{ "id": 8725913, "name": "Lloyd MITCHELL et al v. A. H. BEARD and Hattie B. BEARD, Husband & Wife", "name_abbreviation": "Mitchell v. Beard", "decision_date": "1974-07-08", "docket_number": "74-25", "first_page": "926", "last_page": "929A", "citations": [ { "type": "official", "cite": "256 Ark. 926" }, { "type": "parallel", "cite": "513 S.W.2d 905" } ], "court": { "name_abbreviation": "Ark.", "id": 8808, "name": "Arkansas Supreme Court" }, "jurisdiction": { "id": 34, "name_long": "Arkansas", "name": "Ark." }, "cites_to": [ { "cite": "249 Ark. 713", "category": "reporters:state", "reporter": "Ark.", "case_ids": [ 8723360 ], "weight": 2, "year": 1970, "opinion_index": 0, "case_paths": [ "/ark/249/0713-01" ] }, { "cite": "240 Ark. 280", "category": "reporters:state", "reporter": "Ark.", "case_ids": [ 1727626 ], "weight": 2, "year": 1966, "opinion_index": 0, "case_paths": [ "/ark/240/0280-01" ] }, { "cite": "466 F. 2d 1329", "category": "reporters:federal", "reporter": "F.2d", "case_ids": [ 719554 ], "year": 1972, "opinion_index": 1, "case_paths": [ "/f2d/466/1329-01" ] }, { "cite": "474 F. 2d 1040", "category": "reporters:federal", "reporter": "F.2d", "case_ids": [ 1252215 ], "year": 1973, "opinion_index": 1, "case_paths": [ "/f2d/474/1040-01" ] } ], "analysis": { "cardinality": 486, "char_count": 8373, "ocr_confidence": 0.844, "pagerank": { "raw": 1.1036044620715196e-07, "percentile": 0.5689754499200532 }, "sha256": "5a199a8eb0934659f2c7932a227a15b1517d7eb29eeea6e9d67f42c1915c31d2", "simhash": "1:1b63d90752123d2a", "word_count": 1384 }, "last_updated": "2023-07-14T14:44:14.527021+00:00", "provenance": { "date_added": "2019-08-29", "source": "Harvard", "batch": "2018" }, "casebody": { "judges": [], "parties": [ "Lloyd MITCHELL et al v. A. H. BEARD and Hattie B. BEARD, Husband & Wife" ], "opinions": [ { "text": "Conley Byrd, Justice.\nAppellees Mr. & Mrs. A. H. Beard brought this action jointly and severally against appellants Lloyd Mitchell and J. T. Williams to recover under the Arkansas Securities Law, the value of two bonds given in a real estate transaction and against appellant J. T. Williams individually upon a common law count of fraud. The trial court, based upon the jury\u2019s answer to interrogatories, entered a judgment jointly and severally against both appellants for the face amount of the bonds together with an attorney\u2019s fee and in addition rendered a judgment against appellant Williams for punitive damages. For reversal both Mitchell and Williams raise the several issues hereinafter discussed.\nThere is evidence in the record from which the jury could have found that Williams held himself out to be a retired minister, a director of a bank and a real estate broker. There is also evidence that Williams and Mitchell entered into a partnership to purchase some land from the appellees while Williams was erroneously holding himself out as a broker representing appellees\u2019 interest. In making the. purchase the transaction was handled in Mitchell\u2019s name only but Williams gave all of the consideration. The sale of the land was for a recited consideration of $24,000 consisting of $10,000 in cash, a note in the amount of $4,000 and two $5,000 bonds issued by Digital Control Systems, Inc. to Rio Grande Holding Company, Inc. Appellant Mitchell and his wife as the designated purchasers agreed to indemnify the Beards for the face amount of the bonds in the event they were dishonored at the date of their maturity in 1976. Thereafter Williams, who had originally agreed to purchase the bonds within a short time after closing date, induced the Beards to execute a contractual release to the Mitchells and substituted instead a written indemnity signed by Williams and his wife for t\u00a3ie face amount of the bonds in the event of a dishonor at maturity. During all of the discussions prior to the contractual arrangements and before the institution of this litigation Williams was leading the Beards to believe that he was shortly going to pick up the bonds notwithstanding the written agreements. The proof at the trial showed that one D, L. Hopkins\u2019 signature appeared on the bonds. In view of the testimony of Williams and Mitchell one could gather that they were not entirely strangers to D. L. Hopkins. Proof on behalf of the Beards showed that both the charters of Digital Control and Rio Grande Holding had been revoked in their respective states of Texas and Kansas and that the State Securities Commissioner of the State of Missouri had issued cease and desist orders oh the transfer of the bonds here involved. Other proof showed that before the transaction occurred, Williams had tried to transfer the identical bonds to one Ernest Varner and had been informed that the bonds were no good. Mitchell had suggested to Varner that the bonds could be collected through the underworld for fifty cents on the dollar. Coy Kaylor, Jr., a recognized securities salesman testified that the bonds had no value.\nMitchell first argues that the release executed by the Beards when Williams ostensibly took over the transaction also relieved him of his statutory liability under the Arkansas Securities Law. Like the trial court, we find no merit in this contention due to the fact that the instrument executed only released Mitchell from his contractual liability. Furthermore, the record shows that the Beards were not aware of the misrepresentations concerning the bonds at that time.\nMitchell contends the trial court erred in instructing the jury with respect to the liability of a partner under Ark. Stat. Ann. \u00a7 67-1256(b) (Repl. 1966). This contention is based upon the erroneous premise that a partner must materially aid in the sale before he becomes liable. While the statute does make that a prerequisite to a recovery against an employee, broker or agent, we do not construe that requirement as being applicable to a partner.\nAlthough the record shows that the trial court properly instructed the jury with respect to the liability of a partner under the Arkansas Securities Act, Mitchell contends that the trial court erred in construing thejury\u2019s answers to the interrogatories and that the trial court should have declared a mistrial because the jury\u2019s answers to the interrogatories were unclear. We do not find any objection to the interrogatories as submitted to the jury and before the jury was discharged. Under those circumstances Mitchell\u2019s objections here are raised too late. See Wheaton Van Lines Inc. v. Williams, 240 Ark. 280, 399 S.W. 2d 258 (1966), and Ark. Stat. Ann. \u00a7 27-1762 (Repl. 1962).\nWe find no merit in Williams\u2019 contention that the Arkansas Securities Act, Ark. Stat. Ann. \u00a7 67-1256 (Repl. 1962), does not apply. There is ample proof that the bonds have no value and that Williams had knowledge of such fact when he was representing them to the Beards as being \u201cas good as gold.\u201d He admittedly held himself out as wanting to purchase the bonds. Furthermore, he represented and testified that Mitchell furnished the bonds that were transferred to the Beards while the proof is overwhelming that Williams furnished the bonds.\nWilliams contends that punitive damages cannot be recovered where the Securities Act applies. The record shows that he did not raise that issue before nor during the trial. Sometime before the judgment was entered he filed a motion with the clerk raising that issue but there is no showing that the motion was brought to the attention of the trial court or a ruling obtained thereon. Under such circumstances, we treat the issue as having been raised for the first time on appeal and do not consider it. See Flake v. Thompson, Inc., 249 Ark. 713, 460 S.W. 2d 789 (1970).\nWilliams contends that his subsequent scheme whereby he and his wife ostensibly took over Mitchell\u2019s indemnity on the bonds now precludes the Beards from recovering on his fraud. He cites no authority whereby one can so conveniently relieve himself from liability for fraud and we know of none. Consequently, the contention has no merit.\nAfter suit was instituted Beard refused Williams\u2019 offer to pay the face amount of the bonds less the $400 due Williams by the Beards on a note that Williams had signed as surety. Williams now contends that because of that tender he was entitled to a directed verdict. We find no merit in this contention because the tender was not sufficient to cover Williams\u2019 liability for interest, attorney\u2019s fees, etc. to the Beards.\nThe Beards here request an additional attorney\u2019s fee for the service of their counsel on this appeal which we grant in the amount of $1,000.00.\nAffirmed with an allowance of additional attorney\u2019s fee to appellees in the amount of $1,000.00.\nSupplemental Opinion on Denial of Rehearing delivered October 14, 1974\nSecurities regulation \u2014 prohibited transactions & fraud \u2014 recovery of punitive damages. \u2014 Punitive damages are recoverable when an action is brought and sustained both under the Securities Act and common law fraud.\nPetition denied.", "type": "majority", "author": "Conley Byrd, Justice." }, { "text": "Conley Byrd, Justice.\nOn rehearing Williams correctly points out that the trial court\u2019s docket sheet does show that his motion for judgment notwithstanding the verdict was overruled by the trial court. However, we still find no merit in his contention that punitive damages cannot be recovered where the Securities Act applies. The Securities Act, Ark. Stat. Ann. \u00a7 67-1256(h), provides that \u201cthe rights and remedies provided by this act are in addition to any other rights or remedies that may exist at law or in equity ... .\u201d The authorities generally recognize that where an action is brought and sustained both under the Securities Act and common law fraud, punitive damages are recoverable. See Coffee v. Permian Corporation, 474 F. 2d 1040 (5th Cir. 1973) and Young v. Taylor, 466 F. 2d 1329 (10th Cir. 1972). The proof here was amply sufficient to sustain the common law allegation of fraud.\nPetition for rehearing denied.", "type": "rehearing", "author": "Conley Byrd, Justice." } ], "attorneys": [ "J. L. Hendren and Jeff Duty, for appellants.", "Adams & Wilson, by: Douglas L. Wilson, for appellees." ], "corrections": "", "head_matter": "Lloyd MITCHELL et al v. A. H. BEARD and Hattie B. BEARD, Husband & Wife\n74-25\n513 S.W. 2d 905\nOpinion delivered July 8, 1974\n[Supplemental Opinion on Denial of Rehearing October 14, 1974, p. 929A.]\nJ. L. Hendren and Jeff Duty, for appellants.\nAdams & Wilson, by: Douglas L. Wilson, for appellees." }, "file_name": "0926-01", "first_page_order": 968, "last_page_order": 972 }