Promoters of mining enterprises, in the preparation of
prospectuses, are bound to consider the effect that would be
produced upon an ordinary mind by the statements contained in them,
and, in estimating the probability of persons' being misled by
them, the court may take into consideration not only the facts
stated, but the facts suppressed.
Vendors of mining properties are not responsible for false
statements made in prospectuses issued by a mining company to whom
the properties had been sold unless they knew or connived in such
statements, or were active in putting them in circulation. While
they may have known that prospectuses were being issued, they were
under no obligation to read them, or contradict their statements or
promises, or interfere with their circulation or distribution.
If their title be of record, they are not bound to give notice
of their rights in the property to the purchasers of stock, or to
refuse the money due upon their contract of sale when it is
tendered them.
To constitute an estoppel by silence, there must not only be an
opportunity, but an obligation to speak, and the purchase must have
been in reliance upon the conduct of the party sought to be
estopped.
A person holding a deed of property which he has placed upon
record is not ordinarily bound to disclose his title to persons
contemplating purchasing, or making improvements upon the land,
unless his silence be deceptive or accompanied by an intention to
defraud.
This was a complaint in the nature of a bill in equity filed in
the District Court of Yavapai County, Arizona, by appellants,
Page 189 U. S. 261
or themselves and all others interested, against John Lawler and
Edward W. Wells, principal defendants, and the Seven Stars Gold
Mining Company, the Industrial Mining & Guaranty Company, and
John Griffin, receiver of such companies, to adjudge Lawler and
Wells to be estopped from disputing the title of the Seven Stars
Company to certain mining properties and to decree such properties
to belong to that company, and for an account of the proceeds of
all ore taken from the mines and received by defendants Lawler and
Wells, or, in the alter native, for a money decree against them for
the aggregate amount paid by plaintiffs and others for stock in the
company, upon the representations contained in certain prospectuses
and maps, by which the plaintiffs were induced to purchase stock in
such company, and for a confirmation of the title to the property
in such defendants.
The cause came on for hearing upon the pleadings, and at first
resulted in an interlocutory decree in favor of the plaintiffs,
with an order for an accounting by defendants. The case was then
referred to a master to report the number of shares in the Seven
Stars Company subscribed and paid for, and to ascertain the amount
paid to defendants Lawler and Wells on account of the purchase
price of the property. This was finally fixed at the sum of
$180,139.82, which was held to be a lien, and the property was
ordered sold in satisfaction thereof. A new trial was subsequently
granted, upon the hearing of which, upon pleadings and evidence, it
was held that plaintiffs were entitled to no relief, and the
complaint was dismissed, and an appeal taken to the Supreme Court
of Arizona, which affirmed the decree of dismissal. 62 P. 695.
The supreme court made a finding of facts in sixty-four
paragraphs, which is quite too long to be reproduced here, but
which may be summarized as follows:
In May, 1892, the defendants Lawler and a collection of mines
known as the "Hillside Group," the muniments of such title being of
record in the county recorder's office of Yavapai County.
Lawler and Wells offered these mines for sale at $450,000 cash,
and on May 12 one Warner visited the mines and contracted
Page 189 U. S. 262
for their purchase for $450,000, paying $20,000 in cash, the
remainder to be paid in installments in accordance with the terms
of an escrow agreement entered into between Lawler and Wells and
one Cowland. This agreement provided, among other things, that a
deed conveying the mines to Cowland be held in escrow by the Bank
of Arizona and be delivered upon paying the full sum of $450,000,
and that, upon the failure of the payments, the deed should be
redelivered to Lawler and Wells, and all payments be forfeited.
Cowland agreed that all moneys paid by him should belong to Lawler
and Wells, and should be retained by them as liquidated damages
accruing from the failure to pay for the property, and Lawler and
Wells be released from any obligation to convey the property. It
was further agreed that Cowland might take possession of the
property, develop and operate it, the proceeds to be paid to the
vendors and credited upon the purchase price; that Lawler and Wells
should nevertheless remain in legal possession of the property
until full payment, but should not work it or interfere with its
operation by Cowland. It was further agreed that, should Cowland
fail to make any payments, all improvements on the property and ore
taken therefrom should be the property of Lawler and Wells. A deed
of the property was executed to Cowland and placed in escrow as
above stated. Warner was the real party in interest, and Cowland
only his agent.
On June 14, Warner and Cowland, with some others, incorporated
the Industrial Mining & Guaranty Company for the purpose of
handling mines and buying and selling stock, to which company
Cowland delivered a written assignment of all his interest in the
escrow agreement, as well as a deed of the mining properties, with
a covenant of warranty against encumbrances. The new company
assumed all the covenants of Cowland in the escrow agreement, to
make the payments therein stipulated, and to procure the escrow
deed, then in the hands of the Bank of Arizona. Possession of the
properties was delivered to the new company with full knowledge on
its part of the terms of the escrow agreement. The company remained
in possession until October 1, 1892.
On August 15, 1892, Warner and several others incorporated
Page 189 U. S. 263
the Seven Stars Gold Mining Company under the laws of New
Jersey, of which certain persons, including one of the plaintiffs,
were elected directors. About the same time, the guaranty company
offered to sell and convey all its interests in certain mining
properties, including a part of those described in the escrow
agreement, to the Seven Stars Company, upon receiving $2,800,000 in
cash or stock of such company. On October 1, the guaranty company
placed the Seven Stars Company in possession of the Hillside Group,
with full knowledge on the part of the latter of the terms of the
escrow agreement.
The guaranty company, as the agent of the Seven Stars Company,
issued in September, 1892, a prospectus, known as the American
prospectus, to promote the sale of the stock of the Seven Stars
Company, 300,000 of which prospectuses, accompanied by a map and an
application for subscription to stock, were circulated throughout
the United States. In October, 1892, the guaranty company directed
the issuing of an English prospectus, which was never circulated,
but another, issued without the authority of the guaranty company
or the Seven Stars Company, was prepared, supervised, and
circulated by Cowland. The descriptive matter in this prospectus
was obtained from data furnished by the officers of the guaranty
company. The circulation of this prospectus amounted to 80,000
copies, and accompanying each copy was a map and application for
subscription to stock; but neither Lawler nor Wells had any
knowledge or information that this prospectus had been or was being
circulated in England, or had any knowledge of its contents until
some time in October, 1893. The further material facts are set
forth in the opinion.
MR. JUSTICE BROWN delivered the opinion of the Court.
The principal defendants to this suit are Lawler and Wells
Page 189 U. S. 264
(hereinafter termed "the defendants"), and the case turns upon
their complicity in, and responsibility for, the contents of the
prospectuses, which are full of exaggerated and delusive
statements, and were undoubtedly a gross fraud upon persons who
took stock upon the faith of their exuberant promises. Indeed, they
were of such a character as to create surprise that intelligent
investors should have believed their statements to be true. The
representation upon which the greatest reliance is placed is that
contained in the American prospectus; that "the titles are
unquestionable to the Seven Stars, Hillside, Happy Jack, and other
mines, being held under United States patents," and in the English
prospectus that "the mines owned by the company are situated in the
Eureka Mining District, Yavapai County, Arizona," and that "the
title is indefeasible, being United States patents to five claims,
together with several locations as easements."
Attached to these prospectuses was a map entitled "map of the
group of mines belonging to the Seven Stars Gold Mining Company."
It is true that there is neither in the prospectuses nor in the map
a distinct assertion that the legal title to the properties
mentioned was vested in the Seven Stars Company; but we think that
no one can read them without inferring and believing that the Seven
Stars was the owner of these properties, and that the net proceeds
of their operation would be distributed in dividends to
stockholders. As they were circulated as an inducement to take
stock in the enterprises, we are bound to interpret them by the
effect they would produce upon an ordinary mind.
Andrews v.
Mockford, (1896) 1 Q.B. 372. They were, however, even more
damaging in their omissions than in their statements. No mention
was made of the fact that the title to these properties stood in
the names of Lawler and Wells; no allusion to the Cowland
agreement, with its provisions for forfeiture, nor to the fact that
the only interest of the company was an equitable right to the
properties after the sum of $450,000 had been realized from the
profits and paid to defendants. In estimating the probability of
subscribers' being misled by these prospectuses, we may take into
consideration not only the facts stated, but the facts suppressed.
New Brunswick
Page 189 U. S. 265
&c. Co. v. Muggeridge, 1 Drewry & Smale 363.
They are entitled to know the
cons as well as the
pros. Gluckstein v. Barnes, (1900) App.Cas. 240;
Hubbard v. Weare, 79 Ia. 678;
Hayward v. Leeson,
176 Mass. 310;
In re Leeds and Hanly Theaters, (1902) 2
Ch. 809.
It does not appear, however, that these defendants were
promoters or interested in the organization of the guaranty
company, or the Seven Stars Company, or in the sale of the capital
stock of such companies, although they knew that Warner's intention
was to incorporate a company, and, to use the language of one of
the defendants, "work it for all there was in it." As they were not
concerned in the methods used to procure subscriptions to stock or
in the statements made in the prospectuses, it is difficult to see
how they can be held responsible unless they are made so by the
fact that they knew and connived in the misstatements as to the
title of the company. But, while they might have known that the
prospectuses were being issued, they were under no obligation to
read them or contradict their exaggerated statements and promises.
In their agreement with Cowland, they had stipulated that he or his
assignee should explore, work, and operate the property, and they
could not have failed to know that this would be done through a
company organized for that purpose. Such company would be
authorized to issue prospectuses and obtain subscriptions to stock
as best it could, and clearly defendants were not bound to
supervise its methods in doing so or render themselves responsible
for statements made by the company, provided they did not indorse
them. There were no relations between them and the purchasers of
the capital stock, and no duty on their part to interfere with the
circulation and distribution of the prospectuses and maps or to
inform the subscribers personally that they were the owners of the
legal title to the property. They had the right to rely, so far as
respected these companies and their stockholders, upon the fact
that their title was of record, and was notice of their rights to
everyone who contemplated taking stock in the company.
The testimony bearing upon the complicity of Lawler and Wells
with the preparation of these prospectuses and maps is
Page 189 U. S. 266
such as amounts rather to a suspicion that they may have known
and approved of their contents than to positive proof that they
received their indorsement. Of course, if it were shown that they
were put forth by them personally, with knowledge upon their part
of their contents and of the falsity of their statements, and that
they were issued as a basis of obtaining subscriptions to stock,
they would be justly held liable as participants in the fraud; but
the mere fact that they turned over the organization of the company
to other parties, who would pursue the usual course of issuing
prospectuses for the purpose of raising subscriptions, would not,
of itself, charge them with the duty of examining and verifying
their statements.
The facts principally relied upon are that the defendants caused
to be delivered to Mr. Rickard, an agent of Cowland, a report
previously made upon the mines, known as the Blauvelt report,
together with a map of the underground workings of the mines, known
as the Blauvelt map, as well as copies of the smelter and milling
returns of ores shipped from the mines, known as the "smelters'
returns." It is not found, however, that these documents were false
in any particular except the map, which was prepared by one Brodie,
without the knowledge of the defendants, but was seen by defendant
Lawler hanging in the office of the companies in New York, and was
entitled "Plat of the Hillside and adjoining claims," although it
appears that, afterwards, without the knowledge of Lawler, these
entitling words were changed, before the maps were distributed, to
the words, "Map of group of mines belonging to the Seven Stars Gold
Mining Company." It thus appears that, when Lawler saw this map it
contained no words indicative of ownership in the Seven Stars
Company. It also appeared that, in August of the same year,
defendant Wells visited the office of the guaranty company in New
York, and while there had an interview with Warner, president of
both companies; but the evidence does not show that anything was
said to Wells about the plans of the companies, or the issue and
circulation of a prospectus; although Lawler became aware of the
fact that the prospectus was being prepared for circulation, and
for the
Page 189 U. S. 267
purpose of promoting the sale of the stock of the company, and
that the Blauvelt report and map were being used in connection with
it.
In October, 1892, Warner represented to the defendants that he
was unable to place the securities he held in time to meet the
payment of that portion of the price falling due November 12, and,
relying upon his representations and requests, defendants agreed to
an extension of the time; but on May 8, 1893, the whole scheme, so
far as Warner was connected with it, collapsed by his executing a
general assignment of his property for the benefit of his
creditors. Defendants, learning of this, made a further agreement
with Cowland extending the time for payment under his agreement,
receiving as part of the consideration, $50,000 par value of the
guaranteed capital stock of the Seven Stars Company, and the
appointment of Lawler as manager of the mines. In May, 1893, Lawler
received notice in writing that remittances on account of the
Cowland contract were being made from money derived from the sale
of stock of the Seven Stars Company, and in August, 1893, the
Chancery Court of New Jersey, in which state the company was
incorporated, appointed defendant Griffin receiver of both
companies. In September, defendants, as owners of the legal title,
and exercising their rights under the original escrow agreement,
entered into possession of the group of mines, and remained in
exclusive possession until September, 1897, when a receiver was
appointed by an Arizona court.
The most important item of testimony, and one which lies at the
basis of this suit, is the fact that the defendants received from
the proceeds of the mines, during their operation by the Seven
Stars Company, sums aggregating $47,812.25, and also received from
Warner and others, on account of the purchase price of the
property, $112,339.96. This, however, they had a perfect right to
do under their contract unless they were distinctly apprised of the
fact that it was fraudulently procured. But the prospectus, map,
and application were prepared under the supervision of Warner, and
the documents framed in accordance with his views. The evidence
tends to show that, while defendants had knowledge of the
preparation and circulation of the prospectus
Page 189 U. S. 268
and maps, knowledge of the statements and representations
contained in them is not brought home to them, nor were they bound
to inform themselves as to their contents.
There are further findings that defendants in October, 1892,
became aware that the American prospectus was being distributed by
the guaranty company, and that they did not at any time protest
against its preparation or circulation or in any way give notice of
their rights in the mines to any of the purchasers of the stock of
the Seven Stars Company except as such notice might be imputed to
them through the record title in defendants. But it is further
found that they did not, at the time the subscriptions to the stock
were being made, make any representations or communications to any
subscriber to said stock; nor did they have any notice or knowledge
that any moneys received by them on account of the purchase price
formed a part of the money raised from subscriptions to stock and
paid by the guaranty company on account of the purchase price -- at
least, not until May 20, 1893, when nearly all the payments had
been made. Neither were they interested, as promoters or otherwise,
in the organization of either of the corporations or in the issue
or circulation of the prospectuses or the sale of the capital
stock.
Were they bound to refuse the money when it was tendered them?
Even if defendants had knowledge or notice that payments received
by them on account of the purchase price were made from moneys
raised from subscriptions to stock, there was no impropriety in
receiving their money from the proceeds of the sales of the stock,
although the contract specified only that they should be entitled
to the proceeds of the ore mined. As they had agreed to sell their
interests at $450,000, and Cowland had agreed to pay that amount,
it may be assumed that this was the real value of the properties at
that time. This amount defendants had a right to receive before
they surrendered the deed of the properties, but how it was to be
raised was no concern of theirs. Granting the provision in the
contract for the forfeiture of all moneys paid, in case the sale
finally fell through, to have been a harsh one (and in fact it was
much less harsh than it appeared to be), it was fully
understood
Page 189 U. S. 269
and agreed upon by both parties, and while a bill in equity
might not have lain to enforce it, it does not follow that
defendants will be compelled to return the money unless they
actively participated in the representations under which it was
raised. The case would have been stronger if the Cowland agreement
had provided distinctly that a mining company should be formed and
defendants paid from the proceeds of sales of its stock, but the
agreement made no provision how the money should be raised or from
what fund it should be paid, except that the proceeds of the
operation of the mines and the ores should be at once paid to the
defendants and be credited on the agreement. It was not provided,
however, that this should be the only source from which the money
should be raised.
As matter of fact, the guaranty company was engaged in promoting
sundry mining and industrial enterprises, including the business of
the Seven Stars Company, and during the time the payments were
being made, it received and disbursed the sum of $824,142.13, which
was deposited in its own name in a common fund in the Continental
National Bank, and checked out by the guaranty company in its
various business enterprises as required, and, amongst others, to
the defendants on account of the Cowland agreement. These checks,
which were generally payable to Cowland, were collected by the
payee, the money transmitted to the Bank of Arizona, and placed to
the credit of defendants on account of the purchase price of the
property. Between June 15, 1892, and September 18, 1893, the
guaranty company paid out for operating expenses, purchase of
machinery, purchase price of the Hillside group of mines,
dividends, and all other expenses, an aggregate sum of $380,295.81
-- over $100,000 more than the amount of money received from the
sale of the Seven Stars guaranteed stock.
The case, then, comes to this: whether the mere facts that
defendants knew that a prospectus was to be issued, that they
furnished the Blauvelt report (not shown to be false) to which was
appended a map indicating (though not to their knowledge) that the
mines belonged to the Seven Stars Company, and that
Page 189 U. S. 270
they might have informed themselves, if they had chosen to do
so, of the contents of the prospectus, and did actually receive a
large amount of money without knowing the source from which it came
-- render them liable as participants in the fraud perpetrated by
the circulation of the prospectus.
Putting the case in the most favorable light for the plaintiffs,
it was only a case of estoppel by silence. Indeed, it was not even
an ordinary case of estoppel by silence, but an estoppel by silence
concerning facts of which defendants may have had no actual
knowledge. To constitute an estoppel by silence, there must be
something more than an opportunity to speak. There must be an
obligation. This principle applies with peculiar force where the
persons to whom notice should be given are unknown. So too, to
constitute an estoppel, either by express representation or by
silence, there must not only be a duty to speak, but the purchase
must have been made in reliance upon the conduct of the party
sought to be estopped, and the express finding of the court in this
case is
"that the subscribers to the capital stock of the Seven Stars
Company, in making their several subscriptions therefor and
payments thereon, did so without any knowledge of, and without
relying on, anything said or done, or omitted to be said or done,
in the premises by the said Lawler and Wells, or either of
them."
Granting that, if these subscribers had known all the defendants
knew regarding the title to this property, they would not have
subscribed to the stock of the company, it does not follow that
defendants were bound to take active steps to inform the public of
that which already appeared upon the record.
This case does not belong to that class of which
Gregg v. Von
Phul, 1 Wall. 274, is an example, wherein it was
said that
"if one has a claim against an estate, and does not disclose it,
but stands by and suffers the estate to be sold and improved, with
knowledge that the title has been mistaken, he will not be allowed
afterwards to assert his claim against the purchaser."
Such cases are believed to be confined to those where the
party's silence is inconsistent with the position subsequently
assumed by him, as where he suffers land to be improved while
holding an unrecorded deed of it. In this case, however,
defendants' position
Page 189 U. S. 271
was perfectly consistent with their title of record and with the
Cowland agreement, which distinctly provided that Cowland or his
assignees should enter into possession, develop and work the mines
upon their own account, though paying the proceeds to them.
But, conceding defendants to have been apprised of the contents
of the prospectus, it would certainly be an exceptional case if a
person holding a deed of property which he has placed upon record
would be bound to disclose his title to a person contemplating
purchasing or making improvements upon the land, or would be
estopped from making his claim thereto by mere silence, since he
has a right to rely upon the constructive notice given by the
record, although the rule would be otherwise in case of positive
misrepresentations upon his part.
Brant v. Virginia Coal &
Iron Co., 93 U. S. 326,
93 U. S. 337;
Knouff v. Thompson, 16 Pa. 357;
Brinckerhoff v.
Lansing, 4 Johns.Ch. 65;
Rice v. Dewey, 54 Barb. 455;
Kingman v. Graham, 51 Wis. 232;
Sulphine v.
Dunbar, 55 Miss. 255;
Porter v. Wheeler, 105 Ala.
451. The authorities also recognize a distinction between mere
silence and a deceptive silence accompanied by an intention to
defraud, which amounts to a positive beguilement.
Sumner v.
Seaton, 47 N.J.Eq. 103;
Hill v. Epley, 31 Pa. 331;
Markham v. O'Connor, 52 Ga. 183.
For instance, if a mortgagee stood by while a mortgagor was
selling a piece of property to a person whom the mortgagee knew was
purchasing the property upon the supposition that it was
unencumbered, he might be estopped by his silence, even though his
mortgage were of record. But, upon the other hand, if he were
merely informed that the mortgagor was endeavoring to sell the
property as unencumbered, he would clearly be under no obligation
to look up the purchaser, or to inform the public generally of the
existence of the mortgage. In such case, he might safely rely upon
the record. No duty to speak arises from the mere fact that a man
is aware that another may take an action prejudicial to himself if
the real facts are not disclosed.
Sullivan v. Davis, 29
Kan. 28. As stated by Bigelow on Estoppel, 5th ed. page 596:
"So long as he is not brought into contact with the person about
to act, and does
Page 189 U. S. 272
not know who that person may be, he is under no obligation to
seek him out, or to stop a transaction which is not due to his own
conduct as the natural and obvious result of it."
It cannot be that A would be estopped by silence with respect to
his title to property which B is about to purchase, when he has no
knowledge that B contemplates buying and B has no knowledge that A
is connected with the property. We know of no case holding that a
man is estopped by silence as against the public, or any particular
person with whom he has no fiduciary relation. It was said by the
Court of Appeals of New York in
Viele v. Judson, 82 N.Y.
32, 40, of the cases holding a party to be estopped by his
silence:
"In all of them, the silence operated as a fraud and actually
itself misled. In all, there was both the specific opportunity and
apparent duty to speak. And in all, the party maintaining silence
knew that some one else was relying upon that silence, and either
acting or about to act as he would not have done had the truth been
told. These elements are essential to create a duty to speak."
Before holding that defendants are liable by reason of their
silence, it ought to be made to appear what action they could have
taken to prevent the perpetration of the fraud embodied in the
prospectus and maps. If they had actually participated in it by
circulating these documents or representing them to be true, the
case would have been different, but if they be held at all, it must
be by reason of their silence and inaction, when it is not even
shown that they were cognizant of the statements contained in them.
They may have seen them, but they were not bound to read them, or
inform themselves of the truth of their statements, since they were
no party to them in any way whatever, and were interested only in
obtaining payment for their property. But, conceding that they were
fully apprised of their contents, what action were they bound to
have taken? They could not give notice to the hundreds of thousands
to whom the prospectuses were sent, since they were not even
apprised of their names or addresses. A notice to the company not
to send out these prospectuses would have been equally futile, in
case the directors chose to disregard
Page 189 U. S. 273
it, since they could not control their action, nor could they
have sustained a bill for injunction, since they could have shown
no personal injury to themselves by reason of the action of the
promoters.
The difficulty of doing exact justice to the plaintiffs in this
case, without also doing an injustice to the defendants, suggests
another reason why they should not be charged with liability for
the circulation of this prospectus and map, without clear proof of
their complicity. At the time of the sale of these mining
properties, their real value must have been unknown. If the mines
proved successful, they may have been worth millions; if
unsuccessful, they would be of little value -- perhaps worthless.
The amount agreed upon, $450,000, was one which the defendants were
willing to take as a compromise, and one which the plaintiffs were
willing to pay as a speculation. Each party to the sale took his
own chances, and no complaint is made of unfair dealing on either
side. In their cross-complaint, defendants tendered to the court,
and offered to deliver, the deed and possession of the mines upon
the payment of the residue due them under the escrow agreement. If
the property be now more valuable than the amount agreed to be
paid, no reason is apparent why the tender should not have been
accepted. If, as appears to be more probable, it is of less value,
or wholly valueless, the defendants, in refunding the amount paid,
would not only lose that amount, but all possibility of reselling
the mines to other parties, and would thereby assume the risk of an
unfortunate speculation, which the whole design of the sale was to
impose upon the purchasers under the Cowland agreement, namely, the
plaintiffs. In making the purchase, the vendees were willing to
assume the risk of the mines proving unsuccessful. The vendors were
evidently unwilling to take this risk, and preferred to take a sum
certain for their speculative chances. Assuming that, in equity,
the defendants could be called upon to refund the money paid, it
seems unjust that they should also be saddled with the burden of an
unfortunate speculation. In short, the circumstances have so
changed that justice cannot be done without imposing damages upon
the defendants which were not within the contemplation of the
parties.
Page 189 U. S. 274
If the first alternative prayer of the bill were granted, and it
were adjudged that the defendants were estopped from asserting that
the Seven Stars Company was not the owner of the mining properties,
and adjudging such company to have full title thereto, and that
defendants should also repay all the proceeds of ore taken
therefrom and received by them, amounting to $47,812.25, it will
result that of the $450,000, agreed upon as the price of the
property, they would have received but $112,339.96, and would lose
$337,660.04 of the amount agreed to be paid. Upon the other hand,
if the second alternative prayer were granted and defendants were
adjudged to return the money found due in the first decree of the
district court, namely, $180,139.82, and retake the property, which
now appears to be of little value, they would be practically, in
either case, charged with the entire burden of the venture which it
was the express object of the Cowland agreement to avoid. A decree
that would bring about this result would savor of punishment to
defendants, rather than of compensation to plaintiffs.
We think the plaintiffs have wholly failed to make out such a
complicity on the part of the defendants with the preparation and
circulation of these prospectuses as would make them liable for the
losses which the plaintiffs have doubtless sustained.
The decree of the court below is therefore
Affirmed.