Browne v. San Gabriel River Rock Co.

I dissent from the order denying a rehearing and from the judgment. This is one of the least meritorious of a class of actions with which the time of the courts *Page 687 would never be taken up if parties of mature age, sui juris, and dealing with others at arm's length in ordinary business transactions, would only take the most obvious precautions for the protection of their own interests, a class of actions — it may be added — by which a fraud may be perpetrated as easily as the fraud alleged may be redressed. The decision of this cause, in my opinion, makes a mischievous precedent in two ways; it encourages the parties to similar transactions to neglect without excuse the precautions which would keep them out of trouble, and it opens the door to the prosecution of actions for rescission based upon false claims of misrepresentation. It well illustrates the soundness of the policy upon which many decisions of this and other courts have been based in denying relief to vendees of real property who have neglected, without excuse, to avail themselves of easy access to sources of perfectly trustworthy information as to facts upon the alleged misrepresentation of which they have afterward claimed the right to rescind. The principle of those decisions is that no person of sound mind and dealing at arm's length with his vendor can pose as the victim of false representations when he has shut his eyes to the plain evidence of the real facts. The same principle, in my opinion, is applicable to the sale of shares of stock. Here the claim of plaintiff is based upon the allegation that defendant's stock was represented to be unassessable. But two ways in which, under the laws of this state, the shares of corporate stock can be made unassessable have been suggested — one by a special agreement with the purchaser, the other by special provisions in the charter. (Lum v. American Wheel etc. Co., 165 Cal. 657, [133 P. 303].) Here there is no pretense of special agreement, and an examination of the articles of incorporation which were of easy access (I assume this because there is nothing alleged to the contrary and because the parties were at Monrovia where defendant's principal place of business had been fixed) would have shown that the shares were not unassessable, and the time of three courts would not have been taken up in deciding which of two conflicting stories was the true one. *Page 688