Sheer v. Hoyt

TAGGART, J.

Action to rescind contract to purchase stock in corporation organized to manufacture mining ma

[664]

chinery and operate same on a royalty; also to procure return of real property conveyed in part payment. Defendants, by way of counterclaim, seek to recover balance of purchase price of stock evidenced by writing in form of a promissory note, payable on demand after such stock shall reach a salable value of fifty cents per share. Judgment was for plaintiff and defendants appeal from the judgment and an order denying their motion for a new trial.

The trial court found, in accordance with the allegations of the. complaint, that plaintiff made a contract with the defendant F. J. Hoyt to purchase twenty thousand shares of the stock of the Hoyt Mining Machinery Company for $5,000; that she conveyed the lot of land mentioned above to A. M. Hoyt, wife of said F. J. Hoyt, which conveyance was accepted as the first payment on said stock, and gave her note for $3,000, in the form above stated, to F. J. Hoyt for the deferred payment. The court also found the deed was so made to A. M. Hoyt at the direction and for the benefit of F. J. Hoyt; that to induce plaintiff to purchase said stock and to make such conveyance F. J. Hoyt represented to her that the “Hoyt Ball Amalgamator” (which was practically the sole asset of the corporation whose stock she was buying) was a machine that would effectually and economically abstract and collect from gold-bearing dirt and gravel the finest particles of gold, to wit, flour gold; that said machine had passed the experimental stage and was a perfected machine; that nothing remained- to be done by said corporation but to manufacture and market its machines; that these representations were the material inducements which led plaintiff to purchase the said 'stock; that they were false and untrue; that she relied and acted-upon them, and had no knowledge herself of mining machinery. It is contended in support of this appeal that these findings are unsupported by the evidence, and that the complaint fails to state a cause of action.

The complaint is sufficient against the attacks made upon it. An allegation which states that misrepresentations were made as to the character of the assets of a corporation, and the mechanical fitness and productive capacity of the machine which constitutes its sole means of income, must be regarded as alleging something more than a mere opinion as to the value of an invention, or the market value of the stock of the