Palmerton v. Envirogas, Inc.
| Decision Date | 27 March 1981 |
| Citation | 80 A.D.2d 996,437 N.Y.S.2d 483 |
| Parties | , 31 UCC Rep.Serv. 226 David L. PALMERTON, Respondent, v. ENVIROGAS, INC., Appellant, and John M. Clarey, Defendant. |
| Court | New York Supreme Court — Appellate Division |
Berger & Quigley, by Bernard Sicherman, Buffalo, for appellant.
Duke, Holzman, Yaeger & Radlin, by Gregory Photiadis, Buffalo, for respondent.
Before DILLON, P. J., and CARDAMONE, CALLAHAN, DENMAN and SCHNEPP, JJ.
Defendant Envirogas, Inc. was formed to drill for natural gas from wells in Western New York. John Clarey, president/chairman and major stockholder of Envirogas, Inc., conceived the idea of forming limited partnerships to lease drilling sites and to then contract with Envirogas, Inc. to drill and maintain the wells. Plaintiff David Palmerton claims that in 1976 he was approached by Clarey and asked to invest in a limited partnership, the 1976-A Drilling Program. In ensuing discussions, according to plaintiff, Clarey told him that if he invested in the limited partnership and introduced Clarey to other potential investors, plaintiff could become a stockholder in Envirogas. Plaintiff claims that he made such investment, that he introduced Clarey to several persons who also invested in the limited partnership and, additionally, that he paid $5000 in cash in expectation of receiving 10% of the stock. When Envirogas refused to issue the stock, plaintiff instituted this action for, inter alia, specific performance and breach of contract. In support of his contention plaintiff relies on a letter of January 25, 1977, which states as follows: Dear Dr. David L. Palmerton, 9305 Hunting Valley Rd., Clarence, New York.
As consideration for your assistance in certain corporate matters, Envirogas, Inc. hereby agrees to issue to David L. Palmerton ten percent (10%) of the stock of Envirogas, Inc., a New York Corporation, with its principal place of business at 1260 N. Forest, Williamsville, New York 14221.
Said stock to be issued as soon as possible. Very truly yours, S/ John M. Clarey, John M. Clarey, President. Defendant moved for summary judgment dismissing the complaint on the ground that the letter is insufficient to satisfy the Statute of Frauds applicable to stock transfers, Uniform Commercial Code, § 8-319 which provides, in pertinent part, as follows:
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; or (b) delivery of the security has been accepted or payment has been made but the contract is enforceable under this provision only to the extent of such delivery or payment; or * * * Without addressing the question of whether the writing meets the requirements of subsection (a), it seems clear that the services performed by plaintiff, if established as true, would constitute "payment" within the contemplation of subsection (b).
Summary judgment, of course, should not be granted where there is any doubt as to the existence of a triable issue (Rotuba Extruders v. Ceppos, 46 N.Y.2d 223, 231, 413 N.Y.S.2d 141, 385 N.E.2d 1068; Goldstein v. County of Monroe, 77 A.D.2d 232, 236, 432 N.Y.S.2d 966) or where the issue is "arguable" (Sillman v. Twentieth Century-Fox Film Corp., 3 N.Y.2d 395, 404, 165 N.Y.S.2d 498, 144 N.E.2d 387; Moyer v. Briggs, 47 A.D.2d 64, 66-67, 364 N.Y.S.2d 532; Bisbing v. Sterling Precision Corp., 34 A.D.2d 427, 428, 312 N.Y.S.2d 305). "When reviewing a motion for summary judgment the focus of the court's concern is issue finding, not issue determination, and the affidavits should be scrutinized carefully in the light most...
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