Kennedy v. Bender
Decision Date | 15 March 1911 |
Parties | KENNEDY et al. v. BENDER. |
Court | Texas Supreme Court |
Action by J. M. Bender against Edward Kennedy and another. From a judgment for plaintiff, defendants appealed to the Court of Civil Appeals of the First Supreme Judicial District, and it reversed the judgment, and certified questions to the Supreme Court. Questions answered.
S. Taliaferro and G. L. Teat, for appellants. Wilson & Cole, for appellee.
Certified questions from the Court of Civil Appeals of the First Supreme Judicial District:
To the first question we answer, "No." When Bender purchased the stock of the corporation under the fraudulent representations of the appellants, he acquired title to the stock and became obligated to pay for it according to his contract. He had no contract with the appellants. Therefore, as to them, he had not the right of rescission. His only remedy was an action against the appellants for damages caused by the fraudulent representations whereby they induced him to purchase the stock. Hence nothing that Bender did in the exercise of his rights as a stockholder in the corporation can be looked to as in any way affecting his claim for damages against appellants, unless it be shown by the evidence that his purpose in so acting was to waive his right against them, or that in some way he acquired something of value from the appellants, with the purpose and intent of waiving his right of action for damages. 20 Cyc. p. 93; Schmidt v. Mesmer, 116 Cal. 271, 48 Pac. 54. 20 Cyc. p. 93.
The statement submitted to this court does not show that the additional stock was actually issued to Bender; but for the purposes of this opinion we will assume that it was issued and delivered. When the stock was donated by the three stockholders, it was for the purpose of relieving the financial condition of the company, and shows no purpose to compensate Bender for his damages. That purpose did not exist, either on the part of the donors, or on the part of the corporation, or on the part of Bender. The resolution which was offered in the stockholders' meeting had reference to the disposition of the stock; that is, that it should be sold at not less than 50 cents on the dollar, and the proceeds applied, as stated in the resolution, to the purposes of the corporation. The amendment which was offered, and which Bender either offered or seconded, had reference also to the disposition of the stock; that is, that an amount of it equal to that which was held by certain of the stockholders should be given to them, in order to make their stock equal to that of other stockholders. In making the donation, appellants had no purpose, as we have before said, to repair Bender's loss; neither had the corporation in view anything with reference to Bender's right for damages, and Bender was without any intention to waive his claim for damages. How can it be said, then, that by his acceptance of the stock from the corporation he waived a claim for damages against individuals? Upon what principle can an estoppel be invoked in favor of appellants, when their action had no reference to their transaction with Bender, or against the latter, who manifested no purpose of surrendering any right that he had against appellants. We are unable to see in the facts stated by the Court of Civil Appeals wherein Bender in any way evinced a purpose to surrender his claim for damages against appellants and accept the stock from the corporation.
To the second question we answer that the facts stated by the court do not raise any issue as to Bender's waiver of his right of action for damages against appellants. Therefore we see no reason why the court should have submitted such an issue. However, it may be that circumstances existed, which were in...
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