Braley, J.
In equity the defense of loches may be raised by demurrer if upon its face the bill shows the demand is stale, and no sufficient reasons for the delay are stated specifically, or it may be pleaded, or set up in the answer. If raised by the pleadings, the plaintiff being informed of the defense may have the opportunity to amend by showing if he can that his delay was excusable. Sawyer v. Cook, 188 Mass. 163,168, and cases-cited. Sunter v. Sunter, 190 Mass. 449. But, even if it is not thus raised, the court at the trial in its discretion may deny relief, where' upon the evidence it clearly appears that with knowledge of the facts the plaintiff’s failure to assert his claim .has continued for such an unreasonable time that it would be inequitable for the court to aid him. Phillips v. Rogers, 12 Met. 405, 411. Snow v. Boston Blank Book Manuf. Co. 153 Mass. 456. Sawyer v. Cook, 188 Mass. 163, 168. Sullivan v. [308] Portland & Kennebec Railroad, 94 U. S. 806. Williard v. Wood, 164 U. S. 502, 504.
The defendants failed either to demur, or to raise this issue in their answer, and it was not before the master to whom the case was referred. After his report was filed it was too late for. the defendants as a matter of right to ask the court of its own motion to dismiss the bill. Pingree v. Coffin, 12 Gray, 288, 328.
But, even if this defense were open, upon the facts reported by the master it cannot be said that the plaintiff has unreasonably delayed the prosecution of his suit. Hill v. Mayor of Boston, 193 Mass. 569, 574.
The order not having required a report of the evidence the master’s findings of fact must be treated as final, and, it having been conceded that the defendant Gillette cannot be held, the only question is, whether upon the report the plaintiff is entitled to a decree against the remaining defendants, or either of them. East Tennessee Land Co. v. Leeson, 183 Mass. 37.
The plaintiff was the owner of four thousand one hundred and seventy-seven shares of the capital stock of the Gillette Safety Razor Company, and alleges that, through the fraud and misrepresentations of the defendants, he was induced to sell to them all but five hundred shares at a price much below their value. During the period covered by the transactions all of the remaining defendants with the exception of Curran were directors of the corporation, while Heilborn also was its treasurer. The alleged misrepresentations consisted of oral statements made by Heilborn, who alone dealt directly with the plaintiff, and a letter with an estimated statement of assets and liabilities sent by Heilborn as treasurer to the stockholders pursuant to a vote of the directors, in which the financial condition of the company is found to have been set forth erroneously. The master specifically finds that of the oral representations alleged in the bill the plaintiff failed to prove any except “ that Heilborn was endeavoring to purchase some of the stock of the company including the plaintiff’s stock so that he would be enabled to retain his position with the company, and had a friend, not one of the defendants, willing to back him,” and “that Heilborn had not paid over eighty cents a share, and had bought as low as forty cents.” [309] The full import of this finding appears when considered in connection with the other findings, that the defendants, who by reason of their controlling interest were known as “ insiders,” were seeking to buy at as low a price as possible outstanding stock held in small amounts by a number of stockholders including the plaintiff, and that the plaintiff previously had told Heilborn that he would sell to him, but would not sell to “ insiders.” It having been found further that at the time Heilbom was buying for the purpose of selling or transferring the stock to “ insiders,” this representation not only was false, but properly was held to be material, and the defendants’ first exception must be overruled.
The misrepresentations as to the selling price of the stock also were actionable. Kilgore v. Bruce, 166 Mass. 136, 138; Gurney v. Tenney, 197 Mass. 457. But, as the master further found that in selling the plaintiff did not rely upon these misrepresentations, the plaintiff has not shown that he has been misled by the deceit. Matthews v. Bliss, 22 Pick. 48, 53. Lee v. Tarplin, 183 Mass. 52.
At the time of the negotiations the plaintiff is found to have relied upon the letter or statement sent out by the directors on June 23, 1904, and to have believed its contents as to the company’s financial standing. "A large part of the report is devoted to the truth or falsity of the statements contained in this letter. The master’s conclusion, based on evidence not before us, is that the debts did not exceed the quick assets, and that the company, although somewhat in the experimental stage as to a successful development of the patent, was solvent. ■ In making this finding he includes in the “ quick assets ” the balance of a loan due from the defendant Joyce to the company. But, as Joyce is not shown either to have been insolvent, or to have refused to make further advancements, the defendants’ second exception is not tenable. Poland v. Beal, 192 Mass. 559, 564.
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Braley, J.
In equity the defense of loches may be raised by demurrer if upon its face the bill shows the demand is stale, and no sufficient reasons for the delay are stated specifically, or it may be pleaded, or set up in the answer. If raised by the pleadings, the plaintiff being informed of the defense may have the opportunity to amend by showing if he can that his delay was excusable. Sawyer v. Cook, 188 Mass. 163,168, and cases-cited. Sunter v. Sunter, 190 Mass. 449. But, even if it is not thus raised, the court at the trial in its discretion may deny relief, where' upon the evidence it clearly appears that with knowledge of the facts the plaintiff’s failure to assert his claim .has continued for such an unreasonable time that it would be inequitable for the court to aid him. Phillips v. Rogers, 12 Met. 405, 411. Snow v. Boston Blank Book Manuf. Co. 153 Mass. 456. Sawyer v. Cook, 188 Mass. 163, 168. Sullivan v. [308] Portland & Kennebec Railroad, 94 U. S. 806. Williard v. Wood, 164 U. S. 502, 504.
The defendants failed either to demur, or to raise this issue in their answer, and it was not before the master to whom the case was referred. After his report was filed it was too late for. the defendants as a matter of right to ask the court of its own motion to dismiss the bill. Pingree v. Coffin, 12 Gray, 288, 328.
But, even if this defense were open, upon the facts reported by the master it cannot be said that the plaintiff has unreasonably delayed the prosecution of his suit. Hill v. Mayor of Boston, 193 Mass. 569, 574.
The order not having required a report of the evidence the master’s findings of fact must be treated as final, and, it having been conceded that the defendant Gillette cannot be held, the only question is, whether upon the report the plaintiff is entitled to a decree against the remaining defendants, or either of them. East Tennessee Land Co. v. Leeson, 183 Mass. 37.
The plaintiff was the owner of four thousand one hundred and seventy-seven shares of the capital stock of the Gillette Safety Razor Company, and alleges that, through the fraud and misrepresentations of the defendants, he was induced to sell to them all but five hundred shares at a price much below their value. During the period covered by the transactions all of the remaining defendants with the exception of Curran were directors of the corporation, while Heilborn also was its treasurer. The alleged misrepresentations consisted of oral statements made by Heilborn, who alone dealt directly with the plaintiff, and a letter with an estimated statement of assets and liabilities sent by Heilborn as treasurer to the stockholders pursuant to a vote of the directors, in which the financial condition of the company is found to have been set forth erroneously. The master specifically finds that of the oral representations alleged in the bill the plaintiff failed to prove any except “ that Heilborn was endeavoring to purchase some of the stock of the company including the plaintiff’s stock so that he would be enabled to retain his position with the company, and had a friend, not one of the defendants, willing to back him,” and “that Heilborn had not paid over eighty cents a share, and had bought as low as forty cents.” [309] The full import of this finding appears when considered in connection with the other findings, that the defendants, who by reason of their controlling interest were known as “ insiders,” were seeking to buy at as low a price as possible outstanding stock held in small amounts by a number of stockholders including the plaintiff, and that the plaintiff previously had told Heilborn that he would sell to him, but would not sell to “ insiders.” It having been found further that at the time Heilbom was buying for the purpose of selling or transferring the stock to “ insiders,” this representation not only was false, but properly was held to be material, and the defendants’ first exception must be overruled.
The misrepresentations as to the selling price of the stock also were actionable. Kilgore v. Bruce, 166 Mass. 136, 138; Gurney v. Tenney, 197 Mass. 457. But, as the master further found that in selling the plaintiff did not rely upon these misrepresentations, the plaintiff has not shown that he has been misled by the deceit. Matthews v. Bliss, 22 Pick. 48, 53. Lee v. Tarplin, 183 Mass. 52.
At the time of the negotiations the plaintiff is found to have relied upon the letter or statement sent out by the directors on June 23, 1904, and to have believed its contents as to the company’s financial standing. "A large part of the report is devoted to the truth or falsity of the statements contained in this letter. The master’s conclusion, based on evidence not before us, is that the debts did not exceed the quick assets, and that the company, although somewhat in the experimental stage as to a successful development of the patent, was solvent. ■ In making this finding he includes in the “ quick assets ” the balance of a loan due from the defendant Joyce to the company. But, as Joyce is not shown either to have been insolvent, or to have refused to make further advancements, the defendants’ second exception is not tenable. Poland v. Beal, 192 Mass. 559, 564.
Heilbom, however, not only knew of the contents of this statement, but had prepared it. We have then this situation. This defendant, who was the treasurer and a director, had sent to the plaintiff as a stockholder a statement purporting to set forth the company’s actual financial condition. If this exhibit was taken at its face value, the future success of the company [310] was very doubtful. Having gone thus far, he approaches the plaintiff for the purpose of buying his stock. At the date of the sale, July 8, 1904, or when the option to buy was given, which resulted in a transfer of the shares shortly after, there had been moreover an improvement in the company’s outlook caused by larger sales and increased efficiency of the machinery by the use of small grinders which were working successfully. This substantial change for the better was known to Heilborn, but not to the plaintiff, to whom he did not disclose the fact nor even intimate that any improvement had taken place. The plaintiff, as the master finds, believing and relying upon the representations contained in the statement and acting in complete ignorance of the existing state of affairs, was induced to sell his stock at much less than its fair market value. At the time of the purchase the defendant Heilborn was buying for the purpose of selling to “ insiders ” at an advance, which he immediately did, and received the profit. The subsequent finding to which in connection with the liability of the other defendants we shall refer later, that there was no intent to deceive when the statement was sent out, does not relieve this defendant from the consequences of his fraudulent conduct, when he came to deal directly with the plaintiff. The statement was false and he knew it. He also knew not only of the plaintiff’s ignorance of the falsehood but of his ignorance of the actual state of affairs and of his reliance on the statement. No further proof of Heilborn’s intention that the representations should be acted upon was necessary. Collins v. Denison, 12 Met. 549. Cole v. Cassidy, 138 Mass. 437. Weeks v. Currier, 172 Mass. 53, 55, and cases cited. Pontifex v. Bignold, 3 M. & G. 63. Fisher v. Budlong, 10 R. I. 525. All the essential elements of actionable deceit, whether at law for' damages, or in equity for rescission, are found to have been present in a deliberate misrepresentation by the buyer of facts peculiarly within his knowledge upon which the seller relied and had the right to rely when-made by the treasurer of the company, and by which he was deceived and induced to sell to him his stock for less than its market value. King v. Eagle Mills, 10 Allen, 548, 551. Long v. Athol, 196 Mass. 497, 503, 504, and cases cited. Tyron v. Whitmarsh, 1 Met. 1, 6. Lobdell v. Baker, 1 Met. 193, 201. Fottler v. [311] Moseley, 185 Mass. 563. Elliott v. Baker, 194 Mass. 518, 523. Kountse v. Kennedy, 147 N. Y. 124, 130. Rese River Silver Mining Co. v. Smith, 4 H. L. Cas. 64, 80. Walsham v. Stainton, 1 DeG., J. & S. 527. Stewart v. Wyoming Cattle Ranche Co. 128 U. S. 383.
If Heilborn has parted with the shares, and rescission cannot be decreed with a restitution of the stock, as the master finds, yet the bill as to him can be retained for the award of money damages, which may be assessed before a single justice. Lexington Print Works v. Canton, 171 Mass. 414. White v. Dame, 176 Mass. 542.
Under the master’s findings, that Heilborn bought on his own account, and that although the defendants Joyce and Holloway knew of the proposed purchase and advanced the money and took by transfer from him the shares in certain proportions in their names and in the name of the defendant Curran, a brother in law of Joyce for whom he acted, yet the defendants did not constitute him their agent or clothe him with any authority to make any statements in their behalf and that there was no agreement between them to obtain the plaintiff’s stock, the allegations of agency and of conspiracy are not proved. The plaintiff as to these defendants is consequently compelled to rely solely upon the statement to the stockholders. In this statement the defendant Curran did not participate. The defendants Joyce and Holloway, however, were directors present at the meeting, and the report states that “ the letter or statement as drawn by Heilborn was approved by the board.” But, notwithstanding this action of the directors and the material misstatements which the letter to the stockholders is found to have contained, the master finds that there was no intent to deceive or misrepresent and that the only motive which actuated the directors “ was a perfunctory desire to discharge a duty to stockholders,” and “that it was not sent for the purpose of influencing” the plaintiff “to sell his stock, or for the general purpose of influencing the price of stock,” although upon other findings it is plain they were seeking to purchase from the small stockholders at the lowest possible price. He .further finds that the misstatements and omissions “ are attributable not to bad faith, but to indifference and incompetence.”
[312] If the representations had been found to have been fraudu- • lently made, the present ease would fall within Dottier v. Moseley, 185 Mass. 563, 565, where it is held that liability follows even if the wrongdoer does not contemplate “ the particulars of the injury from his wrongful act nor the precise way in which damages will be inflicted.” But, if the directors of a corporation are chargeable with knowledge of its affairs, where they falsely represent, its condition to induce individuals to take stock or to induce their own stockholders to sell to them, when viewed with the master’s general findings as to their belief in the uncertain outcome of the company at the time, and its prospect of ultimate success, we cannot say that the master’s general conclusions, that they acted honestly, even if they might have been negligent or committed errors' of judgment, are unsupported by the facts before him or are plainly wrong. The result is, that these defendants, not having made any contract with the plaintiff, nor having entered into any scheme to defraud him or falsely mislead him to his damage, cannot be held liable, and, having bought without notice of Heilborn’s fraud, they are innocent purchasers for value against whom the bill cannot be maintained. 1 Story Eq. Jur. (13th ed.) 409.
The various exceptions of the plaintiff must be overruled, the report confirmed, and the bill dismissed as to all the defendants except Heilborn.
Decree accordingly.