Rohrbacher v. Kleebauer

Citations

• 119 Cal. 260
• 51 P. 341
• 1897 Cal. LEXIS 889

Syllabus

<p>Action upon Note—Insufficient Defense—Consideration—Fraud in Bale of Stock of Corporation—Transfer of Corporate Assets—Rescission _Incomplete Restitution.—In an action upon a promissory note, in which the answer pleaded a want of consideration and a total failure of consideration, and alleged that the note was given for the purchase price of shares of stock in a Colorado corporation, of which plaintiff was president and managing agent, and that defendant was induced to purchase the stock by fraudulent representations of the defendant upon which he relied, and that the assets of the corporation were transferred to a new corporation which assumed its liabilities, and that defendant was induced to surrender the original stock purchased and accept the same number of shares in the new corporation in lieu thereof, and that the contract of purchase was rescinded, and said shares of stock tendered back to plaintiff, on account of said fraud; but the evidence disclosed that part of the assets of the original corporation were transferred to a dredging company not referred to in the answer, and that the defendant received stock in both corporations, in lieu of the stock purchased, and had sold all of his stock in the dredging company, the defendant could not defeat the action upon the note and retain any part of the consideration, but the tender of all the stock received in both corporations was essential to a rescission or right of rescission of the contract of purchase, and judgment was properly rendered in favor of plaintiff for the amount of the note.</p>