33 made for other purposes," or for the purpose of influencing other persons.32 For example, an action for damages for fraudulently inducing plaintiff to take the notes of a corporation by the false representations of its officers as to the amount of its paid-up capital stock, could not be maintained against them by evidence of the falsity of their statement of the amount of its paid-up capital stock, filed with the state commissioner, as required by a state statute, since such statement was not addressed to nor intended for the public. This last point was decided in the case of Hunnewell vs. Duxbury," where the Court said: "The action is tort for deceit inducing the plaintiff to take notes of a corporation by false and fraudulent representations, alleged to have been made to him by the defendants, that the capital stock of the corporation, amounting to $150,000, had been paid in, and that patents for electrical advertising devices of the value of $149,650 had been transferred to it. From the exceptions it appears that the corporation was organized in January, 1885, under the laws of Maine and engaged in business in Massachusetts; that it filed with the commissioner of corporations a certificate dated August 11, 1885, required by St. 1884, c. 330, Sec. 3, signed by the defendants, with a jurat stating that on that date they had severally made oath that the certificate was true to the best of their knowledge and belief; that before the plaintiff took the notes the contents of this certificate had been communicated to him by an attorney whom he had employed to examine the records and that he Hunnewell vs. Duxbury, 154 Mass., 286; 28 N. E., 267; 13 Grier vs. Behan, 5 Houst, 401; 100; Linington vs. Strong, 111 33 Hunnewell vs. Duxbury, 154 relied upon its statements in accepting the notes. There was no other evidence of the making of the alleged representations. The main question is whether the plaintiff can maintain an action of deceit for alleged misstatements contained in the certificate. In the opinion of a majority of the court this question should have been decided adversely to the plaintiff. The execution by the defendants of the certificate to enable the corporation to file it under St. 1884, C. 330, Sec. 3, was too remote, from any design to influence the action of the plaintiff, to make it the foundation of an action of deceit. To sustain such an action misrepresentations must either have been made to the plaintiff individually, or as one of the public, or as one of a class to whom they are in fact addressed, or have been intended to influence his conduct in the particular of which he complains. This certificate was not communicated by the defendants or the corporation to the public or the plaintiff. It was filed with a state official for the definite purpose of complying with a requirement imposed as a condition precedent to the right of the corporation to act in Massachusetts. Its design was not to procure credit among merchants, but to secure the right to transact business in the state. The terms of the statute carry no implication of such a liability. Statutes requiring similar statements from domestic corporations have been in force here since 1829, and whenever it was intended to impose a liability for false statements contained in them there has been an express provision to that effect; and a requisite of the liability has uniformly been that the person to be held signed knowing the statement to be false. St. 1829, Sec. 90; Rev. St., c. 38, Sec., 28; Gen. St., c. 160, Sec. 30; St. 1870, c. 224, Sec. 38., cl., 5; Pub. St., c. 106, Sec. 60, cl. 5. To hold that St. 1884, c. 330, Sec. 3, imposes upon those officers of a foreign corporation who sign the certificate, which is a condition of its admission, the added liability of an action of deceit is to read into the statute what it does not contain. If such an action lies, it might have been brought in many instances upon representations made in returns required of domestic corporations, and yet there is no instance of such an action in our reports. In Fogg vs. Pew, 10 Gray, 400, it is held that the misrepresentations must have been intended and allowed by those making them to operate on the mind of the party induced, and have been suffered to influence him. In Bradley vs. Poole, 98 Mass., 169, the representations proved and relied on were made personally by the defendant to the plaintiff in the course of the negotiation for the share the price of which the plaintiff sought to recover. Felker vs. Yarn Co., 148 Mass., 226; 19 N. E. Rep., 220, was an action under Pub. St., c. 106, Sec. 60, to enforce a liability explicitly declared by the statute. Nor is there any English case which goes to the length necessary to sustain the plaintiff's action. The English cases fell under two heads: (1) Those of officers, members, or agents of corporations, who have issued a prospectus or report addressed to and circulated among share holders or the public for the purpose of inducing them to take shares; (2) Those persons who to obtain the listing of stocks or securities upon the stock exchange in order that they may be more readily sold to the public, have made representations to the officials of the exchange, which in due course have been communicated to buyers. Bagshaw vs. Seymour, 4 C. B. (N. S.), 873; Watson vs. Earl of Charlemont, 12 N. and E. (N. S.), 856; Bedford vs. Bagshaw, 4 Hurl and N., 537; Jarrett vs. Kennedy, 6 C. B., 319; Campbell vs. Fleming, 1 Adol. and E., 40; Peek vs. Derry, 37 Ch. Div., 541, and L. R., 14 App Cas., 337; Angus vs. Clifford, 2 L. R. Ch., 449. In these cases the representations were clearly addressed to the plaintiffs, among others of the public or of a class, and were plainly intended and calculated to influence their action in the specific matter in which they claimed to have been injured. So, too, in the American cases relied on to support the action. Morgan vs. Skiddy, 62 N. Y., 319; Terwilliger vs. Telegraph Co., 59 Il., 249; Paddock vs. Fletcher, 42 Vt., 380. The numerous cases cited in the note to Palsey vs. Freeman, 2 Smith Lead. Cas. (9th Amer. Ed.), p. 1320, are of the same character. In the case at bar the certificate was made and filed for the definite purpose, not of influencing the public, but of obtaining from the state a specific right, which did not affect the validity of its contracts, but merely relieved its agents in Massachusetts of a penalty. It was not addressed to or intended for the public, and was known to the plaintiff only from the search of his attorney. It could not have been intended or designed by the defendants that the plaintiff should ascertain its contents, and be induced by them to take the notes. It is not such a representation made by one to another with intent to deceive as will sustain the action. Its statements are in no fair sense addressed to the person who searches for, discovers, and acts upon them, and cannot fairly be inferred or found to have been made with the intent to deceive him. This view of the law disposes of the case, and makes it unnecessary to consider the other questions raised at the trial." SECTION 60. NECESSITY THAT THE PLAINTIFF SHOULD HAVE ACTED UPON THE REPRESENTATIONS AND HAVE BEEN DAMAGED THEREBY. Misrepresentations by themselves do not constitute a ground of action; it is necessary that such representations result in damage to the plaintiff before there can be any recovery by him. If the person to whom the misrepresentations were made does not enter into the contract in connection with which the misrepresentations were made, there is of course no damage and no action. This is also true even if the plaintiff entered into such contract, but was not induced to do so by the misrepresentations.35 If a person relies on his own judgment, and this proves to have been erroneous, he cannot then be allowed to sue another party for the loss.30 A partial reliance upon the defendant's misrepresentations is, however, sufficient to permit a recovery." The representations must have been acted upon within a reasonable time after they were made; what will constitute a reasonable time, under all the circumstances of the case, is a question for the jury." 38 As the final requisite for recovery by the plaintiff his acting upon the misrepresentations of the defendant must have resulted in damage to him. This damage must not have been contingent, uncertain or too remote. For consideration of this point, see Subject of Damages.39 35 Ming vs. Woolfalk, 116 U. S., 599; Brockett vs. Griswold, 112 N. Y., 454; 20 N. E., 376. Anderson vs. McPike, 86 Mo., 293; Granel vs. Wolfe, 185 Pa. St., 83; Herring vs. Draper, 2 Houst., 158. 97 Hindman vs. Louisville First National Bank, 112 Fed., 931; Handy vs. Waldron, 19 R. I., 618; 35 Atl., 884; Strong vs. Strong, 102 N. Y., 69; 5 N. E., 799. Chilson vs. Houston, 9 N. D., 498; 84 N. W., 354. 39 Volume IV, Subject 9. |