such as to turn the scale " but in the 
 estimation of a hair." Judicial adhesion to this arbitrary and inexorable 
 rule, when once established, though in many cases most reluctantly given, 
 produced, as was inevitable, the most startling and outrageous results (I), 
 which at last compelled the legislature to intervene. Accordingly a useful 
 measure was placed upon the statute-book, — the Sales of Eeversions Act, 
 1867, — which, whilst, as has already been pointed out (m), leaving intact 
 aU the sound (which was by far the larger) part of the doctrine, efiectually 
 excised that which was unsound. That is to say, the law of unconscion- 
 able bargains with expectants, so far as regards purchases of reversions, 
 and all that a conveyancer understands by that term (for, it is to be observed, 
 the statute does not apply to any other kind of transaction with an expectant 
 on the credit of his expectancy), was brought back to the condition in which 
 it was before the introduction of the special rule in question, and in which it 
 still is as regards other relations constituted by " the circumstances and 
 conditions " of the particular case. Inasmuch as the statute only applies 
 to " a purchase made bond fide and without fraud or unfair dealing," and the 
 purchaser is therefore not in a position to take the benefit of it unless his 
 purchase answers that description, it follows that it is still open to the 
 expectant to rely upon undervalue as one of the " circumstances and con- 
 ditions " which raise a primd facie presumption in his favour against the 
 dealer, or even, if very gross, to rely upon it alone as constituting such " circum- 
 stances and conditions " : but, whereas formerly he could in any case rely 
 upon undervalue, however slight, as sufficient to call for an answer, he is 
 now deprived of that right : and, whereas formerly no answer which, though 
 establishing complete conscientiousness and good faith on the part of the 
 purchaser, did not establish full value, was of the slightest avail, it is now 
 open to the purchaser to defend himself by proof of the propriety of the 
 transaction, even though he is not in a position to displace the evidence against 
 
 an expectant on the sole ground of undervalue, without any other " circumstance or 
 condition" being proved, and, in some cases, notwithstanding positive proof by the 
 dominant party, to the admitted satisfaction of the Court, that in every other respect the 
 transaction was perfectly conscientious. It is unnecessary, now that the law in this respect 
 has been altered, to cite these cases : it is sufficient to say that the ruling of Grant, M.B., 
 was adhered to by such high authorities as Lord Cbanworth and Lord Cottenham, 
 though the latter, at p. 457 of Aldborough {Earl of) v. Trye (1840), 7 Cl. & Kn. 436, recog- 
 nized that "that proposition had been the subject of much observation undoubtedly." 
 It was to this line of decisions, wherein " all the fair dealing in the world was of no use," 
 that reference was made, in BrenchUy v. Higgins (1901), 70 L. J. (CH.) 788, C. A., by 
 RiGBY, L.J., at p. 790 : op. the like references by Vat7qhan Williams, L.J., at p. 792, 
 and RoMEE, L.J., at p. 793. 
 
 (I) Such as Edwards v. Browne (1845), 2 Coll. 100 (price paid, £1700 : value proved, 
 £1900) ; Foster v. Roberts (1861), 29 Beav. 467 (price £370, value £400) ; Jones v. Richetts 
 (1862), 31 Beav. 130 (purchase-money £200, value £238). It is evident that these cases 
 were decided in obedience to what was understood to be an inexorable and arbitrary 
 rule of equity, and with much doubt as to whether the expectant would derive any benefit 
 from the exercise of his right. For instance, at p. 107 of Edwards v. Browne, sup., Knight- 
 Bbttcb, V.-C, significantly observes that " this dealing with a reversionary interest, if 
 the plaintiff considers it to he for his benefit to press the matter, cannot stand." 
 {m) See § 437, ante. 
 
410 CH. V, SECT. 2, SUB-S. (6). 
 
 him of undervalue in fact (w). It would appear, therefore, that the doctrine 
 as to unconscionable bargains with expectants, though undoubtedly a 
 " special " one before the introduction of the Act of 1867, can no longer be 
 properly so regarded. 
 
 443. It is incumbent on the expectant to prove not only the fact of his 
 distress, but also that the dealer was aware of it (o) : and, where the expectancy 
 is not expressed to be the subject of the purchase, or the security for the loan, 
 he must establish both that he had the expectancy in fact, and that the 
 dealer knew of it (y) : for otherwise he fails in the first step towards the 
 necessary proof that the dealer took advantage of, and traded on, his distress, 
 and trusted to his expectancy. And, though Lord Brougham's view {q), 
 that it is an indispensable element in the expectant's case that the bargain 
 was kept secret from the ancestor, is certainly not correct (r), this fact is never- 
 theless a feature which is very commonly and properly relied upon, where 
 it exists (as it nearly always does), as helping, with other circumstances, to 
 raise the presumption of unconscientiousness (s). 
 
 444. Generally, it must always be remembered that it is not bargains 
 with expectants that are struck at, but unconscionable bargains only. " In 
 each case," as Lord Blackburn found it necessary to point out (t), " it must 
 depend upon the circumstances whether the presumption which Lord Hard- 
 WICKE spoke of is raised. Sometimes there may be a serious question whether 
 it is or not." Not till the presumption is raised is the opposite party called 
 upon for an answer, because not till then does he even become, in contempla- 
 tion of law, a dominant party at all. And the presumption is not raised 
 (as has sometimes been assumed, if not expressed) by mere proof of the 
 expectancy, the bargain with respect to it, and the inequality in the relative 
 position of the parties : there must also be shown some probability at least 
 that an advantage was taken of those circumstances in fact, and that such 
 advantage was unfair, undue, or unconscientious (m). 
 
 {n) BreruMey r. Higgins (1901), 70 L. J. (cH.) 788, C. A. (per Rioby, L.J., at p. 790, 
 Vauohan Williams, L. J., at p. 792, and Romee, L. J., at p. 793). A good illustration of a 
 purchase at an undervalue which, before 1867, must have been set aside, but which, on 
 proof of propriety in other respects, was upheld, even though the expectant had no 
 independent advice, is O'Eorke v. Bolinghroke (1877), 2 App. Cas. 814, H. L., as to the 
 facts of which, see note (x) to § 445, post. Another hypothetical illustration is given by 
 BoMEE, L. J., at p. 793 of BreruMey v. Higgins, sup. 
 
 (o) See Owynne v. Beaton (1778), 1 Brown C. C. 1 (the passage cited in note (i), ante) ; 
 Portmore {Earl of) v. Taylor (1831), 4 Sim. 182 {per Shadwell, V.-C, at p. 207 : " where 
 ". person who stands in the situation of an heir apparent is in distress, and deals with a 
 party who is aware of the distress ..." Sc.). 
 
 {p} See the observations of Jbssbl, M.E., at p. 392 n. of Benyon v. Cook (1875), 10 
 Ch. App. 389 n. 
 
 {q) In King v. Hamlet (1834), 2 My. & K. 456 (at pp. 473, 474). 
 
 («■) See Sugden, V. & P. (11th ed.) p. 316. At pp. 491, 492 of Aylesworth {Marl of) v. 
 Morris (1873), 8 Ch. App. 484, Lord SELBOBif E, L.C., observes that "Lord St. Lbonabds, 
 with good reason, dissents from that opinion," viz. that the presence of " the feature " 
 in question is " an indispensable condition of equitable relief." 
 
 («) This is emphasized in the two leading cases on the subject by Lord Habbwickb, L.C., 
 and Lord Selboene, L.C, respectively. See the passages cited in note {g) to § 434, ante. 
 
 {t) At p. 834 of O'Scyrke v. Bolinghroke (1877), 2 App. Cas. 814, H. L. 
 
 {u) Thus, in Moth v. Atwood (1801), 5 Ves. 845, the expectant proved the bargain made 
 to purchase his expectancy, and also his indigence, but did not prove that any advantage 
 
§§ 442-445 (babgains with " expectants "). 411 
 
 445. As has already been observed, the burden cast upon the dominant 
 party, if and as soon as a frimd facie case is made against him, is not im- 
 possible, though extremely difficult, to sustain. The " contrary evidence " 
 by which alone he can " repel the presumption " is evidence that the transac- 
 tion was " in point of fact, fair, just, and reasonable " iv), or, in other words, 
 that it was " fair " in both senses of the word, that is to say, that his conduct 
 was morally " fair," and that the terms of the bargain were commercially 
 " fair." In a very few cases, both before 1867 (w), when it was much heavier, 
 and since that date when it was lightened (x), the burden was discharged. 
 Of course the affirmative defences available to any dominant party, even if 
 he is unable to sustain the transaction in the sense above indicated, are 
 equally available to a dealer in expectancies. For instance, it may be shown, 
 and in the very case which was the occasion of Lord Hardwicke's exposition 
 of the severe presumptions made against the dealer, and the difficulty of 
 rebutting them, it was in fact shown, that the transaction, assuming it to 
 
 had been taken of it, and was therefore denied relief. The same result attended the 
 expectant's claim, on a similarly defective proof, in Judd v. Oreen (1875), 45 L. J. (cH.) 108 
 {per Bacon, V.-C, at pp. 109, 110 : " it has never yet been held that an expectant heir 
 was incompetent to deal with his interest for substantial purposes, or that the parties 
 dealing with him could have these transactions impeached unless there was something 
 so morally wrong as to make it necessary to discountenance their dealings on the ground 
 of public policy "). 
 
 (u) Per Lord Selboene, L.C, at p. 491 of Ayksworth {Earl of) v. Morris (1873), 8 
 Ch. App. 484. The necessity of establishing both the fairness and justice, and the reason- 
 ableness, is insisted on by Fitzgibbon, L.J. (Ir.), at p. 523 of Eae v. Joyce (1892), 29 L. E. 
 (Ir.) 500 (" the burden is thrown upon the defendant of sustaining the transaction. 
 What has he to prove ? Not merely absence of fraud and dishonesty on his own part, not 
 merely understanding and volition on the plaintiff's part, not merely that a contract in the 
 fullest sense was made, but affirmatively that the contract itself was not only fair and just, 
 but was also reasonable "). See also Fry v. Lane (1888), 40 C. D. 312 {per Kay, J., at p. 322). 
 
 {w) In Berney v. Pitt (1680), 2 Swanst. 143 n., where there were seven defendants. Lord 
 NoTTlNaHAM, L.C, gave judgment in favour of the defendant Pitt, whilst granting relief 
 against the other six, on the ground apparently that the bargain was a fair gamble — (Pitt 
 was to get " three to one," if the plaintiff survived his father ; but, if he did not, " he was 
 to lose his principal") — and there was no "circumvention or practice" : whereas, in 
 the case of the others, the terms were " five to one," and it did not appear that they were 
 to lose all, if the expectant predeceased his father, and there was " circumvention." 
 This decision, however, would not have been approved by Lord Hardwicke, L.C. : 
 see his observations at p. 135 of Barnardision v. Lingood (1740), 2 Atk. 133. In Moth v. 
 Atwood (1801), 5 Ves. 845, it was proved that the expectant "was determined to sell the 
 reversion" ; that it was " offered over and over again to all the town, to twenty persona " ; 
 that the purchaser " was not going about, or lying by to avail himself of an opportunity 
 to get a good bargain " ; that " there was no fraud or circumvention " ; and that the 
 bargain, though " a very considerable one," was " done dehberately, and not in conse- 
 quence of a plan laid to gain a good bargain." In Shelley v. Nash (1818), 3 Madd. 232, 
 Fox V. Wright (1821), Madd. & G. Ill, and Aldborough {Earl of) v. Trye (1840), 7 a. & 
 Fin. 436, the pm'chaser of the expectancy proved full and fair value. 
 
 {x) See O'Borke v. Bolingbroke (1877), 2 App. Cas. 814, H. L., where the expectant was 
 expressly held to have established a case which shifted the onus on to the other side {per 
 Lord Blackbubn, at p. 834), but where it was also held that, though the expectant had 
 no independent advice, and though the purchase was at an undervalue in fact, this onus 
 was sustained by proof on the part of the purchaser that he had good reason to believe, 
 and in fact believed, that the father's health was good, and that (as on that supposition 
 it was) the price paid by him was not only adequate, but Uberal : further, that everything 
 was arranged with the father, and that the father and son, being penniless, could not 
 afford to pay for the independent advice of a professional man, and, being friendless, had 
 no one else to whom they could resort without payment {per Lord BLACKBtrBN, at pp. 835- 
 837). 
 
412 CH. V, SECT. 2, SUB-SS. (6), (7). 
 
 have been unconscionable, was afterwards affirmed by the expectant {y). So 
 also acquiescence, amounting to an implied confirmation, is a good defence, 
 but only if the distress of the expectant has then come to an end (2), and 
 the distress is presumed not to have come to an end until the expectancy 
 has fallen into possession (a). Proof of the concurrence of the ancestor with 
 the expectant in the impeached bargain is a valid answer, and may be put as 
 a plea of " family arrangement " ; but, in the nature of things, it is seldom 
 that such a case can be made out (6). 
 
 Subs. (7). Examination of Certain Relations which, of themselves, give rise 
 to no Presumption of Influence. 
 
 446. There are certain relations which have from time to time been 
 claimed as properly belonging to the class of " influence " relations, but 
 which are now definitely excluded from that category. Foremost among 
 these is the relation between husband and wife. It has been in one case 
 judicially stated (c), and, in another, expressly decided (d), that in transactions 
 between spouses, it will be presumed that an undue influence was exercised 
 by the husband over the wife, unless and until the contrary be shown. But 
 the judicial statement, which was only a dictum in the strictest sense of the 
 word, has long since been recognized as a slip, and was, indeed, afterwards 
 silently corrected by the author of it himself (e), and the decision referred to 
 
 (y) Chesterfield {Earl of) v. Jannsen (1751), 2 Ves. Sr. 215, where the dealer escaped on 
 proof that the expectant, in 1744, after the death of the Duchess of Marlborough, from 
 whom he had anticipated, and had received, large benefits, and when his distress had 
 come to an end, gave a bond confirming an earner one of 1738 (which was the bargain 
 impeached) with full knowledge of all material facts and of his rights, and freely and 
 deliberately {per Lord Habdwickb, L.C, at pp. 158, 159). As to the plea of confirmation, 
 generally, see Sect, 4, Sub-s. (3), post. 
 
 (z) Gowland v. Feria (1810), 17 Ves. 20 {per Gbant, M.E., at p. 25 : " there is no case 
 in which, during the continuance of the same situation in which the party entered into the 
 contract, acquiescence has ever gone for anything : it has always been presumed that the 
 same distress which pressed him to enter into the contract prevented him from suing to 
 set it aside ; thus it is only when he is reUeved from that distress that he can be expected 
 to resist the performance of the contract "). 
 
 {a) Benyon v. Cooh (1875), 10 Ch. App. 389 n. {per Jessel, M.R., at p. 393 n.) ; Fry v. 
 Lane (1888), 40 C. D. 312 {per Kay, J., at p. 324). And see Salter v. Bradshavi (1858), 
 26 Beav. 161 {per Romilly, M.R., at p. 165). 
 
 (6) Wood V. Abrey (1818), 3 Madd. 417, where father and son concmred in selling the 
 son's remainder in tail, the father being the tenant for life, and where relief was refused, 
 might be considered a case of this class. Where, however, the transaction was not " like 
 a dealing between father and son for the purpose of relieving the necessities of the difEerent 
 members of the family," nor was the case that of father and son together resorting to a 
 moneylender for the purpose of reUeving the son, but simply a case of the father purchasing 
 the reversion from the son, the plea of " family arrangement " was held to be quite out 
 of place : TaTbot v. Staniforth (1861), 1 J. & H. 484 {per Wood, V.-C, at pp. 500-503). 
 Cp. Dunnage v. White (1818), 1 Swanst. 137 — see note {j) to § 429, ante — ^for an instance of 
 a similar failure of this plea in a case within Sub-s. (5), ante. The plea, as an answer to a 
 case of non-disclosure in negotiations for a compromise, is discussed in §§ 135, 136, 137, 
 ante. 
 
 (c) By Lord Penzance at p. 468 of Parfitt v. Lawless (1872), L. R. 2 P. & M. 462. 
 
 (d) By Wmght, J., in Bischoff's Trustee v. Frank (1903), 89 L. T. 188, reversed as 
 stated in note ( / ), inf. 
 
 (e) At p. 1230 of Erlanger v. New Sombrero Phosphate Co. (1878), 3 App. Cas. 1218, 
 H. L., where, in a passage of no less generality, and no more necessity to the actual decision, 
 than that referred to in note (c), sup., Lord Penzance omits the relation of husband and 
 
§§ 445, 446 (relations not op influence). 413 
 
 was, thougli there is no report of the appellate proceedings, reversed by the 
 Court of Appeal (/). Both the one and the other are directly opposed to 
 the entire current of authority from 1750 to the present time, wherein it is 
 quite clearly laid down that such a relation is one from which, though influence 
 may be presumed, undue influence certainly cannot be (g) ; for the latter pre- 
 sumption would contradict the whole course of human nature and experience, 
 which has always recognized the influence in question as perfectly natural and 
 proper (h) ; and, inasmuch as a presumption of undue exercise of the influence 
 is the most important of the three which are made in favour of the servient 
 party in the case of any of the recognized relations {i), this is tantamount to 
 saying that the relation of husband and wife is altogether outside that class. 
 It by no means follows, however, that, where it is sought to establish a relation 
 from the circumstances of the particular case (j), or to prove actual undue 
 influence, the fact that the alleged dominant party was the husband of the 
 servient party is to be left out of account altogether. On the contrary, in 
 any case " where the act done by the woman is in some degree a transaction 
 alone with the husband," it has been said by Lord Hardwicke (h) that " a 
 court of equity wiU have more jealousy over it : and if there is any proof 
 that the husband had any improper influence in it by ill, or even extraordinary 
 good, usage, to induce her to it, the Court might set it aside, but not without 
 that." In other words, it is on the one hand sufiicient, and on the other 
 necessary, for the wife, when impeaching a transaction with her husband, to 
 show that, in virtue of the actual facts, he stood in some other and further 
 
 •wife from the " instances " which he there gives of " relations in which courts of equity 
 have given protection and relief against the pressure of unfair advantage resulting from 
 the relation," these instances being only " the relations of principal and agent, trustee and 
 cestui que trust, guardian and ward, priest and penitent." 
 
 {/) This appears from Howes v. Bishop, [1909] 2 K. B. 390, C. A. {per Lord Alvee- 
 STONE, C.J., at pp. 397, 398, who referred to passages from the short-hand note of the 
 judgments of Colldts, M.R., and Rombr, L. J., disapproving both the decision of Weight, 
 J., and the theory on which it was founded that the relation of husband and wife is one of 
 the "suspected" class). In Chaplin & Co. v. Brammall, [1908] 1 K. B. 223, C. A., 
 Vaughait Wiluams, L. J., relied to some extent on the decision of Weight, J., not being 
 aware that it had been reversed, but he also rested his judgment on the evidence of actual 
 pressure and undue influence, " apart from that decision " (p. 237). It appears from 
 Bank of Montreal v. Stuart, [1911] A. C. 120, P. C, that there had been a recent Canadian 
 decision to the same effect, and on the same erroneous ground, as that of Weight, J. 
 
 (g) Nedby v. Nedhy (1852), 5 De G. & Sm. 377 (per Paekek, V.-C, at p. 383) ; Boyse v. 
 Bossborough (1857), 6 H. L. C. 2 {per Lord Ceanwobth, L.C, at p. 48) ; Barron v. Willis^ 
 [1899] 2 Ch. 578 {per Cozens-Haedy, J., at p. 585, expressing an opinion on this point 
 which was not affected in any way by the reversal of the decision itself, [1900] 2 Ch. 121, 
 C. A., a.nd sub nom. Willis v. Barron, [1902] A. C. 271, H. L.) ; Howes v. Bishop, sup. {per 
 Lord Alveestonb, C.J., at pp. 395-398, Moulton, L.J., at p. 399, and Fabwell, L.J., 
 at pp. 399-403, where Lord Penzance's error is corrected, and the opinion of Cozens- 
 Haedy, J., sup., was approved) ; Talbot v. Von Boris, [1911] 1 K. B. 854, C. A. {per 
 Parwell, L. J., at pp. 863, 864) ; Bank of Montreal v. Stuart, sup. (at p. 137). 
 
 {h) See the citations in the last note, and particularly the reference therein to the 
 judgment of Lord Ckanwobth, L.C, at p. 48 of Boyse v. Bossborough, sup., where he 
 observes that " the relation constituted by marriage is of a nature which makes it difficult 
 to inquire, as it would be impolitic to pursue inquiry, into all which may have passed in 
 the intimate union of affection and interests which it is the paramount purpose of that 
 connection to cherish." 
 
 (i) See § 405, ante. 
 
 (j) As in the class of case dealt with in Sub-s. (5), ante. 
 
 {k) At p. 517 of Origsby v. Cox (1750), 1 Ves. Sr. 517. 
 
414 CH. V, SECT. 2, SUB-S. (7). 
 
 relation to her than that of husband (l). Similarly not only the relation of 
 husband and wife, but every other domestic relation which is neither parental 
 nor quasi-parental in the sense already indicated (m), stands outside the class 
 of those from which, without further inquiry or evidence, undue influence is 
 at once presumed (n). 
 
 447. The relation between a testator and a devisee or legatee is not a 
 relation from which any undue influence is presumed to have been exercised 
 by such devisee or legatee. In the case of a gift inter vivos, where one of 
 the recognized relations exists between the donor and donee, a primd facie 
 presumption of a very strong character is at once made against the donee 
 which is not in the least rebutted by mere proof that the donor knew what 
 he was doing, and had a real intention of doing it : a further question, as 
 Lord Bldon said (o), has then to be considered—" how was that intention 
 produced ? " ; and, unless the dominant party can show affirmatively that 
 the presumed influence was in fact duly, and not unduly, exercised, he is 
 liable : whereas, in the case of a will, there is no presumption at all against 
 the validity of the gift. On the contrary, the presumption is either that no 
 influence was exercised at all, or that, if it was, it was a natural and proper 
 influence. A will can, no doubt, be invalidated by affirmative proof on the 
 part of the person disputing it that the so-called testament did not represent 
 the testator's will at all, but another person's will superimposed upon his, and 
 substituted for it, and was in this sense a forgery, just as if it had been 
 physically forged : but if it was in truth and in fact his will, no amount of 
 evidence that it was brought about by influence which, in the case of a gift 
 inter vivos, would be called " undue," will be of the slightest relevance. 
 And, in any case, it is not for the devisee or legatee, as it is for any donee 
 who is a dominant party, to sustain the gift, but for the party disputing the 
 will to show why it should not be " established " (jp). 
 
 {I) The suf&oienoy of such proof is shown by the cases in which, on adducing it, and 
 only because she adduced it, the wife succeeded, such as Turnbull dh Co. v. Duval, [1902] 
 A. C. 419, P. C. ; Bank of Montreal v. Stuart, sup. : the necessity of it is shown by the 
 cases in which, not adducing it to the satisfaction of the Court, she failed, such as Nedby 
 V. Nedby, sup. ; Bischoff's Trustee v. Frank, sup. (in the C. A.) ; Howes v. Bishop, sup. 
 
 (m) In Sub-s. (1), ante. 
 
 (») Illustrations are: Beanland v. Bradley (1854), 2 Sm. & G. 339 (no presumption 
 against a gift by an old man shortly before his death to his guardian and son-in-law : per 
 Sttjabt, V.-C, at p. 343) ; Oobbett v. Brock (1855), 20 Beav. 524 (no presumption of undue 
 influence where the fiano6e of a debtor gives a security to his creditor : per Eomilly, M.R., 
 at pp. 530, 531) ; Taylor v. Johnston (1862), 19 C. D. 603 (no relationship of guardian and 
 ward constituted by mere residence under the same roof for a few months : per Bacon, 
 V.-C, at p. 609) ; Be Coomber, [1911] 1 Ch. 723, C. A. (no domestic relationship shown by 
 mere proof that the alleged dominant party was the alleged servient party's son, and 
 manager of her business : per Cozbns-Haedy, M.R., at pp. 726, 727, Motilton, L. J., at 
 pp. 728, 729, and Buckley, L.J., at pp. 730, 731). 
 
 (o) At p. 300 of Huguenin v. Baseley (1807), 14 Ves. 273. And see the cases cited in 
 note (m) to § 469, post. 
 
 (p) See Middleton v. Sherburne (1841), 4 Y. & C. (Bxch. in Eq.) 358 {per Lord Abingbe, 
 C.B., at pp. 389, 390) ; Hindstm v. Weatherill (1854), 5 Be G. M. & 6. 301 {per Kiiight- 
 Bbxtcb, L.J., at p. 311) ; Boyse v. Sossborough (1857), 6 H. L. C. 2 {per Lord Crahwoeth, 
 L.C., at pp. 47-49) ; Parfitt v. Lawless (1872), L. R. 2 P. & M. 462 {per Lord Penzance, 
 at pp. 468-471). And, as to confirmations of voidable transactions, generally, by will, 
 see Stump v. Gabey (1852), 2 De G. M. & G. 623 {per Lord St. Lbqnabds, L.C, at p. 631). 
 
§§ 446-448 (eelations not of influence). 415 
 
 448. Another relation which in early times was considered, but erroneously, 
 to carry with it some presumption, or suggestion, of undue influence, is the 
 relation between mortgagee and mortgagor. It has already been shown 
 that this relation is not, per se, of a fiduciary character (5"), and the authorities 
 upon which that statement has been based are a fortiori authorities for the 
 proposition that no presumption whatever of influence is raised in favour of 
 a mortgagor, as such, against a mortgagee, as such ; though in earlier times, 
 when land was of more importance as property than it is at present, and when 
 mortgagees were regarded by equity judges with the same kind of distrust 
 as usurers, or even extortioners, it was vaguely thought or assumed that the 
 position of a mortgagee gave such scope to oppression and abuse of pro- 
 prietary rights and power, and was so habitually assumed as a cloak to evade 
 the usury laws then in force, that some sort of burden ought to be cast upon 
 hmi of sustaining any transaction between him and the mortgagor relative 
 to the property during the continuance of the relationship, if and when 
 impeached; and, indeed, in one remarkable case which, however, cannot 
 now be regarded as law. Lord Kedesdale went the full length of holding 
 that any dealing with the mortgaged estate, not being a purchase of the 
 equity of redemption (which he admitted to be unimpeachable), must be 
 presumed in law, until the contrary be shown, to have been procured by 
 " a silent threat " — in other words, the undue influence — of the mortgagee (r). 
 
 (?) See § 347, ante. 
 
 (r) Webb y. Rorhe (1806), 2 Soh. & Lefr. 661 ; 9 R. R. 122. Here a mortgagor im- 
 peached the validity of a lease of part of the mortgaged land for a term of 999 years 
 granted by him to the mortgagee when the mortgage debt was still unpaid, on the grounds 
 (so far as material) that the transaction was brought about by a threat on the part of the 
 mortgagee to foreclose unless the mortgagor, then of great age and of feeble health, 
 assented to it, and that inadequate consideration was given. The latter ground need not 
 be discussed, because no inadequacy of a sufficient character was established (p. 674), and 
 the jury expressly negatived it on an issue directed for this purpose (p. 661). Everything, 
 therefore, depended on the " threat." If the threat had been proved, there might have 
 been some evidence of a case within the class which is the subject of Sub-s. (5), ante (undue 
 advantage taken of the seniUty, feebleness, and distress of the mortgagor), except that 
 the only threat alleged being a threat to do a legal act, it could not, according to Allen v. 
 Flood, [1898] A. C. 1, H. L., of itself have been deemed improper. And it was in this 
 spirit that Lord Rbdesdalb, L.C. (Ir.), approached the question in the first instance, for 
 the directed issues to be tried by a jury as to whether the lease had been obtained by 
 influence and pressure, and also (as above stated) whether a full and fair rent had been 
 given. A verdict was found by the jury in favour of the dominant party on both points. 
 But, on reconsideration. Lord Rbdbsdalb repented of having sent any issue to a jury at 
 all, and in most distinct and unmistakable terms held that the threat and pressure ought to 
 be inferred in law from the relative situation of the parties, and that no evidence was required 
 of the affirmative from the servient party, but that it was for the dominant party to prove 
 the negative. Substantially, in fact, he rests his decision on the theory that a mortgagee 
 is in the position both of a trustee, and of a person who is prima facie deemed to have taken 
 undue advantage of the mortgagor ; though it is true that, at pp. 666, 668, 672, he also 
 refers to " the statutes of usury," or rather " the poUcy on which they are founded." 
 " I did wrong," he says, at pp. 668, 669, " in directing the issues ; and in truth I sent to a 
 jury to try a question properly triable only in a court of equity, viz. whether the relation 
 in which these parties stood, of mortgagor and mortgagee, did not put them in such a 
 condition that, except under extraordinary circumstances, a transaction of this sort must 
 be deemed primA facie an advantage taken by the mortgagee of the situation in which he 
 stood, with respect to the subject-matter of the contract. . . . Now that the defendant 
 did stand in such a situation cannot be doubted. . . . He prevails without using a single 
 word of threat : like the beggar in ' Gil Bias ' who, with his gun at his shoulder, extorted 
 
416 CH, V, SECT. 2, SUB-S. (7); SECT. 3. 
 
 Moreover, this ancient prejudice against the mortgagee still survives in the 
 curious arbitrary rules relating to mortgages which prohibit absolutely any 
 stipulation in the mortgage deed itself, or in any contemporaneous instrument 
 forming part of the entire transaction, calculated to deprive the mortgagor 
 of his right to get back the property, on payment of the debt, in the same 
 condition as that in which it was assigned, and any contrivance or device 
 which operates to prevent or impede redemption, or which assures to the 
 mortgagee any future advantage by diminishing the property to be recon- 
 veyed, as distinct from a mere loading of the debt (s). These rules, when 
 coming up for judicial discussion, have always been accounted for historically, 
 for it is recognized that they have no rational justification or excuse, by 
 reference to the " sentiment " of bygone times which was prone to impute 
 fraud or oppression at sight to any mortgagee merely because he was a 
 mortgagee (i). Scarcely any attempt has been made to defend them on 
 principle : and they have been enforced by the Courts with obvious reluct- 
 ance (m), and like, for example, the rule against the validity of a contract to 
 accept a smaller sum in satisfaction of a larger, or the rules in favour of an 
 executor-creditor, from regard to the disturbance to general business which 
 would result from suddenly abrogating long-established doctrines, however 
 
 money from the traveller without using a single word of threat. . . . The mortgagor is 
 under the control of the mortgagee in the very subject-matter of the contract, and if the 
 mortgagor had distinctly said to the mortgagee, ' You must let me have a lease for 999 
 years at the rent which I think fit to give, and if you will not, I will harass you by all the 
 means by which a mortgagee can harass his debtor ' ; it is plain a lease so obtained could 
 not stand. If the same thing can be done without a word spoken, the same consequences 
 ought to f oUow. Ought evidence of such a conversation to be required ? Is it not better 
 to hold, as in the case of a trustee, ' because this may be done, it shall be taken as done, 
 and the act, if disputed, shall be invalid ' ? . . . The policy of public justice seems to 
 me to require that a dealing of this kind shall not stand, if disputed by the mortgagor ; 
 unless supported by such evidence on the part of the mortgagee as would put the relation 
 between the parties out of the transaction." Nothing could be plainer than this : and 
 nothing coijld be more incorrect, or more directly opposed to the series of authorities cited 
 in notes (i), and {I), to § 347, ante. The case, however, has been discussed at such length 
 for the reason that it is the ablest exposition of a view now determined to be unsound ; 
 and in order to guard against any hasty inference which might otherwise be drawn from 
 the fact that it has never been expressly overruled, or, indeed, expressly disapproved, 
 though it is generally referred to in terms of dubious courtesy as " a very strong case," 
 and has never been followed or acted upon. 
 
 (s) These rules are stated in Gossip v. Wright (1863), 32 L. J. (cH.) 648 {per Kinderslby, 
 V.-C, at p. 653) ; Biggs v. HoddinoU, [1898] 2 Ch. 307, C. A. ; SanUey v. Wilde, [1899] 
 2 Oh. 474, C. A. ; Noakes & Co., Ltd. v. Price, [1902] A. C. 24, H. L. ; Bradlay v. Carritt, 
 [1903] A. C. 253, H. L. ; Samuel v. Jarrah Timber & Wood Paving Oorpn., [1904] A. C. 
 322, H. L. ; FaircUmgh v. Swan Brewery Co., [1912] A. C. 565, P. 0. ; Kreglinger v. New 
 Patagonia Meat dh Coal Storage Co., [1914] A. C. 25, H. L. 
 
 (0 See James v. Kerr (1888), 40 C. D. 449 (per Kay, J., at p. 460) ; Biggs v. Hoddinott, 
 sup. {per CiHTrr, L.J., at p. 322, and Collins, L.J., at p. 323) ; Noakes tfc Co., Ltd. v. 
 Price, sup. {per Lord Davey, at p. 33) ; Samuel v. Jarrah Timber & Wood Paving Corpn., 
 sup. {per Lord Maonaghten who, at p. 326, says that " the rule is founded on sentiment 
 rather than on principle," and refers, in this connection, to the expression used by Lord 
 Hakdwickb, L.C., at p. 495 of Mdlor v. Lees (1742), 2 Atk. 494, — " a design to wrest the 
 estate fraudulently out of the hands of the mortgagor ") ; Kreglinger v. New Patagonia 
 Meat and Coal Storage Co., sup. {per Lord Haldane, L.C., at pp. 35, 36). 
 
 {u) And not only has the slightest attempt to extend the doctrine one iota beyond the 
 established limits been at once repelled, as in De Beers Consolidated Mines, Ltd. v. British 
 South Africa Co., [1912] A. C. 52, H. L., but those limits themselves have been severely 
 criticized, if not contracted, in Kreglinger v. New Patagonia Meat <fc Coal Storage Co., sup. 
 
§§ 448-450 (burden of proof). 417 
 
 irrational, and however repugnant to modern ideas, on the faith of which the 
 community has acted in the various transactions of life. 
 
 449. Though no presumption of undue influence is raised by the mere fact 
 that the transaction was one between mortgagee and mortgagor with reference 
 to the mortgaged property, it is of course recogniSied that such presumption 
 will be made if the dominant party can be shown to have united with his 
 character of mortgagee some other character in virtue of which he stood to 
 the servient party in one of the " suspected " relations, such as that of 
 trustee (v), or solicitor (w). And, where a case is put forward of a relation 
 in virtue of "the circumstances and conditions," and there is other and 
 independent evidence of an unconscientious advantage having been taken 
 of weakness, the fact that the dominant party was a mortgagee who had 
 the servient party, the mortgagor, completely in his power, will not be 
 overlooked, or deemed without significance, in conjunction with the other 
 circumstances of the case(»). It will have been noticed that, in a large 
 number of the illustrations given of unconscionable bargains with expectants, 
 the dominant party was a mortgagee of the reversion or other expectancy ; 
 but hia liability in all such cases was not based on the fact of his being a mort- 
 gagee, but on the fact of the security being an expectancy (y). 
 
 Sect. 3. Burden of Allegation and Proof on the Servient Party. 
 
 450. In order to establish a case entitling him to call upon the dominant 
 party to show cause why a transaction entered into during the subsistence 
 of the relation should not be set aside, or otherwise made the subject of 
 relief, the servient party must allege and, having alleged, adduce some primd 
 facie evidence of, two things, — ^first, a relation between him and the dominant 
 party of one or other of the kinds from which the law presumes undue influence, 
 and, secondly, a gift, or contract, or other transaction made or entered into 
 during the subsistence of that relation. Not until he has discharged this 
 
 {v) As in Barrett v. Hartley (1866), L. R. 2 Eq. 789 {per Sttjabt, V.-C, at p. 795). 
 
 (w) As in Eyre v. Hughes (1876), 2 C. D. 148, where Bacon, V.-C, after finding (p. 158) 
 that the relation of solicitor and oUent existed between the mortgagee and mortgagor 
 " so as to influence the whole of the transactions," and also " a sort of relation something 
 like that of a banker," granted relief against the solicitor-mortgagee on the ground that it 
 was his duty, in Ms character as solicitor, to have advised his client against the stipulation 
 complained of. The rule, now abolished by the Mortgagees Legal Costs Act, 1895 (58 & 59 
 Vict. c. 25), which prohibited a solicitor from charging costs in respect of a mortgage 
 taken from his client, though sometimes put as an application of the doctrine of " clogging 
 the equity of redemption," as in Eyre v. Wynn- Mackenzie, [1894] 2 Ch. 218, must surely 
 have been based on the fact of the mortgagee being a solicitor, as well as a mortgagee, 
 and not on his mere character of mortgagee. 
 
 (x) See Carew v. Johnston (1805), 2 Sch. & Lefr. 280 (where the relief was given " on 
 the ground of unconscientious advantage being . . . taken " by the mortgagee of the 
 distress, and also " of the imbecility and absence of " the mortgagor : per Lord Redesdale, 
 L.C. (It.), at p. 306, and cp. the elaborate series of declarations with which the decree, 
 set out at pp. 306-313, was prefaced) ; Ford v. Olden (1867), L. R. 3 Eq. 461 (a similar 
 case : per SitTART, V.-C, at pp. 363, 364) ; James v. Kerr (1888), 40 0. B. 449 (where the 
 decision was based on advantage having been taken of the necessitous circumstances of a 
 young man, quite independently of other grounds, such as champerty, and " clog on the 
 equity of redemption " : per Kay, J., at p. 460). 
 
 (y) See, generally, the cases cited in the notes to Sub-s. (6), ante.. 
 
 B.N.D. 2 E 
 
418 CH. V, SECT. 3, SUB-S. (1). 
 
 burden is the dominant party called upon for an answer : but if and when the 
 servient party does discharge it, the three presumptions abeady referred 
 to (2) are at once made in his favour, viz. that the dominant party had an 
 influence over him in virtue of the relation ; that the influence operated 
 upon, and procured, the transaction ; and that such influence was undue. 
 The onus is then shifted on to the shoulders of the dominant party to justify 
 or excuse the transaction by allegation and proof of some one or more of 
 the various affirmative pleas available to him which are the subject of examina- 
 tion in their proper places (a). 
 
 Subs. (1). Proof of the Relation. 
 
 451. If the servient party is unable to establish the existence of the 
 alleged relation, he fails at the threshold : for the old heresy that, in cases 
 of gift, the burden is on the donee to support it, if the donor sues to avoid 
 it, though no relation of any sort existed between the parties (6) , is now 
 entirely exploded (c). In cases of a " known " or " suspected " relation {d), 
 there is seldom any dispute on this question, or, if there is, the proof is not 
 difficult : but, where the relation is claimed to have been created solely by 
 the particular circumstances of the case (e), the difficulty in proving the 
 necessary conjunction and interaction of a number of such circumstances is 
 obviously greater than in establishing the comparatively simple fact that the 
 dominant party was at the material date the servient party's parent, or his 
 legal, spiritual, or medical adviser : and in such cases the difficulty has not 
 been always surmounted (/). If neither a relation of influence, nor a relation 
 of " cohfidence " {g) is made out, the party complaining can still succeed on 
 other grounds, such as actual fraud, misrepresentation, duress {dolus, vis, 
 metus), or insanity, or other invalidating cause, but in that case he must 
 assume the whole burden of proof : he has no presumptions to fall back 
 upon {h). 
 
 {z) See § 405, note (o), ante. 
 
 (a) In Sect. 4, post. 
 
 (5) This was tlie opinion persistently maintained by Romilly, M.E., an opinion based 
 not only on his own reasoning, but also on a wholly mistaken belief that it had the 
 authority of Lord Cotteneam, L.C., if not also of Lord Eldon, L.C. : see his observations 
 at pp. 239-241 of Coohe v. Lamotte (1851), 15 Beav. 234, and at pp. 298, 299 of Hoghton v. 
 Hoghton (1852), 15 Beav. 278. Mauns, V.-C, appears to have adopted this error, at 
 p. 567 of Coutts V. Ackworth (1869), L. R. 8 Eq. 558. 
 
 (c) See Phillips v. Mullings (1871), 7 Ch. App. 244 (per Lord Hatheklby, L.C, at 
 p. 247) ; Henry v. Armstrong (1881), 18 C. D. 668 (per Kay, J., at pp. 668, 669). It is 
 quite true to say that, even where the relation is established, a gift is in some respects 
 more difficult to justify than a contract, — see § 405, notes (g) and (h), ante, and §§ 475- 
 479, post, — but the proposition put forward by RoMUiY, M.R., is a very difEerent one. 
 
 (d) The subject of Sect. 2, Sub-ss. (l)-(4). SeeffoZmoMv.io2/m6s(1854),4DeG. M. & G. 
 270 {per Lord Ceajtwoeth, L.C, at p. 272). 
 
 (e) See Sect. 2, Sub-s. (5), and (as to unconscionable bargains with expectants) 
 Sub-s. (6), ante. 
 
 ( / ) For instances of such failure, see § 428, note {u) ; § 440, note (d) ; § 441 ; and § 444, 
 note (u), ante. 
 
 {g) The subject of Ch. IV, ante. 
 
 (h) See the very clear exposition of Lord Bkotjgham, L.C, at pp. 134, 135, 140, of 
 Hunter v. Atkins (1834), 3 My. & K. 113 ; Gmson v. Belworthy (1852), 3 H. L. C 742 {per 
 
§§ 450-453 (burden of proof). 419 
 
 452. Besides proving tte facts alleged to constitute tlie relation, the 
 servient party must be prepared to establish, in case of dispute, that the 
 facts so proved amount in law to such a relation (i). He must also show that 
 the relation existed at the actual time of the transaction, if this is in con- 
 troversy (j). And, if he is complaining of the conduct of a third person 
 who has utilized the relation between the dominant party and himself in 
 obtaining the gift or contract sought to be invalidated, he must further show 
 that the third person was aware of such relation {h). 
 
 453. In considering whether it is made out that the relation subsisted 
 or not at the material date, the Court will always regard its reality and 
 substance, rather than its form, or technical designation. It is not a 
 question of names (Z). Thus, where it is disputed whether the relation of 
 solicitor and client has been proved (that is, such a relation as involves 
 influence), the Court will not hold in the negative merely because the dominant 
 party had not been appointed or retained to act as the servient party's 
 solicitor (m), or was not literally or technically acting as such in reference to 
 the particular transaction (n) : nor, conversely, will it answer the question 
 in the a£S.rmative, merely because the dominant party happened to be a 
 solicitor. Thus, it has been held that, where a solicitor, at the request of a 
 lady who was an entire stranger to him, endeavoured to raise money for her, 
 and, being unable to do so, ultimately agreed to advance the money himself, 
 and, in that sense, acted for her in this isolated instance, no relation of influence 
 was established (o). 
 
 Lord St. Leonabbs, L.C, at p. 752) ; Harrison v. Guest (1855), 6 De Q. M. & G. 424 (per 
 Lord Cbanwobth, L.C, at pp. 432-436). For an instance of failure to prove the alleged, 
 or any, relation, followed by success in estabUshing misrepresentation entitling to relief, 
 see Haygm-fh v. Wearing (1871), L. R. 12 Eq. 320. 
 
 (i) For iUustrations of facts which are not deemed relations from which influence is 
 presumed, see Sect. 2, Sub-s. (7), ante. 
 
 {j) See Rhodes v. Bate (1866), 1 Ch. App. 252 (per Ttjknee, L. J., who treats this as a 
 matter to be established by the servient party, at p. 259 : " I am of opinion that the plain- 
 tiff has estabhshed that a confidential relation /oj- some time subsisted between her and the 
 appellant, and it is then to he considered whether this relation subsisted at the time when the 
 transactions took place. For this purpose it is necessary to examine each of these trans- 
 actions separately." He then does so, and concludes, as to one of them (p. 260), " that 
 the plaintiff has failed to establish the existence of any confidential relation between her and 
 the appellant when this transaction took place," but, as to the other (pp. 260, 261), that 
 the plaintiff had estabhshed the existence of the alleged relation at the material date, and 
 that the defendant had not discharged the onus which thereupon rested on him to show 
 that the influence was not operative in h&c re, or had then ceased). 
 
 (fc) See § 504, note (o), post. 
 
 {!) See § 408, ante. 
 
 (m) Willis V. Barron, [1902] A. C. 271, H. L. (per Lord Halsbuey, L.C, at p. 276, 
 where he points out that the plaintiff came to the defendant Skinner as " the natural person 
 to whom to apply for protection," and to say that he was not formally her solicitor is 
 only " juggling with words " : and see the observations of Lord Davey, at p. 283). Cp. 
 Allison V. ClayhilU (1907), 97 L. T. 709 (per Pabkbb, J., at pp. 711, 712). 
 
 (n) Wright v. Carter, [1903] 1 Ch. 27, C A. (per Vaughak Williams, L.J., at p. S3, 
 Stibling, L.J., at pp. 58, 59, and Cozens-Haedy, L.J., at pp. 61, 62). 
 
 (0) Edwards v. Williams (1863), 32 L. J. (cH.) 763 (per Kmoht-Bbuce, L. J., at p. 765 : 
 " it happens, it is true, that one of the parties was a solicitor, and the other of them had 
 had no legal advice except from that solicitor ; but there had existed no Jjrevious relation 
 of solicitor and client between them, and therefore that confidence which was the basis 
 of the rule of the Court in similar cases did not appear to have existed "). Cp. Pisani v. 
 
420 CH. V, SECT. 3, SUB-S. (2). 
 
 Subs. (2). Proof of the Transaction. 
 
 454. It is only the coniunction of the relation and the transaction which 
 entitles the servient party to relief. It is, therefore, of no more avail to 
 prove the relation without the transaction, than it is to prove the transaction 
 without the relation. If the alleged transaction be a gift, the actual payment 
 or delivery or transfer must be established : no relief is required against a 
 mere promise or declaration of an intention to make a present, which is 
 unenforceable from the first. 
 
 455. In many cases, where the object of the proceedings is simply to 
 annul the transaction whatever it was, it is not vital to establish the precise 
 nature or terms of the transaction. But there are other types of case 
 in which it is essential, or at aU events important, for the servient party to 
 prove that the transaction belonged to the particular class alleged, or that 
 its terms were the exact terms alleged, and no other. 
 
 456. In the first place, it may be a question of great materiality whether 
 the transaction was a gift, or a purchase or other contract for valuable con- 
 sideration : for, as has already been indicated (y), it is, generally speaking, 
 far more difficult for the dominant party to sustain a gift than a contract, 
 and consequently more in the interest of the servient party to allege, and in 
 that event he must prove, that the transaction was in fact of this character, 
 as against the dominant party who is concerned to establish that it was a 
 purchase, and who, for that purpose, frequently relies upon the recitals or 
 express terms of the instrument so describing it, which, however, the Court 
 wiU whoUy disregard, if by the servient party's evidence of what was reaUy 
 done and understood they are shown to be erroneous, and still more it they 
 are shown to have been fraudulently inserted as a prophylactic against 
 possible future invalidation (g). Again, there are cases where, the instrument 
 having represented the transaction as a gift, the dominant party struggles 
 against his own deed to show that for some reason or other this was a mis- 
 description, and that in fact some sort of pecuniary consideration was given (r). 
 On the other hand, where the strength of the servient party's position lies 
 in the fact that there was no real inquiry into the question of value, it is 
 obviously in his interest to allege, and in that case, again, it is for him to 
 prove, that the transaction was a purchase or other contract, and not a 
 gift; because the evidence of such absence of inquiry which is calculated 
 to defeat the dominant party's attempt to sustain the transaction, if it was 
 a contract, is the very evidence which tends to support any contention on 
 the other side that it was a gift, emanating from the pure bounty of the 
 
 Att.-Gen. of Gibraltar (1874), L. E. 5 P. C. 516, where, though the Court would not go 
 quite so far aa the Lords Justices went in Edwards v. Williams, sup., which was referred 
 to in the judgment, they reUed on the circumstances, which were very similar to those of 
 the earlier case as (together with others) exculpating the dominant party (p. 537). 
 
 (ji) See § 405, and notes (g) and (A) thereto, ante : and cp. § 475, post. 
 
 iq) See the cases cited in note (A) to § 472, post. 
 
 (rj As in Huguenin v. Baaeley (1807), 14 Ves. 273 (where the dominant party vainly 
 relied upon an illusory undertaking to repair the property, as evidence that it was not 
 given to him : per Lord Eldon, L.C, at p. 301). 
 
§§ 454-456 (burden op proof). 421 
 
 alleged servient party, who on that view would be entirely unconcerned with, 
 and indifEerent to, any mercantile questions as to the property which he 
 intended to give, whatever it was worth (s). Here the dominant party, if 
 he finds it hopeless to support the transaction considered as a contract, by 
 reason of the consideration having been palpably inadequate, may be forced 
 to set up, even in the face of his own deed, that the transaction was in fact 
 a voluntary one ; in so doing he only substitutes one kind of difficulty in 
 sustaining the transaction for another, but he may think that the Scylla to 
 which he is steering cannot at all events be more fatal than the Charybdis 
 he has avoided, and may be less so (i). It sometimes happens that the servient 
 
 (s) Thus, in Harris v. Tremenheere (1808), 15 Ves. 34, which was, perhaps, rather a 
 case of a "confidence," than an "influence" relation, but which laid down principles 
 equally applicable to both classes, and, as such, is relied upon in the " influence " decisions 
 nest cited. Lord Eldon, L.C, held that, as to three of the four leases there in question, 
 the plaintiff had not sustained the onus of establishing that the grant of them was matter 
 of contract, rather than " the spontaneous fruit of his own generosity ; not weighing the 
 value or amount of the consideration which should have been given, if it had been the 
 subject of barter" (p. 40). In Nicol v. Vauglmn (1833), 1 CI. & Fin. 495, the servient 
 party alleged that the bond in question was given for services rendered, it being contended 
 on the other side that it was a voluntary bond, and the Master reported in favour of 
 the latter view : the Court below thereupon, instead of either adopting or rejecting the 
 Master's report, directed an issue to be tried. The House of Lords on appeal held that 
 the Court below must decide the question of fact one way or the other, and the Court 
 thereupon found that the bond was given partly as a counter-security, and partly in 
 consideration of past services, which, being no consideration at all, meant a gift. On a 
 second appeal to the House of Lords, this finding was reversed, and the Master's report was 
 confirmed. Thereupon the representatives of the obHgor desired to shift their ground, 
 and to impeach the transaction, assuming it now to be a gift, and alleging that it was made 
 during the subsistence of a relation between obligor and obhgee of either confidence or 
 influence, and leave was given to them to institute proceedings for this purpose. On a 
 third appeal to the House of Lords, the Court below was again reversed, on the ground that, 
 having set up a case of contract from the first, and having failed to prove it, therepresentatives 
 of the obligor ought not to be allowed to turn round at this late stage, and set up not only 
 a new, but a contradictory, case which involved charges of misconduct against the obligee 
 (per Lord Bbougham, L.C, at pp. 520-525). The opinion was expressed that the case was 
 of precisely the same character as Harris v. Tremenheere.sup. The Uke iuabihty to estabhsh 
 that the transaction was a bargain for value, and not a gift, resulted in a similar denial of 
 relief to the representatives of the alleged servient party in Be, Coomher, [1911] 1 Ch. 723, 
 C. A., which again was held to be Harris v. Tremenheere, sup., over again (per Cozens- 
 Habdy, M.R., at p. 727 : " it was not made after weighing the value of the consideration ; 
 it was simply an out and out gift " ; Mouiton, L. J., at p. 729 : " it is possible that there 
 might have been a transaction between the son and the mother with regard to the purchase 
 of this leasehold property, in which the son would have had to show that he had given her 
 full information in every possible way as to the value. But in this case the gift was not 
 based on value in any way at all. The mother knew the house. She had lived in it for 
 twenty years, and knew the son was managing it. She meant it to go to the son whatever 
 its value was "). 
 
 (t) There are some curious illustrations of this oscillation between the frying pan and 
 the fire which is sometimes forced upon the dominant party. In MacGabe v. Hussey 
 (1831), 5 BHgh (n.s.) 715, the servient party had promised the dominant party that, in con- 
 sideration of his services in obtaining a commission of lunacy against her aunt, and her 
 appointment as the aunt's committee, she would pay him one- third of the proceeds of the 
 aunt's estate, if the aunt should die intestate. The aunt did die intestate, and the servient 
 party succeeded to her estate, and conveyed the whole of it to the dominant party, and 
 mutual releases were exchanged. Afterwards she filed her bill for restoration of two- 
 thirds of the property, recognizing the dominant party's right to the residue for his 
 services pursuant to the contract. The dominant party, however, instead of being content 
 with the situation, which would have left him the stipulated third, foohshly set up a 
 case of gift as to one half of the estate which, of course, at once stirred up the lady's 
 
422 CH. V, SECT. 3, SUB-SS. (2), (3). 
 
 party seeks in the first instance, not to avoid the transaction in the character 
 of a servient party, but to enforce it as a contracting party, and, on the 
 contractee setting up that it was not a contract, but a gift, asserts by 
 way of reply that, if so, it was made during the subsistence of a relation 
 from which influence is presumed. Two alternative lines of attack are thus 
 open to him ; and it is a matter of comparative indifference to him which of 
 the two characters is assigned to the transaction ; except that his case on the 
 former hypothesis is generally a simpler one to establish, and less likely to be 
 defeated by counter -evidence, than his case on the latter (u). As abeady 
 stated, the question of gift or purchase is one of substance {v). 
 
 457. There are other considerations which may render the exact character 
 of the transaction a matter of importance, and requiring therefore strict 
 proof on the part of the servient party. For instance, in the case of an 
 alleged unconscionable bargain with an " expectant," the expectant's burden 
 of proof is in certain respects, which have been already stated (w), somewhat 
 
 advisers to take him at his word, and to claim, by supplemented and amended bills, 
 restoration of the whole of the property as having been conveyed without consideration, 
 which relief she obtained. In Tomson v. Judge (1855), 3 Drew. 306, the instrument was in 
 the form of a purchase. If it was in truth a purchase, the value given was grossly in- 
 adequate. Alive to this difficulty, the dominant party alleged, and established, that the 
 transaction was in reality a gift, only to find that he had brought himself within the 
 absolute rule, as it was then conceived to be, prohibiting any gift under any circumstances 
 from a client to his solicitor, which was the relation between the parties in that case : per 
 KiNDEBSLBY, V.-C, at p. 316). In Allen v. Davis (1850), 20 L. J. (CH.) 44, the dominant 
 party who had obtained a bill of exchange for £262 from the servient party alleged that 
 £100 of this was for services rendered as a dentist, and, as to the residue, set up, first, that 
 it was a gift, and, afterwards, that it was in consideration of his undertaking to attend 
 to his patient's teeth for the rest of his life. Billage v. Southee (1852), 9 Hare 154, was a 
 similar case. 
 
 (u) The following are illustrations : Nicolv. Vaughan (1833), 1 CI. & Fin. 495 ; Wallcer 
 V. Smith (1861), 29 Beav. 394 (where a lady sued to recover, inter alia, £500 East India 
 Stock, which she had transferred to her solicitor for certain purposes : the soUoitor alleged 
 that the stock was a gift, whereupon he assumed a double burden, first, that of showing 
 that it was a gift, and, secondly, that of sustaining its propriety : he established the second, 
 that is to say, that in fact the influence was not abused, but not the first : per Romilly, 
 M.R., at pp. 398, 399) ; Re Holmes' Estate, Sevan's Case (1861), 3 Giff. 337 (where the cir- 
 cumstances were similar, and the solicitor was under the same double burden : but in this 
 case he failed to prove either that the transaction was a gift, or that, if it was, it could 
 be sustained : per Sttjakt, V.-C, at pp. 345-352) ; Mitchell v. Homfray (1881), 8 Q. B. D. 
 587, C. A. (where the executors of a lady sued her medical adviser for the repayment of 
 money advanced : the defendant alleged that the money was given to him, and the jury 
 found, on a question left to them for this purpose, that the transaction was a gift, and not 
 a loan : the defendant, however, failed to prove explanation of the transaction to the lady, 
 or independent advice, and would therefore have been held liable, but for a plea of 
 confirmation, which he established : per Lord Selbobnb, B.C., at pp. 591, 592, and 
 Bbamwell, B.J., at p. 593). 
 
 (w) The following were, on the evidence, treated as gifts ; — Wright v. Proud (1806), 
 13 Ves. 136 (where a conveyance purporting to be the completion of an agreement for 
 purchase was held to be a gift) ; Dent v. Bennett (1839), 4 My. & Cr. 269 (where a contract 
 whereby a patient purported to promise his medical adviser £25,000 in consideration of past 
 services, and also of future attendance for the rest of his Ufe, was treated as substantially 
 a gift, having regard to the fact that the past services had been duly paid for, when 
 rendered, and the future services must necessarily have been a " negligible quantity " in 
 the case of a patient 85 years of age : per Lord Cottbnham, B.C., at p. 273) ; Wright v. 
 Carter, [1903] 1 Ch. 27, C. A. (where, of the three deeds in dispute, two, which purported to 
 have been executed with the intention to benefit the solicitor for unpaid services rendered 
 in the past, were held to be gifts). And cp., generally, the cases cited in the last three notes. 
 (w) See § 443, note (p), ante. 
 
§§ 456-459 (burden op proof). 423 
 
 heavier when the bargain is not a purchase of, or charge upon, the expectancy 
 itself, than when it is expressed to be so in any instrument. Again, the 
 question of whether the transaction was a purchase or a mortgage determines 
 the particular form of relief which may be appropriate ; and for a similar 
 reason the exact terms and figures are often required to be proved at the trial, 
 or made the subject of inquiries or accounts then directed, in order that the 
 mutual restitution which is an essential element in the rescission of any 
 contract may be efEectively provided for (x) . And in the case of a gift, 
 apart from the above considerations, it may become material to show, by 
 reference to the circumstances, that it was not, or to rebut the dominant 
 party's suggestion that it was, of such a trifling amount or value as to 
 raise no presumption of undue influence or impropriety (y). 
 
 Subs. (3). Matters which the Servient Party is not required to allege or prove. 
 
 458. There are two classes of matters as to which the servient party is 
 under no burden either of allegation or proof. These comprise, first, those 
 matters which he is not bound to, but may (by way of anticipation), set up 
 in the first instance : secondly, those matters which he not only is not required 
 to, but cannot with propriety, set up at any stage in the proceedings, and 
 which are wholly immaterial. 
 
 459. It is a fundamental rule of pleading that nothing need be alleged (z), 
 and it is a fundamental rule of evidence that nothing need be proved, by a 
 party litigant, at the outset, which the law presumes in his favour, or the 
 contrary of which it lies upon the opposite party to establish. Now, as has 
 been indicated, on proof of a relation of the kind under consideration, and 
 of a transaction between the parties during the subsistence of that relation, 
 the law makes three presumptions in favour of the servient party, (1) that 
 the relation gave rise to dominion and influence on the one side, and subjection 
 and amenability to the influence on the other ; (2) that the transaction 
 resulted from the exercise of the influence by the dominant party ; and (3) 
 that the influence was unduly exercised (a). It follows that none of the 
 three facts so presumed need in the first instance be alleged, or, if alleged, 
 need in the first instance be established, by the servient party ; though, 
 where it is known that the dominant party is prepared with materials for 
 an affirmative answer, it may be advisable, and in any case it is allowable, 
 to allege such facts by way of anticipation at the outset, instead of exercising 
 the undoubted right to adopt the alternative, and the more regular and 
 logical, course of awaiting the answer, and then setting up these matters in 
 reply. It may be said that this rule can have no application to the class 
 
 (a;) See Sect. 5, post. 
 
 (y) See § 479, post. 
 
 (z) R. S. C, O. 19, r. 25 : " neither party need in any pleading allege any material 
 fact which, the law presumes in his favour, or as to which the burden of proof lies on the 
 other side." 
 
 (a) See § 405, note (a), ante. 
 
424 CH. V, SECT. 3, SUB-S. (3). 
 
 of case where the relation is alleged to have been constituted by " the circum- 
 stances and conditions," and still less to that peculiar species of the class 
 which is known as " an unconscionable bargain with an expectant " : but, 
 as has been noted in the discussion of these relations, though the servient 
 party is bound to establish facts indicating that the dominant party took an 
 unconscientious advantage of his " weakness," and though the proof of such 
 facts necessarily has the additional effect of meeting in advance any case 
 that may be made, or intended to be made, on the other side, yet what he 
 technically achieves by so doing is proof of a relation, — neither more nor less, 
 — and a right thereupon to have the same presumptions made in his favour 
 as in the case of any of the " known " or " suspected relations " (6). 
 
 460. The second of the above-mentioned classes, consisting of matters 
 irrelevant to any question between the parties, is wholly distinguishable 
 from the first : for here it is not a case of a right to reserve evidence which 
 may, or may not, afterwards be required, but in the meantime is not : it is 
 a case of evidence which can never be material, or therefore admissible, at 
 any stage of the proceedings, and which, therefore, it is as improper for the 
 servient party to adduce, as it is needless for the dominant party to contest. 
 
 461. The first species of this class embraces all facts serving to indicate 
 the motive, purpose, or intention by which the dominant party was actuated. 
 It has long since been established in the present, as in the two other classes 
 of case giving rise to a duty of disclosure which have already been examined (c), 
 and for the same reasons of public utiUty which He at the root qi the whole 
 doctrine (d), that it is not only unnecessary, but immaterial, to allege that 
 the dominant party's breach of duty was animated or accompanied by actual 
 and personal dishonesty, or other moral obliquity, or that he had the intention 
 of defrauding or injuring the servient party : and that it is equally futile 
 and unavailing, because equally irrelevant, for the dominant party to allege 
 or establish the personal innocence of piirity of his intentions or motives (e), 
 
 (6) See Sect. 2, Sub-ss. (5), (6), ante, and note (h), inf. 
 
 (c) See § 197, and § 358, ante, respectively, which, mutatis mutandis, may be taken as 
 repeated in this place. 
 
 (d) See § 407, ante, and the cases cited in the notes thereto. 
 
 (e) Welles v. Middleton (1784), 1 Cox Eq. Cas. 112 (per Lord Thublow, L.C, at p. 119) ; 
 Wright v. Proud (1806), 13 Ves. 136 (where, at p. 138, Lord Erskinb, L.C, points out that 
 the dominant party had been " clearly overreached himself ; and . . . made the instrument 
 of overreaching another in the same transaction ") ; Groves v. Perhirks (1834), 6 Sim. 576 
 (per Shadwell, V.-C, at p. 683) ; Gibson v. Russdl (1834), 2 Y. & C. 104 (where the 
 personal fraud alleged against the dominant party was not only unproved, but affirmatively 
 disproved by evidence — irregularly admitted without objection — of his high character, 
 which, however, did not save him from being held liable : per Khight-Bbttce, V.-C, at 
 pp. 120, 121) ; Harvey v. Mount (1845), 8 Beav. 439 (per Lord Langdalb, M.R., at p. 452) ; 
 Thornber v. Sheard (1850), 12 Beav. 589 (per Lord Landgalb, M.R., at pp. 602, 603) ; 
 Baker v. Bradley (1855), 7 Be G. M. & G. 597 (per Knight-Bbitce, L. J., at pp. 616, 617) ; 
 Longmate v. Ledger (1860), 2 Giff. 157 (per Sttjaet, V.-C, at p. 165) ; Baker v. Monk (1864), 
 4 Be G. J. & S. 388 (per Tubnbe, L.J., at p. 394) ; Tate v. Williamson (1866), L. R. 1 Eq. 
 528 (per Page-Wood, V.-C, at pp. 536, 541) ; Morgan v. Minett (1877), 6 C B. 638 (per 
 Bacon, V.-C, at p. 647) ; James v. Zerr (1880), 40 C B. 449 (per Kay, J., at pp. 460, 461) ; 
 Bae V. Joyce (1892), 29 L. R. (Ir.) 500, 509 ; Willis v. Barron, [1902] A. C 271, H. L. (per 
 Lord Macnaghten, at p. 278) ; Baja Maneahar Bakhsh v. SJutdi Lai (1909), 25 T. L. R. 
 635, P. C. ; Nocton v. Lord AsKburton, [1914] A. C. 932, H. L. 
 
§§ 459-461 (burden op proof). 425 
 
 or his ignorance or unconsciousness of the equitable rules or doctrine (/), or 
 his honest belief that the terms of the transaction were not unfair (g). Even 
 in the case of a relation constituted by " the circumstances and conditions, 
 or an unconscionable bargain with an expectant, it is only necessary for the 
 servient party to prove fraud in the sense of a " presumed or inferred " 
 fraud, not in the sense of personal fraud (h), though it is true that in establishing 
 the circumstances from which the one kind of fraud is presumed, he incidentally 
 establishes, in the majority of cases, the other also. Conversely, the un- 
 meritorious position of the servient party is no reason for depriving him of 
 relief, if he is otherwise entitled to it {i). So irrelevant, and therefore im- 
 proper, are charges of personal fraud, that the making of them by the servient 
 party without proof is always the ground of a special and punitive order 
 as to costs (j), though it can have no effect on his substantive rights even in 
 a case where the dominant party has affirmatively established his complete 
 probity and honour in relation to the particular transaction, or has, by an 
 extreme indulgence, been permitted to adduce evidence (not objected to) 
 of his high personal character and reputation generally (k). 
 
 ( / ) WeUes V. Middleton, sup. {per Lord TinjELOW, L.C., at p. 126 : " they have taken 
 the property, perhaps bluntly and inadvertently, but that is too far out of the sight of a 
 court of justice ") ; Huguenin v. Baseley (1807), 14 Ves. 273 (per Lord Eldon, L.C., at p. 
 300) ; Espey v. Lahe (1852), 10 Hare 260 (per Tubneb, V.-C, at pp. 263, 264) ; Rhodes v. 
 Bate (1866), 1 Ch. App. 252 (per Tubnbb, L.J., at p. 262 : nothing " affecting the moral 
 character of the appellant — I think that he meant to give, and did give, the plaintiff honest 
 advice, and that his habUity arises not from his having failed to do so, but from his not 
 having sufficiently attended to the law of this Court with reference to persons standing in 
 confidential relations ") ; Nocton v. Lord AsKburton, [1914] A. C. 932, H. L. (per Lord 
 Haldane, L.C, at p. 954). 
 
 (g) James v. Kerr (1880), 40 C. D. 449 (per Kay, J., at pp. 460, 461). 
 (h) Gwynne v. Heaton (1778), 1 Brown 0. C. 1 (per Lord Thublow, L.C., at p. 177 : 
 " fraud is not the ground of relief, it is the example and pernicious consequences." This 
 was a case of purchase of a reversion) ; Rae v. Joyce (1892), 29 L. B. (Ir.) 500 (another case 
 of an unconscionable bargain with an " expectant," per Fitzgibbok, L.J. (Jr.), at p. 
 523 : " the essential character of the inequality of the parties to the transaction is distinct 
 from fraud "). It is true that at p. 156 of Chesterfield (Earl of) v. Jannsen (1751), 2 Ves. 
 Sr. 125, Lord HaBDWiCKB, L.C, describes " catching bargains with heirs, reversioners, 
 or expectants " as a " head of fraud," but he makes it quite clear that the " fraud " he is 
 referring to is " fraud presumed or inferred from the circumstances and conditions," 
 and not actual or personal fraud, though, as he adds at p. 157, it so happens that in such 
 cases there is " sometimes proof of actual fraud." So, at p. 887 of Moxon v. Payne (1873), 
 8 Ch. App. 881, James, L.J., points out that, though "gross and premeditated fraud" 
 had not been proved in that case (which was one of a relation of influence created by the 
 circumstances), the failure to do so was no ground for refusing relief, and that fraud had 
 been proved in the only sense in which it is required to be estabUshed, viz. the sense in 
 which " the undue and unconscientious abuse of influence by a person in whom trust and 
 confidence are placed, has always been treated " — that is, by the Court, and inferen- 
 tially — "as a fraud of the gravest character." See also Nocton, v. Lord Ashhurton, sup. 
 
 (i) Hatch V. Hatch (1804), 9 Ves. 292 (where the brother of the dominant party, 
 who had actually prepared the deed which was set aside, and had been party to the 
 undue influence which had procured it, was not deprived of relief (though he was of 
 costs), because he was suing in jure uxoris, and the wife, who had been unduly influenced 
 by both brothers, was not to be prejudiced by her husband's misconduct : per Lord 
 Eldon, L.C., at pp. 298, 299). With this contrast the case of Wright v. Vanderplank 
 (1856), 8 De G. M. & G. 133 (where the unmeritorious husband was suing in right of his 
 equally unmeritorious wife, and on this ground Ttjenek, L. J., at pp. 149, 150, distinguishes 
 the case from Hatch v. Haleh, sup.). 
 
 (j) See Ch. VIII, Sect. 2, Sub-s. (4), post. 
 
 (k) As was done in Gibson v. BiisseU, cited in note (e), sup., q.v. One may assume 
 
426 
 
 CH. V, SECT. 3, SUB-S. (3) ; SECT. 4, SUB.-S. (1). 
 
 462. Not less immaterial is the question of the actual, or anticipated, 
 result of the transaction from a financial or business point of view. Just 
 as in the case of the equitable duties of disclosure and otherwise which arise 
 out of negotiations for a contract ubenimm fidei (Z), or out of a relation of 
 confidence (m), it is no answer to a claim for relief to allege or prove, and 
 quite unnecessary therefore for the servient party to ofier anticipatory 
 evidence contradicting any allegation, that the dominant party incurred 
 serious risk in the transaction, and stood to lose heavily by it (n). Equally 
 irrelevant is any suggestion on the part of the dominant party that the 
 servient party is unwise in seeking to avoid the transaction, and would be 
 better ofE by electing to adhere to it ; this being a matter for the considera- 
 tion of the servient party alone, whose right to relief is not to be in any way 
 afiected by the fact, if it be a fact, that he will be a loser by so doing (o) ; any 
 more than, conversely, the right of the dominant party to judgment in his 
 favour, on his establishing any of the afSrmative defences available to him, 
 or on the servient party's failing to prove a case against him, is to be afiected 
 by the fact, if it be a fact, that, in the event, the transaction has turned out 
 greatly to his advantage (j)). 
 
 Sect. 4. The Affirmative Answers available to the Dominant Party. 
 
 463. As soon as the servient party has established the matters in respect 
 of which the onus rests on him, with the result that the three presumptions 
 
 that, if any objection had been made to its reception, this evidence would have been 
 rejected. In Moore v. Prance (1851), 9 Hare 299, the dominant party, a solicitor, relied 
 upon an offer which he had made before action to reconvey the property to the servient 
 party if he would apologize for having made charges of personal fraud and imposition, 
 but TtJBNEB, V.-C, at pp. 304, 305, held that he had no right to impose such a condition, 
 or " to mix up matters of personal and private feeling " with his plain legal duties, and 
 such an offer, therefore, could have no effect upon the result, or even upon the costs. 
 
 (I) See § 221, ante. 
 
 (m) See § 359, ante. 
 
 (n) Barnardiston v. Lingood (1740), 2 Atk. 133 {per Lord Habdwicke, L.C, at p. 135 : 
 " as to the hazard the defendant ran of its being a losing bargain, it is a circumstance in 
 common only with all people who are dealers in this way, and if this had been a reason for 
 carrying such an agreement into execution, there never would have been any of them 
 set aside." The case was one of an unconscionable bargain of an aleatory description 
 with an expectant). On the other hand, in Berney v. Pitt (1680), 2 Swanst. 143 n., as to 
 which see note {w) to § 445, ante. Lord Nottingham, L.C, did undoubtedly excuse the 
 principal defendant on no other ground than that his bargain with the expectant was in 
 effect a fair gamble. 
 
 (o) See Edwards v. Browne (1845), 2 Coll. 100 (per KNiaHT-BBTrcB, V.-C, at p. 107 : 
 " this dealing with a reversionary interest, if the plaintiff considers it to be for his benefit 
 to press the matter, cannot stand." In that case the actual value was only shown to be 
 £38 more than the £200 paid, and the Vice-Chancellor was obviously surprised that the 
 " expectant " did think it worth his while " to press the matter," but distinctly held that 
 the wisdom or unwisdom of his doing so was absolutely immaterial to his rights) ; Baker v. 
 Monk (1864), 4 De G. J. & S. 388 (per Knight-Bbuce, L.J., who again points out that the 
 question whether the servient party would not have done better for herself by resting 
 content with the sale, was not the question he had to determine, which was solely one of 
 right : p. 389). 
 
 (p) See Moth v. Atwood (1801), 5 Ves. 845 (where the bargain which was upheld was 
 admitted to be " a very considerable one ") ; Montesquieu v. Sandys (1811), 18 Ves. 301 
 (where Lord Eldon, L.C, in sustaining an attorney's purchase, characterized by entire 
 good faith and propriety, and of a very speculative character, which he had been pressed 
 by the client to make, pointed out the irrelevance of the fact that the bargain ultimately 
 turned out to the attorney's advantage : p. 312). 
 
§§ 462-464 (affirmative answers). 427 
 
 above stated (17) are made in liis favour, it lies upon tlie dominant party 
 to show cause why there should not be judgment against him. He must 
 displace the prima facie case made against him by proof that, in some way 
 or another, the servient party has forfeited his right to relief. This, unless 
 he is in a position to establish some one of the various affirmative answers 
 or bars which are applicable to actions of contract in general (r), he can 
 only do by proving actual facts which contradict the facts presumed 
 against him in virtue of the three presumptions in question. Of these, the 
 first, viz. that influence in general results from the relation, is probably 
 irrebuttable, but, on the other hand, the dominant party is not concerned to 
 contest this harmless, because unparticularized, presumption : it is only the 
 other two, for these connect the influence with the transaction impeached, 
 which he is seriously interested in repelling, and one or other of which he 
 must repel, in order to succeed. The former he displaces by proof that in 
 fact the influence was not operative upon the transaction : the latter, by 
 proof that it was not in fact undue (s). Either of these answers is sufficient 
 to exculpate him : if the influence had in fact no efEeot upon the transaction, 
 it is immaterial that there is no proof that, if it had been operative, it would 
 have been in fact a " due " influence ; and, if the influence be shown to have 
 been duly exercised in fact, it does not signify in the least that the dominant 
 party has failed, or has not attempted to establish, that it was inoperative in 
 point of fact. It is only the conjunction of the presumptions which entitles 
 the servient party to relief : and a displacement therefore cf any one of them 
 IS enough to destroy this right. It is necessary to examine these two main 
 classes of affirmative answer separately, and in detail ; and then to consider 
 a third plea available to the dominant party, if he is unable to rebut any 
 of the presumptions against him, which depends for its success on proof 
 that, after the transaction had been entered into, the servient party with 
 full knowledge of all material facts, and of his rights, and in entire freedom 
 from the presumed undue influence, elected to confirm the transaction. 
 
 Suh-s. (I). Proof that the Presumed Influence ivas not Operative upon the 
 
 Transaction. 
 
 464. The servient party having proved that the transaction was entered 
 into at a time when the relation was in existence — the burden of proof is so 
 far on him, but no further {t) — it is open to the dominant party to repel the 
 
 (q) See § 459, ante, and the oases cited in note (a) to § 405, ante. 
 
 (r) Such as accord and satisfaction, release, &c. Statutes of Umitation do not in terms 
 apply : see Allcard v. SUnner (1887), 36 C. D. 145, C. A. (per Lindley, L.J., at p. 186). 
 Nor are they applied by analogy, where the party " has got the property into possession " : 
 Nocton V. Lord AsMurton, [1914] A. C. 932, 957, 958, H. L. In Cockelly. Taylor (1852), 
 15 Beav. 103, a plea of champerty was raised, but unsuccessfully. 
 
 («) For clear and succinct statements of the general burden of proof on the dominant 
 party, in the case of gifts, see Bainhrigge v. Browne (1881), 18 C. D. 188 (per Fry, J., at 
 p. 196) : in the case of transactions for value, Holman v Loynes (1854), 4 De G. M. & G. 
 720 (per Tttbner, L.J., at pp. 282-284). 
 
 (t) See § 452, and the citation in note (j) thereto, ante. 
 
428 CH. V, SECT. 4, SUB-S. (l). 
 
 presumption thereupon made against him that the relation was not only 
 contemporaneous with, but also operative upon, the transaction, by establish- 
 ing that in point of fact it was not so operative. This he may do in one of 
 two ways, or (as often happens) by both combined. He may prove facts 
 tending to show that the relation, or rather the influence presumed to arise 
 from it, had no efiect upon the particular transaction, by reason of its subject- 
 matter ; or that such presumed influence had ceased, or was suspended, at 
 the material date. 
 
 465. The first of these possible answers is made good by evidence that, 
 for instance, the dominant party was not employed, if the relation be a 
 professional one, in the particular transaction, or that the transaction was 
 of such a nature as to render it impossible or unreasonable to suppose that 
 it could have been within the sphere of the influence alleged. If the dominant 
 party can establish that in this way the influence wa.^, as it has been termed, 
 inoperative in hdc re, he is entitled to judgment, without the necessity of 
 going any further (u) ; but, wherever his proof has been found insufficient 
 in this respect, he has failed (v), unless in a position to make good some other 
 of the affirmative answers available to him. 
 
 466. Alternatively, it is open to the dominant party to allege that the 
 influence presumed to have resulted from the relation was entirely at an 
 end when the transaction took place, and that the servient party was at 
 that time in a state of complete freedom and emancipation, notwithstanding 
 that formally and technically the relation itself might be deemed to be still 
 subsisting. There are extremely few examples of such a case being made 
 out ; but, whenever it has been, the dominant party, on this ground alone, 
 and whether he was in a position to establish the propriety of the trans- 
 action or not, has been held entitled to succeed (w) ; whenever it has not, 
 
 (u) As in Montesquieu v. Sandys (1811), 18 Vcs. 301, a case of an attorney purchasing 
 from his client {per Lord Eldon, L.C, at p. 312 : " there is no authority establishing, 
 nor was it ever laid down that an attorney cannot purchase from his client what was not in 
 any degree the object of his concern as an attorney ; the cUent making the proposal, 
 himseU proposing the price, no confidence asked or received in that article, and both 
 ignorant of the value. Under such circumstances he is not the attorney in h&c re ; and 
 therefore, not being under any duty as attorney to advise against the agreement, he may 
 be the purchaser ") ; Edwa/rds v. Meyrick (1842), 2 Hare 60 (per Wigbam, V.-C, stating 
 the proposition at pp. 68, 69, and finding, at p. 71, that the sohcitor had brought himself 
 within it, and had established that he was not employed in Adc re) ; Allison v. Clayhills 
 (1907), 97 L. T. 709 (per Pabkbb, J., at pp. 712 sqq., where the sohcitor — ^it was again a 
 case of a solicitor purchasing from his oUent — was held to have purchased as a friend, and 
 not in the exercise of any influence presumed to spring from the relationship). 
 
 (v) As in Jones v. Thomas (1837), 2 Y. & C. (Exch. inEq.) 498 (per Addbeson, B., at 
 pp. 519, 520) ; HoVman v. Loynes (1854), 4 De G. M. & G. 270 (per Turneb, L. J., at pp. 279- 
 281). 
 
 (w) As in Oldham v. Rand (1751), 2 Ves. Sr. 259 (case of a gift from a grateful cUent 
 to his attorney after the htigation was over, ^er Lord Habdwicke, B.C., at p. 260: "though 
 there had not been that subsequent ratification " — ^for the attorney had estabhshed this 
 plea also — " I do not see how I could come at it, for it is not obtained by the attorney 
 during the course of the cause, or before it, but the whole was over ") ; Lyddon v. Moss 
 (1859), 4 De G. & J. 104 (another case of attorney and chent, where the attorney, though 
 he had failed to prove that he had advised his chent that an agreement to allow interest 
 on his biU of costs was unenforceable, succeeded in estabUshing that the relation had come 
 to an end at the time of the transaction : per Ttjbneb, L. J., at pp. 132-134, and Knight- 
 Bbtjcb, L.J., at pp. 134, 135). 
 
§§ 464-467 (affiemative answers). 429 
 
 the Court, whilst recognizing that the plea is a valid one if satisfactorily 
 established, has always so far as this ground is concerned, pronounced judg- 
 ment against the dominant party (x). And the same consequences ensue 
 upon a failure to prove that the state of freedom in which the servient party 
 may have been at the commencement of the relation continued down to the 
 date of the transaction, as upon a failure to prove a cessation of an initial 
 state of subjection and inferiority before that date (y). If the gaoler can 
 prove that the prison gates were thrown open, and that there was no one in 
 the background to recapture the liberated prisoner, at the time of the act 
 impeached, it is immaterial how long the captive may have previously been 
 in durance : and, conversely, it does not signify how free and unconstrained 
 he may have been when he entered the place in which he was afterwards 
 forcibly detained, if the act complained of was done during such detention. 
 It will be afterwards shown that, when the dominant party relies upon a 
 subsequent confirmation of the transaction, the same onus is on him to show 
 that the transaction was affirmed, as here it is to show that it was entered 
 into, after a complete cessation and extinction of the influence (z). 
 
 467. It must always be borne in mind that the vital thing to be established 
 in support of the plea now under consideration is the non-existence or cessation 
 of the influence deemed to spring from the relation, rather than of the relation 
 itself, which latter is only of importance as presumptively conducing to the 
 former (a). It is useless to show that the relation had come to an end, or 
 
 {x) See Hatch v. Hatch (1804), 9 Ves. 292 (per Lord Eldon, L.C, at p. 296) ; Archer v. 
 Hudson (1846), 15 L. J. (oh.) 211 (per Lord Lyndhxtest, L.C., at pp. 212, 213), and, in 
 the Court below (1844), 7 Beav. 551 (per Lord Langdaie, M.R., at p. 561) ; Holman v. 
 Loynes (1854), 4 De G. M. & G. 270 (per Turner, L.J., at pp. 282, 283) ; Wright y. 
 Vanderplank (1856), 8 De G. M. & G. 133 (per Knight-Bbxtob, L.J., at pp. 136, 137, and 
 Tttrneb, L. J., at p. 146) ; Be Holmes's Estate, Sevan's Case (1861), 3 Giff. 337 (per Stttaet, 
 V.-C, at pp. 346, 347) ; O'Brien v. Lewis (1863), 32 L. J. (CH.) 569 (per Lord Westbtjby, 
 L.C., at p. 572) ; Morgan v. Minett (1877), 6 C. D. 638 (per Bacon, V.-C, at p. 645) ; 
 Bainhrigge v. Browne (1881), 18 C. D. 188 (per Eey, J., at p. 196) ; Idles v. Terry, [1895] 
 2 Q. B. 679, C. A. (per Lopes, L. J., at p. 684) ; Cavendish v. 8trutt (1903), 19 T. L. R. 483 
 (per Bybne, J., at p. 488). In Gibson v. Jeyes (1801), 6 Ves. 266, the dominant party- 
 failed to show that the partnership between himself and his son (who actually exerted 
 the influence) was at an end before the date of the transaction : see § 504, note (m), post. 
 
 (y) Allcard v. Skinner (1887), 36 C. D. 145, C. A. (per Cotton, L. J., at pp. 172, 173, and 
 BoWEN, L.J., at p. 191, pointing out the irrelevance of the mere fact that the servient 
 party's mind and will were entirely free and unfettered when she entered the sisterhood, 
 if the gift impeached was made under the influence afterwards arising out of the relation 
 which she had so entered into, or, in other words, when the initial freedom had come to 
 an end). 
 
 (z) See Sub-s. (3), post. 
 
 (a) Wood V. Downes (1811), 18 Ves. 120 (per Lord Eldon, L.C, at p. 127 : "if the 
 relation has completely ceased, if the influence can be rationally supposed also to cease a 
 client may be generous to his attorney or counsel, as to any other person : but it must go 
 so far ") ; Allison v. Clayhills (1907), 97 L. T. 709 (per Pabkeb, J., at pp. 711, 712 : " there 
 are cases in which it is laid down that this principle only applies when the solicitor is the 
 solicitor of the client in the particular transaction the validity of which is in dispute ; but, 
 in my opinion, that only means that when the relationship is of such a nature that it does 
 not impose any duty to his client in the particular transaction, then the principle has no 
 application. It does not mean, in my opinion, that the principle has no application in any 
 case in which the solicitor is not in the particular transaction actually retained by or 
 actually acting for his client under such circumstances that, if he neglected his professional 
 duty, he would be liable to an action at law for negligence." He then gives, at p. 712 
 
430 OH. V, SECT. 4, SUB-SS. (l), (2). 
 
 was not subsisting, at the date of the transaction, unless circumstances be 
 shown sufficient to raise a presumption that the inJEluence also had ceased, 
 or was inoperative (6) : for the presumption of undue influence which is 
 made against the dominant party in the first instance can only be displaced 
 by this counter-presumption. Still more futile is it to prove merely the non- 
 performance or cessation of acts or duties proper to the particular relation, 
 as, for instance, that the solicitor was not actually retained to act for the 
 client in the particular transaction, or that the physician was not in actual 
 attendance on the patient ; for to prove so much only does not even establish 
 the non-existence or cesser of the relation, much less that of the influence (c). 
 The most that such evidence can indicate is that, at the time of the 
 transaction, the relation was dormant or suspended because at the moment 
 no occasion arose for calling it into activity. So important is the question 
 of the influence, and so comparatively unimportant that of the relation, 
 that, as has been distinctly held, proof of the termination of the former, 
 even without proof of the termination of the latter, may be sufficient to 
 support the plea {d) ; and proof of circumstances tending to show that, 
 
 illustrations of the two types of case, one that of a solicitor who, though at the moment 
 actually representing the servient party in an action, buys a horse from him in the hunting- 
 field ; the other, that of one who having been employed in litigation respecting the servient 
 party's estates, or in the management of them, after ceasing to so act, buys from him part 
 of those estates : in the former case, there would be a technical relation at the time of the 
 transaction, but no influence is deemed to have operated on it : in the latter, there would 
 be no existing relation, but none the less the influence might be inferred). And see the 
 case cited in note (d), inf. 
 
 (6) As in Hylton v. Hylton {llSi), 2 Ves. Sr. 547 {per Lord Habdwicke, L.C, at p. 549 : 
 " undoubtedly, if after the ward or cestui que trust comes of age, and after being actually 
 put into possession of the estate, he thinks fit, when sui juris and at liberty, to grant that 
 or any other reasonable grant, by way of reward for care and trouble, when done with eyes 
 open, the Court could never set that aside : but the Court guards against doing it at the 
 very time of accounting and delivering up the estate," — that is to say, at a time when the 
 ' ' influence "is still fresh, though the relation of guardian and ward is formally at an end) ; 
 Wright v. Proud (1806), 13 Ves. 136 (-per Lord Ekskinb, L.C., at p. 137). Cp. the cases cited 
 in the last note, and also those cited in the notes to § 409, ante, where the relief is given on 
 the theory that though the infancy is at an end, it has come to an end so recently that the 
 influence of parent over " the child " must be presumed still active. 
 
 (c) See Dent v. Bennett (1839), 4 My. & Cr. 269 (per Lord Cottbnham, L.C, at p. 277 : 
 " the relation does not cease because the patient has not medicine actually administered 
 to him at the time, any more than the relation of attorney and client ceases because no 
 suit may be actually in progress. If it were otherwise, I do not know that it would have 
 made any difference." The last sentence apparently means that, even if the relation 
 could be deemed at an end, the influence could not be) ; Ahearne v. Hogan (1844), Dru. 
 310 (per StTGDEN, L.C. (Jr.), at p. 323 : " the relation of physician and patient does not 
 properly cease because the physician may not happen to be in actual attendance at the 
 time ") ; Holman v. Loynes (1854), 4 De G. M. & G. 270 (where, as to the contention that 
 the relation had come to an end because the dominant party had not actually rendered any 
 professional services to the servient party for 16 months before the transaction, Tubneb, 
 L.J., at p. 282, observes that during that period "there was not any cessation of the 
 relation, but only a cessation of the circumstances that were necessary to call the relation 
 into action ") ; Bhodes v. Bate (1866), 1 Ch. App. 252 (per Tueneb, L. J., at p. 260 : " the 
 mere fact that the relation is not called into action is not, I think, sufficient of itseK to 
 determine it, for this may well have arisen from there having been no occasion to resort 
 to it ") ; Wright v. Garter, [1903] 1 Ch. 27, C. A. (per Vattghan Whliams, L.J., at p. 53, 
 Stieung, L.J., at pp. 58, 59, and Cozens-Habdy, L. J., at pp. 61, 62) ; Allison v. Glayhills 
 (1907), 97 L. T. 709 (the passage cited in note (a), sup.). 
 
 (d) Be Holmes's Estate, Bevan's Case (1861), 3 Giff. 337 (per Stuabt, V.-C, at p. 345, 
 
§§ 467, 468 (affibmative answers). 431 
 
 though the relation existed, it was of such a character as presumably to give 
 rise to an extremely slight degree of influence, though not sufficient of itself 
 to make good the particular plea in question, will operate strongly in the 
 dominant party's favour, and may, with other circumstances, be deemed 
 sufficient to sustain the transaction on the ground of its general propriety (e). 
 
 Subs. (2). The Propriety of the Transaction, and the Due Exercise of the 
 
 Influence in Fact. 
 
 468. If the dominant party is not in a position to rebut the presumption 
 that the influence arising from the relation brought about the transaction, 
 a second line of affirmative defence is open to him. He may still escape if 
 he can repel the other presumption made in the servient party's favour, 
 viz. that the influence was unduly exercised, by affirmative evidence that in 
 point of fact it was not unduly, but duly, exercised,— not abused for his own 
 advantage at the expense of the servient party, but properly used with due 
 regard to the rights and interests of both ; and that the transaction was 
 absolutely righteous, just, conscientious, and, in every sense of the word, 
 " fair " (/). By such exculpatory proof he defeats and displaces the 
 
 in a case of a gift from client to solicitor : " the principle of influence vitiates the gift ; 
 but the presumption of influence may be rebutted by circumstances short of the total 
 dissolution of the relation. TJiat relation is only looked at as creating the influence, and as 
 soon as circumstances of evidence are introduced which remove all effect of the influence, 
 whether the relation subsists or not, there is no incapacity on the part of the solicitor to become 
 the object of the client's bounty"). In the particular case, however, the solicitor failed 
 to show the necessary " circumstances of evidence " (pp. 346, 347). 
 
 (e) Pisani v. Att.-Gen. of Gibraltar (1874), L. B. 5 P. C. 516, where the servient party 
 called in the dominant party, a colonial lawyer practising at Gibraltar, who had never 
 acted for her before, and, in fact, was a perfect stranger to her, — to advise as to the suffi- 
 ciency of certain deeds in a proposed sale of her property to a third person at a certain 
 price. Everything being ready for completion, the lady refused to proceed further with the 
 matter, on the ground of a personal objection to the proposed vendee. The dominant 
 party used his best efforts, but in vain, to induce her to complete with this person ; and, 
 on her still refusing, offered to purchase himself at the same price, and eventually did so. 
 In these circumstances, it was held that, though it would be going a little too far to say 
 that there was no relation at all between the parties, as in Edwards v. Williams, cited in 
 note (o) to § 453, ante, or no influence arising out of such a relation, yet (p. 537) " the 
 circumstances of the employment may be considered, and the amount of influence 
 estimated." The Court found, on such consideration and estimate, " no reason to sup- 
 pose that in this case, a high degree of confidence existed, or that much influence had 
 been acquired " ; and this flnding, coupled with flndings of complete good faith, sufficed 
 to excuplate the dominant party (pp. 538, 539). 
 
 (/ ) See Hunter v. Atkins (1834), 3 My. & K. 113 {per Lord Brougham, L.C., at pp. 134, 
 135 : "in order to support the deed, he ought to show that no single advantage was taken, 
 that all was fair," and that he entered into the transaction " taking no advantage of his 
 influence or knowledge, putting the other party on his guard, bringing everything to his 
 knowledge which he himself knew " • again, at p. 136 : " the proof is upon him ... to 
 show that he has placed himself in the position of a stranger, that he has cut off as it were 
 the connection which bound him to the party giving or contracting, and that nothing 
 has happened which might not have happened had no such connection subsisted ") ; 
 Tomson v. Judge (1855), 3 Drew. 306 (the passage cited in note (p) to § 470, post) ; Spencer 
 V. Topham (1856), 22 Beav. 573 (per Bomilly, M.B., at p. 577 : " the validity and bona 
 fides of the transaction") ; Erlanger v. New Sombrero Phosphate Co. (1878), 3 App. Cas. 
 1218, H. L. {per Lord Penzance, at p. 1230 : " the Courts have always cast upon him who 
 holds that position" — i.e. a position of "unfair advantage resulting from the relation " 
 presumptively — " the burden of showing that he has not used it to his own advantage ") 
 Roe V. Joyce (1892), 29 L. R. (Ir.), 500 (the passage cited in note {n) to § 469, post). 
 
432 CH, V, SECT. 4, SUB-S. (2). 
 
 inculpatory presumption, and succeeds in (as it is usually termed) " sustaining 
 the transaction." It has, indeed, been sometimes judicially stated that, 
 in the case of gifts as distinguished from contracts, this second line of defence 
 is not available, and that the dominant party can only succeed by proof of 
 the non-existence or cessation of the influence : but when these statements 
 are examined, it will be found that they amount to no more than an emphatic 
 insistence on the difierent kinds of proof which must be adduced by the 
 dominant party in the respective cases, particularly in regard to inde- 
 pendent advice (g), the necessity for establishing which in the case of a 
 gift, as a separate and distinct probandum, as contrasted with the absence of 
 such necessity in the case of a contract, has, as will be explained hereafter (h), 
 been definitely and clearly laid down : and it is this necessity which, in the 
 statements referred to, is doubtless intended when it is said that the relation 
 must be put an end to before the gift can be secured from avoidance at the 
 option of the donor. 
 
 469. How, then, is the " fairness," or " righteousness," or " propriety," or 
 " conscientiousness " of the transaction to be established ? To some extent 
 the kind of evidence required will depend upon the circumstances of the 
 individual case : an element which may be of the utmost importance in 
 this case may be of little or none in that : that which is not a matter of 
 serious dispute between one pair of litigants may be fiercely contested between 
 another. And, further, there are obvious reasons why, as Lord Brougham 
 remarked (i), it is not desirable to specify too closely, or draw up any 
 authoritative catalogue of, particular facts which will be held by the law, 
 in each and every case, sufficient to " sustain the transaction." This observa- 
 tion, however, is not intended to suggest that the law ought to abnegate, 
 or has abnegated, its duty of formulating general principles. The first of these 
 general principles is that, as has been emphatically laid down, it is whoUy 
 insufficient, and, though indispensable as a preliminary to the evidence which 
 
 {g) Thus, in Morgan v. Minett (1877), 6 C. D. 638, after stating (p. 645) that " the rule 
 is without qualification," i.e. the rule against a solicitor accepting a gift from his client. 
 Bacon, V.-C., goes on to say that " there may be circumstances which would show that 
 that relation had been put an end to, so that the parties are at liberty to deal," and (at 
 pp. 646-649) refers to " independent advice," apparently (for otherwise the whole of this 
 part of his judgment would contradict his previous statement that the rule is unqualified) 
 as one of the means by which the relation may be so put an end to. Similarly, in Liles v. 
 Terry, [1895] 2 Q. B. 679, C. A., statements that the rule is irrebuttable as to gifts, while 
 the relation subsists, are followed by others which recognize that proof of the competent 
 and independent advice of a third person may justify the transaction, because in that way 
 the dominant party puts himself in a position to say that the relation did not operate upon 
 the gift {per Kay, L. J., at pp. 685, 686). Again, at p. 186 of London tfc Westminster Loan dk 
 Discount Co. v. Bilton (1911), 27 T. L. R. 184, Joyce, J., after a statement that the 
 dominant party must show a cesser of the influence, adds that " practically this could 
 hardly be done, except by seeing that " the servient party " had competent and inde- 
 pendent advice." Cp. Lord Bbottoham's observations cited in the last note, as to the 
 kind of evidence whereby the dominant party may establish that he " has cut off, as it 
 were, the connection." 
 
 {h) See § 470, and § 475, post. 
 
 (i) At p. 141 of Hunter v. Atkins (1834), 3 My. & K. 113 : " if it were stated that . . . 
 certain things should be required in order to rebut the presumption of " undue influence, 
 " how easy would it be for cunning men to . . . protect themselves . . . and to place 
 their misdeeds beyond the denunciation of the law." 
 
§§ 468, 469 (affirmative answers). 433 
 
 is to justify the transaction, is not even, strictly, an ingredient in such evi- 
 dence, to prove that the servient party had a real and actual intention of 
 doing or promising that which he is alleged to have done or promised. 
 This of course is the first thing that the dominant party must establish, 
 if it is in dispute, as the foundation on which his plea of good faith and 
 propriety is to be built {j) ; for, however clearly he may satisfy the Court 
 that his conduct has been such as would have abundantly sustained the 
 transaction if there had been any actual intention on the part of the servient 
 party to enter into it, yet, if he fails to prove the existence of that intention, 
 he fails altogether {Jc) : he has built a house, indeed, but upon sand, like the 
 defamer who proves a case of absolutely fair comment on certain facts, 
 assuming them to have been true, but cannot establish that they were true. 
 Having proved that the servient party had a real intention of making the 
 gift or contract, which, if it were the case of a will, would be enough, with- 
 out going further, as has already been explained [l), the dominant party is 
 still only on the threshold : the next question, as Lord Eldon said (m), 
 is, " how the intention was produced." And it is at this point that he takes 
 up his burden ; not, as has been vainly contended, that he lays it down. 
 Accordingly whenever, having shown the existence of actual volition on the 
 part of the servient party with full knowledge of what he was doing, the 
 dominant party has either failed in establishing, or has not attempted to 
 establish, the next step, namely, the freedom from influence and the 
 spontaneity of that volition, contenting himself with the utterly fallacious 
 argument that because proof of intention is an indispensable prerequisite 
 to success it is therefore the only one, his plea has been held bad (n) . 
 
 ij) As in Gibson v. Russell (1843), 2 Y. & C. 104 (where, at p. 115, Kniqht-Bbtjce, V.-C, 
 states this as one of th^ three things which the dominant party was bound to establish, 
 and at pp. 115, 116, finds that he had failed to do so, the matter being left in doubt) ; 
 Moore v. Prance (1851), 9 Hare 299 (where the dominant party did not even attempt to 
 prove that, as he had falsely stated in the recitals of the deed drawn up by himself, the 
 servient party had any intention or desire in fact to restrict his power of dealing with 
 his property, or to appoint the dominant party his trustee, or place his affairs in his 
 hands : per Turner, V.-C, at p. 303). 
 
 {k) Walker v. Smith (1861), 29 Beav. 394 {per Romilly, M.R., at pp. 398, 399). 
 
 (l) See § 447, ante. 
 
 (m) At p. 299 of Huguenin v. Baseley (1807), 14 Ves. 273 : noted and applied by Lord 
 Hathbkley, L.C, at pp. 338, 339 of Turner v. Collins (1871), 7 Ch. App. 329. 
 
 (n) As in Billage v. Southee (1852), 9 Hare 534 {per Turner, V.-C, at p. 540 : " it is 
 said that he intended to be liberal . . . but intention imports knowledge, and liberality 
 imports the absence of influence ") ; Wright v. Vanderplank (1856), 8 De G. M. & G. 133 
 (where, though it was proved that the lady knew exactly what she was doing, it was not 
 proved that she was " in mind, and in person, a free agent " ; per Kniqht-Beuob, L.J., 
 at pp. 136, 137, and Turner, L.J., at p. 146) ; Rhodes v. Bate (1866), 1 Ch. App. 252 {per 
 Turner, L.J., at p. 257) ; Turner v. Collins, sup. ; Rae v. Joyce (1892), 29 L. R. (Ir.) 500 
 {per FiTZQiBBON, L.J. (Ir.), at p. 523 : " the burden is thrown on the defendant of sustain- 
 ing the transaction. What has he to prove ? Not merely absence of fraud and dis- 
 honesty on his own part, not merely understanding and volition on the plaintiff's part, not 
 merely that a contract in the fullest sense was made, but afBrmatively that the contract itself 
 was not only fair and just, but was also reasonable." This was a case of a bargain with 
 an " expectant ") ; Bank of Montreal v. Stuart, [1911] A. C. 120, P. C. at p. 137 (wife's 
 declarations of freedom of wiU " merely showed how deep-rooted and lasting the influence 
 of her husband was "). It has been said that this spontaneity and freedom, where the 
 transaction is a gift, is even more difficult to establish than it ordinarily is in such cases 
 if the servient party makes the gift not in the form of a payment or transfer outright, 
 but in the form of a security to the dominant party's creditor on terms which involve a 
 B.N.D. 2 F 
 
434 CH. V, SECT. 4, SUB-S. (2). 
 
 470. Assuming the foundation to have been laid, as just indicated, the 
 elements essential to the success of the plea may be summarily fetated, ac- 
 cordingly as the transaction is a gift or a contract, as follows. A gift is 
 " sustained " by proof, (1) that the servient party had full disclosure, in the 
 widest sense of the term, from the dominant party ; and (2) that he had, not 
 from the dominant party, but from a separate person entirely independent 
 of him, and free from his influence, honest and competent advice (o). A 
 contract is " sustained " by proof, (1) that the servient party had such full 
 disclosure from the dominant party as is above-mentioned ; (2) that he 
 received honest advice either from an independent third person, or (for the 
 third person's intervention is not an absolutely indispensable condition here) 
 from the dominant party himself who, in that case, must show that he gave 
 precisely the same advice against himself as he would have given if the 
 transaction had been with a stranger ; and (3) that he received not less, or 
 parted with not more than, a fair and proper consideration (p). It is now 
 proposed to consider each of these elements successively. 
 
 471. Whatever be the nature of the transaction, the dominant party 
 can only justify it by proof that, before it took place, he had put the servient 
 party in possession of all the knowledge, in both senses of the word (q), which 
 he then, whether actually or presumptively (r), himself possessed. That is 
 to say, he must be in a position to show, not only that he had communicated 
 to the servient party all material facts within his exclusive cognizance, but 
 also that he had placed at his disposal the whole of his knowledge in the sense of 
 natural or acquired skill or judgment as to the wisest mode of dealing with 
 those facts in the interests, not of himself, but of the servient party. In 
 a word, he must make all such disclosure, and give all such advice, to the 
 servient party as would or might put him back in that position of equality 
 of which the relation has, in contemplation of law, deprived him (s). 
 
 continued future liability : Archer v. Hudson (1846), 15 L. J. (oh.) 211 {per Lord Lynd- 
 HUEST, L.C., at pp. 212, 213) ; Kempson v. Ashhee (1874), 10 Ch. App. 15 (per Lord Caibns, 
 L.C., at p. 19). 
 
 (o) See Archer v. Hudson, sup. (per Lord Lyndhtjkst, L.C, at pp. 212, 213), and, in 
 the court below (1844), 7 Beav. 551 (per Lord Langdai.e, M.R., at p. 561); Grosvenor v. 
 Sherratt (1860), 28 Beav. 659, 665 ; Bainbrigge v. Browne (1881), 18 C. I). 188 (per Fby, J., 
 at p. 196). The above are good general statements of all the necessary elements in the 
 case of gifts : for illustrations of the elements in detail sse the cases cited in the remaining 
 notes to this Sub-section. 
 
 (p) Holman v. Loynes (1854), 4 De G. M. & G. 270 (per Tuener, L.J., at p. 284 : " these 
 rules require no more than that the client " — the case was one of solicitor and client — 
 " should be fully informed, and duly and honestly advised, and that the price should be 
 just ") ; Tomson v. Judge (1855), 3 Drew. 305, another solicitor and client case (per 
 KiNDERSLBY, V.-C, at p. 313 : " the onus lies on the solicitor to show that the transaction 
 was perfectly fair ; that the client knew w)iat he was doing, and, in particular, that a fair 
 price was given, and of course that no kind of advantage was taken by the solicitor ") ; 
 Wright v. Carter, [1903] 1 Ch. 27, C. A. (per Stiklino, L.J., at p. 60) ; Allison v. ClayhilU 
 (1907), 97 L. T. 709 (per Pakkeb, J., at p. 712). The above are clear statements of the 
 main classes of prerequisites to the upholding of a contract. For illustrations of the 
 several elements, considered separately, see the cases cited in the remaining notes to this 
 Sub-section, passim. 
 
 (q) See § 316, ante. 
 
 (r) As to actual and presumptive knowledge, and the various kinds of the latter, see 
 Ch. II, Sect. 3, ante. 
 
 (s) See Grosvenor v. Sherratt, sup. (per Romilly, M.R., at p. 665). 
 
§§ 470-472 (affirmative answers). 435 
 
 472. First, as to communication of knowledge in the former sense. The 
 onus is on the dominant party to establish, and the plea fails at the outset 
 unless he establishes, by evidence which must be " clear and decisive " (t), 
 that he made complete and exact disclosure (m) to the servient party of 
 all material facts {v) within his exclusive cognizance relating to or affecting 
 the subject-matter of the transaction ; such as, where property other than 
 money is in question, all facts relating to the title to the property (w), or the 
 extent and particulars thereof {x), or its value {y) — and such facts, it must 
 be remembered, may be material even where the transaction is a gift, for, 
 though no value is paid, the donor may be none the less concerned in knowing 
 what he is giving (z) ; or, where the consideration for a contract is payable 
 on a certain event, all facts which have a bearing on the probability, or 
 probable time, of that event happening (a) ; or, where it is a question of a 
 series of loans, or services rendered, or other matter of account, all items and 
 details required in order to explain the account, and show clearly how it is 
 
 (t) Taker v. Taker (1863), 3 De G. J. & S. 487 (per Turner, L.J., at p. 490). In this 
 case, the evidence was " clear and decisive " : see note (i), post, 
 [u) As to what this means, see Ch. II, Sect. 1, ante, 
 {v) As to materiality, s e Ch. II, Sect. 2, ante. 
 
 (w) Wright v. Proud (1806), 13 Ves. 136 (non-disolosuie of the fact that the party was 
 purchasing property which was already his own). 
 
 (x) Groves v. Perkins (1834), 6 Sim. 576 (where the dominant party divulged the fact 
 that an intestate's property, to a share of which the servient party was entitled, was 
 ^' considerable," but gave no particulars of the property, or the amount or value of the 
 share, and, accordingly, said Shadwell, V.-C, at p. 583, " there was that non-disclosure 
 of a material fact which compels me to say that the deed cannot stand "). 
 
 (y) Hatch v. Hatch (1804), 9 Ves. 292 (non-disclosure of the improving value of the 
 property : per Lord Eudon L.C, at p. 296) ; Huguenin v. Baseley (1807), 14 Ves. 273 
 (concealment of the real value of the property) ; Grosvenor v. Sherratt (1860), 28 Beav. 
 659 (non-disclosure of previous offers to take the lease, and the reversionary value of the 
 minerals : per RoMiLLy, M.R., at pp. 665, 666) ; Tate v. WiUiamsan (1866), L. R. 1 Eq. 
 528 (concealment of a valuation which the dominant party had obtained from an experienced 
 mining agent, and which put the value of the mines at a much higher figure than that 
 at which he purchased : per Wood, V.-C, at pp. 539, 540) ; Bees v. De Bernardy, [1896] 
 2 Ch. 437 (non-disclosure of the value of the property to which the next-of-kin agent had 
 informed the servient parties that they were entitled, and of the fact that he was stipu- 
 lating for a larger share of the property on estabUshing the title to it than he had previously 
 asked from another person whom at first he had thought to be the heir : per Rombr, J., 
 at pp. 443-445). 
 
 (z) For instance, a man may make a present of what he believes to be grazing or prairie 
 land, without the least intention of giving land with valuable minerals under the surface. 
 It is clearly material to him to know this. The two first of the cases cited in the last 
 note were cases of gifts. In Harris v. Tremenheere (1808), 15 Ves. 34, Lord Eldon, L.C, 
 at pp. 39, 40, with reference to the two leases which he there found to be pure acts of 
 bounty, intimated that, if there had been any evidence of an account laid before the 
 servient party, containing any inaccurate statement as to value, he would have set the 
 leases aside, instead of upholding them as he did. Similarly, in a case where no relation 
 was established, and where, therefore, it was necessary to make out a misrepresentation, it 
 was held that such a misrepresentation as to the value of the property was material, 
 whether the transaction were regarded as a gift, or as a purchase : per Wickens, V.-C, at 
 jp. 329 of Haygarth v. Wearing (1871), L. R. 12 Eq. 320. And in Re Coomber, [1911] 1 Ch. 
 723, C A., the observation of MoTjLTOif, L. J., at p. 729, that " in this case the gift was not 
 based on value," implies that there may be oases in which a gift is based on value. 
 
 (a) Davies v. Cooper (1840), 5 My. & Cr. 270 (where the dominant party purchased a 
 leversionary interest from the servient party without disclosing to him the fact, of which 
 
 he was cognizant, and of which, to his knowledge, the servient party was ignorant 
 
 •believing, indeed, the contrary, — that the life on which the reversion depended was a verv 
 bad one : per Lord Cottenham, L.C, at pp. 277-279). 
 
436 CH. V, SECT. 4, SUB-S. (2). 
 
 made up (b). Further, the dominant party must be prepared to establish 
 that he gave the fullest and most candid information as to the exact 
 nature of the transaction, as well as of its subject-matter; accordingly, 
 his plea falls to the ground whenever he is unable to prove that he clearly 
 explained to the servient party the character of the instrument recording the 
 transaction (c), or the purposes which it was designed to accomplish (d), 
 or the servient party's rights, liabilities, and position at the moment immedi- 
 ately preceding it, with reference to the matters proposing to be dealt with 
 thereby (e), or the efiect which it was calculated to have on those pre-existing 
 rights and liabilities (/), or the right of the servient party both to reject it 
 
 (6) Bevett v. Harvey (1823), 1 Sim. & St. 502 (where the dominant party not only 
 omitted, but failed to comply with an express request, to disclose to the servient party 
 how his account for a series of advances was made up, or to give him any particulars or 
 explanation of it) ; Thornber v. Sheard (1850), 12 Beav. 589 (a similar non-disclosure : 
 per Lord Langdalb, M.R., at p. 601) ; Billage v. Southee (1852), 9 Hare 534 (where the 
 dominant party, a medical man, refused to give his patient any account or explanation 
 of how a certain sum, for which he had obtained a promissory note, was made up, and 
 how much of it consisted of professional charges, and what those charges were : per 
 TuKNEK, V.-Q, at p. 540). 
 
 (c) Chaplin & Co. v. Brammall, [1908] 1 K. B. 223, C. A. (where the nature and effect 
 of a guarantee was not explained : per Vatjghan Wilmams, L. J., at p. 237). 
 
 (d) Willis v. Barron, [1902] A. C. 271, H. L. (where the donor was left to suppose that 
 the object of the deed in question was merely to put right a sUp in a previous deed executed 
 by her which had been so expressed as not to carry out the intention of the parties, though 
 the real purpose of the deed was to deprive her of the general power of appointment con- 
 ferred by the previous instrument : per Lord Halsbttky, L.C, at p. 276, and Lord 
 Macnaghten, at pp. 280, 281). 
 
 (e) As in Tyler v. Yates (1871), 6 Ch. App. 665 (where one of the two servient parties 
 was not told that he was under no liabiUty in respect of the bills of exchange given by the 
 other, an infant, so that no situation had arisen which would make it necessary to enter 
 into the transaction impeached, or what his position was generally : per Lord Hatheeley, 
 L.C, at p. 670) ; Kempson v. ^,'!A6ee(1874), 10 Ch. App. 15 (where the servient party was 
 not informed of the invalidity of the bond which she was supposed to be confirming by the 
 transaction in question : per Lord Cairns, L.C, at pp. 20, 21, and James, L.J., at p. 21) ; 
 Bank of Montreal Y. Stuart, [IQll'i A. C. 120, P. C (where there was a total failure to explain 
 the existing situation to the servient party, or the position of her husband, whose 
 necessities she was asked to relieve). See also Wright v. Garter, [1903] 1 Ch. 27, C. A. 
 {per Vattghan Williams, L. J., at pp. 51-55). 
 
 (/) As in Bennett v. Vade (1742), 2 Atk. 324 {per Lord Habdwicke, L.C, at pp. 326, 
 327) ; Huguenin v. Baseley (1807), 14 Ves. 273 (no explanation of the effect of a provision 
 in the settlement making it revocable only in the presence of certain persons, or of the 
 effect of the deed generally : per Lord Eldon, L.C, at pp. 293-300) ; Bayly v. Wilkins 
 (1846), 3 Jo. & Lat. 630 (concealment from client that the effect of his purchase of an 
 incumbrance on the estate of a debtor to the solicitor would be to benefit the solicitor 
 as a prior incumbrancer, and not the client as heir at law : per Sugden, L.C. (Ir.), at 
 p. 636) ; Moore v. Prarace (1851), 9 Hare 299 (per Ttteneb, V.-C, at p. 304) ; Grosvenor v. 
 Sherratt (1860), 28 Beav. 659 (no explanation of the effect of a reversionary lease on the 
 servient party's interests : per Edmilly, M.R., at p. 666) ; Sharp v. Leach (1862), 31 
 Beav. 491 (not explained that the deed was irrevocable : per Romilly, M.R., at pp. 494- 
 501) ; Procter v. Bobinson (1867), 15 L. T. 431 (servient party not made to understand 
 that the effect of the deed was to benefit the solicitor : per Tueneb, L.J., at p. 432) : 
 Howley v. Cooh (1873), Ir. R. 8 Eq. 370 (no explanation of effect of unprecedented 
 clauses introduced into the mortgage deeds, such as a power of sale without notice) ; 
 Nevill V. SnelUng (1880), 15 C D. 679 (no explanation by moneylender of the " penal 
 claus3 " in the contract : per Denman, J., at pp. 692, 693) ; Be Haslam and Hier-Evans, 
 [1902] 1 Ch. 765, C. A. {per Stibling, L.J., at pp. 769-772) ; Cavendish v. Strutt (1903), 
 19 T. L. R. 483 {per Byene, J., at pp. 488, 489) ; Gocleburn v. Edwards (1881), 18 C. D. 
 449, 455, 460, 462, C. A. (a similar cas3 to Howley v. Cook, sup.); Harris v. Clarson (1910), 
 27 T. L. R. 30 (no explanation by moneylender of the operation of a clause as to interest) ; 
 London & Westminster Loan <b Discount Co. v. Bilton (191] ), 27 T. L. R. 184 (a similar type- 
 
§§ 472, 473 (affirmative answers). 437 
 
 when in fieri, and to repudiate it after execution (g). Sometimes the dominant 
 party seeks to fortify himself by false recitals, or other misrepresentations 
 of the nature of the transaction or its subject-matter, which lie introduces 
 into the instrument in the belief that the servient party will not notice or 
 appreciate their untruth. In such cases, of course, there is a double obligation 
 of disclosure on the dominant party ; and the very thing which he fondly 
 hopes will be his salvation, turns out to be his undoing, and the fabricated 
 recitals to be "scripta auctori perniciosa suo"(^). Where, however, the 
 dominant party succeeds in satisfying the Court that he has made full dis- 
 closure in the above sense, his plea so far, but so far only, prevails (i). 
 
 473. The dominant party must next establish, in order to make good a 
 case of disclosure in the fullest comprehension of the word, that, before the 
 transaction took place, he put at the disposal of the servient party the whole 
 of his knowledge, in the sense of capacity, skill, and judgment ; which means 
 that he gave him " all that reasonable advice against himself that he would 
 have given him against a third person " (j). " He must show to demonstra- 
 tion, for this must not be left in doubt, that no industry he was bound to 
 
 of case to the last : per Joyce, J., at p. 185 : " merely reading over the deed to the 
 defendant or any one else would be of little or no use. It could hardly he understood 
 except after careful perusal and examination by a lawyer, and would require the skUl 
 of an actuary to calculate the exact rate of interest really charged ") ; Stirling v. Mose 
 (1913), 30 T. L. R. 67 (the hke) ; Be Hoggart's Settlement (1912), 56 Sol. J. 415 (no explana- 
 tion of the effect of an agreement between solicitor and client for remuneration by a 
 percentage of sums to be recovered in respect of non-contentious business. The solicitor 
 in this case, however, escaped on proving an offer to have his costs taxed). Cp. the 
 Indian oases of " pardanishin " women, such as Tewarry v. Nawab Syed Ali Hossein Khan 
 (1874), L. R. 1 Ind. App. 192 (at pp. 206, 207); Sudisht Lai v. Mussummat Sheobarat 
 Kunwar (1881), L. R. 8 Ind. App. 39 (at p. 43). Here the onus was not discharged. In 
 Kali Bakhsh Singh v. Bam Gopal Singh (1913), 30 T. L. R. 138, it was. 
 
 (g) As in Procter v. Bobinson (1867), 15 L. T. 431 {per Ttjknek, L.J., at pp. 431, 432, 
 and Caikns, L.J., at pp. 432, 433 : here the servient party was not told that he need 
 never have executed the deed at all, and that, when he had executed it, it was of no 
 validity) ; Morgan v. Minett (1877), 6 C. D. 638 (per Bacon, V.-C, at p. 648). 
 
 (h) See Wright v. Proud, (1806), 13 Ves. 136 (the nature of the plaintiff's interest 
 falsely recited in the deed : per Lord Ebskinb, L.C, at p. 137) ; Gibson v. Bussell (1843), 
 2 Y. & C. 104 (a gift fraudulently recited to be a purchase : per Knight-Bkuce, V.-C, 
 at p. 106) ; Moore v. Prance (1851), 9 Hare 299 (false recitals of the desire and intention 
 of the servient party to place his affairs in the hands of the dominant party, and appoint 
 him his trustee, which the dominant party did not even suggest to be true : per Tuenee, 
 V.-C, at p. 303) ; Broun v. Kennedy (1864), 4 De G. J. & S. 217 (deed condemned on the 
 face of it by its false recitals of the cliaracter and purport of the transaction : per Knight- 
 Betjce, L.J., at p. 221) ; Moxon v. Payne (1873), 8 Ch. App. 881 (a false recital that the 
 price paid to the dominant party in a previous transaction had been " ascertained upon 
 an incorrect basis, and upon a mistake of facts," whereas in truth it was a fraudulent 
 price deliberately obtained from the servient party, and not the result of any " mistake " 
 whatsoever : per Jambs, L. J., at p. 885). Cp. the decisions as to false recitals and descrip- 
 tions, in cases of relations constituted by the circumstances, which are cited in note (r) 
 to § 430, ante. 
 
 (i) As in Edwards v. Meyrich (1842), 2 Hare 60 (per Wigeam, V.-C, at pp. 71, 72) ; 
 Archer v. Hudson (1846), 15 L. J. (cH.) 211 (per Lord Lyndhtjest, L.C, at pp. 212, 213 : 
 but here the dominant party, though proving explanation of the meaning of the promissory 
 note in question, and thus establishing one point in the requisite proof, completely failed 
 to prove any of the others, and was accordingly held liable) ; Hartopp v. Hariopp (1856), 
 25 L. J. (cH.) 471 ; Taker v. ToJcer (1863), 3 Be G. J. & S. 487 (per Knight-Bbtjce, L.J., 
 at pp. 489, 490, and Tuenee, L.J., at p. 490) ; Allison v. Clayhills (1907), 97 L. T. 709 
 (per Pabkee, J., at p. 713). 
 
 (j) Oibson V. Jeyes (1801), 6 Ves. 266 (per Lord Eldon, L.C, at p. 278). 
 
438 CH. V, SECT. 4, SUB-S. (2). 
 
 exert would have got a better bargain " for liiin {k). In all cases of failure to 
 satisfy the Court on this point, the plea has failed (Z). It must obviously 
 be a matter of extreme difficulty for any man in any case to act up to a 
 " counsel of perfection " which requires him to use the whole of his natural 
 and acquired intellectual and moral powers, his sagacity, experience, and 
 skill, his zeal, energy, and industry, in direct opposition to his own interests : 
 and, assuming him to have surmounted this difficulty, a much heavier burden, 
 and the only one which concerns jurisprudence, awaits him when the trans- 
 action is challenged and subjected to judicial investigation, — the burden 
 of proving compliance with a duty so antagonistic to the ordinary impulses 
 and propensities of human nature. In a very few cases, however, the 
 dominant party has succeeded in discharging this burden (m). 
 
 474. There is a very simple and obvious means of escaping these difficulties, 
 and a means which afiords an excellent test of the conscientiousness and 
 propriety of the transaction ; and that is, to give no advice at all, but to 
 see that the servient party has the advice of a third person entirely independent 
 of the influence. This course so plainly suggests itself to an honest and 
 scrupulous man that, when proved to have been adopted by the dominant 
 party, it goes a very long way, and in most cases is sufficient of itself, to sustain 
 the validity and bona fides of the transaction (w) : whereas the omission to 
 resort to it raises an inevitable suspicion that the only reason for the omission 
 must have been a consciousness on the part of the dominant party that the 
 transaction was unrighteous and unfair, and that any impartial person would 
 
 (h) Gibson v. Jeyes (1801), 6 Ves. 266 (per Lord Eldon, L.C., at p. 271) ; Htigtteninv. 
 Baseley (1801), 14 Ves. 273 (per Lord Eldon, L.C, at p. 299) ; Holman v. Loynes (1854), 
 4 De G. M. & G. 270 (per Lord Ceaitwoeth, L.C, at p. 272). The principle is stated, 
 substantially in the same form of words, in all the cases cited in the next two notes, at the 
 pages of the several reports which are cited within brackets after the reference. 
 
 (I) As in Qibson v. Jeyes, sup. ; Dawson t. Massey (1809), 1 Ball & B. 219 (per Lord 
 Manneks, L.C. (Ir.), at p. 236) ; Champion v. Righy (1830), 1 Russ. & M. 539 (per Leach, 
 M.E., at p. 539 : the dominant party, however, escaped here on the ground of the servient 
 party's delay, amounting to implied confirmation, the decision being affirmed by Lord 
 CoTTENHAM, L.C. (1840), 9 L. J. (cH.) 211, on the further ground of additional delay in the 
 appeUate proceedings) ; Moore v. Projice (1851), 9 Hare 299 (per Turner, V.-C, at p. 303) ; 
 Holman v. Loynes, sup. ; Savery v. King (1856), 5 H. L. C. 627 (per Lord Ceanworth, L.C, 
 at pp. 665, 666) ; Oresley v. Mousley (1859), 4 De G. & J. 78 (per Kkight-Brtjcb, L.J., at 
 pp. 88, 89, and Ttfeneb, L. J., at pp. 97, 98) ; Clare v. Joseph, [1907] 2 K. B. 369, C A. 
 (per Buckley, L.J., at p. 378). 
 
 (m) As in Edwards v. Meyrich (1842), 2 Hare 60 (per Wigram, V.-C, stating the pro- 
 position, at pp. 70, 71, and finding that in that case the onus was sustained, at pp. 71, 
 72) ; Spencer v. Topham (1856), 22 Beav. 573 (per Komilly, M.R., at p. 577, stating the 
 rule, and, at pp. 577-583, finding that the burden was discharged) ; Pisani v. Att.-Oen. of 
 Gibraltar (1874), L. R. 5 P. C 516 (at p. 536, statement of the rule, and, at p. 538, finding 
 that it had been complied with). 
 
 (n) In the following cases of gift, the dominant party succeeded, on proof of indepen- 
 dent advice of a third person (with or without other facts showing the propriety of the 
 transaction) :— Pratt v. Barker (1826), 1 Sim. 1 ; Taylor v. Johnston (1882), 19 C. D. 603 
 (per Bacon, V.-C, at p. 610) ; Pe Coomber, [1911] 1 Ch. 723, C. A. (per Cozens-Hardy, 
 M.R., at p. 728). The Uke result attended the like proof in the following cases where the 
 transaction impeached was a contract : — Blackie v. Clark (1852), 15 Beav. 595 (per 
 RomUly, M.R., at p. 603, as to one of the transactions there in question) ; Potts v. Surr 
 (1865), 34 Beav. 543 (per Romilly, M.R., at pp. 551, 552 : this was a case of a family 
 arrangement, in which the father was proved to have given valuable consideration, for 
 which reason the case may be regarded as one of contract, rather than gift). 
 
§§ 473-475 (affirmative answers). 439 
 
 so advise. A party must ordinarily be in a very dubious position who asks 
 a disinterested tribunal to approve, ex fost facto, the propriety of a transaction 
 which he carefully refrained from submitting to the judgment of an equally 
 disinterested (though an unofficial) tribunal before the transaction was 
 entered into. By so acting he may be thought to have pronounced judgment 
 against himself in advance. It is one thing, however, to say that proof of 
 the interposition of a non-conducting medium (so to speak), in the shape of 
 an impartial third person's advice, between the influence and its object 
 is of the utmost service in sustaining the transaction ; it is another to say 
 that proof of this fact is yer se an indispensable probandmn in the sense that, 
 however righteous the transaction may be demonstrated to have been in 
 every particular, it still cannot stand in the absence of evidence that a third 
 person intervened to protect the servient party. The question now arises — 
 and it is one of considerable importance — whether the latter proposition, 
 which does not seem to have much principle or reason in its favour, is estab- 
 lished by authority. The correct answer, it is conceived, to this question 
 is that, in the case of gifts, it probably is so established, but that, in the case 
 of contracts, it is not. 
 
 475. It has abeady been shown what a sharp division the law has from 
 the first made between gifts, or transactions in the nature of gifts, on the 
 one hand, and contracts, or transactions for valuable consideration, on the 
 other ; how " invincible " is the jealousy with which the former have always 
 been regarded by the courts ; and how " almost impossible " it has been 
 thought to be for any gift between parties connected by a relation of influence 
 to stand (o). Approaching the question in this spirit, it is not surprising 
 to find that, in early times, equity only admitted a relaxation of its rigidity 
 and severity towards gifts to the extent of allowing them to stand where the 
 influence is shown to have come to an end ; to which it grudgingly added 
 in modern times the further concession, abeady adverted to (p), that evidence 
 of independent advice might be deemed evidence of the termination of the 
 influence. To hold these views is tantamount to laying down that proof of 
 the servient party's having been advised by a separate and independent 
 person is the only element in the propriety of the transaction which is of the 
 least use or relevance in any attempt to sustain a gift, and that it is so rele- 
 vant, not because it tends to establish that the influence was not abused, 
 but because it proves that no influence was in Mc re exerted at all. And 
 not only is this view to be implied from decisions in which the dominant 
 party failed to sustain the propriety of the gift in other respects, and which, 
 therefore, are not absolutely conclusive (q), but it has been expressed in 
 plain and unmistakable terms in one most remarkable case, from which every 
 
 (o) See § 405, and note (g) thereto, ante. 
 
 {p) See § 468, and note (g) thereto, ante. 
 
 (q) Such as Baker v. Bradley (1855), 7 De G. M. & G. 597; Sharp v. Leach (1862) 
 31 Beav. 491 ; Broun v. Kennedy (1864), 4 De G. J. & S. 217 ; Willis v. Barron, [19021 
 A. C. 271, H. L. ; Chaplin & Co. v. Brammall, [1908] 1 K. B. 223, 0. A. ; Bank of Montreal 
 V. Stuart, [1911] A. C. 120, P. 0. ; London & Westminster Loan & Discount Co v. Bilton 
 (1911), 27 T. L. R. 134. 
 
440 CH. V, SECT. 4, SUB-S. (2). 
 
 other possible basis of the decision was eliminated with the utmost care and 
 precision. It was there held by Tuenee, L.J., with the reluctant and tardy 
 adhesion of Knight-Beuce, L.J., in favour of a servient party with no 
 merits whatever against a dominant party whose conduct had been quite 
 meritorious, that, though " the evidence on the part of the defendant " 
 — who was the dominant party referred to — had established to the complete 
 satisfaction of Tuenee, L.J., as stated in his judgment, " that the plaintifE 
 signed the promissory notes and memoranda, and executed the bonds and 
 deeds in question freely and voluntarily, and without pressure or solicitation 
 on the part of the defendant; that their contents were fully explained to 
 her, and that she perfectly understood them, and their nature, purport, and 
 efiect, and the consequences of her signing and executing them," and that 
 the defendant had " cautioned her " as to the transactions, and " meant 
 to give, and did give the plaintiff, honest advice," — yet, because this full 
 explanation of the transaction and of the plaintifE's rights in respect thereof, 
 and this honest advice, did not proceed from a third person, the gift must 
 be set aside (r). One naturally inquires whether this startling decision has 
 been observed upon, if not overruled, in any subsequent authority. So 
 far from it, it has received the express approbation of Lord Selboene («) ; 
 and the doctrine there laid down has been acted upon, though not always 
 under such striking circumstances, in a series of decisions both before and 
 after the date of that in question (t). So that, however irrational and unjust 
 
 (r) Ehodes v. Bate (1866), 1 Ch. App. 252 {per Tubner, L.J., at pp. 257, 261, 262). 
 The effective judgment of the Court is given by Ttjknbb, L. J., after which Knight-Bbtjcb, 
 L.J., at p. 262, merely adds a few words, from which it appears that, at the last, he was 
 won over to the opinion of his colleague. It will be observed that the plaintifE was 
 deprived of costs (p. 257). 
 
 (s) At p. 591 of Mitchell v. Eomfray (1881), 8 Q. B. D. 587, C. A. (" in Bhodes v. Bate, 
 it was laid down in clear terms that in order to uphold a gift made to a person standing 
 in a confidential relation, the donor must have had competent and independent advice 
 in conferring it. This is undoubtedly the rule so long as the confidential relation exists "). 
 
 (i) See the following cases of gift, in which the dominant party was held liable on the 
 sole ground of failure to prove that the servient party had the independent advice of a third 
 person : Griffiths v. Bobins (1818), 3 Madd. 191 {per Leach, V.-C, at p. 192 : " they can 
 maintain no deed of gift from her unless they can establish that it was the result of her 
 own free will, and effected by the intervention of some indifferent person") ; Ooddard v. 
 Carlisle (1821), 9 Price 169 {per Richaeds, C.B., at pp. 661, 662, and Geaham, B., at 
 pp. 663, 664) ; White v. Meade (1840), 2 Ir. Eq. R. 420 ; Harvey v. Mount (1845), 8 Beav. 
 439 {per Romilly, M.B., at p. 452) ; Archer v. Hudson (1846), 15 L. J. (ch.) 211 {per Lord 
 Lyndhfest, L.C., at pp. 212, 213) ; Nottidge v. Prince ( 1860), 2 Giff. 246 {per Stttaet, V.-C, 
 at p. 269: no proof that "a sufficient protection has been interposed") ; Sercombe v. 
 Sanders (1865), 34 Beav. 382 {per Romilly, M.R., at p. 386) ; Mitchell v. Homfray, sup. 
 (but the dominant party escaped here on the proved plea of ooniirmation, and on that 
 alone. Otherwise he would have been held liable on the sole ground of absence of inde- 
 pendent advice : per Lord Selbobne, L.C, at p. 591, and Beamweix, L.J., at p. 593) ; 
 Allcaird v. Skinner (1887), 36 C. D. 145, C. A. (per Cotton, L.J., at pp. 171-173, Linbley, 
 L. J., at pp. 181 sqq., and Bowen, L. J., at pp. 189-191. This also was a case in which the 
 dominant party, who otherwise would have been held liable, succeeded on the ground of 
 confirmation of the transaction by the servient party) ; Liles v. Terry, [1895] 2 Q. B. 679, 
 C. A. {per Lopes, L.J., at p. 684, and Kay, L.J., at pp. 685, 686) ; Bowdl v. Pmuell, [1900] 
 1 Ch. 243 {per Faewell, J., at pp. 245, 246) ; Wright v. Carter, [1903] 1 Ch. 27, C. A. (as 
 to such of the deeds there in question as were voluntary : per Vaughajt Williams, L.J., 
 at pp. 49-53, Stibliitg, L.J., at pp. 56-58, and Cozens-Haedy, L.J., at p. 61). The few 
 cases in which a dominant party has succeeded in establishing the interposition of the 
 indifferent third person are cited in note (m) to § 474, ante. 
 
§§ 475, 476 (affirmative answers). 441 
 
 the doctrine may appear to some minds, and however distasteful it has in 
 point of fact been to judges of no mean authority (u), and though the Privy 
 Council has recently refused to accept it, in its absolute form, in the case of 
 a gift by a " pardanishin " woman (mm), it is difficult to deny that it is now 
 part of the law of England. 
 
 476. In the case, however, of any transaction for value, which, as has 
 been pointed out (v), is not regarded by the law with that " almost invincible 
 jealousy " which a gift arouses, the rule as to independent advice is not so 
 stringent. Here, though proof of the interposition of a third person's pro- 
 tection and advice is of paramount value as a factor in the justification of 
 the transaction (lo) ; and though the absence of such proof is usually fatal {x), 
 and, further, may contribute to establish that form of relation which is 
 constituted by " the circumstances and conditions " of the case, as has already 
 been shown (y) : yet, as has been distinctly held, if the other facts of the 
 particular case are such as to warrant an inference of complete fairness and 
 conscientiousness in the conduct of transaction, and to indicate that the 
 advice of an indifierent person was impracticable, or would have been of 
 no use or importance, the dominant party's plea will not be defeated merely 
 because he is unable to establish that such advice was given (z) : in other 
 
 (u) The objections which have been, or may reasonably be, made to the rule in question 
 are discussed in App. B., § 665, post. 
 
 (uu) The passage referred to in this most important judgment (delivered by Lord 
 Shaw) is as follows : — " the Judicial Commissioners have laid it down that such a gift 
 cannot stand unless it is proved that the lady had independent advice. In their Lordships' 
 opinion, there was no rule of law of the absolute kind indicated. The possession of inde- 
 pendent advice, or the absence of it, was a fact to be taken into consideration and well 
 weighed on a review of the whole circumstances relevant to the issue whether the grantor 
 thoroughly comprehended, and deliberately and of her own free wiU carried out the trans- 
 action. If she did, the issue was solved, and the transaction upheld ; but if upon a 
 review of the facts . . . the conclusion was reached that the obtaining of independent 
 advice would not really have made any difference in the result, then the deed ought to 
 stand " : Kali Balchsh Singh v. Ram Gopal Singh (1903), 30 T. L. R. 138, P. C, at p. 139. 
 
 (w) See § 405, and note (/) thereto, ante. 
 
 (w) See the " contract " cases cited in note (») to § 474, ante. 
 
 (x) As in Barnard v. Hunter (1856), 2 Jur. (n.s.) 1213 ; Smith v. Kay (1859), 7 H. L. C. 
 750 (per Lord Chelmsfoed, L.C, at pp. 761, 762, and Lord Ceanwobth, at pp. 770-773) ; 
 Lloyd V. Attwood (1859), 3 De G. & J. 614 {per Tuenbk, L.J., at pp. 649, 650) ; Wright 
 V. Carter, [1903J 1 Ch. 27, C. A. (as to such of the transactions therein question as were 
 in the nature of contracts : per VATjGHAisr Williams, L. J., at pp. 54-56, and Stirling, L. J., 
 at p. 60) ; Be Hoggart's Settlement {1912}, 56 Sol. J. 415 (though in that case the servient 
 party had put himself in the wrong by ignoring the offer of the dominant party — his 
 solicitor — to submit his bill of costs to taxation). 
 
 {y) See, generally, the oases cited in the notes to Sect. 2, Sub-ss. (5), and (6), ante ; 
 and, particularly, Taylor v. Obee (1816), 3 Price 83 ; Wood v. Ahrey (1818), 3 Madd. 417 ; 
 Bevett V. Harvey (1823), 1 Sim. & St. 502 ; Davies v. Cooper (1840), 6 My. & Cr. 270 ; 
 Addis V. Campbell (1841), 4 Beav. 401 ; Sturge v. Sturge (1849), 12 Beav. 229 ; Baker v. 
 Loader (1873), L. R. 16 Eq. 49 ; Fry v. Lane (1880), 40 C. D. 312 ; Bees v. De Bernardy, 
 [1896] 2 Ch. 437 ; De Witte v. Addison (1899), 80 L. T. 207, C. A. ; Brenchley v. Higgins 
 (1901), 70 L. J. (ch.) 788, C. A. ; Cavendish v. Strutt (1903), 19 T. L. R. 483. 
 
 (z) O'Borke v. Bolingbrolce (1877), 2 App. Cas. 814, H. L. (a case of a piuchase of the 
 servient party's reversion, where the dominant party proved that he had done everything 
 in the matter which honesty and candour demanded, had made full disclosure both to the 
 servient party, and to his father, and had paid a price which he had every reason to believe 
 was not only fair, but liberal, though it turned out afterwards to have been inadequate : 
 no third person had advised the servient party, but since, to the knowledge of all parties, 
 both father and son were unable to afford this expense, it was held that the conscientious- 
 ness of the bargain had been established in the whole circumstances of the case, which. 
 
442 CH. V, SECT. 4, SUB-S. (2). 
 
 words, proof of this fact is not in every case, as it is where it is a question of 
 a gift, an absolutely indispensable condition precedent to the success of the 
 plea, and the " sustaining " of the transaction. 
 
 477. It must be shown that "the third person" introduced was both 
 independent and competent. By independence is meant entire freedom of will 
 and judgment from the influence of the dominant party, and from that of every 
 other person whose interest may lie in the same direction. This freedom 
 must be a freedom in substance, and not merely in form. A person who is 
 merely called in by the servient party for the express purpose of approving, 
 and putting into legal form, what has already been determined upon, and 
 from whom any dissuasive counsel or attempted exercise of judgment would 
 be immediately resented, or one who is employed by, or is in the confidence 
 of, both parties, or one who is not likely to act in the sole interests of the ser- 
 vient party, though ordinarily his natural protector, by reason of some special 
 circumstance, such as a quarrel or estrangement, is not an independent person 
 in this sense (a). " Competence " (which, being manifestly a term ancipitis 
 sensus, is an unfortunate one to have employed, as judges have constantly 
 employed it, in this connection) imports the competence which arises from 
 full instruction in the material facts on which the third person is to advise : 
 it does not of course mean the competence which arises from skill. The plea 
 therefore is not made out by proof that the servient party was advised by a 
 person who, however independent and honest, was not completely acquainted 
 with every detail of the situation (6), or at least as completely as the dominant 
 party. On the other hand, if the advice was in fact honest and independent, 
 it can hardly be supposed that the servient party can make the dominant 
 party responsible for its want of skill, unless of course the latter had put the 
 
 said Lord Blackbttrn, at p. 837, " mads it impracticable for the lad to have that further 
 advice which, I agree, if practicable, the purchaser should have insisted on his having ") ; 
 Cockburn v. Edwards (1881), 18 C. D. 449, C. A. {per Bkett, L.J., at p. 460 : "if he can 
 show that he has done nothing to which an independent solicitor would not . have 
 assented, and that he fully explained the matter, . . . the law cannot interfere with the 
 transaction " ) ; Beaddy v. Pendergast (1887), 55 L. T. 767 (per Kekewich, J., at p. 768) ; 
 Allison V. Clayhills (1907), 97 L. T. 709 (per Pakkee, J., at p. 712). Cp. the observations 
 of Vatjghau Williams, L.J., at pp. 54, 55 of Wright v. Carter, [1903] 1 Ch. 27, C. A. 
 
 (a) As in Clarke v. Malpas (1862), 4 De G. F. & J. 401 (where the solicitor who was 
 supposed to be advising the servient party was in fact more the solicitor of the dominant 
 party than his : per Knight-Bruce, L.J., at p. 404) ; Tate v. Williamson (1866), L. R. 1 
 Eq. 528 (where the dominant party urged the servient party to consult his father with whom 
 he had quarrelled, — a suggestion which under the circumstances was a mockery : per 
 Wood. V.-C, at p. 539) ; "JRae v. Joyce (1892), 29 L. R. (Ir.) 500 (where the introduction 
 of a solicitor whose function really was to approve and register, rather than to advise 
 impartially, was held to have been quite illusory, and no protection at all to the servient 
 party : per Walkek, L.C. (Ir.), at p. 514, O'Bbibn, C.J. (Ir.), at pp. 621, 522, and FiTZ- 
 QIBBON, L.J. dr.), at pp. 526-527) ; Powell v. PoweU, [1900] 1 Ch. 243 (where " the third 
 person " was the solicitor of both parties, which Fakwell, J., at pp. 245-247, said was not 
 enough; what is required being "the intervention of an independent mind and will 
 acting on behalf and in the interest of " the servient party " only ") ; Willis v. Barron, 
 [1902] A. C. 271, H. L. (where a married lady was the servient party, and her husband's, 
 or the family's, solicitor was the dominant party, and it was held that in telling the lady 
 and her husband, hoth together, to get advice elsewhere, the dominant party was not 
 discharging his full duty, which was to tell the lady alone to obtain the advice of some one 
 independent both of himself and of her husband : per Lord Maonaghtbn, at p. 282). 
 
 (6) Wright v. Carter, [1903] 1 Ch. 27, C. A. (per Stirling, L. J., at p. 60). 
 
§§ 476-478 (affirmative answers). 443 
 
 former in communication witli one wliom lie knew to be lacking in judgment, 
 sagacity, and experience, and as likely to give bad counsel as good. It has, 
 indeed, been said, in a case where the transaction impeached was a gift, that 
 the dominant party must also be in a position to show that the competent 
 and independent advice was followed by the servient party, and that " it is 
 the action resulting from the advice, not action against the advice, which 
 binds the donor " (c) ; but this view seems a highly extravagant and illogical 
 one, and it is not surprising to find that it has since been expressly dissented 
 from (d). 
 
 478. A further element in the necessary proof of the righteousness and 
 fairness of any contract — it has no place or relevance, of course, in the case of 
 a gift (e) — ^is the fairness of the value given, or received, by the dominant 
 party, whose plea has always succeeded on his establishing, together with other 
 facts showing his entire good faith and candour, the fact that he paid the 
 servient party a full and just price, if a purchaser (which is the common 
 case), or, if a vendor, received from him no more than a fair considera- 
 tion (/) : whenever, on the other hand, he has not succeeded in demonstrating 
 by such evidence the mercantile propriety and justice of the transaction, any 
 more than its moral propriety and justice, he has always failed to sustain 
 the contract (g). " Full " or " fair " value, or " a just price," as it has been 
 variously expressed, means for this purpose the utmost sum which the domi- 
 nant party by the exercise of due diligence, inquiry, and skill, could have 
 obtained under the conditions existing at the time, according to the best of 
 the knowledge and information which he then possessed, or might and ought 
 to have acquired (h) : it does not mean a price which, so far as he had any 
 
 (c) This was the view expressed by Fabwell, J., at p. 246 of Powell v. Powdl, sup. 
 
 (d) By MouLTON, L.J., at pp. 729, 730 of Re Coomher, [1911] 1 Ch. 723, C. A. : " all 
 that is necessary is that some independent person, free from any taint of the relationship, 
 and of the consideration of interest which would affect the act, should put clearly before 
 the person what are the nature and the consequences of the act. It is for adult persons 
 of competent mind to decide whether they wiU do an act, and I do not think that inde- 
 pendent and competent advice means independent and competent approval." 
 
 (e) It has been seen — ^see § 456, and note (s) thereto, ante — that the ignoring, or the 
 taking into consideration, of questions of value is a main test of whether the transaction 
 belongs to the gift, or the contract, class, in cases where this is a matter of controversy. 
 
 (/) As in Kingsland (Viscount) v. Barnewall (1706), 4 Brown P. C. 154; Allison v. 
 Clayhills (1907), 97 L. T. 709 ; and the " unconscionable bargain with expectant " cases 
 cited in note (w) to § 445, ante. 
 
 (g) As in Murray v. Palmer (1805), 2 Sch. & Lefr. 472 ; Dawson v. Massey (1809), 1 
 Ball. & B. 219 ; Aylward v. Kearney (1814), 2 Ball. & B. 463 ; Taylor v. Obee (1816), 
 3 Price 83 ; Wood v. Alrey (1818), 3 Madd. 417 ; Jones v. Thomas (1837), 2 Y. & C. (Exch. 
 in Eq.) 498 ; Dent v. Bennett (1839), 4 My. & Cr. 269 ; Champion v. Righy (1840), 9 L. J. 
 (cH.) 211 ; Davies v. Cooper (1840), 5 My. & Cr. 270 ; Sturge v. Sturge (1849), 12 Beav 
 229 ; Cockell v. Taylor (1852), 15 Beav. 103 ; Holman v. Loynes (1854), 4 De G. M. & G 
 270 ; Orosvenor v. Sherralt (1860), 28 Beav. 659 ; Longmate v. Ledger (1860), 2 Giff. 157 : 
 Sharp V. Leach (1862), 31 Beav. 491 ; Clarke v. Malpas (1862), 4 De G. F. & J. 401 
 DaUy Y. Wonham (1863), 33 Beav. 154 ; Baker v. Monk (1864), 4 De G. J. & S. 388 
 Tate V. Williamson (1866), L. R. 1 Eq. 528 ; Wright v. Carter, [1903] 1 Ch. 27, C. A. (as 
 to such of the transactions there in question as were contracts). In the above are not 
 included any of the cases of unconscionable bargains with expectants, which, as to under- 
 value, stand on a special basis of their own. As to these see § 442, and the authorities 
 coUeoted in notes (i), (i), and (I), thereto, ante. 
 
 {h) Gibson v. Jeyes (1801), 6 Ves. 266 {per Lord Eldon, L.C, at p. 271 : "that no 
 industry he was bound to exert would have got a better bargain ") ; Holman v. Loynes 
 
444 
 
 CH. V, SECT. 4, SUB-S. (2). 
 
 reason to believe, after all proper investigation and industry, lie could not 
 have then obtained, but which by evidence subsequently forthcoming is 
 shown to have then been possibly procurable in some quarter or other (i). 
 This question of value, as will be seen hereafter (j), is a question of fact, and 
 of evidence. The same question now arises (though it is not of the same 
 importance, because an affirmative answer to it would not involve the same 
 injustice to the dominant party) as arises, and has been discussed, in reference 
 to " independent advice " : is this issue a wholly separate probandum, in 
 the sense that failure to prove it, though the propriety of the contract be 
 established in all other respects, is fatal to the case of the dominant party ? 
 To take a concrete example : assume the dominant party to have satisfied 
 the Court that he made the fullest and frankest disclosure to the servient 
 party of all material facts, and particularly those relating to value (k) ; that 
 he gave him the same advice against himself that he would have given him 
 against a stranger ; that he recommended the servient party to obtain, and 
 that the servient party did obtain, the independent report and advice of a 
 disinterested third person as to value, and otherwise ; that, in the result, 
 the property was declared to be worth, say, £1000 (l) : assume that, in these 
 circumstances, the servient party insisted on selling for no more than, say, 
 £600. Could this contract be upset ? If the issue is one which the dominant 
 party must establish, or fail, whatever else be established, such a bargain 
 could be upset ; if not, not. It is submitted that such a transaction would not 
 be impeachable, though, no doubt, quoad the £400 difierence, it would have 
 to be sustained by all the evidence, and particularly evidence of independent 
 advice, which is necessary to sustain a gift : but, in the case imagined, this 
 evidence is assumed to have been forthcoming. No actual case has yet been 
 brought before the Courts for decision in which the circumstances were as 
 above supposed : but a hypothetical case has been judicially suggested of 
 much the same charactei (m), and it was said that, in such circumstances, the 
 
 (1854), 4 De G. M. & G. 270 [per Lord Ceanworth, L.C, at p. 272). In Grosverwr v. 
 Sherratt (ISeO), 28 Beav. 659, Romilly, M.R., at p. 661, said: "the obligation fallaon 
 them to show that, iy no possibility, could more have been obtained." The expression, 
 " by no possibihty," goes beyond Lord Eldon's rule, and, so far as it does so, is incorrect. 
 
 (i) O'Eorke v. Bolinghrohe (1877), 2 App. Gas. 814, H. L. (per Lord BLACKBinEiN, at 
 p. 136). So in Champion v. Bigby (1830), 1 Russ. & M. 539, Leach, M.R., at p. 539, said 
 that " a solicitor dealing with his client is bound to show that he has given his client the 
 best price which he would have advised his client to accept from another person," that is, 
 not necessarily the best that could be obtained by any one in the world, or the price which 
 subsequent experience may show to have been in fact the best, but that which the solicitor, 
 or other dominant party, to the best of his knowledge and skill, would be justified in 
 considering, and therefore in advising, to be the best price. And see the first two of the 
 cases cited in note (7s), sup. 
 
 (j) See §§ 499, 500, post, where the proper kinds of evidence of value, and the principles 
 on which it is estimated, are discussed. 
 
 (k) See the cases cited in note {y) to § 472, ante. 
 
 (1) It wiU be observed that the case here put is not that of a price being paid which, 
 though not in fact a fair price, is believed by both parties to be so, as in O'Rorlce v. Boling- 
 broke, sup., but that of a value which both parties know to be an undervalue. 
 
 (m) By RoMEE, L. J., at p. 793 of BrencUey v. Higgins (1901), 70 L. J. (cH.) 788, C. A. : 
 " you must of necessity consider some other circumstances of the purcha,se to some extent. 
 For instance, it may well be that even gross inadequacy of price may not be sufficient in 
 itself to upset the purchase of a reversionary interest under some special and peculiar 
 
§§ 478, 479 (affirmative answers). 445 
 
 answer to the question now being propounded ought to be in the negative. 
 And there are certainly to be found judicial statements and suggestions 
 tending in the same direction (n). It is true that, as has been seen in the 
 case of unconscionable bargains with expectants, undervalue alone, even of 
 the most trifling character, was originally held sufficient per se to invalidate 
 them : but this was the result of an avowedly special doctrine as applied to 
 such cases, and the Sales of Reversions Act, 1867, may be regarded as having 
 restored the law as to these bargains to the state in which it was before the 
 special doctrine was introduced, and in which it always has been with respect 
 to other " influence " relations (o). 
 
 479. It should be mentioned here that it has been judicially suggested 
 that a gift may be sustained, that is, may be shown not to have been improper, 
 or the result of influence which was improper, by proof of its trivial or 
 trifling character (p). No case, however, has as yet arisen in which a dominant 
 party has succeeded on this ground : nor is such a case very likely to arise ; 
 for, where the gift is really of this negligible description, it is not probable 
 
 circumstances that one could imagine. Suppose, for example, a father having a reversion, 
 wishing to give his son an advantage, sells it to the son for, say, half its real value, the 
 father well knowing the value of the reversion, and the son being perfectly innocent in the 
 matter and not unduly persuading his father, of course, in such a case as that, you could 
 not lay hold of the gross inadequacy of price, and say that in itself is sufficient to enable 
 the father to upset the sale as against the son. To see whether gross inadequacy of price 
 would be sufficient to set aside a sale, you must of course look at the general circumstances 
 of the sale — between whom it was made, and how it was brought about." These observa- 
 tions, it is true, were made in a case of the pmrchase of a reversion, where the Court had 
 to consider what, if any, effect the Sales of Reversions Act, 1867, — see § 442, ante — had on 
 the existing state of the law as to such purchases at an undervalue, but the Lord Justice's 
 imaginary illustration admits of easy adaptation to any other relation of influence in 
 such a way as to leave his reasoning and inferences equally applicable : for it is obvious 
 that the same absurdity in pronouncing the transaction an unconscientious bargain on 
 the ground of proved undervalue alone, in the one case, would equally characterize the 
 view, in the other, that the dominant party's proof of the absolute righteousness of the 
 bargain is to be of no avail merely because he fails to prove that full value was in fact 
 given. 
 
 (») See, for instance, Dawson v. Massey (1809), 1 Ball & B. 219 (per Lord Mannees, 
 L.C. (Ir.), at p. 235 : " I do not say that there might not be other considerations, besides 
 the value of the land, to render a transaction of this nature between such parties fair and 
 just; but they do not exist in this case"); Taylor v. Ohee (1816), 3 Price 83 (per 
 Thompson, C.B., at p. 90, and Wood, B., at p. 92, where it is stated that the decision 
 is not based on undervalue alone) ; Dally v. Wonham (1863), 33 Beav. 154 {per Romilly, 
 M.R., at p. 159. where he points out that if the dominant party, instead of keeping to 
 himself all that he knew as to the value of the property, had imparted this knowledge to 
 the servient party, and had said to him, " though I wiU not give it, the property is worth 
 £900, or more," and the servient party had thereupon insisted on selling it for the less value 
 which in fact was given, the transaction might have been supported on the ground of 
 bounty, quoad the difference between the two sums). It is true that in Wright v. Carter, 
 [1903] A. C. 27, C. A., Stikling, L.J., at p. 60, and Cozens-Habdy, L.J., at p. 61, do 
 undoubtedly speak of full value as a fact which must be proved, in addition to others, in 
 order to sustain a contract : but these observations were made in a case in which the 
 dominant party failed to prove those other facts, and where, therefore, the precise point 
 was not the subject of decision. See § 323, and note (p) thereto, anie, where the same 
 views as those expressed in the text are stated with reference to relations of " confidence." 
 
 (o) See § 442, and the oases cited in notes (i), (k), and (I) thereto, ante. 
 
 (p) Rhodes v. Bate (1866), 1 Ch. App. 252 (per Turner, L.J., at p. 258) ; Alkard v. 
 Skinner (1887), 36 0. D. 145, C. A. (per Lindley, L. J., at p. 185) ; Barron v. Willis, (1900] 
 2 Ch. 121, C. A. (per Lindley, M.R., at p. 132) ; Wright v. Carter, [1903] 1 Ch. 27, C. A. 
 (per Vatjghan Williams, L.J., at p. 50). 
 
446 CH. V, SECT. 4, SUB-SS. (2), (3). 
 
 that the servient party will be sufficiently interested to litigate ' the 
 question {q). 
 
 Suh-s. (3). Confirmation of the Transaction hy the Servient Party. 
 
 480. Though not in a position to repel any of the presumptions made 
 against him, either by proof that the influence was not operative upon the 
 transaction, or by proof that it was not unduly exercised (r), the dominant 
 party may, as in the case of any other voidable transaction (s), whatever 
 be the ground of its voidability, set up by way of answer to any claim for 
 relief that the servient party elected to confirm that which, to his knowledge, 
 he had the right to repudiate or not, as he pleased. But this plea of confirma- 
 tion can only be established by the same means as are essential to the validity 
 of a plea justifying the transaction itself. For the latter purpose, as has been 
 shown (t), the dominant party, after having proved (where this question is in 
 dispute) that the servient party had a real intention of entering into the 
 transaction, is required further to show that the intention proceeded from an 
 uninfluenced or emancipated will, and from a fully instructed mind. So, in 
 the case of confirmation, the dominant party, as the groundwork of, and the 
 preliminary to, his plea, must establish that there was an actual intention 
 in fact on the part of the servient party to confirm, and, unless he can make 
 this first step good, it is useless to proceed further, for he has no foundation 
 on which to build, and he fails at the outset (m). The intention may be shown 
 by acts and conduct {v), as well as by express agreement or declaration, 
 though it is a much more difficult case to make out. 
 
 (}) If and when the question comes up in a form, and under conditions, meriting serious 
 discussion, it will have to be considered whether " triviality " means what the donor, or 
 what the donee, would consider trivial. Presumably it means the former. Supposing 
 " the widow's mite " had been given not to the poor, but to a Pharisee exercising undue 
 sacerdotal influence, the latter could not be heard to defend himself by the plea that it 
 was of trifling value to him. It was not so to the widow. In the citation from Wright v. 
 Carter in the last note, Vaughan Williams, L. J., speaks of " a gift made by a man with 
 so ample a fortune that it must have been trifling to him." 
 
 (r) See Sub-ss. (1), and (2), ante. 
 
 (s) See Oh. Ill, Sect. 4, Sub-s. (2), ante, as to affirmation of contracts voidable for 
 non-disclosure during the negotiation ; and Ch. IV, Sect. 4, Sub-s. (5), ante, as to affirma- 
 tion of transactions voidable for breach of duties attaching to fiduciary relations. 
 
 (t) See § 469, ante. 
 
 {u) As in Welles v. Midlleton (1784), 1 Cox 112 (mere general expressions of satis- 
 faction no proof of intention to confirm : per Lord Thublow, L.C, at p. 126) ; Murray v. 
 Palmer (1805), 2 Sch. & Lefr. 472 (where the servient party, "having received the interest " 
 — of the purchase money — " whilst single, . . . and she and her husband having received 
 principal and interest after her marriage," was in the circumstances held not to have 
 indicated an intention to confirm, because, to establish such an intention, it must be shown 
 that the servient party "is aware that the act he is doing is to have the efiect of con 
 firming an impeachable transaction ; otherwise the act amounts to nothing as a confirma- 
 tion " : per Lord Redesdalb, L.C. (Ir.), at pp. 485, 486); O'Brien v. Lewis (1863), 
 32 L. J. (cH.) 569 (mere omission to debit in account held not to be an intentionalrecognition 
 of the transaction, much less an intentional confirmation; per Lord Westbuhy, L.C., 
 at p. 573). 
 
 {v) As it was in King v. Hamlet (1834), 2 My. & K. 456 (per Lord Bkoitgham:, L.C, 
 at pp. 480-484) ; Wright v. Vanderplank (1856), 8 De G. M. & G. 133 (per Knight-Bbuoe, 
 L. J., at pp. 137, 138, and Tubner, L.J., at pp. 147-151) ; Lyddon v. Moss (1859), 4 De G 
 & J. 104 (per T0BNBB, L.J., at pp. 132-134, and Knight-Bruce, L. J., at pp. 134, 135) ; 
 
§§ 479-481 (afpirmative answers). 447 
 
 481. Assuming that the servient party's intention to confirm has been 
 established, or is not in dispute, there then at once arises the same question 
 which Lord Eldon considered to arise in respect of the transaction itself 
 which is sought to be justified, as soon as the servient party's intention to 
 enter into it is made out, — viz. how was the intention produced ? It is 
 for the dominant party to show, in this case as much as in that,— and his plea 
 fails whenever he cannot do so. — that the servient party, when intending and 
 purporting to confirm or ratify the transaction, had received from himself 
 full disclosure, or was otherwise fully cognizant, of all material facts (w), 
 and of his rights in respect of those facts, and, particularly, his right to 
 repudiate and avoid the transaction, and the absence of any obligation to 
 adhere to it on the ground of its supposed validity (x) ; and, further, that the 
 servient party was, at the time of the alleged confirmation, completely emanci- 
 pated from the dominion and influence which operated upon the transaction 
 purporting to be confirmed, — ^this last being a fact which, unless the disclosure 
 or knowledge above-mentioned, or the independent advice of a third person, 
 be first established, is almost unprovable, the inference under such circum- 
 stances being that the mere act of confirmation, so far from indicating the 
 cessation of the influence, demonstrates its strength and persistence (y). 
 As applied to unconscionable bargains with expectants, the rule, as has been 
 
 Turner v. Collins (1871), 7 Ch. App. 329 {per Mauns, V.-C, as to part of the transaction, 
 at pp. 340-342) ; Mitchell v. Homfray (1881), 8 Q. B. D. 587, C. A. {per Lord Selboene, 
 L.C., at pp. 591, 592, and Beamwell, L.J., at p. 593) ; Allcard v. Skinner (1887), 36 C. D. 
 145, C. A. {per Lindley, L.J., at pp. 186-189, and Bowen, L.J., at pp. 191-193) 
 
 {w) Hylton v. Hylton (1754), 2 Ves. Sr. 547 (where a release given to the late guardian 
 of the servient party was held to amount to nothing, as no proper account had been 
 rendered: per Lord Haedwickb, L.C, at p. 549) ; Thornber v. Sheard (1850), 12 Beav. 
 589 {per Lord Lanodalb, M.R., at pp. 601, 602) ; Turner v. Collins, sup. (as to part of the 
 transaction : per Malins, V.-C, at p. 342, the plea being held good as to the other part, 
 where knowledge was shown : see the last note). 
 
 {x) Crowe y. Ballard (1790), 1 Ves. Jr. 215 {per Lord Thuelow, L.C, at pp. 219, 220 : 
 new bond given "under the idea that the old one may be enforced against him ") ; 
 Murray v. Palmer (1805), 2 Sch. & Lefr. 472 {per Lord Redesdale, L.C. (Ir.), at p. 486) ; 
 Purcdl Y. M'Namara (1807), 14 "Ves. 90a {per Lord Eeskinb, L.C, at p. 122 : " subject 
 to the same influence and control, and with as little knowledge of their rights ") ; Savery 
 V. King (1856), 5 H. L. C 627 {per Lord Cranwoeth, L.C, at pp. 663, 664 : ignorance 
 of right to avoid) ; Lloyd v. Attwood (1859), 3 De 6. & J. 614 {per Tctenee, L.J., at p. 
 650); Berdoe v. Dawson (1865), 34 Beav. 603 {per Romilly, M.R., at p. 610) ; Kempson 
 V. Ashbee (1874), 10 Ch. App. 15 (per Lord Caiens, L.C, at p. 20: "to constitute a 
 confirmation there must be knowledge of the invalidity of the document "). 
 
 {y) Hylton v. Hylton, sup. {per Lord Thtjelow, L.C, at p. 549) ; Croive v. Ballard, sup. 
 {per Lord Thuklow, L.C, at pp. 219, 220 : new bond given under same distress and 
 terror as the old) ; Purcdl v. M'Namara, sup. (see the passage cited in the last note) ; 
 Wood V. Downes (1811), 18 Ves. 120 (per Lord Eldon, L.C, at p. 128, where, at the 
 time of the suggested confirmation, the servient party was still " labouring under all the 
 pressure " which attended the original transaction) ; Thornber v. Sheard, sup. (per Lord 
 Langdale, M.R., at pp. 601, 602); Savery v. King, sup. (per lioid Ceanwoeth, L.C, at 
 pp. 663, 664) ; Grosvenor v. Sherratt (1860), 28 Beav. 659 {per Romilly, M.R., at pp. 
 664, 665); Moxon v. Payne (1873), 8 Gh. App. 881 (where the same influence which 
 brought about the original deeds operated to bring about the alleged confirmatory deed, 
 which was " of such a nature as to require the strongest evidence of knowledge, and 
 freedom of will, and deliberate purpose, to sustain it ") ; Barron v. Willis, [1900] 2 Ch. 
 121, C A. (where it was held that the confirmation deed relied upon demonstrated not 
 a confirmed transaction, but a confirmed influence, and where also it was held that a delay 
 of SDme years was to be accounted for by the same persistent influence : per Rigby, L.J 
 at p. 135, and Collins, L. J., at p. 137). 
 
448 CH. V, SECT. 4, SUB-SS. (3), (4), (5). 
 
 stated (2), results in the impossibility of establishing a case of confirmation 
 until the distress of the expectant is at an end, which means, until the rever- 
 sion, or other expected benefit, has fallen into possession. It follows also 
 from the rule, as a necessary consequence, that if at the time of the suggested 
 confirmation the servient party was mentally or otherwise incapable (a) of 
 any act of the will, whether capable at the time of the transaction or not, 
 the confirmation cannot have any effect, and this must be the dominant, 
 not the servient, party's misfortune. But, difficult though it be to discharge 
 the onus, yet, whenever the dominant party has been able to make good all 
 the matters which have been laid down as necessary elements in his proof, he 
 has always been held entitled to judgment (b) . The rule, it should be observed, 
 has no application to the confirmation of a voidable transaction by will (for 
 the same reason which excludes gifts by testamentary disposition from the 
 whole doctrine of undue influence in respect of gifts inter vivos), as was held 
 in a case where a client by his will, after reciting the fact that he had made a 
 conveyance to his solicitor which he, or those coming after him, might be in 
 a position to dispute, proceeded to confirm the transaction, and it was said 
 by Lord St. Leonards that, though in a case of contract the solicitor would 
 have had " to show that the confirmation was made by the client with a full 
 knowledge of his right to set aside the conveyance," yet " it is beyond 
 dispute that . . . if a client, dealing with his solicitor, executes a voidable 
 instrument, and afterwards desires to confirm it by will, he clearly may " ; 
 and, in the case before him, " the party was disposing of his own property " 
 — that is, a devisable equity to avoid the transaction as already explained — 
 ' by will in favour of a person with whom he had previously been dealing, 
 and it was equally competent to him to have disposed of the same property 
 in favour of any other individual " (c). 
 
 Subs. (4). " Family Arrangement." 
 
 482. It is a good answer to the servient party's claim in respect of the 
 alleged abuse of a parental or quasi-parental relation as has already been 
 pointed out, to establish that the transaction sought to be rescinded was in 
 the nature of a " family arrangement," in which the parent was deriving no 
 exclusive or preponderating benefit at the expense of the child (d) : and, 
 
 (z) See the cases cited in note (2), and (a), to § 445, ante. 
 
 (a) De Witte v. Addison (1879), 80 L. T. 207, C. A. (per LnsroLEy, M.R., at p. 212). 
 
 (6) As in the cases cited in note (v) to § 480, ante ; and also in Cole v. Gibbons (1734), 3 P. 
 Wms. 290 (per Lord Talbot, L.C, at p. 293, the servient party being " fuUy apprised of 
 everything," and there being " not the least fraud or surprise ") ; Chesterfield (Earl of) v. 
 Jann^en (ndl), 2 Ves. Sr. 125 (where the expectant, after the state of expectancy had come 
 to an end, and with it his embarrassments, deliberately and with fuU knowledge and in 
 perfect freedom, and without any fraud, contrivance, or surprise, executed a bond con- 
 firming the bond impeached : per Lord Haedwioke, L.C, at pp. 158, 159, Stkahge, M.R., 
 at pp. 148-152, and Btjenet, J., at pp. 145, 146) ; Oldham v. Hand (1751), 2 Ves. Sr. 259 
 (per Lord Habdwicke, L.C, at p. 260). 
 
 (c) Stump V. Gabey (1852), 2 De G. M. & G. 623 (per Lord St. Leonards, L.C, at p. 631). 
 As to " undue influence " not applying to wills, see § 447, ante. 
 
 (d) See the authorities cited in notes (p) and (q) to § 410, ante, which respectively 
 illustrate the success, and the failure, of the plea in cases of parental influence. 
 
§§ 481-484 (affirmative answers). 449 
 
 under the like conditions, a bargain between an " expectant " and a money- 
 lender, where the father or other ancestor concurs with the " expectant " 
 in resorting to the moneylender for financial assistance in their joint interests, 
 may be supported (e). 
 
 Subs. (5). Certain Matters which are not deemed valid Affirinative 
 
 Answers. 
 
 483. It remains to consider certain matters which from time to time have 
 been put forward in argument as affirmative answers to the servient party's 
 case, but which have always been held ineffectual for that purpose. 
 
 483a. In the first place it is of course quite irrelevant to adduce evidence 
 in contradiction of any of those facts, already discussed (/), which it is 
 irrelevant for the servient party to establish. 
 
 484. Secondly, mere delay in instituting proceedings is not of itself an 
 answer to the servient party's claim, unless that claim be obnoxious to the 
 provisions of some statute of limitations. This question has been fully 
 discussed in the Chapter dealing with the duty of disclosure incidental 
 to negotiations for contracts of a certain character (g). The principles there 
 enunciated have also been applied to proceedings for breach of duty arising 
 from relations of confidence Qi). It is unnecessary to repeat these principles 
 here in extenso, or to say more than that they are equally applicable to the 
 subject of the present Chapter. Accordingly, to prove that for a period of 
 time, however long, the servient party abstained from any repudiation of the 
 transaction is to prove nothing, unless it be also affirmatively shown that at 
 some stage in that period of time he was fully aware of his rights, and entirely 
 emancipated from the influence which presumably brought about the transac- 
 tion, and presumably also operated continuously against any attempt or desire 
 to avoid it afterwards {j), that the inaction was accompanied by such acts 
 and conduct during the period in question as to constitute evidence of im- 
 plied confirmation {j), and that the dominant party was in some way injured 
 
 (e) See the cases cited in note (6) to § 445, ante. The " family arrangement " plea 
 occupies a very important place in cases of compromise and release, as to which, see §§ 135, 
 136, anie. 
 
 if) See §§ 461, 462, awte. 
 
 {g) In §§ 216-219, ante. Statutes of Limitation do not in terms, nor, as a rule, " by 
 analogy," apply to actions for the avoidance of transactions on the ground of undue 
 influence : see note (r) to § 463, ante. 
 
 {h) See § 374, areie, and the illustrations of such application which are given in note (e) 
 thereto. 
 
 (i) Aylward v. Kearney (1814), 2 Ball & B. 463 (where, during the whole period of 
 delay, the servient party was in a continuous state of " pupilage," and " the length of time 
 under such circumstances can go for nothing " : per Lord Mannebs, L.C. (Ir.), at pp. 476- 
 478) ; Sharp v. Leach{1862), 31 Beav. 491 {per Romilly, M.R., at p. 502 : " it is obviously 
 reasonable to conclude that the influence which vitiates the act of the person over whom that 
 influence is exercised should also, as long as it lasts, excuse the omission of that person 
 to complain of that act obtained by such influence ") ; Bees v. De Bernardy, [1896] 2 Ch. 
 437 (where the plaintiffs were ignorant of their equitable right to relief : per Rombe, J., 
 at p. 445). 
 
 (j) See several of the cases cited in note (u) to § 480, and in notes (w), (x), and {y) to 
 § 481, ante, for illustrations of inaction and delay not amounting to confirmation, as 
 B.N.D. 2 G 
 
450 CH. V, SECT. 4, SUB-S. (5). 
 
 or prejudiced thereby IJc). And, even in such a case, the plea will fail where 
 the servient party is in a position to suggest any fair excuse for, or explana- 
 tion of, his apparent inactivity, as, for instance, if the transaction was one 
 of suretyship for the dominant party's debt, a reasonable belief, arising 
 from the fact of his never having been pressed by the creditor during the 
 whole of the period of alleged delay, that the primary liability had been duly 
 discharged by the dominant party, in which case there would remain no 
 liability on his own part for which it would be necessary to seek relief (l). 
 Delay may, no doubt, afiect judicial discretion as to costs (m) : but, though 
 it is often urged on behalf of the dominant party that he has at least some 
 moral claim to consideration arising from the loss of evidence (whether oral 
 testimony of witnesses who have died or disappeared, or documents which 
 have been destroyed or mislaid), this contention is usually met by the obser- 
 vation that lapse of time in such cases must count against the wrongdoer, 
 who entered into what he knew, or ought to have known, was a transaction 
 impeachable at any future time, and in so doing must be deemed to have 
 taken all risks, amongst which is the risk in question (n). 
 
 485. Equally futile, as an affirmative answer, is proof by the dominant 
 party of an offer made by him before action, or pendente lite, to surrender or 
 renounce aU or any of his rights under the transaction impeached, unless 
 
 contrasted with those cited in note {v) to § 480, aiiie, where the delay, coupled with other 
 circumstances, was held to constitute confirmation, particularly Allcard v. Skinner 
 (1887), 36 C. D. 145, C. A. {per Lindley, L. J., at p. 186 : " this is far more than inactivity 
 or delay on the part of the plaintiff. There is conduct on her part amounting to confirma- 
 tion of her gift "). 
 
 {k) Murray v. Palmer (1805), 2 Sch. & Lefr. 472 (where, at pp. 486, 487, Lord 
 Redesdaie, L.C. (Ir.), points out that the interests of the dominant party were not 
 affected, nor was " his situation altered " in any way, " and therefore this acquiescence 
 amounts to a mere lapse of time," though he also intimates at p. 488, that circumstances 
 are conceivable in which the dominant party may have been lulled into a false security, 
 and so tempted not to preserve his evidence, with which latter observation cp. those of 
 BowEN, L.J., at p. 192 of Allcard v. Skinner, sup. ; Hatch v. Hatch (1804), 9 Ves. 292 
 (where a delay of 24 years was held not fatal, no one having been injured by it : per Lord 
 Eldon, L.C., at pp. 287, 288) ; Baker v. Bradley (1855), 7 De G. M. & G. 597 (perKmam- 
 Bkuoe, L.J., at p. 618) ; Procter v. Robinson (1867), 15 L. T. 431 (where, again, nobody 
 had been prejudiced by the delay : per CAniNS, L.J., at pp. 433, 434) ; Rees v. De 
 Bernardy, sup. (per Romer, J., at p. 445 : defendant's position not affected). 
 
 (I) Archer v. Hudson (1846), 15 L. J. (oH.) 211 (per Lord Lyndhttrst, L.C, at p. 213) ; 
 Kempson v. Ashitee (1874), 10 Ch. App. 15 (per Lord Caiens, L.C., at p. 21 : " so long as 
 there was no claim asserted, the plaintiff might well be content to let matters remain as 
 they were. She might expect that the creditor would enforce the debt against her step- 
 father. There was, indeed, a threat of proceedings against her ; but no real measures were 
 taken till 1872, when the action was brought, and that immediately led to this bill "). 
 
 (to) See Ch. VIII, Sect. 2, Sub-s. (4), post. 
 
 (n) As in Salter v. Bradshaw (1858), 26 Beav. 161 (where the purchaser of a reversion 
 who was sued for rescission of the transaction after 40 years found himself in difficulties 
 on the question of " fair value," which, however, Bomilly, M.R., said were difiioulties of 
 his own creation, and for which he must suffer : pp. 164, 165) ; Gresley v. Mousley (1859), 
 4 De 6. & J. 78 (where it was again held that the dominant party, who in that case was a 
 solicitor, ought to have known that the transaction might be impeached at a distant date, 
 and must suffer for not having preserved the evidence required to sustain it : per Knight- 
 Bktjoe, L. J., at p. 90, and Tubneb, L.J., at pp. 94^99). And, as to the duty of the 
 dominant party to have his proofs in order in any case, whether delay or not, and as to his 
 responsibility for any difficulties which beset him at the trial in consequence of his having 
 neglected this duty, see Talbot v. Staniforth (1861), 1 J. & H. 484 (per Page Wood, V.-C, 
 ai p. 503) ; Cockburn v. Edwards (1881), 18 C. D. 449, C. A. (per Jessel, M.R., at p. 455). 
 
§§ 484, 485 (apfiemative answers). 451 
 
 the ofier takes the form of a submission to the whole of the relief claimed by 
 the servient party which by the judgment of the Com't he is declared to 
 have properly claimed (o). But where the dominant party has satisfied the 
 Court as to the propriety of the transaction, with the exception of one particular 
 and severable term or part of it, the abandonment of that term or part at 
 the trial may have the effect of entitling him to a judgment in his favour 
 which otherwise he might not have obtained at all, or not in a complete 
 form (p). A proposal by a dominant party before action which in reality 
 veils a threat, or is nothing but a device " to double hatch the cheat," is of 
 course wholly inefficacious, and entitles him to no consideration, even in the 
 matter of costs ; as where a usurer, having extorted an unconscionable 
 bargain from an expectant in distress, offers to take repayment of the loan 
 at ordinary interest, with the alternative of foreclosure, and to relinquish 
 in that event his rights under the bargain, knowing full well that the distress 
 of the servient party is such as to wholly disable him from accepting the 
 offer, and probably to drive him in his desperation to submit to a new and 
 a still harder bargain, in which whips will be exchanged for scorpions. In 
 such a case the offer which the dominant party makes with the intention of 
 using it, if unaccepted (as he knows it will be), as a testimonial to his reason- 
 ableness and good faith when he is called upon to sustain the transaction, 
 naturally produces the exactly opposite efiect (q). And no renunciation by 
 the dominant party at or before the trial, or on appeal, of any rights derived 
 from the transaction will in the slightest degree impede the Court in the 
 exercise of its duty of investigating the circumstances under which those 
 surrendered rights are alleged to have been acquired (r). Any ofier, however, 
 
 (o) As was the case in Ee HoggarCs Setihmeni (1912), 56 Sol. J. 415, where the solicitor 
 whose agreement with a chent as to costs was complained of had before action offered to 
 renounce all rights and claims under the agreement, and to have the bill taxed in the 
 ordinary way, which was the whole relief asked by, or available to, the servient party. 
 As to the general rule that a defendant is not entitled to judgment, or to any special 
 order as to costs, if the offer which before action he has made, or in the proceedings he 
 has placed upon the record, is an offer of something which falls short of the fuU measure 
 of relief to which the Court ultimately declares him entitled, see the cases cited in the notes 
 to O. 65, r. 1, in the Annual Practice (under the heading " Offer "). As to offers, in the 
 case of relations of " confidence," see § 375, note (h), ante. 
 
 (p) As in Hoblyn v. Hoblyn (1889), 41 C. D. 200. 
 
 (q) Wiseman v. BeaJce (1690), 2 Vern. 121, where an "expectant" sued to rescind 
 a bargain with a moneylender as " unconscionable," and the representative of the 
 deceased moneylender pleaded an offer made before action, and embodied in a bill (which 
 was however not proceeded with, though exhibited) to take the actual money advanced, 
 •with interest, otherwise foreclosure, as a ground, if not for refusing reMef altogether, at 
 all events for ordering the expectant to pay the defendant's costs : but the Lords Com- 
 missioners of the Great Seal granted the relief prayed, and refused to make the plaintiff 
 pay any costs (see pp. 121, 122 : " when he had spent the money, then a specious offer was 
 made to relinquish the bargain on payment of the money lent with interest, which at that 
 time was impossible for him to do : and though such biU was exhibited, it was not prose- 
 cuted, but was a contrivance only to double hatch the cheat"). Lord Thublow, L.C., at 
 p. 220 of Crowe v. Ballard (1790), 1 Ves. Jr. 215, applies the above to a case of oonfirma- 
 tion, quoting " the quaint expression " (as he calls it) with which the passage cited ends. 
 
 (f) See Dunnage v. White (1818), 1 Swanst. 137 (per Plitmeb, M.B., at p. 152 : "it 
 •is true that they are now wiUing to correct the error, but the instrument must be considered 
 as it stood at the date ; and the question is, was it then a right disposition of the pro- 
 perty ? ") ; Moxon V. Payne (1873), 8 Ch. App. 881 (per Jambs, L.J., for himself and 
 
452 CH. V, SECT. 4, SUB-S. (5); SECT. 5, SUB-S. (1). 
 
 which is shown to have been not illusory and specious, but genuine and 
 hoiiest, will certainly be taken into consideration on the question of costs, 
 particularly in the case of dealings with expectants, wheie the expectant is 
 frequently regarded as occupying a position analogous to that of a mortgagor 
 inviting the assistance of the Coiiit to enable him to redeem his security (s). 
 486. Lastly, " the personal equation " is for the most part irrelevant. 
 It has already been shown that the personal motives of the dominant party 
 are wholly immaterial (<) . The personal situation or characteristics of the 
 servient party are, generally, no less so. Thus, it is no answer to the servient 
 party's case for relief to allege or prove that he (or she) was of mature age (m), 
 except in some of the cases of influence arising from the parental relation (v), 
 and also in some of those where the influence arises out of " the circumstances 
 and conditions," one of which may be the extreme youth of the servient 
 party (w) ; or that he (or she) was a person of great business capacity, shrewd- 
 ness, or experience, or of vigorous intellect (x) ; or that he (or she) was self^ 
 willed, or firm, or obstinate, on certain points or on certain occasions (y). As 
 
 Mellish, L. J., at p. 886, as to an offer made by the defendant before action to give up all 
 his rights under the two deeds impugned, and to let the earher deed, which they purported 
 to vary, stand unaffected ; " the defendant Payne could not by such an offer . . . purge 
 hiniself of the additional fraud which these documents prove "). Cp. the misrepresenta- 
 tion case (which, however, turned out to be quite as much a case of undue influence in 
 a relation created by the circumstances, as one of misrepresentation) of Curtis v. Bottomley 
 (1911), " Times," 1 Aug., where the defendant, on appeal from a verdict against him^ for 
 damages, abandoned so much of his notice of motion as prayed for judgment, and ex- 
 pressed his willingness to limit his argument to the residue which asked for a new trial, 
 in the hope that the Court of Appeal would thereupon think it undesirable to deal closely 
 with the merits, and would inquire solely into the question whether the former trial had 
 been properly conducted. The hope was vain, and the " astute " manoeuvre, so described 
 by Bttcklby, L.J., was as abortive as that resorted to by the defendant in Moxon v. 
 Payne, sup. 
 
 (s) See §§ 620 (generally), and § 624 (as to expectants), post. 
 
 (t) See Sect. 3, Sub-s. (3), ante. 
 
 (u) , Wiseman v. Beake, sup. (where the servient party was 40 years of age, and it was 
 vainly argued that this made a difference) ; Bromley v. Smith (1859), 26 Beav. 644 (per 
 EOMILLY, M.E.., at pp. 663, 664) ; Rhodes v. Bate (1866), 1 Ch. App. 252 (per Tukneb, L. J., 
 at p. 257 : " I do not think that either the age or the capacity of the person conferring the 
 benefit . . . affects this principle. Age and capacity are considerations which may be of 
 great importance in cases in which the principle does not apply ; but I think they are but 
 of little, if any, importance in cases to which the principle is applicable ") ; Eae v. Joyce 
 (1892), 29 L. R. (Ir.) 500 {per B^tzgibbon, L.J. (Ir,), at p. 526, referring to the age of the 
 servient party in Wiseman v. Beake, sup.). 
 
 {v) See § 409, and notes (I), and (m) thereto, ante. 
 
 (w) See the cases cited in the notes to § 429, § 442, ante. 
 
 (x) Welles V. Middleton (1784), 1 Cox 112 {per Lord Thfblow, L.C, who at pp. 124, 125, 
 points out that the conflicting evidence as to the personal capacity of the deceased servient 
 party was quite irrelevant) ; Barnard v. Hunter (1856), 2 Jur. (n.s.) 1213 {per Lord Cban- 
 WOBTH, L.C., who, at p. 1215, in reference to the argument that the servient party here 
 was a shrewd man of business, expresses his view that the Court cannot regard " the 
 particular competency of the particular man ") ; Bromley v. Smith, sup. {per Eomilly, 
 M.R., at p. 661 : immateriality of the fact that the servient party was a man of vigorous 
 inteUeot) ; Broun v. Kennedy (1864), 4 De G. J. & S. 217 {per KNiGHT-BBtrcB, L.J., at 
 p. 222, describing the transaction there in question as " one from which the lady who 
 executed it, however clever she may he and probably is, has a plain right to be delivered ") ; 
 Baker v. Monk (1864), 4 De G. J. & S. 388 (where the servient party to whom reUef was 
 granted was " said to be a very shrewd old woman " ■- per Tuenbb, L. J., at p. 393) ; 
 Rhodes v. Bate, sup. (see the passage cited in note (u), sup.). 
 
 {y) Cavendish v. Strutt (1903), 19 T. L. R. 483 (where the servient party who obtained 
 
§§ 485-488 (relief). 453 
 
 regards this last feature, indeed, it is a commonplace of psycliology tiat spasms 
 of self-assertion are quite consistent witt constitutional pliancy ; it waS " the 
 noble Othello " who, in the hands of one who knew how to work upon him, 
 was " led by the nose as easily as asses are." Nor is it of any avail to rely 
 on the fact that the servient party belonged to a profession of such a nature 
 as to render those who exercise it peculiarly unamenable to influence m 
 general, or to the kind of influence alleged in the particular case, or even that 
 he belonged to the same profession as that of the dominant party, where the 
 influence is alleged to have sprung from a professional relation (s). But 
 where the influence is presumed from the particular circumstances of the 
 case, and physical or mental incapacity is alleged as 6ne of those circum- 
 stances, several of the last-mentioned considerations are strictly in issue, and 
 cannot possibly be excluded (a). 
 
 Sect. 5. The Relief available to the Servient Pabty. 
 
 487. The servient party may either assert his title to relief as an actor, 
 claiming, whether by original action or cross-claim, that the transaction be 
 judicially annuUed, or he may wait till he is sued, and then stand on the 
 defensive, asserting that, whether judicially annulled or not, the transaction 
 ought to be judicially treated as a nullity. There are also certain miscel- 
 laneous remedies open to him under special circumstances. These three 
 classes of relief invite separate consideration. 
 
 Subs. (1). Rescission and Consequential Relief. 
 
 488. The servient party is always entitled to rescission of any transaction, 
 whether contract or gift, which he has successfully impeached, and which the 
 dominant party has been unable to sustain by countervailing evidence, 
 
 relief was described by Byknb, J., at pp. 484, 485, as a clever man, and one who could 
 be very obstinate at times, though on the whole easily led). At pp. 339, 340, of Turner v. 
 Collins (1871), 7 Ch. App. 329, Lord Hatherlby, L.C, emphasizes the consistency of 
 occasional firmness or fractiousness with normal docihty and weakness in one and the 
 same person (" some evidence is given to show that the young gentleman was not likely 
 from his self-will to be subject to undue influence. . . . I should say that a young man like 
 this was a person most requiring protection. No doubt there are plenty of people in the 
 world whom it is difficult to drive, but whom anybody can lead. It is well known that 
 people who are generally most difficult to drive are usually about the most easy to be 
 led by others who understand them "). It is influence of any kind which the law presumes 
 and guards against, irrespectively of the precise means by which it operates, whether by 
 the domination of fear, or the close ties of affection and trust, whether by coercion or 
 seduction, whether, as Lord Habdwickb, L.C, said, at p. 517 of Origsby v. Cox (1750), 
 I Ves. Sr. 517, by "ill," or " extraordinarily good, usage." 
 
 (z) Wiseman v. Beake (1690), 2 Vern. 121 (where the servient party was a proctor of 
 Doctors' Commons, and it was held that this made no difference) ; Rae v. Joyce, sup. {per 
 EiTZGlBBON, L.J. (Ir.), at p. 526, referring to the above circumstance in the case last cited). 
 In Cooke v. Fitzpayne [coram Weight, J., 14, 16 Nov. 1901 : ex relatione auctoris) the 
 servient party was a solicitor who obtained relief against another solicitor. 
 
 (a) See the cases cited in the notes to § 429, § 442, ante. In Osmond v. Fitzroy 
 (1731), 3 P. Wms. 129, Jekyll, M.B., at pp. 129, 130, says that, though the Court " will 
 not measure the size of people's understandings or capacities " in ordinary cases, it is 
 bound to do so in any case such as that before him (which was one of undue influence by a 
 confidential servant over a youth whom he was employed to protect). 
 
454 CH. V, SECT. 5, SUB-S. (1). 
 
 together with all such other remedies as are consequential upon the main 
 relief (6), subject, however, to the conditions upon which alone any voidable 
 transaction, on whatever ground it is voidable, can be set aside. These con- 
 ditions have already been stated in detail, and once for all (c) ; and it is 
 unnecessary to restate them here. It has been shown that important practical 
 consequences flow from the leading principle that the transaction is not void, 
 but voidable at the option of the party aggrieved {d) ; that the possibility 
 of mutual restoration in specie is a condition of the relief in cases of con- 
 tracts (the rule has of course no application to cases of gift), so that, if the 
 plaintifE has by his own conduct disabled himself from making such restitution, 
 unless the defendant has by his conduct encouraged the plaintiff in so dis- 
 abling himself, he is debarred from obtaining rescission, whether any other 
 remedy be still available to him, or not (e) ; that no transaction can be set 
 aside under which any innocent third party has acquired rights for value, in 
 the absence of such interested party (/) ; that the transaction will be rescinded 
 in toto, or not at all, and as against all the parties to it other than the servient 
 party, unless (which frequently is the case) in the instrument containing 
 or recording such transaction there are separate and severable covenants, 
 
 (6) This being the usual remedy resorted to by the servient party, and, in the case of 
 gifts, his only remedy, it is idle to give a long list of illustrative cases. Suffice it to say 
 that all the authorities referred to in this Chapter, except those cited in the notes to 
 Sub-ss. (2) and (3) of this Section, post, are cases of offensive proceedings (whether successful 
 or not) instituted by the servient party. In the class of case which is the subject of 
 Chapter III, the right to relief is nearly always asserted in the form of a defence, whilst 
 in the class which is the subject of Chapter IV, the two forms of relief are more evenly 
 matched (see Sect. 5 of these Chapters respectively). There are, in the case of each 
 class, business reasons, easily intelligible, for the preference, or absence of preference, 
 manifested by the party complaining for the one, over the other, kind of relief. 
 
 (c) In Ch. Ill, Sect. 5, Sub-s. (1), ante. 
 
 (d) See §§ 225, 226, ante. A striking application of this general rule to a case of a 
 transaction voidable on the ground of undue influence is Be Metcalfe's Trusts (1864), 
 2 De G. J. & S. 122, where the trustees of a lady refused to pay moneys forming part of 
 the trust fund to a religious establishment, though directed to do so by their cestui que trust, 
 and, when sued, set up the audacious, and of course unsuccessful, plea that the payment 
 would be a gift resulting from spiritual influence, — a plea which coiild only prevail on the 
 theory that such a transaction is void and illegal : per Kniqht-Beucb, L.J., at p. 126. 
 
 (e) See § 231, ante ; and, for applications of the doctrine there stated to cases of 
 " influence," see, generally, such of the authorities cited in the notes to this Chapter as 
 resulted in favour of a servient party claiming rescission of a contract, where adequate 
 provision was always made for complete restoration in specie by the plaintifE as the con- 
 dition of relief. For an illustration of the servient party having so dealt with the property 
 that he could not restore the benefits he had derived from the transaction, see King v. 
 Hamlet (1834), 2 My. & K. 456 (per Lord Bbotjgham, L.C, at pp. 480-484) ; Dimsdale v. 
 Dimsdale (1856), 3 Drew. 556 (per Kindeesley, V.-C, at p. 577). On the other hand, 
 where it was not the servient parties' fault that they were unable to give back what they 
 had received (which was not tangible property, but information that they were entitled 
 to such property), this inability was held not to be a bar to relief : Rees v. De Bernardy, 
 [1896] 2 Ch. 437 (per Romee, J., at pp. 445, 446). So also, where the dominant party had 
 led the servient party to suppose that he could do as he pleased with the property in ques- 
 tion : Savery v. King (1856), 5 H. L. C. 627 (per Lord Cbanwobth, L.C, at pp. 668, 669). 
 
 (/) See § 233, ante, and the following " undue influence " cases in illustration of the 
 rule there stated : Farmer v. Farmer (1848), 1 H. L. C. 724 (per Lord Cottenham, L.C, 
 at pp. 748, 749, pointing out that the absence of any one to represent those interested in 
 the personal estate comprised in the impeached conveyances was, of itself, fatal to the 
 plaintiff's case) ; Dimsdale v. Dimsdale, sup. (where the plaintiff had given to third persons 
 interests under the instruments in question which he did not even offer to redeem : per 
 Kindeesley V.-C, at pp. 575, 578). 
 
§ 488 (relief). 455 
 
 terms, or stipulations, one or more of which is a proper subject of relief, 
 whilst the residue is unimpeachable, in which case the court will set aside 
 the former without interfering with the latter {g), — a course it will never 
 adopt if they are all homogeneous parts of one entire transaction {h), — or 
 unless some of the parties to the instrument, being innocent of any abuse 
 of influence, can be detached from any other or others who may be liable, 
 and their rights and liabilities deemed several, in which case the instrument 
 may be set aside against the party or parties so held liable, and left to stand 
 as a valid instrument in favour of, and enforceable by, the other or others (t) ; 
 and, lastly, that an instrument may be set aside in one character, and allowed 
 to stand in another, — for instance, a conveyance may be declared void as 
 such, whilst permitting it to remain in the dominant party's hands as a 
 security (j), and, in the case of an unconscionable bargain, a security for 
 
 (g) See § 239, ante. Illustrations of the application of the rules there stated to cases 
 of the present class, are Bellamy y. Sabine (1847), 2 Ph. 425 (as to which see note (i), inf.) ; 
 Turner v. Collins (1871), 7 Ch. App. 329 (per Lord Hatbceeley, L.C., at p. 342, where the 
 servient party by deed of gift gave the whole of his reversionary interest in certain moneys 
 to his father's second wife and daughter, and also conferred on his father a power of 
 appointment over certain moneys coming to him from his mother, and the deed was 
 sustained as to the former, but invalidated as to the latter) ; Hoblyn v. Hoblyn (1889), 
 41 C. D. 200 (where part of the deed operated to confer an exclusive benefit on the father 
 at the expense of the son, but the residue was held to be " a family arrangement," and the 
 deed was upheld as to this residue only : per Kekewich, J., at p. 207) ; Wright v. Garter, 
 [1903] 1 Ch. 27, C. A. (a useful illustration, because it was there held as to two of the 
 three deeds in question that it was possible to separate those parts of them whereby the 
 servient party conferred a bounty on his children which was not the result of either 
 presumed or proved undue influence from those parts whereby he benefited the dominant 
 party, the solicitor, the latter being declared invalid, and the former left to stand : 
 whilst, on the other hand, in the case of the remaining deed, which was a contract, it was 
 not possible to allocate the consideration, and the whole was set aside against both the 
 soUoitor and the children : per Vattghast Williams, L.J., at p. 54, Stirling, L.J., at 
 pp. 59, 60, and Cozens-Haedy, L.J., at p. 63). 
 
 (h) As in Willan v. Willan (1814), 2 Dow. H. L. 274 (per Lord Eldon, L.C, at pp. 280, 
 281, and Lord Redesdale at pp. 284, 285, where it was held that the Court " could not 
 draw the Une between " the objectionable and the unobjectionable parts of the instrument, 
 and that it must be undone in its entirety) ; Wright v. Carter, sup. (as to one of the deeds 
 there in question : see the last note). 
 
 (i) Asm Bellamy y. jSa6Jme(1847), 2 Ph. 425 (where there were two agreements following 
 one another within the space of a fortnight, which were held, as against the solicitor who 
 was one of the alleged dominant parties, to have constituted one entire scheme ; but the 
 earlier of the two which the servient party and his father, the other alleged dominant 
 party, alone executed, was upheld as a "family arrangement," whilst the latter, which 
 was executed by the servient party and the solicitor only, was set aside : per Pepys, M.R., 
 at pp. 438, 439) ; Turner v. Collins, sup. (where the deed was sustained in favour of the 
 father's second wife and daughter, but invalidated as against the father . see note (g), 
 sup.) ; Beaddy v. Pendergast (1887), 55 L. T. 767 (per Kekewich, J., at p. 769) ; 
 Wright v. Carter, sup. (see, again, note (g), sup.). So, where the transaction consists 
 in the servient party concurring in a security given by the dominant party to his creditor, 
 the instrument is of course only set aside in favour of the servient party, leaving the 
 dominant party liable to the creditor, as in Archer v. Hudson (1846), 15 L. J. (oh.) 211 ; 
 Savery v. King (1856), 5 H. L. C. 625 (per Lord Ceanwobth, L.C, at p. 669 : " I do not 
 think the son is precluded from setting aside the transaction as against him, merely 
 because he concurred with another person who is bound by it "). On the other hand, 
 where it is impossible to separate the responsible from the innocent parties, the trans- 
 action must be rescinded, if at all, against all of them, as in Cooke v. Lamoite (1851), 15 
 Beav. 234 (where, however, the innocent parties were relieved of having to pay costs : 
 per RoMlLLY, M.R., at p. 249) ; Wright v. Carter, sup. (as to two of the deeds there in 
 question : see note (g), sup.). 
 
 (j) As in Gwynne v. Heaton (1778), 1 Brown C. C. 1 ; Newman v. Payne (1793), 2 Ves. 
 
456 CH. V, SECT. 5, SUB-S. (1). 
 
 the repayment of an extortionate principal sum, or amount of interest, may 
 be invalidated as a security for such amounts, without interfering with its 
 enforceability in respect of the actual money advanced with reasonable 
 interest {k), the servient party being in effect allowed to redeem on those 
 terms in substitution for the agreed terms (I). It has also been explained, 
 in the course of the general discussion referred to, that whenever a voidable 
 transaction, of whatever nature, or whatever may be the ground of its voida- 
 bility, is set aside, the order of the Court is so moulded as to effect the first 
 object of all rescission, namely, the undoing of the transaction on both sides, 
 and the restoration of the parties to the position they respectively occupied 
 immediately before entering into it (m). This result is achieved, in cases of 
 " undue influence," as in other cases, by providing in the form of the judg- 
 ment for sach declarations and directions of the following nature as may be 
 deemed necessary or appropriate in the individual circumstances. 
 
 489. In the first place, the order usually begins with a declaration, in 
 the nature of a justificatory preface or preamble, that the transaction im- 
 peached is void (m) ; and, in special cases, it has been thought desirable or 
 convenient to add a recital of the precise grounds for such declaration (o). 
 Though it has occasionally been considered sufficient for all purposes to 
 follow this with a further declaration that the dominant party is to be deemed 
 a trustee for the servient party of the property which passed to him under 
 the transaction declared void (p), in the normal tjrpe of case the order pro- 
 ceeds to direct the setting aside of the transaction. Where necessary or 
 convenient, the dominant party may be required to deliver up to the servient 
 party the instrument in which it is embodied, to be cancelled (q) : and, in 
 
 199 ; Pwrcell v. M'Namara (1807), 14 Ves. 90a ; Thornber v. Shsard (1850), 12 Beav. 589 ; 
 Billage v. Souihee (1852), 9 Hare 534 ; Longmate v. Ledger (1860), 2 Giff. 157 ; Tate v. 
 Williamson (1866), L. R. 1 Eq. 528. 
 
 (k) As in Barnardiston v. Lingood (1740), 2 Atk. 133; Edwards v. Browne (1845), 
 2 Coll. 100 ; Croft v. Graham (1863), 2 De G. J. & S. 155 ; Tyler v. Yates (1871), 6 Ch. App. 
 665 ; Howley y. Cook (1873), Ir. B. 8 Eq. 370 ; NeviU v. Sndling (1880), 15 C. D. 679 ; 
 Rae V. Joyce (1892), 29 L. R. (Ir.) 500. 
 
 (l) It is because the servient party is so regarded that the rules as to costs in cases of 
 redemption of mortgages have been appUed to relief against unconscionable bargains : 
 see § 624, post. Sometimes, as in Benyon v. Cook (1875), 10 Ch. App. 389 n., the servient 
 party, in express terms, asks for redemption. In Carew v. Johnston (1805), 2 Sch. & Lefr. 
 280, there had actually been a decree of foreclosure, but Lord Rbdesdale, L.C. (It.), made 
 a declaration that the servient party's equity of redemption should be deemed not to 
 have been barred by this decree, which had been obtained by " a fraud practised on the 
 Court " (p. 306) : this case accordingly finds a place in Chapter VII, as to concealment 
 from third persons (see note (c) to § 575, post). 
 
 (m) See §§ 237-240, ante. 
 
 (n) See, generally, the cases cited in the notes to this Chapter. 
 
 (o) As in Carew v. Johnston, sup. (see the series of declarations set out at pp. 306-313) ; 
 Tate V. Williamson (1866), L. R. 1 Eq. 528. Cp. the elaborate recitals of the grounds on 
 which the decree proceeded, and the reasons of convenience given by Lord Eldon, L.C, 
 for such declarations, in the compromise case of Gordon v. Gordon (1821), 3 Swanst. 400, 
 as to which see § 237, and note (m) thereto, anU. 
 
 (p) As in Wood v. Downes (1811), 18 Ves. 120 ; Tomson v. Judge (1855), 3 Drew. 306. 
 Where the servient party asks for, and is entitled to, rescission, the relief should not stop 
 short at a declaration of right : Tewarry v. Nawab Syed AH Hossein Khan (1874), L. B. 
 1 lud. App. 192 (at p. 207). 
 
 (?) As in Norton v. Belly (1764), 2 Eden 286 ; Willan v. Willan (1814), 2 Dow H. L. 
 274 ; Aylward v. Kearney (1814), 2 Ball. & B. 463 ; Griffiths v. Bobins (1818), 3 Madd. 191 ; 
 
§§ 488-490 (relief). 457 
 
 any case, he is ordered to repay all sums witli interest and , redeliver all 
 property which he has received, and restore all rights and benefits which he 
 has acquired, under the transaction annulled, and to account for all rents, 
 profits, dividends, and other fruits of the transaction enjoyed by him 
 between the date thereof and the date of the judgment [r), and, where the 
 transaction had been completed, to execute a reconveyance, release, re- 
 assignment, or retransfer, of any property or rights which may have passed 
 to him upon such completion (s) ; on the terms, however, in the case of a 
 contract, that the servient party do, on his part, make the like repayment 
 and redelivery or retransfer to the dominant party of all money, property, 
 benefits, or rights which he has received or to which he has become entitled 
 under the contract, together with just allowances for the value of any per- 
 manent improvements or repairs which the dominant party may have executed 
 on or to the property, if consisting of land, whilst in his possession (t), or the 
 value of any services he may have rendered to the servient party pursuant 
 to, or as the consideration for, such contract (u). For this purpose, the order 
 will direct all such accounts, inquiries, or issues (if any) as may be necessary 
 or appropriate in the circumstances of the particular case (v). 
 
 490. Where a claim is made to rescind a voidable transaction, it is generally 
 a matter of considerable importance whether the transaction has been com- 
 pleted or not. In a case, however, of " undue influence," the question 
 scarcely ever arises, for the simple reason that the conveyance or other act 
 by which the completion is effected is presumed to have been subject to the 
 same influence as the transaction itself, unless and until the contrary is 
 proved, or, in other words, unless and until the completion is shown to have 
 amounted to a confirmation under the conditions, already stated (w), subject 
 to which alone any confirmation is sustainable. Where, however, a contract 
 
 Bevett V. Harvey (1823), 1 Sim. & St. 502 ; Popham v. Brooke (1828), 5 Russ. 8 ; Dent v. 
 Bennett (1839), 4 My. & Cr. 269 ; Baker v. Bradley (1855), 7 De G. M. & G. 597 ; Sharp v. 
 Leach (1862), 31 Beav. 491 ; DaUy v. Wonham (1863), 33 Beav. 154 ; Brenchley v. Biggins 
 (1901), 70 L. J. (oh.) 788, C. A. ; Turnbull & Co. v. Duval, [1902] A. C. 429, P. C. ; Wright v. 
 Carter, [1903] 1 Ch. 27, C. A. (as to the deed which was rescinded in toto). As to the theory 
 and grounds upon which cancellation is ordered, when it is ordered, see § 238, and note (5) 
 thereto, ante. 
 
 (r) See, generally, the cases cited in the notes to this Chapter in which relief was 
 granted. 
 
 (s) See Osmond v. Fitzroy (1731), 3 P. Wms. 129 (where release of the bond in question, 
 it having been mislaid, was ordered) ; Norton v. Relly (1764), 2 Eden 286 (release of an- 
 nuity directed to be executed, as well as the deed delivered up to be cancelled) ; White 
 V. Meade (1840), 2 Ir. Eq. R. 420 (reconveyance of laud and retransfer of stock) ; Addis v. 
 Campbell (lUl), 4 Beav. 401 ; Nottidge v. Prince (1860), 2 Gift. 246 (retransfer of consols) ; 
 Foster v. Roberts (1861), 29 Beav. 467 (reassignment of reversionary interest) ; Clarke v. 
 Malpas (1862), 4 De G. F. & J. 401 (reconveyance of land : here it was said by Knight- 
 Bruce, L.J., at p. 405, that, where a contract has been completed, the proper course is 
 to set it aside, and order reconveyance, differing herein from the view taken by Romilly, 
 M.R., in the court below, and in Hoghton v. Hoghton (1852), 15 Beav. 278, at p. 321, that 
 in such cases it is enough to declare the conveyance void) ; Dally v. Wonham, sup. (recon- 
 veyance of land, as well as delivery up of conveyance to be cancelled). 
 
 (t) See the several forms of decree or order in the cases cited in the notes to this 
 Chapter, generally. 
 
 (m) As in Rees v. De Barnardy, [1896] 2 Ch. 437. 
 
 {v) See, again, the authorities collected in this Chapter, generally. 
 
 (w) In § 481, ante. 
 
458 CH. V, SECT. 5, SUB-S, (1), (2), (3); SECT. 6. 
 
 is sought to be invalidated by reference to " the circumstances and con- 
 ditions " of the case, and, amongst those circumstances and conditions, 
 undervalue is wholly or principally relied upon, it has been said that the fact 
 of completion imposes a somewhat heavier burden on the servient party, in 
 his proof of the unconscionableness of the bargain, than would otherwise be 
 incumbent upon him (x). 
 
 Subs. (2). Defensive Proceedings. 
 
 491. As in the cases which form the subject of Ch. Ill {y), and of 
 Ch. IV (2), respectively, it is always open to the party complaining, though 
 there are obvious perils in adopting this course, to await the enemy's attack. 
 In that event, he has the same right to resist the attack, whether it be made 
 in the form of a claim, or cross-claim, or affirmative plea, and to have the 
 transaction judicially treated as invalid as he would have to its annulment 
 by the express order of the Court if he were taking active proceedings for 
 that purpose. All such matters as would justify an order for rescission in 
 the latter case will equally justify an answer to any claim or counter-claim 
 by the dominant party for specific performance of the contract (a), or to 
 enforce the security (6), or for payment of moneys alleged to be due there- 
 under (c) ; or to any claim in respect of the transaction in an administration 
 suit {d) ; or to any affirmative plea raised by the dominant party (c). The 
 servient party may, and usually does, add to his defence a cross-claim for 
 rescission (/) ; or he may abeady be the plaintiff in an action for that 
 purpose, in which the dominant party is counter-claiming to enforce the 
 contract : in that event, his answer to such counter-claim is asserted by way 
 of reply (</). 
 
 {x) See Longmate v. Ledger (1860), 2 Gifi. 157 {per Stuabt, V.-C, at p. 164) ; Clarke v. 
 Malpas, 4 De G. F. & J.' 401 {per Knight-Bruce, L.J., at p. 403). 
 
 {y) See Ch. Ill, Sect. 5, Sub-s. (2), ante. 
 
 (2) See §§ 381, 382, ante. 
 
 (a) As in Barnardiston v. Lingood (1740), 1 Atk. 133 ; Peacock y. Evans (1809), 16 
 Ves. 512 ; Davies v. Cooper (1840), 5 My. & Cr. 270 (answer to cross-bill). 
 
 (6) As in Bayly v. Wilkins (1846), 3 Jo. & Lat. 630; Blachie v. Clark (1852), 15 
 Beav. 595 (the defence, however, failed here) ; London <Ss Westminster Loan & Discount 
 Co. V. Bilton (1911), 27 T. L. B. 184. 
 
 (c) As in Osmond v. Fitzroy (1731), 3 P. Wms. 129 ; Chaplin & Co. v. Brammall, [1908] 
 1 K. B. 223, C. A. ; Baja Maneshar Bakhsh v. Shadi Lai (1909), 25 L. T. E. 635, P. C. In 
 Ahearne v. Hogan (1844), Dru. 310, the servient party successfully resisted the claim of the 
 dominant party to the policy moneys which the insurance company had paid into court. 
 See also the cases in which, before the Judicature Acts, courts of equity restrained pro- 
 ceedings at law on an instrument impeached for undue influence, for these may beregarded as 
 illustrations of what would now be deemed a good defence to such proceedings, e.g., Goddard 
 V. Carlisle (1821), 9 Price 169 ; Bevett v. Harvey (1823), 1 Sim. & St. 502 ; Bvlkdey v. 
 Wilford (1834), 2 CI. & Fin. 102 ; Espey v. Lake (1852), 10 Hare 260 ; Smith, v. Kay (1859), 
 7 H. L. C. 750. 
 
 (d) See note {h), inf. 
 
 (e) See § 456, and the cases cited in note («) thereto, ante. 
 
 ( / ) This happened in several of the cases cited in the notes to this Sub-section, such 
 as Osmond v. Fitzroy, sup. ; Peacock v. Evans, sup. ; Blachie v. Clark, sup. ; Baja 
 Maneshar Bakhsh v. Shadi Lai, sup. ; London <fc Westminster Loan & Discount Co. v. 
 Bilton, sup. ; also in Fry v. Lane (1888), 40 C. D. 312. 
 
 {g) As in Davies v. Cooper, sup. 
 
§§ 490-494 (questions op law and pact). 459 
 
 Suh-s. (3). Miscellaneous Forms of Relief. 
 
 492. There are certain forms of proceeding, other than actions and counter- 
 claims for the express purpose of obtaining rescission, in the course of which 
 the servient party may be indirectly relieved against a transaction which 
 he claims to be voidable on the ground of undue influence. Thus, he may 
 resist a claim in an administration suit which is founded on such a transac- 
 tion {h) ; or, if the question is between solicitor and client as to the validity 
 of an agreement for costs, such question may be determined in proceedings 
 for, or in relation to, taxation (i). 
 
 493. No relief by way of damages is possible, unless the servient party's 
 case can be, and is, put in the form of a claim (whether alternatively, or not) 
 for relief against a breach of duty of such a nature as to constitute a 
 fraudulent misrepresentation or other tortious act (j) ; or unless the parties 
 consent to the substitution of pecuniary compensation for rescission and 
 mutual restitution in specie (k). Of course neither this, nor any of the fore- 
 going observations on the subject of remedy and relief, has any application 
 to proceedings for statutory non-disclosure, which are the subject of separate 
 and independent treatment hereafter (I). 
 
 Sect. 6. Questions of Law and Fact. 
 
 494. The three presumptions of the exercise of undue influence which 
 arise as soon as the relation, and the transaction during the subsistence 
 of that relation, are established as facts, are presumptions of law, as has 
 been already explained (m). Except the above, all matters in controversy 
 between the parties in any proceedings founded on " undue influence " 
 are issues of fact, subject to the two cardinal rules of evidence that it 
 is always a question of law, (1) whether any, and, if so, what, legal rights 
 or obligations result from a given state of facts ; and (2), whether there is, 
 or is not, any admissible evidence in support, or (as the case may be) in con- 
 tradiction, of any allegation of fact. It is proposed to illustrate this general 
 statement by particular reference to three main classes of questions which 
 
 {h) The servient party successfully resisted the dominant party's claim in an adminis- 
 tration suit, in Se Holmes's Estate, Sevan's Case (1861), 3 GiflE. 337 ; Fry v. Lane ; Ee Fry, 
 Whittet Y. Bush (1888), 40 C. D. 312 (so far as regards Be Fry, Whittet v. Bush). 
 
 (i) As in Re Hoggart's Settlement (1912), §6 Sol. J. 415. 
 
 (j) As in OocJcburn v. Edwards (1881), 18 C. D. 449, 459, 460, C. A. (olaun based on 
 a tortious sale); Curtis v. Bottomley (1911), " Times," 1st Aug., C. A. (where the action 
 was brought, and damages were recovered, for fraudulent misrepresentation, though, in 
 the Court of Appeal, it was recognized, as appears clearly from the judgments of Motjlton, 
 L.J., and Buckley, L. J., that the case might have been put either as one of abuse of 
 influence, or as one of fraud) ; Nocfon v. Lord AsKburton, [1914] A. C. 932, 956-958, H. L. 
 
 (k) Thus, in Sturge v. Sturge (1849), 12 Beav. 229, where the servient party established 
 his right to rescission of a sale of land for £950, and, it appearing that the dominant party 
 had sold it to a third person for more than this sum. Lord Langdaie, M.B., instead of 
 ordering a reconveyance (which would have been the regular reHef), with the consent of 
 the plaintiff — without this it could not have been done — directed the defendant to pay 
 over to him the excess. 
 
 (/) See Ch. VI, post. 
 
 (m) In § 405, note (a), ante. 
 
460 CH. V, SECT. 6, SUB-SS. (1), (2), 
 
 most commonly and prominently arise, viz. questions as to the relation, as 
 to the transaction, and as to value, respectively (n). 
 
 Subs. (1). Qtiestions as to the Relation. 
 
 495. Subject to the two governing rules above-mentioned, all questions 
 relating to the existence of the particular relation alleged, its commencement 
 and termination, and its operation upon the transaction impeached, are 
 questions of fact (o). More particularly and obviously is this so, when the 
 relation is said to have been created by the circumstances of the individual 
 case ; for here not only are facts to be considered, but they are wholly to 
 be considered, inasmuch as they are avowed to be the very foundation of 
 that which is sought to be established (p). It is, however, always a question 
 
 (») Being the subjects of the three Sub-sections respectively which follow. The 
 citation of authorities in the notes to the first two of these is necessarily of a somewhat 
 general character, for the reason that most of the judgments are given by equity judges 
 who are not concerned to mark off, by any sharp dividing line, their findings of fact from 
 their conclusions of law, so that it is a matter of some difSculty to point to any express 
 judicial statement in these cases that this or that question is one of fact, or one of law, 
 however clear it may be, as a matter of inference from the general character of the 
 language used, and from references to the evidence adduced, that the particular question 
 before the Court was treated as one of fact. There are however some cases, few but 
 sufficient, where, the trial being before a judge and jury, questions were left to the 
 jury, and which, therefore, are conclusive as to the questions so left being questions 
 of fact. And, further, the frequent references by Chancery judges of certain matters 
 to the Master for account, inquiry, or report, and the direction of issues to be tried 
 at law, are tantamount to decisions that such matters are questions of fact. 
 
 (o) See, generally, the cases cited in the notes to Sect. 3, Sub-s. (1), and Sect. 4, 
 Sub-s. (1), ante, and, particularly, Rhodes v. Bate (1866), 1 Ch. App. 252 {per Tuenee, L.J., 
 at pp. 259-262). As to its being a question of fact whether a party is so connected with 
 a related person as to be himself also related to the servient party, see the oases cited in 
 note (n) to § 504, post. 
 
 {p) See, generally, the cases cited in the notes to Sect. 2, Sub-ss. (5), and (6), ante ; and 
 in particular, Gibson v. Jeyes (1801), 6 Ves. 266 (per Lord Eldon, L.C, at pp. 272, 273, as 
 to the plaintiff's mental capacity, which, if necessary, he would have sent to a jury to 
 determine) ; WiUan v. WiUan (1814), 2 Dow. H. L. 274 (where, at p. 278, Lord Eldon, L.C, 
 treated the question of the servient party's capacity as one of fact, and a matter for medical 
 evidence, and said that, but for the strength of the other circumstances indicating the 
 " weakness " of the servient party, he would have directed an issue) ; Wood v. Abrey (1818), 
 3 Madd. 417 (per Leach, V.-C., at p. 423, finding as a fact, on the evidence, that the servient 
 party was in pecuniary distress at the date of the transaction) ; Portmore (Earl of) v. 
 Taylor (1831), 4 Sim. 182 (per Shadwbll, V.-C, at p. 212, finding the like " distress," 
 and the dominant party's knowledge of that distress, as facts) ; Howes v. Bishop, [1909] 
 2 K. B. 390, C. A. (where the jury found, in answer to a question left to them by Jelf, J., 
 that influence had been exercised by the husband over the wife, but could not agree on 
 another question left to them, whether the influence had been " unduly " exercised. The 
 Court of Appeal, however, intimated that the second of these questions ought not to have 
 been put, as there was no evidence in support of the affirmative : per Lord Alveestone, 
 C.J., at p. 398, and Moulton, L.J., at p. 399) ; Bank of Montreal v. Stuart, [1911] A. C. 
 120, P. C. (at p. 137, where the existence of the circumstances and conditions necessary 
 to raise the presumption of influence was treated as one of fact on the evidence). As to 
 undervalue, another and a very important element in the proof of the circumstances and 
 conditions, being always a matter of fact and evidence, see § 499, post. The curious view 
 expressed, and course taken, by Lord Redesdale, L.C. (Ir.), in Webb v. BorJce (1806), 
 2 Sch. & Lefr. 661, as stated in note (r) to § 448, ante, where the question of actual exertion 
 of influence and threats, though at first thought to be one of fact, was ultimately 
 pronounced to be one of law, is wholly at variance with the current of authority, and 
 cannot be supported. 
 
§§ 494-498 (questions op law and pact). 461 
 
 of law whether a given state of facts constitutes a relation from which undue 
 influence is to be presumed {q). 
 
 Suh-s. (2). Questions as to the Transaction. 
 
 496. Subject, again, to the primary rules above referred to, all disputed 
 questions as to the nature and class of the transaction (and such disputes 
 not infrequently arise, as, for instance, where the transaction is asserted to 
 have been a gift on the one side, and to have been a contract on the other), 
 and also as to its details (these being always necessary to enable the Court 
 to frame the proper directions for mutual restitution in any case where 
 rescission is granted), are questions of fact (r). 
 
 497. Further, inasmuch as only by establishing that, in point of fact, 
 the transaction was proper, righteous, and fair, can the dominant party 
 repel any presumption of law to the contrary which will otherwise be 
 made against him, it is obvious that all controversies as to such propriety, 
 righteousness, or fairness, must be controversies of fact, to be determined 
 by the evidence (s) : for instance, it is always a question of fact whether the 
 servient party had an actual and real intention of making the gift, or entering 
 into the contract which is sought to be invalidated (t) ; whether the dominant 
 party made full disclosure to the servient party of all material facts, and 
 explained to him the nature of the transaction and his rights and liabilities 
 in respect of it, and gave him such honest advice against himself as he would 
 have given him against a stranger (m) ; and whether the servient party was 
 protected by the intervention of an independent third person (v). 
 
 498. Lastly, all disputed questions which may arise as to whether or 
 not the servient party intentionally and voluntarily confirmed the transaction, 
 
 (g) See Sect. 2, Sub-s. (7), ante. 
 
 (r) See the cases cited in the notes to § 456, and § 457, ante, and particularly Nicol v. 
 VaugMn (1833), 1 CI. & Pin. 495 (where the question of whether the transaction was 
 purely voluntary, with no consideration except past services, or was, on the contrary, in 
 the nature of a counter -security, was referred to the Master for report, as a question 
 of fact. The case is abstracted in note (s) to § 456, ante) ; Mitchell v. Homjray (1881), 
 8 Q. B. D. 537, C. A. (where the question was left specifically to the jury whether the 
 transaction was a loan or a gift). 
 
 («) Generally, see the cases cited in the notes to Sect. 4, Sub-s. (2), ante. 
 
 (t) See the cases cited in the notes to § 469, ante, and, particiilarly, Shades v. Bate 
 (1866), 1 Ch. App. 252 {per Tubneb, L.J., at p. 257). 
 
 («) See the cases cited in the notes to §§ 470^73, ante, and especially the following, 
 in which such questions were specifically left to, and pronounced upon by, a jury : Bulkdey 
 V. Wilford (1834), 2 CI. & Pin. 102 (where the jury found a fraudulent omission to disclose) ; 
 Howes V. Bishop, [1909] 2 K. B. 390, C. A. (where the jury found concealment, and neglect 
 to explain the instrument) ; Mitchell v. Hcrmfray, sup. (where the j ury found, inter alia, that 
 there had been no fraud, or undue influence, by which they meant presumably that ther& 
 had been full disclosure of everything requiring to be disclosed). Por findings of judges, 
 see Rhodes v. Bate, sup. {per Tubnee, L.J., at p. 257) ; GocMmrn v. Edwards (1881), 18 
 C. D. 449, C. A. {per Jessel, M.R., at p. 455, and Cotton, L.J., at p. 462). 
 
 {v) See §§ 474-477, and the oases cited in the notes thereto, ante ; and, especially. 
 Wood V. Abrey (1818), 3 Madd. 417 {per Leach, V.-C, at p. 423) ; Mhodes v. Bate (1866), 
 1 Ch. App. 252 {per Tttenbe, L.J., at pp. 259, 260, referring to the evidence on the point). 
 In Mitchell v. Homfray, sup., the absence of independent advice was admitted by the 
 dominant party, and therefore this issue was not left to the jury, with the others, as it 
 would have been if any evidence of such advice had been adduced. 
 
462 CH. V, SECT. 6, SUB-SS. (2), (3). 
 
 and, if so, whetlier or not, at the time of the suggested confirmation, he was 
 entirely emancipated from the influence which had operated on the transac- 
 tion purporting to be confirmed, and whether or not he was then cognizant 
 of every fact material for him to know and of his rights in respect of the 
 transaction, are, if there is evidence on both sides, questions of fact to be 
 resolved with reference to such evidence (w). 
 
 Subs. (3). Questions as to Value. 
 
 499. Whenever it is a question of the terms on which mutual restoration 
 is to be eSected, which is the primary object of rescission, disputes may arise 
 not only as to the proper amount of the cash sums due or paid under the 
 transaction, but also as to the value of allowances to be made, or credits to 
 be given, by the servient party, as, for instance, for permanent improvements 
 to the property made, or for services rendered, by the dominant party 
 under or in pursuance of the transaction. All these are of course questions 
 of fact, and, as such, are usually made the subject of inquiries or accounts 
 directed by the judgment (x). It is, however, in cases where full value is 
 reUed upon by the dominant party as evidence of the propriety of the con- 
 tract impeached, or where undervalue is set up by the servient party as one 
 of the " circumstances and conditions " raising a presumption of undue 
 influence, or of an unconscionable bargain in relation to an expectancy, 
 that questions of value are most important. These, too, are of necessity 
 matters to be decided, as facts, on a balance of conflicting evidence at the 
 trial {y), or to be referred, as issues of fact, to others for inquiry, report, or 
 assessment (z). 
 
 {w) See the cases cited in the notes to Sect. 4, Sub-s. (3), ante, and, particularly 
 Mitchell V. Homfray (1881), 8 Q. B. D. 537, C. A., where, amongst the questions left to 
 the jury by Stephen, J., was the question whether after the cessation of the relationship, 
 and of the effect produced by it, the servient party intentionally abode by what she had 
 done, which the jury answered in the affirmative ; and this fact so found by the jury, for 
 whom alone it was to determine it, was held by the Court of Appeal to have justified the 
 judgment for the dominant party which the judge had directed to be entered at the trial. 
 
 {x) See § 489, ante. 
 
 ly) In the following cases, the question of value was dealt with by the Court itself, 
 with reference to the evidence : Moth v. Atwood (1801), 5 Ves. 845 {per Abden, M.R., at 
 p. 845) ; Peacock v. Evans (1809), 16 Ves. 512 {per Gbant, M.R., at p. 517) ; Gowland v. 
 De Fa/ria (1810), 17 Ves. 20 {per Grant, M.R., at p. 25) ; Wood v. Ahrey (1818), 3 Madd. 
 417 {per Leach, V.-G, at pp. 423) ; PoHmore {Earl of) v. Taylor (1831), 4 Sim. 182 {per 
 Shadwell, V.-C, at p. 210-212) ; Edwards v. Burt (1852), 2 De G. M. & G. 55 {per Lord 
 Cbanwokth, L.J., at pp. 57-62) ; Salter v. Bradshaw (1858), 26 Beav. 161 ; St. Albyn v. 
 Harding (1859), 27 Beav. 11 {per EoMiLLy, M.R., at pp. 13, 14) ; Foster v. RdberU (1861), 
 29 Beav. 467 (per RoMiLiy, M.R., at pp. 470, 471) ; Talhot v. Stanifmth (1861), IJ. & H. 
 484 {per Page-Wood, V.-C, at pp. 503-508) ; Neshitt v. Berridge (1863), 32 Beav. 282 
 {per RoMHiy, M.R., at pp. 287, 288) ; Balcer v. Monk (1864), 4 De G. J. & S. 388 (per 
 KNiGHT-BBtrcB, L.J., at p. 391) ; Tate v. Williamson (1866), L. R. 1 Eq. 528 (per Paoe- 
 Woor, V.-C, at p. 540) ; Pisani v. Att.-Gen. of Gibraltar (1874), L. R. 5 P. C. 516 (at 
 pp. 538, 539) ; Fry v. Lane (1888), 40 C. D. 312 {per Kay, J., at pp. 322, 323). And see, 
 generally, the cases cited in the notes to § 478, ante. 
 
 (z) Thus, in Webb v. Rorhe (1806), 2 Soh. & Lefr. 661, an issue was directed : whilst 
 the question was the subject of a master's report, or of an inquiry, in Aldborough (Earl of) 
 ■V. Trye (1840), 7 a. & Fin. 436; BootMy v. Boothby (1852), 15 Beav. 212; Jones v. 
 MicIeettB (1862), 31 Beav. 130. 
 
§§ 498-500 (questions of law and fact). 463 
 
 500. So constantly has this question of value occupied the attention of 
 the Courts in cases of bargains with " expectants " that, in the course of 
 time, a set of working rules or principles for general use in determining the 
 proper inferences of fact to be drawn from certain kinds of evidence has 
 emerged and taken shape. It has been held, in the first place, that the 
 value to be ascertained in such cases is the value which the expectancy had 
 at the time of the transaction, not that which it would have had if it had 
 been then known how the event on which such value was contingent (for 
 instance, the continuance or termination of the respective lives) would turn 
 out (a) ; further, it has been said that the expert evidence of actuaries as 
 to market values, calculated according to the recognized tables, is of little 
 or no use without proof of the particular circumstances of the individual 
 reversion, such as the relative position, as regards health, of the " expectant " 
 and of the person on whose death the expectancy falls into possession (b) : 
 but that, if no other evidence is ofiered, the expert evidence must determine 
 the issue (c). It has also been said that an auction sale, unless proved to 
 have been a mere cloak for a fraudulent private bargain, is ordinarily the 
 best test of value {d). None of these, however, are conclusive or infallible 
 criteria. Where, for instance, there is proof of an actual re-sale of the rever- 
 sion at a profit immediately after the transaction, this may carry far greater 
 weight than any other evidence (e). So also proof of the fact that the dominant 
 party received on behalf of the servient party inquiries and applications with 
 a view to purchase, all of which he ignored and concealed from the servient 
 party, is, by itself, eloquent of inadequacy of value (/), just as, conversely, 
 the fact of the servient party having offered the reversion in all directions 
 without result is equally eloquent of adequacy (g). And the most decisive 
 evidence of all is the opinion of an indifferent third person to whom both 
 parties agreed to resort {h). 
 
 {a) OowlanA v. De Faria (1810), 7 Ves. 20 (per Grant, M.E., at pp. 25, 26) ; Nesbitt 
 V. Berridge, sup. (per EoMiLLy, M.R., at p. 287). 
 
 (6) Gibson v. Jeyes (1801), 6 Ves. 266 (per Lord Eldon, L.C, at p. 274) ; Aldborougli 
 (Earl of) V. Trye (1840), 7 CI. & F. 436 (per Lord Cottenham, L.C, at pp. 458-460) ; 
 Edwards v. Surt (1852), 2 De 6. M. & G. 55 (per Lord Ceanworth, L. J., at pp. 56, 57, 
 63, 64). 
 
 (c) Portmore (Earl of) v. Taylor (1831), 4 Sim. 182 (where, at pp. 210, 211, Shadwell, 
 V.-C., says that he " cannot conceive " why the evidence of an actuary should not be 
 accepted " when there is nothing to contradict it "). 
 
 (d) SheUy v. Nash (1818), 3 Madd. 232 (per Leach, V.-G, at p. 236, who, however, 
 thereexcepts the case of "fraudulent sales by auction" . . . "to cover private bargains," 
 which " will operate nothing ") ; Fox v. Wright (1821), Madd. & G. Ill ; Aldborough (Earl 
 of) V. Trye, sup. (per Lord Cottenham, L.C, at p. 460, and Lord Bkougham, at p. 465) ; 
 Foster v. Roberts (1861), 29 Beav. 467 (per Romilly, M.R., at p. 471 : " unless a person 
 gives much more than the value, it is impossible to purchase a reversionary interest with 
 safety, except under a sale by auction "). 
 
 (e) Nesbitt v. Berridge (1863), 32 Beav. 282 (per Bomilly, M.E., at p. 288). 
 
 (/) Grosvenor v. Sherratt (1860), 28 Beav. 659 (per Eomilly, M.E., at pp. 661, 662, 
 664). 
 
 (g) Moth V. Atwood (1801), 5 Ves. 845 (per Abden, M.E., at p. 845 : " he was deter- 
 mined to sell this reversion. ... It is clearly admitted, it was offered over and over again 
 to all the town, to twenty persons. That circumstance is decisive. . . . The plaintiff 
 offered it to the husband of the tenant for life, who refused it. . . The bill must be 
 dismissed with costs "). 
 
 (h) Foster v. Roberts, sup. (per Eomilly, M.E., at p. 471). 
 
464 CH. V, SECT. 7, SUB-SS. (1), (2). 
 
 Sect. 7. Pasties. 
 
 501. It remains to consider by, and against wiom, the right to relief 
 may be asserted in respect of transactions impeachable on the ground of 
 undue influence. 
 
 Sub-s. (1). Who are entitled to assert the right to relief. 
 
 502. The persons entitled to assert the right to relief comprise the servient 
 party, and any person who by operation of law, as, for instance, on the 
 death (^), or the disability of the servient party by reason of insolvency (j), 
 insanity (k), or otherwise, or in virtue of a voluntary assignment from him (I), 
 is or becomes entitled to stand in his place. 
 
 Sub-s. (2). Against whom the right to relief may he asserted. 
 
 503. The persons against whom the right to relief may be asserted com- 
 prise, firstly, the person who is deemed to have exercised, or to be responsible 
 for the exercise of, the undue influence ; and, secondly, any person who, 
 whether by operation of law, or as assignee from the dominant party, is or 
 becomes bound to stand in his place. 
 
 504. The first of these classes includes not only any person against whom 
 individually the exercise of undue influence upon the servient party in respect 
 of the transaction is presumed or proved, but also any person who, 
 whether as partner, principal, or otherwise (m), was associated with 
 
 (i) A very large proportion of the cases cited in the notes to this Chapter are cases in 
 which the plaintiff was the heir, devisee, executor, administrator, next-of-kin, or other 
 representative of the estate of the deceased servient party, as will be seen on reference. 
 They are, indeed, so numerous that it would be a waste of space to give a catalogue of 
 them in this note. They range from Bennett v. Vade (1742), 2 Atk. 324, to Ee Coomber, 
 [1911] 1 Ch. 723, C. A. The reason for this preponderance is plain. The servient party, 
 having once come under the influence, usually remains under it until his death, when 
 " another Pharaoh " comes upon the scene who, being unamenable to the influence, and 
 having no interest except in the estate, at once takes active measures. 
 
 (j) As in Ford v. Olden (1867), L. E. 3 Eq. 461 (where the plaintiff was the assignee of 
 the estate of the bankrupt servient party for the benefit of his creditors) ; Tyler v. Yates 
 (1871), 6 Ch. App. 665 (the Uke). 
 
 (k) As in De WiUe v. Addison (1899), SO L. T. 207, C. A. (where the plaintiff was the 
 next friend of the servient party who was of unsound mind not so found by inquisition). 
 
 {I) The conditions under, and the equities subject to, which a chose in possession, and a 
 chose in action, may be respectively assigned, without rendering any action by the assignee 
 obnoxious to the doctrine of champerty or maintenance, and the application of the law on 
 this subject to voidable contracts in general, have been fully considered, once for aU, 
 in § 279, ante. For an illustration of an assignment which was held not to be champertous, 
 see Cockell v. Taylor (1852), 15 Beav. 103 {per Romilly, M.R., at pp. 116, 117). For a 
 similar illustration, where the relation was one of confidence, see the case cited in note (w ) 
 to § 394, ante. 
 
 (m) See Gibson v. Jeyes (1801), 6 Ves. 266, where a member of a firm of solicitors was 
 held liable for the undue influence personally imputable to his partner and son {per Lord 
 Eldon, L.C, at p. 279a : " I am satisfied by this evidence, upon the question whether 
 the defendant is affected by the conduct of Jeyes the younger, that there is no distinction 
 between them "). In Baker v. Bradley (1855), 7 De G. M. & G. 597, the improper conduct 
 of one of the mortgagees against whom relief was claimed, it being proved that he had 
 acted as agent for all of them, was held sufiicient to render all liable (per Knight-Bbuce, 
 Ij.J., at pp. 614, 615). The liability of the parties in such cases is ordinarily joint, unless 
 it appears on the face of the instrument, or otherwise, that an innocent party claims 
 rights under covenants or parts of the instrument which are severable from those under 
 
§§ 501-505 (parties). 465 
 
 him in the transaction impeached, and must, therefore, take the consequences 
 of its having been improperly brought about ; and any person who, with 
 knowledge of a relation of influence between two persons, procures or suffers 
 the dominant party to exercise the influence belonging to that relation 
 with the object and result of inducing the servient party, as surety or 
 otherwise, to enter into or concur in a contract with himself, by which he, 
 as well as the dominant party, will be benefited («). The burden, in the last- 
 mentioned case, is upon the servient party of showing, not only that 
 the relation alleged existed between him and the dominant party, but 
 also that the person in question was cognizant of, and whether by overt 
 acts or tacitly utilized and traded on, such relation and the influence 
 presumed by the law, and anticipated by him, as likely to result from it(o). 
 A juridical or artificial person, it should be noted, is capable of undue 
 influence {p), just as it is of fraud, or malice (q). 
 
 505. The second class consists of two species, the first of which includes 
 any person to whom the liability is transmitted, or upon whom it devolves, 
 by operation of law, in case of the death (r) or other legal disability of the 
 dominant party (s). 
 
 which a guilty party derives title, in which case, as has been seen — see § 488, and note (i) 
 thereto, ante — the transaction will not be set aside as against such innocent party. 
 
 (») See § 411, and the cases cited in note(r) thereto, ante (where a creditor made 
 use of the parental influence) ; the cases cited in note {h) to § 429, ante; also § 431, and 
 the cases cited in note (i) thereto, ante. To these add Bhodes v. Bate (ISQQ), 1 Ch. App. 252 
 (where one of the dominant parties, Bate, besides exerting undue influence on his own 
 account, took the benefit of that which the other dominant party, his co-defendant 
 Codrington, exercised, in order to obtain guarantees from the servient party of Codriugton's 
 indebtedness to himself. It was on the latter aspect of the case that so much of the relief 
 as ordered Bate to repay aU that he had received under such guarantees was based : per 
 TiTRNER, L.J., at pp. 260, 261). 
 
 (o) See Oobbett v. Brock (1855), 20 Beav. 524 (where it was vainly contended that 
 mortgagees to whom a lady had mortgaged her reversion were deprived of all rights, 
 merely because they knew that the lady was engaged to be married to the person whose debt 
 the mortgage was intended to secure : per Romilly, M.R., at p. 531 : " the fact of Mr. 
 Brock saying, ' I am about to marry a lady who will give you security,' does not amount 
 to notice to them that this security could only be obtained by undue influence ") ; Bain- 
 brigge v. Browne (1881), 18 C. D. 188 (where, a father having exercised undue parental 
 influence over his children, which resulted in their giving a charge to certain creditors 
 of his on their interest under a marriage settlement, it was held that the chargees could not 
 be deprived of their security on the mere ground that they knew that the same solicitor 
 was acting for both father and children {per Fry, J., at pp. 198, 199, and see also the 
 citation in note (<), inf.). 
 
 {p) For instance, in Bank of Montreal v. Stuart, [1911] A. C. 120, P. C, the dominant 
 party was a bank. In London tfc Westminster Loan dk Discount Co., Ltd. v. Bilton (1911), 
 27 T. L. R. 184, and in J. King, Ltd. v. Hay Gurrie (1911), 28 T. L. R. 10, the dominant 
 party was a limited company. For oases of relations of " confidence " in which the party 
 charged was a corporation, see the authorities cited in note (i) to § 399, ante. 
 
 (q) The liability of corporations for fraud is discussed in § 165 of the author's Law of 
 Actionable Misrepresentation ; and their liability for maUce in App. IV, Sect. 4 (sub. fin.) 
 of his Law of Actionable Defamation. 
 
 (r) As in Wiseman v. Beake (1690), 2 Vern. 121 ; Kingaland (Viscount) v. Barnewall 
 (1706), 4 Brown P. C. 154 (devisee and executors) ; Webb v. Rorke (1806), 2 Sch. & Lefr. 
 661 ; 9 R. R. 122 (heir at law and personal representative) ; MacCabe v. Hussey (1831), 
 5 Bligh (s. s.) 715 (administrator : here the dominant party died pending suit) ; Addis v. 
 Campbell (1841), 4 Beav. 401 (personal representatives); Qresley v. Mousley (1859), 
 
 (s) As in other cases of actions of contract. Cp. § 401, ante, as to relations of " con- 
 fidence." 
 
 B.N.D. 8 H 
 
466 CH. V, SECT. 7, SUB-S. (2); CH. VI. 
 
 506. The second of the above-mentioned species includes any one who 
 has acquired property which was the subject of the impeached transaction 
 by conveyance, assignment, or transfer, from the dominant party, if such 
 property was a chose in action {t), or if, being a chose in possession, the servient 
 party is in a position to establish (and in that case it is for him to do so) 
 either that the assignee took as a volunteer, or sub-donee, or otherwise, 
 without consideration, in which case it is wholly immaterial whether he had, 
 or had not, notice of the circumstances rendering the transaction voidable (m) ; 
 or that he took with notice of such circumstances, or in bad faith, in which 
 case it is immaterial whether he gave valuable consideration, or not (v). 
 
 507. Questions as to the efEect on costs, on the one hand, of adding 
 " formal " parties, that is, parties whom, as trustees, holders of the legal 
 estate, incumbrancers, stake-holders, or otherwise, it was necessary or proper 
 to join " for conformity," or persons from whom, though eventually ex- 
 culpated, it was reasonable to seek redress in the first instance, and, on the 
 other hand, of any unnecessary or improper joinder of parties not liable with 
 those who are, form the subject of separate examination in another place (w). 
 
 4 De G. & J. 78 (here the dominant party died during the appeal) ; Baker v. Loader (1873), 
 L. R. 16 Eq. 49 (executrix). 
 
 («) See Barnard v. Taylor (1856), 2 Jur. (n. s.) 1213 {per Stuart, V.-C, at p. 1215, 
 as to so much of the mortgaged property as consisted of a fund in court). The rules stated 
 in the text as to choses in action, and choses in possession, respectively, acquired under 
 voidable transactions in general, irrespective of the particular ground of voidability, have 
 been enunciated and discussed, once for aU, in §§ 283-287, ante, and need not now be re- 
 stated with the same detail. See, however, the statement by Fry, J., of the general rule, 
 as applied to cases of undue influence, which is to be found at pp. 196, 197 of Bainhrigge 
 V. Browne (1881), 18 C. D. 188: "against whom does this inference of undue influence 
 operate ? Clearly . . . against the person who is able to exercise the influence . . . and 
 . . . against every volunteer who claimed under him, and also against every person who 
 claimed under him . . . with notice of the circumstances from which the Court infers 
 the equity. But ... it would operate against no others." Cp. for instances of the 
 applicatio.i of the rules to relations of " confidence," § 402, ante. 
 
 (u) The loous dassicus (perhaps, rather, the purpurens pannus) on the hopeless position 
 of subdonees, however morally free from blame (which they rarely are, however), forms part 
 of the constantly cited judgment of Wilmot, C.J., as one of the Commissioners of the 
 Great Seal, at p. 64 of Bridgeman v. Oreen (1757), Wilmot's Opns. & Judgts., 58, affirming 
 the decision of Lord Hakdwicke, L.C. (1755), 2 Ves. Sr. 626 (" there is no pretence that 
 Green's brother, or his wife, was party to any imposition or had any due or undue influence 
 over the plaintiff : but does it follow from thence that they must keep the money ? No ; 
 whoever receives it must take it tainted and infected with the undue influence and im- 
 position of the person procuring the gift. His partitioning and cantoning it out amongst 
 his relations and friends will not purify the gift, and protect it against the equity of the 
 person imposed upon. Let the hand receiving it be ever so chaste, yet if it comes through 
 a corrupt, polluted channel, the obUgation of restitution will follow it "). The principle 
 so stated has been applied to all subsequent cases of volunteer assignees of property the 
 subject of a transaction resulting from undue influence, such as Carew v. Johnston (1805), 
 2 Sch. & Lefr. 280 ; Huguenin v. Baseley (1807), 14 Ves. 273 {per Lord Eldon, L.C, at 
 pp. 288-290) ; Goddard v. Carlisle (1821), 9 Price 169 {per Richards, C.B., at p. 661, and 
 Graham, B., at p. 664) ; Morley v. Loughnan, [1893] 1 Ch. 736 {per Wright, J., at pp. 757, 
 758) ; Barron v. Willis, [1900] 2 Ch. 121, C. A. {per Lindlby, M.R., at p. 133). 
 
 {v) As in Tottenham v. Oreen (1863), 32 L. J. (oh.) 201 {per Wood, V.-C, at pp. 205, 
 206, as to sub-mortgagees who took with notice) ; Nesbitt v. Berridge (1863), 37 Beav. 
 282 {per Romilly, M.R., at pp. 288, 289, as to sub-purchasers with notice). On the other 
 hand, some of the defendants in Rhodes v. Bate (1866), 1 Ch. App. 252, succeeded in 
 showing that they took for value in good faith, and no relief, therefore, was granted against 
 them {per Turner, L.J., at pp. 261, 262). 
 
 {w) § 623, post. 
 
§§ 506-508. 467 
 
 CHAPTER VI. 
 
 THE STATUTOEY LAW AS TO NON-DISCLOSURE IN 
 PROSPECTUSES OF COMPANIES. 
 
 508. Hitherto this commentary has been concerned solely with the common 
 (in the sense of non-statutory) law of disclosure, so far as it is the subject 
 of civil jurisdiction and relief. It is now proposed to consider how far, and 
 in respect of what matters, the legislature has modified that law. On a 
 careful examination and analysis of the various statutes and enactments 
 in which non-disclosure or concealment is dealt with, after excluding those 
 which merely codify, declare, confirm, re-enact, recognize, or assume existing 
 principles and rules of the common law, without purporting to alter them in 
 any way (x), those which render either existing or newly created duties of dis- 
 closure amenable to criminal jurisdiction only (y), and with which this treatise 
 is not concerned, those which merely provide a special and simpler or more 
 summary procedure for the enforcement of common law rights already enforce- 
 able by action («), and those which have already been dealt with in foregoing 
 
 (x) As, for instance, Marine Insurance Act, 1906 (6 Edw. 7, c. 41), the provisions of 
 which as to disclosure have been frequently referred to in Ch. II, Sect. 3, and in Ch. Ill, 
 Sect. 2, Sub-s. (2), ante ; Conveyancing Act, 1882 (45 & 46 Vict. c. 39) s. 3 and other 
 sections, as to presumptive knowledge, cited, passim in notes to Ch. II, Sect. 3, Sub-ss. (4), 
 <5), (6), ante ; Partnership Act, 1890 (53 & 54 Vict. c. 39), ss. 16, 29, 30, cited in notes to 
 §§ 44, 55, 56, 341, ante ; Sale of Goods Act, 1893 (56 & 57 Vict. c. 31), s. 23 of which, as to 
 disolosxu'e of title, is cited in notes to §§ 110, 170, 287, ante. All these are either codifying 
 or declaratory enactments. For an illustration of an enactment which needlessly pre- 
 scribes, as a statutory remedy, a form of relief already existing at common law, see Law 
 of Property Amendment Act, 1859 (22 & 23 Vict. c. 25), s. 24, as extended by Law of 
 Property Amendment Act, 1860 (23 & 24 Vict. c. 38), s. 8, which purports to render a 
 vendor or mortgagor, or his solicitor or agent, liable in damages to the purchaser or 
 mortgagee for the concealment of any incumbrance or document of title, — a Uabihty which 
 would clearly attach to such a concealment, being an implied fraudulent misrepresentation 
 independently of any statute, as explained in § 85 of the author's Law of Actionable Mis- 
 representation. For instances of statutes which, without altering existing civil rights and 
 liabilities at common law in respect of non-disclosure, give new forms of civil relief or 
 confer additional rights and remedies in respect of other matters not being non- disclosure 
 though akin to it, see Clandestine Mortgages Act, 1692 (4 & 5 W. & M., c. 16), ss. 2, 3 
 (whereby any person who, having mortgaged his lands to one mortgagee, subsequentlv 
 mortgages them to another is deprived of his equity of redemption altogether against 
 that other); Moneylenders Act, 1900 (63 & 64 Vict. c. 51), the effect of which statute 
 is considered in Samuel v. Newbold, [1906] A. C. 461, H. L. ; Moneylenders Act 1911 
 (1 & 2 Geo. 5, 0. 38), s. 1 (3). 
 
 (y) See, for examples. Debtors Act, 1869 (32 & 33 Vict. c. 62), ss. 11, 14, now repealed, 
 and re-enacted, with extensions, by ss. 154, 160, respectively, of the Banlauptcy Act, 1914 
 (4 & 5 Geo. 6, c. 59) ; Moneylenders Act, 1900 (63 & 64 Vict. c. 51), s. 2 ; Prevention of 
 Corruption Act, 1906 (6 Edw. 7, c. 34), s. 1. As to the last, see Se a Solicitor (1909), 
 26 T. L. R. 22, where the solicitor had been convicted of offences under this section). 
 
 (z) See § 616, post, for an example (misfeasance procedure). 
 
468 CH. VI, SECT. 1. 
 
 Chapters, or wliicli do not directly affect the substantive provisions of the 
 general law (a), it will be found that in one class of case only, though that 
 one is of the utmost importance, has the legislature thought fit to alter the 
 existing law by making actionable certain kinds of non-disclosure which were 
 not previously so. The class of case referred to is non-disclosure in prospec- 
 tuses of companies, and the enactment which modifies the law, creates new 
 duties, and renders them the subject of civil relief in respect of such non- 
 disclosure is s. 81 of the Companies (Consolidation) Act, 1908 (6). To this 
 enactment accordingly the residue of this Chapter is devoted. 
 
 Sect. 1. Origin and Object of the Enactment. 
 
 509. In each of the three preceding Chapters, the discussion of the non- 
 statutory duties of disclosure and good faith between persons standing 
 to one another in the relations therein respectively described has been 
 prefaced by some observations as to the theory on which the doctrine is 
 based (c). Where statutory law is concerned, any such iaoj^uiry is of course 
 entirely out of place. It is a case of " hoc volo, sic jubeo : sit pro ratione 
 voluntas." No question of theory or principle arises. But the occasion of 
 any legislative modification of the common law is sometimes a guide to its 
 construction, and in any case is not without historical interest. For this, 
 and other reasons which will become apparent in the course of the discussion, 
 it has been thought advisable to ofier, as an introduction to the present 
 inquiry, some historical observations as to the origin and object of the enact- 
 ment which is the subject of this Chapter, before analysing in detail its some- 
 what multifarious and complicated provisions. 
 
 (a) The Sales of Reversions Act, 1867 (31 Vict., c. 4) has been fuUy dealt with in 
 Ch. V, Sect. 2, Sub-s. (6), ante : so also have the statutes requiring registration of various 
 documents of title, in so far as their provisions affect the doctrine of presumptive know- 
 ledge : see Ch. II, Sect. 3, Sub-s. (6), ante. Disclosure to the world of various other 
 matters is enforced by statutory requirements as to registration, e.g. persons and names, by 
 the Moneylenders Acts, 1900 and 1911 (see s. 1 (2) of the latter Act) ; associations, by the 
 various EYiendly Society, Building Society, and Trade Union Acts, and the Companies 
 (Consolidation) Act, 1908 ; newspapers, by the Newspaper Libel and Registration Act, 
 1881 (44 & 45 Vict. c. 60) ; bills of sale, by the various Bills of Sale Acts. But, except 
 as affecting the rules relating to presumptive knowledge, they have no bearing on the law of 
 actionable non- disclosure, inasmuch as none of them gives any civil remedy, either expressly 
 or impliedly, to any person injured by the non-registration, though they may (or may not) 
 have the effect of rendering contracts by the unregistered persons or societies, or the 
 unregistered instruments, unenforceable, a question which in each case depends on the 
 scope and language of the particular statute : see § 667, post. The secret employment 
 as to puffers at sales by auction, prohibited by the Sale of Land by Auction Act, 1867, 
 being rather a form of implied misrepresentation than of pure non- disclosure, is discussed 
 in Ch. XIII, Sect. 2, of the author's Law of Actionahh Misrepresentation. And, generally, 
 the legislation against fraudulent concealment, or fraud, is of course irrelevant, as such, 
 to the law of non-disclosure, which, as such, does not depend upon fraud at all, as explained 
 in §§ 197, 358, 461, ante. So that, on the whole, it is not incorrect to say that substan- 
 tially the only enactment directly imposing a duty of disclosure, pure and simple, unknown 
 to the common law, and making that duty the subject of civil, and not of merely criminal, 
 jurisdiction is the enactment which forms the subject of this Chapter, — a Chapter which 
 therwise would have been headed generally, "Statutory Non-Disclosure." 
 
 (6) 8 Edw. 7, c. 69 (hereinafter called the Act of 1908). 
 
 (c) See respectively, §§ 83, 317, 318, 407, ante. 
 
§§ 508-511 (statutory disclosure in prospectuses). 469 
 
 510. At common law there is no obligation of disclosure on any person 
 who issues a prospectus inviting tlie public to subscribe for shares or deben- 
 tures in a company, other than and beyond that which rests on everyone 
 who negotiates, or ofiers to negotiate, for a contract which is not uherrimce 
 fidei with another person to whom he is not tied by any relation of con- 
 fidence or influence, — the obligation, namely, to divulge every fact the with- 
 holding of which would render any statement which he chooses to make so 
 fragmentary and defective as to amount to positive falsehood [i). He is in 
 such a case under no duty, apart from statute, to disclose any fact which 
 would not have this efiect, however material it may be. It is established, 
 though it has been said to be " well worth consideration " whether the law 
 is not or ought not to be otherwise (e), that the issuer of a prospectus does 
 not, by reason of the mere fact that the document in which he makes his 
 ofier is a prospectus, undertake for plenary disclosure, or any disclosure 
 except to the extent above stated. Moreover, at common law there is no 
 obligation on any company to issue a prospectus at all, or to take the public 
 into its confidence in any way, or, if not issuing a prospectus, to file any 
 statement containing particulars of the undertaking in any register or office 
 accessible to the public. 
 
 511. This was considered to be an undesirable state of the law; and, 
 accordingly, after the Overend and Gurney litigation had revealed its in- 
 adequacy in the matter of prospectuses, and had provided an object lesson 
 sufficiently striking to excite public attention (/), the legislatm-e intervened, 
 and the Companies Act, 1867 {g), was passed, s. 38 of which was intended 
 to cure the mischief. The section ran thus : " Every prospectus of a com- 
 pany, and every notice inviting persons to subscribe for shares in any joint 
 stock company, shall specify the dates and names of the parties to any con- 
 tract entered into by the company, or the promoters, directors, or trustees 
 thereof, before the issue of such prospectus or notice, whether subject to 
 adoption by the directors or otherwise ; and any prospectus or notice not 
 specifying the same shall be deemed fraudulent on the part of the promoters, 
 directors, and officers of the company knowingly issuing the same, as regards 
 any person taking shares in the company on the faith of such prospectus, 
 unless he shall have had notice of such contract." This egregious piece of 
 drafting was soon perceived to exhibit nearly every imperfection of which 
 legislative expression is capable. The presumable object was to render non- 
 disclosure of material contracts in a prospectus actionable : but instead of 
 saying this in so many words, — than which nothing could have been easier, — 
 
 (d)]Misrepresentation by omission of qualifying circumstances is dealt with in Ch. IV, 
 Sect. 4, Sub-s. (2), of the author's Law of Actionable Misrepresentation ; as to this type of 
 misrepresentation in prospectuses particularly, see the cases cited in note (c) to § 85 in 
 that Chapter. 
 
 (e) Per Eey, J., at p. 311 of Arkwright v. Newbold (1881), 17 C. D. 301, C. A. 
 
 ( / ) " The occasion of this Act must be remembered, viz. the omission from a prospectus 
 of a company of a contract in the Overend and Gurney case which burdened the company : " 
 per Bkamwell, L.J., at p. 499 of Twycross v. Grant (1877), 2 C. P. D. 469, C. A. 
 
 (g) 30 & 31 Vict., c. 131 (hereinafter referred to as the Act of 1867). 
 
470 CH. VI, SECT. 1. 
 
 the legislature preferred to wrap up its meaning in a succession of involucra 
 verborum, in comparison with which a Delphic oracle is simplicity itself. 
 The consequence was that a series of decisions was required to reduce the 
 loose and ill-defined language of the enactment to something like rationality 
 and coherence. Ultimately, after much debate and conflict of opinion, 
 in the course of which the judicial observations on the section were " painful, 
 and frequent, and free," it was determined that the legislature must be 
 taken to have meant, though they did not express their intention in apt 
 terms, to impose a duty on the persons specified to disclose every contract 
 material to be made known to anyone contemplating application for the 
 shares offered in the prospectus for subscription (h). 
 
 512. After enduring 33 years of more or less derisive criticism, the section 
 was repealed by s. 33 (1), and the Schedule, of the Companies Act, 1900 (i), 
 which statute at the same time prescribed the duty of disclosing in any 
 prospectus of a company a long list of specific matters catalogued in s. 10. 
 This section, as varied and extended by s. 2 of the Companies Act, 1907 (j), 
 was reproduced in s. 81 of the Companies (Consolidation) Act, 1908, which 
 now contains the statutory code of the law of disclosure in prospectuses of 
 companies {k) ; the general effect being to render actionable, at the suit of a 
 subscriber for or purchaser of shares or debentures in a company, every 
 omission from the prospectus of the kinds of facts which, at common law, a pro- 
 moter would be under a fiduciary duty to disclose to the company promoted 
 by him (T), or which a director or other oflS.cer of a company would be bound 
 to divulge to such company as his principal (m), but which, at common law, 
 such company promoter, director, officer, or agent, would be under no 
 obligation to disclose to actual or possible shareholders, or to the public (n). 
 Further, by s. 1 (1), and Sched. I, of the Act of 1907, now reproduced in s. 82 
 and Sched. II, of the Act of 1908, it was provided that every company which 
 does not issue a prospectus, other than a " private company," and a company 
 which has allotted shares or debentures before the 1st July, 1898, must file 
 with the registrar of companies a " statement in lieu of prospectus " in 
 the prescribed form, and containing the prescribed particulars {nn). 
 
 {h) See § 532, and note (w) thereto, post. 
 
 (») 63 & 64 Vict., 0. 48 (hereinafter referred to as the Act of 1900). 
 
 (j) 7 Edw. 7, c. 50 (hereinafter described as the Act of 1907). 
 
 {h) It follows that the authorities on so much of s. 38 of the Act of 1867, s. 10 of the 
 Act of 1900, and s. 2 of the Act of 1907, as is reproduced, or represented by equivalent 
 provisions, in s. 81 of the Act of 1908, are relevant to the present inquiry, and, as such, are 
 cited in the following notes. 
 
 (Z) See Ch. IV, Sect. 2, Sub-s. (2), ante. 
 
 (m) See Ch. IV, Sect. 2, 8ub-s. (3), ante. 
 
 (w) See § 345, and notes (z), (a) and (6) thereto, ante. 
 
 (nn) The prescribed form is to be found in Sched. II of the Act of 1908, which repeats 
 Sched. I of the Act of 1907. The particulars required to be inserted in the " statement," 
 pursuant to this Schedule, are substantially the same as those required to be inserted in a 
 prospectus by s. 81 of the Act of 1908 (with the omission of matters (a), (b) and (n) therein). 
 A " private company " is defined in s. 121 of the Act of 1908 (reproducing s. 37 of the 
 Act of 1907), as amended by the Companies Act, 1913 (3 & 4 Geo. 5, c. 25). This pro- 
 vision, however, is not of much practical importance. For, though an allottee of 
 shares would have a theoretical right to damages in respect of non-disclosure of any of the 
 prescribed matters in the " statement," if in a position to prove that he subscribed for 
 
§§ 511-514 (statutory disclosure jn prospectuses). 471 
 
 513. It is thus seen that, so far as the duty of disclosure in pros- 
 pectuses of companies exists, or has ever existed, it is, and always has been 
 since 1867, purely the creature of the legislature (o), if " duty of disclosure " 
 is understood in the strict sense above stated (p) : for non- disclosure which 
 amounts to misrepresentation has always given, and still gives, a cause of 
 action to the party aggrieved concurrently with, and independently of, 
 any remedy which may be available for statutory non-disclosure (q). And, 
 though it was quite unnecessary to do so, the enactment itself which is now 
 under consideration is careful by express words to safeguard these concurrent 
 and independent rights (r). 
 
 514. Defective, however, as was the legislation of 1867, that of 1900, 
 1907, and 1908 may appear to some minds to have achieved a not much 
 larger measure of success. A recognized master in this branch of the law, 
 whilst characterizing s. 38 of the Act of 1867 as " a notorious section," has 
 also described s. 81 of the Act of 1908 as a "monumental" one (s), probably 
 not intending a compliment in the latter case any more than in the former. 
 The enactment may not unfairly be criticized as combining two opposite 
 vices in the art of legislative expression. For it is specific, just where it 
 ought to be general, and general or vague, just where it ought to be specific, 
 It was the ambiguity and obscurity of s. 38 of the Act of 1867 which occasioned, 
 or which at any rate was the justification for, its repeal, not its generality, 
 for generality in such a case is a merit, and not a fault, and is quite consistent 
 with lucidity and precision. In laying down or developing any doctrine, 
 our courts have always manifested a wise and healthy reluctance to tie their 
 hands by enumerating the particular acts and omissions which are to be 
 deemed within the doctrine, and have steadily limited their exposition to a 
 statement of the rule, and the reason and principle of the rule (t) ; whereas 
 
 his shares on the faith of it, it is obvious that such a case is not likely to arise, for the very 
 object of a prospectus-less company is to avoid giving the pubhc any rights against it, and 
 the requirements of the statute can be satisiBed by filing the " statement " at such a short 
 interval before the allotment — see s. 1 (2), and Sched. II of the Act of 1907, reproduced in 
 s. 82 of the Act of 1908 — that there wiU be no opportunity for any member of the public 
 to inspect it before the allotment, which, it has been held, is not avoided by proved non- 
 disclosure : Be Blair Open Hearth Furnace Co., [1914] 1 Ch. 390, C. A. 
 
 (o) " The director is placed in a position which nothing short of a statute could have 
 placed him. He is under an absolute obligation to disclose . . . &c. . . . Therefore the 
 conditions of his liability are fulfilled if he knows the dates and names of the parties to the 
 contract, and does not state them. He is under an absolute obligation to state them " : 
 per Collins, M.R., at pp. 774, 775 of Waits v. Bucknall, [1903] 1 Ch. 766, C. A. (a case under 
 s. 38 of the Act of 1867). 
 
 {p) See § 510, ante. 
 
 (q) Thus it was held, in a case under s. 38 of the Act of 1867, that mere formal com- 
 pliance with the requirements of that section did not of itself negative or displace the 
 shareholder's proof of fraudulent misrepresentation by omissions of material contracts 
 and facts from the prospectus : Aaron's Beefs, Ltd. v. Twiss, [1891] A. C. 273, H. L. {per 
 Lord Halsbuby, L.C, at p. 279, Lord Watson at p. 287, and Lord Davey at pp. 293, 294). 
 
 (r) Sub-s. (9) of s. 81. 
 
 (.s) Buckley, Companies Acts (note to s. 81 of the Act of 1908, at p. 178 of the 9th 
 edition). 
 
 (t) This judicial habit and disposition has manifested itself in the case of each of the 
 main classes of relation dealt with in the three preceding Chapters, as pointed out in 
 §§ 84, 343, 408, respectively, ante, where the preference of the courts for the flexible 
 Lesbian rule (see § 649, post) is illustrated. 
 
472 CH. VI, SECTS. 1, 2. 
 
 lists and catalogues of mala proMbita tave always presented irresistible 
 attractions to the parliamentary draftsman, and the legislature, by its 
 dangerous passion for particularity is constantly engaged in emasculating 
 that which constitutes the essential merit of a judicial rule, its universal or 
 general applicability to future cases (u). So here, erroneously supposing that 
 only by the substitution of the specific for the general could the ambiguity 
 of the former section be removed, and not appreciating the soundness and 
 profundity of Bacon's observation — vt eocceptio firmat vim legis in casibus non 
 exceptis, ita enumsratio injinnat earn in casibus non enum^ratis (v), — the legis- 
 lature, instead of laying down a perfectly general, but none the less on that 
 account a perfectly lucid and definite, rule prohibiting the omission from a 
 prospectus of any fact (which would include a contract or document) material 
 to be known to any person invited to subscribe for or purchase shares or deben- 
 tures of a company, has preferred to set out a " monumental " specification of 
 particular facts, and particular contracts, mixed up with general prohibitions 
 against the withholding of "material" contracts, with the result of at least 
 encouraging the argument that nothing is forbidden which is outside the four 
 corners of the statutory catalogue or proscription list (w). On the other 
 hand, in relation to the questions of remedy and relief, and of the persons 
 respectively entitled and liable, where above all things specification is vital, 
 and where even the despised provision of 1867 was clear and definite, to say 
 nothing of other sections in the Act of 1908 itself (x), the enactment under 
 discussion is utterly indefinite, or rather is absolutely silent («/). 
 
 Sect. 2. The Prospectus. 
 
 515. Before examining the list of matters required to be stated in a 
 prospectus by s. 81 of the Act of 1908, it is obviously essential to ascertain 
 
 {u) Many instances of these cross-currents, and conflicting tendencies, are to be found 
 in other departments of our jurisprudence. The mischief is aggravated by the fact that 
 a large proportion of modern statutes are of the " occasional " or " ad hoc " type, being 
 designed to meet a sudden situation, or even provoked by some popular clamour of the 
 moment, than which no conditions could be more unfavourable to well-considered and 
 enduring legislation. Thus, the Directors' Liabihty Act, 1890 (53 & 54 Vict., c. 64), now 
 reproduced by s. 84 of the Act of 1908, was the outcome of Derry v. Peek (1889), 14 App. 
 Cas. 337, H. L., and the Moneylenders Act, 1900 (63 & 64 Vict., c. 61) was largely stimu- 
 lated by Gordon v. Street, [1899] 2 Q. B. 641, C. A. These measures may be referred to as 
 illustrations of the hastily considered, and therefore ill-expressed, legislation resulting 
 from the attempt to satisfy a momentary outcry by or against a particular section of the 
 pubUc without much regard to the requirements of the future, or the good of the com- 
 munity at large, which are what Bacon, in his " History of Henry VII " (vol. vi, p. 92 : 
 ed. Spedding, EUis, & Heath) contrasts unfavourably with the "laws" which "are 
 deep, and not vulgar ; not made upon the spur of a particular occasion for the present, 
 but out of a providence for the future." 
 
 {v) De Augm. Scient., Book VIII, App. 17. 
 
 (w) See Sect. 3, and particularly § 532, post. 
 
 {x) As, for instance, ss. 84, 85, and 86 of the Act of 1908. 
 
 {y) See §§ 537, 540, 566, post. In express terms the enactment gives no remedy of any 
 sort, and imposes no duty on any person whatever, but only on a thing : " every prospectus 
 . . . must state," &c. The nature of the remedy, and the incidence of the liabiUty, is 
 left to be conjectured from the other provisions of the section, and from the application of 
 general principles of statutory interpretation, as to which, see in § 567, post. 
 
§§ 514-517 (the statutory prospectus). 473 
 
 the statutory meaning of " prospectus " : for a document headed or described 
 as a prospectus may not be a statutory prospectus; whilst, conversely, 
 that which is otherwise headed or described may nevertheless be a prospectus 
 to which the section applies. By the conjoined efiect of the definition of 
 " prospectus " in the general interpretation clause of the Act of 1908, the 
 opening words of s. 81, and the expressions used in sub-s. (7) of that section, 
 the following result is arrived at. The prospectus in which the prescribed 
 disclosure must be made means and includes " any prospectus, notice, circular, 
 advertisement, or other invitation, offering to the public for subscription 
 or purchase any shares or debentures of a company " (z), which is " issued 
 by or on behalf of a company, or by or on behalf of any person who has been 
 or is engaged or interested in the formation of the company (a), whether 
 issued on or with reference to the formation of a company, or subsequently," 
 not being a " circular or notice inviting existing members or debenture holders 
 of a company to subscribe either for shares or debentures of the company, 
 whether with or without the right to renounce in favour of other persons " (b). 
 This definition involves a number of constituent elements which must be 
 separately considered. 
 
 516. In the first place, though the terms "notice" and "invitation" 
 are in themselves neutral, it is quite clear from the context, and the colloca- 
 tion of such expressions as " circular," and " issue," as well as from other 
 provisions of the statute requiring every prospectus to be dated and signed, 
 and a copy filed for registration (c), that the prospectus contemplated by 
 the enactment is a documentary, and not an oral, invitation or ofier. 
 
 517. In the next place, no document can be a statutory "prospectus " 
 which does not constitute, or contain, an " ofier " or " invitation " to anyone 
 to subscribe for, or purchase, shares or debentures (d). And the ofier must 
 be to the public, which expression, however, does not necessarily mean the 
 entire community, but includes any class or section of the public, or any 
 
 (z) This is the definition of " prospectus," contained in s. 285 of the Act of 1908. 
 
 {a) The last cited words are from the commencement of s. 81, from which it is clear 
 that it is not every prospectus, as defined in s. 285, that " must state " the matters pre- 
 scribed, but only every prospectus answering to that definition which is issued by the 
 company or persons specified. See § 519, post. 
 
 (6) The words last cited appear in sub-s. (7) of s. 81. Subject to the exception there 
 stated, they constitute an extension or ampHfication of the introductory language of the 
 section. 
 
 (c) See s. 80 of the statute. 
 
 (d) It is clear from the language of s. 89, (1), (b), of the Act of 1908, that an offer to 
 the public is essential to constitute the document a statutory prospectus, and that there may 
 be " a circular or notice, not being a prospectus, inviting subscription for shares " ; see 
 § 571, post. And, where a promoting syndicate which never intended to, and never did 
 in fact, apply to the pubhc, or carry on business, printed 1 000 copies of a document headed 
 "strictly private and confidential — not for pubhcation," and relating to the prospects 
 of the company of which they were contemplating the promotion, and handed 20 copies 
 to one director, and 200 to the others, and one of these copies was, without any authority 
 from the syndicate, sent to the plaintiff, it was held that the document was not a statutory 
 prospectus, as it was not issued or intended as an offer or invitation at aU, certainly not 
 as " an offer of shares to any one who should choose to come in," which is one of 
 the indicia of an " offer to the public " : Sherwell v. Combined Incandescent Mantles 
 Syndicate, Ltd. (1907), 23 T. L. R. 482 {per Waeeinqton, J., at p. 483). 
 
474 CH. VI, SECT. 2. 
 
 selected number of persons, not being exclusively holders of sliares or deben- 
 tures in the company issuing the prospectus. In short, " the public " means 
 the outside public, whom it is desired to bring into relation with the company, 
 as contrasted with those who are already in relation with it, whether as 
 members or secured creditors, and, if so, since omne majus in se coniinet 
 minus, the expression covers any portion of that outside public (e), though 
 existing members or shareholders may be included in that portion. If, 
 however, such existing members or debenture-holders only are invited, the 
 document is not a prospectus (/). And, generally, when it is clear that the 
 thing alleged to be a prospectus was not " issued," or published at all in the 
 business sense of the word, that is, animo invitandi, or with the intention of 
 appealing to the public, but for some totally difierent purpose, the section 
 has no application (g), and the document is not a statutory prospectus, 
 even if it is capable of being termed a prospectus in any .sense (/i). The 
 question whether the alleged prospectus does, or does not, constitute or 
 contain an ofier or invitation to the public to subscribe for, or purchase, 
 shares or debentures, is a question of fact {i). 
 
 518. The securities offered for subscription or purchase must be either 
 shares (j), or debentures (k). Having regard to the extended statutory 
 
 (e) ^ee Se South of England Natural Gas and Petroleum Co., [1911] 1 Ch. 573, where the 
 prospectus was issued only to shareholders in various gas companies likely to be interested 
 in the projected company, and it was held that these persons were none the less " the 
 public," vis-a-vis the company, because they were not the publio at large, but a selected 
 portion of it {per Swinfen Eady, J., at p. 576). It so happened, however, that the claim 
 in that case failed, because (and only because) the wrong remedy was pursued : see note (v) 
 to § 568, post. 
 
 ( / ) See sub-s. (7) of s. 81, and the observations of Farwell, J., at p. 27 of Burrows v 
 Matabele Gold Beefs & Estates Co., [1901] 2 Ch. 23, C. A. 
 
 (g) Sherwell v. Combined Incandescent Mantles Syndicate (1907), 23 T. L. B. 482. 
 
 (h) See Baty v. Kesmck (1901), 85 L. T. 18, a case under s. 38 of the Act of 1867, 
 which appUes, inter alia, to " every notice inviting persons to subscribe for shares " (per 
 Farwbll, J., at p. 19 : "the Act was not intended, and it is not expressed in such a 
 manner as to impose the very serious consequences of disobedience to its provisions on 
 persons engaged in settling prospectuses in respect of copies not authorized for publication, 
 but shown to friends, or speculators, not as members of the public, but by way of anticipa- 
 tion of the publio, and in order to induce them to co-operate with the promoters in 
 placing the shares with the public"). Here "the plaintiff signed his underwriting 
 agreement and application for shares before any prospectus had been issued to the 
 public, as he must have known, because the agreement mentions the prospectus as a 
 document to be issued in the future " (ibid.), and on this, amongst other grounds, he failed 
 in his action. 
 
 (i) Sherwell v. Combined Incandescent Mantles Syndicate, sup. (per Wabeington, J., 
 at p. 483). 
 
 (j) " Share " is defined in s. 285 of the Act of 1908 as meaning " share in the share 
 capital of the company," and as including " stock, except where a distinction between 
 stock and shares is expressed or implied." 
 
 (h) Drincqbier v. Wood, [1899] 1 Ch. 393, is an instance of a prospectus offering deben- 
 tures. In 3. 285 of the Act of 1908, it is enacted that " debenture includes debenture 
 stock," but there is no statutory definition of either of these expressions. It has been held 
 by Chitty, J. — seep. 264 oiLevy v.AbercorrisSlate Co. (1887), 37 C. D. 260 — that "a deben- 
 ture means a document which either creates a debt or acknowledges it^ and any document 
 which fulfils either of these conditions is a debenture." " Debenture stock " combines 
 the two opposite characteristics of " share " or " stock " on the one hand (a partnership 
 interest), and of " debenture " on the other (a creditor's interest), but, in most cases, is 
 far more in the nature of " stock " than of a " debenture." James, L.J., delivering the 
 judgment of the Court, at p. 349 of Attree v. Hawe (1878), 9 C. D. 337, C. A., described 
 
§§ 517-519 (the statutory prospectus). 475 
 
 meaning of these respective terms, it is difficult to imagine any type of security 
 or instrument in relation to a company which would not come within either 
 the one class, or the other ; but, if there is such a form, no document inviting 
 persons to subscribe for or purchase securities or instruments of that type is 
 a statutory prospectus. Again, it is not easy to conceive any transaction 
 in relation to such securities which would not be either a taking of them, 
 in the sense of subscribing for them, or a purchase of them : but if there 
 be any such dealing, any document inviting the public to so deal in respect of 
 shares or debentures is not a document in which any disclosure is required 
 to be made by the enactment. 
 
 519. Another essential feature in the statutory " prospectus " is its issue 
 " by or on behalf of a company, or by or on behalf of a person who is or has 
 been engaged or interested in the formation of a company." A document 
 not so issued is not within the section [l). A " company " is defined by s. 285 
 of the Act of 1908 as meaning a company formed and registered under that 
 Act, or an " existing company " ; and " existing company " means a com- 
 pany registered under " the Joint Stock Companies Act " (which expression 
 is to include the Joint Stock Companies Acts, 1856, 1857, the Joint Stock 
 Banking Companies Act, 1857, and the statute 21 & 22 Vict., c. 91, but not 
 the statute 8 Vict., c. 110), or under the Companies Act, 1862. A company 
 incorporated by act of parliament, or by a charter, is not a company to 
 which the Act of 1908 applies. It follows that there is no statutory duty of 
 disclosure whatever in the case of a prospectus offering for subscription or 
 purchase theshares or debentures of a parliamentary or chartered company (m). 
 The company on whose behalf the offer is made of course means the company 
 whose shares or debentures are ofiered (w). It will be observed that the 
 
 debentiire-stock issued under ss. 22, 23, and 24 of the Companies Clauses Act, 1863 (26 
 & 27 Vict., c. 118), as "nothing but preference stock with a special preference." It 
 was one of the many defects of s. 38 of the Act of 1867 that creditors' securities were 
 entirely ignored, the enactment being limited to applications for shares, and the Courts 
 finding it impossible to extend the remedy beyond the limits fixed by the express language 
 of the legislature : see Cornell v. Hay (1873), L. R. 8 C. P. 328, where a, bondholder was 
 refused rehef (per Keating, J., at p. 332, and Honyman, J., at p. 334). 
 
 (l) See Sleigh v. Glasgow <Ss Transvaal Options, Ltd. (1904), 6 P. 420, where the so-called 
 prospectus was not issued by the company, or on its behalf, and was never adopted or 
 ratified by them, and, on this ground, was held not to be a prospectus within s. 10 (1) of 
 the Act of 1900, now s. 81 (1) of the Act of 1908. 
 
 (to) This is an astonishing omission. In his treatise on Companies, Bk. I, Ch. Ill, 
 Sect. 2 (6th ed.), Lord Lindley points out that the very prospectus which was the subject 
 of the decision giving rise to the Directors' Liability Act, 1890 (53 & 54 Vict., c. 64), as to 
 misrepresentations in prospectuses (now reproduced in s. 84 of the Act of 1908), was a 
 prospectus of a tramway company incorporated by Act of Parliament. Whatever excuses 
 may be made for the oversight in 1890, none can possibly be made for the deHberate 
 perpetuation of the error, as regards misrepresentations, in 1908, and, as regards non- 
 disclosure, in 1900, 1907, and 1908, when three opportunities of rectifying it successively 
 presented themselves, and were successively neglected. 
 
 (n) See Booth v. New Afrikander Gold Mining Co., [1903] 1 Ch. 295, C. A. This was a 
 case under s. 89 — as to which see § 571, post — where the company was concerned to prove 
 that they had made " an offer to the pubUo " of the shares in question, in order to bring 
 themselves within the permissive and enabhng portion, viz. sub-s. (1), of that section, and 
 outside the prohibitive portion, sub-s. (2), whereby the payment of commission under any 
 other conditions was declared illegal. With this object they gave evidence of an agree- 
 ment by which they — being a " new " or reconstructed company — were to aUot to the 
 
476 CH. VI, SECTS. 2, 3. 
 
 reference to " purcliase " contemplates the case of a promoter issuing a pros- 
 pectus inviting the public to purchase shares or debentures which he has 
 acquired as vendor or promoter or otherwise ; and that by a later sub- 
 section of the enactment it is provided that any document which otherwise 
 answers to the definition of a prospectus, and is not " a circular or notice 
 inviting existing members or debenture-holders of a company to subscribe 
 either for shares or for debentures of the company, whether with or without 
 the right to renounce in favour of other persons," shall, " whether issued on 
 or with reference to the formation of a company, or subsequently," be deemed 
 a prospectus to which the section applies (o). 
 
 520. If, as often happens, there are several documents ofEering shares or 
 debentures, or several editions of such a document, issued either successively, — 
 first, as abridged, and then as complete (^), or first, as a "proof," or "advance" 
 copy, or " subject to revision," and then as final, or finally approved (q), — 
 or simultaneously in different forms, or in difierent places or newspapers (r), 
 each of such documents is, or may be, a " prospectus " : but only that one 
 of them on the faith of which the aggrieved party subscribed for or purchased 
 shares or debentm'es is the prospectus which entitles him to relief ; so that, 
 if that prospectus is not shown to have contravened the section, or to have 
 been issued by the person sought to be made liable, the party fails, however 
 obnoxious to its provisions the other or others of them may have been, and, 
 
 liquidator of the old company shares for distribution amongst as many shareholders of the 
 old company, and, if not, as many members of the public, as would take them. Held 
 that this, if an offer to the pubhc by any one, was certainly not an offer to the public by 
 the company concerned {per Vaitghan Williams, L. J., at p. 312, Stikling, L. J., at pp. 314, 
 315, and Cozens-Habdy, L.J., at p. 316). 
 
 (o) Sub-s. (7) of s. 81. It is difficult to understand why, instead of being banished to 
 an outlying subsection, this amplification, or qualification, was not inserted at the com- 
 mencement of sub-s. (1), together with the expressions which it purports to amplify or 
 qualify. 
 
 (p) White V. Haymen (1883), C. & E. 101, a case under s. 38 of the Act of 1867, where 
 the plaintiff complained of the omission of a material contract from an " abridged pro- 
 spectus " advertised in a newspaper, and the defendant vainly urged that constructive 
 " notice " was given to the plaintiff, within the meaning of that section, by the full 
 prospectus afterwards issued, Mathew, J., holding that, the plaintiff having established 
 that he took his shares on the faith of the first prospectus, and had no actual notice of the 
 second, there was no room for the application of the doctrine of constructive notice. 
 
 (g) Hoole v. Speak, [1904] 2 Ch. 732 (per Kekewich, J., at p. 735). This also was a case 
 under s. 38 of the Act of 1867. On the other hand, if it is made quite clear that the 
 document was not intended to be, and was not in fact, a prospectus at all, and that the 
 document really intended as a prospectus was to be issued at a subsequent date, the 
 first document is not in law a prospectus : see the case referred to in note (h) to § 517, 
 ante, and the citations therein from the judgment of Pabwell, J. 
 
 (r) In Drincqbier v. Wood, [1899] 1 Ch. 393, the plaintiff took his debentures on the 
 faith of two documents, a prospectus (so headed and described), and a letter, under one 
 cover. Bykne, J., at p. 403, expressed the view that each document rendered the defen- 
 dants liable, the former as a prospectus, and the latter as a " notice," under s. 3 of the 
 Directors' Liability Act, 1890 ; which means that he would have held each of them to be 
 a statutory " prospectus " within the more comprehensive definition contained in s. 285 
 of the Act of 1908. In Boussell v. Burnham, [1909] 1 Ch. 127, there was a prospectus 
 issued in England, which stated the minimum subscription on which the company might 
 proceed to allotment, as required by s. 8 1 , ( 1 ), (d) of the Act of 1 908, and another advertised 
 in a liYench newspaper, which did not. The plaintiff claimed relief under ss. 85, 86, in 
 respect of the French prospectus, on the faith of which he established that he had sub- 
 scribed for his shares, and Pabker, J., held that he was entitled thereto. 
 
§§ 519-524 (the statutory disclosure). 477 
 
 conversely, if thai prospectus violates the statutory duty, it is no answer to 
 point to another which complies with it (s). 
 
 521. Where a statutory prospectus is issued or published as a newspaper 
 advertisement, or where it is issued after the lapse of a year from the date 
 at which the company was entitled to commence business, the statutory 
 duty of disclosure is relaxed to the extent specified in sub-ss. (5) and (8), 
 respectively, of the section, and hereafter explained (i). 
 
 Sect. 3. The Matters required to be disclosed in the Prospectus. 
 
 522. The meaning of the statutory prospectus having been ascertained, the 
 next subject of inquiry is the nature and extent of the prescribed disclosure. 
 The " monumental " section, in its first and most " monumental " sub- 
 section, sets out (in an order which is neither logical, nor chronological, nor 
 based on any discoverable principle) a series of matters, or groups of matters, 
 required to be stated in the prospectus, which, as is provided by another 
 section of the Act of 1908, must not be issued until a copy, dated, and 
 signed by every person named therein as a director or proposed director of 
 the company, has been filed for registration, and must state on the face of it 
 the fact that it has been so filed (m). 
 
 523. The first subject of the statutory disclosure is " the contents of the 
 memorandum, with the names, descriptions, and addresses of the signatories, 
 and the number of shares subscribed for by them respectively ; and the 
 number of founders' or management or deferred shares, if any, and the nature 
 and extent of the interest of the holders in the property and profits of the 
 company " (v). " Subscribed for," presumably means " subscribed for in 
 the memorandum." None of these matters need be disclosed in any news- 
 paper advertisement of the prospectus (w), nor " in any prospectus issued 
 more than one year after the date at which the company is entitled to com- 
 mence business " {x). 
 
 524. The next matters to be disclosed are " the number of shares, if any, 
 fixed by the articles as the qualification of a director, and any provision in 
 the articles as to the remuneration of the directors " {y). These are exempt 
 
 (s) See Roussell v. Burnham, sup. (per Pakkbr, J., at pp. 130-132) ; with wMch com- 
 pare the foUowing under s. 38 of the Act of 1867 : White v. Hat/men (1883), C. & E. 101 ; 
 Hoole V. Speak, [1914] 2 Ch. 732 (where the defendants were not proved to have autho- 
 rized the issue of the advance prospectus which contained the same defects as the further 
 and final prospectus which was the subject of Shepheard v. Broome, [1904] A. C. 342, H. L., 
 and which was shown to have had the authority of the directors for its issue. Accordingly, 
 in the first case, the claim failed ; in the second, it succeeded). 
 
 («) See § 523, notes (w) and (x), § 524, note (2), § 525, note («/), and § 530, note (p), post. 
 
 (u) S. 80 of the Act of 1908. It wiU be noticed that this section appHes to " every 
 prospectus issued by or on behalf of a company or in relation to any intended company " ; 
 whereas s. 81 is made to apply to " every prospectus issued by or on behalf of a company, 
 or by or on behalf of any person who is or has been engaged or interested in the formation 
 of a company." Was this difference in language designed, and, if so, what was the design ? 
 Or was it merely inadvertent ? It is impossible to say. 
 
 {v) S. 81, (1), (a). "Memorandum" is the statutory shorthand for "memorandum 
 of association " : s. 285. 
 
 (w) S. 81, (5). 
 
 (x) S. 81, (8). As to when the company is " entitled to commence business," see s. 87. 
 
 ly) S. 81, (1), (b). " Articles " = " articles of association " : see s. 285, where also 
 
478 CH. VI, SECT. 3. 
 
 from disclosure in the case of a prospectus issued more than one year after 
 the company is entitled to commence business (2). 
 
 525. Disclosure is next to be made of " the names, descriptions, and 
 addresses of the directors, or proposed directors " (a), except in any pros- 
 spectus issued more than one year after the date of the company's right to 
 commence business (6). 
 
 526. Then follows a group of matters which, having regard to the other 
 provisions of the Act of 1908, is (and has, indeed, been found in the course 
 of actual litigation to be) of considerable importance. The prospectus 
 is required to state " the minimum subscription on which the directors may 
 proceed to allotment, and the amount payable on application and allotment 
 on each share ; and in the case of a second or subsequent ofier of shares 
 the amount oSered for subscription on each previous allotment made within 
 the two preceding years, and the amount actually allotted, and the amount, 
 if any, paid on the shares so allotted " (c). Any person responsible for the 
 issue of the prospectus has a double interest in divulging the minimum sub- 
 scription, since not only is he liable under the enactment for any omission 
 to do so, but also, by a later section {d), allotment is prohibited unless the 
 amount of such minimum subscription fixed by the memorandum or articles, 
 and named in the prospectus, has been subscribed, and the sum payable on 
 application for the amount so fixed and named, which is to be " not less than 
 five per cent, of the nominal amount of the shares," has been paid to and 
 received by the company ; and, if no amount is so fixed and named, then there 
 can be no allotment unless the sum payable for the whole amount oSered 
 for subscription has been so paid and received : the consequence being that, 
 if the amount of the minimum subscription fixed by the memorandum or 
 articles is not also named in the prospectus, the company is prohibited from 
 going to allotment except on receipt of the whole nominal value of the shares 
 ofiered, and contravention of this provision entails very serious and special 
 consequences (e) independently of, and in addition to, the liability in damages 
 for the non-disclosure itself. Since id certum est quod certum reddi potest, 
 the disclosure is sufficiently made if the prospectus states the proportion of 
 the entire shares ofiered on subscription for which it is proposed to go to 
 allotment (/). 
 
 " director " is defined as including " any person occupying the position of a director by 
 whatever name called." 
 
 (z) S. 81, (8) ; and see s. 87. 
 
 (a) S. 81, (1), (c). 
 
 (6) S. 81, (8) ; and see s. 87. 
 
 (c) S. 81, (1), (d). There was held to have been a non-compliance with this provision 
 in Re Wimbledon (Olympia), Ltd., [1910] 1 Ch. 630, and Re South of England Natural Gas 
 <fc Petroleum Co., [1911] 1 Ch. 573 ; but in each case the plaintiff pursued the wrong 
 remedy : see § 568, and note («) thereto, post. 
 
 (d) S- 85, on which see § 570, post. 
 
 (e) Ss. 85, 86 prescribe two forms of relief, one of which alone is available before any 
 allotment has taken place, and the other only after an allotment : as to these, see § 570, 
 post. 
 
 (/) As in iJc West Yorkshire Darracq Agency, Ltd. (1909), 25 T. L. E. 77, where "ten 
 per cent, of the shares issued " was held to be a sufficient statement of " the minimum 
 subscription." 
 
§§ 524-528 (the statutory disclosube). 479 
 
 527. The next class of facts to be disclosed consists of " the number 
 and amount of shares and debentures which within the two preceding years 
 have been issued, or agreed to be issued, as fully or partly paid up otherwise 
 than in cash, and in the latter case the extent to which they are so paid up, 
 and in either case the consideration for which those shares or debentures 
 have been issued or are proposed or intended to be issued "(g). 
 
 528. Following the above are two groups of matters which, though 
 separated in the section, can only be treated as one group, relating to the 
 property which the company is formed to acquire. It is first provided that 
 there must be disclosure of " the names and addresses of the vendors of any 
 property purchased or acquired by the company, or proposed so to be pur- 
 chased or acquired, which is to be paid for wholly or partly out of the pro- 
 ceeds of the issue ofiered for subscription by the prospectus, or the purchase 
 or acquisition of which has not been completed at the date of the issue of the 
 prospectus, and the amount payable in cash, shares, or debentures, to the 
 vendor, and where there is more than one separate vendor, or the company 
 is a sub-purchaser, the amount so payable to each vendor : provided that, 
 where the vendors or any of them are a firm, the members of the firm shall 
 not be treated as separate vendors " (h). Succeeding this, is a further require- 
 ment contained in a separate paragraph, though it is obviously a part of the 
 fiist, and to some extent a mere repetition of it, that there shall be stated 
 in the prospectus " the amount (if any) paid or payable as purchase money in 
 cash, shares, or debentures, for any such property as aforesaid, specifying 
 the amount (if any) payable for goodwill" (i). In other parts of the enact- 
 ment the above expressions are elucidated and expanded by providing that 
 " every person shall be deemed to be a vendor who has entered into any 
 contract, absolute or conditional, for the sale or purchase, or for any option 
 of purchase, of any property to be acquired by the company, in any case 
 where the purchase money is not fully paid at the date of issue of the pro- 
 spectus, or the purchase money is to be paid or satisfied wholly or in part 
 out of the proceeds of the issue ofiered for subscription by the prospectus, 
 or the contract depends for its validity or fulfilment on the result of that 
 issue " (j) ; and that " where any of the property to be acquired by the 
 company is to be taken on lease, this section shall apply as if the expression 
 * vendor ' included the lessor, and the expression ' purchase money ' in- 
 cluded the consideration for the lease, and the expression ' sub-purchaser ' 
 
 (?) S. 81, (1), (e). 
 
 (h) S. 81, (1), (f). 
 
 («) S. 81, (1), (g). From the reference to " such property as aforesaid," it is obvious 
 that this paragraph or item belongs to that which immediately precedes. Moreover, so 
 much of (g) as prescribes the disclosure of " the amount (if any) . . . payable as purchase 
 money in cash, shares, or debentures, for any such property as aforesaid," is a mere 
 repetition of, and adds nothing to, so much of (f) as requires disclosure of "the amount 
 payable in cash, shares, or debentures to the vendor." The only new elements imported 
 by (g) are the amount of any payment in fact made to the vendor, and the specification 
 of the price paid for goodwill ; and there is no apparent reason why both these should not 
 have formed part of (f). 
 
 (j) S. 81, (2), a reproduction of s. 10, (2), of the Act of 1900. 
 
480 CH. VI, SECT. 3. 
 
 included a sub-lessee " [h). It has been teld that " sub-purchaser " means 
 " sub-purchaser " in the technical conveyancing sense, and not in its popular 
 sense, so that where the company's vendor has paid the original vendor out- 
 right before selling to the company, the company is not a " sub-purchaser " 
 within the enactment, and there is no obligation to state in the prospectus 
 the amount so paid by the company's vendor to the ultimate vendor (l). 
 
 529. The next matter to be divulged in the prospectus is " the amount 
 (if any) paid within the two preceding years, or payable, as commission for 
 subscribing or agreeing to subscribe, or procuring or agreeing to procure 
 subscriptions, for any shares in, or debentures of, the company, or the rate 
 of any such commission : provided that it shall not be necessary to state 
 the commission payable to sub-underwriters " (m). An additional, though 
 an indirect, means of enforcing disclosure of the amount of commission is 
 provided by another section of the Act, which will be considered later («,). 
 
 530. There must be disclosure of " the amount or estimated amount 
 of preliminary expenses " (o), except where the prospectus is " issued more 
 than one year after the date at which the company is entitled to commence 
 business " (y). 
 
 {k) S. 81, (3), reproducing s. 10, (3), of the Act of 1900. It is difficult to see why either 
 this subsection, or s. 81, (2), any more than s. 81, (1), (g), was not incorporated with s. 81 . 
 
 (1), (f). 
 
 (I) Brookes v. Hansen, [1906] 2 Ch. 129, where an action for damages against a director 
 who had authorized the issue of the prospectus for non-disclosure therein of the matters 
 specified in ss. 10, (1), (f ), 10, (2), and 10, (3) of the Act of 1900, now represented by ss. 81, 
 (1), (f), 81, (2), and 81, (3), of the Act of 1908, was dismissed, on the failure of the plaintiff 
 to prove anjrthing beyond the circumstances stated in the text {per Joyce, J., at pp. 135- 
 137, who observes, at p. 136, that " there is no suggestion of any obligation to disclose 
 the amount of the purchase money, however small, paid by the vendor upon his acquisition 
 of the property, however recent," — in that case the vendor had paid £15,000 for the 
 property the day before he sold it to the company for £58,500, — but, he proceeds, " if 
 what the company buys be merely the benefit of a contract for the purchase of a property, 
 the consideration for which remains wholly or in part undischarged, and so, pro tanio, a 
 burden on the company, the company which acquires the benefit of the contract would 
 properly be termed a sub-purchaser, and the amount payable by the company to the 
 original vendor, as well as to their immediate vendor, would, under this subsection (f), 
 have to be stated in the prospectus, and possibly also the name and address of that original 
 vendor, as well as of the immediate vendor to the company ") ; Be Christineville Rubber 
 Estates, Ltd,. (1911), 81 L. J. (ch.) 63, where the plaintiff relied upon, amongst other causes 
 of action, a non-compliance with s. 81, (1), (f), of the Act of 1908, and where it 
 appeared that, though the company's immediate vendor had sold to the company for 
 £51,250 a property which he had bought for £1000 only, he had paid the whole of the £1000 
 to the original vendor one day before the sale to the company, and it was accordingly 
 held, or rather it was admitted, that in this state of the evidence the case could not be 
 brought within the subsection (per Eve, J., at p. 66). It is extraordinary, and only to be 
 accounted for as suggested in note (u) to § 532, post, that it never occurred to the plaintiff 
 in either of these cases to rest his claim on the omission of " a material contract " within 
 s. 81, (1), (k). Anything more "material" within this paragraph, whether it was 
 specifically required to be disclosed by paragraph (f ), or not, than the fact that the com- 
 pany had bought for £51,250 property which had the day before changed hands at £1000, 
 can hardly be conceived. It certainly would be held material as between the vendor- 
 promoter and the company : see Ch. IV, Sect. 2, Sub-s. (2), ante. 
 
 (m) S. 81, (1), (h). 
 
 (») S. 89, as to which see § 571, post. 
 
 (o) S. 81, (1), (i). 
 
 {p) S. 81, (8). For " the date at which the company is entitled to commence business," 
 see 3. 87 of the Act of 1908. 
 
§§ 528-532 (the statutory disclosure). 481 
 
 531. The prospectiis must also state " the amount paid within the two 
 preceding years or intended to be paid to any promoter, and the consideration 
 for such payment " (q). 
 
 532. Next follows, in a most unpretentious position, the highly important 
 provision which was presumably intended to replace in an improved form 
 the discarded s. 38 of the Act of 1867. This requires the prospectus to state 
 " the dates of and parties to every material contract, and a reasonable time 
 and place at which any material contract or a copy thereof may be inspected : 
 proAdded that this requirement shall not apply to a contract entered into 
 in the ordinary course of the business carried on or intended to be carried on 
 by the company, or to any contract entered into more than two years before 
 the date of issue of the prospectus " (r). It has already been shown how the 
 wise generality of this requirement is weakened, rather than strengthened, 
 by the number of specific requirements which accompany it (s). Disem- 
 barrassed of satellites which serve only to encumber freedom of movement, 
 the provision would stand out as a good example of terse, lucid, adaptable, 
 and useful legislation : but, surrounded as it is by these particular prescriptions 
 as to particular contracts, some preceding, and others following it (J), the 
 sphere of its operation and the extent of its applicability, is, or will naturally 
 be thought to have been, deliberately curtailed (u). Moreover, the position 
 which the requirement in question occupies in the statutory list or catalogue 
 is most unfortunate. It neither heads the list, nor closes it. In the former 
 case, adopting a form commonly used in statutory drafting, the enactment 
 would have opened — " all material contracts shall be disclosed in the pro- 
 spectus, and, in particular, the following. . . ." In the latter, there would 
 have been an enumeration of specific contracts ending with a final clause 
 requiring the disclosm'e of all other material contracts of whatsoever kind. 
 Neither of these methods of legislative expression would be perfect, because 
 each would invite the application of the ejusdem generis doctrine, and so 
 tend to limit the generality, and with it the efEectiveness, of the provision. 
 It may be said that a great many of the items in the list are facts, and not 
 contracts. This is true, but the answer is that the criticism here offered applies, 
 mutatis mutandis, to the facts as weU as to the contracts. In this case, 
 
 (j) S. 81, (1), (j). As to what " promoter " means and includes, see §§ 327, 328, ante. 
 
 (r) S. 81, (1), (k). 
 
 (s) In § 514, ante. 
 
 (t) For both (m), and (n), of s. 81, (1), at least involve the existence of contracts. 
 
 (u) And this view wiU derive great encouragement from the marginal heading of the 
 section, which is — "specific requirements as to particulars of the prospectus." It must 
 have been from some idea that, by the specification of particular contracts in (f) and (g) 
 of s. 81, (1), the legislature intended to restrict the area and purview of the " material 
 contracts " referred to in (k), that the plaintiffs, in Brookes v. Hansen, [1906] 2 Ch. 129, 
 and Re Ghristineville Rubber Estates, Ltd. (1911), 81 L. J. (Ch.) 63, respectively, refrained 
 from suggesting that the undisclosed contract was, if not within the special terms of (f ), 
 and (g), at any rate within the general language of (k), and with an exaggerated, but 
 perfectly natural, deference to the expressio unius principle, contentedly assumed that 
 failure to prove the former necessarily involved failure to prove the latter. Definite 
 provisions, it must have been thought, control and limit what is indefinite, whereas an 
 indefinite generality cannot have the effect of expanding what is specifically stated, or, 
 indeed, any operation of any kind on any matters except such as are not the subject of 
 the specific provisions preceding or following it. 
 
 B.N.D. 2 I 
 
482 CH. VI, SECT. 3. 
 
 too, the desirable course would have been to prescribe the disclosure of 
 all material facts, with or without, but preferably without, an enumeration 
 of facts which " in particular " are to be stated. It seems reasonable to 
 suppose that two short clauses, that now under consideration as to material 
 contracts, and another in exactly the same form as to material facts, would 
 have been sufficient to accomplish the intention of the legislature : or, 
 best of all, one clause requiring the disclosure in the prospectus of all con- 
 tracts and facts, or all facts — for a contract is a fact, — material to be made 
 known to any person invited thereby to subscribe for or purchase shares 
 or debentures of the company. Abandoning criticism, however, and dealing 
 with the paragraph in question as it stands, without reference to the possible 
 efiect upon its construction of other paragraphs as to particular kinds of 
 contract, it is necessary to consider the meaning, in this connexion, 
 of the expression " material." What materiality connotes in general has 
 already been the subject of a detailed examination (v), in the course of which 
 it has been pointed out that in each case regard must be had to the class of 
 persons to whom the duty of disclosure is owed in determining whether any 
 particular fact is, or is not, material (w). Now the class of persons to whom 
 the statutory duty is owed under the enactment consists of those who sub- 
 scribe for, or purchase, shares or debentures on the faith of the prospectus 
 in which they are offered. This (so far as regards subscribing for shares) 
 was also the class entitled to be relieved against violation of the provisions 
 of s. 38 of the Act of 1867 ; and, inasmuch as the " contracts " referred to 
 in that section were judicially construed as limited to contracts " material 
 to be made known to persons invited to take shares in order to enable them 
 to form a judgment as to the policy of so doing " (a;), which means neither 
 more nor less than the " material contracts " of the present enactment, it 
 follows that the authorities on the earlier section are also authorities on that 
 which has replaced it, and that the kinds of contract which were in those 
 authorities deemed material to be made known to persons invited to take 
 shares would equally be deemed material to be made known to persons 
 invited to take shares or debentures under the existing statutory condi- 
 tions {y). From an examination of these decisions under the old section it 
 
 {v) See Ch. II, Sect. 2, Sub-s. (2), ante. 
 
 {w] See § 30, and the references in note (II) thereto, ante. 
 
 {x) This is from the definition given by Thbsigeb, L.J., at pp. 460, 461 of SvlUvan v. 
 Mitcalfe (1880),5 C. P. D. 455, C. A., which was adopted andapplledby Suluvan, M.R. (It.), 
 at pp. 401-403 of Jury v. Stoker (1881), 9 L. R. (Ir.) 385. Cp. the similar language used 
 by Lord Coleridge, C.J., in the Common Pleas Division, and by Cockbtjen, C.J., in the 
 Court of Appeal, at pp. 485, 527, respectively, of Tvyyoroas v. Grant (1877), 2 C. P. D. 
 469, C. A. 
 
 (y) It may be observed here that in Shepheard v. Broome, [1904] A. C. 342, H. L., it 
 was held {per Lord Lindlev, at p. 346) that, in any case in which the right to relief accrued 
 before the passing of the Act of 1900, the old section is alone applicable, however long 
 after that date the trial of the action may be. The last reported cases of this description 
 are Macleay v. Tait, [1906] A. C. 24, H. L., where the action was brought in 1902, and the 
 cause of action arose in 1899, and Shepheard v. Bray, [1906] 2 Ch. 235, where the action 
 was commenced in 1904, and the cause of action arose in 1898. It is almost impossible 
 that there should be another. 
 
§§ 532-534 (the statutory disclosure). 483 
 
 appears tliat, generally speaking, any contract or transaction which, at 
 common law, a director or promoter would be required to disclose to the com- 
 pany to whom he stands in a fiduciary relation, though not to anyone else («), 
 was regarded as material to be disclosed by those who issue a prospectus to 
 those who take shares on the faith of it in virtue of the new fiduciary duty 
 created by the legislature. Accordingly, all, or nearly all, the cases in question 
 range themselves under two main classes : first, the class in which the omis- 
 sion of contracts whereby promoters secured to themselves secret profits or 
 advantages was held the subject of statutory relief (a), and, secondly, the 
 class in which the non-disclosure of contracts whereby the promoter seduced 
 the directorate or executive of the company in the form of qualification 
 shares, cash, or other bribes, was held amenable to the section (b) . 
 
 533. The next matter requiring disclosure is " the names and addresses 
 of the auditors (if any) of the company " (c). 
 
 534. Then follows a very important group. The prospectus must give 
 " fuU particulars of the nature and extent of the interest (if any) of every 
 director in the promotion of, or in the property proposed to be acquired by, the 
 company, or, where the interest of such a director consists in being a partner 
 
 (z) See Ch. IV, Sect. 2, Sub-ss. (2) and (3), ante, as to the fiduciary relation between these 
 parties ; and, as to the non-existence of any such relation between the promoters and agents 
 of a company, on the one hand, and shareholders or the public, on the other, see § 393, 
 note (s), ante. 
 
 (a) As in Se Bagnall & Co., Exp. Dick (1875), 32 L. T. 536; Re Coal Economizing Gas 
 Co., Governs Case (1875), 1 0. D. 182 ; Twycross v. Grant (1877), 2 C. P. D. 469, C. A. ; 
 Greenwood v. LeatJier Shod Wheel Co., [1900] 1 Ch. 421, C. A. ; McConnell v. Wright, [1903] 
 1 Ch. 546, C. A. ; Watts v. BucknaU, [1903] 1 Ch. 766, C. A. ; Shepheard v. Broome, [1904] 
 A. C. 342, H. L. ; Stevens v. Hoare (1904), 20 T. L. R. 407 ; J.&P. Coats, Ltd. v. Crossland 
 (1904), 20 T. L. R. 800 ; Nash v. Calthorpe, [1905] 2 Ch. 237, C. A. ; Macleay v. Tait, sup. ; 
 Shepheard v. Bray, [1906] 2 Ch. 235. The plaintiff did not succeed in every one of the 
 above cases, but in all of them the contract, being of the type stated in the text, was held 
 or admitted to be material. Many of them, it will be noticed, would now be within (f) 
 and (g), as well as (k), of the present enactment. 
 
 (6) Examples of this type of case are : — Cornell v. Hay (1873), L. R. 8 C. P. 328 ; Ark- 
 wright v. Newbold (1881), 17 C. D. 301, C. A. ; Jury v. Stoker (1881), 9 L. R. (Ir.) 385 ; Capet 
 & Co. V. Sim's Ships' Composition Co. (1888), 58 L. T. 807 ; Cackett v. Keswick, [1902] 2 Ch. 
 456, C. A. In Arkwright v. Newbold, sup., the alleged contract was held not to have been 
 a contract at aH, but only an " understanding " ; its materiality, however, was recognized. 
 In Baty v. Keswick (1901), 85 L. T. 18, which was decided by Eabweix, J., on the same 
 day as Cackett v. Keswick, sup. (affirmed by the C. A., as above), and related to the same 
 prospectus and the same omitted contract, the plaintiff failed because he did not satisfy 
 the Court, as Cackett did, that he took his shares on the faith of the non-existence of the 
 undisclosed contract, but in both cases it was held that the contract was material, though 
 not so obviously or certainly material to Baty, who took the shares for purposes of an 
 underwriting speculation, as to Cackett who took his as an ordinary investor (per Eaewell, 
 J., at p. 20). The above cases would now fall within s. 81, (1), (m), as well as within (k). 
 There has as yet, probably for the reasons stated in note (u), ante, been no decision on 
 the question of what is a " material contract " within paragraph (k) of s. 81 (1). The 
 only reported case in which that paragraph has even been relied upon is Re Wimbledon 
 (Olympia), Ltd., [1910] 1 Ch. 630, where (amongst other things) it was suggested that the 
 company had omitted a " material contract " from the prospectus, in that they had failed 
 to state therein a mortgage of part of its property : but the action was dismissed on 
 grounds not involving any necessity to consider the materiality of the contract, which, 
 for the purposes of the judgment, was assumed. The reluctance thus exhibited to base 
 proceedings upon non-compliance with this requirement seems to indicate how completely 
 its vitality and utility has been squeezed out of it by the pressure of the particular and 
 specific requirements in which it is imbedded. 
 
 (c) S. 81, (1), (1). 
 
484 CH. VI, SECT. 3 ; SECT. 4, SUB-S. (1). 
 
 in a firm, tte nature and extent of the interest of tie firm, with a statement 
 of all sums paid or agreed to be paid to him or to the firm in cash or shares 
 or otherwise by any person either to induce him to become, or to qualify 
 him as, a director, or otherwise for services rendered by him or by the firm in 
 connexion with the promotion or formation of the company " {d). The 
 term " director " is defined as including " any person occupying the position 
 of a director by whatever name called " (e). The meaning of the terms 
 " promotion " and " promoter " has already been considered (/). 
 
 535. The last item in the catalogue of particulars is, " where the company 
 is a company having shares of more than one class, the right of voting at 
 meetings of the company conferred by the several classes of shares respec- 
 tively " (^). 
 
 536. It has already been explained that where there is a duty of disclosure 
 at common law, that duty is not discharged except by a disclosure which is 
 complete, precise, and plain ; and that any inadequate, partial, or un- 
 particularized revelation, or any resort to " doubtful equivalents " for an 
 express and perspicuous statement, is wholly inefficacious, or worse (h). 
 The statutory " statement " in the prospectus (especially when regard 
 is had to the terms of the marginal note to the section, " particulars of 
 prospectus," and to the " full particulars " mentioned in another place), 
 must certainly be not less candid, complete, exact, and unambiguous than 
 the disclosure which is required at common law (^). 
 
 Sect. 4. The Persons by and against whom the Statutory Relief 
 
 MAY be Claimed. 
 
 537. In s. 38 of the Act of 1867, and also in certain sections of the Act of 
 1908 (j), there is an express designation of the persons to and by whom the 
 statutory duty of disclosure is owed. For some reason which it is impossible 
 to divine, or for no reason at all, s. 81 of the Act of 1908 omits to specify 
 
 (d) S. 81, (1), (m). This is the class of fact the withholding of which by promoters 
 and directors from the company, in breach of their fiduciary duty, plays such a prominent 
 part in the decisions on that subject : see §§ 333, 340, ante. Non-compliance with this 
 particular requirement, or rather with s. 10, (1), (m) of the Act of 1900, of which s. 81, (1), 
 (m) of the Act of 1908 is a repetition, was alleged by the plaintiff, and admitted by the 
 defendants, in SleigJi v. Glasgow and Transvaal Options, Ltd. (1904), 6 F. 420, assuming 
 the document relied upon as a statutory prospectus to answer to that description, which, 
 however, was held not to have been made out. 
 
 (e) S. 285 of the Act of 1908. 
 (/) See §§ 327, 328, ante, 
 {g) S. 81, (1), (n). 
 
 (h) See Ch. II, Sect. 1, ante. 
 
 (i) See Boussdl v. Bwrnham, [1909] 1 Ch. 127 (per Parker, J., at p. 133), a case in 
 which there was no express statement of the amount of the minimum subscription, within 
 s. 81, (1), (d), in the prospectus on which the plaintiff took his shares, though there was 
 such a statement in another prospectus which he never saw, and it was vainly argued that, 
 by a process of reasoning and inference and "putting two and two together," the plaintiff 
 ought to have gathered what the minimum amount probably was. 
 
 [j) For instance, in s. 84 (as to misstatements in the prospectus, where the designation 
 is extremely precise and detailed), and ss. 85, 86 (as to the minimum amount of 
 subscription). 
 
§§ 534-538 (statutory parties). 485 
 
 either class in terms. The intention, however, of the legislature, in this 
 respect is a matter of clear and certain implication from various expressions 
 used in the enactment itself, and in the interpretation clause of the 
 statute (k). 
 
 Subs. (1). By Whom the Statutory Relief may be Claimed. 
 
 538. Where there is any right to civil relief in respect of the violation of 
 a statutory obligation, that right can be asserted by any person who can 
 prove that he has sustained loss or damage in consequence of such violation, 
 and by no other person. Now the prospectus in which the disclosure must 
 be made is defined by s. 285 of the Act of 1908 as " a prospectus, notice, 
 circular, advertisement, or other invitation, offering to the public for sub- 
 scription or purchase any shares or debentures of a company." It is obvious, 
 therefore, that any member of the public who can, and no member of it who 
 cannot, establish that he subscribed for or purchased shares or debentures 
 of a company on the faith of a prospectus of that company in which the 
 prescribed particulars were not stated, belongs to the class of persons entitled 
 to protection. Such member may be either a natural or a juridical person (l). 
 Where such person dies after his cause of action has accrued, his representa- 
 tives may institute, or continue, the proceedings, as the case may be (m). 
 So also, in the case of insolvency, the trustee of the insolvent individual, 
 or the liquidator of the insolvent company, may, and, if the claim is to be 
 pursued at all, must (for the cause of action passes to him by operation of 
 law) claim relief in respect of the statutory, as he would in the case of any 
 non-statutory, wrong done to the estate or property, as distinct from the 
 person, of the insolvent (w). And, generally, whatever right any person, as 
 representing a party aggrieved who is under disability of any kind or his 
 estate, would have to sue for damages in respect of a tort at common law, 
 he would equally have to sue for damages in respect of the statutory tort (o). 
 
 {k) See the introductory words of s. 81 (1), s. 81 (6), and s. 285 (definition of 
 " prospectus " ). 
 
 (l)' Thus, a hmited company was the successful plaintiff in an action under s. 38 of 
 the Act of 1867 (amongst other causes of action) in J. tfc B. Coats, Ltd. v. Crossland (1904), 
 20 T. L. R. 800. , . 
 
 (m) See Twycross v. Grant (1878), 4 C. P. D. 40, C. A., a case under s. 38 of the Act of 
 1867. In Hoole v. Sp&ak, [1904] 2 Ch. 732, which was also a case under that section, the 
 successful plaintiff was the executor of the person who took the shares on the faith of the 
 prospectus, and it was not suggested by anybody that on that account he was disentitled 
 to rehef. Nor was any objection on this score taken to the claim made by the executors of 
 a person who had taken shares on the faith of the prospectus in Re South of England 
 Natural Gas & Petroleum Go., [1911] 1 Ch. 573, which was a case under s. 81 of the Act 
 of 1908. 
 
 (») See, as to damages to the estate of a bankrupt, as distinguished from personal 
 damage, Hodgson v. Sidney (1866), L. R. 1 Bxch. 313, a case of misrepresentation, where 
 it was held that the right to sue passed to the assignees, and a plea to the bankrupt's 
 claim on this ground was held good. And see, generaUy, the treatises on bankruptcy. 
 As to liquidation of a company, see Lord Halsbury's Laws of England, title Companies, 
 vol. V, pp. 446-448. , . 
 
 (o) For it can make no difference to the apphcability of the principle in question 
 whether the act in respect of which the claim to recover damages arises is prohibited by 
 common law, or by statutory rules. As to the position of a married woman in relation 
 
486 CH. VI, SECT. 4, SUB-SS. (1), (2). 
 
 A bare right, however, to sue for damages is not the subject of assignment 
 otherwise than by operation of law {p). 
 
 539. A number of persons may either sue separately, or join in suing, 
 for damages for the breach of the statutory duty {q), as they can for the 
 breach of any other duty. How far, and under what circumstances such 
 proceedings may be the subject of a " representative order," or of an order 
 to stay them pending the trial of a " test action," are questions to be 
 examined at a later stage (r). 
 
 Subs. (2), Against whom the Statutory Relief may he Claimed. 
 
 540. The opening words of the enactment, which govern all the rest, 
 are that " every prospectus issued by or on behalf of a company, or by or 
 on behalf of any person who is or has been engaged or interested in the forma- 
 tion of the company, must state . . ." &c. Now, as an obligation cannot be 
 imposed upon a thing, the plain implication from this language (though it 
 woidd have been far better to have said so expressly, instead of leaving it 
 to inference, however clear) is that the prescribed duty of disclosure was 
 intended by the legislature to be imposed upon any company by or on behalf 
 of which, or any person engaged or interested in its formation by or on 
 behalf of whom, a prospectus is issued. No person who was not " responsible 
 for the prospectus " («), which means of course, responsible for its issue, is 
 liable to proceedings under the section, however engaged or interested he 
 may have been, at or before the date of the issue, in the formation of the 
 company. On the other hand, no person who was not acting on behalf of 
 the company, or who was not engaged or interested in its formation, when 
 issuing the prospectus, or had not previously been so, can be made liable, 
 however clearly it may be proved that in point of fact he issued, or authorized 
 the issue of, the prospectus. 
 
 541. The words " issued by or on behalf of a company " are intended to 
 strike at directors (t), and other agents of the company having its authority 
 to issue the prospectus. They are also sufficient to render the company 
 
 to torts, see Lord Halsbury'a Laws of England, title Husband and Wife, vol. xvi, pp. 445- 
 462. As to the persons entitled to represent an infant, or a lunatic or person of unsound 
 mind not so found by inquisition, in an action of tort, see R. S. C, O. 16, rr. 16, 17, 21, 
 and the various treatises on Infancy, and Lunacy, respectively. 
 
 (p) Because such an assignment would savour of champerty or maintenance. This 
 question is discussed in § 279, ante. 
 
 (g) In Arnison v. Smith (1888), 41 C. D. 348, C. A., there were 52 plaintiffs in an action 
 to recover damages for common law misrepresentation in a prospectus. In Drincqbier v. 
 Wood, [1899] 1 Ch. 393, several debenture-holders joined in an action for damages for 
 statutory misrepresentation under the Directors' Liability Act, 1890 (now s. 84 of the Act 
 of 1908), and it was held that they were entitled to do so, and were not bound to resort 
 to separate actions (per Bybne, J., at pp. 396, 397). 
 
 (r) See § 613, 615, post. 
 
 (fl) This expression is to be found in sub-s. (6) of the enactment, where it is provided 
 that " a director or other person responsible for the prospectus shall not incur " the liability " 
 to which (it is implied) he would otherwise be subject, "if he proves " the facts there 
 specified. 
 
 (t) A director " includes any person occupying the position of a director by whatever 
 name called " : see s. 285 of the Act of 1908. 
 
§§ 538-544 (statutory parties). 487 
 
 itself liable in damages, quoad subscriptions for debentures, and would be 
 sufficient for that purpose as regards subscriptions for shares also, but for 
 the fact that, as will be seen later (m), no remedy in the nature of avoid- 
 ance is given by the enactment, expressly or impliedly, and there is a long 
 and firmly established principle of law which, in the absence of such avoid- 
 ance, debars a shareholder from recovery of damages in respect of his shares 
 against the company of which he still remains a member {v). 
 
 542. The expression, " issued by or on behalf of any person who is . . . 
 engaged or interested in the formation of the company," points to the class 
 of promoters (w), and their agents ; but is evidently not intended to be limited 
 to them, because the word " promoter," which is used in other places in the 
 Act (particularly in s. 84, as to misrepresentations in prospectuses), is here 
 carefully avoided, and the much wider terms " engaged," and " interested," 
 are preferred ; the latter, indeed, being of a comprehensiveness which would 
 be almost dangerous, were it not for the fact that, in this as in the other 
 cases, the " issue " must also be brought home to the " interested " person. 
 
 543. It will be observed that the enactment impliedly renders liable for 
 any breach of its provisions, not only the class of those who, at the date of 
 the issue of the prospectus by them, were engaged or interested in the forma- 
 tion of the company, but also the class of those who, when they issued the 
 prospectus, had ceased to be, though they were originally, so engaged or 
 interested. This provision, bearing in mind the definition of " prospectus " 
 in s. 285, and the language used at the end of sub-s. (7) of s. 81 (" whether 
 issued on, or with reference to the formation of, a company, or subsequently ") , 
 is doubtless designed to meet, amongst others, the possible case of a quondam 
 promoter, after the incorporation of the company, issuing a prospectus 
 " offering to the public for purchase " any of the shares or debentures of the 
 company which he may have acquired as promoter, vendor, or otherwise. 
 
 544. Whoever be the person sought to be made liable, whether a director, 
 promoter, or agent of the company, or other person engaged or interested 
 in its formation, he must be shown either to have actually and personally 
 issued the prospectus, or to have given authority in that behalf to the person 
 
 (tt) See § 568, post. 
 
 (v) This principle, and the grounds for it, are very clearly and convincingly explained in 
 Houldsworth v. City of Glasgow Bank (1880), 5 App. Cas. 317, H. L., by Lord Caibns, L.C, 
 ab pp. 323-326, Lord Selboene, at pp. 329, 330 (" here it is impossible to separate the 
 nature of the pursuer's claim from his status as a shareholder, unless the status can bo 
 put an end to by rescinding the contract which brought him into it," and damages, in 
 such a case, are " neither more nor less than the whole aUquot share due from him in 
 contribution of the whole debts and liabilities of the company. . . . But it is of the 
 essence of the contract between the shareholders, as long as it remains unrescinded, that 
 they should aU contribute equally to the payment of all the company's debts and liabilities. 
 He is either suing all shareholders except himself, who are as innocent as himself, or if 
 they are fraudulent, he is as fraudulent as they "), Lord Hatheklby, at pp. 332-335, and 
 Lord Blackbtjrit, at pp. 338-341. In the above passage from Lord Selboene's judgment, 
 " guilty of statutory non-disclosure," in order to apply the principle to the present class 
 of case, should be substituted for " fraudvilent," which was the word there appropriate, 
 the action being one of deceit. See also Me Hull and County Bank, Burgess's Case (1880), 
 15 C. D. 507 (at pp. 511-514). The rule has no apphcation to the relation between 
 a debenture-holder and the company. 
 
 (w) As to what is involved in promotership, see §§ 327, 328, ante. 
 
488 CH, VI, SECT. 4, SUB-S. (2) ; SECT. 5. 
 
 wlio did so issue it, each of these being a question of fact {x). A promoter, 
 or person " engaged or interested," may be an artificial person, as has been 
 already observed {y), there being nothing to the contrary either in the enact- 
 ment, or in the statute of which it forms part. 
 
 545. The sole civil remedy for the statutory non-disclosure being, as will 
 be explained hereafter, an action for damages (z), it follows that, where there 
 are several defendants, the ordinary rules as to the joint and several liability 
 of tortfeasors acting in concert, and as to the inadmissibility of contribution 
 or indemnity between them, are applicable to such a case (a). 
 
 546. Where the person alleged to have been guilty of the statutory non- 
 disclosure dies before judgment, the action cannot, any more than any other 
 action for damages (6), be brought, or continued (as the case may be), imless 
 the estate of the deceased was enriched at the expense of the plaintifi by the 
 statutory tort (c). 
 
 547. In the case of the insolvency of a tortfeasor, the general rule is that 
 the damages otherwise recoverable are not the subject of a proof in the 
 
 (x) In Hoole v. Speak, [1904] 2 Ch. 732, the plaintiff failed to sustain this onus, as to 
 the " advance prospectus " on the faith of which alone he took his shares, and his action, 
 therefore, was dismissed (per Kekewich, J., at p. 735), whilst, on the other hand, a person 
 who, having subscribed on the faith of the later or final prospectus of the same company, 
 and who did establish that this final prospectus was issued with the authority of the 
 directors, succeeded in Shepheard v. Broome, [1904] A. C. 342, H. L. In Boussell v. 
 Burriham, [1909] 1 Ch. 127, the plaintiff similarly proved that the person issuing the pro- 
 spectus had the authority of the company for that purpose (per Paskeb, J., at p. 132. who 
 there describes the question as one of fact). 
 
 (y) See the cases cited in note (i) to § 399, ante. 
 
 (z) See Sect. 7, post. 
 
 (a) For it can make no difference whether the wrongdoers are so by virtue of a breach 
 of a common law, or of a statutory, duty. The rule that each of two or more wrongdoers 
 acting together is liable in solido, and also severally, is an elementary one. For its applica- 
 tion to statutory non-disclosure under s. 38 of the Act of 1867, see many of the cases cited 
 in notes (a) and (h) to § 532, ante. It is stUl the law that a tortfeasor can recover 
 neither indemnity nor contribution from his principal or associate in the wrong, except 
 where one person employs another to do, or joins with another in doing, " acts not 
 unlawful in themselves " (per Lord Kenyoit, C. J., in Merryweather v. Nixan (1799), 8 
 Term. Kep. 186). The doctrine, with the above qualification, has been followed, and 
 acted upon, in Adamson v, Jervis (1827), 4 Bing. 66 ; Harwell v. London General Omnibus 
 Go. (1877), 2 Ex. D. 365, C. A. ; TU Englishman, and the Australia, [1895] P. 212. It 
 has, however, been severely criticized in Palmer v. Wick, [1894] A. C. 318, H. L., where the 
 House of Lords declined to extend it, and where, also, it was stated not to be a part of 
 Scots law. There is nothing, it will be observed, in s. 81 corresponding to the exemption 
 from the stringency of this rule which, in the case of persons jointly liable for untrue 
 statements in a prospectus, is enacted by s. 84, sub-ss. (3) and (4) of the Act of 1908. 
 
 (6) See Peek v. Gurney (1873), L. R. 6 H. L. 377 (per Lord Cheimsfokd, at pp. 392- 
 395) ; Kirk v. Todd (1882), 21 C. D. 484 (per Jessel, M.R., at p. 488) ; Phillips v. Homfray 
 (1883), 24 C. D. 439, C. A. (per Bowen, L.J., at p. 454) ; Be Duncan, [1899] 1 Ch. 387 (per 
 KoMEB, J., at p. 392) ; Davoren v. Wootton, [1900] 1 Ir. R. 273. 
 
 (c) In Shepheard v. Bray, [1906] 2 Ch. 235, Wakeington, J., at p. 253, decided that 
 a claim under s. 38 of the Act of 1867 is an actio personalis within the meaning of the 
 rule : on appeal, [1907] 2 Ch. 571, C. A., the question was again discussed at considerable 
 length, but ultimately the appeal and action were settled. In Twycross v. Grant (1878), 
 4 C. P. D. 40, C. A., the rule was recognized, though it was not the subject of the decision 
 itself. In Prankenbmg v. Great Horseless Carriage Co., [1900] 1 Q. B. 504, C. A., an action 
 for (inter alia) damages in respect of untrue statements in the prospectus under the 
 Directors' Liability Act, 1890 (now s. 84 of the Act of 1908), the point was debated (per 
 LiNDLBY, M.R., at p. 510, and Rombk, L.J., at pp. 511, 512), but it was not necessary 
 to decide it. 
 
§§ 544-548 (STATUTOEY CAUSE OF ACTION). 489 
 
 bankruptcy, or a claim in the liquidation, unless the insolvent has gained 
 what the claimant has lost, or the liability can be said to constitute an equit- 
 able debt, or to have arisen, however indirectly, out of some contractual 
 obligation {d). There seems to be no reason why this general rule should 
 not apply to the insolvency of a statutory tortfeasor under the Act of 1908, 
 and it has been held that it does so apply (e). 
 
 Sect. 5. Burden of Proof on the Plaintiff in an action for breach 
 OF THE Statutory Duty. 
 
 548. In considering the duty of disclosure which exists at common law 
 between parties negotiating for a contract uherrimce fidei, it was pointed out 
 that the burden is always upon the party complaining (unless relieved of it, 
 whoUy or in part, by the express or implied admission of the party charged) 
 to estabhsh five matters, the first three of which are : — ^the existence of the 
 duty as between himself and the party charged in reference to the particular 
 fact the withholding of which is complained of (and this involves the onus 
 of showing that the particular fact was material to be disclosed, having 
 regard to the nature of the transaction) ; the existence of the alleged 
 undisclosed fact ; and (though this is generally not denied, and, even if 
 it be, the slightest possible evidence is sufiicient to shift the onus) 
 the failure or omission to communicate it (/). The same three probanda 
 exist, mutatis mutandis, in the case of the statutory obligation. That is to 
 say, the plaintiff (g) in any action to recover damages for non-compliance 
 with any of the requirements of s. 81 of the Act of 1908, must establish : — 
 first, the existence of the statutory duty, as between himself and the defendant ; 
 secondly, the existence or occurrence of the matter alleged to have been 
 omitted from the prospectus ; and, lastly, the fact that such matter is not 
 stated at all, or is not stated with the requisite clearness and particularity, 
 in the prospectus for the issue of which the defendant is responsible, and on 
 the faith of which the plaintiff subscribed for or purchased his shares or 
 debentures. There is no obligation, however, on the plaintiff to establish 
 either that the defendant was cognizant of the undisclosed matter (with one 
 
 id) See Bead v. Bailey (1877), 3 App. Cas. 94, H. L. (per Lord Caiens, at pp. 99, 100, 
 and Lord Blackburn, at pp. 102-104) ; Exp. Adamson, Be Collie (1878), 8 C. D. 807, 
 C. A. {per James, L.J., at pp. 818-821) ; Jack v. Kipping (1882), 9 Q. B. D. 113 ; Be Giles, 
 Exp. Stone (1889), 61 L. T. 82 ; Tilley v. Bowman, Ltd., [1910] 1 K. B. 745. And cp., 
 generally. Lord Hakbury's Laws of England, title Bankruptcy, vol. ii, p. 198. As to 
 how far the bankruptcy rules as to provable debts or liabilities apply to the liquidation 
 of companies, see Lord Halsbury's Laws of England, title Companies, vol. v, pp. 508-515. 
 As to the conditions under which alone a party is entitled to segregate the amount of his 
 claim from the assets distributable among the creditors, see § 379, note (d), ante. 
 
 (e) Greenwood v. Humher & Co. (Portugal), Ltd., [1908] W. N. 162. 
 
 (/) See Ch. Ill, Sect. 2, Sub-ss. (1), (2), (3), respectively, ante. 
 
 (g) Throughout the remainder of this Chapter, instead of the expressions "party 
 complaining," and "party charged" (which, for the reasons given in § 12, ante, have 
 hitherto appeared appropriate), the terms " plaintifE " and " defendant " will be respec- 
 tively used, for the reason that there can be no danger of their misleading any one when 
 applied to a class of case in which, as here, the party complaining must of necessity always 
 be a plaintifE : see § 568, post. 
 
490 
 
 CH. VI, SECT. 5, SUB-S. (1). 
 
 exception), or that lie was limself ignorant of it, whicli are the fourth, and 
 fifth, respectively, of the five above-mentioned proianda at common law in 
 the case of a negotiation uberrhnw fdei (h). That this is so, is a clear 
 inference, as will be seen later, from the language of the statute (i). On the 
 other hand, his only remedy for the statutory wrong being the recovery 
 of damages, it is incumbent on him to allege and prove that which is ex vi 
 termini part of his cause of action, viz. the fact of damage, and also a causal 
 connexion between that fact and the defendant's breach of the statutory 
 requirement, as in the case of any other action for damages {j), though, in 
 any case of common law non-disclosure, where rescission, avoidance, defence, 
 and their equivalents, are the only remedies available, such matters are wholly 
 irrelevant {Ic). It is now proposed to examine, separately and seriatim, each 
 of the matters above stated in respect of which the onus rests at the outset 
 (for it is often shifted at a very early stage) on any person seeking relief in 
 respect of statutory non-disclosure in a prospectus. 
 
 Subs. (1). The Existence of the Duty to Disclose in the Prospectus. 
 
 549. The plaintiff must in the first place establish that the statutory 
 duty for the breach of which he claims damages was at the material date 
 owed by the defendants to himself ; which means that he must show that 
 he, or (in case of death, or disability) the person whose estate he represents, 
 belongs to the class of persons entitled to the statutory relief (l), and also 
 that the defendant, or (in case of death, or disability) the person whose estate 
 has devolved upon him, belongs to one or other of the classes of persons 
 liable to the proceedings (m). 
 
 550. He must next show, if the matter is controverted, that the document 
 alleged to be a prospectus was a prospectus in the statutory sense abeady 
 explained («) ; and, in any case in which more than one prospectus was 
 
 (A) See Ch. Ill, Sect. 2, Sub-ss. (4), and (5), respectively, ante. 
 
 (i) See §§ 557, 561, post. 
 
 U) See §§ 558, 559, post. 
 
 (k) See § 359, ante. 
 
 (I) That is to say, that he is a person who subscribed for, or purchased, shares or 
 debentures offered by the prospectus, or a person who, by operation of law, is entitled to 
 represent him, or his estate, within § 537, ante. 
 
 (m) This means that the defendant must be shown to have issued or authorized the 
 issue of the prospectus, being a promoter, director, or agent of the company, or a person 
 who, at the date of the issue, was or had been, engaged or interested in its formation, as 
 described in §§ 540-544, ante ; or he must be shown to represent the estate of such a 
 person, if deceased (see § 546, ante) or under disability, such as insolvency (see § 547, 
 ante). The cases cited in the notes to §§ 540-544, ante, and in the notes to this Chapter, 
 generally, show (though authority is hardly required for the proposition that he who 
 asserts the breach of a duty to him by another must prove the existence of that duty) 
 that the onus of establishing the matters in question is on the plaintiff. All the above 
 are questions of fact (see the above cases). As to promotership, and (when material) the 
 date and diu^ation of such promotership, being issues of fact, see (amongst other cases) 
 Twycross v. Grant (1877), 2 C. P. D. 469, C. A. (where, from p. 476, it appears that Lord 
 Coleridge, C.J., left it to the jury at the trial to find, as a fact, whether the defendant was 
 a promoter, or not). As to the meaning of " promoter," see §§ 327, 328, ante. 
 
 (n) §§ 515-519, ante. If the plaintifi is complaining of omission from the prospectus 
 of any of the matters referred to in sub-ss. (5) or (8), of s. 81, he must show that the 
 
§§ 548-551 (statutory cause op action). 491 
 
 issued, he must further show that the particular prospectus on the faith of 
 which he took his shares or debentures was subject to the statutory duty of 
 disclosure (o). 
 
 551. Lastly, in order to complete his proof of the existence of the statutory 
 duty, it is incumbent on the plaintiff to establish that the undisclosed matter 
 is one of those required by the enactment to be stated in the prospectus (f). 
 With one important exception, the matters enumerated in s. 81 are (as 
 described in the marginal heading to the section) in the nature of " particu- 
 lars," and the subject of " specific " requirements. As to these it is not 
 probable that any difficulty will often arise. The requirement, however, 
 as to " material contracts " (pp) — which constitutes the exception referred 
 to — involves proof of a more general character, since the question whether 
 the omitted contract is one of which disclosure is necessary, or not, depends 
 entirely on whether it was, or was not, material ; and materiality depends 
 on a variety of circumstances and considerations, and is not always self- 
 evident or obvious. The meaning of " materiality," for the purposes of 
 disclosure in general, has been fully discussed in an earlier Chapter (q). It 
 has also been already explained what this term, as applied to the particular 
 statutory duty under consideration, has been held to mean in a succession 
 of decisions under s. 38 of the Act of 1867, which, for the reasons given, are 
 strictly relevant to this provision of the Act of 1908 (r). From these decisions 
 it will be apparent that it is always incumbent on the plaintifi to establish 
 the materiality of the omitted contract (s), which question, as in all other 
 cases where materiality is an essential part of the burden of proof incumbent 
 on a person complaining of non-disclosure (t), is a question of fact (m). 
 
 document on which he took his shares or debentures was not a copy of the prospectus 
 " puWished as a newspaper advertisement," or (as the case may be) was not " published 
 more than one year after the date at which the company was entitled to commence 
 business " : see §§ 523, 524, 525, 530, ante. 
 
 (o) See § 520, and the cases cited in the notes thereto, ante, from which it is apparent 
 that this onus rests on the plaintiff. 
 
 (p) See Sect. 3, in which all these " particulars '' are discussed seriatim, and the 
 notes thereto, ante. 
 
 (pp) This is s. 81, (1), (k). 
 
 (q) See Ch. II, Sect. 2, ante. 
 
 (r) In § 532, ante. 
 
 (s) See the cases cited in the notes to § 532, ante. It is no answer, in any class of non- 
 disclosure case where materiality is established, to allege or prove that the party charged 
 beUeved the undisclosed fact riot to be material : see § 33, ante. So in the case of omission 
 from a prospectus of a contract which is in fact material, it is quite useless for the defendant 
 to set up that he believed, or was professionally or otherwise advised, that it was not of 
 such materiality as to require disclosure : see the following cases under s. 38 of the Act 
 of 1867 -.—Cachett v. Keswick, [1902] 2 Ch. 456, C. A. (per Pabwbll, J., at p. 468) ; Watts v. 
 BucknaU, [1903] 1 Ch. 766, C. A. {per Collins, M.B., at p. 773). On the other hand, as in 
 other cases (see § 33, note (s), ante), where the evidence is confiioting, and the issue is 
 doubtful, the fact that the defendant by his conduct betrayed a consciousness or suspicion 
 of the materiality may turn the scale aerainst him : see, for instance, Broome v. Spealc, 
 [1903] 1 Ch. 586, C. A., a case under s. 38 of the Act of 1867, in which it was regarded as an 
 important fact that the defendants had shown their behef in the materiality of the un- 
 disclosed contracts by referring to them in the first draft of the prospectus from which, as 
 finally issued, they were omitted {per Collins, M.R., at p. 614). 
 
 («) See Ch. Ill, Sect. 6, Sub-s. (1), ante. 
 
 {u) Thus, in Charlton v. Hay (1874), 31 L. T. 437, where a demurrer to a count in the 
 declaration was based on the contention that the omitted contract could not, as a matter 
 
492 CH. VI, SECT. 5, SUB-SS. (2), (3). 
 
 Suh-s. (2). The Existence of the Matter omitted from the Prospectus. 
 
 552. As in cases where a non-statutory duty of disclosure is alleged to 
 have been broken (v), it is obvious that any person who complains of the 
 omission from the prospectus of any of the facts refc[uired by the statute to 
 be inserted therein must prove, if challenged, that the alleged fact was a fact. 
 Here, again, as regards most of the items enumerated in the enactment, the 
 proof of the existence of the alleged fact is extremely simple : but, whether 
 easy or difficult to discharge, the onus in every case rests on the plaintifi 
 of doing so, unless he is relieved of it by admission. Thus, if he complains 
 of the omission of a " material contract " from the prospectus, before any 
 question of materiaUty arises, he must be prepared to prove that the alleged 
 contract, or, if he relies on several contracts, that at least one of them, 
 being a material one, was in fact made {w). For this purpose he must put 
 in evidence the document or documents in which the contract in question is 
 supposed to be contained or recorded, or from which it is to be implied (cc), 
 and must then show that it, or they, amount in law to a concluded and 
 binding contract, as distinguished, for instance, from a mere "understanding," 
 or an " engagement of honour " (?/). 
 
 553. It is not necessary to prove a formal instrument of contract. If 
 
 of law, have been material, and the Court overruled the demurrer In Twycrosa v. Orant 
 (1877), 2 C. P. D. 469, C. A., it was left as a question of fact to the jury, whether the 
 plaintiff would have taken his shares if he had known of the existence of the omitted 
 contracts (p. 476). See also Gackett v. Keswick, [1902] 2 Ch. 456, C. A. {per Fabwell, J., 
 who, at p. 464, expressed his opinion that the determination of the materiality, or 
 otherwise, of the omitted contract depended upon " an inference of fact to be drawn by 
 the Court, or a jury, from the circumstances of the case "). All the above were cases 
 under s. 38 of the Act of 1867. 
 
 («) See Ch. Ill, Sect. 3, Sub-s. (2), ante. 
 
 (w) See the following oases of omitted contracts under s. 38 of the Act of 1867 : Twycrosa 
 V. Grant (1877), 2 C. P. D. 469, C. A. (where the burden was discharged) ; Watts v. BuckwM, 
 [1903] 1 Ch. 766, C. A. (where the plaintiff alleged ten omitted contracts, and proved six 
 of them, all or some of which six were material). On the other hand, in Arkwright v. 
 Newbold (1881), 17 C. D. 301, C. A., the plaintifi failed to prove the making of the alleged 
 contract, and his action, so far as it was based on s. 38 of the Act of 1867, failed, though 
 on other grounds it ultimately succeeded in the Covirt of Appeal. So, in Stevens v. Hoare 
 (1904), 20 T. L. R. 407, out of six alleged contracts the plaintiff proved one only (per 
 Joyce, J., at p. 410), and as to that one failed to prove either his own damage, or the 
 defendant's knowledge, and his action was accordingly dismissed. 
 
 (x) The contracts required to be stated in the prospectus are documentary contracts 
 only. This is clear from the language of s. 81, (1), (k), which requires a statement of 
 " a reasonable time and place at which any material contract or a copy thereof may be 
 inspected." These words, it will be observed, are quite general and absolute, and are not 
 prefaced by any qualification, such as — " where the contract was in writing," or the Uke. 
 In the repealed s. 38 of the Act of 1867, there was no such reference to " inspection " or 
 " copies," and it was accordingly held tha,t oral contracts were within the statutory duty 
 of disclosure : Gapd <b Co. v. Sim's Ships Composition Co. (1888), 58 L. T. 807 [per 
 Kekbwich, J., at p. 810). 
 
 iy) In Broome v. Speak, [1903] 1 Ch. 586, C. A., the plaintiff succeeded in establishing 
 that a certain resolution of the company's board of directors was (in the sense that it 
 related to previous contracts, and affect.ed the mode of payment) a contract, or part of 
 a contract, and not a mere " engagement of honour " {per BtrcKLBY, J., at pp. 598-600, 
 and, in the Court of Appeal, per Colliss, M.E., at p. 617, and Eomee, L.J., at pp. 626, 
 627). On the other hand, in Arkwright v. Newbold, sup., the plaintiff failed to establish 
 anything beyond an "understanding" {per Fey, J., at pp. 308, 309), and, so far as his 
 claim was based on s. 38 of the Act of 1867, his action failed. 
 
§§ 552-555 (statutory cause op action). 493 
 
 the particular contract alleged can be spelt out from the documents in evidence, 
 however informal they may be, this is enough {z). It is necessary on the 
 one hand, and sufficient on the other, to establish that the " real " or " true " 
 contract, the non-disclosure of which is complained of, is to be found in 
 undivulged documents construed by the light of all the other circumstances of 
 the case, where it is suggested that the documents disclosed in the prospectus 
 present a superficial appearance of something which is not the " real " or 
 " true " contract (a). It may be enough, in certain circumstances, to prove 
 the omission of a contract which had been completely executed, or had been 
 cancelled, at the date of the issue of the prospectus, and, a fortiori, of one 
 which at that date had merely been modified (&). 
 
 554. Whether the omitted contract was made or not (c), and whether, 
 in cases of the kind above indicated, it was the " real " or "true" contract (d), 
 are questions of fact. Whether the document or documents proved amount 
 to a binding and enforceable contract, or not, is a question of law (e). 
 
 Suh-s. (3). The Omission from the Prospectus. 
 
 555. It has been shown that, where one of the two parties to a negotiation 
 complains of a breach by the other of a common law duty of disclosure, it 
 is incumbent on such complaining party to give some evidence, if challenged, 
 
 (z) Broome v. Speak, [1903] 1 Ch. 586, C. A. 
 
 (a) Cackett y. Keswick, [1902] 2 Ch. 456, C. A. {per Pabwell, J., at p. 465, Romek, L.J., 
 at p. 476, and SimuuG, L. J., at p. 477, dubitante, on this point, Vaughan Williams, L. J., 
 at pp. 472, 473). The Court, however, was unanimous in thinking that, in this case, it 
 did not matter whether the " real " contract was the expressed contract, or not, for either 
 would be within the section. 
 
 (6) See Broome v. Speak, sup., where the omitted contracts were (i) a contract, con- 
 tained in a letter and minute of the board, whereby the promoter was to receive a bonus 
 of £7500, (ii) a contract, contained in another letter and minute, whereby the promoter 
 agreed to share this bonus with Speak, and (iii) a subsequent resolution of the company's 
 board of directors, with the assent of the promoter, that, in lieu of the £7500, such sum 
 should be paid as the board should think reasonable. It was contended that (iii) had 
 cancelled (i) and (ii), and that (i) and (ii) were accordingly extinct contracts when the 
 prospectus was issued, and not required, therefore, to be disclosed under s. 38 of the Act 
 of 1867, whilst (iii), which had performed its sole function as the extinguisher, was equally 
 outside the duty. But it was h.M by Bitcklby, J. (pp. 600-602), and, in the Court of 
 Appeal, by Collins, M.R. (pp. 615-620), that (iii) had not the effect of putting an end to 
 (i) and (ii), but only of substituting another method of payment ; and, further, that, 
 even if it had the former effect, so that (i) and (ii) at the date of the issue of the prospectus 
 might be called non-existent contracts, still (iii) was a contract, viz. a contract of rescission, 
 and all three were contracts which at various dates had in fact been made, and the non- 
 disclosure of any one of them, all being material, was a breach of the statutory duty. 
 
 (c) See, generally, the cases cited in the notes to this Section, and, particularly, 
 Twyoross v. Chant (1877), 2 C. P. D. 469, C. A., where it appears from p. 476 that the first 
 of the questions left to the jury by Lord Coleeidgb, C.J., was, whether the alleged con- 
 tracts had been made or not. 
 
 (d) See Cackett v. Keswick, sup. {per Parwell, J., at p. 465 : " I find as a fact that the 
 consideration for the 10,000 shares was the agreement by Mathesons to take the company 
 into their offices," the expressed consideration being something else, viz. commission for 
 underwriting these shares). 
 
 (e) In Arkwright v. Newbold (1881), 17 C. D. 301, C. A., and in Stevens v. Hoare (1904), 
 20 T. L. R. 407, Pby, J., and Joyce, J., respectively, in so far as they decided that the 
 contents of the documents proved did not import a concluded or binding contract, seem to 
 have treated the question as one of law. 
 
494 CH. VI, SECT. 5, SUB-SS. (3), (4). 
 
 of the non-disclosure alleged, though, the slightest possible proof of this 
 negative will at once shift the onus on to the other side of establishing the 
 affirmative (/). So, in the case of the statutory non-disclosuie under con- 
 sideration, the burden is technically on the plaintifi to prove the omission 
 from the prospectus of the particular matter which he alleges to have been 
 omitted, — a burden, in the vast majority of cases, easily and instantly dis- 
 charged by merely reading the prospectus, which at that stage will already 
 have been produced and put in evidence, and pointing to the place where 
 the omitted matter ought to be, and is not. It sometimes, however, happens 
 that the proof is less simple, and more argumentative : for instance, where 
 the prospectus contains some more or less distant and oblique references to 
 the taatter in question, it is incumbent on the plaintiS to establish in argu- 
 ment, and it may be by evidence, that these allusions conveyed no real 
 knowledge to him, and fell short of that candid, complete, exact, and un- 
 ambiguous statement which is demanded by the law from every person who 
 is under a duty of disclosure to another, whether the duty arises at common 
 law or is imposed by a statute (g). 
 
 Subs. (4). The Defendant's Knowledge {in one class of case only). 
 
 556. The party complaining of another's non-compliance with a common 
 law duty of disclosure must, as has been explained in an earlier Chapter, 
 establish that the party charged was cognizant of the undisclosed fact (A). 
 Where, however, a statute imposes the duty, there is no such onus on the 
 plaintifi, unless the legislature, in describing the act which constitutes the 
 ofience, qualifies it by language importing that the defendant's knowledge 
 is to be a necessary ingredient in it. In s. 38 of the Act of 1867 such a quali- 
 fication was introduced by virtue of the word " knowingly." Only a person 
 who " knowingly issued " a prospectus omitting a material contract was 
 rendered liable by that section : and, in a series of decisions, " knowingly 
 issuing " was construed to mean no more, and no less, than " issuing a pro- 
 spectus with knowledge that the undisclosed contract at the date of such 
 issue was, or at some material date had been, in fact entered into " (i). In 
 the case, however, of the enactment now under consideration there is no such 
 qualification, except as to one particular class of matter to be mentioned 
 presently. The general duty is prescribed by the introductory words of the 
 enactment in absolute, indeed in impersonal, terms : " every prospectus issued 
 by . . . must state "... &c., and no question of " knowledge " is made rele- 
 vant, or referred to in any way, ins. 81 (1), of the Act of 1908, though a later 
 sub-section of the enactment in specific language creates one exception (j). 
 
 (/) See Ch. Ill, Sect. 3, Sub-s. (3), ante. 
 
 (g) As to what " disclosure " means and involves, see Ch. II, Sect. 1, ante. The 
 statutory obligation "to state" cannot possibly have a narrower connotation than 
 the common law duty to " disclose " or " dommunicate." 
 
 {h) See Ch. Ill, Sect. 3, Sub-s. (4), ante. 
 
 (i) Twycross v. Grant (1877), 2 C. P. D. 469, C. A. ; GachettY. Keswick, [1902] 2 Ch. 456, 
 C. A. ; Watts v. Buohnall, [1903] 1 Ch. 546, C. A. ; Shepheard v. Broome, [1904] A. C. 342, 
 H. L. ; Macleay v. Tait, [1906] A. C. 24, H. L. 
 
 (j) See § 557, ante. 
 
§§ 555-557 (statutory cause of action). 495 
 
 Subject to this exception, it is clear, on ordinary principles of construction, 
 that no knowledge or other state of mind of the defendant is a necessary 
 factor in constituting the statutory tort, or, therefore, requires to be estab- 
 lished by the plaintiff as part of his case : and this is made still clearer by 
 the express provision that ignorance of the undisclosed matter shall be a good 
 affirmative plea, the burden of proving which is placed on the defendant (k) ; 
 and by the fact that, in other parts of the Act of 1908, when it is intended 
 to make "knowledge" of the essence of the prohibited act, it is so 
 stated (l). 
 
 557. The exception above referred to is created by the proviso to sub-s. (6) 
 of s. 81, " that in the event of non-compliance with the requirements con- 
 tained in " a certain paragraph " of sub-section (1) of this section, no director 
 or other person shall incur any liability in respect of the non-compliance 
 unless it be proved that he had knowledge of the matters not disclosed." 
 The paragraph in question embraces the very important class of facts which 
 relate to the interest of the directors of the company in the promotion, and 
 to their qualification by, or other corrupt relations with, the promoter (m). 
 Where omission of any matter of this class is complained of, the plaintiff 
 must prove the defendant's (actual or presumptive) knowledge of such omitted 
 matter at the date of " non-compliance " (that is, the date of the issue of the 
 prospectus which fails to comply with the statutory requirement), and, as 
 in cases under s. 38 of the Act of 1867 (n), unless he establishes this 
 knowledge as a fact (o), his action falls to the ground. The provision 
 is for the protection of a director who, being himself free from blame, 
 was ignorant of the illicit relations existing between his fellow-directors 
 and the promoter : where the plaintiff sues a director solely in respect of 
 the non-disclosure of his own delinquencies in this regard, it is of course 
 unnecessary to prove the defendant's knowledge of his own acts. 
 
 (k) See s. 81, (6), (a) of the Act of 1908, and § 563, post. 
 
 (Z) As in a. 80 (5), — " every person who is knowingly a party to the issue," — and 
 s. 86 (2), — "knowingly contravenes." 
 
 (to) The paragraph is (m) of s. 81, (1), and runs as follows : "full particulars of the 
 nature and extent of the interest (if any) of every director in the promotion of, or in the 
 property proposed to be acquired by, the company, or, where the interest of such a director 
 consists in being a partner in a firm, the nature and extent of the interest of the firm, with 
 a statement of aU sums paid or agreed to be paid to him or to the firm in cash or shares 
 or otherwise by any person either to induce him to become, or to qualify him as, a director 
 or otherwise for services rendered by him or by the firm in connexion with the promotion 
 or formation of the company." As to this clause see § 534, ante. 
 
 (») This was the result in Stevens v. Hoare (1904), 20 T. L. R. 407, where the plaintiff 
 failed to prove that the defendant knew of the existence of the only one of the six alleged 
 contracts which was held to be a contract at all {per Joyce, J., at p. 410). The " know- 
 ledge " to be proved need not necessarily be an actual and personal knowledge. It is 
 enough to show circumstances from which it may fairly be imputed to, or presumed against, 
 the defendant, as in Watts v. Buclcnall, [1903] 1 Ch. 766, C. A. {per Collins, M.E., at p. 772, 
 RoMBR, L.J., at p. 777, and Cozens-Habdy, L.J., at p. 779). As to " presumptive 
 knowledge," and its various forms and species, see Ch. II, Sect. 3, Sub-ss. (2)-(6). 
 
 (o) See, generally, the cases cited in note (i), sup., and particularly Twycross v. Grant 
 (1877), 2 C. P. D. 469, C. A., where one of the questions left to the jury by Lord 
 Coleridge, C.J. (see p. 476), was, whether the defendants had " knowingly omitted 
 mention of the contracts from the prospectus." 
 
496 CH. VI, SECT. 5, SUB-S. (5). 
 
 Subs. (5). Inducement and Damage. 
 
 558. Where, as in the three classes of non-disclosure considered in previous 
 Chapters (jj), or as in cases of innocent misrepresentation {q), the only remedy 
 available is rescission, or its equivalents, the questions of inducement and 
 damage are wholly irrelevant. But where the case is one of fraudulent mis- 
 representation (r), or other fraud or tort, or where a breach of statutory 
 duty is complained of for which no special civil remedy is provided by the 
 statute, — this, as will be seen hereafter (s), is true of the enactment under 
 consideration, — and where, therefore, recovery of damages is the appropriate 
 form of relief, such damage is, ex vi termini, an essential ingredient in the 
 cause of action, and the plaintiff must prove that he has sustained some 
 tangible loss or damage in fact (<), to an amount which is either ascertainable 
 at once, or of which sufficient general evidence is available to justify an 
 inquiry or reference (u). 
 
 559. To prove, however, the mere fact of damage, without going on to 
 establish a causal relation between the damage and the statutory wrong, is 
 to prove nothing. To establish this relation of cause and effect, the plaintiff 
 must show, first, that his subscription for or pmrchase of the shares or 
 debentures resulted in loss to himself, and, secondly, that the non-com- 
 pliance with the statutory duty of disclosure was the cause of that sub- 
 scription or purchase, in the sense that he was induced by his belief that such 
 duty had been observed to so subscribe or purchase. It is true that no 
 express words to this efiect are to be found in the enactment, such as are to 
 be found in other statutory requirements as to prospectuses, — for instance, 
 " by reason of any untrue statement," or " on the faith of the prospectus " (v). 
 But this circumstance is of no significance whatever, in view of the obvious 
 and universal rule that no man can obtain from another compensation for 
 damage which is not shown to have resulted from the proved actionable 
 wrong. The plaintiff, therefore, in an action for damages for the omission 
 by the defendant from the prospectus of any of the matters required to be 
 stated therein by s. 81 of the Act of 1908, is bound to establish no less, though 
 
 ip) See §§ 221, 359, 462, respectively, atite. 
 
 iq) See Ch. XI, Sect. 1, Sub-s. (2), of the author's Law of Actionable Misrepresentation. 
 
 (r) Ibid., Ch. X, Sect. 1. 
 
 (s) See § 568, post. 
 
 (t) Thus, in Stevens v. Hoare (1904), 20 T. L. R. 407, an action for damages for breach 
 of s. 38 of the Act of 1867, one of the reasons for dismissing the action was that the 
 plaintiff proved no damage (per Joyce, J., at p. 409). So also in NaA v. Calthorpe, [1905] 
 2 Ch. 237, C. A. Of course the question of damage, or no damage, and also the amount of 
 such damage (if any), are questions of fact, subject to certain rules of law as to what consti- 
 tutes damage and the principles on which it should be measured, as to which see § 569, post. 
 
 (u) As in Cackett v. Keswick, [1902] 2 Ch. 456, C. A. (per Fahwell, J., at p. 468) ; 
 McConneU v. Wright, [1903] 1 Ch. 546, C. A. (per Bombb, L.J., at p. 558) ; Shepheard v. 
 Broome, [1904] A. C. 342, H. L. (per Lord Lindley, at pp. 347, 348) ; J.dbP. Coats, Ltd. v. 
 Crosskmd (1904), 20 T. L. R. 800 (per Swinebn Eady, J., at p. 807). 
 
 (v) The latter expression is to be found both in s. 38 of the Act of 1867, and in s. 84 of 
 the Act of 1908 (reproducing the Directors' Liability Act, 1890), which latter also contains 
 the words " by reason of any untrue statement " in the prospectus, a curiously elliptical 
 phrase for " by reason of his having acted in the belief of the truth of any untrue statement 
 therein." See the observations of Fabwell, J., at p. 463 of Cackett v. Keswick, sup. 
 
§§ 558, 559 (statutory cause of action). 497 
 
 he need establish no more, than that he took his shares or debentures, and 
 so incurred the alleged loss, on the faith of the non-existence of the particular 
 undisclosed matter (to). This, as was observed by Lord Lindley in one of 
 the cases under s. 38 of the Act of 1867 (which, mutatis mutandis, are strictly- 
 relevant to the present inquiry) means that the plaintifi must show not merely 
 that, on reading a prospectus which turns out to have been in contravention 
 of the enactment, he subscribed for or purchased the shares or debentures, but 
 also that he was induced to do so by his persuasion that the identical fact or 
 contract, the omission of which is the ground of his action, was non-existent : 
 " proof that he applied for the shares on the faith of " the " prospectus, and 
 that he obtained them and paid for them and lost his money, is prima facie 
 evidence, but only prima facie evidence of damage. . . . But if the plaintifi 
 is challenged on this point, he must go a step further and prove that he was 
 misled by . . the omission to disclose some document which ought to have 
 been disclosed " (x). For this purpose, the plaintifi must establish at least 
 that, if the existence of the omitted fact had been revealed to him at the 
 time, he might not have taken the shares or debentures ; and, in one view 
 (which, however, it is conceived, goes too far), it is incumbent on him to 
 show that he would not have done so, and that due disclosure would have 
 had a certainly prohibitive, and not merely a probably or possibly deterrent, 
 effect (y). The question of inducement is one of fact (z). 
 
 (w) Accordingly, in all the cases under s. 38 of the Act of 1867, where the plaintiff 
 failed to show that he was induced to take his shares by a belief (whether there were other 
 inducements or not) that the omitted contract did not exist, he failed altogether, as in 
 Baty V. Keswick (1901), 85 L. T. 18 {per Faewbll, J., at p. 20) ; Sievem v. Hoare (1904), 
 20 T. L. R. 407 (per Joyce, J., at p. 410) ; Sleigh v. Glasgow & Transvaal Options, Ltd. 
 (1904), 6 F. 420 ; Nash v. Galthorpe, [1905] 2 Oh. 237, C. A. (per Vattghan Williams, L.J., 
 at pp. 246, 247, and Stiblinq, L. J., at pp. 254-256) ; Macleay v. Tait, [1906] A. C. 24, H. L. 
 (per Lord Halsbitey, L.C, at p. 26, Lord Robertson, at pp. 27, 28, and Lord Lindley, 
 at pp. 33, 34). 
 
 (x) At p. 31 of Macleay y. Tait, sup. 
 
 (y) Divergent views on this point (generally, however, unnecessary for the decision 
 itself) have been expressed by high authorities, in cases under s. 38 of the Act of 1867. 
 On the one hand, Vaughan Williams, L.J., at pp. 244-246 of Nash v. Galthorpe, sup., 
 and Lord Halsbuey, L.C, at p. 26 of Macleay v. Tait, sup. (a case which related 
 to the same company, and the same prospectus, as Nash v. Calthorpe), expressed a clear 
 opinion that it is incumbent on the plaintiff to establish that he would not have taken the 
 shares if he had known of the omitted contract. The expressions to the same effect used 
 by CocKBiTRN, C. J., at p. 543 of Twycross v. Grant, 2 C. P. D. 469, C. A., and by Thesigee, 
 L.J., at p. 460 of Sullivan v. Mitcalfe (1880), 5 C. P. D. 455, C. A., are by no means con- 
 clusive, because they occur in conjunction with, or in proximity to, other expressions tending 
 distinctly in the opposite direction. The same observation may be made as to the fact (on 
 which Vaughan Williams, L. J., relies in Nash v. Galthorpe, sup.) that one of the questions 
 left to the jury in Twycross v. Grant, sup., was whether the plaintiff would have taken 
 the shares if he had known of the contracts : for it appears from the report of that case 
 (p. 476) that it was also left to the jury, as a separate and independent question, whether 
 the plaintiff subscribed for the shares " on the faith of the prospectus " ; and, as the jury 
 answered both questions in favour of the plaintiff, no decision was called for on the point 
 under discussion. On the other hand, the opposite view is expressed in no less strong and 
 unmistakable language, by Collins, M.R., at pp. 620-622 of Broome v. Speak, [1903] 
 
 (z) See the cases, generally, under s. 38 of the Act of 1867, where the question has 
 always been so treated. In Twycross v. Grant, sup., as stated in the last note, two ques- 
 tions, based on the two above-mentioned views of inducement, were left to the jury by 
 Lord Coleridge, C.J. 
 
 B.N.D. 2 K 
 
498 CH. VI, SECT. 6, SUB-SS. (1), (2). 
 
 Sect. 6. Affirmative Defences to the action for Statutory Non- 
 disclosure. 
 
 560. The remedy for the statutory non-disclosure being an action for 
 damages, it follows that a defendant may avail himself of the affirmative 
 pleas which would be available to a defendant in any other action for damages, 
 except in so far as the enactment itself by express language curtails, increases, 
 or varies them, as in three important respects it does (a). 
 
 Subs. (1). Non-statutory Affirmative Pleas unaffected hy the Enactment. 
 
 561 . There is nothing in the enactment which purports to deprive the 
 defendant of such affirmative common law defences to any action for damages 
 as accord and satisfaction, inactivity and delay amounting to acquiescence 
 or affirmation (6), and the like, or of a defence founded on some other statute, 
 such as a statute of limitations (c). Again, a plea based on proof of the plaintifi's 
 
 1 Ch. 586, C. A., by Rombb, L.J., at pp. 251, 252, of Nash v. Calthorpe, [1905] 2 Ch. 237, 
 C. A., and by Wabeington, J., at pp. 250-253 of Shepheard v. Bray, [1906] 2 Ch. 235, and, 
 it ia submitted, is the more sound of the two. It may be, however, that the difference 
 lies more in form and expression than in thought and substance, and that the apparent 
 opposition is capable of reconciliation, if the proposition is put as Fahwell, J., expressed 
 it, at p. 464 of Oackett v. Keswick, [1902] 2 Ch. 456, C. A. : " if the Court sees that the 
 fact omitted is of such a nature that it might reasonably deter, or tend to deter, the 
 ordinary investor from entering into the contract, this is sufficient. ... If a material fact 
 is omitted from a statement put forward to induce a person to enter into a contract on the 
 faith of that statement, it is a fair inference that he would not have contracted if he had 
 known of the fact." In other words, though technically it is necessary for the plaintiff to 
 prove that he would not have subscribed for the shares if the omitted fact had been dis- 
 closed, he discharges that burden — ■prima facie, at least — by showing that the contract was 
 of a nature to produce hesitation, and " give pause " to a normal person. This is only to 
 say, as is abundantly established ( see § 32, and note (p) thereto, ante, and, as applied to cases 
 of misrepresentation, cp. §§ 120, 134, of the author's Law oj Actionable Misrepresentation), 
 that inducement may be inferred as a fact, but not as a conclusion of law, from materiality, 
 and that the question, " would you have taken the shares if something had been left out, 
 and something else put in ? ", may, in some cases, be properly and sufficiently met, without 
 destroying a, case of inducement otherwise established, by the reply, — " I cannot say ; 
 I have never seen such a prospectus," — as was observed by Byrne, J., in a case under the 
 Directors' Liability Act, 1890 (now s. 84 of the Act of 1908), at p. 404 of Drincqbier v. Wooi, 
 [1899] 1 Ch. 393. 
 
 (a) See Sub-ss. (2), (3), (4), post. 
 
 (6) In Re Ghristineville Rubber Estates, Ltd. (1911), 81 L. J. (ch.) 63, the applicant's 
 inaction and delay, after knowledge of his rights, was held fatal to his motion for rectifica- 
 tion of the register, which was based on the ground of both misrepresentation in the 
 prospectus (which was admitted), and also non-disclosura of matters required to be stated 
 therein by s. 81, (1), (f) of the Act of 1908 (per Eve, J., at p. 66). 
 
 (c) The period of limitation is six years, as in the case of any non-statutory action. 
 It was decided in Thomson v. Lord Olanmorris, [1900] 1 Ch. 718, C. A. {per Lindley, M.R., 
 at pp. 725, 726, and Vatjohan Williams, L.J., at pp. 727, 728) that sect. 3 of the Civil 
 Procedure Act, 1833 (3 & 4 W. 4, c. 42), which enacts that " all actions for penalties, 
 damages, or sums of money given to the party grieved by any statute . . . shall be com- 
 menced and sued . . . within two years after the causes of such actions or suits," has no 
 application to the cause of action " given " by the Directors' LiabiUty Act, 1890 (now s. 84 
 of the Act of 1908), and that " damages and sums of money " refers only to statutory 
 imposition of pecuniary liability in pcenam, and not to compensation by way of civil 
 relief. If this be so, stUl less has the section referred to any application to the enactment 
 now under consideration which " gives " no cause of action at all nomination, as the Act 
 of 1890 did, and s. 84 of the Act of 1908 does. The six. years period runs from the date of 
 the plaintiff's subscription for, or purchase of, the shares or debentures, for then first his 
 cause of action accrues : Thomson v. Lord Clanmorris, sup. (per Lindley, M.R., at pp. 726, 
 727, and Vaughan Williams, L.J., at pp. 728, 729). 
 
§§ 560-562 (statutory defences). 499 
 
 actual and personal (not presumptive) knowledge of the truth, which is 
 always available in an action for damages for misrepresentation {d), is equally 
 available in an action for damages for breach of the enactment, as it was held 
 to be in the case of actions for damages for breach of s. 38 of the Act of 1867 (e). 
 The existence or non-existence of such actual and personal knowledge on 
 the part of the plaintiff is a question of fact (/). 
 
 Subs. (2). Waiver — how affected hy the Enactment. 
 
 562. To a common law action for damages for misrepresentation in a 
 prospectus, or otherwise, it is a valid answer to allege and prove that, either 
 expressly, in the form of a term or condition in the contract, or impliedly, 
 by acts and conduct, the plaintiff agreed to waive, renounce, or surrender, 
 any right to relief to which he might otherwise have been entitled (g). This 
 defence was not abolished, or afiected, by s. 38 of the Act of 1867, and the 
 " waiver clause," which became a common feature in prospectuses of the 
 period, was accordingly recognized as valid if, but only if (which was rarely 
 the case), it was so expressed as to satisfy all those conditions of complete 
 candour and good faith which are required by the law in all cases of waiver, 
 release, or compromise (/i). By s. 10 (5), however, of the Act of 1900, re- 
 peated in s. 81, (4), of the Act of 1908, it was expressly enacted that " any 
 condition requiring or binding any applicant for shares or debentures to 
 waive compliance with any requirement of this section, or purporting to 
 affect him with notice of any contract, document, or matter not specifically 
 referred to in the prospectus, shall be void " {i). It will be observed that 
 the latter part of this clause covers a much wider area than the first part, 
 since it invalidates every attempt to fix the party beforehand with contractual 
 knowledge of any undisclosed matter whatsoever, whether it is or is not a 
 matter required by the enactment to be stated in the prospectus. So far, 
 therefore, as express contracts or conditions are concerned, the defence 
 
 (d) This topic is dealt with in Ch. X, Sect. 2, Sub-s. (1), of the author's Law o/ Action- 
 able, Misrepresentation. 
 
 (e) See Watts v. Buchnall, [1903] 1 Ch. 766, C. A. (per Collins, M.R., at p. 775. At 
 p. 776, he explains why there is no logical inconsistency between the rule which requires 
 actual knowledge to be brought home to the injured party, who is under no statutory 
 liability in the matter, and the rule which denies to the wrongdoer, who is under an 
 absolute statutory duty, a means of escape by pleading that the same facts which 
 prove that the plaintiff had no knowledge, because he had no actual notice, ought to be 
 sufficient to acquit the defendant of " knowingly issuing," because he too had no actual 
 notice). As to " actual " and " presumptive " knowledge, see Ch. II, Sect. 3, ante. 
 As to the defendant's onus of proving the plaintiff's actual and personal knowledge, in an 
 action of misrepresentation, see § 209 of the author's Law of Actionable Misrepresentation. 
 
 (/) In Twycross v. Grant (1877), 2 C. P. B. 469, C. A., one of the questions left to the 
 jury (see p. 476) was whether the plaintiff had " notice," within s. 38 of the Act of 1867, 
 of the omitted contracts. 
 
 (g) See Ch. X, Sect. 2, Sub-s. (2) of the Author's Law of Actionable Misrepresentation. 
 
 (h) See § 132, ante, and all the cases which are cited in note (s) thereto, in connexion 
 with the principles regulating the duty of disclosure in negotiations for compromise. 
 
 (i) It is remarkable that there is no corresponding prohibition of a waiver condition 
 in s. 84 of the Act of 1908 (relating to " untrue statements " in the prospectus). On the 
 other hand, there is such a prohibition in s. 85, as to allotment of shares on less than " the 
 minimum subscription " : see sub-s. (5) of that section. 
 
500 CH. VI, SECT. 6, suB-ss. (2), (3), (4) ; sect. 7. 
 
 of waiver is now, and since the 1st January, 1901 (the date of commencement 
 of the Act of 1900) has been, totally extinct. The defence of waiver by acts 
 and conduct, for what it is worth, still remains. 
 
 Subs. (3). The Defendant's Ignorance of the Undisclosed Matter. 
 
 563. It has been already pointed out that, except in the case of one 
 specified class, the enactment does not require the plaintiff to allege or prove 
 that the defendant was cognisant of the matter alleged to have been 
 omitted from the prospectus (J). It is expressly provided, however, that 
 " in the event of non-compliance with any of the requirements of this section, 
 a director or other person responsible for the prospectus shall not incur any 
 liability by reason of the non-compliance, if he proves that, as regards any 
 matter not disclosed, he was not cognisant thereof " {k). This means that 
 the defendant is not to be deprived of the plea of ignorance, but it is for him 
 to allege and prove it, and not, as in certain common law cases of non- 
 disclosure (l) and in the class of case expressly excepted by the enactment 
 itself, for the plaintiff to establish the defendant's knowledge. 
 
 Sub-s. (4). The Defendant's " Honest Mistake of Fact." 
 
 564. The above cited provision of the enactment, after allowing the 
 defendant a plea of ignorance as compensation for depriving him (except 
 as above stated) of his common law right to insist on his knowledge being 
 proved by the plaiatifE, proceeds to create an entirely new afGurmative defence, 
 not subject to any exception in this case, constituted by proof on the part 
 of the defendant that " the non-compliance (i.e. " with any of the require- 
 ments of the section ") arose from an honest mistake of fact on his part " (m) . 
 
 565. This is an affirmative plea unknown to the non-statutory law relating 
 to breaches of the duty of disclosure. It is to be observed that there are 
 two conditions subject to which alone the " mistake " is to operate as a 
 valid defence. It must, in the first place, be " honest," by which curious 
 expression (w) ' is meant no more than that the mistake must be purely and 
 genuiaely a mistake, arising from mere accident or inadvertence, and not 
 a self-induced error into which the defendant has deliberately determined 
 to fall, or for which he has fraudulently prepared the ground beforehand, 
 in the hope of qualifying himself to take the benefit of the plea, in which 
 case the pretended mistake is in truth and fact no mistake at all. Secondly, 
 the mistake must be one of fact : this requirement being obviously designed 
 to render impossible a repetition of the kind of contention to which the 
 
 (j) See § 557, ante. The excepted class is that comprised in s. 81, (1), (m). 
 
 {k) 81, (6), (a) of the Act of 1908. As to what " cognizance " or " knowledge " means 
 for this purpose, see § 556, ante. 
 
 (I) See Ch. Ill, Sect. 3, Sub-s. (4), ante. 
 
 (to) S. 81, (6), (b), of the Act of 1908. 
 
 (m) See, as to the lax terminology of such expressions as " honest belief," and " honest 
 mistake," § 639, post. 
 
§§ 562-567 (statutory relief). 501 
 
 indefiniteness of the phrase " knowingly issued " in s. 38 of the Act of 1867 
 lent some encouragement in proceedings under that section, viz. that a 
 man does not " knowingly issue " a prospectus who is ignorant of the legal 
 efiect of the section, or who has been advised by counsel that the particular 
 omitted contract does not in law belong to the class of contracts required 
 thereby to be disclosed, and the like (o). 
 
 Sect. 7. The Statutory Eelief. 
 
 566. The enactment undoubtedly in express terms imposes a new duty 
 of disclosure upon certain persons in certain events ; and, equally without 
 doubt, it omits to provide any specific remedy for the breach of that duty, 
 though expressions are used which clearly imply that the legislature assumed 
 the existence of a civil liability of some sort in the case of any contravention 
 of its provisions. The question is whether, on the application of the 
 principles which govern the interpretation of statutes to the above conditions, 
 any civil relief is available to the party aggrieved and, if so, what is its 
 nature. 
 
 567. A clear general statement of the doctrine in question, which has 
 always been accepted and applied, though in some respects it has required 
 and received supplementary amplification, is the following. " There are 
 three classes of cases in which a liability may be established by statute. 
 There is that case where there is a liability existing at common law, and 
 which is only re-enacted by the statute with a special form of remedy ; there, 
 unless the statute contains words necessarily excluding the common law 
 remedy, the plaintiff has his election of proceeding either under the statute 
 or at common law. Then there is a second class, which consists of those 
 cases in which a statute has created a liability, but has given no special 
 remedy for it ; there the party may adopt an action of debt or other remedy 
 at common law to enforce it. The third class is where the statute creates a 
 liability not existing at common law, and gives also a particular remedy for 
 enforcing it, . . . with respect to that class it has always been held that the 
 party must adopt the form of remedy given by the statute " (p). The above 
 
 (o) As in Twycross v. Grant (1877), 2 C. P. D. 469, C. A. {per Lord Colbeidqe, C.J., at 
 p. 489, and Cookbtjkn, C.J., at pp. 541, 542) ; Cackett v. Keswick, [1902] 2 Ch. 456, C. A. 
 (per Fabwbll, J., at p. 463, and Stirling, L. J., at p. 478) ; Watts v. Bucknall, [1903] 
 1 Ch. 766, C. A. {per CoixiNS, M.R., at p. 773) ; Broome v. Speak, [1903] 1 Ch. 586, C.A. 
 (per COLLIKS, M.R., at p. 619, and Romeb, L.J., at p. 628) ; Macleay v. Tait, [1906] A. C. 
 24, H. L. {per Lord Lindlby, at p. 29). 
 
 {p) This is from the judgment of Willes, J., in Wolverhampton New Waterworks Co. v. 
 Bawkesford (1859), 28 L. J. (c.P.) 242 (at p. 246). The citation is made from the Law 
 Journal report, in preference to that in 6 C. B. (N.s.) 336, which, in the description of the 
 second class, is evidently somewhat inaccurate. It was probably for this reason that 
 Pabwell, J., cites the former, and not the latter, report at p. 903 of Stevens v. Chown, mf. 
 Illustrations of the application of the above principles to enactments of the first class are :— 
 Lichfield Oorpn.v. Simpson {lSi5), 8 Q. B. 65 {per Lord Dbnman, C. J., at p. 74, Williams, J., 
 at p. 74, CoLEBiD&E, J., at pp. 74, 75, and Wightman, J., at p. 75) ; Great Northern Steam- 
 ship Fishery Co. v. Edgehill (1883), 11 Q. B. D. 225 (but see the next note as to this case) ; 
 Stevens y. Chown, [1901] 1 Ch. 894 {per Fabwbll, J., at p. 903). For examples of enact- 
 ments held to belong to the second class, see Doe d. Rochester {Bishop of) v. Bridges (1831), 
 
502 CH. VI, SECT. 7. 
 
 statement should be enlarged by the observation that, in the case of all three 
 classes, and not merely the first of them, a prima facie presumption only is 
 raised, which is subject to be rebutted by proof of a contrary intention expressed 
 in, or necessarily to be implied from the tenor and purport of, the statute (q) ; 
 and by the further observation that in every case, whether the statute recog- 
 nizes an existing duty or creates a new one, the party injured, or the Attorney- 
 General, as the case may be, is entitled to resort to the Court for the purpose 
 of obtaining an injunction to restrain the violation of such duty, unless that 
 resort is by express words taken away by the statute (r). The ordinary civil 
 remedies at common law are (apart from injunction) an action for damages 
 or debt. Relief by way of rescission of, or recovery of money paid under, 
 a contract entered into in contravention of the statute, or by a person carrying 
 on business under conditions prohibited thereby, is only available where 
 
 1 B. & Ad. 847 (per Lord Tentbbden, C.J., at p. 859) ; and, possibly, JoJiTiston v. Con- 
 necticut Gas Co. of Toronto, [1898] A. C. 447, P. C. (but see the next note as to this case). 
 The third class is illustrated by WolverTiampton New Waterworks Co. v. Eawkesford, sup. ; 
 Boss Y. Rugge-Price (1876), 1 Ex. D. 200 ; Atkinson v. Newcastle & Gateshead Waterworks 
 Co. (1877), 2 Ex. D. 441, C. A. ; Saunders v. Holborn District Board of Works, [1895] 1 Q. B. 
 64 ; Johnston v. Connecticut Gas Co. of Toronto, sup. (perhaps, but see the next note) ; 
 Att.-Oen. Y. Ashbourne Recreation Ground Co., [1903] 1 Ch. 101, C. A. 
 
 (q) This qualification has been applied, or recognized, in cases belonging to each of the 
 three classes. Thus, in Great Northern Steamship Fishery Co. v. Edgehill, sup., where a 
 new remedy was provided by the statute for an existing common law wrong, and where, 
 therefore, the case fell within the first class, it was recognized that, unless by express words 
 or fair implication the legislature evinces an intention to take away the ordinary common 
 law remedy, the party aggrieved has his choice between that, and the new statutory 
 remedy (p. 226), but it was held that, by clear implication, the legislature had there mani- 
 fested such an intention (pp. 227, 228). So, in cases of the second class, where the statute 
 creates a new liability without specifying any particular remedy, and where, therefore, 
 primA facie the party has a right to resort to the ordinary common law forms of relief for a 
 breach of duty, it is still open to the party sued to show, if he can, a fair inference from the 
 language of the statute that this prima facie right was intended to be taken away : and 
 the defendant succeeded in showing this in Johnston v. Connecticut Gas Co. of Toronto, sup., 
 assuming the case to be within the second, and not, as the Court seemed rather to think it 
 was, within the third class. Lastly, it was recognized in Atkinson v. Newcastle and Gateshead 
 Waterworks Co., sup., that, even where the enactment creates a new liability, and prescribes 
 a new and special remedy (which is the third class of case), and where, therefore, primA 
 facie the aggrieved party can only pursue the statutory remedy, it is nevertheless, open 
 to him to establish, if he can, for the burden is on him of doing so, that by express words, 
 or necessary implication, the legislature has manifested its intention not to take away the 
 common law remedy. In that case, however, the plaintiff wholly failed to sustain this 
 onus. There is one other qualification on the general principles enunciated by Willes, J., 
 which must always be borne in mind, and that is, that no person is entitled to relief of any 
 kind against a breach of statutory duty unless he belongs to the class of persons intended 
 to be protected, and the injury in respect of which he claims, besides resulting from the 
 breach of statutory duty, was that kind of injury which it was the object of the statute to 
 guard against : see Gorris v. Scott (1874), L. B. 9 Exch. 125, where the plaintiff sued for 
 damages for loss of cattle washed overboard by reason of the defendant's non-observance 
 of the provisions of a statute as to the disposing of cattle on board vessels in such a way as 
 to prevent or minimize the danger of infection by cattle-disease, and it was held that, not 
 having sustained the precise sort of damage which the enactment contemplated, or was 
 designed to prevent or relieve against, he had no remedy. 
 
 (r) See Ross v. Rugge-Price (1876), 1 Ex. D. 200 (where the right to an injunction wag 
 assumed) ; Stevens v. Ghown, [1901] 1 Ch. 894 (where Farwell, J., at p. 903, expressed a 
 clear opinion that nothing but express words can destroy the right of an interested 
 party, or the Attorney-General, as the case may be, to resort to the Court for the purpose 
 of restraining the breach of a statute) ; Att.-Gen. v. Ashbourne Recreation Ground Co., 
 [1903] 1 Ch. 101, C. A. 
 
§§ 567-569 (statutory relief). 503 
 
 there is a clear indication in the statute itself that parliament intended all 
 contracts so made to be void, or voidable (s). 
 
 568. Applying the above rules to s. 81 of the Act of 1908, it is manifest 
 that the section falls within the second of the three classes enumerated by 
 WiLLES, J., that the aggrieved party is, therefore, prima, facie entitled to enforce 
 the statutory duty by a common law action, that this prima /aci'e presumption is 
 in no way destroyed by anything contained in the statute, but, on the contrary, 
 is recognized and assumed by the legislature in the very section itself (f), and 
 that civil relief in the ordinary forms of damages, debt, or injunction (though 
 the last two are obviously inappropriate or useless in the class of case under 
 consideration) is available to any person who has subscribed for or purchased 
 shares or debentures on the faith of a prospectus from which any of the 
 specified matters has been omitted ; but that, on the other hand, rescission 
 or analogous relief is impossible, there being no indication in the enactment, 
 any more than there was in s. 38 of the Act of 1867 (m), of an intention on 
 the part of the legislature to render the contract itself either void or voidable (y), 
 and it being, further, made specially clear by other provisions of the statute 
 that parliament was quite alive to the importance of this particular remedy, 
 and that, whenever it was thought a suitable one in any particular case, it 
 was so enacted in express terms (w). 
 
 569. The quantum of damage recoverable by a successful plaintiS in 
 proceedings for breach of the statutory duty is determined in accordance 
 with well-established rules which, in their application to contracts to take 
 or purchase shares or debentures of a company, are as follows. On the one 
 side of the account must be placed all sums which the plaintiff has paid, 
 
 (s) See Whiteman v. Sadler, [1910] A. C. 514, H. L. {per Lord Dunbdin, at pp. 525- 
 527), and the oases there cited, and the observations of Swinfen Eady, L.J., at pp. 408, 
 409 of Se Blair Open Hearth Furnace Co., [1914] 1 Ch. 390, C. A. 
 
 (t) See s. 81, (6), where a "liability in respect of the non-compliance" {i.e. "with 
 any of the requirements of this section ") is twice alluded to as a habUity which, under 
 certain conditions, is not to be incurred, thereby clearly implying (as Swinfbn Eady, J., 
 observed, at p. 577 of Re South of England Natural Oas & Petroleum Co., [1911] 1 Ch. 573), 
 that, in the absence of those conditions, such liability exists. And, since no special 
 remedy is prescribed by the enactment for the breach of the duty which it has created, 
 that liability can only mean a liability to damages. In none of the cases as yet decided 
 under s. 81 has it been suggested that damages is not the proper form of relief, if the liability 
 of the defendant is established. 
 
 {u) See, for instance, lie Coal Economizing Oas Co., Cover's Case (1875), 1 C. D. 182, 
 C. A. (per James, L. J., at p. 189, and Bbamwbll, B., at p. 193). 
 
 (v) See Re Wimbledon (Olympia), Ltd., [1910] 1 Ch. 630 (per Neville, J., at p. 632 : 
 " the section does not in terms so provide, and I cannot attribute to the legislature the 
 intention that the mere fact of the omission of any of the facts required by this section 
 to be stated should give the shareholders this right to get rid of their shares." The motion 
 here was to rectify the register on the ground of the omission from the prospectus of 
 matters required by s. 81, (1), (d), and (k), to be stated therein) ; Re South of England 
 Natural Oas tk Petroleum Co., sup. (per Swinfbk Eady, J., at p. 576). In Roussell v. 
 Burnham, [1909] 1 Ch. 127 (per Pabkeb, J., at p. 133), it was not necessary to decide the 
 point : and in Sleigh v. Olasgow & Transvaal Options, Ltd. (1904), 6 F. 420, the company, 
 who succeeded on other grounds, did not raise it. 
 
 (w) As in 3. 86, (1), of the Act, on which see § 570, note (c), post; also s. 82 which 
 prohibits allotment, and therefore avoids it, and any contract founded on it, unless a state- 
 ment in lieu of prospectus has been filed in the prescribed manner and form : see Re 
 Blair Open Hearth Furnace Co., sup. 
 
504 CH. VI, SECT. 7. 
 
 and the estimated present value of all sums (if any) which he is liable to pay, 
 under the contract, or in respect of the shares or debentures. On the other 
 side is to be placed the real or actual value (if any) of the shares or debentures 
 at the date of the allotment or transfer. The excess (if any) of the total 
 of the sums so paid or payable over the real value (if any) of the shares 
 or debentures at the date named is the measure of damage. Such " real 
 value " means the price which the securities would have fetched in any 
 reasonable dealing, if the whole truth of the undisclosed facts had been 
 withm the knowledge of those fixing the price : it must, therefore, be ascer- 
 tained in the light of the evidence adduced, and without regard to current 
 or market prices, which may be the mere manufacture of the very persons 
 whose misconduct has given the plaintiff his right to damages. If the real 
 value at the material date is found to be nil, as not infrequently is the case, 
 the plaintiff is entitled to the whole of what he has paid. On the other hand, 
 if it is a complete equivalent, he has sustained no damage at all. It is the 
 duty of the plaintiff to minimize the damages in the interests of whom it 
 may concern, if a real opportunity is afforded him of doing so. Thus, he 
 would not be justified in continuing to pay calls with his eyes open, and so 
 heaping up the damages, after a sincere and hona fide offer by the company 
 to avoid the contract, and restore everything received by them under it ; 
 but a mere half-hearted and obscure admission of a breach of duty, unaccom- 
 panied by any such offer, would clearly leave the plaintiff entitled, and bound, 
 to go on meeting all liabilities under the contract, and adding the amount 
 of his payments to the damages [x). 
 
 (x) For instances of the application of the measure of damage stated in the text to 
 cases under s. 38 of the Act of 1867, see Tvyycross v. Grant (1877), 2 C. P. D. 469, C. A. 
 (j>e,r Lord Coleeidge, C.J., at pp. 489-491, Bbamwbll, L. J., at pp. 503-505, and Cock- 
 BTJBN, C.J., at pp. 542-546) ; Jury v. Stoker (1881), 9 L. R. (Ir.) 385, C. A. ; Cackett v. 
 Keswick, [1902] 2 Ch. 456, C. A. (per Fakwell, J., at pp. 468, 469) ; McConnell v. Wright, 
 [1903] 1 Ch. 546, C. A. {per Collins, M.R., at pp. 552-555, Eomee, L.J., at pp. 556-558, 
 and Cozens-Haedy, L.J., at p. 559) ; ^TOome v. Speak, [1903] 1 Ch. 586, C. A.{per Buckley, 
 J., at p. 605, Collins, M.R., at pp. 622, 623, and Cozens-Haedy, L.J., at p. 630) ; S. C, 
 sub nom. Shepheard v. Broome, [1904] A. C. 342, H. L. {per Lord Lindlby, at pp. 347, 
 348) ; Stevens v. Hoare (1904), 20 T. L. R. 407 {per Joyce, J., at p. 409) ; J. d; P. Coats, 
 Ltd. V. Crossland (1904), 20 T. L. R. 800. For a statement of the rule in its application 
 to the Directors' Liabihty Act, 1890 (now s. 84 of the Act of 1908), as to " untrue state- 
 ments " in the prospectus, see Thomson v. Lord Clanmorris, [1899] 2 Ch. 523 {per 
 Kekbwich, J., at p. 529, whose decision was affirmed, [1900] 1 Ch. 718, C. A.). For 
 cases of common law mirsepresentation in prospectuses where the principles on which 
 the damage is to be calculated are enunciated and applied, see Arkwright v. Newbold (1881), 
 17 C. D. 301, C. A. {per Fey, J., at pp. 312, 313 : the decision itself was reversed by the 
 C. A., who gave judgment for the defendant, and, therefore, found it unnecessary to 
 consider the question of the measure of damages) ; Peek v. Derry (1887), 37 C. D. 541, C. A. 
 {per Cotton, L.J., at pp. 591-593, and Sir James Hannen, and Lopes, L.J., at p. 594 : 
 the principles there laid down being of course unaffected by the subsequent reversal of the 
 decision itself in the H. L.) ; Arnison v. Smith (1888), 41 C. D. 348, C. A. {per Lord 
 Halsbtoy, L.C., at pp. 369, 370) ; Glasier v. Rolls (1889), 42 C. D. 436, C. A. {per 
 Kekbwich, J., at p. 455 : here, again, the statement of the rule as to measure of damages 
 is unaffected by the fact that the C. A. reversed the decision of Kekbwich, J., in favour of 
 the plaintiff). In Twyeroas v. Grant, sup., and Jury v. Stoker, sup., the damages were 
 assessed by a jury, under a proper direction from the judge. In the remainder, which 
 were tried before a judge alone, the Court first laid down the principles, and then either 
 a plied them to the circumstances of the case for the purposes of an immediate assessment. 
 
§§ 569, 570 (statutory relief). 505 
 
 570. It should be mentioned here that, as regards two of the matters 
 required to be stated in the prospectus, there may be cases in which, indirectly 
 but efiectually, additional protection and security is provided for the public 
 by other sections of the statute. The first of these matters is the " minimum 
 subscription on which the directors may proceed to allotment," which is 
 one of the most important of the items specified in the statutory catalogue («/). 
 There are, in ss. 85, 86 of the Act of 1908 (z), further provisions in regard 
 to this subject of a somewhat stringent character. No allotment can legally 
 be made unless " the amount (if any) fixed by the memorandum or articles 
 and named in the prospectus as the minimum subscription . . . or, if no 
 amount is so fixed and named, then the whole amount of the share capital 
 so offered for subscription, has been subscribed, and the sum payable on 
 application for the amount so fixed and named," — which sum mast not be 
 less than five per cent, of the nominal amount of the share — " or for the whole 
 amount ofiered for subscription has been paid to and received by the com- 
 pany " {a) ; and, if these conditions are not complied with before the expira- 
 tion of forty days after the first issue of the prospectus, all moneys received 
 by the company must be repaid to the applicants without interest, failing 
 which repayment within a period of eight further days, the directors are to 
 be jointly and severally liable for the amount with five per cent, interest, 
 except as to any director who can prove that the loss of the money was not 
 due to any misconduct or negligence on his part (6) ; further, any allotment 
 made without conforming to the stated requirements is to be voidable at 
 the instance of any applicant within one month of the statutory meeting 
 of the company, and not later, and may be so avoided notwithstanding that 
 the company is in liquidation, and, as an alternative remedy, any director 
 
 or (where the evidence, though sufficient to sustain the plaintiff's burden of proving some 
 damage, was not specific enough for the purpose of quantifying it at once) directed an 
 inquiry, as in Cackett v. Keswick, sup. {per Pabwbll, J., at p. 468) ; McGonnell v. Wright, 
 sup. ; Shepheard v. Broome, sup. {per Lord Lindley, at pp. 347, 348, who there points 
 out the convenience of adopting this course) ; J. & P. Coats, Ltd. v. Crossland, sup. {per 
 SwiNTBN- Eady, J., at p. 807). In Arkwright v, Newbold, sup., though the evidence was 
 inadequate, — indeed, there was none at all, — ^for the purpose of ascertaining the amount, 
 Eby, J., in order to save expense, and without objection on the part of the defendant, made 
 an extemporaneous and summary estimate of the damage, which he put at one half of 
 what the plaintiff had paid (p. 313). In Twycross v. Grant, sup.. Jury v. Stolcer, sup., and 
 Thomson v. Lord Clanmorris, sup., the application of the rules to the evidence resulted in a 
 finding that the shares were wholly valueless at the material date, and the amount of 
 damage was, therefore, the whole sum paid for the shares, without any deduction. On the 
 other hand, in Stevens v. Hoare, sup., the opposite extreme resulted, it being there found 
 by Joyce, J. (p. 409), that the plaintiff had failed to prove that the real value of the shares 
 a.t the material dates was not fully equal to the sum which he had paid for them. In the 
 present class of case the remedy by injunction, which is theoretically available to the 
 plaintiff, as stated in the text, is wholly out of place : contrast the classes of case referred 
 to in note (c), post, and in § 571, note (m), post, where it is of distinct utility to the party 
 aggrieved. 
 
 {y) S. 81, (1), (d) of the Act of 1908, as to which see § 526, ante. 
 
 (z) These are reproductions of ss. 4 and 5, respectively, of the Act of 1900. 
 
 (a) S. 85, sub-ss. (1), (2), (3), which repeat s. 4, sub-ss. (1), (2), (3), of the Act of 1900. 
 
 (6) S. 85, sub-s. (4), to which s. 4, sub-s. (4) of the Act of 1900 corresponds. Relief 
 under s. 4, as well as under s. 5, of the Act of 1900, was sought in Burton v. Bevan, [1908] 
 2 Ch. 240, but was refused for the reason given in note (g), inf. The plaintiff's case for 
 relief under s. 5 failed for the reason stated in note (/ ), inf. 
 
506 CH. VI, SECT. 7. 
 
 who knowingly contravenes this provision, or permits or authorizes the illicit 
 allotment, is rendered liable to compensate either the company, or any 
 allottee, for any loss, damages, or costs which it, or he, may have sustained 
 or incurred thereby, provided that proceedings for the recovery of such 
 compensation must be instituted within two years from the allotment (c) ; 
 and any stipulations for the waiver of these requirements is to be void (d). 
 An additional stimulus to the due observance of the provisions of s. 81 (1) as 
 to the disclosure of the minimum subscription is thus provided ; for, unless the 
 minimum subscription fixed by the memorandum and articles is also " named 
 in the prospectus," the company and directors will be liable to the various con- 
 sequences indicated if they do not receive the whole of the amount of the capital 
 ofiered for subscription, and not merely the " fixed " amount, or (as the case 
 may be) if they proceed to allotment without having received such whole (e). 
 To " knowingly contravene " the statutory provisions means to allot with a 
 knowledge of the facts which render the allotment a contravention of such 
 provisions ( /). The return of the application moneys is the only remedy 
 available before the directors have proceeded to allotment ; the avoidance 
 of the allotment and the compensation is the only remedy available after 
 that date {g). None of the remedies provided by ss. 85, 86, have any appli- 
 cation to the latter part of the earlier enactment which, in the case of a second 
 
 (c) S. 86 of the Act of 1908. For examples of relief under this section, or rather under 
 s. 5 of the Act of 1900 which it reproduces, see Re National Motor Mail Coach Co., Anstis's 
 and McLean's Claims, [1908] 2 Ch. 228 (rectification of register, which, since the company- 
 was in liquidation, would have been impossible but for the express words in the statute 
 which are referred to in the text ,; per Swinfen Eady, J. , at p. 234) ; Boussell v. Burnham, 
 [1909] 1 Ch. 127 (removal of name from register, and return of money paid : per Paekbe, J.). 
 In Burton v. Bevan, inf., the action failed, so far as it rested on s. 5 of the Act of 1900, not, 
 however, because the wrong relief was apphed for, but for the reason given in note (/), 
 inf. Interlocutory injunctions to restrain the company from allotment were applied for in 
 Mears v. Western Canada Pulp & Paper Co., [1905] 2 Ch. 353, C. A., and in Sherwell v. 
 Combined Incandescent Mantles Syndicate, Ltd. (1907), 23 T. L. R. 482, successfully in the 
 former case : but (there being no proof of an " offer to the public ") unsuccessfully in the 
 latter. 
 
 (d) S. 85, (5). 
 
 (e) See Eoussell v. Burnham, sup., which is an excellent illustration of the indirect 
 enforcement of the requirements of s. 81, (1), (d), by means of ss. 85, 86 : for in that one 
 alone of the cases cited, the minimum subscription had been " fixed " by the articles, but 
 had not been also " named " in the prospectus, or rather (which makes the case a still 
 more striking illustration) had been named in one of the two prospectuses issued, but not 
 in the other, on the faith of which latter the plaintiff took his shares ; and it was held that 
 the company was bound to cancel the plaintiff's application, remove his name from the 
 register, and return his money, for, though they had not in fact proceeded to allotment 
 on less than the amount of the minimum fixed by the articles, yet, as against the plaintiff, 
 they could not lawfully allot unless the whole amount of the issue had been subscribed 
 (per Pabkeb, J., at pp. 130-132). 
 
 (/) Burton v. Bevan, [1908] 2 Ch. 240 (per Neville, J., at pp. 247, 248). In so far 
 as this action was based on s. 5 of the Act of 1900 ( = s. 86 of the Act of 1908), it was 
 dismissed on the ground that the defendant was not shown to have been aware of the facts 
 which made the allotment a contravention of the section. For the similar interpretation 
 of " knowingly issued " in s. 38 of the Act of 1867, see the cases cited in note (i) to § 556, 
 ante. 
 
 (g) Burton v. Bevan, sup. (per Neville, J., at pp. 245, 246). The plaintiff here sued 
 for relief under both s. 4 and s. 5 of the Act of 1900 (corresponding to s. 85, and s. 86, 
 respectively, of the Act of 1908), and his claim under the former section for a return of 
 the application moneys was defeated on the ground that the allotment had been already 
 made when the plaintiff took proceedings. 
 
§§ 570-572 (statutory relief). 507 
 
 or subsequent ofier of shares, requires a statement in the prospectus of the 
 amount offered for subscription on each such previous allotment, ' and the 
 amounts actually allotted, and paid on allotment (h). The avoidance by the 
 applicant of the allotment, which must be within the time above specified, 
 means notice of repudiation and intention to avoid, not the institution of 
 proceedings for that purpose, which need not be commenced within the 
 " one month " (i). The payment to, and receipt by, the company which 
 is required by s. 85, (1), is a payment and receipt in cash, not by cheques 
 which are subsequently dishonoured (j). 
 
 571. The second of the two matters above mentioned is "the amount 
 (if any) paid within the two preceding years, or payable, as commission for 
 subscribing, or agreeing to subscribe, or procuring or agreeing to procure 
 subscriptions, for any shares in, or debentures of, the company, or the rate 
 of any such commission " (Jc). Here, again, there is a later section of the 
 statute which, in the same indirect manner as in the case of " the minimum 
 subscription," may in some cases operate as an additional security for the 
 performance of the duty to disclose. This is s. 89, reproducing s. 8 of the Act 
 of 1900, which, as regards shares only, prohibits payment of commission for any 
 of the purposes stated, unless the payment of such commission is authorized 
 by the articles, and the ainount or rate per cent, of the commission paid or agreed 
 to be paid is disclosed in the prospectus (l). Consequently, any company or 
 director paying a commission to an amount, or at a rate, authorized by the 
 articles of association, will nevertheless be committing an illegal act, unless 
 such amount or rate is also disclosed in the prospectus : the remedies being 
 either an injunction at the instance of a shareholder to restrain the company 
 from applying its shares or capital money, directly or indirectly, in payment 
 of any such commission, or of any equivalent in the form of a discount, 
 or allowance (m) ; or an action by the company itself against its directors for 
 the restoration and replacement of moneys so misapplied (w). 
 
 572. There being nothing in the enactment, or in the residue of the Act 
 
 (,h) See Be South of England Natural Gas & Petroleum Co., [1911] 1 Ch. 573 (per 
 SwnwEK Eady, J., at pp. 576, 577). 
 
 (i) Re National Motor Mail Coach Co., Anstis's and Maclean's Claims, [1908] 2 Oh. 2^h 
 (-per SwiOTEN Eady, J., at pp. 234, 235). As to the " statutory meeting," see s. 65 ol 
 the Act of 1908. „ , „ ,t .- 7 
 
 (j) Mears v. Western Canada Pulp & Paper Co., [1905] 2 Ch. 353, C. A. ; Re National 
 Motor Mail Coach Co., sup. (per Swinfbn Eady, J., at pp. 233, 234) ; Burton v. Jievan 
 [1908] 2 Ch. 240 (per Neville, J., at p. 245). In all the above cases, the cheques which 
 the company treated as cash were not in fact honoured, and the defendants were accord- 
 ingly held liable. It may be otherwise, however, where the cheque is immediately 
 afterwards duly met, as in Glasgow Pavilion, Lid. v. Motherwell (1903), 6 F- Ho, which 
 case, being distinguishable on this ground, may be good law : see, however, the powerful 
 dissentient judgment of Lord Monceieff. 
 
 (k) S. 81, (1), (h), of the Act of 1908, as to which see § 529, ante. . , . ^, 
 
 (I) See Ee Worthington, [1914] 2 K. B. 299, C. A., for a case held not mthm the section 
 
 (m) As in Burrows v. Matabele Gold Beefs ofc Estates Co., [1901] 2 Ch. 33, 0. A. ; Bootli 
 r. New Afrikander Gold Mining Co., [1903^1 Oh. 295, C. A. r, ■ . i nmn 
 
 («) As in Dominion of Canada Trading & Investment Syndicate v. Brigsioclce, L1911J 
 2 K. B. 648, Div. Ct. Conversely a payment of commission which, though named in the 
 prospectus, is not authorized by the articles would be equally illegal, as was recogmzed 
 in Be Republic of Bolivia Exploration Syndicate, [1914] 1 Ch. 139. 
 
508 CH. VI, SECT. 7 ; CH. VII, SECT. 1, SUB-S. (1). 
 
 of 1908, which afiects any right or liability under the existing law, whether 
 statutory or non-statutory, and no special remedy being provided by s. 81, 
 it follows that, on general principles, all such rights and liabilities remain 
 undisturbed (o) ; but, for greater caution, sub-s. (9) of s. 81 expressly provides 
 that " nothing in this section shall limit or diminish any liability which 
 any person may incur under the general law or this Act apart from this 
 section." And, as was the practice in the earlier cases (p), a combination 
 of statutory and common law remedies may be enforced in one and the same 
 proceeding against the same or difEerent defendants, if the imperfections 
 of the prospectus constitute the one common ground of complaint. 
 
 (o) See § 513, ante. 
 
 (p) See (to take a few examples out of many) Greenwood v. Leather Shod Wheel Co., 
 [1900] 1 Oh. 421, 0. A., where the plaintiff sued for rescission, and rectification of the 
 register, on the ground of common law misrepresentation, damages under the Directors' 
 Liability Act, 1890 (now s. 84 of the Act of 1908), and damages for omission of contracts 
 under s. 38 of the Act of 1867 ; J.& P. Coats, Ltd. v. Grossland (1904), 20 T. L. E. 800 
 (the like combination) ; Hoole v. Speak, [1904] 2 Ch. 732 (where the plaintiff sued for relief 
 under each of the two enactments above referred to). 
 
§§ 572-574 (concealment prom courts). 509 
 
 CHAPTER VII. 
 
 CONCEALMENT FROM COURTS, PUBLIC AUTHORITIES, AND 
 OTHER THIRD PERSONS. 
 
 573. There are a variety of cases in which one of two parties may have 
 a right to relief in respect of the other's failure to disclose material facts 
 to a third person or to a public authority, if such failiu-e injuriously 
 affects his (the first party's) proprietary interests. These cases do not 
 fall within the scope of any of the preceding Chapters, because the duty 
 which is violated is not (primarily and directly, at least) a duty owed to 
 the party aggrieved. They have accordingly been reserved for separate 
 treatment in this place (q). The main types of such non-disclosure or con- 
 cealment are three : first, where a judicial tribunal, English or foreign, is 
 misled by non-disclosure or concealment to pronounce a judgment, or make 
 an order, or execute any other judicial act, to the prejudice of one of the 
 parties to the litigation ; secondly, where the Crown or the State, or a public 
 authority, is similarly misled to make a grant to, or confer a right or privilege 
 upon, one subject to the prejudice of another or others : thirdly, where material 
 facts are withheld from a third person, or class of persons, not being a judicial 
 or executive officer, or a public authority. 
 
 Sect. 1. Concealment of Material Facts erom a Judicial 
 
 Tribunal. 
 
 Suh-s. (1). English Judgments, &c., procured, hy Non-Disclosure. 
 
 574. It has been undoubted law since at least the time of Coke, and prob- 
 ably from a much earKer date (r), that " acts of the highest judicial authority," 
 though " not to be impeached from within," are yet " impeachable from 
 without " ; for, " although it is not permitted to show that the court was 
 mistaken, it may be shown that they were misled. Fraud is an extrinsic 
 collateral act, which vitiates the most solemn proceedings of courts of 
 justice. Lord Coke says, it avoids all judicial acts, ecclesiastical or 
 
 (q) A corresponding class, in oases of misrepresentation to persons other than those 
 entitled to relief, is separately considered in Ch. XIV of the author's Law of Actionable 
 Misrepresentation. 
 
 {r) For deceptio curiss was punishable both as a contempt of the Crown, and as a wrong 
 to the party, as early as the time of King John, and was indeed the principal, if not the 
 only, subject of the writ of deceit in its earliest form, as explained in App. A, Sect. 1, 
 Sub-3. (1), of the author's Law of Actionable Misrepresentation. 
 
510 CH. VII, SECT. 1, SUB.-S. (1). 
 
 temporal " (s). Accordingly every " judicial act " procured by the fraud of 
 one of the parties to the litigation has always been held voidable at the instance 
 of the other party, but, unless and until so impeached, valid ; where, how- 
 ever, it is the result of the collusion of both parties, it is afabula, non judicium, 
 and is void ab initio (t). The " fraud " referred to usually assumes the form 
 of fraudulent misrepresentation, with or without fraudulent suppression 
 of material facts. But, in the large sense of the term, " fraud " includes 
 any breach of the duty — where it exists — of full and candid disclosure to 
 the Court : and there are several cases, putting aside all those of pure mis- 
 representation (m), in which judgments and orders obtained by means of 
 non-disclosure have on that ground been set aside at the instance of the 
 party against whom, or to whose detriment, they were pronounced, though 
 it has often so happened that positive mendacity constituted a further 
 ground of avoidance. The duty of disclosure to the Court, apart from 
 the duty to abstain from falsehood, must of course be shown in order 
 to entitle the party to relief. When does such a duty exist ? In the first 
 place, whenever the Court, in its capacity of guardian and protector of 
 persons under disability, is concerned to inquire whether a particular com- 
 promise or other transaction would, or would not, be for the benefit of any such 
 person, and ought or ought not to be approved accordingly, every party has 
 the same obligation of candour and good faith to the Court for the purpose 
 of procuring its sanction as he has towards the other parties to the proposed 
 compromise in the course of his negotiations with them for the purpose of 
 procuring their assent (v). Similarly, when the Court, in the course of 
 
 (s) The Duchess of Kingston's Case (1776), 2 Sm. L. C. (11th edtn.) 731. 
 
 (<) Boswdl V. Ooaks (1894), 6 R. 167, H. L. {per Lord Sblbobne, L.C., at pp. 168, 169). 
 
 (it) Such as Priestman v. Thomas (1884), 9 P. D. 210, C. A. ; Cole v. Langford, [1898] 
 2 Q. B. 36, Div. Ct. ; Shurroch v. Littlejohn (1898), 68 L. J. (Q. B.) 165, Div. Ct. ; White v. 
 Ivory (1900), Times, 27th April 
 
 (v) See Brooke v. Lord Mostyn (1865), 2 De G. J. & S. 373. This was a case of a com- 
 promise which required the sanction of the Court, infants being concerned. In the 
 proceedings before the Master with the view of obtaining this sanction, the defendant 
 faUed to disclose a certain valuation of the property, which was of the utmost materiaUty 
 to the question of the terms on which the proposed compromise ought to be approved. On 
 this ground. Knight Beuce and Tttrnbb, LL.JJ., reversing the Court below, set aside 
 the decree sanctioning the compromise, as well as the compromise itself {per Turner, L.J., 
 at pp. 421-424, and Kni&ht-Bbtjce, L. J., at pp. 424, 425). The case was treated as one 
 of non-disolosuie, and not of misrepresentation, for, though misrepresentation was also 
 alleged, it was not satisfactorily proved {per Turner, L.J., at pp. 419-421), and the 
 concealment was dealt with as a breach of duty to the Court, and precisely the same 
 principles (substituting the Court for the party) wore applied to the determination of this 
 question as would have been applied in a compromise case of non-disclosure as between 
 the parties : " the orders of the Court cannot be set aside on grounds less strong than 
 those which would be required to set aside the transaction between competent parties " 
 {per Turner, L.J., at p. 416). "I think it plain," said Knigsht-Bruoe, L.J. (at pp. 
 424, 425), " that there were before the Master persons whose duty to the Court, and to 
 the infant, it was to' bring under the attention of the Master every material fact within 
 their knowledge, but who omitted to lay before him material facts within their know- 
 ledge." And, similarly (at p. 424), Turner, L.J., concluded : — " under all the circum- 
 stances of the case, but more especially having regard to the non- production of Sisson's 
 valuation, my opinion is that this compromise cannot stand and that the decree, there- 
 fore, cannot be supported " (meaning that the same non-disclosure which, in relation to 
 the party, was sufficient to invalidate the compromise was, when proved to have been 
 
§ 574 (concealment from courts). 511 
 
 administering an estate, or otherwise, directs a sale of property, and so (in 
 a sense) becomes the vendor, every purchaser is subject to such duty of 
 disclosure — ^it is an extremely limited one — to the judicial vendor as he would 
 owe to a non-judicial vendor in the case of a sale with which no Court had 
 any concern (w). The like duty arises where a transaction requires the ap- 
 proval of the Court in bankruptcy proceedings (x), or where the Court orders 
 an inquiry before an expert to inform its own mind on any particular sub- 
 ject {y) ; or where, there being at common law a duty of full disclosure to 
 the Crown or the State, as in the case of patents for an invention, the legislature 
 has substituted the Court for the Crown, or for the King in Council, as the 
 authority to deal with applications for the grant or for the extension of 
 any such patent, in which case the disclosure is owed no longer to the original, 
 but to the substituted, authority {z). 
 
 practised on the Court, equally suflficient to invalidate the judicial sanction which had 
 been given to that compromise. 
 
 (w) Thus, in Coaks v. Boswell (1886), 11 App. Cas. 232, H. L., Lord Sblboknb, L.C, 
 was at great pains to explain that the duty of a purchaser of property sold by direction 
 of the Court is to make such disclosure to the Court as is required to be made in other 
 cases of sale by the purchaser to his vendor, — no more and no less : and that this duty 
 is an extremely restricted one, has been exijlained in § 165, ante. " At pp. 453, 454 of 
 27 C. D.," he observes at p. 240, " it is said that ' a person desirous of buying property 
 which is sold under the direction of the Court must either abstain from laying any informa- 
 tion before the Court in order to obtain its approval, or he must lay before it all the infor- 
 mation that he possesses, and which it is material that the Court should have to enable it 
 to form a judgment on the subject under consideration.' As a general and abstract pro- 
 position, this seems to me to be too broadly stated. I do not think that because informa- 
 tion on some material point or points is offered, or given on request, by a purchaser from 
 the Court, it must also be given on all others, as to which it is neither offered nor requested, 
 and concerning which there is no implied representation, positive or negative, direct or 
 indirect, in what is already stated. The case of Brooke v. Lord Mostyn was unlike the 
 present." The concluding remark means that Brooke v. Lord Mostyn, sup. — see the last 
 note — was a case of a compromise, which involves a duty of disclosure between the parties, 
 and, consequently, a duty from each of them to the Court which is asked to sanction it ; 
 whereas Coaks v. Boswell was a case of sale and purchase, in which a purchaser ordinarily 
 owes no duty to the vendor except to tell the whole truth on any matter as to which ho 
 volunteers information, or is asked a question, and, therefore, owes no greater duty to the 
 Court when he is (in a sense) purchasing from the Court. 
 
 (x) Motion V. Moojen (1872), L. R. 14 Eq. 202, where, amongst other forms of deceit 
 practised upon it, the party had concealed the existence of a certain supplemental agree- 
 ment from the Bankruptcy Court, whose approval was sought to a proposed sale and 
 purchase [per Bacon, V.-C, at pp. 214, 215 : " there is no suggestion that that " — i.e. the 
 agreement — " was communicated to the Chief Clerk, so that when he approved the sale, 
 he was aware of the terms contained in the supplemental agreement." It so happened 
 that here the motion failed, because there was held to be no jurisdiction to entertain it. 
 Cp. Re Spink (1913), 108 L. T. 572, a case in which the leave of the Court of Bankruptcy 
 was required, and, on full disclosure made, was given, to a sale of the bankrupt's business 
 to a company promoted by the trustee and committee of inspection, a transaction which 
 otherwise would have been not only voidable at common law, but also void in virtue of the 
 prohibition contained in Rule 316 of the Bankruptcy Rules, 1886. See another motion 
 in the same case (1913), 108 L. T. 811, where Phillimoke, J., on appUcation and disclosure 
 to him of the facts, sanctioned the payment by the trustee (then carrying on the business) 
 of cost prices out of the estate, but not profit-charges (this being contrary to Rule 317 
 of the above Bankruptcy Rules). . . , . , 
 
 (y) As in Flower v. Lloyd (1879), 10 C. D. 327, C. A., where, an inquiry having been 
 directed before an expert, it was alleged (see pp. 329, 330) that part of a certain process 
 which was the subject of the inquiry had not been disclosed to the expert. In this 
 case, however, the " concealed part," even assuming concealment to have been established, 
 was 'held immaterial. See § 576, note (/), post. 
 
 (z) See note (j) to § 581, post. 
 
512 CH. VII, SECT. 1, SUB-S. (1). 
 
 575. More especially -is complete disclosure and the utmost good faith 
 required from a solicitor who is an officer of the Court (a). It is also essential 
 in all cases of ex parte applications to any judicial tribunal (6). Thus, where 
 a decree of foreclosure had been made against an absent mortgagor, under the 
 provisions of 7 Geo. 2, c. 14, at the instance of a mortgagee who, though 
 complying with the formal requirements of the statute, omitted to inform 
 the Court that the mortgagor's absence was due to his imbecility, and also 
 withheld documents and material information from the Master on taking 
 the account, relief was given to the mortgagor by a declaration that his 
 equity of redemption was not to be deemed barred by the decree, on the ground 
 that the mortgagee had violated his duty of disclosure to the Court, as well 
 as to the party (c). So an order made under 3 & 4 W. 4, c. 74, s. 91, and 
 20 & 21 Vict. c. 57, s. 1, on the ex parte application of a married woman, enabling 
 her to charge her interest in personal property without the concurrence of her 
 husband, was set aside on proof of suppression of material information from 
 the Court making the order (d). And where the executor dative of a deceased 
 owner of land in Natal had obtained from the Court ex parte orders for delivery 
 of certified copies of the title deeds, without disclosing the fact that the 
 occupier of the lands held under a possession alleged by him to be lawful, 
 and which might possibly have been accompanied by possession of the title 
 deeds, and such executor had then proceeded to effect and register the transfer, 
 the orders, as well as the transfer, were set aside on the ground (as regards 
 the former) of " material concealment " from the Court (e). 
 
 576. The burden of proof on the party seeking the annulment of a " judi- 
 cial act " procured by non-disclosure to the Court is, mutatis mutandis, 
 
 (a) See Harbin v. Masterman, [1896] 1 Ch. 351, C. A., where it was established that a 
 solicitor, purporting to have the conduct of an appeal on behalf of a client, and in her 
 interests, was in truth doing so entirely in his own interests, and on the terms that the 
 client should be indemnified, and should suffer no loss, and derive no benefit, in either 
 event : whereupon the Court of Appeal, taking the matter into their own hands, called 
 upon the solicitor to show cause why he should not pay the costs of the unsuccessful appeal, 
 and, on his failure to give any satisfactory explanation, made an order accordingly, on the 
 ground that he had deceived the Court by withholding from them the above understanding 
 with his client (per Rig by, L. J., at pp. 369-372). It will be observed that the concealment 
 here was not from the client (who was, moreover, perfectly indifferent as to the solicitor's 
 proceedings), but solely and entirely from the Court. Cp. Be S., a Solicitor (1910), 55 
 Sol. J. 127, where, on the ground that material facts had been withheld from the Court, 
 an order to tax, obtained ex parte on a petition of course, was discharged. 
 
 (6) Dalglish v. Jarvie (1850), 2 Macn. & G. 231 {per Roleb, B., one of the Commissioners 
 of the Great Seal, at p. 243, holding that an interlocutory injunction obtained ex parte 
 by suppression of material facts ought to be dissolved immediately the undisclosed facts 
 aire brought to the notice of the Court) ; London Assurance Co. v. Mansel (1879), 11 C. D. 
 363, a case of insurance, in which Jessbl, M.R. (at p. 368) used the last cited case as an 
 illustration of the principles of good faith in the matter of disclosure which are applicable 
 to all transactions uberrimce fidei. 
 
 (c) Carew v. Johnston (1805), 2 Soh. & Lefr. 280, per Lord Redesdale, L.C. (Ir.), at 
 pp. 298-301, and again, at p. 306, where the decision is based " on the ground of un- 
 conscientious advantage being (by means of a Court of Justice) taken of the imbecility and 
 absence of this man, by which gross injustice has been done, and in fact a fraud practised 
 on the Court." 
 
 {d) Ex p. Coclcerell (1878), 4 C. P. D. 39 (per Lord Coleridge, C.J., at p. 39, and 
 LlNDLEY, J., at p. 40). 
 
 (e) Crowly v. Bergtheil, [1899] A. C. 374, P. C. (at pp. 388, 389). 
 
§§ 575, 576 (concealment prom courts). 513 
 
 or rather, perhaps, odditis addendis, substantially the same as that which 
 rests on a party seeking rescission of a transaction voidable on the ground 
 of non-disclosure to himself. In the ordinary type of case, the first matters 
 to be established by the party complaining are the existence of the duty of 
 disclosure to himself by reason of some relation which gives rise to the duty, 
 and the fact that the undisclosed circumstance was the subject of the par- 
 ticular duty, that is, was material to be communicated as between persons 
 standing to one another in the relation proved. So, in the present class of 
 case, facts must be shown which indicate a duty of communication to the 
 Court, and the materiality of the undisclosed fact /or the Court to know (/) : 
 for, unless such a duty can be established, no party litigant is bound to 
 divulge to the Court, any more than to his opponent, any evidence against 
 himself. Of course, if required to make an affidavit of documents, he must 
 reveal every material document, and he must further answer truthfully all 
 questions put to him in the witness-box, or by interrogatories : but, if not 
 so required, or if not called as a witness, or interrogated, he is under no 
 legal obligation to throw his cards on the table, or allow his hand to be 
 over-looked : for his own protection, and in the defence of his rights and 
 interests, he is entitled in any ordinary case to use all that legitimate 
 reserve and secrecy which the Eoman jurists denominated dolus bonus. 
 Where there would be no duty of disclosure, or only a limited duty, 
 as between two individuals, no duty, or only an equally limited duty, 
 is owed by either of the litigants to the Com-t which is protecting the 
 other, or which has assumed the conduct and direction of the transaction 
 
 (/) See Oh. Ill, Sect. 3, Sub-s. (1), ante, as to the onus on the party complaining of 
 proving the relation between the parties which gives rise to the duty of disclosure, and as to 
 
 he necessity of establishing the materiality of the undisclosed fact. As to the meaning 
 of materiality, see Ch. II, Sect. 2, ante. For illustrations of the burden of showing that 
 the withheld fact is one which it was material /or the Court to know, in the class of ease now 
 under discussion, see Charter v. Trevelyan {18ii), II CI. & Fin. 714 (where the correct copies 
 of certain documents withheld from the Court would not have affected the result if disclosed, 
 and relief on this ground was accordingly refused : per Lord LYUDHimsT, L.C., at p. 739) ; 
 Brooke v. Lord Mostyn (1864), 2 De G. J. & S. 373, where the materiahty of the suppressed 
 valuation.together with the other ingredients in the necessary proof,having been duly estab ■ 
 lished, relief was granted (per Tttrnee, L. J., at pp. 422, 423 : " the materials necessary to 
 enable a fair judgment to be formed upon the question whether this compromise was for the 
 benefit of the infant were not fairly and properly brought before the Master's consideration," 
 and, again, at p. 423 : " I am satisfied that information was withheld which was material to 
 have been given, and which, if given, might have altered the conclusion arrived at ") ; Flower 
 V. Llcyyd (1879), 10 C. D. 327, C. A. (where the party endeavouring to upset the judgment 
 failed for the reason, amongst others, that he had not shown that if every one of the litho- 
 graphic stones alleged to have been concealed had been disclosed to the expert appointed 
 by the Court, his report would have substantially difiered : per Baggallay, L. J., at p. 333); 
 BoswdlY. Coaks (1894), 6 R. 167, H. L. (where the plaintiff wholly failed to satisfy the 
 Court that the omitted passage from a certain letter would, if disclosed, have affected 
 theresult: ^erLordSELBOENB, L.C., at pp. 171-174); Crowly\.Bergtheil,\\?,Q°i]A.C.zni, 
 P. C. (where the concealment was shown to be material : p. 388) ; Be Johnson's Patent, 
 [1909] 1 Ch. 114 (per Pabkeb, J., at p. 126, who held that the undisclosed fact was 
 " obviously material " for the Court to know). In Birch v. Birch, [1902] P. 130, C. A., it 
 was held that there must be a suggestion in the statement of claim, if it is to escape being 
 struck out as frivolous and vexatious, of facts discovered since the trial, and not disclosed 
 thereat, which, if proved, would constitute a reasonable ground for reversing the judg- 
 ment, though they need not necessarily be such as would have been evidence at the trial 
 (per Vattohan Wllliams, L. J., at pp. 136, 137). 
 
 B.N.D. 2 L 
 
514 CH. VII, SECT. 1, SUB.-S. (1). 
 
 or is asked to sanction it {g). Next, as in cases where there is no intervention 
 of any judicial tribunal, the party seeking relief from the judgment, order, 
 or other " judicial act " must establish the existence or occurrence of the 
 alleged undisclosed matter, and the fact of its non-disclosure, though here 
 it is the Court, and not the party, or not the party alone, who must be shown 
 to have been kept in the dark {h}. Lastly (again as in the ordinary type of 
 case) he must show that the party charged had knowledge of the uncommuni- 
 cated fact («'), and that he was himself ignorant of it (J), at all material dates. 
 577. It does not signify what is the precise nature of the " judicial act " 
 which is sought to be invalidated. It may be a judgment, decree, or order, 
 pronounced or made by a court of' equity, or by a court of common law, 
 in an ordinary action ; or an adjudication or order in bankruptcy, or an 
 order conferring a privilege or power or licence, or imposing duties, or making 
 an appointment, whether in the exercise of inherent jurisdiction or pursuant 
 to a statutory provision : or the sentence of an ecclesiastical or matrimonial 
 tribunal, or a judgment of a court of probate establishing a will (k). Questions 
 of jurisdiction, however, sometimes arise, for the purpose of determining 
 which the nature of the " judicial act " impugned may have to be considered. 
 Thus, an application to set aside a bankruptcy order should be made to the 
 judge exercising bankruptcy jurisdiction (I), and a claim to set aside a judg- 
 ment establishing a wiU should be asserted in the Probate Division (m). 
 
 {g) See the observations of Lord Selbornb, L.C., cited in note (w) to § 574, ante. As 
 to the classes of case where there is no duty of disclosure as between negotiating parties, 
 see §§ 165, 166, 167, ante. 
 
 (h) As to the necessity of proving the existence or occurrence of the alleged undisclosed 
 fact, and also its non-diaolosure to the party complaining, in ordinary cases, see Ch. Ill, 
 Sect. 3, Sub-ss. (2) and (3), ante, respectively. In most of the cases cited in the notes to 
 the present Section, neither of these issues was disputed. 
 
 (i) The onus on the party complaining to prove that the party charged had knowledge 
 of the undisclosed fact, in the ordinary type of case, is discussed in Ch. Ill, Sect. 3, 
 Sub-s. (4), ante. In the following cases of non-disclosure to the Court it is stated, or 
 assumed,— jBrooie v. Lord Mostyn (1864), 2 De G. J. & S. 373 {per Ttjbner, L.J., at p. 423 : 
 " this was a suppression of material facts which were within the knowledge of Lord Mostyn 
 and his advisers, and were not within the knowledge of the plaintiff or of those who acted 
 for him ") ; Re Johnson's Patent, [1909] 1 Ch. 114 (per Pakkeb, J., at p. 126 : " neglect 
 to state a fact which is within the petitioner's knowledge, and which it is obviously 
 material that the Court should also know, is not consistent with the candour and good 
 faith which is always required of a petitioner for extension of a patent "). 
 
 (j) That, as between negotiating parties, the party complaining must, if challenged 
 (which, however, is rarely the case), give some evidence of his own ignorance of the undis- 
 closed fact, is shown in Ch. Ill, Sect. 3, Sub-s. (5), ante. The rule equally applies in cases 
 of suppression of facts from the Court : for, if the party claiming to have the judgment set 
 aside had cognizance of the fact in question, and did not inform the tribunal, he cannot 
 with any justice complain of the result. See the cases cited in the last note, and also 
 Birch V. Birch, [1902] P. 130, C. A. In Dunn v. Cox (1853), 11 Hare 61 (a case of mis- 
 representation to the Court), the plaintiff, though averring that he was ignorant of the 
 true facts at the date of the consent order whereby the defendant was ordered to pay him 
 a certain sum of money, abstained from suggesting that he did not know of them when he 
 received the money : and on this ground, amongst others, Paqe-Wood, V.-C, allowed the 
 demurrer to the biU. 
 
 (h) Illustrations of all these types of " judicial act " are to be found in the cases cited 
 in the notes to this Section. 
 
 (l) Motion V. Moojen (1872), L. B. 14 Eq. 202 ; BoaUr v. Power, [1910] 2 K. B. 229, 
 232, C. A. And see, generally, on this question, Lord Halsbury's Laws of England, title 
 " Bankruptcy and Insolvency," voL ii, pp. 56, 299, 300. 
 
 (m) Priestman v. Thomas (1884), 9 P. D. 70 (per Hannen, P., at p. 76). 
 
§§ 576-579 (concealment prom courts). 515 
 
 Subject to such questions of exclusive jurisdiction there seems to be no reason 
 why the judgment of any court should not be invalidated by proper proceed- 
 ings instituted in either the King's Bench, or the Chancery Division («). 
 
 578. The nature of the relief which, on proof of the requisite facts, may 
 be granted to the party invoking the jurisdiction is twofold. Either the 
 " judicial act " impeached will be set aside, or declared inoperative, at the 
 instance of the party aggrieved (o) ; or the non-disclosure will furnish the 
 party with a good answer to any action brought, or to any plea or allegation 
 made, against him which is founded upon the " judicial act " in question, 
 or depends for success upon its validity (p). It should be noted here that 
 the court of bankruptcy has peculiar powers in this respect. It may inquire 
 into the consideration of a judgment debt, and go behind and ignore a judg- 
 ment proved to have been obtained by fraud (whether in the form of suppression 
 and concealment, or in that of positive misrepresentation), but it is by no 
 means bound, and ought not, to do so except upon a very strong 'primd 
 facie case (q). 
 
 579. A claim for the setting aside of a judgment or order procured by 
 suppression of material facts from the Court must be asserted by an action 
 for that purpose, not by motion or application to the Court itself in which 
 the judgment was pronounced or the order made (r), except in the case of 
 an interlocutory order (.s), or a judgment by default {t), in which latter 
 event even a third person may invoke the jurisdiction on motion, if the judg- 
 ment and the default were coUusive [u). It should be remembered, however, 
 that, even in the excepted classes of case, the jurisdiction to entertain 
 an action stUl exists, though any resort to this procedure, where a cheaper 
 and more convenient one is provided by the practice rules (0. 27, r. 15), may 
 be penalized by a special order as to costs {v). The trial of the action is 
 
 (m) Thus, in Dunn v. Oox (1853), 11 Hare 61, the bill in Chancery prayed the setting 
 aside of an order made in the Court of Exchequer, and, though the plaintiii failed because 
 his proof was insufficient, the jurisdiction was not disputed. 
 
 (o) This was the nature of the relief prayed in most of the cases cited in the notes to 
 this Section. In Carew v. Johnston (1805), 2 Sch. & Lefr. 280, citedin note (c) to § 575, ante, 
 the decree of foreclosure was not formally set aside, but a declaration was made that the 
 mortgagor was to be deemed to be stiU entitled to his equity of redemption nan obstante 
 decreto, which had much the same effect. 
 
 {p) See the following misrepresentation cases (which are in point on this question) :— 
 The Duchess of Kingston's Case {1176), 2 Sm. L. C. (Uthedtn.) 731 ; Perry v. Meddowcroft 
 (1846), 10 Beav. 122 ; Eyre v. Smith (1877), 2 C. P. D. 435, 0. A. 
 
 (q) SeeBeFlatau{1888),22Q.B. D.83,C.A.; Boalerv. Power,[l910]2K.B.229,C. A. 
 (r) Flower v. Lloyd (1877), 6 C. D. 297, C. A. 
 («) Wyatt V. Palmer, [1899] 2 Q. B. 106, C. A. 
 {t) As in Dalglish v. Jarvie (1850), 2 Macn. & G. 231. 
 
 (u) As in Harrod v. Benton (1828), 8 B. cSs C. 217 (per Lord Tenterdbn,C.J., at p. 219 : 
 an execution creditor here successfully intervened on motion to set aside a collusive 
 warrant of attorney, judgment, and execution) ; Nixon v. Loundes, [1909] 2 Ir. R. 1 
 (per Gibson, J., at p. 7, Kenny, J., at pp. 8, 9, and Dodd, J., at p. 11 : here a judgment 
 creditor, in the enforcement of a judgment honestly obtained and registered against his 
 judgment debtor, was impeded by a judgment mortgage previously registered against such 
 debtor by another judgment creditor whose judgment had been procured by fraudulent 
 collusion, and on his moving to have the latter judgment set aside, the jurisdiction to 
 grant relief on motion was asserted by the Court). 
 
 (v) Wyatt v. Palmer, sup. (per Lindley, M.R., at pp. 109, 110). 
 
516 CH. VII, SECT. 1. SUB-SS. (1), (2) ; SECT. 2. 
 
 ordinarily by a judge, but there is no reason why it should not take place 
 before a judge and jury, if the parties so desire, and if this mode of trial 
 is ordered on the summons for directions (w). The old learning as to the 
 precise distinction between a suit by " original bill," and a suit, by " supple- 
 mental bill of review," with or without leave, and, indeed, the whole procedure 
 by bill of review, is now obsolete (a;). 
 
 Subs. (2). Foreign Judgtnents procured by Non-Disclosure. 
 
 580. A foreign judgment, that is to say, a judgment pronounced by any 
 court not within the English jurisdiction, whether a court of a foreign State, 
 or an Irish, Scottish, British-Indian, or Colonial Court, is, no less than an 
 English j udgment, and on no other principle, treated as void by courts within 
 the jurisdiction, on proof that it was obtained by the fraud of one or both 
 of the parties (y), whether that fraud consisted in pure misrepresentation («), 
 or in the suppression of material facts from the tribunal (a), accompanied 
 or not by other forms of deception practised upon it. An allegation of 
 such fraud, whether of a positive or negative character, is, if established, 
 a good plea to any action on the foreign judgment. It is not necessarily 
 an answer to the plea that the evidence to prove the fraudulent suppression 
 is the very same evidence which was used in support of the case set up by the 
 aggrieved party before the court which pronounced the judgment (6) ; nor 
 that the foreign court was not ignorant of the truth, or was, in fact, itself 
 guilty of fraud (c). For obvious reasons, the party can only put forward 
 his case by way of defence or answer, where any action is instituted within 
 the jurisdiction for the purpose of executing or enforcing the judgment against 
 him {d), or where, in the course of any proceedings in England, the foreign 
 judgment is sought to be made use of in any manner as an obstacle to the 
 success of his claim or defence, as the case may be, in which event he is entitled 
 
 [w) As waa done in White v. Ivory (1910), " Times," 27th April (where CHANNBn, J., 
 remarked that this was the first case in his experience, or reported, in which the issue had 
 been so tried, but that there was no objection in law or practice to the adoption of this 
 course. 
 
 (a;) Boswdl v. Coahs (1894), 6 R. 167, H. L. (per Lord Selbornb, at p. 170). 
 
 (y) The principle is that the defendant has entered into an implied contract to pay 
 the amount of the debt declared by the judgment to be payable, and this principle is 
 applicable to English and foreign judgments indifferently : Grant v. Hasten (1883), 13 
 Q. B. D. 302, C. A. {per Lord Bsheb, M.R., at p. 303). See, as to foreign judgments, 
 Abouhjfv. Oppenheimer (1882), 10 Q. B. D. 295, C. A. {per Lord Colebidqe, C. J., at p. 303) ; 
 Vadala v. Lawes (1890), 25 Q. B. D. 310, C. A. {per Ldtdley, L.J., at p. 316). Anything, 
 therefore, which would invalidate any contract, such as breach of a duty to disclose, would 
 invalidate this particular type of implied contract. 
 
 {z) Bank of Australasia v. Nias (1851), 16 Q. B. 717 {per Lord Campbell, C.J., at 
 p. 735) ; Cammell v. Sewdl (1858), 3 H. & N. 617 (per Mabtin, B., at p. 646) ; Oossain v. 
 Gossain (1860), 8 W. R. 196, P. C. (an Indian judgment) ; Ocheenbein v. Papelier (1893), 
 8 Ch. App. 695 ; Ahouloff v. Oppenheimer, sup. 
 
 (a) Vadala v. Lawes, sup. (see para. 7 of the statement of claim, set out at p. 311); 
 Growly v. Bergtheil, [1899] A. C. 374, P. C. (at p. 388), cited in note ( / ) to § 576, ante. 
 
 (b) Abouloff V. Oppenheimer, sup. (per Brett, L.J., at p. 307) ; Vadala v. Lawes, sup. 
 (per LiNDLEY, L.J., at pp. 316-320). 
 
 (c) See the citations in note (z), sup., and Price v. Dewhurst (1837), 8 Sim. 279 (per 
 Shadwell, V.-C, at pp. 308, 309). 
 
 (d) See the cases cited in the notes to this Sub-section, generally. 
 
§§ 579-581 (concealment from the state). 517 
 
 to ask the English Court to declare it to be, or to treat it as, an absolute 
 nullity (e). 
 
 Sect. 2. Concealment of Material Facts fbom the Crown 
 OR THE State. 
 
 581. Whenever the Crown, or an officer or department of the State, is 
 induced by suppression, or perversion, of material facts within the actual 
 or presumptive knowledge of the grantee, to confer any privilege on a subject, 
 whereby the rights and interests of any other subject, or of the King's other 
 subjects in general, are proportionately curtailed, such grant, on the proper 
 proceedings being taken by the proper parties, will be repealed, revoked, 
 withdrawn, or avoided, or (without being formally avoided) treated as void. 
 " The rule arises out of a duty which the law casts upon the subject of making 
 known any previous inconsistent grant of which he may himself have notice. 
 If he neglect this duty, he is held to have deceived the King, when accepting 
 the grant made to him, with the result that he takes nothing by his grant " (/). 
 This rule, established from the earliest times, has been applied to grants by 
 the Crown of estates (g) ; charters of incorporation (h) ; markets (*') ; mono- 
 polies in respect of inventions (j) ; and other exclusive rights and licences (k). 
 
 (e) As in Price v. Sewhurst (1837), 8 Sim. 279; Gossain v. Qosaain (1860), 8 W. E. 
 196, P. C. (where a party, for the purpose of estabhshing his claim, was forced to rely 
 upon an Indian judgment procured by fraud, and in breach of a compromise of previous 
 litigation, and, this judgment being treated as a nuUity, his claim fell with it. 
 
 (/) City of Vancouver v. Vancouver Lumber Co., [1911] A. C. 711, P. C, at p. 721. 
 For other statements of the nature and theory of the duty, see the Case of Alton Woois 
 (1600), 1 Coke Rep. 40 b {per the Lord Keeper Egebton, at p. 51 b) ; Com. Dig. Grant, G. 8. 
 At p. 894 of Eastern ArcUpdago Co. v. R. (1853), 2 E. & B. 856, Exch. Ch. (the number of 
 the page is misprinted 568 in the report), Pabkb, B., says that a charter obtained by 
 "fraudulent concealment," as well as one procured by "false suggestion," is "void 
 at common law." Similar rules obtained in Roman law with reference to the fallax petitor 
 who obtained grants and privileges from the Emperor by fraud : see C. 1, 22, 2, 3, 4, 5. 
 
 (g) See the Case of Alton Woods, sup. ; City of Vancouver v. Vancouver Lumber Co., sup. 
 In these, the subject was alleged to have failed to disclose to the Crown the existence 
 of a previous inconsistent grant. In the former, the case was made out : in the latter, it 
 was not. For illustrations of cases where the King was deceived by misrepresentation, see 
 -B. et Reg. v. Kempe (1694), 1 Ld. Raym. 49; Gledstanes v. Earl of Sandwich (1842), 
 4 M. & G. 995. 
 
 (h) See the misrepresentation cases of R. v. Boucher (1842), 3 Q. B. 641 ; Eastern 
 Archipelago Co. v. R., sup. ; La Banque D'Hochelaga v. Murray (1889), 15 App. Cas. 414, 
 P. C. 
 
 (0 As in R. V. -Baiter (1685), 3 Lev. 220 ; Great Eastern Railway Co. v. Goldsmid (1884), 
 9 App. Cas. 927, H. L. In these cases concealment of a previous grant of a market was 
 alleged. In the former, it was proved : in the latter, it was not : see note (x) to § 584, 
 post. 
 
 (j) See R. v. Wheder (1819), 2 B. & Aid. 345 ; Hill v. Thompson (1818), 8 Taunt. 375 ; 
 Brunton y. Hawkes (1821), 4 B. & Aid. 541; Morgan v. Seaward (1837), 2 M. & W. 544 ; 
 NicheUs v. Rolh (1849), 8 C. B. 679. Letters patent for inventions are now sealed with 
 the seal of the Patent Office, pursuant to s. 14, sub-s. (1), of the Patents and Designs Act, 
 1907 (7 Edw. 7, c. 29), and no longer, as they were during the period of the cases above 
 cited, with the Great Seal of the United Kingdom, and the procedure for obtaining revoca- 
 tion is altered ; but the theory on which a patent is revoked, viz. that the State is misled 
 
 (h) Such as a right to take wreck : Alcock v. Goalee { 1 829), 5 Bing. 340. Also, an order 
 of the Board of Trade for the release of a trustee in bankruptcy : Bankruptcy Act, 1914 
 (4 & 5 Geo. 5, c. 59), s. 93 (3). 
 
518 CH. Vll, SECT. 2. 
 
 582. The party entitled to raise the question of the invalidity of the grant 
 by reason of the withholding of material information from Crown or State 
 is, in the first place, the Attorney-General, as representing the Crown or 
 State (I) ; and, secondly, every fellow-subject of the grantee who is directly 
 or indirectly prejudiced by the grant (m), or even one who is not interested, 
 provided that those who are interested would be entitled to relief if they 
 chose to apply for it {n), since the prerogative of the Crown in this respect 
 is the privilege of the subject, and the King cannot fetter the exercise and 
 enjoyment of a privilege which is vested in him for the public good ; so that, 
 whether directly, or indirectly in virtue of his right to call upon the Crown 
 to exercise its powers of revocation and repeal, the subject is entitled ex 
 debito justiticB to have a franchise procured by the suppression of material 
 facts forfeited (o). 
 
 583. Eelief against a grant which is void on the ground of non-disclosure 
 may be given in either of two forms. The charter or patent may be repealed 
 at the instance of the Attorney-General, whether moving ex officio, or on 
 the relation of an aggrieved subject (p) ; in which case the repeal must ordi- 
 narily be in toto or not at all (q), but it has been held that, in cases where 
 the undisclosed fact is a prior inconsistent grant, " the rule is qu.alified to this 
 extent that, if the subject had no actual or constructive notice of the previous 
 grant, the second grant will be good to the extent to which it may be consistent 
 
 into granting a privilege which it otherwise would not have granted, remains. It is on 
 this theory also that a petition for prolongation of the term of a patent, formerly made to 
 the King in Council, but now to the Judge of the Chancery Division appointed to exercise 
 this jurisdiction pursuant to s. 18 of the above statute, may be dismissed on the ground of 
 secrecy and reticence on the part of the petitioner, as it was in Be Johtisori's Patent, [1909] 
 1 Ch. 114, though there were many other grounds justifying the dismissal in that case. 
 See the observations of Paekee, J., at pp. 125, 126 : " again, it appears that in the present 
 case the petitioner applied for a patent to protect his invention in Germany, but did not 
 obtain one, partly, at any rate, because of a prior German patent, which was brought 
 forward as an anticipation. It may well be that the prior patent did not in reality antici- 
 pate the petitioner's invention, but it was, in my opinion, the duty of the petitioner to state 
 this fact in his petition, referring to the alleged anticipation, and giving such explanation 
 as he might think possible or desirable. It ought not to be left to some opponent to 
 bring out such facts as these. Neglect to state a fact widch is within the petitioner' s knowledge, 
 and which it is obviously material that the Court should also know, is not consistent with the 
 candour and good faith which is always required of a petitioner for extension of a 
 patent." 
 
 (1) As in the Case of Alton Woods (1600), 1 Coke Rep. 40 b ; iJ. v. Butler (1685), 3 Lev. 
 220. Cp. the misrepresentation cases of JfJ. et Beg. v. Kempe (1694), 1 Ld. Raym. 49 ; 
 R. V. Wheeler (1819), 2 B. & Aid. 345 ; Mastern Archipelago Co. v. B. (1853), 2 E. & B. 856, 
 Exch. Ch. ; La Banque d'Hochelaga v. Murray (1889), 15 App. Cas. 414, P. C. (where the 
 defendants, who were entitled to raise the question of the invaUdity of a grant of a charter 
 of incorporation to a certain company, as corporators of which they were being sued, 
 thought it nevertheless wise to fortify their position by procuring the Attorney-General of 
 the Colony to proceed, on their relation, by way of scire facias against the company for 
 the repeal of the charter, such proceeding being consolidated with the action). 
 
 (m) Alcock V. Gooke (1829), 5 Bing. 340; Morgan v. Seaward (1837), 2 M. & W. 544 
 {per Pabkb, B., at p. 561 : " such a grant is void not against the Crown merely, but in a 
 suit against a third person ") ; Eastern Archipelago Co. v. B., sup. ; La Banque d'Hochelaga 
 V. Murray, sup. 
 
 (n) Great Eastern Railway Co. v. Goldsmid, [1884] 9 App. Cas. 927, 940, H. L. 
 
 (o) Eastern Archipelago Co. v. B., sup., at pp. 884, 886, 914. 
 
 (p) See the cases cited in notes (I) and (m), sup., respectively. 
 
 (j) La Banque d'Hochelaga v. Murray, sup., at pp. 426-428. 
 
§§ 582-584 (concealment from the state). 519 
 
 with the first grant, though void as to the rest " (r). Or the charter, patent, 
 or other instrument may be treated by the Court as a nullity on the establish- 
 ment by a party litigant of his right to have it so treated, when it is relied 
 upon by the opposite party as the foundation of his case, or a link in his chain 
 of proof (s). The procedure to obtain a repeal is information or action by 
 way of scire facias, for which, however, the legislature has now substituted, 
 in the case of patents for inventions, a petition to the Court for revocation at 
 the instance of the Attorney-General, or of any person aggrieved (f), and, 
 in the case of trade marks, an application to the Court by any person aggrieved, 
 or, where the registration has been procured by fraud, the registrar himself, 
 to make, expunge, or vary any entry in the register of trade marks (m). The 
 right to defensive relief may be asserted by way of plea to an action for in- 
 fringement of the patent (y), charter, or other instrument by which the grant 
 is made (w). 
 
 584. The burden of proof on the party claiming relief is, mutatis mutandis, 
 substantially the same as that which rests on a party complaining of the 
 non-disclosure to him of material facts in the course of a negotiation with 
 a view to a contract or transaction uberrima} fidei. That is to say, the Attorney- 
 General, or the aggrieved subject, as the case may be, must allege and estab- 
 lish circumstances raising the duty of disclosure as between the grantee 
 and the Crown, and must show that it was material for the Crown to be 
 informed of the particular undisclosed fact (x). Secondly, he must show 
 if challenged, the existence or occurrence, in point of fact, of that which 
 he alleges to have been withheld from the King's notice ; for instance, if 
 it be a question of a previous inconsistent grant of land, it must be made 
 quite clear that the grant relied upon was, in fact and in law, a grant of, or 
 a grant which included, the very land or estate which purported to pass by the 
 
 (r) City of Vancouver v. Vancouver Lumber Co., [1911] A. C. 711, P. C, at pp. 720, 721. 
 
 (s) As in the cases cited in note (m), sup. In M. v. Boucher (1842), 3 Q. B. 641, the 
 Court, though with great doubt and hesitation, thought it safer not to decide the question 
 of the vahdity of the charter incorporating a borough, though it was involved in the ques- 
 tion immediately before them of the validity of a rate made by that borough ; the ground 
 of the refusal being that the borough existed de facto, and none of the inhabitants had 
 ever taken any steps to get the charter revoked. 
 
 (i) This procedure was introduced, and the old scire facias procedure abolished, in the 
 cases of patents for inventions, by s. 26 of the Patents, Designs, and Trade Marks Act, 1883 
 (46 & 47 Vict. c. 57), which is reproduced in s. 25 of the Patents and Designs Act, 1907 
 (7 Edw. 7, c. 29). The petition may be presented by the Attorney-General, or by any 
 person authorized by him, or by a party aggrieved : s. 25 (3) of the Act of 1907. 
 
 («) See ss. 12 and 35 of the Trade Marks Act, 1905 (5 Edw. 7, c. 15). 
 
 (v) This ground of defence is expressly reserved by s. 25 (2) of the Patents and Designs 
 Act, 1907 (7 Edw. 7, c. 29). See several of the cases cited in note {j) to § 581, ante, for 
 illustrations. 
 
 (w) See the cases cited in note (m), sup. 
 
 {x) As to the onus of establishing the circumstances and relation giving rise to the duty 
 of disclosure in the course of negotiations with a view to a transaction between individuals, 
 and of establishing that the undisclosed fact was the subject of the duty, i.e. was material, 
 see Ch. Ill, Sect. 3, Sub-s. (1), ante. As to what materiality means and includes, see 
 Ch. II, Sect. 2, ante. The necessity of proving that the undisclosed fact was one which it 
 was material for the Crown, or (in the case of inventions) the Court, to know is illustrated 
 by Johnson's Patent, [1909] 1 Ch. 114(yej-PABKEB, J.,at p. 126: see the citation in note (j) 
 to § 581, ante). 
 
520 CH. VII, SECTS. 2, 3. 
 
 impeached grant (y). Thirdly, he must establish the non-disclosure alleged (s) : 
 but in the ordinary type of case, that is, where there is no recital in the charter 
 or other instrument of any inconsistent grant, or whatever the undisclosed 
 fact may happen to be, the onus is discharged by a mere reference to the non- 
 recital, from which alone, notwithstanding the usual prefatory expres- 
 sion, ex cerid scientid, there is an irrebuttable presumption of law that the 
 King could not have been informed of the withheld fact either by the grantee 
 or any other person ; for the contrary inference would necessarily involve 
 an imputation upon the honour of the Crown (o). Fourthly, it must be 
 shown that the subject to whom the impeached grant was made had either 
 actual or presumptive knowledge of the undisclosed fact ; and he is presumed, 
 in the common case of a prior inconsistent grant, to have had knowledge of 
 such prior grant, if it was enrolled or otherwise recorded in some document 
 puUici juris (6). Lastly, it must be established that the King had no know- 
 ledge aliunde of the undisclosed fact. This, however, will ordinarily be 
 
 (y) pity of Vancouver v. Vancouver Lumber Co., [1911] A. C. 711, P. C. The same 
 obligation rests upon the party complaining in the ordinary type of case, as is explained in 
 Ch. m. Sect. 3, Sub-s. (2). a4. " ^ 
 
 (z) This issue, though a negative, must be established by the party complaining in the 
 case of a transaction between individuals, though very slight evidence is sufficient to 
 throw the burden on the other side, and sometimes it may be inferred as a fact from the 
 nature of the transaction itself : see Ch. Ill, Sect. 3, Sub-s. (3), ante. Aa to what " dis- 
 closure " means, see Ch. II, Sect. 1, ante. 
 
 (a) Case of Alton Woods (1600), 1 Coke Rep. 40 b (at p. 51 b) ; Alcock v. CooJee 
 (1829), 5 Bing. 340 [per Best, C.J., delivering the judgment of the Court of Common Pleas, 
 at p. 354). Cp., as to cases of " misdescription or mistake," whereby the Crown is 
 deceived, Gledstanes v. Earl of Sandwich (1842), 4 M. & G. 995 (per Tindal, C.J., at 
 pp. 1028, 1029), " But," says Holt, C. J., in R. et Reg. v. Kempe (1694), 1 Ld. Raym. 49, 
 " where the words are the words of the King," that is, where the inconsistent grant, 
 or other alleged undisclosed fact, is recited in the charter or patent, " and it appears that 
 he has only mistaken the law, then he shall not be said to be deceived, to the avoidance 
 of the grant." And see Alcock v. Cooke, sup., at p. 350. An actual and personal intention 
 to deceive the Crown is no more required to be proved in the present class of case, than 
 actual and personal intention to deceive the party complaining in the ordinary type of 
 case (as to which, see §§ 197, 358, 461, ante) : truthful and complete disclosure to the 
 Crown being put as an implied condition of the validity of the grant, just as it is to the 
 validity of a contract or transaction between individuals (§ 83, ante) ; see Eastern Archi- 
 pelago V. E. (1853), 2 E. & B. 856 (the page is misnumbered 568 in the report), Exch. Ch. 
 (per Martin, B., at pp. 871, 872). 
 
 (6) This must be proved by the party complaining in ordinary cases, as shown in 
 Ch. Ill, Sect. 3, Sub-s. (4), ante. As to " actual " and " presumptive knowledge," see 
 Ch. II, Sect. 3, anie. For the rule as to the knowledge of the grantee being presumed from 
 the fact that the undisclosed inconsistent grant is enrolled, or otherwise of record, see the 
 Case of Alton Woods (1600), 1 Coke Rep. 40 b (per Lord Keeper Egerton, at p. 61 b : 
 the King ought to be informed of his own estate, for if it be a lease ... of record, 
 whereof the subject may take notice, then ... it is void ") ; Alcock v. Cooke, sup. (per 
 Best, C.J., at p. 349 : " if an individual grants a lease, and the estate of which that in- 
 dividual grants a lease afterwards comes to the King, if the King regrants that, as the 
 subject could not know with certainty that there was a previously existing lease, the 
 position I have been laying down would not apply. The doctrine I am delivering is 
 applicable to a case where the subject cannot be deceived, and he must be deceiving the 
 King : for if the King's prior lease be enrolled, the subject has the means of knowing the 
 existence of that lease, and it is his duty to inform the King of its existence ") ; Cily of 
 Vancouver v. Vancouver Lumber Co., [1911] A. C. 711, P. C. (at pp. 720, 721). Here, 
 amongst other probanda which the party impeaching the grant failed to establish, was the 
 fact that the grantee had actual or constructive notice of the alleged previous grant of 
 the island in question, assuming such a grant to have been in fact made, which also was 
 not satisfactorily proved. 
 
§§ 584, 585 (concealment from third persons). 521 
 
 presumed, just as the grantee's omission to give the required information 
 will be presumed, and for the same reason (c) : but, where the impeached 
 grant was made (as frequently happens in the case, for instance, of markets) 
 after the holding of an inquiry under a writ of ai quod damnum, not only 
 is no such presumption made, but a strong jirimd facie presumption arises 
 to the contrary, which can only be rebutted by the clearest possible evidence 
 on the part of the subject who impeaches the grant that the inquiry was 
 surreptitiously and dishonestly conducted (d). 
 
 Sect. 3. Concealment of Material Facts from Private Third 
 
 Persons. 
 
 585. In the two classes of case hitherto considered, relief is given to a 
 person who, though no duty of disclosure is owed to him in the first instance, 
 is yet prejudicially affected by another's breach of duty to the Court or the 
 State, and who, therefore, has a legitimate ground of complaint on his own 
 merits, as an injured or aggrieved person. But there is a third type of 
 case, in which the law provides a party who has sufiered no wrong, and has 
 no merits whatever, with a way of escape from liability to an action brought 
 against him by one who has practised a fraud, not upon him, but upon a third 
 person. This course is adopted, not because jurisprudence desires to adopt 
 it, but because it cannot achieve its paramount purpose of rendering such 
 frauds unprofitable to those who resort to them without at the same time 
 setting unmeritorious persons free. In such cases the delinquent is deprived 
 of the remedy to which he would otherwise be entitled on those considera- 
 tions of public policy, morality, and decency — and on those alone — which 
 imperatively demand the interposition of the Court (whether the party raises 
 the point or not) whenever the assertion of a claim, or of an affirmative 
 defence, depends for its success upon allegations or facts which disclose 
 illegality, immorality, or other twpis causa. The result, no doubt, is that 
 the party who is devoid of merits, and has of course no rights of his own 
 
 (c) It has been explained that, in ordinary canes, some evidence of the ignorance 
 aliundi of the party complaining must bo adduced, if the matter is in dispute, as it rarely 
 is : see Ch. Ill, Sect. 3, Sub-s. (5), ante. In cases of the description now under considera- 
 tion, where there is no recital of the undisclosed fact, the ignorance of the Crown will 
 always be presumed in the iirst instance at all events, on the same principle that non- 
 disclosure to the Crown will be : see note (a), sup. 
 
 (d) See Great Eastern Railway Co. v. Qoldsmid (1884), 9 App. Cas. 927, H. L. (per 
 Lord Sblbobne, L.C, at pp. 939, 940, 942). Here there had been an inquiry of the nature 
 indicated, and the presumption therefore was that the Crown was not ignorant of the 
 existence of the competing market, no suggestion being made that the inquiry had been 
 improperly conducted. On the other hand, in R. v. Butler (1685), 3 Lev. 220, where it was 
 alleged that the defendant had obtained a grant of a market at Chatham, to the prejudice 
 of an existing market at Rochester, by non-disclosurt tothe King of material circumstances, 
 and that the King had no knowledge from other sources of the undisclosed facts, notwith- 
 standing that a writ of ad quod damnum had been issued, followed by the usual inquiry, 
 this latter allegation (supported by averments that the inquiry bad been held at a place 
 thirty miles distant from Rochester, whereas Chatham was only 1^ miles distant, and 
 without notice to the Corporation of Rochester, and had been otherwise '' mismanaged," 
 and conducted " surreptitiously, fraudulently, and in deceit of them ") was held, on 
 demurrer, to have been well pleaded. 
 
522 CH. VII, SECT. 3, SUB-SS. (1), (2). 
 
 which he can set up in any active proceedings, and who not infrequently is 
 implicated in the very misconduct which defeats the claim made, or affirma- 
 tive defence pleaded, against him, derives benefit and relief; but this is 
 inevitable. Fraud, whether it assumes the form of conscious falsehood, 
 or of a breach of any duty of good faith and candour, is a head of misconduct 
 to which this principle of our law is perhaps in modern times most frequently 
 and most inflexibly applied (e). So familiar to us has this application now 
 become that it is difficult to realize that there was a time when the doctrine 
 appeared to some minds a little novel, if not dangerous. That there was such 
 a time, appears from the almost apologetic terms in which Lord Hardwicke, 
 in a memorable judgment, introduced the doctrine to the notice of his 
 contemporaries : " a fourth head of fraud," he says, " may be collected or 
 inferred in the consideration of this court from the nature and circumstances 
 of the transaction, as being an imposition and deceit on the other persons not 
 parties to the fraudulent agreement. It may seem odd that an agreement 
 may be infected by being a deceit on others not parties : but such there 
 are, against such there has been relief " (/). 
 
 Sub-s. (1). Concealment from Private Third Persons in General. 
 
 586. The concealment of material facts from private third persons which 
 provides an unmeritorious party with a defence or answer to the case of the 
 opposite party, as above stated, may be a concealment either from a specific 
 individual (g), or from one who fills a certain character, and in that character 
 
 (c) " A contract which is a fraud upon a third perton may on that account be void as 
 between the parties to it " : per Baylby, J., at pp. 610, 611 of Pidcock v. Bishop (1825), 
 3 B. & C. 605. For a discussion of this rule in its application to oases where the fraud on 
 the third person consists purely of misrepresentation, see Ch. XIV, Sect. 2, of the author's 
 Law of Actionable Misrepresentation. 
 
 (/) In Chesterfield [Earl of) v. Jannsen (1751), 2 Ves. Sr. 125, at p. 156. 
 
 (g) As in the following : Neville v. Wilkinson (1782), 1 Brown C. C. 543 (as to which, see 
 Dalbiac v. Dalbiac, inf.) ; Jackson v. Duchaire (1790), 3 Term. Eep. 551 (a very curious case, 
 in which the defendant, having agreed to buy certain goods from the plaintifi at a valuation, 
 procured one Welch to buy them for her of the plaintiff for £70, which was the consideration 
 expressed in the bill of sale granted by the plaintiff to Welch. It appeared, however, that 
 there was a contemporaneous agreement between the plaintiff and the defendant, kept 
 secret from Welch by both of them, that the defendant should pay the plaintiff an additional 
 £30 for the same goods, secured by two promissory notes for £15 each, on one of which the 
 plaintiff was suing the defendant. Lord Kenyon, C. J., at the trial, without the defendant 
 having raised the point, ruled that the action would not lie, on the ground that the trans- 
 action was a fraud, not upon the defendant (who had no merits of her own on which she 
 could rely in answer to the claim), but upon Welch, and this ruling was supported by 
 the Court of King's Bench : per Ashurst, J., at p. 552 : " it is clear both on the principles 
 of law and equity, that when any friend advances money to relieve another person from 
 the pressure of his necessities, and the parties interested enter into a private agreement 
 over and above that with which the friend is acquainted, such agreement is void in law, 
 as being a fraud on such friend." To the same effect, Bcllee, J., at p. 553, who observes 
 that, if Welch had been informed of the clandestine bargain, " he probably would not have 
 advanced his money ") ; Dalbiac v. DoZftiac (1809), 16 Ves. 116 (per Gkant, M.R., at p. 125 : 
 " the defendant, procuring himself to be appointed trustee " — of the marriage settlement 
 there in question — " by suppressing the fact that he was a creditor, cannot, upon principles 
 clearly established, revert bade to that character, and set up again the debt which he has 
 suppressed. Many cases have been determined upon that principle. The case is much 
 stronger than Neville v. Wilkinson, where the creditor, having suppressed the fact of his 
 
§§ 585-587 (composition arrangements). 523 
 
 is deceived or wronged, such as, in the case of unconscionable bargains 
 with expectants, the ancestor (h), or from a certain class, such as, in the 
 case of invitations to subscribe to commercial undertakings, the investing 
 or speculating public (i), or, as in the case of dealings by an insolvent debtor, 
 from a particular creditor (j), or the general body of creditors. The last 
 named type of non-disclosure to third persons, in the course of negotiations 
 for composition arrangements, is of special importance, and demands separate 
 consideration. 
 
 Suh-s. (2). Concealment from Creditors in Negotiations for Composition 
 
 Arrangements. 
 
 587. In all cases in which an insolvent enters into a composition deed 
 or arrangement with his creditors, the essence of the transaction is equal 
 distribution of the insolvent's estate, and a rateable abatement of each 
 creditor's claim. Good faith, therefore, and complete candour is required from 
 each of the parties towards the others in the negotiation for, or in the carrying 
 into effect of, the arrangement. If any of the creditors stipulates with the 
 debtor for a separate advantage to himself, without divulging the transaction 
 to all the other creditors, he is obviously violating this duty of good faith 
 
 debt, was not permitted to set it up even against the person in whose favour and at whose 
 instance he made the suppression"); Sims v. Tuff.H (18.34), 6 C. & P. 207 (where the 
 plaintiff, fearing an execution, entered into a secret and collusive agreement with his 
 landlord, the defendant, whereby the latter agreed to, and did, destroy his receipts for 
 rent, and make a nominal and sham distraint upon the plaintiff's goods for pretended 
 arrears of rent ; whereupon the defendant, who was as ready to cheat the plaintiff, as the 
 plaintifi was to cheat his execution creditor, proceeded to distrain upon the goods in real 
 earnest, and, when the plaintiff sued him for conversion, justified as landlord, to which 
 plea the plaintifif set up the clandestine agreement in reply. It was held that this agree- 
 ment, having been kept secret from the execution creditor, could not stand as an answer 
 to the defendant's affirmative plea which, therefore, grossly iniquitous as it was, was allowed 
 to prevail) ; Harrington v. Victoria Graving Dock Go. (1878), 3 Q. B. D. 549 (a principal 
 and agent case, where the agreement to pay the agent a commission or bribe was proved 
 to have been concealed, not from the principal, the defendant company, but from third 
 persons, and on this ground the agent's claim was defeated). 
 
 (h) ChesterfiM (Earl of) v. Jannsen (1751), 2 Ves. Sr. 125, per Lord Habdwickb, L.C, 
 at p. 157 : "in most of these cases have concurred deceit or illusion on persons not privy to 
 the fraudulent agreement : the father, ancestor, or relation, from whom was the expectation 
 of the estate has been kept in the dark." Cp. the observations of Lord Sblbobnb, L.C., 
 at p. 492 of Ayhsford (Earl oj) v. Morris (1873), 8 Ch. App. 484 (" great judges have said 
 that there is a principle of public policy in restraining this; that this system of under- 
 mining ... the fortunes of families is a public as well as a private mischief ; that it is a 
 sort of indirect fraud upon the heads of families from whom these transactions are con- 
 cealed "). See Ch. V, Sect. 2, Sub-s. (5), ante. 
 
 (i) Beghie v. Phosphate Sewage Co. (1875). L. R. 10 Q. B. 491 (concealment from 
 prospective shareholders of the fact that the plaintiffs had not, nor could ever acquure, a 
 right to exercise the invention which they purported to sell) ; Re Great Berlin Steamboat 
 Co. (1884), 26 C. D. 616, C. A. (concealment from subscribers to an undertaking of a 
 private arrangement wherebv certain moneys deposited with the company were not to be 
 the moneys of the company! having been deposited for the sole purpose of enabling it to 
 obtain a delusive credit with bankers and others : per Cotton, L.J., at p. 619) ; Scott v. 
 Brown, Doering, McNab & Co., [1892] 2 Q. B. 724, C. A. (concealment from the investing 
 public that certain contracts for sale and purchase of shares on the Stock Exchange had 
 been entered into for the sole purpose of creatine; a fictitious market). 
 
 (j) See the cases cited in note (m) to § 579, ante. 
 
524 CH. VII, SECT. 3, SUB-S. (2). 
 
 and candour, with the result that the clandestine agreement cannot be en- 
 forced even against the debtor ; for, though the favoured creditor has done 
 no wrong, and infringed no duty, to him, he has failed in his duty to third 
 persons, — the class of creditors other than himself. The relation between 
 the creditors inter se is sometimes described as based on an implied repre- 
 sentation by each of them to the others that he is deriving no benefit from 
 the debtor over and above the agreed composition : in which view, any 
 creditor who has derived, or bargained for, such a benefit is guilty of an im- 
 plied fraudulent misrepresentation (Jc). But it may, with at least equal 
 propriety, be described as a relation between members of a class which 
 imposes on each member a duty to reveal to the rest of them any transaction 
 between himself and the debtor which is calculated to destroy or alter the 
 equality of treatment on which such relation is founded. In whichever way 
 it is put, the clandestine bargain entered into between the insolvent and the 
 favoured creditor is a fraud upon the other creditors, though not upon the 
 insolvent, and is accordiagly invalidated on the same priaciple of public 
 policy as any other kind of concealment from third persons (J). 
 
 588. There are various forms of transaction by which an advantage 
 may be stipulated for between a creditor and the debtor. It is quite im- 
 material, however, in what precise mode the creditor is favoured. If he 
 is in fact favoured, and if the arrangement for the conferring of the favour 
 
 m The subject is treated from this point of view in § 364, note (6), of the author's 
 Imw of Actionable Misrepresentation. 
 
 {I) See § 139, ante, where the type of case now under discussion is treated as belonging 
 to the subject of compromises generally, so far at the duty of disclosure is concerned, but 
 i.. reserved for more appropriate handling in this place, by reason of the duty being owed 
 to third persons. The favoured creditor's secret agreement is put as fraud in the following 
 cases : Fawcett v. Gye (1796), 3 Anstr. 910 {per Macdonald, C.B., at pp. 914, 915 : " the 
 principle is that in such oases each must conduct himself openly, and in the manner in 
 which he appears to the world to act. If his conduct is such as has a natural tendency to 
 induce the other creditors to believe that aU are acting upon equal terms, and receiving 
 equal shares, as they may be induced by that appearance, any private arrangement for 
 greater benefit to one is a fraud upon the rest, and therefore void ") ; Pidcoch v. Bishop 
 (1825), 3 B. & C. 605 (per Baylby, J., at pp. 610, 611 : " where by a composition deed the 
 creditors agree to take a certain sum in full discharge of their respective debts, a secret 
 agreement whereby the debtor stipulates with one of the creditors to pay him a larger 
 sum is void upon the ground that that agreement is a fraud upon the rest of the creditors. 
 So that a contract which is a fraud upon a third person may on that account be void as 
 between the parties to it ") : Me Gross (1848), 4 De G. & Sm. 364 n. ; Higgins v. Pitt (1849), 
 4 Exch. 312 (per Paeke, B., at p. 324 : " every secret bargain is a fraud on the creditors, 
 and is void when it is made, and being executory, cannot be enforced even against a 
 fraudulent party"); Ex p. Milner (1885), 15 Q. B. D. 605, C. A. (per Beett, M.R., at 
 pp. 613, 614, Baggallay, L. J., at p. 615, and Bowen, L. J., at p. 616). As to " public 
 policy " lying at the root of the doctrine, see Chesterfield (Earl oj) v. Jannsen (1751), 
 2 Ves. Sr. 125 (per Lord Haedwickb, Ij.C, at p. 156, who there mentions iiecret bargains 
 for the private advantage of a particular creditor in cases of composition deeds as one 
 of the examples of his " fourth head of fraud," referred to in note (n) to § 586, ante. " In 
 this," he says, "there can be no particular deceit on the debtor, who is party thereto; 
 but it tend.s to deceit of the other creditors, who relied on an equal composition ") ; Jack- 
 man V. Mitchell (1807), 13 Ves. 581 (per I/Ord Eldon, L.C, at p. 587 : " in these cases, 
 which proceed upon grounds of public policy, the relief is given on account not of the 
 individual, but of the public ") ; Re Cross, sup. ; Atkinson v. Denby (1862), 7 H. & N. 
 934, Exch. Ch. (per Cookbuen, C. J., at p. 936 : " contrary to the policy of the law "). 
 As to the inconvenience and slight ambiguity of the term "public policy," as explained 
 by Lord Haedwickb, see § 646, note (y), post. 
 
§§ 587-590 (composition arrangements). 525 
 
 is kept secret from the other creditors, it will be relieved against, on the proper 
 steps being taken by the proper parties. 
 
 589. The most common and simple type of transaction is a promise by 
 the debtor to pay the favoured creditor at some future date the difference 
 between the composition debt and the full debt, whether the deficiency be or 
 be not also secured by the debtor's bond, promissory note, or acceptance, 
 or to pay him a larger dividend than the composition deed provides for, 
 or to give him some other advantage over and above the other creditors, 
 by cash payment, or otherwise (m). 
 
 590. A second, and more subtle, form of transaction is where the debtor, 
 though not promising any extra payment to the favoured creditor from 
 his own purse, or from the estate, promises a third person to enter into 
 such an engagement, or to guarantee the discharge of the composition debt. 
 Thus, clandestine agreements of the following nature have been treated as 
 void : where the debtor, as a condition of the favoured creditor's signing the 
 certificate under the old insolvency law, induced his sister to pay a certain sum 
 in cash to the creditor, and to give him a promissory note for a further sum(»i) ; 
 where the debtor procured a third person to give the creditor security for the 
 payment of certain instalments which were not secured by the composition 
 deed, and where it was held to be no answer to say that the favoured creditor 
 was to receive no greater amount than the other creditors, his advantage 
 consisting in the fact that his debt was to be better secured than theirs (o) ; 
 where the third person was to satisfy the deficiency by deliveries of goods to 
 the favoured creditor (p), or by his acceptance (q) ; where the debtor 
 arranged with the favoured creditors (his bankers) that they should be entitled 
 to reserve their remedies against the third person who had guaranteed the 
 debtor's account with them (r) ; where an advantage, not coming from the 
 debtor's estate, was secured to the creditor (s) ; where the debtor's brother 
 gave an undertaking to make additional payments to the creditor, and it was 
 again held that the fact of the secret favom- not being at the expense of the 
 estate was quite immaterial (t) ; and where, the third person having given the 
 favoured creditor his promissory note or acceptance for an amount beyond 
 the composition instalments, the debtor afterwards guaranteed payment of 
 such negotiable instrument in consideration of the creditor's forbearance, 
 
 (m) See, for illustrations, Cockshott v. Bennett (1788), 2 Term. Rep. 763 ; Fawceft v. 
 Gye, sup. ; Jack-man v. Mitchell, sup. ; Smith v. Guff (1817), 6 M. & S. 160 ; Pendlebury y. 
 Walker (1841), 4 Y. & C. (Exch. in Eq.) 424 ; Norton v. Reilly (1843), 11 M. & W. 492 ; 
 Be Cross, slip. ; Higgins v. Pitt, sup. ; Mallalieu v. Hodgson (1851), 16 Q. B. 689 ; Ex p. 
 Oliver, re Hodgson (1851), 4 De G. & Sm. 354 ; Atkinson v. Denby, sup. ; Ex p. Phillips, re 
 Harvey (1888), 36 W. R. 567, C. A. ; Re Otway, [1895] 1 Q. B. 812, C. A. ; Re Shaw, 
 ex p. Gill (1901), 83 L. T. 754, C. A. ; Re Goldberg (1904), 21 T. L. R. 139, C. A. 
 
 (n) Smith v. Bromley (1766), 2 Dougl. (k.b.) 695 n. 
 
 (o) Leicester v. Rose (1803), 4 East. 371. 
 
 ip) Knight v. Hunt (1829), 5 Bing. 432 (per Best, C.J., at p. 434). 
 
 (g) Howdenv. Haigh (1840), 11 A. & E. 1033 (per Lord Dbnman, C.J., at p. 1038). 
 
 Ir) Davidson v. M'Gregw (1841), 8 M. & W. 755. Here, however, no relief was given, 
 because the ignorance of the other creditors was not proved : see § 601, note (g), post. 
 
 (.s) Dauglish v. Tennent (1866), L. R. 2 Q. B. 49. 
 
 (t) Ex p. Milner (1885), 15 Q. B. D. 605, C. A. {per Bkett, M.R., at pp. 613, 614). 
 
526 CH. VII, SECT. 3, SUB-S. (2). 
 
 and it was held that the third person's debt, and consequently also the debtor's 
 guarantee, was iUegal and void (m). 
 
 591 . The following case was of a somewhat special character. The debtor, 
 who, by the composition deed, had covenanted to pay the creditors eight 
 shillings in the pound, entered into a secret agreement with one of them 
 that, in consideration of the creditors guaranteeing payment of this amount 
 to all the creditors, he (the debtor) would pay to the creditor the residue 
 of his debt. It was held that this agreement was void, and, when it was 
 urged that the stipulation was for the advantage of the creditors generally, 
 it was answered that the creditors, as a body, may or may not have con- 
 sidered it in that light : but it was for them to judge, and they had not been 
 asked their opinion: it was a case, therefore, of the suppression of an 
 agreement which, as it might have deterred them from executing the com- 
 position deed, was material to be disclosed to them (v). 
 
 592. In a subsequent case, of a similarly anomalous character, the cir- 
 cumstances were these. The debtor, Lenzberg, owed various sums to one 
 Kearns, as security for which he had deposited a policy for £5000 on the 
 joint lives of himself and his wife. He had for some time previously been 
 making monthly payments of certain amounts to nominees of Kearns. These 
 payments were entirely voluntary. As a condition of executing the compo- 
 sition deed, Kearns secretly stipulated that Lenzberg should, and he did 
 in fact, continue to make these voluntary payments to Kearns's nominees. 
 On the death of Lenzberg's wife, the insurance company paid the policy 
 moneys into Court to abide the result of the conflicting claims of Lenzberg 
 and Kearns. It was held that Lenzberg was entitled to credit for the amount 
 of the allowances which, though previously voluntary, he had bound himself 
 by the clandestine bargain to pay to Kearns's nominees, on the ground that 
 the agreement was void as a fraud on the other creditors. The debtor, 
 it is true, was obtaining an advantage out of a fraud to which he was a party, 
 but this circumstance could not be allowed to interfere with the application 
 of an absolute and inflexible rule, founded on considerations of public utility(«*). 
 
 593. The secret arrangement between the debtor and the favoured creditor 
 may be relieved against, or treated as a nullity, in a variety of forms. The 
 first, and simplest, class of case is that in which the favoured creditor sues 
 the debtor to enforce the clandestine bargain, or otherwise asserts a claim 
 against the debtor thereunder, and the debtor's plea or answer of non- 
 disclosure to the other creditors is allowed to prevail {x). 
 
 (u) Geere v. Mare (1863), 2 H. & C. 339 (where the debtor assigned to the creditor a 
 policy on his life to secure a bill of exchange, covenanting to pay premiums : held that 
 the assignment was bad). 
 
 (v) Wood V. Barker (1865), L. E. 1 Eq. 139 {per Stuakt, V.-C, at p. 144: "the 
 secrecy puts them to this disadvantage, that but for the secrecy they might be willing 
 to forego the guarantee in consideration of receiving a higher rate of dividend. It is 
 plain that the concealment prevented them from exercising this option "). 
 
 (w) Be Lenzberg's Policy (1877), 7 C. D. 650 (per Hall, V.-C, at p. 654). 
 
 (x) As in Cockshott v. Bennett (1788), 2 Term. Eep. 763 ; Howden v. Haigh (1840), 11 
 A. & E. 1033 ; Be Lenzberg's Policy, sap. (where the favoured creditor and the debtor were 
 claiming adversely to one another in respect of a fund in court, under the circumstances 
 stated in § 592, sup.). 
 
§§ 590-595 (composition arrangements). 527 
 
 594. A record type of case is where the favoured creditor sues, or sets 
 up a right against, a third person who, by procurement of the debtor, has 
 entered into the impeached agreement with such creditor, and the third 
 person successfully pleads the concealment of the agreement from the other 
 creditors by the debtor, the favoured creditor, and himself (y). 
 
 595. In a third class of case, the debtor himself, if coerced, but not other- 
 wise, is granted relief against his own iniquity, on the principle that though, 
 where an action is brought under or in respect of an illegal transaction, the 
 general rule is that potior conditio est defendentis, an exception exists where 
 there is proof or presumption that the party suing was constrained by the 
 pressure of circumstances " to bow to the rod which the other party held 
 over him." Thus, on proof of the secret agreement, and of the pressure 
 and coercion, a debtor has been held entitled, in proceedings instituted by 
 him against the favoured creditor, or in a contest between himself and the 
 creditor as rival claimants to a fund, to have the agreement set aside or 
 delivered up to be cancelled, or to recover the moneys which he has paid 
 to the favoured creditor or to bond fide- holders for value of negotiable instru- 
 ments given by him pursuant to the impeached agreement, or to have such pay- 
 ments credited to him in account. In other cases the debtor has been held 
 entitled to a declaration that the favoured creditor has no claim to the extra 
 payment stipulated for, or has obtained an order that the original compo- 
 sition deed be set aside (2). 
 
 (y) As in Leicester v. Rose (1803), 4 East 371 (where the successful defendant was a 
 person whom, unknown to the other creditors, the favoured creditor and the debtor had 
 procured to give collateral security for payment of two composition instalments which 
 were unsecured by the deed of arrangement) ; Knight v. Hunt (1829), 5 Bing. 432 (secret 
 agreement to satisfy balance of favoured creditor's debt by deUveries of coal to be made 
 by the debtor's brother : per Best, C.J., at pp. 433, 434) ; Davidson v. M'Gregor (1841), 
 8 M. & W. 755 (where a bank, by its public officer, sued the defendant as guarantor of the 
 debtor's account with the bank : plea, that the debtor had executed a composition deed 
 with his creditors, of whom the bank was one, whereby the debtor was to be released on 
 payment of IQs. M. in the £, which had been done, and, there being no longer any principal 
 debt, there was no secondary Uabihty either : replication, express reservation of the bank's 
 rights against the surety : rejoinder, that this express reservation was not disclosed to the 
 other creditors, and was therefore void. It was held that the agreement would have been 
 invalid on this ground if the defendant had proved — which he did not — that the other 
 creditors were ignorant of it : see note {q) to § 601, post) ; Clay v. Ray (1864), 17 C. B. 
 (N.s.) 188 (where a guarantee given by the debtor's son was held void) ; Mayhew v. Boyes 
 (1910), 103 L. T. 1, 0. A. (where the defendant was sued by the favoured creditor on a 
 promissory note which he had joined with the debtor in making, and succeeded on proof 
 of a secret bargain between him, the debtor, and the favoured creditor, whereby he had 
 promised at some future date to discharge the whole of the debtor's liability to the 
 favoured creditor with interest). 
 
 (z) Thus, at the debtor's suit, the bond given in pursuance of the secret agreement was 
 ordered to be delivered up to be cancelled in Fawcett v. Oae (1796), 3 Anstr. 910 ; Jaclcman 
 V. Mitchell (1807), 13 Ves. 581 (per Lord Eldok, L.C, at pp. 585-587). The debtor success- 
 fully sued for the return of sums paid to the favoured creditor under the clandestine agree- 
 ment, as money had and received, in Atkinson v. Denby (1862), 7 H. & N. 934, Exch. Ch. 
 (per Cur., at p. 936), and for the recoupment of moneys which he had been compelled to 
 pay to a holder in due course of a negotiable instrument given by him to the favoured 
 creditor pursuant to the impeached arrangement, in Smith v. Cuff (1817), 6 M. & S. 160 
 {per Lord Ellbnboeottgh, C.J., at p. 165, pointing out that the agreement had been 
 obtained from the debtor " extorsively and by oppression," and that " when one holds 
 the rod, and the other bows to it," the oppressed party, in this sense and to this extent, 
 is not in pari delicto with the other), and in Horton v. Beilly (1843), 11 M. & W. 492 (per 
 
528 CH. VII, SECT. 3, SUB-S. (2). 
 
 596. A fourth species of case is where, on the same principle, similar 
 relief is granted to a third person who, at the favoured creditor's and the 
 debtor's instance, ' has contracted to confer an advantage on such creditor, 
 without the knowledge of the other creditors. Such relief may be given in 
 the form of an order for repayment of moneys paid under the agreement (a), 
 or, if the transaction consisted in the third person guaranteeing a com- 
 position instalment, an order discharging him from his suretyship (h). 
 
 597. The next class of case in which the validity of a secret bargain with 
 a particular creditor may be successfully impeached is where the favoured 
 creditor institutes, or threatens to institute, bankruptcy proceedings against 
 the debtor, founded on the non-payment of the composition debt, and 
 such creditor is held disentitled to a receiving order on proof, either of a 
 clandestine agreement made by him with the debtor for a special advantage 
 over the other creditors, or of an attempt by him to extort such an advantage, 
 whether the attempt succeeded or not, as a condition of forbearance from 
 the threatened proceedings, or of withdrawing or suspending proceedings 
 already instituted. Such last mentioned conduct constitutes, if concealed 
 from the other creditors, a sufficient cause, within s. 7 (3) of the Bankruptcy 
 Act, 1883 (now s. 5 (3) of the Bankruptcy Act, 1914), for refusing to make a 
 receiving order (c). Further, it has been held that the favoured creditor in 
 such a case deprives himself of the right to relief of any kind, and, in the 
 attempt to overreach the other creditors, overreaches only himself : for, on 
 
 Lord AsraGER, C.B., at p. 493, and Pabke, B., at pp.-493, 494). The deoiaion in Wilson v. 
 Bay (1839), 10 A. cfc E. 82, which is apparently in diiect conflict with each of the two caaea 
 last cited, cannot be accepted as law, unless it is possible to distinguish it, which Lord 
 Abingeb, C.B., at p. 493 of Horton v. ReiUy, sup., and the Court of Exchequer, but not the 
 Exchequer Chamber, in Atkinson v. Deriby, sup., attempted to do, on the ground that 
 there the pressure was over when the debtor executed the agreement. In Wood v. Barker 
 (1865), L. R. 1 Eq. 139, the debtor sought, and obtained, relief in the form of an order for 
 an account, and a declaration that, on the taking of the account, the favoured creditor 
 was not to be allowed more than the percentage payable to each of the creditors under the 
 composition deed {per STtJABT, V.-C, at pp. 144, 145). In Ee Lenzburg's Policy (1877), 
 7 0. D. 650, for an abstract of which see § 592, ante, the debtor established his claim to be 
 credited in account with sums paid to the favoured creditor's nominees under the secret 
 arrangement. 
 
 (a) Smith v. Bromley (1760), 2 Dougl. (k.b.) 695 n. {per Lord Mansjibld, C.J.). 
 
 (5) Pendlebury v. Walker (1841), 4 Y. & C. (Exoh. in Eq.) 424 {per Aldebson, B., at 
 p. 441). In this case a bank, one of the creditors of the insolvent, agreed with him and the 
 other creditors that, upon obtaining guarantees from one person for £5000, and from 
 twenty others for £1000 each, they would provide a sum sufficient to pay 10s. in the £ 
 to the creditors, and, after such payment, to enable the debtor to carry on business. The 
 plaintiff was one of the £1000 guarantors, and he filed a bill on the equity side of the Court 
 of Exchequer alleging a secret agreement between the bank and the debtor for the payment 
 by the debtor to the bank of the remaining moiety of his indebtedness to them, and claiming 
 that the composition deed was thereby rendered no longer binding on any of the creditors, 
 and that he, therefore, as a guarantor of a supposed indebtedness which no longer existed 
 in law, was discharged from the obligations of his suretyship. It was held that these 
 allegations disclosed a good cause of action, and a demurrer to the bill was overruled. 
 
 (c) Exp. Phillips, Be Harvey (1888), 36 W. R. 567, C. A. ; Be Otway, [1895] 1 Q. B. 
 812, C. A. {per Lord Eshee, M.R., at pp. 813, 814 : this was a case of an attempted 
 exaction by the creditor of an additional payment, as a condition of the creditor's consent 
 to an adjom-nment of the hearing of a petition for a receiving order. The attempt failed, 
 but the Court held that this made no difference) ; Be Shaw, Ex p. Oill (1901), 83 L. T. 754, 
 C. A. ; Be Goldberg (1904), 21 T. L. E. 139, C. A. 
 
§§ 596-600 (composition arraitgements). 529 
 
 the one hand, he cannot enforce the secret agreement : nor, on the other 
 hand, can he proceed in bankruptcy on the original debt, because the release 
 contained in the composition deed stands in his way, which release, though 
 expressed to become void on non-payment of the composition debt, is in law 
 absolute, since the condition of avoidance is illegal and void (d). 
 
 598. Another variety of case presents itself where the debtor sues one 
 of the creditors on a covenant for indemnity in the composition deed against 
 claims in respect of liabilities from which he is thereby released, and the 
 creditor repels such claim on proof of an agreement between himself and the 
 debtor, undisclosed to the other creditors, whereby special terms were 
 stipulated for in the creditor's favour (e). 
 
 599. The cases in which an unfavoured creditor invokes the assistance 
 of the Court constitute another distinct and separate class. It has been held 
 that any such unfavoured creditor, on discovering that a secret agreement 
 was entered into between the debtor and a favoured creditor, has the right 
 to insist that the composition arrangement is void, and should be judicially 
 ignored, leaving him free to claim the full original debt by action (/), or to 
 make it the subject of bankruptcy proceedings (g). 
 
 600. The following is an anomalous and unique case. A creditor sued 
 the debtor for the price of goods sold and for moneys paid. The debtor 
 pleaded his release by a composition deed to which the plaintiff was a party. 
 In his rephcation to this plea the plaintiff, with comical impudence, set up 
 
 (d) Re Cross (1848), 4 De G. & Sm. 364 (at p. 365) ; MaUalim v. Hodgson (1851), 
 16 Q. B. 689 {per Eble, J., at p. 711) ; Ex p. Phillips, Be Harvey (1888), 36 W. R. 567, 
 C. A. ; Maykew v. Boyes (1910), 103 L. T. 1, C. A. {per Cozens-Hardy, M.R., at p. 3). 
 
 (e) Higgins v. Pitt (1849), 4 Exoh. 312 {per Pakkb, B., at pp. 324, 325). Here the 
 debtor had executed a composition deed whereby he covenanted to give the creditors 
 bills (to the extent of 5s. in the £) in substitution for existing bills, and, in consideration 
 thereof, each of the creditors covenanted to indemnify him against aU claims in respect of 
 any existing bills which he might have negotiated to holders in due course. The debtor, 
 having been compelled to pay to one of such holders the full amount of an old bill indorsed 
 to him by a creditor, sued the creditor on the above covenant to indemnify. The creditor 
 pleaded his own and the debtor's fraud on the other creditors in virtue of a clandestine 
 agreement between him and the debtor whereby he (the creditor) was to be paid 5s. in 
 the £ in cash beyond the amount of the composition bill, and, in respect of certain goods 
 sold, was to be paid in full. The plea was held good on demurrer. It wiU be observed that 
 the decision in this case proceeded upon the ground that the debtor was not, as he was in 
 the cases cited in note {z) to § 595, ante, proved to have been under pressure : if it had been 
 so proved, he might, as in those cases, have been held entitled to relief. It is on this 
 distinguishing feature that Wilson v. Bay (1839), 10 A. & E. 82, may be supported. 
 
 (/) Dauglish v. Tennent (1866), L. R. 2 Q. B. 49 {per Cockbttrn, C.J., at p. 54). Here 
 the unfavoured creditor sued the debtor on the original debt, to which the defendant 
 set up release by the composition agreement, whereupon the plaintiff pleaded a replica- 
 tion setting up a secret agreement between the defendant and certain creditors, other than 
 himself, by which such creditors became entitled to special advantages, though not at the 
 expense of the estate. On demurrer, the replication was held good. 
 
 (sr) Exp. Milner (1885), 15 Q. B. D. 605, C. A. {per Bbbtt, M.R., at pp. 612-614, 
 Bagoaulay, L.J., at p. 615, and Bowbn, L.J., at p. 616). In this case the unfavoured 
 creditor, on discovery of the secret bargain with the favoured creditor, issued a 
 bankruptcy notice against the debtor in respect of a judgment for the full amount of the 
 original debt, ignoring, and insisting that the Court should ignore, the composition deed 
 as altogether a nullity, by reason of the non-disclosure to the creditors other than the 
 favoured creditor. The debtor moved to set aside the notice. The Registrar refused 
 to do so, and the C. A. held that this refusal was correct. 
 
 B.N.D. 2 M 
 
530 CH. VII, SECT. 3, SUB-S. (2). 
 
 that, when giving him a secret advantage over other creditors, the defendant 
 fraudulently misrepresented to him that he was not conferring similar favours 
 on any other creditor, whereas in fact he had entered into such agreement 
 with another creditor. In other words, whilst avowing, and indeed pro- 
 claiming, his own complicity in a fraud on the other creditors, he complained 
 of other similar frauds, not because they were frauds, but because he derived 
 no benefit from them. The replication was held bad (h). 
 
 601. The burden of allegation and proof on the party seeking relief is, 
 mutatis mutandia, precisely the same as that which, in an ordinary case, 
 rests on the party who complains of the non-disclosure of a material fact 
 by the other party to a negotiation for a compromise or other contract 
 uberrimcB fidei. That is to say, the party impeaching the alleged secret 
 bargain with the favoured creditor must allege and prove each of the following 
 matters : first, the existence of a relation between the parties giving rise 
 to the duty of disclosure to the creditors of any material agreement of the 
 nature in question (?'), — which duty, it must be remembered, is to divulge 
 to all the creditors, and continues until the last of them has executed the 
 composition deed (j), — and the fact that the particular agreement impeached 
 was the subject of such duty (k) by reason of its materiality, which means 
 no more than that its disclosure might have influenced the general body 
 of creditors, or some of them, to decline to accede to the proposed composition 
 arrangement (T) ; secondly, the execution in fact of the alleged secret agree- 
 ment (w) ; thirdly, its non-disclosure to all the creditors (n) ; fourthly, that 
 the persons concerned had knowledge of it (o), which fact is of course estab- 
 lished by mere proof of the making of the agreement between those persons ; 
 
 (h) Mallalim v. Hodgson (1851), 16 Q. B. 689 (per Eble, J., at pp. 712, 713, and 
 CoLEBiDGB, J., at pp. 714-716). It is somewhat surprising to find that Wightman, J. 
 (whose decision was reversed by the Court of Q. B.), had at the trial directed a verdict for 
 the plaintiff, and still more astonishing to find that as a member of the Court, after full 
 argument, he adhered to his view at nisi prius, and dissented from the rest of the Court. 
 
 (i) See Ch. Ill, Sect. 3, Sub-s. (1), ante. 
 
 (j) Ex ■p. Milner (1885), 15 Q. B. D. 605, C. A. (where it was held that the duty of 
 disclosure, being a duty to all the creditors, continues until aU of them have executed the 
 composition deed, and it is therefore immaterial that the secret bargain is made after the 
 unfavoured creditor complaining of the non- disclosure has executed the composition deed, 
 if it is still unexecuted by some of the creditors {per Bbbtt, M.R., at p. 613). 
 
 (k) Exp. BurrellyBe Robinson (1875), 1 C. T>. 537, C. A., is a good illustration of the 
 sort of fact which a debtor is under no duty to disclose to the creditors. 
 
 (Q As to the meaning of " materiaUty " in general, see Ch. II, Sect. 2, ante. For 
 illustrations of the application of the principles there enunciated to cases of the character 
 now under discussion, see Knight v. Hunt (1829), 5 Bing. 432 {per Best, C. J., at pp. 433, 
 434, explaining that it is sufficient to estabhsh that the other creditors might have been 
 influenced by the disclosure of the suppressed agreement, in determining whether or not 
 to accede to the composition deed) ; Wood v. Barker (1865), L. R. 1 Eq. 139 {per Sttjabt, 
 V.-C, at p. 144, — ^the passage is cited in note (v) to § 591, ante) ; Dauglish v. Tennent (1866), 
 L. R. 2 Q. B. 49 {per CocKBTJuif, C.J., who, at p. 54, points out that the disclosure of 
 the secret stipulation might have resulted in the deed of arrangement not going through ; 
 for any particular creditor may distrust his own judgment, and may be induced to accede 
 to the arrangement by his belief that the entire body of creditors, persuaded thereto by 
 fair means and not bribed, have considered it to their advantage to concur). 
 
 (m) See Ch. Ill, Sect. 3, Sub-s. (2), ante. 
 
 (») See Ch. Ill, Sect. 3, Sub-s. (3), ante. Generally, as to what constitutes " dis- 
 closure," see Ch. II, Sect. 1, ante. 
 
 (o) See Ch. Ill, Sect. 3, Sub-s. (4), ante. 
 
§§ 600-602 (composition arrangements). 531 
 
 and, lastly, that the persons to whom the duty was owed were ignorant Irom 
 any other source of the undisclosed agreement (p), such persons being the 
 entire body of creditors (q). 
 
 602. The affirmative defences of waiver, and affirmation, available 
 to a party charged in an ordinary case of compromise (r), are equally avail- 
 able to a party against whom relief is sought in respect of a clandestine 
 bargain with a paiticular creditor : but, inasmuch as the duty is to disclose 
 to the general body of creditors, neither of these pleas can be established 
 except on proof that all the creditors waived their right to disclosure, or 
 acquiesced in the non-disclosure («). 
 
 (p) See Ch. Ill, Sect. 3, Sub-s. (5), ante. Generally, as to the constitutive elements of 
 " knowledge," actual and constructive, see Ch. II, Sect. 3, ante. 
 
 (q) See Davidson v. M'Gregor (1841), 8 M. & W. 755, the facts of which are abstracted 
 in note («/) to § 594, ante {per Cur., at p. 768 : "it does not appear on the pleadings, nor was 
 it proved at the trial, that this reservation of the plaintiff's rights against the defendant 
 was not known to the other creditors. . . . Inasmuch as the defendant is seeking to 
 establish that this agreement, which he in fact entered into, was invalid in law, we think 
 that the fact ought to have been proved by him. In the absence of this proof, we see 
 nothing to show that the agreement was not binding on him "). 
 
 (r) Ch. UI, Sect. 4, Sub-ss. (1) and (2), ante. 
 
 (s) Oeere v. Mare (1863), 2 H. & C. 339 (where it was argued for the plaintiff that " here 
 the defendant chose to waive the illegality by not availing himself of it in the action on the 
 note " : on which Eblb, C. J., at p. 192, observed that " the fraud is upon the general body 
 of creditors, and there is no sign of Waiver by them "). Cp. the case of Whichcote v. 
 Laiorence (1798), 3 Ves. 739, cited in note (») to § 393, ante, as to the burden being on a 
 trustee for the sale of a debtor's property for the creditors to establish, if he sets up 
 acquiescence, that the entire body of creditors acquiesced, — an almost impossible onus 
 to sustain where the creditors are, as they were in that case, very numerous. 
 
532 CH. VIII, SECT. 1. 
 
 CHAPTER VIII. 
 
 JURISDICTION AND PROCEDURE. 
 
 603. To complete this commentary, it remains to examine the question 
 of the jurisdiction of Courts in cases of non-disclosure, and to consider certain 
 rules of pleading, practice, or procedure which are special to such cases, 
 or which, though general, have a special character or importance in their 
 application to the topic of non-disclosure. 
 
 Sect. 1. Jurisdiction. 
 
 604. Where the right to relief in respect of non-disclosure is asserted by way 
 of affirmative defence (i), no question as to the jurisdiction of the Court 
 to entertain the plea arises : for, in such cases, the party complaining has 
 not chosen the forum, but is cited to appear in it, nolens volens, and, as a 
 general rule, if the jurisdiction is challenged at all, it must be the jurisdiction 
 to entertain the action, not the defence, any Com't which is competent and 
 bound to try the one being, generally speaking, competent and bound to try the 
 other. It is only necessary therefore to consider the cases in which the party 
 complaining is the actor in the proceedings, whether those proceedings be 
 instituted for the purpose of obtaining rescission, and consequential or analogous 
 remedies!, or for pecuniary relief in the form of an action for money had and 
 received, or otherwise (u). For any of these purposes, the Courts having 
 jurisdiction are the Chancery Division (r), and (subject, where rescission 
 is claimed, to transfer in a proper case) the King's Bench Division (w), of 
 
 (t) As it frequently is : see Ch. Ill, Sect. 5, Sub-s. (2), Ch. IV, Sect. 5, and Ch. V, 
 Sect. 5, Sub-s. (2), ante. 
 
 («) See Sect. 5 of Chapters III, IV, and V, ante, respectively. As to the action for 
 money had and received against the bribed agent, and for damages against a party who 
 has corrupted such agent, see Ch. IV, Sect. 5, Sub-s. (2), ante. 
 
 (v) By s. 34 of the Judicature Act, 1873 (36 & 37 Vict. c. 66), " the setting aside, or 
 cancellation of deeds or other instruments " is assigned to the Chancery Division. This 
 provision, however, is materially quahfied by s. 24, sub-ss. (1), (2), (3), (4), and (7), of the 
 same statute, which empowers and requires any Division of the High Court to give effect, 
 not merely to any equitable claim so far as it is pleaded or operates as a defence, — see 
 Mostyn (Lord) v. West Mostyn Coke dh Iron Go. (1876), 1 C. P. D. 145 {per Brett, J., at 
 p. 150, Archibald, J., at pp. 153, 154, and Lindley, J., at p. 154), — but also to any 
 equitable claim to relief set up by a plaintiff,' "against any deed, instrument, or contract; 
 or against any right, title, or claim whatsoever asserted by any defendant." 
 
 {w) It results from the combined effect of the two sections cited in the last note that 
 actions for rescission may be instituted, and, if no application is made by the defendant to 
 transfer to the Chancery Division, may be maintained, in the King's Bench Division. 
 Such actions have been quite commonly brought in the latter Division, without objection, 
 since 1873: see, for instance, Eivaz v. Oerussi (1880), 6 Q. B. D. 622; Mitchell v. 
 Homfray (1881), 8 Q. B. D. 587, C. A. ; Plowright v. Lambert (1885), 52 L. T. 646; 
 
§§ 603-605 (JUMSBICTION). 533 
 
 the High Court of Justice ; the two Chancery Courts of the Counties Palatine 
 of Lancaster, and of Durham, respectively (x) ; and (subject, in each case, 
 to the local and pecuniary limits of the jurisdiction) the Mayor's Court {y), 
 any County Court (2), and any borough or local court of civil jurisdiction 
 havmg authority (by statute, charter, or custom) to entertain proceedings 
 mstituted for the objects mentioned (a). Where, on the liquidation of a 
 company, which automatically stays all actions, leave is obtained to prosecute 
 an action in the K. B. D., and for a trial by jury, there is nevertheless 
 jurisdiction to transfer the action to the Winding-up" Court, notwithstanding 
 that fraud is charged, if the parties charged do not object {aa). 
 
 605. For the purpose of the various statutory proceedings by which, 
 or m the course of which, questions of non-disclosure may be raised and 
 determined, the Courts having jurisdiction are those (if any) specified in 
 the respective enactments. Thus, misfeasance proceedings are, in England, 
 subject to the jurisdiction of such judge or judges of the Chancery Division 
 as the Lord Chancellor may assign to deal with the winding up of com- 
 panies, or the judge who for the time being exercises the bankruptcy 
 jurisdiction of the High Court, or, where the company is within the dis- 
 trict of either of the two above-mentioned Palatine Courts, or of certain 
 County Courts having bankruptcy jurisdiction, or is within the stannaries, 
 to the jurisdiction of such Courts respectively (within certain pecuniary 
 limits) ; in Ireland, to the jurisdiction of the Irish High Court of Justice 
 (though, in a proper case, they may be transferred to the Court of Bank- 
 ruptcy having jurisdiction in the place where the registered office of the 
 company is situate) ; and, in Scotland, to the jurisdiction of the Court of 
 Session, though that Court, in its discretion, may remit the winding up proceed- 
 ings, in the case of any particular company, to one of the permanent Lords 
 Ordinary (6). Applications under the Vendor and Purchaser Act, 1874, are 
 
 Liles Y. Terry, [1895] 2 Q. B. 679, C. A. ; and the misrepresentation case of Moore v. 
 Explosives Go. (1887), 56 L. J. (q.b.) 235, C. A. When an appUcation is made to transfer, 
 the Court has a discretion to make the order, or to retain the action, as in all the 
 circumstances may be deemed just and convenient ; see s. 11 of the Judicature Act, 1875 
 (38 & 39 Vict., c. 77), and Lord Halsbury's Laws of England, title " Couits," vol. ix, 
 pp. 60, 61. An order may be made in a proper case for the transfer of an action for 
 rescission from the C. D. to the K. B. D., as in Forrester v. Jones, [1899] W. N. 78. 
 (x) See Lord Halsbury's Laws of England, title " Coiirts," vol. is, pp. 120-127. 
 iy) Ibid., title " Mayor's Court," vol. xx, p. 286. 
 
 (z) Ibid., title " County Courts," vol. viu, p. 444. Re Pepperell (1879), 27 W. R. 410, 
 is an instance of an action to set aside a sale, on the ground of abuse of a fiduciary relation, 
 which was commenced in the County Court, but removed to the Chancery Division on its 
 appearing to be outside the pecuniary limit of the equitable jurisdiction. 
 
 (a) See Lord Halsbury's Laws of England, title " Courts," vol. ix, pp. 129-213. 
 As to when the judge appointed to exercise bankruptcy jurisdiction, or one of the judges 
 appointed to deal with the winding up of companies, is empowered, or required, to enter- 
 tain claims made by or against insolvent persons or companies in respect of non-disclosure, 
 see § 388, ante ; note (I) to § 401, ante ; and § 616, post. 
 
 (aa) Re Pacaya Rubber & Frodwee Go., [1913] 1 Ch. 218, C. A. 
 
 (5) See ss. 132, 133 (as to England), 134 (as to beland), 135, 136 (as to Scotland), of 
 the Companies (ConsoHdation) Act, 1908 (8 Edw. 7, c. 69). The Court of the Vice- Warden 
 of the Stannaries was abolished by the Stannaries Court (AboHtion) Act, 1896 (59 & 60 
 Vict., c. 45), and by order made thereunder the jurisdiction was transferred to the Cornwall 
 County Courts, and is now vested in the Courts having bankruptcy j urisdiction in Cornwall : 
 
534 CH. VIII, SECTS. 1, 2, SUB-S. (1). 
 
 (as has been already stated) within the exclusive jurisdiction of the Chancery 
 Division (c). Questions of non-disclosure arising in a certain class of life 
 insurance case may, as has also been indicated, be dealt with by a court 
 of summary jurisdiction, pursuant to statutory authority {d). The Com- 
 panies (Consolidation) Act, 1908 (e), and the Money-lenders Act, 1900 (/),the 
 former of which expressly relates, and the latter' may be applied, to cases of 
 statutory and common law non-disclosure respectively, are statutes which do 
 not limit the jurisdiction to any particular court ; the consequence being 
 that any of the courts above mentioned as having jurisdiction in relation 
 to non-statutory breaches of the duty of disclosure has the like jurisdiction, 
 and within the same limits, in respect of the non-disclosure to which those Acts 
 relate, or are applicable. Questions as to the Courts having jurisdiction 
 to deal with cases of concealment from judicial tribunals, the State, or 
 private third persons, have been incidentally touched upon in the course of 
 the general discussion of these topics (g). 
 
 Sect. 2. Procedure. 
 
 606. Under the head of procedure, it may be convenient to notice 
 such rules of pleading, discovery, and practice as are either peculiar to, or 
 have a special interest and importance in connection with, cases of non- 
 disclosure ; then, to deal separately, and in some detail, with the entire 
 subject of the statutory procedure (in the widest sense of the word) relating 
 to misfeasance (having regard to the large proportion of the authorities illus- 
 trating the duty of disclosure incidental to relations of confidence which 
 consists of misfeasance cases) ; and, lastly, to examine the principles on 
 which judicial discretion in the matter of costs has been exercised. 
 
 Subs. (1). Certain Rules of Pleading and Discovery in Proceedings 
 for Non-Disclosure. 
 
 607. Every fact, the burden of establishing which is upon the party com- 
 plaining of non-disclosure (h), must in the first instance be distinctly alleged 
 
 see s. 280 of the Act of 1908, as to the winding up part of the jurisdiction, which, as was 
 decided in Dunbar v. Harvey, [1913] 2 Ch. 530, C. A. is exclusive, and not concurrent with 
 that of the High Court. See also Be Sodium Ore Mines, Ltd. (1913), 30 T. L. R. 66, C. A. 
 As to the procedure in misfeasance, see § 616, post. 
 
 (c) See § 251, ante. 
 
 (d) 37 & 38 Vict., c. 78. See the statute and cases referred to in § 241, and note (A) 
 thereto, ante. 
 
 (e) 8 Edw. 7, c. 69. See Ch. VI, Sect. 7, ante. 
 
 (/) 63 & 64 Vict. 0. 51. By s. 1, (1), (2), " any coiirt " may give the statutory reUef 
 both to a borrower who is defending himseU, and to one who is taking active proceedings 
 against, the moneylender : whilst, by s. 1 (3), courts of bankruptcy are empowered to 
 apply the remedial provisions of the Act to claims and proceedings in bankruptcy. The 
 question of " unconscionableness " appears to be one of law for such " court," and not 
 one of fact : Abrahams v. Dimmoch, [1914] 2 K. B. 372, affd., [1914] W. N. 449, C. A. 
 
 (g) See, as to the Courts having jurisdiction to set aside or otherwise deal with judg- 
 ments, Ch. VII, Sect. 1, and particularly § 577, ante : as to setting aside, or treating as 
 void, Crown grants or charters, see Ch. VII, Sect. 2, ante : as the jurisdiction of bank- 
 ruptcy courts in reference to undisclosed agreements made with a favoured creditor by an 
 insolvent compounding with his creditors, see § 597, ante. 
 
 (h) See Sect. 3 of Chapters III, IV, and V, respectively.. 
 
§§ 605-607 (procedure). 535 
 
 in that party's statement of claim (i), or defence (j), as the case may be. This 
 means that the particular "suspected" relation (^), or the particular 
 CHcumstances and conditions " (l), relied upon as giving rise to the duty 
 of disclosure or other fiduciary duty must be stated, as well as the facts 
 showmg the alleged non-observance of such duty. In a case where the 
 cause of action, or ground of defence, is " undue influence," it is not essential 
 to make use of the actual expression (m), provided that matters of fact are 
 pleaded sufficient to raise the legal presumption of the existence and undue 
 exertion of such influence (n). But these matters of fact, whether in a 
 pleadmg, or in an affidavit, must be averred with precision and particularity, 
 and nothing must be left to conjecture (o). The kind and degree of particu- 
 larity required varies according to the nature and circumstances of the 
 individual case (p). And it must be remembered that, though in proceedings 
 based on the violation of a duty other than fiduciary the party alleging such 
 violation must give all necessary particulars without first receiving any 
 assistance by means of discovery from the other side {q), this is not so where 
 
 (i) See O. 19, r. 6, of the R. S. C, where not only " fraud," but " undue influence," 
 IS expressly mentioned. As regards "fraud," see Myddleton v. Lord Kenyan (1794), 
 2 Ves. 391 {per Lord Eldon, L.C, at p. 412), and Davy v. Garrett (1878), 7 C. D. 473, C. A. 
 (the passage cited in note (m), inf.). 
 
 (j) R. S. C, O. 19, r. 15. Wallingford v. Mutual Society, inf., was a case of fraud as a 
 defence : see note (o), inf. 
 
 (k) See Ch. V, Sect. 2, Sub-ss. (1), (2), (3), (4), ante. 
 (I) Ibid., Sub-ss. (5), (6), ante. 
 
 {m) See, as to the analogous case of fraud, Davy v. Garrett, sup., per Thbsiqeb, L.J., 
 at p. 489 : " there is another stiU stronger objection to the statement of claim. The 
 plaintiffs say that fraud is intended to be alleged, yet it contains no charge of fraud. . . . 
 It may not be necessary in all cases to use the word ' fraud ' — ^indeed, in one of the most 
 ordinary cases, it is not necessary " . . . &c. . . but " the plaintiff is bound to show 
 distinctly " — i.e. by pleading facts amounting in law to fraud — " that he means to allege 
 fraud." 
 
 (n) As to the presumptions made in favour of the servient party from a proved relation 
 of influence, see § 405, and the cases cited in note (a), thereto, ante. That a party need 
 not aver anything which the law presumes in his favour, is expressly provided by 0. 19, 
 r. 25. 
 
 (o) The observance of this rule has been always strictly insisted upon in cases of fraud : 
 Redgrave v. Hurd (1881), 20 C. D. 1 (per Jbssbl, M.R„ at p. 12) ; Lawrance v. Lord Norreys 
 (1890), 15 App. Gas. 210, H. L. (per Lord Hebschell, at p. 219, and Lord Watson, at 
 pp. 221, 222) ; Bentley v. Black (1893), 9 T. L. R. 580, C. A. ; Birch v. Birch, [1902] P. 130, 
 C. A. {per Cozens-Haedy, L.J., at p. 138). The rule equally appUes to an affidavit : see 
 Wallingford v. Mutual Society (1880), 5 App. Gas. 685, H. L. (per Lord Selborne, L.G., 
 at p. 697, with reference to an affidavit of a defendant in proeeedings under 0. XIV., 
 setting up fraud as a ground for leave to defend : " with regard to fraud, if there be any 
 principle which is perfectly well settled, it is that general allegations, however strong may 
 be the words in which they are stated, are insufficient even to amount to an averment of 
 fraud of which any court ought to take notice "). 
 
 {p) " The amount and kind of explanatory statement required in order to impart 
 relevancy to such charges will necessarily vary according to circumstances " : per Lord 
 Watson, at p. 222 of Lawrance v. Lord Norreys, sup. Similarly, where actual damage 
 is a necessary element in the cause of action, " as much certainty and particularity must 
 be insisted on as is reasonable, having regard to the circumstances, and to the nature of 
 the acts themselves by which the damage is done : " per Bowen, L.J., at p. 532 of Eatcliffe 
 V. Evans, [1892] 2 Q. B. 524, C. A. 
 
 (q) For, where misrepresentation is alleged, it is obvious that the party who sets it 
 up is in a position to give full particulars without discovery, or, if he is not, he should not 
 have brought his action, or raised his affirmative plea. On precisely the same principle, 
 
536 
 
 CH. VIII, SECT. 2, SUB-S. (1). 
 
 the duty alleged to have been broken is one of good faith. In all such cases, 
 as will be seen hereafter, the party complaining has an absolute right to 
 discovery, if he insists upon it, before delivering hie particulars (r). 
 
 608. It is not ordinarily permissible to raise at the trial a case of non- 
 disclosure which has not appeared in any pleading of the party seeking relief, 
 and which is a new case, not merely in point of form and expression, but in 
 substance (s). Where, however, on the cross-examination of a party at the 
 trial, admissions are made by him which show that such a case might have 
 been made by the other party in the first instance, if he had been then aware 
 of the facts which he has succeeded in eliciting on such examination, leave 
 will be given to amend, and judgment may be given for the latter party 
 on such amended case, or, subject to penalization in the matter of costs, 
 even where no such amendment has been made or asked for (t). In that 
 event, if the former party is taken by surprise, but not otherwise, it is 
 proper to ofier him a reasonable adjournment (m). 
 
 609. Where non-disclosure is set up as a defence to an action to enforce 
 a contract, it is incumbent on the defendant to allege in his pleading that, 
 from the time when he discovered the existence or occurrence of the undis- 
 closed fact, he never recognized any liability, or asserted any right, or derived 
 any benefit, under the contract impeached, but did what in him lay to dis- 
 affirm it {v). 
 
 610. In all cases of non-disclosure, the party complaining is entitled to 
 have an affidavit from the party charged containing such discovery of facts 
 and documents as will enable him to deliver, if otherwise unable to do so, 
 
 the defamer who pleads justification to an action of defamation is not entitled to discovery 
 to enable him to give particulars of his plea : Ziereriberg v. Labouchere, [1893] 2 Q. B. 183, 
 C. A. 
 
 (r) See § 610, post, as to non-disclosure cases, generally ; and § 611, post, as to marine 
 insurance cases in particular. At p. 187 of Ziereriberg v. Labouchere,, sup., Kay, L.J., is 
 careful to distinguish non-disclosure cases, in this respect, from the class of case there under 
 consideration. 
 
 (s) Nicol V. Vaughan (1833), 1 CI. & Pin. 495 (where, after two trials and two appeals 
 to the House of Lords, it was sought, on a third hearing, to raise an entirely new case for 
 impeaching the bond there in question, viz. that it was in the nature of an undisclosed 
 gift by principal to agent, in breach of the latter's fiduciary duty. On a third appeal to 
 the House of Lords, it was held that this could not be done : per Lord Bbotjoham, L.C, 
 at pp. 520-525). Cp. Laiorance v. Lord Norreys (1890), 15 App. Cas. 210, H. L., at p. 213, 
 where it appears that the plaintiff had been, in the Q. B. D., refused leave to amend by 
 setting up concealed fraud, or an expanded statement thereof. In Omnium Electric 
 Palaces, Ltd. v. Baines, [1914] 1 Ch. 332, C. A., Sakgant, J., at the trial, whilst allowing a 
 very Umited amendment, refused to permit the plaintiffs to transform their whole case by 
 adding a new claim for account on the theory of secret profits ; which (as he said, at p. 544), 
 if raised at the proper time, would have altered the entire course of the defendant's inter- 
 locutory proceedings and evidence. 
 
 (i) Shipway v. Broadwood, [1899] 1 Q. B. 369, C. A. (a case of fraud). 
 
 (u) Biding v. Hawkins (1889), 14 P. D. 56, where, in a probate action, it appeared from 
 admissions made by the defendant in cross-examination at the trial that the plaintiff 
 might have had a possible case of fraud, which he had not pleaded, and Btttt, J., thereupon 
 gave the latter leave to amend by adding an allegation, with particulars, that the execution 
 of the wiU had been obtained by fraud, at the same time offering the defendant a post- 
 ponement of the trial to enable him to meet the new charges. This course (though a new 
 trial was ordered on other grounds) met with the approval, on appeal, of Sir James Hannen, 
 P., and A. L. Smith, J. -. see the observations of the latter at p. 59. 
 
 («) See § 246, and the oases cited in note (h) thereto, ante. 
 
§§ 607-611 (procedube). 537 
 
 proper particulars of his claim, or (as the case may be) of his defence (?«). 
 In ordinary cases, the party alleging a breach of contract or tort would 
 not be so entitled : but, where the wrong complained of is the withholding 
 of information which, by reason of the relation between the parties, ought 
 m good faith to have been divulged, the same considerations which give 
 rise to the initial obligation of disclosure justify the imposition of a like 
 duty of discovery at the earliest stage in the litigation. 
 
 611. In actions of marine insurance, a fuller measure of discovery is 
 exacted from the assured even than that which is required in other proceedings 
 for non-disclosure. " In cases of this nature, the underwriters are entitled 
 not only to discovery of all the circumstances attending the original contract, 
 but to the whole history of the adventure and loss," and " nothing " could be 
 " more dangerous than to limit the rights of the underwriters to discovery "(x). 
 The order is made without any affidavit on the part of the applicant ; 
 and it provides for a stay of the action until the assured, and all persons 
 interested, do produce all the ship's papers and documents, such production 
 being (in the case of the assured) verified and vouched on oath (//). This 
 rule, as a rule special to marine insurance business, was adopted by the Courts 
 at an early stage in the history of our commercial law, and (as has been held, 
 in spite of vigorous contentions to the contrary) was neither impliedly 
 abolished, nor affected in any way, by the Judicature Acts, and remains part 
 of the established practice (s). It has further been distinctly laid down 
 that, if any question arises as to the sufficiency of the affidavit of discovery, 
 the assured must satisfy the Court that he has taken all possible steps, not 
 only to produce the documents from his own or his agent's custody, but to 
 procure their production by other interested parties over whom he has no 
 absolute legal control, and he must further give all possible information as to the 
 
 (w) Whyte V. Ahrens (1884), 26 C. D. 717, C. A. ; Leitch v. Abbott (1886), 31 C. D. 374, 
 C. A. ; Sachs v. Spidman (1887), 37 C. D. 295 ; Edelston v. Russell (1888), 57 L. T. 927. 
 
 (x) Per Lord Abingeb, C.B., at pp. 136, 137 of Janson v. Solarte (1836), 2 Y. & C. 
 (Exoh. in Eq.) 127. So also Brett, L.J., at p. 145 of China 8.S. Co. v. Commercial 
 Assurance Co. (1881), 8 Q. B. D. 142, C. A., emphasizes the fact that " long before the 
 Judicature Acts, the peculiarity of insurance business had given rise to a practice ... of 
 granting discovery to a larger extent than in ordinary business." The same explanation 
 of the special rules as to discovery in marine insurance cases is given in Bovlton v. Houlder 
 Bros., [1904] 1 K. B. 784, C. A., by Coluns, M.R., at p. 790 (" the discovery aUowed in an 
 ordinary action would be ineffectual in such a case as the present "), and by Mathew, L. J., 
 at pp. 791, 792 (" it is an essential condition of a policy of insurance that the underwriters 
 should be treated with good faith, not merely with reference to the inception of the risk, 
 but in the steps taken to carry out the contract. That being the meaning of the contract, 
 effect is given to it by means of the order of discovery of ship's papers, and the affidavit 
 with relation to them. In order that the underwriters should be on equal terms with the 
 assured, a stringent form of order for discovery has been long in use "). 
 
 (y) See Twizell v. Allen (1839), 5 M. & W. 337 ; Bayner v. Bitsen (1865), 6 B, & S. 888 ; 
 West of England Bank v. Canton Insurance Co. (1877), 2 Ex. D. 472 (where, Denman, J., 
 having struck out of the order the words " and all persons interested," the Court restored 
 them) ; China S.8. Co. v. Commercial Assurance Co., sup. ; China Trading Insurance Co. 
 V. Boyal Exchange Assurance Co. (1898), 3 Comm. Cas. 189 ; Boulton v. Houlder Bros., sup. 
 
 (z) Per Cleasby, B., at p. 474 of West of England Banlc v. Canton Insurance Co., sup. : 
 "the old practice, which is confined to actions on marine policies, was not superseded by the 
 Judicature Acts." This statement was followed by Beett, L.J., in China S.S. Co. v. 
 Commercial Assurance Co., sup. (see the passage cited in note {x), sup.). 
 
538 CH. VIII, SECT. 2, SUB-SS. (1), (2). 
 
 contents of sucli documents as lie cannot produce, or procure to be produced(a) . 
 The practice in question, as a matter of history, is supposed to have origi- 
 nated at the time when applications first began to be made by assured parties 
 for orders consolidating separate actions brought against the several under- 
 writers, and the Courts thereupon required the assured, as a condition of this 
 indulgence, to make ample discovery (6). 
 
 Subs. (2). Certain Rules of Practice in Proceedings for Non-Disclosure. 
 
 612. There are certain rules of practice, as to joinder of parties and causes 
 of action, which, in relation to proceedings for non-disclosure in prospectuses 
 of companies and to marine insurance cases, require to be noticed. 
 
 613. First, as to joinder of parties. It generally happens, where there 
 has been statutory non-disclosure in the prospectus of a company, that 
 relief is claimed by a number of allottees. In that case, each of them can 
 sue separately, or aU, or any two or more, of them can join in suing (c) ; 
 but, in the latter event, each plaintifi must establish his separate right to 
 relief as regards matters which are peculiar to his own case {d). No " repre- 
 sentative " proceedings, therefore, can be instituted ; that is to say, it is 
 
 (a) See West of England Bank v. Canton Insurance Co. (1877), 2 Ex. D. 472, where the 
 plaintiffs, mortgagees of the insured vessel, in vain protested that they had no control over 
 the mortgagor in whose custody were the reqiiired documents {per Cleasby, B., at p. 475 : 
 " they cannot say, ' We will do no more than make an affidavit that we have no papers 
 ourselves, or none under our actual control.' So ; they must go further, and endeavoirr 
 to comply with the practice in substance ; that is to say, they must endeavour to produce 
 the ship's papers ; they must satisfy us that they have made application to the mortga- 
 gor ") ; London & Provincial Insurance Co. v. Chambers (1900), 5 Comm. Cas. 241 ; Boulton 
 V. Honlder Bros., [1904] 1 K. B. 784, C. A., where the underwriters were not being sued, 
 but were plaintiffs in an action to recover policy moneys already paid so far as they 
 exceeded the sums properly payable, on the ground of the bad faith of the assured in 
 ignorance of which the excessive payments had been made, and tho plaintiffs were held 
 entitled to the same measure of full discovery from the defendants, according to the 
 established practice, as if they had not already paid tho money, and were being sued for it 
 on the policies {per Collins, M.R., at pp. 789, 790, and Mathbw, L.J., at p. 792) ; the 
 order for discovery here made was to the same effect as, but more elaborate than, that 
 which was made in West of England Bank v. Canton Insurance Co., sup., though, as in 
 that case, it was again fruitlessly contended on behalf of the assured that they ought 
 not to be compelled to produce documents which were not in their custody, or only in 
 their custody as agents for other persons {per Collins, M.E., at p. 790, who said that the 
 discovery " ought certainly to embrace a statement on oath by the defendants as to the 
 steps they have taken to put themselves in a position to produce the documents, and 
 failing to produce them, they should be directed to give such information as to them as 
 they can obtain by reasonable exertions on their part " ; to which Mathew, L.J., at p. 
 791, added that the defendants ought " to state what they know as to the contents of " 
 the documents in question). 
 
 (5) Twizell V. Allen (1839), 5 M. & W. 337 (per Maulb, B., during the argument, at 
 p. 339) ; Boulton v. Houlder Bros., sup. {per Collins, M.E., at p. 790). 
 
 (c) See § 539, and the cases cited in note {q) thereto, ante. 
 
 {d) Arnison v. Smith (1888), 41 C. D. 348, C. A. (a case, not of non-disclosure, but of 
 misrepresentations in the prospectus : for the present purpose, however, this circumstance 
 is immaterial) furnishes a good practical illustration of what is stated in the text. There 
 12 of the 52 plaintiffs did not appear at the trial, in the mistaken expectation that a judg- 
 ment for the 40 who established their right to relief would enure for their benefit also. 
 Kbkewioh, J., who decided in favour of the forty who appeared, was compelled to give 
 judgment against the twelve absentees, which latter judgment the C. A. were no more 
 able to disturb than the former, though their order affirming it was expressed to be 
 " without prejudice to a fresh action " (pp. 374, 375). 
 
§§ 611-614 (procedure). 539 
 
 not permissible for any one of the subscribers to sue on behalf of himself 
 and all others constituting the class of persons claiming to have been injured, 
 for, though questions as to the issue of the prospectus, and as to the omission 
 therefrom, and the materiality (in some cases), of the undisclosed matter, 
 are common to every member of the so-called " class," other important 
 questions, and particularly those relating to inducement and damage, are 
 special to the individual (e). If, however, where a " representative " suit 
 is instituted, no application is made by any defendant before the trial to 
 strike out so much of the title of the action as purports to give it a represen- 
 tative character, the plaintiff's case will not be dismissed, but will be heard 
 as if he were suing on his own behalf alone (/). The usual practice 
 in such cases is to resort to the " test action " form of order, the procedure 
 being as follows. The subscribers claiming relief issue separate writs in 
 the first instance, whereupon an application is made at chambers for an order 
 whereby one of the actions is selected as a test, and the others are stayed 
 until the trial of the action so selected, upon proper terms for the protection 
 of the defendants on the one hand, and, on the other hand, for the preven- 
 tion of prejudice to any of the plaintiffs in the outstanding actions from 
 collusive or incompetent conduct of the test action [g). 
 
 614. Similarly, in the case of a number of underwriters of a marine 
 insurance policy, though (as has been explained) the contract of each under- 
 writer with the assured is a separate and distinct one (k), yet in practice 
 some one underwriter is habitually sued without objection, and, being so 
 sued, sets up any defence he may have, including that of non-disclosure, 
 on behalf of himself and all the others, who by express or tacit agreement 
 consent to be bound by the result. No doubt, the assured has the right, 
 if so minded, to sue each underwriter separately ; but in that case the defen- 
 dants would immediately apply for, and, in the absence of special circum- 
 stances obtain, a consolidation order {i). To avoid this circuitous process, 
 the more busjness-like course referred to is always adopted. It sometimes. 
 
 (e) Community of interest or of liability alone justifies a representative suit : Jones v. 
 Garcia del Rio (1823), 1 T. & Russ. 297 ; Long v. Yonge (1830), 2 Sim. 369 ; MarU & Co. 
 V. Knight S.S. Co., [1910] 2 K. B. 1021, C. A. ; Allen v. Hyatt (1914), 30 T. L. R. 444, P. C. 
 There is no such community in the case of several allottees suing in respect of statutory 
 non-disclosure, any more than there is where several persons sue for misrepresentation 
 (common law or statutory), in a prospectus. In both classes of case the " inducement," or 
 the taking of the shares " on the faith of " the prospectus, is a separate issue in relation to 
 each individual plaintiff : see Croskey v. Bank of Wales (1860), 4 Giff. 314 {per Stuaet, 
 V.-C, at p. 330) ; Hallows v. Fernie (1868), 3 Ch. App. 467 (-per Lord Chelmsford, L.C., 
 at p. 471). The old rule as to representative actions is now embodied in the R. S. C, 
 O. 16, r. 9. Theoase of £eec«m3V.i%(i(1855),2 Drew. 229, which was approved in the 
 dissentient judgment of Buckley, L. J., at pp. 1045, 1046 of Markt & Co. v. KmgU 
 S.S. Co., would seem to be in direct conflict with Hallows v. Fernie, sup., which latter case 
 was not noticed either by Btjoklby, L. J., or by the majority with whom he disagreed. 
 
 ( / ) This course was adopted in Hallows v. Fernie, sup. Cp. Allen v. Hyatt, sup. 
 
 (g) For an elaborate form of an order in a test action, see that made by Field, J., in 
 Bennett v. Lord Bury (1880), 5 C. P. D. 339, as set out at p. 346. 
 
 {h) See § 277, ante. In Janson v. Property Insurance Co. (1913), 19 Comm. Cas. 3b, 
 this principle seems to have been entirely overlooked. 
 
 (?) Both under the old practice in cases of marine insurance, and now under 0. 49, r. 8. 
 
540 CH. VIII, SECT. 2, SUB-SS. (2), (3). 
 
 though very rarely, happens that the underwriters, without waiting to be 
 sued on the policy, take the field themselves and institute proceedings against 
 the assured for rescission of the policy or analogous relief. In that case, 
 unless objection is made by the defendant, any one or more of them can 
 sue in a representative character (j) ; and there are instances of the adoption 
 of this procedure (k). 
 
 615. Secondly, as regards joinder of causes of action in one proceeding 
 by, or against, several parties. The general rule, applicable to non-disclosure 
 as to other cases, but specially illustrated by the decisions in proceedings 
 agamst companies and their officers, is that several plaintifis may sue, and 
 several defendants may be sued, together in respect of several causes of action, 
 if (in the case of plaintiffs) those causes " arise out of the same transaction, 
 or series of transactions," or if (in the case of either plaintiffs or defendants) 
 evidence in support of one cause of action would be evidence in support of 
 the other or others (I), but not otherwise (m). 
 
 Suh-s. (3). Misfeasance Procedure in the Liquidation of Companies. 
 
 616. It will have been noticed that a considerable proportion of the 
 authorities cited in an earlier chapter to illustrate the fiduciary duty of 
 disclosure which is owed to a company by its promoter (n), or by its agents (o), 
 were cases in which the company was being wound up, and that in nearly 
 all these cases the relief granted, or applied for, was of a statutory nature, 
 pursuant to successive enactments framed with the object of providing a 
 summary remedy for " misfeasance " (which includes cases of non-disclosure) 
 in the liquidation of companies. The procedure referred to was introduced 
 in 1862 (p), extended in 1890 {q), and re-enacted, with some further 
 
 (j) Under 0. 16, r. 9. See Janson v. Property Insurance Co. (1913), 19 Comm. Cas. 
 36, a case of a policy on a motor car according to the practice at Lloyds'. 
 
 (k) As in Bivaz v. Gerussi (1880), 6 Q. B. D. 222 (successful representative action for 
 rescission) ; Brooking v. Maudslay (1883), 38 C. D. 836 (representative action for declara- 
 tion and injunction, which failed on the merits). 
 
 (1) As regards plaintiffs, see 0. 16, r. 1, which should be read in conjunction with 0. 18, 
 r. 1. As regards defendants, see 0. 16, rr. i, 7, which, though not expressed in terms so 
 wide as those of 0. 16, r. 1 in its present extended form, have been hberally interpreted so 
 as to bring the companion rules into harmony : see Compania Sanainena de Games 
 Congeladas v. Houlder Bros. & Co., [19)0] 2 K. B. 354, C. A. ; (Esterreichische Export, &c. 
 V. British Indemnity Assurance Co., [1914] 2 K. B. 747, C. A. {per Kekneby, L.J., at 
 pp. 752, 754, and Swihpen Eady, L.J., at pp. 756, 757). Illustrations of actions against 
 several defendants in respect of different causes of action, one of these causes of action 
 being statutory non-disclosure in a prospectus, which have been held unobjectionable, on 
 the principles stated in the text, are : — Frankenburg v. Great Horseless Carriage Co., [1900] 
 1 Q. B. 504, C. A. {per Lindley, M.R., at pp. 508, 509, and Romeb, L.J., at pp. 510-512) ; 
 Greenwood v. Leather Shod Wheel Co., [1900] 1 Ch. 421, C. A. ; J. cfc P. Coats, Ltd. v. 
 Crossland (1904), 20 T. L. K. 800. 
 
 (w) See Gower v. Gouldridge, [1898] 1 Q. B. 348, C. A., which was recognized as a 
 sound decision, and distinguished, by Lindley, M.R., at pp. 508, 509 of Frankenburg v. 
 Great Horseless Carriage Co., sup. ; Stroud v. Lawson, [1898] 2 Q. B. 44, C. A, {per A. L. 
 Smith, L.J., at pp. 50, 51, Chitty, L.J., at p. 52, and Vaughan Williams, L.J., at 
 pp. 54, 55). 
 
 («) In Ch. IV, Sect. 2, Sub-s. (2), ante. 
 
 (o) See Ch. IV, Sect. 2, Sub-s. (3), ante. 
 
 Ip) By s. 165 of the Companies Act, 1862 (25 & 26 Vict., c. 89). 
 
 (2) By s. 10 of the Companies (Winding Up) Act, 1890 (53 & 64 Vict., c. 83). 
 
§§ 614-616 (misfeasance peocedure). 541 
 
 amplification, in the consolidating statute of 1908 (r). In its present form, 
 the enactment runs as follows : " where in the course of winding up of a 
 company it appears that any person who has taken part in the formation 
 or promotion of a company, or any past or present director, manager, or 
 liquidator, or any officer of the company, has misapplied or retained or 
 become liable or accountable for any money or property of the company, 
 or has been guilty of any misfeasance or breach of trust in relation to the 
 company, the court may, on the application of the official receiver, or of 
 the liquidator, or of any creditor or contributory, examine into the conduct 
 of the promoter, director, manager, liquidator, or officer, and compel him 
 to repay or restore the money or property or any part thereof respectively 
 with interest at such rate as the court thinks just, or to contribute such sum 
 to the assets of the company by way of compensation in respect of the mis- 
 application, retainer, misfeasance, or breach of trust as the court thinks 
 just." It is now proposed to analyze and interpret this provision in the light 
 of the authorities. The question of the courts having jurisdiction in mis- 
 feasance procedure has already been considered (s). The application for 
 relief is by summons in the High Court, and by motion in any other court, 
 supported by affidavit. The liquidator is not bound to resort to the 
 summary remedy : he can sue, if he pleases, in the name of the company, 
 or (as in certain cases may be expedient) he can seek to attain his object 
 by settling the name of the delinquent on the list of contributories in respect 
 of shares which he has secretly received from the promoter as a gift or bribe (t). 
 If he elects to pursue the statutory remedy, it is not a matter of course 
 that he will be allowed to proceed : the court has a discretion, as in the case 
 of summary applications to rectify the register, though it is very seldom 
 that it refuses to exercise the jurisdiction, and the circumstances must be 
 very special to justify such a refusal (m). The procedure is prima facie 
 applicable to a winding up by the court, or subject to its supervision, but 
 on the application of the liquidator, or any contributory or creditor, it may 
 in a proper case, and on such conditions as may appear just, be applied to 
 a voluntary winding up (v). The burden of proof on the applicant is as 
 
 (r) Companies (Consolidation) Act, 1908, (8 Edw. 7, c. 69), s. 215. Each of the cases 
 cited below is a decision on the particular one of the three sections which was m force 
 
 at the time. , . ., • • ^ j. i, • 
 
 is) See S 605, note (6), ante. The authorities cited in the remaimng notes to this 
 Sub-section relate to "misfeasances" of all kinds, for the reason that lUustrations of 
 procedure in " misfeasance " are obviously independent of the particular dehnquency in 
 respect of which the procedure is resorted to. In fact, it is only a few of the non-disclosure 
 cases dealt with in Ch. IV, Sect. 2, Sub-s. (2), ante, which are of importance m connection 
 with the present topic of procedure. 
 
 («) See § 388, notes (?), (r), and («), aM<e. ,« n. t c 
 
 (u) In the peouHar circumstances of Me Sunlight Incandescent Go (1900), lb I. U K 
 535 Wbight, J., declined to give statutory reUef. Giffabd, L J., however, at P..494 of 
 Re Mercantile Trading Co., Stringer's Case (1869), 4 Ch. App. 475, observed : I think the 
 instances are rare in which the jurisdiction ought not to be exercised. 
 
 (v) See Be County Marine Insurance Co. (1870), 6 Ch. App. 104, where (yer James L J 
 at pp. 114, 115, and Mellish, L.J., at pp. 120, 121) it was held that s 138 of the Act of 
 1862 (now s. 193 of the Act of 1908) enabled the misfeasance procedure authorized by 
 s. 165 of that Act (now s. 215 of the Act of 1908) to be apphed, under the prescribed 
 conditions, to voluntary liquidations. 
 
542 CH. VIII, SECT. 2, SUB-S. (3). 
 
 follows. First, lie must establish that the respondent's conduct was such as 
 to constitute " misfeasance " within the section, which is not the same thing 
 by any means as misfeasance at large. " It has been settled," said Lord 
 Macnaghten in a well-known judgment (w), " and I think rightly settled, 
 that that section " — ^he was referring to s. 165 of the Act of 1862, which in 
 this respect is the same as s. 215 of the Act of 1908 — " creates no new offence, 
 and that it gives no new rights, but only provides a summary and efficient 
 remedy in respect of rights which apart from that section might have been 
 vindicated at law or in equity. It has also been settled that the misfeasance 
 spoken of in that section is not misfeasance in the abstract, but misfeasance 
 in the nature of a breach of trust resulting in a loss to the company." Besides 
 proving that the non-disclosure or other wrongful act complained of was 
 actionable at law or in equity, that it was, if not a breach of trust, a violation 
 of some fiduciary duty to the company, and that it occasioned damage or 
 loss to such company, the applicant must also, if challenged on any of 
 these matters, establish that he belongs to one of the classes entitled to 
 the benefit of the statutory procedure (that is, official receiver, liquidator, 
 creditor, or contributory), and, if a creditor or contributory, that he has an 
 interest in the result of the application {x), and that the respondent was at 
 the date of the alleged misfeasance a member of some one or more of the 
 classes of persons rendered by the section amenable to its provisions, that is 
 to say, was a person " who took part in the formation or promotion of the 
 
 (w) At p. 669 of Bentinck v. Fenn (1889), 12 App. Gas. 652, H. L. Cp. the observations 
 of James, L. J., at p. 670 of Me Canadian tb Land Reclaiming cfc Colonizing Co., Coventry and 
 Dixon's Case (1880), 14 C. D. 660, C. A. : " misfeasance in that section means . . . some- 
 thing which the officer of the company has done wrongly by which . . . the company's 
 property has been wasted, or the company's credit improperly pledged. It must be some 
 act resulting in loss to the company." " Misfeasance in the abstract " will not do (per 
 Beamwell, L. J., ibid., pp. 672, 673). The wrong must have been committed " in relation 
 to the company," as is expressly provided by the section. Though there may be a mis- 
 feasance which is not actually a breach of trust, as in the case of Re Cardiff Savings Bank, 
 Davies's Case (1890), 45 C. D. 537, the act complained of must at least constitute a violation 
 of some fiduciary obligation to the company, in such a way as to diminish its assets, as 
 distinguished from mere negligence, for instance, or other breach of non-fiduciary duty : 
 Re Forest of Dean Coal Mining Co. (1878), 10 C. D. 450 (per Jessel, M.R., at pp. 458, 459) ; 
 Re Hill's Waterfall Estate & Gold Mining Co., [1896] 1 Ch. 947 (see note (5), inf.) ; Re 
 Kingston Cotton Mill Co., No. 2, [1896] 2 Ch. 279, C. A. (per Lindley, L.J., at p. 283, 
 Lopes, L.J., at p. 288, and Kay, L.J., at p. 291). In short, it is an entire mistake to 
 suppose that because the section provides a summary means of getting what could be 
 got by the ordinary procedure (per Lindley, L.J., at p. 334 of Be North Australian 
 Territory Co., Archer's Case, [1892] 1 Ch. 322, C. A.), and because every misfeasance must 
 be actionable, therefore everything that is actionable is a misfeasance. 
 
 (x) Bentinck v. Fenn (1887), 12 App. Gas. 652, H. L. (per Lord Hebschell, at pp. 664, 
 665, Lord Watson, at p. 667, and Lord Macnaghten, at pp. 669, 672). In that case the 
 applicant, being, though a contributory, the holder of fuUy paid shares, was held to have 
 had no interest in the result of his application. Perhaps this was the reason why, in 
 the case of Re Westmoreland Green & Blwe Slate Co., Blarvd's Case, [1893] 2 Ch. 612, C. A., 
 a contributory obtained the leave of the Court to institute the proceedings in the name of 
 the liquidator. It was on precisely the same principle that, where one of three partners in 
 an insolvent firm filed a bill for the rescission of a purchase of the estate at an undervalue 
 by a person who was trustee for the sale thereof for the benefit of the creditors, the biU 
 was digmissed, it appearing that, even if the estate could have been sold for what the 
 plaintiff alleged to be its full value, there would have been no surplus for the partners, 
 after satisfying the creditors' claims, and therefore the plaintiff had no substantial interest 
 in the suit : Dover v. Buck (1865), 12 L. T. 136 (per Stcjaet, V.-C, at p. 137). 
 
§ 616 (misfeasance procedure)-. 543 
 
 company " («/), if the company is being wound up in England, — for, if it is 
 being wound up in Ireland or Scotland, such a person is expressly exempted 
 from liability under the section {z), — or that such respondent was a past or 
 present director (a), manager, liquidator (6), or " officer " of the company. 
 This last expression means and includes any permanent official constituted as 
 such either by statute, or by the memorandum or articles of the company (c), 
 but not any person otherwise appointed or employed, such as (ordinarily) the 
 company's banker (d), nor its solicitor (e), nor its liquidator, where (there being 
 no case against him as such liquidator) he is sought to be made liable in his 
 character of " officer," unless in connection with the alleged misfeasance he was 
 executing duties imposed on him as a receivesr or otherwise under the Com- 
 panies Winding Up Eules (/), nor a trustee for the company's debenture- 
 
 (y) As to what constitutes " promotership," see §§ 327, 328, ante. Presumably 
 " formation " is not used as a mere synonym of " promotion," and the legislature must 
 be supposed to have contemplated the case of a person who, without being a promoter, 
 assisted in bringing the company into being. The class of " promoters " are not mentioned 
 in s. 165 of the Act of 1862. 
 
 (2) See s. 215, sub-s. (4), of the Act of 1908. 
 
 (ct) A de facto, as well as a de jure, director is within the section : Ee Canadian Land 
 Reclaiming d; Colonizing Co., Coventry and Dixon's Case (1880), 14 0. D. 660, C. A. {per 
 Jbssbl, MIR., in the Court below, at p. 666, and, in the C. A., per James, L.J., at p. 670, 
 and Bramwell, L. J., at p. 673, so far agreeing with him, though the actual decision was 
 reversed) ; Re Western Counties Steam Bakeries S Milling Co., [1897] 1 Ch. 617, C. A. 
 (per LiNDLBY, L.J., at pp. 626, 627, and A. L. Smith, L. J., at pp. 629, 630). " Director " 
 is defined in s. 285 of the Act of 1908 as including " any person occupying the position of 
 director by whatever name called." 
 
 (&) A liquidator can only be proceeded against in the character of one who, as such, 
 has property of the company in his hands or under his control, in relation to which he is 
 contravening, or omitting, some fiduciary obligation to such company. A claim against 
 a liquidator based on his alleged neglect to allot shares to the applicant in pursuance of a 
 reconstruction scheme is in reaUty nothing more than a personal claim for damages, in 
 respect of a breach of non-fiduciary duty, and so fails to satisfy either of the two conditions 
 — see note {w), sup. — required to bring the case within the section : Re Hill's Waterfall 
 Estate & Gold Mining Co., [1896] 1 Ch. 947 (per Stirling, J., at p. 953). 
 
 (c) Such as, for instance, a secretary, as in Re Morvah Consols Tin Mining Co., McKay's 
 Case (1875), 2 C. D. 1, C. A. (per Mbllish, L.J., at p. 6, and Brett, J., at pp. 7, 8) ; a 
 trustee of a Savings Bank, as in Re Cardiff Savings Bank, Davies's Case (1890), 45 C. D. 
 537 ; or an auditor, if so constituted as stated in the text, as in Re London & General 
 Bank, [1895] 2 Ch. 166, C. A, and Re Kingston Cotton Mill Co., No. 1, [1896] 1 Ch. 6, C. A., 
 but not otherwise ; e.g., an accountant called in to audit the company's accounts, who 
 holds no " office " under the articles, or by statute, is not amenable to the section : Re 
 Western CourUies Steam Bakeries <fc Milling Co., sup. (per Lindlby, L.J., at pp. 627, 
 628, who points out that, where the section specifies a particular office by name, such 
 as a " director," a directorship de facto is sufficient, but, where it is a question whether 
 the misfeasant comes within the generic description of " officer," it is essential to establish 
 the " office," and mere proof of the de facto performance of acts proper to the execution of 
 such an office, if it had been created, does not establish this fact. A soUcitor may, perhaps, 
 under very special circumstances, be deemed an " officer," but prima facie he is not so : 
 see note (e), inf. 
 
 (d) Re Imperial Land Co. of Marseilles (1870), L. R. 10 Eq. 298 ; Re General Provident 
 Assurance Co. (1872), 14 Eq. 507. 
 
 (e) Re Great Wheal Polgooth Co. (1883), 53 L. J. (oH.) 42 (per Bacon, V.-C, at p. 47) ; 
 Re Great Western Forest of Dean Coal Consumers Co., Carter's Case (1886), 31 C. D. 496. 
 But a solicitor who undertakes all the company's business at a fixed salary has been 
 held to come within the description of " officer " : Re Liberator Benefit Building Society 
 (1894), 71 L. T. 406 (per Cavb, J., at pp. 407, 408, and Collins, J., at p. 408). 
 
 (f) Re Hill's Waterfall Estate <fc Gold Mining Co., [1896] 1 Ch. 947 (per Stirling, J., 
 at pp. 954, 955). The rules there relied upon, though unsuccessfully, were Rules 89, 90 
 of the Companies (Winding Up) Rules, 1890, which correspond to Rule 75 of the present 
 Companies (Winding Up) Rules. 
 
544 CH. VIII, SECT. 2, SUB-SS. (3), (4). 
 
 holders (g). On the death of an alleged misfeasant, his representatives do 
 not become amenable to the procedme {h). An ambassador, or other diplo- 
 matic representative of a foreign State, or his secretary, or a member of his 
 suite, is no less exempt from liability as a misfeasant than he is from liability 
 bo any other civil process (hh). It should be noted that, though in ordinary 
 cases of a fiduciary relation it is not incumbent on the party complaining 
 to prove non-disclosure as a condition precedent to relief, this burden is 
 placed upon the shoulders of one who resorts to the statutory remedy ; for, 
 the onus being on him to prove the statutory misfeasance, it follows that, 
 where the misfeasance is alleged to have consisted in non-disclosure, such 
 non-disclosure must be established (i). The grounds of the application should 
 always be stated on the face of the summons, or in the affidavit filed in 
 support (j). It is not necessary to aver, or prove, actual or personal fraud {k). 
 The remedies provided by the enactment are : — ^repayment of money with 
 interest, restoration of property (other than money), or compensation in the 
 nature of damages, as the circumstances of the case may require {I). The 
 questions which may arise as to the measure of value, or of damages, the rate 
 of interest, and the like, have already been discussed (m). A misfeasance 
 claim is the subject of assignment (n). In an earlier chapter, the question 
 of the nature and extent of the habUity of a deceased delinquent's estate 
 has been considered (o). A right to the recovery of money or damages 
 against a misfeasant under the statutory procedure is not the subject as 
 set-ofi (p), though, to the same extent and under the same conditions as 
 any common law right, it may be the subject of release (j)p). 
 
 {g) Astley v. New Tivoli, Ltd., [1899] 1 Ch. 151 (per North, J., at p. 154). 
 
 (h) Re East of England Bank, Felton's Executors' Case (1865), L. E. 1 Eq. 219; Re 
 British GvardianLife Association Co. (1880), 14C. D. 335 (pcrHAiL.V.-C.at pp. 340, 341). 
 
 (hh) Re RepiMic o/ Bolivia Exploration Syndicate, [1914] 1 Ch. 139 (per AsTBtniY, J., 
 at pp. 148-157). 
 
 (i) Bentinck v. Fenn (1887), 12 App. Cas. 652, H. L. (per Lord Watson, at p. 666, and 
 Lord Macnaohten at pp. 670, 671) ; Re North Attstraiian Territory Co., Archer's Case, 
 [1892] 1 Ch. 322, C. A. (per Lindley, L.J., at p. 335, and Bowbn, L.J., at p. 341). 
 
 (j) Bentinck v. Fenn, sup. (per Lord Heeschell at pp. 662, 663) ; Re New Mashonaland 
 Exploration Co., [1892] 3 Ch. 577 (per Vatjghan Williams, J., at pp. 583, 584). 
 
 (k) Re Sale Hotel dh Botanical Gardens, Ltd., Ex p. Hesketh (1898), 78 L. T. 368, C. A. 
 (per Lindley, M.R., at p. 370 : " such application need not be based on fraud, except so 
 far as secrecy involves fraud. The word ' fraud ' is not to be found in the section ; and 
 fraud need not be either alleged or proved to bring a person within its operation "). 
 
 (I) See s. 215, sub-s. (1) of the Act of 1908. By sub-s. (2), the section is to apply 
 though the misfeasance may be one for which the misfeasant is criminally responsible. 
 By sub-s. (3), an order for payment of money made under the section is to be deemed a 
 final judgment within the meaning of s. 4, (1), (g), of the Bankruptcy Act, 1883 (46 & 47 
 Vict. c. 52), now s. 1, (1), (g), of the Bankruptcy Act, 1914 (4 & 5 Geo. 5, c. 59). By 
 sub-s. (4), " so much of the section as relates to " (inter alia) " property of the company 
 other than money " is not to " apply to a winding up in Scotland or Ireland." 
 
 (m) In §§ 379, 380, ante. 
 
 (n) See § 279, ante. 
 
 (o) See § 379, note (d), and § 388, note (o), ante. 
 
 (p) Re Anglo-French Co-operative Society, Exp. Felly (1882), 21 C. D. 492, C. A. (per 
 Jbssbl, M.II., at pp. 502, 503, Brett, L.J., at p. 507, and Cotton, L.J., at pp. 509, 510) ; 
 Re Carriage Co-operative Supply Association (1884), 27 C. D. 322 (per Pearson, J., at 
 pp. 330, 331). 
 
 (pp) See Re Joint Stock Trust and Finance Corporation (1912), 56 Sol. J. 272. As to the 
 conditions on which releases are valid at common law, see § 132, ante. 
 
§§ 616-618 (costs). 545 
 
 Subs. (4). Costs in Proceedings for Non-Disclosure. 
 
 617. It is often said that, whereas in cases heard without a jury, the 
 discretion of the judge as to costs is unfettered, in cases tried before a 
 judge and jury the judge has very little discretion at all, since, in the 
 absence of a special order, "the costs follow the event," that is, the verdict 
 of the jury : but the difierence between the two modes of trial, as regards 
 the nature, limits, and conditions of the judicial control over costs, has been 
 greatly exaggerated ; such control being, in the former case, considerably 
 less, and, in the latter, considerably more, than is generally supposed (q). 
 In deference, however, to the supposed distinction, it is proposed to limit 
 the succeeding observations to the consideration of rules as to costs in 
 proceedings for non-disclosure heard before a judge alone. 
 
 618. Any judge would strongly and justly resent the statement that there 
 are, or the suggestion that there ought to be, any rules of law or practice 
 dictating to him the lines on which he is to exercise his discretion in the 
 matter of costs, — a discretion which must necessarily have regard to the 
 individual circumstances of the particular case, the conduct and attitude 
 of the parties, and a variety of matters which no cast-iron formida is 
 capable of coping with, or foreseeing. At the same time it must not be 
 forgotten that, firstly, it is a condition precedent to the exercise of any discre- 
 tion at all that there be some materials on which to exercise it (r) ; and that, 
 secondly, even in relation to the cases where such materials are present, great 
 equity judges, without listening for a moment to any dictation or intrusion 
 ab extra, have nevertheless from time to time enunciated certain leading 
 principles or rules of conduct, for their own guidance and convenience, as to 
 the disposition of costs in certain circumstances and conditions. The first, and 
 the most firmly established, of these " rules of conduct " is that which visits 
 a party who succeeds in his action or defence with the costs of any unproved 
 charge of fraud which he may have unnecessarily made — and in every case 
 of non-disclosure, as has already been explained in the proper places, such 
 a charge is whoUy gratuitous (s). In all such cases, though the party, if 
 otherwise entitled to succeed, is not ordinarily deprived of his right to judg- 
 ment (t), he is, in the absence of special circumstances, mulcted in costs, to 
 a greater or less degree according to the view which the judge takes of the 
 conduct of both parties throughout the litigation, by some one of the many 
 
 (q) For, by O. 65, r. 1, where there is a jury, the judge may make any " exceptional 
 order " which may appear to him just as to costs, that it to say, any order which will prevent 
 the costs "following the event " in the usual course. Illustrations of the various forms of 
 such " exceptional orders " are given in the notes appended to this Rule in the books of 
 practice. It is true that the discretion does not exist where there is no " good cause," 
 that is, where there are no materials on which it can be exercised : but equally, according 
 to the modern authorities, a judge sitting without a jury has no jurisdiction to make an 
 " exceptional order " as to costs in the absence of any materials at all : see the cases cited 
 in the next note. 
 
 {r) New Brunswick and Canada Railway and Land Co. v. Cmybeare (1862), 9 H. L. C. 
 711 (see note (v), post) ; Civil Service Co-operative Society v. General Steam Navigation Co., 
 [1903] 2 k. B. 756, C. A. ; Kin^ (,F.) dk Co. v. Oillard & Co., [1905] 2 Ch. 7, C. A. 
 
 («) See § 197, and note (Ic) thereto, § 358, § 461, and note (k) to § 616, ante. 
 
 (t) See note (m) to § 300, ante. 
 B.N.D. 2 N 
 
546 CH. VIII, SECT. 2, SUB-S. (4). 
 
 varieties of order whicli have been framed for this purpose (m). On the 
 other hand, a judge has no right to exercise his discretion in the opposite 
 direction by dismissing without costs the action of a plaintiff who has based 
 his case on fraud, and has failed to prove it, the defendant being entitled 
 in such a case to have the action dismissed with costs in the ordinary way (v), 
 unless, again, there are special circumstances, as, for instance, where the 
 party unjustly charged with fraud has been guilty of dubious conduct in 
 other respects (w), or has withheld explanations which he was in a position 
 to give, and which, if given when required, would have prevented the con- 
 tinuance of the litigation (x). In a proper case, the court may give the 
 party unnecessarily and unsuccessfully accused of fraud his costs as between 
 solicitor and client, so far as his general costs have been increased by such 
 charge {y) : but there is no jurisdiction to give him costs " on the higher scale," 
 merely because he has been so accused, whether the case is simple (e), or 
 complicated (a). 
 
 619. Another such " rule of conduct," as to costs, is the following. A 
 party who succeeds in resisting a claim for non-disclosure is nevertheless 
 frequently deprived of his costs, if his conduct is shown to have been devoid 
 of all merits (6), or characterized by obliquity in other respects (c), or if he 
 
 (tt) The following are selected iUustratious of various forms of order as to costs whereby 
 the party complaining of non-disclosure was punished for making unnecessary ohsirges 
 of fraud which were not proved: Welles v. Middlekm (1784), 1 Cox Eq. Cas. 112 (per 
 Lord Thtjrlow, L.C, at p. 119, who deprived the successful plaintiff of his costs) ; Groves 
 V. Perhins (1834), 6 Sim. 576 (the like : per Shadwbll, V.-C, at p. 583) ; Champion v. 
 Bigby (1840), 9 L. J. (n.s.), (oh.) 211 (per Lord Cottenham, L.C, at p. 216, dismissing a 
 bill with costs which otherwise would have, and in fact in the Court below had, been 
 dismissed without costs) ; Gibson v. Bussell (1843), 2 Y. & C. 104 (successful plaintiff 
 deprived of his costs up to the filing of the replioation, when an offer was made which 
 the defendant ought to have accepted : per Knight-Bbttce, V.-C, at pp. 120, 121) ; 
 Shackleton v. Sutcliffe (1847), 1 Dr. & Sm. 609 (successful defendant deprived of his costs 
 " so far as increased by the defendant having imputed fraud or unfair intention to the 
 plaintiffs or their solicitors " ■- per Kkioht-Bbtjce, V.-C, at p. 623) ; Dimsdale v. Dimsdale 
 (1856), 3 Drew. 556 (a similar case to Champion v. Rigby, sup. . per Kindeksley, V.-C, 
 at p. 578) ; Parher v. McKenna (1874), 10 Ch. App. 96 (so much of the bill as alleged fraud 
 dismissed with costs, and plaintiff to have no costs of the residue on which he had suc- 
 ceeded : per Lord Cairns, L.C, at pp. 122-124, and Jambs, L. J., at p. 125) ; Thomson v. 
 Eastwood (1877), 2 App. Cas. 215, H. L. (the like form of order, except that the plaintiff 
 was not deprived of his costs of the residue of his claim : per Lord Cairns, L.C, at p. 244) ; 
 J. P. Goats, i<d. v.CrossfajMi (1904), 20 T. L. R. 800 (where, as against one of the defendants 
 only, the plaintiff was deprived of the costs of unfounded charges of fraud, so far as the 
 costs of the other issues on which he had succeeded had been increased thereby, but he was 
 not ordered to pay any costs to that defendant : per Swinfen Eady, J., at p. 807). See 
 also the oases cited in note (i) to § 624, post. 
 
 (v) New Brunswick and Canada Railway and Land Co. v. Gonybeare (1862), 9 H. L. C. 
 711 (per Lord Wbstbuby, L.C., at pp. 735, 736). 
 
 (w) See the cases cited in notes (c), (d), (/), (g), and (h), to § 619, post. 
 
 (x) See § 619, note (e), post. 
 
 (y) As in Forester v. Read (1870), 6 Ch. App. 40 (per Jambs and Mbllish, LL.JJ., 
 at pp. 42, 43). 
 
 (z) Paine v. Chisholm, [1891] 1 Q. B. 531, C A. 
 
 (a) Assets Development Go. v. Close Bros. & Co., [1900] 2 Ch. 717 (per Bttcklby, L.J., 
 at pp. 719-721). 
 
 (6) As in Halxh v. Hatch (1804), 9 Ves. 292 (per Lord Eldon, L.C, at pp. 298, 299) ; 
 Rhodes v. BaU (1866), 1 Ch. App. 252 (per Turner, L.J., at p. 257). 
 
 (c) As in Montesquieu v. Sandys (1811), 18 Ves. 301 (per Lord Eldon, L.C, at p. 313, 
 dismissing without costs a bill to set aside the purchase by an attorney of his client's 
 
§§ 618-620 (COSTS). 547 
 
 refused, or delayed, when requested, to make to the party complaining a 
 communication {d), or explanatory statement (e), which, if made, might 
 be expected to put a stop to the litigation, and the withholding of which 
 reasonably invited suspicion ; or if his conduct has been " indiscreet," or 
 " injudicious " (/), or " precipitate " (g) , or if, the alleged non-disclosure 
 having been established against him, he escapes from its consequences solely 
 by reason of supervening or fortuitous circumstances (h) ; or, generally, 
 if the proved concealment was deliberate and morally censurable, whilst 
 the proved exculpatory facts involved no personal merit on the part of the 
 wrongdoer (i). 
 
 620. A third principle which is sometimes applied in a certain type of 
 case is that according to which a party is punished in the matter of costs 
 who has unreasonably refused or ignored a reasonable offer from the other 
 
 reversionary interest, on the ground of the attorney's dubious conduct in mis-stating the 
 nature of the transaction in a receipt) ; Harrison v. Guest (1860), 6 De G. M. & G. 424 
 (where a solicitor, who succeeded in his defence, had chosen, quite unnecessarily, to 
 mis-state the consideration for a certain contract, thinking it would look better when the 
 title came to be examined, though no one was misled or damaged : per Lord Cranwokth, 
 L.C., at p. 438) ; Armstrong v. Armstrong (1873), Ir. R. 8 Eq. 1 (where the successful 
 defendant in an undue influence case had concealed a certain deed) ; Taylor v. Johnston 
 (1882), 19 0. D. 603 {per Bacon, V.-C, at pp. 610, 611 : " suspicious circumstances " in 
 the conduct of the successful defendant). 
 
 (d) As in Harris v. Tremenheere (1808), 15 Ves. 34 {per Lord Eldon, L.C, at p. 40, 
 who, whilst dismissing the biU with costs as to some of the leases sought to be set aside, and 
 granting relief with costs as to another of them, dismissed the bill as to the remaining 
 leases without costs, because "a suspicion attaches to the transaction, and justified an 
 examination"); Hunter v. Atkins (1834), 3 My. & K. 113 {per Lord Beouoham, L.C, 
 at p. 157 : successful defendant deprived of costs because of his persistent refusal to give 
 particulars, which was calculated to excite some suspicion). 
 
 (e) As in Patch v. Ward (1867), 3 Ch. App. 203 {per Lord Caibns, L. J., at pp. 210, 211). 
 (/) Harvey v. Mount (1845), 8 Beav. 439 (where one of the defendants succeeded, 
 
 but was deprived of his costs because of his injudicious conduct in attempting to serve 
 two masters: per Lord Lakgdalb, M.R., at pp. 452, 453); Baker v. Loader (1872), 
 L. R. 1 Eq. 49 (where a sohcitor defendant had been guilty of " a great want of discretion 
 -and judgment " : per Malins, V.-G, at p. 56) ; Bagnall {John) & Sons v. Carlton (1877), 
 6 C. D. 371 (where the solicitor defendants who were successful, and against whom 
 "charges had been made . . . considerably beyond what ought to have been made," 
 had nevertheless been guilty of " impropriety and indiscretion," in " arming some person 
 with that which might have been made the means of fraud," and were accordingly deprived 
 of their costs down to a certain date : per James, L. J., at pp. 401, 402). 
 
 {g) As in Pisani v. Att.-Gen. of Gibraltar (1874), L. B. 5 P. C. 516 (at p. 540). 
 (h) As in Re Summerson, [1900] 1 Ch. 112 n. {per Bomee, J.) ; Hepworth v. Pickles, 
 11900] 1 Ch. 108 {per Eaewbll, J., at p. Ill) ; Greenhalgh v. Brindley, [1901] 2 Ch. 324 
 {per Paewell, J., at pp. 328, 329). In all these cases, the vendor was proved to have 
 clearly failed in his duty of disclosure to the purchaser with respect to incumbrances and 
 restrictive covenants, but he was nevertheless held entitled to succeed in his defence to 
 a claim for rescission in the first two cases, and in his action for specific performance in 
 the third, because of the accidental circumstance (accidental in the sense that it involved 
 no merits, or rather no expunging of proved demerits, on the part of the vendor) that the 
 alleged restrictive covenant had ceased to be enforceable, and that the alleged incumbrance 
 was therefore in law no longer an incumbrance at all. It does not appear from the report 
 of Re Summerson, sup., that Romeb, J., dismissed the summons without costs, but it is so 
 stated at p. 329 of Greenhalgh v. Brindley, sup., by Faewell, J., who had been counsel in 
 the case. 
 
 (i) See Re Hoggart's Settlement (1912), 56 Sol. J. 415 (where a solicitor who had made 
 an agreement for costs with his ohent which was impeachable on the ground of absence of 
 explanation or independent advice, and who only escaped because he had abandoned the 
 agreement and offered taxation before the proceedings were instituted, was deprived of 
 his costs). And see further, the cases cited in § 168, notes {x) and {y), ante. 
 
548 CH. VIII, SECT. 2, SUB-S. (4). 
 
 side {j), but not, where he has properly and justifiably declined to entertain 
 an ofier which was obviously unreasonable, illusory, or intended as a trap (k). 
 
 621. Where the party charged fails on the issue of disclosure, but succeeds 
 on the ground of illegality, which he has not pleaded, or which he has con- 
 curred with his opponent in requesting the judge to ignore, but which the 
 Court takes notice of, as it must, if it is apparent on the face of the trans- 
 action, or on the whole of the relevant facts, but not otherwise (kk), he may be 
 ordered to bear his own costs, or even to pay the costs of the other party (Z). 
 
 622. The delay of a successful party complaining may affect his costs (m). 
 So also may that of a successful party charged («). 
 
 623. Trustees, incumbrancers, stakeholders, and, generally, parties joined 
 for conformity merely, who are in no way implicated in the non-disclosure 
 or other breach of duty charged, or guilty of any other misconduct, and have 
 not made common cause with any of the substantial parties held liable, 
 are entitled to their costs (o), in which case the guilty parties are ordered 
 
 (j) As in Gibson v. Russell (1843), 2 Y. & C. 104 (where, though, for the reason that he had 
 been unnecessarily charged with fraud which was not proved, the defendant was excused 
 from paying any costs down to the date of the repUcation, he was made to pay the plaintiff's 
 costs after that date, because an offer was then made which he ought to have accepted : 
 per Knight -Brticb, V.-C, at pp. 120, 121) ; Howley v. Cooh (1873), Ir. R. 8 Eq. 370' 
 (where a borrower, though he succeeded in obtaining rescission of certain deeds executed 
 by him at the instance of the moneylender under pressure, was ordered to pay the defen- 
 dant's costs, having refused an offer of all that he was entitled to). And see the " uncon- 
 scionable bargain" cases cited in notes (d) and (e) to § 624, post. 
 
 (Ic) As in Moore v. Prance (1851), 9 Hare 299 (where the trustee against whom judgment 
 was given had offered to reconvey the premises which had passed to him under the im- 
 peached instrument, but only if the plaintiff would apologize for having charged him 
 with imposition and fraud, and it was held that, since the trustee had no right to impose 
 such a condition, or " to mix up matters of personal or private feeling with the discharge 
 of his trust," the offer was not such as should affect the costs : per Tukneb, V.-C, at 
 pp. 304, 305). Cp. the cases cited in notes (/), and (g), to § 624, post. 
 
 (kk) North. Western Salt Co. v. Electrolytic Alkali Co., [19)4] A. C. 461, 469, 475, H. L. 
 
 (J,) See Oedge v. Royal Exchange Assurance Corporation, [1900] 2 Q. B. 214 (per 
 Kennedy, J., at p. 224, depriving the successful party of his costs) ; Chnrlesworth v 
 Faber (1900), 5 Comm. Gas. 408 (per Biqham, J., at p. 413, who ordered the successful 
 defendant to pay the plaintiff's costs). 
 
 (m) As in Att.-Gen. v. Lord Dudley (1815), G. Cooper 146 ; 14 R. R. 226 (per Grant,. 
 M.R., at p. 148 : " the length of time in this case ought to weigh, and therefore the decree 
 must be without costs"). For examples of converse cases in which the delay and con- 
 firmation to be inferred therefrom was fatal to relief, but the bill was dismissed without 
 costs, see Gregory v. Gregory (1815), G. Cooper 201 ; 14 R. R. 244 (per Grant, M.R., at 
 pp. 204, 205) ; Champion v. Rigby (1830), 1 Russ. & M. 539 (per Leach, M.R., whose 
 decision, however, was varied on appeal by making the plaintiff pay the costs, he having 
 in the meantime introduced new and unfounded charges of fraud : see note (u) to § 618,. 
 ante) ; Salmon v. Cuits (1850), 4 De G. & Sm. 125 (per Knight-Bbt70E, V.-C, at pp. 129, 
 130). See also the case cited in note (n) to § 218, ante. 
 
 (n) As in Cane v. Lord Allen (1814), 2 Dow H. L. 289, where Lord Redesdalb, at 
 p. 298, pointed out that the party charged, who succeeded in obtaining a decree for specific 
 performance, and rebutting the case of undue influence made against him by the defendant, 
 had allowed the cause to sleep after his replication in 1786, down to 1807, and on that 
 account ought to be deprived of costs, though not of his right to specific performance,, 
 because, as Lord Eldon, .L.C, observed at p. 300, the defendant had been equally supine,. 
 in not moving to dismiss the bill during the above period of 21 years, as he ought to have 
 done. 
 
 (o) See 0. 65, r. 1 (as to trustees), and Bentley v. Craven (1853), 18 Beav. 75 (two of 
 four partners made defendants for conformity in a suit in which the third partner sued the 
 fourth to recover secret profits for the firm) ; Beck v. Kantoromcz (1857), 3 K. & J. 230 
 (a similar case) ; Tottenham v. Green (1863), 32 L. J. (oh.) 201 (per Wood, V.-C, at p. 206 :. 
 
§§ 620-623 (costs). 549 
 
 either to indemnify any successful party who has to pay the costs of a formal 
 party (p), or to pay such costs to the formal party direct (q). But any 
 party who has at any time claimed an interest (r), or has been guilty of 
 improper conduct (s), is not only not entitled to costs, but may have to pay 
 them. Sometimes, a party who is both a trustee of, and a beneficiary under, 
 an instrument which is set aside, though he is disallowed all costs in his 
 character of beneficiary, is granted leave to apply at a subsequent date, as 
 he may be advised, for his costs as trustee out of the trust property (t). 
 A not uncommon form of order against a solicitor who has aided his client 
 in committing, or made it possible for him to commit, the breach of duty 
 complained of, is an order whereby, though judgment goes against the client 
 only, the solicitor is made a guarantor of the costs primarily payable by such 
 client (m). On the other hand, the old and disreputable practice of adding 
 agents, and particularly solicitors, as defendants in proceedings based on 
 breaches of fiduciary duty, or undue influence, without sufficient grounds, 
 in the hope that something will turn up at the trial which may justify an 
 order against such an agent or solicitor for costs, or with the still more shameful 
 motive of inducing him to put pressure upon his client and co-defendant to 
 settle the action, has frequently been denounced by high judicial authority (v). 
 
 sub-mortgagees to have their costs) ; Kimber v. Barber (1872), 8 Ch. App. 56 ; Turner v. 
 Collins (1871), 7 Ch. App. 329, 349 (trustees); Fry v. Lane (1888), 40 C. D. 312: per 
 Kay, J., at p. 325 (trustee). 
 
 ip) As in Smith v. Pincombe (1852), 2 Maon. & G. 653 ; CocMl v. Taylor (1852), 15 
 Beav. 103 {per Romilly, M.R., at p. 129); Sharp v. Leach (1862), 31 Beav. 491 (per 
 ROMILLY, M.R., at p. 503) ; Rhodes v. Bate (1866), 1 Ch. App. 252 {per Ttjenek, L.J., at 
 p. 262). 
 
 (q) As in Cavendish v. Strutt (1903), 19 T. L. R. 483 {per Bybnb, J., at p. 489). 
 
 (r) As in Tate v. Williamson (1866), L. R. 1 Eq. 528 (where a defendant who, though 
 claiming no interest at the trial, had originally done so was deprived of his costs : per 
 Wood, V.-C, at p. 540). 
 
 (s) See Bennett v. Vade (1742), 2 Atk. 324 {per Lord Hardwickb, L.C, at p. 327, as to 
 a solicitor defendant who had been guilty of improper conduct, and had obtained a benefi t 
 under the impeached deed) ; Beadles v. Bwrch, cited in note {v), inf. (the like) ; Phosphate 
 Sewage Co. v. Hartmont (1877), 5 C. D. 394, C. A. {per Malins, V.-G, at pp. 443-447 : 
 here the guilty agents were ordered to pay costs) ; Powell v. Powell, [1900] 1 Ch. 243 {per 
 Fab WELL, J., at p. 248, who disallowed costs to the solicitor who was one of the trustees 
 of the settlement, though he did not order him to pay costs). And see, further, the cases 
 cited in note (/) to § 619, ante. 
 
 (t) This was the order made in Wright v. Carter, [1903] 1 Ch. 27, C. A., as regards one 
 of the defendants who, as trustee, had submitted to the direction of the Court (see the 
 minutes of the order, at p. 65). 
 
 (m) As in Bowles v. Stewart (1803), 1 Sch. & Lefr. 209 (per Lord Redesdale, L.C. (Ir.), 
 at p. 227) ; Baker v. Loader (1873), L. R. 16 Eq. 49 (per Malins, V.-C, at p. 59). In 
 Tyrrell v. Bank of London (1862), 10 H. L. C. 26, it was considered in the House of Lords, 
 per Lord Westbuky, L.C, at p. 47, that Romilly, M.R., might properly have made such an 
 order against Read, one of the defendants, who was associated with TjrrreU, the other 
 defendant, who unsuccessfully appealed ; that is, an order that he should pay to the 
 Bank whatever TyrreU did not pay, and it was regretted that this course had not been 
 adopted. However, since the Bank were not cross-appealing from this part of the decision, . 
 whilst Read was (for obvious reasons) not joining with Tyrrell in his original appeal, the 
 House had no jurisdiction to interfere. 
 
 {v) Though, as Shadwell, V.-C, said in Beadles v. Burch (1839), 10 Sim. 332, at 
 pp. 337-339, a solicitor, to whom " purity of intentions " may fairly be attributed, may 
 nevertheless be properly joined as a defendant, if there has been any actual impropriety of 
 conduct, and even made to pay costs, the practice referred to in the text was vigorously 
 denounced by Lord Selbornb, L.C., at p. 255 of Barnes v. Addy (1878), 9 Ch. App. 244, 
 
550 CH. VIII, SECT. 2, SUB-S. (4). 
 
 624. In the class of case in whicli relief is sought against an unconscionable 
 bargain between an " expectant " and a person dealing with him in relation 
 to, or on the faith of, his expectancy — a class of case to which special attention 
 has been devoted in an earlier chapter (w) — ^something approaching to a 
 code of " rules of conduct " as to costs has gradually emerged {x). It was, 
 in the first instance, considered a sound general principle that the expectant, 
 being in the position of a mortgagor coming for redemption against a mort- 
 gagee in possession, ought to pay the dealer's costs, assuming the latter to 
 have been guilty of no actual or personal misconduct, as well as the debt, 
 interest, and charges, just as in an ordinary case of redemption of a mort- 
 gage (y). It was then thought that, in some cases, the expectant should 
 pay only the costs of the inquiry as to the value of the expectancy, and 
 of the taking of the necessary account (z), but that in another type of 
 case, as for instance where he had made unfounded charges of personal 
 fraud, or where he succeeded on the ground of undervalue alone, the expectant 
 ought, as a condition of relief, to pay all the dealer's costs except the costs 
 of such inquiry or account (a). Subsequently, in that very common kind 
 of case in which the merits, or the demerits, of the parties are very evenly 
 balanced, or where the decision proceeded solely or mainly on undervalue, 
 it became a not unusual practice to do a sort of rough justice, and save both 
 parties the expense of taxation, by giving no costs to either side (h). Where, 
 however, the dealer is shown to have been guilty of personal misconduct, 
 and not merely to have infringed a doctrine of law, the general rule has always 
 been that he is required to pay aU the expectant's costs (c). Where an ofEer 
 has been made by either party to the other, the nature of the offer, and the 
 manner in which it was met or dealt with, are matters of considerable import- 
 ance in deciding how the costs should be borne. Generally speaking, the 
 
 and again at pp. 40, 41 of Burstall v. Beyfus (1884), 26 C. D. 35, C. A. ; and by Jessel, M.R., 
 at p. 502 of Mathias v. Yetts (1882), 46 L. T. 497, C. A. (a misrepresentation case). 
 
 (w) See Ch. V, Sect. 2, Sub-s. (6), ante. 
 
 ix) Both KoMiLLY, M.R., at pp. 14, 15 of St. Albyn v. Harding (1859), 27 Beav. 11, 
 and Kay, J., at p. 324 of Fry v. Lans (1888), 40 C. D. 312, attempted a rough classification 
 of the various forms of order made in this description of case, though each of them acknow- 
 ledges that there is " no imperative rule in these cases " {per Romilly, M.R. ; " no 
 absolute rule," is the expression of Kay, J.). 
 
 iy) See Twisleton v. Griffith (1716), 1 P. Wms. 309 {per Lord Cowpek, L.C, at p. 310) ; 
 Peacock v. Evans (1809), 16 Ves. 512 {per Grant, M.R., at p. 518) ; Gowland v. De Faria 
 (1810), 17 Ves. 20 {per Grant, M.R., at p. 26). 
 
 (z) As in Gwynne v. Heaton (1778), 1 Brown C. C. 1 {per Lord Thuelow, L.C., at pp. 10, 
 11) ; Portmore {Earl of) v. Taylor (1831), 4 Sim. 182 {per Shadwell, V.-C, at pp. 213, 214). 
 
 (a) See Edwards v. Burt (1852), 2 De G. M. & G. 55 {per Lord Ceanworth, L.J., at 
 p. 65) ; Boothby v. Boofhhy (1852), 15 Beav. 212 {per Romilly, M.R., at p. 214) ; Jones v. 
 BickelU (1862), 31 Beav. 130 {per Romilly, M.R., at p. 132). 
 
 (6) AsinSaZferv. Brads^aM)( 1858), 26 Beav. 161 ; ifoster v. iJoftcrte (1861), 29 Beav. 467 
 {per RoMiLLy, M.R., at pp. 471, 472) ; Tottenham v. Green (1863), 32 L. J. (cH.) 201 (per 
 Wood, V.-C, at p. 206, stating it to be a general rule that where the transaction is set 
 aside on the ground of undervalue alone, there should be no costs on either side, but 
 where there has been misconduct on the part of the dealer, the " expectant " should have 
 his costs) ; Croft v. Graham (1863), 2 De G. J. & S. 155 {per Stttart, V.-G, at p. 159) ; 
 Aylesford {Earl of) v. Morris (1873), 8 Ch. App. 484 (per Lord Selboene, L.C, at p. 499) ; 
 Fry V. Lane (1888), 40 C. D. 312 {per Kay, J., at p. 325) ; Bae v. Joyce (1892), 29 L. R. (Ir.) 
 500 {per Walker, L.C. (Ir.), at p. 517). 
 
 (c) See Tottenham v. Green, sup., as cited in the last note. 
 
§ 624 (COSTS). 551 
 
 expectant who has refused the dealer's reasonable offer ol redemption, or 
 the dealer who has refused, or met with an impossible counter-proposal, 
 the expectant's reasonable offer of payment, will be ordered to pay all the 
 costs of his opponent {d) ; and, in the absence of special circumstances, 
 this rule has been often applied to the case of a dealer declining, or ignoring, 
 an offer made by the expectant before trial to pay the debt, with interest 
 at 5 per cent., and charges and costs (e). In the less common case of the 
 dealer offering to accept payment, or to allow redemption, on certain terms 
 before the trial, the Court narrowly examines the nature of the offer, and 
 the time when it was made, and the conditions with which it was clogged, 
 for the purpose of ascertaining whether it was a genuine and a reasonable 
 offer, or, on the contrary, a specious and insincere " contrivance to double- 
 hatch the cheat " (/), or an utterly unreasonable proposal {g) ; in either 
 of which events, the dealer will receive no indulgence in the matter of costs. 
 As in the case of any other party complaining of non-disclosure (h), the 
 expectant who makes unnecessary charges of personal misconduct, which he 
 fails to prove, will be penalized in costs (i). 
 
 (d) Per RoMiLLY, M.R., at pp. 14, 15 of St. Alhyn v. Harding (1859), 27 Beav. 11. 
 
 (e) As in Neshitt v. Berridge (1863), 32 Beav. 282 {per RoMiLLr, M.R., at p. 289) ; 
 Benyon y. Cook (1875), 10 Ch. App. 389 n. ; Nevill v. SriMing (1880), 15 C. D. 679 {per 
 Denman, J., at p. 705). 
 
 (/) Wiseman v. Beahe (1690), 2 Vern. 121 {per Cur., at pp. 121, 122 : " when he had 
 spent the money, then a specious offer was made to relinquish the bargain on payment of 
 the money lent with interest, which at that time was impossible for him to do : and though 
 such bin " — i.e. a bill by the moneylender in Chancery offering to allow redemption on 
 payment of principal and interest only—" was exhibited, it was not prosecuted, but was 
 only a contrivance to double-hatch the cheat"). 
 
 {g) As in 8t. Albyn v. Harding, sup., where the dealer, on the offer being made, insisted 
 on an immediate formal tender, which, in the case of the costs charges and expenses, was 
 (as he well knew) an impossible condition to comply with {per Romilly, M.R., at pp. 14, 15). 
 
 {h) See § 617, and the cases cited in note {u) thereto, ante. 
 
 {i) Thus, in Bromley v. Smith (1859), 26 Beav. 644, the " expectant," though he 
 obtained relief, had to pay the defendant's costs of the charges of fraud, and was dis- 
 allowed his costs of the residue of the claim {per Romilly, M.R., at pp. 675, 676) ; so, 
 also, in St. Albyn v. Harding, sup. {per Romilly, M.R., at p. 15). For illustrations of 
 cases in which the successful " expectant " was deprived of costs on the ground that he 
 had pitched his case too high, see Talbot v. Stanisjorth (1861), 1 J. & H. 484 {per Wood, 
 V.-C, at p. 508); Tyler v. Yates (1871), 6 Ch. App. 665 (per Lord Hathbeley, L.C, at 
 p. 671). 
 
APPENDICES. 
 
§§ 625, 626 (terminology). 555 
 
 APPENDIX A. 
 
 TERMINOLOGICAL QUESTIONS. 
 
 625. Extremely little criticism of an adverse nature can justly be made as to the 
 substance of the English law of disclosure and kindred duties of good faith. It may 
 fairly be claimed for it that, in this department as in many others, our jurisprudence 
 yields to none of the codes of other nations, ancient or modern, whilst, in the richness 
 of its subordinate propositions and the variety of its illustrations, it surpasses them 
 all (j). Not quite the same commendation, however, can be bestowed on the English 
 terminology of the subject, which in some particulars invites observation. Sir J. P. 
 Stephen remarked (in the Preface to his Digest of the Law of Evidence) that, the 
 longer he studied and practised the law, the more forcibly he was impressed with, 
 on the one hand, the conspicuous merits of our jurisprudence in point of substance, 
 and, on the other, its equally conspicuous defects in point of form, arrangement, and 
 terminology. The same contrasted merits and defects were attributed by that 
 remarkably acute jurist and moralist. Lord Kames, to the Roman system, when 
 insisting on " the supreme importance " of analysis and arrangement in any scientific 
 exposition of law (k). The particular province of our law which is the subject 
 of this treatise, it must be admitted, has not altogether avoided the faults, whilst 
 in no way falling short of the merits, ascribed by these high authorities to the entire 
 system : it is undoubtedly, however, less characterized by vicious terminology than 
 many other departments (l). 
 
 Sect. 1. General Observations on the Importance op Terminology. 
 
 626. " All human Spirit and Reason does yet what Father Adam began life by 
 doing ; strive to name the new Things it sees of Nature's producing, — often helplessly 
 enough " (to). The importance of terminology, in any department of knowledge 
 which pretends to rank as a science, one would suppose to be obvious. And yet, 
 in nearly e.very branch of English law, precision and lucidity of nomenclature has 
 been, if not openly disparaged, in practice treated as a thing of quite subsidiary 
 
 (j) In App. B, post, occasional confliots between popular ethics and legal doctrines, 
 as to certain topics, are pointed out, but with no suggestion in any case, except that of 
 gifts (§ 665, post), that the popular view is preferable to the juridical . The " law " referred 
 to in the text is of course the non-statutory law built up by the judges, not the manu- 
 factures of the legislature. As to these, and the points in which they are obnoxious to 
 criticism, see Ch. VI, ante. 
 
 {k) At pp. xiii, xiv, of the Preface to the third edition (1778) of his Principles of 
 Equity : "in an institute of law, or of any other science, the analysing it into its constituent 
 parts, and the arranging every article properly, is of supreme importance. One would not 
 conceive, without experience, how greatly accurate description contributes to clear con- 
 ception. . . . Witness, in particular, the famous body of Roman law compiled under the 
 auspices of the Emperor Justinian, remarkable even among law books for defective 
 arrangement. 
 
 (l) Such as, for instance, misrepresentation, as to which see App. A, Sect. 5, bub-s. (1), 
 of the Siuthox's Law of Actionable Misrepresentation, and defamation, the loose termmology 
 in which branch of the law is the subject of App. xxi, Sect. 2, of the author's Code of the 
 Law of Actionable Defamation. 
 
 {m) Carlyle's French Revolution, Book V, Ch. I. 
 
556 APPENDIX A, SECTS. 1, 2, SUB-S. (1). 
 
 interest. It is an old fallacy, exposed again and again by accurate thinkers, but 
 still flourishing like a green bay tree in the English mind, that things and thoughts 
 are the realities, and that names do not matter. But the fact is that terminology 
 reacts on thought. Loose definitions encourage loose conceptions. It is as true 
 of scientific, as it is of artistic, expression that " ^Ss tSiov tov vov to. KaXa 
 ovo/JLara" (n). Bacon describes "the Idols of the Market-place " as "the most 
 troublesome of all; idols which have crept into the understanding through the 
 alliance of words and names. For men believe that their reason governs words, 
 but it is also true that words react upon the understanding " (o). And, in another 
 place, he insists that " the juggleries and charming of words will in many ways seduce 
 and forcibly disturb the judgment, and (after the manner of the Tartar bowmen) 
 shoot back at the understanding from which they proceeded " (p). No doubt, there 
 are circumstances and conditions in which this attitude of indifference to names is not 
 merely excusable, but entirely proper and requisite. Where, for instance, a dis- 
 cussion arises as to whether a particular state of things, or a particular relation 
 between persons, is covered by a general proposition of law, it is quite sound, and in 
 accordance with a healthy intellectual instinct, to enter upon the inquiry in a spirit 
 of suspicion towards every contention of those who "for a tricksy word defy the 
 matter " (q), or which is based on a pedantic servility to mere nomenclature, and to 
 insist that the question is not one of names, or whether the state of things, or the 
 relation, under discussion bears a label identical with that of any of the objects to 
 which that proposition has hitherto been applied, but whether or not the case 
 presented falls within, not the words of the rule, or even the rule itself, but its reason 
 and principle. In several parts of this work, illustrations have already been given 
 of this salutary and justifiable independence and distrust of names under the 
 conditions stated (r). But, where the concepts to which the proposition itself 
 relates, and the terms in which it is enunciated, are in question, it is quite another 
 matter. Here a judicious choice of distinct names to express distinct ideas in the 
 first instance, followed by a loyal recognition afterwards of the authority of the names 
 so selected, is essential to the stability of the science : " it is most necessary," said 
 Lord Westbxjby, "to mark this again and again, for there is not a more fruitful 
 source of error in law than the inaccurate use of language " {s). 
 
 627. The expressions in relation to which inexact, ambiguous, or misapplied 
 terminology has characterized the branch of law dealt with in this treatise are 
 "fraud;" "negligence;" "mistake;" "confidence;" "influence;" "actual," 
 " constructive," and " imputed " knowledge ; and others of minor importance. 
 
 Sect. 2. Criticism of the Use of the teems " Pbaud," " Negligence," and 
 " Mistake " in relation to Non-Disclosure, &c. 
 
 628. These three terms have been considerably abused both by judges in their 
 judicial deliverances and by writers in treatises even of the highest authority. They 
 
 («) Longinus, De Subl. Or, descending from the "sublime" of Longinus to the 
 " ridiculous " of Justice Shallow, " good phrases are surely, and ever were, very commend- 
 able" (Henr. IV., Part 11, Act 3, Sc. 2). 
 (o) Nov. Org., lix. 
 
 (p) De Augm. Scient., Book V, Oh. IV. Lord Pahkeb. at p. 53 of Kregli-nger v. New 
 Patagonia Meat & Coal Storage Co., [1914] A. C. 25, H. L., doubtless had this passage in 
 mind when he observed that maxims, such as " once a mortgage, always a mortgage, 
 invariably " beg the question, and, like Bacon's idols of the market-place, lead to miscon- 
 ception and error." 
 
 (q) " The fool hath planted in his memory 
 
 An army of good words ; and I do know 
 A many fools, that stand in better place, 
 Garnish'd Uke him, that for a tricksy word 
 Defy the matter." — Mercli. of Ven., Act 3, Sc. 1. 
 (r) See, for instance, § 85, § 343, and note (v) thereto, and § 408, ante, 
 (a) At p. 676 of Ktiox v. Gye (1872), L. R. 6 H. L. 576 ; and cp. the observations of 
 Lord Kames cited in note {k), sup. 
 
§§ 626-629 (TEEMINOLOaY). 557 
 
 have been applied, as will now be seen, sometimes ambiguously, sometimes in- 
 correctly, and still more often, unnecessarily. 
 
 Subs. (1). Dovble Use of the tvord "Fraud." 
 
 629. At a very early stage in the growth of equitable principles, it was clearly 
 laid down that proof of fraud is not necessary to render non-disclosure actionable, 
 where a duty of disclosure exists (t). And yet, after having been so established, the 
 proposition has been again and again solemnly re-asserted (m). " What needs this 
 iteration ? " Why was it found necessary, at secular intervals, to remind the world 
 of the existence of the ancient rule, and, with more or less elaboration, to justify 
 and explain its continued vitality ? The answer is to be found in the unfortunate use 
 of the one word " fraud " to describe two whoUy distinct, and even opposite, things. 
 Whilst constantly proclaiming that fraud in its proper, plain, and natural sense of 
 "actual," "active," "positive," " personal," "moral," "intentional" or "conscious" 
 fraud, or fraud " in the odious " or " offensive " sense {v), need never be alleged or 
 proved in proceedings for non-disclosure, the courts have nevertheless alternated these 
 definite declarations, in regularly recurring strophe and antistrophe, with equally 
 frequent and definite declarations, that fraud in another sense — a totally unnatural 
 and incorrect one (it is submitted) — must always be established in such proceedings : 
 that is to say, that the duty, and its breach, must be shown, and that such breach 
 thereupon is deemed to constitute "constructive," "legal," "technical," "artificial," 
 "tmconscious," "equitable," or "presumptive" fraud. Thus, in the law of marine 
 insurance, expressions are used by Lord Mansfield {w), and in at least one accepted 
 treatise on the subject {x), which clearly involve the terminological heresy in question, 
 — a heresy which, in the course of his remarkable judgment in a very valuable case (y). 
 Lord EsHEB. vigorously condemned (z), adopting the sound and philosophical language 
 of an excellent text-book writer who had previously, and no less convincingly, con- 
 demned it (a). So also, in relation to transactions between vendor and purchaser, 
 
 (t) See § 197 (in Ch. Ill), § 358 (in Ch. IV), and § 461 (in Ch. V), ante. 
 
 (m) See the cases cited in note (k) to § 197, and in the notes to §§ 358, 461, ante. 
 
 {v) All these expressions are to be found either in the authorities cited in the im- 
 mediately succeeding notes, or else in the misrepresentation cases referred to in the notes 
 to § 457 of the author's Law of Actionable Misrepresentation, where the use of the contrasted 
 terms " legal," and " moral," as applied to fraud, is shown to have been necessitated by the 
 same initial error as is the subject of the present criticism. 
 
 (w) At p. 1909 of Carter v. Boehm (1766), 3 Burr. 1905: "the keeping back such a 
 circumstance is a fraud, and therefore the policy is void. Although the suppression should 
 happen through mistake, without any fraudulent intention, yet stiU the underwriter is 
 deceived, and the policy is void." 
 
 (x) Arnould's Marine Insurance. See note (a), inf. 
 
 (y) Btachburn, Low & Co. v. Vigors (1886), 17 Q. B. D. 553, C. A. The dissentient 
 judgment of Lord Esheb was supported, and the decision of the majority reversed, by the 
 House of Lords, (1887), 12 App. Cas. 531, H. L. 
 
 (z) At p. 562 of Blackburn, Low & Go. v. Vigors, sup., m the C. A. As might be 
 expected from his well-known, and constantly avowed, antipathy to all legal or equitable 
 "presumptions" of fraud, malice, intention, and the hke, Lord Eshbb vigorously con- 
 demned the view expressed in Arnould's work— see the next note — as one of those 
 " figures of speech " and " oracular phrases " which were so exceedingly distasteful to him. 
 
 (a) Phillips, in a passage which Lord Eshbb cites at length at the page of his judgment 
 referred to in the last note, and warmly approves ("this seems to me to be true doctrine "), 
 stated and criticized Arnould's theory as foUows : " since a representation through mis- 
 take or inadvertence has the same effect, in reference to the underwriter, as an in- 
 tentional or hteraUy fraudulent concealment, ... he deems it to be excusable to apply 
 the term ' fraud.' . . . But I cannot think that the anomalous use of the term is justi- 
 fiable on this ground, since ambiguous phraseology is not to be tolerated in any science, 
 and least of aU in that of law, where it can possibly be avoided, as it may easily bo in this 
 case by stating the practical doctrine in diieot terms." The " direct terms " in which, 
 according to PhilKps, Lord Esheb, and, in the House of Lords, (1887). 12 App. Cas. 531, 
 H L at p 539, Lord Watson, the doctrine ought to be stated are, that fuU disclosure 
 is " an implied condition of the contract of insurance." PhilUps was an American writer 
 
558 APPENDIX A, SECT. 2, SUB-S. (1). 
 
 even Lord St. Lbonaeds (6) committed himself to a proposition similarly misleading 
 without the necessary qualification and explanation which, omitted by himself, was 
 afterwards added by Sir William James (c), and made use of expressions which at 
 least encouraged, though they may not have justified, the ridiculous theory of a pos- 
 sibly actionable " fraudulent silence," — a theory to which advocates in distress have 
 resorted, as to a tabula in nanfragio, in every case where no breach of any recognized 
 duty of disclosure could be suggested (d). And Lord Hathbeley mentions cases 
 " between vendor and purchaser " as constituting the first of " the three particular 
 classes of cases of what the Court terms fraud," the other two being cases of partnership, 
 and cases " in which an agent for a purchaser receives a gratuity from the vendor " (e), 
 which latter Lord St. Leonards also described as cases of "fraud," though not in 
 the "odious" or "felonious" sense (/). Lastly, in respect of the "undue in- 
 fluence " type of case, we find Lord Habdwickb describing breaches of the equitable 
 duties involved therein as " presumed fraud " (g) ; whilst Sir William James, in a 
 casein which " preconceived design," and " premeditated fraud," had not been made 
 out, observed that this made no difference, beoautee "the obtaining of property, or any 
 benefit, through the undue and unconscientious abuse of influence by a person in 
 whom trust and confidence are placed, has always been regarded as fraud of the 
 gravest character " (h), — a statement which is only correct if " fraud " be understood 
 in the artificial and comprehensive meaning previously assigned to that term by 
 himself (i), and absolutely incorrect it the word is taken in its natural meaning, — 
 the meaning which Lord Thtjelow, and Sir George Jessel, put upon it, when they 
 emphatically denied its relevance, even in that (morally speaking) gravest species 
 
 on marine insurance, whose treatise, published at Boston about the middle of the last 
 century, has always been highly commended by the best authorities on the subject in this 
 country, such as Sir John Willbs and Sir James Mathew, as well as Lord Eshee. The 
 first of these cited § 1183 of the 1853 edition of PhilKps's book, describing it as " a very 
 able work." in the " Memorandum on Over-Insurance, Valued PoUcies, and Constructive 
 Loss " which he prepared, in 1867, for the Commission on Unseaworthy Ships, whose 
 report was pubhshed in 1874. The Memorandum of Sir John Willes, including the 
 passage cited by him from PhiUips, was adopted by Sir James Mathew in his judgment in 
 Herring v. Jackson (1895), 1 Comm. Cas. 177, at p. 179. Lord Eshee (then Bebtt, L.J.), 
 at p. 463 of Bradford v. Symondson (1881), 7 Q. B. D. 456, C. A., expressed his opinion that 
 " of all the great text authorities on insurance law, PhiUips is the one most to be con- 
 sidered," and at pp. 561 and 563, respectively of Blacicburn, Low & Co. v. Vigors (1887), 
 12 App. Cas. 531, H. L., described him as " always the more accurate guide," and his 
 " propositions " as " always nicely accurate." 
 
 (5) In his Vendor and Purchaser (14th ed.), p. 244. And cp. the language used by 
 him judicially in the case cited in note ( / ), inf., in relation to agency and partnership. 
 
 (c) At pp. 124, 125 of Torrance v. Bolton (1872), 8 Ch. App. 118 : " it was very strongly 
 impressed upon us that Lord St. Leonabds had said in his book that contracts for sale, 
 though they might not be enforced in this Court, could only be set aside on the ground of 
 fraud. The word ' fraud ' there is nomen generalissimum, and it must not be construed 
 so as to mislead persons into the notion that contracts for the sale and purchase of lands 
 are in any respect privileged, so as to be free from the ordinary jurisdiction of the Court to 
 deal with them as it deals with any other instrument or transaction in which the Court is of 
 opinion that it is unconscientious for a person to avaU himself of the legal advantage which 
 he has obtained. Indeed, the books are fuU of cases in which the Court has dealt with 
 contracts of that kind — contracts obtained by persons from others over whom they have 
 dominion, contracts obtained by persons in a fiduciary position. ... A contract for sale, 
 like every other contract, is subject to the ordinary rules and jurisdiction of this Court, 
 and that passage of Lord St. Leonards must be understood as meaning that the same 
 kind of case must be made when a party comes here to set aside a contract for sale as must 
 he made in setting aside any other contract or dealing between the parties." 
 
 (d) See, as to the futile contentions based on this meaningless or, rather, misleading 
 phrase, § 305, ante, with which cp. §§ 153-158, and note {y) to § 163, ante. 
 
 (e) At p. 1243 of Erlanger v. New Sombrero Phosphate Co. (1878), 3 App. Cas. 1218, H. L. 
 (/) At pp. 751, 752 of Cutts v. Salmon (1852), 21 L. J. (cH.) 750. 
 
 ig) At pp. 155, 156 of Chesterfield (Ea/rl of) v. Jannsen (1751), 2 Ves. Sr. 125. 
 (h) At p. 887 of Moxon v. Payne (1873), 8 Ch. App. 881. 
 {i) See note (c), sup. 
 
§§ 629-631 (terminology). 559 
 
 of "undue influence" which is constituted by unconscionable bargains with "'ex- 
 pectants (j). Again, Lord LmDLEY has spoken of "undue influence "as "including 
 one of the many varieties " of "fraud" (k), and Kat, J., in a case in which he 
 expressly found that "no moral fraud has been proved," said that, nevertheless, 
 such transactions " — the case was one of an unconscionable bargain with an expec- 
 tant—'' amount to unfair dealing, which equity considers a fraud," though, as he 
 unmediately added, he " would rather the word were used only for moral delin- 
 quencies " (l). The same unfortunate use of the term is noticeable in cases relating 
 to coniposition arrangements with creditors (to), and in cases of innocent misrepre- 
 sentation against which relief by way of rescission is given without the slightest 
 necessity for proving "fraud " in its ordinary sense (») ; and it is encouraged by 
 digests and text-books, in which non-disclosure is habitually classed under the 
 general head of "fraud," and by the constant use of the terms "concealment," 
 and " withholding the facts," as exact synonyms of non-disclosure, which scientifically 
 they may be, but certainly are not to the mind of the layman who, rightly or 
 wrongly, infers a distinct moral imputation from these positive expressions which 
 he does not attach to the negative term (nn). 
 
 630. As has been already hinted, all this seeming conflict and confusion can be 
 traced back to the needless, and worse than needless, use of the word "fraud " in 
 a secondary and enlarged sense, not only alternately, but concurrently, with its 
 use in the natural and proper sense. Chancery judges have thus wantonly converted 
 a name which, if ever a name did, always signified one thing, and one thing only, 
 into a name akcipitis sensus. To the plain man " fraud " has never suggested any- 
 thing short of actual deception practised by one man upon another with a wicked 
 intent. In equity, on the other hand, it has from the earliest times connoted no 
 more than a non-compliance with equitable rules, or a violation of equitable duty, 
 and has denoted, therefore, no less than every act or omission which answers to 
 that description (o). 
 
 631. In applying the term in question indifferently to cases falling within either, 
 or both, of these two definitions, the Courts have disregarded that iirst law of scientific 
 terminology which requires that every term used for the purpose of the science, 
 
 (j) At p. 10 of Owynne v. Beaton (1778), 1 Brown C. C. 1, Lord Thublow, L.C, says 
 that " fraud is not the ground of relief " ; and, at p. 391 n. of Benyon v. Cook (1875), 10 
 Ch. App. 389, Jbssbl, M.R., explains that "the doctrine has nothing to do with fraud." 
 Both these were cases of unconscionable bargains with expectants. 
 
 (h) When Ldtdlby, L.J., at p. 183 of Allcard v. Skinner (1887), 36 C. D. 145, C. A. 
 
 (l) At p. 324 of Fry v. Lane (1888), 40 C. D. 312. 
 
 (to) Mayhew v. Boyes (1910), 100 L. T. 1, C. A., per Cozens-Habdy, M.R., who there 
 describes such a secret agreement as one " which the law declines to recognize, as being 
 against public poUcy, and in the eye of the law fraudulent, though not morally so." 
 
 (n) As to which, see §§ 456, 457 of the author's Law of Actionable Misrepresentation. 
 
 (nn) As to this, op. § 184, note (z), ante. Jessel, M.R., at p. 370 of London Assurance 
 Co. V. Mansel (1879), 11 C. D. 363, says that " concealment properly so called means 
 non-disclosure of a fact which it is a man's duty to disclose." But describe non-diaolosure 
 to a jury as " concealment," and they will hesitate in the plainest case : see Taylor v. 
 Yorkshire Insurance Co., [1913] 2 Ir. R. 1. 
 
 (o) See the observations of James, L.J., cited in note (c), sup., and those of Lord 
 HALDAjfE, L.C, at pp. 629-632 of Noctm v. Lord Ashburton, [1914] A. C. 932, H. L. 
 So, too. Dr. Story (Eq. Jurispr. vol. i, ch. vii, § 258) includes within his description of 
 " constructive fraud " all " such acts and contracts as, although not originating in any 
 actual evil design . . . are yet, by their tendency to deceive or mislead other persons . . . 
 deemed equally reprehensible with positive fraud, and therefore are prohibited by law, as 
 within the same reason and mischief as acts and contracts done malo animo." He admits 
 that these doctrines " may seem to be of an artificial, if not of an arbitrary, character " ; 
 yet, he contends, "on closer observation they will be perceived to be founded on an anxious 
 desire of the law to apply the principle of preventive j ustice. " The apology, however, should 
 have been made, not for the doctrines, but for the nomenclature. There is nothing " arti- 
 ficial " or " arbitrary " in applying the principles of pubUc policy and " preventive justice " 
 to acts of which the tendency is mischievous, whatever the intention may have been. The 
 arbitrariness is in describing these acts by a name in popular use to which they do not answer. 
 
660 APPENDIX A, SECT. 2, SUB-SS. (1), (2). 
 
 whatever it be, should denominate one concept, and not more than one. No doubt 
 the science of jurisprudence, since it is concerned with the application of logic and 
 ethics to the common aflfairs and transactions of life, is forced to draw largely upon 
 the popular vocabulary for purposes of expression. But this course should be adopted 
 only when it is unavoidable ; because, though not without certain advantages, it is 
 commonly attended by inconveniences and perils which far outweigh them. Of 
 these the most serious are, as Dr. Whewell (p) has pointed out, the danger that the 
 laxity of vernacular usage may infect the terminological apparatus of the science, 
 and the disturbing element due to the fact that, for the most part, expressions 
 sermoni propiora are tinged with sentiment, emotion, imagination, and other subtly 
 pervading personal associations. It is unwise, therefore, to father a term current 
 in the milgare eloquium for the purposes of any scientific proposition, if it is possible 
 to state that proposition clearly and fully without resort to it. But, if it is imprac- 
 ticable, and would be pedantic, to avoid the use of the term altogether, it is at any 
 rate essential that the position which it is to occupy in its adoptive home should be 
 exactly defined at the outset, and afterwards strictly maintained. Both these 
 principles have been flagrantly disregarded in the case of this unhappy term. In the 
 first place, it was from the beginning wholly unnecessary to use the word at all for the 
 purpose of stating the fundamental principles of the law of non-disclosure. In one 
 of the two " opinions " between which equity has " halted," it is said that fraud is 
 essential to liability, but that the omission to disclose material facts as between two 
 persons standing to one another in certain relations amounts in law to fraud, and 
 raises a conclusive presumption of it. But what is this but a confession that the 
 essential thing is the non-disclosure ? If so, there was no need for the introduction 
 of this middle term at all (q). It is as true of nomina as of entia, that they are rum 
 multipUcanda prceter necessitatem ; and the application of this useless label would 
 seem to sin gravely against the above philosophical canon. It would have been 
 quite sufficient to have simply stated the existence of the duty of disclosure under 
 certain conditions, and to have then laid down that any breach of the duty under 
 those conditions is actionable ; and when judges have gone out of their way to 
 describe such omissions of duty as fraud " in the eye of the Court," whilst lamenting 
 that the word has not been confined to its proper sense of " moral delinquency " (qq), 
 it is strange that they have never perceived that it has always been in their own hands 
 to remove the cause of their lament, or at all events give no further occasion for it, by 
 the very simple expedient of eschewing, or abandoning, the use of the word altogether. 
 Secondly, the employment of the word lacks the negative, as well as the positive, 
 merit of Shylock's " harmless necessary cat." It has been as misleading and harmful 
 in its life as it was unwanted at its birth. Being a term of all others "tinged 
 with sentiment," in WheweU's phrase, and suffused with inevitable suggestions of 
 moral reprobation and odium, it should at least have been rigidly confined to its 
 popular signification. Yet, as has been pointed out, this is exactly what has not been 
 done ; the courts having been as guilty in general, as the legislature has been 
 occasionally {r), of the terminological crime of branding with one common nota 
 
 (j)) In his Novum Organon Renmatwm, Book IV. 
 
 (q) " Whenever," as is wisely observed by Dr. Wendell Holmes, " it is said that a 
 certain thing is essential to liability, but it is conclusively presumed from something else, 
 there is always ground for suspicion that the essential is to be found in that something, of 
 what is said to be presumed " (The Common Law, Lect. IV, at p. 134). 
 
 (qq) See, for instance, the language of Kay, J., in the citation given in note (i), anU. 
 
 (r) It was said by Sir Geobgb Mbllish, as counsel, at pp. 608, 609, of Re Overend, 
 Ghirney & Co., Ex p. Oakes and Peek (1867), L B. 3 Eq. 576, that " there are certain 
 statutes . . . which make things fraudulent which may be most innocent things in the 
 eyes of the world. As, for instance, under the statute of Elizabeth against fraudulent 
 conveyances, a man may have made a conveyance without consideration, and yet under 
 that statute it would be held to be fraudulent against a subsequent conveyance for value. 
 ... It is a misfortune that the word ' fraud ' has ever been applied to transactions which 
 do not involve any moral fraud at all." It is a curious fact that this was the very case 
 which is supposed to have occasioned the introduction of s. 38 of the Companies Act, 1867, 
 (see Ch. VI, ante) a few months later in the same year, — the enactment (now happily 
 
§§ 631-634 (terminology). 561 
 
 infamicB actions and persons which the common conscience would, and those which 
 they would not, designate as dishonest, notwithstanding that, in all other connexions, 
 judges have never wearied in denouncing the enormity of making such a charge as 
 fraud without adequate grounds (s). 
 
 632. The error in question has been encouraged, and the mischief resulting from 
 it aggravated, by that persistent judicial tendency to trespass upon the provinces 
 of the preacher, the priest, and the pedagogue, on occasions where no moral question 
 is raised to justify the intrusion, which has of late aroused no little resentment 
 when manifested in other departments of law [t). 
 
 633. A corresponding double use of the terms bona fides, "honesty," and the 
 like, with the same results, may be noticed in some of the authorities («). So also, 
 in the law of misrepresentation (v), and in that of defamation (w), the like twofold 
 application of the words "fraud " and " malice," respectively, has been responsible 
 for the ridiculous division of the former into " moral " and " legal " fraud, and of the 
 latter into " malice in law," and " malice in fact," to the confusion of aU clear thought 
 and exposition. 
 
 Subs. (2). Misuse of the term " Fraud " in connection with the Doctrine of 
 Presumptive Knowledge. 
 
 634. In the discussion of the various species of presumptive knowledge, it was seen 
 that one of them consists in the knowledge which a party is presumed in law to have 
 acquired of some document or fact in virtue of his actual knowledge of some other 
 and connected document or fact under such circumstances that reasonable investiga- 
 tion, if made, would have led him from the latter to the former knowledge (x) ; and 
 it was explained that this presumption is made for the general convenience of the 
 community, and that accordingly any characterization of the party's motives or 
 morals in omitting to pursue the necessary inquiry is logically irrelevant and 
 indefensible (y). No doubt, in a large number of cases, it has so happened that the 
 
 repealed) which presents the most flagrant example of the " misfortune " referred to by 
 Sir Geobgb Mellish, and which, had it then been in force, would have added point and 
 weight to his argument. The judicial attitude towards this and all other statute-made 
 frauds, which are even more repulsive than judge-made frauds, was forcibly expressed by 
 Vattghan Williams, L. J., at p. 471 of Cackett v. Keswick, [1902] 2 Ch. 456, C. A. : "I think 
 that the 38th section, which in effect provides that a man . . . shall although acting 
 honestly be deemed fraudulent, is a section which no judge can give effect to, not only 
 without a feeling of repugnance, but without a feeUng that that which he is doing does not 
 really tend to the maintenance of commercial honesty and commercial moraUty. To herd 
 together, under a collective word like ' fraudulent,' people who are honest and people who 
 are dishonest, to my mind, cannot possibly tend to the maintenance of commercial 
 morality." Op., on "the painful duty " thrust upon the Court by this enactment, the 
 observations of Cozbns-Habdy, L.J., at pp. 628, 629 of Broome v. Speak, [1903] 1 Ch. 
 586, C. A., concurred in and adopted by Lord Halsbuby, L.C, at p. 345, and Lord 
 LiNDLBY at p. 346, of the same case, on appeal to the House of Lords, sub nam. Shepheard 
 V. Broome, [1904] A. C. 342, H. L., and those of Bbamwell, L. J., at pp. 19, 20 of Be Wheal 
 Unity Wood Mining Co., Ghynoweth's Case (1880), 15 C. D. 13, C. A., on a similar enactment 
 in the Stannaries Act, 1869 (32 & 33 Vict., c. 19), s. 35. 
 
 (s) " A charge of fraud is such a terrible thing to bring against a man," said Lord 
 EsHBB, M.R., who always expressed himself very strongly on this subject, at p. 498 of 
 Le Lievre v. Gould, [1891] 1 Q. B. 491, C. A. This is why gratuitous and unproved charges 
 of fraud are visited with such heavy penalties in the matter of costs : see § 618, ante. 
 
 (t) See § 670, post. 
 
 (u) Thus, in Foster v. Roberts (1861), 29 Beav. 467, Romilly, M.R,, at p. 470, after 
 observing that " there is perfect bona fides on both sides," that is, in the moral sense, goes 
 on to say that " the burden of proof lies on the defendant to prove that the transaction 
 was a bond fide one in the sense that a fuU and sufficient price was given for the reversion." 
 
 (v) This is the subject of §§ 458, and 465, of the author's Law of Actionable Misrepre- 
 
 (w) See App. II of the author's Code of the Law of Actionable Defamation, 
 (x) See Ch. IL Sect. 3, Sub-s. (5), ante. 
 
 (y) See § 58, ante, where the terminological questions arising were expressly reserved 
 for discussion in this Appendix. 
 
 2 o 
 
 B.N.D. 
 
562 APPENDIX A, SECT. 2, SUB-SS. (2), (3). 
 
 conduct of the party was dishonest in the sense that, whilst conscious of something 
 in the background afifeoting the validity of his title or of the transaction in which 
 he was engaged, he deliberately refrained from ascertaining what that something 
 was, with the intention of putting himself in a position to assert with literal truth, 
 when subsequently sought to be " fixed " with notice, that he was in fact ignorant 
 of that which is alleged to have taken place with his cognizance. In every such case, 
 judges have not been slow in ascribing to the party "fraudulent blindness" (2), 
 " wiKul blindness "( a), " diligence in ignorance " (6), and all manner of wickedness. 
 And so frequent have been the cases in which the conduct of the party has been such 
 as to call down this thunder from Olympus, that at least two great masters of equity. 
 Lord Eldon (c), and in more recent times, James, L.J. (d), have been tempted to lay 
 down that fraud is not only a very usual concomitant of the abstention from inquiry 
 which raises the presumption of Imowledge, but is a condition precedent to that pre- 
 sumption being made at all ; and this in face of the considerable number of reported 
 decisions wherein omissions to take the necessary precautions have been held to be 
 actionable which undoubtedly proceeded from nothing more than sheer laziness, stu- 
 pidity, or unfamiliarity with the recondite principles on which equity imputes to a 
 man a knowledge which he never had (e). The explanation of the uncompromising 
 and unqualified language in which the above proposition came to be expressed is the 
 same as that which accounts for so much that is unsatisfactory and perplexing in our 
 jurisprudence, as will be noticed hereafter {/). The process is this. A judicial state- 
 mentof a general rule is aocompaniedbyethical reflections on theconduct of the parties 
 which may be justified by, but in any case are only relevant to, the circumstances of 
 the particular case. Under the like circumstances the same thing happens again and 
 again, until at last the accompanying reflections are thought to be an integral part of 
 the proposition itself, and that which was never more than an accidental annex comes 
 to be treated as a substantive and essential condition of the applicability of the rule. 
 635. That the proposition stated by Lord Eldon and James, L. J., is too absolute, 
 and to that extent inaccurate, is now abundantly clear. It runs counter to the main 
 current of authority, according to which not only a fraudulent, but a negligent, 
 " blindness " or abstinence from inquiry is sufficient to raise the presumption of 
 knowledge (g), and it is in still wider disaccord with the statutory expression of the 
 
 (z) The expression of Wigbam, V.-C, at p. 61 of Jones v. Smith (1841), 1 Hare 43, by 
 which he meant (see p. 56) " a suspicion of the truth, and a fraudulent deterinination not 
 to learn it." 
 
 (a) Per Cookbukn, C.J., at p. 605 of Bates v. Hewitt (1867), L. R. 2 Q. B. 595. Cp. 
 the " wilful ignorance " of Lord St. Leonards at p. 1035 of Owen v. Roman (1853), 
 4 H. L. C. 997. 
 
 (6) A favourite locution of Sir Jambs Knioht-Bbttce. 
 
 (c) In Evans v. Bicknell (1801), 6 Ves. 174, at p. 190. In Northern Counties of England 
 Fire Insurance Go. v. Whipp (ISSi), 26 C. D. 482, C. A., Fby, L.J., delivering the judgment 
 of the Court, at pp. 488-490, elaborately analyses and explains Lord Eldon's judgment 
 and phraseology in the above case, and, at p. 490, concludes : " all this language of Lord 
 Eldos, though loose and difficult to construe, appears to us to point to fraud as the 
 necessary conclusion before the Court can deprive the owner of the legal estate of his legal 
 rights derived from that estate." Cp. Manners v. Mew (1885), 29 C. D. 725 {per Nobth, J., 
 at p. 727). 
 
 {d) At p. 654 of Batcliffe v. Barnard (1871), 6 Ch. App. 652. 
 
 (e) For which unfamiliarity small blame can be imputed, in the case of doctrines and 
 rules so compUoated and refined that judge after judge has exclaimed against them, 
 protested against their extension in the sUghtest degree, and rejoiced in their apparent 
 restriction by statute : see Ch. II, Sect. 3, Sub-s. (7), ante. 
 
 ( / ) See § 647, post. 
 
 (gr) For examples, see Jones v. Smith (1841), 1 Hare 43 {per Wigbam, V.-C, at p. 55, 
 where he mentions, as two distinct and separate " classes " of constructive notice, first, 
 the cases in which knowledge of a fact or instrument is imputed to a party who would 
 have acquired actual knowledge thereof if he had pursued the inquiries it was reasonable 
 for him to make, and negligent, therefore, not to make : and, " secondly, cases in which 
 the Court has been satisfied from the evidence before it that the party charged had 
 designedly abstained from inquiry for the very purpose of avoiding notice ") ; Jones v. 
 Williams (1857), 24 Beav. 47 {per Romilly, M.R., at pp. 58, 59, distinctly stating that 
 
§§ 634-637 (terminology). 5(53 
 
 rule introduced in 1882, which mentions neither fraud, nor negligence, as necessai-y 
 to found the presumption {h). 
 
 636. The only cases in which fraud is a necessary condition of the presumption 
 are cases in which it is sought to deprive a party of the special statutory advantages 
 to which he is entitled as the holder of a negotiable instrument (i), or as having duly 
 registered a title to land pursuant to any of the Registry Acts (j). Obviously these 
 are nothing but exceptions which prove the rule. 
 
 Svi-s. (3). Misuse of the term " Negligence," as the Equivalent of " Fraud," in 
 Connection udth the Doctrine of Presumptive Knowledge. 
 
 637. Those who were responsible for the view that, in the class of case just con- 
 sidered, a party to whom it is sought to impute knowledge of a fact must be proved 
 to have been guilty of fraudulent ignorance before the imputation can be made (k), 
 found themselves in a difficulty when confronted with the decisions of unquestionable 
 authority in which it had been held that negligence, at all events if " gross " and 
 " culpable," is equally adequate to raise the presumption (l). Recognizing that 
 the proposition enunciated by them was unsustainable unless negligence could be 
 in some way identified with fraud, they proceeded to evolve the amazing theory that 
 negligence, if " gross " enough, is fraud, or at aU events is evidence of it (m). Both 
 Lord Eldon (w) and Sir George Thrnbk (o) committed themselves to the first, 
 
 fraud is not necessary) ; Hunt v. Elmes (1860), 2 De G. F. &, J. 578 (per Tueitee, L.J,, 
 at p. 588) ; Bat^ v. Hewitt (1867), L. R. 2 Q. B. 595 (per Cockbuen, C.J., at p. 605 : " if 
 the insurer chooses to raejicci the information which he receives, . . . it is his own fault "). 
 Then came the disturbing judgment of Jambs, L.J., in 1871, cited in note (d), sup., which, 
 however, after eleven years, was corrected or quahfied by the statement of the rule 
 which is contained in the enactment mentioned in the next note. Ultimately, though 
 not until after the lapse of another seventeen years, a definite note of dissent to the 
 extreme view of James, L. J., was struck in the case of Oliver v. Hinton, [1899] 2 Ch. 264, 
 C. A. (per LiNDLEY, M.R., at p. 274 : " the actual decision in that case was, I think, 
 perfectly right. But I think that James, L.J., went too far in the language which ho 
 used. ... To deprive a purchaser for value without notice of a prior incumbrance of the 
 protection of the legal estate, it is not, in my opinion, essential that he should have been 
 guilty of fraud ; it is sufficient that he has been guilty of such gross negUgence as would 
 render it unjust to deprive the prior incumbrancer of his priority "). And see the sub- 
 quent oases of Berwick & Co. v. Frice, [1905] 1 Oh. 632 (per Joyce, J., at p. 640 : " the 
 omission by a purchaser to investigate the title, or to require delivery or production of the 
 title deeds, is not to my mind either fraudulent or culpable, nor does it since the judgment 
 of LiNDLBY, M.R., in Oliver v. Hinton, seem necessary to characterize it by any such 
 epithet ") ; Walker v. Lynom, [1907] 2 Ch. 104 (per Paekbr, J., who, after referring to 
 Northern Counties of England Fire Insurance Co. v. Whipp, cited in note (c), ante, which 
 certainly supports the now discarded heresy, observes, at p. 113 : " there are, however 
 subsequent cases that . . . fraud is not necessary." He then cites and adopts the 
 language of, and the quahfications introduced by, Oliver v. Hinton, sup., and Berwick & Co. 
 V. Price, sup. 
 
 (h) See § 66, ante, in which the enactment referred to, s. 3 (1) of the Conveyancing Act, 
 1882 (45 & 46 Vict. c. 39), is set out ; § 67, ante, in which it is explained with reference to the 
 authorities ; and § 68, anie, in which it is shown that neither " fraud," nor " negUgence," 
 nor any other motive or state of the mind, is expressly or imphedly alluded to in the 
 section as a condition precedent to presumption of notice. It is rather strange, therefore, 
 that, in the cases after 1882 which are cited in the last note, greater rehance was not 
 placed on the statutory rule. 
 
 (i) See § 70, ante. 
 
 (j) See § 73, anie. 
 
 (k) For examples, see the cases cited in note (c) to § 634, ante. 
 
 (I) See the cases cited in note (g) to § 635, ante. 
 
 (m) Cp. the similar process described in Sub-s. (1), ante, where it is shown that, having 
 once said that non-disclosure must be fraudulent to be actionable, theCoxirts were driven to 
 T)uttress up the initial error of substance by another of terminology. 
 
 (n) In Evans v. Bickndl (1801), 6 Ves. 174 (at p. 191 : " negligence so gross as to 
 amount to fraud"). 
 
 (o) In Hewitt v. Loosemore (1851), 9 Hare 449 (at p. 458 : " gross and wilful neghgence 
 wrhich in the eye of this Court amounts to fraud "). 
 
564 APPENDIX A, SECT. 2, SUB-SS. (3), (4). 
 
 and bolder, of these propositions, which is now entirely exploded. Not only is 
 negligence not the same thing as fraud, or (as it is otherwise expressed) " equiva- 
 lent " or " tantamount " to it ; it is its direct antitheton. " It has been said," 
 observes Sir Edward Ery, " that there may be negligence which amounts to fraud. 
 That language has always seemed to me not strictly accurate. Eraud imports 
 design and purpose. Negligence imports that you are acting carelessly and without 
 that design. But what is meant is this^ — that conduct which might be negligent, or 
 might be attributable to negligence, is really attributable to a design not to know 
 more " (p). One can only say, in reference to the attempted excuse so courteously 
 made for the astounding heresy under criticism, that i£ that was the meaning, the 
 very opposite was said ; and so Sir Edward Ery himself, two years later, seems to 
 have thought. The milder, and more superficially plausible, of the two views above 
 referred to, which was alternatively propounded by Lord Eldon (q), and others (r), 
 viz. that negligence is evidence of fraud, even if it be not identical with it, is in reality 
 not less inaccurate. Negligence no more indicates fraud than it constitutes it. 
 White cannot be evidence of black, any more than it is black. It is true that the 
 alleged white may be of so dubious and dingy a hue that any person called upon to 
 decide whether it is black or white, there being no middle colour possible, may be 
 justified in saying that what is described as white is in fact black. But this does not 
 justify the proposition that white ever can be evidence of black. One might as 
 reasonably say that because there are many cases in which a jury find that what 
 is suggested to be justifiable homicide is murder, therefore the former is evidence of 
 the latter. Here, again. Sir Edward Pry delivers some sound criticism : " the 
 expression ' gross negligence that amounts to evidence of a fraudulent intention ' 
 is certainly embarrassing, for negligence is the not doing something from carelessness 
 or want of thought and attention ; whereas a fraudulent intention is a design to 
 commit some fraud, and leads men to do or omit doing a thing not carelessly, but 
 for a purpose. But Lord Eldon seems to have meant by his words the not doing 
 of something so ordinarily done by honest men under the given circumstances as 
 to be really attributable not to negligence or carelessness, but to a fraudulent inten- 
 tion. In short, it appears to us that, in the mouth of Lord Eldon, the word ' negli- 
 gence ' was used simply to express non-feasance." Then follows the criticism, above 
 referred to, of Lord Eldon's bolder proposition : "in one place he speaks of negligence 
 so gross as to amount to fraud, which seems like speaking of carelessness so great as 
 to amount to design " {«), or, returning to the simple illustration above given, it may 
 be said that it is like speaking of an object so white as to amount to black. 
 
 [p) At p. 706 of Kettlmell v. Watson (1882), 21 C. D. 685. The later case referred to 
 in the text is Northern Counties of England Fire Insurance Co. v. Whipp, 26 C D. 482, 
 C. A., at p. 490 of which, in criticizing the language of Lord Eldon cited in note (to), ante, 
 he uses somewhat more caustic language. Similar attempts have been vainly made to 
 identify gross negligence with fraud in the law of misrepresentation (see § 110 of the 
 author's Law of Actionable Misrepresentation), and with malice in the law of defamation 
 (see Piftard v. Oliver, [1891] 1 Q. B. 474, C. A., at p. 476). 
 
 {q) In Evans v. Bicknell (1801), 6 Ves. 174, at p. 189 ("that gross neghgence that 
 amounts to evidence of fraud"), at p. 190 ("that gross negUgence that amounts to 
 evidence of a fraudulent intention "), and at p. 193 (" a circumstance of so gross neghgence 
 . . . that it is conclusive evidence of fraud "). 
 
 (r) See Jones v. Smith (1841), 1 Hare 43 (per Wigeam, V.-C, at p. 71) ; Batcliffe v. 
 Barnard (1871), 6 Ch. App. 652 (per James, L. J., at p. 654 : " that wilful negligence which 
 leads the Court to conclude that he was an aooompKce in the fraud ") ; Manners v. Mew 
 (1885), 29 C. D. 725 {per North, J., at p. 727 : " the gross negligence may be such that, 
 looking to the circumstances of the particular case, the Court wiU see that there was fraud ; 
 or it may be in itself, or coupled with other circumstances, sufficient to show fraud," — 
 than which a more confused or confusing statement it would be impossible to imagine) ; 
 Oliver v. Hinton, [1899] 2 Ch. 264, C. A. {per Jbunb, P., at p. 275 : " negligence so gross 
 as would justify the Court of Chancery in concluding that there had been fraud in an 
 artificial sense of the word "). 
 
 (s) Northern Counties of England Fire Insurance Co. v. Whipp, sup., at pp. 489, 
 490. 
 
§§ 637, 638 (terminology). 565 
 
 Subs. (4). Whether such terms as " Negligence" and "Duty" are applicable at all 
 to cases of Presumptive Knowledge. 
 
 638. For the purpose of demonstrating that fraud need not necessarily be estab- 
 lished against a person whose knowledge of a fact is presumed from omission to make 
 reasonable inquiry, certain authorities have been relied upon which support the above 
 negative position in virtue of the affirmative statement that negligence of a certain 
 character and degree is a good ground for the imputation of such knowledge ; and 
 it has hitherto been assumed that this latter proposition is correct. But it may well 
 be doubted whether, strictly speaking, it is so ; and whether, notwithstanding the 
 reiterated use of such phrases as " gross," " wilful," " culpable," and the like (t), 
 there is really any question of a duty at all, in the proper sense of a duty owed by 
 one person to another, or of "negligence" in the proper sense of the breach or 
 disregard of such a duty. The foundation of the presumption in question, as of 
 aU other legal presumptions, is public utility and convenience. The Courts declare, 
 or properly declare, no more than that, under certain circumstances, a man will be 
 deemed to have acquired all that knowledge to which he would have been led by 
 reasonable inquiry : if he does not make such inquiry, his omission to do so is at his 
 own risk and peril. And, in the codifying enactment on the subject in s. 3 of the 
 Conveyancing Act, 1882 (u), as well as in several of the authorities {v), the proposition 
 is stated in a form which negatives, or at least in no way suggests, the existence of 
 any duty in the matter, except in the metaphorical sense of a duty to one's seH, or any 
 motive for pursuing theneoessaryinvestigation otherthan the protection of the party's 
 own interests, or any " guUt," or " culpability," in not doing so. Lord Sblbobne, 
 indeed, is very emphatic on the point. In a registry of title case he observes with his 
 usual felicity and accuracy of expression: " it has been said in argument that investi- 
 gation of title and inquiry after deeds is the ' duty ' of a purchaser or a mortgagee ; 
 and no doubt there are authorities (not involving any question of registry) which do 
 use that language. But this, if it can properly be called a duty, is not a duty owing 
 to the possible holder of a latent title or security. It is merely the course which a 
 man dealing bond fide in the proper and usual manner for his own interest, ought by 
 himself or his solicitor to follow uith a view to his own title and his own security " (w). 
 
 (t) See, generally, the cases cited in the notes to this Sub-section. It is, however, in 
 Ware v. Lord Egmont (1854), 4 De G. M. & G. 460, a case which in other respects is a very 
 valuable authority on presumptive knowledge, that the error in question is expressed in 
 its most aggravated form. Lord Cbanwobth, L.C, commits himself distinctly to the full 
 proposition which is canvassed in the text. " The question," he says at p. 473, " when 
 it is sought to affect a purchaser with constructive notice, is not whether he had the means 
 of obtaining and might with prudent caution have obtained, the knowledge in question, 
 hut whether the not obtaining it was an act of gross and culpable negligence." Here what 
 is stated not to be the question is precisely what the enactment of 1882 declares to be the 
 only question, whilst the enactment, on the other hand, contains not the remotest reference 
 to those considerations of duty and guUt which Lord Cbanworth describes as being 
 the sole question. 
 
 (tt) As to this section, see §§ 66, 67, 68, ante. 
 
 (u) In the following cases, for example, the doctrine of presumptive knowledge or 
 notice was stated without the slightest suggestion of any duty on the part of the person to 
 whom the knowledge is imputed towards the person in whose favour the presumption 
 is made, or of any culpability, or " guilt " attaching to the former, or of anjrthing being in 
 question except his own " protection " and "interest" : Eyrev. DolpMn{l8l3),2^a,'0.&,B. 
 290 {per Lord Manners, L.C. (Ir.), at p. 301) ; Sadler v. Lee (1843), 6 Beav. 324 {per Lord 
 Langdaie, M.R., at p. 351) ; West v. Reid (1845), 2 Hare 249 {per Wigbam, V.-C, at 
 pp. 259, 260, 261) ; London Joint Stock Bank v. Simmons, [1892] A. C. 201, H. L. {per 
 Lord Hebschell, at p. 220 : " when it is said that a person is put on inquiry, the result 
 in point of law is that he is deemed to know the facts which he would have ascertained 
 if he had made inquiry. He cannot better his position by abstaining from so doing ") ; 
 Berwick & Co. v. Price, [1905] 1 Ch. 632 {per Joyce, J., at p. 640 : see the passage cited 
 in note {g) to § 635, ante) ; and see, also, the cases cited in the next two notes. Cp. the 
 similarly erroneous phrase, " guilty of laches," which is criticized in § 217, ante. 
 
 {w) At p. 157 of Agra Bank, Ltd. v. Barry (1874), L. E. 7 H. L. 135. 
 
566 APPENDIX A, SECT. 2, SUB-SS. (4), (5) ; SECT. 3. 
 
 It would seem, therefore, that " negligence " in this connection means simply neglect 
 of a man's own interests, and the word " ought," which is used both in the above 
 citation and in the enactment of 1882, imports no idea of " duty " in the juridical 
 sense, but bears the same meaning as it does when a person is told that, i£ he wishes to 
 catch a certain train or vessel, or to obtain a certain appointment, he "ought " to be at 
 a certain place not later than a certain hour ; or that he " ought " to be'armed, if he 
 intends to travel in a dangerous district, or " ought " to take a guide in the ascent of 
 a particular mountain, or that, if engaged in a business transaction , in order to prevent 
 the possibility of disputes he "ought " to reduce the terms of his agreement into 
 writing, and the like. In reference to s. 3 of the Act of 1882, in which presumptive 
 notice is made to depend on the probability of actual knowledge resulting from such 
 inquiries as "ought reasonably to have been made," it has been distinctly held that the 
 word " ought " there used " does not import a duty or obligation, for a purchaser 
 need make no inquiry. The expression ' ought reasonably ' must mean ' ought as 
 a matter of prudence,' having regard to what is usually done by men of business 
 under similar circumstances " {x). 
 
 Suh-s. (5). Lax Use of the term " Mistake " in the Law of Non-Disclosure. 
 
 639. In connection with certain types of case, particularly where there is great 
 difficulty in establishing the existence of a relation between the parties of such a 
 character as to give rise to a duty of disclosure, occasional tendency is manifested to 
 indulge sympathy at the expense of justice, and grant relief on the general ground 
 of " mistake," — ^not " mistake " as known to the law, but " mistake " as a nomen 
 generalissimum, with a large and generous meaning far transcending the definite and 
 sober limits assigned to that concept by jurisprudence. Some instances of this loose 
 use of the word have been given in a previous chapter (y). Another misuse of the 
 word, not, however, by judges, but by the legislature, is its association with the 
 adjective " honest." As has already been pointed out (z), one of the affirmative 
 pleas available to a person sought to be made liable for non -disclosure in a pros- 
 pectus under s. 81 of the Companies (Consolidation) Act, 1908, is " honest mistake." 
 This expression is meaningless. If " honest " is to import any addition to the 
 connotation of " mistake," it can only do so on the basis that there is such a thing 
 as dishonest mistake. But there is no such thing. A man may dishonestly pretend 
 to be mistaken, but he cannot be dishonestly mistaken. Dishonesty and error are 
 mutually exclusive. To speak, therefore, of an honest mistake, is as tautological as 
 to speak of a rectangular square; whilst "dishonest mistake " is as self-contra- 
 dictory an expression as " unrectangular square." The similar phrases "honest 
 satisfaction" (zz), and "honest belief," are subject to the same criticism. It has, 
 it is true, been found possible to give a meaning, though a very strained one, to 
 " dishonest belief " (a) : but, assuming the possibility of a real and actual belief 
 
 (x) Per Stirling, L.J., at p. 135 of Bailey v. Barnes, [1894] 1 Ch. 25, C. A. Cp. Gains- 
 horoiigh {Earl of) v. Watcombe Terra Ootta Clay Co. (1885), 54 L. J. (ch.) 991 {per North, J., 
 at p. 994). Cp. Scriven Bros. & Co. v. Hindley & Co., [1913] 3 K. B. 564 {per A. T. 
 Lawrence, J., at p. 569 : " a buyer when he examines a sample does so for his own 
 benefit, and not in the discharge of any duty to the seller ; the use of the word 
 " neghgence " in such a connection is entirely misplaced ; it should be reserved for cases 
 . . . where some duty is owed by one person to another "). Similarly, as to the term 
 "fault," used by Cockbtten, C.J., at p. 605 of Bates v. Hewitt (1867), L. R. 2 Q. B. 595 
 (" if he shuts his eyes to the Ught, it is his own fault "), it is clear from the context that 
 nothing was meant but that one who omits to take precautions for his own protection 
 has only himself to blame. 
 
 {y) See § 138, and note (ra) thereto, ante. 
 
 {z) See Ch. VI, Sect. 6, Sub-s. (4), ante. 
 
 {zz) Seethe observations of A. L. Smith, L.J., at p. 307 of Harward v. Hackney Union 
 (1898), 14 T. L. R. 306, C. A. ; "a dishonest satisfaction would be no satisfaction at all." 
 
 {a) Thus, in the celebrated misrepresentation case of Derry v. Peelc (1889), 14 App. Cas. 
 337, H. L., Lor3 Herschbll, after sajring, at p. 374, that " to prevent a false statement 
 being fraudulent, there must always be an honest belief in its truth," proceeds in a later 
 passage of his judgment to explain precisely what he means by " honest belief." " If 
 
§§ 638-642 (terminology). 567 
 
 which may yet be regarded as dishonest, because dishonestly produced, how can 
 fraudulent manufacture be ascribed to a mistake ? If the thing is a mistake, it 
 cannot be a fraud : if it is a fraud, it cannot be a mistake. 
 
 Sect. 3. Criticism of Terminology applied to Relations of Confidence and 
 
 Influence. 
 
 640. In connection with the duty of disclosure and other dutiesincidental to relations 
 of confidence and influence, expressions have occasionally been used with some laxity. 
 In the first place, the term uberrima fides, as applied to contracts in the negotiation 
 for which full disclosure is required, has been referred to as possibly open to excep- 
 tion (6), though in this case the comment may be considered somewhat hypercritical. 
 
 641. Secondly, as regards relations of confidence, Lord Moulton, in language 
 remarkable for its force and lucidity, has drawn attention to the confusion arising 
 from the lax and indiscriminate use and application of the general term " fiduciary 
 relation " (c) ; and Lord Westbtjby has strongly condemned the Kke misuse of the 
 word " trustee " in connection with one particular class of fiduciary relation (tZ). 
 
 642. Thirdly, with respect to relations of " influence," it has already been pointed 
 out how frequently " influence " and " confidence " are confounded with one 
 another, and the distinction between them hazily defined, or altogether dis- 
 regarded (e) ; whilst the ambiguities and difiiculties, in this case perhaps unavoid- 
 able, which surround the expression " undue," — applied, as it is, to " influence " 
 in at least three senses (the popular sense, the " testamentary " sense, and the sense 
 in which it is used by lawyers in relation to transactions inter vivos), — have been 
 observed upon by Lord Cranworth ( / ) and Lord Abinger (g). 
 
 I thought," he observes, at p. 376, "that a person making a false statement had shut his 
 eyes to the facts, or purposely abstained from inquiring into them, I should hold that honest 
 belief was absent, and that he was just as fraudulei.t as if he had knowingly stated that 
 which was false." That is to say, in any action of deceit, where it is necessary to prove 
 that the representor did not beUeve in the truth of his representation, a belief actually 
 held, but dishonestly engendered, will be deemed as clear a badge of fraud as the absence 
 of any belief at aU. But this principle has no apphcation whatever to the case of non- 
 disclosure which is actionable without fraud. 
 
 (&) See §§ 1, 2, 85, 87, 106, ante. 
 
 (c) At pp. 728, 729 of Re Coomber, [1911] 1 Oh. 723, C. A. : " it is said that the son was 
 manager of the stores, and therefore was in a fiduciary relationship to his mother. This 
 illustrates in a most striking form the danger of trusting to verbal formulae. Fiduciary 
 relations are of many different types ; they extend from the relation of myself to an errand 
 boy who is bound to bring me back my change up to the most intimate and confidential 
 relations which can possibly exist between one party and another, where the one is wholly 
 in the hands of the other. . . All these are cases of fiduciary relations, and the Courts 
 have again and again . . . interfered to set aside acts which, between persons in a wholly 
 independent position, would have been perfectly vaHd. Thereupon in some minds there 
 arises the idea that, if there is any fiduciary relation whatever, any of these types of 
 interference is warranted by it. They consider that every kind of fiduciary relation 
 justifies every kind of interference. Of course this is absurd. The nature of the fiduciary 
 relation must be such that it justifies the interference." Cp. § 143, note {h), ante. 
 
 {d) At pp. 675, 676 of Knox v. Oye (1872), L. R. 5 H. L. 656. See note (6) to § 646, 
 post. Cp. Omnium Electric Palaces, Ltd. v. Baines, [1914] 1 Ch. 332, C. A. (per Sabgant, J., 
 at p. 347), and the criticism of Lord WESTBtrBY's views in the Privy Council, at pp. 87, 88 
 of Gcn-don v. Holland (1913), 82 L. J. (p.c.) 81. 
 
 (e) In § 314, note (t), and § 404, ante. 
 
 (/) At pp. 47, 48 of Boyse v. Eosshorough (1857), 6 H. L. C. 2 : "the difficulty of 
 deciding such a question arises from the difficulty of defining with distinctness what is 
 undue influence. In a popular sense we often speak of a person exercising undue influence 
 over another, which influence is certainly not of a nature which would invalidate a wfll. 
 A young man is often led into dissipation by following the example of a companion of 
 riper years . . . ; the companion is then correctly said to exercise an undue influence. 
 But if in these circumstances the young man, influenced by his regard for the person who 
 had thus led him astray, were to make a wiU, and leave to him everything that he possessed, 
 such a wfll certainly could not be impeached on the ground of undue influence." 
 
 {g) At p. 367 (during the argument) of Middleton v. Sherburne (1841), 4 Y. & C. (Exch. 
 
568 APPENDIX A, SECTS. 3, 4. 
 
 643. Lastly, the vague and misleading use of such mere figures of speech as " un- 
 fairness," " inequality," " mistake," and the like, in connection with the duties inci- 
 dental to the negotiation of compromises and other contracts vberrvmoefidei{h), as also 
 with those incidental to relations of influence (i), has already been criticized. The 
 use of the terms " fair " and " unfair " in a variety of meanings has been particularly 
 productive of pitfalls in the law of non-disclosure (j), as it has been in other depart- 
 ments of our jurisprudence {h). And the same is true, as has been emphatically 
 noted by Sir Geoegb Jbssbl, of the haphazard application of the terms " hard- 
 ship" (I) and " oppression " (m). 
 
 Sect. 4. Ceiticism oi' Conflicting Tbeminology applied to the Docteinb 
 OF Actual and Peesttmptivb Knowledge. 
 
 644'. An examination of the phraseology used in the authorities as to "actual," 
 " constructive," and " imputed " knowledge will reveal an extremely inconvenient 
 and perplexing want of consistency in the application, and unanimity in the inter- 
 pretation, of these respective adjectives. Conflicting definitions have been given, 
 
 in Eq.) 358, where he also mentioned an unreported case in which " Mr. Justice Chambre, 
 who tried the case and who was the best lawyer of his day, told the jury he hardly knew 
 what undue influence was." Cp. the oases cited in note (^) to § 447, ante, and Wingrove v. 
 Wingrove (1885), 11 P. D. 81 (per Hannen, P., at p. 82). 
 
 (h) See § 138, ante, and the cases cited in notes (e), (/), (g), (h) to § 163, ante. 
 
 (i) See § 428, ante. 
 
 {j) Thus, at p. 324 of Fry v. Lane (1888), 40 C. D. 312, Kay, J., speaks of "unfair 
 dealing, which equity considers a fraud," though " no moral fraud has been proved " ; 
 at p. 662 of Bromley v. Smith (1859), 26 Beav. 644, Romilly, M.R., uses the expression 
 "fairness of the transaction" as indicating adequacy of price only; whilst Lord 
 Sblbobnb, L.C., at p. 491 of Aylesford {Earl of) v. Morris (1873), 8 Ch. App. 484, and, 
 following him, Fitzgibbon, L.J. (Ir.), at p. 523 of Bae v. Joyce (1892), 29 L. E. (Ir.), 600, 
 seem to regard the term as negativing the taking of any unconscionable advantage of 
 the distress and weakness of a servient party, as distinguished from the reasonableness, 
 in a commercial aspect, of the bargain. 
 
 (4) The unfortunate ambiguities in the appHcation of the term " fair " to " comment " 
 are minutely discussed and criticized in App. XII, Sect. 4, of the author's Oode of the Law 
 of Actionable Defamation. Similar difficulties have arisen, in connection with the law 
 relating to contracts in restraint of trade, whenever reliance has been placed on a supposed 
 standard of " fair restraint," "fair competition," and the like : see Mogul Steamship Co. v. 
 McGregor, Gow & Co. (1889), 23 Q. B. D. 598, C. A., per Bowen, L.J., at p. 615 : " we 
 were told that competition ceases to be the lawful exercise of trade, ... if carried to a 
 length that is not fair or reasonable. . . . This seems to assume that, apart from fraud, 
 intimidation, molestation, or obstruction, of some other personal right in rem or in 
 personam, there is some natural standard of " fairness " or " reasonableness " (to be 
 determined by the internal consciousness of judges and juries) beyond which competition 
 ought not in law to go. There seems to be no authority, and I think, with submission, 
 that there is no sufficient reason for such a proposition. . . . The defendants, we are told 
 by the plaintiffs' counsel, might lawfully lower rates provided they did not lower them 
 beyond " a fair freight," whatever that may mean. But where is it established that there 
 is any such restriction on commerce ? And what is to be the definition of ' a fair freight ' ? " 
 So, at p. 47 of the report of the same case on appeal to the House of Lords, [1892] A. C. 
 25, H. L., Lord Bbamwell observes : " it is admitted that there may be fair competition 
 in trade, that two may offer to join and compete against a third. If so, what is the 
 definition of a ' fair competition ' ? What is unfair that is neither forcible nor fraudu- 
 lent ? " ; and, to the same effect. Lord Moreis, at p. 51 : "I am not aware of any stage 
 of competition caUed ' fair,' intermediate between ' lawful ' and ' unlawful.' The 
 question of ' fairness ' would be relegated to the idiosyncrasies of individual judges." 
 
 {I) At p. 413 of Middleton v. Brown (1878), 47 L. J. (oh.) 411, C. A., in a passage, cited 
 in note («) to § 428, ante, which was adopted in Bae v. Joyce (1892), 29 L. K. (Ir.) 500 
 (per Walker, L.C. (Ir.), at p. 510). 
 
 (m) At p. 260 of Wallis v. Smith (1882), 21 C. B. 243, C. A. : " he "—Lord Eldon— 
 " perfectly well knew that, whatever had been the doctrine of equity at one time, it was 
 not then the doctrine of equity to give reUef on the ground that agreements were oppressive, 
 where the parties were of full age, and at arm's length." 
 
§§ 643, 644 (terminology). 569 
 
 not only of the expressions " constructive," and " imputed," but (which one would 
 hardly expect) even of the word " actual " also (m). Thus Lord Eeskikb, after using 
 actual notice " in its ordinary meaning, proceeded to distinguish it from, on the 
 one hand, " notice by construction of law, as where notice to the agent is notice 
 to the principal," and, on the other hand, from " imputed " notice, which he under- 
 stood as " that notice which from the nature of the transaction every person of 
 ordiuary prudence must have " (o). Lord Chelmsfokd, however, expressed his 
 preference for a limitation of the phrase " constructive notice " to the notice which 
 a person is deemed to have had of that which reasonable inquiry would have revealed, 
 whilst that which Lord Ebskine called " constructive," viz. the knowledge which 
 a principal is deemed to have in virtue of his agent's knowledge, should in his view 
 be denominated " actual," or, if not, then " imputed " knowledge (p). The former 
 of the two adjectives thus suggested as proper to be applied to cases of knowledge 
 through an agent was afterwards expressly adopted by Lord Hathebley (j) and 
 Lord Caiens (j-), and impliedly by the various judges who have insisted that, for 
 purposes of knowledge as of all others, the principal is " identified " with his agent (s) : 
 the latter was preferred by Sir Geoboe Tubnbe and Sic Edwaed Fey (t). Lord 
 EsHEE strongly objected to the use of any such phrase as " constructive " or " im- 
 puted " notice, but his repugnance was not so much to the names, as names, but 
 to the theories to which they were applied. " The doctrine of constructive notice," 
 he observes, " is whoUy equitable," and " is a dangerous one." He protests that 
 " it is not known to the common law," and insists that the cases at common law of 
 " wilful blindness," in order to avoid knowing the truth, are not really cases of 
 constructive notice at aU, but of actual notice : " when a man has statements made 
 to him, or has knowledge of facts, which do not expressly tell him of something which 
 is against him, and he abstains from making further inquiry because he knows what 
 the result would be — or, as the phrase is, he wilfully shuts his eyes — then judges are 
 
 (m) In Ch. II, Sect. 3, ante, the various species of Icnowledge are discussed. 
 
 (o) At p. 120 of Hiern v. Mill (1806), 13 Ves. 114. 
 
 {p) At p. 554 of Espin v. Pemberton (1859), 3 De G. & J. 547 : "I think it would tend 
 very much to clearness in these cases if it " — i.e. knowledge through an agent — " were 
 classed under the head of actual notice. . . . Constructive notice, properly so called, is 
 the knowledge which the Courts impute to a person upon a presumption so strong of the 
 existence of the knowledge that it cannot be allowed to be rebutted, either from his 
 knowing something which ought to have put him on further inquiry, or from his wiLtully 
 abstaining from inquiry to avoid notice. I should therefore prefer calling the knowledge 
 which a person has, either by himself, or through his agent, actual'knowledge ; or, if it is 
 necessary to make a distinction between the knowledge which a person possesses himself, 
 and that which is known to his agent, the latter might be called imputed knowledge." 
 The definition here given of "constructive notice," as distinct from "actual" and " im- 
 puted notice," is somewhat unfortunately expressed, because it describes constructive 
 notice as something which the. Courts "impute." It is taken almost verbatim from a 
 passage in the judgment of Tttknek, V.-C, in Hewitt v. Loosemoore (1851), 9 Hare 449, 
 at p. 455, but it is plain from the context that the Vice- Chancellor meant by his " con- 
 structive," " imputed," and " presumed " knowledge^ — for in his view aU three epithets 
 are equally applicable — the knowledge which a principal is deemed to have in virtue of the 
 actual knowledge of his agent, and no other kind of knowledge. 
 
 (q) In Bolland v. Hart (1871), 6 Ch. App. 678, at pp. 681, 682 : " it has been held over 
 and over again that notice to a sohcitor of a transaction, and about a matter as to which 
 it is part of his duty to inform himself, is actual notice to the cHent." 
 
 (r) At p. 148 of Agra Bank, Ltd. v. Barry (1874), L. R. 7 H. L. 135 ("actual notice 
 either to the principal, or to the agent, whose knowledge is that of the principal "). 
 
 (s) See Stribley v. Imperial Marine Insurance Co. (1876), 1 Q. B. D. 507 {per Lush, J., 
 at p. 614 : " when the master of a ship, or the agent or correspondent of the owner . . . 
 withholds any fact material to the risk, the owner, in making any insurance, is identified 
 with his agent, and liable for his default." Cp. the following misrepresentation cases : 
 S. Pearson & Son, Ltd. v. Dublin Corporation, []907] A. C. 351, H. L. (per Lord Loebbubk, 
 L.O., at p. 354, and Lord Halsbuby, at pp. 357, 358) ; Lloyd v. Grace, Smith & Co., [1912] 
 A. C. 716, H. L. 
 
 (t) Hewitt V. Loosemoore, sup. (per Tubnee, V.-C, at p. 455) ; Bradley v. Riches (1878), 
 9 C. D. 189 (per Fky, J., at p. 196). 
 
570 APPENDIX A, SECTS. 4, 5. 
 
 in the habit of telling juries that they may infer he did know what was against him. 
 . . . There is no question of ' constructive notice,' or ' constructive knowledge ' ; 
 it is actual knowledge which is inferred " (u). 
 
 645. In this marked divergence of nomenclature, the course which suggests itself 
 as the best adapted to avoid confusion, when dealing with this topic, is to em- 
 ploy the principle of dichotomy, and divide all knowledge into two main classes — 
 knowledge which is acquired personally and directly, and is the subject of evidence, 
 on the one hand ; and knowledge which is not so acquired, and not so proved, but is 
 inferred in law, on the other. The former class it cannot be wrong to call " actual." 
 I"or the latter a class-name should be chosen which has not been appropriated to any 
 particular variety, or applied by dififerent judges to different varieties, of the class, 
 and which at the same time expresses its full connotation. No term answers these 
 requirements so satisfactorily as " presumptive," which, moreover, has received the 
 countenance of a strong body of authority (v). Accordingly, in the treatment of the 
 subject of knowledge in an earlier chapter (w), and throughout this work generally, 
 the terminology described has been adopted. 
 
 Sect. 5. Observations on the Pbovbebial Philosophy of the Subject, 
 AND ON Judicial Expression op Peopositions. 
 
 646. The branch of law which forms the subject of this work is, in common with 
 others, overrun by elliptical formulae, gnomic phrases, metaphors, and figures of 
 speech. These should always provoke a somewhat cautious and critical attitude. 
 A principle or proposition of law can seldom be concentrated in terminological 
 tabloids and quintessences. A phrase can, as a rule, only present one facet of the 
 truth : the whole truth is more than these " broken lights." Proverbial wisdom, 
 attractive though it be on the surface, is of necessity so imperfect and one-sided that 
 he who rehes upon it for solid support in any question of science is leaning on a 
 broken reed. Even in common affairs, popular sayings are often untrue to life, as 
 Charles Lamb has wittily demonstrated : in matters of philosophy and science, they 
 are still more unsafe guides. For, indeed, as against almost every accepted maxim, 
 paradox, or even dilemma, it is possible to formulate a contradictory one, which 
 shall be just as good, or just as bad. Bacon was so impressed with this possibility, 
 
 {u) At pp. 707, 708 of English & Scottish Mercantile Investment Co. v. Brunton, [1892] 
 2 Q. B. 700, C. A. He had previously protested, in Allen v. SecMiam (1879), 11 C. D. 790, 
 at p. 795, that " the doctrine of constructive notice ought to be narrowly watched. . . . 
 Indeed, anything ' constructive ' ought to be narrowly watched, because it depends 
 on a fiction." 
 
 (v) As in Noble v. Kennaway (1780), 2 Dougl. (k.b.) 510 (per Lord Mansfield, C.J., 
 at p. 512 : " every underwriter is presumed to be acquainted with the practice of the trade 
 he insures ") ; Friere v. Woodhouse (1817), Holt N. P. 572 (per Bukbough, J., at p. 573 : 
 " presumed within the knowledge of the underwriter ") ; Stewart v. Bell (1821), 5 B. & Aid. 
 238 (per Cur., at p. 239 : " the underwriter is presumed to be acquainted with the usual 
 course of the voyage ") ; West v. Reid (1843), 2 Hare 249 (per Wigbam, V.-O., at pp. 260, 
 261 : " a purchaser must be presumed to investigate, &c., . . . and may therefore be 
 presumed to have examined, &c. . . . and that presumption I take to be the foundation 
 of the whole doctrine. But it is impossible to presume that a purchaser examines instru- 
 ments not directly nor presumptively connected with the title ") ; Smith v. Capron (1849), 
 7 Hare 185 (per Wigbam, V.-C, at p. 192 : the presumption, therefore, would be that he had 
 made himself acquainted with the whole of the instrument. I do not think that I ought 
 to allow this presumption to be rebutted by the averment that. . . . &c.) ; Hewitt v. 
 Loosemoore (1851), 9 Hare 449 (per Ttjbnbe, V.-C, at p. 455 : " a presumption so strong 
 that it cannot be allowed to be rebutted ") ; Mspin v. Pemberton (1859), 3 De G. & J. 547 
 (per Lord Chelmsfobd, L.C, using the Uke expression : see note (p), ante) ; Harrowenr v. 
 Hutchinson (1870), L. R. 5 Q. B. 584, Exch. Ch. (per Kelly, C.B., at pp. 591-593, where 
 the word " presumed " is repeatedly used, as also in the treatises of PhiUips, and of Duer, 
 there cited, and per Cleasey, B., at p. 594) ; Leigh v. Adams (1871), 25 L. T. 566 (per 
 CooKBiTBN, C. J., at p. 569 : " the knowledge that every underwriter is presumed to 
 ssess "). 
 
 (w) See Ch. II, Sect. 3, ante. 
 
§§ 644-647 (terminology). 571 
 
 in regard to science in general, that lie recommended (De Augm. Scient., Book vii.) 
 special attention to be given to "Antitheses of Things," and with that object 
 sketched out the beginnings of a suggested " Promptuary," or "Preparatory 
 btorehouse," with examples of antithetical aphorisms arranged in parallel columns. 
 In relation to jurisprudence in general, and the law of non-disclosure in particular, 
 Lord EsHEK expressed his strong distrust of, and distaste for, these " oracular 
 phrases," and emphasized the " danger which always arises from the use in law of 
 these figures of speech. Their terseness prevents them . . . from expressing accurately 
 the proposition they are used to enunciate. They are generally larger than that 
 proposition " (x). Of such are the meaningless caveat emptor (xx), in the law relating 
 to sale and purchase, " estoppels are odious," de minimis -non curat lex, and the like. 
 Similarly metaphorical and analogical modes of expression have found small favour 
 with great judges. Even the phrase " public poUoy," which figures so largely in 
 the law of non-disclosure as the name applied to that general utility which is the 
 theoretical foundation of nearly all its rules, was thought at one time of a suflaciently 
 figurative complexion to demand judicial apology and explanation at the hands of 
 Lord Habdwicejs (y). The word " justice " itself has not escaped the attention of 
 the metaphor-mongers, and has been used as a figure of speech (z). Lord Manshbld, 
 indeed, roundly declared that " nothing in law is so apt to mislead as a metaphor " (o), 
 and, in particular relation to the case of a " trustee by metaphor," was heartily 
 supported in this view by Lord Westbuey (6). It may be doubted, however, 
 whether such unqualified denunciation of the metaphor is just. The use of this 
 mode of conveying thought is quite proper in itself. Its application may of course 
 be incorrect, as may be that of analogy, which is only expanded metaphor, as 
 metaphor is condensed or crystaUized analogy. If so, it is not ai/a \6yov. The 
 alleged ratio does not exist. One does not, however, denounce the Rule of Three, 
 because many schoolboys cannot apply it correctly. Half our language is meta- 
 phorical. The word " metaphor " is itself a metaphor. 
 
 647. From time to time judges show an inclination to reproach advocates with 
 the vice of misapplying, or accepting too broadly and literally, the language in which 
 they have expounded or enunciated a, rule or principle of law. Advocates, on the 
 
 (x) At p. 557 of Blackburn, Low & Co. v. Vigors (1886), 17 Q. B. D. 553, C. A. Cp. the 
 observations of Lord Paekek cited in note (p) to § 626, ante. 
 
 (xx) See note (c) to § 91 of the author's Law of Actionable Misrepresentation, 
 (y) At p. 156 of Chesterfield {Earl of) v. Jannsen (1751), 2 Ves. Sr. 125, where, after 
 describing the various classes of unconscionable transactions, he added : " these cases 
 show what courts of equity mean when they profess to go on reasons drawn from pubUc 
 utUity. To weaken the force of such reasons, they have been called political arguments, 
 and introducing poHtics into the decision of courts of justice. This was showing the thing 
 in the light which best served the argument for the defendant, but far from the true one, 
 if the word politics is taken in its common acceptation : but if in its true original meaning, 
 it comprehends everything that concerns the government of the country ; of which the 
 administration of justice forms a considerable part ; and in this sense it is admitted 
 always. To apply this : thus far, and in this sense, is rehef in a court of equity founded on 
 pubUo utility ... as the rest of mankind besides the parties contracting are concerned 
 it is properly said to be governed on pubhc utility." It must have been the use of the 
 word " poHcy," instead of " utihty," and not the thing itself, which prompted, and gave 
 an air of plausibihty and wisdom to, the exceedingly inept description of it by BuREorrGH, J., 
 as the " unruly horse. " See § 668, j)05f, for a more detailed examination of the various 
 shades of meaning assigned to this term. 
 (2) See § 670, post, 
 (a) See the next note. 
 
 (6) In Knox v. Oye (1872), L. R. 5 H. L. 656, Lord Westbuey, L.C, after speaking of 
 " the advantage of correcting an inaccurate use of a word, although that use may be found 
 in treatises of reputation," and giving an instance of it from his own experience (p. 675), 
 goes on, at p. 676, to say that the case before the House — (the case of a man who was 
 " improperly and by metaphor only called a trustee," but whom it was sought to 
 fix \vith the same habilities " as if he were a trustee by declaration — in other words, a 
 complete trustee ") — " well illustrates the remark made by Lord Mansfield that nothing 
 in law is so apt to mislead as a metaphor." 
 
572 APPENDIX A, SECT. 5 ; APPENDIX B, SECT. 1. 
 
 other hand, and jurisperiti retort that it is unfair in a judge who has not used suffi- 
 ciently guarded language to blame his hearers for supposing that he had meant 
 what he said, and for taking him at his word. Non nostrum est tanias componere lites. 
 It is sufficient to call attention to the prevalence (in the present, as well as in other 
 departments of our law) of two opposite errors, or alleged errors, in the treatment of 
 judicial deliverances. On the one hand, it has been made a subject of complaint (by 
 no means justly, however, in many oases) that, in argument, a general proposition 
 stated by a judge is cited without reference to the circumstances of the particular 
 case to which that proposition was intended to be confined (c). The only observation 
 proper to be made on this complaint is that its justice depends on the form in which 
 the proposition was declared. If it purported to be a summum axioma, and the case 
 itself was decided as it was because, and only because, it was a partioiUar instance 
 of the general rule, then the proposition ought to be cited without reference to the 
 particular circumstances : if, on the other hand, it was expressed to be confined to 
 those circumstances, it ought not to be relied upon apart from them. The converse 
 error (for which again, however, it is submitted, judges are themselves partly re- 
 sponsible) arises when a pure general proposition is intended to be declared, but the 
 expression of it is adulterated by the admixture of some of the particular facts of the 
 case of which the proposition is really quite independent, and afterwards (not alto- 
 gether unnaturally) the advocate supposes this adventitious and alien element to be 
 an integral part and an essential condition or qualification of the proposition itself, 
 and to have been so intended {d). 
 
 (c) Thus, Sir James Mansfield, C.J., at p. 162 of Brisbane v. Dacres (1813), 5 Taunt. 
 143, in a passage cited with approval by Hamilton, L.J., at p. 138 of Baylis v. Bishop of 
 London, [1913] 1 Ch. 127, C. A. , said : " it is certainly very hard on a judge, if a rule which 
 he generally lays down is to be taken up and carried to its full extent. This is sometimes 
 done by counsel, who have nothing else to rely on ; but great caution ought to be used by 
 the Court in extending such maxims to cases which the judge who uttered them never 
 had in contemplation " : Rigby, L.J., at p. 276 of Oliver v. Hinton, [1899] 2 Ch. 264, C. A., 
 expressed the view that " the Court is not bound to treat the mere language used by a 
 learned judge in the particular case with which he was dealing as laying down a principle 
 of law governing other cases " : Lord Halsbuey, L.C, at p. 506 of Quinn v. Leathern, 
 [1901] A. C. 495, H. L., insisted that " every judgment must be read as applicable to the 
 particular facts proved, since the generahty of the expressions to be found there are not 
 intended to be expositions of the whole law, but governed and quaUfied by the particular 
 facts of the case in which such expressions are to be found." The soundness of these 
 various dicta seems somewhat questionable. If taken literally, they would render vain 
 all induction and deduction in the study of jurisprudence, and turn science into chaos. 
 But the warning conveyed by Lord Haldanb, L.C, at pp. 38, 40, 42, 43, of Kreglinger v. 
 New Patagonia Meat tb Cold Storage Co., [1914] A. C. 25, H. L., against the judicial — not 
 the forensic — habit of paying too much attention to the rule, and too little to the principle 
 of the rule, is heartily to be commended. See §§ 475, 478, ante, for examples of this 
 error. 
 
 (d) Many of the cases cited in the notes to § 635, ante, are illustrations of this type of 
 misappUed learning. Another, and a very striking example, is furnished by the mis- 
 representation case of Lloyd v. Grace, Smith & Co., [1912] A. C. 716, H. L. 
 
§§ 647-649 (ethics op disclosure). ,573 
 
 APPENDIX B. 
 
 COMPARISON BETWEEN JURISPRUDENCE AND ETHICS IN RELATION 
 TO THE DUTY OF DISCLOSURE AND THE USE AND ABUSE OP 
 CONFIDENCE AND INFLUENCE. 
 
 648. It is proposed in this Appendix to consider where, and why, ethical and juridical 
 doctrines, as to the various subject-matters of this treatise, coincide, and where, 
 and why, they diverge, and in what respects they have influenced one another (e). 
 
 Sect. 1. As to the Stjbstantial Cokeespondencb between the Moral and 
 JuEiDiCAL Treatment oe the Duty of Disclosure and Fiduciary 
 Obligations generally. 
 
 649. Ethical philosophy, conventional or customary morality (" sittUchkeit "), 
 and the juridical body of doctrine which is known as " equity," concur in their 
 distaste for rigid and unprogressive formulae, and in their preference for elastic 
 and adaptable principles, in all matters concerned with the conceptions of Good 
 Faith and Honour : " tov yap aopLcrrov aoptoros Kai, 6 Kavoiv icmv, mtnrep koL t«s 
 Actr/Stas oiKoSoiJ,^i; 6 /j.o\vfiSiv6s Kavtav' Trpos yap to crx^/xa tov XlBov /ueTa/ctj/en-at 
 KOI ov p-ivii 6 Kavu>v" (/). The flexible Lesbian rule which appealed thus strongly 
 to Aristotle, as the only flt instrument to be applied to aU moral questions, has 
 appealed with at least equal force to jurists in relation to the various topics dealt 
 with in this work, and particularly (as has been already noticed) to the equitable 
 duty of candour in negotiations with a view to transactions uberrimcB fidei {g), the 
 principles aSecting " contracts for disclosure (h), and the use and abuse of con- 
 fldence (i), and influence (j) ; as it has also in relation to other provinces of our 
 law, such as defamation (k), or the doctrine of restraint of trade (1). Philosophical 
 equity, again citing from Aristotle, aims at to eTrietKc's, as a necessary expansion 
 or correction of the absoluteness of moral formulae which, if universally applied, 
 would on occasions shock the conscience, " koI ecTTiv avrq rj ^ucrts 17 tov iirieiKovs, 
 iiravopdw/xa vo/jlov, y iXXuirei. Sta to KaOoXov " (m). And this is precisely 
 
 (e) In App. B. of the author's Law of Actionable Misrepresentation, a similar com- 
 parative treatment is to be found. 
 
 (/) Eth. v. 10. Bacon (De Augm. Scient, Hb. 8, cap. 3, aph. 32) says that equitable 
 principles also must proceed ex arhitrio boni vivi et discretione sand, ubi legis norma deficit, 
 lex enim non sufficit casibiis, adding that Time is sapientissima res, et -novorum casuum 
 auoiidie auctor et inventor, adopting Xen. Hellen., iii. 3, 2. Cp. Lord Kam^s in the Intro- 
 duction to his PnwcipZ&s o/-Bgtt%( vol. i, pp. 24, 25). 
 
 (g) See § 85, ante (insurance) ; § 109, ante (vendor and purchaser) ; § 120, ante (surety 
 ship). 
 
 (A) § 171, ante. 
 
 (i) § 343, ante. 
 
 {j) § 453, ante. ,«..,,„ 
 
 {k) In connection with the rules relating to protected or privileged commumcations, 
 the praiseworthy elasticity of the law (miscalled by some " fluctuation ") is noted and 
 iUustrated in App. SXI, Sect. 1, of the author's Code of the Law of Actionable Defamation. 
 
 (l) See Nordenfddt v. Nordenfddt Maxim Oun & Ammunition Co., [1894] A. C. 535, 
 H. L. ['per Lord Watson, at pp. 553, 554, and Lord Ashbourne, at p. 558). 
 
 (m) Bfh., V. 10. 
 
574 APPENDIX B, SECT. 1. 
 
 the function of juridical equity, as stated by Bacon (to), and Lord Karnes (o), in 
 almost identical language ; and so it always has been of " sittlichkeit," as reflected 
 in the summary judgments of those organs of current sentiment, " the man in 
 the street," the Homeric " tii" (p), or the modern juryman. The represen- 
 tatives of these three points of view are at one in their keen appreciation of the 
 danger of cantoning out the denotation of bad faith, or dolus, or fraud, and in their 
 aversion to cast-iron definitions, or itemized catalogues {q). This is the real meaning 
 of the reiterated judicial statement that it is impossible to define fraud, and it is only 
 in this sense that it is strictly accurate. Thus Lord Rbdesdalb observed : " Crescit 
 in orbe dolus. Cases cannot always be found to serve as direct authority for subse- 
 quent cases ; but if a case arises of fraud, or presumption of fraud, to which even no 
 principle already established can be applied, a new principle must be established 
 to meet the fraud . . . ; for the possibility will always exist that human ingenuity 
 in contriving fraud will go beyond any cases which have before occurred " (r). And 
 Lord Hathbrley : " the Courts of Equity have at all times abstained from attempt- 
 ing a nice definition of imposition. ... It is notorious that every mode that can 
 well be conceived of dealing with contracts which ought not to be maintained . . . 
 has from time to time come before the consideration of Courts of Equity, although 
 the precise circumstances of the case may never yet have come before the Court " (s). 
 In other words, it is not a case of intellectual impossibility of defining fraud, or bad 
 faith, in the sense of declaring the connotation of those terms, but of the refusal of 
 the Courts, on grounds of high policy, to map out their denotation, and provide the 
 wrong-doer with an inventory or specification of particular acts to be avoided. It 
 is, therefore, inaccurate to say, as Lord Langdalb did, that " nobody has been able 
 to define fraud," because " it is so multiform " (i), for multiplicity of species is no 
 obstacle to a definition of the genus ; but it may be permissible to say, with Lord 
 LiNDLBY (tt), that " no Court has attempted to define fraud," or " to define undue 
 influence," if " define " is understood in the above hmited (and not very correct) sense. 
 650. Further, there appears to he, and to have been from the earliest times, a 
 general agreement between the attitude of the community, as expressed in the works 
 of dramatists, poets (v), and other writers not professedly philosophic, on the one 
 hand, and that of jurisprudence, on the other, towards the simpler problems, and the 
 main and rudimentary principles, of the subject. Popular sentiment, and public 
 authority, whether ecclesiastical or civil, reflecting that sentiment, have at all times 
 and in all civilized countries denounced abuses of power, and of knowledge, for the 
 purpose of extorting private advantage from the necessities of the helpless. " Cursed 
 
 («,) "Adjuvandi, vel supplendi, vel corrigendi juris oivilis gratis." See, generally, as 
 to the functions of prsetorian courts, his De Augm. Scieni., lib. 8, cap. 3, aphh. 32-46. 
 
 (o) Lord Kames considered the doctrines of ethics and equitable jurisprudence so 
 intimately allied that he prefixed to his Equity Jurisprudence (in the first two editions) 
 a " preliminary discourse on the principles of morality." 
 
 (p) See Six Richard Jebb's Essay on " Ancient Organs of Public Opinion " (Collected 
 Essays, pp. 130-132). 
 
 (q) It is true that theological casuistry revels in particular instances, — indeed it would 
 not be true to its name if it did not, — ^but even here the Jesuits always insist that the 
 minutiae to which at first sight such disproportionate importance seems to be attached 
 In their " case-books " are chiefly used to illustrate great principles. 
 
 (r) At p. 666 of Welh v. RorU (1806), 2 Sch. & Lefr. 661 ; 9 R. R. 122. 
 
 (s) At p. 1243 of Erlanger v. New Sombrero Phosphate Co. (1878), 3 App. Cas. 1218, H. L. 
 
 it) At p. 303 of Franks v. Weaver (1847), 10 Beav. 297. 
 
 (u) When Lindlby, L.J., at p. 183 of Allcard v. Skinner (1887), 36 G. D. 145, C. A. 
 
 {v) At p. 50 of Piggott v. Stratton (1859), 1 De G. F. & J. 33, Lord Campbell, L.C, 
 vouches " morahsts and jurists " for a proposition in the law of misrepresentation. So, at 
 p. 291 of Cox V. Lee (1869), L. R. 4 Exch. 284, Piqott, B., in considering the effect on a 
 man's reputation of a charge of ingratitude, referred to the " light " in which " it is re- 
 garded by poets and moralists, who are the mirrors and exponents of the universal feeUngs 
 and judgments of mankind." Homer is frequently cited in the Institutes and Digest, 
 and, in one of the episiolce prefixed to the latter, Justinian describes him as patrem omnis 
 virivMa. 
 
§§ 649, 650 (ethics op disclosure). 575 
 
 be he that maketh the blind to go out of his way," said the Mosaic law {w), and the 
 commination was deemed, or expanded, to cover the negative offence of not putting 
 the blind on his way. This may be regarded as the earliest recognition of a duty of 
 disclosure arising out of a relation between the strong and the weak. A breach of 
 the duty was visited with public execration in Athens {x), and was denounced both 
 by the Roman poet, and the Roman moralist (y), as one of the gravest crimes against 
 humanity. In all drama and fiction questions as to the duty of breaking silence, 
 over and above the mere duty of veracity [z), and problems arising out of the conflict 
 between interest and honour (a), have supplied the strongest, because the most 
 human, situations, and have appealed the most powerfully to audiences and readers, 
 — a fact which is only explicable on the hypothesis of a popular appreciation of the 
 existence and sanctity of such a duty. Of the close correspondence in aU essentials 
 between professed moral philosophy and jurisprudence as to the doctrine of Good Faith, 
 no less than as to other doctrines which form the common subject of the two sciences, 
 no better proof can be suggested than an examination of the writings of Paley, and, 
 the fact, which such an examination will abundantly reveal, that most of his ethical 
 rules are reasoned out on precisely the same basis as those of jurisprudence, whilst 
 jurisprudence has made many avowed references and appeals to his philosophy in 
 support and elucidation of her own principles. This great moralist had quahfica- 
 tions and gifts which specially commended his views to jurists. " An Englishman," 
 said Mr. F. D. Maurice (&), " can never allude to Paley without remembering how 
 eminently English he was in all the habits of his mind, in his exquisitely transparent 
 style, in a kind of quaint, homely humour . . . and in his detestation of everything 
 which appeared to him unpractical. These, with a most genial temperament and 
 an acuteness developed by visits to our law courts, and the study of evidence, may 
 assure us that he will give us much that his predecessor (c) — ^however he may have 
 been excelled by him in the special refinement and richness of the Greek mind — 
 could not give " {d). It is not a matter of surprise, therefore, that his works have 
 
 (w) This is the third Curse in the Commination Service. The duty in question is 
 noticed by Juvenal as one imposed by the Jewish Code ; but it is described by him, and 
 made a subject of reproach on that account, as a duty of a strictly tribal character, and 
 owed to no one who is not a co-religionist : "non monstrare vias eadem nisi sacra colenti " 
 (Sat. xiv. 103). The Mosaic prohibition of usury was similarly limited : see § 664, note (<), 
 post. 
 
 (x) See Cic, De Off., III. 13 : " quod Athenis exsecrationibus sanctum est." 
 
 {y) Cic, De Off., I. 16, citing Ennius, where he contrasts the humanity of him " qui 
 erranti comiter monstrat viam " with the meanness of refusing or omitting such an obvious 
 service to a fellow-creature, — a service which, like the act of permitting another to light 
 his lamp or fire from one's own, can be rendered without any extinction or diminution of 
 the light or heat from which the other borrows. In this sort of view the duty of candour 
 appeared not so much a dictate of justice as of humanity, just as the theologians of a later 
 date, such as Augustine, spoke of honest disclosure, and even of veracity, as a branch of 
 the specially Christian virtue of charity, rather than as a requirement of honour. 
 
 (z) The double duty is recognized in Horace's "justitise soror, incorrupta fides, 
 Nudaque Veritas " (Carm. I. xxiv), and still more markedly in the pathetic exclamation 
 of Neoptolemus in Soph. PUloct., 908, 909, which appears on the title-page of this work : 
 
 S> Zev, t1 SpitTio ; SevTepov \ri<p6u kukos, 
 KpiirTUV 6' &. yu^ Set, Ka\ Kiyap ai(XX'<Tr' eVSy ; 
 (a) In Tro. & Cress., Act 4, Sc. 5, Agamemnon welcomes Hector in terms which 
 admirably express the whole duty of disclosure and disinterested candour in relations of 
 
 confidence and influence : „ , , , 
 
 jaitn, and troth. 
 Strained purely from all hollow hias-drawing. 
 Bids thee, with most divine integrity. 
 From heart o/ very heart, great Hector, welcome." 
 (6) In his " Inaugural Lecture to a Course on Casuistry, Moral Philosophy, and Moral 
 Theology, deUvered in the Senate House, Cambridge, on the 4th December, 1866." 
 
 (c) The reference is to Aristotle. 
 
 (d) That Paley had a more than bowing acquaintance with the practical side of law, 
 we learn as a fact from the Memoirs o/ William Paley, by G. W. Headlam (2nd ed., 1810), 
 
i 
 
 576 APPENDIX B, SECTS. 1, 2, SUB-S. (1). 
 
 attracted the attention of practical lawyers as well as of philosophic jurists. Eeskine, 
 at a trial before Lord Ellbnboroitqh, C.J., in 1803, recommended the study of his 
 writings to all members of his profession (e). ' In his reference to " moralists," in 
 1859, there can be no doubt that Lord Campbell, L.C, had Paley especially in 
 mind(/). In 1871, Hannen, J., in dealing with the question of the conditions 
 necessary to create a duty to remove the delusion of a negotiating party, said that 
 the rule of law applicable to such a case is "a corollary from the rule of morality, 
 which Mr. Pollock cites from Paley " {g). In 1873, Beamwbll, B., strongly advised 
 certain judicial persons to " read and inwardly digest Paley's Moral and Political 
 Philosophy ... in which the necessity for positive rules of general application, the 
 doctrine of particular and general consequences, and the superior importance of, 
 and regard due to, general consequences are clearly expounded " (h) : whilst Arch- 
 bishop Whateley, as a training in the principles of evidence, recommended to students 
 of the law a study of the philosopher's writings, and particularly his Horce Paulinoe (i). 
 It will be noticed that many occasions have already been taken (j), and will hereafter 
 arise [k), in these pages, to illustrate and enforce the principles of non -disclosure and 
 fiduciary duty by references to Paley. Writers on other departments of our juris- 
 prudence are no less in the debt of this great casuist for suggestion and Olumination 
 in connection with, for instance, the law of representations and promises (I), or that 
 of bailments, or defamation (m). It is true that Coleeidge carped at Paley's 
 principles, which he considered unworthy of the higher philosophy, and described 
 as " time-serving " (n) ; but, if this criticism be just, which it is not, the groxmd of it, 
 viz. that his doctrines reflect current sentiment, is the very circumstance which makes 
 his works so apt an illustration of the point now insisted upon, that there is a 
 substantial sympathy, as regards moral questions, between jurisprudence on the 
 
 though no one reading the Moral and Political Philosophy with attention could fail to infer 
 it. As a boy, he attended the Lancaster Assizes (M&moirs, p. 5). On the 3rd May, 1759, 
 he heard the trial of Eugene Aram, whom he shrewdly described as " a man who got 
 himself hanged by his own cleverness " (ibid., pp. 7-9). He also paid regular visits to the 
 Old Bailey, where he had a special place near the Bench, and took in the Old Bailey 
 Session Papers from 1763 to 1765 (ibid., pp. 142, 143). He was a local magistrate from 
 1795 (ibid., pp. 100, 101). 
 
 (e) Headlam's Memoirs, p. 208. 
 
 ( / ) At p. 50 of PiggoU v. Stratum (1859), 1 De G. F. & J. 33. See note (v), ante. 
 
 (g) At p. 610 of Smith v. Hughes (1871), L. K. 6 Q. B. 597. 
 
 (h) At p. 59 of B. V. Middleton (1873), L. E. 2 C. C. R. 38. 
 
 (i) In his Miscellaneous Lectures and Reviews, Lect. IV, where, after speaking of 
 Paley's " remarkably clear and forcible style, very simple, with an air of earnestness, 
 generally devoid of ornament, and often homely, but occasionally rising into a manly and 
 powerful eloquence," he proceeds to draw special attention to the Horce Paulinm, in which, 
 he says, the task the author had set himself " is done so ably and satisfactorily that I have 
 often recommended the study of this work to legal students ; not merely on account of its 
 intrinsic value, with a view to its own immediate object, but also as an admirable exercise 
 in the art of sifting evidence." 
 
 (j) See § 20, note (d), § 83, note (u), and § 86, notes (w), (x), ante. 
 
 (k) See § 654, note (v), § 659, note (z), and § 667, notes (g), (t) and (u), post. 
 
 (I) Dr. Story, for instance {Equity Jurisprudence, vol. i, § 205) cites Paley with approval, 
 as to a vendor's duty of disclosure. And in Austin's Lectures on Jurisprudence, vol. i, 
 p. 456, the philosopher's doctrine of deceptive promises is approved in the main, though 
 corrected in one particular. 
 
 (m) See Story on Bailments, § 182 : " Dr. Paley, in his Treatise on Moral Philosophy, 
 has, with his usual good sense, put the case of mandates on a reasonable ground." So, 
 in the law of defamation, the view insisted on by Paley (Principles of Moral and Political 
 Philosophy, Book III, Part II, ch. xii) that " truth may be made instrumental to the 
 success of malicious designs as well as falsehood," is adopted in Bacon's Abridgment, 
 title Slander. 
 
 (n) WiUiam Hazlitt, in giving us his early impressions of Coleridge, alludes to an 
 interview with him, in the course of which the latter " mentioned Paley, praised the natural- 
 ness and clearness of his style, hut condemned his sentiments, thought him a mere time- 
 serving casuist, and said that the fact of his work on Moral and Political Philosophy being 
 made a text-book in our universities was a disgrace to the national character." 
 
§§ 650-654 (ethics op disclosure). 577 
 
 one hand, and " Sittliohkeit " (of which, in Coleridge's view, Paley was merely an 
 exponent) on the other. 
 
 651. WhUst, however, jurisprudence and ethics (popular and philosophical) 
 undoubtedly concur in the recognition of trust as a necessary condition of human 
 society, and are alike persuaded that confidence on the one side necessarily involves 
 certain duties of candour and good faith on the other (o), it is no less true that, when 
 it comes to the consideration of the exact nature and incidence of these duties under 
 given conditions, occasional differences of attitude emerge, which it is now proposed 
 to examine. 
 
 Sect. 2. Comparison between Jtjkispeudenob and Popular Sentembnt 
 OR Moral Philosophy in relation to partioulab Doctrines and Rttlbs 
 OF Disclosure and Good Faith. 
 
 652. The points at which the law finds itself not altogether in sympathy with 
 some of the views of the general, or the mercantile, community, or with philosophical 
 casuistry, may conveniently be discussed under the following heads : — negotiations 
 for contracts uberrimcB fidei (particularly insurance) ; relations of confidence ; 
 relations of influence (particularly the parental and sacerdotal relations) ; oppression 
 and usury ; gifts ; and " wilful ignorance " (p). It will be seen that, in all cases of 
 divergence, the ideals of jurisprudence are not lower than those of ethics ; whilst in 
 most of them, whether designedly or (so to speak) accidentally, they are higher. 
 
 Subs. (I). In respect of the Duty of Disclosure in Negotiations for certain Contracts. 
 
 653. In this class of case (q), whilst, on the one hand, jurisprudence and mercantile 
 morality condemn with equal severity the resort to forms of law for the purpose of 
 defeating expectations legitimately entertained on the faith of honest and laudable 
 trade customs, as in the case of the " slip " in marine insurance (r), there are, on 
 the other hand, numerous questions on which the practices, if not the avowed 
 views, of the commercial community are in direct conflict with the more stern, 
 stringent, and exalted requirements and principles of the law. 
 
 654. Custom being, for good or evil (s), " the principal Magistrate of Man's life "(«), 
 or, as Pascal puts it, " une seconde nature " {u), it follows that jurisprudence must 
 
 (o) Lord Karnes acutely observes that " veracity, and a disposition to believe what is 
 affirmed for truth, are certainly principles wliich make one entire branch of the human 
 nature. Veracity would be of no use were men not disposed to beheve ; and, abstracting 
 from veracity, a disposition to believe would be a dangerous quahty " : Essays on the 
 Principles of Morality and Natural Religion, Part I, Essay 11, Ch. vi ("Justice and 
 Injustice "). Lord Karnes was both a jurist and a moral philosopher, and thought and 
 wrote excellently in both characters. He occupied much the same position in Scotland 
 as Paley held in England, the same lucidity of expression and style characterized the 
 writings of both, and their ratiocinative methods and conclusions were very similar. For 
 instance, on the very point mentioned in the text, the passage from Paley which is cited 
 in note (u) to § 83, ante, runs on parallel fines with Lord Karnes's reflections. Accordingly, 
 as (in a sense) doctus utriwsque juris. Lord Karnes is an author to whose treatises references 
 may usefuUy be made for the purposes of the subjects discussed in this Appendix. 
 (p) These are the subjects of the six Sub-sections respectively of this Section. 
 (q) See Chapter III, ante, 
 (r) See § 189, notes (I) and (m), ante. 
 
 («) For good, on the whole, as most people believe ; for Ul, in the view of those who 
 think with J. S. Mill {Liberty, Ch. III.) that "the despotism of custom is everywhere 
 the standing hindrance to human advancement." 
 
 tt) Bacon, Essays and Counsels, Essay xxxix (" Of Custom and Education"). 
 (u) "La coutume est une seconde nature qui detruit la premiere. Pourquoi la 
 coutume n'est elle pas naturelle ? J'ai bien peur que cette nature ne soit ellemSme qu'une 
 premiere coutume, comme la coutume est une seconde nature " : Pensies, Art. Ill, § 13. 
 So Greek philosophers, poets, and historians were never tired of extolling the paramountcy 
 of custom in morals, and in social fife. Pindar's " v6ii.os i irticTcoi' fiaaiXtis, Bvarav tc 
 K<u aeavdrav" (Frogm.) is cited with approval by Herodotus (IIL 18, who again, in VII 
 104, speaks of the " Sco-itotJis v6iios'), and by Plato {Gorgias, 484 b). 
 
 B.N.D. 2 P 
 
578 APPENDIX B, SECT. 2, SUB-S. (1). 
 
 mould, and from time to time vary or expand, its rules so as to give effect and 
 expression to the usages and requirements of contemporary society. Within certain 
 limits, as " homo est minister et interpres naturse," in the Baconian phrase, so "jus 
 est minister et interpres consuetudinis " ; and Justice, by waiting on Custom, wins 
 faith and acceptance from those with whom that custom originated. To say this, 
 however, is not to concede for one moment "that custom possesses any proper 
 authority to alter or ascertain the nature of right and wrong " (v): for " sunt certi 
 denique fines, Quos ultra citraque nequit consistere rectum." Where usage has tran- 
 scended these certi fines, and rebelled against the primary rules of right and wrong, 
 the law has always set its face sternly and unflinchingly against it, however violently 
 the trading community may have resented the condemnation, and however closel;^ 
 and impenetrably the " damnfed custom " may have " brassed " the public conscience 
 " so that it be proof and bulwark against sense." In such cases to apply the principle 
 of "non nisi parendo vincitur," justly applied to innocuous practices, would be a 
 base abnegation of the highest function of judicature ; for Custom is here no longer 
 the subject, whose lawful wishes, sentiments, and habits are to be respected, but the 
 insurgent, with whose treason no terms can be made. The occasions on which the 
 law is oaUed upon to frustrate and suppress these persistent attempts upon its 
 purity occur and recur with increasing frequency. It may be that, as Buckle 
 thought (w), the main principles of morality have remained fairly constant in the 
 history of civilization ; but this proposition, if true, in no way conflicts with the 
 equally true one that the science of casuistry, or the application of these simple 
 prmciples to particular cases, has become more and more difficult, in proportion as the 
 cases themselves have multiplied, together with those " divided duties " which are 
 the inevitable outcome of a growing complexity in social conditions. In primitive 
 days, the questions addressed to jurisprudence and ethics admitted of a prompt and 
 plain answer — -generally the same answer — ^from both, and there was little occasion 
 for any conflict between juridical and popular sentiment. But when, in the course 
 of time, the problems submitted for decision became less easy of solution, for the 
 reason that the same simple principles had to be applied to a variety of much more com- 
 plicated facts, and when the mercantile community, in this change of the " old order, 
 yielding place to new," seized on the opportunity to introduce and encourage dubious 
 practices, and, after a decent interval, clamoured for their recognition by the law 
 as established customs, the courts of the land stood at the parting of the ways, and 
 were faced with a clear duty which, unmoved by the civiwm ardor prava jubentium, 
 they discharged with unbending constancy. Then commenced that warfare between 
 the uncompromising inflexibility of jurisprudence, in reference to commercial 
 customs opposed to plain principles of honesty, and the pliant casuistry of commerce 
 which has been waged, in one form or another, ever since, and is not even now by 
 any manner of means extinct. For the moral fibre, once relaxed, does not easily 
 regain its tone, " nee vera virtus, quum semel excidit. Curat reponi deterioribus," 
 so long as the convenient " justification by custom " remains an article of mercantile 
 faith, and the individual trader's conscience is stupefied, and subjected to base trans- 
 formations, by the Circean enchantments of " Commodity." As early as the time 
 of Lord Mansfield, and probably much earlier, merchants began to solicit the courts 
 to incorporate their knaveries into the common law on the sole ground that they had 
 been consecrated by usage. The solicitations were vain. The law of England, which 
 is founded on " the reason and custom of generations " {x), — ^not on custom alone, 
 irrespective of whether it conforms, or not, to the requirements of reason and 
 
 («) Paley, Principles of Moral and Political Philosophy, Book III, Part I, Ch. 
 viii. 
 
 (w) Lecky (see his Sise and Influences of the Spirit of Rationalism in Europe, vol. I, 
 ch. 3, and his History of European Morals, passim) and J. S. Mill are entirely opposed 
 to this view. The latter has recorded his opinion that " the human intellect has not im- 
 proved in anything like the same ratio as the sentiments " {Letters of J. S. Mill, ed. Hugh 
 EUiot, vol. ii, p. 374). 
 
 {xj Lord Acton, Hist, of Freedom, dhc, p. 72. The expression used in one of the old 
 cases is : " the common laws comply with the Genius of the Nation." 
 
§§ 654, 655 (ethics of disclosure). 579 
 
 oonsoience,— "rejecit alto [jussa] nocentium Vultu, et per obstantes catervas Explicuit 
 sua victor arma." 
 
 655. The duty of candid and complete disclosure in negotiations for contracts 
 uberrimcejidei has, amongst other duties of good faith, been the subject of persistent 
 attempts to undermine or emasculate, by means of dishonest practices and dubious 
 customs, the unqualified severity of the law's requirements. Particularly in cases 
 of marine insurance efforts were made from the earliest times to win the countenance 
 and connivance of the law in debasing the moral currency. In every case the failure 
 was complete, and, in denouncing the particular immoral usage relied upon, the courts 
 have always spoken with no uncertain voice, as witness (to takeafewexamples out of 
 many) the powerful judgment of Cockbxtbn, G.J., in one memorable case (y), and those 
 of Lord Alvebstonb (z), and Lord Shaw (a), in another. This uncompromising 
 stringency of jurisprudence not only conflicts with the views of the dishonest traders 
 who justly suffer from it, — this is only to be expected, — but also, it must be admitted, 
 finds little favour even with the average non-mercantile citizen, andis not altogether in 
 harmony with current sentiment, as reflected in the jury-box, the journals, and the 
 market-place. It seems impossible to persuade the man in the street to take up any but 
 a contra proferentem attitude against the insurer (6), or to stir a step outside his simple 
 creed that the man who receives the premiums ought to pay the insurance moneys, 
 disclosure or no disclosure, unless the non-disclosure amounts to positive fraud, or 
 to convince him that the man whose ship or life or health has been assured ought to 
 be under any obligation to divulge anything that he is not asked about by the 
 underwriter or insurance society. Boger North (c) bears witness to the enormous 
 strength of this popular feeling in the middle of the seventeenth century (though he 
 expresses his sense of its irrationality), and it is certainly no less strong at the 
 present day. 
 
 {y) Who, at pp. 606, 607 of Bates v. Hewitt (1867), L. R. 2 Q. B. 595, after pointing out 
 how dangerous it would be to allow an assured who has failed in his duty of disclosure 
 " to speculate as to what may or may not have been in the minds of the underwriters," 
 proceeds : — •" if we were to sanction such a course, especially in these days, when parties 
 frequently forget the old rules of mercantile faith and honour which used to distinguish 
 this country from any other, we should be lending ourselves to innovations of a dangerous 
 and monstrous character." 
 
 (z) At p. 538 of Thames <& Mersey Marine Insurance Co. v. Qunford Ship Co., [1911] 
 A. C. 529, H. L., with reference to the contention that the duty of disclosing double 
 insurances had been impliedly waived by " the practice " in the marine insurance world : — 
 " the practice of underwriters as to accepting risks, or not making inquiries on particular 
 points, cannot in my opinion affect the duty." 
 
 (a) At p. 543 of the case last cited : " the argument for the respondents ... is this, 
 that the poUcies . . . are gambling and wagering policies, but that the shipping and 
 insuring world is aware that such things go on ; and that every insurer of ship or hull 
 takes his risk that the scales may be weighted in favour of the destruction of the vessel 
 by that kind of underwriting." Again, at p. 545 : " the practice is continued because 
 underwriters pay upon such pohcies. They go by the much-abused name of " honour " ; 
 and the illegitimate " honour " pohcies constitute that incentive of self-interest towards 
 the destruction of the vessel which "... &c. 
 
 (6) The law is not altogether unsympathetic towards this attitude, if there is evidence 
 that the underwriter had even presumptive knowledge of the undisclosed fact, but not 
 otherwise. It took a very little evidence of this kind to satisfy Lord Mansfield, with his 
 Guildhall merchants, that the underwriters had taken the premium with a suspicion of 
 the truth, and with the fraudulent intention of repudiating their obligations, if necessary, 
 on the ground of a supposed non-disclosure which never deceived them in the least. See 
 the passage from his judgment in Carter v. Boehm (1766), 3 Burr. 1905, which is cited in 
 note (s) to § 191, ante. 
 
 (c) " I have had occasion to wonder," he says in his Autobiography , " that insurers of 
 ships have a sort of obloquy, which either chance or custom has given them, and they 
 come not to the law without prejudice, such as extortioners, usurers, or pawnbrokers 
 usually meet with, and the insured is favoured, and all presumptions taken on his part. 
 Whereas the insurer cannot be a cheat," — Lord Mansfield thought he could be, and often 
 
 ■yyas, " and is very often cheated by the insured ; for the falsities come on their side who 
 
 know their own motives, which are secret to the insurers." 
 
580 APPENDIX B, SECT. 2, SUB-S. (2). 
 
 Stib-s. (2). In respect of the Duty of Disclosure in Relations of Confidence. 
 
 656. In two of the principal authorities on the fiduciary duty of a trustee towards 
 his cestui que trust, there is a remarkable revelation of the astounding discrepancy 
 between the juridical and the ethical conception of the obligations involved in a 
 situation of trust. In one of these, we are permitted to explore the conscience of a 
 Scottish merchant ; in the other, that of an English bishop. In the former, the 
 merchant, under cross-examination, laid bare his view on the question with engaging 
 frankness, which was (shortly), that a trustee bargaining with his cestui que trust is 
 under no duty of disclosure of any sort or kind : indeed, it was a matter of profound 
 and obviously genuine astonishment to him to hear it suggested that there is such a 
 duty, or that " fairness had anything to do with it " (d). In the other case, the 
 bishop was not called upon to declare his moral attitude, but it must be assumed, in 
 that spirit of charity and courtesy which, in their observations, the judicial, manifested 
 towards the episcopal, bench, that in his clearly proved violation of his equitable 
 duty the bishop was entirely unconscious of having broken any moral duty within 
 the range of his cultivated ethical knowledge and experience ; for otherwise a high 
 ecclesiastical dignitary must be assumed (nefandum dictu !) to have been capable, 
 and in fact guilty, of gross moral delinquency (e). Nothing could be more eloquent 
 than are the reports of these two cases, of the guK which separates the doctrines of 
 jurisprudence in this particular relation, not merely from the views of conventional 
 or commercial morality, but even from the presumably exalted and refined 
 principles of expert casuistry. In the face of these two glaring examples, it need 
 occasion no surprise to find that the mercantile community either cannot understand, 
 or will not be reconciled to, the elementary proposition of law that an agent who 
 receives a present, or bribe, or private advantage from a third person in the course 
 or execution of his agency, without disclosing the fact to his principal, or a 
 director of a company who is clandestinely qualified or otherwise bribed by its 
 promoter, is guOty of any moral impropriety. Expressions of amazement that this 
 wide discrepancy should continue in existence, and not only continue but grow 
 wider with each succeeding year, and denunciations of the deplorable moral laxity— 
 for so it seemed to them — of the mercantile commimity on this question of pommis- 
 sions, have proceeded from judge after judge, such as (in order of date) Lord 
 
 (d) Dougan v. Macpherson, [1902J A. C. 197, H. L. The highly instructive examination 
 referred to in the text is set out verbatim, as it deserved to be, in the narrative, at p. 199. 
 It is as follows. " When I concluded the bargain," the trustee stated, "I estimated that 
 I would make a few hundred pounds." (Q.) " If you were told that the profit would be 
 between £800 and £900, would that alter your opinion as to its fairness ? " ( A. ) " I simply 
 would not beheve it. I do not see that fairness has anything to do with it ; if a man sells at 
 his own valuation, and another buys, it has nothing to do with fairness. I did not personally 
 at any time submit to him a statement of his interest under either deed. I was not called 
 upon to do so, because I was never asked." (Q.) " Did you think it was a duty upon you as 
 trustee, and holding a fiduciary relation to your brother, to disclose to him the extent of 
 his interest in the trust estate ? " (A.) " Certainly not, when he could get all information 
 from the law agents of the trust." The curious state of mind revealed in these ingenuous 
 avowals is commented upon by Lord Halsbtjey, L.C, at pp. 202, 203, Lord Ashbottrnb 
 at p. 204, and Lord Lindley, at p. 206. 
 
 (e) Greenlaw v. King (1840), 9 L. J. (cH.) 377, before Lord Langdale, M.R., affirmed 
 (1841), 10 L. J. (cH.) 129, by Lord Cottbnham, L.C. It certainly appears, on a perusal 
 of these reports, that this was a plain, and a rather gross case. Yet both Lord Lanodale 
 and Lord Cottbnham went out of their way to acquit the Bishop of any want of personal 
 good faith : the latter observing, at p. 129, that " the bishop was not, at the time of the 
 transaction, aware, nor had he his attention drawn to the rules of this Court relative to 
 purchases made by persons holding confidential situations." One would have thought 
 that episcopal erudition and conversance with ethical problems would not have required 
 a reminder from the Courts as to the obligations of good faith, though Scottish com- 
 meroiaUsm might : and it must therefore be presumed that, in the exculpatory observations 
 which Lord Lanodalb and Lord Cottenham made, they intended to express their 
 recognition of the hiatus which separates the moral standards of jurisprudence, in the 
 matter of fiduciary duty, from those of the rest of the community, even when represented 
 by a specially cultured class. 
 
§ 656 (ethics of disclosure). 581 
 
 Wyotord, L.C. (/), Lord Langdalb, M.E. {g), Lord Esheb (h), James, L.J., in 
 no less than four oases (i), Hellish, L.J. (j), Thesigbr, L.J., on behaM of himself 
 and the other members of the Court of Appeal (k), Field, J. (l). Fry, L.J. (m), 
 
 (/) At p. 202 of Rothschild v. Broohman (1831), 5 Bligh (n.s.) 165 : " Mr. Rothschild 
 has only followed a practice which I beheve has been acted on in London. It is fit your 
 Lordships say now that such practices cannot be endured. If they are common, it is 
 fit your Lordships say, in language that cannot be misunderstood, that such practices must 
 not continue to prevail." 
 
 (?) At p. 83 of Oilhtt V. Peppercorne (ISiO), 3 Beav. 78 (" it is said that this is everyday 
 practice in the city. I certainly should be very sorry to have it proved to me that such 
 a sort of deaUng is usual "). 
 
 (h) When Brett, J., deUvering his opinion as one of the judges summoned by the 
 House of Lords, at pp. 816, 817 of Robinson v. Mollett (1875), L. R. 7 H. L. 802 : " it is 
 when merchants dispute about their own rules that they invoke the law. The Courts, 
 therefore, being appealed to, have been obliged to apply some rule. When merchants 
 have disputed as to what the governing rule shall be, the Courts have applied to the 
 mercantile business brought before them what have been called legal principles, which 
 have almost always been the fundamental ethical rules of right and wrong. They have 
 decided in favour of that course of business which was in accordance with such principles 
 or rules, and against that course which was inconsistent with them. . . . Customs of trade 
 . . . are generally courses of business invented or reUed upon in order to modify or evade 
 some appUoation which has been laid down by the Courts of some rule of law to business, 
 and which apphcation has seemed irksome to some merchants. And when some such 
 course of business is proved to exist in fact, and the binding effect of it is disputed, the 
 question of law seems to be whether it is in accordance with fundamental principle-s of 
 right and wrong." 
 
 (i) The four cases referred to (in the first of which he was Vice- Chancellor, and in the 
 others a Lord Justice) are the following : — Turnbull v. Garden (1869), 20 L. T. 218 (at 
 p. 220 : " the defendant depended upon what he alleged to be the custom of the trade. 
 The defendant said, ' True it is I never paid the actual sums charged in my account to 
 you, but I was authorized in charging you more than I actually paid by the custom of the 
 trade of army agency.' It is not the first time the Court has heard of, and disapproved, 
 the custom of ' salting invoices ' ") ; Panama & South Pacific Telegraph Co. v. India 
 Rubber, Gutta Percha,and Telegraph Co. (1875), 10 Ch. App. 515 (at pp. 527, 528: "this 
 is a contract as to which res ipsa loquitur, and at which I am bound to express my strongest 
 disapprobation and reprehension ") ; Re Canadian Oil Works Corporation, Hay^s Case 
 (1875), 10 Ch. App. 593 (at p. 599, expressing amazement " that a body of Enghsh gentle- 
 men consented and condescended to become on these terms the hired retainers of unknown 
 adventurers from the other side of the Atlantic ") ; Re Caerphilly Colliery Co., Pearson's 
 Case (1877), 5 C. D. 336, C. A. (at p. 342 : "that a gentleman of Sir Edwin Pearson's 
 position should have allowed this matter to be discussed in one Court is strange enough ; 
 that it should have been brought up by him for further discussion in a Court of Appeal 
 passes my comprehension "). 
 
 ij) At p. 529 of Panama <fc South Pacific Telegraph Co. v. India Rubber, Outta Percha, 
 <& Telegraph Co., sup. : " I cannot help expressing my astonishment that gentlemen like 
 Sir Charles Bright, and the directors of the Telegraph Works Company, should actually 
 think that this is a mere technical rule of a Court of Equity, and that there is nothing 
 morally wrong in itself in the man who is engineer of a telegraph company, and who has 
 to certify to them when the money becomes payable by them to a construction company, 
 having behind their backs a sub-contract with that construction company for part of 
 what they had contracted to do for the purposes of the telegraph company." 
 
 (k) At p. 317 of De Bussche v. Alt (1878), 8 C. D. 286, C. A. : " one matter, alleged 
 by the defendant, and actually supported by evidence, although in argument admitted 
 to be untenable, ought not to pass without notice or reprobation, namely, an alleged custom 
 or practice in the ports in which the defendant trades for an agent for sale with a minimum 
 limit himself to take at that limit, and at his own option, the thing he is employed to sell. 
 We cannot but express a hope that the Court will never again hear of such a contention, 
 or have before it such evidence." 
 
 (l) At p. 552 of Harrington v. Victoria Craving Dock Co. (1878), 3 Q. B. D. 549 : " the 
 present case affords an instance how sadly loose commercial practice has become in 
 transactions of this nature." 
 
 (m) At p. 369 of Boston Deep Sea Fishing <fc Ice Co. v. Ansell{1888), 39 C. D. 339, C. A. . 
 " we were invited to consider the state of mind of Mr. Ansell, whether he thought it wrong ; 
 
582 APPENDIX B, SECT. 2, SUB-S. (2). 
 
 RoMEB, J. {n), Lord Alvbkstone, C.J. (o), Kennedy, J. (p), BtrcKLEY, J. {q), and 
 Lord Maonaghten (qq). 
 
 657. Though, m this long series of authorities, the decisions themselves have had 
 valuable results in settling and enforcing sound legal doctrine, it may be doubted 
 whether the hortatory and moralizing portions of the judgments have in the slightest 
 degree succeeded in their presumed object of commending the ideals and principles 
 of jurisprudence to the mercantile conscience. Indeed, it may be questioned whether 
 these judicial exercises in homUetios have not been a little overdone, and whether 
 they are in any CEise either necessary or advisable. The equitable rules of disclosure 
 are entirely independent of personal motives or intentions (as has been pointed oi:t 
 many times already), and, this being so, these excursions are quite needless for all 
 purposes of juridical exposition. If they are undertaken in the hope of reconciling the 
 commercial community to the law, the hope is doomed to disappointment. If the object 
 is to advise and warn the merchant, pro salute animce, the answer is that this is foreign 
 to the business of a judge (r), who is not the pastor of a spiritual flock, but an officer 
 of State entrusted with the sole duty of administering justice according to law, — a 
 sufficiently exalted and responsible office of itseK, without adding to it alien "functions, 
 or intruding upon the domain of the preacher or pedagogue, and thereby provoking 
 public uneasiness and irritation. The plain trader is much like the schoolboy who 
 has no particular objection to a whipping without a lecture, or to a lecture without a 
 whipping, but strongly protests against being made the subject of both at one and 
 the same time. He imderstands, and accepts with resignation, the adverse operation 
 of a rule of law, if it is put to him as a rule of law simply, and he is told that he is 
 " within its danger " : but he chafes at a simultaneous philippic against his personal 
 character. If, therefore, the judges were to content themselves with the mere 
 proclamation to the laity of the rules which, for the genera] good, they have seen fit 
 to make, and their determination to see that they are observed, without any rurming 
 ethical commentary, there would be no occasion for resentment and antipathy on 
 
 in other words, we are invited to take as the standard for our decision the alleged conscience 
 of a fraudulent servant. I decline to accept any such rule as one on which the Court 
 is to decide such questions." 
 
 {n) At p. 45 of Hovenden & Sons v. Millhojf (1900), 83 L. T. 41, C. A. i " some persons 
 undoubtedly hold laxer views. Not that these persons like the ugly word ' bribe,' if 
 that word be used, but they differ from the courts in their view of what constitutes a bribe." 
 
 (o) At p. 7 of Hippisley v. Knee Bros., [1905] 1 K. B. 1, Div. Ct. ; "unfortunately 
 there appears to prevail in commercial circles, in which perfectly honourable men desire 
 to play an honourable part, an extraordinary laxity in the view taken of secret profit by 
 agents." 
 
 (p) At p. 9 of Hippisley v. Knee Bros., sup. (" I should be sorry to say that the practice 
 itself is an honest one ") : and again, at p. 95 of Swale v. Ipswich Tannery, Ltd. (1906), 
 11 Comm. Cas. 88 (" I beUeve, I am sorry to say from experience as well as from hearsay, 
 that in business tliere are a good many people who profess, and apparently genuinely, 
 to see no harm in doing things which they ought unquestionably to see there is the greatest 
 harm in doing "). 
 
 (?) At pp. 196, 197 of Ee Telescriptor Syndicate, Ltd., [1903] 2 Ch. 174 : " I regret to 
 say that transactions of this kind are so far from uncommon that many persons will 
 condescend to them without the intent which is the matter relevant to a question of 
 personal integrity. The giving and acceptance of commissions and presents have grown 
 to such an extent that legislation is now pending to deal with that which is admitted to be a 
 great evil." Again, at p. 197, he observes, " with great regret," with respect to one of 
 the respondents, that, " although he was a director of this company, he considered himself 
 as having really no responsibility. . . . Thisisaframeof mind strongly to be condemned." 
 The " pending legislation " referred to materialized, but not until after three more years' 
 incubation, in the Prevention of Corruption Act, 1906 (6 Edw. 7, c. 34). 
 
 {gg) At p. 192 of Tackey v. McBain, [1912] A. C. 186, P. C. : " brokers examined on 
 behalf of the plaintiff were shocked to think that the manager of a company could tell an 
 untruth to a broker, but there Was not one of them who seemed to have thought that there 
 was any harm in a broker trying to worm out secrets from the confidential manager of a 
 company." 
 
 (r) See § 670, post. And cp. § 632, ante. 
 
§§ 656, 657 (ethics of disclosure). 583 
 
 the one side, or for lamentations over mercantile perversity on the other, any more 
 than there is when the legislature, without any moral reflections, nakedly commands 
 or prohibits certain acts in a statute which incipit a jussione, and gets to business 
 at once, after the fashion of the " plagosus OrbUius " who expounded the Beatitudes 
 to the animosa inventus of Eton in a manner which none of his audience misunderstood 
 or resented (" blessed are the pure in heart. Boys, take care to be pure in heart. 
 Boys, if you are not pure in heart, you will be whipped "). As it is, the chasm between 
 the two points of view remains, and the well-meant efforts to bridge it over by 
 disquisitions on morals serve only to aggravate, and not to heal, the dissension. The 
 Launoelot Gobbos of commerce, between the Fiend and Conscience, or what the 
 law tells them is, or ought to be, their Conscience, wiU always conclude that the latter 
 "is but a kind of hard conscience," and that "the Fiend gives the more friendly 
 counsel " [s). This, indeed, is recognized by Rigby, L.J., almost in the very words 
 of " honest Launcelot," when, in'discussing the rule against clandestine commissions, 
 he takes occasion to observe that " many people think it a hard principle " (t). If 
 judges will reiterate that the practice is dishonest, instead of simply saying "we 
 forbid it," the trader will persevere in his protest that it is not dishonest; and 
 how favourably this protest is received by juries will be manifest to any one conversant 
 with the sort of verdicts which they return in commission cases, when injudicious 
 references to "fraud" from the bench give them an opportunity of declaring 
 their views on the moral aspect of the question. To take one instance out of many, 
 there was a case in which the facts were so strong that the jury felt bound to record 
 their opinion that "the practice" of receiving a commission " calculated to bias " the 
 recipient was reprehensible, and yet insisted on finding that there had been "no 
 fraud " (m). It is easy to characterize such an attitude in terms of reprobation and 
 ridicule-: " I am quite aware," said Lindley, L.J., in a case as to secret creation of 
 fictitious prices by rigging the market, "that what the plaintiff has done is very 
 commonly done ; it is done every day. But this is immaterial. Picking pockets 
 and various forms of cheating are common enough, and are nevertheless illegal " (v). 
 But this sort of rather obvious criticism is wanting in a just appreciation of all that 
 is involved in the public feeling on this matter, which rests upon the supposition 
 that the practices in question are not merely usual, but that they are generally known 
 to prevail, or are so common that everybody ought to know, if he does not, thft 
 everybody else is resorting to them daily. It is not suggested that this hypothesis 
 corresponds with fact. But it is not right to ignore its importance altogether, as the 
 foundation of the popular sentiment, and this is what judicial denunciations of the 
 above type frequently do. The whole and sole vice, morally as well as juridically, 
 of the condemned customs is their secrecy, as has already been noted (w) : and it 
 the receipt of commissions by agents in general business should ever become of such 
 universal notoriety (like the receipt by domestic servants, or postmen, of Christmas 
 presents from tradesmen, or the public, respectively) as to justify an imputation cf 
 knowledge of the practice to all concerned, the only element which renders it 
 objectionable, and with it the objection itself, would disappear. That time has not 
 yet come, nor is it likely that it ever will : but, in the meantime, the belief that it is 
 rapidly approaching explains in some degree the violent opposition of the meroantUn 
 community, not so much to the juridical code itself, as to that particular theoretical 
 justification of it, occasionally put forward, which involves the imputation of persf nal 
 dishonesty. The strength and persistency of this divergence, however it is to be 
 explained, between the common law and the common conscience in these matters is 
 responsible for the steady under-current of opposition which Sir Edward Fey ard 
 Lord Russell encountered before they could obtain legislative recognition of the 
 criminal character of clandestine commissions in the form of the Prevention of 
 Corruption Act, 1906 (6 Edw. 7, c. 34), and for the enormous difficulties which 
 
 (s) Merchant of Venice, Act II, Sc. 2. 
 
 (<) At p. 753 of Costa Rica Railway Co. v. Forwood, [1901] 1 Ch. 746, C. A. 
 
 (u) Smith V. Sorby (1878), 3 Q. B. D. 552 n. 
 
 (v) At p. 729 of Scott V. Brown, Doering, McNab & Co., [1892] 2 Q. B. 724, C. A. 
 
 (w) See the cases cited in note {x) to § 316, ante. 
 
584 APPENDIX B, SECT. 2, SUB-SS. (2), (3). 
 
 notwithstanding the energetic efforts of societies and leagues, are still met with in 
 enforcing the provisions of the statute, and, when a prosecution is instituted for that 
 purpose, in obtaining verdicts against the accused. And so it will always be until 
 harmony is somehow established between the views of the man in the street and 
 those of the man of law : quid leges sine moribus Vance proficiunt ? 
 
 658. The above observations as to the unwisdom of giving an ethical colour 
 to such rules of disclosure as are in law independent of moral considerations for 
 their efficacy have of course no application to ca«es where breaches of these rules 
 are committed by persons over whom, as its officers, the Court has disciplinary 
 jurisdiction. Here it is obvious that judicial reflections on professional ethics (a;) are 
 not only not misplaced, but essential. 
 
 659. As to the fiduciary duties involved in the relation of partnership, as dis- 
 tinguished from other forms of agency, jurisprudence is at one with mercantile, and 
 (we may add) religious, sentiment. The baseness of concealment from a partner is 
 recognized and condemned by commerce quite as heartily as it is by the law («/), 
 or even by the Church, as illustrated in the story of Ananias, whose ofience was 
 simply and solely concealment of material facts from those associated with him in an 
 informal koivuivm of goods for pious uses (z), — an ofience which, nevertheless, St. Peter 
 expressly characterized as a lie, condemning the name of Ananias to eternal infamy 
 as that of the typical liar, notwithstanding that he had in fact made no false, or indeed 
 any, representation whatever {a), and associating him for all time with Sapphira who 
 had undoubtedly made a false statement, and had lied in the ordmary sense of the 
 word (6), as persons equal in guUt, and meriting the same swift and tragic fate. 
 
 Sub-s. (3). As to the "Suspected Relations" of Influence. 
 
 660. The " man in the street," not without some support from a certain school of 
 jurists, is by no means in sympathy with the equitable presumptions of undue 
 influence applied to certain of the relations which have been called, after Sir IVederick 
 Pollock, " suspected " (c), and thinks it an unjust imputation upon humanity, 
 and an unwarrantable interference with individual freedom, that these relations 
 should be so " suspected." Influence, he urges, is a fundamental condition of 
 society. Man is not man except in relation to his feUows. He is " (jivaei ■koXitlko's." 
 It is_only the supreme spirits whd can endure the loneliness of regulating each action 
 of their lives by pure reference to principle, rather than by imitation of some living 
 ideal or personal model. The average man must necessarily exercise, and come under, 
 
 {x) Such as those of Lord Alvbestone, C.J., at p. 191 of Re Four Solicitors, [1901] 
 1 K. B. 187, Div. Ct., and, again, in Re a Solicitor (1909), 26 T. L. R. 22, Div. a. 
 
 (y) Indeed, it must be admitted that, in one case, no less an authority than Lord 
 Blaokbitrn appears to have entertained a somewhat less exalted conception of the fidu- 
 ciary duties of partners to one another than the popular one, when he says : " I generally 
 think it is advisable, as a matter of prudence, as well as on other grounds, to let everything 
 be above board " : Cossets v. Stewart (1881), 6 App. Cas. 64, H. L. (at p. 80). One is not 
 surprised to find that, in a later case, Lord Macnaghten, with gentle irony, characterized 
 this as " a very proper sentiment, worthy perhaps of a more unhesitating acceptance " : 
 Trimble v. Goldberg, [1906] A. C. 494, P. C. (at p. 500). 
 
 (z) Acts, iv. 32-36. See, as to this Koivavia, Paley's Principles of Moral and Political 
 Philosophy, Book III, Pt. II, Ch. V. 
 
 (a) Acts, V. 1-6, from which it is quite clear that the crime of Ananias consisted, not 
 in his mere retention of part of the price of the possessions which he^sold for the supposed 
 benefit of the common fund, but in the secrecy of his retention, and in his false pretence 
 (by the mere act of delivery without express reservation) that what he was transferring was 
 the whole price (" whiles it remained, was it not thine own ? and after it was sold, was it 
 not in thine own power ? "). It was the breach of the fiduciary duty, and not any direct 
 falsehood, which made the offence a lie " not unto men, but to God." 
 
 (6) Acts, V. 8 : " and Peter answered unto her, TeU me whether ye sold the land for 
 so much ? And she said. Yea, for so much." 
 
 (c) As to the various " suspected' relations," see Ch. V, Sect. 2, Sub-ss. (l)-(5), ante. 
 As to the presumptions of law which arise on proof of any such relation, see § 405, ante. 
 
§§ 657-663 (ethics of disclosuke). 585 
 
 influences of all kinds from the cradle to the grave, — influences moral, religious, 
 social, professional, artistic, scientific, or that which "bright eyes rain,"— as well as 
 those which are immediately concerned with the direction of his temporal and 
 business affairs. Why, it is often asked, should the law look kindly on the former, 
 and askance at the latter ? It is firmly established that even the latter class of 
 influence is not presumed to have been undue or improper in the case of a testae 
 mentary disposition of property (d), and popular ethics finds it difiicult to appreciate 
 the reasons which move jurisprudence to draw a distinction between such a mode of 
 disposition and a disposition inter vivos, and, whilst making no unfavourable pre- 
 sumption against the one, to cast grave suspicion on the other. 
 
 661. Ofthefour " suspected " relations, two (viz. that between medical attendant 
 and patient, and that between legal adviser and client) do not, perhaps, give rise to 
 any very great difference of opinion. The two others, however, do. These are the 
 parental and the spiritual relations. 
 
 662. The plain man can conceive nothing more natural and proper than the 
 parental influence (e). And, to a certain extent, jurisprudence goes along with him 
 in so thinking. For example, as has already been noted, not only in the discussion 
 of this particular species of influence (/), but also in that of compromises, and 
 bargains with expectants (g), the law makes no presumption of impropriety against, 
 but distinctly favours, " family arrangements." Again, it refuses to " suspect " the 
 influence of a husband over his wife when he appeals to her for succour in his financial 
 distress, or to deem him a spoliator against whom omnia prcBSumuntur (h). Why, then, 
 asks the layman, should a parent who has a natural, and, indeed, in certain circum- 
 stances a legal, right to look to his chOd for support in his pecuniary difficulties, 
 be accounted a presumptive spoliator by reason of his parentage alone, and be at 
 once put to the proof of the purity of his motives, and the good faith of the trans- 
 action ? Why should not the child, as the wife is, be required to make out some 
 primd facie case of impropriety before the parent is called upon for an answer ? 
 
 663. In the case of the sacerdotal relation, the ordinary man either agrees 
 vehemently, or disagrees vehemently, with the doctrines of jurisprudence. The 
 Laodicean attitude of the " spiacenti a Dio ed a nemici suoi " is not common. There 
 is, no doubt, a strong body of popular opinion which supports the law in gravely 
 suspecting this relation (i), as is shown by the history of the persistent, and ultimately 
 successful, warfare waged by the Crown and its judges, with the hearty sympathy 
 •of the community, against the usurped jurisdiction of ecclesiastical tribunals (j). 
 It is commonly felt that an influence which dominates every stage in man's pil- 
 grimage, — ^now at his side with counsel, now at his back to support or spur forward, 
 now in front of him to bar access to prohibited ground, — must necessarily hold such 
 pervading and persistent sway over his temporal concerns as to provoke suspicion and 
 invite vigilance. In modern times the seductive and coercive power of the priest 
 and monk is not nearly so universal as it was in the middle ages, when, as we may 
 read in the eloquent pages of the historian of European morals, "the more pious 
 minds recoiled from the disposing of their property in a manner which would not 
 redound to the advantage of their souls " (k), and in time " the evil attained such a 
 point that a law was made under Valentinian depriving the Christian priests and 
 monks of that power of receiving legacies which was possessed by every other class 
 of the community, and St. Jerome mournfully acknowledged that the prohibition 
 was necessary " (l). But the influence, though more sporadic and occasional at the 
 
 (d) See § 447, ante. 
 
 (e) See §§ 409, 410, ante. 
 (/) In §410, ante. 
 
 Ig) In § 135, and § 482, ante, respectively. 
 
 {h) See § 446, ante. 
 
 li) See § 421, ante. 
 
 (j) This is traced historically in the author's Code of the Law of Actionable Defamation, 
 App. V, Sect. 4. 
 
 (Je) Lecky's History of European Morals from Augustus to Charlemagne (9th ed.), 
 vol. ii, pp. 133, 134. 
 
 (I) Ibid., vol. ii, p. 151. See also p. 216 of the same vol. 
 
586 APPENDIX B, SECT, 2, SUB-SS. (3), (4). 
 
 present day than formerly, exercises, when it exists at all, as powerful a dominion as 
 ever, and excites as deep a distrust. Accordingly current English sentiment, no less 
 than English law, is still in accord with the views of Pothier, and other French jurists, 
 as regards the impropriety of gifts to confessors and spiritual directors (m), or to the 
 conventional establishments or monastic orders of which they are members (n). The 
 ecclesiastical point of view is of course violently antagonistic. The influence which 
 the law presumes to be a breach of duty to man, the Church presumes to be an 
 absolute duty to God. Spiritual persons strongly, and, in the opinion of many, 
 justly, resent judicial interference with dispositions in favour of ecclesiastical bodies 
 and institutions, though willing to concede that the individual priest who uses his 
 sacerdotal authority for the purpose of extracting private gain for himseK is a 
 desecrator of his divine office, and a fraudulent trustee of the authority placed in his 
 hands (o), and that, even in matters strictly within his province, it is not the function 
 of a wise director to establish too great a personal dominion over the penitent, "le 
 role d'un confesseur " being, according to Bossuet, " de mettre les ames en etat 
 de se passer de lui." " You countenance and encourage," they say to jurists, " the 
 exertion of Influence for the preservation of family honour and estates (oo). Why 
 should a presumption be made against the influence which we exert for the 
 honour and peace and temporal welfare of the spiritual families committed to our 
 charge ? " To which jurisprudence replies : " we do not prohibit these gifts. Let 
 Mcodemus give all his possessions to the Church, if he will : but if he should 
 afterwards be minded to revoke his gift, we will call on the establishment which is 
 in receipt of his bounty to sustain the transaction. The Church may censure the 
 back-sliding of one who is no longer " a cheerful giver," but the law cannot allow her 
 to retain, it and when challenged, anything which she has obtained by the abuse of 
 her spiritual ascendancy." The Church on this protests that what she complains of 
 is not the taking away of property acquired by proved abuse of influence, but the 
 presumption of law, without proof in the first instance, that there must have been 
 such an abuse. The conflict, therefore, ultimately turns on the fairness or unfairness 
 of the presumption ; and on this issue jurisprudence, supported by a large idass of 
 popular opinion, is, and probably always will be, hopelessly and irreconcileably 
 opposed to sacerdotalism. 
 
 (m) See Pothier, Traiti des Donations entre Vifs, Sect. 2, Art. 1 (OEuvres, ed. Dupin, 
 1825, vol. vii, p. 441), and TraiU des Donations Testamentaires, Oh. Ill, Art. 3 ; also 
 Merlin, Repertoire de Jurisprudence, tit. Confesseur, Art. 3. The first of these references 
 was in the mind of Sir Samttel Komilly, in his opening argument, at p. 280, and in his 
 reply, at p. 286, of Huguenin v. Baseley (1807), 14 Ves. 273. As to the authority of the 
 " celebrated reply," see note (c) to § 408, ante. All three passages were cited (in argument) 
 in Middleton v. Sherburne (1841), 4 Y. & C. (Exch. in Eq.) 358. 
 
 (re) See the citations from Pothier in the last note, and the observations of Stuabt, 
 V.-C, at p. 270 of Nottidge y. Prince (1860), 2 Giff. 246 : " the law of France, as stated by 
 Pothier, absolutely prohibited not only all gifts by a penitent to his confessor, but all gifts 
 to that religious community of which the confessor is a member." 
 
 (o) The view so forcibly expressed by Prince John of Lancaster, when denouncing the 
 rebellious Archbishop of York (Scroop) for prostitution of his sacred office {Henry IV, 
 Part II, Act 4, Sc. 2) :— 
 
 " Who hath not heard it spoken 
 How deep you were within the books of God ? 
 To us the speaker in His parhament ; 
 To us the imagined voice of God himself ; 
 The very opener and inteUigencer 
 Between the grace, the sanctities of heaven 
 And our dull workings. 0, who shall beUeve 
 But you misuse the reverence of your place. 
 Employ the countenance and grace of heaven. 
 As a false favourite doth his prince's name. 
 In deeds dishonourable ? " 
 
 {oo) See §§ 135, 410, 482, ante. 
 
§§ 663, 664 (ethics of disclosure). 587 
 
 Subs. (4). As to Oppression and Usury. 
 
 664. In relations not of the "suspected " types, but such as are created by the 
 particular " circumstances and conditions " of the case, where the weakness of the 
 seryient^ party is taken advantage of by unconscionable conduct on the part of 
 the dominant party (p), and particularly in the relation between an " expectant " f r.d 
 a person dealing with him on the faith of his expectancy (q), it has been seen that 
 oppression and usury play a prominent part. Here the moral sense of the community 
 has always enthusiastically supported the judicial code in all its stringency. Indeed, 
 it has at times shown an anxiety to go even further than the judges, and to force 
 imwise measures upon the legislature. The general hatred of the oppressor was 
 probably responsible for some of the more grotesque of the rules and presumptions 
 made by Courts of equity against mortgagees (r). The abuse of power and riches 
 to extort advantages from distress and helplessness by unconscientious means, and 
 particularly by usury, has been the subject of execration in all civilized times and 
 countries, whether we look to the ethical and theocratic code of Israel (s), — though, 
 as in the case of misleading the blind (t), the prohibition was purely tribal, ard 
 directed against usury domi, and not fcri.o, — or to the decrees of the Christian 
 Councils, such as the Fifth CouncU of Lateran, 1515 ; or to Greek phOosophy 
 which insisted specially on the tendency of usury to propagate sedition and dis- 
 order (u), and on the unnatural character of fecundity in a naturally unproductive 
 material (v) ; or to Athenian legislation (w) ; or to Roman law (x), and history (y) ; 
 
 (p) This is the subject of Oh. V, Sect. 2, Sub-s. (5), ante, 
 {q) Separately treated in Ch. V, Sect. 2, Sub-s. (6), ante. 
 
 (r) Such as the rule that " a mortgagee is not allowed at the time of the loan to enter 
 into a contract for the purchase of the mortgaged property," — a rule which, at p. 326 of 
 Samuel v. Jarrah Timber & Wood Paving Corporation, [1904] A. C. 322, H. L., Lord 
 Macnaghten characterized as "founded on sentiment rather than on principle," and 
 framed, in accordance with that sentiment (the sentiment of Lord Habdwicke's day), 
 in order "to protect embarrassed landowners from imposition and oppression," and to 
 checkmate a supposed "design" on the part of the extortionate mortgagee "to -HTest the 
 estate fraudulently out of the hands of the mortgagor." 
 
 (s) See Deuteronomy, xxiii. 20 (prohibition of usiiry, except to the stranger). The Old 
 Testament is full of denunciations of the oppressor and the usurer, and of him who 
 " grindeth the face of the poor." The last of the nine Curses in the Commination Service 
 is directed against {inter alios) " the unmerciful," and " the extortioner." " He that hath 
 given his money upon usury " is excluded from the Lord's tabernacle, and an outcast 
 from " His holy hill " : Ps. xv. 6. The cruelty inflicted by the manufacture of " corners 
 in commodities of necessity is reprobated in Prov. xi. 26 : " he that withholdeth corn, 
 the people shall curse him ; but blessings shall be upon the head of him that selleth it." 
 (i) See § 650, notes (x) and (y), ante. 
 
 (u) Plato {Rep. vii. 555, 556) insists that the inevitable result of allowing xpiM"'^"'''^''^ 
 to ply their trade and force their attentions upon dissolute and ruined youths must be to 
 engender a class of drones {Kfi<privf'i) and of " veaiTepurnov ipZvTfs " who wiU bring disorder 
 into the State. 
 
 {v) See Plato, Rep. vii. 556 (" tov irarpis exydvovs t6kovs iroAAoTrAa<n'ous"), and Legg. 
 742 C : also Aristotle, Polit. I. 10. 4, 5 (" & 5e tokos yiverai i'6iJ.Lcrfia voiJ.ia-tJ.aTos' Sctte koI 
 ftdKioTa irapa (jiva-iv ovtos twv xP't^o.''' '"'!'■'''' ("tIv "). The same idea is expressed by Bacon 
 in his Essay on Usury {Essays or Counsels, Civil and Moral, Essay XLI : " it is against 
 nature for money to beget money "), and by Shakespeare in the lines cited in note(a), post, 
 {w) Solon legislated against usury: see Plutarch, Solon, 15; Lysias, Contra Theom- 
 nestum, I. 18 ; Schol. in Demosth., Timocr. 766 (" jxi] Xa/iPavsiv ttoXAovs t6kovs "). 
 
 {x) The XII Tables limited the rate of interest to an unciarium foenus. The Lex 
 Genuoia (a plebiscitum of 340 B.C.) further restricted usury. In Cicero's Time, 12 per 
 cent, was the maximum, and compound interest was not allowed. Tacitus, in Ann. vi., 
 
 (y) See Livy, VII, 16, 27, 42; Lucan, Pharsalia, I, 181, 182 :— 
 
 " Hinc usura vorax, avidumque in tempore foenus, 
 Et concussa fides, et multis utile beUum." 
 
 Cp. the passages cited in the last note from Tacitus. It was said that the revolt of 
 Boadioea was precipitated, if not caused, by Seneca's sudden calling in of a huge loan. 
 
588 APPENDIX B, SECT. 2, SUB-SS. (4), (5). 
 
 or to mediaeval sentiment (z) ; or to the later views of renaissance poets (a), and 
 sociologists (5) ; or to the laws for the suppression of usury in modem states, in- 
 cluding our own (c). So overpowering has been the public detestation and distrust 
 of this particular form of "influence" that the community, in this as in other 
 countries, has always refused even to contemplate the other side of the question, 
 though presented to them by the wisdom of a Bacon {d), and has been blind and deaf 
 to every suggestion of compensating mercantile advantage. In their feverish 
 hankering for repressive legislation, the midtitude has never stayed to consider " how 
 small of all the iUs 'that men endure, The part which kings or laws can make or 
 cure," or how easily statutes of this character are evaded, or (if not evaded) in what 
 consequences they wOl inevitably involve the very classes which it is intended to 
 benefit and protect, — consequences of the utmost gravity, not only financiaUy, since, 
 in order to repay him for his increased risk, the usurer must exchange whips for 
 scorpions (e), but also morally, in that the borrower's conscience is debauched by the 
 strong temptation held out to him to cheat his oppressor under forms of law (/). 
 
 Subs. (5). As to Gifts. 
 
 665. With reference to donations, as distinct from transactions for value, between 
 living persons standing to one another in any of the " suspected " relations, the 
 
 16, 17, gives a short account of the legislation against moneylenders down to the time of 
 which he is writing and, in Ann. xiii, 42, reports Suilius as stating, in his spirited defence 
 to Seneca's charges, against him under the Lex Cinoia de Donis et Muneribus(asto which 
 see § 680, note (m), post), that the provinces, as well as Italy, had been drained by usurers, 
 and (lest there should be any mistake as to the person he was aiming at) asking by what 
 sort of philosophy Seneca in four years of imperial favour had amassed 300,000,000 sesterces 
 (£2,500,000). Justinian prescribed different scales of permissible interest, graduated 
 according to the risk (12 per cent, being the maximum in maritime contracts, 8 per cent, 
 in other mercantile transactions, 6 per cent, in the case of private dealings with ordinary 
 persons, and 4 per cent, where the borrower was in an exalted station, or an agriculturist). 
 Cp. Bacon's suggestion referred to in note (6), inf. As to the S. C. Macedonianum with 
 reference to usurious bargains with " expectants," see § 685, in App. C, post. 
 
 (z) The Nine Circles of Dante's Inferno are largely peopled by extortioners, oppressors, 
 usurers, and other abusers of trust and power. 
 
 (a) See the Merchant of Venice, passim, where Antonio represents the current feeUng 
 of Shakespeare's day against lending " upon advantage," and " the giving or the taking 
 of excess," particularly in the case of a friend ; "for when did friendship take A breed for 
 barren metal of his friend ? " (Act I, Sc. 3, 11. 134, 135). 
 
 (6) See Cicero, De Off., I, 42, and II, 25, and Bacon's History of Henry VII, in which 
 he speaks of usury as "the bastard use of money," and his above cited Essay (" Of 
 Usury "), where he sets forth its various " discommodities," as reflected in popular say- 
 ings, — for instance, that the DevU takes the tithe, instead of the Church ; that it is un- 
 natural for " barren metal " to propagate its kind, — see note {v), ante, — that the usurer's 
 plough, goes every Sunday, which is a violation of Christian law ; that it is contrary to 
 the Divine decree, in sudore vultus tui comedes panem (not in sudore vultim alieni) ; that it 
 is a breeder of drones ; that it engenders disorder and sedition ; that it concentrates wealth 
 in a few hands ; that it prevents money circulating, and money " is like muck, not good 
 except it be spread " ; and that its tendency is to " duU and damp all industries " (cp. 
 Polonius's " borrowing dulls the edge of husbandry "). These popular views are repeated 
 in other of his Essays, such as Essay XV (" Of Seditions and Troubles "), and Essay 
 XXXIV (" Of Riches "). Bacon was, however, too wise a thinker to accept all this pro- 
 verbial philosophy of the multitude without quahfication. He says that usury is and 
 must be conoessum propter duritiem cordis : he sets out its " commodities," and concludes 
 that " to speak of the aboUshing of usury is idle," — " that opinion must be sent to 
 Utopia," — but its " tooth must be grinded that it bite not too much," and he then 
 suggests a graduated scale, like that of Justinian : — see note (x), ante. 
 
 (c) See § 436, ante, as to the Usury Acts, and their abolition. Cp. Lecky's Bise and 
 Influence of Rationalism in Europe, vol. ii, ch. 6. 
 
 (d) See note (6), sup. 
 
 (e) See § 435, note (m), ante. 
 
 (/ ) As was observed by Lord Eldon, L.C, at p. 139 of Davis v. Duhe of Marlborough 
 (1818), 2 Swanst. 108, and by Fabwell, L.J., at p. 891 of Sadler v. Whiteman, [1910J 
 1 K. B. 868, C. A. 
 
§§ 664, 665 (ethics or disclosure). 589 
 
 equitable code of duties is of an almost Draconian severity. It has already been 
 explained (g) that at one time it was deemed " impossible " to sustain a gift made 
 under such conditions ; then " almost impossible " ; then impossible unless the 
 relation, and the influence presumed from it, has been first absolutely terminated, or 
 unless the donor is proved to have acted on the independent and competent advice 
 of a third person. The common sense and conscience of the public vehemently, and 
 not without reason, rebels against the stringency, and (it almost may be said) 
 savagery, of these rules. The commimity at large cannot be reconciled to a doctrine 
 which lays down that, however real was the intention of the donor to make the gift, 
 and however honest, impartial, and candid the conduct and advice of the donee may 
 have been, yet, if the relation, or the influence created by it, existed or lingered at 
 the material date, the gift may be afterwards undone at any time most convenient 
 to the donor, or most inconvenient or ruinous to the donee, merely because the 
 disinterested and unbiassed advice given by the latter did not pass through the lips 
 of the indispensable "third person," and a non-conducting medium was not thus inter- 
 posed between the related parties. " Sittlichkeit " thinks that mankind should not be 
 encouraged in practices which even the gods did not permit themselves (h). A man's 
 gift by win cannot be upset unless his supposed will is proved not to have been in 
 truth his will at all, but somebody else's will, superimposed upon his (hh). But if 
 he chooses to give the devised or bequeathed property to the objects of his bounty 
 before he dies, and becomes (as William of Wykeham is said to have done) the 
 executor of his own will, the gift is revocable under the conditions, and subject to the 
 exceptions, above stated. What good reason, it is asked, can there be for such a 
 distinction ? How can the mere fact that the donor is dead make the donation 
 a matter of less suspicion than if he still lived ? If anything, the law's distrust and 
 suspicion ought to be less in the latter case than in the former, at any rate where the wiU 
 is a death-bed one made by a testator in a state of bodily or mental weakness, and per- 
 haps a preyto morbid apprehensions as to the future, or exaggerated remorse as to the 
 past : but, certainly, it ought not to be greater. The ordinary man appreciates the 
 policy of the law in refusing to enforce a promise to make a gift, just as it refuses to 
 enforce a wager : but in the case of a wager the law equally refuses to enforce restora- 
 tion of the amount of the wager, when once paid. Why, it is asked, is not the same 
 equality of treatment meted out to donor and donee ? What fairness is there in 
 allowing the giver to suddenly recall his gift, perhaps long years afterwards, when the 
 recipient has spent it, or has altered the style of his living on the faith of the honesty 
 and validity of the transaction ? It is this very circumstance which the law has allowed 
 to operate even as an estoppel against the recovery of moneys paid or credited in 
 error (i). To this the law answers ; " we only allow a completed gift to be imdone 
 when the suspected relation is proved ; from this relation we presume undue in- 
 fluence, though even then not quite irrebuttably." Whereupon the plain man 
 protest's that it is just this " almost irrebuttable " presumption to which he objects. 
 Why should security and stability be denied to a gift honestly made and honestly 
 accepted, and the donee's enjoyment of it, and his legitimate expectations of its 
 continuance, be defeated by the belated caprice, or vanity, or senile imbecility of a 
 donor who, perhaps, takes ofience at what he (or, more commonly, she) may consider 
 a falling oS in the profuse servility expected as the life-long interest on the gift, or 
 by the exchange of one particular form of influence for another (j) ? Why should it 
 
 (?) See § 405, note (3), and § 475, ante. , ^., 
 
 {h) " The gods themselves cannot recall their gifts - Tennyson s Tithonus. 
 
 (hh) See § 447, ante. 
 
 (i) See Brisbane v Dacres (1813), 5 Taunt. 143 (per Gibbs, J., at pp. 152, 153, and 
 Su: Jambs JIaksfield, C.J., at p. 162) ; Skyring v. Greenwood (1825), 4 B. & C. 281 [per 
 Abbot, C.J., at p. 290, and Bayi,by, J., at pp. 290, 291). 
 
 (j) For example, the decisions in O'Brien v. Lewis (1863), 32 L. J. (CH.) 569, Broun v. 
 Kennedy (1864), 4 De G. J. & S. 217, Rhodes v. Bate (1866), 1 Ch. App. 252, and Ules v. 
 Terry, [1895] 2 Q. B. 679, C. A., are decisions of judges, or appellate tribunals, which 
 popular sentiment would in fact condemn (whether rightly or wrongly, is another question), 
 and which no jury would have given, any more than they did in the similar oases of 
 
590 APPENDIX B, SECT. 2, SUB-SS. (5), (6) ; SECT. 3. 
 
 be made impossible to take a bounty, except on the terms of giving the donor a 
 promissory note to repay it on demand '! The donee is thus made, instead of " taking 
 a bond of Fate," to give a bond to Pate, and, instead of " making assurance doubly 
 sure," to shatter it to pieces. This feeling, indeed, has not only been recognized, 
 but shared, by more than one eminent judge {k). As for the view of the law that 
 the donor usually gives in haste, and repents at leisure, this is by no means in complete 
 accordance with the facts of life. Quite as often as not, the gift is deliberate, and 
 the revocation hasty and capricious. Further, the revocation is often, perhaps more 
 often than not, the revocation not of the donor, but of those whom he leaves behind 
 him, and in such a case the equitable rules operate with double cruelty, for they 
 disappoint the life-long desire and intentions of the donor who has gone hence in the 
 pathetic confidence that he has securely provided for the object of his affection, as 
 well as the trust and faith of the donee in the permanence of his possession. For these 
 reasons, or some of them, high authorities, such as Lord Bbougham [1), Lord Camp- 
 bell (m), Lord Eshbr (»), and Lord Shaw, delivering the judgment of the Judicial 
 Committee of the Privy Council (nn), have expressed opinions by no means in dis- 
 accord with popular sentiment as to the unfairness of the supposed absolute require- 
 ment of equity that a gift, made in psrfect good faith in every other respect, can 
 nevertheless be successfully impeached if the consilium tertii be not proved, whereby 
 ii results that, to use the felicitous phrase of Lord Shaw in the case last mentioned, 
 " the legal protection " intended to be thrown round the donee is "transmuted into 
 a legal disability." 
 
 Subs. (6). As to the Doctrine of " Wilful Ignorance." 
 
 686. Li examining certain questions of terminology, it has been noticed that, 
 pnder such phrases as " wilful ignorance," " intentional " or " fraudulent blindness," 
 " diligence in ignorance," " dishonest belief," and the like, English law has exhibited 
 a distinct tendency to impute moral blame in certain circumstances to passive and 
 
 Kennedy v. Broun (1863), 13 C. B. (n.s.) 677, and Mitchell v. Homfray (1881), 8 Q. B. D. 
 587, C. A., which were tried by a judge and jury. Even in Broun v. Kennedy, sup. (where 
 current morality, if disagreeing with the decision, would clearly have been at fault), it 
 would not seem otherwise than human in the normal person to recoil with disgust from 
 the base ingratitude of the oHent towards her " able and effectual advocate " (per Knight- 
 Bkitob, L.J., at p. 218), to whom she was indebted for her success in the protracted 
 litigation with reference to her step-father's will. In Allcard v. Skinner (1887), 36 C. D. 
 145, C. A. (where, as in Mitchell v. Homfray, sup., the donor, though successful, succeeded 
 only on the ground of confirmation), it was proved that the donor had come under religious 
 influences opposed to, and deeply interested in obliterating, the particular land of spiritual 
 influence under which she had made the gift. In all the cases cited in this note, except 
 O'Brien v. Lewis (1863), 32 L. J. (Ch.) 569, the donor was a woman. 
 
 [k) Thus, in O'Brien v. Lewis, sup., Lord WESTBtrny, B.C., at p. 573, was careful to 
 point out that his decision was not based on any merits on the part of the donor ; in 
 Rhodes v. Bate (1866), 1 Ch. App. 252, KNiGHT-BurrcE, L.J., at p. 257, expressed his 
 extreme repugnance to a judgment against a donee who had abundant merits, in favour of 
 a donor who had none ; and in Liles v. Terry, [1895] 2 Q. B. 679, G. A., Lord Esher, M.R., 
 at pp. 683, 684, protested against the hard and fast equitable doctrine, and said that he 
 only followed it under compulsion " the learned judge has found, and I beUeve it to be the 
 truth, that . . . she did precisely what she intended to do, and that no undue influence 
 whatever was exercised upon her." Then, after stating the equitable rule, he proceeds : 
 " I submit to that rule. I own that I think it unfortunate that such a rule should have 
 been laid down, because in particular instances it may work great injustice ; and I do not 
 think that a hard and fast rule which may work such injustice ought to be the rule of law 
 in the matter. But I feel bound by the authorities to hold that there is such a rule in 
 equity. On that ground only ... I think the female defendant must lose the benefit 
 which the plaintiff, her aunt, intended to confer upon her." 
 
 {I) At p. 526 of Nicol v. Vaughan (1833), 1 CI. & Fin. 495, and, again, at p. 137 of 
 Hunter v. Atkins (1834), 3 My. & K. 113. 
 
 (m) At p. 374 of Jenner v. Jenner (1860), 2 De G. F. & J. 359. 
 
 (w) In Idles v. Terry, sup. : see note (k), sup. 
 
 (rera) At p. 139 of Kali Bakhsh Singh v. Bam Gopal Singh (1913), 30 L. T. 138, P. C. 
 
§§ 665-667 (ethics op disclosure). 591 
 
 negative states of mind (o). In so far as expressions have been judicially used which 
 imply that fraud, as distinct from negligence, must always be established when it is 
 sought to presume against a man a knowledge of that which in fact he does not know, 
 some reasons have been given for concluding that these expressions go too far {p) ; 
 but there can be no doubt that there is one species of the actual ignorance deemed in 
 law equivalent to knowledge which is marked off from the rest by the circumstance 
 that the party to whom the knowledge is imputed deliberately and dishonestly closed 
 his eyes and ears to the truth which for purposes of his own he did not want to see 
 or hear. With the attitude of jurisprudence in respect of this particular species 
 ethics is in hearty accord. Theology reprobates " blindness " and " hardness of 
 heart," from which, in two petitions of the Litany, the congregation prays to be 
 delivered, whilst, in a third, it seeks forgiveness for " all our sins, negligences, and 
 ignorances." Quite a common expression with divines is " sinful blindness " (q), 
 and "false doctrine, heresy, and schism," and matters of faith and belief generally, 
 are accounted by them questions of the wiU and the heart, quite as much as of the 
 intellect. Similarly, popular sentiment appreciates the deep guilt of that ignorance 
 of crime which it is vainly hoped wUl be evidence of innocence hereafter, — ^the 
 ignorance in which Macbeth desired his wife to remain, — 
 
 " Macb There will be done 
 
 A deed of dreadful note. 
 Lady M. What's to be done ? 
 
 Macb. Be innocent of the knowledge, dearest chuck, 
 Tin thou applaud the deed " (r), — 
 
 or the ignorance which Pompey rebuked Menas (proposing the murder of the other 
 two " world -sharers," Lepidus and Octavius) for not leaving him in, 
 
 ..." Repent that e'er thy tongue 
 Hath so betrayed thine act : being done, unknown, 
 I should have found it afterwards well done. 
 But must condemn it now " (s). 
 
 As to the remaining species of presumptive knowledge, the man in the street (Aris- 
 totle's " o </)p6Vt/u.os " ) would in some cases make the same imputations as the law, in 
 others, he would not [t) ; and with his views as to these latter (consisting principally 
 of various kinds of " constructive notice " in mercantile transactions) jurisprudence 
 is so far in sympathy that both judges (m), and the legislature (v), have indicated in 
 the strongest possible manner their intention to restrict, rather than to extend, the 
 operation of the doctrine. 
 
 Sect. 3. When, and why, Jueispeudence disebgards Ethics. 
 
 667. There are undoubtedly cases in which the law neglects the moral quality 
 of the act which is the subject of its civil principles and process. It is true that Lord 
 EsHEE, in afamous judgment, has stoutly maintained that "ewr?/ general proposition 
 laid down by judges as a principle of law ... is the statement of some ethical 
 
 (o) See App. A, § 634, ante. 
 
 (p) Ibid., §§ 635, 637, ante. 
 
 (q) See Archbishop Trench's Letters and Memorials (Kegan Paul & Co., 1888), vol. ii, 
 p. 188 (a letter from Dr. Pusey to the Archbishop, dated the 2nd April, 1875). 
 
 tr) Macbeth, Act III, So. 2, 11. 43-46. 
 
 (s) Ant. & Cleop., Act III, So. 7, 11. 83-86. 
 
 {t) The normal person, for instance, would not be disposed, as a rule, to presume 
 knowledge to the same extent as the law does in the classes of case which are dealt with 
 in Sub-ss. (4) and (5), but would probably agree with the rules which are the subject of 
 Sub-ss. (2), and (3), of Ch. II, Sect. 3, ante. 
 
 (u) See Ch. IL Sect. 3, Sub-s. (7), ante. 
 
 (v) See §§ 66, 67, 68, ante. 
 
592 APPENDIX B, SECT. 3. 
 
 priaciple of right and wrong, applied to ciroumatances in real life, that is, in the life 
 of social intercourse, or in the life of business. If the suggested principle is not 
 obviously a rule of right and wrong, or if the suggested application cannot be sup- 
 ported by the suggested principle, the proposed application must be wrong, or mutt 
 be supported hy some other principle of right arid wrong, or cannot he supported at 
 all " {w). But this language is obviously much too wide (since it includes several 
 propositions of law which are entirely devoid of all ethical content whatever, such as 
 those which relate to the passing of property, or are otherwise based on public con- 
 venience alone), and is recognized as being so in other judicial expositions for which 
 the same high authority is responsible, and which introduce the proper qualifications. 
 In one case, for instance, we find him justifiably protesting that "unless we are 
 forced by paramount authority to hold that it is law, nothing which is contrary to 
 natural justice can be part of the law of England " (x), and, in another, that " legal 
 principles have almost always been the fimdamental ethical rules of right and 
 wrong " (y). The fact is that jurisprudence and ethics view their common subject^ 
 the field of human action, from opposite standpoints, and must necessarily do so, 
 if they are to remain true to their respective functions. The law must refer its 
 problems to the ultimate standard of public utility, convenienoy, and expediency, 
 rather than that of morals (z), except in so far as public morality is a p rt of public 
 policy, and except, of course, in cases where fraud or malice or other personal wicked- 
 ness constitutes an essential ingredient in the cause of action, or the criminal offence. 
 It is true that the resultant conclusion is in most cases practically identical, but this 
 is (scientifically considered) an accident (a). It is also true that, as has been already 
 pointed out, ethical considerations may affect the question of costs (6), or, in 
 certain classes of case, may aggravate or reduce the damages, or, in another kind of 
 case, where the form of remedy prayed is discretionary (e.g. specific performance), 
 may even be a ground for refusing relief (c). But subject to these qualifications 
 and exceptions, the law can only enquire whether a legal duty has been violated. 
 It can only regard the effect upon the temporal interests of the party injured, whereas 
 ethical casuistry devotes itself to the examination of the motive and intention of the 
 alleged wrongdoer. Jurisprudence is the surgeon, whilst the moralist is the physician, 
 of human conduct,— the one is concerned with visible and palpable results, the other 
 with internal feelings, habits, causes, and diatheses. The distinction between the 
 
 (w) In Blackburn, Low & Co. v. Vigors (1886), 17 Q. B. D. 553, C. A., at p. 558. 
 
 (x) At p. 531 of Stumm v. Dixon (1889), 22 Q. B. D. 529, C. A. 
 
 (y) See the passage from pp. 816, 817 of Robinson v. Molhtt (1875), L. R. 7 H. L. 802, 
 which is cited in note (ft) to § 656, ante. 
 
 (z) See §§ 197, 358, and 461, ante, and the cases cited in the notes thereto, and par- 
 ticularly Hunter v. Atkins (1834), 3 My. & K. 113 {per Lord Brougham, L.C, at p. 134 ; 
 "the various departments of its" — ^the Court's — "jurisdiction £tre not in any portion 
 accurately defined . . . but at least its outer boundary is sufficiently marked, and 
 separates it plainly enough from the province of the moralist, — ^from the regions under the 
 sway of what are not very accurately termed duties of imperfect obligation ") ; Liles v. 
 Terry, [1895] 2 Q. B. 679, C. A. {per Lopes, L.J., at p. 684, and Kay, L.J., at p. 685) ; 
 Barron v. Willis, [1900] 2 Ch. 121, C. A. {per Lindley, M.B., at pp. 131, 132). 
 
 (a) In Qillett v. Peppercorne (1840), 3 Beav. 78, Lord Lanodale, M.R., at p. 84, said : 
 " these transactions cannot be supported ; not only are they in themselves so extremely 
 likely to lead to the commission of fraud, as to make them directly against the policy 
 of the law ; but in those cases which have occasionally come to the knowledge of the 
 Court, ... it has invariably been found that fraud has been the result of such trans- 
 actions." In Cooke v. Lamoite (1851), 15 Beav. 234, Eomilly, M.R., at p. 241, refers to 
 the coincidence of ethics and jurisprudence, but in such a way as to indicate that the 
 coincidence is rather incidental than consciously aimed at ( " if the doctrine there stated 
 were carried to the extent here contended for," — he is speaking of some of the expressions 
 used by Lord Bbougham in Hunter v. Atkins, sup., — " it might . . . prevent this Court 
 from exercising a jurisdiction by which it has not only estabUshed a rule of equitable 
 jiuisprudence, but has, at the same time, enforced a principle of high moraUty "). 
 
 (6) See §§ 168, 618, 623, ante. 
 
 (c) See, as to the damages, § 168, note {z), ante ; and, as to specific performance, § 245, 
 
§ 667 (ethics of disclosure). 593 
 
 two attitudes somewhat resembles that which exists between the judgments of history 
 and the social verdicts of the moment : and not merely by the theologian, but even by 
 the most utilitarian philosopher, many matters which are vital from the juridical point 
 of view are deemed of comparatively slight account in forming ethical judgments (d). 
 The officia virtutis which Lord Kenyon, Lord Eldon, and (though not altogether 
 approving the phrase) Lord Brottgham, described as duties of "imperfect" obliga- 
 tion (e), are precisely those which are deemed by such moralists as Kant(/) at one 
 end of the scale, and Paley (g) at the other, duties of " perfect " obligation ; whilst 
 the officia juris which alone the law regards as of " perfect " obligation, are, in a 
 strictly ethical aspect, since their sanction is not purely moral, considered of " im- 
 perfect " obligation. Nothing could more neatly illustrate the totally opposite 
 standpoints in relation to all such questions of conduct as are the common subject 
 of both systems. Dr. Story, after an exposition of the equitable doctrine of good 
 faith, adds : " the principles of natural justice and social morals do, indeed, go 
 further ; and require the most scrupulous good faith, candour, and truth in all dealings 
 whatever. But courts of justice generally find themselves compelled to assign limits 
 to the exercise of their jurisdiction, far short of the principles deducible ex sequo et bono, 
 and with reference to the concerns of human life, they endeavour to aim at mere 
 practical good and general convenience" {h). Or, as Cicero puts it, " alitor leges, 
 
 {d) " Contemporaries look at the agents, their motives, and characters ; history looks 
 rather at the acts and their consequences " (Hare, Giiesses at Truth). J. S. Mill, in his 
 diary, under date 2nd March, 1854, wrote : " it is a common saying that the only true 
 test of a person's character is actions. There is much error in this. . . . Actions, no 
 doubt, are the fittest test for the world at large, because all they want to know is the actions 
 they may expect from him. But to his intimates who care about what he is, and not 
 merely about what he does, the involuntary indications of feeUng and disposition are a 
 much surer criterion of them than voluntary acts " {Letters of J. S. Mill, ed. Hugh EUiot, 
 vol. ii, p. 376). So also Canon Mozley (Bampton Lectures, vol. i, p. 11), after sajdng that 
 " a perfectly sinless character . . . would be as great a miracle as any that could be con- 
 ceived," proceeds : " where is the proof of perfect sinlessness ? No outward life or 
 conduct, however just, benevolent, and irreproachable, could prove this, because goodness 
 depends upon the inward motive, and the perfection of the inward motive is not proved 
 by the outward act." 
 
 (e) " It is not every moral and social duty the neglect of which is the ground of an 
 action. Eor there are some which are called in the civil law duties of imperfect obhgation, 
 for the enforcing of which no action Ues " •- Pasley v. Freeman (1789), 3 Term. Rep. 51 
 {per Lord Kenyon, C.J., at p. 63). So Lord Eldon, L.C, at p. 275 of Gibson v. Jeyes 
 (1801), 6 Ves. 266 : " thisCoxu:t cannot proceed upon those nice and dehcate considerations 
 in matters of propriety that would suggest . . . that, as matter of moral, and therefore 
 imperfect, obligation," &o. Lord Brotjgham, L.C, also used the expression in the same 
 sense — see the citation in note (2), ante — but not without a suggestion of its inaccuracy. 
 
 ( / ) In the Second Section of his Metaphysic of Morals. 
 
 {g) Principles of Moral and Political Philosophy, Book II, Ch. x : "I call these 
 obhgations ' imperfect ' in conformity to the estabUshed language of writers upon the 
 subject. The term, however, seems iU chosen upon this account, that it leads many to 
 imagine that there is a less guilt in the violation of an imperfect obligation than of a 
 perfect one ; which is a groundless notion. For an obhgation being perfect or imperfect, 
 determines only whether violence may or may not be employed to enforce it ; and deter- 
 mines nothing else. The degree of guilt incurred by violating the obhgation is a different 
 thing, and is determined by circumstances altogether independent of this distinction." 
 In another passage (Book III, Part I, Ch. vii), when speaking of contracts of sale, he 
 draws a distinction between " what the parties ought to do, and what a judge or arbitrator 
 would award to be done," that is to say, between the lawyer's "imperfect" obhgation 
 and the lawyer's "perfect" obligation. It is in reality only a question of words. 
 Prom the point of view of jurisprudence, that only is a "perfect" duty which is 
 unadulterated (if the word may be permitted) with moral sanctions : to the moralist, 
 that only is a perfect duty which derives its authority from within, and is independent 
 of any external monitor. If for the term " perfect obhgation," which suggests different 
 ideas in the two connections, and in both of them inappropriate associations, there 
 were substituted the term " purely legal," or " purely moral," obligation, as the case 
 may be, there would be no difficulty. 
 ' {h) Equity Jurisprudence, vol. i, § 194. 
 
 B.N.D. 2 Q 
 
594 APPENDIX B, SECT. 3. 
 
 aliter philosophi, toUunt astutias : leges, quatenus manu tenere possunt, philosophi, 
 quatenus ratione et intelligentifi, " (i). Even " the Chancery " of earlier times, 
 described by Bacon as " the Praetorian power for mitigating the rigour of law in 
 case of extremity by the conscience of a good man," conceived itself to be under this 
 disabOity. " With such a conscience," said Lord Nottingham, L.C, " as is only 
 naturalis et interna this court has nothing to do ; the conscience by which I am to 
 proceed is merely civilis et politica, and tied to certain measures " {j) ; and, in the 
 same spirit, Jekyll, M.R., observed that "though proceedings in equity are said 
 to be secundum discretionem viri boni, yet, when it is asked, vir bonus est quis ? the 
 answer is, Qui consulta patrum, qui leges juraque servat " {k). " There is a well- 
 known case in the books," said Lord Cbanwobth, L.C, " with which those who 
 praotioe in the courts are very familiar {I), in which, upon a counsel saying to Lord 
 Thurlo w, ' Your lordship would think in point of honour, so and so,' Lord Thuklow 
 said, ' upon that point you must apply to the party himseU. I do not give any 
 opinion on that subject ' " (m). Accordingly, in the matter of disclosure, juris- 
 prudence, though requiring the utmost openness and candour in specific relations 
 and transactions which are deemed to give rise to fiduciary duties, and though pro- 
 hibiting such concealment as amounts to implied misrepresentation and fraud even 
 in cases where there is no such specific relation or transaction (n), has found it 
 impracticable and impolitic to enforce conformity to the high Stoical ideals of 
 complete disclosure, in any and every kind of dealing, of everything which the other 
 party to the transaction is interested in knowing (o). Thus Lord Thtjelow, L.C, 
 in reference to the common illustration of a man purchasing an estate without dis- 
 closing to the vendor the existence of a valuable mine under the surface, says : 
 " the question is, not whether the transaction be such as a man of honour would 
 disclaim and disdain, but it must fall within some settled definition of wrong recog- 
 nized by this court"; otherwise the court would be "undoing all the common 
 transactions of mankind," and "rendering all their dealings too insecure " (^). 
 " Simple reticence," observes Lord Campbell, L.C, " does not amount to legal 
 fraud, however it may be viewed by moralists " (q). And, according to Dr. Story, 
 " Pothier has expounded this subject with his usual force and sterling sense. ' As 
 a matter of conscience,' says he, ' any deviation from the most exact and scrupulous 
 sincerity is repugnant to the good faith that ought to prevail in contracts. Any 
 dissimulation concerning the object of the contract and what the opposite party has 
 an interest in knowing, is contrary to that good faith ; for, since we are commanded to 
 love our neighbours as ourselves, we are not permitted to conceal from him anything 
 which we should be unwilling to have concealed from ourselves. But in civil 
 tribunals something plainly injurious to good faith ' (that is, to positive rules of 
 jurisprudence) ' must be shown to justify their interference ' " (r). The same 
 disclaimer of the pretensions of civil courts to invade the domain of pure ethics has 
 
 (i) De Ojf. III. 17. 
 
 (j) At p. 600 of Oook V. Fountain (1676), 3 Swanst. 585. He had previously observed 
 that the "trust, security, or agreement" which was vainly sought to»be proved in that 
 case was " such ... as is only between a man and his confessor." 
 
 (i) At p. 753 of Cowper v. Earl Oowper (1734), 2 P. Wms. 720. In this case Jekyll, 
 M.R., felt himself constrained to give judgment for the plaintiff, though " were I " — he 
 says at p. 734 — -"to consider the matter, not as sitting in judicature, but taking in all 
 manner of considerations, such as honour, gratitude, private conscience, &c., I must think 
 this claim should never have been made." 
 
 (Z) Fox V. Mackreth, cited in note (p), inf., may have been the case which was in Lord 
 Cranworth's mind. A fortiori, all considerations of perverted "honour" (so-called) 
 will be contemptuously rejected by the law, as in the case of the " honour " policies referred 
 to in note (a) to § 655, ante. 
 
 (to) At p. 773 of Smith v. Kay (1859), 7 L. C. 750. 
 
 (re) See Ch. Ill, Sect. 2, Sub-s. (8), ante. 
 
 (o) As to the Stoical and Ciceronian view of the question, see § 675, in App. C, post. 
 
 ip) At p. 321 of Fox V. Mackreth (1788), 2 Cox 320 ; 2 R. R. 55. 
 
 (q) At pp. 723, 724 of Walters v. Morgan (1861), 3 De G. F. & J. 718. 
 
 (r) Equity Jurispr., vol. i, § 194. 
 
§§ 667, 668 (bthics of disclosure). 595 
 
 been made by jurists of high authority from Lord Eldon, L.C, to Lord Mac- 
 NAOHTEN (s). Th3 above, it will be observed, are illustrations of cases where juris- 
 prudence dseras it injudicious, and inconsistent with its main purpose and utility, 
 to regard ethical considerations, either because it is impracticable to secure the 
 " equality " of conditions in the full sense that casuistry might require, or (it may be) 
 because it is impossible to devise a suitable remedy, which are amongst the reasons 
 suggested by Paley, and by Lord Kames {t) ; though the former, in other passages, 
 treats the rules of law, in relation to particular kinds of transaction, as based on 
 identically the same considerations as the rules of morality, and insists that the one 
 and the other pay the like regard to both motive and effect (m). 
 
 668. There is another type of case in which the law peremptorily and deliberately 
 
 (s) See Gibson V. Jeyes (1801), 6 Ves. 266 (per Lord Eldon, L.C, at p. 275: the passage 
 is cited in note (e), ante) ; Harris v. Tremenheere (1808), 15 Vea. 34 (per Lord Eldon, 
 L.C., at p. 39 : "I am not entrusted with a jurisdiction to say what a delicate and prudent 
 consideration would have suggested ") ; Blackburn, Low & Co. v. Vigors (1887), 12 App. 
 Cas. 531, H. L. (per Lord Maonaghten at p. 543 : " I apprehend that it is not the function 
 of a Court of Justice to enforce or give effect to moral obligations which do not carry with 
 them legal or equitable rights "). For a variety of illustrations of the dividing line 
 between legal, and purely moral, obligations, see §§ 165, 166, 167, and the cases cited in 
 the notes thereto, ante. 
 
 (t) Principles of Moral and Political Philosophy, Book III, Part I, Ch. viii : " what 
 some say of this kind of contracts " — i.e. wagering and insurance contracts — " ' that one 
 side ought not to have any advantage over the other,' is neither practicable nor true. 
 It is Moi practicable ; for that perfect equality of skill and judgment, which this rule 
 requires, is seldom to be met with. I might not have it in my power to . . . underwrite 
 a policy of insurance once in a twelvemonth, if I must wait tOl I meet with a person whose 
 art, skill, and judgment in these matters is neither greater nor less than my own. Nor is 
 this equality requisite to the justice of the contract. . . . The proper restriction is that neither 
 side have an advantage by means of which the other is not aware." The whole of the 
 above passage accords with jurisprudence, except the last sentence, which states a proposi- 
 tion wider than the law would now accept : see § 164, ante. For another sense in which 
 the enforcement of certain moral obligations is said to be " impracticable," see Lord 
 Kames, Principles of Equity, Introduction, vol. i, p. 23. He there points out that the 
 nature of such obligations is entirely dependent upon the individual conscience and 
 circumstances, whilst those " founded on interest " admit of closer definition and limita- 
 tion, and that ' ' viewing the matter in this light, it wiU appear that such duties are left upon 
 conscience, not from neglect or insensibility, but from the difficulty of a proper remedy." 
 
 (u) Principles of Moral and Political Philosophy, Book III, Part I, G.h. vii ("Con- 
 tracts of Sale ") : " the rule of Justice, which wants with most anxiety to be inculcated in 
 the making of bargains, is, that the seller is bound in conscience to disclose the faults of 
 what he offers for sale. Amongst other methods of proving this, one may be the following : 
 I suppose it wiU be allowed that to advance a direct falsehood, in recommendation of 
 our wares, by ascribing to them some quahty which we know that they have not, is 
 dishonest. Now compare with this the designed concealment of some fault which we know 
 that they have. The motives and the effects of actions are the only points of comparison 
 in which their moral quahty can differ : but the motive in these two cases is the same, viz. 
 to procure a higher price than we expect otherwise to obtain : the effect, that is, the 
 prejudice to the buyer is also the same. ... If, therefore, actions be the same, as to all 
 moral purposes, which proceed from the same motives, and produce the same effects ; 
 it is making a distinction without a difference to esteem it a cheat to magnify beyond truth 
 the virtues of what we have to sell, but none to conceal its faults." It is not quite certain, 
 having regard to the several expressions itahcized above, whether this passage is intended 
 as the statement of a rule of " justice," or a rule of " conscience " ? if the former, it is not 
 quite a correct statement, unless by " designed concealment " is meant the actual covering 
 up, or hiding away, or disguise of a fault by positive artifices, or unless the " fault " is 
 of a kind which, as affecting the title, the vendor is under a duty to disclose : see Ch. Ill, 
 Sect. 2, Sub-s. (8), ante. If, however, it was intended to enunciate a purely moral principle, 
 the statement is quite sound, as ethics, and it serves in that case to indicate the precise 
 point at which law and morals diverge. Theological casuists accentuate this point of 
 divergence more than other moral philosophers. Thus, St. Thomas Aquinas (Summa 
 Theologice, Secunda Secundce, Qusest. Ixxvii, Art. 3) holds that the seller should reveal all 
 except manifest faults, whUst the law lays down the exact opposite, viz. that he need 
 disclose none unless actively concealed. 
 
596 APPENDIX B, SECT. 3. 
 
 refuses to give effect to the principles which would be applied by ethics as between 
 individuals, on the ground of that higher justice, or suprema lex, usually termed 
 " public policy " or (better, perhaps) " public utility," which is recognized as over- 
 riding the particular interests, and, sometimes, even the private rights, of the parties 
 concerned. There are various conditions under which " public policy," or the higher 
 kind of " justice," becomes the dominating factor in judicial determinations, and 
 correspondingly various senses which those expressions bear. In the first place 
 public utility demands that persons under disability, whether by reason of status or 
 circumstances, and persons unable to help themselves, or not represented in the 
 immediate inquiry, such as infants, creditors, " expectants," and the like, shall ha 
 protected, even where the protection results in persons who are morally guilty going 
 free ())). Secondly, it is an element in this larger and controlling " justice " that 
 its rules should peremptorily ignore the personal innocence of the party to whose 
 prejudice they operate, on the ground that mankind at large must be preserved from 
 the temptation and tendency to evil doing which would otherwise result (" how oft 
 the sight of means to do iU deeds Makes deeds ill done "), — ^the disregard of moral 
 considerations under such circumstances being dictated by what is sometimes 
 described as "the policy of the law" {w). Lastly, in establishing and enforcing its 
 presumptions (irrebuttable or rebuttable, as the case may be) of knowledge, con- 
 fidence, or influence, the law defers to that general convenience which almost 
 amounts to a public necessity, when it disregards the individual conscience of the 
 actors, a close introspection of which, it required to be pursued on each occasion, 
 instead of being dispensed with, as it is, by the presumptions in question , would result 
 in a paralysis of business (a;). The respective claims on jurisprudence of utility, 
 justice, and interest, have been acutely and soundly analyzed by Lord Kames {xx), 
 
 (v) As to infants, see Stiheman v. Dawson ( 1847), 1 De G. & Sm. 90, per Kni&ht-Brtjce, 
 V.-C., at p. Ill : "fraud is certainly odious, and to be repressed. But neither is pro- 
 tection to be withheld from the imbecility of youth. Is not allowance to be made for its 
 exposure and obnoxiousuess to influence, to temptation, and seduction, especially in a 
 state of legal nonage ? " And, again, at pp. 116, 1 17 : " there may be a want of delicacy, 
 or indeed of morality, in the conduct of a young man of twenty buying a picture or a 
 statue upon credit, without mentioning his age ; but laws cannot vindicate every deflection 
 from propriety ; and it must be preferable surely that men of fuU age, in or out of trade, 
 should sometimes suffer for acts of carelessness or imprudence, than that there should be 
 given the obvious facihty and plain encouragement to minors to be their own destroyers, 
 and to others to make them a prey, which would be afforded by the rule that mutual 
 silence, with an appearance of manhood, should expose a boy, upon the ground of fraud, 
 to be fixed after his majority with the most rash and foolish contracts, or with the liability 
 to restore money wasted in childish extravagance. Nulla lex satis commoda omnibus est ; 
 id modo quieritur, si majori parti et in summam prodest." As to creditors, in the case of 
 secret agreements whereby one of them is favoured, see § 587, and note (Z) thereto, ante. 
 As to these, and " expectants," and third persons generally, see Chesterfield {Earl of) v. 
 Jannsen (1751), 2 Ves. Sr. 125 {per Lord Hakdwioke, L.C., at pp. 156, 157). 
 
 {w) The expression used by Lord Langdale, M.E,., — see the citation in note (o) to 
 § 667, ante — and by others. For illustrations of this aspect of " public policy," and for 
 the theory that the equitable rules of good faith, in disclosure and other matters, are 
 founded on a recognition of the general tendency and temptation to wrong-doing which 
 would result in wrong being done, if there were no such rules, see § 317 (in Ch. IV), and 
 § 407 (in Gh. V), ante. Cp. Lord Kames, Principles of Equity, Book 11, Ch. i (vol. ii, 
 pp. 84-88), where he points out that " acts in themselves lawful are reprobated in equity 
 as having a tendency to corrupt morals," and that " wrong must be done before justice 
 can interfere, but utility \&ys down measures to prevent wrong," and removes " temptation 
 to fraudulent practices." He then gives instances from the rules relating to the fiduciary 
 position ot trustees, agents, and the hke, observing with respect to the receipt of secret 
 profit by a person in such a position : " an act of this nature may in itself be innocent, 
 but is poisonous with respect to consequences." 
 
 {x) As to certain rules of presumptive knowledge being founded on pubUc convenience 
 of the kinds mentioned in the text, see §§ 41, 47, ante : as to the like, in the case of relations 
 of confidence, and of influence, see § 317, and § 407, ante, respectively. 
 
 {xx) His Principles of Equity (as announced by him in his Introduction) is divided into 
 two Books, the first of which is devoted to " The Powers of a Court of Equity derived 
 
§ 668 (ethics of disclosube). 597 
 
 who says that though "in opposing 'private utility to justice, the latter 
 ought always to prevail," yet public utility, in the proper sense, and within the 
 proper limits, ought to prevail against not only private utility, but private justice 
 too.^ " It is not, however," he adds, " every sort of public utility that can outweigh 
 justice ; it is that sort only which is preventive of mischief affecting the whole or 
 bulk of society : public utility, as far as it concerns positive additional good to the 
 society, is a subject which comes not within the sphere of a court of equity," but, 
 with this exception, " wherever it is at variance with justice a court of equity ought 
 not to enforce the latter." The principles of public utility, and of private justice, 
 it is true, "for the most part are good friends," but there are " branches of utility 
 which are not so strictly attached to justice," and cases sometimes arise where the two 
 " are in declared opposition," to the extent of defeating the enforcement of just moral 
 claims, but no further ; for " the influence of public utility stops there, and never 
 authorizes a court of equity to enforce any positive act of injustice." What is 
 called " public policy," therefore, whether the word " policy " is happily chosen or 
 not, is a real and sound principle in jurisprudence, and by no means deserves the 
 disparaging reflections of BtrBROirGH, J., or his somewhat inept comparison of the 
 doctrine to an " unruly horse." Public policy, said this judge in an oracular passage 
 which has been cited ad nauseam, as if it had been drawn from the very fount 
 of Amdom. " may lead you from the sound law. It is never argued at all but 
 when other points fail. It is a very unruly horse, and when once you get astride it, 
 you never know where it will carry you." A. L. Smith, M.R., however, described it, 
 in equally metaphorical, but more accurate, phraseology as " a high horse to mount, 
 and difficult to ride when you have mounted it " (y). The fact is that this steed, 
 which might very weU have been allowed to rest during the many years since it was 
 led out of the stables in 1824, is a horse of excellent race, mettle, and temper, and, 
 whenever he has come to grief, it has been due not to himseH, but to bad riding. The 
 best horse in the world, if put to impossible fences, wfll bring himself and rider to the 
 ground. No doubt, he is " a high horse," but is none the worse for that : and he 
 may be " difficult to ride, when you have mounted him," but this does not necessarily 
 involve unruliness. Of course the doctrine in question "may lead you from the 
 sound law " : so may any other, if misapplied : but to say that it is never argued at 
 all but when other points fail " is simply contrary to the fact, and Bueeough, J., 
 when he made this observation, was singularly oblivious of " the celebrated reply " 
 of Sir S. RoMiLLY in the leading case on " influence " relations, and of judgment after 
 judgment of Lord Haedwicke, and of Lord Eldon, prior to 1824. No doubt, the 
 circumstances to which, sometimes properly, and sometimes improperly, the rule of 
 "public policy" is applied, are infinite in variety, but the fluctuation, or (more 
 properly speaking) the development, of the forms in which the rule is from time to time 
 expressed in no way negatives, but rather emphasizes and illustrates, the essential 
 unity of the doctrine itseK : "the determination of what is contrary to the so-called 
 policy of the law varies from time to time," but " the rule remains," notwithstanding 
 that " its application necessarily varies with the principles which for the time being 
 guide public opinion " (yy). 
 
 from the principles of Justice " (vol. i, and vol. ii, pp. 1-83), and the second to " The 
 Powers of a Court of Equity founded on the principle of Utility " (vol. ii, pp. 84 ad fin.). 
 The citations in the text are from the concluding chapter of Book II, entitled " Justice 
 and UtiUty Compared " (vol. ii, pp. 127-131). 
 
 (y) At p. 605 of Driefoniein Consolidated Mines, Ltd. v. Janson (1901), 17 T. L. R. 
 604, C. A. The "unruly horse" originally came from the judgment of BuKROtron, J., 
 at p. 252 of Richardson v. Mellish (1824), 2 Bing. 229. Lord Meksey, at p. 46 of Kreg- 
 linger v. New Patagonia Meat and Cold Storage Co., [1914] A. C. 25, H. L, prefers " the 
 unruly dog " as a simile. 
 
 (yy) Eventurel v. Eventurd (ISli), L. R. P. C. 1, at p. 29. Cp. the like observations, as 
 to the " public pohoy " rules against restraint of trade, in Nordenfeldt v. Nordenfeldt Maxim 
 Gun iSs Ammunition Co., [1894] A. C. 535, H. L., and, with respect to the theory on which 
 immunity is granted to certain classes of defamatory publication, in Lewis v. Levy (1858), 
 E. B. & E. 537 (per Lord Campbell, C.J., at p. 560), Wason v. Walter (1868), L. R. 4 Q. B. 
 73 (per Cgckbtjrn, C. J., at p. 93), and Usill v. Hales (1878), 3 C. P. D. 319 (per Colekidge, 
 
598 APPENDIX B, SECT. 3. 
 
 669. Moral teachers and casuists, on the other hand, look at every problem from 
 the other end of the telescope. Personal character, and the springs that set conscience 
 in motion, are more to them than the general efieot of actions on society at large, or 
 even than their individual effect on the material interests of the parties concerned. 
 The utilitarian MUl, no less than the theologian Mozley, has expressed himself in 
 language {z) which distinctly implies this attitude. Indeed, there are certain types 
 of theological casuistry which insist that the confessor should, in his devotion to the 
 salus aninue, occupy himseH entirely with the task of " diiecting the intention," to 
 the total, or almost total, exclusion of the effect. This is one of the doctrines which 
 Pascal makes a subject of reproach to the Jesuits, a member of which Society, in an 
 imaginary conversation with himself, he represents as justifying the system of 
 "diriger I'intention, qui consiste a se proposer pour fin de sis actions un objet 
 permis," by reference to the fact that " les juges, qui ce petetrent pas dans les 
 consciences, ne jugcnt que par dehors de Taction, au lieu que nous regardons princi- 
 palement a I'intention ; et de la vient que nos maximes sont quelquefois un peu 
 dififerentes des leurs." It is this same " diriger I'intention, " without reference to 
 results, which excited BoUeau's scorn in the satire addressed to " L'Equivoc,ue " : 
 " tu s§us, dirigeant bien en eux I'intention, De tout crime laver la ccupable action "(o). 
 The general spirit, however, of phUosophical, and even of theological, ethics is not 
 fairly obnoxious to this censure. The soundest moralists by no means entirely 
 ignore the effect of acts, just as for certain purposes, such as eosts, damages, or 
 discretionary relief (b), the law does not entirely ignore motive and intention. Paley 
 gives weight to both in determining the moral complexion of a certain class ef trans- 
 action (c), and St. Augustine plainly avows that it is no answer for a man who 
 intended the act to say, " I did not intend to sin " (d). Pascal, indeed, in the Letter 
 in which he ridicules the above-mentioned practice of the Jesuits, expresses his own 
 views on the subject in such terms as to suggest that, so far from ignoring the efic ct, 
 he is disposed rather to ignore the intention, and to think more juridically than 
 jurisprudence itself : "I'intention de celui qui blesse ne soulage point celui qui est 
 bless6 : il ne s'apergoit point de cette ' direction ' seciMe, et U ne sent que celle du 
 coup qu'on lui porte. Et je ne sais meme si on n'aurait pas moins de depit de se voir 
 tuer brutalement par des gens emportes, que de sentir poignarder consoienoieusement 
 par des gens devots " (e). And it must be remembered that ecclesiastical authority 
 has always so far regarded temporal consequences as to require restitution to the 
 injured party, where possible, as apart of the penance inflicted pro salute animss, and 
 a condition of absolution : indeed, the King's Courts in early times found in this 
 practice .evidence of an intermeddling with temporal concerns sufficient to justify 
 them in wresting back from the Church the exclusive jurisdiction over slander, and 
 certain other causes of action, which she had previously usurped (/ ). 
 
 670. The main purpose of jurisprudence being as above stated, and the aptr^ 
 of any art or science consisting, according to Plato, in accomplishing its own epyov, 
 it foUows that the law falls short of that excellence when it concerns itself with moral 
 themes, and inquires into personal motives, which are not an element in, or germane 
 
 0. J., at p. 327). As to the unsuitableness of the term " policy," by reason of its sugges- 
 tion of other associations, see the remarks of Lord Haedwicke, L.C, cited in §646, note,{y), 
 ante. And it cannot be denied that " the policy of a statute " is not only an absurd 
 expression, but stands for a preposterous method of reasoning. 
 
 (z) Cited in note (d) to § 667, ante. 
 
 (a) The passages cited are from Pascal's Les Provinciales, ou les Lettres icrites par 
 Louis de Montalte a un Provincial de ses Amis set aux rivirends Fires Jesuites, Letter VII, 
 and Boileau's Satires, XII, 287, 288. 
 
 (6) See §§ 168, 618, 623, ante. 
 
 (c) See the citation in note («) to § 667, ante. 
 
 (d) Liber Betrdet., oh. xv. 
 
 (e) Les Provinciales, Letter VII. This is exactly the view of Enghsh jurisprudence, 
 and also of the civihans : " neque emin interest emptoris cur f allatur, ignorantiS, veuditoris, 
 an eaUiditate " (in contracts of sale) : D. 21. 1. 1. 1. 
 
 ( / ) See App. V, Sect. 4, of the author's Code of the Law of Actionable Defamation. 
 
§§ 669, 670 (ethics of disclosure). ; 599 
 
 to, either some cause of action, or some ground of defence, or some form of relief. 
 Ne sutor ultra crepidam. This is the belief and the practice of the large majority of 
 English jurists and judges. It cannot be denied, however, that in recent times there 
 has been manifested in this country a growing tendency to administer, or coquet with, 
 eccentric forms of justice, and to stray beyond the bounds of " justice according to 
 law." Amongst these spurious types are "natural justice " (g') ; "poetic" or 
 " dramatic justice " {h) ; " substantial justice," when car is given to the urgent 
 entreaty, — "wrest once the law to thine authority. To do a great right, do a little 
 wrong " (») ; and what has been described by Lord Sumnee as "that vague juris- 
 prudence which is sometimes attractively styled ' justice as between man and 
 man ' " (j), as if, except in the Platonic metaphor, there ever could be any justice 
 except between two human beings ("del iv -rrkuocnv dvajKq etvai to ahiKOv"). 
 Further, it cannot escape notice that a judicial propensity to intrude upon the 
 domain of ethics where it is unnecessary, and therefore wrong, to do so, and to 
 improve the occasion by parenthetical sermons or lectures, is on the increase, and 
 that the community deeply resents this intrusion as an impertinence. We are told 
 in the Articles of Religion that " the other books, as Hierome saith, the Church doth 
 read for example of life and instruction of manners, but yet doth not apply them to 
 establish any doctrine." But these non-canonical digressions of judges not only do 
 not establish any doctrine, but, unlike the non-canonical books of Scripture, are not 
 even read " for example of life and instruction of manners," or regarded at all 
 except upon their merits as homilies, which are often not very conspicuous, inasmuch 
 as the moral denunciations of the particular conduct passed under review represent 
 merely the individual attitude of the particular judge to the particular delinquency 
 or delinquent, exhibit the widest variations in the strength or mildness of the censure, 
 and are often the outcome of the personal sentiment, caprice, or even prejudice of 
 the moment (k). The wisest exponents of our law have observed upon the growth of 
 this tendency, and its accompanying perils, with no little apprehension. " I for one," 
 said BowEN, L.J., " should deeply regret the day, if it ever came, when courts of 
 law or equity thought themselves justified in interfering more than is strictly necessary 
 with the private affairs of the people of this country " (I). A generation or so later, 
 
 (g) Relied upon by Cicero, and the Stoics whom he followed, as the foundation of their 
 ethico-jural views on disclosure : see § 675, post. Lord Eshek, too, considered that no 
 rule of law should prevail which is contrary to " natural justice" : see § 667, note (x), 
 ante. And, as was pointed out by Hamilton, L.J., at pp. 199-201 of E. v. Local 
 Government Board, [1914] 1 K. B. 160, C. A., and by Lord Shaw in the H. L. (July 20, 
 1914 — ^not yet reported), the expression either means no more than "justice" simpliciter, 
 or, if intended to recall the old jus naturale, is totally misleading. 
 
 (Ji) The justice which is illustrated by " the enginer hoist with his own petar," and 
 the faUing into the pit dug for another, and which forms the TreptTreVeia of " The Merchant of 
 Venice," " Measiu-e for Measure," and the story of Phalaris. 
 
 (i) Merchant of Venice, Act iv. So. 1, 11. 215, 216. 
 
 {j) At p. 140 of Baylis v. Bishop of London, [1913] 1 Ch. 127, C. A. 
 
 (k) See the cases cited in note (i) to § 656, ante, and particularly Panama tb South 
 Pacific Telegraph Co. v. India Rubber, Outta Percha, d> Telegraph Go. (1875), 10 Ch. App. 
 575, where, before his moral lecture, Jambs, L. J., observed, at p. 527 : " I might have been 
 content to have allowed this case ... to have been based upon the apphoation of a plain 
 principle of equity which is to be enforced . . . without regard to the particular facts 
 or the particular conduct or misconduct of the parties in a particular case." A just and 
 wise remark, which it would have been better to have acted on. But the craving for 
 homiletic exercises and excursions was too much for him. " But I cannot," he proceeds, 
 " content myself with disposing of this case merely upon that general principle, and only 
 saying that it is the general principle which has crushed this contract." It is submitted 
 that the judgment would have gained, and not lost, in authority and power, if he had so 
 contented himseU. After the moral reflections, he concludes by saying, at p. 528, 
 " res ipsa loquitur." He had begun by implying that jus ipsum loquitur. Then, cur 
 judex loquitur ?, it might be asked. The mild handling of the Bishop's conduct m the 
 case cited in note (e) to § 656, ante, is in sharp contrast with the severe strictures upon that 
 of the mercantile Soot in the case cited in note (d) thereto, cmte. If any ethical discourse 
 was necessary, why this distinction in its personal apphcation ? 
 
 (l) At p. 335 of Be Agar-Ellis (1883), 24 C. D. 317, C. A. 
 
600 APPENDIX B, SECT. 3 ; APPENDIX C, SECT. 1. 
 
 when the time which Bowbn, L.J., foresaw as a possibility had arrived,MouLTON,L.J., 
 expressed his views on the subject in much more trenchant and spirited language : "I 
 own," he said, " that not only as an individual but as a member of the Judicial Bench, 
 I rebel against the suggestion that according to English law he " — the litigant — " may 
 do this only so far as it may accord with the notions of some judge who, as such, has 
 no more authority to act towards him as a moral director than has the man in the 
 street. . . . The Court has the right and duty to decree the proper relief against him, 
 but it can do no more. It cannot add to this relief directions or comments as to his 
 future conduct. If they are not part of the relief itself, they are pronounced without 
 authority. The conception of the Court interfering with litigants otherwise than 
 by granting the relief which it is empowered and bound to grant, is wholly vicious 
 and strikes at the foundation of the status and duties of judges. We claim and obtain 
 obedience and respect for our office because we are nothing other than the appointed 
 agents for the enforcing upon each individual the performance of his obligations. 
 That obedience and that respect must cease if, disregarding the difierence between 
 legislative and judicial functions, we attempt ourselves to create obligations and 
 impose them on any individual who refuses to accept them " (m). Even when 
 expressly invited by the parties to pronounce on the ethical aspects of the case, a 
 judge, though not to be blamed overmuch if he accedes to the invitation, will yet act 
 more correctly if he declines it, as Tuenbb, L.J., did in a celebrated case: "the 
 defendant," he observed, "in the course of his argument, invited us to give an 
 opinion on his conduct. I advisedly decline to do so further than by saying it has 
 been wholly at variance with the principles of the Court " (m). The unnecessary 
 homilies of judges are, as has already been pointed out (o), responsible for various 
 terminological errors, and have set public feeling against doctrines which, but for 
 their faulty expression, would have been readily accepted by the laity.. It has been 
 the cause of not a few incorrect decisions : added to which, the authority of even 
 a correct decision is weakened, and not strengthened, when it is needlessly based 
 upon moral grounds, and great judges such as Lord Eldon (p), and Jbbvis, C.J. (q), 
 have even expressed distrust of their own decisions, and grave fears as to being unduly 
 swayed by moral indignation, in cases where the personal merits of one party were 
 in such sharp contrast with the utter demerits of the other as to be a source of 
 temptation (r). 
 
 (m) At p. 273 of Scott v. Scott, [1912] P. 241, C. A. 
 
 {») At p. 223 of Broun v. Kennedy (1864), 4 De G. J. & S. 217. But, in Ee Telescriptor 
 Syndicate, Ltd., [1903] 2 Oh. 174, Btjokiey, J., did, more or less under protest, think fit to 
 accede to a similaT application. The directors, he said at pp. 195, 196, " invite the 
 judgment of the Court upon the matter from the point of view of their personal integrity. 
 This Court is not a court of conscience, and the question of legal liability is not at present 
 ripe for decision. In the absence, therefore, of the invitation held out to me by their 
 counsel to express an opinion on their case as affecting them in their personal character, 
 and as apart from legal liabihty, I should have added nothing upon the case as regarded 
 from that point of view. But upon that invitation I add that which follows." That 
 " which followed " was not exactly what the directors hoped for when they proffered 
 their exceedingly ill-advised " invitation," as will be seen by the extracts given in note (g) 
 to § 656, ante. 
 
 (o) See §§ 652 and 657, ante. 
 
 (p) Who, at p. 468 of Gordon v. Gordon (1821), 3 Swanst. 400, said that he " had never 
 knowa a case in which it was more the duty of a judge to enter into a covenant with himself 
 not to suffer his feelings to influence his judgment." 
 
 (e) Who, at pp. 784, 785 of Hvans v. Edmonds (1853), 13 C. B. 777, concluded his 
 judgment in these words : " I cannot help saying that I somewhat distrust my judgment 
 in this case. It was impossible to avoid having one's feehngs enlisted in favour of the 
 defendant. It is one of the most scandalous cases I ever met with." 
 
 {r) In Ellard v. Lord Llandaff (1810), 1 BaU. & B. 241, Lord Mannbks, L.C. (Ir.), 
 would seem to have yielded to this temptation, and, as regards some at least of the 
 principles he there laid down, to have " wrested the law to his authority." See Ch. Ill, 
 Sect. 8, Sub-s. (4), ante, where this case is the subject of special consideration and criticism. 
 
§§ 670-672 (ROMAN LAW). 601 
 
 APPENDIX 0. 
 
 THE ROMAN LAW OP NON-DISCLOSURE AND ABUSES OP CONPIDENCE 
 
 AND INPLUENCE. 
 
 671. Some of the English rules relating to disclosure and good faith in transactions 
 and relations of confidence and influence are, if not founded on, at least fortified and 
 illustrated by, the principles of the Roman jurists in reference to Dolus and actions 
 bonce fidei ; whilst, as regards others, our courts have arrived at conclusions which 
 are in substance identical with those transcribed in the Digest («) from Ulpian and 
 the other great Roman authorities, as supplemented by scattered legislation in the 
 Codex (t). It may, therefore, be of interest to institute a comparison between the 
 two systems in this department of jurisprudence (u). 
 
 Sect. 1. General View ojf Doltts, as involving Non-Disclosube, in Roman 
 
 jueispbudencb. 
 
 672. In Roman law there were certain classes of transaction which were the 
 subject of actions bonce fidei, as opposed to others called stricti juris. In an action 
 of the former description, it was the duty of the judex to inquire whether good faith 
 had, or had not, been observed, by both or either of the parties, the formula being — 
 quicquid paret dare (facere) oportere ex fide bond, doc. ; whereas, in the latter class of 
 action, bad faith, whether by concealment or otherwise, was not relevant at all 
 before the introduction of the AquOian Pormula, and, even after that date, could 
 only become so if afiirmatively raised as the ground of either an actio, or an exceptio, 
 doli mali. Cicero, in this respect concurring with those equity judges of this country 
 who (rightly or wrongly) have construed the term " fraud " as a nomen generalissimuin 
 applicable to any and every breach of fiduciary principles, constantly insists on 
 the adaptabOity, and corresponding utility, of the ex fide bond clause, which, he says, 
 ought to be applied alike to all transactions where confidence must be reposed on 
 one side, and good faith therefore required on the other, if human society is to be 
 kept together in any enduring bond. He cites Q. Sosevola as declaring "summam 
 vim esse in omnibus arbitriis, iu quibus adderetur : ex fide bond ; fideique bonse 
 
 (s) The title prefixed to the First Book of this collection of extracts from the treatises 
 of the great Roman jurists is " Domini Nostri Saoratissimi Principis Justiniani juris 
 enucleati ex omni vetere jure coUecti Digestorum sive Pandectarum Liber Primus." We 
 ought, therefore, strictly to speak of " the Digests," not " the Digest." It is curious that, 
 whilst the Greek title " Pandects " is always correctly used in the plural, jurists have 
 conspired to use the singular number in the case of the equally plural Latin equivalent. 
 
 (i) The Codex referred to in this Appendix is Justinian's collection of Imperial 
 Constitutions. 
 
 (u) The mode of citing from the Corpus Juris in the following notes is that now 
 generally used : " D. " stands for " Digest," and " C. " for " Codex." The first flgm-e 
 after the " D." or the " C," as the case may be, indicates the number of the Book ; the 
 second, the number of the Title (or Chapter) ; the third, that of the section ; and the 
 fourth (where there is a fourth), the number of the clause (or paragraph, or " fragment " ). 
 When the clause is an introductory one, and has no number, the abbreviation " pr." 
 (for " principium") is used. 
 
602 APPENDIX C, SECT. 1. 
 
 nomen . . . TOawareZaiimm^jidque versari in tutelis,societatibus, fiduciis, mandatis. 
 rebus emptis venditis, conductia locatis, quibus vita societas coniineretur " {v). In 
 other passages, he mentions negotiorum gestio, and res uxoria, as transactions which 
 are the subject of a bonce fidei action. It will be recognized that the classes of trans- 
 action and relation enumerated correspond closely with some, but by no means all, 
 of the classes which are stated in Chapters III, IV, and V, of this treatise to give 
 rise to duties of disclosure and good faith generally. It remains now to consider 
 the circumstances and conditions under which, with reference to a transaction not 
 boncB fidei in the above sense, the Eoman law allowed an action, or plea, of dolris 
 malus to be raised, and what kind of non-disclosure in such a case was deemed 
 indicative of dolus malus. 
 
 673. It was C. Aquilius Gallus, an official colleague, personal friend, and relative of 
 Cicero, who invented the judicium de dolo malo, enthusiastically extolled by the latter 
 as the " everriculum malitiarum omnium " (w). The AquUian Formula, as set out 
 in the Digest, is in designedly general and simple terms : " quae dolo malo facta esse 
 dicentur, si de his rebus alia actio non erit, et justa causa esse videbitur, judicium 
 dabo " (x). The introduction of this new cause of action, and ground of affirmative 
 defence, can be traced to the Stoical teaching by which Aquilius, like Cicero, was 
 deeply influenced. The Stoic phOosopher Panaetius taught Mutius Scaevola, of 
 whom both Aquilius and Lucius Balbus were disciples. The latter, who is made 
 to represent the Stoical side of the discussion in Cicero's De Naturd Deorum, instructed 
 the renowned jurist, Servius Sulpicius. Cicero's De Officiis, whether it is to be 
 regarded as a treatise on law or on ethics, on officio juris or on officia virtutis (y), was 
 avowedly founded on Pansetius (z), and is saturated with Stoical doctrine which, 
 through him and others, sank deeply into the fabric of the Digest in relation to all 
 departments of the corpus juris (a), but pre-eminently in relation to Dolus. 
 
 674. Having in view its Stoical parentage, one is not surprised to find that the 
 doctrine " manabat latissime," that Roman jurisprudence shrank from restricting 
 the meaning or range of Dolus, and that not only bad faith or fraud, in the ordinary 
 sense, of whatever kind, but also any other oppressive, unconscionable, extortionate, 
 or malicious conduct, evincing a wicked and deliberate intention to overreach or 
 injure another, as distinguished from mere negligence and unintentional wrong 
 (culpa), was included within its purview, just as the term " fraud " has been extended 
 by our equity judges to embrace a simDarly miscellaneous assortment of trans- 
 
 (v) De Ojf. Ill, 17. Op. De Nat. Deorum, III, 30 (where substantially the same list is 
 given, with others: "inde tot judicia de fide mal§,, tutelse, mandati, pro socio, fiducise ; 
 reliqua, quae ex empto aut vendito aut oonducto aut locato contra fidem fiunt "), and 
 Top. xvii. 66 (where negotiorum gestio, and res uxoria, are added). In Pro Ocec. iii, 7-9, 
 Cicero mentions tutela, societas, res mandata, and fiducice ratio, and adds that a decision 
 against a party in a honm fidei actio was a turpe judicium, that is, involved infamia. In 
 Just. Instit. 4. 6. 28, the complete list of bonoe fidei actions is given as follows : " ex empto 
 vendito, locate oonducto, negotiorum gestorum, mandati, depositi, pro socio, tutelse, com- 
 modati, pigneraticia, familiEe erciscundse, communi dividundo, prsesoriptis verbis quae de 
 aestimato proponitur, et ea quae ex permutatione competit, et hereditatis petitio." 
 
 {w) De Nat. Deorum, III, 30. 
 
 (x) D. 4. 3. 1. 1. 
 
 (y) It has generally been regarded as a juridical treatise both by Eoman lawyers and 
 by Engliah judges (see Sect. 6, post), as also by English, American, and French writers 
 on jurisprudence, e.g. Sir Edward Fry [Specific Performance), Dr. Story (Equity Juris- 
 prudence), and Pothier. In one or two passages, however, Cicero himself admits, with 
 regret, that he is expounding some purely ethical principle ("lege naturae sanctum") 
 which is not, though it ought to be, part of the positive law. For instance, speaking 
 (De Off. III. 17) of certain customary breaches of good faith in transactions of purchase 
 and sale, he laments that they incur no legal penalty, nor even mor.il or social censure : 
 hoc . . . video, propter depravationem consuetudinis (Hamlet's " damned custom "), negue 
 more turpe Jiaberi, neque aut lege sanciri aut jure civili. 
 
 (z) " Panaetius . . . qui sine controversia de officiis accuratissimfe disputavit, quemque 
 nos, correctione qu^dam adhibita, potissimum secuti sumus : " De Off. Ill, 2. 
 
 (a) In the very beginning of the Digest, Chrysippus, described as " philosophus 
 summae stoicae sapientiae," is cited for his definition of f6fjics (D. 1. 3. 2.). 
 
§§ 672-675 (ROMAN law). 603 
 
 gressions against cequum et honum (6). Even culpa, the direct antithesis of dolus, 
 was, in Its more serious degrees {latior, or lalissima, as distinguished from levis), 
 frequently described, as it has been by our own lawyers, — erroneously in both cases,— 
 as either equivalent to doZas (c), or next door to it (d). In the passage of the Digest 
 which is usually cited for the definition of dolus malus in the more restricted sense 
 of bad faith (e), the AquOian rule is stated to have been aimed at all manner of 
 dolosi, with the object of rendering their fraud, or want of candour, both unprofit- 
 able to them, and innocuous to their intended victims (/). The definitions of Ihe 
 rival schools of Servius and Labeo are then contrasted, with the result that the 
 former is found too narrow in one respect, and too broad in another, and the latter is 
 preferred. Labeo 's definition is : " every kind of craft, deceit, or covin, use d for the 
 purpose of circumventing another " (g), — a definition which presents an almost 
 ludicrous example of a circulus in definiendo, but which, from the higher standpoint of 
 jurisprudence, commands approbation by reason of the very generality and vagueness 
 which constitutes its defect in the eyes of the mere precisian in logic or language (A). 
 It is now proposed to inquire what sort of non-disolosure in transactions other than 
 those which might be the subject of a honce fidei action, which will be considered 
 later (i), and other than reticence of a kind which amounts to misrepresentation (j), 
 was deemed by Roman law to constitute, or indicate, dolus malus. 
 
 675. The locus classicus on the vexed question of the dividing line between guUty 
 concealment and permissible reticence, as drawn by the Roman jurists, is the 
 passage in the Be Officiis in which Cicero puts, and debates, the famous case of the 
 Alexandrian corn-merchant and the famished Rhodians (k). He supposes that the 
 frumentarius carries corn from Alexandria to Rhodes, where there is a famine, 
 and sells it to the Rhodians at famine prices, without disclosing the fact that on his 
 voyage he had passed several vessels bound for the starving city with abundant 
 supplies, — a fact which, if known, would have at once reduced the market price to 
 normal proportions, and which was, therefore, in one sense of the word, an obviously 
 material fact. The question is : was this fact material in the other sense of the term ? 
 that is to say, was it material to be disclosed ? The frumentarius is assumed, in 
 this " case of conscience," to be a man honestly anxious to do what is right, but " per- 
 plexed in the extreme " as to the course which duty enjoins. Cicero assigns the 
 advocacy of the opposing views to Diogenes ApoUonius, and his disciple, Antipater, 
 respectively, both disputants being Stoical casuists, but, in this and like matters, 
 
 (5) See §§ 629, 630, 631, ante. 
 
 (c) D. 16. 3. 32 : " quod Nerva diceret latiorem culpam dolum esse, Proculo displicebat, 
 mihi verissimum videtur,"- — Celsus, Digesta, lib. xi. is here being transcribed, — " nam . . . 
 nisi ad suum modum curam in deposito prsestat, fraude non caret : nee enim salvd, fide 
 minorem is quam suis rebus diligentiam prsestabit." This is the same terminological error 
 as that for which English judges are responsible in those incautious pronouncements in 
 which they have treated negligence as either the equivalent of fraud, or as evidence of it : 
 the topic is discussed in § 637, ante. Even for the purposes of an action of deceit, this was 
 the view entertained by many equity lawyers before Derry v. Peek (1889). 14 App. Cas. 
 337, H. L. 
 
 (d) D. 17. 1. 29. pr. : " dissoluta negligentia prope dolum est." Again see § 637, 
 ante. • 
 
 (e) Which is taken from Ulpian, Ad Edictum, lib. xi. 
 (/) D. 4. 3. 1. pr. 
 
 (3) D. 4. 3. 1. 2 : " Labeo ... sic definiit dolum malum esse omnem ealliditatem, 
 faUaciam, machinationem ad circumveniendam, faUendum, decipiendum alteram 
 adhibitam." 
 
 (h) Dr. Hunter, in his valuable work on Roman law, characterizes the definition as 
 " neither very precise nor very accurate." It certainly is not very precise, but fcr that 
 reason it is not inaccurate, for the thing to be defined is not precise. 
 
 (i) See § 676, post. 
 
 (j) These forms of implied misrepresentation by silence, and by conduct, as the subject 
 of Roman jurisprudence, are discussed in Appendix C (§§ 509, 510, 511, 813) of the 
 author's Laio of Actionable Misrepresentation. 
 
 {k) De Off. Ill, 12, 13. 
 
604 APPENDIX C, SECTS. 1, 2. 
 
 drawing different conclusions from their common principles (I). Antipater is repre- 
 sented as pressing the unconditional and inviolable claims of what in the language of 
 modern ethical philosophy would be termed " the categorical imperative " (m). To 
 this exalted view Cicero himseH obviously inclines (ra) ; but he states, fairly and 
 forcibly, the counter arguments of Diogenes Babylonius, who, after further debate (o), 
 is allowed to have the last word, and the credit of a first attempt to distinguish between 
 silence and concealment (p). Then follows a series of further illustrations,mostly taken 
 from the law of vendor and purchaser (q), after which, Cicero finally delivers his own 
 judgment both in the matter of the frumentarius, and in the other cases put {r), and, 
 in so doing, defines justifiable reticence, and unjustifiable concealment, respectively, 
 in a formula which, though a little more scientific than that of Diogenes Babylonius, 
 and though constantly cited in our courts {«), is open to grave exception. The 
 
 {I) " In hujusmodi causis aliud Diogeni Babylonio videri solet, magno et gravi Stoico, 
 allud Antipatro, disoipulo ejus, homini acutissimo " : De Ojf. Ill, 12. 
 
 (m) Ibid. : " omnia pateficienda, ut ne quid omnino, quod venditor norit, emptor 
 ignoret." The duty is thus stated as universal, and absolute, neither dependent on any 
 condition, nor limited in any way as to the subject-matter of the disclosure. 
 
 (n) See note (r), inf. 
 
 (o) Diogenes Babylonius urges that no wrong can be done where there is no legal duty 
 of disclosure, and there can be no such duty where the purchaser has no right to expect that 
 the vendor will depreciate his chances of making the most of his own property : to which 
 Antipater answers, in the spirit of modern theological casuistry, that the duty of dis- 
 closure springs from the general and primary obhgation of benevolence to mankind, or 
 to one's neighbour, and expresses surprise that a Stoic who accepts as amongst the 
 " principia naturae, quibus parere et quae sequi debeas," the duty of so acting " ut utilitas 
 tua communis sit utihtas " (our " pubKc poUcy " in one of its senses), should yet reject 
 one of its most obvious apphoations, the duty of imparting " hominibus, quid iis adsit 
 commoditatis et oopiae." Diogenes objects that silence is not concealment, that there 
 can be no universal obhgation to instruct mankind in useful knowledge, and that abstention 
 from such instruction in matters of far greater moment than the price of corn, such as 
 theological or moral philosophy, has never been called concealment (" aliud est celare, 
 aliud tacere : neque ego nunc te celo, si tibi non dioo quae natura deorum sit, qui sit finis 
 bonorum : quae tibi plus prodessent oognita, quam tritici \dhtas. 8ed non. quicquid tibi 
 audire utile est, id mihi dicere necesse est "). Thereupon Antipater, instead of recognizing 
 that his proposition stood in need of at least some quahfication, vehemently adheres to it 
 in its absolute form, and bases it again on the paramount claims of the members of any 
 human societas upon one another, which gives Diogenes the obvious retort that it would 
 be a curious societas which denies to its members the right of private property, and that 
 under such conditions any transaction between man and man, other than a gift, would be 
 unrighteous (" numista societas tahs est, ut nihil suum cujusquam sit ? Quod si ita est, 
 ne vendeudum quidem quidquam est, sed donandum ") : De Off. Ill, 12. 
 
 ip) See the last note, and the " aliud est celare, aliud tacere " passage there cited, which 
 is so frequently reMed upon in EngUsh judgments (see § 694, post). The mere distinction, 
 however, is in itself quite colourless, and does not advance matters in the least. It is 
 only when Cicero's distinction between permissible and improper reticence is tacked on 
 to it, that it has any real meaning or importance. 
 
 iq) Be Off. Ill, 13. These illustrations are referred to in note {h) to § 676, post. 
 Antipater and Diogenes express the same contrary opinions on the merits of these cases 
 as on the conduct of the corn-merchant, the former comparing the concealment in question 
 to the refusal or neglect to put a wanderer on the right path, — see notes {w), (x), and {y) to 
 § 650, ante, — or rather to the much graver offence of dehberately misleading him ( ' ' quid est 
 enim aUud, erranti viam non monstrare, ... si hoc non est, emptorem pati ruere et per 
 errorem in maximum fraudem incurrere ? Plus etiam est quam viam non monstrare : 
 nam est scientem errorem alterum inducere ") ; and the latter insisting that the vendor, 
 who is admittedly not bound by mere laudatory generahties on the merits of his own 
 property, to which no one is supposed to attach any importance, is stiU less required " to 
 cry stinJdng fish." In short, Antipater represents the extreme, not to say grotesque, 
 attitude of ethics in excelsis ; whdst Diogenes reflects the strictly juridical view, and, in so 
 doing, perhaps goes to the other extreme. 
 
 (r) " Non igitur videtur nee frumentarius iUe Rhodios, nee hie aedium venditor celare 
 emptores debuisse " : De Off. Ill, 13. 
 
 (s) See § 694, post. 
 
§§ 675, 676 (ROMAN law). 605 
 
 proposition runs thus : "neque enim id est celare, quioquid retioeas ; sed quum 
 quod tu soias, id ignorare emolumenti tui causa velis eos quorum intersit id scire " {t). 
 In its most literal sense, the statement is so inconformable to the principles even of 
 sound ethics (tt), not to speak of law, that one at first doubts whether Cicero intended 
 it to be so understood. But, on examining the context, and the examples which he 
 gives, and, above all, the theory which he enunciates as the groundwork of the whole 
 doctrine, viz. that " it is contrary to natural justice for one man to take advantage 
 of the ignorance of another " {u), it is evident that he did mean the proposition to be 
 taken aupied de la lettre, and without any qualification other than as stated by himself. 
 Regarded in the light of a jurisprudental maxim, as most writers (whether justly or 
 not) have regarded it, it is certainly a proper subject of the criticism which has been 
 applied to it by Pothier (v), Grotius (w), Pufendorf {x), Kent {y). Story (z), and Sir 
 Edward Fry {a), some of whom suggest qualifications, subject to which the pro- 
 position, it is said, may be assented to by jurists. Thus Grotius is of opinion that 
 the undisclosed fact must be material (6), which is true, so far as it goes, but more 
 than this is required to make the rule consonant with English jurisprudence. Sir 
 Edward Ery inclines to the view that the only additional element necessary in 
 order to make the proposition a sound juridical one may be obtained by expanding 
 " velis " into " desire, and take active steps to procure " the ignorance of which the 
 guilty party seeks to take advantage (c). But, surely, even this is not enough, unless 
 " intersit " be also enlarged so as to include not only the interest of the opposite party 
 in knowing the uncommunicated matter, but also his right to have it communicated. 
 
 Sect. 2. The Duty of Disclosure between Negotiating Parties in 
 
 Roman Law. 
 
 676. It has already been explained that in English law there is a duty on parties 
 negotiating for contracts of certain specified and defined types to disclose all matters 
 respectively deemed material (d). Roman jurisprudence had no such detailed or 
 scientific cleissification. It enjoined bona fides in general terms on a surety (e), and 
 as between parties compromising litigation ( / ), and, in negotiations of whatever 
 kind, dissimulation was accounted a form and badge of dolus (g). But no specific 
 
 (t) De Off. Ill, 13. The passage follows, and is put as the ground of, the decision. 
 
 (tt) See Thomas Aquinas, Summa Theol., II, ii, QuEest. Ixvii, Art. 3, and Pothier, 
 note {v), inf. 
 
 (u) De Off. Ill, 17 : " ex quo inteUigitur, quoniam juris natura fons est, hoc secundum 
 naturam esse, neminem id agere, ut ex alterius prsedetur inscitiS,." 
 
 (v) Traiti du Contrat de Vente, pp. 233-242, and pp. 297, 298. At p. 241 he remarks 
 that most writers on the subject regard " la decision de Ciceron " as" outree," and expresses 
 his opinion that it " souffre beaucoup de difSculte', meme dans le for de conscience." 
 
 (w) De Jure Belli et Pads, lib. II, ch. xii, s. 9 : " non ergo generaUter sequeudum iUud 
 ejusdem Ciceronis, celare esse, quum quod tu scias, id ignorare emolumenti tui causa. 
 veUs eos quorum intersit id scire ; sed turn demum id locum habet, quum de iis oritur quce 
 rem subjectam per se contingunt." 
 
 {x) Law of Nature and Nations, Book V, Ch. 3, § 4. 
 
 (y) Commentaries, vol. ii, Lect. 39, pp. 485-491. 
 
 (z) Equity Jurisprudence, vol. i, § 205. 
 
 (a) Specific Performance, §§ 705, 713 : see the citations in note (c), inf. 
 
 (b) See the citation in note (lo), sup. This was also the qualification upon which 
 Diogenes Babylonius insisted : see note (o), sup. 
 
 (c) In note (1) to § 705 of his Specific Performance, he observes that the Kmitation 
 suggested by the Dutch jurist would probably bring the Ciceronian proposition into 
 conformity with English law ; but in note (2) to § 713 of the same treatise he supplements 
 this opinion by the further suggestion that " if the whole is to express the principles of 
 our law, velis must, it is conceived, import not only will, but some act consequent thereon." 
 
 (d) In Ch. Ill, Sect. 2, ante. 
 
 (e) Sponsio, Fidepromissio, Pidejussio. 
 
 ( /) Called " transactio " in Roman law. 
 
 ig) D. 18. 1. 43. 2 (" qui insidiosfe et obscuifi dissimulat "). Cp. Cic. De Off. Ill, 15 
 (" ex omni vit§, simulatio dissimulatioque tollenda est. Ita nee, ut emat melius, nee ut 
 vendat, quidquam simulabit aut dissimulabit vir bonus "). 
 
606 APPENDIX C, SECTS. 2-4, SUB-SS. (1), (2). 
 
 duties of disolosure were prescribed in respect of special classes of contract, except 
 that between vendor and purchaser. Here the vendor was required in all cases to 
 divulge to the purchaser facts of a material character, known only to himself {h), in 
 substantial accordance with the rules of English law (i), and, in cases expressly 
 provided for by legislation, certain named defects in the thing sold, whether he knew 
 of them or not (J), as in the corresponding cases of statutory disclosure in our juris- 
 prudence (k). The iEdUician Edict (l) prescribed the disclosure of the particular 
 defects (" vitia ") spacified therein on every market sale, and made the failure in this 
 duty th3 subject of both an actio redhibitoria, and an exceptio. The requirements, 
 at first very limited, both as regards the subject-matters of the sale, and the " redhi- 
 bitory " defects, were by degrees enlarged until they embraced nearly every kind 
 of property, and most of the ordinary material defects (m). The actio redhibitoria 
 was so called because the seller was thereby forced to take back what he had before, 
 or, in other words, submit to an undoing or annulment of the sale : " redhibere est 
 facere, ut vursus habeat venditor quod habuerit " («.). 
 
 Sect. 3. Roman Law as to the Duty of Disclosure in Relations of 
 
 Confidence. 
 
 677. The obligations of disclosure and otherwise incidental to relations of 
 " confidence " form the separate subject of one of the foregoing Chapters (o). The 
 relations in question are those classified under three main heads {p). One of these, 
 the relation between a promoter and the company promoted by him has no analogue 
 in Roman law ; but, under the name of fiducise {qj mandata, and societas {r), we find, 
 
 (fe) Such facta, for instance, as that the vendor was selling a slave with vices, physical, 
 mental, or moral, or diseased cattle, decayed timber, incumbered land, and the like. See 
 D. 19. 1. 1. ; D. 19. 1. 4. pr. ; D. 19. 1. 6. 9. ; D. 19. 1. 13. pr., 1, 2, 3 ; D. 19. 1. 21. 1 ; 
 D. 19. 1. 41 ; D. 19. 2. 19. 1. The non-disclosure of such defects, if known to the vendor, 
 and unknown to the purchaser, is dolus. See also Cio. De Off. Ill, 12, 13, 16, 23. The 
 examples there given are, besides the case of thefrumentarius (III, 12), which is discussed in 
 § 675, ante, sales of houses which the vendor knows, but the purchaser does not know, to 
 be insanitary, or infected with serpents (the English cases are concerned with a minuter 
 pest), or dilapidated, or ruinous, or jerry-built (III, 13), or to have been condemned by the 
 augurs as an obstruction to the taking of the auspices, or to be subject to servitudes 
 (III, 16); or sales, under the like conditions, of wine which is "going off" {fugiens), 
 or of slaves addicted to lying, gambling, thieving, or drunkenness (III, 23). 
 
 (i) Some of them fall within the classes of case which are the subject of Ch. Ill, Sect. 2, 
 Sub-s. (3), ante, dealing with facts material to be disclosed in the negotiation for a contract 
 of sale. The residue are of the same character as those referred to in Ch. Ill, Sect. 2, 
 Sub-s. (8), dealing with cases of negotiation where there is no duty of disclosure in the 
 first instance, though supervening conduct or circumstances, or fraud, may create such 
 a duty. 
 
 (j) D. 21. 1. 1. 2 : " dummodo soiamus veuditorem, etiamsi ignoravit ea quae sediles 
 prsestari jubent, tamen deberi tenetur." 
 
 {k) The subject of Ch. VI, ante. 
 
 (I) Set out in D. 21. 1. 1. 1. 
 
 (m) For the history and development of the rules introduced by this Edict, see Cic. 
 De Off. Ill, 16, 17 ; and see D. 21. 1 (De iEdilioio et Eedhibitione et Quanti Minoris) 
 generally, for iUustratious of its application. 
 
 (») i>. 21. 1. 21. pr., (from Ulpian's Commentary on the ^dUician Edict). 
 
 (o) Ch. IV, ante. 
 
 (p) See Ch. IV, Sect. 2, ante. 
 
 (q) Cicero mentions ^dwcJcE amongst the transactions or relations which are the subject 
 of bonce fidei actions, in De Off. Ill, 17, De Nat. Deorum, III, 30, Pro Case, iii., 7, Pro 
 Soscio Oomcedo, vi. The equitable rule against direct purchases from the cestui que trust, 
 or principal, is stated, but in an absolute, not a qualified form, in D. 18. 1. 34. 7 : " tutor 
 rem pupUU emere non potest : porrigendum est ad similia ; id est ad curatores, pro- 
 curatores, et qui negotia aUena gerunt." Cp. D. 18. 1. 46; D. 26. 8. 5. The relation of 
 trustee and cestui que trust is dealt with in Ch. IV, Sect. 2, Sub-s. (1), ante. 
 
 (r) Mandata (res mandatce) are included amongst 5ora<E^fl!ci transactions in Cic. De Off. 
 Ill, 17 ; Top. X, xvii ; De Nat. Deor, III, 30 ; Pro Ccec. iii, 7 ; and societas, and the 
 
§§ 676-680 (ROMAN law). 607 
 
 both in Cicero and in the Digest, frequent references to relations corresponding to the 
 other two English types of confidential relation, those, namely, which exist between 
 trustee and cestui que trust, and between agent and principal, including partnership. 
 As regards these, the Roman jurists always insist in the strongest terms on the 
 general duty of hona fides, without, however, except in a very few instances, con- 
 descending to particulars, or working out the theory in any detail. 
 
 Sect. 4. The Roman Dooteinb of Good Faith in Relations of Influence, 
 
 678. In the Chapter devoted to this class of relation (s), six species of influence 
 have been separately considered, that of the parent or guardian (domestic), those of 
 professional advisers or directors (legal, sacerdotal, and medical), and that which is 
 created by the special circumstances and conditions of the individual case, and 
 particularly, in this connection, the influence of the moneylender or dealer over the 
 " expectant." It is proposed to compare the two systems of jurisprudence in relation 
 to these several species. 
 
 Svh-s. (1). As to the Parental or Quasi-Parental Relation. 
 
 679. Roman law, from the very earliest times, numbered tutela among its 
 " suspected " relations, in the sense that the tutor could not deal directly with his 
 pupillus, and might always be required to establish his good faith. But the notion, 
 so deeply implanted in our jurisprudence, that a parent, merely as such, and apart 
 from actual guardianship, is properly the subject of vigilant scrutiny when entering 
 into a transaction with a son just emerging from infancy, is foreign to the Roman 
 system, in which the duty of good faith was strictly limited to the actual juridical rela- 
 tion of guardianship, and no presumption of improper influence was made, as it is with 
 us, against those who were in a position of purely domestic and natural ascendancy (<). 
 
 Siib-s. (2). As to the Relation between Legal Adviser and Client, 
 
 680. The influence of the advocate was from an early stage in Roman history the 
 object of deep distrust. The growing domination of the Senate (from whom came 
 most of the advocates) over the subservient plebs, by means of this particular type 
 of influence, stimulated the passing of the Lex Cincia de Bonis et Muneribus, in the 
 year 204 B.C., which prohibited the acceptance of gifts by an advocate from his 
 client " ob causam orandam," — he could not stipulate for afee (merces) by the existing 
 
 action pro socio, in the same passages, as well as in Pro Eoscio Amerino, xl (where Cicero 
 explains the theory on which good faith is especially required of partners in substantially 
 the same language as an EngKsh Court of equity would use). See also, as to the relation 
 of partnership in Roman law, D. 17. 2 (on the action pro socio) ; C. 4. 37. 3 (" in societatis 
 oontractibus fides exuberet ") ; Just. Instit. 3. 25. 4 (" si quis caUid^ in hoc renunciaverit 
 societati, ut obveniens aliquod lucrum solus habeat, . . cogitur hoc lucrum com- 
 municare "). The English law as to the duty of disclosure and good faith in the relation 
 of principal and agent, including partnership, is the subject of Ch. IV, Sect. 2, Sub-s. (3), 
 ante. 
 
 (s) The subject of Ch. V, ante. 
 
 \t) As Cicero tells us in De Off. Ill, 15, the duties incidental to tutda were the subject 
 of express provisions in the XII Tables. See Lib. 36 (De Tutelis) of the Digest, and all 
 the passages from Cicero cited in note (r), sup., except Pro Rose. Am. xl. The parental or 
 quasi-parental relation in English law is the subject of Ch. V, Sect. 2, Sub-s. (1), from which 
 it wiU be seen that our jurisprudence includes among the domestic relations which raise a 
 presumption of influence on one side, and a corresponding duty of good faith on the other, 
 many relations which would not come within the well-defined limits of the Roman tutela. 
 On the other hand, Roman law recognized transactions relating to res uxoria as giving 
 rise to duties of good faith (see Cio. Top. xvii), whereas EngUsh law now draws no pre- 
 sumption of influence from the relation of husband and wife (see § 446, ante). It is curious 
 to find that in Athens there was a law of Solon which invalidated transactions due to the 
 influence of the wife over the husband (" &Kvpa ravTa Trctj/TO, orav ris -yvvtuKl ■n-eiBd/j.epos 
 irpdTTT} " : Demosth. In Olymp. 1183). 
 
608 APPENDIX C, SECT. 4, SUB-SS. (2-6). 
 
 law, — and enabled the donor to recover any such gift at any time during the joint 
 lives of himself and the donee (m). This plebiscitum is referred to, as an important 
 measure, by Livy {v), Cicero, and Tacitus {w). It was re-enacted as a senatus con- 
 sultum in the prinoipate of Augustus (with a severer penalty, viz. repayment of the gift 
 fourfold). The practice, however, went on, unchecked by either old plebiscita or new 
 senatus consulta, tUl, in the principate of Nero, " nihil publicss merois tam venale fuit 
 quam advocatorum perfidia," and, in the case of one Publius SuUius, the scandal was 
 so flagrant that even the corrupt Senate of that day was shamed into prosecuting 
 him. It was recognized at last that these donations could not be stopped, and 
 Claudius, adopting a middle course, limited the amount of any one gift to dena 
 sestertia (about £80). At one time the Senate required an oath from the litigant 
 parties in every cause that they had not made, promised, or secured, any donation to 
 their respective advocates. Constantine relaxed these provisions considerably ; 
 but we stUl find references in the Digest to the liability of an advocate receiving more 
 than the maximum to disgorge the overplus, though his right is recognized to take a 
 present made to him after the litigation is terminated (x). Any ohampertous agree- 
 ment (called a pactum de quota litis) was prohibited by a constitution of Constantine. 
 
 Suh-s. (3). As to Spiritual Influence. 
 
 681. Sacerdotal dignity and supremacy, in the pagan times of Home, was never 
 the object of suspicion, but on the contrary claimed, and received, the deepest 
 respect, recognition, and confidence. StiU less did the law exhibit any of that 
 hostility to the exercise of .spiritual influence in worldly matters which is so deeply 
 embedded in both the jurisprudence and the popular sentiment of this country (y). 
 During the later period when Christianity had become firmly established in the 
 constitution of the Empire, so far from distrusting the temporal influence of the 
 Church, and of its sacerdotal administrators and ofiicers, both the executive and 
 the judiciary encouraged it by every possible means. Justinian, in particular, took 
 great pains to provide facilities for effectuating testamentary gifts in favour of 
 ecclesiastical institutions, and precautions against their invalidation by the (then very 
 common) omission of any human person or earthly place as the object of the bequest. 
 Thus, in one of his Constitutions, he notes the prevafling practice of instituting as heir 
 to the whole or a portion of the testator's property either " our Lord Jesus Christ,"- 
 or " one of the Archangels or Martyrs," without naming any priest or church, and 
 he ordains that in all such cases the gift shall not be defeated on that account, but 
 shall take effect cy-pr&s in various prescribed forms (z). 
 
 Suh-s. (4). As to Medical Influence. 
 
 682. As has been already pointed out, this type of influence is the object of 
 suspicion in English law (a). It was also, apparently, distrusted, or subjected to 
 vigilant scrutiny, in Roman jurisprudence. Gifts to archiatri were legislated 
 
 (u) This lex was a plebiscitum, introduced by the tribune M. Cinoius. For the English 
 law as to the relation between legal adviser and client, see Ch. V, Sect. 2, Sub-s. (2), ante. 
 
 {v) Hist, xxxiv, 4, where M. Poroius Cato, speaking pro Lege Oppid, is represented as 
 asking : " quid legem Cinciam de donis et muneritus [exoitavit], nisi quia vectigalis jam 
 et stipendiaria plebs esse senatui ooeperat ? " 
 
 {w) Cic. De Senect. iv. ; De Oratore, II, 71. Tacitus, in his report of the speech of 
 Psetus Thraseet — see § 685, note (m), post — mentions this law. 
 
 {x) The authorities for the account of the Lex Cincia in the text are : Tacitus, Ann. xi. 
 5, xiii. 42, xv. 20 ; PHny, Epist. V. 20 ; D. 50. 13. 10. 12. 
 
 {y) See § 421, ante. 
 
 {z) See 0. 1. 2. 26, pr. : " quoniam in plerisque nuper testamentis invenimus hujusmodi 
 inatitutiones, quibus ex asse quis scripserit Dominum nostrum Jesum Christum hseredem, 
 non adjioiens oratorium aut templum ullum, aut ... ex semisse "... &o. Again, 
 in C. 1. 2. 26, 1,2: " si vero unius ex Archangelis meminerit, vel venerandorum Martyrum, 
 nuU^ saorae aedis mentione "... &c. 
 
 (a) The subject of Ch. V, Sect. 2, Sub-s. (4), ante. 
 
§§ 680-685 (eoman law). 609 
 
 against (6), on the same lines as gifts to advocates (c), in an imperial constitution 
 which, besides prescribing certain counsels of perfection (such as that the physician 
 should devote himself to the service of the poor and needy, rather than basely 
 pander to the imaginary diseases of wealth and fashion), prohibited the acceptance 
 of gifts promised by a patient when in the throes of a dangerous illness, but per- 
 mitted the receipt of a present made after complete restoration to health. 
 
 Subs. (5). As to Undue Influence in Fact. 
 
 683. The species of influence, viz. that which is presunjed from a relation con- 
 stituted by the particular " circumstances and conditions" of the case, and which 
 plays such a prominent part in the English law of undue influence (d), is the subject of 
 occasional denunciation in general terms by the Roman jurists, such as Cicero in 
 the oft-cited passage where he characterizes as the vilest form of fraud and oppression 
 that which is made possible by the dominant party's preliminary professions of 
 friendship, and the assumption of the character of honest adviser, to the servient 
 party in his distress (e). But, except aa to bargains with expectants, — ^the topic 
 next to be considered, — ^these general principles are not worked out in any detail. 
 
 Siib-s. (6). As to Unconscionable Bargains with Expectants. 
 
 684. Oppressive bargains with " expectants," which it has always been the special 
 object of our jurisprudence to relieve against, as already explained {/), occupied in a 
 no less degree the attention of the Roman legislature. As early as 200 B.C. (circ), 
 a statute was passed which prohibited the circumvention of adolescentes, that is, 
 young men who, though of age (puberes), were less than 25 years old, by abuse of 
 influence, or other unconscionable means (g). There were also various statutory 
 attempts to repress, or curtail, usury in general [h). In course of time, however, the 
 rapid growth of extravagance, luxury, and indebtedness on the part of these 
 " adolescentes," bringing in its train the inevitable, and equally rapid, multiplication 
 of extortioners, demanded much more stringent and specific measures to cope with 
 this particular evil. 
 
 685. Accordingly the famous Senatus-consultum Macedonianum, not infrequently 
 referred to in judgments on bargains with expectants in our courts (i), was passed, 
 either in the principate of Claudius (j), or in that of Vespasian (k). This enactment 
 was a piece of occasional legislation in the sense that it was immediately provoked 
 by the enormities of its eponymous hero, one Macedo, a peculiarly infamous usurer 
 of the day (/), just as the like enormities of the Polish usurer known to our courts 
 as Alexander Gordon were the immediate occasion of the passing of the Moneylenders 
 
 (6) C. 10. 52. 9 : " archiatri . . . honest^ obsequi tenuioribus malint quam tiirpiter 
 servire divitiis. Quos etiam ea patimur accipere, qua3 sani offerunt pro obsequio, non 
 ea quse pericUtantes pro salute promittunt." 
 
 (c) See § 680, note (x), ante. 
 
 (d) Dealt with in Ch. V, Sect. 2, Sub-s. (5), ante. 
 
 (e) " Totius injustitiaj nuUa capitalior est quam eorum qui, cum maximfe faUunt, id 
 agunt ut viri boni esse videantur" (Cic. De Off. I. 13), a passage cited by Sir S. Romilly, 
 in his " celebrated reply " in Huguenin v. Basdey (1807), 14 Ves. 273 (at p. 285),— as to 
 which see § 408, note (c), ante,— in support of his denunciation of " undue influence " in 
 all its many varieties. Plato (Crito, 52 E) speaks of contracts being invahdated in 
 Athenian law on the ground of coercion, or pressure, with no time given to reflect or take 
 counsel : " -rks ^wdiiKas Ka\ S/ioKoyias /j.ii irapa^aivnv Thv ovx l^ avdjKvs dixohoyiffavra, 
 . . . ovSf iv 6\lytf3 xptfi'w &vayKa(T6ei/Ta 0ovX€v(rafT6aL. 
 
 (/) In Ch. V, Sect. 2, Sub-s. (6), ante. „ ^^ ttt ,= j n 
 
 (g) The Lex Plstoria (or Laetoria), mentioned by Cicero m De Off. iii, 15, ana De 
 Nat. Dear. Ill, 30. 
 
 {h) Per a brief account of legislation against usury, see § 664, ante. 
 
 {i) Particularly, in those of Lord Habdwickb, L.C. ; see § 698, note (j), post. 
 
 (j) As Tacitus says, Ann. xi. 13. 
 
 (fc) According to Suetonius, F&sp. 11. . jj.i, -w 
 
 {I) It has been sometimes said that Macedo was the name of a notorious spendtnrilt 
 of the day, and the principal prey of the moneylenders, and not that of a moneylender at 
 B.N.D. 2 R 
 
610 APPENDIX C, SECT. 4, SUB-S. (6); SECT. 5, SUB-S. (1). 
 
 Act, 1900 (w). The actual words are set out by Ulpian in a passage which is in- 
 corporated in the Digest (n). There is first a short preamble, reciting the misdeeds 
 of Macedo, and the temptation to crime which was thereby placed in the way of the 
 expectants to whom he lent money: "cum inter caeteras sceleris causas, quas iUi 
 natura administrabat, etiam ses alienum adhibuisset, et ssepe materiam peccandi 
 malis moribus praestaret, qui pecuniam (ne quid amplius diceretur) incertis nominibus 
 crederet." Then follow the operative words ("placere ne cui, qui flliofamihas 
 mutuam pseuniam dedisset, etiam post mortem parentis ejus cujus in potestate 
 fuisset, actio petitioque daretur "), with a statement that the intent of the enactment 
 is that no usurer shall have a cause of action in respect of a loan on the faith of the 
 expectation of the ancestor's decease ("ut scirent qui pessimo exemplo foenerareht, 
 nullius posse filufamilias bonum nomen expectata patris morte fieri "). Ulpian does 
 not in terms say that the object of the Senate was to prevent attempts upon the life 
 of the ancestor, as well as upon his property, but it is so stated plainly by Justinian 
 in the Institutes (o). It will be observed that in most respects this measure was less 
 far-reaching than the flexible principles of our equitable doctrine on the subject. 
 Thus, it only gave the expectant an exceptio to an actio or petitio by the usurer for 
 the recovery of the loan: "ne cui . . . actio petitioque daretur " (^). It gave 
 no relief to the expectant, by way of rescission or otherwise, it he had once paid the 
 money ; which is quite contrary to English law (q), and must have gone far to 
 emasculate the statute. Also the enactment gave no remedy to any one who was 
 more than 25, or was otherwise " suae potestatis " {r), whereas all that our law requires 
 to be proved is that, whatever his age or exact legal status may have been, the servient 
 party had an expectation of benefit from some ancestor or relative, on which the 
 moneylender was trading {«). The exceptio was not available against a lender who was 
 reasonably induced by the acts and conduct and " holding out " of the borrower to 
 believe that he was a paterfamilias {t), or who could not have known that the borrower 
 was under disability in point of age or status (m.). The bar to relief only operated 
 against one who either knew, or could have discovered, that the borrower was under 
 
 all. How this notion could ever have gained ground, it is difficult to understand. The 
 preamble of the S. C, which recites the usurer's crimes (see the text, sup.), entirely 
 negatives the suggestion. 
 
 (m) 63 & 64 Vict., c. 51. The revelations made in Gcyrdon v. Street, [1899] 2 Q. B. 641, 
 G. A., as to the practices of this Macedo of the period, self-described as "the hottest and 
 bitterest " of his tribe, " with a gross of aliases," stimulated and provoked this measure. 
 For other instances of Roman legislation occasioned by scandals of the day, see the speech 
 of Psetus Thrasea, when prosecuting Claudius Timarchus for corruption as an administrator 
 of Crete in the principate of Nero, as given by Tacitus {Ann. xv. 20). The orator there insists 
 that the notoriety and spread of some particular vice has always beenthecause of repressive 
 legislation, and mentions, as illustrations, the Lex Cincia De Donis et Muneribus (see 
 § 680, notes («), {v), (w), {x), ante), provoked by the growing licence and rapacity of 
 advocates ; the Leges JuUse, occasioned by corrupt practices at elections ; and the 
 Leges Calpurniae, by the extortions of magistrates. 
 
 (») D. 14. 6. 1. pr. (taken from Ulpian, Ad Edictum, lib. xxix). 
 
 (o) Instit. 4. 7. 7 : " quae ideo senatus prospexit, quia sjepe onerati sere aUeno creditarum 
 pecuniarum quas in luxuriam consumebant, vitm parenium insidiabantur." 
 
 ip) See also T>. 14. 6. 1. 1 : " deneganda est actio." On the other hand, the money- 
 lender was debarred from recovering anything : he lost the whole of his principal, as well 
 as the benefit of the spdcial terms made. This is directly contrary to our law. 
 
 (q) See Cb. V, Sect. 5, ante. 
 
 (r) C. 4. 28. 1. 
 
 (s) As explained in § 438, ante. 
 
 (t) D. 14. 6. 3. pr. : " si quis patremfamihas esse credidit, non vanfi, simpUcitate 
 deceptus, nee juris ignorantiS,, sed quia pubho^ paterfamihas plerisque videbatur, sic 
 agebat, sic contrahebat, sic muneribus fungebatur, cessabit S. C." As to the exceptions of 
 " vana simpUcitas," and " juris ignorantia," and the conditions under which these states 
 of mind affect legal presumptions of knowledge, see §§ 40, 41, ante, respectively. As to 
 presumed knowledge or ignorance of infancy in English law, see the passages from the 
 judgment of Knioht-Bbtjce, V.-C, in Stikeman v. Dawson (1847), 1 De G. & Sm. 90, 
 which are cited in note (i) to § 164, ante. 
 
 («) D. 14. 6. 3. 2. 
 
§ 685, 686 (ROMAN law). 611 
 
 the prescribed age, or was " in aliena potestato " (v). If credit was really given to the 
 parent, and not to the exp3Ctant, the statute had no application (w),— which corre- 
 sponds with the like rule in English law (x). So also, if the paterfamilias was 
 cognisant of the whole transaction (?/), or if it was done at his instance {z), or with his 
 authority and consent (a) : and this again accords with our law (6). If the filius- 
 familias was fidejussor for another, the exceptio was avaOable to both (c). It was no 
 answer to the exceptio that the transaction was not in form a loan, but a sale to the 
 fiVmsfamilias (d), or a guarantee of his indebtedness (e). 
 
 Sect. 5. Roman Law as to Burden op Proof, Affirmative Defences, and 
 Belief, in Cases of Non-Disolosuee. 
 
 Sub-s. (1). As to the Facts required to establish the Actio or Exceptio Doli. 
 686. Those nice and difficult questions of the burden of proof with which our 
 law has been so busily concerned are not very minutely discussed in the Digest. 
 But the general principle, ei incumbit probatio qui dicit, non qui negat (ee), pervades 
 both systems ; and, in regard to dolus in particular, there is an imperial constitution 
 requiring, as English law requires, the utmost strictness of proof (/). In ordinar}- 
 cases of non-disclosure the party complaining was, as he is in English law, bound 
 to establish that the party charged had knowledge, actual or presumptive, of the 
 undisclosed fact {g). Where it was a question of a statutory duty of disclosure, the 
 precise terms of the enactment had to be considered in order to determine whether 
 any, and what, knowledge on the part of the alleged delinquent was required to be 
 proved before a breach of the duty could be said to have been established : thus, to 
 take two illustrations, it has already been pointed out that the non-disclosure of 
 certain redhibitory defects under the ^dOician Edict was actionable independently 
 of the question whether the vendor knew of them, or not {h) ; whilst, on the other 
 hand, actual or constructive knowledge on the part of the usurer as to the expectant's 
 ■disability was apparently a necessary ingredient in the proof required to establish 
 the statutory exceptio given by the S. C. Macedonianum (i). Illustrations have 
 been given of what the Roman jurists regarded as amounting to presumptive know- 
 ledge (j) in one of its various forms, as known to English law (k). With respect 
 to another of these types of presumptive knowledge, it seems clear that Roman 
 jurisprudence, agreeing with ours (l), as a general rule, imputed the knowledge of 
 the agent to his principal (m). 
 
 {v) D. 14. 6. 19 : " exoeptionem S. C. nuUi obstare nisi qui sciret, aut scire potuisset, 
 filiumfamiUas esse eum cui oredebat." 
 (w) D. 14. 6. 3. 4 ; D. 14. 6. 6. 
 (x) See § 482, note (e), ante, 
 (y) D. 14. 6. 12. 
 (z) 0. 4. 28. 2. 
 (a) C. 4. 28. 4. 
 (6) See note (e) to § 482, ante. 
 
 (c) D. 14. 6. 7. pr. ; D. 14. 6. 7. 1. 
 
 (d) D. 14. 6. 3. 3 ; D. 14. 6. 7, 3. 
 
 (e) D. 44. 1. 7. 1 (" etsi pro iBIiofamilias contra S. C. quis fidejusserit, aut pro minore 
 ■vigintiquinque annis oircumsoripto "). 
 
 (ee) D. 22. 3. 2. 
 
 (/) C. 2. 20. (or 21) 6 : " dolum perspiouis insidiis probari convenit." Pothier cites 
 the passage with "indiciis," instead of "insidiis." The former certainly makes better 
 ■sense, and better Latin. 
 
 (g) See § 676, note (h), ante, which accords with Enghsh law, as stated in Ch. Ill, 
 :Seot. 3, Sub-s. (3), ante. 
 
 (h) See § 676, note (j), ante, and cp. the like rules in cases of statutory disclosure in 
 prospectuses (§ 556, ante). 
 
 (i) See notes (<), (u), {v), to § 685, ante. 
 
 (j) In § 676, note (j), and § 685, notes (i), («), ("). «»'«■ 
 
 (k) Viz. that which is the subject of Oh. II, Sect. 3, Sub-s. (2), ante. 
 
 [l) See Ch. II, Sect. 3, Sub-s. (4), ante. 
 
 (m) D. 14. 4. 5. pr. (citing Ulpian, .4d Edictum, lib. xxix) : " procuratoris scientiam 
 ■et dolum nocere debere domino neque Pomponius dubitat, nee nos dubitamus." 
 
612 APPENDIX C, SECT. 5, SUB-SS. (2), (3). 
 
 Subs. (2). As to the Affirmative Answers available to the Party Charged. 
 
 687. Proof that the party complaining had actual knowledge of the undisclosed 
 fact was a good answer in Roman law (n), as it is in our jurisprudence (o). So also 
 was proof of a certain kind of presumptive knowledge, viz. that which is imputed to a 
 vendor in the case of " objects of sense " (p) ; and herein the Boman rules sub- 
 stantially, though not exactly, corresponded with our own {q). Generally, also, the 
 knowledge of the agent was imputed to the principal complaining of the non- 
 disclosure {r), as with us («). It has been said that Boman law presumed against the 
 party complaining a knowledge of the conditio of the party charged (t). H this really 
 was so, which does not seem quite certain, the Boman rule was certainly at variance 
 with the English («). The burden of establishing this, or any other affirmative plea 
 was, as it is with us, on the party charged : " reus in exceptione actor est " (uii). 
 
 688. The rule that an express engagement to waive disclosure, inquiry, or in- 
 vestigation constitutes an answer to a case of concealment is a part of the Boman law 
 on the subject (v), as it is of the English (w). And the countervailing rule of English 
 law (x), that the answer is destroyed by proof of fraudulent devices for the purpose 
 of covering up or hiding away any particular defects or risks or facts, prevailed in 
 
 (re) D. 19. 1. 1. 1 : " non videtur esse oelatus qui scit, neque certiorari debuit qui non 
 ignoravit." Tiiis was the rule even in the case of statutory relief : see § 685, note {y), 
 ante. 
 
 (o) See Ch. IV, Sect. 4, Sub-s. (3), ante, as to relations of confidence, and § 445, ante, 
 as to bargains with " expectants." In negotiations for contracts vberrimcB fidei, it would 
 seem that the burden is on the party complaining to establish his own ignorance, though 
 very slight evidence is sufficient to shift the onus on to the shoulders of the party charged, 
 and call upon him for affirmative evidence of the former's knowledge : see Ch. Ill, Sect. 3, 
 Sub-3. (5), ante. 
 
 ip) D. 18. 1. 43. pr. (whether a slave is good-looking, or a house weU-built, palam 
 apparet, and must be known to the emptor : English law would certainly not agree as to 
 the house, though it might as to the slave) ; D. 18. 1. 43. 1 (sale of a slave luminibus 
 ejfossis : cp. the insurance of the one-eyed man in Bawden v. London, Edinburgh tSa Olasgow 
 Assurance Co., [1892] 2 Q. B. 534, C. A.) ; D. 21. 1. 1 (patent blemishes) ; D. 21. 1. 14 
 (a visible scar, or bUndness). On the other hand, no knowledge is imputed of the intel- 
 lectual or artistic capacity of a slave to the party complaining : D. 18. 1. 43. pr., sup. 
 Plato (Legg. xi. 916, 917) draws a distinction between physical defects which would be 
 patent and palpable to a layman, and morbid conditions or tendencies, such as epilepsy, 
 which could only be detected by the expert eye and knowledge of a physician or trainer. 
 
 (}) See § 39, note (ii), and § 193, ante. 
 
 (r) D. 21. 1. 51. 
 
 (a) See § 49, notes (x) and (y), ante ; but the agent to whom the knowledge is sought 
 to be imputed must be " an agent to know " •- see ibid., note (z), ante. 
 
 (t) " Qui cum aUo contraHt vel est, vel debet esse, non ignarus conditionis ejus." 
 Knight-Bbtjcb, V.-C, at p. 107 of Stikeman v. Dawson (1847), 1 De G. & Sm. 90, cites 
 this as a rule of the civilians, without giving any reference, and he appends, as a gloss on 
 this rule appearing in the best commentaries, the following : " conditio accipitur pro 
 statu, servus sit an liber, paterfamilias an filiusfamUias. Ita significat setatem, mores, 
 fortunam, valetudinem." 
 
 {u) At p. 107 of Stikeman v. Dawson, sup., Knight-Bbitcb, V.-C, adds, after stating 
 both the rule and the gloss cited in the last note : " I am not satisfied that, as a general 
 rule, the law of England dissents." The opinion is expressed in a halting, qualified, and 
 negative form, it is true : but it is amazing to find in the mouth of so sound and erudite 
 a judge even the faintest suggestion or hint that the law of England imputes, or ever did 
 impute, to a party alleging non-disclosure, knowledge of the opposite party's age, character, 
 financial circumstances, and bodily health. The rule was not even, as stated, one of Roman 
 law, see note (u) to § 685, ante ; much less was the gloss. EngUsh law utterly repudiates it. 
 
 (km) D. 44. 1. 1. 
 
 (v) D. 50. 17. 23 : " nisi A quid nominatim convenit, legem enim contractus dedit." 
 See also the citations in note (y"), inf. Such an express term was called a pactum. Like 
 estoppel in English law, it gave rise to no cause of action, and could only operate as a 
 bar or exceptio. 
 
 (w) See § 202, ante. 
 
 (x) Ibid., notes (k) and (m), ante. 
 
§§ 687-691 (ROMAN law). 613 
 
 Roman jurisprudence also {y). Again, as in our system {2), an express contract to 
 exclude liability for fraudulent concealment, or other fraud, was wholly 
 inefficacious (0) ; and, for the same reason, an express stipulation for the general 
 observance of good faith is declared in the Digest to be nugatory (6), just as an express 
 contract for full disclosure in general terms is equally futile in English law (c). 
 
 Subs. (3). As to Relief. 
 
 689. In so far as non-disclosure constituted an element in dolus, it was the 
 subject of both ofEensive and defensive proceedings, — both an actio and an exceptio {d). 
 The terms in which the AquUian action was made part of the prsetorian law have 
 already been stated (e). The formula used for the purpose of raising the exceptio doli 
 mali was : " Si paret Numerium Negidium Aulo Agerio . . . dare [facere] oportere, 
 si in ea re nihil dolo malo Auli Agerii factum est, neque fiat, condemna. Si non 
 paret, absolvito " (/). Redhibitory relief could be granted to a defendant setting 
 up the exceptio, which means that every such plea involved a counterclaim for 
 rescission. So, in English law, as has been pointed out (g), the party complaining 
 has his choice between ofiensive and defensive proceedings, or he may add a counter- 
 claim for rescission to his defence. Whatever was sufficient to support the action 
 was, as in our law, sufficient to support the defence (h). In any case of statutory 
 relief, the exact form of remedy prescribed by the express language of the plebiscitum, 
 senatus consultum, or imperial constitution, as the case might be, was to be followed 
 (if any remedy at all was provided, which was almost invariably the case in Roman 
 legislation), and no other : which corresponds to one of our canons of statutory 
 interpretation (i). To take one example, the benefit of the S. C. Macedonianum, as 
 has been explained (J), could only be taken in the form of a defence, for the enact- 
 ment, though giving the aggrieved party an exceptio, was silent as to any actio. 
 
 690. The active remedies for dolus consisted of rescission, the subject of an 
 actio redhibitoria, and also compensation, recoverable in an actio quanti minoris, or 
 mstimatoria, which latter form of relief is not ordinarily permissible in our law, where 
 the case is one of mere non-disclosure (h). 
 
 691. The actio redhibitoria was the outcome of the ^dilician Edict (I). The rules 
 laid down in the Digest as to redhibition, or specific restitution, in cases of sales are, 
 first, that where it is the vendor's fault that the purchaser cannot give back what he 
 has received the inability to restore constitutes no defence to the redhibitory action ; 
 secondly, that where neither party is in fault the like result follows ; but, thirdly, 
 
 (y) D. 19. 1. 1. 1 (where the case is put of a man who, on selling a house, declares that, 
 so far as he knows, it is not subject to any servitude, but he wishes to protect himself by 
 an express condition against the consequences of any servitude being afterwards dis- 
 covered : here, if he knows of no servitude, the condition protects him ; if he does know 
 of any, and is concealing it, the condition is no defence). See also D. 19. 1. 6. 9 ; D. 19. 1. 
 13. 6 ; D. 21. 1. 14. 9 (concealment is a good repUcatio doli mali to an exceptio pacti). 
 
 (z) See § 202, note (e), ante. 
 
 (a) D. 2. 14. 27. 3 ; D. 13. 6. 17. pr. 
 
 (6) D. 18. 1. 68. 1 ; D. 50. 17. 23 (where, after the sentence cited in note (v), sup., the 
 following exception to the rule is noted : " excepto eo, quod Celsus putat, non valere 
 si convenerit, ne dolus prsestetur ; hoc enim bonse fidei judicio contrarium est." 
 
 (c) As to which, see Ch. Ill, Sect. 2, Sub-s. (9), ante. 
 
 (d) See § 672, ante. 
 
 (e) In § 673, ante. 
 
 (/) For iUustrationa, see D. 44. 4 (De DoU MaU et Metus Exoeptione), passim. 
 
 ig) See Ch. Ill, Sect. 5, Ch. IV, Sect. 5, and Ch. V, Sect. 5, ante. 
 
 (h) D. 44. 4. 2. pr. : " palam est autem hanc exceptionem ex eadem caus^ propositam, 
 ex qua causS. proposita est de dolo malo actio." 
 
 (i) See the last of the three rules mentioned in § 567, note (p), ante. 
 
 (1) See § 685, note (c), ante. 
 
 (k) As stated in Sect. 5 of Chs. Ill, IV, and V, ante, subject to the exceptions therem 
 respectively mentioned. 
 
 (I) Cic. De Off. Ill, 16, 17 ; D. 21. 1. See § 676, notes [1), (m), (»), anU, for an account 
 of this Edict. 
 
614 APPENDIX C, SECT. 5, SUB-S. (3) ; SECT. 6. 
 
 if it is the purchaser's fault entirely, as (for instance) if he has manumitted the slave 
 who, or alienated the thing which, passed by the contract, there is a complete answer 
 to proceedings of any kind. The first and third rules are the same as in English 
 law. The third rule points to what in our courts would be regarded as also a case 
 of affirmation. The second rule is not in accordance with the English decisions (m). 
 
 692. In any action bonce fidei, as distinguished from an action stricti juris, no 
 exceptio doli mali was required, because the action itself imposed on the judex the 
 duty of examining whether complete good faith had been observed on the one side, 
 and on the other, the formula being : quicquid dare [facere] oportere ex fide bona, . . . 
 &o. As in the case of the equitable action for money had and received, which Lord 
 Mansfield is said to have introduced into our jurisprudence, the utmost latitude 
 was permitted both to the actor in formulating his equitable claims, and to the revs 
 in resisting them on equitable grounds. The principles of mquum et bonum could 
 be invoked on either side, without any special exceptio, or replicatio, and the judex 
 was invested with ample authority to do what was right between the parties, enter- 
 tain cross claims, order reduction of prices, strike a balance (compensatio, or deductio), 
 and give effect to equities all round (ra). 
 
 Sect. 6. Applications of, and References to, the Principles of the Roman 
 Law op Non-Disclosure and Dolus in English Judgments. 
 
 693. The references to Cicero and the Digest in the judicial deliverances of our 
 courts on questions of n on -disclosure and good faith are not infrequent or unim- 
 portant. Tn most of these, the principles of Roman jurisprudence are appealed to 
 in support of established rules of English law ; but, in one or two cases, they are 
 prayed in aid of the individual judge's personal predilections in favour of an extension 
 of those rules (o). The topics now to be considered are those in reference to which 
 the most frequent judicial allusions are made to the views of Roman jurists. 
 
 694. The definition and examples of dolus mains given in Cicero and the Digest, 
 as already cited (p), are adopted, or referred to, by Lord Hardwicke {q). Lord 
 Brougham (r), Knight-Bruce, V.-C. (s), Willbs, J. (t), Sheb, J. (u), and the Privy 
 Council (v), in important judgments. 
 
 (m) For the third rule, see D. 21. 1. 47. pr. For illustrations of the other two, see D. 
 21. 1, passim. As to these three rules in English law, see § 231, § 377, note (I), and § 488, 
 note (e), ante. 
 
 (n) See Just. Instit. 4. 6. 28, with which cp. the description given by Lord Mansfield, 
 
 C. J., of the nature, fairness, and convenience of the action for money had and received, at 
 p. 1012 of Moses v. Macferlan (1760), 2 Burr. 1005. 
 
 (o) As, for instance, those of Lord Mansfield, C.J. (observed upon by Lord Eldon, 
 L.C., in Conolly v. Parsons (1797), 3 Ves. 625 n.), and those of Sheb, J. (see note (m), inf.). 
 
 (p) In § 673, ante. 
 
 (g) In Le Neve v. Le Neve (1747), Ambl. 436 (at p. 445), 1 Ves. 64 (at p. 68), 3 Atk. 646 
 (at p. 654). In Ambler, the spelling of the words cited ia hopelesslv inaccurate. 
 
 (r) In Attwood v. Small (1838), 6 a. & Fin. 232, 444, 445' ("dolus dans locum 
 contraotui "). 
 
 (s) At p. 109 of Stikeman v. Dawson (1847), 1 De 0. & Sm. 90, where the reference is 
 given as D. 4. 3. 12, instead of D. 4. 3. 1. 2, as it should be, and as it is in the reporter's 
 note (4) to p. 210 of the report in 16 L. J. (cH.) 205. 
 
 (t) At p. 1047 of Thompson v. Hopper (1858), E. B. & E. 1038. He there says that 
 "it" {i.e. the judgment below) "appears to me to be founded on a misapplication of 
 the maxim. Dolus circuiiu non purgaiur. ' Dolus ' therein stands for dolus malus, and 
 cannot mean simply anything which may lead to the damage of another: indeed, some such 
 acts constitute what has been called dolus bonus, and some are danna absque injuria. 
 Without entering into a discussion of the precise meaning of dolus, or dolus malus, in the 
 civil law, I may say that if dolus, in the sense in which it is used in the maxim, can exist 
 independently of evil intention, it cannot so exist without either the violation of some 
 legal duty, independently of contract, or the breach of a contract, express or implied, 
 between the parties." 
 
 (m) At p. 496 of Lee v. JoTies (1864), 17 C. B. (n.s.) 482, Exch. Oh., a suretyship case, 
 wherein he gives a translation of D. 18. 1. 43. 2 (which the reporter incorrectly cites as 
 D. 43. 2), as to that form of dolus which consists in dissimulation. At p. 502 he cites 
 
 D. 17. 1. 29, as to extreme neghgenoe being near aldn to dolus : see note (d) to § 673, ante, 
 (v) At. p. 382 of Crowly v. Bergtheil, [1899] A. C. 374, P. C, where it is pointed out that 
 
§§ 691-698 (ROMAN LAW). 615 
 
 695. The Ciceronian view of the distinction between innocent reticence and 
 culpable concealment (w) is cited freely by both common law and equity judges, such 
 as Lord Mansfield, C.J. {x), Lord Abinger, C.B. {y), Knight-Bruce, V.-C. (2), 
 fc>HEE, J. (a), Cleasby, B. (6), and Chittty, J. (c). It is to be noted that many of 
 these eminent judges {d), and several jurists, including that extremely accurate writer, 
 as well as judge. Sir Edward Pry (e), were content to adopt Lord Mansfield's 
 citation on trust, without checking it with the original. Had they taken this 
 precaution, they would have discovered that the first half of the words cited by 
 Lord Mansfield as forming one continuous sentence (" aliud est celare, aliud tacere ") 
 occurs in the middle of the argument of Diogenes Babylonius, and the latter half 
 expresses the ground of the opinion which Cicero himself delivers, much later, on the 
 case of the frumentarius, in a passage which is separated by a considerable quantity 
 of intervening disputation from the former, — "longo intervallo," and not even 
 " proximus huic." 
 
 696. Lord Cranworth illustrates the English rules as to the impropriety of a 
 trustee buying from his ceftui que trust, or an agent from his principal (/), and 
 Knight-Bruce, V.-C, the like rules as to a legal adviser accepting gifts from his 
 client (g), by references to the Roman law on these subjects. 
 
 697. As to the good faith which should exist between partners. Turner, V.-C, 
 cites the Roman doctrine {h). 
 
 698. The S. C. Macedonianum (i) is referred to both by Lord Hardwicke, L.C. (j), 
 and by Lord Thurlow, L.C. (k), in illustration of the English law as to bargains 
 Avith " expectants." 
 
 dolus malus in Roman- Dutch law, which governed the case then before the Court, no less 
 than fraud in English law, is sufficient to prevent a registered owner of land from relying 
 on his registration. 
 
 (w) See § 675, ante. 
 
 (x) At p. 1910 of Carter v. Boehm (1764), 3 Burr. 1905. 
 
 (y) At pp. 380, 381 of Cornfootv.Fowke (1840), 6 M. & W. 358, where almost the entirety 
 of De Off. Ill, 12, 13 — see notes to § 675, ante — is either cited or abstracted. 
 
 (j) At p. 571 of Gibson v. D'Este (1843), 2 Y. & C. 542, and again at p. 221 of Ndthorpe 
 V. Holgate (1844), 1 Coll. 203. 
 
 (a) At p. 498 of Lee v. Jones (1864), 17 C. B. (n.s.) 482, Exch. Ch. 
 
 (6) At p. 595 of Harrower v. Hutchinson (1870), L. E. 5 Q. B. 584. 
 
 (c) At pp. 208, 209 of Turner v. Green, [1895] 2 Ch. 205. 
 
 (d) See § 675, ante. Lord Mansfield, C.J., in Carter v. Boehm, sup. — see note {x), 
 sup. — was the beginner, and the error was copied, without examining the text, by 
 Shbb, J., at p. 498 of Lee v. Jones, sup. — see note (a) of the reporter on that page,^and 
 by Chitty, J., in Turner v. Green, sup. — -(see the last note). In Gibson v. D'Este, sup.- — 
 see note (z), sup. — Knight-Bruce, V.-C, makes " non quicquid . . . &c. " follow 
 immediately upon " aliud est celare, ahud tacere," omitting the intervening matter set out 
 in note (0) to § 675, ante. 
 
 (e) In note (2) to § 713 of his Specific Performance. 
 
 If) At p. 474 of Aberdeen Railway Co. v. Blakie Bros. (1854), 1 Macq. (h.l.) 461. 
 See Ch. IV, Sect. 2, Sub-ss. (1), (3), as to the English law. The passage cited is D. 18. 1. 
 34. 7, set out in note (q) to § 677, ante. 
 
 {g) At pp. 733-736 of Kennedy v. Broun (1863), 13 C. B. (n.s.) 677, where, in justice to 
 the plaintiff's erudite and brilliant argument, he traces the whole history, with appropriate 
 citations, of the position of the advocate in Roman jurisprudence as to remuneration and 
 gifts : see § 680, ante. As to the English law, see Ch. V, Sect. 2, Sub-s. (2). 
 
 (h) At p. 523 of Blisset v. Daniel (1853), 10 Hare 493. The passage cited is from 
 Just. Instit. 3. 25. 4, and is set out in note (r) to § 677, ante. The English rules are stated 
 in Ch. IV, Sect. 2, Sub-s. (3). 
 
 (i) See § 685, ante. For the English law on bargains with expectants, see Ch. V, 
 Sect. 2, Sub-s. (6), ante. 
 
 (j) At pp. 157, 158 of Chesterfield (Earl) v. Jannsen (1751), 2 Ves. Sr., 125: "the 
 senate and law-makers in Rome were not so weak as not to know that a law to restrain 
 prodigality, to prevent a son's running in debt in the life of his father, would be vain in 
 many cases : yet they made laws to this purpose, viz. the Macedonian decree, . . . happy, 
 if they could in some degree prevent it : est aliquod " — (sic : it should be " aliquo ") — 
 " prodire tenus." 
 
 (k) At p. 9 of Gwynne v. Heaton (1778), 1 Brown C. C. 1. 
 
616 APPENDIX C, SECT. 6 ; APPENDIX D, SECT. 1. 
 
 699. The doctrine of our law as to the knowledge which is imputable to the party 
 complaining, so as to establish an affirmative answer to his complaint {I), is illustrated 
 by references to the Digest in a judgment of Knight-Bbuce, V.-C. (m) ; whilst the 
 Roman rule according to which both the knowledge and the dolus of an agent is 
 deemed to affect his principal (n) is cited by Jeevis, C.J. (o). And, in support of a 
 personal suggestion that the English doctrine of presumptive knowledge may without 
 undue violence be stretched so far as to impute to one of two contracting parties 
 a knowledge of the other's conditio (including his status, age, character, financial 
 position, and state of health), — a suggestion of amazing unsoimdness, — Knight- 
 Bruce, V.-C, prayed in aid the supposed opinions and dicta of certain civilians and 
 glossators (p). 
 
 700. The rules, statutory and otherwise, of our jurisprudence as to the secret 
 employment of puHers at auction sales have not been dealt with in this treatise, for 
 the reason that they were considered to belong rather to the department of mis- 
 representation law iq). But they may also be regarded as part of the law of non- 
 disclosure, and, in whichever light the practice in question be viewed, Cicero con- 
 sidered it indicative of dolus, and denounced it, as such, in a passage (r) which was 
 the foundation of several of Lord Mansfield's decisions on sales by auction (s), 
 and at a later date was cited by Byles, J., in dealing with the same question (t). 
 
 (I) See § 687, ante. 
 
 (m) At p. 687 of Beyndl v. Sprye (1852), 1 De G. M. & G. 660, citing D. 22. 6. 9. 2— 
 the passage is set out in § 40 {sub fin.), ante ; the phrase, however, which he also purports to 
 quote, " qui vult deoipi, deoipiatur," and the similar expression, "haud decipitur qui seit 
 Be deoipi," which is cited by Lord Cbanwobth, L.G., ibid., at p. 710, are not to be found in 
 the part of the Digest to which the reference is given. 
 
 (w) D. 14. 4. 5, pr., set out in note (m) to § 686, ante. 
 
 (o) At p. 108 of Coleman v. Riches (1855), 16 C. B. 104. The spelling and syntax are 
 hopelessly inaccurate here, " procurationis " being substituted for " procuratoris," and 
 " dominus " for " dominum." 
 
 (f) At p. 107 of Stikeman v. Dawson (1847), 1 De G. & Sm. 90. See note (t) to § 687, 
 ante. 
 
 {q) See § 508, note (a), ante. In Oh. XIII, Sect. 2 of the author's Law of Actionable 
 Misrepresentation, this topic is fully discussed. 
 
 (r) De Off, III. 15 : " non iUioitatorem venditor, nee qui contra se liceatur, emptor 
 appouet." 
 
 («) Lord Eldon, L.C., though agreeing with the decisions themselves, thought that 
 some of Lord Mansfield's dicta, following too closely the exalted Stoical doctrines, went 
 further than our jurisprudence would permit : see Conolly v. Parsons (1797), 3 Ves. 625 n. 
 
 (i) At p. 208 of Green v. Baverstock (1863), 14 0. B. (n.s.) 204, where, however, instead 
 of qui contra se liceatur, the citation is, qui contra asse liceatur, — which makes nonsense of 
 the whole passage. When Serj. Byles, he had previously cited the passage in his argument 
 in Thornett v. Haines (1846), 15 M. & W. 367, as " the rule of ethics laid down by Cicero," 
 on which "this doctrine of our law is founded," and which, he adds. Lord Mansfield 
 always followed. 
 
§§ 699-702 (SCOTTISH law). 617 
 
 APPENDIX D. 
 
 THE SCOTTISH LAW OP NON-DISCLOSURE, 
 
 701. Scots law, in the department of non-disclosure, as in most others, follows, or 
 at aU events is in conformity with, the leading principles of Roman jurisprudence. 
 Ihe consequence is that, in substance {u), its rules as to the duty of disclosure 
 and good faith differ very little from those of English law on such questions, 
 tor these latter also coincide in the main with, and in some instances even purport 
 to be derived from, the doctrines of the Digest (v). Where any such difference exists. 
 It will generally be found that the Scottish rule is the more logical and just (w). It 
 IS now proposed to compare very briefly the two systems in connection with the 
 following topics : — (1) the duty of disclosure in negotiating for contracts uberrimm 
 fidei ; (2) the duties of disclosure and good faith in relations of " confidence " ; 
 (3) the like duties m relations of "influence " ; (4) questions of remedy and relief ; 
 and (5) statutory duties and provisions {x). 
 
 Sect. I. As to the Duty of Disclostjee in Negotiations foe Conteacts 
 
 DEEMED UbEEEIM^ FiDEI. 
 
 702. The rules of English law as to the duty of disclosure in negotiations with a 
 view to any contract or transsiction falling within certain recognized classes are the 
 
 (u) See, generally. Lord Kames's Principles of Equity, and BeU's Principles of the Law of 
 Scotland, §§ 13, 13a. There are great differences, however, in terminology, since Scottish 
 jurisprudence has always adopted a special and highly technical system of nomenclature 
 which, though sometimes provoking the derision of um'efleoting persons, presents this 
 enormous advantage that it tends to accuracy in definition, which means precision in 
 thought, whereas the English practice of drawing upon popular language serves only to 
 promote confusion : see App. A, ante. There are also differences in the rules of pleading 
 and practice, all of them to the advantage of the Scottish system, as to which see §§ 546, 
 547 in App. D to the author's Law of Actionable Misrepresentation. 
 
 (v) See App. 0, Sect. 6, ante. 
 
 (w) Lord Cockbm-n, not without warrant, boldly asserts, in his Life of Lord 
 Jeffrey, that " with a httle deduction on account of the feudality which naturally adheres 
 to real property, it is perhaps the best and the simplest system in Europe. It is deeply 
 founded on practical reason, aided by that conjoined equity, which is equity to the world, 
 as well as to lawyers. There can be no more striking testimony to its excellence than the 
 fact, that most of the modern improvements in English law, on matters aheady settled 
 in the law of Scotland, have amounted, in substance, to unacknowledged introductions 
 of the Scotch system." This " striking testimony " has been added to since Lord Cock- 
 burn's time. For example, in the Sale of Goods Act, 1893, the legislature deliberately 
 adopted the Scottish rules in preference to the English, where there was a discrepancy 
 between the two, as the rules which were to govern the sale of goods in the United Kingdom. 
 One reason of the greater logicality and simplicity of Soots jurisprudence is that, following 
 (as it does) the Praetorian law of Borne, it has never had occasion to estabhsh or recognize 
 a pair of parallel and conflicting sets of rules, as in England, or to hamper themselves with 
 such ridiculous distinctions as that, for instance, drawn so persistently in our courts at 
 one time between " legal " and " equitable " fraud, or between " legal " and " equitable " 
 estoppel, and the hke. See the observations of Lord BROtrGHAM (on certain points of 
 difference which existed in his day) referred to in note (g) to § 703, post. 
 (x) See the five Sections, respectively, of this Appendix. 
 
618 APPENDIX D, SECTS. 1-4. 
 
 subject of separate treatment in an earlier chapter of this work (y). The rules of 
 Scottish jurisprudence are precisely the same, as has always been held by the House 
 of Lords in every case in which the question has been argued, or in which for any 
 other reason it was deemed necessary to express an opinion on it, " whether in 
 relation to contracts of marine or life insurance {z), contracts between vendor and 
 purchaser (a), contracts of suretyship or, in Scottish phrase, " cautionary obliga- 
 tion " (6), compromises (c), or "family arrangements " {d). 
 
 Sect. 2. As to the Duties oe Disclostjee and Good Faith in Relations of 
 
 CONnDBNCE. 
 
 703. The two systems are completely at one in respect of these duties. The 
 rules of our jurisprudence as to their nature and limits, and as to the relations which 
 give rise to them, and the conditions under which they are deemed to continue, or to 
 cease (e), are precisely the same rules as those which are applied in Scotland, whether 
 examples be sought from cases of trustee and cestui que.trust {/), of principal and 
 agent (fir), or of partnership (A). 
 
 Sect. 3. As to the like Duties in Relations of Influence. 
 
 704. Here, too, there is no difference whatever between English and Scottish 
 jurisprudence. The same principles are applied in the same way, and to the same 
 classes of case, and on the same theory ; the duties being deemed to arise on a pre- 
 sumption of the existence, and the undue exercise, of influence by the dominant 
 
 (y) Ch. Ill, ante. 
 
 (j) As to the duty of disclosure in negotiating for marine insurance, dealt with in 
 §§ 91-99, ante, see the Scotch case of Thames and Mersey Marine Insurance Co. v. Ounford 
 Ship Co., [1911] A. C. 529, H. L. As to the like duty, in the case of life insurance (see 
 §§ 100-102, ante). Lord Watson, at p. 687 of Thomson v. Weems (1884), 9 App. Cas. 671, 
 H. L., says that the principles apphcable are precisely the same in the two systems. 
 
 (a) For an instance of the application of the English rules of disclosure in cases of 
 vendor and purchaser (see Ch. Ill, Sect. 2, Sub-s. (3), ante) to a Scotch case, see Browrdie 
 V. Campbell (1880), 5 App. Cas. 925, H. L. 
 
 (6) The English law of disclosure in negotiations for suretyship (see Ch. Ill, Sect. 2, 
 Sub-s. (4), ante) was applied to Scotch cases of " cautionary obligations " in Smith v. 
 Bank of Scotland (1813), 1 Dow. (App. Cas.) 272 ; 14 R. R. 67 ; Mactaggart v. Wilson 
 (1835), 3 CI. & Fin. 525 ; Railton v. Mathews & Leonard (IMl), 10 CI. & Fin. 934 ; Hamilton 
 v. Watson (1845), 12 CI. & Fin. 109 ; Bonar v. MacdonaU (1850), 3 H. L. C. 226. 
 
 (c) The Enghsh principles as to the duty of disclosure in negotiating compromises were 
 applied, as laid down in Ch. Ill, Sect. 2, Sub-s. (5), ante, to the Scotch case of Watt v. 
 Assets Co., [1905] A. C. 317, H. L. 
 
 {d) The rules of good faith in " family arrangements," discussed in §§ 135, 136, ante, 
 were apphed to Scotch cases in Stewart v. Stewart (1839), 6 CI. & Fin. 911 (where Lord 
 CoTTENHAM, L.C., after first reviewing the English cases, cites, at pp. 970, 971, three 
 Scotch oases, and passages from Lord Stair's Institutes, with the view of showing that 
 Scotch law is the same as oiu:s on this subject) ; Tennent v. Tennent (1870), L. R. 2 H. L. 
 (So.) 0. 
 
 (e) In Ch. IV, ante. 
 
 (/) See Hamilton v. Wright (1842), 9 CI. & Fin. Ill ; Dougan v. Macpherson, [1902] 
 A. C. 197, H. L. {per Lord Macnaghten, at p. 204, and Lord Shahd, at p. 205). 
 
 ig) See Aberdeen Railway Co. v. Blalcie Bros. (1854), 1 Maoq. H. L. 461 (per Lord 
 CRANW0BTH,L.C.,at pp. 473, 474, and Lord Brougham, at pp. 479, 482, 483, though the 
 latter takes occasion in one of these passages to express his regret that English law had 
 not up till then adopted the Scotch doctrine of bona fide consumptio et receptio, that is, 
 that " friiges bona fide perceptse et consumptae " remain the property of the actual 
 possessor, until dispossessed, and, in the other, to lament the then divided, legal and 
 equitable jurisdiction of the Enghsh Courts, as contrasted with their union in Scottish 
 law,— an objection now partially removed) ; McPherson v. Watt (1877), 3 App. Cas. 254, 
 H. L. {per Lord Blackectkn, at p. 272). 
 
 (70 See Cassels v. Stewart (1881), 6 App. Cas. 64, H. L. 
 
§§ 702-708 (SCOTTISH law). ' 619 
 
 over the servient party, and the presumption being made in every case where, either 
 by reason of a "suspected" relation existing between the parties, or by reason 
 of the actual circumstances, the one party must be supposed to be in a state of 
 subjection and inferiority, and the other in a position of predominance and 
 ascendancy, — a relation which in Scottish terminology, reminiscent of the Roman 
 circumscriptio adolescentium, is sometimes aptly termed a relation of "facility " on 
 the one side, and " circumvention " on the other (i). 
 
 Sect. 4. As to Relief. 
 
 705. Speaking broadly, our law gives any party entitled to complain of non- 
 disclosure two remedies, a right to rescission (and analogous or consequential relief), 
 and a good answer to any proceedings instituted for the purpose of enforcing the 
 impe£U3hed contract or transaction (j). And, though the terminology used is some- 
 what different, the like double set of remedies is placed by the law of Scotland at the 
 disposal of the party complaining. 
 
 706. Thus, as regards offensive proceedings, a contract or transaction may be 
 " reduced " (rescinded), and the parties " reponed " to their former position (mutual 
 restoration in specie), where such contract is voidable, whether on the ground of non- 
 disclosure (k), or misrepresentation (l), or for any other reason. Further, in a proper 
 case, the aggrieved party may sue for " repetition " (m), which answers to our 
 action for money had and received, and also to the Roman condictio indebiti (m) ; or 
 he may obtain an order for an account (o). 
 
 707. Defensive relief against an impeachable contract is also avaOable to an 
 aggrieved party in Scots law under precisely the same conditions as it is in our courts, 
 whether the ground on which the contract is impeached be non-disclosure (p), or 
 misrepresentation {q), or otherwise, and whether the party complaining adds, or does 
 not add, to his defence a cross claim for "reduction." 
 
 708. It not infrequently happens in Scots procedure that two cross actions are 
 raised, or cross claims are made, by the opposing parties ; the one seeking to enforce 
 a contract, and the other claiming " reduction " of the contract so sought to be 
 enforced, or " suspension " (stay) of the first action. In such cases, whether the 
 ground on which the "reduction," orthe "suspension," is sought benon-disclosure (r), 
 
 (»■) BeU's Principles of the Law of Scotland, vol. i, § 13a. The " influence " cases are 
 the subject of Ch. V, ante. The cases dealt with in Sect. 2, Sub-ss. (5) and (6), of that 
 Chapter are termed in Scotch law, cases of " facihty and circumvention." 
 
 (j) See Sect. 5 of Chs. Ill, IV, and V, respectively. 
 
 (k) In the following non-disclosure cases "reduction " was the subject of the action, 
 or cross-claim : Stewart y. Stewart {IS39), 6 CI. & Fin. 911 ; Sailton v. Mathews & Leonard 
 (1841), 10 a. & Fin. 934; Hamilton v. Wright (1842),- 9 CI. & Fin. Ill (cross-claim); 
 Tennent v. Tennent (1810), L. R. 2 H. L. (Sc.) 6 ; Watt v. Assets Co., [1905] A. C. 307, H. L. 
 
 {I) Such as Burnes v. PenneU (1849), 2 H. L. C. 497 ; Dandson v. Ttdloch (1860), 3 
 Maeq. H. L. 783 ; Tennent v. City of Glasgow Bank (1874), 4 App. Cas. 615, H. L. ; Stewart 
 V. Kennedy (1890), 15 App. Cas. 108, H. L. ; Edinburgh United Breweries, Ltd. v. Molleson, 
 [1894] A. C. 96, H. L. ; Ufe & Health Assurance Co. v. Yvle (1904), 6 F. 437 ; Fergvson v. 
 Wilson (1904), 6 F. 779 ; Gamage (A. W.), Ltd. v. Charlesworth, [1910] S. C. 257. 
 
 (m) As in Brownlie v. Campbell (1880), 5 App. Cas. 925, H. L. 
 
 (n) BeU's Principles of the Law of Scotland, §§ 531-535. 
 
 (o) As in Cassels Y. Stewart {1881), 6 AT^-p.Ca,s.6i,'H.'L. r, ^ o-,o 
 
 (p) For illustrations, see Smith v. Bank of Scotland (1813), 1 Dow (App. Cas.) 272 ; 
 Hamilton v. Wright (1842), 9 CI. & Fin. HI (with a cross-claim for reduction) ; ;^l^ffee» 
 BaUway Co. v. Blakie Bros. (1854), I Maoq. H. L. 'i'^^0 ; Thomson v. Weems(188i)Q 
 App. Cas. 671, H. 1,. ; Thames dk Mersey Marine Insurance Co. v. Gunford Ship Co., [lyuj 
 
 A. C. 539, H. L. , „ ■, r, j^ni n 
 
 (q) See the cases cited in iiote (s), inf., and National Exchange Co. of Glasgow v. Dew 
 
 (1855), 2 Maoq. H. L. 103. , .. „ • i a f„. 
 
 (r) As in Smith v. Bank of Scotland, sup. (claim for "reduction on one^side and for 
 "suspension" on the other) ; Hamilton v. WaUon (1845), 12 CI & Fin 109 (the like); 
 McPherson v. Watt (1877), 3 App. Cas. 254, H. L. (action for " reduction heard together 
 with action on the other side claiming the " implementing of the contract). 
 
620 APPENDIX T>, SECTS. 4, 5. 
 
 or misrepresentation (s), the actions or claims are " conjoined," and heard together 
 as parts of one entire proceeding. 
 
 709. It has been shown that delay, imless amounting to affirmation, or some 
 other recognized head of defence, is of itself no bar to relief in our courts (<). It is 
 the same with the Scots " mora " (u). 
 
 Sect. 6. As to Statutory Duties and Provisions. 
 
 710. A special chapter has been devoted to the statutes and enactments afiecting 
 (whether by way of codification, or amendment) the English common law of dis- 
 closure (v). Most of these statutes, with such variations as may be prescribed, apply 
 to Scotland. For example, the Companies (Consolidation) Act, 1908 (8 Edw. 7, 
 c. 69), subject to certain adaptative provisions (w), is part of the Scottish statutory 
 law (x) : and so also is the Marine Insurance Act, 1906 (6 Edw. 7, c. 41), the efiect of 
 which is whoUy declaratory and codifying (y). On the other hand, the Vendor and 
 Purchaser Act, 1874 (37 & 38 Vict., c. 78), does not apply to Scotland (z). The Sale 
 of Land by Auction Act, 1867 (30 & 31 Vict. c. 48), is expressed not to extend to 
 Scotland (see s. 9), but this was because Scots law, following the Eoman, was 
 already in the condition in which the statute provided that it Should thereafter be 
 for England and Ireland (a). Scotland has its own statute law on such matters as 
 the limitation of aictions (6), registration of titles to land (c), and others of the like 
 more or less domestic character. 
 
 («) As in Sibbald v. Hill (1814), 2 Dow. (App. Cas.) 273 ; Bmnes v. Pennell (1849), 2 
 H.L. 0.497. ^ fi' J , 
 
 (t) See §§ 217, 218, ante. 
 
 (u) See Watt v. Assets Co., [1905] A. C. 317, H. L. (per Lord Davey, at p. 334). 
 
 («) Ch. VL ante. 
 
 (w) See § 616, notes {z) and (l), ante. 
 
 (x) Such as Glasgow Pavilion, Ltd. v. Motherwell (1903), 6 F. 116, cited in note (j) to 
 § 570, ante ; Sleigh v. Glasgow and Transvaal Options, Ltd. (1904), 6 F. 420, cited in note (n) 
 to § 545, ante. 
 
 (y) See Thames & Mersey Marine Insurance Co. v. Gunford Ship Co., [1911] A. 0. 
 
 Oou, H. ±j, 
 
 (z) See s. 10 of the Act. And, generally, as to this statute, see § 251, ante. 
 
 (a) Bell's Principles of the Law of Scotland, §§ 130-132. See, as to this Act, Ch. XIII, 
 Sect. 2, of the author's Law of Actionable Misrepresentation, to which subject it more 
 properly belongs than to the law of non-disclosure. 
 
 (6) Bell's Principles, §§ 589-604. 
 
 (c) Gordon-Gumming v. Houldsworth, [1910] A. C. 537, H. L., was concerned with the 
 Scottish " Register of Sasines." In this case it was observed by Lord Shaw, at p. 555, 
 that " the system of registration of title in Scotland . . . was substantially perfected in 
 the seventeenth century, beginning particularly with the Act of 1617, c. 16." 
 
INDEX. 
 
 ABANDONMENT, 
 
 of supposed rights, good consideration for compromise, 108 
 
 of right to relief, when conduct of party amounts to, 194 
 
 of contract by one party, gives the other a right to sue for money had and 
 
 received, without rescission, 212 
 offer of, when given effect to at the trial, 451, 452 
 of contract, when not affecting the duty to disclose the abandoned contract in a 
 
 prospectus, 493 
 
 ABATEMENT, 
 
 of price, agreement to accept in Ueu of rescission, 181 — 184 
 waiver of, as well as of right to rescission, 184, 185 
 specific performance with, 216 
 
 ABNORMAL. See Unusual. 
 
 ABRIDGED, prospectus, when subject of statutory duty of disclosure, 476 
 
 ABSTENTION, from inquiry, when raising a presumption of knowledge, 41 — 47 
 
 ABUSE, 
 
 of confidence. See CoNnDENCE. 
 
 of influence. See Influence. 
 
 of voting power in a company, 356, 357 
 
 ACCEPTANCE, 
 
 of ofier to waive, necessary to sustain plea of waiver, 181 
 of negotiable instrument, affected by fraud, rules as to, 246 
 
 ACCESS, 
 
 of light, deed acknowledging absence of right to, need not be disclosed, 83 
 of servient party to natural protectors, where dominant party prevents, 398, 
 400 
 
 ACCESSIBLE TO PUBLIC, 
 
 documents, registration or entries in. See Public Documents. 
 
 ACCIDENT, 
 
 personal, as subject of insurance, 74. And see Life and Health Insurance. 
 to property, as subject of insurance, and duty of disclosure in negotiation there- 
 for, 74, 75 
 to ship, as subject of marine insurance, 64, 65 
 vendor's non-disclosure merely by, protected by waiver clause or condition, 
 
 177_179, 182, 183 
 omission in prospectus by honest, subject of statutory defence, 500, 501 
 
 ACCOUNTANT, 
 
 when not " officer " of company, for purposes of misfeasance, 543 
 
 [ 1 ] 
 
Index. 
 
 ACCOUNT, 
 
 guarantees of, what duty of disclosure in negotiations for, 90, 91 
 disclosure, and explanation of, in partnership cases, 110, 111 
 
 in " influence " cases, 435, 436 
 directions for taking, as incident to rescission, 210 
 
 as to value where undervalue alleged, 462 
 right of party complaining to, in " confidence " cases, 341 — 346 
 
 servient party to, in " influence " cases, 457 
 rules as to costs of taking, in " expectant " cases, 550 
 
 ACCURATE, 
 
 information in fact received is material to be disclosed, whether accurate, or not, 
 
 13, 14 
 opinion in fact given, or entertained, — the like, 15 
 in sense of exact. See Exact. 
 
 ACQUIESCENCE, 
 
 amounting to affirmation, a good plea, 194 
 
 of party charged in the other party's dealing with 
 property, may destroy the validity of a plea of 
 impossibility to restore in specie, 203 
 ACT, 
 
 when knowledge of agent for purposes of single act in a transaction is, and when 
 
 it is not, deemed the knowledge of the principal, 35 
 of mind or will, servient party incapable of, cannot confirm a transaction, 448 
 
 ACTS AND CONDUCT. See Conduct. 
 
 ACT OF PARLIAMENT. ,Sfee Statute. 
 
 ACTING UPON, 
 
 independent advice, not necessary for dominant party to show that there was 
 
 any, on part of servient party, in order to sustain the transaction, 443 
 acceptance of offer of waiver by, 181 
 
 ACTION, 
 
 when, and what form of, is the proper proceeding to obtain relief in oases of 
 
 non-disclosure. See Relief. 
 when win lie. See Actionable. 
 causes of. See Cause of Action. 
 chose in. See Chose in Action. 
 
 ACTIONABLE, 
 
 when non-disclosure, and other breaches of fiduciary duty, are, in — 
 negotiations for certain contracts, 60 — 119. And see Negotiation. 
 relations of confidence, 279 — 306. And see Confidence. 
 relations of influence, 369 — 412. And see Influence. 
 prospectuses of companies, 468 — 489. And see Pbospectus. 
 cases of concealment from the Court, 509 — 517 
 the State, 517—521 
 third persons, 521 — 523 
 creditors, 523—531 
 cases where, though no duty of disclosure in first instance, a duty is created 
 by the special circumstances of the case, such as — 
 pre-existing or incidental fraud, 120 — 123 
 supervening circumstances, 123 — 130 
 question asked, and answer given, 131 — 134 
 when non-disclosure is not, in — 
 
 negotiations for contracts of certain kinds, 134 — 144 
 relations of confidence, 306 — 313 
 
 [2 ] 
 
Index. 
 
 ACTION ABIjE— continued. 
 
 relations of influence, 412 — 417 
 
 when non-disclosure to third persons is not, 140, 141, 308 309 
 
 misfeasance proceedings only available in respect of what'is, 542 
 
 ACTIVE, 
 
 concealment by positive devices, eiieot of, 121, 122, 177 178 
 partner under duty of disclosure to dormant partner, 110, 111 
 " fraud " : criticism of expression, 557 
 
 ACTUAL, 
 
 knowledge, meaning of, 20 
 
 bittden of proof, and evidence, as to, 20, 233 
 
 must be proved against party complaining, in order to constitute 
 
 affirmative defence, 331 — 333 
 the like, in prospectus cases, 498, 499 
 
 requisite to defeat statutory presumptions from registration, &c., 
 50 — 55 
 intention, proof of, sufficient to sustain will, 414 
 
 not sufficient to sustain a transaction in relations of 
 
 influence, 433 
 does not per se establish affirmation, 185, 186, 335, 446, 447 
 value. See Value. 
 fraud, not necessary to prove, in — 
 
 cases of negotiation for certain contracts, 170 — 172 
 relations of confidence, 321 — 323 
 relations of influence, 424, 425 
 misfeasance cases, 544 
 criticism of term, 557 
 contract, in cases of statutory omission from prospectus, material to ascertain 
 what was the, 493 
 
 ACTUARIAL, evidence, how far useful in questions of adequate value, 463 
 
 ADEQUATE, value, or price. See Value. 
 
 ADJOURNMENT, on new case of non-disclosure at trial, 536 
 
 ADMINISTRATOR, 
 
 transmission of rights and liabilities to. See Death. 
 fiduciary duties of, to beneficiaries, 279, 280 
 of deceased partner, duties to, of surviving partner. 111 
 not liable to beneficiaries, where no surplus assets, 307 
 
 de son tort, comes under same duty of disclosure to beneficiaries as if he had 
 been duly appointed, 394 
 
 ADMINISTRATION SUIT, relief for non-disclosure, &c., indirectly given in, 459 
 
 ADOPTION, knowledge of agent by, when affecting principal, 31 
 
 ADVANCE, 
 
 prospectus, when within the statutory law of disclosure, 476 
 of money. See Moneylendbk. 
 
 ADVANTAGE, 
 
 taking, of exclusive or superior knowledge, in relations of confidence : — 
 generally, 273, 274 
 
 [ 3 ] 
 
Index. 
 
 ADY ANT AQ^— continued. 
 
 trustee and cestui que trust, 281 — 285 
 promoter and company, 291 
 agent and principal, 297, 298 
 partners, 304—306 
 taking unconscientious, over servient party in relations of influence, or procuring 
 by unconscientious means : 
 generally, 363—365, 428—448 
 in relations created by the circumstances, 390—397 
 bargain for private, by a particular creditor, is subject of relief, it undisclosed 
 
 to other creditors, 523 — 531 
 secret, secured or promised from third person must be disclosed, in relations of 
 confidence, e.g. : — ■ 
 by a promoter to the company, 291 
 by an agent to his principal, 298 — 304 
 by partner to partner, 304, 305 
 public. See Public Policy. 
 
 ADVERTISEMENT, 
 
 offer of shares by, may be a prospectus, for purposes of the statutory law relating 
 
 to omissions therein, 473 
 in newspaper, when prospectus published by, relaxation of certain statutory 
 
 duties, 477. 
 
 ADVICE, 
 
 when duty to give honest, as if advising against a stranger, in relations of 
 confidence — 
 generally, 273, 274 
 trustee, 282—285 
 agent or partner, 297, 298 
 the Kke, in relations of influence, 437, 438 
 importance of, in cases of " influence " generally, 377 
 taking of legal, does not support plea of ignorance, or mistake, in prospectus 
 
 cases, 501 
 independent and competent, of third person. See Independent and Com- 
 petent Advice. 
 
 ADVICES (IN SENSE OF INTELLIGENCE OR INFORMATION), 
 receipt of, a fact material to be disclosed, 13, 14 
 
 ADVISER, 
 
 self- constituted, when a " dominant party," 302 — 304 
 alienating servient party, or " expectant," from natural, 398, 400 
 legal. See Solicitob. 
 medical. See Medical. 
 
 ADVOCATE, 
 
 colonial or Scotch, subject to fiduciary duties, 379. And see Solicitor (A), 
 in the sense of counsel. See Counsel. 
 
 ADVOWSON, on sale of, charge on the living need not be disclosed, 83 
 
 AFFECT, 
 
 document afiecting property, when to be disclosed, 80 — 85 
 
 when party affected with notice. See Knowledge (B). 
 
 condition purporting to affect party with notice, in prospectuses of company, is 
 
 void, 499 
 any fact which may affect mind of party, when deemed material, 16. And see 
 
 Material. 
 
 [4 ] 
 
Index. 
 
 affidavit, 
 
 on ex parte application, full disclosure required in, 512 
 in support of application for relief, must contain fuU particulars, 635 
 in support of misfeasance summons, the like, 644 
 of discovery, when must precede particulars, 536, 537 
 rules as to contents of, on discovery in marine insurance cases, 537, 538 
 AFFIRMATION (CONFIRMATION), 
 distinction between, and waiver, 185 
 right of election as to, exhausted when exercised, 185 
 can only be made by unequivocal language or acts, 185, 186 
 ambiguous language or conduct is suspension, not exercise of right of, 186 
 can only be with complete knowledge of facts, and of rights, 186, 187 
 of transaction in respect of one non-disclosure, not necessarily affirmation in 
 
 respect of another, of which the party has no knowledge, 187, 188 
 acquiescence when amounting to, 188 — 190, 194 
 questions as to, how far fact, and how far law, 461, 462 
 principles of the law relating to, in their application to : — 
 
 relations of confidence, 334 — 336 
 
 relations of influence, 446 — 448 
 
 bargains with " expectants," 412 
 
 prospectuses of companies, 498 
 
 composition arrangements with creditors, 531 
 
 impeachable transactions generally, 187 
 
 AFFIRMATIVE ANSWERS, 
 
 1. To a case of non-disclosure in negotiations for certain contracts : — 
 
 general, 173, 174 
 
 waiver of duty of disclosure, or of right to rescission in respect of breach of 
 such duty, with or without compensation, 174 — 185. And see Waiveb. 
 affirmation, 186 — 188. And see Affirmation. 
 
 2. To a case of non-disclosure or other breach of duties of good faith in relations 
 
 of confidence : — 
 general, 326, 327 
 
 termination or suspension of relation, 327 — 329 
 complete propriety of transaction, 329 — 331. And see Confidence. 
 knowledge of party complaining, 331 — 333 
 express waiver, 333, 334 
 confirmation, 334 — 336 
 
 3. To the like, in relations of influence : — 
 
 general, 427 
 
 termination or suspension of relation and influence, 427 — 431 
 
 complete propriety of transaction, and due use of influence in fact, 431 — 
 
 446. And see Infltiencb. 
 confirmation, 446 — 448. 
 " family arrangement," 448, 449 
 
 4. To the like, in cases of bargains with " expectants," 411, 412 
 
 5. To the like, in cases of composition arrangements with creditors, 530, 631 
 
 6. To statutory proceedings for omissions of prescribed matters from prospectuses 
 of companies, 498—601. And see Pkospectus. 
 
 burden on party charged to allege and prove, 173, 174, 326, 366, 366 
 what are not, 
 
 in cases of negotiation for certain contracts, 188 — 196 
 in relations of confidence, 336, 337 
 in relations of influence, 449 — 453 
 AGE, 
 
 taking advantage of immature, or advanced, 394 
 materiality of facts as to, in life and health insurance, 72, 73 
 to what extent material, in relations of influence, 452 
 under. See Infancy. 
 B.N.D. [ 5 ] 2 s 
 
Index. 
 
 agency, agent, 
 
 (A) Knowledge of agent or partner, presumption of knowledge of principal or 
 
 firm from : — 
 theories on which presumption is made, 28, 29 
 may be made against either party, 29, 30 
 the agent must be an " agent to know," and must be acting in the course 
 
 and execution of his duty as such, 30, 31 
 when sub-agent is agent to know, 31 
 what oflfioers of a company are agents whose knowledge affects the company, 
 
 31 
 only the principal for whom the agent is acting in the particular matter is 
 
 fixed with the agent's knowledge, 33, 34 
 rules applied to case of solicitor when acting for one party, the other not 
 
 being legally represented, and when acting for both parties, 33 
 where agent is common officer of two companies, 33 
 where agent not acting in the particular capacity in which he is employed, 
 
 34—36 
 what knowledge is imputed, when agent is brought in for the purposes of a 
 
 single act or step in the entire transaction, 35 
 when knowledge acquired by the agent in alia re may be imputed to the 
 
 principal, 35 
 presumption rebutted, when agent committing a fraud upon his principal, 
 
 36—38 
 when presumptive knowledge of agent or partner, is imputed to the principal, 
 
 or firm, 32, 48 
 when knowledge of principal is imputed to the agent, 32 
 actual knowledge of agent will defeat principal's right to rely on registered 
 
 title, 53 
 position, character, and duties of agency, how far question of law, and how 
 
 far of fact, 234, 235 
 
 (B) Duties of disclosure incidental to relations of agent and principal {including 
 
 partnership) : — 
 
 various types and forms of agency to which duty of disclosure attaches 
 (directors of companies, sub-agents, partners, brokers in particular 
 markets, agents for purchase, or for sale, &c., &c.), 294, 295 
 
 duty of agent or partner to reveal his identity or connexion with any person 
 dealing with his principal, and, if he is dealing openly with his prin- 
 cipal, to impart all his knowledge, in both senses of the word, and otherwise 
 to make no unfair use of confidence, 295 — 298 
 
 duty of agent or partner to disclose to principal or firm any profit or ad- 
 vantage received from, or promised by, third persons, 298 — 302 
 
 above rules applied to partners, directors of companies, sub-agents, &c., 
 302 — 306. And see Directors, and Partnership (C). 
 
 (G) Miscellaneous : — 
 
 principal or firm may assert a right to relief in respect of non-disclosure to 
 
 agent or partner, 239 — 241 
 non-disclosure of agent, or partner, when rendering the principal, or firm, 
 liable : — 
 
 in negotiations for certain contracts, 243, 244 
 in relations of confidence, 357, 358 
 in relations of influence, 464, 465 
 when agent owes duty of disclosure not only to his principal, but to the 
 
 opposite party, 243, 244 
 makes no difference that agent is an officer of the Court, 243 
 where a person deals with one whom he knows to be an agent for a third 
 person, he assumes the fiduciary duties owed by such agent to that third 
 person, 357, 358 
 
 [ 6 ] 
 
Index, 
 
 AGENCY, AQ-EKI— continued. 
 
 (C) Miscellaneous (continued) : — 
 
 self-constituted, may be deemed a " dominant " party, in relations of 
 influence, 392, 393 
 
 rules as to costs of agents, when joined as parties to proceedings for non- 
 disclosure, 549 
 
 law agent in Scotland, under same duties as solicitor, or other legal adviser 
 379 
 
 AGGRIEVED PERSON, 
 
 rights of, in case of statutory non-disolosure, 501 — 508 
 concealment from Court, 509 — 517 
 non-disolosure to Crown or State, 517 — 521 
 ALIAS, 
 
 secret deaMng with cestui que trust, company, or principal, by trustee, promoter, 
 
 or agent, under an, 280, 290, 295, 296 
 undisclosed interest of partner in similar and competing firm or business, 
 
 under an, 304—306 
 burden on party complaining to prove that party charged was secretly 
 dealing with him under an, 318 
 
 "ALL FAULTS," "ALL RISKS," 
 
 express agreement to take property with, 177 — 179 
 
 ALLEGATION, burden of. See Burden of Allegation and Proof. 
 
 ALLOTTEES (OP SHARES IN COMPANY), 
 
 where necessary to show discharge of fiduciary duty to future possible, 293, 294 
 rights of, in case of omissions from prospectus, by statute, 485, 486, 505 — 607. 
 
 And see Prospectus. 
 test action, not representative suit, proper remedy in case of a number of 
 
 allottees suing the company in respect of same non-disclosure, 529, 530. 
 
 ALLOWANCE, 
 
 customary, to agents, &o., when presumptive knowledge of, and when not, 26 
 
 agreement to accept, in lieu of rescission, 181, 182 
 
 agreement to waive, as well as rescission, 184, 185 
 
 such agreements invalidated by fraud, 182 — 184 
 
 specific performance with, 216 
 
 just, must be made as condition of rescission, even to delinquent agent, or 
 
 promoter, 210, 343 
 receipt of, by agent, promoter, &c., must be disclosed, 298 — 302 
 value of proper, is question of fact, 462, 463 
 
 ALTERATION, 
 
 in character of contract or relation, no presumptive knowledge of custom which 
 
 involves, 26 
 of contract between surety and creditor, effect of, 95, 96 
 of facts by supervening circumstances, duty to disclose, 127 — 130 
 of substance of subject-matter of contract, when a bar to rescission, 202, 203 
 in character of relation, facts producing, must be disclosed, in relations of con- 
 fidence, 278 
 
 ALTERNATIVE, 
 
 rights in case of warranty or condition, 146, 147 
 
 remedies in case of non-disclosure, 185, 199 
 
 rights to rescission or account, 340 — 342 
 
 rights to take the property acquired by agent, promoter, &o., as bribe, or its 
 
 value, 342—346 
 remedies of executor of deceased partner. 111 
 
 [ 7 ] 
 
Index. 
 
 ALTERNATIVE— cojiiimecZ. 
 
 form of relief, in oases of auction sales, devised by Lord Bldon, 339 — 341 
 form of order, in cases where it is doubtful whether mutual restoration can be 
 
 made, 203 
 remedies available to liquidator of company against directors, secretly qualified 
 
 by promoter, 351, 352 
 
 AMBIGUOUS, AMBIDEXTROUS, 
 
 disclosure, is no disclosure at all, 11, 12 
 
 language or conduct, may give rise to duty of disclosure, though none originally, 
 
 124—126 
 expressions or acts, do not support plea of affirmation, 186 
 
 waiver, 333, 334 
 admission, or offer, no effect in reducing damages, 604 
 terminology. See Tebminology. 
 
 AMENDMENT, 
 
 required, when new case of non-disclosure raised at the trial, vrith certain 
 exceptions, 536 
 
 ANCESTOR. See Expectant. 
 
 ANNUAL, 
 
 renewal of life and fire insurances, by payment of premiums, effect of, on duty 
 of disclosure, 74 
 
 ANNUITY, 
 
 financial position of grantor of, not material to be disclosed in negotiation for 
 
 sale of, 83 
 dealers in. See Expectant. 
 
 ANNULMENT 
 
 of transaction. See Rescission. 
 
 of judgment procured by non-disclosure, 509 — 517 
 
 of grant by Crown or State, procured by like means, 517 — 521 
 
 ANSWER (IN TECHNICAL SENSE), 
 
 non-disclosure as, to proceedings to enforce contract in respect of which it 
 
 occurred. See Defensive Peoceedings. 
 affirmative, to a case of non-disclosure which otherwise would be established. 
 
 See AFiTEMATrvE Answers. 
 
 ANSWER (IN ORDINARY SENSE), 
 
 reasonable, to demand for delivery or production of documents of title, when 
 
 destroys presumption of knowledge, and when not, 41 — 43. 
 duty to give true, to question as to a matter which there is no duty to disclose, 
 
 if any answer is given at all, 131 — 134 
 effect of, to question, when made basis of the contract.as in life insurance cases, &c. , 
 
 144—149 
 
 ANTICIPATION, 
 
 of future event, is a " fact,'' which it may be material to disclose, 15 
 illustrations of above, 64, 65, 154 
 
 APPEARANCE, 
 
 external, of " object of sense," when presumptive knowledge of defects disclosed 
 
 by, 21, note (ii) 
 visible, of land, when presumptive knowledge of condition disclosed by, 47 
 where party complaiaing cannot plead ignorance of what is disclosed by, of 
 
 thing or person, 167 
 
 [8 ] 
 
Index, 
 applicant, application (for shares in company), 
 
 applicant may sue for money had and received, 213 
 
 rights of applicant, in cases of statutory non-disclosuie in prospectus, 8ee 
 
 Prospectus. 
 as against delinquent director, evidence of application for shares at par may be 
 
 evidence of par value, 345, 346 
 
 APPLICATION (TO THE COURT, BY MOTION OR SUMMONS), 
 generally. See RELiEr. 
 under Vendor & Purchaser Act, 220, 221 
 by purchaser, for discharge from purchase, in cases of sales by order of Court, 
 
 221, 222 
 for relief, in relations of confidence, 350 — 352 
 for relief, in relations of influence, 459 
 in respect of judgments obtained by concealment, 515 
 in respect of grants from State or Crown procured by like means, 519 
 for relief, in cases of composition arrangements with creditors, 528 
 for relief, in cases of misfeasance, 540 — 544 
 defences and answers to, for relief, 214 
 uberrimcefidei required in ex parte, 512 
 
 APPREHENSION, 
 
 as to the future, may be a " fact " material to be disclosed, 15 
 illustrations, 154 
 
 ARRANGEMENT, 
 
 in sense of contract. See Conteact. 
 for settlem.ent of disputes. See Compromise. 
 fam£y. See Family Askangement. 
 
 with creditors, for composition. See Composition Aeeahgements with 
 Ceeditobs. 
 
 ARTICLES OF ASSOCIATION, 
 
 every member of company presumed cognizant of contents of, 45, 46 
 
 waiver of duty of disclosure contained in, 333 
 
 provisions of, as to remuneration of directors, required by statute to be dis- 
 closed in prospectus, 477, 478 
 
 non-disclosure in prospectus of minimum subscription fixed by, entails statutory 
 liabiUty, 605—507 
 
 the Kke, as to amount or rate of commission payable for underwriting, 507 
 
 officer constituted as such by, is liable to misfeasance proceedings, 543 
 
 ARTIFICE. See Device. 
 
 ARTIFICIAL, 
 
 person. See Company. 
 
 trustee, in artificial sense, or " by metaphor," 306 
 
 criticism of expression, " fraud in an artificial sense," 557. 
 
 ASCENDANCY. See Influence. 
 ASCERTAINMENT OF DAMAGE. See Damages. 
 ASSENT. See Consent. 
 
 ASSERTION, 
 
 in sense of statement. See Representation. 
 of right. See Relief. 
 
 ASSESSMENT, of damages. See Damages. 
 of value. See Value. 
 
 [ 9 ] 
 
Index, 
 assignment, 
 
 of lease, duty of disclosure on intending assignee in negotiation for, 81 
 
 of specific property, carries with it equity to avoid for non-disclosure, but 
 
 assignment of naked right to avoid is invalid, as maintenance, and may be 
 
 champertous, 241, 242, 356 
 of claims to money, right of parties in respect of, accordingly as the money is 
 
 unspecific, or is an earmarked and traceable fraud, 242, 356 
 misfeasance claims may be subject of, 242 
 
 right of parties on assignment of securities, accordingly as they are non-nego- 
 tiable, or negotiable, 245, 246 
 of property in possession, effect of, is that assignee takes free from equity to 
 
 avoid the contract for non-disclosure, not having been already avoided, 246, 
 
 247, 360, 361, 466,— 
 unless party complaining can establish that party charged took as volunteer, 
 
 or with notice, or in bad faith, or is estopped, 247, 248, 360, 361, 466 
 no duty on creator of security of which there has been an, to disclose to assignee 
 
 collateral equities, except under certain conditions, 143 
 of property on insolvency. See Iksolvency. 
 
 ASSOCIATION, 
 
 articles of. See Articles op Association. 
 memorandum of. See Mbmoeandtjm op Association. 
 
 ASSURANCE, ASSURED. See Insurance, Marine Insurance, Life Insurance, 
 Fire Insurance. 
 
 ATTENDANT, 
 
 medical, name and attendance of, when material to be disclosed, in lite insurance, 
 
 73 
 relation between medical, and patient, is one of the recognized relations of 
 
 " influence." See Medical Relation. 
 
 ATTORNEY, 
 
 in fact. See Agency. 
 in law. See Solicitor. 
 
 ATTORNEY-GENERAL, 
 
 position of, in cases of concealment from Crown, 518, 519 
 
 AUCTION, 
 
 sales by, subject to duty of disclosure, 79 
 
 Lord Eldon's practice as to putting up property again for sale by, where first 
 
 sale avoided, 339—341 
 misfeasance claims may be sold by, 242 
 
 AUDITOR, 
 
 of company, knowledge of, as such, does not afiect company, 31, 32 
 
 names of, to be disclosed in prospectus, 483 
 
 when " officer " of company, for purposes of misfeasance, 543 
 
 AUTHORITY (IN SENSE OF MANDATE). See Agency. 
 
 AUTHORITY (IN SENSE OF PUBLIC OR LOCAL OFFICER OR BODY), 
 concealment from, 517 — 521 
 orders of, in respect of land, when to be disclosed, 82 
 
 AVOIDANCE, 
 
 of contract or transaction by party. See Election, and Voidable. 
 
 court. See Rescission. 
 of judgments, 509 — 517 
 of grants by Crown or State, 517 — 521 
 where right of, has not been exercised, assignee takes free from equity to rescind, 
 
 246,247 
 right of, dominant party must explain to servient, 437 
 
 [ 10 ] 
 
Index. 
 
 A VOID AN Ci:— continued. 
 
 no confirmation, unless explanation given of right of, 447 
 mtention of, to be notified by shareholder, in prospectus cases, as condition of 
 a certain kind of statutory relief, 507 
 
 AWARD, 
 
 as to party wall, when to be disclosed, in negotiation for vendor and purchaser 
 contract, 82 
 
 BAD FAITH, 
 
 in sense of breach of duty of good faith incidental to certain relations. See 
 
 Good Faith. 
 in other senses. See Feaud. 
 
 BANK, BANKER, 
 
 presumed to know terms of security lodged by customer, as against that customer, 
 
 but not as against any other customer, 40 
 guarantees to, of overdraft, 91 
 not deemed, as such, a promoter of company, 309 
 not, as such, an " officer " of company, for purposes of misfeasance, 543 
 
 BANKRUPTCY, 
 
 trustee in, not assignee for value, 247 
 special powers of Court in, to go behind judgment, 515 
 secretly favoured creditor deprived of rights in, 528, 529 
 when unfavoured creditor can proceed in, 529 
 generally. See Insolvency. 
 
 BARGAIN, 
 
 generally. See Transaction. 
 with expectant. See Expectant. 
 
 BELIEF, 
 
 a fact which may be material to be disclosed, 14, 15 
 
 general, of persons in business or trade affected, but not of party, or individual 
 
 witness, as to effect on his own mind, relevant to the question of materiality, 
 
 17—19 
 of party charged that transaction not unfair, is irrelevant to the question of 
 
 liabUity, 170, 321, 424, 425 
 " honest " : criticism of this expression, 566, 567 
 
 BENEFICIARIES, 
 
 no enforceable duty of executor to, where no assets, 307 
 no fiduciary duty between, inter se, 308 
 
 BENEFIT, 
 
 generally. See Advantage. 
 
 when acquired must disclose name of person for whose, the life insurance is 
 
 effected, 73 
 whether contract likely to be of, to party seeking to set it aside for non-disclosure, 
 
 is immaterial, 195, 323, 324, 426 
 
 BIDDER, BIDDING. See Auction. 
 
 BILL, 
 
 of exchange, 245, 246. And see Negotiable Insteitment. 
 
 of lading, 41, 246. And, generally, see Negotiable Instetjment. 
 
 of sale, duty of moneylender to explain default clause, and mode of calculation 
 
 of interest, in, 10, 22, 436, 437 
 of review, procedure by, now obsolete, 516 
 
 BLINDNESS, wUful, and fraudulent. See Wilful. 
 
 [ 11 ] 
 
Index. 
 
 BOARD, 
 
 of directors of company, knowledge of, sitting as board, is imputed to company, 
 
 but not knowledge of individual director, &c., 32 
 duty of promoter to disclose dependency of board of directors of company on 
 
 himself, 292, 293, 355, 356 
 
 BODY, 
 
 general, of shareholders, what disclosure promoter must make to, 293, 294 
 general, of creditors, what disclosure favoured creditor must make to, 523 — 531 
 
 BONA FIDES, 
 
 generally. See Good Eaith. 
 Roman law as to, 601 — 605. 
 
 BONUS, 
 
 agent must disclose to principal the receipt or promise of, by third person, 
 299—302 
 
 BOOKS, 
 
 of partnership, when to be disclosed, 110, 111 
 accessible to public. See Public Documents. 
 generally. See Docitments. 
 
 BORROWER. See Moneylendeb. 
 
 BREACH, 
 
 of duty of disclosure, when actionable. See Actionable. 
 
 of promise of marriage, when non-disclosure justifies, 113 — 116 
 
 of implied contract to perform trust, non-disclosure may be regarded as, and in 
 
 that character is subject of proof or claim in insolvency, 351 
 of trust, act or omission must be in nature of, in order to constitute ' ' misfeasance ' ' 
 
 in company cases, 542 
 
 BRIBE, 
 
 receipt of, from third person, must be disclosed by agent, &o., to principal, &o., 
 
 299—302 
 of directors of company by promoter, must not be kept secret from company, 
 
 291—294, 302—304 
 directors who receive, jointly and severally liable for the whole amount of, 
 
 in ordinary cases, 359 
 
 BROKER, 
 
 in stocks and shares. See Stockbbokek. 
 
 in insurance, ordinarily owes duty to his own principal, not to the other nego- 
 tiating party, 309 
 in marine insurance. See Mabine Insueancb. 
 
 BROTHER, 
 
 may be in loco parentis to brother, and so within the parental relation of influence, 
 373. And see Parental Relation. 
 
 BURDEN OE ALLEGATION AND PROOF: 
 
 (A) On Party Complaining of Non-Disclosure, dkc. — 
 
 1. in negotiations for contracts uberrimce fidei, to establish (i) duty and 
 materiality, (ii) existence or occurrence of imdisclosed fact, (iii) non- 
 disclosure, (iv) knowledge of party charged, and (v) his own ignorance, 
 151-170,— 
 
 but not to establish personal fraud, actual inducement, or loss, 170 — 
 183, 195 
 
 2. in relations of confidence, to establish (i) existence of relation at material 
 date, (ii) the undisclosed transaction or fact, 314 — 319, — 
 
 but not to establish personal fraud, or loss, 321 — 326 
 
 [ 12 ] 
 
Index. 
 
 BURDEN OF ALLEGATION AND FmO¥ {continued): 
 
 (A) On Party Complaining of Non-Disclosure, die. (continmd)— 
 
 3. in relations of influence, to establish same matters as in those of con- 
 fidence, 418 — 423,— 
 
 but not fraudulent motive of party charged, or loss to himself, 424 — 426 
 
 4. ia cases of bargains with expectants. See Expectant. 
 
 5. as to statutory omissions from prospectuses of companies, 489 — 497. 
 
 And see Peospectits. 
 
 6. as to judgments obtained by concealment, 512 — 514 
 
 7. as to grants from Crown or State so obtained, 519—521 
 
 8. as to composition arrangements with creditors, 530, 531 
 
 9. as to misfeasance, 540 — 544 
 
 (B) On Party Charged with Non-Disclosure, &c. — 
 
 1. to establish affirmative answers in cases of negotiation for certain con- 
 
 tracts, 173, 174 
 
 2. the Kke, in cases of relation of confidence, 326 
 
 3. influence, 365, 366 
 
 4. in statutory cases of prospectuses, 500, 501. And see Pbospectus. 
 
 as to what these affirmative answers are in the several classes of case. See 
 ApEiEMATivB Answers. 
 
 (C) As to Particular Issues — 
 
 on party to whom knowledge otherwise imputable through agent, to prove 
 
 agent's fraud on himself, 38 
 on party complaining to prove facts necessary to defeat waiver, 182 
 on party complaining to prove absence of value, notice, or bad faith against 
 
 assignee of chose in possession, 247, 248 
 on party charged to prove " contract for truth," 149 
 in case of negotiable instruments, 245, 246 
 
 BURDEN ON LAND. See Inoumbkance. 
 
 BUSLNESS, 
 
 evidence of persons conversant with the particular, when admissible on the 
 
 question of materiality, 18, 229 
 presumptive knowledge of established usages in, 24 — 27 
 when knowledge of agent employed in the particular, is, and when it is not, 
 
 imputed to the principal, 34 — 36 
 commissions, allowances, profits, &c., received by an agent in the known course 
 
 of the particular, in which he is employed, need not be disclosed, 26 
 ignorance of, in general, or of the particular, may entitle a person negotiating 
 
 for a partnership to disclosure from person proposing the partnership who is 
 
 conversant therewith, 110, 111 
 real value of, must be disclosed to company by promoter who is selling, 291 
 interest in similar or competing, must be disclosed by a partner to his firm, 304' — 
 
 306 
 capacity of servient party in, when irrelevant, 452, 453 
 date at which company entitled to commence, as affecting statutory disclosure in 
 
 prospectuses, 477 
 price of goodwill of, to be disclosed in prospectus, 479 
 contracts in ordinary course of, need not be stated in prospectus, 481 
 
 CALCULATION, 
 
 when presumptive knowledge of rules and methods of, and when not, 22, 23 
 of damages. See Damages. 
 of value. See VALrE. 
 
 [ 13 ] 
 
Index. 
 
 CALLS, 
 
 injunction against making, when ancillary relief to rescission, 211, 212 
 
 CANCELLATION, of instrument, when ordered, 208, 209 
 
 CANCELLED, 
 
 contract, though, may be material to be disclosed in a prospectus, 493 
 
 CAPACITY, 
 
 in sense of status or persona. See Chabactek (in sense of Capacity). 
 individual, of parties, in relations of influence, when irrelevant, 452, 453 
 
 CAPTURE, 
 
 of vessel, or liability to, when to be disclosed in negotiation for marine insurance, 
 65 
 
 CARE, CAUTION. See Negligence. 
 
 CARGO, 
 
 mode of loading, or stowing, when material in marine insurance, 69 
 over-valuation of, when material in like cases, 66 
 
 CASH, 
 
 credit, guarantee of, what duties of disclosure involved in, as distinct from 
 
 guarantees of fidelity, 90, 91 
 paid or payable for property, to be disclosed in prospectus, 479, 480 
 interest, as well as share interest, of directors in the promotion of the company, 
 
 to be stated in prospectus, 483, 484 
 minimum subscription stated in prospectus must be paid and received in, 505 — 
 
 507 
 
 CASUISTRY, 
 
 popular and philosophical, as to duties of disclosure and good faith, compared 
 with jurisprudence, 573 — 600 
 
 " CATCHING," 
 
 " conditions of sale," relieved against, 97 
 
 attempted waiver by, invalid, 177 
 " bargains with expectant heirs." See Expectant. 
 
 CAUSE OF ACTION, 
 
 for non- disclosure, &c., what constitutes. See Btjbdbn oe Allegation and 
 
 Pkoof. 
 joinder of, generally, 540 
 
 in prospectus oases, 508 
 
 CAUTIONARY OBLIGATION, CAUTIONER, 
 
 Scots law of disclosure as to, same as English as to duty of disclosure in negotia- 
 tion for contract of suretyship, 618. And see Subety. 
 
 CESSATION. See Tebmination. 
 
 CESTUI QUE TRUST, 
 
 when affected by knowledge of trustee, 32 
 
 duties of disclosure, &c., owed by trustee to, 279 — 285. And see Teustee. 
 
 where no duty owed to, 307, 308 
 
 no fiduciary relation between one, and another, 308, 309 
 
 CHAMPERTY, 
 
 sale of naked right to sue for non-disclosure savours of, 242 
 temptation and tendency to commit, in cases of relation between solicitor and 
 client, 378 
 
 [ 14 ] 
 
Index. 
 
 CHANCE, 
 
 of life or death, facts affecting, to be disclosed in negotiation for life and health 
 insurance, 70 — 73 
 
 CHANCERY, courts of, having jurisdiction in cases of non-disclosure, 532—534 
 CHANGE. See Alteration. 
 
 CHARACTER (IN SENSE OP CAPACITY), 
 
 knowledge of agent not acting in his, as such, is not imputed to the principal, 
 
 34—36 
 double, of vendor and promoter, must be disclosed to the company, 289, 290 
 person who is both agent, and creditor, if only acting in latter character owes no 
 
 fiduciary duty to his debtor and principal, 367, 368 
 burden on such person to prove that he was acting solely in the latter character, 
 
 of trustee, &c., " shaking off," what kind of, liberates the party charged from his 
 
 fiduciary obligations, 327, 328 
 of trustee, solicitor, or other relation of confidence or influence, when united 
 
 with character of mortgagee, may render such mortgagee liable to fiduciary 
 
 duties to which he would not otherwise be subject, 417 
 when rescission may be ordered of an instrument in one, whilst leaving it to 
 
 stand in another, 206 
 
 CHARACTER (IN SENSE OP NATURE OR SUBSTANCE), 
 
 of business or transaction to be regarded in determining any question of 
 
 materiality, 16 
 of relation between parties, no presumptive knowledge of customs which entirely 
 
 alter, 26, 27 
 of facts of which disclosure is alleged to be waived must be disclosed, 176, 177 
 of property subject of transaction, entire alteration of, precludes relief by way 
 
 of rescission, 201, 202 
 of agency, questions as to, how far law, and how far fact, 234, 235 
 of relation, duty to disclose transaction which wholly alters, 278 
 
 CHARACTER (PERSONAL), 
 
 imputations upon, when unnecessary,. irrelevant, and visited with costs, 170 — 
 
 172, 321—323, 424, 425, 452, 453, 545, 546, 551 
 duty of disclosure as to, by parties negotiating with a view to marriage, 112 — 116 
 taking advantage of infirmity in, when a circumstance indicative of undue 
 
 influence in fact, 397 
 attacks upon, of persons who are the natural protectors of the servient party, 
 
 for the purpose of isolating him from their advice and protection, 398 
 
 CHARGE, 
 
 in sense of imputation on character. See Chabacteb (Pebsonal). 
 in sense of incumbrance on property. See Inctjmbbance. 
 
 CHARTER, 
 
 obtained by concealment, relief in respect of, 517 — 521 
 company incorporated by, not within statutory prospectus law, 475 
 
 CHARTER-PARTY, CHARTERED VESSEL, PREIGHT, &c. -See Maeine 
 Instjeancb. 
 
 CHASTITY, vital to promises of marriage, 112 
 
 CHATTELS, REAL. See Land, and Vendob (A). 
 
 CHILD, relation between, and parent. See Paeental Relation. 
 
 CHOICE. See Election. 
 
 [ 15 ] 
 
Index, 
 chose in action, 
 
 ia property, for purposes of statutory rules as to presumptive knowledge, 48, 49 
 
 duties of disclosure, 78, 79 
 assignee of, takes subject to equities, except in case of negotiable instruments, 
 
 to which special rules applicable, 244 — 246 
 effect of assignment of, in " confidence " relations, 360, 361 
 " influence " relations, 466 
 
 CHOSE IN POSSESSION, 
 
 assignee of, passing under voidable contract, takes free from assignor's equity 
 to rescind, unless volimteer, or notice, or bad faith, the burden of proving 
 each which is on party complaining, 246 — 248 
 afiect of assignment of, in relation of confidence, 361 
 
 influence, 466 
 
 CLOG ON EQUITY OF REDEMPTION, doctrine of, discussed, 416—417 
 
 CmCULAB, 
 
 when a prospectus, for purposes of statutory disclosure, 473, 474 
 in ambiguous terms to shareholders, no effect on damages, 504 
 
 CIRCUMSTANCES, 
 
 subject of duty of disclosure, what are, 13 — 16 
 
 material, what are. See Materiality. 
 
 altered, and supervening, effect of, in creating duty of disclosure, where none 
 
 in flrst instance. See SuTERVENma Ciectjmstances. 
 special, effect of, on costs, 545 — 548 
 
 "CIRCUMSTANCES AND CONDITIONS OF THE PARTICULAR CASE," 
 a relation of influence, described as above by Lord Hardwicke, but sometimes 
 
 called " influence in fact," may be constituted by, 388, 389 
 must be such as to indicate weakness on one side, and unconscientious advantage 
 
 taken of that weakness on the other, the weakness being physical, mental, 
 
 moral, or financial, and the advantage being taken by various methods, which 
 
 are classified, and illustrated, 390 — 398 
 any of the " suspected " relations of infiuence may co-exist with the relation 
 
 constituted by, 396, 397 
 relation constituted by, in respect of bargains with " expectants." See 
 
 Expectant. 
 when, in case of relation constituted by, a third person who leaves dominant party 
 
 to exert the influence is liable to the servient party, 398 
 
 CLAIM, 
 
 statement of. See Peoobdtjke. 
 
 abandonment of, by compromise. See Compromise. 
 
 in misfeasance proceedings. See MiSFBASAifCE. 
 
 against estate of insolvent person or company. See Insolvency. 
 
 CLANDESTINE. See Secrecy. 
 
 CLASS, 
 
 of transaction, to be regarded in questions of materiality, 16 
 
 of facts required to be waived, must be communicated, 176, 177 
 
 of persons conversant with the particular business, evidence of those belonging 
 
 to, admissible for purposes of determining materiality, 172, 173, 229 
 persons belonging to a particular, presumed to have knowledge of matters of 
 
 business with which such class is famfliar, 21 
 waiver set up by virtue of document addressed to a, when valid, and when not, 
 
 181 
 of third persons, concealment from, 522, 523 
 
 [ 16 ] 
 
Index. 
 
 CLASS — continued. 
 
 representatives of, when aUowed to sue, or to be sued, on behalf of themselves 
 
 and other members of class, 538, 539 
 offer of shares for subscription to a, when a prospectus, 473, 474 
 of shares, special voting rights attached to, must be disclosed in prospectus, 484 
 
 CLAUSE, 
 
 usual. 8ee Usual. 
 unusual. See Untistjal. 
 of waiver. See Waivee. 
 
 CLEAR. See Unambigtjous. 
 
 CLIENT. See Solicitor. 
 
 CO-ADVENTURERS. See PAKiNEESHre. 
 
 CO-AGENTS, when jointly and severally liable for non-disclosure, and when not, 359 
 
 CODIFYING STATUTES, 
 
 generally, as to non-disclosure, 467 
 as to presumptive knowledge, 48 — 50 
 
 COERCION, 
 
 in relation of influence created by the circumstances, 397 
 exploded doctrine as to presumption of, in mortgages, 415 — 417 
 of debtor by favoured creditor, 527 
 
 exercised under guise of offer, prevents such oiier from having any affect on the 
 costs, 451, 452, 550, 651 
 
 COLLUSION 
 
 between one of two related parties and the agent of the other not to com- 
 municate to the latter's principal, results in such principal not having pre- 
 sumptive knowledge, 37 
 
 in mortgage cases, between vendor of mortgaged property and purchaser, 311, 
 312 
 
 between parties in cases of judgment to prejudice of third party, 510, 515 
 
 order in " test actions " framed so as to prevent, 531 
 
 with third person to disguise identity of a party to a relation of confidence who is 
 dealing with the other party thereto, 357, 358 
 
 COLONIAL,! 
 
 advocate, in the same position as a sohcitor, for the purpose of the relation of 
 
 influence between legal adviser and client, 379 
 judgment, deemed a foreign judgment, 516 
 
 COBIMERCIAL, 
 
 instruments, presumptive knowledge of usual, but not of unusual, clauses and 
 
 provisions of, 24—27, 40-^3 
 custom, " slip " equivalent to policy, in marine insurance, by, 156 
 negotiable instruments by, 245, 246 
 presumptive knowledge of established, 24 — 26 
 no presumptive knowledge of recent, or dishonest, 26, 27 
 transactions, reluctance of courts to extend rules of " constructive notice " to, 
 
 65—57 
 parentage, a possible theory of the fiduciary position of promoters, 288, 289 
 trustees, directors regarded as, 294, 296 
 
 COMMISSION, 
 
 receipt of, when promoter must disclose to company, 291 
 when agent must disclose to principal, 299 — 306 
 
 [ 17 ] 
 
Index. 
 
 COMMISSION— continued. 
 
 when presumptive knowledge of custom for agent to receive from the opposite 
 
 principal, 25, 26 
 amount or rate of, subject to statutory duty of disclosure in prospectuses of 
 
 companies, 480 
 statutory relief where non-disclosure of, in prospectus, 480, 507 
 
 COMMON KNOWLEDGE, presumptive knowledge of matters of, 21 
 
 COMMON LAW, 
 
 rules as to presumptive knowledge, how affected by statute, 48 — 55 
 rights and liabilities, how affected by statute, 467, 468 
 
 warranties are conditions. See War- 
 
 BANTT. 
 
 remedies, when available in case of statutory wrongs, 501 — 503 
 
 expressly preserved by enactment as to prospectuses, 507, 508 
 cause of action, misfeasance claim must show a, 642 
 
 COMMUNICATE, COMMUNICATION. See Disclosure. 
 
 COMMUNITY, 
 
 generally. See Public (The). 
 good of the. See Public Policy. 
 
 COMPANY, 
 
 when knowledge of executive or officer of, is imputed to, 31, 32, 355, 356 
 
 in case of a common officer of two companies, when his knowledge is imputed to 
 
 either, 33 
 stranger has presumed knowledge of external position of, only, 45, 46 
 member of, has irrebuttably presumed knowledge of contents of memorandum 
 
 and articles of association, because he is a statutory party thereto, 46 
 disclosure to, and knowledge of, when proved by disclosure to, or knowledge of, 
 
 the executive, and when only by disclosure to, or knowledge of, general 
 
 meeting of shareholders, 355, 356 
 suit in name of, where majority of shareholders is oppressively using its voting 
 
 power to commit an iUegal or fraudulent act, 356, 357 
 when subject to fiduciary duty to third persons, or individual member, without 
 
 its officers being personally so subject, 359 
 is capable of " influence," 465 
 
 what is a, for purposes of statutory prospectus law, 475, 476 
 may, for purposes of statutory prospectus law be a party aggrieved, 485 
 
 be a party liable, 488 
 generally, as to duty of disclosure in prospectus of. See Pbospectus. 
 fiduciary duties of directors and officers to. See Dieector. 
 
 promoter to. See Promotee. 
 liquidation of. See Liquidation. 
 
 misfeasance proceedings in winding up of. See Misfeasance. 
 private, statutory definition of, 470, note (nn) 
 
 COMPENSATION, 
 
 agreement to accept, as substitute for rescission, is good answer to claim to 
 rescind, unless fraud, or difference in substance between the property without, 
 and the property with, the undisclosed defects, 181 — 184 
 
 the like, in the case of an express waiver of both rescission and, 184, 185 
 
 specific performance with, when granted, and when not, 216 
 
 in nature of damages, as remedy for misfeasance, 544 
 
 COMPETENT, 
 
 advice, meaning of, 442, 443. And see Independent and Competent Advice. 
 
 [ 18 ] 
 
Index, 
 complete, 
 
 disclosure, what is, 7 — H 
 requisite in — 
 
 negotiation for certain contracts, 157 — 160 
 relations of confidence, 273—278, 329—331 
 relations of influence, 434 — 441 
 prospectuses of companies, 484 
 knowledge of undisclosed fact, must be proved against the party charged, to 
 
 support case of non-disclosure, 161 — 164 
 enough for party complaining to show that his knowledge of undisclosed fact 
 
 was not, 167 
 to support plea of affirmation it must be shown that party complaining had 
 complete knowledge of all material facts and rights, 185 — 187, 334, 335, 447 — 
 450 
 discovery in action, when, and at what stage, to be given, 535, 536, 537 
 trustee, what is a, 279, 280 
 
 promoter is not a, 287 — 289 
 whether director is a, 294, 295 
 mortgagee is not a, 310, 311 
 prospectus, for purposes of the statutory law as to disclosure in prospectuses, 
 476 
 
 COMPLETION, 
 
 of contract sought to be set aside, effect of, on relief — 
 generaUy, 201, 202 
 in relations of influence, 457, 458 
 when contract of which there has been, is required to be disclosed in a prospectus, 
 and when not, 479, 493 
 
 COMPOSITION ARRANGEMENT WITH CREDITORS, 
 
 in negotiation for, any agreement stipulating for a private advantage to a 
 
 particular creditor, must be disclosed to the other creditors, 523, 524 
 classification of various forms of agreement whereby one creditor is secretly 
 
 favoured, in negotiations for, 524 — 526 
 how such secret agreement, in negotiations for, are relieved against, and between 
 
 what parties, 526 — 530 
 burden of proof in proceedings in respect of non-disclosure of such agreements 
 
 in negotiations for, 530, 531 
 affirmative defences, in the like, 531 
 
 COMPROMISE, 
 
 in negotiation for, it generally happens that none of the parties desire to know the 
 exact truth, 98— 100 
 
 courts anxious to uphold a, particularly when it is in the nature of a family 
 arrangement, 101 — 103. And see Family Abbangembnt. 
 
 duty of disclosure in negotiation for, 103 — 106 
 
 not invalidated merely because subsequent events show it to have been im- 
 prudent, or because of " hardship," &c., in the popular sense, 107, 108 
 
 consent order giving effect to, may be invalidated, for same reasons as the 
 compromise is, 510, 511 
 
 with creditors. See Composition Abkangement with Ckeditors. 
 
 CONCEALMENT, 
 
 inconvenience of use of the word, because of its double sense of mere non-dis- 
 closure, and also of active and fraudulent measures to hide the truth, 160, 
 
 559 
 in sense of non-disclosure simply. See Non-Disclosuee. 
 in sense of active devices to disguise or hide defects, or conceal facts — 
 effect of, on negativing a plea of waiver, 182—185 
 
 [ 19 ] 
 
Index. 
 
 CONCEALMENT— coBimwaZ. 
 
 in sense of active devices to disguise or hide defects, or conceal facts (cont.) — 
 of identity of persons, or nature of ceremony, may be ground for annulling 
 
 marriage, 116 — 118 
 of any other matter, has no effect on marriage, 200, 201 
 of offers for reversion, material as to value, 463 
 actionable, though no duty of disclosure, when, 120 — 140, 178, 179 
 
 CONCLUSION OF CONTRACT, 
 meaning of, 156 
 
 " slip " in marine insurance is, not the policy, 156 
 undisclosed fact must be shown to have existed before, 155 
 party charged must be shown to have had knowledge before, 163, 164 
 enough for party complaining to prove that he was ignorant of the undisclosed 
 
 fact before, 169, 170 
 period of duty of disclosure may be extended beyond, e.g. in insurance cases, 
 
 163, 164 
 duty of disclosure in suretyship cases after, arises from the contract itself, 95, 
 
 96. And see Subbty. 
 must be shown as condition of rescinding the contract, 199, 200 
 effect of, on duty to disclose material contracts in prospectuses, 492 
 
 CONDITION (IN JURIDICAL SENSE), 
 
 disclosure is implied, of validity of contracts uberrimce fidei, 59 
 
 inherent in contracts of sale, that title be disclosed, 79, 220 
 
 " catching," in contracts of sale, 97, 177 
 
 " tricky," in prospectuses, 97, 98 
 
 of sale, not particulars, proper place for term waiving rescission or disclosure, 
 
 181 
 in contracts of insurance that, if non-disclosure, premium is not to be returned, 
 
 or that policy is to be void, 204, 205 
 of executing composition arrangement, when void unless disclosed to general 
 
 body of creditors, 528, 529 
 usual, in contracts or instruments, need not be disclosed, but unusual, must be. 
 
 See Unttsital, and Usual. 
 requiring waiver of right to disclosure, or to relief. See Waivbk. 
 express, that complete truth of answers to questions shall be basis of contract 
 
 of insurance, effect of. See Wabkanty. 
 
 CONDITION (IN SENSE OE STATE), 
 
 of a physical thing, may be fact material to be disclosed, 13 
 
 of a man's mind, may be a material fact, 14, 15 
 
 of bodily or mental health, when material in life insurance, 70 — 73 
 
 contracts to marry, 113 — 116 
 of servient party's mind, will, body, and estate, when material, in certain relations 
 
 of influence, 392—397 
 physical, of property sold, when there is no duty to disclose, 138 — 141 
 
 CONDUCT, 
 
 of party charged may be relevant to materiality, 17, 18 
 
 when duty of disclosure not otherwise incumbent on a party may be created by 
 
 his, 120—123 
 imphed waiver of disclosure by, 179 — 181, 334. And see Waivee. 
 implied affirmation by, 186, 335, 336, 449. And see Aitibmation. 
 constituting relation of promotership, 286, 287 
 
 agency, 316, 317 
 improper. See Miscondtjct. 
 
 CONFIDENCE, 
 
 on one side, and exclusive knowledge on the other, is the foundation of the duty 
 of disclosure. See Thboby. 
 
 [20 ] 
 
Index. 
 
 GONFIDE'NGE— continued. 
 relations of : — 
 
 general description of, and statement as to duties in, 273—278 
 distinguished from relations between negotiating parties for certain 
 
 contracts, 272 
 distinguished from relations of influence, 272, 273, 362, 363 
 duties of disclosure, in two senses of the word, and of giving disinterested 
 advice and fair value, and of not disguising identity, where dealing direct, 
 in, 273, 274 
 rules as to, applied to three species of. See Tettstee, Peomotee, and 
 
 Agency (B), respectively, 
 what are not, 306—313 
 
 burden of proof on party complaining in, 314 — 319 
 affirmative answers available to party charged in, 326 — 336 
 relief and remedy in proceedings for breaches of duty in, 338 — 352 
 questions of law and fact in proceedings as to, 352, 353 
 parties in such proceedings, 353 — 361 
 laxity in use of the term, and, generally, of the language employed in discussing 
 
 relations of, 111, 112, 567 
 ethical views as to duties involved in, as compared with jiiridioal, 580 — 584 
 Roman law as to relations of, 606, 607 
 Scots law as to relations of, 618 
 
 CONriRMATION. See Ateiemation (Coneiemation). 
 
 CONSCIENTIOUS, 
 
 use of confidence or influence must be proved, in order to sustain impeached 
 
 transaction. See Peopeibty oe Teansaction. 
 motives of party charged, when irrelevant. See Motive. 
 
 CONSCIOUSNESS, 
 
 of materiality, shown by conduct of parties, when relevant, 17 — 19 
 
 of illegality of insurance by insurer, the assured being unconscious thereof, 
 
 renders premium returnable : but where consciousness of illegality on both 
 
 sides, or want of it on both sides, premium not returnable, 205 
 of violation of duty, need not be proved by party complaining, but only the fact 
 
 of non-disclosure or other breach, 170, 171, 321—323, 424, 425 
 of impropriety of transaction shown by false recitals, statements, &c., 398, 420, 
 
 437 
 absurdity of application of term, to " fraud," 557 
 
 CONSENT, 
 
 of creditor required to vary contract between him and surety, 95, 96 
 
 absence of real, must be proved to annul marriage, 117 
 
 of party complaining to waiver must be shown, 181 
 
 of infants, only to be obtained through the Court, 328 
 
 of principal, to receipt of commission by agent, must strictly be shown, but 
 
 usually inferred from disclosure or knowledge, 331 
 of ancestor, in " expectant " cases, when a good answer to claim by expectant, 
 
 412, 449 
 orders by, when set aside for non-disclosure, 510, 511 
 when " silence gives," and when not, 121, 127, note (t), 331 
 
 CONSIDERATION, 
 
 valuable. See Value. 
 
 for compromise, abandonment of uncertain rights, 108 
 
 false statement of, by party charged, important in considering the propriety of 
 
 the transaction impeached, 398 
 for shares paid otherwise than in cash, to be disclosed in prospectus of a company, 
 479 
 B.N.D. [ 21 ] 2 T 
 
Index. 
 
 CONSIDERATION— conJJjiMed!. 
 
 for purchase or loan of property, to be stated in prospectus, 479, 480 
 for payments made to promoter, to be stated in prospectus, 481 
 for judgment debt may be examined in bankruptcy court, 515 
 transactions for. See Contract. 
 without. See Gift. 
 
 CONSTITUTION, 
 
 of company, how far presumptively known to member, and to stranger, respec- 
 tively, 45, 46 
 officer created by, of company, liable to misfeasance proceedings, 543 
 
 CONSTRUCTIVE, 
 
 notice or knowledge. See Bjtowledge (B). 
 
 trustee, liable to the same duties of disclosure as a complete trustee, when, 279, 
 
 280 
 trustee for company, in what sense a promoter is, 287 — 289 
 
 a director is, 295 
 trustee for mortgagor, mortgagee ordinarily is not, 310 — 313 
 infancy of servient party in certain relations of influence, 402 
 " fraud," an incorrect expression, 657 — 559 
 criticism of the word, as applied to notice or knowledge, 669, 670 
 
 CONTENTS, 
 
 of document, when knowledge of, is presumed, and when not, 39 — 45 
 of prospectus, statutory requirements as to, 477 — 482 
 
 CONTINGENCY. See Event. 
 
 CONTRABAND OF WAR, disclosure required in marine insurance as to, 66 
 
 CONTRACT, 
 
 is a " fact " which may be material to be disclosed, as such, whether valid or not, 
 
 16, 16, 154 
 every material, required by statute to be stated in prospectus of company, 
 
 481 — 483, 493. And see Prospectits. 
 anything likely to affect judgment of party in determining whether to enter into, 
 
 or not, may be material, 16, 17 
 what clauses or conditions in a mercantile, a party is presumed to have knowledge 
 
 of, and what not, 26 
 uherrirruB fidei, what is. See Uberrima Fides and Negotiation. 
 
 full disclosure is implied condition of, 69 
 of insurance, nature of, aleatory, 61, 62 
 of life insurance, nature of, 70 
 of marine, and fire, insurance, nature of, as distinguished from that of life 
 
 insurance, 74 
 of sale. See Vendor. 
 of suretyship. See Sttrety. 
 of compromise, 98 — 108 
 of waiver. See Waiver. 
 for partnership, 110 — 112 
 to marry, 112—116 
 
 of marriage, as distinguished from contract to marry, 116 — 118 
 conclusion of. See Conclusion of Contract. 
 completion of. See Completion. 
 
 express, for full disclosure in insurance cases. See Warranty. 
 conditions in, as affecting right to disclosure, or consequences of non-disclosure. 
 
 See Condition (in Juridical Sense). 
 with third person for commission or remuneration, must be disclosed in relations 
 
 of confidence, 299—304 
 
 [22 ] 
 
Index. 
 
 CONTRACT— cowemwei. 
 
 voidable, not void, for non-disclosure, 197—199, 204, 205, 338, 369, 454 
 
 sought to be rescinded, must be shown to be subsisting, and not void, or illegal, 
 
 or something more than contract, 199 — 201 
 difficulties in executing engineering, need not be disclosed, 141 
 by which relation of confidence created, must be proved, 314 — 317 
 new, " shaking off " relation, proof of, may be affirmative defence, 327, 328 
 but, in case of infants, such contract must be sanctioned by Court, 328 
 with agent of party complaining, relief against third person who has entered 
 
 into, for commission or profit, 348, 349 
 by debtor with favoured creditor, must be disclosed to other creditors, 523 — 531 
 implied, to perform obligations of trust, in cases of non-disclosure, results in 
 
 claim being subject of proof in insolvency, 351, 352, 489 
 election to adhere to, or avoid. See Election. 
 affirmation, or confirmation, of impeachable. See Affirmation. 
 rescission of impeachable, conditions of, and rules as to. See Rescission. 
 expenses under, but not those arising out of, may be subject of indemnity, in 
 
 relief against non-disclosure, 210 
 non-disclosure as defence to proceedings for enforcement of. See Defensive 
 
 Pbocbedings. 
 
 CONTRIBUTION, none between tortfeasors, whether statutory or not, 488 
 
 CONTRIBUTORIES IN LIQUIDATION OE COMPANY, 
 
 liquidator may settle a director who has received his qualification from promoter 
 
 on Ust of, 351, 352, 541 
 rights of, against a " misfeasant," 541 
 
 CONVENT, gifts to, when invalidated, 385. And see Sacebdotal Relation. 
 
 CONVEYANCE, 
 
 contract completed by, when not subject of rescission, 201, 202 
 
 may be rescinded where fraud or substantial error, 201,., 
 
 202 
 will be set aside in cases of influence as a rule, 457, 458 
 of specific property, carries with it equity to avoid, 241, 242 
 
 CONVEYANCER, 
 
 certificated, may be deemed within the relation of legal adviser and client, 379 
 of Court, is in same position as conveyancing counsel of vendor in ordinary case,. 
 for purpose of duties of disclosure, 222 
 
 CONVEYANCING LAW, 
 
 rules of presumptive knowledge in, 48 
 
 " sub-purchaser " according to, is a " sub-purchaser " for the purpose of certaini 
 matters required by statute to be disclosed in prospectuses, 479, 480 
 
 CONVICTION, 
 
 personal, of licence-holder, not a matter of title requuing disclosure by vendor 
 
 to purchaser, 83 
 
 CORRECTION, , , . ^ t 
 
 of opposite party's mistake, when required to be made, as part of the duty of 
 disclosure, and when not, 125 — 130, 134 — 143 
 
 CORRUPTION 
 
 of agent by' third person. See Commission and Profit. 
 
 relief in respect of, 348, 349. And see Relief (B). 
 
 legislation against, 467, 583 
 
 parties engaged in, jointly and severally liable, 359 
 
 [23 ] 
 
Index. 
 
 COSTS, 
 
 of investigating title, when part of relief in vendor and purchaser cases, 211, 221 
 undue influence of solicitor may be relieved against in proceedings for taxation 
 
 of, 459 
 special orders as to, jurisdiction to make, unless no materials on which discretion 
 
 can be exercised, 545, 546, 551 
 imnecessary and improved charges of fraud visited with pimitive orders as to, 
 
 of various kinds, 645, 546 
 where no legal duty of disclosure, conduct of successful party may justify order 
 
 depriving him of, or otherwise afiectiog him in the matter of, 144, 323, 546, 
 
 547, 550 
 refusal or withholding of reasonable explanation may affect successful party's 
 
 right to, 646, 647 
 where party guilty of non-disclosure, and only succeeds by supervening, or 
 
 accidental, circumstances, adverse order as to, may be made, 547 
 mode of dealing with oSers before action, how affecting the, 547, 548, 550, 551 
 delay, as affecting, 548 
 of formal parties, how dealt with, 648, 649 
 when solicitor-defendant, though escaping judgment, made to guarantee his 
 
 co-defendant's, 549 
 special code of rules, and various forms of order, made as to, in cases of bargains 
 
 with " expectants," 660, 651 
 effect of illegality on, when point raised by Court, and not by the parties, 548 
 may be affected, where party resorts to action instead of summary procedure 
 
 authorized by statute or riiles of Court, 515 
 of amendment, or adjournment, where new case of non-disclosure raised at the 
 
 trial for the first time, 536 
 solicitor not entitled to receive profit costs, without disclosure to client to whom 
 
 he stands in another fiduciary relation, 300, 302 
 
 COUNSEL, 
 
 within the relation of legal adviser and client, 379 
 opinion of, when material to be disclosed, 15 
 
 does not support the statutory plea of " mistake in fact," in cases of 
 non-disclosure in prospectuses, 501 
 actual knowledge of, when presumptive knowledge of client, 48 
 conveyancing, of Court, regarded as counsel of the vendor, in sales under direction 
 of the Court, for purposes of duty of disclosure, 222 
 
 COUNTERCLAIM, 
 
 for rescission, on the ground of non-disclosure, &c., 207 
 for money had and received, on like grounds, 212, 213 
 non-disclosure may be set-up as reply to, 214 
 
 COUNTY COURT, jurisdiction of, in proceedings for non-disclosure, &c.', 633 
 
 ■COURSE, 
 
 and execution of agency. See Ageno't. 
 
 ordinary, of business, or events. See Obdinaey. 
 
 holder in due. See Negotiable Instrument, Chose in Possession. 
 
 ■COURT, 
 
 sales by order of, subject to same rules of disclosure as other sales, though relief 
 
 is given in a different form, 221, 222, 510, 511 
 can alone give consent for, or sanction contract with, infants, 328 
 relief against judgments obtained by concealment from. See Judgment. 
 jurisdiction of various kinds of, in non- disclosure cases, 532 — 534 
 
 COVENANT, 
 
 presumptive knowledge of usual, in head lease, or documents of title, and no 
 duty therefore to disclose, 39, 40, 67 
 
 [ 24 ] 
 
Index. 
 
 COVENANT— coniinuerf. 
 
 no presumptive knowledge of unusual, in such documents, and any such unusual 
 
 covenant, if onerous, or otherwise material, must be disclosed, 40, 41, 67, 81 
 relief may be given in respect of one, leaving another in the same instrument, 
 
 u severable, to stand, 206 
 
 COVERING UP, 
 
 faults or defects, renders party liable, though no duty to disclose, or though 
 sale " with all faults," or " at all risks," &c., 121, 178, 179 
 
 COVERTURE, no duty to disclose, but must not be misrepresented, 142 
 CREDIT, duties of disclosure to guarantor of. See Sttbety. 
 CREDITOR, 
 
 duties of, to surety, as regards disclosure. See Surety. 
 
 execution, not an assignee for value, 247 
 
 judgment, who is also agent and attorney for the judgment debtor, own no 
 
 fiduciary duty in the former character, 307, 308 
 secured, (mortgagee) owes no fiduciary duty, as such, to the mortgagor, and 
 
 as such, stands in no relation of infiuence to him, 310 — 313, 415 
 agreement conferring special advantages on, without communication to general 
 body of creditors, in cases of composition arrangements, may be relieved 
 against. See Composition Akkastgements with Cbeditoes. 
 rights of, as against a " misfeasant," in liquidation of company, 541, 542 
 
 CRIMINAL, 
 
 liabUity for non-disclosure not the subject of this work, 6 
 
 conduct of person whose fidelity is guaranteed, or even suspicion thereof, must 
 
 be disclosed to surety, 91 — 93 
 conduct of person whose credit merely is guaranteed, need not be disclosed, 
 
 90, 91 
 conduct of person engaged to be married, when material to be disclosed to the 
 
 other party, 113, 114 
 
 CROWN, 
 
 grant of estate, patent, charter, licence, &c., by concealment of material facts 
 
 from, or from any department or officer of State, is subject of relief by proper 
 
 procedure, 517 
 parties to proceedings for invalidation of grant obtained by such concealment 
 
 from, 518 
 forms of remedy and relief, where grant so obtained from, 518, 519 
 burden of proof on party aggrieved by grants so obtained from (existence of duty 
 
 and of undisclosed fact, knowledge of grantee, ignorance of Crown), 519 — 521 
 non-disclosure presumed from omission of undisclosed matter from recitals in 
 
 grant by, 520 
 ignorance of, presumed from such omission, unless inquiry on writ of ad quod 
 
 damnum, when presumption is the other way, unless inquiry misconducted, 
 
 520, 521 
 knowledge on part of grantee of previous inconsistent grant by, is presumed from 
 
 enrolment thereof, 520 
 
 CUSTODY, 
 
 of third person, presumptive knowledge of deeds or documents of title in, unless 
 reasonable excuse given for non-production, 41 — 44 
 
 CUSTOM, 
 
 of particular trade, or agency, when knowledge of, is presumed, 24 — 26, 156 
 
 is not presumed, 26, 27, 332 
 evidence as to, when relevant to question of materiality, 229 
 instruments made negotiable by mercantile, 245, 246 
 duties of agent by, must be proved by party complaining, 316 
 ethical views as to, compared with jurisprudential, 577 — 579 
 
 [25 ] 
 
Index, 
 customer, 
 
 of bank, guarantee of overdraft of, duties of disclosure in respect of, 90, 91. 
 
 And see Surety. 
 presumptive knowledge by bank of terms of security lodged by, as against 
 
 that customer, but not as against any other, 40 
 
 DAMAGES, 
 
 not ordinarily recoverable for non-disclosure, 196, 459 
 
 but available form of relief, if non-disclosure amounts to fraudulent misrepresen- 
 tation, or other fraud, 121, 128, 129, 133, 134, 224, 225, 459 
 amount of, may be affected by conduct of party seeking to enforce a contract, 
 
 though defence of non-disclosure is not established, 144 
 non-disclosure good defence to action for, when, 214 
 action for, lies against person who has corrupted the agent of party complaining, 
 
 348, 349 
 measure of, in claim against such corruptor, is the amount of the bribe, because 
 
 price presumably enhanced by that amount, whether bribe actually paid or 
 
 not, 349 
 right to, as against such corrupter, is cumulative to, and independent of, right 
 
 to recover amount of bribe from agent, the two sums being (though equal) 
 
 distinct sums, 349 
 against such corruptor, subject to reduction by amount actually recovered from 
 
 agent, 349 
 liabUity to, of such corruptor, transmissible as in any other case of damages for 
 
 tort, 360 
 recovery of, proper remedy in statutory proceedings for breach of duty of 
 
 disclosure in prospectuses, 485, 501 — 503. And see Pbospbctus. 
 rules for ascertainment of, 503, 504 
 right to, in cases of statutory non-disclosure, transmissible as in any case of 
 
 non-statutory tort, 485, 488, 489 
 party aggrieved, in cases of omission of prescribed matters in prospectus, must 
 
 prove, and that such damages flowed from the statutory breach, 496, 497 
 compensation in nature of, in cases of misfeasance, 544 
 expenses arising " out of " contract rescinded for non- disclosure are in the nature 
 
 of, and cannot therefore be recovered, 210 
 
 DATE. See Time. 
 
 DAUGHTER, and parent. See Paeental Relation. 
 
 DE FACTO, BE JUBE, 
 
 directors of company, position of respectively, in misfeasance proceedings, 
 543, note (c). 
 
 DEALINGS, 
 
 in shares, when evidence of value against bribed director, 345, 346 
 
 with " expectant," as to his expectancy. See Expectant. 
 
 direct, between persons standing to one another in a relation of confidence. See 
 
 CouriDENOE. 
 generally. See Teansaction. 
 
 DEATH, 
 
 of party oomplaming of non-disclosure, transmission of rights on, as in other 
 cases of contract, — 
 in negotiations for transactions uherrimm fidei, 241 
 in relations of confidence, 356 
 in relations of influence, 464 
 
 [26 ] 
 
Index. 
 
 BEATR— continued. 
 
 of party charged, transmission of liability on, as in other oases of contract, — 
 in negotiations for transactions uberrima! fidei, 244 
 in relations of confidence, 351, note (o), 360 
 in relations of influence, 465 
 of plaintiff or defendant in action for statutory non- disclosure in prospectuses, 
 transmission of rights and liabilities on, as in other cases of tort, 485, 488, 489 
 of misfeasant, transmission of liability on, 544 
 
 DEBENTURES, 
 
 knowledge of contents of, when, and against whom, presumed, 41, 42 
 irregularity in issue of, knowledge of, when presumed, and when not, 46 
 rights of purchasers of, in. respect of non-compliance with statutory duty of 
 
 disclosure in prospectuses, 485. And see Prospectus. 
 trustee for holders of, not an " officer " of the company, in misfeasance, 543, 
 
 544 
 
 DEBT, 
 
 non-disclosure is defence to action to recover, 214 
 
 claim in proceedings for non-disclosure may be regarded as equitable, and there- 
 fore provable on insolvency of party charged, 242, 351, 488, 489, — 
 but not segregated from other assets, unless strictly a trust, 344, 351 
 judgment, bankruptcy court may go behind, 515 
 guarantees of, duties of disclosure in. See Stjeety. 
 
 ofier to pay, with proper interest, effect of, on costs on " expectant " cases, 
 550, 551 
 
 DECEASE, DECEASED, 
 
 transmission of rights and liabilities on decease of party. See Death. 
 duties of disclosure, &c., on executors or administrators to beneficiaries under 
 will, or by law, of deceased testator or intestate, 279. And see Trustee. 
 
 DECEIT, DECEPTION, 
 
 of self, the other party, if not under any duty of disclosure, is not bound to 
 
 correct, 138—142 
 generally. See Fraud. 
 
 DECLARATION, 
 
 in answer to questions, effect of, on duties of disclosure in insurance cases, 
 144r— 149 
 
 trustee by express, as distinguished from trustee " by metaphor," 279 
 
 of common law rules in statutes, instances of, 48 — 50 
 
 by the Court, as a form of relief, — 
 
 generally, ancillary to rescission, 207 
 in proceedings under the Vendor and Purchaser Act, 221 
 in cases of principal and agent, as regards future payments, &c., 344, 350 
 in " influence " cases, 45, 46 
 
 in cases of a bargain with favoured creditor kept secret from general body of 
 creditors, 527 
 
 DEED, 
 
 relating to property, when presumptive knowledge of existence and contents of, 
 
 and when not, 39 — 45 
 of separation, duty of disclosure on spouses negotiating for, 118, 119 
 of composition with creditors, duties of disclosure owed by each creditor who 
 
 executes, to the others, 523 — 531 
 
 DEFAULT, 
 
 judgment by, may be relieved against, if impeachable at all, by interlocutory 
 order, 515 
 
 [27 ] 
 
Index. 
 
 DEFECT, 
 
 in property or article sold, when presumptive knowledge of, and when not, 
 21, note (ii), 22, 47 
 
 in title of holder of negotiable instrument, when knowledge of, is presumed, 
 and when not, 60, 51 
 
 in security taken by, or in agreement with, moneylender, when assignee fixed 
 with notice of, and when not, 52 
 
 physical, in chattel sold, effect of positive devices to conceal, though no duty to 
 disclose, 121—123, 178, 179 
 
 physical, in land sold, it it can be regarded as defect in title, is subject of dis- 
 closure, if otherwise, not, 83 — 85 
 
 DEFENSIVE PROCEEDINGS, 
 
 available on groimd of non-disclosure to action, counterclaim, or application to 
 enforce contract, and may be set up by way of defence, plea, reply, answer, 
 affidavit, or otherwise, with or without cross-claim for rescission, 214 
 same burden of proof on party complaining who resorts to, as on party who sues 
 for rescission, except that less evidence required to resist action for specific 
 performance, or other discretionary relief, than would be required to establish 
 right to rescission, 215, 216 
 repudiation and non-recognition of contract sued upon must be pleaded by party 
 
 complaining who resorts to, 217, 536 
 where prompt taking of active proceedings gives the party a better equity to 
 
 relief than waiting untU sued, and then resorting to, 217 
 Ulustrations of, in, — 
 
 relations of confidence, 347, 348 
 
 " influence " relations, 458 
 
 actions to enforce English Judgments, 515 
 
 foreign judgments, 516 
 actions in respect of grants from Crown or State, 519 
 
 proceedings to enforce secret bargain with favoured creditor, 526, 527, 529, 
 530 
 by several imderwriters of marine policy to action on policy, special nature 
 and form of, 639, 540 
 
 DELAY (AND LACHES), 
 
 not, per se, an affirmative answer, unless beyond some statutory period of 
 limitation, though it may give scope for, or be evidence of, waiver, or affirma- 
 tion, 188—194, 199 
 and inaction, in support of plea of waiver, instances of, 335 
 
 affirmation, instances of, 336, 449, 450 
 may in any case affect the costs, 193, 648 
 
 in giving explanation, when asked, effect of, on costs of successful party charged, 
 546, 647 
 
 DELEGATION, 
 
 of duties of negotiating or executing transaction to agent cannot make the 
 
 principal's position better, as regards obligation of disclosure, 30, 31 
 of agent's duties to sub-agent. See Sub-Agent. 
 
 DELIVERY, 
 
 of title deeds, when party not obtaining, or requiring, is fixed with notice of 
 contents of deeds, and when not {e.g. if he receives reasonable excuse for non- 
 delivery), 38 — 44 
 
 of instrument set aside by party complaining, to be cancelled, when ordered, 
 as part of relief, 208, 209 
 
 DELUSION, 
 
 of one of two negotiating parties, when duty on the other to correct, 125 — 130 
 
 when no duty to correct, 134 — 143 
 [28 ] 
 
Index, 
 delusive. 
 
 offer before action, no effect on relief, 451, 452 
 
 in reduction of damages, 504 
 
 DEPENDENCE, '"' '^"''''°'' °^ '"'''' '''' '''' ''"' ^'^ 
 
 of one party on the other, who has exclusive knowledge, in negotiating certain 
 forms of contract, is the theory on which duty of disclosure in such cases rests. 
 See Knowledge (C). 
 of servient on dominant party, for information, advice, and guidance, is ground 
 on which duty of disclosure, and other duties, are imposed on latter, in 
 relations of confidence. See Theory. 
 of directors or executive of company on promoter, is a fact, material to be dis- 
 closed by promoter to company, 292 — 294 
 
 DEPOSIT, 
 
 on contract of sale rescmded, or avoided, for non-disclosure, is ordmarily return- 
 able to party charged, as part of the mutual restoration, unless otherwise 
 agreed, 203—205, 213 
 
 if contract illegal, no return of, unless the party claiming the return was induced 
 by the fraudulent misrepresentation of the other party to believe it was legal, 
 
 return of, may be ordered as part of relief under the Vendor and Purchaser Act, 
 221 
 
 DEPRECIATION, DESTRUCTION, DETERIORATION, 
 
 of subject-matter of contract impeached, when a bar to rescission, and when not, 
 202, 203 
 
 DETERRENT, 
 
 in what sense it must be shown that undisclosed fact would have been, if disclosed, 
 
 in order to constitute materiality, 17 
 the like, in order to establish inducement, in prospectus cases, 496, 497 
 illustrations, in cases of composition arrangements with creditors, of facts of 
 
 which the disclosure would have been, 526, 530 
 
 DETRIMENT. See Loss. 
 
 DEVICE, 
 
 use of positive, to hide defects, may render party liable, though no duty to 
 
 disclose, or agreement to waive disclosure, 121 — 123, 177, 178 
 use of, to conceal identity, by alias, or manipulation of names, in relations of 
 
 confidence, where transaction entered into between the related parties, 280, 
 
 290, 295—297 
 to disguise fact that directors bribed by promoter, 302, 303, And see Directoe. 
 to conceal fact that mortgagee is real purchaser of the property, 311, 312 
 " to double hatch the cheat," by delusive offer, in case of bargain with expectant, 
 
 531 
 
 DEVISE, 
 
 of specific property carries with it right to avoid, 241, 242 
 
 expectation of, is an expectancy within the meaning of the rules as to bargains 
 
 with expectants, 404, 405 
 creates no relation of influence between devisee and testator, 414 
 
 DIFFERENCE, 
 
 in substance between property subject of contract impeached and property 
 which party complaining is able to restore, bars rescission, with certain 
 exceptions, 201—203 
 total, between what was contracted to be transferred, and what is tendered in 
 traxisfer by party charged, defeats plea of waiver, 183, 184 
 
 [29] 
 
Index, 
 diligence, 
 
 "in ignorance," effect of, on presumptive knowledge, 38, 39, 562 
 want of. See Negligence. 
 
 DIRECT, 
 
 notice, ia " actual " knowledge. See Knowledge (A). 
 
 enforcement of contract, non-disclosure is good defence to action for, 214 
 
 transactions between parties related to one another by a relation of confidence. 
 
 See CONEIDENCE. 
 
 DIRECTION, 
 
 of court, kinds of, ancillary to rescission, 210 
 
 in case of " influence " relations, 456, 457 
 sales by, of court, some rules of disclosure apply to, as to other cases of sale, 
 221—223, 510, 511 
 
 DIRECTOR OF A COMPANY, 
 
 presumptive knowledge of company through actual knowledge of, when acting 
 
 officially, but not otherwise, 32 
 stranger not presumed to be aware of absence of authority of board of directors 
 
 to do acts on behalf of company, when, 46 
 when disclosure to, or knowledge of, directors is not disclosure to, or knowledge 
 
 of, company, 293, 335 
 no duty of disclosure owed by an individual director to a stranger, or even to an 
 
 individual shareholder, when negotiating with him a sale or purchase of shares, 
 
 except that which lies on any other vendor or purchaser, 138, 139, 140, 308, 
 
 356 
 when pleas of payment, and set-oS, are not available to a delinquent, 326 
 waiver of disclosure by, in articles of association, 333, 334 
 when liability of directors for non-disclosure is joiat and several, and when 
 
 several only, 359 
 liability of, for statutory non-disclosure in prospectuses, 486 — 488. And see 
 
 Peospecttjses. 
 when liable in misfeasance proceedings, 541 — 544 
 described as " fiduciary agent," " commercial trustee," or " managing partner,'' 
 
 295 
 duties of disclosure incumbent on, as to certain classes of material facts, 302 — 304 
 person exercising duties of, liable as a, whether so called or not, 484 
 
 DIRECTOR (SPIRITUAL). See Sacerdotal Relation. 
 
 DISABILITY, 
 
 transmission of rights on disability of party entitled, or charged. See Tkans- 
 
 MISSION. 
 
 of parties related by relations of confidence and influence from dealing with one 
 another directly, except under certain conditions. See Coneidence and 
 
 iNIXtTENCE. 
 
 by reason of infancy, coverture, &c., need not be disclosed, but must not be 
 
 misrepresented, 142 
 persons under, can only consent to termination of relation, or to waiver, with 
 
 sanction of court, 328 
 the like, as to affirmation of an impeached transaction, 335, 447 
 unless termination of, be established, it is of no use for purposes of affirmative 
 
 plea, to prove mere termination of the relation, whether of confidence or of 
 
 influence, 328, 429—431 
 
 DISAFFIRM. See Election and Voidable. 
 
 DISCHARGE, 
 
 of surety, from contract, 95, 96. And see Sukety. 
 
 [ 30] 
 
Index. 
 
 DISCHARGE— ccm<mMe<f. 
 
 delay of guarantor who reasonably thinks that there has been a discharge of 
 
 pt?^!^ -^^ S= ^^^ assumed as a servient party, is excusable, and is not 
 evidence of afifirmation, 450 
 
 of warranty, proved or admitted, does not necessarily negative or excuse the 
 duty of disclosure, 146 
 
 of purchaser from contract, in sales by order of court, where non-disclosure 
 
 proved, 221, 222 
 of burden of proof. See Burden of Allegation and Prook 
 ot duties of disclosure, &c. See Duty. 
 
 DISCIPLE, 
 
 relation between, and spiritual director, religious order, conventual estabHsh- 
 ment, &c. See Sacerdotal Relation. 
 
 DISCLOSURE, 
 
 must be exact, complete, and unambiguous, 7 — 12 
 
 duty of, as regards facts material to be disclosed (but no others) in— 
 
 negotiations for certain contracts uherrimce fidei, 61 — 119 
 
 relations of confidence, 279—306 
 
 relations of influence, 372 — 412 
 
 prospectuses of companies (statutory duty), 468 — 489 
 
 obtaining judgments, English or foreign, 509—517 
 
 applying for grants from Crown or State, 517, 518 
 
 in transactions involving rights of third persons, 521 — 523 
 
 in composition arrangements with creditors, 523 — 531 
 
 in circumstances creating duty of, though none originally owing, 120 — 134 
 
 in transactions where fuU disclosure is expressly contracted for, 144 — 149 
 facts which are respectively deemed the proper subject of, in the above relations 
 
 and circumstances. See Materiality (C). 
 where no duty of, in — 
 
 negotiations for certain classes of contract, 134 — 144 
 
 relations of confidence, 306 — 313 
 
 relations of influence, 412 — 417 
 question of, whether or not, is question of fact, if any evidence, 232, 233, 353 
 ethical views as to duty of, 573 — 600 
 Roman law as to, 601^ — 616 
 Scots law as to, 617 — 620 
 
 DISCOUNT, 
 
 receipt of, or stipulation for, to be disclosed by agent to principal, 300 
 when principal deemed to have presumptive knowledge of custom to allow agent, 
 in the particular class of business, 26 
 
 DISCOVERY (IN THE ORDINARY SENSE), 
 
 of all facts and documents to which actually known facts and documents would 
 
 have led, if reasonable inquiries, is deemed to have been in fact acquired, 38 — 47 
 of falsity of representation when made, or of facts supervening which render it 
 
 false, raises a duty of disclosure on the party, 120 — 130 
 of undisclosed fact, no affirmation until, 185, 186, 334, 335, 417 
 
 DISCOVERY (IN THE PROFESSIONAL SENSE), 
 
 same duty of, in an action, as of disclosure in the relation or circumstances which 
 
 gave rise to it, 534, 535 
 must be fuU and exact, and generally required to be given before the party 
 
 complaining furnishes particulars, 534 — 637 
 special practice as to, in cases of marine insurance, 537, 538 
 
 DISCREPANCY. See Difference. 
 
 [ 31 ] 
 
Index. 
 
 discretion, 
 
 of court, as to granting or refusing specific performance, with or without con- 
 ditions, consequences of, 215, 216 
 exercise of judicial, as to whether action should be ordered instead of summary 
 procedure authorized by statute or practice, in — 
 cases imder the Vendor and Purchaser Act, 221 
 
 motions to discharge purchaser from purchase on sale ordered by Court, 222 
 misfeasance cases, 541 
 application to set aside judgments, 515 
 of court, as to costs, how exercised^ See Costs. 
 
 DISEASE, 
 
 bodily or mental, when to be disclosed in negotiating contract to marry, and 
 when not, 115 
 
 when material to be disclosed in negotiation for contracts of life and health 
 insurance, 72, 73. And see Life Instjeance. 
 
 relation between person affected with, and medical adviser or attendant. See 
 Medical Relation. 
 
 taking advantage of servient party's, by dominant party, one of the " circum- 
 stances and conditions " creating a relation of influence, 393 
 
 mental, in sense of lunacy. See Lunacy. 
 
 DISGUISE, 
 
 of identity, is breach of duty in trustee, agent, or partner dealing directly with 
 the cestui que trust, principal, or firm, under other names, or through nominee, 
 &c., 280, 290, 295, 296 
 burden on party complaining to prove the above, 318 
 
 DISHONESTY, 
 
 no presumptive knowledge of customs and practices characterized by, 269, 332 
 of person whose fidelity is guaranteed, known to person to whom guarantee is 
 
 given, or even suspicion thereof, must be disclosed to surety, 91 — 93 
 of one whose credit or overdraft merely is guaranteed, need not be disclosed to 
 
 surety, 91 
 in conduct of inquiry pursuant to writ of ad quod damnum, negatives presumption 
 
 otherwise made of Crown's knowledge of inconsistent grant, 521 
 in sense of " fraud," generally. See Fbaud. 
 
 DISINTERESTED, 
 
 advice, opinion, and judgment, when duty to give. See Advice, and Indepen- 
 dent AND Competent Advice. 
 
 DISPUTE, 
 
 negotiations for settlement of. See Compromise. 
 
 DISQUALIFICATION, 
 
 of directors, power of, reserved to promoter, a device for the corruption of the 
 company's executive, 303. And see Dibectok of Company. 
 
 DISTINCT. See Sepaeate. 
 
 DISTRESS, 
 
 financial, when party negotiating not bound to disclose his own, 142 
 
 of grantor of annuity being sold, not material to be disclosed to the 
 
 purchaser, 83 
 not material to be disclosed in negotiations for marriage, 113 
 need not be disclosed in negotiations for guarantees of cash credit, 90, 91 
 of servient party, and taking advantage thereof by dominant party, are circum- 
 stances creating a relation from which undue influence will be presumed, 
 392—397 
 of " expectant," taking advantage of, in cases of unconscionable bargains. See 
 Expectant. 
 
 [ 32 ] 
 
Index, 
 dividend, 
 
 secret bargain of debtor to give or secure larger, to a favoured creditor than to the 
 others, -Hdll be relieved against, 525 
 
 DOCTOE. See Medical Relation. 
 
 DOCTRINE, 
 
 ignorance of equitable, as to disclosure, is no answer to charge of having in fact 
 contravened it, 170, 321, 322, 424, 425 
 
 DOCUMENT, 
 
 when presumptive knowledge of form and contents and clauses of a mercantile, 
 
 and when not, 25 — 27 
 when knowledge of existence and contents of one, is presumed from proved 
 
 knowledge of existence and contents of another, and when not, 38 — 47 
 fundamental, of company (memorandum and articles of association), statutory 
 
 irrebuttable presumption that every member is acquainted with contents of, 
 
 45,46 
 accessible to public, when every member of public presumed to know contents of, 
 
 in case of — 
 
 books and registers of a company, 46 
 enrolments of grants, 520 
 
 registers of title, and other public documents, 52 — 55 
 of title. See Title. 
 
 ship's documents, rules as to production of, in marine insurance cases, 537, 538 
 entry in public, may justify rescission of contract which is not voidable, but 
 
 already void, 200 
 condition in prospectus purporting to affect party with notice of any undisclosed, 
 
 is made void by statute, 499, 500 
 
 DOLUS, in Roman law, 601—605 
 
 DOMESTIC RELATIONS, 
 
 raising a presumption of influence. See Parental Relation. 
 from which no influence is presumed (husband and wife, &c.), 412 — 414 
 
 DOMINANT, DOMINATION, DOMINION, 
 
 ■ meaning of expression " dominant party," as used in this work, 362 
 relations raising a presumption of domination or dominion of one party over the 
 other. See Inhuence. 
 
 DONATION, DONOR, DONEE. See Gnrr. 
 
 DORMANT, 
 
 partner, duty of disclosure to, when, 110, 111 
 
 relation, no answer to case of servient party, if the influence springing from it 
 was not, at the time of the transaction, 429 — 431 
 
 DOUBLE INSURANCE, 
 
 may be material to be disclosed in negotiations for marine insurance, 66 
 
 DUE, 
 
 course, holder in. See Negotiable Instrument, Chose in Action, and 
 
 Chose in Possession. 
 use of confidence, or influence. See Peopeiety oe Teansaction. 
 
 DURATION, 
 
 of life, what facts affecting, must be disclosed in negotiations for life msurance, 
 
 72,73 
 generally. See Time. 
 
 [ 33 J 
 
Index. 
 
 DUTY, 
 
 of disclosure, in negotiations for contracts uberrimcE fidei, 60 — 119 
 
 created by special circumstances, where originally none, 120 — 134 
 to the Court, in obtaining judgment, 509 — 516 
 to Crown or State, in obtaining grants, 517 — 521 
 to third persons, when, 521 — 523 
 to general body of creditors, when, 523 — 531 
 pursuant to express contract or warranty, 144 — 149 
 statutory, in case of prospectus of company, 468 — 489 
 of good faith (including disclosure, and other cognate matters), in — 
 relations of confidence, 279 — 306 
 influence, 369—412 
 where there is no fiduciary, in 
 
 negotiations for contracts, 134 — 144 
 certain relations, 306—317, 412—417 
 party complaining must prove existence of the, in — 
 negotiations for certain contracts, 151 
 relations of confidence, 314 — 317 
 
 influence, 418—423 
 cases of prospectus (statutory), 490, 491 
 proceedings founded on non-disclosure from Court, 516, 517 
 
 State, 519—521 
 composition arrangements with creditors, 530, 531 
 misfeasance proceedings, 541 — 544 
 how party charged may prove due discharge of his. See Affiemative Answers. 
 conflict of, with interest, theory on which doctrine of disclosure and good faith 
 
 rests, 275—277, 290, 292, 302—304, 368, 369, 377, 378, 382, 383 
 where conflict between the, arising out of the relation, and another, not so arising, 
 
 same principle applies, 276, note {y), 358, note (M) 
 principal presumed to know facts which agent was under, to disclose to him, 
 
 30—38 
 of agent, when material to be proved, 316, 317 
 
 mere cessation or dormancy of professional, is not cessation of influence, 429 — 431 
 where non-disclosure can be regarded as breach of contractual, to perform 
 obUgations of trust, party complaining has a right of proof or claim on in- 
 solvency of party charged, 489 
 of party to himself, in his own interests, to move promptly, or to make inquiries, 
 &c., if he is to escape being fixed with notice, is not duly in strict judicial 
 sense, 188—194, 565, 566 
 ethical views as to fiduciary, contrasted with those of jurisprudence, 573 — 600 
 Roman law as to fiduciary, 601 — 616 
 Scots law, as to fiduciary, 617 — 620 
 
 EASEMENT, 
 
 on land sold, duty to disclose, 80, 81 
 when presumptive knowledge of, 47 
 
 ECCLESIASTICAL, influence. See Sacerdotal Relation. 
 
 EFFECT, 
 
 on judgment of normal person, to be considered in determining materiality of 
 
 any fact, 17 
 on mind of persons conversant with the particular business, evidence of, ad- 
 missible on question of materiaUty, but not effect on mind of party, or of 
 individual witness, 229 
 of transaction on rights and interest of party complaining must be disclosed 
 and explained to him by party charged, 274, 329, 436, 437, 447 
 
 [ 34 ] 
 
Index. 
 
 EFFECT—continued. 
 
 statutory non-disclosure and damage must be proved to have been connected 
 
 with one another as cause and, 496, 497 
 and intention, ethical and juridical views compared as to the relative importance 
 
 of, 598 
 
 ELECTION, 
 
 to avoid transaction for non-disclosure, or to affirm it, is the right of the party 
 
 complaining, but, when once exercised, is exhausted, 185, 199 
 what is not an exercise, but a suspension of the right of, 186, 189, 190 
 delay in exercising right of, not per se a bar to rescission, 189 — 194 
 party complaining has right of, between rescission and account, as against agent, 
 
 341, 342 
 right of, either to take the thing itself which has been corruptly received by 
 
 agent, or its value, 344 — 346 
 liquidator of company entitled to relief has right of, between three remedies, 
 
 action, putting party charged on list of oontributories, and misfeasance 
 
 proceedings, 351, 352 
 duty on surviving partner to disclose facts to executor of deceased partner to 
 
 enable him to exercise his right of, whether to be treated as a partner, or to 
 
 take interest on his capital. 111 
 
 EMANCIPATION, 
 
 of servient party must be proved, to support the dominant party's plea of cesser 
 
 of relation at time of transaction by agreement, 428, 429 
 the like, to support a plea of confirmation, 447, 448 
 whether or not, is a question of fact, 462 
 
 EMBARRASSMENT, financial. -See Distress. 
 
 EMPLOYMENT, 
 
 guarantee of fidelity of servant, clerk, or officer in, rules as to duty of disclosure 
 
 by employer to surety, in negotiations for, 91 — 93 
 of a person standing in relation of confidence or influence to another, may result 
 
 in the employer, if he knows of the relation, coming under the same duties 
 
 to that other, 357, 358, 465 
 where there was no, of dominant party in the particular transaction, efiect of, 
 
 on affirmative plea that influence inoperative in hoc re, 428 
 mere absence of actual, at the moment of the impeached transaction, not 
 
 necessarily evidence of cessation of the relation, much less of the influence, 
 
 430 
 of solicitor to carry out that which has been pre-determined, is not the procure- 
 ment of independent advice, 442 
 
 ENACTMENT. See Stattjtoey. 
 
 ENGAGEMENT, 
 
 of marriage, duties of disclosure in negotiation for, 112 — 116 
 
 previous, which was broken ofi, need not be disclosed in negotiations for marriage, 
 
 113 
 of honour, need not be disclosed m prospectus, 492 
 
 of interest in formation of company, renders any person so engaged or mterested 
 liable to statutory duty of disclosure in prospectus, 486, 487 
 
 ENTIRETY, 
 
 of material facts to be disclosed, 7 — 11 t,- i . 
 
 transaction impeached must be set aside in its, if set aside at aU, subject to 
 
 certain exceptions, 206, 339, 454, 455, 518 
 of bribes received by dkectors, when each is jointly and severaUy accountable 
 to company for, and when not, 359 
 
 [35 ] 
 
Index. 
 
 ENTIRETY— cora^iMMcd. 
 
 secret contract to pay to favoured creditor original debt in its, is voidable, in 
 cases of composition arrangements, 525, 526 
 
 of creditors, disclosure to, or knowledge of, must be proved in cases of com- 
 position arrangement, where special bargain has been made with a favoured 
 creditor, 530, 531 
 
 of creditors, affirmation or waiver by, must be shown in the like cases, to support 
 such pleas respectively, 531 
 
 when unfavoured creditor may sue for debt in its, without regard to the composi- 
 tion arrangement, 529 
 
 ENTRY, 
 
 in Lloyds Lists, and similar mercantile registers and books, when presumptive 
 
 knowledge of, and when not, 25 — 21 
 in registers and books of company, when and to whom knowledge of, is imputed, 
 
 45,46 
 in registers of title, and other public documents, when presumptive knowledge 
 
 of, and against whom, 52 — 55 
 
 EQUALITY, 
 
 of knowledge, or of ignorance, on the part of both parties, renders non-disclosure 
 
 innocuous, 19 
 of parties, in one sense, is the object aimed at by the doctrine of disclosure, 59, 60 
 in any other sense, is not a condition of the vaHdity of the impeached transaction, 
 
 and the absence of, other than that which results from due disclosure, is not the 
 
 subject of reUef, 103, 107, 108, 135, 136, 390, 568 
 of sums recoverable by principal from his bribed agent, and from the contractee 
 
 who has corrupted him, does not prevent the two sums being distinct, and 
 
 separately recoverable, 349 
 between creditors, the foundation of every composition arrangement, and of the 
 
 duties of disclosure in negotiation for the same, 523 
 
 EQUITY (IN THE SENSE OE A SYSTEM OR BODY OF DOCTRINE), 
 rules of presumptive knowledge said to be wholly the creation of, 56, 57 
 ignorance of rules of, in relation to disclosure, is no answer to a proved case of 
 non-disclosure in fact, in cases of — 
 
 negotiations for contracts uberrimce fidei, 170 
 relations of confidence, 321, 322 
 
 influence, 424, 425, — 
 particularly where the dominant party is a solicitor, 378 
 claim to moneys for which party charged is accountable is deemed a debt in, 
 
 341, 342 
 but is not deemed trust money in, unless it can be shown to have been the money 
 of the party complaining, when received by the party charged, 242, 343, 344, 
 351, 352 
 the like, in contemplation of, as to property other than money, 344 — 346 
 " fraud in the view of," a misleading expression, 557 — 559 
 
 EQUITY (IN THE SENSE OP AN EQUITABLE RIGHT), 
 
 efEect of registration on presumptive knowledge of any, affecting property or 
 
 title registered, 52 — 55 
 collateral, affecting a security, when creator of security not bound to disclose 
 
 to assignee thereof, 143 
 assignee of chose in action takes subject to every personal, affecting it, including 
 
 equity to avoid for non-disclosure, except in cases of negotiable instrument, 
 
 where certain primd facie presumptions made in favour of holder, 244 — 246 
 transferee of chose in possession takes free from every personal, unless party 
 
 complaining proves absence of consideration, express notice, or bad faith, 
 
 246—248 
 of redemption, clog on, law as to, 415 — 417 
 
 [ 36 ] 
 
Index, 
 equivocal, 
 
 disclosure, is no disclosure at aU, and may be worse than none, 11, 12 
 language or conduct, may create duty of disclosure, though none originally, 
 124—126 
 not evidence of affirmation, 186 
 does not support plea of waiver, 333, 334 
 admission or offer, ineffectual in reduction of damages, 504 
 
 ERROR. See Mistake. 
 
 ESTATE, 
 
 no presumptive knowledge of law affecting title to particular, 23 
 
 duty of disclosure in negotiations for contracts of sale and purchase of, in land. 
 
 (See Vendor (A), 
 arrangements for settling family. See Family Abeangement. 
 preservation of family, said to be one of the objects of the equitable doctrine as 
 
 to bargains with " expectants," 400, 401 
 grant of, by Crown, when impeachable for non-disclosure, 517 — 521 
 rights and liabilities of persons representing the, of a party complaining, or 
 
 party charged, respectively, who is deceased, or under disability. See Death, 
 
 lNFAJ<rcY, Insolvency, Lunacy. 
 immaterial that advantage secretly secured to a favoured creditor in negotiations 
 
 for composition is not to come out of debtor's, 525 
 
 ESTOPPEL, 
 
 distinguished from non-disclosure, 6 
 
 none against infant misrepresenting his age, 142 
 
 against party charged who has encouraged the party complaining to alter or 
 
 destroy the subject matter of a contract voidable for non-disclosure, whereby 
 
 party charged is precluded from setting up impossibility of restoration in 
 
 statu quo, as bar to rescission, 203 
 against assignee of property in possession, when party complaining is in a position 
 
 to establish, 248 
 by silence, where duty to speak, but not otherwise, 126, 127, note {t) 
 
 ETHICS, 
 
 of non-disclosure, good faith, undue influence, &c., as compared with juris- 
 prudence, 573—600 
 
 EVENT, 
 
 past, is a " fact," and, as such, if material, must be disclosed, in any negotiation 
 
 or relation involving a duty of disclosure, 13 
 burden on party complaining of proving the occurrence in fact of any, which he 
 
 alleges to have been undisclosed, 151 — 156, 318, 319 
 contract of insurance is wager on future, 61, 62, 70 
 some types of bargain with " expectant " are wagers on future, 406 
 everything is material to be disclosed (where there is a duty of disclosure) which 
 
 has a bearing on the future, if any, on which liability under the contract is 
 
 contingent, 435 
 supervening, may give rise to duty of disclosure though none existed originally, 
 
 120—134 . 
 
 subsequent, showing compromise to have been unwise, is no ground for rebevmg 
 
 against it, 108 
 rules as to costs following the, 545 
 
 EVIDENCE, 
 
 when, under what conditions, and what kinds of, admissible on the question of 
 
 materiality, 17, 18, 227—230 
 actual knowledge, whether or not, is matter of, 20, 234 
 
 what kinds of presumptive knowledge are, and what are not, rebuttable, by, 
 36—38 
 B.N.D. [ 37 ] 2 U 
 
Index. 
 
 EWWENCK— continued. 
 
 always a question of law whether any, in support, or in contradiction of, any 
 
 aUegation of fact, 225, 352, 459 
 what presumptions as to influence may be rebutted by, 365, 366 
 of value, where question of fair value, is relevant, 462, 463. And see Value. 
 of fact, and amount, of damage, in prospectus cases, 496, 497 
 of fraud, negligence incorrectly described as constituting, 563, 564 
 generally. See Bueden" op Allegation and Proop, Afeiemative Answees, 
 and Questions oe Law and Fact. 
 
 EX PARTE, 
 
 applications, candid disclosure to court required in, 612 
 
 EXACT, 
 
 disclosure must always be, of aU facts material to be disclosed, 7—12 
 
 nature of interest in competing business, to be disclosed by partner to firm, 
 
 296, 297 
 amount of bribe, and terms of corrupt bargain with promoter or contractee, 
 
 to be disclosed by agent to principal, or by director to company, 299 — 302 
 nature and terms of transaction, often of importance to establish, in relations 
 
 of influence, 420—423 
 the like, in cases of suretyship, 86 — 88 
 nature of rights of parties to compromise, usually neither known, nor expected to 
 
 be disclosed, but special circumstances may exist indicating such an expecta- 
 tion, 98—100 
 party alleged to have affirmed the impeached transaction must be shown to 
 
 have had exact and full knowledge of aU material facts, and of his rights in 
 
 respect thereof — • 
 
 in negotiations for contracts uherrimce fidei, and generally, 186, 187 
 ia relations of confidence, 334 — 336 
 influence, 447 — 449 
 statutory disclosure in prospectus must be, 484 
 pleading, and particulars, in action must be, 535 
 
 ■"EXCEPTION OUT OF POLICY," 
 
 curious theory on which partial relief founded in cases of marine insurance, 
 now exploded, 218, 219 
 
 :excessive, 
 
 insurance or valuation, when material to be disclosed, in cases of marine insurance, 
 66 
 
 EXCHANGE, 
 
 biU of. See Negotiable Insteitment. 
 
 of land, duty of disclosure applies to negotiations for, 78 
 
 EXCLUSIVE, 
 
 knowledge of one of two parties, facts necessarily within, to be disclosed by him 
 
 to the other. See Knowledge (C). 
 knowledge, taking advantage of, in relations of confidence— 
 generaUy, 273, 274 
 as against trustee, 281 — 285 
 promoter, 291 
 agent or partner, 297, 298 
 benefit, where parent obtains out of transaction with child, undue influence is 
 presumed, but where otherwise, the transaction may be upheld as family 
 arrangement, 374, 375, 412, 448, 449 
 licence, or other grant, from Crown or State, when relieved against, for non- 
 disclosure, 517 — 521 
 advantage to favoured creditor, bargain securing, must be disclosed to other 
 creditors; 523—531 
 
 I 38 ] 
 
Index. 
 
 EXCUSE, 
 
 valid, for non-disclosure, what is. See Apfikmative Answees. 
 
 reasonable, for non-delivery, or non-production, as the case may be, of title- 
 deeds, negatives presumptive knowledge, and absolves party from further 
 inquiry, but not, if unreasonable, or not believed, or obviously untrue, 44 
 
 EXECUTION, 
 
 of agency, knowledge acquired by agent in, imputed to principal, 29 — 38 
 
 duty of disclosure by agent of material facts of which he has or 
 acquires knowledge in, 299 — 302 
 of contract, in the sense of conclusion. See Conclusion of Contract. 
 
 in sense of completion or carrying out, on both sides, renders 
 rescission impossible, except where fraud or misconduct, &c., 201 — 203 
 creditor, not deemed an assignee for value of what is taken in, 247 
 
 EXECUTOR, 
 
 transmission of rights and liabilities to. See Death. 
 fiduciary duties of, to beneficiaries, 279 
 of deceased partner, duties to, of surviving partner. 111 
 not liable to beneficiaries, where no surplus, 307 
 
 de son tort, comes under same liability to beneficiaries, as to disclosure and 
 otherwise, as if he had been duly appointed, 394 
 
 EXECUTORY, contract which is, on one side or the other, may be rescinded, 202, 203 
 
 EXERCISE, 
 
 of election. See Election. 
 
 of jurisdiction. See Jtjeisdiction and Procedure. 
 
 of discretion. See Discretion and Costs. 
 
 of influence, presumption of. See Influence. 
 
 EXISTENCE, X . ,, J 
 
 or occurrence of undisclosed fact, event, transaction, or contract, burden ot 
 
 proving, in — 
 negotiations for contracts uherrimoe fidei, 152 — 156 
 relations of confidence, 318, 319 
 relations of influence, 420 — 423 
 prospectus cases, 492, 493 
 cases of judgments, 513 
 
 grants from Crown or State, 519 
 composition arrangements with creditors, 530 
 of duty of disclosure, burden of proving, in cases of negotiations for certain 
 
 classes of contract, 151 . , j. , i, 
 
 of exact relation alleged, and of duties of good faith arismg therefrom, to be 
 
 established by party complaining, 314—317, 418, 419 
 of statutory duty, to be proved by plaintiff in action for non-disolosure m 
 prospectus of company, 490, 491 
 
 EXISTING 
 
 contract sought to be avoided for non- disclosure must be shown to be, 199, 200 
 promoter cannot be agent for company which is not, 288, 289 . 
 
 may be trustee for company which is not, but which is mtended or 
 contemplated, 354 , , u 
 
 when fiduciary duties owed to persons, or to classes, who are not, (unborn 
 
 children, future aUottees, or successors in an office, &o.), 354—356 
 members of company, document addressed to, is not deemed a prospectus, 473, 
 
 lawj^expressly preserved by enactment as to disclosure in prospectuses of 
 companies, 508 
 
 [39 ] 
 
Index, 
 exorbitant, 
 
 prices, selling goods at, to " expectant," 406 
 
 interest, statutory jurisdiction as to, in case of moneylender, 534 
 
 EXPECTANT, 
 
 unconscionable bargains with, on faith of expectancy, raise the same three 
 presumptions of influence made against dominant party as in other cases of 
 influence, but subject to certain special rules, and statutory provisions, 399 — 
 403 
 relation between, and moneylender or other person making the bargain, rules 
 as to, applicable — 
 to what kinds of "expectant" (expectant heir, reversioner, remainder- 
 man, any person having hope of benefit from ancestor or relative, &c.), 
 404, 405 
 to which kinds of " expectancy " (this term does not include property in 
 
 possession), 405 
 to what kinds of bargain or dealing (purchase, mortgage, charge, loan, sales, 
 &c., if on faith of expectancy, whether so expressed or not), 405, 406 
 burden on, in proceedings for relief, to establish — 
 
 (1) the expectancy, 406 
 
 (2) the bargain or transaction on the faith thereof, 406 
 
 (3) his own distress, 407, 408 
 
 (4) the dominant party's knowledge of the distress and of the expectancy, 
 
 410 
 
 (5) unconscientious advantage taken by the dealer of such distress (inade- 
 
 quate value, &c.), 408 — 410 
 afBrmative answers available against — 
 
 (1) fairness, justice, and reasonableness of the bargain, 411 
 
 (2) confirmation of bargain by expectant, when distress at an end, and 
 
 expectancy has fallen into possession, 411, 412 
 
 (3) knowledge, consent, and concmxenoe, of ancestor, 412 
 rules for determining whether full value given to, or not, 462, 463 
 
 rights of, not affected by repeal of usury laws, nor by Sales of Reversions Act, 
 1867, except in one respect, 403, 404 
 
 theory on which right of, to relief is founded (public policy, suppression of 
 youthful vices on the one side, and extortion and oppression on the other, and 
 protection of the ancestor from deceit, and family estates from ruin), 399—403 
 
 special rules as to costs payable to, or by, 550, 551 
 
 Roman statutory law for the protection of, 609 — 611 
 
 EXPECTATION, 
 
 is a " fact," which, as such, may be material to be disclosed, 15, 154 
 
 of life, facts affecting, to be disclosed in life and health insurance cases, 70 — 73 
 
 of benefit from ancestor, or relative. See Expectant. 
 
 EXPENSES, 
 
 of corrupt promoter or agent, when to be allowed by company or principal, as 
 
 condition of relief, 343 
 of investigating title, when allowed to party complaining in vendor and purchaser 
 
 action, and in proceedings under the Vendor and Purchaser Act, 211, 221 
 preliminary, of company, one of the matters required by statute to be stated in 
 
 prospectuses, 480 
 
 EXPLANATION, 
 
 reasonable, of non-delivery, or non-production, of title deeds, rebuts presumption 
 
 of knowledge, 44 
 of effect of proposed transaction on rights and interests of party complaining, 
 must be given by party charged — 
 in relations of confidence, 274, 329 
 
 influence, 436, 437, 447 
 [ 40 ] 
 
Index. 
 
 EXPLANATION— coM^iTOwtZ. 
 
 of operation of default clause on rate of interest, and of figures and accounts, 
 
 must be made by moneylender to borrower, 10, 22, 436 
 withholding or delaying reasonable, when demanded by party complaining, 
 effect of, on costs of successful party charged, 546, 547 
 
 EXPRESS, 
 
 notice of facts rendering transaction voidable, effect of, on rights of assignee. 
 
 See Assignment. 
 contract to waive. See Waiver. 
 affirmation of transaction, effect of, 334, 335, 446 
 declaration, trustee by, 279 
 
 EXTERNAL, 
 
 position and status of company, stranger presumed to be cognisant of, 45, 46 
 appearance of defects in " objects of sense," or in physical condition of land, 
 &c., when knowledge of, imputed to either party, 21, note [ii), 47 
 
 EXTORTION, 
 
 rules as to bargains with expectants are for the purpose of suppressing, 400 — 403. 
 
 And see Expectant. 
 by creditor of concession or special advantage from insolvent debtor relieved 
 
 against, 528, 529. And see Composition Arrangements with Creditors. 
 
 EXTRAORDINARY. See UNUsrAL. 
 
 FACTS, FACT, 
 
 what matters are deemed to be. See Material (A), (B). 
 
 what classes of, in the various relations, are material to be disclosed. See 
 
 Material (C). 
 of what kinds of, knowledge is presumed. See Knowledge (B). 
 questions of, what are. See Questions of Law and Pact. 
 undue influence presumed from " circumstances and conditions " of the case 
 sometimes called undue influence in, 389, as to which see " Circumstances 
 AND Conditions," &c. 
 undisclosed, burden of proof as to existence of, 151 — 156, 318, 319, 420 — 423 
 
 knowledge of, by party charged, 161 — 164 
 ignorance of, by party complaining, 164 — 
 170 
 supervening, when duty of disclosure created by, 127 — 130 
 mistake of, a statutory plea to action for omission from prospectus, 500, 501 
 
 FAIR, 
 
 disclosure, what is, 7 — 12 
 
 value. See Value. 
 
 use of confidence, or influence. See Propriety or Transaction. 
 
 opportunity of inspection of head lease, or other instrument containing onerous 
 
 restrictions, may be a ground for imputing knowledge of such restrictions 
 
 to party who makes no use of such opportunity, 41 
 whether any such opportunity was, or was not, is question of fact, 235 
 and " unfak," loosely applied expressions, 103, 107, 270, 271, 391, 568 
 
 FAITH, 
 
 good. See Good Faith. 
 
 " utmost good," used in a statute as the equivalent of uherrimm fides, 1, 2. And 
 
 see Uberrima Fides. 
 bad. See Fraud. 
 
 [41 ] 
 
Index. 
 
 FALSITY, 
 
 of information, makes no difference to duty of disclosing it, 13, 14, 64, 65, 164 
 of recitals in instrument recording the transaction impeached is ground for 
 negativing plea of propriety in the conduct of such transaction, 398, 420, 437 
 of statement, generally. See Misbepeesentation. 
 
 FAMILY ARRANGEMENT, 
 
 what it means and includes, 101, 374, 375 
 
 wiU be supported if the object of the parties was solely to terminate or prevent 
 family disputes, and promote the security or honour of the family, but if it 
 was a scheme for other and dishonest purposes, or it more likely to promote 
 litigation than to prevent it, wiU be discouraged, 101, 102 
 
 in negotiation for, as for any other kind of compromise, there is a duty of disclosure 
 by party who has knowledge of a material fact of which he is aware that the 
 other party is ignorant, 103 — 106 
 
 is not a transaction in respect of which undue parental influence will be pre- 
 sumed, it entered into with the object and result of benefiting both parent 
 and child, or the family generally, and not for the purpose of securing an 
 exclusive advantage to the parent, at the expense or to the disadvantage of 
 the child, 374, 375 
 
 proof of, rebuts a presumption of influence which would otherwise be raised by 
 the " circumstances and conditions " of the particular case, 448, 449 
 
 FATHER, relation between, and chUd. See Paeental Relation, 
 
 FAULT. See Defect. 
 
 FAVOUR, 
 
 of Court towards f amUy arrangements, when. See Family Aeeangement. 
 
 towards mercantile customs, when, 156, 577 
 secret, given or promised to a particular creditor by insolvent debtor, when 
 and how relieved against, 523 — 531 
 
 FEAR, 
 
 expression of, as to future perils or contingencies, is a fact which may be material 
 to be disclosed, 14, 15, 154 
 
 FICTIONS, 
 
 judicial, as to presumptive knowledge, not to be extended, 56, 57 
 statutory, of " fraud," strongly objected to by judges, and by community, 
 557—561 
 
 FIDELITY, rules of disclosure in guarantees of, 91 — 93. And see Sueety. 
 
 FIDUCLARY, 
 
 relations. See Cokfidence. 
 
 duties. See Duty. 
 
 " position " of promoter of company, 287 — 289 
 
 " agents," directors of company sometimes described as, 295 
 
 used, with other expressions of the like nature, with unscientific laxity, 567 
 
 FIGURES OF SPEECH, 
 
 unsatisfactory use of, in the law of non-disclosure, 570, 571 
 
 FINANCIAL, 
 
 distress. See Distress. 
 
 type of guarantee, what duty of disclosure in negotiation for, 90, 91, 93, 94. 
 
 And see Sueety. 
 results to be anticipated from avoidance of impeached transaction are wholly 
 
 immaterial to the right to avoid, 195, 323, 324, 426 
 
 [42 ] 
 
Index. 
 fire insurance, 
 
 nature of contract of, 74 
 what duty of disclosure in negotiations for, 74 
 
 disclosure and truth of answers to questions usuaUy the subject of express 
 warranty in contracts of, 74, 75 
 
 FIRM. /See Partnership. 
 
 FOREIGN, 
 
 language, documents in, when knowledge of meaning of, is presumed, 40 
 State, when knowledge of regulations of, is, and when it is not, presumed, 26, 
 
 65, 66 
 judgment, defence to, on ground of non-disclosure to Court, 516, 517 
 government, diplomatic agent of, not liable to misfeasance proceedings, any 
 more than to any other process, 544 
 
 FORGETFULNESS, 
 
 of undisclosed fact, as affecting proof of ignorance of party complaining, 20 
 
 knowledge of party charged, 161 
 FORMAL, & 1^ y 5 . 
 
 relation, cesser or suspension of, consistent with continuance of confidence, 317 
 
 influence, 419, 
 429—431 
 contract, though not, may be required to be stated in prospectus, 492, 493 
 parties, niles as to costs of, 548, 549 
 
 FORMATION OF COMPANY, 
 
 document issued to public by persons engaged or interested in, which invites 
 
 subscriptions, is a prospectus, 473 
 persons interested or engaged in, liable to statutory duty of disclosure, 486 — 
 
 488. And see Pbospecttjs. 
 what persons concerned in, liable for misfeasance, 541 — 543 
 generally. See Incobpobation, and Peospectus. 
 
 FRAGMENTARY, disclosure, when no disclosure at all, 8—11 
 
 FRAUD, 
 
 where agent is committing, upon his principal, the former's knowledge is not 
 
 imputed to the latter, 36 — 38 
 effect of, on presumptions of knowledge otherwise raised by statutory registration 
 
 of title, 52—55 
 of party previous to negotiation may impose on him a duty of disclosure which 
 
 otherwise would not exist, 120 — 123 
 of party during the negotiation may raise an obligation of disclosure not pre- 
 viously incumbent on him, 123 — 130 
 presence, or absence, of, whoUy irrelevant to question of liability for breach of 
 duty of disclosure, in — 
 
 negotiations for contracts unberrimos fidei, 170 — 172 
 relations of confidence, 321 — 323 
 
 influence, 424, 425 
 cases of prospectus of company, 489 
 misfeasance cases, 544 
 agreement not to impeach a transaction for, is invalid, 175 
 proof of, defeats a plea of waiver, 177 — 179 
 
 enables the court to rescind a completed contract, 201 
 prevents recovery or repayment of premiums and deposits, 203, 204 
 shifts burden of proof in case of negotiable instruments, 246, 247 
 assignee of chose in possession who takes with, is subject to equities, 247 
 effect of, on title of repurchaser with notice from one who without notice 
 originally purchased from him, 248, note (e) 
 
 [43] 
 
Index. 
 
 FRAUD — continued. 
 
 gross undervalue was evidence of, before the Sale of Reversions Act, 1867, and 
 
 may still be evidence of, within the meaning of that statute, 284, 409, 410 
 exercise of power of sale by mortgagee may be such as to indicate, 511 — 513 
 where non-disclosure is accompanied by, or amounts to, it is the subject of relief 
 
 by way of damages, 122, 128, 129, 224, 225, 459 
 interest payable on money obtained and retained by, 213 
 minecessary and unfounded charges of, as affecting costs, 545, 546, 551 
 lax use of term in connection with non-disclosure, 557 — 561 
 
 presumptive knowledge, 561 — 563 
 improper use of term, as equivalent to, or evidenced by negligence, 563, 564 
 
 FRAUDULENT, 
 
 blindness, 50, 51, 57, 562 
 
 ignorance, 46, 53, 57, 247, 500 
 
 silence, 120—134, 264, 265 
 
 concealment. See Concealment. 
 
 misrepresentation. See Miskepbesentation. 
 
 over-valuation, or over-insurance, duty to disclose, in negotiation for contract 
 
 of marine insurance, 66 
 excuse in answer to demand for delivery or production of title deeds, does not 
 
 relieve the party from presumption of knowledge, 44 
 
 FREEDOM, 
 
 of servient party from influence at time of alleged agreement to terminate or 
 
 suspend the relation, must be established, 428, 429 
 the like must be shown in order to support a plea of confirmation, 447, 448 
 of third person from the dominant party's influence, when independent advice 
 
 is relied upon, must be shown, 442, 443 
 whether state of, existed at the material date, or not, is question of fact, 462 
 
 FULL, 
 
 disclosure required, what is, 8 — 11 
 knowledge. See Complete. 
 value. See Value. 
 
 FUTURE, 
 
 expression of intention, apprehension, or expectation, as to the, is a " fact," 
 which may be material to be disclosed, 14, 15 
 
 allottees or members of company, when contemplated, disclosure to, or know- 
 ledge of, directors of company is not disclosure to, or knowledge of, the 
 company, 355 
 
 holders of an office, or successors in title, when entitled to complain of non- 
 disclosure to existing holder, 354 
 
 contingency on which transaction depends, when duty to disclose facts which 
 have a bearing on, 435 
 
 event, insurance is a wager on, 61, 62, 70 
 
 many bargains with " expectant " are wagers on, 404 — 406 
 
 receipts by agent pursuant to corrupt contract, the Court may make a declara- 
 tion of the principal's title to, without making order for payment, 344, 350 
 
 GAIN. See Advantage, Benefit, Pbofit. 
 
 GAMING, 
 
 contracts of insurance are contracts of, 61, 62, 70 
 
 duty in negotiations for insurance to disclose facts showing the contract to 
 
 involve illegal, 66, 68 
 on chance of expectant surviving ancestor, several forms of bargain with 
 
 expectant amount to, 404 — 406 
 by merchant's clerk on the Stock Exchange, without disclosure to his employer, 
 
 is good ground for dismissal, 301 
 
 [ 44 ] 
 
Index. 
 
 GENERAL, 
 
 notoriety, presumptive knowledge of facts of, 21 
 
 "^praotkef '£-2?'''™^*'''^ knowledge of, but not of recent or unestablished 
 practices, what evidence as to, admissible on question of materiality, 18 
 principles of law, presumptive knowledge of, but not of particular titles or 
 nguts, Zo 
 
 meeting of shareholders, when disclosure must be made to, by promoter or 
 9q^^°q'S "^ °^^^^ *° discharge his duty of disclosure to the company, 293, 
 
 body of creditors, burden on party charged of proving disclosure of special 
 bargam with favoured creditor to, or waiver, or affirmation by, or knowledge 
 of, 530, 531 
 
 releases, construction of, 97. And see Release. 
 
 waiver conditions, construction of, 174^179. And see Waiver. 
 
 questions as to disclosure put by insurers in life insurance cases, inutility of, 
 148, 149 ' J ' 
 
 good of the community. See Public Policy. 
 
 GENUINE, 
 
 offer by one party to the other, before trial, effect of, on relief, 450 — 452 
 
 damages, 504 
 
 costs, 547, 548, 551 
 GIFT, 
 
 receipt or promise of, by third person to agent or partner, must be disclosed to 
 
 principal or firm, 298 — 302 
 by promoter to directors of company, must be disclosed, 302 — 304 
 from servient to dominant party during the existence of a relation of influence 
 
 will be set aside unless the dominant party can sustain the gift, 363 — 365 
 by what affirmative proof sustainable, and wherein the dominant party's 
 
 evidence differs from that which he is required to adduce in the case of a 
 
 transaction for value, 432, 438 — 442. And see Influence. 
 above distinction between, and contract, as to the mode of " sustaining " it, 
 
 illustrated in the case of the parental, legal, sacerdotal, and medical relations, 
 
 376, 379—382, 385, 387, 388 
 importance in certain cases of showing that the transaction was a gift, and not a 
 
 contract, or vice versa ; burden of proof in such cases, 420 — 422 
 old doctrine that donee is called upon to support any sort of, though no relation 
 
 proved, is erroneous, 418 
 triviality of, may rebut the presumption of undue influence, 423, 445, 446 
 whether transaction is, or a contract, is question of fact, 461 
 ethical views as to, 588 — 590 
 
 GOOD FAITH, 
 
 duties of, generally. See Duty. 
 
 " utmost." See Ubeerima Fides. 
 
 proof of, in what sense, and in what respects, necessary to sustain a transaction 
 
 in relations of confidence, and of influence. See Propriety of Transaction. 
 personal, proof of, is no answer to a case of non-disclosure, or other breach of 
 
 fiduciary duty, 170—172, 321—323, 424, 425 
 compromises entered into in, favoured by the Court, 101 — 108 
 mercantile, customs and practices involving, are upheld and given efiect to, 
 
 156, 577 
 assignee of non-negotiable chose in action is subject to personal equities, though 
 
 taking in, 244, 245 
 transferee of negotiable instrument, when fraud in the inception or negotiation 
 
 thereof is established, is required to prove his, 245, 246 
 contractual, only, to be observed by mortgagee to mortgagor, 311 — 313 
 
 [43] 
 
Index. 
 
 GOOD FAITR—continued. 
 
 of party charged, effect of, on rate of interest, 342, 343, 346 
 
 costs, 548 — 551 
 sales of reversions in, made by statute unimpeacliable on the mere ground of 
 
 undervalue, 409, 410 
 various ambiguous uses of the term, criticized, 1, 2, 59, 76, 561 
 ethical views as to requirements of, compared with those of jurisprudence, 573 — 
 600 
 GOODWILL, price of, to be disclosed in prospectus, 479 
 
 GOODS, 
 
 when presumptive knowledge of defects in, and when not, 22, note (ii), 47 
 presumptive knowledge of authority to dispose of, under the Factors Acts, 51 
 duty of disclosure, in sales of, 79 
 
 physical defect in, though no duty to disclose, or express agreement to waive 
 disclosure, must not be concealed by positive devices, 121, 177 — 179 
 
 GRANT, 
 
 obtained by concealment from Crown or State, impeachable, 517 — 521. And see 
 Ceown. 
 
 GROSS, 
 
 neghgence, incorrectly described as equivalent to, or as evidence of, fraud, 
 
 563, 564 
 undervalue. See Value. 
 
 GROUNDS, 
 
 absence of good, for an opinion, does not affect the duty to disclose such opinion, 
 
 if material, 15 
 validity of compromise not affected by mere fact that it is subsequently shown 
 
 to have been made without good, 108 
 of appUoation in misfeasance proceedings to be stated in the summons, or in the 
 
 affidavit, 544 
 theoretical, of various rules of non-disclosure. See Theoky. 
 
 GUARANTEE. See Subbtyship. 
 
 GUARDIAN, 
 
 duties of disclosure, &c., incumbent on, or on person in position of. See 
 
 Paebntal Relation. 
 dominant party in virtue of the particular circumstances and conditions of the 
 
 case, regarded as standing to the servient party in the position of a, 389, 390 
 alienation of servient party from his natural, an element in the impropriety of 
 
 the transaction impeached, 398 ■ 
 
 HABITS, 
 
 personal, when to be disclosed, and when not, in negotiations for life insurance, 
 
 72,73 
 marriage, 
 113—115 
 
 in the sense of customs. See Ctjstgm. 
 
 HARDSHIP, 
 
 not a ground for avoiding a transaction, except in a special and restricted sense, 
 
 390 
 criticism of loose use of the term, 104, 107, 108, 135, 390, 568 
 discussion of the doctrine of, in connection with the case of Ellardv. Lord Llandaff, 
 269—271 
 
 HAZARD. See Wagee. 
 
 [46] 
 
Index, 
 head lease, 
 
 when duty to disclose unusual restrictions in, 81. And see Vendor (A). 
 
 HEALTH, 
 
 of assured, when material to be disclosed in negotiation for contracts of lile 
 insurance, 70 — 73 
 
 of spouse, when to be disclosed in negotiations for marriage, and when not, 
 113 — 116 
 
 weak, physical or mental, of servient party may be one of the circumstances 
 and conditions creating a relation of influence, 392—397 
 HEIR, 
 
 transmission of rights and liabilities, &c. See Death. 
 expectant. See Expectant. 
 
 HIDE. See Concealment. 
 
 HIGH COURT OP JUSTICE, jurisdiction of. See Jueisdiction. 
 
 HOLDER, 
 
 in due course of negotiable instrument. See Negotiable Instrument. 
 chose in possession. See Chose in Possession. 
 HONEST, 
 
 advice. See Adviob. 
 
 conduct of transaction by party charged in relations of confidence and influence. 
 
 See Peopbiety ob' Transaction. 
 mistake, a defence to action for statutory non-disclosure in prospectuses of 
 
 companies, 500, 501 
 mistake, criticism of expression, 107, 108, 566, 567 
 ignorance of illegality of contract on both sides, effect of, on right to a return 
 
 of premium, or deposit, 205 
 offer before action, effect of, on relief, 450 — 452 
 
 damages, in prospectus cases, 504 
 costs, 647, 548, 551 
 HONESTY, 
 
 personal, of party charged, is no answer to a case of non-disclosure, or kindred 
 breach of duty, 170—172, 321—323, 424, 425 
 
 HONOUR, 
 
 mercantile, contracts binding in, though for revenue purposes not enforceable, 
 
 when and how given effect to, 156, 577 
 contracts binding only in, need not be disclosed in prospectus, 492 
 policies, so-called, in marine insurance, practice of underwriters in respect of, 
 
 is not recognized by the law, 67 
 of families, settlements made for the sole purpose of securing or maintaining, 
 
 are favoured by the law. See Family Aeeangement. 
 matters of, how regarded by popular ethics, as compared with jurisprudence, 
 
 573—600 
 
 HOPE, 
 
 expression or entertainment of, as to any future event, is a " fact " which may 
 
 be material to be disclosed, 14, 15, 154 
 of succession or benefit, from ancestor or relative, is an " expectancy," within the 
 
 meaning of the rules as to bargains with expectants, 404, 405. And see 
 
 Expectant. 
 
 HUSBAND AND WIFE, 
 
 knowledge of one, when imputable to the other, 32 
 relation between, is not a relation of " influence," 413, 414 
 
 may be important as one of the circumstances creating a 
 relation of influence in fact, 395, 396 
 generally. See Marriage. 
 
 .[ 47 ] 
 
Index. 
 
 £DENTITY, 
 
 of vessel subject of marine insurance with a vessel which has become liable to 
 
 capture, must be disclosed, 65, 66 
 of party charged with person in whose name, or through whom, he is dealing 
 with the party complaining, during the subsistence of a relation of con- 
 fidence, must be disclosed to party complaining — 
 in cases of trustee and cestui que trust, 280 
 promoter and company, 290 
 agent or partner, and principal or firm, 295 — 297 
 the, above referred to, must be proved as a fact by the party complaining, 318 
 
 IGNORANCE, 
 
 actual, of certain classes of fact, does not negative presumed knowledge. See 
 
 Knowledge (B). 
 of both parties, renders non-disclosure innocuous, 19 
 wilful, intentional, or fraudulent, when deemed to be knowledge in law, as 
 
 illustrated in various kinds of transaction, 46, 47, 50, 63 — 55, 57, 247. 
 
 And see Wilful. 
 of one party as to the undisclosed fact, to the knowledge of the other party, does 
 
 not of itself create a duty of disclosure, if there is otherwise none, 136^138 
 party complaining must prove his own, of the undisclosed fact in— 
 negotiations for certain contracts, 164 — 170 
 cases of judgments obtained by concealment, 514 
 
 grants from Crown obtained by concealment, 520, 521 
 composition arrangements with creditors, 531 
 but no burden on party charged to prove his own, as to any undisclosed fact, 
 
 in relation of confidence or influence, 320, 424, 425 
 means absence of presumptive, as well as of actual, knowledge, 167 
 is not negatived by proof that the party had means of acquiring knowledge, 167 
 of equitable rules or doctrines, is no answer to a case of non-disclosure, 17fr — 172, 
 
 321—323, 424, 425 
 honest, of illegality of transaction, induced by misrepresentation of legality on 
 
 the other side, renders premium, deposit, or other sum paid, recoverable, 
 
 203—205 
 of servient party, where dominant party takes unconscientious advantage of, 
 
 the tranasotion is impeachable, 388 — 397 
 of any matter omitted from prospectus which is required by statute to be 
 
 disclosed therein, is good statutory defence to action, 500 
 of law, or statutory rule, or wfiful, is not a " mistake of fact," within the meaning 
 
 of the statutory plea to actions for non- disclosure in prospectuses, 500, 501 
 " diligence in," 39, 562 
 ethical views as to wilful, 690, 591 
 
 ILLEGALITY, 
 
 in wagering or gaming, duty to disclose fact showing, in marine insurance cases, 
 
 66 
 of contract, renders it void, not voidable, 197 — 199 
 Court wfil not, as a rule, rescind a contract already void for, 200 
 in cases of contracts of insurance void for, premiums not returnable if both 
 
 parties ignorant, or both cognizant, of the illegality, but if one party is induced 
 
 to believe the contract to be legal by the fraud of the other, he is entitled to a 
 
 return of such premium, 203 — 206 
 whether evidence is admissible as to the materiality of facts disclosing, 230 
 of condition on which release of debtor is to be cancelled, renders the release 
 
 absolute, 528, 529 
 when duty of Court to take notice of, without either party raising the point, 
 
 or desiring it to be decided, or even when both concur in inviting the Court to 
 
 ignore it, 548 
 
 [48 ] 
 
Index. 
 
 ILLUSORY. See Delttsive. 
 
 IMBECILITY, 
 
 physical, mental, or moral, of servient party, when taken advantage of by 
 dominant party, creates a relation from which undue influence will be pre- 
 sumed, 392—397 
 
 IMMATERIAL. ;8ee Material. 
 
 IMPARTIAL advice. See Advice. 
 
 IMPEACHABLE, 
 
 when, and how, a transaction is, for non-disclosure and other breaches of fiduciary 
 duty. See Actionable, and Relief. 
 
 IMPLIED, 
 
 notice or knowledge. See Knowledge (B). 
 
 condition. See Condition. 
 
 misrepresentation, when non-disclosure is. See Misbepeesentation. 
 
 waiver, 179, 180. And see Waivee. 
 
 affirmation, 186, 188, 194. And see Aitiemation. 
 
 trustee, subject to same duties as express trustee, 279, 280 
 
 mortgagee is not, except for one purpose, 310 — 312 
 from circumstances, a relation of confidence or influence may be, in which case 
 
 the party complaining must prove those circumstances, 314 — 317, 418, 419 
 contract to perform trust obligations, when non-disclosure may be regarded as, 
 
 and when on this theory, party entitled to proof or claim on insolvency, 
 
 351, 352, 489 
 consent to agent, &c., receiving a gift, from sUence after disclosure, 331 
 contract, must be disclosed in prospectus, 492, 493 
 
 IMPUTED, knowledge or notice. See Knovstledge (B). 
 
 IN HAC BE, 
 
 knowledge acquired by agent, imputed to principal, but not as a rule knowledge 
 
 acquired in olid re. See Agency (A), 
 employment, when necessary in relations of confidence, 315 — 317 
 
 influence, 428 
 
 IN LOCO PARENTIS. See Parental Relation. 
 
 IN SPECIE, 
 
 performance. See Specific Performance. 
 
 mutual restitution, a condition of rescission, 202, 203, 209, 210 
 
 IN TOTO, 
 
 when rescission, if at all, must be, and when it need not be, 206, 339, 404, 405 
 when repeal of Crown grant must be, 518, 519 
 
 INACTION, 
 
 waiver not to be inferred from mere, 179, 180, 188 — 194, 199 
 affirmation not to be inferred from mere, 188 — 194, 199, 449, 450 
 
 INADEQUATE, 
 
 disclosure, is no disclosure at all, 7 — 11 
 value or price. See Value. 
 generally. See Complete. 
 
 INADVERTENCE, 
 
 no answer to case of non-disclosure to show that such non- disclosure arose 
 from, in — 
 negotiations for contracts uberrimm fidei, 170 — 172 
 relations of confidence, 321 — 323 
 influence, 424, 425 
 
 [49] 
 
Index. 
 
 INADVERTENCE— cojrfjwed 
 
 waiver conditions construed as applying only to errors arising from honest, 
 
 177—179, 182, 183 
 mistake arising from honest, is a statutory answer to an action for non-disclosure 
 in prospectus, 600, 501 
 
 INCAPACITY, 
 
 for married state, what kinds of, to be disclosed in negotiations for marriage, 
 
 114, 115 
 in sense of disability in law. See Disability. 
 personal, of body or mind, in servient party, when taken advantage of by 
 
 dominant party, 392 — 397 
 
 INCHASTITY. See Unchastity. 
 
 INCOMPLETE. See Complete. 
 
 INCONSISTENT, 
 
 positions, in case of voidable transaction, party complaining must elect between. 
 
 See Election. 
 remedies, what are, and what are not. See Relief. 
 
 grants from Crown, relief in respect of, where Crown has been deceived, or not 
 fuUy informed, 518 — 520. And see Ckown. 
 
 INCORPORATION, 
 
 of company, promoter cannot be agent of company before, but may be trustee 
 for it, under certain conditions, 287 — 289, 354 
 
 promoter may be under statutory liability to company for omissions in pro- 
 spectus issued after its, 487. Aiid see Pbospecttjs. 
 
 charters of, when reheved against, for non-disclosure to Crown, 517 — 521. 
 And see Cbown. 
 
 INCUMBRANCE, 
 
 on title to land, duty to disclose, 80 — 82. And see Vendor (A). 
 
 chattels, duty to disclose, 79 
 rules as to presumptive knowledge of, generally, 40 — 43 
 statutory rules as to registration of, 52 — 55 
 on patent, trade-mark, &c., statutory rules as to, 58 
 
 INDEMNITY, 
 
 marine and fire insurances are contracts of, 74 
 
 right of party complaining to an, against expenses under, but not arising out of, 
 
 rescinded contract, 210 
 no right of, between statutory tortfeasors in prospectus cases, 488 
 debtor deprived of, contained in composition arrangement, if he has made 
 
 secret bargain with favoured creditor, 529 
 formal party in proceedings for non-disclosure when entitled to, from guilty 
 
 party, 548, 549 
 
 INDEPENDENT AND COMPETENT ADVICE OP THIRD PERSON, 
 
 an important element in establishing the propriety of the impeached transaction 
 
 in relations of confidence, whether a separate prdbandum or not, 329 
 the nke, in relations of influence, quoad transactions for value, unless the pro- 
 curing of such third person's advice was impracticable, or would have made 
 no difference, 441, 442 
 probably a separate prdbandum in cases of gifts in relations of influence, 439 — 
 
 441 
 meaning of " independence " (actual freedon of will and judgment of one who is 
 to advise the servient party alone, and not both parties, and who is not called 
 in merely to give formal sanction to something already determined), 442 
 meaning of " competence " (full instruction as to all material facts), 442, 443 
 not necessary for party charged to prove that the advice was acted upon, 443 
 a useful, if not necessary element, in establishing a plea of confirmation, 447 
 
 [50 ] 
 
Index, 
 indifferent, 
 
 third person, advice of. See Independent and Competent Advice, &c. 
 opinion of, best evidence of value, 463 
 
 INDIVIDUAL, 
 
 opinion of witness as to effect of disclosure of undisclosed fact upon his own 
 
 judgment as an, not evidence of materiality, 229 
 shareholder, no duty of disclosure on director of company towards, 138 — 140, 
 
 308, 356 
 member of company, is not, as such, under any duty to the public, merely because 
 
 the company is, 359 
 temperament, capacity, &c., when disregarded in relations of influence, 386, 
 
 387, 452, 453 
 case, when circumstances of, create a relation of influence. See Ciecitmstances 
 
 and Conditions of the Particular Case. 
 circumstances, opinion of one who has no knowledge of, is of no importance in 
 
 determining value of reversion, 463 
 motives and conduct of the, irrelevant to the absolute equitable rules of disclosure 
 and good faith, in — 
 negotiations for contracts uberriirue fidei, 170 — 172 
 relations of confidence, 321—323 
 influence, 424, 425 
 
 INDUCEMENT, 
 
 actual, of party complaining, not, as a rule, necessary to be proved, 172, 173 
 but must be proved, where no duty of disclosure, and non-disclosure is relied 
 
 upon as an implied misrepresentation, 133, 173 
 must be established in statutory action for damages by reason of omissions from 
 
 prospectus, 496, 497 
 in connection with materiality. See Material (B). 
 
 INEQUALITY. See Equality. 
 
 INFANCY, 
 
 need not be disclosed, but must not be subject of misrepresentation, 142 
 position of representatives of parties imder disability by reason of— 
 in asserting claim to relief for non-disclosure, &c., 241, 356, 464 
 in resisting claim to relief for non-disclosure, &c., 244, 360, 465 
 persons under disability by reason of, cannot consent to termination or suspension 
 of relation, or confirm a voidable transaction, except through the Court, 328, 
 335, 336 
 duties of disclosure and good faith owed to parties during, 354 
 youth just emerging from, has right to fuU disclosure and good faith from his 
 parent in any transaction, imless a family arrangement, 373. And see 
 Parental Relation. 
 constructive, attributed by Lord Hardwicke to the servient party in certain 
 relations of influence constituted by circumstances, 402 
 
 INFERENCE, 
 
 of law. See Presumption, and Questions oe Law and Fact. 
 of fact. See Questions oe Law and Fact. 
 
 INFERIORITY, 
 
 on the one side, and dominion or superiority on the other. See Influence. 
 of knowledge, duties of disclosure and of good faith to party who is necessarily 
 labouring under, when. See Exclusive. 
 
 INFIRMITY. See Weakness. 
 
 [51] 
 
Index. 
 
 influence, 
 
 relations of, classified as follows : — 
 
 (i) " suspected " : (a) domestic, 372 — 376. And see Paeental 
 Relation. 
 (6) professional : legal, 377— 379. AndseeSoiAcnoR. 
 sacerdotal, 382 — 385. Avd see 
 
 Sacebdotal Relation. 
 medical, 386, 387. And see 
 Medical Relation. 
 (ii) created by the circumstances and conditions of the particular case, 
 
 388 — 398. And see CnicfcrMSTANCES and Conditions, &c. 
 (iii) unconscionable bargains with expectants, 399 — 406. And see Ex- 
 pectant. 
 what are not relations of, 412 — 417 
 
 nature of, as distinguished from, " confidence," 272, 273, 279, 362, 363 
 " dominant party," and " servient party," in relations of, 362 
 law draws no distinction between kinds and degrees of, in the various relations, 
 
 369—372 
 burden on servient party, in proceedings for breach of duty incidental to relation 
 of, to establish the existence of the relation, and the fact and nature of the 
 transaction which is said to have been influenced, 418 — 423 
 on proof of relation of, and of the transaction, the law presumes, in favour of 
 the servient party, (1) the existence of the influence, (2) its exercise and 
 operation upon the transaction, and (3) its impropriety and abuse, 363 — 365, 
 426, 427 
 the second and third of the above presumptions as to, are rebuttable respec- 
 tively by proof on the part of the dominant party that in fact the influence 
 did not operate on the transaction, or in fact was duly exercised, 427 
 good answer to show that the, was inoperative in Mc re, by reason of the subject- 
 matter, or otherwise, 427, 428 
 termination or suspension of the, presumed from the relation is a good answer, 
 but it is not enough to prove termination or suspension of the relation itself, 
 stUl less the dormancy of the duties attaching to it, if the influence was not 
 entirely extinguished, or inoperative, 428 — 431 
 valid answer is constituted by proof of a due use of the, 431, 432 
 proper use of the, is shown by proof of real intention on the part of the servient 
 party, fairly produced, in complete freedom of will and judgment, and after 
 fuU disclosure of all material facts, and explanation of effect of proposed 
 transaction on servient party's interest, and his right to reject and revoke, &c., 
 and after honest advice from dominant party against himself, or from dis- 
 interested third person, 434 — 438 
 in cases of gifts, fair and conscientious use of the, must be shown by proof of the 
 independent and competent advice of a third person, but in the case of con- 
 tracts, such proof not indispensable, if impracticable to obtain such third 
 person's advice, or unreasonable to seek it, 438 — 443, and, as to what constitutes 
 such independent and competent advice, see Independent and Competent 
 Advice op Thied Person. 
 in transactions for value, proof of fair value is of the utmost importance in 
 proving the proper and due exercise of the, but doubtful whether indispensable, 
 if full information and honest advice given as to value, 443 — 445 
 triviality of gift may show absence of undue, 445, 446 
 above presumptions and rules as to, illustrated in cases of — 
 parental relation, 372—377 
 
 relation between legal adviser and client, 379 — 382 
 sacerdotal relation, 385, 386 
 medical relation, 387, 388 
 
 relation created by the particular circumstances, 388—399 
 bargains with " expectants," 399 — 412 
 
 [ 52 ] 
 
Index. 
 
 INFLUENCE— cowforawed 
 
 transaction resulting from undue, is voidable, not void, 384 
 
 bm:den of proof on servient party, in relations of, 418 — 423 
 
 affirmative answers available to dominant party, in relations of, 428—448 
 
 what are not affirmative answers so available in relations of, 449—453 
 
 relief and remedy given to servient party, in relations of, 453—459 
 
 questions of law and fact, what are respectively, in relations of, 459—463 
 
 questions of parties arising in relations of, 464 — 466 
 
 ethical views on relations of, 684 — 590 
 
 Roman law as to the exercise of, 607 — 611 
 
 Scots law as to relations of, 618, 619 
 
 INFORMATION, 
 
 IS a "fact," which may be material to be disclosed, whether it turns out to 
 
 be correct, or not, 13, 14, 154 
 when necessary to give sigmflcance to a document or entry which, without it, 
 
 discloses nothing, 27 
 what, must be imparted by the party charged to the party complaimng— 
 
 in negotiations for certain contracts. See Negotiation. 
 
 in relations of confidence generally, 273, 274 
 
 by trustee to cestui que trust, 282 — 284 
 
 by promoter to company, 291 
 
 by agent to principal, 297, 298 
 
 by partner to firm, 304 — 306 
 
 in relations of influence, 434 — 437, 446 
 
 INJUNCTION, 
 
 as remedy ancillary to rescission, 211, 212 
 uberrima fides required in ex parte applications for, 512 
 
 knowledge of terms of, imputed to a solicitor who goes out of Court for the 
 purpose of avoiding actual knowledge, 46 
 
 INJUSTICE. See Justice. 
 
 INOPERATIVE. See Operative. 
 
 INQUIRY (IN SENSE OF INVESTIGATION), 
 
 presumptive knowledge of facts and documents to which reasonable, would have 
 
 led, 39-^7 
 statutory codification of above rule as regards property, 48 
 " put on," meaning of expression, 42, 43 
 when a person is deemed to have been " put on," and when not, or when " put 
 
 off," by reasonable excuse for non-delivery, &c., 40 — 44 
 when " put on," as to nature of tenancy, if a third person is found in possession 
 
 or occupation, 44, 45 
 not " put on," as to the last occupier or occupation of vacant land, 45 
 how far party relieved from, in cases of registration of title, 52 — 55 
 when creator of security is " put on," as to position of surety, 94, 95 
 mere proof that the party complaining was " put on," does not establish his 
 
 knowledge of the undisclosed fact, 332 
 absence of, as to value, supports contention that the impeached transaction was 
 
 a gift rather than a contract, 420, 421 
 
 INQUIRY (IN SENSE OF QUESTION), 
 
 reasonable excuse for non-delivery or non-production of title deeds, in answer 
 
 to proper, rebuts presumption of knowledge, but not if excuse is obviously 
 
 frivolous or fraudulent, 40 — 44 
 liability of party owing no duty of disclosure to give truthful answer (i£ electing 
 
 to give one at aU) to a proper, as to any material fact, 131 — 134 
 effect of answer to, being made the basis of certain contracts of insurance, 144 — 
 
 149. And see Wakeanty. 
 
 B.N.D. 
 
 [ 53 ] 2 X 
 
Index. 
 
 INQUIRY (IN SENSE OF qUESTlOm— continued. 
 
 whether, and how far, waiver of disclosure as to matters not made the subject 
 
 of express, can be implied, in insurance cases, 180, 181 
 ignoring of, as to property, from possible purchasers, how far evidence of value, 
 463 
 
 INQUIRY (IN PROFESSIONAL SENSE), 
 
 order for, a remedy ancillary to rescission, 210 
 when directed in " influence " oases, 457 
 
 as to adequacy of value, 462, 550 
 costs of, when directed as to value in cases of bargains with " expectants," 550 
 ordered by Court, duty of disclosure to Court in, 510, 511 
 pursuant to writ of ad quod damnum, effect of, 521 
 as to damages, in prospectus cases, 496 
 
 INSANITY. See Lunacy. 
 
 INSOLVENCY, 
 
 transmission of rights on, of party complaining, 241, 356, 464 
 liabilities on, of party charged, 244, 360, 465 
 right or liabihty to damages on, of party entitled or liable, how transmitted, 
 
 360, 485, 488, 489 
 duties of disclosure, &c., on trustee or assignee of estate in case of, when enforce- 
 able by beneficiaries, and when not, 279, 280, 307, 308 
 of party charged, when creditor, or even the insolvent, can impeach a trans- 
 action voidable for non-disclosure, in the, 351 
 of party charged, right of party complaining to claim or proof in the, as for an 
 equitable debt, but not to segregate the sum claimed from the rest of the 
 assets, unless strictly trust money, 343, 344, 351 
 of person entitled to statutory rehef for omissions in prospectus, transmission 
 of rights on, 485 
 liable to statutory relief for omissions in prospectus, transmission of 
 liabilities on, 488, 489 
 of individual, generally. See Bankruptcy. 
 of company, generally. See Liquidation. 
 
 INSPECTION, 
 
 presumptive knowledge of facts and documents to a discovery of which reason- 
 able, would have led, 39 — 45, 48 
 
 " fair opportunity " of, in case of a head lease or other instrument of title 
 containing unusual restrictions, effect of, on presumptive knowledge, 40 — 42 
 
 of material contracts, time and place for, to be announced in prospectus, pursuant 
 to statutory requirement, 481, 492, note (x). 
 
 INSTRUMENT, 
 
 party charged must explain to party complaining effect of every, which purports 
 
 to contain or record the proposed transaction, 274, 329, 436, 437, 447 
 creating alleged relation of confidence, or influence, must be proved by party 
 
 complaining, 314 — 317 
 false statement in, of purpose and nature of transaction purporting to be recorded 
 
 thereby, tends to defeat a plea of propriety in the exercise of the alleged 
 
 influence, 398, 420, 437 
 negotiable. See Negotiable Instrument. 
 generally. See Document. 
 
 INSURANCE, 
 
 contracts of, involve uberrima fides, and are marked off in this respect from other 
 
 contracts, 61, 62 
 rules of disclosure in negotiations for, apply equally to every species of, 63 
 
 [ 54] 
 
Index. 
 
 INSURANCE— comimMctZ. 
 
 duty of disclosure ordinarUy on the assured, but may in special circumstances 
 
 be on the insurer, in negotiation for, 63 
 contract of, compared with contract of suretyship, in respect of duty of dis- 
 closure, 87, 88 
 express stipulation in contracts of, other than marine, for true and complete 
 
 answers to questions put, how affecting duty of disclosure, 144 — 149 
 excessive, when duty to disclose, in negotiations for marine policies, 66 
 duty of disclosure in negotiations for marine. See Maeine Insurance. 
 
 life and health. /See Life and Health 
 
 Instjeance. 
 fire. See Tieb Insueance. 
 miscellaneous, 74, 75 
 popular ethics as to disclosure in negotiations for, 577 — 579 
 
 INTENTION, 
 
 when a " fact," material to be disclosed, and when not, 14, 15, 91, 94, 154 
 expression of, by agent, not to communicate a certain fact to his principal, in 
 
 collusion with opposite party, prevents knowledge of that fact being imputed 
 
 to such principal, 37 
 existence of real, on the part of the servient party to enter into the contract, 
 
 or make the gift, which is impeached, must be established, as the first step 
 
 in the dominant party's plea of propriety in the exercise of the alleged influence, 
 
 432, 433 
 proof of such, not sufficient in itself to establish such plea, 433 
 whether such real, on the part of the servient party existed or not, is question 
 
 of fact, 461, 462 
 proof of, sufficient to establish a will, 414 
 to waive, on part of party complaining, when waiver pleaded as affirmative 
 
 defence, must be proved to have been expressed in clear language, and with full 
 
 knowledge. See Waivee. 
 of party complaining to affirm, when plea of affirmation set up, must be proved 
 
 by party charged to have been evinced by unambiguous language or conduct, 
 
 and with fuU knowledge of facts and rights, and in absolute freedom of wiU 
 
 and judgment, 237, 238, 334, 335, 446—448, 461, 462 
 to infringe known equitable rules of disclosure, not necessary to establish, 
 
 when the infringement in fact is proved, 170—172, 321—323, 424, 425 
 to avoid knowledge, when knowledge is presumed from proof of. See 
 
 WlLFtTL. 
 
 and effect, of acts, ethical views as to relative importance of, compared with 
 those of jurisprudence, 591 — 598 
 
 INTEREST (IN THE ORDINARY SENSE), 
 
 of agent in not communicating a fact to his prmcipal, proof of, does not of itself 
 
 prevent imputation of knowledge of that fact to the principal, 38 
 duty to disclose facts showing absence of, in negotiation for contract of marine 
 
 insurance, 68 
 the like, in negotiation for life insurance, 73 
 conflict between, and duty, is one of the grounds of the doctrme of disclosure 
 
 and good faith in relations of confidence and influence, 275—277, 290, 292, 
 
 302—304, 368, 369, 377, 378, 382, 383 
 duty of agent to disclose the exact nature of his, or of any company or firm 
 
 dealing with his principal, when, 295—297 . . , . 
 
 duty of partner to disclose to firm his, in any similar or competmg busmess, 
 
 where no surplus assets, beneficiary not having any, cannot obtain relief against 
 
 executor or trustee of insolvent estate, 307 _ , ■ ^ ^ r 
 
 nartv charged under duty to party complammg to explam effect of proposed 
 ^ transaction on the latter's, 274, 329, 436, 437, 447 
 
 [ 55 ] 
 
Index. 
 
 INTEREST (IN THE ORDINARY S'E'NSE)— continued. 
 
 persons having had an, in the formation or promotion of a company, when liable 
 to statutory proceedings for omissions from prospectus, 486 — 488. And 
 see Prospectus. 
 
 of signatories of company's memorandum of association in. its property and 
 profits required by statute to be disclosed ia prospectus, 477 
 
 of directors in the promotion of the company, statutory duty to state in pro- 
 spectus, 483, 484 
 
 director not liable under the statute for non-disolosure ia prospectus of a feUow- 
 direotor's, in the promotion, unless he knew of it, 495 
 
 when party complaining who seeks relief by way of defence must plead non- 
 recognition of any, ia the transaction impeached siace the date of his dis- 
 covery of the undisclosed fact, 536 
 
 all persons having any, ia the subject of a policy of marine insurance, may be 
 ordered to give discovery, 537 
 
 applicant in misfeasance proceedings must prove that he has an, 542 
 
 formal parties not asserting any, entitled to costs, but not otherwise, 548, 549 
 
 INTEREST (IN THE FINANCIAL SENSE), 
 
 order for repayment of moneys with, as ancillary to, or a condition of, rescission, 
 
 209, 210 
 payment of, ordered in action for money had and received, or for account against 
 
 party charged in confidence relations, 213, 342, 346 
 rate of, ordered to be paid, affected by conduct of party charged, 209, 210, 323, 
 
 342, 343, 346 
 when application moneys ordered to be repaid with, by company to subscribers 
 
 for shares, on the ground of statutory non-disclosure of " minimum sub- 
 scription " in prospectus, 505 
 orders for payment of money with, in cases of misfeasance, 644 
 efiect on costs of offer of " expectant " to repay loan with reasonable, 551 
 statutory powers of Court as to, in actions by or against moneylenders, 534 
 duty of surviving partner to disclose facts enabling representative of deceased 
 
 partner to elect whether to take, on capital of deceased, or to be still treated 
 
 as a partner. 111 
 duty of moneylender to explain to borrower clause as to, 10, 22, 436 
 
 INTERNAL, 
 
 or " indoor " affairs of company, stranger not presumed to have knowledge of, 46 
 
 INTERPOSITION, INTERVENTION, 
 of third person. See Third Pbeson. 
 
 INVALID. See Void.] 
 
 INVALIDATE, INVALIDATION. See Avoidance and Rescission. 
 
 INVENTION, 
 
 grant of patent for, when relieved against for concealment from Crown or Court, 
 517—521 
 
 INVESTIGATION, 
 
 of title, costs of, in rescission proceedings, 210, 211 
 
 in proceedings under the Vendor and Purchaser Act, 221 
 INVITATION, 
 
 every documentary, offering to the public for subscription or purchase any 
 shares or debentures of a company, which is issued by the company or by 
 any person engaged or interested in the formation, on or with reference 
 to its formation, except a circular addressed to existing members, is a 
 prospectus, within the meaning of the enactment requiring disclosure of 
 certain matters therein, 472 — 477. And see Pbospectits. 
 
 [ 56 ] 
 
Index, 
 irrebuttable, 
 
 presumptions of knowledge, what are, and what are not. /See Knowledge (B). 
 presumptions, generally. See Presumptions. 
 
 IRREGULARITY, 
 
 in acts of company, when no knowledge of, imputable to stranger, 46 
 
 IRRELEVA^'T. See Material. 
 
 ISOLATED, 
 
 knowledge of agent employed solely for the purposes of one isolated act or 
 step in the entire transaction is not imputed to the principal, nor is the 
 ignorance of a person brought in for such a purpose credited to him, 35 
 
 the fact that an alleged relation of influence is only proved in respect of one 
 isolated transaction is a strong element in establishing a due use of the 
 influence by the dominant party, even i£ it does not negative the existence 
 of the relation, 419 
 
 ISSUE (IN THE ORDINARY SENSE), 
 
 of prospectus, statutory duty of disclos\u:e arising on. See Peospecttts. 
 
 of shares by company, as fuUy paid, and consideration, must be stated in 
 
 prospectus, 479 
 amounts received on previous, of shares, required by statute to be disclosed 
 
 in the prospectus, 479 
 of negotiable instruments affected with fraud, proof of, rebuts presumption that 
 
 holder is a holder in due course, 245, 246 
 
 ISSUE (IN TECHNICAL SENSE), 
 
 of fact, what is. See Questions oe Law and Fact. 
 
 directions for trial of, or inquiry as to. See Reliee, Pbocedubb, Costs. 
 
 JOINDER, 
 
 of parties, generally, 538, 539 
 
 of parties in statutory proceedings for non- disclosure in prospectus, 486 
 
 of underwriters in marine insurance cases, 539, 540 
 
 of causes of action, generally, 540 
 
 in prospectus cases, 508 
 of remedies, generally, 640 
 
 in prospectus cases, 508 
 JOINT, 
 
 contracts, rights in respect of, 239 
 
 subscriptions of underwriters are not, 239 — 241 
 
 and several liability of co-agents and co-directors, when, 359 
 
 liability of statutory tortfeasors in prospectus oases, 488 
 
 JUDGE, 
 
 when trial by, with, and when without, jury, 532 — 534 
 
 rules as to costs on trial by, with, and without jury, respectively, 545 
 
 JUDGMENT (IN ORDINARY SENSE), 
 
 fact disclosure of which is likely to affect the, of a normal person, is m one sense 
 
 of the word material, 17, 482 
 duty on party charged to give the party complaining the benefit of his honest 
 and impartial, in — 
 relations of confidence, 273, 274, 278, 282—285 
 influence, 434, 437, 438 
 freedom of. See Freedom. 
 
 infirmity of, in servient party, coupled with fact that dominant party takes 
 unconscientious advantage of it, is one of the " circumstances and conditions " 
 by which a relation of influence may be constituted, 394 — 397 
 
 [ 57 ] 
 
Index, 
 judgment (in juridical sense), 
 
 what duty of disclosure to the Courts is incumbent on party obtaining, and what 
 
 violation of such duty entitles the party against whom judgment was given 
 
 to relief, 509—512 
 includes for this purpose any " judicial act," 514, 515 
 burden of proof on party aggrieved by the, 512 — 514 
 relief (offensive, and defensive) available against the, 515 
 special jurisdiction of Courts in cases of any, as to a will, or any adjudication in 
 
 bankruptcy, 514, 515 
 procedure to be adopted in seeking relief against the, 515, 516 
 foreign, defence to proceeding to enforce, on the ground of concealment from the 
 
 foreign tribunal, 516, 517 
 
 JUDGMENT-CREDITOR, 
 
 has no duty, as such, to judgment debtor, though he may happen to be also his 
 agent, 307, 308 
 
 JUDICIAL, 
 
 acts, proceedings, tribunals, for purposes of relief against judgments procured 
 by concealment from Court, 509 — 517. Aiid see Judgment (in Jtjeidioal 
 Sense). 
 
 vendor is under same duty of disclosure as any other, 221, 222, 510, 511 
 
 discretion. See Discretion. 
 
 fictions, as to presumptive knowledge, not to be extended, 55 — 57 
 as to " fraud," criticism of, 557 — 561 
 
 JURISDICTION, 
 
 Courts having, in cases of non-disclosure, &c., which is the subject of an action, 
 
 532, 533 
 what Courts have, in various statutory proceedings (misfeasance, liquidation of 
 
 companies, the Vendor and Purchaser Act, &c.), 533, 534 
 of Court, in prospectus cases. See Pkospbctus. 
 
 in oases of concealment from tribunal, 514, 515 
 
 Crown or State, 517 — 519 
 under the Moneylenders Acts, 534 
 as to costs, 545, 546 
 
 JURISPRUDENCE, 
 
 doctrines and aims of, in respect to the subjects of this treatise, as compared 
 with those of popular, or philosophical, ethics, 573 — 600 
 
 JURY, 
 
 when trial by judge with, and when without, 532 — 534 
 
 rules as to costs when trial by, and when by judge without, respectively, 545 
 
 JUS TEBTII. See Third Person. 
 
 JUSTICE, 
 
 between the parties, one of the grounds on which the rule imputing knowledge 
 
 of agent to the principal is founded, 28, 36 
 to third party, when ground of refusing relief to the party otherwise entitled, 
 
 188—194 
 of the transaction in relations of influence constituted by " the circumstances 
 
 and conditions " of the particular case, when, and in what sense, required 
 
 to be established by the dominant party, 391, 431 
 of a bargain with an " expectant," must be proved, when, and in what sense, 
 
 411 
 financial, of the price of the property the subject of the contract impeached, in 
 
 relations of influence, how far necessary to establish, in order to sustain the 
 
 transaction, 443. And see Value. 
 various non- juridical senses of the term, 599 
 
 [ 58 ] 
 
Index. 
 
 KING. See Ckown. 
 
 KING'S BENCH DIVISION, 
 
 jurisdiction of, in oases of non-disolosure, 532, 533 
 
 KNOWLEDGE, 
 
 (A) Actual Knowledge, 
 
 means personal and direct knowledge, or express notice, only, 20 
 when alleged, not sufficient to show vicarious knowledge, 20 
 must be proved agamst party complaining, where a plea of knowledge is 
 OQ, ^P ^g^"ist him, and mere proof of means of knowledge not enough, 
 
 must be brought home to the very person who is alleged to have possessed 
 
 it, 333, 498, 499 
 is matter of proof and evidence, 20, 233 
 necessary to defeat registered title, or statutory presumption of ignorance, 
 
 50 — 55 
 
 (B) Presumptive Knowledge, 
 
 expression used in this treatise to denote every kind of knowledge other 
 than actual, 20 
 
 rules as to, are questions of law, 21, 233—236 
 
 of five classes of matters, as follows : — 
 (i) Matters of public notoriety, objects of sense, topics of general informa- 
 tion, elementary laws and facts of nature, general principles of law, 
 &c., 21—24 
 
 (ii) Matters of common knowledge in business of parties, usages and 
 practices of trade, and usual conditions, clauses, &c., 24 — 27 
 
 (iii) Matters known to the agent of the person to whom the knowledge is 
 imputed, if he is the " agent to know," and if employed in 7i.dc re, 
 unless he is shown to have been perpetrating a fraud upon his 
 principal at the material date, 27 — 30 
 
 (iv) Facts or documents to the discovery of which such inquiries and 
 inspections as were reasonable under the circumstances, having 
 regard to the party's actual knowledge of connected facts or 
 documents, would have led, 38 — 47 
 
 (v) Matters of which knowledge is imputed by statutes (whether codifying, 
 or modifying common law rules and presumptions), 48 — 55 
 
 (C) Knowledge in Oeneral, 
 
 equal, of parties, negatives duty of disclosure, 19 
 
 necessarily exclusive on one side, and corresponding trust on the other, 
 is foundation of duty of disclosure in negotiation for contracts uberrima: 
 fidei, 58—60, 70—73, 78, 88, 89, 97, 104^106, 110—116, 118, 119 
 in two senses (knowledge of facts, and capacity, skiU, experience, &c.), 
 must be imparted in relations of confidence and influence, 273 — 278, 
 281—285, 434^-438 
 of undisclosed fact by party charged must be proved by party complaining, 
 in — 
 negotiations for certain contracts, 161 — 164 
 proceedings for relief against a judgment, 514, 517 
 
 grant, 520 
 composition arrangements with creditors, 530 
 condition in prospectus purporting to afiect applicant for shares with, of 
 
 any undisclosed fact, is rendered void by statute, 499 
 no valid affirmation or confirmation of transaction impeached without full 
 
 and exact, 185, 186, 334—336, 447 
 possessed by party charged during relation of confidence, though acquired 
 by him previously, must be communicated, 282, 283 
 
 [ 59 ] 
 
Index. 
 
 KNOWLEDGE— cowfewei. 
 (0) Knowledge in General — continued. 
 
 of directors of company, as to one another's corruption by promoter, renders 
 
 them jointly and severally liable, 359 
 of expectancy, and of expectant's distress, must be proved against the 
 
 moneylender or dealer, 410 
 independent advice of third person is not also competent, unless given with 
 
 full and exact, of all the facts, 442, 443 
 actuarial opinion as to value must be with, of the facts, 463 
 absence of. See Ignorance. 
 
 of certain matters, required to be proved in proceedings for statutory non- 
 disclosure in prospectus, viz. : — 
 " knowingly issuing " the prospectus, 494, 495 
 knowledge by one director of another's qualification by promoter, &c., 
 
 495 
 " knowingly contravening " the enactment, 505, 506 
 means of, not equivalent per se to, 168, note (6) 
 judicial criticism of doctrine of presumptive, 55 — 57 
 use of terms " fraud," and " negligence," in connection with presumptions 
 
 of, criticized, 561 — 564 
 reasons for classifying as " actual," and " presumptive," in preference to 
 the classification of " actual," " implied," and " constructive " know- 
 ledge or notice, 568 — 570 
 
 LACHES. ,See Delay. 
 
 LADING, 
 
 bin of, no presumptive knowledge of terms of charter-party from, 41 
 is a negotiable instrument, for purposes of rules as to assignment, 246 
 
 LAND, 
 
 includes any estate or iaterest in, and chattels real, 78, 79 
 presumptive knowledge of title to, general rules as to, 39 — 45 
 
 in cases of statutory registration, 52 — 55 
 duties of disclosure on vendor negotiating for contract relating to. See 
 
 Vendor (A), 
 the like, on purchaser. See Purchaser. 
 
 LATENT, 
 
 defect, no presumptive knowledge of, 22 note (ii), 47 
 
 LAW, 
 
 presumptive knowledge of general principles of, but not of particular rights or 
 
 claims, 23 
 ignorance of, as to duties of disclosure, is no excuse for breach of such duties, 
 
 170—172, 321—323, 424, 425 
 " mistake," as a defence to statutory action for non-disclosure in a prospectus, 
 
 does not mean ignorance of the statutory, 501 
 ignorance of the statutory, as to prospectuses, does not negative a case of 
 
 " knowingly contravening," 606 
 questions of. See Qitestions of Law and Pact. 
 presumptions of, as to knowledge. See Knowledge (B). 
 
 in influence relations, 363 — 365 
 transmission of rights and liabilities, by operation of. See Death, Infancy, 
 
 Insolvency, Lxtnacy. 
 common. See Common Law. 
 statutory. See Statutory. 
 Roman, as to duties of disclosure and good faith, 601 — 616 
 
 [ 60 ] 
 
Index. 
 
 LEASE, 
 
 '^^whennot'lo^S^"^^^^^^ "^ contents of superior, or original, or head, and 
 
 duties of disclosure as to restrictive covenants of , in negotiation for sub-lease or 
 
 assignment. See Vbndoe (A). 
 included in "purchase," and "lessee" in "purchaser," for the purposes of 
 
 certam matters requu-ed by statute to be disclosed in prospectus, 479, 480. 
 
 Aitd see Pbospeotus. 
 
 LEGATEE, 
 
 one who has the hope of becoming, is an " expectant," within the doctrine of 
 
 unconscionable bargains," &c., 405 
 fiduciary duty of executor, trustee, &c., not enforceable by, when there are no 
 
 surplus assets, 307 
 no fiduciary duty owed by one, to another, 307 
 no relation of " influence " between testator and, 414 
 LEGAL, 
 
 adviser. See Solicitoe. 
 
 personal representative. See Administkatok, and Executor. 
 
 " fraud," criticism of the expression, 557 — 559 
 
 LEGISLATIVE. See Statutory. 
 
 LETTERS PATENT. See Patent. 
 
 LIABILITY, 
 
 joint and several, of co-agents or co-defendants, when, 359 
 
 of statutory tortfeasors in prospectus cases, 488 
 effect of transaction on, of party complaining, must be fuUy explained to him, 
 
 274,329,436,437,447 
 when party complaining must plead previous repudiation of, in his defence, 
 
 217, 536 
 generally. See Duty. 
 
 LICENCE, 
 
 of public house, indorsement of conviction on, when not material to be disclosed 
 
 by vendor to purchaser, 83 
 marriage, not voidable for non-disclosure any more than the marriage itself, 
 117, 118 
 
 LIE. See Miseepeesentation. 
 
 LIFE AND HEALTH INSURANCE, 
 contract of, defined, 70 
 
 duty on assured in negotiation for, to disclose all facts affecting expectation of 
 life, or state of health, of which he has exclusive knowledge, and particularly — 
 any past or existing disease, or inherited disposition to disease, 70 — 72 
 personal habits affecting life or health, 72, 73 
 applications to other offices, declined, &c., 73 
 for whose benefit the insurance is effected, 73 
 family, or usual or latest, medical attendant, 73 
 employment of surgeon or specialist for a, particular disorder, 73 
 where specific questions and the truth or completeness of the answers thereto 
 is made the basis of the contract of, how far common law duty of disclosure 
 affected, 144—149, 180, 181. And see Waeeanty. 
 when premiums paid on policy of, returnable, 203 — 205 
 
 recoverable, 213 
 statutory tribunals having jurisdiction in proceedings relating to certain kinds 
 
 of, 212, 213 
 how far knowledge of disease can be imputed to assured in contracts of, 162 
 
 [ 61 ] 
 
Index. 
 
 LIGHT, 
 
 deed acknowledging no right of access to, when not material to be disclosed by 
 vendor to purchaser, 83 
 
 LIMITATION, 
 
 statutes of, when an answer to proceedings for non-disclosure and other breaches 
 of fiduciary duty, and when not, in — 
 
 negotiations for contracts uberrimce fidei, 173 
 relations of confidence, 321 note (ii), 326, 344 
 influence, 498 
 when statutory period of, begins to run in cases where the statute is applicable, 
 
 321, 344 
 special periods of, fixed by enactments relating to prospectuses of companies, 
 505—507 
 
 LIQUIDATION OF COMPANY, 
 
 three remedies (action in name of company, settling on list of contributories, 
 
 and misfeasance summons) available to liquidator in, for breach of duty of 
 
 disclosure to company, 351, 352 
 in voluntary, on motion of liquidator, certain statutory provisions applicable 
 
 to winding up by the Court may be applied, 541 
 misfeasance proceedings in, 540 — 544 
 certain statutory remedies available against company in prospectus cases 
 
 notwithstanding, 505. And see Insolvency. 
 LIST, 
 
 Lloyds' Shipping, when presumptive knowledge of contents of, or entries in, 
 
 and when not, 25 
 of contributories, when liquidator may settle name of director who has been 
 
 qualified by promoter upon, 351, 352 
 
 LITIGATION, 
 
 compromise of. See Compeomise. 
 
 LIVING, charge on the, need not be disclosed, on sale of advowson, 83 
 
 LOADING A SHIP, 
 
 duty of disclosure in marine insurance cases as to place of, 66 
 
 mode of, 69 
 LOAN. See Moneylendbe. 
 
 LOCAL, 
 
 authority, orders of, afiecting title to land, to be disclosed, 82 
 knowledge, what imputed to resident in negotiations for sale and purchase of 
 land, 21 
 
 LOSS, 
 
 or benefit, likely to result from avoiding, or adhering to, the transaction im- 
 peached, is wholly irrelevant to the party's right to relief, 195, 323 — 326, 426 
 sustained by delinquent agent of company on bargain by which he improperly 
 obtained shares is irrelevant to question of the value of such shares to the 
 company, and the right to recover such value, 346 
 by company must be shown by applicant in misfeasance proceedings, 542 
 of ship, whole history of, is subject of discovery in marine insurance cases, 537 
 generally. See Maeinb Instjeancb. 
 LUNACY, 
 
 of party complaining, transmission of rights in case of, 241, 356, 464 
 
 charged, transmission of liabilities in case of, 244, 360, 465 
 unsoundness or infirmity of mind, though not amounting to, on one side, and 
 unconscientious advantage taken of it, on the other, are circumstances from 
 which a particular relation of influence may be presumed, 393 — 397 
 
 [ 62 ] 
 
Index, 
 maintenance, 
 
 assignment of naked right to avoid a transaction is, or savours of, 242 
 MAJORITY, 
 
 in sense of full age. See Infancy. 
 
 oppression of minority of members of company by, may entitle the minority to 
 use ot name of company, or to institute a representative suit, 356, 357 
 MALA FIDES. See Bad Faith. 
 
 MANAGEMENT, 
 
 mternal or " indoor " of company, stranger has no presumptive knowledge of, 
 
 MANAGER, 
 
 self-constituted, of afEau:s of servient party, stands towards him in a relation of 
 
 influence," 392—394 
 of company, may be liable to misfeasance proceedings, 543 
 
 MANAGING PARTNERS, directors of company described as, 295 note {q). 
 
 MANOEUVRE. See Device. 
 
 MARINE INSURANCE, 
 
 in negotiations for, it is the duty of the assured to disclose to the underwriter 
 aU material facts withiu his (actually or presumptively) exclusive knowledge, 
 such as — • 
 (i) facts relating to voyage, accidents, injuries, storms, dates of departure 
 and arrival, so far as they bear on question of whether overdue or 
 missing ship, disposal of goods on board, &c., 64, 65 
 (ii) facts relating to war-risks, capture, re-capture, prize, regulations of 
 foreign governments affecting ship's safety, articles contraband of 
 war, &c., 65, 66 
 (iii) places of loading and discharge, if not recognized ports, 66 
 (iv) material facts as to over- valuation, double insurance, illegal gaming, 
 
 &c., 66 
 (v) in cases of insurance of chartered freight, or of reinsurance, any unusual 
 
 conditions in charterparty, or in original policy, respectively, 67 
 (vi) detention of ship at places other than contemplated, or unusual methods 
 of loading or stowing cargo, and other miscellaneous facts, 68, 69 
 illustrations of facts material either to the risk, or the amount of premium 
 
 payable, in oases of, 68, 69 
 " material," in contracts of, means what a rational and prudent underwriter 
 
 would consider as, 69 
 in negotiation for, the assured must communicate the particular element which 
 
 gives significance to the undisclosed fact, 154 
 if two facts, each of which is meaningless except in conjunction with the other, 
 
 the assured must disclose both in negotiation for, 67 
 what facts the assured, and the underwriter, respectively are, and what they 
 
 are not, presumed to know in cases of, 22, 24, 25, 30, 31, 40 
 initialling of slip, not the issue of the policy, is the conclusion of contract of, 
 
 156 
 importance of the above rule to the party complaining illustrated in connection 
 with the burden on him of establishing — 
 
 the existence of the undisclosed fact, 155, 156 
 the knowledge thereof on the part of the party charged, 163, 164 
 his own ignorance thereof, 169, 170 
 subscription of each underwriter to a policy of, constitutes a separate and 
 
 distinct contract, 239 — 241, — 
 but, in practice, one of the underwriters of policy of, usually defends, or sues, 
 on behalf of the others, 539, 540 
 
 [ 63 ] 
 
Index. 
 
 MARINE mSTJRA^CE,— continued. 
 
 specially stringent rules as to discovery by the assured in proceedings on a 
 
 policy of, where non-disclosure is set up by the underwriter, 537, 538 
 relief on ground of non- disclosure in negotiation for, 218, 219 
 
 MARKET, 
 
 presumptive knowledge of usages of, 25, 26 
 
 agent's duty of disclosure of identity in dealing on, for his principal, 295, 296 
 
 prices, not conclusive as to value of reversion, 463 
 
 in assessing damages for statutory non-disclosure in 
 prospectus, 504 
 grant of, when impeachable for non-disclosure to Crown, 517 — 521 
 
 MARRIAGE, 
 
 (A) Contract to marry {"pre-contract of marriage ") : — 
 
 duty in negotiation for, to disclose — 
 unchastity in the woman, 112 
 permanent disease, bodily or mental, tending to show incapacity for 
 
 marriage state, 114, 115 
 loose behaviour, or reputation, in the woman, to what extent, 114, 115 
 criminal conduct or character on the part of the man, 114 
 
 no duty to disclose — 
 
 past and cured bodily or mental disease, 113 
 past, and broken ofi, engagement to marry a third person, 113 
 on part of the woman, the " adulteries of art," 113, 115, 116, 
 on the part of the man, defeets of temper, disposition, &c., or financial 
 distress, &c., 113 
 
 (B) Contract of Marriage : — 
 
 stands on a totally different footing from contract to marry : confers 
 status, and therefore not capable of annulment on the ground of non- 
 disclosure or fraud inducing the assent, but only on proof that the party 
 never assented at all, 116, 117 
 
 above principle applies to a marriage settlement, or licence, as much as to a, 
 but not to a deed of separation, which is not void, but voidable, for 
 non-disclosure, 117 — 119 
 
 is never voidable at option of party complaining, but, when subject of relief 
 at all, can only be declared null and void by the proper tribunal, 200, 201 
 
 (C) Relation constituted by Marriage : — 
 
 is not one of the recognized relations of " influence," but may be important, 
 with other circumstances, in constituting a particular relation of influence, 
 395, 396 
 
 Roman and Attic law as to, 607 note (i) 
 
 MATERIAL, MATERIALITY, 
 
 (A) What are deemed "facts " or " circumstances " capable of materiality : — 
 
 a thing, or a past or present event, 13 
 
 receipt of information, news, intelligence, rumours, &c., whether afterwards 
 
 found to be true or false, 13, 14 
 mental states, opinions, expectations, apprehensions, existing in fact, 
 
 whether well-founded or not, 14, 15 
 the making of an agreement, whether valid or not, 15, 16 
 
 (B) Materiality : — 
 
 any fact, in order to have, must be of a nature to affect the judgment of a 
 normal person in determining whether to enter into the proposed trans- 
 action on the precise terms proposed, 16 
 [64 ] 
 
Index. 
 
 MATERIAL, MATERIALITY— cowimwecZ. 
 (B) Materiality {continued) : — 
 
 means materiality to the inducement, when, 16, 17 
 
 in determining, regard must be had to the nature of the transaction or 
 
 business, 16, 17 
 likeKhood of disclosure having a deterrent effect on the party is enough to 
 
 constitute, 17, 526, 530 
 belief of parties, or of a witness as to, irrelevant, 17 
 conduct of party charged may, in cases of doubt, be important in determining 
 
 question of, 17, 18 
 when the asking, or refraining from asking, a question on any particular 
 
 topic is important in determining, 133, 134 
 what constitutes, in case of a complex fact, or two facts which are only of 
 
 importance in the light of one another, 67, 154, 161, 162, 168, 169 
 in order to constitute the kind of, which raises a duty of disclosure, the 
 fact in question must be not only material in above sense, but in 
 the sense that it is material to be disclosed {i.e. has a vital bearing on 
 the class of transaction or business in hand) : illustrations of this rule 
 in negotiation for — ■ 
 marine insurance, 69 
 life insurance, 72 
 contracts of sale, 83 
 suretyship, 85 — 90 
 
 releases, compromises, &c., 97, 103 — 106 
 partnership. 111, 112 
 contracts to marry, 113 
 separation deeds, 118, 119 
 is question of fact, and subject of evidence — 
 generaUy, 225—231 
 in prospectus cases, 491 
 by what kinds of evidence established, 229 
 burden of proving, on party complaining, in — 
 negotiations for contracts uberrimce fidei, 151 
 prospectus oases, 491 
 cases of concealment from Court, 513 
 Crown, 519 
 composition arrangements with creditors, 530 
 when aU questions of, excluded by express warranty or condition, bee 
 
 Waebanty. 
 of dates. See Time. 
 
 (C) Classes of facts deemed material to he disclosed by the party charged, in .— 
 
 (i) negotiations for — 
 
 insurance, generally, 58 — 62 
 
 marine insurance, 64 — 75 
 
 life insurance, 70 — 73 
 
 fire, &c., insurance, 74, 75 
 
 contracts of sale and purchase, 79—85 
 
 suretyship, generaUy, 88—90, 95, 96 
 
 financial guarantees, 90, 91 
 
 fidelity bonds, 91 — 93 ^ i no qk 
 
 guarantees of performance of particular contracts, 93—95 
 
 releases, 97 
 
 compromises, 103 — 106 
 contracts for partnership, 110, 111 
 
 to marry, 112 — 116 
 separation deeds, 118, 119 
 
 [ 65] 
 
Index. 
 
 MATERIAL, MATERIALITY— comfowed 
 
 (0) Classes of facts deemed material to be disclosed by the party charged, in (cant) : — 
 (ii) relations of confidence — 
 generally, 273, 274 
 
 between trustee and cestui que trust, 279 — 285 
 promoter and company, 290 — 294 
 agent and principal, and between partners, 294 — 306 
 (iii) relations of influence — 
 generally, 362—366 
 parental, 372—375 
 
 between legal adviser and client, 379 — 382 
 sacerdotal, 385, 386 
 medical, 387, 388 
 
 created by particular circumstances, 388 — 392 
 between expectant and moneylender or dealer, 400 — 403 
 (iv) cases of statutory duty of disclosure in prospectuses, 481—483 
 
 MATHEMATICAL LAWS, 
 
 when presumptive knowledge of rudimentary, 22, 23 
 
 discussion of two decisions as to contracts made in ignorance of, 249 — 255 
 
 MAXIMS, of law, deceptive and question-begging character of, 570, 571 
 
 MEANS, 
 
 financial, want of. See Distress. 
 
 of knowledge, not equivalent to knowledge, 168, note (6) 
 
 use of positive, to hide defects, in contracts of sale, and use of unconscientious, 
 for the purpose of influence on servient party. See Device. 
 
 MEASURE, 
 
 of damages. See Damages. 
 of value. See Value. 
 
 MEDICAL ATTENDANT, 
 
 when duty on assured in negotiation for life insurance to disclose name of his 
 
 last, or regular, or specially called in, 73 
 relation between, and patient. See Medical Relations. 
 
 MEDICAL RELATIONS, 
 
 is one of the recognized or " suspected " relations of " influence," 386, 387 
 same three presumptions as to existence, operation, and abuse, of influence, and 
 
 same means of rebutting them, in the case of, as in the case of any other 
 
 relation of influence, 387, 388. And see iNrLUEucB. 
 
 MEETING, 
 
 general, of shareholders, when disclosure must be made to, in order to discharge 
 
 duty to company, 293, 294, 333, 355 
 right of voting at general, of shareholders, attached to classes of shares, required 
 
 by statute to be disclosed in prospectus, 484 
 statutory, of shareholders, importance of date of, in relation to period within 
 
 which relief of a certain kind must be applied for, in prospectus cases, where 
 
 omission to state therein the amount of " the minimum subscription," 505 
 
 MEMBER, of company. See Peospectus, and Shaeeholdee. 
 
 MEMORANDUM OF ASSOCIATION OP COMPANY, 
 
 knowledge of contents of, irrebuttably presumed against every member of 
 
 company, 45, 46 
 contents of, required by statute to be stated in prospectus, 477 
 amount of " the minimum subscription " fixed by, must also be disclosed in 
 
 prospectus of company, pursuant to the statute, 505 — 507 
 " officer " constituted by, liable for misfeasance, when, 643, 544 
 
 [ 66 ] 
 
Index. 
 
 MEMORIAL, 
 
 of enrolment of deed, what knowledge of contents of deed is presumed from, 41 
 of enrolment of previous grant, raises a presumption of knowledge against 
 
 grantee from Crown of a later inconsistent grant, and renders the latter the 
 
 subject of revocation, 520 
 
 MENTAL, 
 
 state or condition is a " fact," which may be material to be disclosed, 14, 15 
 disease, when to be disclosed in negotiation for contract to marry, and when 
 
 not, 114, 115 
 disease, to be disclosed in negotiation for contract of life insurance, if existing 
 
 and permanent, but not if past, and cured, 72, 73 
 infirmity of servient party, and advantage taken thereof by dominant party, 
 
 constitute circumstances from which a particular relation of infiuenoe may be 
 
 presumed, 390—397 
 
 MEMORY, 
 
 want of, as affecting proof of ignorance of party complaining, 20, 167 
 
 knowledge of party charged, 161 
 
 MERCANTILE. See Commercial. 
 
 METAPHOR, 
 
 " trustee by," in Lord Westbury's phrase, is under same duties of disclosure 
 as any other trustee, 279, 280 
 
 promoter of company may be regarded as trustee by, 288, 289 
 
 dominant party, in relations of influence constituted by the particular circum- 
 stances, may be regarded as parent or guardian of servient party, by, 390 
 
 supposed " duties," when only duties by way of, and not in strict contemplation 
 of law, e.g. — 
 
 so-called " duty " of diligence and inquiry, 191 — 194, 565, 566 
 mortgagee to mortgagor, 311 
 
 use and abuse of, in jurisprudence, 570, 571 
 
 MIND. See Mental. 
 
 MINE, 
 
 duty of disclosure as to existence of, under surface, or exhaustion of, or other 
 facts relating to, in cases of sale or purchase of land, as follows : — 
 
 none arising out of mere relation of vendor and purchaser of land, 139, 140 
 but where relation of confidence exists between the vendor and purchaser, 
 
 duty arises, 140, 277, 278 
 though no duty originally, supervening circumstances in the course of the 
 negotiation may create one, 122, 123 
 exhaustion of, when a bar to rescission, 202 
 
 MINIMUM SUBSCRIPTION, ,,,;,,,■,. 
 
 on which company wfil proceed to aUotment, amount of, to be stated m pro- 
 
 non^disdosure of amount of, in prospectus, involves liability to damages, and 
 (mdirectly) other liabilities, 503, 505—507 
 
 ^''^^rf'^hareholders in company, rights of agamst majority using their voting power 
 oppressively to prevent iUegal or fraudulent acts bemg judioiaUy mvestigated, 
 
 356, 357 
 
 in sense of nonage. See Infancy. 
 
 *^^^of°pOTS^n whose fidelity is guaranteed, duty of employer to disclose to surety, 
 91—93 
 
 [ 67 ] 
 
Index. 
 
 MISCOHmVCT— continued. 
 
 of one whose credit or aocount only is guaranteed, no obligation on creditor or 
 
 bank to disclose to surety, 90, 91 
 what, must be disclosed between persons negotiating for marriage engagement, 
 
 114 
 intended, when to be disclosed in negotiation for deed of separation, 119 
 need not be disclosed in any negotiation or relation to which no fiduciary duty 
 
 attaches at aU, 142 
 proof of personal, on the part of the party charged, may afiect — 
 
 the question of whether interest shall be ordered to be paid, and the rate 
 
 thereof, if ordered, 323, 342, 343, 346 
 discretionary relief, 143, 144 
 the measure of value or damage, 144, 323 
 the incidence or amount of costs, 144, 323, 425, 546 — 551 
 director of company who can prove absence of, is excused from statutory 
 liabUity for going to allotment without having received the amount of " the 
 minimum subscription " fixed by the memorandum, and named in prospectus, 
 505 
 of inquiry, pursuant to writ of ad quod damnum, destroys presumption which 
 would otherwise arise of the Crown's knowledge of certain material facts, 
 521 
 
 MISFEASANCE, 
 
 statutory remedy, which liquidator is not bound to resort to, if he chooses to 
 
 bring action against misfeasant, or settle his name on list of contributories, 
 
 351, 352, 541 
 procedure, is by summons in the High Court, and motion in any other, supported 
 
 by affidavit, and may be resorted to in all three species of winding up, but 
 
 where liquidation is voluntary, an order must be made on the application of 
 
 the liquidator, or a contributory, or creditor, 542 
 means and includes an actionable breach of trust, or wrongful act in the nature 
 
 thereof, causing loss to the company, 542 
 does not include any breach of duty which is not actionable, or which is only 
 
 misfeasance at large {e.g. negligence), or which occasions no loss to the com- 
 pany, but only to the applicant individually, 542 
 no new rights or liabilities created by the statutory provisions as to, but only new 
 
 and more convenient remedy, 542 
 procedure, persons entitled to resort to, are official receiver, liquidator, and (if 
 
 in a position to prove that he has an interest in the application, but not 
 
 otherwise) a contributory, or a creditor, 541, 542 
 persons who may be liable for, are promoter, past or present director (de facto, 
 
 or de jure), liquidator, or " officer " of the company (which term, for this 
 
 purpose, means a person holding an office constituted by the memorandum 
 
 or articles of the company, or by statute, de jure, and not de facto merely), 
 
 542—544 
 illustrations of positions which do, and which do not, respectively, constitute 
 
 a person an " officer of the company," liable, as such, to be proceeded against 
 
 for, 543, 544 
 representative of deceased person alleged to have been guilty of, is not liable 
 
 to proceedings in, but estate of person against whom, in his lifetime, an order 
 
 has been made, may in certain circumstances be accountable, 351 note (o), 544 
 non-disclosure, when alleged as constituting the, must be proved by the applicant, 
 
 544 
 personal fraud not a necessary element in, 544 
 grounds of alleged, must be stated in summons or affidavit, 544 
 relief and remedy in cases of, 544 
 claims in, assignable and saleable, 544 
 
 not subject of set-ofi, but may be of release, 544 
 [ 68] 
 
Index. 
 
 misrepresentation, 
 
 distinguished from non-disclosure— 
 generally, 6 
 
 as regards inducement, 172 
 illustrations of matters which there is no duty to disclose, but which must 
 
 not be subject of, 142, 143 
 as regards appUcation of statutes of limitation, 321, note lii) 
 wnat non-disclosure may be regarded as implied,— 
 omission of qualifying circumstances, 120 
 withholding of supervening facts, 123—130 
 non-disclosure in suretyship cases, 90 
 . . composition with creditors, 524 
 
 prmciples of law of, the same as, and therefore of service in illustrating, those of 
 non-disclosure, in following topics — 
 questions of what is a " fact," 13 
 certain questions as to materiality, 16—19, 72 
 rules as to waiver, 174, 178, 179 
 
 affirmation, 187 
 conditions of rescission, 197 — 212 
 
 rule as to means of knowledge not proving knowledge, 168, note (6) 
 doctrine of election, 342 
 
 as to forgetfulness being no answer (quoad innocent misrepresentation only), 
 161 
 
 as to unconsciousness of infringing rules of law or equity being no defence 
 (quoad innocent misrepresentation only), 172, 332, 333 
 of nature or object of transaction, in relations of confidence and influence, 
 effect of, in negativing a plea of proper use of the confidence or mfluenoe, 
 398, 420, 437 
 alienation of servient party from his natural protectors by, 398 
 by false answers to proper, not officious and improper, questions, 132 — 134 
 MISSING, 
 
 facts indicating that ship is, must be disclosed in negotiations for marine 
 insurance, 64. And see Mabine Insurance. 
 
 MISTAKE, 
 
 distinguished from non-disclosure, as a cause of action, 6 
 only honest, protected by waiver, conditions, 172 — 179, 182 — 184 
 proof of " honest," in prospectus oases, a statutory defence, 500, 501 
 criticism of laxity in use of the term, 107, 108, 566, 567 
 
 MODIFICATION, 
 
 of common law by statute, 467, 468 
 
 of one contract by another, in case of, statutory duty of disclosing each of the 
 contracts in prospectus, 493 
 
 MONEY HAD AND RECEIVED, 
 
 where action or counterclaim for, is appropriate remedy for non-disclosure, 
 and rescission is unnecessary, 212 
 
 deposits, premiums, application-moneys for shares, &c., recoverable or repay- 
 able in proceedings for, 213 
 
 same principles applied in claim for, as in claim for rescission, 212, 213 
 
 where money obtained or retained by fraud, but in no other case, interest may be 
 recoverable on, 213 
 
 claim for account against trustee, promoter, or agent, is usually regarded as 
 claim for, though occasionally termed a claim for damages, 342 — 344 
 
 net profit only made by party charged in confidence relations is recoverable as, 
 343, 344 
 
 where iasolvent debtor can recover against a secretly favoured creditor in com- 
 position arrangements with creditors the sums paid under the bargain as, 527 
 
 B.N.D. [ 69 ] 2 Y 
 
Index. 
 
 moneylender, 
 
 statutory rule, negativing presumptive knowledge of defects in title of, 52 
 relation between, and borrower in distress, may, with other " circumstances and 
 
 conditions," be deemed one of " influence," 392 — 397 
 relation between, and an expectant. See, Expectant. 
 duty of, to explain transaction (operation of an oppressive default clause, &c.), 
 
 and also the accounts and figures, to the borrower, 10, 22, 436 
 statutory relief, and jurisdiction of courts, in relation to disputes between, and 
 
 borrower, 534 , 
 
 effect of legislation against, and repeal thereof, 403 
 history of public opinion as to the, 587, 588 
 
 MORALITY, 
 
 duties of, in relation to disclosure, which are not enforced by jurisprudence, in 
 negotiation for — 
 
 contracts of sale and purchase, 138 — 141 
 contracts to marry, 113 — 116 
 generally, 135, 138—142 
 doctrines of, compared with those of jurisprudence, in relation to fiduciary duty, 
 
 573—600 
 public, advancement of, regarded as one of the foundations of the equitable 
 rules of disclosure and good faith in — 
 relations of confidence, 275, 276 
 certain relations of influence, 368 
 personal, of party charged irrelevant to the question of his liability, 170 — 172, 
 321—323, 424, 425 
 
 MORTGAGE, 
 
 on land sold, must be disclosed by vendor, 80 
 
 does not, per se, constitute a relation of either confidence, or influence, between 
 
 mortgagor and mortgagee, 310 — 313, 415 — 417 
 but contractual relation between parties to, may with other circumstances, 
 
 constitute a particular relation of influence, 417 
 when character of mortgagee in virtue of, is united vrith that of trustee, solicitor, 
 
 &c., such mortgagee comes under fiduciary duties incidental to the latter 
 
 relation, 417 
 case of expectant coming to the court for relief, is sometimes, for purposes of 
 
 costs, treated as analogous to a case of, where the mortgagor comes for relief 
 
 against mortgagee in possession, 550 
 
 MOTION. See Application (to the CotrRT). 
 
 MOTIVE, 
 
 of party charged in not complying with duty of disclosure is whoUy irrelevant 
 to the question of his liabflity, in — 
 
 negotiations for contracts uherrimce fidei, 170 — 172 
 relations of confidence, 321 — 323 
 influence, 424, 425 
 purchaser under no duty, merely as such, to disclose to the vendor the nature 
 
 of his, in purchasing, 138 — 141 
 relative importance of, and of effect, as viewed by moralists and jurists respec- 
 tively, 598 
 
 MUTUAL, restoration in specie, a condition of rescission, 202, 203, 209, 210 
 
 NAME, 
 
 use of another's, by party charged, to disguise identity, when dealing with the 
 party complaining, is a breach of fiduciary duty in relations of confidence, 
 280, 290, 295—297 
 duty of partner to disclose to firm his interest in a simflar and competing business 
 under another, 304, 305 
 
 [ 70 ] 
 
Index. 
 
 NAME — continued. 
 
 or names of following persons required by statute to be disclosed in prospectus 
 of company — 
 
 directors, 477, 478 
 
 signatories of memorandum of association, 477 
 parties to every material contract, 481 
 auditors, 483 
 officer exercising directorial functions, by whatever, he may be called, is a 
 " director," for the purposes of the enactment as to disclosure in prospectuses, 
 484 
 unimportance of any, in comparison with the substance. iSee Substance. 
 
 NATURAL, 
 
 course, every fact not to be expected in the, having regard to the proposed 
 
 transaction, must be disclosed to a surety, 89, 90 
 place or document, waiver condition in writing must be in {e.g. in conditions of 
 
 sale, and not in particulars), 181 
 protectors, alienation of servient party from his, 398, 400 
 result of statutory wrong, damage must be, in prospectus cases, 496, 497 
 
 NEGLIGENCE, 
 
 honest mistake of fact through mere, is a statutory defence in prospectus cases, 
 
 500, 501 
 director who can prove absence of, when excused in case of allotment without 
 
 having received minimum subscription, 505 
 mere, is not the subject of misfeasance proceedings, 542, note (w) 
 misuse of term, as the equivalent, or as evidence, of fraud, 563, 564 
 unnecessarily applied to rules of presumptive knowledge, 565, 566 
 
 NEGOTIABLE INSTRUMENT, 
 
 what the expression means and includes, viz. any instrument made negotiable 
 
 by statute or custom, 245, 246 
 assignee of, presumed to be "holder in due course" until fraud. Sec, in 
 
 the inception or negotiation thereof is shown, when the burden is thrown 
 
 upon him to prove that he gave value without notice and in good faith, 245, 
 
 246 
 given secretly by insolvent debtor to favoured creditor, relief against, 525, 526 
 
 NEGOTIATION FOR CONTRACTS VBERRIMM FIDEI, 
 
 duty of disclosure in, theory, nature, and limits of, generally described, 58—62 
 particular classes of facts to be disclosed in negotiation for the following species, 
 of contract deemed uberrimce fidei — 
 insurance generally, 61 — 63 
 
 marine insurance, 64—69. And see Marine Insubance. 
 life and health insurance, 70—73. And see Life Instjeance. 
 fire and other insurance, 74, 75 
 
 between vendor and purchaser, 79—85. Ami see Vendor. 
 suretyship, 88— 96. And seeSvB.^TY. 
 release, compromise, waiver, 96—108, 174—181. And see Compromise, 
 
 Release, Waiver. 
 partnership, 110 — 112 
 to marry, 112 — 118 
 separation deeds, 118, 119 
 proceedings for non-disclosure in,— ,,„,„„ a j t, 
 
 burden of proof on party complaining, 149-173. And see Burden of 
 
 Allegation and Proof. 
 affirmative answers available to party charged, 173-188. And see 
 
 Affirmative Answers. 
 relief, 197—225. And see Relief. 
 
 [ 71 ] 
 
Index. 
 
 NEGOTIATION FOE CONTEACTS VBEBRIMM FIDEI— continued. 
 proceedings for non- disclosure in (continued), — 
 
 questions of law and fact, 225 — 239. And see Qtjestions or Law and 
 
 Fact. 
 parties, 239 — 248. And see Parties. 
 ethical views, compared with those of jurisprudence, as to duty of disclosure in, 
 
 573—600 
 Roman law as to duty of disclosure in, 601 — 616 
 Scots law as to duty of disclosure in, 617 — 620 
 
 NEWS, items of, are " facts,'' and may be subject of duty of disclosure, 13, 14 
 
 NEWSPAPEE, 
 
 advertisement, exemption from statutory liability for omission of certain 
 matters from prospectus published as, 476, 477 
 
 NOMINAL, 
 
 purchaser, disguising identity under name of. See Name. 
 value of shares, when director or agent accountable for, 345, 346 
 
 NOMINEE, 
 
 party charged dealing with party complaining must not conceal the fact that 
 
 he is so doing by acting in the name of a, 280, 290, 295, 296 
 promoter must disclose to the company the fact that any director or officer is 
 
 his, 292—294 
 mortgagee must not purchase mortgaged property, when put up for sale, through 
 
 a, 311—313 
 
 NONAGE. See Infancy. 
 
 NON-COMPLIANCE, 
 
 with certain statutory provisions as to disclosure in prospectus, when subject 
 of statutory excuse, 499 — 501 
 
 NON-DELIVEEY, 
 
 reasonable excuse for, when given to party inquiring, relieves him from further 
 inquiry, but not if the inquiry ought to be for production, in which case a 
 reasonable excuse for non-deHvery, if it is not also a justification for non- 
 production, has no effect on any presumption of knowledge, 41 — 44 
 
 NON-DISCLOSUEE, 
 
 distinguished from misrepresentation, mistake, estoppel, 6 
 
 may be actionable at common law, or by statute, 4 
 
 criminal, is not the subject of this work, 6 
 
 means the breach of any civil duty of disclosure, as to which, see Disclosttee. 
 
 does not bear quite the same meaning in the popular view as " concealment," 
 
 or " withholding," 160, 161, 559 
 may be regarded as implied misrepresentation in certain class of case. See 
 
 MiSBBPEESENTATION. 
 
 burden of proving the fact of, though a negative, is on the party complaining, 
 in cases of — 
 
 negotiations for contracts uberrimce fldei, 157 — 161 
 statutory omissions from prospectuses, 494 
 procuring judgments by concealment from Court, 514 
 
 grants by concealment from Crown, 520 
 composition arrangements with creditors, 530 
 misfeasance, 544 
 burden is not on party complaining to prove the fact of, but on party charged 
 to prove disclosure, in — 
 relations of confidence, 320 
 influence, 423 
 when actionable, and when not. See Actionable. 
 
 [ 72 ] 
 
Index. 
 
 NON-DISCLOSURE-co«<mtted 
 
 affirmative answers to case of. See Affirmative Answees. 
 
 civil consequences of. See Relief. 
 
 whether, or not, is question of fact, 232, 233, 353 
 
 '"^TOndltions" SSfi^"^^*^ *° ^^ ""^^^^^ ^^ *"''^' ""^ °'' ^W^^^, except under stringent 
 what must be pleaded in defence setting up, 217, 536 
 ethical views as to, compared with those of jurisprudence, 573—600 
 Koman law as to, 601 — 616 
 Scots law as to, 701 — 710 
 NON-EXISTENCE, 
 
 of relation at material date, when an answer, in cases of— 
 relations of confidence, 327 — 329 
 influence, 428 — 431 
 of undisclosed fact, plauitiff in statutory action for omission from prospectus 
 must prove that he subscribed on the faith of the, 496, 497 
 NON-PRODUCTION. See Non-deliveey. 
 NORMAL, 
 
 person (i.e. a person of ordinary intelligence and education), judgment of, test 
 of materiality, 16 
 facts within the capacity of, subject of presumptive knowledge, 22, 23 
 features in transaction of suretyship need not, but features which are not 
 
 normal must be, disclosed, 88 — 90 
 the like, as to separation deeds, 118, 119 
 NOTICE, 
 
 generally, in the sense of knowledge. See Knowledge. 
 
 by local or public authorities, affecting title to premises, must be disclosed in 
 
 negotiation for sale of land, 82 
 assignee of negotiable instrument presumed to have taken without, until fraud 
 
 in inception, &c., proved, when onus shifted, 245, 246 
 assignee of chose in possession under contract voidable for non-disclosure is 
 subject to equity to resciad, if he took with, which it is for the party complain- 
 ing to prove, 247, 248 
 inviting subscriptions for shares and debentures, when a prospectus, 473 
 of facts and documents, condition in prospectus purporting to fix applicant 
 
 for shares with, is void by statute, 499 
 of intention to avoid, when equivalent to avoidance, for the purposes of a certain 
 
 statutory provision as to omissions from prospectuses, 507 
 " constructive," criticism of the expression, 668 — 570. And see Knowledge. 
 
 NOTORIETY, presumptive knowledge of matters of public, 21 
 
 NOVEL. See Unusual. 
 
 NUMEROUS PERSONS, 
 
 rules as to joinder and representation of, as parties — 
 generaUy, 538, 539 
 where several causes of action, 540 
 in cases of underwriters of marine policies, 539, 540 
 in prospectus oases, 508 
 
 OBJECT, 
 
 in sense of motive. See Motive. 
 
 and nature and effect of transaction, to be fully explained by party charged to 
 party complaining in relations of confidence and of influence, 274, 329, 330, 
 436, 437 
 " of sense," rules as to presumptive knowledge of defects in, whether chattel, or 
 land, 22, note (m), 47 
 
 [ 73 ] 
 
Index, 
 obligation, 
 
 generally. See Duty. 
 
 " cautionary," Soots term for contract of suretyship, 618, note (6) 
 
 OCCUPATION, 
 
 of land by third person, puts purchaser on inquiry as to nature and terms of, 
 
 as against tenant or occupier, but not as against vendor, 44, 45 
 where land not under, no duty of inquiry as to last occupier, 45 
 
 OCCUERENCE. See Event. 
 
 OFFENSIVE PROCEEDINGS. See Relief. 
 
 OFFER, 
 
 by party charged, before, or at, trial, has no effect on relief unless everything 
 
 offered to which party complaining is declared by the Court to be entitled, 
 
 337, 451, 452,— 
 but may affect damages in prospectus cases, 504 
 costs in aU cases, 647, 548 
 effect of, on costs, when made either by expectant or dealer in " expectant " 
 
 oases, 550, 551 
 receipt, and refusal by party charged of, to purchase reversion, &c., or, on the 
 
 other hand, non-receipt by him of any, after endeavouring to obtain, is 
 
 material evidence on the question of value, 463 
 to public of shares or debentures, when a prospectus for the purposes of statutory 
 
 law as to omission therefrom, 473, 474. And see Pbgspecttjs. 
 amount received by company on any previous, of shares or debentures to the 
 
 public, required by statute to be disclosed in prospectus, 478 
 
 OFFICER, 
 
 of company, actual knowledge of, when imputed to company, 32, 355 
 common, of two companies, when either company is affected by knowledge of, 33 
 of Court, when subject to same duties of disclosure and good faith, in sales by 
 
 direction of Court, as other vendors, 221, 222 
 effect of articles of association providing for vacation of office by director or 
 
 other, of company, 333 
 succeeding, when duty of disclosure to, as well as to the existing holder of the 
 
 office, 354 
 duty of good faith specially incumbent on solicitor, as an, of the Court, 378, 512 
 who is deemed an, of a company, for purposes of misfeasance proceedings, 543, 
 
 544 
 concealment from judicial. See Judgment. 
 of State. See Ceown. 
 
 OFFICIAL RECEIVER 
 
 may be an applicant in misfeasance proceedings, 542 
 
 OFFICIOUS, 
 
 and improper question, no duty to answer at all, or (in some cases) to answer 
 
 truthfully, 134 
 intervention of self-constituted adviser or manager in the affairs of the servient 
 party may raise presumption of influence, 392, 393 
 
 OMISSION. 
 
 of duty of disclosure, or good faith. See Duty. 
 
 of matters required by statute to be stated in prospectus, consequences of. See 
 Prospectus. 
 
 ONEROUS, 
 
 and unusual covenants in head lease, &c., duty of disclosure of, in negotiation 
 for contract of sale of land, 81, 82. A-nd see Vendor (A). 
 
 [ 74 ] 
 
Index. 
 
 ONUS PROBANDI. See Burden of Allegation akd Peoof. 
 
 OPERATION OF LAW, 
 
 transmission of rights' and liabilities by. See Transmission. 
 assignee by, such as trustee in bankruptcy, or execution creditor, is not assignee 
 avord) 247" ""^ ^°^^ "°* *^^^ ^'^^ ^™ni equities (including equity to 
 
 OPERATIVE, 
 
 party charged may sustain the transaction impeached in a relation of confidence 
 
 ^•^<.-^™oo-, n Jir® relation was not operative on the transaction at the material 
 date, oZi — 329 
 
 in a relation of " influence," the influence is presumed to have been operative 
 on the transaction, but the dominant party may rebut the presumption by 
 proof that in fact it was not, the nature of the requisite proof varying accord- 
 mgly as the transaction was a gift or contract. See Influence. 
 
 whether influence was operative on the transaction or not, at the material date, 
 IS question of fact, 460 
 
 OPINION, 
 
 IS a " fact " which, whether sound or not, may be material to be disclosed, 15, 
 154 
 
 of parties, or witness, not relevant to question of materiality, if merely individual, 
 
 17, 18, 229 
 in relations of confidence, party charged must give the benefit of his honest, to 
 the party complaining, with regard to any purposed transaction — 
 generally, 274, 278 
 between trustee and cestui que trust, 284, 285 
 
 agent or partner, and principal or firm, 298 
 of indifferent third person, best evidence of value of reversion, 463 
 of counsel, does not support statutory plea of " mistake of fact " in prospectus 
 cases, 501 
 
 OPPORTUNITY, 
 
 fair, of inspection of head lease, &o. , if given by vendor, and not made use of 
 
 by purchaser, may raise a presumption of knowledge against the latter, 40 — 43, 
 
 235 
 whether or not such, was given in any case, and whether fair or not, are questions 
 
 of fact, 235, 236 
 
 OPPRESSION, 
 
 exercised by majority over minority of members of company may entitle the 
 
 latter to use name of company, or institute a representative suit against 
 
 company and the majority, 356, 357 
 on part of mortgagee, by fraudulent sale to himself at gross undervalue, effect of, 
 
 312 
 old theory of presumption of influence arising from mortgagee being in a position 
 
 to exercise, over mortgagor is now exploded, 415 — 417 
 loose use of the term, with a view of creating spurious duties of good faith, and 
 
 relations of influence, 107, 108, 135, 568 
 Ellard v. Lord Llandaff, in so far as founded on a theory of, criticized, 269, 
 
 270 
 
 OPTION, 
 
 of becoming a trustee does not constitute trusteeship, for the purposes of the 
 
 law affecting relations of confidence, 309 
 of purchase, contract for, required by statute to be disclosed in prospectus, 479 
 generally. See Election. 
 
 [ 75 ] 
 
Index. 
 
 ORDER, 
 
 of Court, duties of disclosure in sales by, 221, 222, 610, 511 
 
 forms of, made by way of relief against non-disclosure, 209 — 211, 
 
 456, 457 
 obtained by concealment from tribunal, 509 — 517 
 for " test action," when made, 539 
 exceptional, as to costs, when, 545, 546. And see Costs. 
 receiving, when secretly favoured creditor is refused, 528, 529 
 of local authorities, affecting title to land sold, must be disclosed by vendor to 
 purchaser, 82 
 
 ORDINARY, 
 
 intelligence and education, any person of, is a normal person, whose judgment 
 
 is the test in determining materiality, 16, 88 — 90 
 course of business, presumptive knowledge of dealings and practices in, 24 — 27 
 no presumptive knowledge by person dealing in, as to defects 
 
 of title in negotiable instruments, 245, 246 
 contracts made in, exempt from statutory duty of disclosure 
 in prospectus, 481 
 course of management, director of company is under no duty to impart knowledge 
 obtained in, to any individual shareholder, and stiU less to a stranger, 140, 141, 
 308, 356 
 course of events, deterioration of property in, is no bar to rescission, 203 
 
 ORIGINAL, 
 
 debt, when unfavoured creditor is entitled to sue for, and to disregard composition 
 
 arrangement with insolvent debtor, on discovery of secret bargain with 
 
 favoured creditor, 529 
 lease, duty to disclose unusual and onerous covenants of, in negotiations for 
 
 contract of sub-lease or assignment, 81 
 policy, when duty of assured to disclose unusual terms of, in negotiation for 
 
 contract of marine reinsurance, 67 
 vendor, when promoter, must disclose to company price at which he bought the 
 
 property from the, — 
 
 as part of common law duty, 291 
 
 in prospectus, pursuant to statutory duty, 479, 480 
 
 OVERDRAFT, duty of disclosure in negotiation for guarantee of, 90, 91 
 
 OVERDUE, 
 
 ship; duty to disclose facts indicating, 64 
 
 negotiable instrument, indorsee of, takes subject to equities, 245, 246 
 
 OVER-INSURANCE, OVER-VALUATION, 
 
 facts indicating, when to be disclosed by assured to underwriters in negotiation 
 for marine insurance, 66 
 
 PAR, 
 
 when value of shares taken at, ordered to be paid to company by delinquent 
 director, 345, 346 
 
 PARENTAL RELATION, 
 
 is the relation between parent and child, just emerging from infancy, or dependent 
 upon parent for home, and livelihood, of whatever age, and includes the quasi- 
 parental relation between guardian and ward, and between any person, 
 whether parent or not, who is in loco parentis and the person under his 
 guardianship or protection, 372, 373 
 is one of the " suspected " relations of influence, 369 
 
 [ 76 ] 
 
Index. 
 
 PARENTAL RELATION— corrfMiwed. 
 
 the same three presumptions made against the dominant party in, as in any 
 other relation of influence, 372. And see Influence. 
 
 by what evidence on the part of the dominant party two of the above pre- 
 sumptions may be rebutted in a case of, accordingly as the transaction is a 
 gift or a contract, 372, 373, 376. And see Influence. 
 
 where presumption in fa vein: of family arrangements negatives the presumptions 
 against the validity of a transaction during the existence of the, and what is a 
 family arrangement for this purpose, 374, 375, 448, 449. And see Family 
 Aebangement. 
 
 one who, with knowledge of the existence of a, between two persons, procures or 
 leaves the parent to influence the child to pay or guarantee debt due from 
 parent to himself, is subject to the same duties as the parent, 376 
 
 where a dominant party in a relation of influence constituted by the particiilar 
 circumstances may be regarded as constructively standing in a, towards the 
 servient party, 389, 390 
 
 in a mercantile sense, between promoter and company, 288, 289 
 
 PARITY. See Equality. 
 
 PARLIAMENT, 
 
 company incorporated by, not subject to statutory liability for omissions in 
 
 prospectus, 475 
 generally. See Statutory. 
 
 PARTIAL, 
 
 disclosure is no disclosure at aU, 7 — 11. 
 
 knowledge, alleged affirmation with only, is ineffective as an answer to a case of 
 
 non-disclosure, 186, 187 
 rescission of transaction, when granted, and when not, 206, 339, 454, 455 
 repeal of Crown grant, when, and when not, 518, 519 
 relief, in marine insurance cases by " excepting out of the policy," doctrine of, 
 
 is now exploded, 218, 219 
 
 PARTICULAR, 
 
 titles, or rights, no presumptive knowledge of law as to, 23 
 " circumstances and conditions of the case," relation of influence constituted 
 by. See Circumstances and Conditions, &c. 
 
 PARTICULARS, 
 
 of sale, waiver of right to complain of omissions in. See Waiver. 
 
 not the proper place for a condition of waiver, 181 
 what, required by statute to be disclosed in prospectus of company, 477—484. 
 And see Prospectus. 
 
 in pleadings, what must be given, 534—536 
 
 when discovery will be ordered to be given by party charged before 
 
 party complaining is required to give, 535 — 537 
 generaUy, what must be given in discharge of duty of disclosure. See Exact. 
 
 what, may assert right to relief for non-disclosure and breaches of fiduciary 
 duty, in cases of — 
 negotiations for contracts uberrimoe fidei, 239—242 
 relations of confidence, 353 — 357 
 
 influence, 464 
 bargains with " expectants," 404, 405 
 * prospectuses of companies, 485, 486 
 obtaining judgments, 515, 516 
 
 grants from Crown or State, 518 
 composition arrangements with creditors, 526—531 
 misfeasance, 541, 542 
 
 [ 77 ] 
 
Index. 
 
 PARTIES— continued. 
 
 against what, right to relief for non-disclosure, &c., may be asserted, in cases of — 
 negotiations for contracts uberrima, fidei, 243 — 248 
 relations of confidence, 357 — 361 
 
 influence, 464 — 466 
 bargains with " expectants," 405, 406 
 prospectuses of companies, 486 — 489 
 obtaining judgments, 515, 516 
 
 grants from Crown or State, 518 
 composition arrangements with creditors, 526 — 531 
 misfeasance, 542 — 544 
 rules as to joinder of, generally, 538 — 540 
 
 in marine insurance cases, 539, 540 
 in prospectus cases, 486 
 formal, rules as to coats of, 548, 549 
 
 meaning of " party complaining," and " party charged," as used in this work, 5 
 " dominant," and " servient party," in relations of influence, 362 
 joint liability of. See Joint. 
 
 several liability of, and relief against. See Several. 
 
 where one of two, is induced or allowed by the other to abuse a relation of 
 confidence or influence for the advantage of the latter, both are liable to the 
 party complaining, 357, 358, 376, 398, 465 
 
 PARTY-WALL, 
 
 award, when material to be disclosed by vendor to purchaser in negotiation for 
 contract of sale of land, 82 
 
 PARTNERSHIP, 
 
 (A) being mutual agency, knowledge ,of partner is presumptive knowledge of 
 
 the firm under the same conditions as knowledge of agent is imputed to 
 principal. See Agency (A). 
 
 (B) Duties of disclosure in negotiation for contract of, — 
 
 the negotiating party who has the exclusive or superior knowledge of the 
 property and affairs and business of the proposed partnership must make 
 full disclosure to the other of all material facts, books, accounts, &c., 110 
 
 illustrations of facts material to be disclosed in such negotiation (where 
 owner of business invites another, ignorant of that, or of any business, 
 to become partner, or where active, or indoor, partner invites dormant, 
 or outdoor partner, to increase his interest, or where surviving partner is 
 dealing with representative of deceased), 110, 111 
 
 regard must be had to nature of particular business in determining what 
 is material to be disclosed ; no duty to disclose anything which may be 
 important for the other party to know in a general and loose sense, if it 
 is not material to the particular kind of partnership. 111, 112 
 
 (C) Duties of disclosure and good faith between the partners during the subsistence 
 
 of the relation of, — 
 
 relation of partnership is mutual agency, with certain special features, 304 
 
 duty on every partner to disclose any bargain entered into with third person 
 for his private benefit on any matter of business within the scope of the 
 partnership, 300 
 
 partner must not secretly engage in any business of a nature to compete 
 with that of the firm, in his own or another's name, for his private%dvan- 
 tage, or use knowledge and information obtained by reason of his position 
 in the firm, if, but not unless, the firm is entitled to it, 304 — 306 
 
 no duty on partner to disclose to the firm the fact of his selling to, or buying 
 from, another partner a share therein, 309 
 [ 78 ] 
 
Index. 
 
 P^TNmsmP-continued. 
 (D) Miscellaneous — 
 
 wten firm 7Sf *° ^eUef on ground of non-disclosure to partner, 239, 240 
 fiducLTylty.tJTs? iL^tT"' non-disclosure or other breach of 
 
 ^"*rtt:\f hTstl'^Tn^^^^^^^^^^^ °^ --^-^ -'^^^^ 'y 
 
 PATENT, 
 
 defect, when presumptive knowledge of, 21, 22 47 
 
 ""fto^^L' r*''^,!*'''*' '"Y ^^'''^ Srant or prolongation of, is obtained from 
 <Jrown or Court by concealment, 517—521 
 
 effect of registration on presumptive knowledge of equities afiecting, 55 
 PATIENT. See Medical Relation. 
 
 PAYllENT, when plea of, not avaUable to a bribed director, 326, note Id) 
 what, ordered as part of rehef for non-disclosure. See Relief. 
 what kmds of, and contracts for, must be disclosed in prospectus, pursuant to 
 
 statute. See Prospectus. r r r 
 
 offer of, by " expectant." See Ofeek. 
 
 PENITENT. See Saceedotal Relation. 
 
 PERIOD, 
 
 statutory, of limitation. See Limitation. 
 generally. See Time. 
 
 PERMANENT, 
 
 improvements, expense of, allowed to party charged against whom rescission 
 
 ordered, 210, note (w), 340, 457 
 improvements, value of, is question of fact, 462 
 official of company, when deemed an " officer," for the purposes of misfeaeance 
 
 proceedings, 543, 544 
 
 PERSON, 
 
 normal. See Normal. 
 artificial. See Company. 
 third. See Third Person. 
 
 PERSONAL, 
 
 equities. See Equity (qt the sense of an Equitable Right). 
 
 knowledge. See Knowledge (A). 
 
 temperament, or " equation," when disregarded in applying rules affecting 
 
 relations of influence, 387, 452, 453 
 morality or motives of party charged, when irrelevant, 170 — 172, 321 — 323, 
 
 424, 426 
 intimacy, as friend or servant, one of the circumstances from which a particular 
 
 relation of influence may be presumed, 394, 395 
 conduct of party, as affecting costs, 545 — 551 
 identity. See Identity. 
 
 representatives. See Administrator and Executor. 
 habits. See Habits. 
 belief or opinion. See Individual. 
 " fraud," criticism of the expression, 557 — 559 
 
 PHYSICAL, 
 
 laws, presumptive knowledge of, 22 
 disease or infirmity. See Disease. 
 
 [ 79 ] 
 
Index. 
 
 PBYSICAL— continued. 
 
 defects in property sold, when presumptive knowledge of, 21, 22, 47 
 when duty to disclose, 83 — 85 
 
 duty not to conceal by positive devices, though no 
 duty to disclose, 140, 178, 179 
 cancellation, delivery up of instrument for, when ordered, 208, 209 
 
 PHYSICIAN. See Medical Relation. 
 
 PICTURE, 
 
 no duty to impart exclusive knowledge of value or authorship of, in negotiation 
 
 for purchase, 140, 141, — 
 but there is such a duty if the purchaser stands to the vendor in a relation of 
 confidence, 140, 277 
 
 PLEADING, certain rules of, special to proceedings for non-disclosure, 534 — 537 
 
 POLICY (IN GENERAL SENSE), 
 
 anything affecting the judgment of a reasonable person as to the, of entering 
 into the proposed transaction on the proposed terms may be material, 16, 
 482 
 public. See Public Policy. 
 
 POLICY OF INSURANCE, 
 
 marine. See Mabinb Insurance. 
 
 Ufe. See Life and Health Insurance. 
 
 fire. See Fire Insurance. 
 
 " guarantee," efiect of, whether insurance or suretyship, 88 
 
 PORT, 
 
 presumptive knowledge of every usual, but not of a place not generally known 
 
 as, in marine insurance cases, 24, 26, 27 
 place not known as, fact that ship is going to, must be disclosed in marine 
 
 insurance cases, 27, note {j), 66 
 accident to ship in, must be disclosed in negotiation for marine insurance, 64 
 
 POSITIVE, 
 
 means or devices to conceal defects may render party liable, though under no 
 
 duty to disclose, or though there was an agreement to waive disclosure, 
 
 120—123, 178, 179 
 " fraud," criticism of the expression, 557 — 559 
 
 POSSESSION, 
 
 presumptions of knowledge against one who has actual knowledge that lands, 
 
 or title-deeds, are in, of a third person, 44, 45. And see Knowledge (B). 
 property in, is not an " expectancy," within the meaning of the rules as to 
 
 bargains with " expectants," but mere fact that the bargain relates to such 
 
 property mixed with property in reversion, does not prevent the entirety being 
 
 regarded as an " expectancy," 405, 406 
 distress of " expectant " not deemed to be at an end tiU the property falls into, 
 
 412 
 when dominant party in " expectant " cases is regarded as a mortgagee in, for 
 
 the purposes of costs, 550 
 chose in. See Chose in Possession. 
 
 POVERTY. See Distress. 
 
 POWER, 
 
 in sense of influence. See Inelubncb. 
 of sale, oppressive use by mortgagees of, 312, 416, 417 
 
 voting, unfair use of, by majority of shareholders to oppress minority, 356, 357 
 
 [ 80 ] 
 
Index. 
 
 PRACTICE (IN THE SENSE OP MERCANTILE USAGE), 
 
 evidence as to, admissible on question of materiality, 18, 227—229 
 presumptive knowledge of established, and honest, but none of unusual, novel, 
 
 uncertain, or dishonest, 24 — 27 
 generally. See Custom. 
 
 PRACTICE (IN SENSE OP LEGAL PROCEDURE), 
 
 certain rules of, in non-disclosure cases, 538—540 
 PRECISE. See Exact. 
 
 PRE-CONTRACT, 
 
 of marriage, term formerly used to express a contract to marry, as distinguished 
 from contract of marriage, 116, note (z) 
 
 PREDOMINANCE. ;See Influence. 
 
 PRELIMINARY EXPENSES, 
 
 required by statute to be disclosed in prospectus of a company, 480 
 PREMIUM, 
 
 (i) in marine insurance cases : — 
 
 every fact likely to affect the judgment of the underwriter in determining 
 whether to agree to the proposed rate of, may be material, 16, note (m). 
 (ii) in insurance cases other than marine : — 
 
 is returnable to the assured, as a condition of rescission, unless it is otherwise 
 
 provided by the contract, 203 — 205 
 is not returnable on rescission, it the contract is illegal, and either both 
 parties had guilty knowledge, or both were in innocent ignorance, of the 
 illegality, but is returnable where the assured in good faith relied upon the 
 insurer's fraudulent misrepresentation of its legality, 205 
 is recoverable, or not recoverable, by the assured, as money had and received, 
 
 under the same conditions as above stated, 212, 213 
 effect of extension of time for payment of, on duty of disclosure, 163, 164 
 
 PRESCRIBED, by statute. See Statutory. 
 PRESENT. See Gift. 
 
 PRESSURE, 
 
 use of, to secure unfair advantage, over person in distress, is one of the circum- 
 stances from which a particular relation of influence will be presumed, 397 
 
 erroneously supposed at one time to be impUedly incidental to the position of a 
 mortgagee in relation to the mortgagor, 415 — 417 
 
 exerted on debtor by favoured creditor in composition arrangement with 
 creditors, how relieved against, 527 
 
 PRESUMPTIONS (IN LAW), 
 
 of knowledge. See Knowledge (B). 
 
 as to holdership and possession " in due course," 245—248 
 
 of existence, operation on the transaction, and undue use, of influence by the 
 dominant party, 363—365. And see Influence. 
 
 as to influence, how rebuttable. See Influence. 
 
 of King's ignorance of previous inconsistent grant, and of subject's knowledge 
 thereof, 619—521 _ 
 
 of King's knowledge of previous mconsistent grant of market or charter of in- 
 corporation where there was an inquiry pursuant to writ of ad quod damnum, 
 unless misconducted, 521 
 
 PRESUMPTIVE, . 1 • ,-fi J rr,A 
 
 " knowledge," use of expression m this work justihed, 570 
 " fraud," expression criticized, 557— 561 ^ ^ , ,. , . , ^ , ,. 
 knowledge, erroneous views as to necessity of establishing fraud and negligence, 
 and misuse of those terms and conceptions, in cases of, 561—566 
 
 [ 81 ] 
 
Index. 
 
 PRICE, 
 
 stipulation for abatement in, and waiver of right to rescission for non-disclosure, 
 
 in cases of sale, 181 — 184 
 agreement to waive abatement in, as well as right to rescission, in the like cases, 
 
 184, 185 
 specific performance with abatement in, 216 
 purchase at inadequate, or sale at excessive. See Valtjb. 
 given by vendor for property which he is selling, need not be disclosed, where 
 no other relation between parties than that of vendor and purchaser, 138, — 
 but must be disclosed, where there is a co-existing relation of confidence, 
 291 
 payable by promoter to original vendor, when required by statute to be 
 
 disclosed in prospectus, 479, 480 
 selling goods at exorbitant, to " expectant," 406 
 market, not conclusive as to value of reversion, 463 
 
 in ascertaining damages for statutory non-disclosure in 
 prospectus, 504 
 
 PRIEST. See Sacekdotal Relation. 
 PRIMA FACIE. See Rebuttable. 
 
 PRINCIPAL, 
 
 debtor and surety. See Subety. 
 and agent. See Agency. 
 
 PRIVATE, 
 
 knowledge, when duty to impart to party complaining, and what kinds of. 
 
 and under what conditions and circumstances. See Knowledge (C). 
 treaty, same duty of disclosure in sales by, as in sales by public auction, 79 
 ownership of trustee's, promoter's, or agent's knowledge, experience, and skill 
 is one theory on which right of cestui que trust, company, or principal, to full 
 disclosure is founded, 277, 278 
 profit, when to be disclosed in certain relations. See Profit. 
 advantage, unconscientiously taken of knowledge, confidence, or influence. 
 
 See Advantage. 
 " company," statutory definition of, 470, note {nn). 
 
 matters exempted from statutory disclosure in prospectus of, 470 
 duty of disclosure to future shareholders (if contemplated) of, is 
 the same as the duty of disclosure to any other species of com- 
 pany, 289, note (t) 
 
 PROBATE DIVISION, 
 
 exclusive jurisdiction of, in cases of wills procured by fraudulent concealment, 
 514 
 
 PROCEDURE, 
 
 as regards pleading, discovery, representative suits, and test actions, and other 
 
 rules of practice, in cases of non-disclosure generally, 534 — 539 
 special, in marine insurance cases, as to discovery, 537, 538 
 
 parties, 530, 531 
 as to joinder of parties, causes of action, and combination of remedies, 540 
 for obtaining relief against purchase of property sold by direction of the court, 
 
 on the ground of non-disclosure, 221, 222 
 for relief against secret bargain by compounding debtor with a favoured creditor, 
 
 526—529 
 for relief against judgments obtained by concealment, 515 — 517 
 
 grants from State, obtained by concealment, 518, 519 
 statutory, under the Vendor and Purchaser Act, 220, 221 
 
 in prospectus cases, 501 — 508. And see Pbospectus. 
 in misfeasance oases, 540 — 544 
 
 [ 82 ] 
 
Index, 
 production, 
 
 of title deeds, withholding of, how far party from whom it is withheld is put on 
 
 inquiry, 39 — 44. Ancl see Non-Delivbky. 
 of ship's papers ordered in marine insurance oases, 537 
 
 PROFESSIONAL, 
 
 relations of " influence," 369. And see Solicitor, Saoeedotal Relation, 
 
 and Medical Relation. 
 employment, cesser of, does not necessarily negative continuance of professional 
 
 influence, 428 
 practice, fact that servient party is in, or even in the same, as the dominant party, 
 
 does not negative presumption of influence, 453 
 
 PROFIT, 
 
 which vendor is making, or which purchaser has arranged to make, need not 
 
 ordinarily be disclosed, 138, — 
 but if vendor and purchaser stand to one another in a relation of confidence 
 
 (e.g. promoter and company), such profit must be communicated, 291 
 received, or stipulated for, by agent or partner from third person must be 
 
 disclosed to principal or firm, 298 — 302 
 costs, receipt of, or agreement for, must be disclosed by a solicitor who stands 
 
 in a relation of confidence to his client (e.g., director of a company, or trustee 
 
 of a college), 302 
 receipt of, or agreement for, must be proved by party complaining, 319 
 knowledge of receipt of, implies consent thereto, 331 
 net only, recoverable against agent, &c., 343 
 
 property with accrued, to be restored by delinquent agent, &c., 344, 345 
 of company, interest of holders of founders' or management or deferred shares 
 
 in, required by statute to be stated in prospectus, 477 
 casual, made by company in ordinary course of management, need not be dis- 
 closed by director to stranger, or even to individual shareholder, in negotiation 
 
 for sale or purchase of shares, 140, 141, 308, 356 
 
 PROMOTER, . ^ cj 
 
 relation between, and the company promoted by him, is one ot confadence, 
 
 285, 286 
 judicial descriptions of what constitutes a, 286, 287 
 whether a person was, or was not, at material date, is a question of fact, 314, 
 
 various theories of, and views as to, exact fiduciary position of a, 287—289 
 union of character of, with that of vendor to company, involves a, conflict 
 between interest and duty, and the necessity for rules as to disclosure, 289, 
 
 when dealing with company in double capacity of vendor and promoter, must not 
 conceal either character under name of trustee or nominee, or other disguise, 
 
 must disclose all facts showing real value of property, the profit he is making 
 
 on the sale, and all commissions, benefits, &c., 291 
 if executive of company is dependent upon himself, must disclose such depen- 
 
 dency to the company, 292 — 294 ,.„ -, ^, ,■ ^ nno 
 
 must disclose the fact (if it be so) that he has qualified the directors, 302- 
 
 hafno duties to company afterwards incorporated, unless it was the company 
 contemplated by him when purchasing the property which he is reseUing 
 
 does not include a banker, or a solicitor, merely as such, 309 , , . 
 
 itbmty and position of, in the statutory law relating to disclosure of certain 
 
 prescribed matters in prospectuses. See Pbospecttjs. 
 liability of, to misfeasance proceedings, 541—543 
 
 [ 83 ] 
 
Index. 
 
 PROOF, 
 
 in the sense of evidence. See Evidence. 
 
 in the sense of claim in insolvency, when party complaining has a right of, 344, 
 
 351, 352. And see Insolvency. 
 in printer's sense, prospectus in, when not subject to the statutory law relating 
 
 to disclosure in prospectuses, 476, 477 
 
 PROPERTY, 
 
 for purposes of legal presumptions of knowledge, includes real and personal, 
 
 and any right or interest in, whether in possession or not, and a debt or chose 
 
 in action, 48, 49 
 various presumptions of knowledge as to title of, and condition of, 39 — 51 
 statutory presumptions (by reason of registration) of knowledge of title to, 
 
 52—55 
 duties of disclosure on vendor in negotiation for sale and purchase of. See 
 Vendor (A), 
 purchaser, in the like. See Ptjkchasbe. 
 specific, assignment or devise of, carries with it the right to avoid, 241, 242 
 consisting of specific fund which can be earmarked and traced, assignment of, 
 
 carries with it the same right, 242, 356 
 private right of, in knowledge, skiU, and experience of agent, &c., is one of the 
 
 grounds on which rules as to disclosure in confidence relations are founded, 
 
 277, 278 
 rules as to disclosure of, and otherwise relating to, price of, or previously given 
 
 for, in transactions of sale and purchase. See Price. 
 option of party complaining, in relation of confidence, to take the, for which 
 
 the party charged is accountable, or to rescind the transaction, 341, 342 
 the like option of party complaining to take the actual, or its value, 344 — 346 
 family settlement or division of, arrangements for, when exempt from ordinary 
 
 rules of disclosure. See Family Arkangembnt. 
 what is, and what is not, deemed an expectation of, for the purposes of the rules 
 
 relating to bargains with " expectants," 404 — 406 
 " expectant " not deemed emancipated, so as to constitute a confirmation by 
 
 him of the transaction valid, until the, in reversion or expectation, falls into 
 
 possession, 412 
 rules as to disclosure and knowledge of facts relating to value of the, and as to 
 
 giving, or not taking more than, full value, for the. See Value. 
 sold to company, what contracts and facts relating to, are required by statute 
 
 to be disclosed in prospectus. See Prospectus. 
 restoration of, in misfeasance cases, 544 
 
 PROPOSAL, 
 
 in hfe insurance contracts. See Life and Health Insurance. 
 for transaction, right of party complaining to reject, in the first instance, or 
 when asked to confirm it, must be explained to him, 274, 329, 436, 437, 447 
 to waive, must be shown to have been accepted, 181 
 generally. See Offer. 
 
 PROPRIETY OF THE TRANSACTION, 
 
 burden on party charged to establish the, in relations of confidence, in order to 
 rebut presumption of abuse of confidence, 329, 330 
 
 is shown, in relations of confidence, by proof of fuU disclosure, disinterested 
 advice against himself, or (preferably) the advice of an independent third 
 person, and (though probably this is not an indispensable prohandum, if the 
 other elements are proved) the giving of fair value, 273, 274 
 
 illustrations of proof of, in cases of trustee, and of agent, 280 — 285, 295 — 298 
 
 burden on dominant party to establish the, in relations of influence, in order to 
 rebut presumption that influence was undue, 365, 366, 431, 432 
 
 is question of fact, 461 
 
 [ 84 ] 
 
Index. 
 
 PROPRIETY OP THE TRANSACTION— cowJimwaZ. 
 
 in relations of influence, is shown by proof of the following : — 
 
 (i) real intention on the part of the servient party, fairly produced, in 
 complete freedom of will and judgment, and after fuU disclosure of all 
 material facts, and after explanation of effect of transaction on 
 servient party's rights and interests, and honest advice from dominant 
 party against himself, or from disinterested third person, 434 — 439 
 (ii) in cases of gifts, the independent and competent advice of a third 
 person, but in cases of contract, proof of third person's advice not 
 indispensable, if unreasonable to seek it, or impracticable to obtain 
 it, 439 — 443. And see Independent and Competent Advice. 
 (iii) in cases of contract, giving of, or receiving no more than, fair and just 
 value, but doubtful whether such proof is indispensable, if all other 
 elements in the propriety be estabhshed, 443 — 445 
 illustrations of proof of, in following relations of influence- — 
 parental, 372 — 375 
 solicitor and client, 379 — 382 
 sacerdotal, 385, 386 
 medical, 387, 388 
 
 created by " circumstances and conditions of case," 390 — 392 
 " expectant " and dealer, 411, 412 
 
 PROSPECTUS OP COMPANY, 
 
 statutory law relating to non-disclosure in, history and general statement as to, 
 
 468—472 
 means and includes any notice, circular, advertisement, or other documentary 
 invitation, offering to the public for subscription or purchase any shares or 
 debentures of a company, which is issued by the company or, on its behalf, by 
 any person engaged or interested in its formation, or subsequently on or with 
 reference to its formation, except a circular to existing members only, 472, 473 
 meaning, in the above definition, of " the public," and of " existing members," 
 
 473, 474 
 " company," 475, 476 
 " private company," 470, note (nn) 
 " any person engaged," &c., 486 
 where several forms, or versions, or editions of, issued at difierent times or places, 
 enough to show non-disclosure in the particular prospectus or the faith of 
 which the plaintiff subscribed, 476, 477 
 published as newspaper advertisement, relaxation of statutory requirements as 
 
 to, in certain respects, 477 
 matters required by the statute to be stated in, viz. — 
 
 contents of memorandum, names, &c., of signatories, and number of shares 
 
 subscribed for by them, and nature and extent of interest in the property 
 
 and profits of the company of all holders of founders', management, or 
 
 deferred shares, 477 
 
 qualification, and remuneration, of directors fixed by the articles, 477, 478 
 
 names of directors, and proposed directors, 478 
 
 minimum subscription on which directors may proceed to allotment, and, 
 if a previous offer of shares within two preceding years, amounts offered, 
 allotted, and paid, 478 
 number and amount of shares, &c., issued within the two preceding years 
 as fully or partly paid up otherwise than in cash, and consideration 
 therefor, 479 
 names of vendors of property purchased, or to be purchased, by company 
 out of proceeds of issue, or the purchase of which has not been completed, 
 and the consideration in cash shares, or debentures paid or payable to 
 the vendor, or, where there are several vendors, or the company is a 
 sub-purchaser, to each vendor, and the amount (if any) payable for good- 
 wUl, 479, 480 
 B.N.D. [ 85 ] 2 Z 
 
Index. 
 
 PEOSPECTUS OF COMPAi^iY— continued. 
 
 matters required by the statute to be stated in, viz. (continued) — ■ 
 
 amount paid within two preceding years, or payable, as commission for 
 
 underwriting, or the rate of such commission, 480 
 amount of preliminary expenses, 480 
 
 sums paid or payable within last two years to promoter, 481 
 dates and names of parties to every material contract, except those entered 
 into in the ordinary course of business, or more than two years before 
 the issue, 481^83 
 names, &c., of creditors, 483 
 
 interest of every director, or of his firm, in the promotion or property of 
 the company, and sums paid or payable to him to induce him to become, 
 or qualify as, a director, or otherwise for services in promotion, 483, 484 
 voting rights (it any) attached to special classes of shares, 484 
 discussion of meaning of following expressions in the above list of matters 
 required to be stated in, — 
 " vendor," " original vendor," " sub-purchaser," &c., 479, 480 
 " material contract," 481 — 483 
 " director," 484 
 persons who may sue for statutory non-disclosure in, — 
 
 (i) any one who took shares or debentures on the faith of the non-existence 
 
 of the omitted matter, 485, 486 
 (ii) his representatives on his death or insolvency, 486 
 persons who may be sued for statutory non-disclosure in, — 
 
 (i) any persons engaged or interested in the formation of the company who 
 issued, or authorized the issue of, the prospectus (directors, agents, 
 promoter, who may be a company, as well as an individual), in- 
 cluding a promoter who invites a purchase of shares, &o., after the 
 incorporation of the company, — such persons, if more than one, being 
 jointly and severally liable, 486 — 488 
 (ii) representatives of such person on his death or insolvency, under such 
 conditions only as would render the representatives of any non- 
 statutory tortfeasor liable, 488, 489 
 burden on plaintiif in action for statutory non- disclosure in, to prove : — 
 
 that he is one of the persons to whom the right to relief is given by the 
 enactment, and that the defendant is one of the persons on whom the 
 statutory duty is imposed thereby, 490, 491 
 existence or occurrence of alleged omitted fact, and conclusion of alleged 
 
 omitted contract, 492, 493 
 the alleged omission, 493, 494 
 
 the defendant' s knowledge of the undisclosed matter, in one case only, 494, 495 
 inducement, and damage, 496, 497 
 affirmative answers available to defendant in action for statutory non-disclosure 
 in,-- 
 (i) common law affirmative pleas, or statute of limitations, 498, 499 
 (ii) ignorance of omitted fact or contract, burden of establishing which 
 is on the defendant, except in one case (receipt of bribe by directors) 
 where the onus is on the plaintiff to prove knowledge, 500 
 (iii) " honest mistake of fact," 500, 501 
 condition requiring waiver, or purporting to fix the subscriber, with notice, of 
 
 any matter omitted from the, is made void by the statute, 499, 500 
 relief for statutory non-disclosure in, is recovery of damages, no special remedy 
 
 being provided by the enactment, 501 — 503 
 further indirect remedies for omission from, of " the minimum subscription," 
 and also for omission from, of the amount or rate of commission paid or 
 payable for underwriting, 505 — 507 
 saving of existing common law and statutory rights in respect of non-disclosure 
 in, 508 
 
 [ 86 ] 
 
Index. 
 
 PROSPECTUS OF COWPANY-continued. 
 
 questions of law and fact arising in action for statutory non-disclosure in. See 
 
 Questions of Law and Pact (D). 
 rules as to ascertainment and measure of damages in statutory actions for 
 
 omissions from, 503, 504 
 
 PROTECTION, 
 
 all advice necessary for, of servient party, must be given by the dominant 
 
 party. See Advice. 
 alienation of servient party from the, of his natural guardians and advisers is a 
 
 material element in establishing a particular relation of influence, 398, 400 
 
 PRUDENT, 
 
 underwriter, effect on mind of, is a test of materiality in marine insurance cases, 66 
 
 PUBLIC (THE), 
 
 ofier to, {e.g. by insurer), can only be relied upon by one who has expressly, 
 or by conduct, accepted it, 181 
 
 no duty on director of company to make disclosure to, 308, 356 
 
 dealings in shares by, may be evidence of value against an accountable director, 
 promoter, &c., 345, 346 
 
 meaning of issue to, for the purpose of determining whether a document is a 
 prospectus as defined by the enactment relating to omissions from pro- 
 spectuses, 473, 474 
 
 documents accessible to. See Public Documents. 
 
 general welfare of. See Public Policy. 
 
 PUBLIC AUCTION. See Auction. 
 
 PUBLIC AUTHORITY, 
 
 orders by, affecting title to land sold, must be disclosed by vendor in negotiation, 82 
 grants obtained by concealment from, 517 — 521. And see Crown. 
 
 PUBLIC DOCUMENTS, 
 
 rules as to presumptive knowledge of contents of, relating to a company (memo- 
 randum and articles of company, &o.), 45, 46 
 when presumptive knowledge of contents of, relating to marine insurance 
 
 (Lloyds' shipping registers and lists, &c.), 25 
 enrolment of previous inconsistent grant from Crown in, effect of, 519 — 521 
 effect of records or entries in, {e.g. registration of title to land, patents, trade- 
 marks, bills of sale, &c.). ySee Registration. 
 PUBLIC NOTORIETY, presumptive knowledge of matters of, 21 
 
 PUBLIC POLICY, 
 
 in the sense of utility, convenience, or necessary requirements of the community 
 at large, or in the sense of social morality, or in both senses, is the basis and 
 justification of the following : — 
 
 (i) the presumption of knowledge of general principles of law, 23 
 (ii) the rule which imputes an agent's knowledge to his principal, 28, 29 
 / jjj) invalidates an agreement not to impeach a transaction 
 
 for fraud, 175, note (e). 
 (jy\ prohibits assignment of a naked right to avoid, 242 
 
 (v) the presumptions made as to, and generally, the equitable doctrines 
 
 applied to, relations of confidence, 275—277, 321 
 (vi) the like, as to relations of influence, 366 — 369 
 (vii) the like, as to unconscionable bargains with expectants, 400 — 403 
 (viii) the rules which invalidate transactions in which there has been con- 
 cealment from third persons, and particularly secret bargains 
 between insolvent debtor and favoured creditor in negotiations for 
 composition, 521, 522, 524, 592 
 relative importance attached to, by moralists and jurists, 591—595 
 -various kinds of, 595 — 597 
 
 [ 87 ] 
 
Index. 
 
 public trustee, 
 
 in same position, as regards duties of trusteeship, as any private and non-statu- 
 tory trustee, 282, note (mm), 328, note (o) 
 
 PUBLICI JURIS, documents whicli are. See Public Documents. 
 
 PUPILAGE, 
 
 servient party in certain relations of influence described by Lord Hardwicke 
 
 as reduced to a state of constructive, 402 
 generally. See Pakentai Relation. 
 
 PURCHASER, 
 
 includes mortgagee, lessee, and any person dealing for property for valuable 
 
 consideration, for purposes of the rules as to presumptive knowledge, 38 — 
 
 48 
 deemed by statute to include also, for the like purposes, any person who bond 
 
 fide makes any payment or transfer on the faith of the validity of any agree- 
 ment with, or security taken by, a moneylender, 52 
 no duty of disclosure to vendor is incumbent on, as such, in negotiation for 
 
 purchase, 138 — 142, — 
 
 but such a duty may conceivably arise from special circumstances, 79 
 may impose a duty of disclosure on himself, though none existed originally, 
 
 by his conduct previous to the negotiation, or during it, in relation to super- 
 vening circumstances, 120 — 134 
 discharge of, from contract, in oases of sale by order of Court, on the ground of 
 
 non-disclosure, 221, 222 
 from one to whom he stands in a relation of confidence or influence is under 
 
 duties of disclosure and good faith to his vendor, not as such, but in his 
 
 character of cestui que trust, &o., agent, partner, &c. See Confidence, and 
 
 Influence. 
 who has only an option of becoming a trustee, or who, being a tenant for lite, 
 
 purchases at the request of the trustee, is under no duty to the vendor cestui 
 
 que trust, 309 
 of a share in partnership from his partner need not disclose the fact to the firm, 
 
 309 
 with notice of defect in title, or restrictions, from a person who has no notice, 
 
 may acquire a good title, free from equities and restrictions, except under 
 
 circumstances which involve fraud, 248, note (e). 
 of reversion in good faith not now required, as formerly he was, to prove full 
 
 value, 409, 410 
 when company is, of property from vendor-promoter, certain contracts and 
 
 facts as to the purchase are required by statute to be disclosed in the prospectus. 
 
 See Pkospbctus. 
 duties of vendor to. See Vendor. 
 
 PURPOSE, 
 
 in sense of intended or probable effect of a transaction on the interests or rights 
 of another. See Effect. 
 
 in sense of motive. See Motive. 
 
 for which land sold is to be used, restrictions on, must be disclosed by vendor to 
 purchaser, 81 
 
 for which money lent on guarantee is to be applied, when required to be dis- 
 closed to the surety, and when not, 90, 91 
 
 for which deed of separation entered into, when other than the normal and proper 
 purposes of such a deed, must be disclosed in negotiation, 118, 119 
 
 "PUT ON INQUIRY," "PUT OFF INQUIRY." See Inquiey. 
 
 [ 88 ] 
 
Index. 
 
 QUALIFICATION (IN ORDINARY SENSE), 
 
 of licensed premises, endorsement of licence which does not affect, need not be 
 
 disclosed, 83 
 of third person to advise party complaining in relations of confidence and 
 
 influence where independent and competent advice must be shown, 442, 443. 
 
 And see Independent and Competent Advice. 
 
 QUALIFICATION OF DIRECTOR OF COMPANY, 
 
 when provided by promoter, duty of promoter to disclose to company, 292—294 
 
 director to disclose to company, 302 — 304 
 required by statute to be stated in the prospectus, 
 with particulars of amounts paid or payable, 
 483, 484 
 amount required for, by articles, to be stated in prospectus, 477, 478 
 
 QUALITY, 
 
 of a thing is a " fact," which may be material to be disclosed, 13 
 
 physical, of land, need not be disclosed by vendor in negotiation for sale, unless 
 
 it can be regarded as affecting title, 83 — 85 
 alteration in the, of property transferred under impeached contract, when a 
 
 bar to rescission, 202, 203 
 total difference in, between the property contracted to be sold and the property 
 
 tendered as a compUance with the contract is an answer to a plea of waiver 
 
 of the right to rescind the contract, 183 — 185, — 
 and also to an objection that completion is a bar to rescission, 201, 202 
 
 QUANTIFICATION, of damages, or value. See Damages, and Value. 
 
 QUASI-FIDUCIARY RELATIONS AND DUTIES. See TBEMiNOLoay. 
 
 QUASI-PARENTAL RELATION. See Parental Relation. 
 
 QUASLTRUSTEE. See Trustee. 
 
 QUESTIONS OF LAW AND FACT, 
 
 (A) 4?!. negotiations for contracts iiberrimce fidei, as to the following : — 
 
 materiality, 225 — 231 
 
 the existence or occurrence of the alleged undisclosed fact, 232 
 
 the disclosure, 232, 233 
 
 the knowledge of either party, 233 — 236 
 
 waiver, 236, 237 
 
 affirmation and election, 237 — 239 
 
 (B) in relations of confidence, as to the following : — 
 the existence of the relation, 352 
 disclosure, 353 
 
 knowledge, 353 
 
 affirmation, 353 
 
 the nature of the transaction, 353 
 
 value, 353 
 
 (C) in relations of influence, as to the following .■— 
 
 the influence, which is irrebuttably presumed in law to arise from the 
 relation, and (though not irrebuttably) to have operated on the trans- 
 action, and to have been undue, 459, 460 
 the transaction, — ^ ,nr. ^ai 
 
 in regard to its nature, whether gift or contract, 460, 4bl 
 with respect to its propriety, 461 
 confirmation by the servient party, 461, 462 
 value, adequate or inadequate, 462, 463 
 
 [ 89 ] 
 
Index. 
 
 QUESTIONS OF LAW AND ¥ACT—conUniied. 
 
 (D) in the statutory action for non-disclosure in the prospectus of a company, as 
 
 to the following : — 
 whether alleged prospectus answers to the statutory definition, 474 
 whether issued to the public or not, 474 
 
 by or on behalf of the defendant or not, 487, 488 
 materiality of omitted fact or contract, 491 
 whether alleged omitted contract amounted in law to a contract, or not, 
 
 492 
 whether such contract was entered into, or not, 493 
 whether plaintifi had knowledge of the undisclosed fact or contract, or not, 
 
 499 
 " honest mistake of fact " on part of defendant, 500, 601 
 
 QUIESCENCE, 
 
 amounting to affirmation of transaction impeached, but not otherwise, is a 
 good affirmative plea to a case of non-disolosure, 194 
 
 RATE, 
 
 of interest. See Interest (in the Financial Sense). 
 
 of commission payable for underwriting, or the amount, required by statute to 
 be disclosed in prospectus, 480 
 
 RATIONAL. See Reasonable. 
 
 REAL, 
 
 intention, proof of, however produced, enough to sustain wUl, 414 
 
 necessary, hut insufficient of itself, to sustain an impeached 
 transaction in relations of influence, 414, 432, 433 
 
 affirmation not established by proof that the intention of the party complaining 
 was actual and, unless complete emancipation and knowledge be also shown, 
 334, 335, 447, 448 
 
 contract, material to ascertain what was the, in case of alleged statutory non- 
 disclosure of material contract in prospectus, 493 
 
 property, and chattels. See Land. 
 
 value. See Value. 
 
 purchaser, or vendor, non-disclosure of identity of, in dealings between parties 
 standing to one another in relation of confidence. See Identity. 
 
 REASONABLE, 
 
 person, judgment of, test of materiality, 16 
 
 inquiries and inspections, presumptive knowledge of facts and documents 
 
 discoverable by, 38 — 48 
 dominant party must establish that the impeached transaction was, in relations 
 
 of influence, and, particularly if the transaction was with an " expectant," 
 
 391, 411, 431, 432 
 explanation of, or excuse for, non-delivery or non-production of title deeds 
 
 absolves the party from further inquiry, and negatives the presumption of 
 
 knowledge which otherwise would be made, 39 — 44 
 ofier of either party, efiect of, on costs, 547, 548, 550, 551 
 
 REBATE, 
 
 when presumptive knowledge of custom of agent to receive, and when not, 26 
 agent or partner must not receive, or stipulate for, from third person without 
 
 disclosure to, or knowledge (actual or presumptive) of, the principal, or firm, 
 
 299—302 
 
 [ 90 ] 
 
Index. 
 
 REBUTTABLE, 
 
 when, and how, the following presumptions of knowledge are,— 
 imputation of agent's knowledge to principal, 36—38 
 presumption of knowledge of a document or fact from actual knowledge 
 
 of a connected document or fact, 39 — 14 
 statutory presumption of knowledge, or absence of knowledge, from 
 registration, 52 — 55 
 presumption that influence operated upon the transaction in relations of in- 
 fluence IS, by proof that in fact the relation and mfluence was terminated or 
 suspended at the material date, 364, 428—431 
 presumption in the like cases that the influence was abused is, by proof of the 
 propriety of the transaction in all respects, and that in fact the exercise of the 
 influence was not undue, 364, 431 — 446 
 presumption of King's ignorance of previous inconsistent grant of a market 
 or charter of incorporation is, by proof that an inquiry, pursuant to a writ of 
 ad quod damnum, was held, but the presumption which thereupon arises of the 
 King's knowledge is, by proof that the inquiry was misconducted, 521 
 
 RECEIVER, 
 
 official, may be an applicant in misfeasance proceedings, 541 
 liquidator acting as, under statutory powers, but not otherwise, njay be the 
 respondent to a misfeasance summons, as an " officer " of the company, 543 
 
 RECEIVING ORDER, 
 
 when secretly favoured credito;r is precluded from obtaining, against insolvent 
 debtor compounding with his creditors, 528, 529 
 
 RECITALS, 
 
 false statements in, effect of, as negativing a plea of " the propriety of the 
 transaction," 398, 420, 437 
 
 RECOLLECTION. 8ee Porgetfulness. 
 
 RECONVEYANCE, when ordered in judgment for rescission, 209, 210 
 
 REDEMPTION, 
 
 clog on equity of, 416, 417 
 
 " expectant " regarded in some cases in the light of a mortgagor asking for, 
 against a mortgagee in possession, for the purposes of orders as to costs, 550 
 
 REDUCTION, 
 
 in price. See Abatement. 
 of damages. See Damages. 
 Scottice, for " rescission," 619 
 
 REFUSAL, 
 
 or delaying of reasonable explanation by successful party charged may affect 
 
 costs, and particularly in " expectant " cases, 546, 547 
 right of, to entertain the proposed transaction, or afterwards to confirm it, must 
 
 be made clear by party charged to party complaining, 329, 335, 436, 437, 447 
 
 REGISTRATION, 
 
 effect of, on rules of presumptive knowledge, as regards — 
 Lloyds' registers, lists, &c., in marine insurance, 25 
 title to land, 52—55 
 patents, trademarks, &c., 55 
 
 bills of sale, and other commercial instruments, 55 
 of membership in register of members of company may justify the rescission 
 
 of a contract which is not voidable, but void, 200 
 copy of prospectus required by statute to be filed for, 477 
 
 [ 91 ] 
 
Index, 
 relation, 
 
 duty of party charged to disclose all facts indicating an alteration in the, existing 
 
 between the parties, 278 
 no presumptive knowledge of facts which change the entire character of the, 
 
 in which the parties stand to one another, 26 
 between parties negotiating for contracts uberrimm fidei. See Negotiation 
 
 FOB Contracts Ubbeeim^ Fidbi. 
 of confidence. See Confidence. 
 of influence. See Inelubnob. 
 
 existence of, must always be proved, by the party seeking relief, whatever the 
 relation alleged may be, e.g. — 
 relation between parties negotiating for a contract uberrimce fdei, 151 
 relation of confidence, 314 — 317 
 
 influence, 418, 419 
 statutory relation in respect of omissions from prospectuses, 490, 491 
 in cases where judgment obtained by concealment from Court, 513 
 in cases where grant obtained by concealment from Crown or State, 519 
 in cases of composition arrangements with creditors, 530 
 what kinds of, give rise to no duty of disclosure. See Actionable. 
 when, and how, presumptions arising from proof of the existence of the, may be 
 
 rebutted. See Affibmative Answers. 
 efiect of the co-existence of two kinds of, 328, 396, 397 
 questions of law and fact as to the, in cases of confidence, or of influence. See 
 
 Questions of Law and Fact (B), (C). 
 in determining the exact nature of the, where the question is of importance, 
 regard is had to the substance and reality of the, rather than to its description 
 and form. See Sttbstange. 
 
 RELEASE, 
 
 in negotiation for a specific, disclosure must be made of every fact material to 
 the particular subject-matter, 96, 97 
 
 where a general, is negotiated for, disclosure must be made of the general nature 
 and class of claims contemplated as the subject thereof, 97 
 
 above rules a^ to, are applied to " catching conditions of sale,'' and " tricky " 
 waiver clauses in prospectuses of companies, 97 
 
 in determining whether a particular transaction negotiated for is a, or a compro- 
 mise, the Court regards the substance, and not the form, 100 
 
 of original debt in composition arrangement remains valid, notwithstanding a 
 condition that, if terms of arrangement not complied with, it shall be void, 
 where the condition is itself void by reason of the non-disclosure of a special 
 bargain with a particular favoured creditor, 528, 529 
 
 misfeasance claim may be the subject of, under the same conditions of validity 
 as any other, 544 
 
 RELEVANT. See Matbeial. 
 
 RELIEF, 
 
 available for non-disclosure, and other breaches of duty, in — 
 (A) Negotiations for Contracts Vherrimce Fidei : 
 (i) rescission, 197 — 212. And see Rescission. 
 
 (ii) moneyhadandreceived, 212, 213. jlrad see Money Had and Received. 
 (iii) summons under Vendor and Purchaser Act, 220, 221. And see Vendor 
 
 AND PUBCHASBE ACT. 
 
 (iv) discharge of purchaser on motion to the Court, in case of sale by its 
 
 direction, 221, 222. 
 (v) defence, or answer, to proceedings for enforcement of the impeached 
 
 transaction, 214 — 217. And see Defensive Pbooeedings. 
 (vi) damages, if, but not unless, the non-disclosure involved fraudulent 
 
 misrepresentation, or was characterized by fraud, 121, 128, 129, 
 
 133, 134, 196, 224, 225 
 
 [ 92 ] 
 
Index. 
 
 RELIEF — continued. 
 
 available for non-disclosure, and other breaches of duty, in {continued)— 
 
 (B) Relations of Confidence : 
 
 (a) against the trustee, promoter, agent, or partner : 
 
 (i) rescission, &c., 338—341. And see Rescission. 
 (ii) account and payment of secret profits in money, or delivery 
 
 of property other than money, or its value, 341 — 346 
 (iii) defence or answer to proceedings by agent, &c., to recover 
 remuneration for services, or damages for wrongful dis- 
 missal, &o., 347, 348 
 (6) against the oontraotee who has secretly bribed the agent, &c. : - 
 (i) rescission, &c., 348 
 
 (ii) defence or answer to proceedings to enforce contract, 348 
 (iii) damages, 348, 349 
 (c) against of&cers of a company in liquidation, restoration of property or 
 money, or payment of compensation, under misfeasance order, 544 
 {d) miscellaneous remedies, 350 — 352 
 
 (C) Relations of influence : 
 
 (i) rescission, &c., 453 — 458 
 (ii) defensive proceedings, 458 
 (iii) miscellaneous remedies, 459 
 
 (D) Prospectuses of companies {statutory omissions) : 
 (i) damages, 501 — 504 
 
 (ii) further indirect remedies, in oases of omission of " minimum sub- 
 scription," and of amount or rate of commission, 505 — 507 
 (iii) common law and other statutory remedies saved, 608 
 
 (E) Obtaining Judgments, 515, 516 
 
 (F) Obtaining Grants from the Crown or State, 518, 519 
 
 (G) Composition Arrangements with Creditors, 526 — 530 
 
 RELIGIOUS, influence. See Sacerdotal Relation. 
 
 REMAINDER. Se.e Rbveksion. 
 
 REMEDIES, 
 
 generally. See Relief. 
 
 combination of by, or against, several parties, 540 
 
 alternative, or cumulative, in — 
 
 relations of confidence, rescission, and account, 341, 342 
 
 account against agent, &c., and damages against 
 
 contractee, 349 
 to recover the property, or its value, 344, 345 
 " contracts for the truth," 145—147 
 
 REMUNERATION, 
 
 non-disclosure is defence to agent's claim for, 347, 348 
 
 when, on granting rehef against promoter, &c., aUowanoe is ordered for his 
 
 reasonable, and expenses, 343 
 of directors, required by statute to be disclosed m prospectus, 477, 464 
 
 RENUNCIATION. -See Abandonment. 
 
 REP AYME NT, 
 
 when ordered in action for money had and received, on the ground of non- 
 disclosure, 212, 213 , . J ■, . .• ■ 
 by party complaining, of moneys received under rescmded transaction, is a 
 
 condition of rescission, 209 
 of moneys, as part of misfeasance relief, 544 
 
 [ 93 ] 
 
Index. 
 
 UEPAYWET^iT— continued. 
 
 of application moneys to applicant, when ordered as statutory relief in the case 
 of a company going to allotment without having received the full amount 
 of "the minimum subscription" named in the prospectus, or where no 
 minimum named therein, though fixed by the articles, the full amount offered 
 for subscription, 505 — 507 
 
 " REPETITION," Scottish equivalent for " money had and received," 619 
 
 REPLY (IN ORDINARY SENSE). See Answer (in Oetmnaey Sense). 
 
 REPLY (IN PLEADING SENSE), 
 
 non-disclosure may be raised by way of, to a counterclaim to enforce the contract 
 
 impeached, 214 
 abuse of a relation of influence may be set up by way of, to an affirmative plea 
 
 that the transaction sued upon was a gift, and not a loan, 421, 422 
 
 REPORT (IN SENSE OF RUMOUR). See Rumotje. 
 
 REPORT (IN PROFESSIONAL SENSE), 
 as to questions of value, when ordered, 462 
 non-disclosure to officer appointed by Court to furnish, 513, note (/). 
 
 REPRESENTATION, 
 
 non-disclosure may amount to, 6 
 
 effect of non-disclosure equivalent to, or involving, a false. See Miseepeesbnta- 
 
 TION. 
 
 REPRESENTATIVE, 
 
 legal, of parties under disability. See Death, Infancy, Insolvency, Lunacy. 
 suit, not permissible in case of several allottees, 529, 530 
 
 in practice resorted to by underwriters of marine policies, 530, 531 
 by minority of members of company, when allowed, 356, 357 
 
 REPUDIATION, 
 
 of transaction must be pleaded in defence of non-disclosure, 217, 536 
 notice of intention of, equivalent to avoidance, for the purpose of the statutory 
 rule which limits the period within which an allotment without having 
 received " the minimum subscription " may be avoided, 507 
 generally. See Election, and Voidable. 
 
 REPURCHASE, 
 
 of shares on stock exchange by broker, as part of the same transaction, when 
 closing client's account, whereby an advantage accrues to himself, if undis- 
 closed to client, is actionable, 302 
 
 secret agreement by promoter with directors to repurchase qualification shares 
 amounts to a secret bribe, 303 
 
 by a party of property from a person to whom, having no notice of equities or 
 restrictions, the party originally sold it, for the purpose of freeing himself 
 from notice, is a fraudulent and ineffectual device, 248, note (e) 
 
 REPUTATION, 
 
 when facts as to the, of one of the parties negotiating for marriage, must be 
 
 disclosed to the other, 114 
 attacks upon the, of a servient party's natural advisers and protectors, tend to 
 
 negative the dominant party's plea of the propriety of the transaction, 398 
 
 REQUISITIONS, 
 
 as to title, under the Vendor and Purchaser Act, 221 
 no duty to answer improper, 134, note {v) 
 
 [ 94 ] 
 
Index. 
 "res ipsa loquitur," 
 
 in certain cases of materiality, 228 
 
 '"'dTscWrTsr*"""'^ '''*° ^ °°''*'''°* °^ ^'''"'^'^'" establishes the fact of non- 
 
 where undervalue is so gross as, per se, to indicate fraud, 284, 312 
 
 it TnrT^K"' *^^,'3*^>^'' °f the transaction reveals impropriety on the face of 
 It, and abuse of mfiuence, 397, 398 i^ if J 
 
 in case of a bargain with an expectant, so outrageous in its terms as, of itself, 
 to constitute it unconscionable, 408 
 RESALE, 
 
 vendor-promoter must disclose the profit he is making on the, to the company of 
 
 the property it is to acquire, 291 
 price paid, or agreed to be paid, to the dominant party for property on, is 
 
 evidence against him of its value, 463 
 
 RESCISSION, 
 
 when party complaining is entitled to, on the ground of non-disclosure or 
 
 kindred breaches of duty. See Relief. 
 right of election between, and adherence to the contract, or other forms of relief. 
 _ See Election, Relief, and Voidable. 
 right to, may be waived. See Waivee. 
 
 can only be granted (whether for non-disclosure, or any other cause) under the 
 following conditions : — 
 
 1. there must be a subsisting and concluded contract, which is valid until 
 
 avoided, and not one which is already void for illegality, or otherwise, 
 or one which, though a contract, is something more (e.o. marriage), 
 199—201. 
 
 2. the transaction to be rescinded must be executory on one side or the 
 
 other, and not completed by conveyance, or otherwise fuUy executed 
 on both sides, except where fraud, or difference in substance, &c., 
 201, 202 
 
 3. the party complaining must be in a position to make specific restoration 
 
 of all property in specie (if any) which he has received under the 
 transaction impeached, unless the destruction or alteration in character 
 of such property is attributable to the party charged, 202—205 
 
 4. the rights of third parties honestly acquired on the faith of the sub- 
 
 sistence and validity of the transaction must not be afieoted, 205, 206 
 
 5. the transaction must be set aside in toto, or not at all, except in the case 
 
 of severable covenants, characters, or parties, 206, 339, 454, 455 
 
 may be granted either on a claim, or a counterclaim, 207 
 
 when prefaced by a declaration, 207, 208 
 
 all documents containing, or recording, or (in any case where a completed contract 
 is subject to the relief) purporting to complete, the transaction are the subject 
 of, in contemplation of law, and certain classes of instrument may further be 
 ordered to be delivered up for physical, 208, 209 
 
 judgment for, is accompanied by all necessary orders and directions for repay- 
 ment, redelivery, reconveyance, so as to efieot complete mutual restitutio ad 
 integrum, and for indemnity against expenses incurred under, but not expenses 
 " arising out of," the impeached contract, and (in proper cases) expenses of 
 investigating title, and for accounts, inquiries, and (in certain kinds of case) 
 for injunction, 209—212 
 
 RESETTLEMENT, 
 
 of family estates, arrangements for. See Family Akbangement. 
 
 RESTORATION, RESTITUTION, 
 
 mutual, in specie, a condition of rescission, 202, 203, 209, 210 
 of property or money by misfeasant, is one of the forms of rehef in misfeasance 
 proceedings, 644 
 
 [ 95 ] 
 
Index. 
 
 restrictions, restrictive covenants, 
 
 in head lease, &c., duty to disclose in negotiations for sub-lease, or assignment 
 
 of lease, if unusual, but, not, if usual, 80, 81 
 when presumptive knowledge of, and when not, 40 — 43 
 
 RESULT, 
 
 damages in prospectus cases must be shown to have been the natural, of the 
 
 statutory non-disclosure, 406, 407 
 validity of compromise not afiected by the, of subsequent htigation showing 
 
 that supposed rights the subject of the surrender never existed, 108 
 value of property, how far question, whether fair or not, is affected by the, of 
 
 subsequent sales or dealings, 463 
 probable, to party complaining of avoiding transaction, is immaterial to his 
 
 right to avoid, 195, 323—326, 426 
 
 RETAINER, 
 
 formal, of dominant party, not necessary to establish existence of a professional 
 relation of influence, 419, 430 
 
 RETICENCE. See Silence. 
 
 RETRANSPER, of property, in judgments for rescission, 202, 203, 209, 210 
 
 REVERSION, 
 
 of expectant, unconscionable bargains with respect to. See Expectant. 
 statutory modification of law as to sales of, 403, 404 
 rules for ascertaining value of, 463 
 
 REVIEW, procedure by biU of, obsolete, 516 
 
 REVOCATION, 
 
 of proposed transaction, party charged must explain to party complaining 
 his right of — 
 in relations of confidence, 329 
 
 influence, 436, 437 
 the like duty when the party complaining is invited, or is proposing, to confirm 
 the transaction, — 
 in relations of confidence, 335 
 influence, 447 
 of Crown grants for non-disclosure, 518, 519 
 
 RIGHTS, 
 
 particular, as distinguished from general principles of law, no presumptive 
 
 knowledge of, 23 
 of way, to be disclosed in negotiation for sale of land, 80 
 in property, included in " property," for the purposes of statutory rules a^ to 
 
 presumptive knowledge, 48, 49 
 declaration of, when made as part of judgment for rescission, 207, 208 
 non-recognition of, under impeached transaction, must be pleaded in defence of 
 
 party complaining who sets up non-disclosure, 217, 536 
 of party complaining, including his right to reject, and, when made, revoke the 
 transaction, must be fully explained to him by the party charged — 
 (i) when the transaction is proposed, in — 
 relations of confidence, 329 
 
 iniluence, 436, 437 
 (ii) when the party complaining is invited, or is proposing, to affirm or 
 confirm the transaction, in^ — 
 relations of confidence, 335 
 influence, 447 
 offer to concede or surrender, effect of, on relief and costs. See Offee. 
 creation of new, by statute, 467, 468 
 
 [ 96 ] 
 
Index. 
 
 BIGHTS — coniimied. 
 
 no new, created by enactment as to misfeasance, 542 
 
 of votmg attached to special classes of shares, required by statute to be disclosed 
 
 m prospectus, 484 
 various remedies for the enforcement of, in respect of non-disclosure and breaches 
 
 of cognate duties. See Kelibp, Remedies. 
 in sense of title to property. See Title. 
 
 who may enforce, and who liable to enforcement of. See Pasties. 
 surrender of, by way of compromise. See Compeomise. 
 
 waiver. See Waivek. 
 of third persons. See Third Persons. 
 joint. See Joint. 
 several. See Several. 
 as correlative to duties. See Duty. 
 
 RIGHTEOUSNESS, 
 
 of the transaction, must be affirmatively established by the party charged, to 
 rebut legal presumptions of abuse of confidence or influence. See Propriety 
 OF the Transaction. 
 
 RISK, 
 
 in marine insiirances. See Marine Insurance. 
 
 in hfe and health insurances. See Life and Health Insurance. 
 
 in fixe, &c., insurances. See Fire Insurance. 
 
 fact material to inducement, though not to the, may be a fact material to be 
 
 disclosed, 16, 17 
 eSect of express contract to buy at all risks, 177 — 179 
 nothing is material to be disclosed of the existence of which the party complaining 
 
 is presumed to take the. See Knowledge (B), (C). 
 no answer to claim to rescind a transaction that party charged took the, of loss, 
 
 when entering into it, 195, 325, 426 
 
 ROMAN LAW, as to non-disclosure, bona fides, and dolus, 601 — 616 
 
 RULES, 
 
 general, of the corpus juris, presumptive knowledge of, 23 
 
 of equity, ignorance of, is no defence to an established claim to relief as the 
 
 ground of non-disclosure, &c., 170—172, 321—323, 424, 425 
 principle and reason of, rather than the rule itself, is to be regarded. See 
 
 Substance. 
 of pleading and discovery, in cases of non-disclosure, 534 — 538 
 of practice, in the like eases, 538 — 540 
 
 RUMOUR, . , , ,. , , „ 
 
 existence of, is a " fact," which may be material to be disclosed, 13, 14 
 when duty to disclose existence and nature of, and when not, 65 
 
 SACERDOTAL RELATION, 
 
 is a recognized relation of influence, 382, 383 
 
 species of, viz. relations between priest, confessor, convent, monastic order, sister- 
 hood, preacher, &c., of any denomination, on the one side, and penitent, 
 disciple, nun, monk, novice, postulant, &c., on the other, 384, 385 
 
 special features in the influence presumed from, 382, 383 
 
 variety of modes in which the influence springing from, may be exerted, 382 
 
 subiect to the same three presumptions of influence, affirmative answers, and 
 relief, or any other relation of influence, 385, 386, as to which presumptions, 
 answers, and relief, see Influence. 
 
 attitude of the lay community towards, 585, 586 
 
 Roman law as to, 608 
 
 [ 97 ] 
 
Index, 
 
 SALE, 
 
 duties of disclosure in relation to contracts of, generally. See Vendob. 
 
 power of, mortgagee though constituted trustee of, by the mortgage deed 
 is not, by reason of that fact alone, under any fiduciary duty to mortgagor, 
 but he may be proved to have fraudulently exercised his, 312 
 
 by auction. See Atjction. 
 
 by order of Court. See Purchaser. 
 
 conditions of, waiver contained in. See Waiver. 
 
 misfeasance claims are subject of, 242, 544 
 
 when subject to fiduciary duties attaching to relations of confidence, 308 — 313 
 
 of expectancy by " expectant." See Expectant. 
 
 of goods at exorbitant prices to '' expectant," when treated as an extortionate 
 loan, 406 
 
 registration of bill of, 55, note (/). 
 
 duty of moneylender to explain to borrower the operation of default 
 clause in, 10, 22, 436 
 
 SANCTION OP COURT, 
 
 to compromise or scheme, when set aside for non-disclosure to Court, 510, 511 
 
 SCIRE FACIAS, 
 
 writ of, when used to obtain relief against grant by Crown or State on ground of 
 concealment, 519 
 
 SCOTTISH LAW, as to non-disclosure, &c., 617—620 
 
 SECRECY, 
 
 as to undisclosed fact, when actionable. See Actionable. 
 as to receipt of commission, profit, or other bribe, by agent, &c., not the receipt 
 itseU, renders the agent, &c., liable, 293, 299, 304 
 
 SECRETARY, 
 
 of company, not ordinarily a person whose knowledge is imputed to the company, 
 
 32 
 of company, may be an " officer " thereof, within the meaning of the enactment 
 
 as to misfeasance, 543, note (c). 
 
 SECURITY, 
 
 lodged by customer with bank, knowledge of contents of, is imputed to the bank 
 
 as against that customer, but not as against any other, 40 
 taken from moneylender, when presumptive knowledge of defects in, is negatived 
 
 by statute, 52 
 creator of, when not bound to disclose to assignee thereof certain collateral 
 
 equities affecting it, 143 
 alteration in character of, when a bar to rescission, 202, 203 
 obtaining a, from servient party by procuring or leaving a dominant party to 
 
 exercise his influence, efieot of, 376, 398 
 giving of additional, to favoured creditor by insolvent debtor in negotiation 
 
 for composition arrangement must be disclosed to the other creditors, 525, 526 
 insolvent and compounding debtor, or third person, may recover money paid to 
 
 bondfde indorsee of, from the creditor to whom security given, when the giving 
 
 of it was pursuant to secret bargain conferring special advantage upon such 
 
 creditor, 527, 528 
 in the sense of shares in company. See Shareholder. 
 
 SELF-CONSTITUTED, 
 
 manager, adviser, or agent of the affairs of a person in a state of bodily, mental, 
 or financial weakness, when deemed a dominant party, 392 — 394 
 
 SELF-INDUCED, 
 
 mistake of one party to a negotiation, need not be corrected by the other, in the 
 absence of special circumstances, 138 — 141 
 
 [ 98 ] 
 
Index. 
 
 SELLER. See Vendor. 
 
 SENSE, 
 
 " objects of," rules as to presumptive knowledge of defects in, 21, note {ii), 47 
 
 SEPARATION, 
 
 deed of, same duty of disclosure in negotiation for, as in negotiation of contract 
 to marry, 118 
 
 in negotiation for deed of, the parties must disclose to one another any feature 
 in the transaction which would not naturally be expected, as (e.g.) the past 
 misconduct of the wife, and any intention to use the deed for purposes other 
 than the normal, as e.g. the wife's intention to use it a? a means of facilitating 
 an adulterous intercourse with the trustee of the deed, 118, 119 
 
 SERVANT, 
 
 rules of disclosure in negotiation for guarantee of fidelity of, 91 — 93 
 taking advantage of known infirmities of master, presumption of undue influence 
 against, 394 
 
 SERVICES. See Remuneration. 
 
 "SERVIENT PARTY," 
 
 expression used in this work to denote the person on whom influence is presumed 
 to have been exercised by " the dominant party," in relations of influence, 
 362 
 
 SET OFF, 
 
 when plea of, not available to a bribed and undisclosing director of a company, 
 
 326, note (d). 
 misfeasance claims not the subject of, 544 
 
 SETTING ASIDE. See Relief, and Rescission. 
 
 SETTLEMENT, 
 
 of disputes. See Compromise. 
 of family estates. -See Family Arrangement. 
 
 of land, included under transactions of sale and purchase, 78. And see Vendor. 
 marriage, cannot be avoided for mere non-disclosure, or for any other cause than 
 such as would be ground for annulling the marriage itself, 117, 118 
 
 SETTLING ON LIST OF CONTRIBUTORIES, 
 
 one of the three remedies available to a liquidator against a director secretly 
 qualified by promoter, 351, 352, 641 
 
 SEVERAL, . ■. ,■ . A- ,■ <. A 
 
 covenants, parties, or characters, m a transaction, if entirely distinct and 
 
 independent, enable the Court to rescind the transaction as regards one of 
 
 them, leaving it to stand as regards the others, 206 
 
 subscriptions of underwriters to marine policy constitute separate and distinct 
 
 contracts, not one joint contract, 239— 241 ,.,-,,. 
 
 sums recoverable against bribed agent, and against contractee who bribed him, 
 though equal in amount, are distinct and, 349 , . , -, 
 
 when Uability of co-directors or other co-agents for non-disclosure is, only, and 
 
 when it is joint and, 359 . ^ ^ ^ 
 
 forms or editions, of a prospectus, involve hability for statutory omissions m 
 respect of any one of them on the faith of which the plaintiff applied for 
 shares or debentures, 476, 477 
 persons, joinder of, as parties — 
 generally, 538, 539 
 
 in the case of underwriters of marme pohcies, 539, 540 
 in actions for statutory non-disclosure m prospectus, 486 
 
 [ 99 ] 
 
Index. 
 
 SEVERAL — continued. 
 
 causes of action, joinder of — 
 
 generally, 540 
 
 in statutory action for omissions from prospectus, 508 
 joint and, of statutory tortfeasors in case of omissions from prospectus, 488 
 
 SHARE, 
 
 purchase or sale of, in partnership, involves duties of disclosure as between 
 
 vendor and purchaser, 110, 111 
 involves no duty of disclosure to firm, 309 
 of agent, &c., in profits made by third person out of principal, must be disclosed, 
 
 300—302 
 of directors and signatories to memorandum of company in property and profits 
 of company, required by statute to be disclosed in prospectus, 477, 483, 484 
 in company. See Shabbholder in Company. 
 
 SHAREHOLDER IN COMPANY, 
 
 each, has presumptive knowledge of contents of memorandum and articles, 
 
 45,46 
 directors are under no duty of disclosure to individual, 138, 139, 140, 308, 356 
 injunction against forfeiture of shares held by, when granted to, in the course of 
 
 action by, against company, 211, 212 
 when application or allotment moneys recoverable by, 213 
 individual, has no duty, &c., as such, to the persons to whom the company owes 
 
 a duty of disclosure, 359 
 statutory rights of, in respect of omissions from prospectus. See Peospectus. 
 qualification of director as, in respect of the prescribed holding. See QtrALiFi- 
 
 CATION OF DiBECTOE OF A COMPANY. 
 
 when disclosure must be shown to have been made, or knowledge brought home, 
 to general meeting of shareholders, 293, 294, 333, 355 
 
 SHIP, SHIPMENT, SHIPPING REGISTERS, LISTS, &c. See Mabine 
 Instjbancb. 
 
 "SHIPS PAPERS," 
 
 stringent practice rules as to discovery of, in action, 537, 538 
 
 SILENCE, 
 
 as to material facts by a party on whom a duty of disclosure rests is actionable. 
 
 See Actionable. 
 when an implied misrepresentation. See Miseeprbsentation. 
 when a party is entitled to preserve, in — 
 
 negotiations for contracts uberrimoe fidei, 134 — 143 
 relations of confidence, 306 — 313 
 influence, 412 — 417 
 when, though a party is entitled to maintain in the first instance, a duty 
 arises to break, by reason of — 
 fraudulent conduct of the party, 120 — ^124 
 supervening circumstances, 123 — 130 
 party is entitled to keep, when asked a question as to a fact which there is no 
 duty to disclose, but if he elects to answer it, being a proper one, he must 
 answer truthfully, 139 — 141 
 " fraudulent," in the proper sense of the word, is actionable, 120 — 124 
 cannot be made actionable, when there is no diity of disclosure, by calling it 
 
 " fraudulent," 134—136, 262—269 
 exploded theory of mortgagee's " silent threat," 415 — 417 
 " gives consent," when, and when not, 126, 127, note (<), 331 
 Roman law as to justifiable, and unjustifiable, 601 — 605 
 
 SISTERHOOD. See Sacebdotal Relation. 
 
 [ 100 ] 
 
Index. 
 
 SLIP, 
 
 initialmg of, in marine insurance, not the issue of the policy, is the conclusion 
 
 of the contract, 156 
 importance of the above rule in connection with the following matters — 
 
 the existence of the undisclosed fact, 155, note (j) 
 
 the assured's knowledge thereof, 183 
 
 the underwriter's ignorance thereof, 169, 170 
 
 SOCIETY, the welfare and convenience of. See Public Policy. 
 
 SOLICITOR, 
 
 (A) Relation between, and client : — 
 
 is one of the recognized relations of " influence," 377 
 
 special features of, 377, 378 
 
 for the purpose of rules relating to, " solicitor " includes any kind of 
 
 legal adviser, such as counsel, certificated conveyancer, Scottish law agent, 
 
 colonial advocate, &c., 378, 379 
 raises the same presumptions, which are rebuttable by the same proof, as 
 
 in any other relation of influence, accordingly as the transaction impeached 
 
 is one of gift or of contract, 379 — 382, as to which presumptions, and 
 
 affirmative answers, see Influence. 
 rxiles of disclosure when relation of mortgagee and mortgagor co-exists with, 
 
 417 
 may exist, though no formal retainer, 419, 430 
 is regarded as a relation of confidence, and not of influence, where the 
 
 solicitor is acting merely as agent for sale or purchase, 378 
 relief against sohcitor for breach of duty in, may be given indirectly — 
 on taxation, 459 
 in the exercise of the court's disciplinary jurisdiction, 378 
 
 (B) Miscellaneous rules as to position of solicitor : — 
 
 knowledge of terms of an order will be imputed to a, who goes out of Court 
 
 for the express purpose of not hearing the order pronounced, 46 
 when knowledge of, or knowledge which he might and ought to have 
 
 acquired, as such, is deemed the client's knowledge, 48 
 utmost good faith required from, on ex parte applications, 512 
 duty of disclosure incumbent on, as to profit costs, when standing in relation 
 
 of confidence to the client [e.g. director of company, or vice-chairman of 
 
 the governing body of a college), 302 
 no duty of disclosure on, who is also judgment creditor of his client, in so 
 
 far as he is acting in the character of creditor only, 307, 308 
 is not, merely as such, a promoter of a company, 309 
 
 an " officer " of a company for the purpose of 
 misfeasance proceedings, 543 
 joined as a defendant to proceedings for breach of fiduciary duty, though 
 
 held not liable, may on ground of misconduct be ordered to pay to the 
 
 plaintiff the costs payable in the first place by his co-defendant client, 
 
 if the latter fails to do so, 549 
 
 SON. See Parental Relation. 
 
 SPECIALIST, ^ . ^ ^- . Av. A 
 
 employment of, in relation to a grave disease, when to be disclosed by assured, 
 
 in negotiation for life insurance, 73 
 
 SPECIFIC 
 
 questions, effect of contract for truthful answers to. See Waeeanty. 
 mutual restitution, a condition of rescission 202, 203, 209, 210 
 property or fund, right to, regarded as equitable debt, 242 
 
 B.N.D. [ 1"! ] 3 ^ 
 
Index. 
 
 specific performance, 
 
 is a discretionary form of relief, not ex debito justitim, and the grant or refusal 
 thereof, and the conditions of either, are affected by the conduct of the 
 parties, 144 
 
 non-disclosure is defence to action for, 214 
 
 the burden of proof on party complaining who resists, is greater than on 
 one who is resisting claim to rescission, 215, 216 
 
 STANNARIES, jurisdiction, Courts exercising, 533, note (6) 
 
 STATE (IN SENSE OF GOVERNMENT), 
 
 duty of disclosure in case of grants obtained from, 517 — 521 
 regulations and orders of foreign, when duty to disclose, and presumptive 
 knowledge of, and when not, 26, 65 
 
 STATE (IN SENSE OF CONDITION). See Condition (in sense ov state). 
 
 STATE OF MIND. See Mental. 
 
 STATEMENT, 
 
 when non-disclosure is an implied, 6 
 false. See Misbepkesentation. 
 
 STATEMENT OF CLAIM. See Pleading. 
 
 STATUS, 
 
 of marriage. See Mabriage (B). 
 
 of infancy, coverture, &c., no duty to disclose, 142 
 
 STATUTORY, 
 
 provisions affecting the law of non-disclosure, classified, 467, 468 
 
 relief, general rules as to, 501 — 503 
 
 law as to prospectuses. See Pkospecttjs. 
 
 presumptions of knowledge, 46, 48 — 53 
 
 periods of limitation. See Limitation. 
 
 rules as to " the holder in due course " of a negotiable instrument, 245, 246 
 
 codification of laws as to disclosure, c&c, in partnership, 306, note (q) 
 
 expressions used in certain enactments considered — 
 
 " utmost good faith," 1, 2 
 
 " actual fraud," 54 
 - " honest mistake," 500, 501, 566, 567 
 
 " void," 198, 199 
 repeal of usury laws, effect of, 403 
 
 modification of the law as to sales of reversions, 403, 404, 409, 410 
 remedies, in cases of misfeasance, 544 
 procedure, under Vendor and Purchaser Act, 220, 221 
 " meeting " of company, 505 
 jurisdiction, courts exercising, 533, 534 
 
 STOCK EXCHANGE, 
 
 mercantile clerk, secretly gambling in differences on, liable to dismissal, 301 
 
 STOCKBROKER, 
 
 who, in closing his client's account, secretly buys back the shares sold at an 
 advantage to himself is liable to his client for non-disclosure, 302 
 
 SUBAGENT, 
 
 when knowledge of, is imputed to the ultimate principal, 31 
 
 who acts for one whom he knows to be agent of the party complaining and 
 
 under a fiduciary duty to him may subject himself to the same fiduciary 
 
 duty to such party, 301, 357. 358 
 
 SUBJECTION. See Influence. 
 
 [ 102 ] 
 
Index. 
 
 sublease. 
 
 duty of disclosure in negotiating for, 81 
 
 included in " purchase," for purposes of the statutory law relating to disclosure 
 in prospectuses, 479, 480 
 
 SUBORDINATION. See Influence. 
 
 SUBPURCHASER, 
 
 meaning of, for the purpose of the statutory law as to disclosure of sale and 
 purchase transactions in prospectuses, 479, 480 
 
 SUBSCRIPTION, 
 
 of each underwriter to a marine policy of insurance is a distinct contract, 239 — 
 
 241 
 for shares or debentures on the faith of a prospectus omitting matters required 
 
 by statute to be disclosed therein. See Prospbcttjs. 
 " the mi n imum," on which it is intended to go to allotment, must be disclosed 
 
 in prospectus of a company. See Minimum Subscription. 
 
 SUBSEQUENT, 
 
 ofier of shares by company for subscription, in case of, certain facts as to 
 
 previous offers are required to be disclosed in prospectus, 478 
 to incorporation of company, issue of prospectus, may be subject to statutory 
 
 duty of disclosure, 487 
 shareholders in company, or holders of an office, &c., when duty of disclosure 
 
 is owed to, as well as to existing holders. See Eutube. 
 events. See Supeevening Events. 
 
 SUBSERVIENCE. See Inixuence. 
 
 SUBSTANCE, 
 
 illustrations of regard paid to, rather than to mere forms or names, in deter- 
 mining — ■ 
 whether a contract is uherrimce fidei, or not, 60, 61 
 
 transaction is one of suretyship, or of insurance, 87, 88 
 a compromise or a release, 100 
 whether a " warranty " so called, is also in the nature of a condition, in 
 
 life insurance cases, 145 
 whether a relation is one of confidence, or not, 306, 307 
 
 influence, 369—372 
 whether the parties are within the relation of solicitor and client, or not, 
 
 378, 379, 419 
 what is an " expectancy," 404, 405 
 whether property is in expectation, or in possession, 406 
 a transaction is a contract, or a gift, 420 — 422 
 what constitutes a third person " independent " of the influence, in cases 
 of " influence," 442, 443 
 of property the subject of the contract, difference between, and the substance 
 
 of what is tendered, defeats plea of 
 waiver, 183, 184 
 like difference in answer to objection 
 of " completed contract," 201, 202 
 alteration in, when bar to rescission, 
 202, 203 
 
 SUBUNDERWRITING, ■ ^ ^, .u , , , , u ^- t a 
 
 of shares, commission paid for, is not required by the statute to be disclosed 
 
 in prospectus, 480 
 
 *^TTCCESSOR 
 
 in offi[ce, when a duty of disclosure to, as well as to the existing holder, 354 
 
 [ 103 ] 
 
Index. 
 
 SUMMARY, 
 
 procedure and relief, under tlie Vendor and Purchaser Act, 220, 221 
 in misfeasance cases, 540 — 544 
 in cases of sales by order of the Court, 221, 222 
 jurisdiction, court of, is authorized by statute to decide certain life insurance 
 cases involving non-disclosure, 534 
 
 SUMMONS, 
 
 under the Vendor and Purchaser Act, 220, 221 
 misfeasance, 540 — -544 
 
 under O. 14, affidavit in answer to, alleging fraud, must state the facts with 
 same particularity and precision as is required in a pleading, 535 
 
 SUPERIOR LEASE, when duty to disclose unusual restrictions in, 81 
 
 SUPERIORITY, SUPREMACY. See Influence. 
 
 SUPERVENING EVENTS, 
 
 may impose a duty of disclosure, though none existed in the first instance, 
 
 123—130 
 showing invalidity of claims surrendered on a compromise cannot invalidate the 
 
 compromise, 108 
 value of reversion not to be judged by, 463 
 when party charged succeeds by reason only of, he may be deprived of costs, 
 
 547 
 
 SUPERVISION OF COURT, 
 
 winding up of company under, statutory misfeasance procedure may be applied 
 in, 541 
 
 SUPPRESSION. /See Concealment. 
 
 SURETYSHIP, 
 
 contract of, whether strictly uberrimce fidei or not, is within the principle and 
 reason of the rule which requires disclosure to be made in negotiations for 
 certain transactions which presuppose superior knowledge on one side, and 
 trust on the other, 85 — 87 
 whether duty exists in any particular case of alleged, and whether the transaction 
 is one of, or of insurance, or of both combined (as e.g. a " guarantee policy "), 
 is a question of substance, 87, 88 
 rule of disclosure in cases of, is the same as in others, but is necessarily applied 
 
 to a more restricted area, 88, 89 
 in cases of, the test is whether the undisclosed fact was, or was not, such as 
 might naturally be expected as an element in the particular kind of guarantee 
 which formed the subject of the negotiation, 89, 90 
 non-disclosure in negotiations for, is sometimes described as implied misrepresen- 
 tation, 90 
 three types of, involving difference in the kind of facts to be disclosed in negotia- 
 tion, viz. — 
 (i) financial: where there is no duty to disclose embarrassments of the person 
 whose credit is guaranteed, for the surety must know that this is 
 the very reason for his being applied to, nor his misconduct or dis- 
 honesty, but an agreement, as distinct from a mere intention, to 
 apply the cash resulting from the guarantee in discharge of an old 
 debt must be disclosed, 90, 91 
 (ii) fidelity .• where past dishonesty or misconduct, or even suspicion 
 thereof, is material to be disclosed, but not mere irregularity, without 
 suspicion of dishonesty, 91 — 93 
 (iii) guarantee of the due performance of a particular contractual obligation, 
 where the question of what must be disclosed depends on the exact 
 nature of the obligation in question, 93 — 95 
 [ 104 ] 
 
Index. 
 
 SURETYSHIP-coMimwed. 
 
 duty of disclosure in negotiation comes to an end on the conclusion of the contract 
 
 oi, any duty still remaining (as in the case of continuing guarantees) being 
 
 purely contractual, and not fiduciary, 95, 96 
 when an implied obligation of, is imposed on a defendant solicitor in an action 
 
 lor non-disclosure, &c., by an order of the Court that he do pay the plaintiffs 
 . ??f.*^ ^ ^^^ co-defendant client fails to do so, 549 
 liability of one who induces or leaves the dominant party in a relation of in- 
 
 Huence to obtain a contract of, from the servient party guaranteeing payment 
 
 ot the dommant party's debt to himself, 376, 398 
 when m a contract of, procured as above stated, the delay of the surety in 
 
 taking proceedings may be accounted for by a reasonable belief that the 
 
 dominant party has discharged the debt, 450 
 where an insolvent and compounding debtor procures a third person to enter 
 
 into a secret contract of, with a particular creditor, whereby such person 
 
 guarantees the debtor's original, or composition, debt, the transaction may 
 
 be relieved against, 525, 526 
 
 SURGEON. See Medical Attendant, and Medical Relation. 
 
 "SUSPECTED" RELATIONS OE INFLUENCE, 
 what are, 369 — 372 
 ethical views as to, 584 — 588 
 SUSPENSE, 
 
 of relation of confidence, or influence, at the time of the impeached transaction, 
 
 is a good answer, 327, 328, 428 — 431 
 SUSPICION, 
 
 mere, of mala fides in disposition of goods not enough to destroy title of pledgee, 51 
 
 mere, wiU not defeat right to rely on a registered title, 53 
 
 of illegal gaming, duty on assured to disclose facts giving rise to, in negotiations 
 
 for marine insurance, 66 
 of dishonesty of person whose fidelity is guaranteed, facts giving rise to, need 
 
 not be disclosed in negotiation for financial guarantee, but must be disclosed 
 
 in negotiation for fidelity guarantee, 91 — 93 
 mere, of facts giving the party complaining a right to avoid the transaction, not 
 
 enough to support a plea of affirmation, 186, 187 
 delay of party charged in giving explanation when such as to give rise to, on 
 
 the part of the party complaining may affect the former's costs, though he 
 
 escapes liability, 546, 547 
 
 " SUSTAINING THE TRANSACTION." See Pkopbiety of the Transaction 
 
 TACIT. See Silence. 
 
 TAXATION OF COSTS, 
 
 relief given against solicitor on, in case of abuse of influence, 459 
 
 TECHNICAL, 
 
 " fraud," criticism of term, 557 — 559 
 in sense of formal. See Foemal. 
 
 TEMPTATION, 
 
 and tendency, to evil conduct, rather than actual dishonesty in the particular 
 case, is the foundation of the equitable rules as to disclosure and good faith, 
 as applied to — 
 
 relations of confidence generally, 275^ — 277 
 
 in particular, the relation between promoter and company, 290, 292 
 
 director and company, 302—304 
 relations of influence generally, 368, 369 
 
 in particular, the relation between solicitor and client, 377, 378 
 the sacerdotal relation, 382, 383 
 [ 105 ] 
 
Index. 
 
 TENANCY, 
 
 when knowledge of nature of, is imputed to a party having actual knowledge 
 that the land is occupied by a third person, such imputation being made in 
 favour of the tenant, not of a vendor, 44, 45 
 
 what facts in relation to the, of land sold, must be disclosed by vendor in negotia- 
 tion for sale, 81, 82 
 
 for life, when no fiduciary duty attaches to, 309 
 
 TENDENCY, 
 
 of fact, if disclosed, to affect judgment of normal person, is one test of its 
 
 materiality, 16 
 and temptation to misconduct is the theory on which equitable rules of disclosure 
 
 are founded. See Temptation. 
 
 TERM, 
 
 in sense of condition. See Condition (in Jueidical Sense). 
 in sense of expression or phrase. See Terminology. 
 
 TERMINATION, 
 
 of relation of confidence, proof of, is a good answer to claim for abuse of such 
 
 confidence, 327—329,— 
 
 unless the termination happened so soon before the transaction that the 
 
 exclusive knowledge of the party charged must have remained, or unless 
 
 otherwise the grounds for the presumption of confidence still existed, at 
 
 the latter date, 282, 328 
 
 of relation of influence, or rather of the influence itself, is vaHd answer to 
 
 claim for abuse of the influence, 428 — 431 
 of the influence, no plea of confirmation is vahd without establishing the, at 
 
 the date of the alleged confirmation, 447, 448 
 of the expectant's distress, in " expectant " cases, is not presumed until the 
 expectancy has fallen into possession, 412, 418 
 
 TERMINOLOGY, 
 
 defects of, in English jurisprudence, generally, 555 
 importance of exact, 555, 556 
 
 explanation and justification of the, which is used in this work, in relation to 
 the following expressions : — 
 
 " party complaining," and " party charged," 5 
 " dominant party," and " servient party," 362 
 " expectant," 404, 405 
 
 " actual knowledge," and " presumptive knowledge," 570 
 discussion of the application and misapplication of figures of speech, maxims, 
 
 aphorisms, and phrases, generally, in, 570, 571 
 the use and abuse of metaphor in, 571 
 
 criticism or explanation of the use or misuse or ambiguous application of the 
 following expressions in the, of the law relating to non-disclosure, — 
 
 " actual," " imputed," and " constructive " notice, or knowledge, 568 — 
 
 570 
 uberrima fides, 1, 2, 61, 62, 76 
 "fiduciary," and " confidence," — 
 generally, 567 
 
 in relation to partnership. 111, 112 
 promotership, 287 — 289 
 directors, 295 
 
 mortgagees, 308, 309, 347, note (r) 
 confounded with " influence," 273, 362, 363 
 " trustee," 279, 280, 567 
 " undue," 567 
 
 " hardship," and " oppression," 104, 107, 108, 135, 270, 271, 390, 568 
 " equality," 103, 107, 135, 136, 390, 568 
 
 [ 106 ] 
 
Index. 
 
 TBBMimhOGY— continued. 
 
 criticism or explanation of the use, or misuse, or ambiguous application of the 
 toUowing expressions in the, of the law relating to non-disclosure (continued)— 
 guilty of delay," 191—194 
 "void," 197—199, 204, 205 
 "fraud"— 
 
 actual and " constructive," 557—561 
 " presumed," 389 
 
 in connection with doctrine of presumptive knowledge, 568 — 570 
 " fair," and " unfau-," 103, 107, 270, 271, 391, 568 
 " just," 391 
 " reasonable," 391 
 " good faith," 1, 2, 59, 76, 561 
 " honest mistake," 107, 108, 566, 567 
 " concealment," and " withholding," 160, 161, 559 
 
 " negligence," in connection with rules of presumptive knowledge, 563, 564 
 " condition," and " warranty," 145 
 
 TEST ACTION, when an appropriate remedy, form of order in, 539 
 
 TESTAMENTARY, 
 
 dispositions, the " undue influence " necessary to invalidate, differs from the 
 
 "undue influence" which is sufficient to invalidate a gift inter vivos, in 
 
 material respects, 414 
 influence, ambiguous use of the word " undue " as appUed to, and to influence 
 
 exercised upon a living donor, 567 
 
 THEORY, 
 
 of the rule which presumes the principal's knowledge of what his agent actually 
 
 or presumptively knows, 28, 29 
 of the equitable doctrines and rules as to the duties of disclosure and good faith 
 in — 
 negotiations for contracts uberrimcB fldei, generally, 58, 59 
 
 of sale, in particular, 77 — 79 
 relations of confidence, generally, 275 — 277, 321 
 in particular, the relation between promoter and company, 287 — 289 
 relations of influence, generaUy, 366 — 369 
 in particular, — 
 parental, 372 
 
 soHoitor and client, 377, 378 
 
 created by circumstances and conditions of the case, 388, 389 
 between " expectant " and dealer, 400 — 403 
 of the duty of disclosure in certain oases to third persons, 521, 522 
 on which a secret bargain with a favoured creditor, in cases of composition 
 arrangements, is invalidated, 523, 524 
 
 THIRD PERSON, 
 
 attempted fraud by agent on, and not on the principal, does not negative the 
 
 principal's presumptive knowledge, 38 
 deeds in possession of, rules as to presumptive knowledge of party who finds, 
 
 and as to his being " put on inquiry," 44 
 what presumptions of knowledge are made, and in favour of whom, against one 
 
 who purchases land in the occupation of a, 44, 45 
 what transactions with, must be disclosed in a relation of confidence, 295—297, 
 
 299—304, 329 
 where no duty on director to disclose company's affairs to, 138, 139, 140, 308, 
 
 356 
 
 delay or laches gives scope for intervention of rights of, 188 — 194 
 no rescission granted where it would affect the honestly acquired rights and 
 interests of a, 203, 204 
 
 [ 107 ] 
 
Index. 
 
 THIRD V'EB.SOm— continued. 
 
 when honest and competent advice of an independent, is a necessary or important 
 element in " sustaining the transaction." See Independent and Competent 
 Advice. 
 
 relief against a, who has secretly corrupted an agent, 348, 349 
 
 one who deals with another whom he knows to stand in a relation of confidence 
 to the party complaining, may come under the same obligations to such 
 party, unless he can prove the interposition of a, 357, 358 
 
 cannot complain of abuse of confidence or influence, but only the party in relation 
 to whom the confidence, or influence, was abused, 385 
 
 may apply, under certain conditions, to set aside a collusive judgment by 
 default, 515 
 
 when concealment from, is the subject of relief, and what remedies are appli- 
 cable — 
 generally, 521—523 
 in the case of creditors, in particular, 523^ — 531 
 
 THREAT, 
 
 silent, erroneously supposed at one time to be involved in the exercise by a 
 
 mortgagee of his rights, 415, 416 
 ineffectiveness of offer veiling a, by a dominant party before action, both as to 
 
 relief and as to costs, 451, 551 
 
 TIME, 
 
 periods of, within which certain actions are required by statute to be commenced. 
 
 See Limitation. 
 mere lapse of, not being beyond any statutory period of limitation, does not 
 
 affect the rights of the party complaining, 188 — 194, 199 
 in negotiations for contracts uherrimae fidei it is necessary and sufficient for 
 
 the party complaining to prove that before the, of the conclusion of the 
 
 contract — 
 the undisclosed fact existed or occurred, 155, 156 
 the party charged was cognisant of it, 163, 164 
 he was himself ignorant of it, 169, 170 
 of commencement, termination, or suspension of relation, and also that of the 
 
 transaction, materiality of, illustrated in connection with relations of con- 
 fidence, and of influence. See Confidence, Influence, and Afeiemativb 
 
 Answers. 
 of incorporation of company, importance of, in questions of promotership, 
 
 287—289 
 of agency, directorship, &c., receipt of present or bribe during, though pursuant 
 
 to agreement made before, and, conversely, agreement for bribe made during, 
 
 though carried out after, must be disclosed, 303, 317 
 value of reversion to be determined as at the, of the transaction, 463 
 what are material questions of, in prospectus cases. See Prospectus. 
 
 TITLE, 
 
 no presumptive knowledge of any particular, but only of general principles of 
 
 law, 23 
 what presumptions of knowledge are made against one who abstains from inquiry 
 
 as to documents of, 38 — 45 
 statutor}' presumptions of knowledge in cases of registration of, 52 — 55 
 duty of vendor, in negotiating for sale of land, to disclose every fact affecting 
 
 his. See Vendor (A), 
 what are, and what are not, matters affecting. See Vendor (A), 
 to goods, there is an implied warranty of, 79 
 of holder of negotiable instrument, rules as to presumptive knowledge of defects 
 
 in, 50, 51 
 statute negativing presumptive knowledge of defects in, where agreement with, 
 
 or security taken from, moneylender, 52 
 
 [ 108 ] 
 
Index. 
 
 TITLE — continued. 
 
 substantial difference in, defeats plea of waiver of defects in, 183, 184 
 instrument which is " a cloud on the," may be ordered to be dehvered up to 
 
 be cancelled, though already void, 208, 209 
 jurisdiction as to questions of, under the Vendor and Purchaser Act, may 
 
 indu^ectly involve relief for non-disclosure, 220, 221 
 costs of investigating, as part of the relief in an action, 211 
 
 proceedings under the Vendor and 
 r^T,„^ „ ^ Purchaser Act, 221 
 
 TITLE-DEEDS. See Title. 
 
 TORTFEASOR, 
 
 rules as to transmission of rights and liabilities, on death or insolvency, in cases 
 
 of tort generally, apply to the case of a, who has tortiously corrupted the agent 
 
 of a principal to whom he becomes liable in damages, 300 
 the like rules apply to the case of a statutory, who has violated the duty of 
 
 disclosure in a prospectus imposed by the Companies Act, 485, 486, 488, 489 
 where more than one, aU are jointly and severally liable, and none has any 
 
 right of contribution or indemnity against any other, in prospectus cases, 
 
 as in the case of any common law tort, 488 
 inducement and damage must be proved against the statutory, in prospectus 
 
 cases, as against any other, 496, 497 
 
 TRADE. See Business. 
 
 TRADE MARK, 
 
 statutory registration of, effect of, on rules of presumptive knowledge, 53 
 concealment from Court in oases of, 519 
 
 TRANSACTION, 
 
 fact which it is important for party complaining to know, in order to enable 
 
 him to judge whether to enter into the proposed, or not, is material, 16 
 no presumptive knowledge of condition which alters the entire nature of the, 26 
 the knowledge of an agent, if acting as such in the particular, but not otherwise, 
 
 is imputed to the principal, 34 — 38, 48 
 what kinds of, are deemed uberrima; fidei. See Negotiation foe Contracts 
 
 Uberkim^ Fidei. 
 particular nature of, to be examined in determining — 
 whether it is one of suretyship, or of insurance, 87, 88 
 whether it is of the nature of gift, or of contract, 420—423 
 the particular, which is alleged, must be proved, in — 
 relations of confidence, 316 — 319 
 influence, 420—423 
 proof that the relation did not operate upon the, is a good answer to claim for 
 non-disclosure, in — 
 
 relations of confidence, 327 — 329 
 influence, 427—431 
 affirmation or confirmation of the, is a good answer to case of non-disolosure, 
 
 &c., in — 
 negotiations for contracts uberrimce fidei, 185 — 188 
 relations of confidence, 334 — 336 
 influence, 446 — 448 
 may be " sustained," by proof of its propriety in aU respects. See Peopeiety of 
 THE Transaction. . „„„+„;„ 
 
 for value, and gift, distinction between, as regards the proof required to sustam 
 
 the transaction. See Peopeiety of the Teansaction , . , , , . 
 
 effect of on rights and interests of party complaining, must be explained to him 
 
 fully, in relations of confidence and influence. See Rights. 
 misrepresentation of object and nature of, raises or supports a presumption of 
 abuse of influence, 398, 420, 437 
 
 [ 109 ] 
 
Index. 
 
 TRANSACTION— comfewet?. 
 
 may be so outrageous in itself as to raise a presumption of undue influence, 
 
 397, 398, 408 
 unconscionable, with " expectant." See Expectant. 
 whether adherence to, or avoidance of, likely to be more beneficial to party 
 
 complaining, is wholly irrelevant to that party's right to rescission, 195, 323 — ■ 
 
 326, 426 
 questions as to character of, are questions of fact, 461, 462 
 in cases of statutory non-disclosure in prospectus. See Peospeotus. 
 secret, with favoured creditor, in negotiation of composition arrangement. See 
 
 Composition Abeanoement with Ceeditoes. 
 where the same, or the same series of transactions, is common to all, parties may 
 
 be joined in respect of several causes of action, 540 
 for value, generally. See Valite. 
 
 TKANSPEB, 
 
 of property, as part of relief in rescission, 209 — 212 
 
 from Court to Court, of proceedings for non-disclosure, &c., jurisdiction as to, 
 532, 533 
 
 TRANSMISSION, 
 
 of rights by operation of law (death, insolvency, &e.), in cases of — 
 negotiations for contracts uberrimce fidei, 241 
 relations of confidence, 356 
 
 influence, 464 
 statutory non-disclosure in prospectuses, 485, 486 
 of liabilities by operation of law (death, insolvency, &c.), in cases of — 
 negotiations for contracts uberrimce fidei, 244 
 relations of confidence, 359, 360 
 
 influence, 465 
 statutory non-disclosure in prospectuses, 488 
 of rights on assignment, in cases of — 
 
 negotiations for contracts uberrimce fidei, 241, 242 
 relations of confidence, 356 
 influence, 464 
 of liabilities on assignment, in oases of — 
 
 negotiations for contracts uberrimce fidei, 244 — 248 
 relations of confidence, 360, 361 
 influence, 466 
 
 TRIAL. See Pkocedubb. 
 
 TRICK. See Device. 
 
 " TRICKY," 
 
 waiver clauses in prospectus, and conditions of sale, inefficacy of, 97, 177 
 
 TRIPLING, TRIVIAL, 
 
 gifts, may be held not within the presumption of influence, 423, 445, 446 
 
 TRUTH, 
 
 or falsity of information, rumour, &c., immaterial to question of whether the 
 receipt of the information, or the existence of the rumour, ought to be dis- 
 closed, 13, 14 
 
 contracts for the, 144 — 149. And see Waeeanty. 
 
 TRUST, 
 
 in popular sense. See Confidence. 
 
 in legal sense, misfeasance must be in the nature of a breach of, 542 
 
 generally. See Trustee. 
 
 [ 110 J 
 
Index. 
 
 TRUSTEE, 
 
 " by metaphor " — 
 
 generally, what is a, 279 
 
 in what sense a promoter of a company is, 287 — 289 
 mortgagee is, 347, note (r) 
 director of a company is, 294, 295 
 various species of, all alike subject to duties of disclosure and good faith in 
 
 relation between, and cestui que trust, 279, 280 
 duties incumbent on, in the above relation, are — 
 
 (i) not to deal with the cestui que trust secretly, under an alias, or under 
 
 cover of an undisclosed nominee or agent, &c., 280 
 (u) if dealing openly with the cestui que trust, to give him the benefit of all 
 his knowledge, in the sense of information acquired or possessed 
 during his trusteeship, and also in the sense of skUl, judgment, and 
 honest advice against himself, 281 — 285 
 (iii) to give fair, or to receive no more than fair, value, or, at all events, to 
 see that the cestui que tru>4 is honestly and fully informed and 
 advised as to the value, either by himself, or by an independent 
 third person, 283, 284 
 if unable to sustain the transaction by proof that the above duties were dis- 
 charged, must be in a position to prove that the relation was terminated, or 
 suspended, at the time of the transaction, 281, 282 
 or that disclosure was waived, 333, 334 
 or that the transaction was afterwards confirmed, 334 — 336 
 for another, party charged who enters into transaction as, is none the less liable 
 
 for non-disclosure to the party impeaching the transaction, 358, note {M). 
 public, appointed pursuant to Public Trustee Act, is subject to the same fiduciary 
 
 duties as any other, 282, note {mm), 328, note (o) 
 for debenture holders, not an " officer" of the company for purposes of mis- 
 feasance law, 543, 544 
 in bankruptcy, not an assignee for value, 247 
 invahdation of deed of separation entered into for secret purpose of facilitating 
 
 adulterous intercourse of wife with, 118, note (l) 
 knowledge of a party not established by proof of knowledge of his, 163 
 costs of, when joined as formal defendant, 548, 549 
 
 " UBERRIMA FIDES," 
 
 meaning of, discussed, 58 — 61 
 
 criticism of the expression, 1, 2, 61, 62, 76 
 
 reasons for requiring, in negotiations for certain contracts (exclusive or superior 
 
 knowledge on the one side, and necessary confidence on the other), 58 — 60, 62 
 why, and to what extent, the following contracts are respectively deemed to 
 involve a duty of, in the negotiation therefor, — 
 
 instance, 61 — 63 
 
 vendor and purchaser, 76 — 79 
 
 suretyship, 85 — 90 
 
 release, 96, 97, 100 
 
 compromise, 98 — 103 
 
 waiver, 174 — 179 
 
 partnership, 110 — 112 
 
 to marry, 112 — 116 
 
 separation deed, 118, 119 
 
 UNAMBIGUOUS, 
 
 disclosure must always be, 11, 12 
 
 language or conduct, waiver must be expressed by, 174—179 
 
 affirmation must be expressed by, 186 
 offer, before or at trial, must be, to affect the damages m prospectus cases, 504 
 
 [ 111 J 
 
Index. 
 
 unchastity, 
 
 of woman, must be disclosed in negotiation for contract to marry, 112 
 
 UNCONSCIOUS, 
 
 no answer to a case of non-disclosure or breach of requirements of good faith 
 to prove that the party charged was, of the equitable doctrine, in cases of — 
 negotiations for contracts uherrimce fidei, 170 — 172 
 relations of confidence, 323 — 326 
 
 influence, 424, 425 
 particularly where the dominant party is a solicitor, 378 
 " fraud," absurdity of this expression, 557 — 559 
 
 UNCONSCIENTIOUS, UNCONSCIONABLE, 
 
 advantage taken by one person of another's weakness (physical, mental, moral), 
 
 or financial distress, is one of the circumstances constituting a particular 
 
 relation of influence, 390 — 399 
 bargains with " expectants." See Expectant. 
 
 UNDERLEASE. See Sublease. 
 
 UNDERWRITER OF MARINE POLICY, 
 
 each, subscribing the policy enters into a separate and distinct contract with the 
 
 assured, 239—241 
 in practice one, is sued, or sues, on behalf of the others, with an express or tacit 
 
 agreement that such others will be bound by the result, 539, 540 
 special rules as to the discovery of ship's papers to be made by the assured to, 
 
 in the litigation, 537, 538 
 
 UNDERWRITER OF SHARES IN A COMPANY, 
 
 amount or rate of commission paid or payable to, is required by statute to be 
 disclosed in the prospectus, subject to certain statutory consequences of non- 
 compKance, 480, 507. And see Pkospectus. 
 
 UNDERVALUE. See Valttb. 
 
 UNDISCLOSED FACT, 
 
 when material, and when not. See Material. 
 
 when non-disclosure of, is actionable, and when not. See Actionable. 
 
 when presumptive knowledge of, and when not. See Knowledge (B). 
 
 in negotiations for certain contracts party complaining must prove the existence 
 
 or occurrence, the other party's knowledge, and his own ignorance, of, 151 — 
 
 156, 161—169 
 in relations of confidence, and of influence, party complaining must prove the 
 
 existence or occurrence of the, 314 — 319, 424 — 426 
 in cases of statutory non- disclosure in prospectuses, the plaintifi must prove the 
 
 existence or occurrence of the, but need not prove the defendant's knowledge 
 
 of the, except in one case, where the defendant can only escape by proving his 
 
 ignorance of the, 489, 490, 492, 493, 500 
 matters to be proved as to the, in oases of concealment from the Court, the Crown, 
 
 or creditors. See Judgment, Ceown, Composition Arbangements, &c., 
 
 respectively. 
 
 UNDUE INFLUENCE, 
 
 presumed from certain relations. See Influence. 
 
 " in fact," a term frequently applied to that species of, which is presumed from 
 
 a relation constituted by " the circumstances and conditions " of the particular 
 
 case. See Circumstances and Conditions, &c. 
 presumption of, may be rebutted by proof that in fact the exercise of the influence 
 
 was not undue. See Propriety of the Transaction. 
 when intended to be relied upon, must be stated in the party's pleading, 535 
 views of popular and philosophical ethics as to what is, and what is not, 584 — 586 
 generally. See Influence. 
 
 [ 112 ] 
 
Index. 
 
 UNEQUIVOCAL. See Unambiguous. 
 UNFAIR, 
 
 ^'^0-7,' ^o!^'" ^^^'^^ loosely used in many senses, and misleading, 103, 107, 270, 
 271, 391, 568 
 
 dealing with expectant, or other servient party, excluded from the protection 
 given by statute to sales of reversions at an undervalue, 409 
 UNJUST. See Injustice. 
 UNLAWFUL. See Illegal. 
 
 UNREASONABLE, 
 
 offer, or counter-offer, effect of, on costs, — 
 generally, 547, 548 
 in cases of " expectants," in particular, 551 
 
 UNSUBSTANTIAL. See Teifling. 
 
 UNTRUTH. See Falsity. 
 
 UNUSUAL, 
 
 there is no presumptive knowledge of, and therefore there is a duty on the party 
 charged to disclose if within his cognisance any matter which is, in the par- 
 ticular business or transaction, e.g., unusual — 
 practices in the trade or business in question, 24^27 
 clauses, conditions, and terms in maritime or other mercantile documents, 
 
 26, 27, 67—69 
 places of loading, and discharge, in marine insurance, 66 
 restrictions, or onerous covenants, in head lease, &c., in negotiations for 
 
 sub-lease, or assignment of lease, 39 — 43, 80 — 82 
 features in a transaction of suretyship, 89 — 94 
 deed of separation, 118, 119 
 whether any matter was, or was not, at the date of the impeached transaction, 
 is a question of fact, 234 — 236 
 
 USAGE. See Custom. 
 
 USE, 
 
 proper, of influence. See Confidence. 
 
 of influence. See Influence. 
 of land, when duty on vendor to disclose unusual restrictions on, 80 — 82 
 intended, of property bought, purchaser need not disclose his, 141 
 intended abnormal and improper, of a separation deed, must be disclosed, 118. 
 119 
 
 USUAL, 
 
 there is presumptive knowledge of, and there is accordingly no duty to disclose, 
 any matter which in the particular business or transaction is, e. g. , usual — 
 practices of trade or business in question, 24 — 27 
 
 clauses, conditions, and terms in mercantile documents, 24 — 26, 67—69 
 ports, &c., in marine insurance, 66 
 restrictions or covenants in head lease, &c., in negotiations for sub-lease, 
 
 or assignment of lease, 39 — 43, 67, 80 — 82 
 features in a transaction of suretyship, 89 — 94 
 medical attendant, duty to disclose name of, in answer to a specific question 
 
 in negotiation for life insurance, 73 
 whether any matter was, or was not, at the date of the impeached transaction, 
 is question of fact, 234 — 236 
 
 XTOTTDV 
 
 repeal of laws restricting, no effect on equitable rules as to unconscionable 
 
 bargains with " expectants," 403 
 historical account of social attitude towards, 587, 588 
 
 [ 113 ] 
 
Index. 
 
 UTILITY, pubUc. See Public Policy. 
 
 " UTMOST GOOD FAITH." Hee Uberrima Fides. 
 
 VACANT, land, no duty to inquire as to last occupation of, 45 
 
 VALID, 
 
 question whether a contract is, or is not, does not affect the duty of disclosing 
 
 the fact of its having been made, 15, 16, 154 
 contract impeachable for non-disclosure is, until disaffirmed, 197 
 
 VALUATION, i, 
 
 in possession or control of party charged must be disclosed by party charged, 
 
 in confidence relations, when dealing with the party complaining with respect 
 
 to the property to which it relates, 283, note (o) 
 excessive, when to be disclosed by assured to underwriter in negotiation for 
 
 marine insurance, 66 
 
 VALUE, 
 
 facts showing insurance of ship for more than real, when to be disclosed ia 
 
 negotiation for marine insurance, 66 
 facts as to, of shipments under earlier marine policy, when to be disclosed, 68 
 of land, facts relating to, when not affecting title, need not be disclosed in 
 
 negotiation for sale and purchase by either party to the other, 138 — 141 
 assignee of chose in action, though for, takes subject to equities, 244, 245 
 holder of negotiable instrument is presumed to be holder for, until fraud in 
 
 inception be proved, when he is required to prove, 245, 246 
 assignee of chose in possession is primA facie presumed to have given, but pre- 
 sumption may be rebutted by party complaining, 247, 248 
 facts, information, opinions, valuations, &c., showing the, of property the 
 
 subject of dealing between parties standing to one another in a relation of 
 
 confidence, must be disclosed, and it is important, if not absolutely necessary, 
 
 for party charged, in order to sustain the transaction, to prove that he gave 
 
 fair, 274, 283, 284, 291, 329, 330 
 fair, dominant party in relation of influence, where the transaction was one of 
 
 contract, must prove that he gave, or received, as the case may be, 434, 435, 
 
 436 
 grossly inadequate, or excessive, as the case may be, in certain cases may, of 
 
 itself, indicate fraud, 284, 408 
 fraudulent exercise of power of sale by mortgagee may be shown by his selling 
 
 at price greatly below fair, 312 
 principal in confidence relations who is entitled to relief against secretly bribed 
 
 agent has an option to take the property itself, if other than money, or its, 
 
 344, 345 
 rules for computing the, in the above cases, particularly with reference to shares 
 
 corruptly received by directors from promoter for qualification, 345, 346 
 conduct of agent in such cases, may affect the measure of, 322, 323, 345, 346 
 sales of reversions were formerly held impeachable on the sole ground of 
 
 inadequate, but, since the Sales of Reversions Act, they are not impeachable 
 
 on that ground alone, if honest, though inadequacy of, may be deemed so 
 
 gross as to negative honesty, 409, 410 
 transactions for, and gifts, subject to different rules as to the proof required to 
 
 establish a due exercise of influence. See Influence. 
 when facts as to, may be material, even in case of gifts, 435 
 presents of trifling or trivial, not deemed to have been procured by undue 
 
 influence, 423, 445, 446 
 whether transaction for, or a gift, is question of fact, 461 
 amount of, is question of fact, 462 
 
 [ 114] 
 
Index. 
 
 VALUE — continued. 
 
 of reversion, rules for ascertaining, and appropriate kinds of evidence for that 
 
 purpose, 463 
 costs of inquiries as to, when " expectant " ordered to pay, or held entitled to be 
 
 paid, in oases of " expectants," 550 
 in cases where inadequacy of, is alleged, the question whether the transaction 
 
 has been completed, or not, is important, 458 
 questions of, immaterial to plea of waiver of right to rescission, but material to 
 
 substituted right of compensation, where rescission is waived subject to such 
 
 substituted right, 183, 184 
 questions of, generally, subject of inquiries and accounts, 210 
 
 VENDOR, 
 
 (A) In Sales and Purchases of Land : 
 
 is subject to a duty of disclosure, in negotiations for sale of land : extent of 
 
 such duty, and theory on which it has been based, 76 — 79 
 includes mortgagor, lessor, sub-lessor, settlor, &c., for purposes of rules 
 
 as to presumptive knowledge, and as to duty of disclosure, 48, 78 
 must disclose, in the negotiation, every fact relating to his own title of which 
 
 he is deemed to have exclusive knowledge, 78 — 80 
 is under the same duties, whether the sale negotiated for is by public auction, 
 
 or private treaty, or by order of the Court, 79 
 disclosure by, of his own title, may be also regarded as an implied condition 
 
 of the contract itself, 79 
 must disclose the following classes of matters, as bearing on title — 
 
 (i) facts indicating absence, or doubtfulness, of title to any part of 
 
 the property, 80 
 (ii) any substantial difference in the character of the title from that 
 
 which purports to be negotiated for, 80 
 (iii) all incumbrances, mortgages, charges, liens, easements, and other 
 
 burdens on the property, 80 — 82 
 (iv) nature and terms of all tenancies, &c., there being no presumption 
 in his favour as against the purchaser that the latter is ac- 
 quainted therewith from the mere fact that he is cognisant of 
 the existence of the tenancies, 45, 80 — 82 
 (v) when negotiating for a sub-lease, or the assignment of a lease, 
 all unusual restrictions and onerous covenants in the superior 
 lease, unless fair opportunity of inspection be given, 81, 82 
 (vi) all lawful orders of local or public authorities, or notices by 
 landlord, &c., or party- wall awards, &c., which constitute 
 a burden on the property, 82 
 (vii) all latent physical defects which may properly be regarded as 
 defects in title, 83—85 
 is not bound to disclose facts which neither directly nor indirectly affect 
 
 title, 83 
 where not bound to disclose patent and visible defects, 21, note {ii), 47 
 
 (B) In Sales and Purchases of Goods : 
 
 is deemed to impKedly warrant title, and freedom from incumbrances, 79 
 
 (C) Generally : 
 
 duty of disclosure on, in negotiation for property of every kind, real, personal , 
 and any estate or interest therein, and whether in possession or in action, 
 
 78, 79 
 when liable for return of deposit to purchaser, 203—205, 213 
 duties of, when standing to purchaser in a relation either of conEdence, or 
 
 of influence. See Confidknce, and Ini-luence. 
 when also promoter of company to whom he is selling, must disclose his 
 
 double character, 289, 290 
 
 [ 115 ] 
 
Index. 
 
 Y'ENDOR— continued. 
 
 (C) Oenerally (continued) — 
 
 who is deemed, and what contracts by, and facts as to purchase and 
 sale, are by statute required to be disclosed in the prospectus of a com- 
 pany, 479, 480. And see Peospectus. 
 when non- disclosure by, though of a fact not material to be disclosed, 
 
 may become actionable. See Actionable. 
 discussion of Wilde v. Gibson in connection with duties of, 255 — 262 
 relief available to purchaser for non-disclosure, — 
 at common law. See Relief. 
 by statute. See Vbndok and Puechaser Act, 1874. 
 
 VENDOR AND PURCHASER ACT, 1874, 
 
 summary procedure under, described, 220, 221 
 
 question of non- disclosure of matters affecting title may be indirectly dealt 
 
 with on summons under, though no jurisdiction to determine validity of 
 
 contract, 220, 221 
 relief under, may consist of declaration, rescission, order for return of deposit, 
 
 costs of investigating title, &c., 221 
 jurisdiction under, is discretionary, and action may be ordered to be brought, 
 
 if statutory procedure inconvenient, 221 
 
 VESSEL. See Marine Insueance. 
 
 VISIBLE, defects in property sold, when presumptive knowledge of, 21, note (m), 47 
 
 VOID, 
 
 transaction impeachable for non-disclosure is not, unless also illegal, immoral, 
 
 against public policy, or made void by statute, 197 — 199, 204, 205, 33S, 369, 
 
 454 
 if contract is already, Court will not rescind it for non-disclosure, &c., unless 
 
 necessary for the purposes of protecting the party against a public record 
 
 or entry, &c., 199, 200 
 for illegality, when premiums paid under policy of insurance which is, are 
 
 returnable, or recoverable, and when not, 204, 205, 213. And see Illegality. 
 waiver clauses in prospectus, and conditions therein affecting to fix applicant 
 
 for shares with notice, declared by statute to be, 499, 500, 505 
 where condition of insolvent and compounding debtor's release is, by reason 
 
 of secret bargain with favoured creditor, the release becomes absolute, 528, 
 
 529 
 fact of having made a contract which is, may nevertheless be material to be 
 
 disclosed, 15, 16 
 lax use of the term, for " voidable," by — 
 judges, 198 
 parliament, 198 
 parties to insurance contracts, leases, &o., 198, 205 
 
 VOIDABLE, 
 
 transaction impeachable for non-disclosure, or for abuse of confidence or influence, 
 
 is, at the option of the party complaining, and not void, unless also illegal, 
 
 immoral, or against public policy, or made so by statute, or by agreement 
 
 of party, 197—199, 204, 205, 338, 369, 454 
 consequently no third person is entitled to impeach a transaction which is, at 
 
 the option of the party complaining only, 385, 454, note (d). 
 position of assignee of property under contract which is, for non-disclosure or 
 
 otherwise. See Assignment. 
 contract to take shares on the faith of a prospectus from which matters required 
 
 by statute to be stated therein have been omitted is not, except in the case 
 
 next mentioned, 503 
 
 [ 116 ] 
 
Index. 
 
 VOIDABLE— cowiiMwed 
 
 allotment may be, under certain conditions, in case of a breach of the statutory 
 duty not to go to allotment except on receipt in cash of the amount of 
 " minimum subscription " named in the prospectus, or, if not so named, the 
 fuU amount of the issue, 505 — 507 
 
 VOLUNTARY, 
 
 transaction, in the sense of a transaction without valuable consideration. See 
 
 Gift. 
 winding up of company, misfeasance proceedings may be applied to, under 
 
 certain conditions, 541 
 
 VOLUNTEER, 
 
 assignee when, is subject to equities, including equity to avoid for non-disclosure, 
 
 &c. See Assignment. 
 trustee in bankruptcy is a, 247 
 
 VOTING, 
 
 power, abuse of, by majority of shareholders, when entitling the oppressed 
 
 minority to use the name of company, or institute representative suit, 356, 357 
 rights, attached to special classes of shares., required by statute to be disclosed 
 
 in prospectus, 484 
 
 VOYAGE. /See Marine Insueance. 
 
 WAGER, 
 
 insurance regarded as a contract of, 61, 62, 70 
 
 on survivorship, in the case of certain bargains with " expectants," 402, 406 
 assured must disclose facts tending to show illegal, in negotiation for marine 
 insurance, 66, 68 
 
 WAIVER, 
 
 express, or implied, is a good answer to a case of non-disolosure, unless pro- 
 hibited by statute, 174—179 
 of right to impeach a transaction for fraud is probably mvahd, as against public 
 
 in negotiating for, there must be disclosure of the class or kind of facts the 
 communication of which is proposed to be waived, 176, 177 
 
 express agreement of, must be stated in unambiguous language, 175, 333, 334 
 
 plea of, not supported by " catching conditions of sale," " tricky " clauses in 
 prospectus, &c., 175 -, , j. 
 
 only honest mistakes as to defects, &o., are protected by, not fraudulent con- 
 sciousness of such defects, 177, 178 , , , „ ,,,,,,, ■,■ 
 
 in the form of an agreement to take " with all faults," or defects, dispenses 
 with disclosure even of known defects, unless the party charged has used 
 positive means and fraudulent devices to disguise them, 178, 179 
 
 may be implied from conduct, or even from inaction, but difBcu t to prove the ■ 
 former, and almost impossible to establish the latter, 179—181, 334 
 
 acceptance of proposal for, addressed to the public must be shown by proof 
 that the party charged became aware of the proposal, and acted upon it, 181 
 
 agreement for, must, in cases of sale, be contained in the document or place, 
 where it would naturally be expected, e.g. in the conditions ot sale, not the 
 
 of thfrighTto ieicission only in respect of non-disclosure of defects, but not of 
 the dutv of disclosure, for the violation of which compensation, or aUowance, 
 is agreed to be the sole remedy, is a valid answer to an action for rescission 
 unless the party complaining can estabUsh either fraud on the part of the 
 party charg^ed, or entL difference in substance, quality character or ti le 
 between the property without, and the property with, the defects, 181-184 
 
 [ 117 ] 3 B 
 
Index. 
 
 WAIVER — continued. 
 
 double condition of, whereby both rescission and compensation or allowance 
 
 is waived, same principles applicable to, as to above single condition, mutatis 
 
 mutandis, 184, 185 
 questions of, how far fact, and how far law, 236, 237 
 of statutory right to disclosure of certain prescribed matters in a prospectus is 
 
 now abolished by statute, 499, 500, 506 
 difierence between, and affirmation, 185 
 
 as an element in an agreement of compromise. See Compkomise. 
 a deed of release. See Release. 
 WAR, 
 
 facts relating to, when presumptive knowledge of, in oases of marine insurance, 22 
 risks, facts relating to, when duty on assured of disclosing, in negotiations for 
 
 marine insurance, 65, 66 
 contraband of, duty to disclose presence of articles or goods which are, in 
 
 marine insurances, 65 
 
 WARRANTY, 
 
 of truthful and complete disclosure by assured in life insurance cases, where 
 it is intended as " the basis " of the contract, or the condition on which its 
 validity is to depend, effect of, on rules of disclosure, as follows : — 
 
 (i) absolves insurer from necessity of proving duty of disclosure, or 
 materiality, as regards all matters covered by the specific questions 
 asked, 144—147 
 (ii) assured not thereby relieved of his duty of disclosure in respect of 
 such material facts, if any, as are not the subject of specific inquiry. 
 145, 146 
 (iii) even as to matters covered by the warranty, the assured is subject to 
 the non-contractual duty of disclosure, as well as to the contractual, 
 and neither duty excludes the other, 146, 147 
 (iv) where the warranty is general, e.g. that no material fact has been 
 omitted, the party complaining derives no benefit from it beyond 
 his ordinary rights to disclosure in any case, and may be held in 
 some cases to have impliedly limited those rights, 148, 149 
 implied, of freedom from incumbrances, in sales of goods, 79 
 
 WEAKNESS, 
 
 taking advantage of, whether physical, mental, moral, or financial, one of the 
 " circumstances and conditions " which may raise a presumption of a par- 
 ticular relation of influence, 390 — 399 
 
 WHOLE. See Entieety. 
 
 WIPE, 
 
 and husband, when knowledge of one imputed to the other, 32 
 
 relation between, is not a recognized relation of influence, 413, 414 
 
 may be important, with other circumstances, in 
 
 raising a presumption of undue influence in 
 
 fact, 395, 396 
 
 need not disclose, but must not misrepresent, her status of married woman, 142 
 
 generally. See Marriage. 
 
 WILFUL, 
 
 ignorance, also called " fraudulent blindness," or " diligence in ignorance," &c.; 
 
 described, 39, 562 
 abstention from inquiry, ejBEect of, as raising a presumption or inference of 
 knowledge, — 
 generally, 39—48 
 
 as regards certain specific matters the subject of express statutory pro- 
 visions, 50 — 55 
 
 [ 118 ] 
 
Index. 
 
 WILFUL— co)rfjjiM€d. 
 
 bliudness or ignorance, how aflfecting title of assignee of negotiable instrument, 
 
 and of chose in possession, respectively, 246, 247 
 ignorance, statutory plea of " honest mistake " in prospectus cases is negatived 
 
 by proof of, 500 
 in the sense of " fraudulently designed," criticism of use of this and kindred 
 
 expressions, 39, 661 — 563 
 popular and theological casuistry as to blindness and ignorance which is, 590. 591 
 
 WILL (IN ORDINARY SENSE), 
 weakness of. See Weakness. 
 freedom of. See Emancipation. 
 
 WILL (IN TESTAMENTARY SENSE). See Testamentaky. 
 
 WINDING-UR See Liquidation. 
 
 WITHDRAWAL. See Revocaxion. 
 
 WITHHOLDING, 
 
 of reasonable explanation, when demanded, may affect the costs of the party 
 
 charged, though successful in obtaining judgment, 546, 547 
 inconveniences in the use of the word, as a synonym for non-disclosure, 160, 
 161, 559 
 
 WITNESS. See Evidence. 
 
 WORDS. See TEHMiNOLOGy. 
 
 WORK, 
 
 engineering or buUdiug difficulties in executing contractual, employer not 
 bound to disclose to contractor, 141 
 
 WRIT, 
 
 of scire facias, 519 
 ad qiwd damnum, 521 
 
 WRONGDOER. »See Toetfeasok. 
 
 YEARLY, 
 
 renewal of life, or fire, insurance policy, effect of, on duty of disclosure, 74 
 
 YOUTH, 
 
 in the sense of infancy. See Infancy 
 
 relation between child in early, and parent. See P.iKENTAi Relation. 
 
 of person in distressed circumstances, taking advantage of. See Circumstances 
 
 AND Conditions of the Particulak Case. 
 of " expectant," trading on inexperience, follies, and vices incidental to, for 
 
 purposes of extorting an unconscionable bargain. See Expectant. 
 
 THE END. 
 
 PErSTED BY WILLIAil CIOTVES iSD SONS, LIMITED, LONDON AND BECCLES.