McClanahan v. Ivanhoe Land & Imp. Co.

Citations

• 96 Va. 124
• 30 S.E. 450
• 1898 Va. LEXIS 69

Syllabus

<p>1. Stock Subscriptions—Fraud in Procurement—Rescission—Payment of Premium to a Third Party—Gase in Judgment.—A person who has been induced to become a subscriber to the stock of a company through the fraud of the company and its misrepresentation of material facts may, on discovery of the fraud and misrepresentation, have his contract of subscription rescinded, and recover back the purchase money paid, with interest thereon, although he may have paid a third party a premium or bonus to get the stock. In the case in judgment the contract of subscription was made by the appellant with the company. It was obtained by misrepresentations of material facts made directly to him. The certificates were issued directly to him. The cash payment and the subsequent assessments were paid by him, and, though he may have paid a third party a premium or bonus to get the stock, there is not an intimation, either in the certificate or the record, that the Stock had ever been subscribed to by any other person, and transferred by such other person on the books of the company to the appellant. The just and fair inference, therefore, is that such third person to whom he may have paid a premium or bonus stood to the company in the relation of agent, and the contract will be rescinded, and a decree pronounced against the company for the purchase price paid, with interest from the date of payment.</p>