Davis v. Butler

SLOSS, J.

On November 7, 1905, the defendant sold' to the plaintiff two hundred and fifty shares of the capital stock of the Salinas Yalley Bottling Company, a corporation. In January, 1906, the plaintiff, claiming that he had been induced to buy the stock by means of fraudulent misrepresentations made to him by the defendant, undertook to rescind the agreement of purchase and sale. The defendant refusing to restore the money and property received as the purchase price, the plaintiff brought this action, praying a decree that the agreement be rescinded, and that defendant be required to transfer to plaintiff the property received as the purchase price of the stock upon plaintiff retransferring the two hundred and fifty shares of stock. The plaintiff had judgment in the court below. The defendant now appeals from an order denying his motion for a new trial.

The Salinas Valley Bottling Company was engaged in the business of bottling and selling beer which it purchased in bulk. Four hundred and thirty shares of its stock, of the par value of ten dollars each, had been issued. The misrepresentations alleged by plaintiff to have been made by defendant had reference to three matters. The complaint averred that the defendant had stated that the indebtedness of the corporation, over and above the money it then had in bank and solvent credits due to it by its patrons, amounted to the sum of $1530 and no more, whereas in fact such indebtedness amounted to the sum of $2,963.64. He had represented that the corporation was and had been marketing and selling two carloads of beer per month, whereas in fact it had not been and was not selling more than one carload per month. The third representation relied upon was that the corporation received a net profit of $6.15 per barrel on the beer bottled and marketed by it, when as a matter of fact said net profit did not exceed $3.35 per barrel.

A jury impaneled to try the issues raised as to fraudulent representations returned a verdict in favor of plaintiff, and, in addition, the court made findings covering all the issues. It found that representations had been made by defendant,

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as alleged in the complaint, with reference to the three matters above mentioned. The actual indebtedness of the corporation, over and above its money in bank and solvent credits due it, was found to be $2800, instead of $2,963.64, as averred in the complaint. It was found that not more than one carload of beer per month had ever been marketed or sold by the corporation, and that the profit per barrel on the beer marketed and sold by it did not exceed $4.77 per barrel.