Oakley v. Little, 803SC247
| Decision Date | 02 December 1980 |
| Docket Number | No. 803SC247,803SC247 |
| Citation | 272 S.E.2d 370,49 N.C.App. 650 |
| Court | North Carolina Court of Appeals |
| Parties | , 30 UCC Rep.Serv. 675 J. B. OAKLEY v. J. D. LITTLE, Sr. |
Williamson, Herrin & Stokes by Mickey A. Herrin, Greenville, for plaintiff-appellant.
James, Hite, Cavendish & Blount by M. E. Cavendish, Greenville, for defendant-appellee.
Appellant contends generally that the trial court erred by granting defendant's motion for summary judgment. Under G.S. 1A-1, Rule 56, summary judgment shall be rendered if the trial court determines from a consideration of the pleadings, depositions, and affidavits that there is no genuine issue as to any material fact and that any party is entitled to judgment as a matter of law. Summary judgment allows quick and final disposition of claims where there is no real question as to whether plaintiff should recover, or where the defendant has established a complete defense. Here it appears the latter is the case. Defendant had a complete defense in the statute of frauds.
Plaintiff failed to produce a writing sufficient to show a contract between him and defendant.
The sale of investment securities is governed by Article Eight of the Uniform Commercial Code. G.S. 25-8-319 is the statute of frauds applicable to such transactions in North Carolina. Section (a) of that statute states:
A contract for the sale of securities is not enforceable by way of action or defense unless
(a) There is some writing signed by the party against whom enforcement is sought or by his authorized agent or broker sufficient to indicate that a contract has been made for sale of a stated quantity of described securities at a defined or stated price.
To be sufficient to comply with the requirements of this statute the writing must (1) evidence a contract for the sale of investment securities, (2) be signed by the party against whom enforcement is sought, and (3) contain terms stating the quantity and price of the securities. The essential point of these basic requirements is that the written memorandum be reasonably sufficient to prove the existence of a contract obligating the defendant to buy or sell investment securities.
Plaintiff's exhibit No. 1 consists of two pages of notes that defendant allegedly gave plaintiff during a discussion of the proposed transaction. The notes are entitled "Outline of Proposed Sale." They disclose many of the important terms, including the price and quantity, of the proposed transaction. Since there is no evidence that this document was signed by defendant, it cannot, standing alone, fulfill the requirements of the statute of frauds. Plaintiff's exhibit No. 2 consists of a Pilot Life insurance policy in the amount of $65,000. Plaintiff is listed as the insured, and defendant is named as the beneficiary of the policy. The signatures of both plaintiff and defendant appear on the policy. Defendant is listed as the owner of the policy and he is designated as "Business Partner". Presumably, this label refers to plaintiff.
There are few cases construing the statute of frauds applicable to the sale of investment securities. Prior decisions involving the construction of the statute of frauds applicable to the sale of goods, U.C.C. § 2-201, are instructive in determining the correct application of G.S. 25-8-319. Where there are similar provisions in these two statutes of frauds the courts should give a similar construction to both. The intent of the draftsmen of the Code was to make the investment securities provision conform to the policy underlying the statute of frauds of Article Two. Official Comment, G.S. 25-8-319, 3 Anderson, Uniform Commercial Code, § 8-319:3 (2d ed. 1971).
G.S. 25-2-201 does not require a writing which embodies all of the essential and complete terms of a contract. However, it does require some writing sufficient to indicate that a definite contract for the sale of goods has been made. Where writings only represent negotiations for agreements to be made in the future the courts have held under U.C.C. § 2-201 that they were not binding contracts. In re Flying W. Airways, Inc., 341 F.Supp. 26 (D.C.Pa.1972) ) 341 F.Supp. at 72. See also Arcuri v. Weiss, 198 Pa.Super. 506, 184 A.2d 24 (1962).
Applying this reasoning to the instant case it appears that plaintiff's exhibits are insufficient to show a contract for the sale of the stock, because they merely represent tentative negotiations.
Plaintiff's exhibit No. 1, although it does contain the necessary price and quantity terms, cannot be construed as a binding final contract. This document was only a working tool used by plaintiff and defendant in their discussions of a possible agreement. The first sentence of these notes labeled them "Outline of Proposed Sale of the Interest of T. J. Morris in General Heating, Inc. with additional transactions regarding the ultimate disposition of such interest and Mr. Morris' affiliation with the Company." This...
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McClure v. Duggan
...transaction is insufficient to indicate that a contract for sale has been made between the parties. In J.B. Oakley v. J.D. Little, Sr., 49 N.C.App. 650, 272 S.E.2d 370 (1980), the plaintiff alleged that the defendant agreed to purchase a certain amount of stock from a third party and, in tu......
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Conagra, Inc. v. Nierenberg
..."admitted" that an agreement was reached, but his testimony also indicated that the agreement was "conditional"); Oakley v. Little (1980), 49 N.C.App. 650, 272 S.E.2d 370, 374 (concluding that although price and quantity were discussed, testimony of defendant indicated that alleged agreemen......
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Wakefield v Crawley
...an agreement with regard to price and quantity of stock and had drafted a document reflecting the agreement); Oakley v. Little, 272 S.E.2d 370, 374 (N.C. Ct. App. 1980) (holding that the judicial admission exception did not apply to prove the existence of an oral agreement for the sale of s......
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Holley Equipment Co. v. Credit Alliance Corp.
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