Diamonds and Toads
It is Aarne-Thompson tale 480, the kind and the unkind girls. Others of this type include Shita-kiri Suzume, Mother Hulda, The Three Heads in the Well, Father Frost, The Three Little Men in the Wood, The Enchanted Wreath, The Old Witch, and The Two Caskets. Literary variants include The Three Fairies and Aurore and Aimée.
<button>useless button</button> A bad-tempered old widow had two daughters, her older daughter was disagreeable and proud but looked and behaved like her mother, and therefore was her favourite child. She and her eldest daughter badly mistreated the woman's younger daughter, who was sweet, courteous, and beautiful, but resembled her late father.
One day while drawing water from the well, an old woman asked for a drink of water. The girl politely consented and after giving it, she found that the woman was a fairy, who had taken the guise of a crone to test the character of mortals. As the girl was so kind and compassionate toward her, the fairy blessed her with having either a jewel, a diamond or a pretty flower fall from her mouth whenever she spoke.
Upon arriving home and explaining why she took so long to her mother, the widow was delighted at the sight of diamonds, pearls and roses falling from the girl's lips, and desired that her favoured eldest daughter, Fanny, should have the gift as well. Fanny protested, but the widow forcibly sent her to the well with instruction to act kindly toward an old beggar woman. Fanny set off but the fairy appeared as a fine princess, and requested that the girl draw her a drink from the well. The elder daughter spoke rudely to the fairy and insulted her. The fairy decreed that, as punishment for her despicable attitude, either a toad or a snake would fall from Fanny's mouth whenever she spoke.
When Fanny arrived home, she told her story to her mother and disgusting toads and vipers fell from her mouth with each word. The widow, in a fury, drove her younger daughter out of the house. In the woods, she met a king's son, who fell in love with her and married her. In time, even the widow was sickened by her older daughter, and drove her out, and she died alone and miserable in the woods.
See also 
- Andrew Lang, The Blue Fairy Book, "Toads and Diamonds"
- Iona and Peter Opie, The Classic Fairy Tales, p 100 ISBN 0-19-211559-6
- Heidi Anne Heiner, "Tales Similar to Diamonds and Toads"
- Jack Zipes, The Great Fairy Tale Tradition: From Straparola and Basile to the Brothers Grimm, p 543, ISBN 0-393-97636-X
- Iona and Peter Opie, The Classic Fairy Tales, p 98 ISBN 0-19-211559-6