Court Opinion

ID: 7278222
Source: CourtListenerOpinion
Date Created: 2022-07-25 20:02:47.868426+00
Date Added: 2024-06-11T16:18:57.423973
License: Public Domain

Mr. Justice Eobb
delivered the opinion of the Court:
While an affidavit of defense is to be liberally construed (Codington v. Standard Bank, 40 App. D. C. 409), its terms must reasonably warrant the inference that the defendant has a substantial defense to plaintiff’s claim. The defendant is here seeking to avoid the payment of a promissory note, because, as he contends, it was given for an illegal consideration. Ho avers that the plaintiff received a fee from the corporation for transferring defendant’s property to it. This averment amounts to nothing more than a statement that the plaintiff prepared the papers for the transfer after the terms of the transfer had been agreed upon. The defendant then states that the plaintiff proposed to have the value of defendant’s property to the 'corporation fixed at $6,500, instead of $5,000, its true value, and that he, defendant, finally “consented to the said proposition.” He does not state that any misrepresentations were made to the incorporators by the plaintiff, nor, indeed, does he state that any representations whatever were made. Nor does he state that the incorporators were ignorant of the relations existing between plaintiff and defendant. In short, it merely inferentially appears that the plaintiff, representing the defendant, secured for him a good price for his property. It was perfectly proper and legitimate for the plaintiff thereafter to represent all the incorporators in preparing the transfer papers. We have thus far assumed that there were other bona fide incorporators, but the affidavit contains no such averment. Inasmuch as it inferentially appears that the property transferred constituted the assets of the corporation, it is fair to assume that defendant was following the custom obtaining in this jurisdiction by incorporating his business.' In other words, that to all intents and purposes he was the corporation. If the facts were other*206wise, he should, have stated them, for he was in a position to know what they were.
The defendant further complains that the plaintiff did not procure the issuance of the stock. There is no averment that it was his duty to do so. For his own protection he was to hold the stock as collateral security for the payment of his note. Inasmuch as the stock was not issued, he, of course, could not hold it. The affidavit utterly fails to allege that he was to perform any further service after the organization of the corporation. The closing averment that plaintiff never procured the'' stock to be issued is without force, because it is not preceded by any averment that he ever agreed to do so.
The affidavit does not impress one as being entirely ingenuous. Reading it as a whole, and indulging in the inferences naturally deducible therefrom, we must, conclude that the plaintiff rendered the defendant legitimate services, for which he was to receive a certain number of shares of stock in the corporation to be formed; that the defendant purchased plaintiff’s rights to that stock, gave his promissory note in payment, and, the corporation failing of success, sought to avoid payment of his note.
The judgment must be affirmed, with costs. Affirmed.