Epitomized Opinion

Published Only in Ohio Law Abstract

Action by Mason to recover money paid on a preorganization subscription to the capital stock of a subsequently formed Rotary Machine and Engineering Co., on the ground that the preorganization agreement was unlawful. The action was also to recover for a gas regulating machine which Mason bought but later discovered its use was prohibited by the Gas Co. He claimed that there was an implied warranty that the machine was fit for the purpose for which it Was to be used. A demurrer was sustained to the petition; In affirming the judgment, the Court of Appeals held:

1. No section of the Securities Act or other statute has been pointed out which is applicable to the preorganization agreement.

2. The gravamen of the plaintiff’s complaint is not that the machine failed to function; in fact it is well suited; to that purpose, but that the Gas Co. prohibited the use of it. There was no implied warranty that went beyond the manufacture of the article itself and the seller is not liable because a third person deprived the purchaser of the contemplated benefits.