Royal Air Properties, Inc., a Corporation, Harold L. Heathman and Madge I. Heathman, His Wife v. R. Philip Smith

This is the second appeal to come before us in this case. On the first appeal, Royal Air Properties, Inc. v. Smith, 312 F.2d 210 (9th Cir. 1962), we held that the district court was correct in finding that certain misrepresentations of appellants, made in connection with the sale ■of stock in appellant Royal Air Properties, Inc., gave appellee Smith the right to recover his purchase price under § 10 (b), Securities Exchange Act of 1934 (15 U.S.C.A. § 78j(b)) and rule X-10B-5 of the Securities and Exchange Commission ( 17 C.F.R. § 240 .10b-5 (1949)). However, appellant had also pleaded the defenses of laches, estoppel and waiver as a bar to appellee’s enforcement of his right. The trial court held that these defenses were not permissible under § 10(b) of the Securities Exchange Act of 1934. We held such ruling to be error and remanded the case for further proceedings. A second trial was had on the issues as directed whereupon the trial court held that the facts did not justify the application of said defenses of laches, estoppel and waiver. We now have that decision for consideration.

A complete statement of the facts giving rise to this suit is set out in our first opinion, but…