Kendrick v. Schwartz

[172]

WOOD (W. J.), J.

Plaintiff sought to recover a judgment in the sum of $7,440, damages which he claims to have suffered because of the fraudulent representations and deceit of defendants’ agent in the purchase of 2,000 shares of corporate stock of Menasco Manufacturing Company. The trial court rendered judgment in favor of defendants, from which plaintiff has appealed.

Defendants are stock brokers maintaining offices in Los Angeles and San Francisco, doing business under the firm name of Sutro & Co. After conversations with defendant Joyce, who was agent for the other defendants, plaintiff purchased 2,000 shares of the capital stock of Menasco Manufacturing Company on December 23 and 30, 1938, at prices ranging from four and one-eighth to five and one-eighth dollars per share. In his complaint plaintiff alleged that a number of false representations concerning the financial condition- of Menasco Company were made by the agent of defendants for the purpose of inducing him to purchase the.stock; that defendants were manipulating the price of the Menasco stock; that defendants concealed certain important facts from plaintiff concerning the dealings of the Sutro partners in the Menasco stock; that the Menasco Company was insolvent at the time of plaintiff’s purchase and that its insolvency was known to defendants; that the stock was not worth more than $1.00 per share. Plaintiff asked for judgment in the amount paid by him for the stock over and above the sum of $1.00 per share.

All of the allegations concerning fraud and concealment were denied by defendants and the trial court found all of these issues in their favor. The court also found that the stock purchased by plaintiff was acquired in the open market and not from the partners or the customers of defendants. The trial court further found that plaintiff did not" suffer any damages whatever because of the purchase of the stock and that “the actual value of the 2000 shares of Menasco Manufacturing Company stock purchased by plaintiff was not less than the amounts paid therefor by plaintiff at the time of said purchases. ’ ’

On this appeal plaintiff contends that the findings are not supported by the evidence. Defendant Schwartz, senior partner of Sutro and Co., testified that in his opinion the Menasco stock was worth $5.50 per share on December 30,