Ex-Mission Land & Water Co. v. Flash

Citations

• 97 Cal. 610
• 32 P. 600
• 1893 Cal. LEXIS 600

Syllabus

<p>Corporations — Fraud of Promoters — Setting aside Decree of Foreclosure — Cancellation. — A corporation may maintain an action to annul a decree of foreclosure of a mortgage upon its property, and to cancel the notes and mortgage for fraud in their procurement by false representations of the promoters of the corporation and their agents, made to subscribers to stock, as to the price at which the land was obtained by the promoters under a bid at an administrator’s sale, and that it was intended, in organizing the corporation, to place all the stockholders upon an equal footing, by purchase of the land at the bottom price at which it was bid in at the sale, and to complete the purchase at the price bid, and by fraudulent concealment from the other subscribers of the fact that two of the subscribers were agents of the promoters, acting for a commission to sell the land to the corporation at a price much greater than the amount of the bid, whereby the subscribers were induced to subscribe to the stock aud to consent that the corporation should execute the notes and mortgage for such greater price.</p> <p>Id. — Agreement between Subscribers — Purchase by Corporation — Assignment — Right of Action for Fraud. — Where an agreement between individuals, who afterwards became subscribers to the stock of a corporation, agreeing individually to purchase land in the proportions in which they became subscribers to such stock, was not a binding contract of purchase, for want of a party who proposed or agreed to sell, and the intention of the subscribers to the agreement was not to purchase the land individually, hut to become subscribers to a corporation to be organized, which should purchase the land, and which obtained a deed under the contract to purchase it, and executed notes and mortgage for the purchase-money, the corporation must be regarded as the purchaser, and it is not necessary that the subscribers to the agreement should assign to the corporation their right of act