Queen City Printing & Paper Co. v. McAden

• Citation: 42 S.E. 575,131 N.C. 178
• Parties: QUEEN CITY PRINTING & PAPER CO. v. McADEN.
• Decision Date: 21 October 1902
• Court: North Carolina Supreme Court

42 S.E. 575

131 N.C. 178

QUEEN CITY PRINTING & PAPER CO. v. McADEN.

Supreme Court of North Carolina

October 21, 1902

Appeal from superior court, Mecklenburg county; Starbuck, Judge.

Action by Queen City Printing & Paper Company against Henry M McAden. Judgment for plaintiff. Defendant appeals. Reversed.

This action is brought to recover the amount ($500) subscribed by defendant for 10 shares of stock in plaintiff company. Defendant resisted a recovery upon the grounds (among others not necessary now to be stated or discussed) that plaintiff through its agent and president, H. A. Murrill, induced the subscription by false representations. Upon the trial the defendant in his own behalf testified that: "Between the 16th and 20th of April, 1900, Mr. Murrill came to me with the subscription list introduced in evidence. He had other papers with him, or at least told me he had, but I did not see them. He told me that he and J. P. Wilson and George B. Hiss and others had been talking about reorganizing the Queen City Printing & Paper Company, and wanted me to help him; that he J. P. Wilson, E. A. Smith, and George B. Hiss had agreed to take most of the stock, and would take it all, but wanted a few outsiders for their influence, and that George B. Hiss had recommended and sent him to me. He said George B. Hiss would be treasurer of the company, and that George B. Hiss J. P. Wilson, and E. A. Smith would be large stockholders and that George B. Hiss would be actively in charge of the financial part of the business. I said to him: 'I don't know anything about your business, but if George B Hiss is going to be a stockholder and manage the thing, and I can be of any assistance to you, I will be glad to take some stock. I suppose you want only a small subscription. I will subscribe for three shares, or $150.00.' He said, 'You might as well make it $500.00.' I replied, 'Well, if George B. Hiss is going to be interested and manage this concern, and asks for my help, we will make it $500.00.' I then signed my name for $500.00. At that time George B. Hiss and I were associated in a number of business enterprises, and we had been accustomed to help each other out. If Mr. Hiss wanted help, I would help him, and vice versa. Mr. Murrill told me that Mr. Hiss had sent him to me. *** I said to him, 'Why is it that Mr. Wilson and Mr. Hiss have not subscribed?' He said, 'They haven't subscribed their names, because they expect to take whatever stock is left, and don't know now what to put down;' and he further said that Wadsworth and Franklin had authorized him to put their initials on the list, but had not signed themselves because they were constantly being solicited to take stock in companies, and didn't want everybody to be bothering them, but that they were going to be stockholders in the company. Mr. Hiss is a splendid business man, and I had absolute confidence in him. When Mr. Murrill came to see me, he stated that he knew I had great confidence in Mr. Hiss. I told Mr. Percy Thompson what I have told here. Some time before the meeting, which was held on the 26th of April, 1900, Mr. Murrill came back to see me, and said: 'It may be Mr. Hiss is so busy in other matters that he can't become treasurer. Would some other good man do for treasurer?' I said, 'Any reliable man that the stockholders may agree on for treasurer will be satisfactory to me.' He then said, 'Would Mr. D. W. Oates do?' and I replied, 'If Mr. Oates is satisfactory to a majority of the stockholders as treasurer, he will be satisfactory to me.' He showed me a paper from Mr. Oates, stating that he would accept the position. I then said to him, 'Well, what about Mr. Hiss?' He said, 'He is a stockholder, and will give it as much of his time as his business will permit, and will be interested in the management of the company.' I then said to him, 'I take the stock on account of my friendship for Mr. Hiss, and because it has been represented to me that he wanted me to take it.' This representation was what had caused me to sign the subscription list. I told Mr. Murrill of my friendship for Mr. Hiss, and of the different things we were interested in together. Mr. Murrill told me that the corporate stock of the reorganized company was to be $15,000; that he did not want a large subscription from outsiders, because Mr. Smith, Mr. Wilson, and Mr. Hiss expected to be large stockholders. Mr. Wilson and Mr. Smith are highly successful business men. The main reason why I signed the subscription list was because Mr. Murrill stated to me that Mr. Hiss was going to be a large stockholder and take an active interest in the company, and I was willing to intrust my money in the enterprise on account of my confidence in Mr. Hiss. Afterwards I had a conversation with Mr. George B. Hiss and Mr. J. P. Wilson. In consequence of what they said to me, I went and saw Mr. Murrill before the meeting, which was held on the 26th of April, and stated to him that things had been misrepresented to me, and that Mr. Hiss had told me that he was not a stockholder and had never intended to be, and had not suggested Murrill's going to see me, and would have nothing to do with the management of the concern. I told Mr. Murrill that I withdrew my subscription. I got the notice of the meeting of the 26th of April, 1900, after this conversation with Mr. Murrill. After the notice, and on the day set for the meeting, I went to see Mr. Murrill again, and repeated to him what I have just stated, adding that I was not liable on the subscription and would not come to the meeting. It was stated in the notice that the meeting would be held for the...