Kenney v. Porter, 1201
| Decision Date | 20 October 1977 |
| Docket Number | No. 1201,1201 |
| Citation | 557 S.W.2d 589 |
| Parties | 22 UCC Rep.Serv. 1048 Clarence KENNEY, Appellant, v. John PORTER, Appellee. |
| Court | Texas Court of Appeals |
This is a summary judgment case. Clarence Kenney brought suit against John Porter for specific performance of an alleged contract to purchase some 3355 shares of stock in a closely held corporation. Defendant Porter answered Kenney's petition and filed a motion for summary judgment. After reviewing Porter's motion for summary judgment, Kenney's answer to the motion, the accompanying affidavits and briefs, the trial court granted the motion. Plaintiff Kenney has perfected his appeal to this Court.
Kenney and Porter are the sole stockholders of the Valley Plumbing Supply Company, a Texas corporation. On April 16, 1971 they entered into an agreement of purchase and sale which provided that if either stockholder should become dissatisfied he could set in motion a buy-sell arrangement. This agreement provided for the buying out of either by the other or the sale of stock by either to the other. The agreement also provided for the purchase of the stock by the surviving party should the other die. The buy out/sell out portion of the agreement provided that in the event either of the stockholders should become dissatisfied with their position in the Company, he could give sixty (60) days notice in writing to such effect to the other stockholder. Such notice would contain a statement that the party giving the notice (Offeror) desires to sell his stock or purchase the other party's stock and that he has estimated the value of his stock in said company to be a set certain sum, which is to be stated in the notice. The agreement provided that the other party would have a period of sixty (60) days in which to accept or reject the offer.
On July 7, 1976, Kenney sent Porter a letter exercising the above quoted portion of the agreement. In his letter, Kenney offered to sell to Porter his 3,355 shares for $25 per share for a total of $83,875.00. Kenney also offered in the alternative to buy Porter's 4,830 shares for $25 per share for a total of $120,750.00. At this point the facts are in dispute. Kenney claims that Porter accepted the offer orally on September 7, 1976, and after a couple of scheduled meetings to close, the transaction failed to develop; and Porter then informed Kenney he would not carry out his acceptance. Porter claims he never accepted Kenney's offer; that he never agreed to buy Kenney's stock or sell his stock to Kenney; and that he never signed any written agreement which obligated him to buy or sell his stock.
The only pertinent fact which is uncontroverted is that Porter did not accept Kenney's written offer in writing. Porter's argument, with which the trial court evidently accepted, was that Section 8.319, Tex.Bus. & Com.Code Ann. (1968), requires that there be a written contract for the sale of stock and since there was no written acceptance, there was no written contract for the purchase of the stock. Kenney presents seven points of error to this Court. The major question raised in this appeal is presented in Kenney's points of error 1 through 3. These points allege that the trial court erred in granting the motion for summary judgment on the grounds that Porter's acceptance of Kenney's offer had to be in writing, and even if this were true there was a fact question whether or not the stock in question was in fact a security under Section 8.319.
The pertinent portion of Section 8.319 states:
The fact question allegedly raised is whether or not the stock in Valley Plumbing Supply Company constituted a "security" as that term is defined by the code. 1
Because of the language of Section 8.102(a) defining security, Section 8.319 would not apply unless "the securities": were issued in bearer or registered form; were of the type commonly dealt in upon securities exchanges or markets commonly recognized in the area in which it is issued or dealt in as a medium for investment; and was either one of a class or series or by its terms was divisible into a class or series of instruments; and evidences a share, participation or other interest in property or evidences an obligation of the issuer. From this definition above...
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Wakefield v Crawley
...been overruled. Zamore v. Whitten, 395 A.2d 435 (Me. 1978) was overturned by Bahre v. Pearl, 595 A.2d at 1035 and Kenney v. Porter, 557 S.W.2d 589 (Tex. Ct. App. 1977) was overturned by Kenney v. Porter, 604 S.W.2d at 21 In his concurrence to the Court of Appeals' opinion, Judge Susano asse......
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