Thursday, November 21, 2013

Gashwiler v. Willis case brief

Gashwiler v. Willis case brief summary
33 Cal. 11 (1867)

Plaintiff purchasers sought review of an order of the District Court, Fifth Judicial District, Tuolumne County (California), which entered a nonsuit in their action against defendant stockholders seeking damages for the stockholders' false representations regarding the deed to a mine.

At a meeting, the stockholders passed a resolution to sell a mine to a grantee. The corporation's trustees executed a deed in favor of the grantee. The stockholders represented to the purchasers that written instructions on the deed required $ 50,000 to be paid in California. When purchasers took possession of the mine, they discover that the representation was false, but the grantee had sold the mine to other parties. The purchasers sought to collect the damages they sustained. At trial, they tried to introduce the deed into evidence, but the trial court excluded it. Judgment was entered in favor of the stockholders.


  • The court affirmed and held that the deed was properly excluded. 
  • The deed was inadmissible if no corporate seal was affixed to it. 
  • The trustees did not have the power to execute the deed on behalf of the corporation. 
  • The stockholders adopted the resolution authorizing the sale of the mine, not the trustees. 
  • The resolution adopted by the stockholders was not a corporate act, and it conferred no authority on the trustees to perform a corporate act, execute the deed, or adopt a seal.

The court affirmed the nonsuit that was entered in the purchasers action seeking damages for the stockholders' false representations regarding the deed to a mine.

Recommended Supplements for Corporations and Business Associations Law

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