and 140 New York State Reporter ants, with the intent that it should be published for the information of the public and for all who would have dealings with the bank and in its stock. The defendants claim that there is no sufficient proof that the said report or statement was false. We think this contention is wrong. It is conceded that no considerable losses were incurred by the bank after March 28, 1904, and before June 30, 1904. On or about June 30th, the 100 per cent. assessment had been ordered and was regularly made. The order from the Comptroller directing the assessment and the assessment thereafter were made in compliance with the United States statutes (paragraphs 5205 and 5206). The Comptroller is required to instruct the bank the amount to which the capital has been impaired and require the stockholders to make the assessments. Hulitt v. Bell (C. C.) 85 Fed. 98. This assessment having been directed by the Comptroller and made by the stockholders, among whom were the defendants, is evidence that, when the report was made, there was in fact no surplus, no undivided profits, and that the capital had been impaired to its full amount. This action of the Comptroller ordering the assessment is a judicial determination for the necessity of such an assessment, and is conclusive upon the stockholders, and cannot be questioned by them in any collateral proceeding, or in any litigation which may thereafter be instituted. Bank v. Mathews, 85 Fed. 934, 938, 939, 29 C. C. A. 491, and cases cited; Aldrich v. Campbell, 97 Fed. 663-665, 38 C. C. A. 347. The evidence shows that the report or statement was false. The defendants urge that, though the report should be found false, there is not sufficient proof that the defendants knew it to be false, and that they cannot be held liable in an action for deceit based upon the false report unless they attested the report knowing it to be false. The bank had received notice from the Comptroller about March 1, 1904, that $194,000 of the items counted as assets of the bank were doubtful and must be collected or charged off. This notice was known to the defendants at the time, they being directors of the bank, and it was a direct warning to them by the bank examiner and Comptroller that assets to nearly twice the amount of the capital stock were considered doubtful. This warning is, of course, not competent proof that the doubtful paper was uncollectible; but it gave to these defendants notice that they should not include all those assets in the report, at least without investigation and examination. Had they examined, as they should have done, they would have learned that the capital was impaired to its full amount. The failure to make any examination is not mere negligence, misjudgment, or want of caution; nor is it mere casual indifference to results or breach of duty. It amounts either to actual recklessness of results, or to a willful refusal to make the examination, so that they could innocently make a good report, when a true statement of the condition of the bank would perhaps have been ruinous. The facts are very different from those existing in Robinson v. Hall (C. C.) 59 Fed. 648, and Warner v. Penoyer (C. C.) 82 Fed. 187, among other things, from the fact that here the defendants had direct warning in writing from the Comptroller, after reports from the bank examiner, of the bad condition of the assets. After the warning by the Comptroller and proof of the actual condition of the bank, at the time of which the report speaks, the court is bound to hold that either defendants knew the actual condition and concealed it or made the report recklessly. It is not necessary for the plaintiff to show that these defendants actually knew the report to be false. It is sufficient to maintain the action if he shows that the defendants attested this report, not knowing whether it was true or false, and not caring what the fact might be, but recklessly paying no heed to the injury which might ensue. Kountze v. Kennedy, 147 N. Y. 124, 129, 41 N. E. 414, 29 L. R. A. 360, 40 Am. St. Rep. 651. "Fraud is proved when it is shown that a false representation has been made knowingly or without belief in its truth, or recklessly without caring whether it be true or false." Headnote, 12 Eng. R. C. 250; Derry v. Peek, 14 App. Cas. 337. The fact that the defendants had reason to believe that the report was false and still made it is evidence of their intent to deceive. Salisbury v. Howe, 87 N. Y. 135. The defendants, as directors of the bank, evidently were at the time in a difficult position. They at least knew from the warning given by the Comptroller that the bank was probably in a bad financial condition. What actual facts they knew concerning the condition of the bank is not disclosed by the evidence. A report, however, showing losses to the amount of $194,000, would more than wipe out the capital stock, surplus, and undivided profits, as shown in the report, and would probably cause the ruin of the bank. The officers and directors of the bank would naturally hesitate to make a report which would cause its ruin; but, however loyal this sentiment may be to the bank, it cannot relieve these defendants from the consequences of making a report either falsely or recklessly. After the warning by the Comptroller, and before attesting the report, the defendants must have proceeded upon some reasonable inquiry, and have had some apparently good ground for attesting the report as it stood (Hammond v. Pennock, 61 N. Y. 145, 151), in order to relieve themselves from responsibility. They were not called as witnesses, either to show lack of knowledge of the actual condition of the bank, or to show that they made any inquiry or had any apparent ground for attesting this report to be true. On the contrary, the evidence discloses that they had good reason for believing that the report was false. When this report was made of the standing of the bank it was made and published to disclose the financial condition of the bank and to assure those who would deal with the bank; and, when it was attested by directors, they knew that, if not true, they were deceiving those who read it, both as to the standing of the bank and as to the value of the stock. In this particular case the statement assured the public that, not only the capital stock was unimpaired, but there was a surplus and undivided profits of $63,000, when in fact there was no surplus or undivided profits and the capital was lost. It is not sufficient here to say that this report disclosed the actual condition as shown by the books of the bank. These defendants could not rely upon the books after the warning they had received from the Comptroller. They were told by the Comptroller that the very books contained items of assets to the amount of $194,000 which the Comptroller considered doubtful. This is not a case in which directors, without warning and without reason to be and 140 New York State Reporter lieve that there were considerable inaccuracies in the books of the bank, attest a statement believing it to be true. It is rather a case in which these defendants either knew the statement to be false or willfully refused to make an examination, and, reckless of consequences, attested the report. The plaintiff and his agent, Waterbury, relied upon the report in the purchase of this stock. This is the fair inference to be drawn from the facts of the case. Although Waterbury made statements to the plaintiff outside of the report, it appears that it was the report itself which he relied upon in assuring the plaintiff of his estimate of the value. It was the substantial part of the inducement. It is not necessary for the plaintiff to show that it was the sole inducement. Bank v. Bank, 56 Fed. 139, 5 C. C. A. 448. It is said in Hadcock v. Osmer, 153 N. Y. 608, 47 N. E. 923: "An action to recover damages for deceit cannot be maintained without proof of fraud as well as injury. Actionable deceit cannot be practiced without an actual intention to deceive, resulting in actual deception and consequent loss. But, while there must be a furtive intent, it may exist when one asserts a thing to be true which he does not know to be true, as it is a fraud to affirm positive knowledge of that which one does not positively know. Where a party represents a material fact to be true to his personal knowledge, as distinguished from belief or opinion, when he does not know whether it is true or not, and it is actually untrue, he is guilty of falsehood, even if he believes it to be true; and if the statement is thus made with the intention that it shall be acted upon by another, who does so act upon it to his injury, the result is actionable fraud. Kountze v. Kennedy, 147 N. Y. 124, 130, 41 N. E. 414, 29 L. R. A. 360, 49 Am. St. Rep. 651; Rothschild v. Mack, 115 N. Y. 1, 7, 21 N. E. 726; Marsh v. Falker, 40 N. Y. 562, 573; Bennett v. Judson, 21 N. Y. 238; Addison on Torts, 1007; 1 Bigelow on Fraud, 514." If, under those facts, one should be held liable for the damage caused, he cannot be allowed to escape liability when he had been warned that the report showed a false condition of the bank. The plaintiff has established all of the elements necessary to maintain the action against the defendants. 12 Eng. Rul. Cas. 235, 298; Palsey v. Freeman, 3 Term Rep. 51-65; Derry v. Peek, 14 App. Cas. 337-380; Arthur v. Griswold, 55 N. Y. 410; Kuelling v. Lean Mfg. Co., 183 N. Y. 85, 75 N. E. 1098, 2 L. R. A. (N. S.) 303, 111 Am. St. Rep. 691. The measure of damages in this case is "a sum of money equal to the difference between the value of the property (stock) as it was in fact and the value as it would have been if the representations had been true." Vail v. Reynolds, 118 N. Y. 310, 23 N. E. 302. Under the report of the value of the stock was $163 per share. The Comptroller's warning that book assets were doubtful to the amount of $194,000 is not proof that the assets were in fact valueless to that amount; but the assessment directed by the Comptroller is evidence that its book value was then nothing. Whether the losses, passed upon by the Comptroller in his determination that the assessment must be made, were included entirely in the $194,000 of doubtful assets, does not appear. It does appear by stipulation that, of the $194,000 of doubtful assets, $97,000 have been collected; but I am not informed whether before or after the assessment. If we assume, as defendants in their brief say we must assume, that the directors did their duty and collected the entire $194,000 of doubtful assets, then the cause of the assessment must have been something else than the said doubtful assets. Between the time of the notice from the Comptroller, about March 1st, and the assessment, three months expired; so that, if the directors did their duty, they would probably have collected a large part of that which could be collected before the time of the assessment. If the doubtful assets included all of the losses that had occurred at the time of the assessment, then the stock, after the payment of the $97,000 collected, was worth $66 per share, and the plaintiff's loss would be $94 per share; but no proof is presented as to the actual value of the stock at any time after the assessment, except that the collection of the assessment gave it a value of $100 per share. Under the proof and the rule of damages, I am bound to hold that the plaintiff has suffered damages as claimed in the sum of $4,800, with interest from the time the stock was delivered, July 1, 1904. Judgment accordingly. GIBBONS v. LEHIGH VALLEY R. CO. (Supreme Court, Appellate Division, Fourth Department. November 13, 1907.) 1. MASTER AND SERVANT-NEGLIGENCE OF MASTER. Evidence examined, in an action against a railroad company for injuries to an employé, and held insufficient to warrant submitting to the jury the question of defendant's negligence. 2. NEGLIGENCE-PLEADING AND PROOF. Where negligence is charged, the specific acts constituting it should be shown. [Ed. Note. For cases in point, see Cent. Dig. vol. 37, Negligence, §§ 200211.] Appeal from Trial Term, Erie County. Action by Richard Gibbons against the Lehigh Valley Railroad Company. From a judgment for plaintiff and from an order denying a new trial, defendant appeals. Reversed, and new trial ordered. Argued before MCLENNAN, P. J., and SPRING, WILLIAMS, KRUSE, and ROBSON, JJ. Daniel J. Kenefick, for appellant. SPRING, J. The plaintiff, a locomotive engineer in the employ of the defendant, was injured February 5, 1904, while operating his engine on the defendant's track between Buffalo and Niagara Falls, and claims that the defendant is responsible for the injuries sustained by him. The line of the defendant from Buffalo to Niagara Falls consists of two parallel tracks extending in a general northerly and southerly direction. The westerly one of these is for east, or more properly south, bound trains, and is called the "east-bound track"; and the other the west-bound. Tonawanda Junction and Williamsville are two stations, about six miles apart, on this route, and the accident occurred in a cut between these two places. The plaintiff had been running an engine on a passenger train over this route for seven years, and each day made the round trip two or three times. On the and 140 New York State Reporter day of the accident and for several days preceding the east-bound track was covered with snow to the depth of several feet, and all the trains used the west-bound track, which had been kept clear of snow. He had passed over the track five times on the day of the accident. About 10 o'clock in the evening he left Buffalo with a passenger train, and when in the cut, as he testified, ran into a pile of snow which cov ered the engine cab, causing the derailment of the train, and the engine, after going about 1,000 feet, toppled over into a ditch and the plaintiff was seriously injured. There had been no snow track on any of the previous trips. During the evening, and up to about the time of the accident a snow plow had been cutting out the snow on the east-bound track. The snow plow, a rotary one with knives, cut the snow and threw it through an adjustable funnel, and all the proof is that this funnel was turned away from the west-bound track. It cleaned out a space extending about 15 to 18 inches beyond the rails on each side, and there was the same width of cut on the westbound track. The plaintiff had received clearance cards before leaving Buffalo advising him that no orders with reference to his train had been received and implying that he was to make his usual trip, and at Williamsville the order board denoted that he was to continue. He claims that the defendant was negligent in not warning him that the snow had collected on the track where the train was derailed. The complaint alleges two causes of action. The first one charges that the defendant had "carelessly and negligently thrown" this snow upon the track, and "carelessly and negligently allowed and permitted" it "to remain upon said track," and then alleges the service of the notice in pursuance to the employer's liability act (chapter 600, p. 1748. Laws of 1902). For the second cause of action it is alleged that the train which the plaintiff was operating was run and operated by telegraphic orders issued in the usual manner advising him that the track was clear, and "that said orders so issued to this plaintiff and conductor were false and untrue, and were falsely and untruthfully, carelessly and negligently issued by this defendant, or by and through the carelessness and negligence of its superintendent or foreman or person entrusted with and exercising superintendence over the operation of said train"; that the plaintiff ran his train in reliance upon these orders. No evidence was given showing the way in which the snow came upon the track, if it was there at all. After the snow plow had removed the snow, the space between the tracks, about eight feet, contained a pile of snow about five feet wide at the base and slanting upwards from four to six feet. The gist of the first cause of action was that the snow had been thrown upon the track by the snow plow, but the witnesses testified otherwise; and at the close of the evidence the counsel for the plaintiff "disclaimed a right to recover under the first cause of action." This disclaimer is not very important, as there was no evidence to support the claim. There was no evidence to sustain the charge that the defendant falsely issued the telegraphic orders, which is the gravamen of the second cause of action, and the trial judge expressly charged that no negligence could be founded upon any act or omission of either the train dispatcher or the operator |