Pirilla v. Bonucci
| Decision Date | 09 December 1983 |
| Citation | 320 Pa.Super. 496,467 A.2d 821 |
| Parties | , 37 UCC Rep.Serv. 872 Leonard J. PIRILLA, Jr., Appellant, v. Bruno L. BONUCCI, Herman W. Blair, Joseph Dorazio, Elbert B. Lowther, Walter Mucci, Peter Rebottini, Thomas Kalman, Perryopolis Auto Auction, Inc., and Perryopolis Land Company, Inc. 1217 |
| Court | Pennsylvania Superior Court |
Thomas R. Wright, Pittsburgh, for appellant.
Charles W. Watson, Connellsville, for appellees.
Before ROWLEY, BECK and MONTEMURO, JJ.
This is an appeal from a final decree in equity entered by the trial court denying appellant's request for specific performance of a contract for the sale of shares of stock on the ground that the contract was not enforceable because the writings relied on by him to prove the contract do not satisfy the applicable statute of frauds, 13 Pa.C.S. § 8319 1. We do not agree and, therefore, reverse and remand for proceedings not inconsistent with this opinion. 2
The facts are stipulated by the parties. Perryopolis Land Company, Inc. and Perryopolis Auto Auction, Inc. are two closely held Pennsylvania corporations which share a common group of stockholders. On January 10, 1977, a special stockholders' meeting of each corporation was held. At that meeting appellant, Leonard J. Pirilla, Jr., who owned 9.09% of the shares of stock in each corporation, offered to buy all of the outstanding shares of stock held by the remaining shareholders in both corporations for $525,000.00, plus a $15,000.00 commission to the Freeze Dorazio Agency, Inc. The minutes of the stockholders' meetings were recorded and reflect that all of the shareholders of both corporations were present in person or by proxy and that all of the shareholders voted to accept appellant's offer. The minutes of the two meetings likewise reflect that the officers of the two corporations were authorized by the shareholders to implement the sale of all of the shares of their stock in both corporations to appellant. Pursuant to the authorization given to the officers, a Letter of Intent was signed the next day by appellant and the officers of Perryopolis Land Company, Inc. and Perryopolis Auto Auction, Inc. which contained all the terms of the sale. 3 Subsequently, on January 20, 1977, appellant tendered a formal Stock Purchase Agreement to the other shareholders. The individual appellees, who own more than 63% of the stock of each corporation, refused to execute the Stock Purchase Agreement, and gave appellant written notice that they rejected "in total the proposed sales agreement previously delivered." At the next scheduled meetings of the two corporations, the shareholders refused to ratify the minutes of the January 10, 1977 meetings and repudiated the sale.
Appellant instituted this action for specific performance, and the appellees raised the defense of the statute of frauds. The court below denied appellant's request for specific performance, finding that the statute of frauds rendered the contract unenforceable. This appeal followed.
In Sorokin v. Krasner, 289 Pa.Super. 324, 327, 433 A.2d 88, 89-90 (1981), our standard of review in equity cases was set forth as follows:
The scope of review of an appellate court in the consideration of an appeal from a final decree in an equity action is well established. A Chancellor's findings of fact, approved by the court en banc, are entitled to the weight of a jury's verdict and will not be reversed on appeal if supported by adequate evidence. See McDole v. Duquesne Brewing Co. of Pittsburgh, 281 Pa.Super. 78, 83, 421 A.2d 1155, 1158 (1980), and cases cited therein. The Chancellor's findings are afforded particular weight in cases in which the credibility of witnesses must be evaluated, as the Chancellor has had the opportunity to hear their actual testimony and to observe their demeanor on the witness stand. See Fascione v. Fascione, 272 Pa.Super. 530, 416 A.2d 1023 (1979). We should not reverse on appeal unless it is evident that the lower court abused its discretion, lacked evidentiary support for its findings, or was capricious in its disbelief of evidence submitted. See Davis v. Buckham, 280 Pa.Super. 106, 421 A.2d 427 (1980); Commonwealth ex rel. Powelson v. Powelson, 277 Pa.Super. 220, 222, 419 A.2d 741, 742 (1980). The same principles apply when a single judge, rather than a court en banc, reviews the case. Gilmore v. Northeast Dodge Co., Inc., 278 Pa.Super. 209, 420 A.2d 504 (1980). Therefore, we must examine the evidence of record in the instant case to determine whether any basis exists for a reversal of the lower court's findings and conclusions.
The question presented before the Chancellor and the court en banc was a legal one, however, and not a factual one. Therefore, the trial court's legal conclusion based upon the stipulated facts may be appropriately reviewed by us for error. The crucial question is whether an enforceable agreement for the sale of securities existed between the parties. 13 Pa.C.S. § 8319 provides that:
A contract for the sale of securities is not enforceable by way of action or defense unless:
(1) 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;
(2) delivery of the security has been accepted or payment has been made but the contract is enforceable under this paragraph only to the extent of such delivery or payment (3) within a reasonable time a writing in confirmation of the sale or purchase and sufficient against the sender under paragraph (1) has been received by the party against whom enforcement is sought and he has failed to send written objection to its contents within ten days after receipt; or
(4) 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.
It is well settled that several writings may be used to satisfy the requirements of 13 Pa.C.S. § 8319(1) if they bear an express reference to one another or manifest internal evidence of their interrelation. Conaway v. 20th Century Corporation, 491 Pa. 189, 201, 420 A.2d 405, 411 (1980).
In this case, there are five documents which appellant claims satisfy the statutory requirement that the contract be in writing. They are: the minutes of the January 10, 1977 meetings of each of the two corporations, the Letter of Intent signed by appellant and the officers of the two corporations, the unexecuted Stock Purchase Agreement, and the stipulation of facts submitted by the parties. The Chancellor, as affirmed by the court en banc, concluded that none of these documents, whether considered alone or in conjunction with each other, demonstrated that the "party to be charged" had signed any "paper, document or commitment" which constituted a writing sufficient to satisfy 13 Pa.C.S. § 8319(1).
Appellees admit in the stipulation of facts that the events recorded in the minutes of January 10, 1977 shareholder's meetings took place. At those meetings, the officers of the two corporations were given authority to consummate the sale of all of the shareholder's shares of stock in both corporations to the appellant. The individual shareholders, who owned all of the outstanding stock of the two corporations, were represented at the January 10, 1977 meetings. It is clear that at that meeting each of the appellees authorized the corporate officers to represent them in the sale of their stock to appellant. Although the creation of an agency relationship requires a manifestation by the principal that the agent shall act for him, such a relationship may be inferred from the circumstances and need not be in writing. Scott v. Purcell, 490 Pa. 109, 415 A.2d 56 (1980). Therefore, since the corporations had no stock to sell, 4 the authority given to the officers was to act on behalf of the individual shareholders and not the corporations. The fact that the agency relationship in this case was created in the context of a corporate meeting was merely incidental.
Our reading of the record convinces us that the officers of the two corporations were authorized to act as agents of the individual shareholders. As such, the officers signed the Letter of Intent agreeing to sell the appellees' shares of stock in the two corporations to appellant. The Letter of Intent contains a stated quantity of stock, i.e. all the outstanding shares of both corporations, and a defined and stated price, i.e. $525,000.00, plus a $15,000.00 commission to the Freeze Dorazio Agency, Inc., subject to certain conditions. Consequently, the requirements of 13 Pa.C.S. § 8319(1)...
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