Opinion
Decided June 8, 1931.
Corporations — Purchaser of stock and realty not entitled to rescind — Restriction against Jews and agent's authority to make requirement, not established.
Purchaser of stock in, and realty from, development company subject to restrictions, held not entitled to rescind, because agent notified purchaser that he, being member of Jewish race, would not be permitted to build, where agent's authority and existence of such restriction were not established.
ERROR: Court of Appeals for Lucas county.
Messrs. Marshall, Melhorn, Marlar Martin, for plaintiff in error.
Messrs. Smith, Baker, Effler Eastman, for defendants in error.
The original action was commenced in the court of common pleas by the Home Bank Trust Company against Irving S. Frank to recover an amount claimed on a subscription to the capital stock of the Toledo Beach Development Company. The original subscription made by Frank was for $3,400, on which $850 had been paid. Later, the Home Bank Trust Company came to be, by consolidation, the Security-Home Trust Company. The defendant filed an amended answer and cross-petition, and the Toledo Beach Development Company and the Ajax Investment Company were made additional defendants. Frank denied some of the allegations of the petition, and by way of cross-petition set up facts by which he claimed to be entitled to have the subscription canceled, and also another subscription to stock of the same company canceled, and asked for a judgment against the Toledo Beach Development Company.
The case was tried to a jury, and upon the conclusion of all the evidence the trial judge directed a verdict in favor of the plaintiff bank for the amount of its claim against Frank, upon the issues joined on his cross-petition.
The only claimed error on which reliance is placed is that the trial judge erred in directing a verdict.
Frank had subscribed for stock in the Development Company, and had contracted to purchase real estate owned by that company; the property being in a summer resort. The land contract which he had entered into provided that the property purchased by him should be subject to certain restrictions, etc., contained in a certain deed. Those restrictions are set forth in Exhibit 13, articles 1 and 7, and prohibit people of a certain race or races occupying any of the property included in the allotment, and provide that the plans and specifications for any building to be erected in the allotment should be subject to the approval of the company. The Toledo Beach Development Company had constituted the Welles-Bowen Company, a real estate firm, agents to handle the development and to sell lots which had not as yet been disposed of. Frank claims that a representative of the Welles-Bowen Company orally notified him that he would not be permitted to build on the property which he had purchased, nor to occupy the same, because he was a Jew, and because there was a building restriction against it on the property. Frank thereupon said to him: "If I am that type of citizen in the community, and I am objectionable to your company, and your associates, I will tender you back and do now tender you back my interest in my lot, my common stock, and you give me back what I have already paid you."
It is not claimed that Frank then had the stock with him, or that he did more than make the statement quoted. Frank contends that by reason of this notification to him that he was within the restriction, and excluded from building, he was entitled to, and did, rescind the contract. The difficulty with that position is that the record contains no evidence tending to show that the representative of the Welles-Bowen Company had any authority to make any such requirement of Frank. Nor did the restrictions contained in the instrument referred to in the contract signed by Frank have any reference to Jewish people, or in any way exclude them from owning or occupying property in the development; nor did the contract which Frank himself signed contain any such restrictions. There being no such restriction, and there being no evidence tending to show that the representative of the Welles-Bowen Company had any authority to make such statement, Frank had no right to demand a rescission of the contract.
We find no error in the record to the prejudice of the plaintiff in error, and the judgment will be affirmed, the amount found due to the bank to be paid upon tender or delivery by it of the deed and stock.
Judgment affirmed.
LLOYD and WILLIAMS, JJ., concur.