Court Opinion

ID: 7991868
Source: CourtListenerOpinion
Date Created: 2022-09-09 01:32:07.115826+00
Date Added: 2024-06-11T16:35:23.971576
License: Public Domain

ON THE MERITS.
We find in the record an agreement by counsel for the appellants and for the appellee that this case be submitted for hearing on two issues: (1) On the plea in bar to the appeal of S. A. Jones, one of the appellants; and (2) on the merits of the case. We have decided the first issue by sustaining the plea in bar.
Appellee filed his bill in chancery against appellants to restrain them from prosecuting two suits then pending in the circuit court, and from filing other suits on certain notes given them by appellee in payment for a part of the capital stock in a sawmill company, also for the purpose of rescinding the contract of sale of the stock, and for the purpose of having the notes declared void for the want of consideration and because their execution was induced by fraudulent representation. The bill, which contains, at length, averments showing the false and fraudulent representations which it is alleged were made by appellants in connection with the contract of sale, was fully denied by appellants in the answer which they filed, and which answer they made a cross-bill, praying judgment against the appellee for the entire sum of the notes given by him for the purchase price of the stock.
The case was tried by the chancellor, and submitted for his decision, upon issues of fact. The finding shown in the final decree is that the giving of the notes “was induced by misrepresentation, and that the property sold to the complainant was worthless.” He denied the prayer of the cross-bill, and granted that the bill of complaint, perpetually enjoining appellants from prosecuting any further suits on the notes, directing the delivery of the notes by appellant for cancellation and return to ap-pellee, and declaring the notes to be void. The decision *808of the facts in this case by the chancellor favorable to the- appellee is supported by the evidence and will not be disturbed.
Appellants contend that there was an affirmance of the contract of sale by appellee, because after purchasing the stock from appellants he operated the business for one month, when he sold his interest to K-. C. Oliver, who was one of the organizers, with appellants, of the sawmill company, and held one-half of the capital stock therein. But there is ample evidence to show that appellee did not know, when he was operating the business, that the statement made to him of the financial condition of the company at the time of the sale of the interest in the capital stock was false, and that the representations then made by appellants were not true. The statement referred to was in writing, and is an exhibit in the record. This statement showed that the company had a clear capital stock of ten thousand dollars, which was not true. The company was then practically in failing condition. The statement did not show the correct financial situation of the company. For instance, there was no mention in the statement of a liability consisting of an indebtedness to Gr. L. Hawkins secured by a collateral pledge of the capital stock of the company amounting to seven thousand dollars. There were other representations made to ap-pellee at the time, which were shown by the testimony to be false, and which he had no knowledge- of until after his connection with the business had ended. Under the facts in this case, and in the absence of the knowledge of the false and fraudulent representations, it cannot be said that his connection with the mill for the short period of one month could be a ratification of the contract which would amount to an affirmance thereof by him.
We do not see that there was any unreasonable delay on the part of appellee in rescinding the contract of sale. It is shown in the record that he did not know of the real financial condition of the company until some time after *809his deal with Oliver. In fact, he testifies that he did not know of the omission from the statement shown him of the large indebtedness to Hawkins nntil after he had disposed of his interest to Oliver and Oliver had closed the mill. The suits were brought by appellants shortly after he received this information from Oliver. Knowledge of other misrepresentations were not received by appellee nntil after he was sued by appellants. He did nothing to ratify the contract after he discovered the fraud practiced upon him. There was no delay, in view of the particular circumstances of this case, in rescinding, which is unreasonable, and which will amount to an affirmance.
Nor can it be said that there was a consideration in this case which should be returned by appellee as a condition precedent to the right to rescind. The evidence shows that, while he made a trade for his interest in the company with Oliver and received notes to evidence the amount due therefor, he did not collect anything thereon and that the notes were worthless; Oliver having failed and gone through bankruptcy. In truth, it is shown that the sawmill company and S. A. Jones, as well as Oliver, failed and were adjudged bankrupts. Ap-pellee received nothing whatever of any value from his purchase of the stock at all. He did not receive the stock at all. There was nothing to be returned.
When we sustained the plea in bar as to appellant S. A. Jones, the appeal was thereby dismissed as to him. The case then remained on the docket for hearing as to the other appellant, B. 0. Jones. The dismissal of the appeal of S. A. Jones did not carry with it the dismissal of the appeal of his coappellant, B. C. Jones.
We find no error in the trial of this case, and it is affirmed.

Affirmed.