FRAUD OR DECEIT.—In order to establish the tort of fraud, it is necessary to prove the following five allegations: (1) that A makes a false statement of a material fact; (2) with knowledge of its falsity; (3) with the intent that it should be acted upon; (4) that the other party believed it to be true; and, (5) acted upon it to his damage. The absence of any one of these five elements will prevent the action of fraud from existing. The action of fraud is most important not only in torts, but also it plays a large part in the law of contracts, and the law of sales, as to both real property and personal property. A stock broker says to Mr. Jones: "My house is offering the best bargain in oil stocks which has been on the market for five years. Aetna Oil Mining Stock at $5 a share is the best buy on the curb to-day. There is no doubt the company will pay 10% in dividends in the first year." Green, relying on this representation, purchases 100 shares of the stock. The stock, thereafter, steadily declines, and never pays a dividend. Has he cause of action for fraud? Clearly not, because there has been no false statement of material fact. These statements about the future earning capacity are seller's talk, or the salesman is merely puffing his wares. Both these expressions are common in the reports and for a mere statement of opinion, no action of fraud lies. It must be a statement of fact. Supposing the same broker had said to his customer, "Aetna Oil Company has paid 10% dividends for the last ten years," and such statement afterwards was found by the purchaser to have been false. An action of fraud would lie, because the dividend record of a company is in the past, and it is not opinion, but fact. Again, suppose the statements to have been the same as in the second illustration, and that they were altogether false, but within three months, through a sudden change in conditions, the affairs of the company were greatly improved, the stock went up in value, and began to pay large dividends. Again, there would be no cause of action, because the fifth element, that of damage, would be lacking. Again, suppose the purchaser, after learning from the broker about the past dividend record, should say, "I will give you my answer to-morrow." Meanwhile, he looks up in a financial paper the dividend record and discovers the statements to be false. He then purchases the stock. Here he would have no cause of action, although he might be damaged, for the reason that by making his own investigation, he has clearly shown that he has not relied on the statement made by the broker, and the fourth element of the action of fraud is missing. In all of these situations, the court assumes that it is dealing with a person of ordinary intelligence, and it does not require the very highest degree of caution on the part of the person claiming to be defrauded, nor will it aid the defrauded person if he does not exercise an ordinary degree of care in safeguarding his rights and forming his judgment in the particular transaction. In laying down this rule, the court does not require that a person must make his own private investigation ordinarily, but he may rely upon the statement made to him. For example, in a Massachusetts case, a real estate broker, in selling a piece of property to a purchaser in a suburban town adjoining Boston, told him that forty trains per day stopped there. The statement was false, the purchaser could have easily inquired at the railroad ticket office, which was only a short distance from the real estate agent's office, but he did not do so. It was held that he could recover in an action of fraud. Were it not so, the courts would, in practice, be laying down the rule that one must assume everyone a liar. On the other hand, had this same purchaser been defrauded by the same real estate dealer a half-dozen times before, then he would not be acting as a reasonably careful man in relying on a statement of this kind. Under these circumstances, the ordinary prudent man would make his own investigation.
FALSE IMPRISONMENT.—A person under ordinary conditions, enjoys the full right of freedom of locomotion. The invasion of that right we call false imprisonment. It is immaterial how trivial the imprisonment may be, for merely locking a person in a room for five minutes as a joke would be enough to give rise to cause for action. The amount of damages which the jury might allow under the circumstances would, of course, be another matter. Many of the principles mentioned in assault and battery are applicable in this tort. Certain persons have a right to imprison other people, and it is not false imprisonment. The sheriff of the county, with a warrant for my arrest, may imprison me, and, of course, I have no action for false imprisonment. He is acting under regular process from the court. A man commits a serious crime in my presence. I lock him in a room until I can call an officer. This is not false imprisonment. The right of a private citizen to make an arrest and not be liable for false imprisonment is stated as follows in Section 183, of the New York Code of Criminal Procedure:
A private person may arrest another: (1) For a crime, committed or attempted in his presence; (2) When the person arrested has committed a felony, although not in his presence.
This is typical of the rule as it exists, with slight modifications, in most of the States. While mere words alone will not constitute an assault, it has been held that mere words will constitute false imprisonment. While a person may be justified in arresting someone else, yet, for the abuse of that privilege, the same as using greater force in self-defense than is necessary, the action of false imprisonment will lie. The man whom I arrest for committing a very serious crime in my presence, I lock in my house and keep there a month, feeding him on bread and water. I am guilty of false imprisonment because while I had a right to arrest him, it was my duty to turn him over to the proper authorities just as soon as possible. In a case, such as this, a month is, of course, an unreasonable time.
NEGLIGENCE.—To say that negligence is failure to use due care is a poor attempt at definition, but it is practically all that can be said. The common law maxim, "sic utere tuo ut alium non laedas" (so use your own as not to injure another), is at this basis of the law of negligence. At the outset, we must be careful to distinguish between "accident" and "negligence." I am walking on a street and slip on a banana skin, and in falling, knock down a passing pedestrian. This is an accident. With my office window overlooking the street, in a banana-eating contest, I eat fifteen bananas, and throw the skins out of the window on the sidewalk. The street is not well lighted. A passerby falls and is injured. This is negligence, and I would be liable.
CONTRIBUTORY NEGLIGENCE.—Negligence must be proved in order to entitle the injured party to recover. The court will not presume negligence merely because an injury takes place. Again, I repeatedly warn a motorman and conductor on a trolley car that I wish to get off at a certain station. Both parties forget the request, and the car goes by the station at the rate of fifteen miles an hour. I think I can get off safely, and attempt to do so. In doing so, I slip and break a leg. Although the two employees of the trolley company were negligent, for not attending to their business, I am guilty of contributory negligence in trying to get off a rapidly moving car, and cannot recover. Contributory negligence is a bar to recovery.
STANDARD OF CARE.—The standards of care to be applied in negligence vary from time to time. What would have been due care on the part of a railroad company fifty years ago, would probably, in few cases, be held to be due care to-day. This is so, because of the improvements which have been made in mechanical devices in the past fifty years. Again, in order to make a cause of action for negligence, there must be some causal relation between the negligent act and the injury. Granting that the man who slipped on the banana skin, which I threw from my office window, had sued me for damages because of his broken leg, it would not follow that I would be liable to the same man five years later, for the reason that an insurance company denied him a policy because of stiffness in the same broken leg, caused by the fall on the banana skin. The law looks not at the remote, but at the proximate, cause of the injury.
ILLUSTRATION.—The owner of lands owes a duty to persons coming upon that land, and the failure to perform that duty is negligence. Here, again, we have to consider who the person is. I enter Wanamaker's store to make a purchase. In going from the second to the third floor, I trip on a defective nosing on the stairway. This has been out of order for some time, and the floor walker was aware of that fact. I have a cause of action against Wanamaker's store for failure, on their part, to exercise due care in having the premises reasonably safe for the use of customers. Suppose, in making a purchase in that same store, in the basement, I see an open door leading into the engine room where the heat generator is located. Being interested in heating appliances, I go into the room, although there is a sign above the door "no admittance." I fall in an unguarded hole in the floor, which has been open for a long while, and the existence of this hole is known to the management. I cannot recover because I am a trespasser. I am in a place where I had no right to be, and, as to trespassers, the owner of property owes no duty, except to refrain from wilful attempts to injure such a person. I may not set a trap in my back yard to catch a trespasser, although I owe no duty to him to have the back yard safe for his use. A peculiar variation in this rule has been made by some States, in the so-called turn-tables cases. Railroads maintain turn-tables in their yards for the purpose of reversing locomotives and other cars. While children, coming upon the premises, are trespassers, nevertheless, many courts have held that such things are what might be called "attractive nuisances," and in such cases the owner of property is under special duty to use care even as to trespassers, to see that they are not injured. These are merely a few of the general principles of the law of negligence as applied by the courts.
CAPACITY OF PARTIES IN TORT ACTIONS.—We discussed the question of the capacity of parties in making a contract. There is not as much qualification upon a party's liability for tort as for contract. To-day, generally, a married woman is liable for her torts, the same as any one else. A corporation is liable for its torts committed by its agents or servants in the scope of their employment. An infant is held responsible for his torts. It is sometimes said that a person is liable for his torts from the cradle to the grave. This is not strictly true. If a baby two years old puts his finger in my eye, injuring it, he would clearly not be liable. But a person of tender years is liable for his torts, whenever he has sufficient intelligence to know what he is doing. Some courts place the age at seven years, while others consider each individual case and the degree of intelligence possessed by the infant.
THE CRIMINAL LAW.—A crime is a wrong which the State recognizes as injurious to the public welfare, and punishes in a criminal action in its own name. There are certain leading principles of the American system of criminal law which must be kept in mind.