261 Mass. 38 | Mass. | 1927
The single question for decision in this case is, whether good faith of an officer of a corporation in signing a statement of condition of the corporation bars responsibility under G. L. c. 156, § 36, for a return false in particulars which he might on reasonable examination have known to be false.
Under the law as it existed before the enactment of St. 1911, e. 488, § 1, this court held that bad faith in making the return must be shown before a corporate official could be held liable to creditors for the debts of the corporation. The language of the statutes then in force imposing the liability made the officers liable if they signed a certificate required by law “knowing it to be false,” or “which they know to be false” in any material representation. The court held that actual knowledge of the falsity and bad faith in making the representation were essential to liability. Stebbins v. Edmands, 12 Gray, 203. Felker v. Standard Yarn Co. 150 Mass. 264. International Paper Co. v. Gazette Co. 182 Mass. 578. Harvey-Watts Co. v. Worcester Umbrella Co. 193 Mass. 138. See also Heard v. Pictorial Press, 182 Mass. 530.
It was argued in Felker v. Standard Yarn Co., supra, that the defendants sought to be charged admitted that they had known the fact to be different from the statement in the return, and that it was no excuse that they had forgotten it and were acting in good faith and in full belief of the truth of the return when they signed. The court, however, held wilful misstatement essential, following Stebbins v. Edmands, supra, and said, page 266: “If the Legislature had intended to change the law as declared in Stebbins v. Edmands, we think this intention would have been indicated by some substantial change in the phraseology of the statute concerning the knowledge which the officers named must have that the certificate is false, in order to render them liable.” That case was decided in 1889. The language of the statute was changed in 1911; and St. 1911, c. 488, § 1, inserted after the words “which they know” the significant addition “or on reasonable examination could have known.” We think this made a substantial change in the law. The intent of the
In the case before us there is an explicit finding that, had reasonable examination of the return been made, the falsity of statements it contained would have been recognized. The further finding of good faith in signing without examination is immaterial. To hold otherwise would render the certificate worthless as a safeguard for creditors. Creditors are entitled to demand of the signer both good faith and reasonable examination to ascertain the truth of the representations of the certificate.
Decrees affirmed with costs.
