First State Savings Bank of Muskegon Heights v. Dake

In First State Savings Bank of Muskegon Heights v. Dake, 250 Mich 525; 231 NW 135 (1930), a corporation seeking a line of credit provided a financial statement of the defendant, a corporate officer, who co-signed notes to be used as collateral for the loan. Id. at 525-526. The defendant prepared a list of assets and liabilities, showing a net worth of $ 40,279 and the bank issued the line of credit. Id. at 526. On his financial statement, the defendant averred that he "maintains and guarantees that said statement is in all respects true and correct; and you may consider said statement as to the pecuniary responsibility of the undersigned as continuing to be true and correct until written notice of a change is given you by the undersigned." Id. at 528. It was ultimately determined that the notes were worthless. Id. The bank sued the defendant for fraud and misrepresentation, stating that the financial statement was false because it did not accurately value certain property or list outstanding obligations. Id. at 526-527. The Supreme Court agreed, stating that this financial statement was a continuing representation of the defendant's responsibility. Id.