Becker

This is an action for damages arising out of the sale of 8,500 shares of the capital stock of Coast Amusements, Inc., under circumstances more particularly described in this and in the companion case of Coast Amusements, Inc., v. F. L. Stineman (Civil No. 860), post, p. 746 [ 2 Pac. (2d) 447 ]), this day decided.

Respondent and appellants entered into a written agreement to operate a place of amusement at the Ocean Park Pier in Santa Monica. Appellants furnished certain .materials, labor and cash. Subsequently they incorporated, each subscribing for certain shares of stock as follows: F. W. Becker, 3,500 shares; W. E'. Knotts, 5,000 shares; F. L. Stineman, 5,000 shares; and Charles Paige 6,500 shares, according to the interest each had, or was to have, in the business under some oral preorganization agreement. Respondent Becker did not sign the articles of incorporation.

After incorporation an application was made to the corporation commissioner for a permit to sell 20,000 shares of stock at a par value of $1 per share. This permit was granted on condition that the sale price would be for cash. The board of directors and officers included appellants and respondent. They…