(185 P.)

denied merely upon the ground that the parties | 2. CORPORATIONS 30(6) AGREEMENT BY cannot be placed in statu quo. If equity can still be done between the parties, courts will grant relief to the defrauded party."

[3] There is no merit in the contention that the respondents could not rescind the contract of exchange of properties without the consent of the owner of the apartment house, which consent is not shown in the findings. There is no showing that the lease contained a covenant against assignment. The finding of the court upon this subject is: "And the plaintiff did then and there tender and offer to the defendant, the said lease, together with an assignment thereof, executed by the plaintiffs, James F. Spencer and Minnie Spencer." The assignment of the lease would operate to re

store the defendant to the same position, with regard to the use of the premises, he had previously occupied.

[4] Assuming that it is true as claimed by appellant that the court went outside the issues in its findings relative to the execution of the lease referred to from the owner of the apartment house, yet such is of no grave moment as far as the integrity of the resultant Judgment is concerned, for we find the judgment to be amply supported by other findings against which such criticism may not be made.

PARTNERSHIPS TO INCORPORATE VALID PRO-
MOTERS' AGREEMENT.

An agreement between various partnerships to merge their companies in a corporation, the members to receive corporate stock in proportion to their interests, was valid as a promoters' agreement, binding upon them, and good as an offer to the corporation, to become binding on the corporation upon its lawful acceptance of benefits.

3. CONTRACTS

309(1)—CORPORATIONS 30(6)-VALIDITY OF CONTRACT FOR DISSOLUTION OF PARTNERSHIPS AND FOR FORMING CORPORATION.

An agreement of partners for dissolution, and for the transmutation and distribution of assets, in contemplation of formation of a cor

poration, was valid, notwithstanding the corporation commissioner might never issue the permit and corporation might never be formed; for a contract, valid in its inception, may become voidable or impossible of performance by a subsequent contingency, yet, if the contingency is one that may happen, the parties are bound until it can be determined that it cannot be enforced.

4. PARTNERSHIP 311(3)

AGREEMENT FOR
DISSOLUTION AND FORMING OF CORPORATION;
DECREE ENFORCING CONTRACT.
Partners cannot have the benefit of agree-
ment for dissolution and formation of a cor-

[5] As stated in Davis v. Butler, 154 Cal. poration and evade those contract provisions 623, 626, 98 Pac. 1047, 1048:

"A single material misstatement, knowingly made with intent to influence another into entering into a contract, will, if believed and relied on by that other, afford as complete ground for rescission as if it had been accompanied by a multitude of other false representations."

The judgment is affirmed.

by which their respective rights in the partnership assets are determined.

5. APPEAL AND ERROR 1169(8)-REVERSAL

WILL NOT BE DECREED BECAUSE CONTINGEN-
CY MAY MAKE JUDGMENT UNENFORCEABLE.

Judgment holding valid a contract for dissolution of partnership and formation of a corporation and determining proportion of stock respective partners should receive, although informal and rendered before permit to form corporation had been granted by commissioner

We concur: WASTE, P. J.; RICHARDS, J. of corporations, will not be reversed because

(43 Cal. App. 498)

NANNIZZI et al. v. CAPRILE et al.

(Civ. 2886.)

refusal of permit may render judgment unenforceable as to allotment of stock.

Appeal from Superior Court, City and County of San Francisco; Edmund P. Mogan, Judge.

Suit by Dante Nannizzi and others against (District Court of Appeal, First District, Di- Natale Caprile and others. Judgment for devision 2, California. Oct. 10, 1919. ing Denied by Supreme Court Dec. 8, 1919.)

Hear

1. CORPORATIONS 30(6) SUBSCRIPTION FOR CORPORATE STOCK PRIOR TO PERMIT TO

INCORPORATE INVALID.

fendants, and plaintiffs appeal. Affirmed. James M. Thomas, of San Francisco, for appellants.

I. F. Chapman, of San Francisco, for respondents.

Under the Investment Companies Act prior BRITTAIN, J. In a suit for partnership to the permit of commissioner of corporations, no valid subscription for corporate stock can accounting, dissolution, sale, and distribution be made, so that, regardless of incorporators' of the assets, it was adjudged there bad been attempt to subscribe for stock in excess of the full accounting and dissolution. The appeloriginal qualifying shares, there could be no lants are satisfied with that portion of the subscription for corporate stock prior to the judgment. Upon findings, supported by evicommissioner's permit.

dence, that the plaintiff partners had agreed

For other cases see same topic and KEY-NUMBER in all Key-Numbered Digests and Indexes
185 P.-43

the attorney may refuse to approve the title. No showing of impossibility is made in this case, nor is there any showing which would have justified the court in this suit in disregarding the agreement of the partners concerning what they should have in lieu of their respective partnership interests.

with the defendant partners that the partner- that the attorney will not or cannot approve ship should be dissolved and its property title. Neither party may evade the obligamerged with that of other partnerships engag- tions of the contract merely by showing that ed in the same line of business, in a consolidation under a corporation to be formed, and that the partners should receive respectively stock in the corporation at par, equivalent to their respective interests in the partnership, the members of each partnership as a group to receive such stock of equivalent value to the respective partnership contributions of [4, 5] The portion of the judgment appealed property to the corporation assets, and the from simply determines that the plaintiffs further finding that application had been shall receive stock in the corporation if the made in good faith to the commissioner of commissioner of corporations issues his percorporations for permission to issue the stock mit. This was exactly what the appellants in accordance with this agreement, though agreed they should have. It is contended that the permit had not been granted at the time the judgment is informal in that it fails to of the judgment, the court determined that, determine what the appellants shall have in if the permit should be granted, the appel- the event the commissioner of corporations lants would be entitled to their respective shall refuse to issue the permit. There is no portions of the corporation stock. This part question in regard to the validity of the orof the judgment only is attacked by the plain-ganization of the corporation. It cannot be tiffs on this appeal.

[1, 2] On behalf of the appellants it is argued that, under the Investment Companies Act (St. 1913, p. 715), prior to the permit from the commissioner of corporations no valid subscription for the corporate stock can be made. This is true. It follows that, regardless of any attempt on the part of the incorporators to subscribe for stock in excess of the original qualifying shares, there was no subscription for stock of the corporation. The agreement between the various partnerships was a valid one. It was a promoters' agreement, binding upon them and good as an offer to the corporation, to become binding on

the corporation upon its lawful acceptance of its benefits. Scadden Flat G. M. Co. v. Scadden, 121 Cal. 33, 53 Pac. 440; Garretson v. Pacific, etc., Co., 146 Cal. 184, 79 Pac. 838.

[3] The agreement of the partners for dissolution and for the transmutation and distribution of its assets was also valid. The fact that the commissioner of corporations might never grant his permission to the issuance of the corporate stock had no more effect upon the validity of the partnership agreement for dissolution than would the subsequent failure of the other promoters to organize the corporation. A contract valid in its inception may become voidable or impossible of performance by the failure of a subsequent contingency; but, if the contingency is one which may happen, the parties are bound by their contract until it can be determined it cannot be enforced. There are many familiar applications of this rule, one of the most common being where parties contract for a sale of real estate, contingent upon an attorney's approval of title. Such a contract is enforceable by either party until it is shown

presumed that the incorporators have been guilty of an overvaluation of the partnership assets transferred to the corporation, or of a violation of the law in any other respect. If they have obeyed the law, they will be entitled to the permit from the commissioner of corporations, and in that event the appellants will receive under the judgment what they agreed with their partners they should receive. Under these circumstances, the judgment, while informal, may be sustained upon either of two theories: First, that in a suit to decree the dissolution of a partnership, in the absence of its inherent invalidity or facts which might enable one of the contracting partners to rescind it, the court cannot disregard the agreement for dissolution, but by its decree must enforce it; and, secondly, that in such a suit none of the partners can have the benefit of the agreement for dissolution and evade those of its provisions by which their respective rights in the partnership assets are determined. If this decree in a suit in equity shall become impossible of enforcement by reason of the refusal of the commissioner of corporations to permit the carrying into effect the original agreement of the parties, there is no reason why their respective rights as they then exist may not be determined; but, until it shall be made to appear that the appellants have been injured by the judgment from which the appeal is taken, it will not be reversed. On this appeal, since the judgment simply bound them to their prior agreement, in contemplation of law, they cannot be aggrieved by it.

The judgment is affirmed.

We concur: LANGDON, P. J.; NOURSE, J.

(43 Cal. App. 662)

(185 P.)

SIMPSON V. MALTER. (Civ. 2907.) (District Court of Appeal, First District, Division 2, California. Oct. 20, 1919. Hear

ing Denied by Supreme Court Dec. 18, 1919.) 1002-FINDINGS ON CONFLICTING EVIDENCE NOT REVIEWABLE.

1. APPEAL AND ERROR

gallon for which he should sell said wine. With relation to the contract between the plaintiff and the defendant, and its fulfillment, the court found: That the parties had entered into a contract the terms of which

were as alleged by the plaintiff, and that thereafter, while said contract was in full force and effect, the plaintiff obtained a

The appellate court may not review con- purchaser who was ready, able, and willing flicting evidence.

2. TRIAL 404(1)-FINDING IMPLYING VALID AGREEMENT TO PURCHASE.

In a wine broker's action for commission on a sale, a finding that the purchaser procured agreed to accept the wine and to make payment therefor implied a valid and binding agreement, eliminating any question of limitation on the authority of the agent for the purchaser.

3. APPEAL AND ERROR 931(3) — PRESUMP

TION OF FINDINGS BY INFERENCE.

Whenever, from the facts found by the trial court, other facts may be inferred which will support the judgment, the inference will be deemed to have been made by the trial court, and on an appeal from the judgment an appellate court will not draw from the facts any inference contrary to that which may have been drawn by the trial court for the purpose of rendering its judgment. 4. CORPORATIONS

400-EFFECT OF LIMITATION ON GENERAL AUTHORITY OF MANAGER.

The general limitation in the resolution of the directors of a company that the powers of its general manager should be exercised under the direction of its president is not to be construed to mean that the president's sanction to every detail of every transaction, such as pur

chase of wine made in the course of the company's business, is a condition precedent to the manager's authority to contract.

to purchase 60,000 gallons of wine at a price of 35 cents per gallon and upon the terms contained in the contract between the plaintiff and defendant, and said plaintiff immediately notified said defendant thereof and of the name of said purchaser and brought said defendant and said purchaser together at the city of Fresno, and that the defendant thereupon agreed to make said sale and deliver said wine on said terms to said purchaser; that said purchaser agreed to accept said wine and to pay for the same in cash, but that said defendant, thereafter, and without any cause or reason, and without any fault on the part of the plaintiff, or upon the part of the purchaser, declined to consummate the sale and declined to make delivery.

[1] In accordance with the rule recognized by the appellant, we may not review the conflicting evidence on the question of the måking of the contract, its terms, etc.; nor the finding that the defendant agreed with the purchaser for the sale of his wine in accordance with the terms of this contract made by said defendant with the plaintiff. For dence upon which is based the further findthe same reason we may not review the eviing of the court that the time which elapsed between the making of the agreement and

5. APPEAL AND ERROR 931(1)- PRESUMP- the performance of the same by the plaintiff

TION IN FAVOR OF TRIAL COURT AS TO EVI-
DENCE.

The Appellate Court must indulge every presumption with regard to the evidence which will support the findings of the trial court on which the judgment is based.

was not an unreasonable time. The last finding is based upon logical deductions from numerous matters which appear in evidence, such as the conduct of the parties during the interval, the apparent understanding of the parties as evidenced by the negotiations when the purchaser was produced, etc. After a Appeal from Superior Court, Fresno Coun- reading of the evidence, we think this finding ty; D. A. Cashin, Judge. also may not be disturbed by us.

This leaves for our consideration the fur

Action by W. J. Simpson against George H. Malter. Judgment for plaintiff, and defend-ther objection made by the appellant that ant appeals. Affirmed. the plaintiff is not entitled to recover because Mr. Baker, purporting to act for the Jesse

without authority to consummate the sale in

Short & Sutherland, of Fresno, for appel- Moore Hunt Company, the purchaser, was lant. Lewis H. Smith and Iener W. Nielsen, both accordance with the terms of the contract of Fresno, for respondent.

LANGDON, P. J. This is an appeal by the defendant from a judgment in favor of the plaintiff in an action to recover for services in securing a purchaser for certain wines owned by the defendant under an alleged contract with the defendant whereby he was to receive as his remuneration for such services any amount in excess of 30 cents per

between the plaintiff and the defendant, and that the defendant could not have enforced said agreement against the said Jesse Moore Hunt Company, for whom Baker was acting if he had so desired, and therefore he was not liable to the plaintiff for commissions. This contention arises under the following facts in evidence: It is conceded that Mr. Baker was the general manager of the Jesse Moore Hunt Company. He testified that he

For other cases see same topic and KEY-NUMBER in all Key-Numbered Digests and Indexes

(185 P.)

(43 Cal. App. 630)
SHEPARD v. HUNT. (Civ. 2991.)

The action was dismissed as to Sereen L. Webb. The judgment was against the plain

(District Court of Appeal, First District, Divi- tiff, from which he prosecutes this appeal.

sion 1, California. Oct. 18, 1919. Hearing Denied by Supreme Court Dec. 5, 1919.)

1. BILLS AND NOTES 518(1)

EVIDENCE

In an action on a note where the maker claimed failure of consideration and that plaintiff was not a bona fide purchaser, evidence held to warrant a finding that plaintiff was not such a purchaser.

5. BILLS AND NOTES 493(3), 497(2)—BurDEN OF PROVING BONA FIDER PURCHASE.

Where the holder of a note establishes a prima facie case, the burden is upon the defendant maker to show failure of consideration, and, where such proof is adduced, the holder has the burden of showing that he was a bona fide purchaser.

Appeal from Superior Court, Los Angeles County; L. P. Price, Judge.

Action by Elgin R. Shepard against Laura S. Hunt. From a judgment for defendant, plaintiff appeals. Affirmed.

Responsive to the issues raised by the answer of defendant Hunt, hereinafter referred to as the defendant, the court found, among other facts, that on or about March 21, 1914, Sereen L. Webb, the payee named in the note, indorsed and delivered said note to plaintiff, and that said plaintiff gave for said note the sum of $50 in money, and his own promissory note in the principal sum of $2,500, payable one year after date to Sereen L. Webb, without interest; that no part of the principal or interest of the note sued upon has been paid; that said note was given in payment of a certain written contract, presently to be referred to, entered into between defendant and Domestic Utilities Manufacturing Company, a corporation, of which Sereen L. Webb was an agent, which contract was of no value whatever; and that there was no consideration for said note. The court also found that the plaintiff did not purchase said note in ordinary course of business, nor in good faith; that on or about June 3, 1914, Sereen L. Webb waived presentment, demand, and notice of protest of said note, at which time plaintiff knew that said note had been made without consideration and that defendant, prior to the maturity of said note, notified plaintiff that said note was without consideration and void and that she would not pay the same; and that said plaintiff had at said time paid but $50 in money for said note, and nothing on his own promissory note payable to Sereen L. Webb.

The principal grounds urged for the reversal of the judgment, and the only ones meriting discussion, are these: That the evidence does not sustain the findings of the court (1) that there was no consideration for the note sued upon; and (2) that plaintiff did not purchase the note in the ordinary course of business and in good faith.

[1, 2] Directing our attention to the evidence adduced at the trial on the question of the alleged lack of consideration for the execution of the notes sued upon, we believe that there is sufficient evidence to sustain the finding of the court on that subject. The

Fred M. Arnoldy, of Los Angeles, for appel- execution of the note grew out of a translant.

action wherein Sereen L. Webb, as the agent

C. F. Holland and Charles E. Dow, both of Domestic Utilities Company, for the conof Los Angeles, for respondent.

sideration of $5,000, sold to defendant 1,667 clothes washers (subsequently delivered) toBARDIN, Judge pro tem. Plaintiff sued to gether with certain so-called rights relating recover on a promissory note executed by to prospective sales of additional washers Laura S. Hunt, in the state of Minnesota, and of the prospective sales also of other like on June 3, 1913, for $2,583, payable to Se contracts when and if willing purchasers reen L. Webb, on or before one year after might be found, and which sales of clothes date, and which plaintiff claims was in-washers and contracts would, if consuminatdorsed and delivered to him prior to ma-ed, yield remunerative return in commissions turity, in due course of trade, and for a val- and profits to the defendant. uable consideration. At the time the contract was entered into, For other cases see same topic and KEY-NUMBER in all Key-Numbered Digests and Indexes