lack Letter
KU.S. Supreme Court (Chief Justice Marshall), 1817draftborradorunverifiedsin verificar

Laidlaw v. Organ

15 U.S. (2 Wheat.) 178 (1817)

Buyer hears the war is over and buys tobacco before the news spreads

In one lineEn una línea
A buyer need not volunteer market news that both sides could have learned, but may not actively mislead the seller.El comprador no tiene que revelar noticias del mercado que ambos podían averiguar, pero no puede engañar activamente al vendedor.
RuleRegla
There is no general duty to disclose extrinsic information bearing on price when the means of knowledge are equally open to both parties; each party, however, must not say or do anything that imposes on the other.
Why this case is herePor qué está aquí este caso
Crespi's starting point for nondisclosure: the rule that silence about market information is not fraud, and its limit, that a party may not do anything to mislead.
Procedural posturePostura procesal
Seller retook the tobacco after learning of the peace; buyer sued for the goods or their value; jury verdict for the buyer; writ of error to the Supreme Court, which reversed for a new trial.

Facts

In New Orleans in February 1815, Organ learned before the public that the Treaty of Ghent had ended the War of 1812, which meant the British blockade would lift and tobacco prices would jump. Early that morning he bought a large lot of tobacco from Laidlaw & Co. When the seller’s agent asked whether there was any news affecting the price, Organ, by the record, said nothing. Once the news spread, Laidlaw refused to deliver and retook the tobacco.

Procedural posture

Organ sued for the tobacco. The trial court directed a verdict for Organ. On writ of error, the Supreme Court (Marshall, C.J.) reversed and remanded for a new trial.

Issue

Whether a buyer who knows of extrinsic news that will raise prices must disclose it to the seller before buying.

Holding

No general duty to disclose, so long as the information was equally accessible to both sides; but the case had to go to a jury on whether Organ did anything to impose on the seller.

Reasoning

Marshall reasoned that information “exclusively within the knowledge of the vendee” need not be shared when both parties had equal means of learning it; requiring disclosure would be hard to confine and would punish diligence. The limit is active deception: each party must take care not to say or do anything tending to impose upon the other. Because the trial judge had kept that question from the jury, a new trial was required.

Rule (own words)

Silence about publicly discoverable market facts is not fraud. Active misleading is. R.2d § 161 later carved out specific situations where silence itself becomes an assertion.

What-ifs

  • If Organ had answered “no news” when asked, that would be a false assertion under R.2d § 159 and the contract would be voidable.
  • If the parties had a relationship of trust (lawyer and client), R.2d § 161(d) would require disclosure.

Likely follow-upsRepreguntas probables

Was Organ required to answer when Laidlaw's agent asked whether there was any news?
The Court sent that question back to the jury: silence alone was permitted, but if Organ said or did something that misled the agent, that would be imposition.
How does the modern Restatement treat this?
R.2d § 161 lists when nondisclosure equals an assertion: when disclosure is needed to correct a prior statement, a known basic mistake where nondisclosure violates good faith, a mistake about the writing, or a relation of trust. Market news alone usually fits none of them.
Why does the law tolerate Organ's silence?
To reward the effort of gathering information: if buyers had to share what they learned, nobody would invest in finding it.
nondisclosuremisrepresentationcaveat emptor

AssignedAsignado: 2026-10-20

Read the public opinionLeer la opinión (texto público). SourceFuente: Own brief from the public opinion; assigned in ASS#9 for Oct 20.