Court Opinion

ID: 9460284
Source: CourtListenerOpinion
Date Created: 2023-08-04 21:46:24.684831+00
Date Added: 2024-06-11T17:36:33.367821
License: Public Domain

STEPHENSON, Circuit Judge
(concurring and dissenting).
I agree that this cause must be reversed and appellant granted a new trial. Instruction No. 12 was erroneous and under the circumstances aptly described by the majority the error was not harmless.
However, I disagree with that portion of the opinion which appears to hold that “The defendants’ inquiry into subsequent operations losses was irrelevant for the purpose of determining the value of the stock as of the time of sale * * I agree that absent appropriate instructions, the jury may have been misled as to the relevance of this evidence. Once the plaintiff offered evidence with respect to the financial condition of the company at the time of purchase, it was proper for defendants to offer evidence of subsequent events to the extent that they had bearing on the value of the company as of the time of the purchase. Plaintiff called the Trustee in Bankruptcy which brought to the attention of the jury that the company was in bankruptcy. As a matter of fact, the evidence discloses that the company was in bankruptcy less than three years after its purchase1 by plaintiff. Under *774these circumstances it would be unfair to not allow defendants to offer evidence to show that PL&I’s failure was due to gross mismanagement by plaintiff’s manager, Markham. Defendants were entitled to offer evidence in support of their claim that Markham shortly after the purchase caused the company to suffer huge losses.
This evidence should have been received under proper instruction by the court that it was being received for whatever bearing it might have on the value of the company and its stock at the time of plaintiff’s purchase and for no other reason. The jury should have been cautioned that mismanagement by the plaintiff and its officers subsequent to purchase does not relieve defendants of their obligation and liability for misrepresentation as to the value of the company and the stock at the time of the purchase, if such existed. On the other hand, plaintiff was not entitled to recover losses aggravated by its own action subsequent to the date of the purchase.

. Appellees advise in their brief that the collapse of PL&I and Arkansas Loan & Thrift Company received widespread news coverage in the general area of the trial.