Morgan v. Callahan

THE COURT.

This action is one to recover sums aggregating $4,532.87 loaned by the plaintiff to the Radio-Therapy Corporation, a Nevada corporation. To evidence portions of the amount loaned two promissory notes were executed to the plaintiff on behalf of the corporation; the first, for $2,500, executed by defendant Richard E. Callahan and C. R. Gailfres as its president and secretary, respectively, and the second, for $1,771.11, by Richard E. Callahan as president, and Miriam A. Callahan as its secretary, no note being executed for the balance of the loan. As se

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curity for the several notes two chattel mortgages were executed by the same officers of the corporation, neither of which contained a covenant to pay the debt. In the mortgage securing the first note defendant Mathilde' P. Callahan joined with the corporation as a mortgagor. The plaintiff, as grounds for recovery, alleged that the loans were made at the request of defendants 'Callahan, and were induced by the false and fraudulent representations of Richard E. Callahan, the president of the corporations, as to his own financial condition and that of the corporation, which the plaintiff believed and upon which he relied in making the loans; that contrary to his agreement to use these sums to reorganize the corporation under the laws of California Callahan diverted the same to other corporate purposes; that the latter, in addition to this agreement, promised to issue to the plaintiff certain stock of the new corporation, neither of which promises did he perform or intend to perform when the same were made, and further, that the plaintiff had given notice of rescission upon the above grounds.

'The court found in accordance with the complaint and that the plaintiff had promptly rescinded. Judgment was entered against the defendants for the amounts loaned with interest, from which they appeal.

They contend that the findings are unsupported, and that the conclusions of the trial court thereon are against law.

As to defendants corporation and Richard E. Callahan it will be sufficient to say that a careful reading of the evidence shows the findings as to the acts and representations of the latter to be fully supported, and a review thereof would answer no useful purpose.