fraud

Fraud has a broader meaning in equity (than at law) and intention to defraud or to misrepresent is not a necessary element. Fraud, indeed, in the sense of a court of equity properly includes all acts, omissions and concealments which involve a breach of legal or equitable duty, trust, or confidence, justly reposed, and are injurious to another, or by which an undue and unconscientious advantage is taken of another.

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.

This must be an original bill, which may be filed without leave of court; 1 Sch. & L. 355; 1 Ves. Ch. 120; 3 Bro. C. C. 74. It must state the decree, the proceedings which led to it, and the ground on which it is impeached; Story, Eq. PI. § 42S. The effect of the bill, if the prayer be granted, is to restore the parties to their former situation, whatever their rights. See Story, Eq. PI. § 426; Mitf. Eq. PI. 84.

Fraud consists of some deceitful practice or willful device, resorted to with intent to deprive another of his right or in some manner to do him an injury. As distinguished from negligence, it is always positive, intentional. Maher v. Hibernia Ins. Co., 67 N. Y. 292; Alexander v. Church, 53 Conn. 561, 4 Atl. 103; Studer v. Bleistein, 115 N. Y. 316, 22 N. E. 243, 7 I R. A. 702'; Moore v. Crawford, 130 U. S. 122, 9 Sup. Ct 447, 32 L. Ed. 878; Fechheimer v. Baum (C. C.) 37 Fed. 167; U. S. v. Beach (D. Ct) 71 Fed. 160; Gardner v. Heartt, 3 Denlo (N. Y.) 232; Monroe Mercantile Co. v. Arnold, 108 Ga. 449, 34 S. E. 176. Fraud, as applied to contracts, is the cause of an error bearing on a material part of the contract, created or continued by artifice, with design to obtain some unjust advantage to the one party, or to cause an inconven-ienco or loss to the other. Civil Code Ln. art. 1847. Fraud, in the sense of a court of equity, properly includes all acts, omissions, and concealments which involve a breach of legal or equitable duty, trust, or confidence justly reposed, and are injurious to another, or by which an undue and unconscientious advantage is taken of another. 1 Story, Eq. Jut. § 187. Synonyms. The term "fraud" is sometimes used as synonymous with "covin," "collusion," or "deceit." But distinctions are properly taken in the meanings of these words, for which reference may be had to the titles Covin ; Collusion ; Deceit. Classification. Fraud is either actual or constructive. Actual fraud consists in deceit, artifice, trick, design, some direct and active operation of the mind ; it includes cases of the intentional and successful employment of any cunning, deception, or artifice used to circumvent or cheat another; it is something said, done, or omitted by a person with the design of perpetrating what he knows to be a cheat or deception. Constructive fraud consists in any act of commission or omission contrary to legal or equitable duty, trust, or confidence justly reposed, which is contrary to good conscience and operates to the injury of another. Or, as otherwise defined, it is an act, statement or omission which operates as a virtual fraud on an individual, or which, if generally permitted, would be prejudicial to the public welfare, and yet may have been unconnected with any selfish or evil design. Or, according to Story, constructive frauds are such acts or contracts as, though not originating in any actual evil design or contrivance to perpetrate a positive fraud or injury upon other persons, are yet, by their tendency to deceive or mislead other persons, or to violate private or public confidence, or to impair or injure the public interests, deemed equally reprehensible with actual fraud. 1 Story, Eq. Jur. § 258. And see, generally, Code Ga. 1882, § 3173; People v. Kelly, 35 Barb. (N. Y.) 457; Jackson v. Jackson, 47 Ga. 99; Hatch v. Barrett, 34 Kan. 223, 8 Pac. 129; Forker v. Brown, 10 Misc. Rep. 161, 30 N. Y. Supp. 827; Massachusetts Ben. L. Ass'n v. Robinson, 104 Ga. 256, 30 S. E. 918, 42 L. In A. 261; Haas v. Stembach, 156 III. 44, 41 N. E. 51; Newell v. Wagness, 1 N. D. 62, 44 N. W. 1014; Carty v. Connolly, 91 Cal. 15, 27 Pac. 599. Fraud is also classified as fraud in fact and fraud in law. The former is actual, positive, intentional fraud. Fraud disclosed by matters of fact, as distinguished from constructive fraud or fraud in law. McKibbin v. Martin, 64'Pa. 356, 3 Am. Rep. 588; Cook v. Burnham, 3 Kan. App. 27, 44 Pac. 447. Fraud in law is fraud in contemplation of law; fraud implied or inferred by law; fraud made out by construction of law, as distinguished from fraud found by a jury from matter of fact; constructive fraud (q. v.) See 2 Kent, Comm. 5l2-532; Delaney v. Valentine, 154 N. Y. 692, 49 N. E. 65; Burr v. Clement, 9 Colo. 1, 9 Pac. 633. Fraud is also said to be legal or positive. The former is fraud made out by legal construction or inference, or the same thing as constructive fraud. Newell v. Wagness, 1 N. D. 62, 44 N. W. 1014. Positive fraud is the same thing as actual fraud. See Douthitt v. Applegate, 33 Kan. 395, 6 Pac. 575, 52 Am. Rqp. 533.

— Actionable fraud. See Actionable.

— Frauds, statute of. This is the common designation of a very celebrated English statute, (29 Car. II. c. 3,) passed in 1677, and which bas been adopted, in a more or less modified form, in nearly all of the United States. Its chief characteristic is the provision that no suit or action shall be maintained on certain classes of contracts or engagements unless there shall be a note or memorandum thereof in writing signed by the party to be charged or by his authorized agent. Its object was to close the door to the numerous frauds which were believed to be perpetrated, and the perjuries which were believed to be committed, when such obligations could be enforced upon no other evidence than the mere recollection of witnesses. It is more fully named as the "statute of frauds and perjuries."

— Pious fraud. A subterfuge or evasion considered morally justifiable on account of the ends sought to be promoted ; particularly applied to an evasion or disregard of the laws in the interests of religion or religious institutions, such as circumventing the statutes of mortmain.

Any cunning, deception or artifice, used to circumvent, cheat or deceive another; any act, omission or concealment which involves a breach of legal or equitable duty, trust or confidence justly reposed, and is injurious to another, or by which an undue and unconscientious advantage is taken of another. Fraud in fact: actual or positive fraud: fraud which consists in, or appears from matter of fact Fraud in Ijiw: fraud, in contemplation of law; fraud implied or inferred by law; fraud made out by construction of law.

[L. Fr. fraude; Lat fraus, dolus malm, dolus.^ Any cunning, deception or artifice, used to circumvent, cheat or deceive another; {pmnem callidiiatem,fallaciam, mackinationem ad circumveniendum, fallendum, decipiendum alterum adhihitam.) Big, 4. 8. 1. 2. Id. 2. 14. 7. 9. — Every kind of artifice made use of by one.person for the purpose of deceiving another; {toute espece d'artifice, dont quelque un se sert pour entromper un autre.) Pothier Traite des Oblig. part 1, c. 1, n. 28. Both these definitions are quoted with approval by Mr. Justice Storv, who observes of the former, " This definition is, beyond doubt, sufficiently descriptive of what may be called positive, actual fraud, where there is an intention to commit a cheat or deceit upon another to his injury. But it can hardly be said to include the large class of implied or constructive frauds which are within the remedial jurisdiction of a court of equity. Fraud, indeed, in the sense of a court of equity, properly includes all acts, omissions and concealments which involve a breach of legal or equitable duty, trust or confidence justly reposed, and are injurious to another, or by which an undue and unconscientious advantage is taken of another." 1 Story^s Equity Jur. % 187, See % JCen Vi Com. ^88, note. The difficulty of giving any precise definition of fraud has been frequently admitted. See observations of Ware, J, 8 Story's R. 611, 634. See Jeremy's Equity Jurisd. 383, and the opinion of Lord Chancellor Hardwicke, in Chesterfield v. Janssen, in which the dififerent species of frauds against which equity will give relief, were classified. 2 Vesey, 125. White's Equity Cases, 344.

TO DEFRAUD, torts. unlawfully, designedly, and knowingly, to appropriate the property of another, without a criminal intent. Illustrations, 1. Every appropriation of the right of property of another, is not fraud. It must be unlawful; that is to say, such an appropriation as is not permitted by law. Property loaned, may during the time of the loan, be appropriated to the use of the borrower. Thisis not fraud, because it is permitted by law.—2. The appropriation must be, not only unlawful, but it must be made with a knowledge that the property belongs to another, and with a design to deprive him of the same. It is unlawful to take the property of another; but if it be done with a design of preserving it for the owners, or if it be taken by mistake, it is not done designedly or knowingly, and, therefore, does not come within the definition of fraud.— 3. Every species of unlawful appropriation, not made with a criminal intent, enters into this definition when designedly made, with a knowledge that the property is another’s; therefore, such an appropriation, intended either for the use of another, or for the benefit of the offender himself, is comprehended by. the term.—4. Fraud, however immoral or illegal, is not in itself a crime, or offence for want of a criminal intent. It only becomes such in the cases provided by law. Liv. System of Penal Law, 739.