Court Opinion

ID: 9683988
Source: CourtListenerOpinion
Date Created: 2023-08-24 13:42:17.334065+00
Date Added: 2024-06-11T08:51:41.616086
License: Public Domain

Supplemental Opinion on Rehearing delivered January 20, 1975 John A. Fogleman, Justice. In their petition for rehearing, appellants have correctly pointed out that in our opinion of December 2, 1974, we overlooked their contention that Gary E. Jones and Gomer Jones should be held liable under Ark. Stat. Ann. § 67-1256 (b) as officers of Titan Oil & Gas, Inc., the seller. Even though this point was only casually stated in appellants’ brief, it was argued in their reply brief. It was clearly overlooked by the trial court, even though, when the pleadings are construed in favor of the pleader, the question was in issue. Sec. 67-1256 (b) clearly makes an officer of a seller liable jointly and severally with and to the same extent as the seller unless he was a non-seller-and sustains the burden of proving that he did not know and in the exercise of reasonable care could not have known of the existence of the facts by reason of which the liability was alleged to exist. It provides for contribution “as in cases of contract among the several person so liable”. As we read the statute, an officer who materially aids in a sale would be liable regardless of his knowledge or lack of knowledge. Consequently a discussion of this liability on the part of Gary E. Jones and Gomer Jones is material to our af-firmance of the chancellor’s finding on this liability only and we adhere to our original opinion insofar as this question is concerned. On the other hand, the chancery court did not consider or decide the question of the liability of an officer who is a non-seller. The general rule in equity cases is that, with all the record fully developed, we should finally decide a case here instead of remanding it to the chancery court, particularly when we can plainly see what the rights and the equities of the parties are. Narisi v. Narisi, 233 Ark. 525, 345 S.W. 2d 620; Pickett v. Ferguson, 45 Ark. 177, 55 Am. St. Rep. 545. We can say that this is the case with reference to the liability of Gary E. Jones. We note that under Ark. Stat. Ann. § 67-1256 (f) Gary E. Jones would have been barred from recovering if he had knowledge of the facts by which the making or performance of the contract with him was in violation of the Arkansas Securities Act. In our original opinion we stated that there was no evidence that Gary E. Jones had any knowledge whatever of the facts by reason of which any contract made was in violation of the statute and that we could not say that there was a preponderance of the evidence showing that Gary Jones was barred from recovery. The testimony shows that Gary E. Jones had heard about these wells in Louisiana and that he had accepted, at face value, a prospectus and a letter from Donald & Kuhn, accountants in Monroe, Louisiana. The appellee-plaintiffs did not contend that these were misleading. There was also testimony that Gary E. Jones attended the meetings that other purchasers attended but otherwise did not participate in the meetings. Gary E. Jones received the prospectuses from his father Gomer, who asked him to read them. It was only after the first well was a producer that his father asked him if he would be interested in being a seller’s representative. He made investments just as the other purchasers did. He testified that he never received notice or participated in any shareholders’ meetings. He said that he had never been involved in any oil ventures or securities dealings prior to these. According to appellant Harvey, Gary E. Jones was not elected vice president until sometime in the fall of 1971, “around October”. At this time, Shipley and James P. Jones had already purchased interests in at least one well. We feel that Gary E. Jones sustained the burden of proving that he did not know, and in the exercise of reasonable care could not have known, of the existence of the facts by reason of which the liability was alleged to exist. The situation is quite different as to Gomer Jones. We cannot say that we can plainly see what the rights and the equities of the parties are as to him or the decree which should have been rendered on the cross-complaint against him. It is true that the chancellor held that there should be contribution on his part as to $3,150 of the collective judgment against Titan and its other officers, together with pro rata costs and attorneys’ fees. This holding was obviously based on the sales in which Gomer Jones materially aided. Contribution is an equitable doctrine and relief is granted only when the equities are equal. See Taylor v. Joiner, 180 Ark. 869, 24 S.W. 2d 326; U. S. Fidelity and Guaranty Co. v. Aetna Casualty & Surety Co., 418 F. 2d 953 (8th Cir.1969). See also Risor v. Brown, 244 Ark. 663, 426 S.W. 2d 810. It is abundantly clear that the chancery court left this issue undecided and that questions of fact were involved. Since this is so, we exercise our discretion to remand this case to the trial court for a determination of this issue on the cross-complaint against Gomer Jones. In all other respects we adhere to our original opinion.