Henningsen v. Anderson

RICHARDS, J.

This appeal is prosecuted by the defendant C. L. Anderson from a judgment in favor of the plaintiff rendered and entered in an action brought by the latter to rescind an agreement for the sale of certain shares of the capital stock of a corporation known as Oakland Steel Foundry Company, and which stock was purchased by the plaintiff from the defendant for the sum of $5,000, payable as hereinafter set forth. The agreement for "the purchase of said stock was, in its inception, oral, and was entered into on or about October 13, 1927, at which time the plaintiff paid the sum of $100 on account of said agreement, giving his note for the sum of $1,000, payable on or about October 28, 1927, and agreeing to make payment of further sums within a few days thereafter, when his funds arrived from the east. On October 28, 1927, the agreement

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was consummated in the form evidenced by the following receipt:

“October 28, 1927.

“The Oakland Steel Foundry Company “Received of Harry G. Henningsen Five Thousand Dollars ($5,000.00) in payment of fifty (50) shares of stock of The Oakland Steel Foundry Co. as follows:

“Four Thousand Dollars ($4,000.00) cash and 1,000.00 (One Thousand Dollars) promissory note for six months dated October 13th, due April 13th, said stock to be held in safekeeping by Mr. Olin as collateral of payment of above note when due, Mr. Henningsen to have full voting power of said fifty (50) shares.

“ (Signed)

“C. L. Anderson

“E. W. Olin

“H. G. Henningsen.”

On or about November 15, 1927, the plaintiff gave notice of the rescission of said agreement and within a few days thereafter commenced the present action, making the defendant C. L. Anderson and The Oakland Bank, a corporation, parties thereto, the latter, however, being only a formal defendant, not concerned in the merits of this action or of this appeal. The rescission upon which the plaintiff predicates this action was based upon certain alleged grounds of misrepresentation and fraud committed by the defendant Anderson and by one E. W. Olin, his brother-in-law, whereby the plaintiff was induced to enter into and consummate the agreement for the purchase of said stock, and upon the further ground of a failure of consideration. The defendant Anderson appeared in said action and filed an answer therein, denying substantially all of the allegations of the plaintiff’s complaint and later amended complaint with respect to the issues of misrepresentation and fraud and of failure of consideration. The ease went to trial before the court sitting without a jury upon the issues as thus framed. Upon the submission thereof the trial court made and filed its findings of fact and conclusions of law wherein, after finding that the parties to said agreement had entered into the same and that the plaintiff had performed each and all of the acts to be by him per