Marten v. Paul O. Burns Wine Co.

Fitzgerald, J. This action was brought to recover four thousand dollars and interest, paid by plaintiff to the defendant corporation for five thousand shares of its capital stock. The recovery is sought upon a rescission of the contract of sale, on the ground that plaintiff was induced to make the purchase by the false and fraudulent representations of the defendant as to the profits of its business and the value of its stock. The stock was purchased in March, 1887, and the alleged discovery of the facts constituting the fraud complained of was made January 20, 1890, and the attempt to rescind was made on April 23, 1890. Defendant had judgment and plaintiff appeals therefrom, and also from the order denying his motion for a new trial.

Upon the question of rescission, which is the only one necessary to be determined on this appeal, the court in its decision found in effect, that at the time of the purchase of the stock by plaintiff he had full knowledge of the true value thereof, and of the resources, liabilities, assets, and actual condition of the, defendant corporation; that the stock when purchased by plaintiff was worth. the price, paid for it, and that he never discovered any fact or facts constituting fraud by defendant; that after plaintiff purchased his stock he received a dividend of one hundred dollars thereon, and on the twentieth day of January, 1890, was present at a stockholders’ meeting of the defendant corporation, and voted for an assessment of five cents per share or two hundred and fifty dollars upon his stock, and on March 19, 1890, he voluntarily paid the same.

On April 23, 1890, having prior thereto dealt with and-claimed said stock as his own, plaintiff demanded of defendant that it pay to him the four thousand dollars paid by him for the stock and the two hundred and fifty dollars paid by him on-[357]said assessment, and thereupon offered to return the stock so purchased to defendant, hut without deducting or offering to deduct or accounting in any way for the one hundred dollars received by him as dividend thereon.- Upon these facts, which must be taken as undisputed, as the findings thereof are not attacked by the specifications, it follows that plaintiff was not in a position to rescind; but conceding, as he alleges, that he did not discover the facts constituting the fraud complained of until the twentieth day of January, 1890, it appears that on that day he was present at a stockholders’ meeting of the defendant and voted for the levy of'an assessment on the capital stock thereof, and that subsequent to that day he attended another meeting of the stockholders, and, afterwards, on March 19th following, he paid the assessment so levied without objection. This was in effect an affirmance of the contract which plaintiff will not be permitted to disaffirm after having with full knowledge of the fraud dealt with the subject-matter thereof under circumstances and to an extent that amount to a ratification.