Wann

Plaintiffs, husband and wife, brought this action to rescind the purchase of stock in defendant corporation on two separate grounds; first, failure of consideration in that the stock in question was purchased upon am express agreement and representation by certain officers of defendant that the funds of the corporation to the extent of $25,000 were to be held and used exclusively as a deposit with the state of California, to qualify the Mount Diablo Mutual Benefit and Life Association as a legal reserve insurance company, which plan was abandoned; and secondly, on the ground of fraud in that it was promised to R. C. Wann that he would, upon the purchase of stock in defendant corporation, be elected a director and vice-president therein, which promise was not performed.

Judgment was rendered for plaintiffs, from which judgment defendant prosecutes this appeal.

The testimony discloses that at the time plaintiffs became interested in defendant corporation it was operated exclusively as a personal loan company. The directors of the defendant corporation were also directors of Mount Diablo Mutual Benefit and Life Association, and it was represented to plaintiffs at the time of their…