¶1By the Court.
¶2The plaintiff claimed, that the defendant had sold to him twenty-two shares of the stock of a corporation, for which he had paid the defendant $22,000, and also that the purchase was so induced by the false and fraudulent representations of the defendant; that the plaintiff had a right to rescind the purchase and recover the $22,000, also claiming that he had in fact rescinded. The defenses denied the right to rescind and the fact of rescission, claiming that the plaintiff had not tendered or returned the stock to the defendant, in a manner that would allow the plaintiff to rescind, or in other words, unconditionally.
¶3The most important fact, as to the return of the shares *191to the defendant is, that after negotiation or dispute between the plaintiff and defendant, after the plaintiff had demanded that defendant should give security, as well as his own obligation, as an indemnity against plaintiff’s liability as stockholder, etc., the defendant and his wife, the latter expressly charging her separate estate, made a bond to the plaintiff. It recited, whereas William F. Bridge has transferred or is about to transfer to George H. Penniman, all his stock and interest in the company specified, and has resigned as president and trustee of the company, in consideration of the premises and of one dollar, the‘said George H. Penniman, who is here the defendant, and his wife, “ do jointly and severally agree to indemnify and save harmless the said Bridge from all claims, debts or demands, of whatever name, nature or kind, now existing against said company or heretofore contracted by it, or on its behalf, also from all claims or demands against him as a stockholder in, or trustee of said company,” etc. The plaintiff upon receiving this bond transferred the stock.
¶4The matter may be considered in view of alternative suppositions; one, that the loss indemnified against in the bond, was of the kind that might be the foundation of a recovery for damages in an action brought for damages from the fraudulent representations referred to ; the other that the arrangement as to the bond was independent of the original transaction, and the transferring of the stock was merely a consideration for the contract of indemnity.
¶5On the former supposition, when the plaintiff took indemnity for the losses, upon a claim for damages, he would elect to stand upon his right to damages for being induced by fraudulent means to make the purchase. In such case, he had lost the right to rescind, and indeed the possibility of returning the shares, as a condition of the right to rescind, was gone upon his transferring them, under the contract made by the bond of indemnity. My rendering of the testimony is, that in fact, the bond was *192given under the plaintiff’s repeated claim for damages from the original transaction.
¶6On the other supposition, that the transfer of the shares was merely a consideration for the bond, it would seem clear that the shares, and the whole of their value and of then use, were given and wholly devoted to the object of the bond as a contract, and that, as in the former case, the plaintiff lost the right and power to use them in any way, as a condition of rescinding the purchase and claiming the money paid on it from the defendant. Evidently, the plaintiff had.lost all dominion, or jus disponendi of the shares, and this he must have to enable him to return the shares or tender them in disaffirmance or rescission of the original contract.
¶7This latter supposition, includes the possible case of the original purchase and sale being made under a mutual mistake of fact.
¶8The learned counsel for the appellant argues, that the bond of indemnity was given in consequence of a promise made by the defendant, after the plaintiff had discovered that the representations were untrue. That promise was in a letter of defendant, and was, “I need not write you that anything in my power to do, wiE be done to keep you from loss.” The learned referee in his opinion, shows that this was not in its meaning, a promise to indemnify, or an offer to make a contract of indemnification, but was an assertion as to the writer’s future action in the business of the company. If it were otherwise, and was a contract, some consideration must be found to support it. The plaintiff made no mutual promise to form a considertion. If the implied promise was the legal obligation of the defendant to make the plaintiff good from loss from the original transaction, then the plaintiff elected not to rescind. If there were an impHed promise that each should do what was afterwards done when the bond was given, then, as it has been remarked before, the plaintiff devoted the shares to a purpose other than giving or tendering them to the defendant, in order that the latter *193might be subjected to the obligation to return the money paid for the shares.
¶9It is unnecessary to go into further particulars, for the opinion of the referee fully and satisfactorily shows the merits of the case.
¶10Judgment affirmed, with costs.
¶11Freedman, J., concurred.
¶12(dissenting). I cannot concur in the disposition made of this case by the referee, nor in the result reached by Sedgwick, Oh. J.
¶13The plaintiff had purchased from the defendant, his relative, in whose statements he had reason to suppose he might place confidence, twenty-two shares of stock in “ The Linseed, and Sperm Oil Company,” at one thousand dollars a share, and purchased additional shares of defendant’s brothers, upon similar representations. The representations of the defendant, which induced the plaintiff to buy these shares, were material. They referred to the condition of the company, and the value of the stock. The representations proved to be false.
¶14These conditions authorized the plaintiff to return the shares, purchased from the defendant, and to demand from the defendant, the price he had paid for them. In other words he might rescind the sale. Dealing with a relative, with whom he had been on friendly terms, his. movements in the direction of a rescission were not so direct, prompt and decisive, as they would have been, had he been dealing with strangers. On purchasing these shares, the plaintiff became a trustee and the president of the company. This was in pursuance of the understanding of' the parties. Shortly after assuming the duties of his office as trustee, and in June, 18J6, and from an examination of the books of the corporation, he discovered the facts, which showed that the capital of the company was largely impaired, and that his stock was worthless. Plaintiff at once, and in a kindly manner, called the defendant’s attention to the facts, and to the worthlessness of his stock. He *194submitted statements taken from the books. The defendant could find nothing to substantially impeach the truthfulness of the plaintiff’s discoveries from the books. He claimed some errors, but not enough to materially change the result reached. On June 28, the defendant wrote the plaintiff a letter, in which he said, “ I need not write to you that anything in my power to do, will be done, to keep you from loss.”
¶15The defendant did however, claim at the same time, that «there was a much larger stock of seed on hand, than they had supposed, which would make the condition of the company better, and that there were other assets of of the company, of which the plaintiff had no knowledge. Defendant also claims that when the seed was worked up the condition of the company would be found to be improved. The plaintiff then told the defendant that, relying upon such statements, and that the defendant would save him from loss, he would remain in the company until the seed was worked up. The seed was worked up by the latter part of October following, but the affairs of the company were not at all improved. The result was the same as when plaintiff discovered the real condition of the company in June. About the last of October the plaintiff informed the defendant, that he expected that he would hold him harmless, and pay him the money for the stock, and that he wanted him to give a written obligation, that he would get the money that he had put in the concern for his benefit. Plaintiff told the defendant in this interview, that he could have the stock, that it was worthless, and that he expected that he would pay back the money which he had received for it.
¶16The certificates for the shares, it appears, were not actually transferred to the defendant until November 10 or 12, when an undertaking of indemnity was executed by the defendant, and his wife, the purpose of which was to save the plaintiff harmless from the debts and liabilities of the company, to which he might be exposed from havbeen a stockholder and trustee of the corporation. This *195obligation made no provision for payment for the shares, nor has defendant returned to the plaintiff, the money paid by him on the purchase of the shares.
¶17In giving this bond of indemnity, the defendant did not come up to the measure of his liability to the plaintiff. And in executing and delivering it, he was only moving in the direction which he had clearly undertaken to pursue in his letter of June 28, to hold plaintiff from loss.
¶18The plaintiff is still, however, out of pocket, through the purchase of these shares, from the defendant, in the sum of $22,000, and upwards.
¶19It was held by the referee that the bond of indemnity was the result of a new arrangement between the parties, inconsistent with a right of rescission, or a demand at this ■ time for the price paid for these shares. I do not put such construction upon the bond of indemnity, nor the letters of the parties. I do not understand from the case, that the plaintiff when he received that undertaking, gave up, or intended to give up, his demand or claim for the money he had paid for the stock, and which moneys the defendant used to extinguish, joro tanto, his obligations to the corporation. The certificates for the stock itself, as the plaintiff testifies, he delivered to the defendant on or about the first of November, with a demand for payment. The transfer of the shares was not however, made until about the 11th day of the month. According to the evidence, the debts of the company did not cause the plaintiff alarm, as he believed there were assets sufficient to pay them.
¶20That his stock had become valueless or substantially so, through the loss of three-quarters of the capital of the corporation, was the fact upon which his claim and demand against the defendant rested. For that, he seeks indemnity in the action.
¶21I cannot find and do not believe under the evidence, that he ever intended, in his negotiations with the defendant, to abandon such substantial claim, or that his delivery of the shares to the defendant, under the circuxn*196stances, is to be considered otherwise than as an effort to get back his money.
¶22It was suggested on the argument that the bond of indemnity guarantees the plaintiff against liability from his ownership of the shares purchased from the brothers of the defendant, in addition to these he acquired from the defendant himself. But in guaranteeing against liability as the owner of all the shares, the defendant was doing nothing more, than discharging his duty. He had promised to secure the plaintiff against all loss by his letter of June 28.
¶23The referee has found as a fact, that the plaintiff bought all the shares relying upon the representation m'ade by the defendant.
¶24That was consideration sufficient to sustain the promise made, and feeling the force of such obligation he made the original promise.
¶25The judgment should be reversed, with costs to abide the event.