Windram v. French

• Decision Date: 18 June 1890
• Citation: 151 Mass. 547,24 N.E. 914
• Parties: WINDRAM v. FRENCH et al.
• Court: United States State Supreme Judicial Court of Massachusetts Supreme Court

151 Mass. 547

24 N.E. 914

WINDRAM v. FRENCH et al.

Supreme Judicial Court of Massachusetts, Suffolk.

June 18, 1890

The defendants demurred to the declaration for "that said declaration, and the matters and things therein contained, in manner and form as the same are therein stated and set forth, are not sufficient in law for the plaintiff to maintain his action against the defendants; for that no cause of action is therein set forth against the defendants; and for that it does not appear in and by said declaration that the defendants made any false representations to the plaintiff, or that the plaintiff was deceived by any false representations made by the defendants wherefore, for want of a sufficient declaration, the defendants pray judgment."

COUNSEL

T.F. & G.F. Nutter, for plaintiff.

Hutchins & Wheeler, for defendants.

OPINION

HOLMES J.

It appears from the declaration that the defendants knowingly and fraudulently signed, as president and treasurer respectively, and issued, invalid certificates of stock in a New Hampshire corporation, which were afterwards acquired by the plaintiff in good faith and for value, in Massachusetts. The certificates were in the usual form of stock certificates, and bore upon their face the words "Incorporated under the Laws of the state of New Hampshire. Non-assessable." There is no doubt that, by thus authenticating and issuing the certificates, the defendants made certain representations which accompanied them, and which, like the offer in a letter of credit, addressed themselves to whoever should purchase those certificates thereafter, whoever he might be. Bruff v. Mali, 36 N.Y. 200, 205. See Bartholomew v. Bentley, 15 Ohio, 659; Clark v. Edgar, 84 Mo. 106; Bank v. Lanier, 11 Wall. 369, 378; Matthews v. Bank, 1 Holmes, 396; Lobdell v. Baker, 3 Metc. 469, 471.

The scope of these representations is matter of construction. They certainly went to the point that the stock was not spurious, and that it was not invalid by reason of the fraudulent or known acts or omissions of the officers in question. In view of the word "non-assessable," they went further. That word affirmed that such things had been done as were required by New Hampshire law to be done in order to make the stock rightfully exempt from further assessment. This is not the case of an original subscriber to whom the facts were made known, upon which the conclusion non-assessable was based, and who seeks to avoid liability to an assessment, as in Upton v. Tribilcock, 91 U.S. 45. See Eaglesfield v. Londonderry, 4 Ch.Div. 693. Here the facts were unknown, and a statement of the conclusion imported a statement that facts existed which justified it, just as when a man states that he owns a thing, or that two persons are husband and wife, or that goods are attached, or that a pauper has a settlement in a certain place. West Bridgewater v. Wareham, 138 Mass. 305; Burns v. Lane, Id. 350, 354; Rosenberg v. Doe, 148 Mass. 560, 562, 20 N.E. 176. See Eaglesfield v. Londonderry, 4 Ch.Div. 693, 703.

The representations thus made by the defendant were false. It is suggested that unless the plaintiff knew the New Hampshire law, which is not alleged, there was no representation that the stock was fullpaid. But there was an express representation that somehow or other the stock was non-assessable, and that is enough; or, if that does not imply that it was fullpaid, and if some other mode by which it might become non-assessable can be conceived, the declaration discloses by reasonable implication that the only mode, in fact, under the New Hampshire law, was by the par value having been fully paid in. It also alleges that in truth nothing had been paid in, and thus that the representation was false, if the certificate represented stock at all. There is a further allegation that the stock was invalid by reason, as we understand it, of the defendants' acts and omissions set forth. This, so far as it involves a conclusion of law, is an allegation of New Hampshire law, and therefore of matter of fact which we must take to be true. In this respect, also, the representations imported by the face of the certificate set forth were false.

If, as we must assume, the stock was void, the damage to the plaintiff is apparent. The same would be true if, though not void, it was subject to...