Stancil v. Stancil, No. 299PA89
| Docket Nº | No. 299PA89 |
| Citation | 326 N.C. 766, 392 S.E.2d 373 |
| Case Date | June 13, 1990 |
| Court | United States State Supreme Court of North Carolina |
Page 373
v.
Howard STANCIL.
Narron, Holdford, Babb, Harrison & Rhodes, P.A. by Elizabeth B. McKinney and William H. Holdford, Wilson, for defendant-appellant.
MITCHELL, Justice.
The plaintiff filed this action on 29 October 1986 to compel the specific performance of an alleged oral agreement between the plaintiff and the defendant. The plaintiff alleged that the agreement[326 N.C. 767] gave him the right to purchase the defendant's shares of stock in Bruce Stancil Refrigeration, Inc. The defendant raised as an affirmative defense that article 8 of the Uniform Commercial Code--Investment Securities (hereinafter, article 8), codified in Chapter 25 of the General Statutes of North Carolina, makes such oral agreements for the sale of investment securities unenforceable and moved for summary judgment. The trial court granted the motion and entered summary judgment for the defendant. On appeal, the Court of Appeals reversed and remanded. Thereafter, this Court granted the defendant's petition for discretionary review. We now conclude that the trial court's judgment was correct and reverse the decision of the Court of Appeals.
The pleadings and the parties' forecasts of evidence tended to show that the plaintiff incorporated Bruce Stancil Refrigeration, Inc. as a North Carolina close corporation in 1973. The defendant, the plaintiff's brother, became associated with the corporation in 1980. The plaintiff sold fifty percent of the stock in the corporation to the defendant for $35,000. In his complaint, the plaintiff alleged that the defendant orally agreed to sell his shares to the plaintiff in the event that the defendant (1) could not perform his duties at the company, (2) left the business, or (3) could not work with the plaintiff in an agreeable manner. Thereafter, the brothers' professional relationship deteriorated, and the defendant left the company on 12 October 1984. The plaintiff now contends that the defendant's departure gave the plaintiff the right under the oral agreement to purchase the defendant's shares of stock. The defendant has refused to sell his shares of stock in the closely held corporation to the plaintiff.
Before the trial court, the defendant moved for summary judgment arguing that N.C.G.S. § 25-8-319 makes oral contracts for sales of investment securities, including shares of stock of a closely held corporation, unenforceable. The trial court granted the defendant's motion. The Court of Appeals held that shares of stock in a closely held corporation, such as the shares of Bruce Stancil Refrigeration, Inc., are not investment "securities" as that term is defined in N.C.G.S. § 25-8-102 and, therefore, article 8--including N.C.G.S. § 25-8-319--does not apply to this case. We disagree.
Page 375
With respect to the applicability of article 8, the Court of Appeals focused on the fact that the corporation involved here was closely held. Relying upon Penley v. Penley, 314 N.C. 1, 332 [326 N.C. 768] S.E.2d 51 (1985) and Meiselman v. Meiselman, 309 N.C. 279, 307 S.E.2d 551 (1983), the Court of Appeals concluded that shares of stock in the closely held corporation were not suitable for trading on a securities exchange or market. While this may be true, the Court of Appeals' reliance on Penley and Meiselman in this regard was misplaced. Since both of those decisions involved questions arising under the North Carolina Business Corporations Act, N.C.G.S. Chapter 55, they are inapposite to the central question in this case--whether shares of a closely held corporation are investment "securities" for purposes of article 8.
Under article 8, an investment security is an instrument which:
(i) is issued in bearer or registered form; and (ii) is of a type commonly dealt in upon securities exchanges or markets or commonly recognized in any area in which it is issued or dealt in as a medium for investment; and (iii) is either one of a class or series or by its terms is divisible into a class...
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Allen v. Coates, No. 94-505
...publicly or close held--are instruments "of a type" commonly dealt in on securities exchanges or markets. Stancil v. Stancil, 326 N.C. 766, 392 S.E.2d 373, 375 (1990). In addition, not only is stock in a closely-held corporation an interest "of a type" that is traded on ......
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Wakefield v Crawley, 99-00029
...WL 137977, at n. 7 (Mo. Ct. App. May 26,1981),rev'd on other grounds, Schultz v. Schultz, 637 S.W.2d 1, 7 (Mo. 1982); Stancil v. Stancil, 392 S.E.2d 373, 376 (N.C. 1990); Gross v. Vogel, 81 A.D.2d 576, 577 (N.Y. App. Div. 1981); Domo v. Boulder Bluff Corp., No. 920T065, 1993 WL 527911, at *......
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In re Bame, Bankruptcy No. 99-40683. Adversary No. 00-4011.
...hold that shares in a closely-held family corporation, such as Al & Alma's, do not fulfill this requirement. See Stancil v. Stancil, 326 N.C. 766, 392 S.E.2d 373, 375 (1990) (citing cases). However, the majority of courts hold that shares in a closely-held family corporation do, in fact......
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State v. Smith, No. COA06-49.
...the argument falls far short of the standard a defendant must meet for an ineffective assistance of counsel argument. Id. at 662, 392 S.E.2d at 373. Further, defendant's brief on this issue states "the present state of the law does not support this Defendant has also not shown his tria......
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Allen v. Coates, No. 94-505
...publicly or close held--are instruments "of a type" commonly dealt in on securities exchanges or markets. Stancil v. Stancil, 326 N.C. 766, 392 S.E.2d 373, 375 (1990). In addition, not only is stock in a closely-held corporation an interest "of a type" that is traded on securities markets, ......
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Wakefield v Crawley, 99-00029
...WL 137977, at n. 7 (Mo. Ct. App. May 26,1981),rev'd on other grounds, Schultz v. Schultz, 637 S.W.2d 1, 7 (Mo. 1982); Stancil v. Stancil, 392 S.E.2d 373, 376 (N.C. 1990); Gross v. Vogel, 81 A.D.2d 576, 577 (N.Y. App. Div. 1981); Domo v. Boulder Bluff Corp., No. 920T065, 1993 WL 527911, at *......
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In re Bame, Bankruptcy No. 99-40683. Adversary No. 00-4011.
...hold that shares in a closely-held family corporation, such as Al & Alma's, do not fulfill this requirement. See Stancil v. Stancil, 326 N.C. 766, 392 S.E.2d 373, 375 (1990) (citing cases). However, the majority of courts hold that shares in a closely-held family corporation do, in fact, me......
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State v. Smith, No. COA06-49.
...the argument falls far short of the standard a defendant must meet for an ineffective assistance of counsel argument. Id. at 662, 392 S.E.2d at 373. Further, defendant's brief on this issue states "the present state of the law does not support this Defendant has also not shown his trial cou......