Glover v. Radford

• Decision Date: 05 July 1899
• Citation: 79 N.W. 803,120 Mich. 542
• Court: Michigan Supreme Court
• Parties: GLOVER v. RADFORD ET AL.

79 N.W. 803

120 Mich. 542

GLOVER v. RADFORD ET AL.

Supreme Court of Michigan

July 5, 1899

Error to circuit court, Wayne county; Robert E. Frazer, Judge.

Action by Henry P. Glover against George W. Radford and others. Judgment for defendants, and plaintiff brings error. Reversed.

Fred A Baker, for appellant.

T. E Tarsney and E. G. Stevenson, for appellees.

HOOKER J.

The defendants purchased, for $30,000 in cash, the exclusive right to the Dr. Keeley Gold Cure for the state of Michigan. With two others, they organized a corporation called the Keeley Institute, with $50,000 capital stock in 125 shares. The articles stated that $30,000 was paid in. It began business at Northville, December 22, 1891, where it was continued until May, 1892, when it was removed to Ypsilanti. Its only substantial asset was the right to use the Keeley cure in Michigan. One Van Cleve, representing the plaintiff, and other residents of Ypsilanti, had some negotiations with the defendants, who at that time controlled, if they did not own, all of the stock of the corporation, with a view to procuring an interest in the concern, and having the business removed to Ypsilanti; and such an arrangement was made whereby amended articles were filed increasing the stock to $250,000, of which the Ypsilanti parties subscribed $50,000. The evidence shows that the defendants sold one-fifth interest in the concern for $50,000, and that this consideration went to them, and we think that the record shows that the increase of capital stock to $250,000 was with the assent of plaintiff, and the knowledge on his part that only $30,000 had been paid in. The business was not successful at Ypsilanti. This action was brought to recover the consideration paid, or damages for deceit on the part of defendants in the sale. Plaintiff's claim is that the purchase by his client was induced by the representation that the concern was earning 12 per cent. upon $250,000, that this was not true, and that the plaintiff did not discover the fraud until a short time before the action was commenced, and that he then sought to rescind, but his offer was refused. He then brought this action, joining counts based upon rescission and upon breach of the contract. The court held that the counts were inconsistent, and required the plaintiff to elect which theory he would stand upon, and counsel chose rescission, taking exception to the ruling. Counsel asked the witness Combs what he did, after being elected upon the board of directors in March, 1893, in regard to finding the situation of the company, stating that the answer would bear upon the question "when the fraud was discovered." The court excluded the answer against the plaintiff's exception. These are the most important questions in the case, and we think there is error in both. There can be no doubt that the two theories were inconsistent in a sense, because one is based upon the continuation of the contract and...