The copper era and Morenci leader., 1912-04-26
|MPORTANTDEC|S|ON |S RENDERED BY
 N. '. COURT
Court Of Appeals Holds All Parties Connected With Sale of Stock Re sponsibIe For All Representa-
 tionS Made.

Within the past few days the court of appeals of the state of New York has rendered a decision that is of vital importance to everyone interest ed in the stocks of corporations.
 In effect it holds all the parties con nected with the sale of stock or the promotion of a company responsible for any and every representation made in the literature or prospectus put out, by the company or by an eccredit- ed agent. By so doing, the common law of justice between man and man is strongly upheld.
 The case as viewed in New York is commented upon by the New York Comme in the following words:
 Tt has sometimes been said that the laws of this country do not give the investor the protection he should have and that he would enjoy in Eng land, for instance This judgment seems to go as far as any English case has ever gone, and all that a complaining investor has to do is to keep the literature he received through the mails as proofs of the representations which induced him to pay over his money.
 This case simply settles what has always been supposed to be the law on the subject of representations, and it will have the effect of making men of standing very careful about allow ing their names to be connected with any business over which they cannot maintain close personal supervision. It is in line with the growing disposi- tion to make directors of companies take an active part in their manage ment instead of trusting everything to executive officers.
 1ioh of oD1nIauar for. the acts of his servant when engaged in his service is well settled and thor ough1y understood. The court of ap- peals has simply decided that sales man binds his employer by any rep resentations made in effecting a sale, and it will force all who employ sales men to be very careful in picking their men.
 The extent to which directors are personally liable for the acts of en- ployees of the company is being wid ened. According to the reasoning of the court in this case, it is very easy to put the directors of a new con- pany in the position of personal em- ployerS of the company's agents, when stock is being sold to the public.
 By making directors or promoters of new companies personally reSpOn- sible for prospectuses, the name of a Indn VIII carry HlOT0 W6lSuL than it does now. This would give the public greater confidence in such offerings and should make it easier and less expensive to sell stock in worthy enterprises. People are d. ways willing to take a chance in any thing with which successful men are identified, and the assurance that stock salesmen are telling them through printed prospectuses or state mentS just what the men whose names attract them are willing to back with their money and regulations, should improve this class of business
 A suggestion made by the Commer- cial in this connection is well worth consideration, viz, to make it illegal to issue prospectuses or representa- tions of any kind which do not bear the names of those responsible at law for their truthfulness. By so doing it will curb the enthusiasm of such agents as have none too strict re gard for the truth, for those actually responsible for the company will then not be able to assert that they are not aware of the character of the rep resentations being made by their az ents. It would put stop to the all together too common practice of us ing figureheads.
 The decision in, question will go a long way toward making investments in stocks more secure, in that it will cause promoters and officers to be more careful as to the class of litera- ture put out and the representations made-Daily Mining Record.