Consolidated Petroleum Industries, Inc. v. Jacobs
| Decision Date | 24 February 1983 |
| Docket Number | No. 11-82-068-CV,11-82-068-CV |
| Citation | 648 S.W.2d 363 |
| Parties | 39 UCC Rep.Serv. 989 CONSOLIDATED PETROLEUM INDUSTRIES, INC. et al., Appellants, v. John R. JACOBS, Appellee. |
| Court | Texas Court of Appeals |
Rufus Wallingford, Murray Fogler, Fulbright & Jaworski, Houston, Charles Scarborough, Scarborough, Black, Tarpley & Scarborough, Abilene, for appellants.
Frank Jennings, Jennings, Dies & Turner, Graham, for appellee.
The principal issue on appeal is whether the Statute of Frauds 1 requires us to reverse a judgment for damages resulting from nonperformance of an oral contract for the sale of stock.
The jury answered all issues in favor of plaintiff, John R. Jacobs, 2 and judgment was rendered in his favor against defendants, Consolidated Petroleum Industries, Inc., D. Truitt Davis and Jack W. Young for the sum of $2,095,000.00 plus attorney fees. 3 Defendants appeal. We reverse and render.
The issues submitted to the jury, and the jury's answers, are quoted in full:
SPECIAL ISSUE NO. 1
Do you find from a preponderance of the evidence that before June, 1979, Davis and Young and Jacobs agreed to an oral contract as follows:
(1) Jacobs would surrender and transfer all of his shares of stock in Old Falcon to Falcon-Delaware, Inc., and all of his shares of stock in Dunnam and his interest in DTS Leasing Company to CPI Oil Services, Inc.; and
(2) Davis and Young would transfer to Jacobs 100,000 shares of stock in CPI; and
(3) Jacobs would receive cash in the amount of $87,239.68 and a promissory note in the principal amount of $574,531.82 from Falcon-Delaware, Inc. and cash in the amounts of $7,111.45 and $1,162.00 and a promissory note in the principal amount of $42,668.65 from CPI Oil Services, Inc.; and
(4) Jacobs would pay cash in the total amount of $65,000.00 and execute promissory notes in the total principal amount of $435,000.00 to Davis and Young; and
(5) Each of such promissory notes would provide for interest at the rate of ten percent (10) per annum and be payable in ten (10) equal semi-annual installments?
ANSWER: Yes
You are instructed that for a contract to exist there must be a meeting of the minds between the parties to the contract on the subject matter of the agreement, and all of its essential terms.
SPECIAL ISSUE NO. 2
Do you find from a preponderance of the evidence that from the time he surrendered and transferred his shares of stock in Old Falcon and Dunnam and his interest in DTS Leasing Company until this suit was filed, Jacobs was ready, willing, and able to perform the oral contract inquired about in Special Issue No. 1?
ANSWER: Yes
SPECIAL ISSUE NO. 3
Do you find from a preponderance of the evidence that before or at the time Jacobs surrendered and transferred his shares of stock in Old Falcon and Dunnam, Davis and Young promised to Jacobs that they would sign a contract that had been or would be prepared providing for the transfer of 100,000 shares of stock in CPI to Jacobs in accordance with the oral contract inquired about in Special Issue No. 1?
ANSWER: Yes
SPECIAL ISSUE NO. 4
Do you find from a preponderance of the evidence that it was reasonably foreseeable to Davis and Young that Jacobs would rely upon the promises inquired about in Special Issue No. 3?
ANSWER: Yes
SPECIAL ISSUE NO. 5
Do you find from a preponderance of the evidence that in surrendering and transferring his shares in Old Falcon and Dunnam, Jacobs relied upon the promises of Davis and Young that they would sign the contract inquired about in Special Issue No. 3?
ANSWER: Yes
SPECIAL ISSUE NO. 5-A
Do you find from a preponderance of the evidence that such reliance resulted in a detriment to Jacobs?
ANSWER: Yes
SPECIAL ISSUE NO. 6
Do you find from a preponderance of the evidence that CPI, through one or more of its directors, other than Davis and Young, knew of the oral contract between Davis and Young and Jacobs inquired about in Special Issue No. 1?
ANSWER: Yes
SPECIAL ISSUE NO. 7
Do you find from a preponderance of the evidence that CPI, acting through its Board of Directors, interferred with the performance by Davis and Young of the oral contract with Jacobs inquired about in Special Issue No. 1?
ANSWER: Yes
SPECIAL ISSUE NO. 8
Do you find from a preponderance of the evidence that such interference on the part of CPI, acting through its Board of Directors, was willful and intentional?
ANSWER: Yes
SPECIAL ISSUE NO. 9
Do you find from a preponderance of the evidence that such interference on the part of CPI, acting through its Board of Directors, was a proximate cause of Davis and Young not performing the oral contract with Jacobs inquired about in Special Issue No. 1?
ANSWER: Yes
SPECIAL ISSUE NO. 10
What do you find from a preponderance of the evidence would have been the market value of 100,000 shares of stock in CPI on or about March 1, 1980 had such shares been transferred to Jacobs?
ANSWER: $2,500,000.00
SPECIAL ISSUE NO. 11
What do you find from a preponderance of the evidence would have been the market value, on or about March 1, 1980, of the two promissory notes to be executed by Jacobs payable to Davis and Young in the total principal amount of $435,000.00 under the oral contract inquired about in Special Issue No. 1?
ANSWER: $380,000.00
SPECIAL ISSUE NO. 12
What do you find from a preponderance of the evidence would be a reasonable fee for the services of an attorney representing Jacobs in preparing for and trying this case in this Court?
ANSWER: $40,000.00
SPECIAL ISSUE NO. 13
What do you find from a preponderance of the evidence would be a reasonable fee for the services of an attorney for representing Jacobs in the Court of Civil Appeals if there is an appeal of this case to such Court?
ANSWER: $6,000.00
SPECIAL ISSUE NO. 14
What do you find from a preponderance of the evidence would be a reasonable fee for the services of an attorney for representing Jacobs in the Texas Supreme Court if there is an appeal of this case to such Court?
ANSWER: $4,000.00
Appellants have briefed seven points of error. We will assume, without deciding, that Special Issue Number 1 was properly submitted and that there is evidence which is legally and factually sufficient to support the jury's answer. 4 Even so, we must sustain appellant's first point of error which states:
The trial court erred in overruling the motions of the defendants, Davis and Young, for instructed verdict and judgment notwithstanding the verdict, and in entering judgment because, as a matter of law, the alleged oral agreement was unenforceable under the applicable statute of frauds, and Jacobs failed to establish any exception either by partial performance or promissory estoppel to the application of the statute.
Appellee argues that the oral agreement found in answer to Special Issue Number 1 "was entered into for the purpose of achieving a corporate reorganization" and that it did not constitute a "sale of securities" within the meaning of section 8.319, supra. We hold that even though the oral agreement dealt with the corporate reorganization of several corporations in which Davis and Young owned stock, the agreement contemplated a "sale of securities" within the meaning of section 8.319, supra. 5 The agreement found by the jury shows clearly that it dealt with: (1) the sale of Jacobs' stock in Falcon Drilling Company 6 to Falcon-Delaware, Inc.; (2) the sale of Jacobs' stock in Dunnam Tool & Supply, Inc. to CPI Oil Services, Inc.; and (3) the sale from Davis and Young to Jacobs of 100,000 shares of stock in Consolidated Petroleum Industries, Inc. That agreement shows the amount of cash and promissory notes for each of the sales. The first two sales were reduced to writing and completed. The third sale of securities was never reduced to writing, and it is barred by the express language of Section 8.319, supra, unless one of the statutory exceptions or the doctrine of promissory estoppel is applicable.
The first statutory exception does not apply because there is no writing signed by Davis and Young "sufficient to indicate that a contract has been made for sale of a stated quantity of described securities at a defined or stated price." See section 8.319(1), supra.
The second statutory exception is not applicable because Jacobs has neither paid the $65,000 cash nor signed notes totalling $435,000. The fact that Jacobs completed the sales of his Falcon stock and his Dunnam stock does not constitute "delivery or payment" as to the stock which Davis and Young orally contracted to transfer to Jacobs. See section 8.319(2), supra.
The third exception is not urged.
The fourth exception, which is strongly argued by appellee, provides that the oral contract for the sale of securities can be enforced if:
the party against whom enforcement is sought admits in his pleading, testimony or otherwise in court that a contract was made for sale of a stated quantity of described securities at a defined or stated price. (Emphasis added)
Davis and Young each testified in court, admitting they had discussed with Jacobs his acquisition of 100,000 shares of stock in Consolidated Petroleum Industries, Inc. and that they had discussed a price of $5.00 per share; however, each of them denied that such a contract was made. Each of them claimed that all of the essential terms were not agreed upon. We are unable to hold that Davis and Young admitted in their "pleadings, testimony or otherwise in court" that an oral contract was made. They refused to admit an agreement...
To continue reading
Request your trial
-
Turner v. PV Intern. Corp., 05-87-01123-CV
...Kenney v. Porter, 604 S.W.2d 297 (Tex.Civ.App.--Corpus Christi 1980, writ ref'd n.r.e.), and Consolidated Petroleum Industries v. Jacobs, 648 S.W.2d 363 (Tex.App.--Eastland 1983, writ ref'd n.r.e.). Neither case is in point since an agreement for the sale of stock in a corporation was invol......
-
Deauville Corp. v. Federated Dept. Stores, Inc.
...Stock ownership generally constitutes a superior financial interest that will trigger the privilege. Consolidated Petroleum Industries, Inc. v. Jacobs, 648 S.W.2d 363, 367 (Tex.App.1983). We hold that the financial interest privilege applies to Deauville's tortious interference claims again......
-
U.S. Enercorp, Ltd. v. SDC Mont. Bakken Exploration, LLC
...808 S.W.2d 648, 654-55 (Tex. App. 1991) (citing Clements v. Withers, 437 S.W.2d 818, 821 (Tex. 1969)); Consol. Petroleum Indus. v. Jacobs, 648 S.W.2d 363, 367 (Tex. App. 1983) (same). 5. Defendants also argued that the issue of whether Taicher was in fact a partner of Defendants under their......
-
Central Sav. and Loan Ass'n v. Stemmons Northwest Bank, N.A.
...writ). Stock ownership is a superior financial interest that will trigger the privilege. Consolidated Petroleum Indus., Inc. v. Jacobs, 648 S.W.2d 363, 367 (Tex.App.--Eastland 1983, writ ref'd n.r.e.). Also, an agent is not liable for interference with his principal's business relations. Ba......