Phelps v. A. L. Jameson & Co.

WILLIS, J., pro tem. Respondent herein commenced this action against A. L. Jameson & Company, a Nevada corporation ; A. L. Jameson, Columbia Cement Company, a Nevada corporation; and W. J. Shaw, by filing her complaint on May 15, 1931, charging defendants with fraud and deceit in respect to representations made by defendants individually and as agents of each other, resulting in an exchange of 300 shares of preferred stock of Monolith Midwest Cement Company, owned by respondent and of the reasonable value of $3,000, for 200 shares of preferred and 100 shares of common stock of said Columbia Cement Company, alleging damage in the sum of $3,000 and praying for that amount. The defendant Shaw defaulted and his default was duly entered. Defendants A. L. Jameson & Company and A. L. Jameson filed a joint answer denying all the allegations of the complaint except those relating to residence of the parties and the corporate capacity of the two corporations named as defendants. After trial and submission of the cause the court found that seven out of twelve specifications of representations set forth in the complaint were made to plaintiff by defendants Shaw and Jameson, acting individually and as agents for A. L. Jameson & Company; that the same were false and were made with intent to deceive plaintiff and induce her to make the exchange and that plaintiff believed the same and relied thereon, and as a result thereof made such exchange; “that defendants offered the sale of said Columbia Cement Company stock to the public, and the sale of said 200 shares of the preferred capital stock and the 100 shares of the common capital stock of Columbia Cement Company by the defendants to plaintiff was and is a sale to the public, and that said sale of • said stock was made by defendants to plaintiff at a time when the Columbia Cement Company had no permit from the commissioner of corporations of the state of California permitting the sale of said stock to the public”; that said Columbia stock “was and now is of no value whatsoever and the same is void”; [548]“that the issuance and sale of said stock to plaintiff was in violation of the Corporate Securities Act of the State of California and the sale and issuance of said stock was and is void”; that said Monolith stock at the time of exchange had an agreed and reasonable value of $2,624.40. From the facts found, the court concluded that the sale or exchange of the Columbia stock was in violation of the Corporate Securities Act, and that plaintiff had been damaged in the sum of $2,624.40 with interest from November 4, 1929, and was entitled to judgment against defendants A. L. Jameson Company, A. L. Jameson and W. J. Shaw for that amount. Judgment was entered accordingly, from which A. L. Jame-son & Company and A. L. Jameson appeal.