Page:Federal Reporter, 1st Series, Volume 7.djvu/639

 BANK Ot MONTREAL V. THAYER. 627 �in Bruffv: Mali, 3& N. T. 200, 206, it was held that officers of a railroad corporation were liable to any person injQred by their misconduct in issuing false certificates of stock, and inducing a party to purchase the same by faJse and fraudulent representations as to the affaire of the cona- pany; and see to same effect the following authorities: Bigelow on Fraud, 89-90; Cazeait, v. Mali, 25 Barb. 578; Bartholemew v. Beatty, 15 Ohio, 660 ; Railroad Go. v. Schuyler, 34 N. Y. 30. There is nothing in the authorities cited by defendant's counsel whieh, rightly understood, is in conflict ■nith this mie. It is very true -that an innocent misrepre- Bentation — an honest mistake — ^cannot be made the ground of an action for fraud. There must be an intent to defraud by false representations. This must be alleged and proved. We hold that it is sufficiently alleged by the plaintiff. If it is not true let the defendant join issue. We cannot give judgment in his favor while he stands here admitting the allegations of the petition. �We construe the allegations of the petition to mean that defendant executed and plaeed upon the market certain in- struments payable to bearer, and containing on their face false representations intended to deceive the purchasers thereof, whoever they migbt be. This being so, if the plain- tiff purchased them in good faith, before maturity, witliout notice, relyihg upon the representations, he may recover, al- though the defendant had no purpose to defraud and deceive the plaintiff in particular when he' executed the instruments. �There is sufficient privity between the defendant and any purchaser of the certificates to support the action. Nor is it any answer to say that the Joliet Iron & Steel Company, the payee of the certificates, must have partioipated in the fraud. The action is based upon defendant's written representations contained in the body of the certificates, and upon these alone. If we were at liberty to assume that similar false represen- tations must have been made by the Iron & Steel Company to the plaintiff, this would not release the defendant from liability, nor would it be necessary to join the Iron & Steel Company as a party defendant. ��� �