119 Iowa 202 | Iowa | 1903
This action was originally brought at law, and no reason is apparent on the record why it should
In January, 1894, plaintiff and defendant, with others, were stockholders in the Dubuque Specialty Machine Works, a corporation organized some years before "through the instrumentality of one Smith, who transferred to it certain patent rights, receiving in exchange preferred stock. At this time the corporation was not in a very prosperous condition. Its stock was not readily salable, only a few transfers having been made, and these at from $25 to $35 per share, of the par value of $100. Smith was apparently involved in financial embarrassments, and his stock was largely, if not entirely, pledged for his personal obligations. Furthermore, Smith was endeavoring to effect a sale of the entire corporate property, having been vested with authority to do so by the corporation. 'The other stockholders seem to have been in general accord ■as to the desirability of effecting such sale. Under these ■circumstances, Smith secured the co-operation of defendant in a scheme to dispose of one hundred shares of preferred stock for $3,000, to enable Smith to continue efforts which he had been making in the eastern states to effect a sale of the property. The one hundred shares of stock to be sold were represented as being the stock of Smith, but were in fact the stock of defendant. Smith and defendant induced plaintiff, who was not only a stockholder in the corporation, but had been instrumental in organizing it, and was also a creditor of Smith’s to a considerable amount, to become one of six persons (defendant being another) to subscribe the $3,000 for the purchase of the ■one hundred shares. It was agreed that the $3,000 should be raised on a joint note signed by the six purchasers, made payable to Smith, to be negotiated at a bank in
As thus modified, the judgment of the lower court is AEEIRMED.