Strong v. Repide

Citations

• 213 U.S. 419
• 29 S. Ct. 521
• 53 L. Ed. 853
• 1909 U.S. LEXIS 1883

Syllabus

<p>Although there is no technical finding of facts by the court of first instance of the Philippine Islands, if the opinion shows the facts on' which the judgment is based and the courts below differ .in regard thereto they may be reviewed by this court under § 10 of the act of' July 1, 1902, c. 1369, 32 Stat. 691. De la Rama v. De la Rama, 201 ■ U.S.303.</p> <p>Where a sale made through an agent of the vendor has been effected by the fraud and deceit of the vendee, the sale cannot stand whether or not the vendor’s agent had power to sell.</p> <p>A director ,upon whose action the value of the shares depends cannot avail of his knowledge of what his own action will be to acquire shares from those whom he intentionally keeps in ignorance of his expected action and the resulting value of the shares.</p> <p>This is a rule of common law, and also' of the Spanish law before the adoption of the Philippine Civil Code; and, under §§ 1261-1269 of that code; a contract obtained under such circumstances can be avoided</p> <p>• by the party'whose' consent would not have been given had he known the facts within the knowledge of the other party.</p> <p>Even though a director may not be under the obligation of a fiduciary nature to disclose to a shareholder his knowledge affecting the value of the shares, that duty may exist in special cases, and did exist upon</p> <p>■ the facts in this case.</p> <p>In this case the facts clearly indicate that a director of a corporation owning friar lands in the Philippine Islands, and who controlled the action of the corporation, had so concealed his exclusive knowledge of the impending sale to the Government from a shareholder from whom he purchased, through an agent,, shares in the corporation,- that the concealment was in violation of his duty as a director to disclose such knowledge and amounted to deceit sufficient to avoid the sale; and, under such circumstances, it was immaterial whether the shareholder’s agent did or did not have power t