Steel v. Webster

• Citation: 188 Mass. 478,74 N.E. 686
• Parties: STEEL et al. v. WEBSTER et al.
• Decision Date: 22 June 1905
• Court: United States State Supreme Judicial Court of Massachusetts

188 Mass. 478

74 N.E. 686

STEEL et al. v. WEBSTER et al.

Supreme Judicial Court of Massachusetts, Essex.

June 22, 1905

COUNSEL

G. L. Mayberry and W. M. Morgan, for plaintiffs.

Knox & Coulson, for defendants.

OPINION

LATHROP J.

The auditor has found in this case that the plaintiffs sold goods to a corporation represented now by the defendants; that before making the contract of sale the plaintiffs inquired through a mercantile agency as to the financial condition of the corporation, and received in return a statement in detail of the assets and liabilities of the corporation, contained in its annual returns of condition, in pursuance of the requirements of Pub. St. 1882, c. 106, § 54; that these returns were knowingly false, and made for the purpose of giving the corporation a credit to which it was not entitled and to deceive the public and persons from whom the corporation might seek and obtain credit. The questions are whether the plaintiffs can avail themselves of these false statements, they relying on the same, and making the sale in consequence thereof; and whether they can rescind the sale and maintain an action of replevin for the goods. No question is made that the requirements of Pub. St. 1882, c. 106, § 54 apply to the corporation in question. This requires an annual certificate 'to be signed and sworn to by its president treasurer, and at least a majority of its directors,' and stating, among other things, 'the assets and liabilities of the corporation, in such form and with such detail as the commissioner of corporations shall require or approve.' See, also, St. 1887, p. 858, c. 225; St. 1890, p. 181, c 199; St. 1896, p. 304, c. 369; Rev. Laws, c. 110, § 51; St. 1903, p. 439, c. 437, § 45. There are also many acts preceding the Public Statutes. In Fogg v. Pew. 10 Gray, 409, 415, 71 Am. Dec. 662, in reference to the return required from an insurance company to the Secretary of the Commonwealth, it was said by Mr. Justice Bigelow: 'The return made by the corporation to the Secretary of the Commonwealth in compliance with the provisions of the statutes was irrelevant and immaterial to the issue before the jury, unless accompanied by further evidence that the defendant saw or knew of such statement, and was thereby deceived; and entered into contracts of insurance with the corporation relying in some degree on the statements which it contained.' In Thayer v. New England Lithographic Co., 108 Mass. 523, 528, Mr. Justice Wells, speaking of St. 1862, p. 180, c. 210, requiring a certificate to be filed, said: ...