Wiseola Co. of United States v. Moore

MAYFIELD, J. Appellee filed the bill in this case to annul and cancel a contract of subscription for 100' [164] shares of stock in the appellant corporation. The bill sought to have the contract of subscription canceled upon the ground of fraud practiced upon complainant, by the corporation, or its agents, through fraudulent representations made to him. The false representation alleged was that the corporation had a paid-up capital stock of $25,000; it being averred by complainant that the only paid-up capital consisted of certain property, of the value of $6,000, by the' promoters transferred and conveyed to the coi’poration, in payment of such stock, at the fictitionus price and value of $25,000, and that this fraud was practiced upon complainant and other bona fide purchasers of such stock with the purpose of inducing them to subscribe for shares of such stock. It is also alleged in the bill that m> certificates of stock have ever been issued to complainant, and that he has been denied the right to participate in the meetings of the stockholders of the corporation, and denied the right to share in the profits or dividends of such corporation. Complainant, as a part of the rescission of the contract of subscription, asks to have the cash payments, which he has made on his subscription, refunded to him, and to have the notes executed by him for the deferred payments on such subscription, which are held by the corporation, canceled and surrendered to him. The bill does not show that complainant has received any profits from his subscription, and it is therefore not defective in failing to offer to do equity. The corporation demurred to the bill, assigning want of equity and a number of special grounds of demurrer. The chancellor overruled the demurrer, and the corporation appeals from that decree on demurrer. The bill certainly contains equity, and we find no error in the overruling of the demurrer as to any of the [165] special grounds assigned. Most of tbe special grounds' were speaking demurrers, and were clearly without merit. Tbe bill is not subject to demurrer on account of lacbes. We do not say that tbe bill was not subject to demurrer; but that it was clearly not subject to any of tbe grounds interposed. Finding no error, tbe decree overruling tbe demurrer is affirmed. Affirmed. Anderson, O. J., and Somerville and Gardner, JJ., concur.