Anderson v. Adams

MR. JUSTICE KNIGHT Delivered the Opinion op the Court.

This is an appeal by defendant from an adverse judgment in an action to recover the sum of $2,000 which plaintiff claims was loaned by him to the defendant at the

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latter’s request to enable defendant to purchase certain shares of stock in a mining corporation which the parties were organizing. The defendant denied that the money advanced by plaintiff constituted a loan, but the trial court, sitting without a jury, found otherwise, and in our opinion there is sufficient evidence to support such finding.

It appears from the record that -plaintiff and others had contributed certain sums of money to a so-called prospecting fund to send defendant to Venezuela to examine certain mining properties in that country, the amount of the plaintiff’s contribution thereto being $1,000. Upon defendant’s return his report was submitted and an “equipment” fund was created by the same parties for the purpose of operating the property, to which plaintiff subscribed $5,000, half of which was paid at the time the subscription was made. A corporation was then organized under the laws of Nevada, of which defendant became the president; and at a meeting subsequently held in San Francisco certificates of stock were delivered to those who had contributed and subscribed to the funds above mentioned in proportion to the amount of their contributions and subscriptions. When plaintiff’s certificates were handed to him he noted that they called for 5,000 shares of preferred stock and 35,000 shares of common stock in excess of the amount he had contributed and subscribed, which excess stock represented a value of $5,000. According to the testimony given by plaintiff and other witnesses called in his behalf he protested, stating that he had not subscribed for the amount of stock called for by the certificates and that he would not accept it, and he demanded that the certificates be reissued for the correct amount. However, plaintiff and defendant were intending to proceed at once to Venezuela, and the process of obtaining corrected certificates would have delayed their departure because it would have been necessary to send the erroneous certificates back to Reno, Nevada, and have new ones issued and- signed by the resident secretary of the corporation. Defendant called attention to this situation, and in order to avoid the delay agreed with plaintiff, according to the testimony supporting the trial court’s finding, that he would take over a portion of the excess called for by said certificates to the extent of $2,000, if plaintiff would lend him the money to pay for the same,