Long v. Douthitt

• Decision Date: 23 February 1911
• Citation: 142 Ky. 427,134 S.W. 453
• Parties: LONG v. DOUTHITT.
• Court: Kentucky Court of Appeals

134 S.W. 453

142 Ky. 427

LONG v. DOUTHITT.

Court of Appeals of Kentucky.

February 23, 1911

Appeal from Circuit Court, Graves County.

Action H. B. Douthitt against Z. T. Long.From a judgment for plaintiff, defendant appeals.Affirmed.

W. J Webb and Speight & Dean, for appellant.

Wheeler & Hughes and Robbins & Thomas, for appellee.

CARROLL J.

The appellant Long was a stockholder and director in the May Pants Company of Mayfield, Ky. and in October 1905, sold to the appellee Douthitt 23 1/2 shares of stock for $141.50 per share.This suit was brought by Douthitt to recover the amount so paid, upon the ground that the stock was worthless at the time of his purchase, and that he had been induced to buy it by the guaranty and representation of Long that it was worth the price paid.Upon a trial, he recovered a judgment for $2,673, and this judgment we are asked to reverse for errors in the admission of evidence and in giving and refusing instructions.We may at the outset say that although the pleadings presented several issues, there was no issue of fact made by the evidence except the one relating to what was said by the parties in reference to the value of the stock at the time and before it was purchased.

The appellee testifies that the stock was worthless at the time of his purchase, and the appellee was not asked to and did not deny this fact.Nor did he dispute that at the time of the sale and for some years before he was a stockholder and director in the corporation.The appellee testifies that "At the time the trade was consummated, my brother and I were standing there about the bank, and Mr. Long approached me and asked: Had I thought anything more about the trade and I told him I hadn't thought much more about it.So my brother asked him what the stock was worth, and he said it was worth $141.50 a share.He says, 'Is it worth that on the books, Zack?'Mr. Long says: 'Yes; I am a director in the concern, and know what I am talking about, and I guarantee it to be worth $141.50 per share.'So I traded with him then.Q.Tellthe jury what you said to him after that--tell what you said?A.I told him if he would guarantee the stock to be good, to be worth that, I would accept his proposition.Q.I don't care anything about the proposition--the trade was closed then, was it?A.Yes, sir."The appellant denied that he guaranteed the stock to be worth $141.50 or any other sum, or that he made any representations concerning it except as appear in the following answers: "A.Yes; some time in November, myself and Dr. Carney were standing in the door, standing there in the buggy store, and Mr. Douthitt came along, and we had a few words.He said that he had moved to Paris, Tennessee, and wanted to sell me his home upon South Eighth street, I believe it was.I told him I didn't know as I wanted to buy any house.I told him I might trade for it.He asked what I would trade him; and I told him some May Pants stock.He asked me what the stock was worth, and I told him I didn't know, but I thought it was worth $141.50 on the books, I would not be positive.I says, 'You can go and see for yourself.'I asked him what he asked for his house and lot, and he said, '$3,000.'I told him I didn't think it was worth that, but I told him I might give him $2,750 in stock at the book value, that he could investigate--to go himself and ask Mr. Minton, the bookkeeper, what it was worth.Q.That is what took place?A.Yes, sir.Q.Youmade the statement that the book value was $141.50?A.I told him I thought it was.Q.Did he come back?A.Yes; he went off and was gone about 25 or 30 minutes, and then come back.Q.When he came back in 25 or 30 minutes, what took place?A.He come back and said he had investigated and found out it was worth $141.50, and says, 'I will trade with you."'Both parties were corroborated in their respective statements by witnesses who testified that they heard what took place; and, if no error of law was committed to the prejudice of appellant, there is no reason why the finding of the jury upon the disputed issue of fact should be disturbed.

The first error assigned by counsel for appellant is that Turner Allen, Wright, and Gardner were permitted to testify that the stock was worthless in 1905, although each of them said that their opinion was based upon information that had come to them in 1907 and that personally they did not know anything about the condition of the corporation in 1905.This evidence was incompetent, but it was not prejudicial, because it was not denied by appella...