contracts. The unlawful suppression of any fact or circumstance,
by one of the partis to a contract, from the other, which in justice ought
to be made known. 1 Bro. Ch. R. 420; 1 Fonbl. Eq. B. 1, c. 3, 4, note (n);
1 Story, Eq. Jur. 207.
2. Fraud occurs when one person substantially misrepresents or conceals
a material fact peculiarly within his own knowledge, in consequence of which
a delusion exists; or uses a device naturally calculated to lull the suspicions
of a careful man, and induce him to forego inquiry into a matter upon which
the other party has information, although such information be not exclusively
within his reach. 2 Bl. Com. 451; 3 Id. 166; Sugd. Vend. 1 to 10; 1 Com.
Contr. 38; 3 B. & C. 623; 5 D. & R. 490; 2 Wheat. 183; 11 Id. 59; 1 Pet.
Sup. C. R. 15, 16. The party is not bound, however, to disclose patent defects.
Sugd. Vend. 2.
3. A distinction has been made between the concealment of latent defects
in real and personal property. For example, the concealment by an agent
that a nuisance existed in connexion with a house the owner had to hire,
did not render the lease void. 6 IV. & M. 358. 1 Smith, 400. The rule with
regard to personalty is different. 3 Camp. 508; 3 T. R. 759.
4. In insurances, where fairness is so essential to, the contract, a concealment
which is only the effect of accident, negligence, inadvertence, or mistake,
if material, is equally fatal to the contract as if it were intentional
and fraudulent. 1 Bl. R. 594; 3 Burr. 1909. The insured is required to disclose
all the circumstances within his own knowledge only, which increase the
risk. He is not, however, bound to disclose general circumstances which
apply to all policies of a particular description, notwithstanding they
may greatly increase the risk. Under this rule, it has been decided that
a policy is void, which was obtaineed by the concealment by the assured
of the fact that he had heard that a vessel like his was taken. 2 P. Wms.
170. And in a case where the assured had information of "a violent
storm" about eleven hours after his vessel had sailed, and had stated
only that "there had been blowing weather and severe storms on the
coast after the vessel had sailed" but without any reference to the
particular storm it was decided that this was a concealment, which vitiated
the policy. 2 Caines R. 57. Vide 1 Marsh. Ins: 468; Park, Ins. 276; 14 East,
R. 494; 1 John. R. 522; 2 Cowen, 56; 1 Caines, 276; 3 Wash. C. C. Rep. 138;
2 Gallis. 353; 12 John. 128.
5. Fraudulent concealment avoids the contract. See, generally, Verpl. on
Contr. passim; Bouv. Inst. Index, h. t.; Marsh. Ins. B. 1, c. 9; 1 Bell"s
Com. B. 2, pt. 3, c. 15 s. 3, 1; 1 M. & S. 517; 2 Marsh. R. 336.
Source: Bouviers Law Dictionary 1856 Edition
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