Court Opinion

ID: 5210649
Source: CourtListenerOpinion
Date Created: 2022-01-06 16:11:56.971336+00
Date Added: 2024-06-11T08:27:21.891408
License: Public Domain

Gaynor J. (dissenting):
' The case is.simply this: The defendant induced the plaintiff and his assignor’s to sign an agreement to contribute the sums specified opposite the names of each for the purchase of the United States Iron Co. of Hew Jersey, which had a par capital stock of $1,000,000, and also “ a valuable coal property situated on the border line between the states of Kentucky and Virginia, * * * which property, being owned by various parties, can be acquired at reasonable prices ” ; and the said agreement appointed the defendant, and two others who were subject to him and mere instruments in his hands, as “ syndicate managers ” to purchase such of the said properties as should by them be “ deemed advisable and proper The defendant signed this agreement first of all for a subscription of $500,000 in cash.. He in fact owned one half of the capital stock of the said Hew Jersey corporation, but concealed that fact from the plaintiff and his assignors, and when the subscriptions were paid in, the stock of the said corporation was bought by the defendant and his two associates- for the syndicate, and he paid his subscription by turning 'over his said stock to the syndicate at $70 a share, and paying only the balance in cash. The rule that if a trustee or agent buy of himself for his cestui or principal, the transaction is fraudulent, and. may at the election of the cestui or principal be deemed void, has full application to the cáse (Davoue v. Fanning, 2 Johns, Ch. 252 ; Clark v. Bird, 66 App. Div. 284 ; Getty v. Devlin, 54 N. Y. 403 ; Brewster v. Hatch, 122 id. 349). The defendant perpetrated a fraud on the plaintiff and his assignors. As soon as they discovered it, they tendered back the certificates of stock in the corporation *269formed by the said managers of the syndicate to take over the properties purchased which had been issued to them for the amounts of their subscriptions, and demanded back the said amounts; which being refused, this action was brought to recover the same.
The judgment should be affirmed.
Judgment reversed and new trial granted, costs to abide the event.