Court Opinion

ID: 9644297
Source: CourtListenerOpinion
Date Created: 2023-08-22 20:52:32.783679+00
Date Added: 2024-06-11T18:11:11.275647
License: Public Domain

On Petition for Rehearing.
Before LEWIS and PHILLIPS, Circuit Judges'
PER CURIAM.
Appellants have filed a petition for rehearing herein in which they assert that in our opinion in the instant case, in holding it was incumbent on the plaintiffs to prove deception, we departed from our earlier opinion in Dunnett v. Arn, 71 F.(2d) 912, wherein the parties plaintiff were different but the transaction involved the same as in the instant case. While the transaction was not in form a sale by the corporation of its corporate assets, we held in Dunnett v. Arn, supra, it should be so regarded as to those stockholders who were deceived by the action of Dunnett and Cloud.
However, where a stockholder, acting with full knowledge of the facts and not misled by the misrepresentations of Cloud and Dunnett, elected to make an individual sale of his stock to the Sunray Company, such sale was neither in form nor substance a corporate transaction. Hence we held proof of deception was necessary. See Dunnett v. Arn, supra (C.C.A.) 71 F.(2d) 912, at page 920. The trial court rightly denied relief as to plaintiffs who failed to make proof of deception in the instant case.
The petition for rehearing is denied.