Shakra v. Benedictine Sisters of Bedford, New Hampshire, Inc., 87-502

• Decision Date: 06 February 1989
• Docket Number: No. 87-502,87-502
• Citation: 553 A.2d 1327,131 N.H. 417
• Parties: Nicholas L. SHAKRA and Emily K. Shakra v. The BENEDICTINE SISTERS OF BEDFORD, NEW HAMPSHIRE, INC., Defendant, and Sister Elena Simonis, Intervenor.
• Court: New Hampshire Supreme Court

Page 1327

553 A.2d 1327

131 N.H. 417

Nicholas L. SHAKRA and Emily K. Shakra v. The BENEDICTINE SISTERS OF BEDFORD, NEW HAMPSHIRE, INC., Defendant, and Sister Elena Simonis, Intervenor.

No. 87-502.

Supreme Court of New Hampshire.

Feb. 6, 1989.

Bossie, Kelly & Hodes P.A., Manchester (Jay L. Hodes, on the brief and orally and Marlene A. Lein, on the brief), for plaintiffs.

Roussos & Boeckeler, Manchester (John C. Boeckeler, on the brief and orally), for Sister Elena Simonis, intervenor.

BATCHELDER, Justice.

The plaintiffs in this case, Nicholas and Emily Shakra, appeal from the Superior Court's (Goode, J.) dismissal of their petition for specific performance of a purchase and sale agreement made between the Shakras and The Benedictine Sisters of Bedford, New Hampshire, Inc. (the Benedictine Sisters) for the subdivision and sale to the Shakras of portions of property purported to be owned by the Benedictine Sisters. For the reasons that follow, we affirm the court's dismissal of the Shakras' petition.

On August 7, 1957, Sister Raphaela Elena Simonis, Sister Alfonsa Eidimtas, Sister M. DeLillis, James Broderick, Jr., and J. Vincent Broderick formed the Benedictine Sisters of Bedford, New Hampshire, Inc. as a voluntary non-profit corporation under RSA Chapter 292. The corporation was formed to establish and maintain a Roman Catholic convent and to foster the convent's religious and charitable purposes. On August 12, 1957, the incorporators met and adopted corporate by-laws. They also elected Sr. Elena Simonis as president and permanent secretary and Sr. Alfonsa Eidimtas as treasurer.

The by-laws provided for a board of directors comprised of three to seven directors having general supervisory control and management powers over corporate property, but no authority to sell or mortgage the corporation's real estate without the consent of a majority of the members. The by-laws also provided that, upon dissolution of the corporation, all the corporate assets would be transferred to the Benedictine Sisters of Kaunas, Lithuania.

On August 20, 1957, four members of the board of directors met and authorized Sr. Simonis to transact business for the corporation and to bind the corporation by her signature. On the same day, Sr. Simonis executed a mortgage deed in her capacity as president of the Benedictine Sisters to purchase the piece of land located on Wallace Road in Bedford where the nuns have lived and operated a convent since 1957.

On April 26, 1977, the Benedictine Sisters was dissolved under RSA 292:25-29 for failure to file the 1976 decennial return and fee. As of November 10, 1987, the corporation had not been reinstated or revived.

Seven years later, in May 1984, Nicholas Shakra, a real estate broker, knocked on the convent door and spoke with Sister Elena Simonis, the convent's mother superior, regarding his interest in purchasing a portion of "her" land to build a new home for his family. No agreement was made at that time. Over the next four months, Mr. Shakra kept in contact with Sr. Simonis through conversations unrelated to his proposed land transaction and by performing favors for the sisters of the convent.

Sometime during the summer of 1984, Sr. Simonis offered to sell the Shakras a portion of the Benedictine Sisters' land upon which to build a family home. After negotiations concerning the size, location, and future use of the land, Sr. Simonis agreed to sell to the Shakras about eight and one-half acres of the total of about thirty acres owned by the Benedictine Sisters'. On November 28, 1984, the plaintiffs and Sr. Simonis executed a purchase and sale agreement drafted by Sr. Simonis' attorney, James Otis, which described the parcel of land involved and outlined the terms of the agreement. Both the Shakras and Sr. Simonis, as well as the lawyer, apparently believed mistakenly that the Benedictine Sisters was still in existence as a corporate entity. Neither of the parties made any effort to verify Sr. Simonis' authority or the existence of the corporation.

The plaintiffs tendered a deposit of ten thousand dollars, twenty percent of the agreed-upon sale price of fifty-thousand dollars, to Sr. Simonis and subsequently expended further monies in order to proceed with an application before the Bedford Planning Board for subdivision approval pursuant to the terms of the purchase and sale agreement. Midway through the application process, Sr. Simonis notified both the planning board and the plaintiffs that she wished to rescind the purchase and sale agreement because, she alleged, Mr. Shakra had misled her about the amount of land involved in the sale. The planning board deferred decision regarding the Shakras' subdivision application pending the resolution of any civil dispute between the parties regarding the purchase and sale agreement. Sr. Simonis refused to accept the plaintiffs' tender of the remainder of the purchase price or to execute and deliver the deed upon the Shakras' demand.

The plaintiffs brought a petition for specific performance of the purchase and sale agreement and damages against the Benedictine Sisters and also petitioned for a special ex parte attachment on the Benedictine Sisters' real estate located at 333 Wallace Road, Bedford, New Hampshire. A writ of attachment was served on Sr. Simonis in her capacity as mother superior of the Regina Pacis Convent of Benedictine Sisters on April 3, 1985. Sr. Simonis subsequently filed a petition to intervene as a party defendant, which the court granted. As intervenor Sr. Simonis argued that the purchase and sale agreement could not be enforced against the Benedictine Sisters, because the Benedictine Sisters no longer existed as a corporation; that, whether or not the corporation existed, she had acted outside her authority in executing the purchase and sale agreement; and that enforcement of the agreement would create undue hardship for the Benedictine Sisters.

In its decision the trial court noted that "the threshold question [in this case] is whether the purchase and sale agreement is valid. To form a contract it is necessary, among other things, that there be a party capable of contracting and a party capable of being contracted with." To answer these questions, the court had to determine whether the Benedictine Sisters was an entity in existence at the time the "contract" was made and, if so, whether Sr. Elena Simonis was a party capable of contracting on its behalf.

The court found that, at the time the purchase and sale agreement was executed, there was no corporate entity in existence whose president had authority to enter into a contract; that the plaintiffs failed to establish either a de jure or a de facto corporation; that there were insufficient grounds to support a claim of equitable estoppel; and that Sr. Simonis "entered into the agreement while on a frolic of her own, without the benefit of authorization or approval." The court denied the plaintiffs'...