Fraud

The unlawful obtaining of another's property by design, but without crim- Any cunning deception or artifice used to circumvent, cheat, or deceive another.

Story, Eq. Jur. § 186.

Fraud is sometimes used as a term synonymous with "covin," "collusion," and "deceit," but improperly so. Covin is a secret contrivance between two or more persons to defraud and prejudice another of his rights. Clollusion is an agreement between two or more persons to defraud another under the forms of law, or to accomplish an illegal purpose. Deceit is a fraudulent contrivance by words or acts to deceive a third person, who, relying thereupon, without carelessness or neglect of his own, sustains damage thereby. Co. Litt. 357b; Bac. Abr. Actual or positive fraud includes cases of the intentional and successful employment of any cunning, deception, or artifice, used to circumvent, cheat, or deceive another.

1 Story, Eq. Jur. § 186.

Legal or constructive fraud includes such contracts or acts as, though not originating in any actual evil design or contrivance to perpetrate a fraud, yet by their tendency to deceive or mislead others, or to violate private or public confidence, are prohibited by law. Thus, for instance, contracts against some general public policy or_ fixed artificial policy of the law; cases arising from some peculiar confidential or fiduciary relation between the parties, where advantage is taken of that relation by the person in whom the trust or confidence is reposed, or by third persons; agreements and other acts of parties which operate virtually to delay, defraud, and deceive creditors; purchases of property, with full notice of the legal or equitable title of other persons to the same property (the purchaser becoming, by construction, particeps criminis with the fraudulent grantor); and voluntary conveyances of real estate, as affecting the title of subsequent purchasers.

1 Story, Eq. Jur. c.

7..^^In the Civil Law. According to the civilians, positive fraud consists in doing one's self, or causing another to do, such things as induce the opposite party into error, or retain him there. The intention to deceive, which is the characteristic of fraud, is here present; the definition of "constructive fraud" being the same as at common law. Fraud was also divided into that which has induced^ the contract, dolus dans causam contractui, and incidental or accidental fraud. The former is that which has been the cause or determining motive of the contract, that without which the party defrauded would not have contracted, when the artifices practised by one of the parties have been such that it is evident that without them the other would not have contracted. Incidental or afccidental fraud is that by which a person, otherwise determined to contract, is deceived on some accessories or incidents of the contract, — for example, as to the quality of the object of the contract, or its price, — so that he has made a bad simply subjects the party to damages. It is otherwise where the fraud has been the determining cause of the contract, qui causam dedit contractui. In that case, the contract is void. Toullier, Dr. Civ. liv.

3, tit. 3, c. 2, note, § 5, note 86 et seq. See, also, 1 Mall. Anal, de la Disc, du Code Civ. pp. 15, 16; Bouv. Inst. Index. In Equity.

It is sometimes Inaccurately said that such and such transactions amount to fraud in equity, though not in law; according to the popular notion that the law allows or overlooks certain kinds of fraud which the more conscientious rules of equity condemn and punish. But, properly speaking, fraud in all its shapes is as odious in law as in equity. The difference is that, as the law courts are constituted, and as it has been found in centuries of experience that it is convenient they should be constituted, they cannot deal with fraud otherwise than to punish it by the infliction of damages. All those manifold varieties of fraud against which specific relief, of a preventive or remedial sort, is required for the purposes of substantial justice, are the subjects of equity and not of law jurisdiction.

— The following classification of frauds as a head of equity jurisdiction is given by Lord Hardwicke (2 Ves. Jr. 155): (1) Fraud, or dolus malus, may be actual, arising from facts and circumstances of imposition. (2) It 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 no honest or fair man would accept, on the other. (3) It may be inferred from the circumstances and condition of the parties;

— for it is as much against conscience to take advantage of a man's weakness or necessity as of his ignorance. (4) It may be collected from the nature and circumstances of the transaction, as being an imposition on^ third persons.

In Criminal Law. "Without the express provision of any statute, all deceitful practices in defrauding or endeavoring to defraud another of his known right, by means of some artful device, contrary to the plain rules of common honesty, are condemned by the common law, and punishable according to the heinousness of the offense.

Co. Litt. 3b; Dyer, 295; Hawk. P. C. c. 71.