Pearson v. National Equitable Investment Co.

Supreme Court of New Jersey

Pearson v. National Equitable Investment Co.

141 A. 765, 104 N.J.L. 564, 1928 N.J. LEXIS 256

DecidedMay 14, 1928

StatusPublished

This text of 141 A. 765 (Pearson v. National Equitable Investment Co.) is published on Counsel Stack Legal Research, covering Supreme Court of New Jersey primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook

Pearson v. National Equitable Investment Co., 141 A. 765, 104 N.J.L. 564, 1928 N.J. LEXIS 256 (N.J. 1928).

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Opinion

*565 The opinion of the court was delivered by

Mjntihin, J.

The suit was instituted by fifty purchasers of stock of the National Equitable Investment Company, and its predecessor, The Equitable Investment Company, but proceeded to trial by consent of counsel, under the court’s direction as to the plaintiff alone. At the conclusion of the testimony, in behalf of the plaintiff, the trial court granted a nonsuit upon the ground of an absence of privity between the parties, as well as an absence of tender, upon the plaintiff’s part, for the purpose, of restoring the status quo of the parties.

The gravamen of the action was fraud and misrepresentation in the sale and purchase of the stock in reliance ■ upon which the plaintiff paid upon the contract' of purchase the sum of $4,975; that upon discovering the imposition, the plaintiff tendered back to defendant the stock thus purchased, and demanded the refund of his money. The evidence elicited the fact that the negotiations for the purchase of the stock were had with E. H. Spence & Company, and its agents, and not with the defendant, and that any representations that were made resulting in the sale and contract in question were made with E. II. Spence & Company, which company executed both the written subscription agreement and the written contract of sale. There was no proof that Spence & Company was the agent of the defendant, upon which liability of the defendant as principal could be predicated. Neither was there proof that the dividends received by the plaintiff, upon the stock, had been tendered with the stock to the defendant, so as to complete the legal act of rescission, and thus place the plaintiff in the legal status made necessary by the rule which requires a complete restoration of the legal status quo ante, as a condition precedent to a recovery by the vendee of the consideration paid.

We think that these undisputed facts, under the adjudications in this state, evincing the well-settled rule of law to which we have adverted, legally warranted the action of the trial court. In the absence of proof of a contractual relation existing between the parties hereto, as a basis for liability, as well as in the absence of proof of. a complete tender not *566 only of the stock purchased, hut of the added emoluments of profit received thereunder, the rule is settled that a legal rescission has not been completed, so as to warrant a recovery of the consideration paid. Byard v. Holmes, 33 N. J. L. 119; Crosby v. Wells, 73 Id. 790; Roberts v. James, 83 Id. 492. The judgment appealed from will therefore be affirmed.

- For affirmance — The Chancellor, Chibe Justice, Trenchard, Parker, Minturn, Black, Katzbnbach, Campbell, Lloyd, Van Buskirk, McGlennon, Kays, Heteield, Dear, JJ. 14.

For rev ersal — N one.

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*565 The opinion of the court was delivered by

Mjntihin, J.

The suit was instituted by fifty purchasers of stock of the National Equitable Investment Company, and its predecessor, The Equitable Investment Company, but proceeded to trial by consent of counsel, under the court’s direction as to the plaintiff alone. At the conclusion of the testimony, in behalf of the plaintiff, the trial court granted a nonsuit upon the ground of an absence of privity between the parties, as well as an absence of tender, upon the plaintiff’s part, for the purpose, of restoring the status quo of the parties.

The gravamen of the action was fraud and misrepresentation in the sale and purchase of the stock in reliance ■ upon which the plaintiff paid upon the contract' of purchase the sum of $4,975; that upon discovering the imposition, the plaintiff tendered back to defendant the stock thus purchased, and demanded the refund of his money. The evidence elicited the fact that the negotiations for the purchase of the stock were had with E. H. Spence & Company, and its agents, and not with the defendant, and that any representations that were made resulting in the sale and contract in question were made with E. II. Spence & Company, which company executed both the written subscription agreement and the written contract of sale. There was no proof that Spence & Company was the agent of the defendant, upon which liability of the defendant as principal could be predicated. Neither was there proof that the dividends received by the plaintiff, upon the stock, had been tendered with the stock to the defendant, so as to complete the legal act of rescission, and thus place the plaintiff in the legal status made necessary by the rule which requires a complete restoration of the legal status quo ante, as a condition precedent to a recovery by the vendee of the consideration paid.

We think that these undisputed facts, under the adjudications in this state, evincing the well-settled rule of law to which we have adverted, legally warranted the action of the trial court. In the absence of proof of a contractual relation existing between the parties hereto, as a basis for liability, as well as in the absence of proof of. a complete tender not *566 only of the stock purchased, hut of the added emoluments of profit received thereunder, the rule is settled that a legal rescission has not been completed, so as to warrant a recovery of the consideration paid. Byard v. Holmes, 33 N. J. L. 119; Crosby v. Wells, 73 Id. 790; Roberts v. James, 83 Id. 492. The judgment appealed from will therefore be affirmed.

- For affirmance — The Chancellor, Chibe Justice, Trenchard, Parker, Minturn, Black, Katzbnbach, Campbell, Lloyd, Van Buskirk, McGlennon, Kays, Heteield, Dear, JJ. 14.

For rev ersal — N one.

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141 A. 765, 104 N.J.L. 564, 1928 N.J. LEXIS 256, Counsel Stack Legal Research, https://law.counselstack.com/opinion/pearson-v-national-equitable-investment-co-nj-1928.