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MILLER v. SAN SEBASTIAN GOLD MINES, INC.

No. 75-1195.

540 F.2d 807 (1976)

John B. MILLER and Doris Miller, his wife, Plaintiffs-Counterdefendants-Appellees, v. SAN SEBASTIAN GOLD MINES, INC., a Nevada Corporation, Edward L. Machulak, James F. McLaughlin and Commerce Group Corp., a Wisconsin Corporation, Defendants-Counterclaimants-Appellants.

United States Court of Appeals, Fifth Circuit.

October 15, 1976.

Attorney(s) appearing for the Case

Stanley Jay Bartel, Hugo L. Black, Jr., Miami, Fla., for defendants-counterclaimants-appellants.

Doris and John Miller, pro se, George Scariano, Metairie, La., for plaintiffs-counterdefendants-appellees.

Before DYER, SIMPSON and RONEY, Circuit Judges.

RONEY, Circuit Judge:

In this 10b-5 case a corporation seeks to cancel shares of its stock which were issued to a founder of the corporation without consideration. The district court held there was no deceit, misrepresentation or fraud upon which the corporation could posit a cancellation claim because all of the founding stockholders of the corporation knew that the stock was issued without consideration. The appealing corporation asserts that the inquiry for fraud...

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