Mulholland v. Washington Match Co.

Citations

• 35 Wash. 315
• 77 P. 497
• 1904 Wash. LEXIS 452

Syllabus

<p>Process — Summons—Waiver of Defect by Appearance. A motion to quash tbe service of a summons for insufficiency in form is properly overruled, where defendant bad already entered a full appearance in the action, and filed an answer to the complaint.</p> <p>Fraud — By Corporation — Rescission of Sale of Stock — Duty of Purchaser to Investigate Representations — Truth Not at Hand. The purchaser of treasury stock from a corporation may rescind,the sale for fraud where he relied upon false representations of the officers and promoters with regard to the ownership by the corporation of a device for manufacturing matches and the patents therefor, and a prospectus containing false representations as to the capacity of such machine, since the facts with reference to the existence of the machine and the patents therefor were not at hand, and the representations involved a special skilled knowledge, concerning which the plaintiff was not under obligations to investigate for himself.</p> <p>Rescission — Fraud—Laches—Diligence in Bringing Suit. A delay of eighteen months in bringing an action for rescission of a sale of stock in a corporation on the ground of fraud will not estop the plaintiff, where the complaint alleged that the action was commenced within a reasonable time after the discovery of the fraud, and the plaintiff testified that he believed the representations to he true until one month before the commencement of the action.</p> <p>Rescission — Sale Induced by Fraud — Estoppel,—Collateral Security Not Aeeecting Fraud in Original Contract. Where a purchase of treasury stock in a corporation was induced by fraud, the purchaser is not estopped to rescind the contract by the fact that afterwards certain other shares of stock were pledged as a guaranty, and other stock was put up as collateral, and that plaintiff had availed himself of the guaranty and collateral, since such guaranty and collateral do not affect the fraud in the original contract, or carry with it any