Jones v. Balboa Motor Corp.

LANGDON, J.

This is an appeal by the defendant from a judgment against it for $10,473.25, in an action brought by plaintiff to rescind a contract for the purchase and sale of certain shares of stock in the defendant company.

The evidence presents some conflicts, but the findings of the trial court are supported by the evidence and are to the following effect: That on or about the twenty-fifth day of August, 1924, plaintiff agreed to buy and defendant agreed to sell to the plaintiff 1,000 shares of the capital stock of the Balboa Motor Corporation for the sum of $10,000, payable by the delivery by plaintiff to the defendant of five certain bonds, described in the findings and of the par value of $10,473.25. These bonds were delivered to the defendant on August 25, 1924, in full payment for said shares of stock. It was also agreed as one of the conditions of said sale, that unless

bona fide

subscriptions for 12,500 shares of said stock should have been obtained from responsible subscribers, and there should have been paid on account thereof the sum of $125,000 in cash and notes on or before four months from date, that said agreement between plaintiff and defendant should be deemed to have been canceled and rescinded, and then and in that event the said bonds or the par value thereof should be returned to the plaintiff on demand, and it was further agreed that until said subscribers were so obtained and the said cash and notes so received, that the said consideration so agreed to be paid by the plaintiff should be impounded as required by the terms of the permit issued by the corporation commissioner of the state of California to the said defendant.

The said defendant did not receive

bona fide

subscriptions for 12,500 shares of its capital stock from responsible subscribers, and there was not paid on account thereof the sum

[100]

of $125,000 in cash or notes within said four months from the said twenty-fifth day of August, 1924, and the total

bona fide

subscriptions received by defendant during said period did not exceed 600 shares and the said consideration so paid by the plaintiff was not impounded by the defendant.