Search results
Ultimately, Ultramares Corporation v Touche raised the issue of potential liability “in an indeterminate amount for an indeterminate time to an indeterminate class” (174 NE 441 (1931) per Cardozo CJ). Facts of the Case: Fred Stern & Company had falsified their accounts and was actually insolvent.
Ultramares Corporation v. Touche, 174 N.E. 441 (1932) is a US tort law case regarding negligent misstatement, decided by Cardozo, C.J. It contained the now famous line on "floodgates" that the law should not admit "to a liability in an indeterminate amount for an indeterminate time to an indeterminate class."
Ultramares (Plaintiff) made loans to accountant’s (Defendant’s) clients after relying on Defendant’s financial statements. Defendant’s client went bankrupt and plaintiff brought suit seeking to extend liability to the accountant for
Ultramares Corporation (“Ultramares”) (plaintiff), in absence of privity with the Touche accountants, relied upon those statements and made loans to the Fred Stern, who later went bankrupt. Ultramares brought a misrepresentation suit against Touche.
In Ultramares Corp. v. Touche, 255 N.Y. 170 (1931), Chief Judge Cardozo held that a public accounting firm owed no duty of care to third parties not in privity with the firm who were damaged by their reliance upon the firm's inaccurate financial statements.
Jan 23, 2024 · Ultramares Corporation (plaintiff) sued Touche (defendant) after relying on a negligently audited financial statement that led to unpaid loans. Touche had certified Fred Stern & Co.’s balance sheet, which included falsified information about its solvency.
Ultramares brought suit against Touche for negligent misrepresentation and false certification of the truthfulness of the audit. At trial, the jury awarded Ultramares $187,500 in damages. However, the trial judge entered judgment for Touche on the ground that Ultramares failed to state a cause of action.
