McCampbell v. Obear

RICHARDS, J.

This is an action brought to recover the sum of eleven thousand five hundred dollars, alleged to have become due to the plaintiff from the defendant in accordance with the terms of a contract between them arising out of a stock transaction.

The two chief witnesses upon the trial of the case were the plaintiff and the defendant. The testimony of the plaintiff tended to show the following to be the facts out of which the contract in question arose: The plaintiff, who was a rancher and vineyardist then living in Los Angeles County, met 'the defendant, a real estate agent and promoter, in the city of Los Angeles in the year 1907. He had been interested in transactions with the defendant before, and upon this occasion the latter sought to enlist his interest and co-operation in a plan for the purchase, development, and sale of a tract of land in San Mateo County. He asked the plaintiff to go in with him, and assured him that he would double his money in a short time and offered to give him a written guarantee to that effect if he would put five thousand dollars into the venture. In October, 1907, the plaintiff came to San Mateo County and looked the land over, and upon so doing told the defendant that he would go in with him, and then gave him the sum of two thousand five hundred dollars on account of the transaction, for which the defendant gave a receipt, in which the organization of a stock company to handle the project is referred to, and also in which the defendant offers a guarantee that the stock of the plaintiff shall have a guaranteed dividend of ten per cent per annum, and a guaranteed value of two hundred dollars per share. A little later the plaintiff paid an additional two thousand five hundred dollars to the defendant and received another receipt referring to his former subscription. In the mean timé the corporation was in process of organization, with a capital stock of five hundred and fifty thousand dollars, divided into three thousand seven hundred and fifty shares of preferred stock, and one thousand seven hundred and fifty shares of common stock, each of the par value of one hundred dollars per share. " The plaintiff signed the subscription for stock in

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this corporation to the amount of five thousand dollars and upon the completion of the organization of the corporation the San Mateo County property was bought. Early in January, 1908, the plaintiff visited the office of the defendant in Los Angeles and asked for the formal guarantee which he was to receive, whereupon the following document was executed and delivered to him: