271 F. 80 | 5th Cir. | 1921
Defendant in error was plaintiff below, and' brought suit to recover damages for breach of a contract for the salé and future delivery to it by defendant of 500 bales of cotton seed linters. Defendant admitted the execution of the contract, and that plaintiff had lost profits in the amount claimed as damages, but set up in its answer the affirmative defense that it was induced to enter into the contract by false and fraudulent representations of plaintiff’s financial responsibility. Descending to particulars, the answer alleged that the business manager of the plaintiff company represented that it was, at the time of the contract, a corporation fully organized, and with paid-in capital stock of $5,000; that this false and fraudulent statement was made with the intention to deceive defendant, and was believed to be true and relied upon; and that, upon discovery of its falsity, defendant elected to, and did, rescind the contract. The evidence introduced to sustain the answer was, substantially, that defendant before entering into the contract required the broker who procured it to ascertain the
The, evidence of plaintiff tended to show that the organization meeting of the plaintiff company was held July 1, 1916, and that prior thereto $500 of its capital stock had been paid in. It was admitted, however, that at the time of the interview" between the representatives of the two companies there had not been paid in to the plaintiff corporation in excess of $500 on account of capital stock. August 3, 1916, defendant wrote the plaintiff a letter which contained the following statements :
“On July 31st, I requested that your Mr. H. O. Bickmore come to my office, as I wished to get some further information in regard to the financial standing of your corporation, and during the conversation Mr. Bickmore stated that the Bickmore Nitrating Cotton Company was incorporated under the laws of New York, with an authorized capital of $5,000, of which not a dollar had been paid in, and that the corporation was doing business without having effected an organization under your charter, but that they expected to pay the amount in before the opening of next season. This statement, of course, was a great surprise to us, as our contract with you had been based entirely on information secured by L. S. Smith from yon; otherwise, we would not have executed the contract. As we have been misled in believing that your company had a paid-in capital stock of $10,000, as represented by your Mr. Bickmore to Messrs. L. S. Smith and W. I). Hall, we beg to advise that we here and now rescind the contract as made by ns, and refuse to have any further connections with it in any shape or form.”
Defendant’s president testified that the linters did not advance in price until the following October, and that he resold them at the same price as that fixed in the contract. At the close of the evidence the court directed a verdict for the plaintiff.
We are of opinion that the rights of the parties depend, not upon questions of law, but upon questions of fact, and inasmuch as there is a conflict in the evidence upon material facts, the case is peculiarly one to be settled by the verdict of a jury.
The judgment is reversed, and the cause remanded for a new trial.