In England the courts have gone very far in consequence of the doctrine that a guilty state of mind is a necessary element in order to make the defendant liable. Both in Deny v. Peek 53 and in Angus v. Clifford 54 the court held that no recovery could be had though the defendants made statements which were untrue and which it is absolutely impossible to suppose they did not know were untrue. On the most favorable view the courts simply did not think that the untruth was believed to be of any importance by the defendants, who therefore had no intent to defraud if that word be used in the sense naturally given to it. In Deny v. Peek the defendants stated that their company had a right to use steam motive power for its cars. In fact the defendant directors confidently expected to get that right, but that all of them supposed, or could have supposed, that they actually had it is incredible. Lord Bramwellalone squarely faced and justified all that was involved in the decision of the court. He said: "It is also certain that the defendants knew what the truth was, and therefore knew that what they said was untrue. But it does not follow that the statement was fraudulently made. ... A man may know it [the truth], and yet it may not be present to his mind at the moment of speaking; or if the fact is present to his mind, it may not occur to him to be of any use to mention it." 55 So in Angus v. Clifford the defendant stated that a certain published report of an expert on the company's property had been made for the directors. In fact the report had not been made for the directors, but for the promoters who sold the property to the company. It is impossible to suppose that the directors did not know this. Some members at least of the court tried to rest the case on the ground that the defendants were not using the published words of the prospectus in the natural sense in which the plaintiff understood them; but that "made for the directors" can by anybody ever have been supposed to mean made for some one else he should be expected to know, although he thinks he knows, it should also be held that a man who asserts what is false, and what he knows is false, if his words be taken in their natural meaning, may, if he used them in an unnatural sense, prove this and so escape liability.

53 14 App. Cas. 337.

54 [1891] 2 Ch. 449 (C. A.).

55 14 App. Cas. 337, 348.