References: [1836] 1 M & W 101, [1836] EngR 146, (1836) 150 ER 363
Links: Commonlii
Coram: Gurney B, Parke B, Alderson B, Lord Abinger CB
Ratio:The question before the court was whether a misrepresentation, that a particular fund in which Lord Edward Thynne had a life interest was charged with only three annuities, was a representation relating to Lord Edward’s credit or ability within the statute. Gurney B explained the mischief to which Lord Tenterden’s Act of 1828 was aimed: ‘But a series of cases, commencing with the case of Pasley v Freeman (3 TR 51), had occurred, in which defendants were charged, not strictly and specifically as guarantees for the solvency of others, but on alleged representations and assurances respecting them and their credit or ability, averred to be false and fraudulent.
There is no doubt that there have been many cases in which false and fraudulent representations of the ability of others have been made, in order to obtain credit for them, by which honest men have suffered. On the other hand, there has been but too much reason to fear that innocent persons have been the victims, not merely of intentionally false, but of unintentionally exaggerated statements of conversations.
If inquiry were made and information given respecting the credit or ability of the person whom the inquirer was called upon to trust either with money or with goods, the inquiry would be private, the communication would be private, and, if the inquirer was a competent witness, on his evidence alone, without the possibility of contradiction or explanation, the case must rest.
It has been a subject of complaint that these cases had trenched upon the security intended to be afforded by the Statute of Frauds, and it was considered by the legislature that a person so circumstanced was entitled to the same protection as the Statute of Frauds had given to the person whom a plaintiff sought to charge for the debt or miscarriage of another. To afford this protection, among other purposes, the statute of 9 Geo.4, c. 14 was passed.
That act is intituled, ‘An Act for rendering written Instrument necessary to the Validity of certain Promises and Engagements.”
Alderson B said: ‘According to the view which I take of the act, the representation, in order to be within it, must, therefore, be of the third person’s trustworthiness, as evidenced by his character, conduct, ability, credit, trade, or dealings, and must be one whereby, if true, that trustworthiness is increased. If indeed the real clause as drawn by Lord Tenterden stood thus, ‘To the intent that such third person might obtain money or goods upon credit,’ which is highly probable, this conclusion would be strengthened. But I do not rely on that which is, after all, only matter of probable conjecture from the ungrammatical state of the sentence as it now stands.’
Parke B said: ‘The words of the clause in question are, it is to be observed, clearly inaccurate, probably from a mistake in the transcriber into the Parliamentary roll. We must make an alteration in order to complete the sense, and must either transpose some words, and read the sentence as if it were ‘to the intent or purpose that some other person may obtain money or goods upon credit,’ or interpolate others, and read it as if it were ‘to the intent or purpose to obtain credit, money, or goods on such representation.’ If we assume Lord Tenterden’s object to have been merely to prevent evasion of the Statute of Frauds, as we think it was, and use this a key for the construction of the clause, it would induce one to prefer the former alteration, by which the clause is made clearly to apply only to cases where the purpose of the representation is to obtain personal credit for the third person: but then, it would not apply to all cases of such credit, for it would include money and goods only, not work and labour done for the third person, or houses or land let to him, on the faith of such representation; which, however, are cases by no means of so frequent occurrence as transactions in money and goods. On the other hand, if we make the latter alteration, using the same key to the construction of the clause, we must reject the words ‘money or goods’ as surplusage, as they would be included in the general term credit. I think it highly probable that the first correction would make the clause such as Lord Tenterden originally wrote it; . .’
Lord Abinger CB said: ‘With regard to the remarks which have been made upon the introduction into the statute of the word ‘upon’, without any grammatical relation to the other words of the sentence, I must observe, that I am decidedly of the opinion that this word must be rejected as nonsensical, and that we cannot admit a conjectural transposition of it in order to interpret that statute. Neither do I think that either of the conjectures offered gives the most probable account for the introduction of the word. The manuscript of this clause most probably contained the word ‘thereupon’; on revising it, the author considered that the word was superfluous to express his meaning, and that it might possibly, if it had any effect, rather narrow the construction. He has therefore meant to strike it out, but has not carried his erasure with sufficient force through the latter part of the word. The word upon has, therefore, found its way into the print, and has escaped notice afterwards when the bill was in committee. The printers of bills for the two houses seldom commit an error on the side of omission. Every thing which is not beyond doubt erased in MS. is sure to be served up in print, and, if it should afterwards escape detection in committee, finds its way upon the rolls of Parliament, and into the Statute Book.’
Statutes: Statute of Frauds (Amendment) Act 1828
This case cites:
- Cited – Pasley -v- Freeman ((1789) 3 Durn & E 51, (1789) 3 Term Rep 5F, Commonlii, [1789] EngR 1703, (1789) 3 TR 51, (1789) 100 ER 450)
The court considered the tort of deceit. A representation by one person that another person was creditworthy was actionable if made fraudulently. A false affirmation made by the defendant with intent to defraud the plaintiff, whereby the plaintiff . .
(This list may be incomplete)
This case is cited by:
- Cited – Contex Drouzhba Ltd -v- Wiseman and Another CA (Bailii, [2007] EWCA Civ 1201, Times 08-Jan-08, [2008] BCC 301)
The defendant was a director of a company. He signed a letter for the company promising to pay for goods ordered. The representation was found to have been made fraudulently because he knew the company was insolvent, and unable to pay. He now . . - Cited – Lindsay -v- O’Loughnane QBD (Bailii, [2010] EWHC 529 (QB), [2012] BCC 153)
The claimant had purchased Euros through a foreign exchange dealer. The dealer company became insolvent, causing losses to the claimant, who sought to recover from the company’s managing director, the defendant, saying that he was aware of the . . - Cited – Roder UK Ltd -v- West and Another CA (Bailii, [2011] EWCA Civ 1126, [2012] QB 752, [2012] 3 WLR 469, [2012] 1 All ER (Comm) 659, [2012] 1 All ER 1305, [2011] NPC 101)
The claimant sought to allege that the defendant company director was personally liable after misrepresentations as to the company’s creditworthiness in ordering goods when the defendant was really insolvent.
Held: The defendant’s appeal . .
(This list may be incomplete)
Last Update: 04-Jun-16
Ref: 263275