Bartlett v. Blei

This action is brought to recover damages for deceit. The complaint alleges that the defendant Blei was the owner of 600 shares of stock of the La Lux Mining & Tunnel Company, and that the defendant Youngman made certain false representations to the plaintiff, and urged her to buy said 600 shares of stock at 55 cents per share from said-Blei. The complaint further alleges that the defendants Morgan and Burbank and Stewart were officers and directors of said company, and that said company advertised in magazines, printed and distributed circulars, etc., purporting to be signed by them, which came into plaintiff’s possession, which said circulars, etc., contained certain false and fraudulent representations. The complaint also contains allegations asserting that the plaintiff believed the representations so made to be true, and gave Youngman $330 to pay to said Blei for said 600 shares of stock, and that the representations were in fact false, and known to be false at the time they were made. It also alleges that the defendants Blei and Youngman knew the stock to be worthless, and that defendants well knew that “said corporation was organized as a ‘cloak’ to cheat and defraud this plaintiff.” The defendant Stewart demurs to the complaint, on the ground

The allegations contained in the complaint were insufficient to connect the defendant Stewart with the cause of action alleged. If the defendant Stewart is to be held liable for fraud, there must be allegation ar;d proof which will connect him with the fraud alleged to have been perpetrated upon the plaintiff. The single circumstance that Stewart was a director of a company which issued circulars containing false representations is not, in and of itself, sufficient upon which to predicate the individual liability of Stewart. Arthur v. Griswold et al., 55 N. Y. 400 ; Kountze v. Kennedy, 147 N. Y. 124 , 41 N. E. 414 , 29 L. R. A. 360 , 49 Am. St. Rep. 651 . The same question seems to have been passed upon by Mr. Justice Bischoff in Bartlett v. Young-man, N. Y. Law Journal, November 16, 1911,^[1] and in that case the learned justice held that the complaint, which was similar to the one now before us, was insufficient.

The complaint fails to state facts sufficient to constitute a cause of action against the defendant Stewart, and the order appealed from is reversed, with $10 costs and disbursements, and the motion is granted, sustaining the demurrer, with $10 costs, with leave to plaintiff to plead over within six days after service of a copy of the order, entered herewith, with notice of entry, upon payment of costs in this court and in the court below. All concur.