Sovereign Pocahontas v. Bond

Corporate officers Moyer and Bond (defendants) sent financial statements to creditor Sovereign Pocahontas (plaintiff) showing a profitable year when the corporation had actually lost money, causing Sovereign Pocahontas to refrain from debt collection and instead extend additional credit; the corporation's finances continued deteriorating, leaving Sovereign Pocahontas able to collect less than it could have when the false statements were issued. Sovereign Pocahontas sued for fraud, but no evidence showed the officers personally examined the books, understood bookkeeping, prepared the statements, or actually knew the figures were false or the company unprofitable; the trial court directed a verdict for the officers, and Sovereign Pocahontas appealed.