Lindgren v. Dowis

• Decision Date: 12 February 1976
• Docket Number: Nos. 30518,30519,s. 30518
• Parties: , 19 UCC Rep.Serv. 239 Gray M. LINDGREN v. W. Courson DOWIS. W. Courson DOWIS v. Gray M. LINDGREN.
• Court: Georgia Supreme Court

Page 682

223 S.E.2d 682

236 Ga. 278, 19 UCC Rep.Serv. 239

Gray M. LINDGREN v. W. Courson DOWIS.

W. Courson DOWIS v. Gray M. LINDGREN.

Nos. 30518, 30519.

Supreme Court of Georgia.

Feb. 12, 1976.

Valianos, Joh & Homer, Christopher J. Valianos, Atlanta, Roy D. Moultrie, Hamilton, for appellant.

W. B. Steis, E. Earl Seals, Hamilton, for appellee.

HILL, Justice.

These two appeals involve a contract between the parties. On March 12, 1973, plaintiff Lindgren entered into a concise written contract which provided: 'I agree to sell to W. Courson Dowis 7,500 shares of Pine Mountain Club Chalets, Inc., stock for $22,500; payable in cash on or before April 1, 1973.' The contract was singed by the seller and was accepted as shown by the signature of the buyer.

A year later, on March 13, 1974, the seller sued the buyer for damages, the trial court overruled the buyer's motion to dismiss, and the Court of Appeals affirmed, Dowis v. Lindgren, 132 Ga.App. 793, 209 S.E.2d 233 (1974), finding an offer bythe seller, accepted by the buyer, to sell described stock at a certain price payable on or before a certain date, and saying: 'This is sufficient to constitute a contract mutually binding on the parties, and is not lacking in mutuality, nor is it unilateral. . . . The acceptance by the defendant was an assent to the terms of the offer . . . and was binding upon him.'

Having won in the trial and appellate courts, the seller dismissed his suit. In January 1975, the seller refiled, this time seeking damages or specific performance of the contract. Among other defenses the buyer asserted that the purported contract was not a contract and was never intended by the parties to be a contract.

Both parties moved for summary judgment and the trial court granted and denied summary judgment as follows: (1) granted seller's motion that the contract is valid and binding, (2) denied buyer's motion that no proper tender had been made, (3) denied seller's motion that specific performance is a proper remedy, (4) granted buyer's motion that seller had suffered no direct damage, and (5) found that a question of fact exists as to any other damages to seller. Both parties appeal.

1. The buyer contends that the trial court erred in finding that the contract was valid and binding. He maintains that he did not intend to form a contract and, citing Code Ann. § 20-702, he argues that the intention of the parties is a question of fact.

In Dowis v. Lindgren, supra, the Court of Appeals held that this same written agreement was 'mutually binding on the parties.' That statement included a determination that the contract was 'valid,' because the court would and could not find an 'invalid' contract to be 'mutually binding.' The trial court's later finding that the contract was 'valid and binding' may have been based upon the court's examination of the contract itself or upon the decision of the Court of Appeals, or both. In any event, that decision was not erroneous.

2. The buyer also contends that the seller did not properly tender the stock and that the court erred in denying buyer's motion for summary judgment on the ground of lack of tender. The buyer cites Code Ann. § 109A-8-314(2) and points out that seller admits that he neither endorsed nor delivered the stock to buyer. The Official Comment to § 8-314 of the Uniform Commercial Code (Code Ann. § 109A-8-314 as adopted in Georgia) makes it clear that subsection (2) describes the point at which the transferor of stock has completed 'delivery' (so that the risk of loss and other rights and liabilities move from the transferor to the purchaser). The section does not describe tender. Thus the seller's admissions as to nondelivery did not show that no tender was made and the trial court did not err in denying the buyer's motion for summary judgment based on lack of tender.

3. The seller enumerates as error the trial judge's order finding that specific performance is not a proper remedy in this case and therefore denying seller's motion for summary judgment on this issue.

The seller cites Code Ann. § 109A-8-319 as authority for the proposition that a written, signed contract for the sale of securities is 'enforceable.' He urges that the use of the word 'enforceable' connotes enforcement by specific performance. However, the cited section is a statute of frauds requiring that contracts for the sale of securities be in writing, or that there be acceptance of delivery, or payment, etc. The fact that a contract isnot unenforceable under the statute of frauds does not ipso facto mean that such contract is enforceable by specific performance. Code Ann. § 109A-8-319 does not make stock sales contracts enforceable by specific performance.

The seller urges that specific performance is available to him under existing Georgia case law, citing Times-Journal v. Jonquil Broadcasting Co., 226 Ga. 673, 177 S.E.2d 64 (1970), and DeLamar v. Fidelity Loan & Investment Co., 158 Ga. 361(4), 123 S.E. 116 (1924), for the proposition that a contract for sale of securities may be enforced by specific performance. In both of those cases the party seeking specific performance was the buyer, the securities were not readily available other than from the seller, and damages thus was an inadequate remedy. However, Murrey v. Specialty Underwriters, Inc., 233 Ga. 804, 213 S.E.2d 668 (1975), indicates that a seller may also enforce a stock repurchase agreement by specific performance against the company which issued the stock and which formerly employed the seller.

Although the trial court may have found that the seller had an adequate remedy at law (by selling the stock to someone else), because of our ruling in Division 4 of this opinion we proceed upon a different basis.

According to the contract, the sale was to take...