Appeal from Circuit Court, Multnomah County. Patrick E. Dooley, Judge.
R. Alan Wight, Portland, argued the cause for appellants and cross-respondents. On the briefs were Norman J. Wiener, J. David Petersen, and Miller, Anderson, Nash, Yerke & Wiener, Portland.
Marvin S. Nepom, Portland, argued the cause for respondents and cross-appellants. With him on the brief was Leo Levenson, Portland.
Plaintiffs purchased shares of stock in TiLINE, Inc., from defendant E. M. Adams & Co., an Oregon brokerage house, through defendant Donald Bruce, its sales representative, as follows:
12/20/67 3,500 shares at $2.50 per share
5/3/68 1,000 shares at 4.125 per share
1/6/69 2,000 shares at 8.625 per share
Plaintiffs brought this suit to rescind the above purchases and allege they were induced to buy the stock by the material misrepresentations of defendant Bruce. The court found that plaintiffs were entitled to rescind the third purchase only and ordered defendants to return the purchase price in that transaction to plaintiffs. Defendants Bruce and E. M. Adams & Co. appeal from the adverse decree.*fn1 Plaintiffs cross-appeal from the decree insofar as it denies rescission of the first and second stock purchases.
Plaintiffs met defendant Bruce in the fall of 1967 when Bruce inquired about purchasing plaintiffs'
home. During October 1967 defendant Bruce offered to sell plaintiffs some shares of stock in the TiLINE corporation which Bruce knew would be offered through the offices of E. M. Adams & Co. TiLINE was a new over-the-counter issue which would be offered to residents of Oregon only at $2.50 per share. After several meetings and discussions, the first sale was consummated.
There was a conflict of testimony concerning the representations made by defendant Bruce at these meetings. Plaintiffs testified that Bruce stated that there was a highly confidential letter in the E. M. Adams & Co. office from The Duriron Company, Inc., of Dayton, Ohio, to TiLINE. The letter, according to plaintiffs, was supposed to contain an offer to buy out TiLINE's stock within two years at $20 per share. Plaintiff Robert Myer testified ...