Tonopah daily bonanza. [volume] (Tonopah, Nev.) 1906-1929, 1912-04-25
RESPONSIBILITY AFFIRMED.

Within the past few days the court of appeals
Of the state Of New York has rendered decision
that Is Of vital Importance to every one inter-
esfed III the stock of corporations
In effect II holds all the parties connected
with the sale of stock or the promotion Of
company responsible for any and every represen-
tation made III the literature or prospectus put
out BY the company or by accredited agent
By doing the common law of justice between
and is strongly upheld. The ease as
viewed IN New York, is commented upon by
the New York Commercial IN the following
words
1T has sometimes been said that the laws
u this country do not give the investor pro-
lection he should have and that he would enjoy
III England. for instance This judgement seems
to 90 as far any English has ever gone
and all that complaining investor has to do is
To keep the literature be received through the
mails as proofs Of the representations which in
dueed him 10 pay his money.
This ease simply settles what has always
been supposed to be the law the subject of
representations, and il will have the effect of
making men of standing very careful about al
lowing their names to be connected with an bust
ness over which they cannot maintain close per-
sonal supervision. 1t is in line with the grow
ing disposition to make directors of companies
take an active part in their management instead
Of trusting everything to executive officers.
The liability of employer for the acts of
his servant when engaged in his service is well
settled and thoroughly understood. The court of
appeals has simply decided that a salesman binds
his employer by any representations made in
effecting sale and il will force all who en-
plov statesmen to be very careful in picking
their men.
.'The extern to which directors are person
ally liable for the acts Of employees of the com
pany is being wdened According to the rea-
soning of the court in this it is very easy to
put the directors of company in the posi-
tion Of personal employers Of the company s
agents. when stock is being sold to the public.
By making directors promoters Of new
companies personally responsible for prospec-
fuses the name Of a prominent will carry
more weight than il does now This would give
the public greater confidence ia such offerings
and should make II easier and less expensive 10
sell stock III worthy enterprises People are al.
ways willing 70 take chance Ia anything with
when successful men are identified and the
assurance that stock statesmen are telling them
through printed prospeetuscs or statements iu.t
what the men whose names attract them are
willing - hack with their money and repnta.
iiens should improve this class ~ business
suggestion made hy the Commercial Ia this
connection j. well worth consideration viz Ia
make = Illegal "a issue prosperu~eS or reprrsen.
tations ~ any kind whieh do not hear the names
II those responsible ~ law for their truthful.
ness rs - doine t will curb thu enthusiasm
II sFteh agents have none too strict q regard
Ter tbs truth. Tor thoss actually responsible Tor
The company viii then not ~ able % a.seri that
lhet net aware ~ the character 81 the Feprs.
seHfatlans being ris,ls ht their agents h waul.l
Haii step - ths altogether foa eomraau psas.
fles g s>iav deurvhess.
fhe fsft.ion ia gufsitnu will ~ a hong way
toward msking lntrsfasnts lu sineks nofe ~
eHre q ghai Il wiii rauss prumuiers snd ai'laes.
@ e. maFs saFetpl ta the rlsss 80 literature
rssi saf aah ~ representations vasis