Charles Brown & Sons v. White Lunch Co.

This is an action brought for the rescission of a contract and the recovery of the purchase price of certain stock of the defendant corporation purchased by the plaintiff.

The plaintiff is a corporation engaged in the hardware business in the city of San Francisco, and the defendant corporation is engaged in operating a chain of restaurants. The contract between the parties, which plaintiff seeks to rescind, is evidenced by two letters, one from the defendant to plaintiff and the other from plaintiff to defendant. The letters are as follows:

The stock mentioned in the foregoing letters was transferred to plaintiff and fully paid for. For several months after the date of the letters Z. W. White continued to be president of the defendant corporation, and during such time the defendant corporation purchased all of its supplies, which plaintiff could supply, from plaintiff. About August or September, 1922, the officers and management of defendant corporation changed, L. B. Foster becoming its president. Thereafter defendant purchased its supplies in the open market—some being purchased from plaintiff and the rest elsewhere. In August, 1924, plaintiff demanded compliance with the…