Becker v. Johnson
Becker v. Johnson
Opinion of the Court
delivered the opinion of the court.
This suit was brought by the appellant, Becker, to rescind the sale of twenty shares of stock in the Universal Spring Motor Corporation and cancel four negotiable notes made by him for the purchase «price thereof, on the ground that the sale was procured by false representations fraudulently made to the plaintiff by the appellee, Johnson. Upon the allegation that the notes in question had been placed in the custody of S. H. Graves and subsequently transferred to Tatum, Davis and Adams, those parties were impleaded along with Johnson. Graves disclaimed all interest in or possession of the notes, but the other defendants asserted ownership of them as holders in due course.
The material allegations of the bill on the main features of the case are in substance, that the defendant, Johnson, sold to the plaintiff the twenty shares of stock for $1,200. taking his four negotiable notes therefor; that, as an inducement to the purchase, Johnson represented (among other matters not necessary to be mentioned) that A. E. King, an influential and prosperous citizen of Roanoke had subscribed for one hundred shares of the stock at the reduced price at which it was offered to the plaintiff, and had actually paid $2,000 on his purchase; that he moreover represented that S. H. Hieronimous, another influential and prosperous citizen,
The bill called for an answer under oath, and Johnson filed his answer denying the allegations of the bill, and averring that his co-defendants were bona fide transferees for value of the notes.
The depositions of the plaintiff and King were taken, and the charge in the bill as to the alleged false representations of Johnson of the sale of one hundred shares of stock to the latter was substantially proved. But the plaintiff, after diligent effort failed to discover evidence to establish the untruth of the representation touching the sale of the twenty-five shares to Hieronimous.
In this state of the proof, the case came on to be heard, and the court was of opinion that the allegations of the bill were not sustained; that Johnson was the bona fide holder of the plaintiff’s notes on June 18, 1908; and, establishing the titles of his respective transferrees, passed the decree complained of dismissing the bill with costs.
Shortly thereafter and within the time prescribed by statute, the plaintiff presented a bill of review for newly-discovered evidence, and moved the court for leave to file the same and to reinstate the original case on the docket. This motion the court overruled, and from that order and the former decree dismissing the original bill, this appeal was allowed.
The allegation of the bill of review, with respect to the newly-discovered evidence, is substantially as follows: That
This bill of review complies with the rule of practice of courts of chancery with respect to such bills; it is sworn to by the plaintiff and sustained by the affidavit of Hieronimous. The evidence relied on is new, and could not have been discovered by the use of ordinary diligence in time for .the former trial; and it is relevant to a distinct charge of misrepresentation in the bill and is such, as, if true, ought to produce a different result on a rehearing of the case. Durbin v. Roanoke Building Co., 108 Va., 468, 62 S. E. 399; Campbell's Ex'ors v. Campbell's Ex'or, 22 Gratt. (Va. Rep. Ann.), 649, 696.
It is obvious that the corporation court was of opinion that the evidence of the plaintiff was not sufficient to satisfy the rule that when the bill calls for an answer under oath and an answer under oath responsive thereto is filed it furnishes evidence for the defendant and will be taken as true unless overcome by the testimony of two witnesses or of one witness and corroborating circumstances or by documentary evidence. Coldiron v. Ashville Shoe Co., 93 Va. 364, 25 S. E. 238. This rule of practice, however, is answered by the affidavit of Hieronimous, which shows that he stands prepared to testify to the falsity of Johnson’s representation that he had subscribed for twenty-five shares of stock.
For these reasons, we are of opinion that the corporation court errer in denying the plaintiff leave to file his bill of review, and for that error the order of refusal must be reversed and annulled, and the case remanded for further proceedings to be had therein not in conflict with the views expressed in this opinion.
Reversed.
Reference
- Full Case Name
- Becker v. Johnson and Others
- Cited By
- 1 case
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- Published
- Syllabus
- 1. Equity — Bill of Review — After-Discovered Evidence — Gase in Judgment. — If a bill of review for after-discovered evidence is sworn to by the plaintiff, and tenders the affidavit of the witness who is to testify to the new matter, and it appears that the evidence is new and could not have been discovered by the use of ordinary dilligence in time for the former trial, and is relevant to the issues made by the pleading and such as, if true, ought to produce a different result on a rehearing of the case, it complies with the rule of practice of courts of chancery with respect to such bills, and leave should be granted to file it. In the case in judgment, prior to the hearing the witness declined to give any information on the subject although applied to by counsel for the complainant, but, after the decree was entered, furnished the affidavit filed with the bill of review. 2. Fraud — Sale of Stocks — Misrepresentation as to Other Sales. — A sale of stock in a corporation, induced by fraudulent representations by the seller of other sales, at the same price, to designated influential and prosperous citizens of the same city as the purchaser, will be set aside at the instance of the purchaser who knew nothing of the existence of the company, or of the value of its stock. 3. Equity — Discovery—Effect of Answer. — If a bill calls for an answer under oath, and an answer under oath responsive thereto is filed, it furnishes evidence for the defendant and will ¡be taken as true unless overcome by the testimony of two witnesses, or of one witness and corroborating circumstances, or by documentary evidence. This rule, however, is satisfied where a bill of review for after-discovered evidence is sworn to by the complainant and accompanied- by the affidavit of a witness that he will testify to the material allegations of the original bill.