Daily capital journal. (Salem, Oregon) 1903-1919, 1911-10-27
OREGON SUPREME COURT DECISIONS
Published BY Courtesy Of F. A. Reporter Of the
Supreme Court
Elgin '. Snyder and Snyder, Marion
County

ents. Appeal from the circuit court
for Marion county The Hon. VIM.
Galloway, judge. Argued and sub
mitted, September 26, 1911. NJ. E.
Pogue, (W. NJ. Kaiser, on brief) for
appellant. John II. McNary, (Charles
L. McNary, on brie) for respondents.
Bean, ]. Affirmed.
This is a suit 10 rescind a con-
tract, whereby plaintiff conveyed to
defendant, S. H. Snyder, 46 acres of
land valued at $4,000 in considera-
tion of 30 shares of stock in the Sa-
lem Box and Lumber company, a cor
poration, of the par value of 800 per
share, on the ground of fraud. From
a decree in favor of defendants
plaintiff appeals.
Plaintiff alleges, as the gist of his
complaint, that said defendant, his
agents, servants and associates, who
were the officers and stockholders of
the corporation for the purposes of
cheating, wronging and defrauding
plaintiff, knowingly and falsely rep
resented to the public, and to plain
tiff, that said stock was of the value
of 75 to so cents on the dollar, know
ing that said shares were of no value
whatever, and that the corporation
was then insolvent, all of which Is
set out at length and with minute de-
tail. For this purpose property Of
the value of about $3,50O was turned
over to the company by Mason e Sny-
der, two of the incorporators, for
$1,000 in stock.
That on October 10, 1907, plaintiff
having no knowledge or means Of
knowledge of the falsity of such rep
reservations, believing them to be
true and relying thereon, made the
trade, caused the land to be conveyed
tc Snyder, and received the certif-
Gates of stock "The said plaintiff
did not discover the nature and ex-
tent of such fraud, and the evidence
by which the same could be proven
until long after March 16 1908, when
the petition had been filed in the
United States court for the purpose
of throwing said corporation into
bankruptcy"
Defendants, s. H. Snyder and
wife, admit that the contract and ex-
change were made, but deny the al
legged fraud and false representations
to plaintiff, concerning the stock, and
aver that plaintiff knew the exact
value of the stock at the time, and
that 1t was Of equal value to the
premises conveyed Plaintiff, by his
reply, denies the new matter of the
answer.
Upon the trial, plaintiff testified in
substance, that prior to the making of
the deal, he asked Mr.. Hoefer, one OF
the stockholders who was looking af-
ter the matter for Snyder, If the stock
was worth rs or 80 cents on the dol
lar. Hoefer said, perhaps 1t would
be-. He made the exchange with de-
fendant, and was chosen manager Of
the company, acting as such from
October 25th to November 28th, 1907.
In short time, finding out that the
company did not amount to anything
and had no money to pay its bills, he
told the directors that he would not
serve in a firm that could not pay its
bills, and resigned He knew the
company was In bad shape but did
not know that 1t was insolyent until
March 16, 1908. While manager, he
found statements of indebtedness
contracted the summer previous, and
entered them in the books. He and
Mr. Hoefer were appointed as a COM
mittee to examine the books kept
while Mr.. Snyder was manager, but
as 1t was such a tedious job, they
simply accepted Snyder's work with
MN N
alton, plaintiff further stated that he
did not look at the plant before maxi
ing the contract Some one told him
there was about $1,000 of the COM
pany's Indebtedness when he took
the stock He made practically no
inquiry before concluding the bar
gain. He supposed Mason thought he
was doing him a good turn, by ask
ing him to buy this stock Plaintiff
also said that he never offered the
stock back to Snyder until the
amended complaint was filed in De-
cember, 1909 though he did try to
sell 1t to Mr.. McGllchrist. Finding
the material on hand, machinery
etc, appraised too high, was one OF
the causes that made him wish tC
sell out,
George #, Mason witness for plain
tlff, testified to the effect that he was
formerly In partnership with defen.
dant Snyder, in the box business, foI
five or six months, doing very fairly
Not having money enough to carry on
the business they incorporated the
company and turned the property
over to the corporation at S11 900 In
stock. BY purchasing the Voget
property for $4,000 and Hurst lot fol
$780, by building warehouses and ad
dltions to the buildings and improv
ing the plant generally they placed
themselves in debt about $4,000
Wiley A, Moores brother-in-law o.
plalntIf, testified In identification o
the records of the directors meet
ings He stated that he was secre
tary of the company. that Snyder wa!
manager from September 9th. 1905
until plaintiff bought in; and further
that he advised Elgin, before the dea
was made, TO make a thorough in
vestigation of the business.
Defendant Snyder in giving hii
version of the matter, stated that a
the time the company was organized
they took an inventory of the Mason
Snyder property and put what the!
thought fair price on It; new ma
chlnery, at cost, old at deprecated
value, lumber at cost laid down at tht
factory, finished products at estimat
ed cost. In March, 1907, the plan
was moved from South, to East Sa
lem, October 7th, 1907, he, as mana
ger renragented liabilities Of th