Halsey, Stuart & Co. and the Equitable Life Insurance Dispute

Halsey, Stuart & Co. was involved in a significant dispute with the Equitable Life Insurance Company in the late 19th century. This dispute would have far-reaching consequences for the firm.

At the heart of the dispute was a disagreement over the interpretation of a trust agreement. The Equitable Life Insurance Company had invested in a number of properties, including a large tract of land in the Midwest. Halsey, Stuart & Co. had been hired to manage these properties, but the company was unhappy with the firm's handling of the investments.

A fresh viewpoint: Equitable PCI Bank

In the landmark case of Equitable Life Ins. Co. v. Halsey, Stuart & Co., the Supreme Court ruled in favor of the buyer of bonds. The buyer had relied on material false representations made by the seller, and the court held that he was not precluded from recovering damages due to his failure to make his own investigation.

A fresh viewpoint: Court Square Capital Partners

The trial court correctly instructed the jury that to find a verdict for the purchaser, they must determine whether the untrue statements were known by the seller to be untrue or were made as true with no reasonable ground for believing them to be true. This instruction was in conformity with Iowa law.

The seller had induced the purchase of the bonds by exhibiting a balance sheet of a corporation that guaranteed the payment of the bonds, without disclosing circumstances indicating that the financial condition of the corporation had been seriously impaired. The trial court correctly submitted this evidence to the jury, instructing them that they could find the seller liable for fraud or misrepresentation from this partial disclosure accompanied by willful concealment of material facts.