Action against Fitzmaurice et als., directors of the Army and Navy Provision Market (Limited), and against Hunt, the secretary, and Hanley, the manager, asking for the repayment by them of a sum of £1500 advanced by the plaintiff on debentures of the company, on the ground that he was induced to advance the money by the fraudulent misrepresentations of the defendants.
Plaintiff, who was a shareholder in the company, received a prospectus issued by order of the directors, inviting subscription for debenture bonds. This prospectus contained the following statement as to the objects for which the issue of debentures was made:—
“1. To enable the society to complete the present alterations and additions to the buildings, and to purchase their own horses and vans, whereby a large saving will be effected in the cost of transport.
“2. To further develop the arrangements at present existing for the direct supply of cheap fish from the coast, which are still in their infancy.”
Plaintiff took debenture bonds to the amount of £1500; and testified that he relied, as one inducement, on the fact that the company wanted the money for the objects stated in the prospectus.
At the hearing before Denman, J., the plaintiff contended and offered evidence tending to show that the real object of the directors in issuing the debentures was to pay off pressing liabilities of the company, and not to complete the buildings or to purchase horses and vans, or to develop the business of the company.[[319]]
Davey, Q. C., W. W. Karslake, Q. C., and J. Kaye, for Fitzmaurice.
There was no misrepresentation of any fact, and the directors merely stated their intention as to the money, which of course they might alter. There is every difference between the two: Maddison v. Alderson, 8 App. Cases, 467. Unless it amounts to a contract, a mere statement that you will do something is of no effect: Jordan v. Money, 5 H. L. C. 185; and if it was a contract then it was with the company, and the directors cannot be sued: Ferguson v. Wilson, L. R. 2 Chan. 77.
Sir F. Herschell, in reply. An allegation of intention may be fraudulent: Ex parte Whittaker, L. R. 10 Chan. 446.
[Denman, J., delivered an elaborate opinion, substantially sustaining the plaintiff’s contention. He gave judgment against the directors.]