California Credit & Collection Corp. v. Bernardini

KNIGHT, J.

The defendant Gomes Bernardini has taken this appeal from an adverse judgment in an action brought against him by the plaintiff California Credit and Collection

[382]

Corporation upon an assigned promissory note dated May 4, 1920, for the principal sum of $750 given by him to plaintiff’s assignor, Virden Packing Company, as payment for the balance of the purchase price of corporate stock issued and sold to him by said Virden Packing Company.

Appellant resisted payment of the note upon the ground that its execution had been obtained through fraudulent ¡ representations made to him by the representative of said packing company at the time the stock was purchased. Those representations, as they are set forth in the answer, were as follows: that “said Virden Packing Company was doing a large and profitable business and that the actual value and the market value of its capital stock was $100 per share, and it would soon thereafter be worth $125 per share and was paying big dividends.” It was further alleged that said representations were false; that at the time the same were made neither the actual nor the market value of the capital stock of said packing company exceeded $65 a share and that the prospective value did not exceed $40 a share. The trial court found that said representations were made to appellant as claimed, but further found that the same were not made with the intent to cheat and defraud, and that the same were not false.

Much of the argument presented on the appeal has been devoted to the question of whether or not the representations, if false, are sufficient in law to relieve appellant from the payment of said note. Assuming appellant’s contention with respect to that question to be supported by the authorities cited by him, he. is still confronted with the finding of the trial court that said representations were not proved to be false.

In order that representations may warrant relief in any case they must, of course, be false. (12 Cal. Jur. 743, citing cases.) The entire proof pertaining to this issue, as it is set forth in the bill of exceptions upon which the appeal has been taken, consists first of a stipulation reading as follows: “It was here stipulated by the parties that the only dividends declared upon the capital stock of the Virden Packing Company from