Odden v. Jamison
| Decision Date | 04 June 1915 |
| Docket Number | No. 19231[155].,19231[155]. |
| Citation | 129 Minn. 489,152 N.W. 871 |
| Parties | ODDEN v. JAMISON et al. |
| Court | Minnesota Supreme Court |
OPINION TEXT STARTS HERE
Appeal from District Court, Yellow Medicine County; G. E. Qvale, Judge.
Action by H. C. Odden against Robert Jamison, as receiver, and others. Dismissed as to the receiver, and judgment for the other defendants, and plaintiff appeals. Affirmed.
Where the purchaser of stock in a corporation reserves the right to rescind his purchase if, upon investigating the corporation, he should elect to do so, and obtains an undertaking, executed by sureties, that in such event the amount paid for the stock shall be refunded, which undertaking contains no limitation upon the time within which he shall exercise his right to rescind, he must make his investigation and rescission within a reasonable time or the sureties will be released. A delay of more than ten months held unreasonable under the circumstances of this case. Bert O. Loe, of Granite Falls, for appellant.
John A. Dalzell, of Morton, and Allen & Fletcher, of Minneapolis, for respondents.
At the trial, the action was dismissed as against the receiver, but was submitted to the jury as against defendants Hannah and Pedersen, and a verdict was returned for plaintiff. Thereafter the court rendered judgment for defendants Hannah and Pedersen notwithstanding the verdict, and plaintiff appealed therefrom.
The following is a brief outline of the facts: In May, 1913, one D. R. Morrow, an agent of the Sterling Securities Corporation, was at the village of Echo, in Yellow Medicine county, engaged in selling the capital stock of that corporation. He represented that the company had a series of banks in the states of Wisconsin, Minnesota and Dakota from which they derived large profits, and that they were about to establish a state bank at Echo, and wanted a large number of local people to become interested with them. He also represented that, if any stockholder should become dissatisfied, he could surrender his stock, and the company would refund the amount paid therefor. The defendants Hannah and Pedersen and about 25 others residing at or near Echo purchased stock. On May 30th, Morrow, accompanied by defendant Hannah, went to plaintiff to sell him some stock. No sale was consummated at this time, but they arranged to meet him at defendant Pedersen's drug store on the following day. At the meeting at the store on the following day, plaintiff purchased stock to the amount of $525, but, as a part of the transaction, insisted upon and obtained the signatures of Hannah and Pedersen to the following writing:
‘May 31, '13.
‘This is to certify that H. G. Odden may at any time upon his going to Mpls. and investigating receive his entire amt. of $525.00 back upon his request.
‘Sterling Sec. Corp.,
‘Per D. R. Morrow, Agt.
‘G. W. Hannah.
‘J. D. Pedersen.’
On June 5, 1913, plaintiff's certificate of stock was issued and mailed to him from the office of the company at Minneapolis. On June 12, 1913, the stockholders residing in the vicinity of Echo held a meeting, which was attended by the president of the company and at which arrangements were made to organize the bank. The president explained the purpose of the company, and, in this connection, stated that any stockholder could go to its office in Minneapolis and investigate its affairs, and, if they were not found to be correct and as represented, that his money would be refunded. Plaintiff attended this meeting and was selected as one of the incorporators and directors of the bank. On June 18, 1913, the articles of incorporation of the bank were duly executed by plaintiff and the other incorporators, and plaintiff was named therein as one of the directors. Thereafter the company began the erection of a bank building, and constructed the walls and roof thereof, but it had not been completed at the time the company ceased doing business. The company declared a dividend of 10 per cent. in January, 1914, but never paid it. In the early part of April, 1914, the company sent out notices of a stockholders' meeting to be held at its office...
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