Dox v. R. E. Lomax Co.

JAMES, J.

The plaintiff sued to recover the sum of one thousand dollars, with interest, alleged to have been paid in December, 1912, as the purchase price for two hundred shares of the capital stock of defendant corporation. She alleges that coincident with the making of that purchase, and as a part of the contract, the corporation defendant executed in her favor the following writing:

“R. E. Lomax Co.

“Los Angeles, Cal., Dee. b, 1912.

“This is to guarantee that in event of Mrs. Julia R. Dox wishing to sell her stock at any time—on six months’ notice the above Co.—(R. E. Lomax Co.—) will purchase it at its face value— This also guarantees a profit of not less than 10% per annum.

“R. E. Lomax Co.,

“J. P. T.”

In a separate cause of action she alleged that she was induced to purchase the stock by reason of certain false representations made by defendant, to the effect that the corporation was doing a profitable business and earning a profit of not less than ten per cent on the invested capital, and that during the whole period of the existence of the corporation a dividend of ten per cent had been paid. There was added by amendment a cause of action for money had and received. A stipulation of facts was filed in the case, and judgment followed in favor of plaintiff for the recovery of one thousand dollars, with interest at seven per cent from the date of the purchase of the stock. The appeal is from that judgment.

In the stipulation of facts it is admitted that plaintiff purchased the shares of stock described in her complaint for the consideration therein stated on or about the sixth day of December, 1912, and “that the negotiations for the sale and purchase of said stock were on the part of said R. E. Lomax Company conducted by one J. P. Tait, who was then and there a director and officer, to wit: Vice President of said R. E. Lomax Company, ...” It was further admitted that Tait

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had signed and issued the guaranty contract set out in plaintiff’s complaint, and that R. E. Lomax, president and general manager of the corporation, had knowledge of the guaranty and consented thereto; that on the ninth day of June, 1913, the plaintiff notified the company that she elected to sell and dispose of her stock in accordance with the terms of the writing, and that upon the expiration of the six months’ period prescribed in said contract she tendered to the company the certificate of stock, with an assignment thereon properly executed, and demanded the sum of one thousand dollars and that she had tendered into court the certificate for the two hundred shares. It was further stipulated that the corporation had received the one thousand dollars and had used it in its corporate business. Further facts were stipulated as follows: