Mr. Justice Gary
delivered the opinion of the Court.
Condensed, the appellee’s version of this case amounts to this:
The parties became acquainted in 1887.
The appellant was president of the Chicago Trust and Savings Bank, from which appellee had borrowed $1,000, which was yet unpaid, when the appellant called upon the appellee and told a flattering tale. What rate of interest was paid on that $1,000 we fail to find; but as subsequent transactions seem to have been in substance on the basis of two and one-half per cent per month, probably that was the rate.
To present the case of the appellee in its best aspect, we copy from the brief of his counsel:
“ The record shows that several times, at least three, prior to the completion of the sale, Tolman went to see Murray. He went to see him at his place of business in Chicago. Except as informed by Tolman, Murray had never heard of the Midland company, and he knew nothing about the value of its stock, its organization, its objects or its purposes. Tolman was the president of the Chicago Trust and Savings Bank, a bank so far as Murray then knew, in good standing, and here is what Murray says with regard to the conversation:
I had three or four conversations, running over a period of three weeks, in April, 1888, in my office in Chicago. The first time he said to me he was getting up a company to enable business men like myself, and others whose names he mentioned, who had to borrow money on short time, to borrow that money at the same rate of interest as bank interest—-six per cent; and he said he was getting up this company or guarantee fund; that it was a kind of mutual company on the order of building and loan associations; that is, that all members could borrow at this low rate; that is; that a member had to be a member of the company to borrow at all. And then he went to work on paper to show me how I would be able to borrow at this low rate of six per cent, although I paid one per cent a month to the Midland company for guaranteeing the note, and that his bank, the Chicago Trust and Savings Bank, or any other bank in the city, would discount the note after being guaranteed by this Midland company.
Q. Can you state any of the elements that entered into the computation ?
A. Ho; I would not undertake to figure out how he made it come out. He figured it out to my satisfaction that it was feasible, and I told him at the same time that I didn’t need to go into it; that I didn’t need to borrow money in that way; I could get all the money I needed at my bank. Then he said it was a profitable investment any way; that there were other men in it that did not need to borrow money. He mentioned some names; one was J oseph Stockton. I knew him and had known the firm for years, and that gave me confidence. He mentioned three or four furniture men in the city that I knew; one was Cogswell, on the west side, and another one was on Bandolph street, and one by the name of McDonald. These were men I knew personally. He told me that it was a good investment, because it would pay twenty-five per cent dividend on the money invested. He figured it up, but I can’t figure it. He said it would at any rate give twenty-five per cent.
He said he was getting up a company, and showed me a list of names he had. He was tb en the president of the bank. He said the stock was well worth all that I was paying for it; I paid $1,500; ten shares, $150 a share. He said I could sell it for that if I got tired of my bargain; that he himself would buy it back at that figure. . He has promised that twice since. That is all that I remember. He said the business of the Midland company was to guarantee the notes of its members, so that they could borrow money at a low rate of interest. Afterward we had another conversation, ivhen I found that they were paying no dividends. It "was near meeting time, and ivhen they decided they couldn’t pay the dividend I wanted to sell my stock. He said, come in the spring and I will buy it of you. He said he had all the Midland stock he wanted to carry then. I went in the spring, but he refused to buy. I offered to give him my stock at 8 f,500, to pay off the two notes that he had against me in the bank, and $500, $2,000 in all. I was willing to forego the interest if he would take the Midland stock. He refused to accept. Six months after the issuance of the stock I had a talk with him; I asked him at the bank how the Midland company was getting on, and he said well, and would pay twenty-five per cent dividend. That was all. My notes were not all paid then.”
Again: “ In all the renewals my transactions were carried on with Tolman at the bank; I believed what Tolman said, or I would not have gone into it at all; I didn’t know anything of the Midland company, except what Tolman told me.”
On cross-examination he said: “When Tolman called on me to join the Midland company, it was without prior arrangement. I did not meet him on the street, and I didn’t ask him to call at any time. When he called he said he was getting up a company to accommodate such men as me needing money on short time, on the mutual principle of building and loan associations. He called two or three times afterward; the last time I agreed to take stock. These conversations took up about three weeks. I made no examination in reference to the Midland company; I took Tolman’s word.”
“ Q. Then the question of paying twenty-five per cent dividend, the amount they would pay, was just as open to you as to him, wasn’t it ? A. I supposed that he would know more about it than I would; I made no inquiry; he figured out what he could do and would do; I was satisfied with the figures he made, but I don’t remember how he did it; I took his say-so for it; he persuaded meto join the company, and I believed what he said; I supposed him to be the biggest stockholder; I know it was a company organized for the purpose of guaranteeing commercial paper of its members, as it was represented to me.”
George T. Thompson, the book-keeper of Murray, testified: “ I am book-keeper for Murray & Company, or Mr. Murray; I know Tolman since I saw him in the office of Murray & Company, two or three times when he talked to Mr. Murray; the last time he was there Murray called me and said: ‘ Mow, Mr. Tolman will show you how this is figured out.’ Murray told me about this before; I went to the desk where they were sitting; he had a pencil and a piece of paper, and said: ‘You know how the building and loan associations work; the idea is like this: there is a number of people get together and become members; we loan this money to the members, and then it comes back ultimately; ’ he said they were profitable, yielding generally about twenty-five per cent; in that way it is quite profitable; the payments come quite reasonable, so you do not notice it. He said, if you are a member of this, it does not cost you any more to bor7 row money than the ordinary bank rate of interest; he said of course it was very profitable, and like building and loan associations; I did not hear all the conversation at that interview; Murray had quite a conversation before and after.”
The foregoing is some of the evidence directly upon the question of the fraudulent statements and representations by which Murray was induced to purchase the stock.
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Mr. Justice Gary
delivered the opinion of the Court.
Condensed, the appellee’s version of this case amounts to this:
The parties became acquainted in 1887.
The appellant was president of the Chicago Trust and Savings Bank, from which appellee had borrowed $1,000, which was yet unpaid, when the appellant called upon the appellee and told a flattering tale. What rate of interest was paid on that $1,000 we fail to find; but as subsequent transactions seem to have been in substance on the basis of two and one-half per cent per month, probably that was the rate.
To present the case of the appellee in its best aspect, we copy from the brief of his counsel:
“ The record shows that several times, at least three, prior to the completion of the sale, Tolman went to see Murray. He went to see him at his place of business in Chicago. Except as informed by Tolman, Murray had never heard of the Midland company, and he knew nothing about the value of its stock, its organization, its objects or its purposes. Tolman was the president of the Chicago Trust and Savings Bank, a bank so far as Murray then knew, in good standing, and here is what Murray says with regard to the conversation:
I had three or four conversations, running over a period of three weeks, in April, 1888, in my office in Chicago. The first time he said to me he was getting up a company to enable business men like myself, and others whose names he mentioned, who had to borrow money on short time, to borrow that money at the same rate of interest as bank interest—-six per cent; and he said he was getting up this company or guarantee fund; that it was a kind of mutual company on the order of building and loan associations; that is, that all members could borrow at this low rate; that is; that a member had to be a member of the company to borrow at all. And then he went to work on paper to show me how I would be able to borrow at this low rate of six per cent, although I paid one per cent a month to the Midland company for guaranteeing the note, and that his bank, the Chicago Trust and Savings Bank, or any other bank in the city, would discount the note after being guaranteed by this Midland company.
Q. Can you state any of the elements that entered into the computation ?
A. Ho; I would not undertake to figure out how he made it come out. He figured it out to my satisfaction that it was feasible, and I told him at the same time that I didn’t need to go into it; that I didn’t need to borrow money in that way; I could get all the money I needed at my bank. Then he said it was a profitable investment any way; that there were other men in it that did not need to borrow money. He mentioned some names; one was J oseph Stockton. I knew him and had known the firm for years, and that gave me confidence. He mentioned three or four furniture men in the city that I knew; one was Cogswell, on the west side, and another one was on Bandolph street, and one by the name of McDonald. These were men I knew personally. He told me that it was a good investment, because it would pay twenty-five per cent dividend on the money invested. He figured it up, but I can’t figure it. He said it would at any rate give twenty-five per cent.
He said he was getting up a company, and showed me a list of names he had. He was tb en the president of the bank. He said the stock was well worth all that I was paying for it; I paid $1,500; ten shares, $150 a share. He said I could sell it for that if I got tired of my bargain; that he himself would buy it back at that figure. . He has promised that twice since. That is all that I remember. He said the business of the Midland company was to guarantee the notes of its members, so that they could borrow money at a low rate of interest. Afterward we had another conversation, ivhen I found that they were paying no dividends. It "was near meeting time, and ivhen they decided they couldn’t pay the dividend I wanted to sell my stock. He said, come in the spring and I will buy it of you. He said he had all the Midland stock he wanted to carry then. I went in the spring, but he refused to buy. I offered to give him my stock at 8 f,500, to pay off the two notes that he had against me in the bank, and $500, $2,000 in all. I was willing to forego the interest if he would take the Midland stock. He refused to accept. Six months after the issuance of the stock I had a talk with him; I asked him at the bank how the Midland company was getting on, and he said well, and would pay twenty-five per cent dividend. That was all. My notes were not all paid then.”
Again: “ In all the renewals my transactions were carried on with Tolman at the bank; I believed what Tolman said, or I would not have gone into it at all; I didn’t know anything of the Midland company, except what Tolman told me.”
On cross-examination he said: “When Tolman called on me to join the Midland company, it was without prior arrangement. I did not meet him on the street, and I didn’t ask him to call at any time. When he called he said he was getting up a company to accommodate such men as me needing money on short time, on the mutual principle of building and loan associations. He called two or three times afterward; the last time I agreed to take stock. These conversations took up about three weeks. I made no examination in reference to the Midland company; I took Tolman’s word.”
“ Q. Then the question of paying twenty-five per cent dividend, the amount they would pay, was just as open to you as to him, wasn’t it ? A. I supposed that he would know more about it than I would; I made no inquiry; he figured out what he could do and would do; I was satisfied with the figures he made, but I don’t remember how he did it; I took his say-so for it; he persuaded meto join the company, and I believed what he said; I supposed him to be the biggest stockholder; I know it was a company organized for the purpose of guaranteeing commercial paper of its members, as it was represented to me.”
George T. Thompson, the book-keeper of Murray, testified: “ I am book-keeper for Murray & Company, or Mr. Murray; I know Tolman since I saw him in the office of Murray & Company, two or three times when he talked to Mr. Murray; the last time he was there Murray called me and said: ‘ Mow, Mr. Tolman will show you how this is figured out.’ Murray told me about this before; I went to the desk where they were sitting; he had a pencil and a piece of paper, and said: ‘You know how the building and loan associations work; the idea is like this: there is a number of people get together and become members; we loan this money to the members, and then it comes back ultimately; ’ he said they were profitable, yielding generally about twenty-five per cent; in that way it is quite profitable; the payments come quite reasonable, so you do not notice it. He said, if you are a member of this, it does not cost you any more to bor7 row money than the ordinary bank rate of interest; he said of course it was very profitable, and like building and loan associations; I did not hear all the conversation at that interview; Murray had quite a conversation before and after.”
The foregoing is some of the evidence directly upon the question of the fraudulent statements and representations by which Murray was induced to purchase the stock. There is much other evidence in the record corroborating this which space forbids ps quoting here.
The Midland company was chartered, as expressed in its articles, “ to secure information and furnish statements concerning the responsibility of persons and corporations, to conduct a merchandise commission business, and to contract in respect thereto.” The application was filed with the secretary of state, March 7, 1888, and the certificate of incorporation was filed July 26, 1888.
It seems hardly credible that on this showing a manufacturer on a scale that required a book-keeper, in business in Ohicago for twenty-two years, could have been induced to buy at §150, shares i.n a company as yet unorganized.
Without commending the morality of their exercise, we do not disguise our admiration of the fascinations of the appellant.
The whole case of the appellee, upon which he has obtained a decree which was intended to be one of rescission and restitution, stands upon the hypothesis -that he was defrauded by false and fraudulent representations, and that hypothesis is based upon the assumption that in effect the appellant told the appellee that the Midland company was what it was not, i. e., a company organized—chartered—to guarantee commercial paper. All other supposed deceit is but prophecy.
First, the appellant made no such representation. On the appellee’s own testimony the representation was that the •business of the Midland company was to guarantee the notes of its members; and he adds as a summing up, “ I knew it was a company organized for the purpose of guaranteeing commercial paper of its members, as it ivas represented to me,” which is not a statement of what the representation was, but of what he knew from it. The representation of Avhat the business of the company Avas, or, as the appellee seeks to have it understood, for what purpose it was organized, is no representation of what the charter is.
It is an ambiguous statement Avhich the appellee has no right to rely upon as but of one construction. And even these representations, though expressed—if they were—in the present tense, related not to Avhat existed then, but to what was going to be. They may have been promises, but are not statements of facts existing then. Hallows v. Fernie, L. R., 3 Ch. App. Ca. 467, 475.
Second, it is clear that a good charter, bad charter, or no charter was of equal value to a company which proposed a profit by guaranteeing payment by borrowers who had not such credit or collaterals as warranted confidence by bankers in the promises to pay of such borrowers.
Loss in such business, if conducted in good faith, was inevitable.
If all the borrowers for whom the company would become liable, were to be members of the company, as the appellee says the appellant told him, and all the members were borrowers in the ratio of their stock, ivh'ere would be the profit even if all paid ?
Third, the misrepresentation was not such that care and prudence could not have provided against the deception; “ the law will not extend its protection to those who, through negligence or inattent'on to their business, suffer an advantage to be taken of their credulity.” Cooke v. School Com., 1 Gilm. 537.
“ It is not for every lo dng bargain a court of equity will interpose to relieve.” Tuck v. Downing, 76 Ill. 71.
Only such representations as a man of ordinary prudence would be likely to rely upo i, can be a ground of relief. Grier v. Peterbaugh, 108 Ill. 602.
In Hicks v. Stevens, 121 Ill. 186, where the representations were as to an invention of an improvement in boilers, which case is relied upon by the appellee, the court say: Hicks was the inventor, and claimed to have made thorough tests of his invention, and presumably, had a greater knowledge of its use, capabilities, utility and value than any other person.
From these facts, and his profession of friendship to Jones, and of his desire to put him into a good paying business, we think Stevens and Jones not only relied upon the representations, but had a right to rely upon them, in making their purchase. There, by construing the representations as stating results already proved by experience, the representations were of existing facts, material to the value of the thing bought. Ho such element is here present.
An English judge expressing his surprise that people could be taken in by such simple devices as a witness, a jockey, described, was answered by the jockey: “ My lord, there is a fool born every minute, and, thank God, most of them live.”
The law can not take care of them. Wightman v. Tucker, 50 Ill. App. 75.
The decree is reversed and the bill dismissed as to the appellant with costs.