Source: https://law.justia.com/cases/federal/appellate-courts/F2/519/1105/85499/
Timestamp: 2019-07-20 19:45:28
Document Index: 325232268

Matched Legal Cases: ['§ 1702', '§ 1701', '§ 1703', '§ 1706', '§ 1710', '§ 1707', '§ 1710']

Claude Y. Paquin et al., Plaintiffs-appellants, v. Four Seasons of Tennessee, Inc., et al., Defendants,norman H. Cronk, Defendant-appellee, 519 F.2d 1105 (5th Cir. 1975) :: Justia
Justia › US Law › Case Law › Federal Courts › Courts of Appeals › Fifth Circuit › 1975 › Claude Y. Paquin et al., Plaintiffs-appellants, v. Four Seasons of Tennessee, Inc., et al., Defendan...
Claude Y. Paquin et al., Plaintiffs-appellants, v. Four Seasons of Tennessee, Inc., et al., Defendants,norman H. Cronk, Defendant-appellee, 519 F.2d 1105 (5th Cir. 1975)
U.S. Court of Appeals for the Fifth Circuit - 519 F.2d 1105 (5th Cir. 1975)
The Act closely parallels the philosophy and approach of the Securities Act of 1933. The underlying purpose of both is that prior to the purchase the buyer must be informed of facts which would enable a reasonably prudent individual to make an informed decision about purchasing the security or the property. The test of materiality is whether a reasonable investor might have considered the omitted fact or erroneous statement as important in making a decision. See Affiliated Ute Citizens of Utah v. United States, 1972, 406 U.S. 128, 153-54, 92 S. Ct. 1456, 1472, 31 L. Ed. 2d 741.
After a two day Bench trial, Judge Henderson found that the sale was not exempted by 15 U.S.C. § 1702(a) (10) and we agree. He found that for the purposes of offering the lot for sale, Cronk was an agent of the developer within the meaning of § 1701 of the Act, which was conceded in oral argument before this Court. He further held that there was no evidence that Cronk had knowingly and wilfully misrepresented material facts in the sale of the lot. After a critical examination of the trial record, with this we also agree.
"Liability under 15 U.S.C. § 1703(a) (1) is dependent on a statement of record in effect pursuant to 'section 1706 of this title' and a 'property report meeting the requirements of section 1707 of this title, being furnished to the purchaser in advance . . . ' of the sale. The statement of record filed with the Secretary of the Department of Urban Development (Defendant's Exhibit No. 3), complies with 15 U.S.C. § 1706 (24 C.F.R. § 1710.105). Similarly, the property report (Plaintiffs' Exhibit No. 7) fulfills the requirements of 15 U.S.C. § 1707 (24 C.F.R. § 1710.110). No evidence was adduced at the trial to establish the contrary. Neither is there any showing of a material misrepresentation or omission of material facts in the property report. Accordingly, the plaintiffs have not sustained the burden of proof in establishing their right of recovery."