Richmond dispatch. [volume] (Richmond, Va.) 1884-1903, 1898-06-19


sonable to believe he SO intended. He
survived his wife year and made no
change in his will-which also required
the son to support his two sisters while
single-an obligation that might termi-
nate during the mothers life, or con-
tlnue long after her death. Taking the
whole will together, the condition Is con-
strued as subsequent, not precedent; ana
its performance, rendered impossible by
the act of God in the lifetime or the
testator, the son holds the estate by an
absolute title, as il no condition had peen
attached. See Nunnery VS.. Carter
Jones Eq $40; F1nlay VS.. King, Pet,
$40; Birmingham VS.. Lesau, II Me-, 4si
RESCIss1oN. &C.
Wilson, Trustee. VS.. Hundley. REVERSED
Opinion by Rely, j.
In 1880 II. subscribed for 800 shares OF
the capital stock of the Rivermont Com
many. to be paid in instruments. He
made the first payment, 1900, in AUGUST
1890; the second $1,000 the following NO
vember, In pursuance OF calls, but mace
default on three subsequent calls for ike
amounts.
The company made an assignment In
June, 1898, of all its assets, including UNI
Maid subscriptions, and the trustee
fraud in the procurement Of his sub
scription. In brief, this was that the
representation to him by the agents was
that the Roanoke syndicate" had sub
| scribed 500. Oc0-nearly one-half OF inc
capital stock-when, in fact, 1t had mere>
lv taken an option on $4,000, and SUD
ecrihed absolutely TO only $4,000; and
| that he did not learn Of this misrepre-
| santation till after he had paid the nrst
| and second calls. But sundry letters OF
| n. in the record show that he unequiVo-
| cally elected, after actual knowleose lroii
| official sources of the falslty Oh the az
| legged representation, 10 ail'rhh HS
| tract of subscription
Unia. A contract induced by fraud
,s MT void but yoidable at the option OF
the injured party, who has the choice Oh
| tuh remedies-to rescind, II he can re-
s,ora uyhat he has received in the same
| condition. and recover the consideration
naId or IL he has paid nothing, rely upon
| the fraud es a complete detence IL sueu'
| or retain what ne has received ana Drlhs
| an action for damages sustained py ree1-
| son ~ the deceit. The latter course IN
| effect afirm5 the contract, but not as
| made in good faith. He consents 10 10
| hound. but does not thereby release Vi
naive his claim for damages. Many au-
| thorities cited. ,,., -, cha
2. But II he elect, on discovery VI tne
| fraud. TO affirm the contract ms -
:. e., and conclusive. He has but one
aIection 10 rescind, and having ONE
oIected 10 affirm the contract must aDioe
~, mat election. Bigelow on Fraud, sec
| tior, l9s. Grymes VS.. Saunders, IS u o. o.
LIZ, va Miller, 95 Va, 80; Hudson vs.
| Waugh, SO Va, olS. $500 ,,as that
! a The substance Of the fraud was thd'
TIA entire subscription was not aDsoiute,
80 represented, but optional, and TINS
oa,s+ituted the fraud and gave the rlgnt
| 20 rescissIon. knowledge subsequently
oao,,,red Of the terms of the option was
NOT the discovery Of a new irauoi tne'o
were merely the incidents OF the sanno
| fraud. and their discovery ola not Ie' Az
a right that had been waived aIter li0
discovery Of the essential fact tndt o an
| stItuted the fraud. The supseqteH. go
coyerv OF a new incident IN tue Irauu
49, not confer a new right TO resclho'
30 ON sales. sections 452-'S; Max Mea-
49,, 7. 60. VS.. Brady. 80 Va, ~
FICTITIOUS or c0lorable subscriptions,
| - md used to induce other persons
80 subscribe, with the secret uhosI s.dnH
", W 49, no liability should attach, coulu
| ins arArata az a fraud on ii, Tor such
| NJ Sor,~,,ons are as valid ana plnoins
az orSginally made in good faith' ana
al, ia unheld and so treated py the
| courts Thompson on CORP SCI
Isol.,Os. Morawetz. Sec. lVI; Iayior OH
| Corp, Secs. loo, 5Zl " ,ras-
Tha next question is, could H. uhoer
| the circumstances MAINTAIN 49,.
| ton for deceit! s,otad On
paragraph /, supra, as to contracts per-
| tainine 70 goods and chatteis. the ="
ss laid down by the House OF Lorus Is
mat a person induced by fradulent ms
concentrations Of an agent 10 tdhe
| shares in a company cannot alter uis-
covery OF the fraud, elect 70 retain the
shares and sue the company for damages,
upon the ground that such action Is
,,sriance with the contract entered into
", h,n, with his fellow shareholders or
| mariners in becoming MEMBER Oh inc
comnany. Addie VS.. West Bank OF SCOT
| land T. r. Sc, App, 146; Houldswortn
va C,itv of Glasgow Bank, etc., Appear
/ cases AT. In Re Addlestone LAnoleuni
| 20 81 on Div. 1el. He Is left 10 Dis
action against the agent. Benz. on sales,
Secs. 1853; Taylor on Corp, Sec. oZS;
| Cook on stockh., Sec. i5s; note.
2. A subscription to the capital stoch
OF a Joint stock company is not only ar
Undertaking to the company, but with all
/
~ the contract between the shareholders
that they shall contribute rataoly TO the
payment of the company's debts. IL a
subscriber. induced 10 purchase by FRAUD
elects. after discovery, TO affirm his con
tract ne declares, in effect: "Notwitn'
standing the fraud which induced me 70
become a member OF the company VII
stand in with II and take my chances.
II he might recover back all ne had palc
on his shares, Notwithstanding his cleo
ton to retain them and remain mem
Der OF the company. he would contribute
in fact, not a cent 10 the DEBTS ana ia
bilities Of the company. The effect. there
fore OF allowing a shareholder TO main
tain an action against the company tol
fraud would be 10 throw the purden o.
the debts, etc., on the other sharehold
ers, as innocent as he OF the irauo-s
result wholly at variance with his con-
tract of membership.
With these views Of the case. the con
stitutionallty OF the Acts OF December ~
1885. and December z. 1877. need not %
| discussed.