has made rescission impossible. He personally participated as a director in the dissolution of the first corporation, as a general partner in the formation and dissolution of the intervening partnership, and as a director in the formation of the second corporation of which fifty-one per cent. of the capital stock was issued against new money, thus reducing his proportion of the total capital stock.
The plaintiff found himself the unfortunate victim of a war time regulation and he charges fraud. He is not too sure, however, that he is taking the proper course and he writes Mr. Rich, the President of the present Company, and asks his advice as to whether it would pay him better to risk new money on lawyers who 'do not work for nothing' or take his share of the earnings the new corporation would earn. It is significant that this letter is written long after he had ceased to receive coal and long after the unfolding of the successive steps in the Company's existence in which he, the plaintiff, was an active participant.
Assuming that the purchase was induced by fraud of the defendant, the plaintiff, as the defrauded party, could have affirmed or disaffirmed the contract when the fraud was discovered, yet he may not do both together, and if he concludes to abide by it as upon the whole advantageous, he shall not be afterwards permitted to question its validity. Woltjen v. Lauer, 2 Leg.Rec., Pa., 194.
Conclusions of Law.
1. The Court has jurisdiction of the parties and of the subject matter of this suit.
2. The defendant sold his subscription rights to one hundred fifty shares in the Mahanoy Coal Mining Company on April 14, 1944, to the plaintiff in the ordinary course of business.
3. The defendant, at the time of making the sale, did not make any warranty or representation to the plaintiff what pro rata share of the production of Mahanoy Coal Mining Company he would receive as a result of the purchase of Clifford R. W. Bressler's said subscription rights.
4. The plaintiff who was a subscriber for stock prior to his purchasing subscription rights from the defendant knew the terms upon which the corporation was allocating its coal and was bound thereby.
5. The defendant at no time ever made to the plaintiff any false or fraudulent warranties, statements, promises or representations in connection with the sale on April 14, 1944, of his one hundred fifty subscription rights in Mahanoy Coal Mining Company to the plaintiff.
6. The plaintiff as a result of his actions as a director in the Mahanoy Coal Mining Company, in passing resolutions authorizing its dissolution and in signing the necessary and required legal documents to effect legally the said dissolution, has made the question which he raises in this case moot.
7. The plaintiff, by his own actions and execution of the necessary documents to dissolve the Mahanoy Coal Mining Company, has destroyed any legal rights he may have had in connection with the purchase of the subscription rights for one hundred fifty shares of stock of Mahanoy Coal Mining Company against the defendant.
8. The plaintiff, after the dissolution of the Mahanoy Coal Mining Company, then signed the necessary papers for entering into a limited partnership, and subsequently executed papers for the dissolution of that limited partnership, the assets of which were taken over by a new corporation with an enlarged capital structure and in which he became a stockholder, and thereby extinguished any legal rights he had against the defendant.
9. The doctrine of rescission of a contract of sale has no application to this case since plaintiff, by his own actions, has made it impossible to tender to the defendant the subscription rights or shares of stock called for by the original contract.
Judgment will be entered for the defendant in accordance with these Findings of Fact and Conclusions of Law.
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