148 N.W. 505 | S.D. | 1914
On November 25, 1908, plaintiff entered into a contract with the Blue Bell Medicine Company whereby he exchanged 320 acres of land for 120 shares of. the preferred treasury stock of said company. Five of these shares he turned over to one Griffing. On February 25, 1911, he brought this action for rescission of the contract on the ground of fraudulent misrepresentations as to the value of the shares of stock. After the transfer of the land, a mortgage of $4,500 was placed upon -the land, which is still outstanding. On. September 1, 1909, the defendant ’Baslcer-ville, at all times a stockholder and director of the company, loaned the company $5000, taking its promissory note therefor. On September 10, 1910, he began suit upon said note and caused the said land to be attached. Thereafter, on the same day. insolvency pro
At the time of the transfer the company was solvent. At the time of the attempted rescission it was insolvent and had been in the 'hands of the .receiver about five and a half -months. Unpaid claims in excess -of $58,000 had been filed with the' receiver and there were not enough assets to pay the claims. Plaintiff had been the -owner -of the shares of stock more than two years and had never received a dividend thereon. Plaintiff must be c-harg-ed with laches in asserting his claimed right of rescission. Through delay and owing to the insolvency of the corporation he has lost such asserted right. Morawetz on 'Corporations, §839, Cook on -Corp. §161, 164; Jones on Insolvent and Failing Corporations, §399; Fear v. Bartlett, 81 Md. 435, 32 Atl. 322, 33 L. R. A. 721; South Bend Toy Mfg. Co. v. Pierre F. & M. Ins. Co., 4 S. D. 173, 56 N. W. 98.
But in addition to his asserted right of rescission, plaintiff claims under a special contract of guaranty made with- the company at -or about the time of the transfer. By this contract the company guaranteed the retirement of this preferred treasury stock and the repayment of its par value, including a -premium of twenty-five per cent, with interest, on -or before five years. Prior to be
Defendant Baskerville has, however, expended money in the payment of interest on the mortgage. As to such payments and as to any other payments for interest or taxes he is entitled to be reimbursed.
The judgment of the trial court is reversed with directions to enter judgment in favor of plaintiff and against the company and the receiver as a general claim against the estate, for the amount due under the guaranty upon the 115 shares of stock still held by-plaintiff, upon the surrender of the certificates for such shares, and that judgment be entered vacating the attachment of defendant Baskerville upon die land in question and enjoining the sheriff from proceeding to sell that land under execution; but not in any