Pirilla v. Bonucci

BECK, Judge,

dissenting:

I respectfully dissent, on the grounds that the documents relied upon by appellant to satisfy the statute of frauds in a sale of securities are not sufficient to satisfy 13 Pa.C.S. *503§ 8319(1). The majority apparently accepts the minutes of the two shareholders meetings as (1) written proof of the shareholders’ acceptance of appellant’s offer, and (2) evidence of the shareholders authorization of the officers to act as agents to complete the sale. I disagree.

My analysis begins with the nature of the writings which are in issue. The principal documents relied upon by appellant are the two sets of corporate minutes, signed by the secretary of Perryopolis Auto Auction, Inc. and the secretary-treasurer of Perryopolis Land Co. Inc. When an officer signs minutes of a meeting, he is testifying as to their accuracy for the corporation. He is not acting as an agent of the shareholders. I distinguish between a simple writing, which minutes certainly are, and a writing signed by the “party against whom enforcement is sought or by his authorized agent” within the meaning of § 8319(1).

The shareholders of both corporations assert that the unratified and repudiated minutes are not an enforceable agreement of sale. They cite Konsuvo v. Netzke, 91 N.J. Super. 353, 220 A.2d 424 (1966), in which the Court denied specific performance of a sale of securities where corporate minutes were offered to satisfy the statute of frauds. The Court ruled that minutes, to satisfy the statute, must be subsequently ratified and adopted by the shareholders. Thomas v. Prewitt, 355 So.2d 657 (Miss.1978), relying on Konsuvo, held that minutes, even when prepared by the corporate attorney and signed by the corporation’s president and secretary, were not a sufficient writing to constitute an enforceable sales contract. I believe the reasoning in these two cases was correct.

Nor are the other documents offered by appellant, singly or together, a binding contract. The Letter of Intent, signed by the officers, is not an agreement of sale. Although the title of the document is Letter of Intent rather than “contract” or “agreement” I do not believe that the title is dispositive. However, it appears clear that if the parties themselves intended this Letter of Intent to be a final agreement of sale, there would have been no subsequent Stock Purchase Agreement prepared and submitted *504by appellant. As our Supreme Court explained in Cona-way, supra, writings must show more than plan and intent. Writings which show that the parties are still negotiating, or which look forward toward a future contract, do not satisfy the statute of frauds. The writings must demonstrate that “a contract has been made ” (491 Pa. at 200, 420 A.2d at 411) (emphasis in original).

If any agency was created by the corporate minutes, it was to implement a sale, not to make the sale final. In each case, the officers of the corporation, in the minutes of January 10, 1977, were authorized to “proceed with the sale” provided certain conditions were met. Without more, the authority to implement an agreement does not constitute authority to make a contract. Therefore, even if the Letter of Intent could be viewed as an Agreement of Sale, the officers who signed it were not properly authorized by the minutes to complete the sale.

Appellant’s contention that appellees have made a judicial admission of the existence of a contract is unconvincing. The Stipulation of Facts as to the minutes (Nos. 6 and 7, R.4) is simply that the minutes as written are an accurate record of the meetings.

For all these reasons I would affirm the lower court’s order denying the request for specific performance.