Krisch v. Interstate Fisheries Co.

• Decision Date: 28 July 1905
• Citation: 81 P. 855,39 Wash. 381
• Parties: KRISCH v. INTERSTATE FISHERIES CO.
• Court: Washington Supreme Court

81 P. 855

39 Wash. 381

KRISCH v. INTERSTATE FISHERIES CO.

Supreme Court of Washington

July 28, 1905

Appeal from Superior Court, King County; W. H. White, Judge pro tem.

Action by Frank Krisch against the Interstate Fisheries Company. From a judgment for plaintiff, defendant appeals. Affirmed.

H. E. Foster, for appellant.

Willett & Willett, for respondent.

RUDKIN J.

On the 16th day of November, 1903, the plaintiff in this action purchased from the defendant, through one Casedy, its treasurer and general manager, 5,000 shares of the capital stock of the defendant, and paid therefor the sum of $500. On the same day the plaintiff also entered into a contract with the defendant, through the same officer, by the terms of which the plaintiff entered the employ of the defendant, and was to receive for his services the sum of $50 per month in cash and 400 shares of the capital stock of the company at an agreed valuation of 10 cents per share. The plaintiff continued in the employ of the defendant under this contract until the 24th day of February, 1904, and received in all 1,200 shares of the capital stock of the company, in part payment for his three months' services. The plaintiff alleges in his complaint, which consists of two causes of action, that he was induced to purchase the stock and enter into the contract of employment by the false and fraudulent representations of the defendant, through its said treasurer and general manager. The substance of these representations was as follows: That the defendant had sold $14,000 worth of its capital stock, and with the proceeds had acquired property of the aggregate value of $13,050; that the defendant was not indebted to exceed the sum of $180; that the business of the defendant for the six months preceding the 16th day of November, 1903, had been on a paying basis that the defendant had $400 in cash in its treasury; and that the defendant was on a dividend paying basis, had an established trade, etc. The complaint further averred that all these representations were false, and known to the defendant to be false; that the plaintiff believed them to be true, and relied upon them; and that he investigated the affairs and condition of the defendant company, so far as lay within his power, before he purchased the stock or entered its employ. The complaint further averred that the stock was of no value whatever, and prayed judgment against the defendant for the sum of $620, with interest. The answer admitted the corporate existence of the defendant, the purchase of the 5,000 shares of the capital stock by the plaintiff, and the contract of employment under which 1,200 shares of the stock were received, but denied each and every other allegation of the complaint. The action was tried before the court without a jury. The court found the facts substantially as alleged in the complaint, and found that all the representations were made as alleged: that the value of the defendant's property did not exceed the sum of $2,400; that the corporation was in debt to exceed $1,500; that the defendant had no established trade or business, and was not, and had never been, upon a paying basis; that the business of the defendant was carried on at a loss, and for the sole purpose of deceiving intending investors in its stock; and that the stock was utterly valueless. The court further found that all representations made were false, and were known by the defendant to be false that they were made for the purpose of deceiving the plaintiff, and inducing him to purchase the stock and enter the employ of the defendant; that the facts were particularly within the knowledge of the defendant's manager, and not open to the...