January 24, 2016

Derry v. Peek | Case Brief - 14 App. Cas 337 (1889) - House of Lords

FACTS: Plaintiff invested in a company thinking it had the right to use steam power and other mechanical power.  However, the Board of Trustees didn't grant them the authority to use steam power, etc. 

HISTORY: Action dismissed, reversed, then appealed. 

ISSUE: Is plaintiff liable if they thought they were making true statements? 

HOLDING: No 

RATIONALE: Fraud is established by showing:

1) knowingly

2) without belief in its truth

3) careless as to whether it is True or False

"Making false statement through want of care falls far short of and is a very different thing from fraud and same may besaid of false representation honestly believed through on insufficient grounds."