Johns v. Coffee

Citations

• 74 Wash. 189
• 133 P. 4
• 1913 Wash. LEXIS 2020

Syllabus

<p>Corporations — Stock—Subscriptions—Fraud. The fact that a subscriber to capital stock gave his note and assigned stock to an existing corporation by name, does not estop him from asserting that his subscription was fraudulently induced by representations that the company was to be subsequently formed by certain persons in whom he had confidence.</p> <p>Appeal — Review—Findings. Findings upon directly conflicting testimony will not be disturbed on appeal where the evidence does not preponderate against them.</p> <p>Corporations — Stock—Subscriptions—Fraud—Liability to Creditors. Where a stockholder was induced to subscribe for stock by the fraudulent representations of the corporation, and promptly rescinded, he is not liable to creditors for the balance due upon the stock, as he is himself a creditor and stands on an equal footing with other creditors.</p> <p>Same — Stock — Subscriptions — Fraud — Laches. Where a subscriber inquired of the vice president and agent and was informed that he was subscribing to a corporation to be thereafter formed by certain men, neither the corporation nor its receiver can complain that he was guilty of laches in not ascertaining the falsity of the representations.</p> <p>Same — Stock — Subscriptions — Fraud — Rescission — Defenses. Upon the rescission of a stock subscription for fraudulently representing that the corporation was to be formed and controlled by certain men, it cannot be shown in defense that other stock of equal value was issued to the subscriber.</p> <p>Corporations — Insolvency—Evidence. The insolvency of an insurance company is not established by the fact that it was in need of ready money to meet its fire losses, and.had no way of proceeding except by calling in its stock subscriptions, upon which only one-half had been paid.</p> <p>Corporations — Stock—Subscriptions—Fraud ■— Rescission — Notice. Where a stock subscription was induced by the fraud of the corporation, rescission may he effected by timely notice t