Sims, J.,
after making the foregoing statement, delivered the following opinion of the court.
[1] 1. There is no controversy before us asf to the law of the case in so far as the primary question is concerned as to what misrepresentation would entitle the appellants to the rescission of their contracts of stock subscription and the recovery back of the money paid by them thereon, if those of them who have by their proof brought themselves within the rule of law applicable thereto have not waived their rights by ratification of such contracts.
[329]*329As stated in section 347 of Black on Rescission of Contracts:
“One who is induced by fraud or material false representations as to matters of fact to subscribe for stock in a corporation may rescind his .agreement on discovery of the fraud, and may have the aid of a court of equity to make his rescission effective and either to release him from liability on his subscription or to recover back what he has paid.”
To the same effect, see Fear v. Bartlett, 81 Md. 435, 32 Atl. 322, 33 L. R. A. 721; Hurley v. Y. M. C. A., 16 Ariz. 26, 140 Pac. 816, 52 L. R. A. (N. S.) 220; Hindman v. First Nat. Bank, 112 Fed. 931, 50 C. C. A. 623, 57 L. R. A. 108; 9 Cyc. 41; 20 Cyc. 44; 13 Corpus Juris, section 653, p. 611; 6 Va. & W. Va. Dig., pp. 466-7.
Further: It is said in Grim v. Byrd, 73 Va. (32 Gratt) 293:
“Whatever conflict of opinion may have existed in the English writers on this subject, the doctrine is believed to be well settled in the United States, that a false representation of a material fact, constituting an inducement to the contract, on which the purchaser had the right to rely, is a ground for a rescission by a court of equity, although the party making the representation was ignorant as to whether it was true or false; and the real inquiry is not whether the vendor knew the representation to be false, but whether the purchaser believed it to be true, and was misled by it in entering into the contract. For in such case, whether the false representation was innocently made or knowingly made, the effect is the same upon the purchaser. In Story’s Equity Jurisprudence, the rule is thus laid down: ‘Whether the party thus misrepresenting the material fact knew it to be false or made the assertion without knowing whether it was true or false, is wholly immaterial; for the affirmation of what one does not know or believe to be true is [330]*330equally, in morals and in law, unjustifiable as the affirmation of what is known to be positively false. And even if the party innocently misrepresents a material fact by mistake, it is equally conclusive, for it operates as a surprise and imposition upon the other party.” 1 Story Equity, par. 193, note. In Smith v. Richards, 13 Pet. 26 [10 L. Ed. 42], the Supreme Court of the United States said: 'It was immaterial to the purchaser whether the misrepresentation, proceeded from fraud or mistake. The injury to him is the same, whatever may have been the motives of the seller/ See also Adams Equity, mar. p. 117, and note; 2 Parson on Contracts, 177; 1 Story on Contracts, 632, and notes of cases cited — note 3; Bispham P. of Equity, 268.
“The doctrine of these cases was substantially affirmed, by this court in Crump v. United States Miming Co., 7 Gratt. (48 Va.) 352 [56 Am. Dec. 116]. It was there decided that in written propsals of sale for stock in a mining company, if the representations contained therein are false as. to any material fact, by which the purchasers have been misled to their-injury, and in which they are presumed to-have trusted to the vendors, the contract founded on such-misrepresentations is void, whether the vendors knew the representation to be false at the time they were made or not, and whether made with fraudulent intent or not.”
[2] It is also true, however, that the misrepresentation,, to entitle appellants to relief, must have been one of existing fact. The general rule is that mere puffing statement® or talk as to future prospects consisting of matters of opinion, will not have that effect. Grome v. Economic Life Ins.. Co. (Del. Ch. 1911), 80 Atl. 809.
[3] It is further true that allegations of misrepresentation, partaking as they do of the nature of allegations of fraud, even in cases where no actual fraudulent intent exists, must be clearly proved by evidence which is unequivocal and convincing in its character.
[331]*331[4] Applying these principles to the facts of the cause before us set forth in the above statement, we are of opinion that appellants, Jas. T. Rhoades, Jas. T. Payne, W. G. or W. J. Buckner, W. E. or W. R. Tinder, W. A. or A. Wj Biscoe, L. A. Rhoades, Mrs. M. D. Jones, Miss Emma S. Jones, R. C. Slaughter and Miss Maud Row, have brought themselves within the rule of law entitling them to the relief aforesaid; but that the other appellants — namely, J. H. Biscoe, J. F. Lumsden, L. M. Wood, W. L. or W. I. Estes and B. F. Thompson — have not brought themselves within such rule.
It should be said, however, in justice to appellee, the Mortgage, Trust and Banking Company, its officers, directors, counsel and stockholders, and also in justice to the ap-pellee, the Virginia Finance Company and its officers, directors, counsel and stockholders, that, as appears from the record, none of them at any time authorized or knew until after it was made, of the misrepresentation aforesaid. The record discloses nothing reprehensible in their conduct in the premises. But, on principle and under the authorities on the subject this does not alter the effect of the misrepresentation aforesaid made by the agents, Williams and Liles, the solicitors of the stock subscriptions in question. The fact being that such subscriptions were obtained by misrepresentation, as aforesaid, the appellants, although they may show that they were unauthorized and may repudiate responsibility for the action of their said agents in making them, cannot under the circumstances aforesaid, retain the fruits of such misrepresentation.
2. The only remaining question we have to consider is whether the ten appellants above mentioned have waived their rights aforesaid by having ratified their stock subscription contracts, or must be treated as having ratified such contracts because of the action' of their attorney at law and attorney m fact. J. G. Hiden, in filing proxies of [332]*332some of appellants at the organization meeting of the company, in being present during most of the time of such meeting, in allowing the stock of appellants to be voted by the secretary on the proxies filed by said Hiden as to some of it, and on other proxies to other persons as to the remainder of it, and by the failure of said Hiden to repudiate such appellants’ stock subscription contracts at such meeting after he had been informed before the meeting that the representation on which such appellants rely to avoid the contracts was a misrepresentation?
We say that this is the only remaining question for our consideration because the decision of it will dispose also of any question as to the action of certain of appellants in appointing other persons proxies than Mr.
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Sims, J.,
after making the foregoing statement, delivered the following opinion of the court.
[1] 1. There is no controversy before us asf to the law of the case in so far as the primary question is concerned as to what misrepresentation would entitle the appellants to the rescission of their contracts of stock subscription and the recovery back of the money paid by them thereon, if those of them who have by their proof brought themselves within the rule of law applicable thereto have not waived their rights by ratification of such contracts.
[329]*329As stated in section 347 of Black on Rescission of Contracts:
“One who is induced by fraud or material false representations as to matters of fact to subscribe for stock in a corporation may rescind his .agreement on discovery of the fraud, and may have the aid of a court of equity to make his rescission effective and either to release him from liability on his subscription or to recover back what he has paid.”
To the same effect, see Fear v. Bartlett, 81 Md. 435, 32 Atl. 322, 33 L. R. A. 721; Hurley v. Y. M. C. A., 16 Ariz. 26, 140 Pac. 816, 52 L. R. A. (N. S.) 220; Hindman v. First Nat. Bank, 112 Fed. 931, 50 C. C. A. 623, 57 L. R. A. 108; 9 Cyc. 41; 20 Cyc. 44; 13 Corpus Juris, section 653, p. 611; 6 Va. & W. Va. Dig., pp. 466-7.
Further: It is said in Grim v. Byrd, 73 Va. (32 Gratt) 293:
“Whatever conflict of opinion may have existed in the English writers on this subject, the doctrine is believed to be well settled in the United States, that a false representation of a material fact, constituting an inducement to the contract, on which the purchaser had the right to rely, is a ground for a rescission by a court of equity, although the party making the representation was ignorant as to whether it was true or false; and the real inquiry is not whether the vendor knew the representation to be false, but whether the purchaser believed it to be true, and was misled by it in entering into the contract. For in such case, whether the false representation was innocently made or knowingly made, the effect is the same upon the purchaser. In Story’s Equity Jurisprudence, the rule is thus laid down: ‘Whether the party thus misrepresenting the material fact knew it to be false or made the assertion without knowing whether it was true or false, is wholly immaterial; for the affirmation of what one does not know or believe to be true is [330]*330equally, in morals and in law, unjustifiable as the affirmation of what is known to be positively false. And even if the party innocently misrepresents a material fact by mistake, it is equally conclusive, for it operates as a surprise and imposition upon the other party.” 1 Story Equity, par. 193, note. In Smith v. Richards, 13 Pet. 26 [10 L. Ed. 42], the Supreme Court of the United States said: 'It was immaterial to the purchaser whether the misrepresentation, proceeded from fraud or mistake. The injury to him is the same, whatever may have been the motives of the seller/ See also Adams Equity, mar. p. 117, and note; 2 Parson on Contracts, 177; 1 Story on Contracts, 632, and notes of cases cited — note 3; Bispham P. of Equity, 268.
“The doctrine of these cases was substantially affirmed, by this court in Crump v. United States Miming Co., 7 Gratt. (48 Va.) 352 [56 Am. Dec. 116]. It was there decided that in written propsals of sale for stock in a mining company, if the representations contained therein are false as. to any material fact, by which the purchasers have been misled to their-injury, and in which they are presumed to-have trusted to the vendors, the contract founded on such-misrepresentations is void, whether the vendors knew the representation to be false at the time they were made or not, and whether made with fraudulent intent or not.”
[2] It is also true, however, that the misrepresentation,, to entitle appellants to relief, must have been one of existing fact. The general rule is that mere puffing statement® or talk as to future prospects consisting of matters of opinion, will not have that effect. Grome v. Economic Life Ins.. Co. (Del. Ch. 1911), 80 Atl. 809.
[3] It is further true that allegations of misrepresentation, partaking as they do of the nature of allegations of fraud, even in cases where no actual fraudulent intent exists, must be clearly proved by evidence which is unequivocal and convincing in its character.
[331]*331[4] Applying these principles to the facts of the cause before us set forth in the above statement, we are of opinion that appellants, Jas. T. Rhoades, Jas. T. Payne, W. G. or W. J. Buckner, W. E. or W. R. Tinder, W. A. or A. Wj Biscoe, L. A. Rhoades, Mrs. M. D. Jones, Miss Emma S. Jones, R. C. Slaughter and Miss Maud Row, have brought themselves within the rule of law entitling them to the relief aforesaid; but that the other appellants — namely, J. H. Biscoe, J. F. Lumsden, L. M. Wood, W. L. or W. I. Estes and B. F. Thompson — have not brought themselves within such rule.
It should be said, however, in justice to appellee, the Mortgage, Trust and Banking Company, its officers, directors, counsel and stockholders, and also in justice to the ap-pellee, the Virginia Finance Company and its officers, directors, counsel and stockholders, that, as appears from the record, none of them at any time authorized or knew until after it was made, of the misrepresentation aforesaid. The record discloses nothing reprehensible in their conduct in the premises. But, on principle and under the authorities on the subject this does not alter the effect of the misrepresentation aforesaid made by the agents, Williams and Liles, the solicitors of the stock subscriptions in question. The fact being that such subscriptions were obtained by misrepresentation, as aforesaid, the appellants, although they may show that they were unauthorized and may repudiate responsibility for the action of their said agents in making them, cannot under the circumstances aforesaid, retain the fruits of such misrepresentation.
2. The only remaining question we have to consider is whether the ten appellants above mentioned have waived their rights aforesaid by having ratified their stock subscription contracts, or must be treated as having ratified such contracts because of the action' of their attorney at law and attorney m fact. J. G. Hiden, in filing proxies of [332]*332some of appellants at the organization meeting of the company, in being present during most of the time of such meeting, in allowing the stock of appellants to be voted by the secretary on the proxies filed by said Hiden as to some of it, and on other proxies to other persons as to the remainder of it, and by the failure of said Hiden to repudiate such appellants’ stock subscription contracts at such meeting after he had been informed before the meeting that the representation on which such appellants rely to avoid the contracts was a misrepresentation?
We say that this is the only remaining question for our consideration because the decision of it will dispose also of any question as to the action of certain of appellants in appointing other persons proxies than Mr. Hiden and the voting of stock by such proxies amounting to a ratification of the subscription contracts of those appellants.
The question under consideration may be divided into two parts, which will be considered in their order as stated below.
[5] (a). Did certain of appellants, by their appointment of Mr. Hiden as their proxy or by their employment- of him as their attorney to attend the organization meeting of the company without giving him authority to repudiate the contracts of stock subscroption, ratify such contracts and waive the rights of such appellants to repudiate such contracts after such organization meeting was held?
This question must be answered in the negative.
As disclosed by the statement of facts preceding this opinion, while some of the appellants suspected the existence of the misrepresentation subsequently relied on as affording ground for their repudiation of the 'contracts in question, none of them had actual knowledge of such misrepresentation until after the organization meeting.
As said in 20 Cyc., page 93:
[6] “The question of waiver is largely one of intent. [333]*333Hence, acts done in affirmance of a contract can amount to a waiver of fraud only when they are done with full knowledge of the fraud and of all the material facts, and with the intention clearly manifested of abiding by the contract and waiving all right to recover on the deception.”
As said in 13 Corpus Juris, page 395:
“* * * It is necessary that ratification be with full knowledge of the party’s rights and be clearly shown.”
As said by this court in Wilson v. Carpenter, 91 Va., at p. 192, 21 S. E. at p. 246 (50 Am. St. Rep. 824) :
“No man can be bound by a waiver of his rights unless such waiver is distinctly made, with full knowledge of the rights which he intends to waive; and the-fact that he knows his rights and intends to waive them must plainly appear. Montague’s Adm’r v. Hassey, 76 Va. 307.”
This principle applies where the rights of no third person intervene, and hence is applicable in the case before us to the question under consideration and is conclusive of it.
As said by this court in White v. Am. Nat. Life Ins. Co., 115 Va. 305, 78 S. E. 582:
“The fact that the defendant gave the president of the company a proxy to represent him in a meeting of the stockholders is also relied on as evidence of ratification of the contract. The meeting referred to was held in January, 1908, only a few days after the subscription by the.defendant to the first block of stock, and, of course, long before the fraud was discovered. In such case, giving the proxy did not operate as a waiver of his right to rescind the contract for fraud. Va. Land Co. v. Haupt, 90 Va. 533, 19 S. E. 168, 44 Am. St. Rep. 939.”
And so in the instant cause. The proxies to Mr. Hiden and the employment of him as attorney to attend the organization meeting to obtain information concerning the affairs of the' company, etc., was before the misrepresentation was discovered.
[334]*334The following authorities are cited for appellees, namely: 10 Cyc. 425; Wilson v. Hundley, 96 Va. 96, 30 S. E. 492, 70 Am. St. Rep. 837; Max Meadows Land & Imp. Co. v. Brady, 92 Va. 71, 22 S. E. 845; Hurt v. Miller, 95 Va. 32, 27 S. E. 831; Campbell v. Building Asso., 98 Va. 729, 37 S. E. 350; University of Va. v. Snyder, 100 Va. 567, 42 S. E. 337. But they all involve cases where the party complaining had full actual knowledge of the fraud or misrepresentation prior to the act or conduct relied on by the opposite party to evidence an election to ratify and affirm the contract.
(b) Did the aforesaid action or commission or omission of Mr. Hiden in the organization meeting aforesaid, as the attorney or as the proxy for appellants — which action consisted, in substance, in not repudiating appellants’ stock subscription contract at the organization meeting after notice to him that they were obtained by misrepresentation— amount to a ratification of such contracts so as to bind appellants whom Mr. Hiden represented, and preclude them, from thereafter repudiating such contracts?
This question must be answered in the negative under the facts of this case.
[7, 8] It appears from the statement of facts aforesaid, that Mr. Hiden was without authority to act for appellants in the matter of ratifying or repudiating their stock subscription contracts. Notwithstanding the existence of the misrepresentation aforesaid, upon a full knowledge on their part, they, under the well-settled law on the subject, had the right of election to affirm or repudiate their contracts. Mr. Hiden had no authority to act for them in making that election. That was not within the scope of his actual or apparent authority as proxy or as attorney. His actual and apparent authority as proxy coincided, indeed, and was confined to such matters as could and did properly-come before the organization meeting for action. And as attor[335]*335ney at law, his actual and apparent authority likewise coincided in the case before us, as an attorney at law, as such, .has no right to do any act which surrenders a substantial right of his client. 2 R. C. L., sec. 54 p. 976, sec. 63 p. 986, sec. 75 p. 995. Moreover, this being in truth a business matter, out of court, the apparent authority was not that of an attorney at law, but of an agent, which in this caste was confined to his authority as proxy aforesaid. Idem. sec. 58, p. 989. And, as appears from the above statement •of facts, the subject of the ratification or repudiation of s.aid •contracts did not come before such meeting. Further, the facts of this case do not put in operation the rule under which in some cases a principal is bound by the action of his .agent within the apparent, although beyond the actual, scope of his authority. So that in any aspect, it is plain that the acts of Mr. Hiden in question were not binding upon the appellants and did not amount to a ratification •of the contracts in question.
The cases of Columbia Nat. Bank v. Matthews, 85 Fed. 934, 29 C. C. A. 491; St. John's Mfg. Co. v. Munger, 106 Mich. 90, 64 N. W. 3, 58 Am. St. Rep. 468, 29 L. R. A. 63; Eichelberger v. Mann, 115 Va. 774, 776, 80 S. E. 595; Chicago Building & Mfg. Co. v. Beaven, 149 Ky. 267, 148 S. W. 37; Harrison v. Heathorn, 6 M. & S. 81; Estates Investment Co. v. Ashleys, L. R. 9 Eq. 266, cited for appellees, touching the effect of ratification of stock subscription contracts by participation in organization meetings of the company, all involve personal action of the stock subscriber, either by personal presence or by appointment of proxy after full personal actual knowledge of the alleged misrepresentation relied on as affording ground to rescind the contract. None of these authorities involve a case such as that before us.
The case of Chaffin v. Cummings, 37 Me. 77, cited for .-appellees, is not in point. It holds merely that taking part [336]*336in an organization meeting is some evidence that a party is a stockholder of a. company.
[9] It is true that in some cases the law of agency will conclusively impute to a principal the knowledge of his agent acquired by the latter under certain circumstances; but we have been pointed to no authority which holds that such constructive knowledge will be imputed to a principal under circumstances which negative the possibility of actual knowledge on his part of the existence of a right of election to affirm or repudiate a contract because of misrepresentation, and where no agent is authorized to exercise 'such right of election. And upon principle, we do not think that such constructive knowledge will be imputed in such a case. The knowledge of the principal in such case must be actual to give rise to such duty of election.
For the foregoing reasons, we are of opinion to reverse the decree under review as to the ten appellants aforesaid, with costs to them, and to affirm the decree as to the other appellants.
Reversed as to certain of appellants, and affirmed as to the other appellants.