Virginia Land Co. v. Haupt

Citations

• 90 Va. 533
• 19 S.E. 168
• 1894 Va. LEXIS 18

Syllabus

<p>1. CORPORATIONS — Subscription—Fraud.—Where one is fraudulently induced by an agent or promoter of a corporation to subscribe to its capital stock, held, he may repudiate the contract at his discretion.</p> <p>2. Idem — Case at bar. — Where such promoter induced defendant, in ignorance of the fact that the former had an option on the land which the corporation was formed to purchase, and in reliance on the former’s supposed disinterested and superior judgment, to subscribe to the capital stock, and the defendant was thereby misled to his injury into ■ making a contract which otherwise he would not have made, held, the defendant is not bound by his subscription.</p> <p>3. Idem — Waiver.—Nor does such defendant waive his right to annul his said subscription by giving to said promoter a proxy to represent him in the first stockholders’ meeting, when the facts as to the promoter’s option on said land was disclosed, as defendant should not be affected by notice to the promoter of what the latter knew from the beginning and did not disclose to him.</p> <p>4. Idem — Laches.—Laches does not begin to run until subscriber is chargable with notice that a fraud has been perpetrated upon him.</p> <p>5. Idem — Notice—What is — Duty to investigate. — Mere suspicions or random statements heard in public, or in stockholders’ meetings, do not necessarily constitute notice. But after a subscriber’s suspicions are reasonably aroused, it is his duty to investigate at once.</p> <p>6. Idem — Burden of proof. — Corporation has the burden of proof in asserting that the subscriber had notice and was guilty of laches.</p>