Boushall v. Stronach

• Decision Date: 18 October 1916
• Docket Number: (No. 257.)
• Citation: 90 S.E. 198
• Court: North Carolina Supreme Court
• Parties: BOUSHALL. v. STRONACH.

(172 N.C. 273)

90 S.E. 198

BOUSHALL.

v.STRONACH.

(No. 257.)

Supreme Court of North Carolina.

Oct. 18, 1916.

Appeal from Superior Court, Wake County; Cooke, Judge.

Action by John H. Boushall, receiver of Raleigh Custom Shirt Manufacturing Company, against W. B. Stronach. Judgment for plaintiff, and defendant excepts and appeals. Affirmed.

This is an action by the receiver of an insolvent corporation to recover upon a subscription to the stock of the corporation. The defendant admits the subscription to the stock and alleges the following as a defense:

"But the defendant alleges that in signing his name to said paper he was not aware that he was binding himself to pay any shares of stock in said corporation or making himself liable therefor, and that he, the said defendant, did not knowingly or intentionally contract or agree to take three shares or any other number of shares of stock in said corporation; that he, the defendant, was induced, persuaded, and misled to sign said paper by false statements and representations made by the said C. R. Towles, promoter of said corporation; that he, the said Towles, was engaged in promoting or organizing a corporation to manufacture "and sell shirts in the city of Raleigh, and that he was getting up a list of good, responsible people of Raleigh to sign their names to assist him in getting other people to take stock, and that it was not intended, nor his purpose, that the defendant should pay any money or take any stock, or assume any financial obligation by reason of his signing said paper, and that the defendant was not required to take any stock or pay for any stock, and that the signing of said paper did not bind him to do so; that the defendant was induced by said representations to sign his name to the paper which was presented to defendant, without reading or examining the same, and merely as an accommodation, as defendant was not interested in a proposition to manufacture shirts, knew nothing of the financial possibilities of the scheme, and had no money to invest in such ventures, defendant being engaged in the railway business as a train conductor and being thereby kept away from home and deprived of the time or opportunity to keep in touch with such enterprises; that the said representations and statements made by the said C. R. Towles were false, and were made with a knowledge of their falsity, and were calculated and intended by the maker thereof to deceive the defendant, and that the defendant relied upon said statements and representations, and was deceived thereby, and was induced thereby to sign his name to the said paper without reading the same; that the defendant did not discover said fraud, so practiced upon him, until after the financial failure of the said corporation and the appointment of a receiver thereof by the court; that no demand or notice to pay for any stock in the said corporation had ever been made upon defendant, and defendant had received no notice or information that he was considered a subscriber for said stock, or liable therefor, until the failure aforesaid and the appointment of said receiver, whereupon defendant promptly refused to pay any money on account of his alleged subscription for stock, and disaffirmed the same; and defendant hereby pleads said fraud in disaffirmation and repudiation of the alleged contract of subscription and in bar of the plaintiff's right to recover thereon."

His honor held that the matters alleged in the answer were not a defense, and rendered judgment on the pleadings in favor of the plaintiff, and the defendant excepted and appealed.

William B. Snow, of Raleigh, for appellant.

W. H. Pace and S. Brown Shepherd, both of Raleigh, for appellee.

ALLEN, J. A fair construction of the answer of the defendant is that he subscribed for three shares of stock, not intending to pay for them, and that he was induced to make the subscription by the statement of the promoter that he would not be required to pay, that he wanted his name on the subscription list, as one of the good responsible people of Raleigh, to assist him in getting other people to take stock; and, as thus understood, the facts alleged do not constitute a defense.

In the first place, the subscription listis a contract in writing, supported by a valuable consideration, and comes within the principle that a written contract cannot be impaired or changed by parol, and the facts alleged are, in substance, that the defendant subscribed for the...