ISSUE:
Whether a false representation by the Appellant and the company leads to fraud, due to misrepresentation in the prospectus?
RULE:
A material misstatement may be a ground for rescinding the contract, but the consequences of fraud and of breach of contract are widely different.
A false statement, made through carelessness and without reasonable ground for believing it to be true, may be evidence of fraud but does not necessarily amount to fraud.
Such a statement, if made in the honest belief that it is true, is not fraudulent and does not render the person making it liable to an action of deceit.