Hamilton v. Mihills

Citations

• 92 Wash. 675
• 159 P. 887
• 1916 Wash. LEXIS 820

Syllabus

<p>Bills and Notes — Actions—Defenses—Fraud in Procurement. A note and its renewal given for stock is shown to have been obtained by fraudulent representations where it appears that the maker relied upon representations that the corporation, capitalized at $2,000,000, had valuable limestone deposits, which a responsible party had agreed to develop by a plant costing $350,000, when no such agreement had been made and the only asset of the company was an option on the deposits of little or no value.</p> <p>Same — Actions—Defenses—Failure of Consideration. There is a practical total failure of consideration for a note for $4,900, given for corporate stock, where nothing was given for the stock originally issued to the officers, and there were no assets or anything back of $2,000,000 in capital stock and $1,250,000 in bonds except an option to purchase lands of little or no value, and the stock was never worth more than $600 paid thereon; partial failure of consideration being a defense pro tanto.</p> <p>Same — Bona Fide Holders — Consideration — Knowledge. The president of a company in active management of its affairs is not a 1bona fide holder of a note which he took from the corporation knowing that it was given for bonds and stock that he knew to he practically worthless, as he is charged with knowledge of failure of consideration.</p>