Court Opinion

ID: 6723399
Source: CourtListenerOpinion
Date Created: 2022-07-20 22:59:58.743803+00
Date Added: 2024-06-11T16:01:35.474520
License: Public Domain

VICKERY, P. J.
The Glass Coating Co. brought an action in the Cleveland Municipal Court against E. B. McGinty to recover $800 uppn a stock subscription in the. corporation.' McGinty subscribed for TO shares of stock at $100 par value,' and had paid $200 down,. refusing to pay niore.' McGinty claimed there were false false representations' amounting' to fraud and therefore the contract could be avoided. The case Vas tried'On the theory that .the relation of the parties was that of an officer .and stockholder' of a corporation' with a stranger; and if""'áh^ 'statement' "was made',' not true, it Was"' a "misrepresentation. The Municipal Court rendered judgment in favor of the Company.’ ■ McGinty prosecuted" error and the Court of Appeals held:.....
'1.' Absolute good' faith between officers, Stockholders' and strangers "is necessary in s'alé' of' stock, and' Whether a statement is known to be false of not, the defense of mis-‘fépr'esentátion still exists.
‘ 2. There is a failure to show that a false representation had been made. Judgment af-"firméd.