Winkler v. Los Angeles Investment Co.

NOURSE, J.

George C. Kemp, guardian

ad litem,

for Kemp J. Winkler and Lois M. Winkler, both minors, instituted two separate actions in the superior court on behalf of said minors to recover back money paid for the purchase of stock in the defendant corporation. The • actions were tried jointly, and by stipulation are brought to this court on one record. It is alleged that both of the minors were under the age of sixteen years when the actions were commenced; that at different times between the eighth day of April, 1910, and the twenty-fifth day of April, 1913, they purchased shares of stock from the defendant corporation, and that prior to the commencement of the action each of the defendants dis-affirmed the contracts and demanded the return of the money paid. All of the allegations of the complaints were denied by the defendant, and the court found that it was not true that the plaintiffs entered into any agreement whereby defendant sold and plaintiffs bought shares of stock in said corporation, and that it was not true that the plaintiffs paid any sum of money for said stock or that they disaffirmed any contracts with the defendant. These findings constitute the only assignment of error upon this appeal, appellants arguing that the evidence is not sufficient to support them.

The material facts are that when each of the minors was about two years of age their grandfather, George 0. Kemp, delivered to their father, J. H. Winkler, shares of stock of the value of five hundred dollars for each, with the intention on the part of the grandfather to make a gift of this stock to each minor, to be held by their father and invested and reinvested by him for the purpose of providing means for their education. From time to time, with the consent of said George C. Kemp, J. H. Winkler sold the stock and invested the proceeds of the sales by loaning some and investing the balance in other stocks. From these investments the original gifts increased from five hundred dollars to $746.43 in the case of Kemp J. Winkler, and to $1,269.20 in the ease of Lois M. Winkler. During the period from 1910 to 1913 the father of the minors, with the consent of the grandfather,

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disposed of all of the securities held by him for the two minors, and, without the knowledge or consent of the minors, purchased certain shares of stock of the defendant corporation. Certificates of stock were issued in the name of the minors, and thereafter dividends were made by checks drawn in their names. These checks were all indorsed for payment by the minor in whose name they were drawn and by J. H. Winkler, who received the money. Prior to the commencement of the action a notice of rescission was given to the defendant by the attorneys for the minors upon the ground that the sale of the stock to the minors was a fraud upon them because of misrepresentations as to the value of the stock on the part of the agents of defendant corporation. The action was tried upon the theory that the contracts for the purchase of the stock were the contracts of the minors made while they were under the age of eighteen years, and that this notice of rescission was in effect a notice of disaffirmance of these contracts.