151 Iowa 663 | Iowa | 1911
About January, 1904, the plaintiff became the owner of ten shares of stock in the defendant company. "They were purchased at the price of $125 per share. They purported to have a par value of $100 per share. The plaintiff avers that he was induced to purchase the same by certain false representations made to him by defendant’s 'agents, and that he discovered the falsity of such representátibns shortly prior to March 19, 1908. That upon such date he rescinded the contract and tendered back the stock. In a second count of his petition, the plaintiff claims damages for breach of a certain contract of employment. This contract will be set out later herein. The allegations of the petition are generally denied in the answer. By way of affirmative defense, the defendant also pleads that on September 22, 1905, the plaintiff, with full knowledge of the alleged falsity of the representations now complained of, entered into a contract of settlement with the defendant, and that he thereby ratified the contract of purchase and can not now repudiate the same. On the question as to whether false representations were made to plaintiff in the purchase of the stock, there was sufficient evidence to go to the jury, and defendant makes no serious
The alleged false representations were in substance as follows: (1) That the full premium of $25, at which the stock was sold to plaintiff, was to be paid into the treasury of the company and to constitute a part of the surplus, whereas, in fact, a large part of the same was paid out in commissions to the officers. (2) That the directory of the company included, among others, Morgan G. Bulkeley, president Aetna Life Insurance Company, Hartford; George L. Chase, president Hartford Fire Insurance Company, Hartford, Conn.; William B. Clark, president Aetna Insurance Company, Hartford, Conn. (3) That the shares sold to plaintiff had an actual value of $125, whereas, in fact, they were worthless.
Of the subscription price the plaintiff paid $500 cash. Thereafter and prior to September 22, 1905, the plaintiff, being an attorney, performed legal services for the defendant and rendered a bill therefor amounting to $130, plus expenses. Prior to September 22, 1905, he had sent his check for $150 to the defendant to pay the balance of his subscription price, but countermanded the same before it was presented. Some correspondence was had between the parties and also a personal conference, which resulted in the following agreement, hearing date September 22, 1905:
This agreement made this 22nd day of September, in the year one thousand nine hundred and five, 'between George W. Bowen, of Carroll, Iowa, party of the first part, and the Aetna Indemnity Company, a corporation duly organized under the laws of the state of New York, party of the second part, witnesseth:
Whereas, the party of the first part has duly subscribed for ten (10) shares of capital stock of the Aetna Indemnity Company, and has' promised pay thereon and*666 therefor the sum of twelve hundred and fifty ($1250) dollars; and
Whereas, the said party of the first part has heretofore and prior to the date of this agreement paid into the treasury of the Aetna Indemnity Company the sum of five hundred dollars ($500.00) on account of said subscription; and
Whereas, one hundred and thirty dollars ($130.00) due the party of the first part for legal services, has been credited on account of said subscription, thereby leaving a balance due on said subscription of six hundred and twenty dollars ($620.00) ; and
Whereas, the party of the first part is an attorney and counselor at law engaged in the practice of his profession:
Now, therefore, in consideration of the premises and of the sum of one dollar ($1.00), lawful money of the United States, in hand duly paid by the party of the first part to the party of the second part, the receipt whereof is hereby acknowledged, it is hereby covenanted and agreed between- said parties that the party of the first part shall pay the balance of his subscription to the capital stock aforesaid amounting to six hundred and twenty dollars ($620.00) as aforesaid, by rendering and performing legal services on behalf of said corporation.
And it is further covenanted and agreed that the party ©f the first part shall not be compelled to pay any subscription of his stock in any -other manner than by the rendition of legal services.
And it is further covenanted and agreed that the party of the second part will, when practicable, employ the party of the first part as its attorney at law and representative in the prosecution and defense of such actions at law, or suits in equity as the party of the second part may from time to time have in the territory tributary to its Des Moines office in the state of Iowa, and that all just and proper fees that may become due and owing to the party of the first part, for and on account of such services to be rendered by the party of the first part at the request of the party of the second part, as its representative and attorney at law as aforesaid, shall be applied to and used in liquidation of the amount due from the said party of the first part on account of his stock subscription aforesaid until the same shall be wholly liquidated.
We think, also, that if, when such contract was entered into, the plaintiff knew or ought to have known substantially all the material facts upon which he now bases his claim of falsity of representations, then he ratified the sale and waived his right to rescind on such ground. But the burden was upon’ the defendant to prove this affirmative defense. The evidence, as it is presented to us in this record, is not so conclusive as to warrant the direction of the verdict in favor of defendant. In view of a new trial, we refrain from discussing it in detail. It is sufficient to say that under the evidence the question was for the jury at this point also.