Two officers of a corporation, Moyer and Bond (defendants), sent out financial statements showing profits over the last year when in fact the corporation lost money. As a result, its creditor, Sovereign Pocahontas (plaintiff), refrained from debt collection action and instead made another sale to the corporation. The corporation’s financial condition continued to worsen, meaning Sovereign Pocahontas ultimately collected less than it could have when the financial statements issued. Sovereign Pocahontas sued for fraud, defined as knowing or reckless misrepresentations. The officers were frequently in the corporation’s office and spoke for it, but someone else kept the books. No evidence showed the officers examined the books, understood bookkeeping, prepared the financial statements, knew they were wrong, or even knew the corporation was unprofitable. The trial court directed a verdict for the officers and Sovereign Pocahontas appealed.