Wills v. Porter

Citations

• 6 Cal. Unrep. 492
• 61 P. 1109
• 1900 Cal. LEXIS 1089
• 132 Cal. 516

Syllabus

<p>Contract of Corporation—Rescission—Return of Consideration. Civil Cod©', section 1691, provides that one party cannot rescind a contract without the consent of the other party unless he restores to the latter everything of value which he has received from him thereunder. A corporation which owed $46,650 to its principal stockholder borrowed money from a bank, and, in consideration of Ms guaranteeing its note, paid its indebtedness to him before maturity. Held, in an action by other stockholders to compel repayment to the corporation, that the •aetiom could not be maintained without releasing the principal stockholder from his guaranty.</p> <p>Contract of ‘Corporation—Rescission—Delay.—Civil Code, section 1691, provides that a party entitled to rescind a contract must do so promptly. A corporation which owed $46,650 to its principal stockholder borrowed money from a bank, and, in consideration of his guaranteeing its note, paid its indebtedness to him before maturity. Held, that an action brought by other stockholders two years thereafter to compel repayment to the corporation co-uld not be maintained, no excuse being shown for the delay.</p> <p>Corporation,—Where the Complaint in an Action to Compel Repayment of money paid by a corporation to its principal stockholder alleged that complainants had no knowledge thereof at the time, but did not .allege when they obtained knowledge, it will be presumed on appeal that they obtained knowledge at least by the day following the transaction.</p> <p>Corporation.—Where a Corporation Pays a Debt Due Its Principal Stockholder before maturity, as a consideration for his guaranteeing its note, repayment to the corporation will not be enforced by a court of equity at the suit of other stockholders, without a showing that the corporation or its stockholders were injured in some way.1</p>