Daily capital journal. (Salem, Oregon) 1903-1919, 1911-10-27

He made no false representation and
authorized none to be made. The
farm was worth, or represented to be
worth, in the neighborhOod Of $1,000.
After trading with plaintiff, he lived
here until the next August, but knew
nothing about the business that win
ter.
A. F. Hofer, witness for defendant,
stated that he and Wiley A. Moores
checked over the inventory and in
voices of the property turned over to
the company, and considered $1,000
fair valuation. Mr.. Elgin, as man
ager, had access to the books and
could have obtained the books of Mr..
Moores before he purchased. Acting
for defendant, he traded so much
stock for so much land" The value
Of the stock was then somewhere be-
tween 60 and 10 cents. Plaintiff as
sumed the management of the
company, and never made his dis
satisfaction known to him until
plaintiff and his friends ran it into
bankruptcy. Then he commenced to
squeal".
Robert McGilchrist testified in part
that he bought three shares of stock
in the company, January 1st, 1907.
In October, 1907 when he was one of
the directors, stock was reputed to be
worth about 20 cents on the dollar.
Three weeks after Elgin became man
ager, the latter offered him his stock
for IS cents and later for 80 cents.
He came near selling his farm and
buying the stock as he considered the
company solvent at that time. The
business was a success during the
time he was employed to run it. Nc
Gilchrist said, these holidays hit us
pretty hard, referring to the finan-
cial panic in this state which oc-
Cured soon after plaintiff entered
into the business. 1t appears that
for about six weeks, legal holidays,
known as bank holidays, were de-
clared and banks were closed. Dur
ing that time boxes were shipped in
from other factories and sold for less
than they could be manufactured in
Salem. The property of the company
was appraised in the bankruptcy
proceedings at $502750 and sold for
$4,000. The stockholders realized
nothing on the stock.
Bean, j. From the evidence it ap-
pears that the Salem Box and Lum-
ber Company was an infant industry.
Its parents, the incorporators,
seemed to have had faith in its fu-
ture development. It's success de-
pended in great measure upon
faith and credit The capital was
limited, and instead of growing to
huge proportions, the industry pined
away and died.
This contract, in controversy for
the exchange of stock for land, was
made about October 10, 1907. Plain
tiff entered into active management
of the business, assisted in increas-
ing the debts of the company, and as
he states, found out in a short time
that the concern did not amount to
anything, and had no money to pay
its bills with. For that reason. after
about month, he was unwilling to
| serve as manager. Notwithstanding
this fact, he retained his stock,
treated it as his own, speculated on
the chance of the business improv-
ing, and the stock increasing in
value, and did not offer to rescind
the contract, or return the stock to
defendant Snyder, until the complaint
was filed in this suit, March 9Th,
1909, the tender of the stock being
long after that date.
1t is well settled principle of
law, and so held in this state, that
one who desires to rescind a con-
tract must act promptly upon the
discovery of the accident, fraud, OF
mistake which affords grounds for
the relief sought, and place the other
party in statu quo, returning or Of
fering to return that which has been
received; Vaughn " Smith, "a Or,
54; Sievers v. Brown, 36 Or. 21S;
Clarno v, Grayson 30 Or Ill.
1t was held by this court in Scott
v, Walton, 80 Or. 460, that a party
induced by fraud to make contract
has upon the discovery of the fraud
an election of remedies, either to af-
firm the contract and sue for dam
ages, or disatlirm 1t and be renstateC
in the position in which he was be-
fore 1t was Consummated The
adoption of one of these remedies
which are wholly inconsistent, is thu
exclusion of the other If he desires
to resclnd, he must act promptly, anC
return or offer to return what he has
received under the contract. He can
not retain the fruits of the contract
awaiting further developments, to de
termine whether it will be NOR,
profitable for him to affirm or disaf
firm 1t, Any delay on his part, es
pecially in remaining In possession o
the property by him under the con
tract. and dealing with Il as his own
will be evidence of his intention Il
abide by the contract.
The conduct of the plaintiff in thi
case, in regard to this contract, doe
not measure up to the standard o
the rule laid down in either of tn
above cases. for one who desires I,
rescind contract on the ground o
fraud. 1t was plaintiffs duty, whel
he became dissatisfied, found tina
the concern did not amount to any
thing. and would serve no longer a
manager II he desired to rescind tn
contract, to do so then, Inform defen
dent s. Fl, Snyder, and return or of
fer to return the certificates of stocl
which he had received He had n
right to retain the same and awai
future developments, in order to as
certain whether, under favorabl
= conditions, the venture of the com
pany would be a success, or unde
= adverse circumstances, a failure, |
: was no excuse for plaintiffs failur
\ la .aIl.a..a ~ ..AA.I. 49,