Court Opinion

ID: 3934867
Source: CourtListenerOpinion
Date Created: 2016-07-06 09:59:36.69255+00
Date Added: 2024-06-11T14:15:33.417142
License: Public Domain

The issues made by the pleadings upon the question of fraud should, in our opinion, have been submitted to the jury. The testimony is not entirely insufficient, as a pure matter of law, to constitute a cause of action against the appellees. The officers of the A. P. Moore's Sons, Incorporated, as admittedly proven, signed and delivered an audited annual financial statement of such corporation to the R. G. Dun  Co. mercantile agency. The statement on its face purported to reflect the solvency or financial strength of the corporation, exhibiting all of its resources and all of its liabilities. The sole purpose of the statement as issued, in form and contents, was, as proven, to obtain loans or credit. And there is testimony tending to show knowledge on the part of directors as such of the statement as issued, in form and contents, and the purpose of its issuance. A particular item of "asset" or resource was stated therein simply as unpaid assessments of stockholders, "$50,000." It can hardly be doubted from the evidence that such particular item was intended, to the knowledge of some of the directors, to be carried into the statement to the advantage of the corporation, inducing a favorable opinion of credit upon the whole statement. The recital of the purported fact, as simply stated, is clear and unambiguous, and a reasonable person could gather therefrom as fact that a valid absolute assessment to the amount stated had been agreed upon by the stockholders, and that such sum was available and payable to the corporation as a part of its resources or working capital to discharge its obligations as they fell due in the ordinary course of business. And it was permissible to appellant to give it that meaning, as it had the right to presume that the audited statement approved by the officers correctly recited the facts. There were no circumstances putting appellant upon inquiry that the assessment was not payable absolutely, or was not agreed to by stockholders, or that all the facts were not stated. And in the form of the statement it was permissible to appellant to conclude, without further inquiry, that it was an assessment pursuant to express agreement or understanding of the stockholders, and not an attempted assessment pursuant to any statutory permission or authority. Accordingly it would appear that the appellant was ignorant, actually and permissibly, of the truth of the matter of the specific item listed, and upon the whole statement. Such being the inference that may be drawn, and the evidence further tending to show fraud of directors in the listing of the item, an action for deception would lie in case the appellant was influenced to act upon the statement in a way to his damage.
The parties seem to agree upon the law of the case. However, if in the transaction which is in suit it is affirmatively shown that any individual director did not have actual participation or knowledge, a claim of fraudulent or false representation cannot be predicated against him. A director is liable only for his own acts or omissions. He is not merely by virtue of his position liable. 7 Thompson, Corp. § 8510. As appears in this case, the minutes of the corporation purport to show the appellant J. B. Parker, present at a directors' called meeting of January 2, 1922, voting for a resolution of assessment of stockholders. These minutes were offered in evidence, and properly so, by appellant. And, over objection of appellant, Mr. Parker was permitted to testify to the effect that he did not in fact participate, and that no such resolution was passed by a board as such. It was competent for him to so testify, as against a charge of fraud. He was entitled to have the whole of what was said and done on the subject at that meeting or interview stated as a part of the evidence. The question was as to the true nature of the transaction which the parties had under consideration, for the correct determination of the question of fraud on his part. It was essential that all that had passed between them should be known. The minutes were prima facie, and not conclusive, of the statements therein. Both the minutes and the evidence of Mr. Parker were equal evidence to the jury, who were authorized to give such credence as it might appear to them to deserve. And actual knowledge or assent on the part of Mr. Parker, in the capacity of a creditor, of the form and contents of the statement, could probably be inferred by the jury from the evidence. The same can be said as to the special defense of Mr. T. B. Ramey, Jr. — that a jury question was presented — although the evidence, as we think, as to him is on the very border line of any legal liability, rather tending to show he was innocent. He was not a director before January 10, 1922, and was never present at a directors' meeting. If he afterwards had any means at hand of knowing that the particular item was actually *Page 613 
incorporated in the statement given to R. G. Dun  Co., so as to impute assent to what others did, it rests entirely in the opportunity and means as a director to so know in the few days before the date it was delivered to R. G. Dun  Co. As it stands, the inference of knowledge or assent primarily is for the jury.
The judgment is reversed, and the cause is remanded.