Berkline Corporation v. Bank of Mississippi

In Berkline Corporation v. Bank of Mississippi (Miss. 1984) 453 So. 2d 699, Berkline sold furniture on credit to Furniture City based on a bank officer's written statement that Furniture City had an active line of credit in the low-six-figure range and a checking account with average balances in the low-five-figure range. The officer also stated Furniture City was a satisfactory account and the principals displayed sound business judgment. After Furniture City went bankrupt, Berkline learned the information given by the bank officer was incorrect. The Mississippi Supreme Court held there could be "a right of recovery upon proof of negligent misrepresentation of material facts reasonably relied upon to the detriment of plaintiff ... ." (Id. at p. 700.) More fully, it explained: "Where a bank, through one of its duly authorized officers or agents, undertakes to supply credit information, arguably gratuitously, the bank and its officers are bound to use the skill and expertise which they hold themselves out to the public as possessing. There is ordinarily no reason why factual information given by the bank should not be accurate. When a bank officer makes representations or omissions of material facts false at the time, and where that officer has not exercised reasonable care and diligence to see that the information dispensed is accurate, the bank may incur a liability." (Id. at p. 702.)