Sec 273

This liability is not affected by the fact that the representations were put in the shape of reports by agents of the corporation to the corporation, when the reports are published by the corporation as its own.3 "If reports," so is the rule stated by Lord Westbury, "are made to the shareholders of a company by their directors, and the reports are adopted by the shareholders at one of the appointed meetings of the company, and these reports are afterwards industriously circulated; misrepresentations contained in those reports must undoubtedly be taken, after their adoption, to be representations and statements made with the authority of the company, and therefore binding on the company." And Lord St. Leonards saya:4 "I have certainly come to this conclusion, that, if representations are made by a company fraudulently, for the purpose of enhancing the value of their stock, and they induce a third rized to use them for that purpose. Thus, the case rested only on the purchaser having acted under an impression derived from these reports at some former time; and that was not such a direct connection between the false representation and the conduct induced by it as must be shown in order to rescind a contract." See supra, sec 237. On this point see Eaton v. Avery, 83 N. Y. 31, cited infra, sec 279.

Statement must be within range of authority.

Reports by agents to principal may bind principal.

1 Wh. on Ev. sec 1173-4.

2 Wh. on Agency, sec 164. The statement of the Indian Contract Act, s. 238 (Wald's Pollock, 503), is as follows: " Misrepresentations made, or frauds committed, by agents acting in the course of their business for their principals, have the same effect on agreements made by such agents as if such representations or frauds had been committed by the principals; but misrepresentations made, or frauds committed by agents in matters which do not fall within their authority, do not affect their principal." Supra, sec 269.

3 New Brunswick, etc. Co. v. Cony-beare, 9 H. L. C. 725.

4 Nat. Ex. Co. of Glasgow v. Drew, 2 Macq. 103.

person to purchase stock, these representations so made by them do bind the company. I consider representations of the directors of a company as representations by the company; and, although they may be representations made to the company, it is their own representation."1

Sec 274

A party who commits the management of his whole business, or of a particular line of his business, to an agent, is bound by the admissions of his agent, as to the entire business committed to him; nor, when the agent is the principal's general and continuous representative, is it necessary for the admission of such declarations that they should either have been part of the res gestœ, or should have been specially authorized.2

Sec 275

As a corporation can only act through agents, it is necessarily bound by the contractual representations of its agents. While a contract obtained by false representations can be rescinded as against a corporation, a corporation cannot obtain specific performance of a contract induced by the false statements of its agents; and a corporation is liable in an action of deceit for its agent's false representations by which other parties are injured.3 Hence, "if the directors or agents of the company, in the course of their duties or employment, issue a prospectus or report, or other document inviting subscription for shares, which contains fraudulent misrepresentations, the shareholders who have been induced thereby to take shares are entitled to avoid their contracts with the company:"1

General agents may make contractual admissions.

Corporations are necessarily so bound.

1 That when an agent ignorantly makes a false statement of which the principal knows the falsity, the principal cannot enforce a bargain thus induced, see Wh. on Agency, sec 167; that the agent's false representations are imputable to principal, so as to expose the latter to an action for deceit, see Wh. on Agency, sec 171, 478.

2 Wh. on Ev. sec 1177, citing Kirkstall Co. v. R. R., L. R. 9 Q. B. 468. This is eminently the case with corporations, which can only act through agents. Dowdall v. R. R., 13 Blatch. 403; Morse v. R. R., 6 Gray, 450; McGenness v. Adriatic Mills, 116 Mass. 177; Custar v. Gas Co., 63 Penn. St. 381; Charleston R. R. v. Blake, 12 Rich. S. C. 634; Northrup v. Ins. Co., 47 Mo. 435.

3 Supra, sec 130 et seq. 133; Green's Brice Ultra Vires, 425; Houldsworth v. Bk., L. R. 5 App. Ca. 317; Chaples v. Brunswic Benefit Co., L. R. 5 C. P. D. 331; Nat. Ex. Co. v. Drew, 2 Macq. 103; Ranger v. R. R., 5 H. L. C. 72; Mackay v. Bank, L. R., 5 P. C. 394; Barwick v. Bk., L. R. 2 Ex. 259; Swift v. Winter-botham, L. R. 8 Q. B. 244; Mechanic's Bk. v. Bk. of Columbia, 5 Wheat. 336; McGenness v. Adriatic Mills, 116 Mass. 177; New Y. & N. H. R. R. v. Schuyler, 34 N. Y. 30; Anderson v. R. R. 54 N. Y. 344; Indian. R. R. v. Tyng, 63 N. Y. 653; Penn. R. R. v. Plank Road, 71 Penn. St. 350; Columbia Ins. Co. v. Masonheimer, 76 Penn. St. 138, Globe Ins. Co. v. Boyle, 21 Oh. St. 119.