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Fraud is an act of deliberate deception with design of securing something by taking unfair advantage of another.

An intentional perversion of truth for the purpose of inducing another in reliance upon it to part with some valuable thing belonging to him or to surrender a legal right; a false representation of a matter of fact, whether by words or by conduct, by false or misleading allegations, or by concealment of that which should have been disclosed, which deceives and is intended to deceive another so that he shall act upon it to his legal injury. Brainerd Dispatch Newspaper Co. v. Crow Wing County, 196 Minn. 194, 264 N.W. 779, 780. Any kind of artifice employed by one person to deceive another. Goldstein v. Equitable Life Assur. Soc. of U. S., 160 Misc. 364, 289 N.Y.S. 1064, 1067. A generic term, embracing all multifarious means which human ingenuity can devise, and which are resorted to by one individual to get advantage over another by false suggestions or by suppression of truth, and includes all surprise, trick, cunning, dissembling, and any unfair way by which another is cheated. Johnson v. Mc- Donald, 170 Okl. 117, 39 P.2d 150. "Bad faith" and "fraud" are synonymous, and also synonyms of dishonesty, infidelity, faithlessness, perfidy, unfairness, etc. Joiner v. Joiner, Tex.Civ.App., 87 S.W. 2d 903, 914, 915.

It consists of some deceitful practice or willful device, resorted to with intent to deprive another of his right, or 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 A. 103; Studer v. Bleistein, 115 N.Y. 316, 22 N.E. 243, 7 L.R.A. 702; McNair v. Southern States Finance Co., 191 N.C. 710, 133 S.E. 85, 88. It comprises all acts, omissions, and concealments involving a breach of a legal or equitable duty and resulting in damage to another. Coppo v. Coppo, 163 Misc. 249, 297 N.Y.S. 744, 750. And includes anything calculated to deceive, whether it be a single act or combination of circumstances, whether the suppression of truth or the suggestion of what is false, whether it be by direct falsehood or by innuendo, by speech or by silence, by word of mouth, or by look or gesture. People v. Gilmore, 345 Ill. 28, 177 N.E. 710, 717. 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 inconvenience or loss to the other. Civil Code La. art. 1847. Strauss v. Insurance Co. of North America, 157 La. 661, 102 So. 861, 865; Jesse French Piano & Organ Co. v. Gibbon, Tex.Civ.App., 180 S. W. 1185, 1187.

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.Jur. § 187; Howard v. West Jersey & S. S. R. Co., 102 N.J.Eq. 517, 141 A. 755, 757.

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. Code Ga.1882, § 3173 (Civ.Code 1910, § 4622) ; People v. Kelly, 35 Barb., N.Y., 457; Jackson v. Jackson, 47 Ga. 99; Massachusetts Ben. L. Ass'n v. Robinson, 104 Ga. 256, 30 S.E. 918, 42 L.R. A. 261; Allen v. United States Fidelity & Guaranty Co., 269 Ill. 234, 109 N.E. 1035, 1038.

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 P. 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. 512-532; Delaney v. Valentine, 154 N.Y. 692, 49 N.E. 65; Lovato v. Catron, 20 N.M. 168, 148 P. 490, 492, L.R.A.1915E, 451; Furst & Thomas v. Merritt, 190 N.C. 397, 130 S.E. 40, 43.

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. Douthitt v. Applegate, 33 Kan. 395, 6 P. 575, 52 Am.Rep. 533; Nocatee Fruit Co. v. Fosgate, C.C.A. Fla., 12 F.2d 250, 252.

Extrinsic or Collateral Fraud

Extrinsic or collateral fraud justifying equitable relief against a judgment or decree means some intentional act or conduct by which the prevailing party has prevented the unsuccessful party from having a fair submission of the controversy. Farley v. Davis, 10 Wash.2d 62, 116 P.2d 263, 268.

Pious Fraud

Pious fraud is 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.

Statute of Frauds

This is the common designation of a very celebrated English statute, (29 Car. II. c. 3,) passed in 1677, and which has 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 and perjuries. It is more fully named as the "statute of frauds and perjuries." Smith v. Morton, 70 Okl. 157, 173 P. 520, 521; Housley v. Strawn Merchandise Co., Tex.Com.App., 291 S.W. 864, 867; Norman v. Bullock County Bank, 187 Ala. 33, 65 So. 371, 372; Garber v. Goldstein, 92 Conn. 226, 102 A. 605, 606.

Related Statute

Related Cases / Recent Cases / Case Laws

  • Harjas Rai Makhija (D) through LRS v Pushparani Jain and Another, Civil Appeal Jurisdiction, Civil Appeal No 11491 OF 2016, Supreme Court of India judgment dated January 2, 2017
  • Vijayander Kumar and Others v State of Rajasthan and Another, Criminal Appeal Jurisdiction, Criminal Appeal No. 1297 OF 2004, Supreme Court of India judgement dated February 11, 2014
  • A V Papayya Sastry v Government of Andhra Pradesh, (2007) 4 SCC 221: Fraud may be defined as an act of deliberate deception with the design of securing some unfair or undeserved benefit by taking undue advantage of another. In fraud one gains at the loss and cost of another. Even most solemn proceedings stand vitiated if they are actuated by fraud. Fraud is thus an extrinsic collateral act which vitiates all judicial acts, whether in rem or in personam. The principle of “finality of litigation” cannot be stretched to the extent of an absurdity that it can be utilised as an engine of oppression by dishonest and fraudulent litigants.
  • R K Dalmia v Delhi Administration, AIR 1962 SC 1821: Fraud is cheating intended to get an advantage.
  • S Dhawan v Shaw Bras, (1992) 1 SCC 534
  • S P C Naidu v Jagannath, (1994) 1 SCC 1