Petitioner corporation challenged the judgment of the Superior Court of Santa Clara County (California), which held that petitioner was amenable to suit under Cal. Corp. Code § 25400 and § 25500, by out-of-state stock purchasers, for manipulating its stock price by issuing false statements to the general public concerning its financial situation.
Petitioner corporation issued press releases that gave false information about its finances, artificially inflating its stock price, whereby insider officers and directors were able to make a profit. After the false disclosures were revealed, respondents, out-of-state purchases of petitioner's stock, filed suit under Cal. Corp. Code § 25400 and § 25500. Petitioner filed a motion to dismiss, claiming that the law only applied to in-state purchasers of stock, and did not reach beyond the state boundary. The trial court and the appellate court ruled against petitioner, and petitioner appealed the ruling. The court helddemand letter that under the ambiguous language of the statute, the statute did not limit its reach or recovery merely to in-state purchasers of petitioner’s stock. The court determined that in accordance with the rest of the statute and the underlying purpose of the law, respondents should be able to sue petitioner even though they were out-of-state purchasers. The court concluded that this interpretation did not conflict with federal securities law or the U.S. Const. art. I, § 8, cl 3 Commerce Clause. The court denied petitioner's writ of mandate and affirmed the lower court.
 
 
The court affirmed the judgment of the lower court and held that respondents, out-of-state stock purchasers, were entitled to bring a lawsuit against petitioner corporation for issuing false press releases and manipulating its stock. Further, the law permitting respondents' action did not violate federal securities law or the U.S. Constitution’s Commerce Clause.
Appellant creditor sought review of a judgment of the District Court, Seventh Judicial District, Solano County (California), in favor of respondent, a debtor's brother, in the brother's action seeking to recover damages for the alleged taking of a stage-coach, horses, and harness by the creditor.
The debtor owned the property. He later became insolvent. At the request of his sister, the debtor executed a bill of sale to the brother to secure, or in payment of, a debt due to the brother. The brother was not present at the time of the execution and the sister acted as his agent. The debtor was also indebted to the creditor, who commenced an action a few days afterwards. The creditor recovered a judgment and an execution issued, which was duly levied upon the property. The brother filed his action. Following a trial, judgment was entered for the brother. On appeal, the court held that the trial court erred by sustaining an objection to testimony by a defense witness as to a statement made by the debtor as to what the reason the bill of sale had been made was. The creditor had an undoubted right to prove that the debtor made the bill of sale for the purpose of defrauding his creditors, and his statements were competent evidence to prove that fact, as against him. The statements were also admissible against the brother if they were made before he ratified the contract. This was a jury question. The sister's attorney was bound to disclose statements she made to third parties.
The court reversed the judgment and remanded the case for a new trial.