95 N.Y.S. 920 | N.Y. Sup. Ct. | 1905
In this action for damages for fraud and deceit the defendant Seaman demurs for general insufficiency of the complaint. It is alleged that the demurring defendant was treasurer of the National Gramaphone Corporation, but it is not alleged that he was a director. It is alleged that at a certain meeting of the directors of the corporation, at which it is not alleged that defendant Seaman was present^ a resolution was adopted declaring monthly dividends of one per cent, each, payable out of earnings, for the months of March and April, 1899; that said dividends were not made from surplus profits arising from the business of the corporation to the knowledge of the defendants; that notice of the declaration of the dividend was at the instance of the directors and of the defendant Seaman published in certain newspapers;
In order to maintain an action for damages for misrepresentation and deceit it is not necessary either that the false representation shall be made directly to the plaintiff by the defendant, or that it shall have been made to any one by the defendant personally, for if he shall have authorized and caused it to be made it is the same as though he had made it himself. So if any person makes or causes to be made to the public at large, for the purpose of inducing purchases of the stock of a corporation, false statements as to the solvency and prosperity of the corporation, any person acting upon such representations and suffering loss thereby may prosecute his action for damages. Brackett v. Griswold, 112 N. Y. 454. The elements of an action for false representations were tersely stated by Chief Justice Church to be “ representation, falsity, scienter, deception and injury.” Arthur v. Griswold, 55 N. Y. 400. In order to sustain the complaint against the demurring defendant it must be found to contain allegations that he made or caused to be made certain representations; that they were false; that he knew them to be false; that plaintiff’s assignor became cognizant of the representations; that he relied and acted upon them and was thereby deceived, and that he suffered injury in consequence thereof. The principal false representation charged is that the directors of the corporation by the very act of declaring dividends payable out of earnings represented to the public that the com
It follows that the demurrer must be oterruled, with costs, with leave to defendant to withdraw his demurrer and answer within twenty days upon payment of costs.
Demurrer overruled, with costs, with leave to defendant to withdraw and answer within twenty days upon payment of costs.