S. PEARSON & SON, Limited, v. LORD MAYOR OF DUBLIN
In the House of Lords, May 30, 1907.
Reported in [1907] Appeal Cases, 351.
The Dublin Corporation having by their agents furnished the appellants with plans, drawings, and specifications, the appellants contracted to execute certain sewage outfall works according to the plans, &c. In the plans, &c., representations were made as to the existence and position of a certain wall. In the contract (clauses 43, 46, 47, 48) it was stipulated that the contractor should satisfy himself as to the dimensions, levels and nature of all existing works and other things connected with the contract works; that the corporation did not hold itself responsible for the accuracy of the information as to the sections or foundations of existing walls and works; and that no charges for extra work or otherwise would be allowed in consequence of incorrect information or inaccuracies in the drawings or specifications. The appellants performed the contract, and brought an action of deceit against the corporation, claiming damages for false representations as to the position, dimensions and foundations of the wall, whereby the appellants were compelled to execute more costly works than would otherwise have been required. The plans, drawings and specifications were prepared by engineers employed by the corporation.[[368]]
[At the trial before Palles, C. B., the plaintiffs offered evidence tending to show that the aforesaid representations were not sincerely believed by the engineers to be true.] Palles, C. B., refused to leave any question to the jury, and entered judgment for the respondents on the ground that the contractors were bound by their contract to verify for themselves all the information given in the plans, &c.
The King’s Bench Division (Wright, Boyd, and Gibson, JJ., Lord O’Brien, C. J., dissenting) reversed the decision of Palles, C. B., and entered judgment for the appellants on the ground that there was a question of fact for the jury upon the allegation of fraud.
The Court of Appeal (Sir Samuel Walker, L. C., Fitzgibbon and Holmes, L.JJ.) reversed that decision, and restored the decision of Palles, C. B.
Plaintiff appealed to the House of Lords.
The House of Lords (Lords Loreburn, Halsbury, Ashbourne, Macnaghten, James of Hereford, Robertson, Atkinson, and Collins) reversed the order of the Court of Appeal, and restored the judgment of the King’s Bench Division. Portions of the opinions are as follows:—
Lord Loreburn, L. C.... Now it seems clear that no one can escape liability for his own fraudulent statements by inserting in a contract a clause that the other party shall not rely upon them. I will not say that a man himself innocent may not under any circumstances, however peculiar, guard himself by apt and express clauses from liability for the fraud of his own agents. It suffices to say that in my opinion the clauses before us do not admit of such a construction. They contemplate honesty on both sides and protect only against honest mistakes. The principal and the agent are one, and it does not signify which of them made the incriminated statement or which of them possessed the guilty knowledge.
Earl of Halsbury.... The action is based on the allegation of fraud, and no subtilty of language, no craft or machinery in the form of contract, can estop a person who complains that he has been defrauded from having that question of fact submitted to a jury....