58 N.C. App. 123 | N.C. Ct. App. | 1982
In its first assignment of error, defendant argues the court “erred in allowing Plaintiffs Motion for Summary Judgment on the issue of liability as to Plaintiffs original or first cause of action in that no evidence whatsoever was presented by Plaintiff to show that the defendant corporation had ever conveyed any of its assets.” Defendant does not contend that the issue of liability was not susceptible to summary judgment, and in fact next assigns error to the court’s failure to enter summary judgment that defendant was not liable as a matter of law. The question of law presented by these assignments of error, is therefore the following: Was the 31 May 1979 transaction by which defendant’s four shareholders simultaneously sold 100 percent of the stock in defendant corporation to Patel a sale of defendant’s property within the terms of the exclusive sales agency contract? Defendant would be liable for commission if and only if such stock sale by the shareholders, which was within the stipulated six month period, was a sale of the property by defendant corporation.
A case recently resolving issues similar to the one in the present case is Kingston Development Co. v. Kenerly, 132 Ga. App. 346, 208 S.E. 2d 118 (1974). In Kingston, the six sole shareholders of defendant Kingston exchanged all of their stock in Kingston with another corporation, Presidential, for stock in Presidential. Kingston, a corporation whose principal asset was real property located in Gwinnett County, thereby became a subsidiary of Presidential. The question before the court was whether this stock exchange transaction, whereby the stock in Kingston came under different ownership, relieved defendant Kingston of a contractual obligation to the plaintiff real estate brokers to pay them a commission upon a sale of the Gwinnett County property owned by Kingston.
The court in Kingston noted that after the transaction, (1) Kingston still held legal title to the realty, (2) but its stock was now owned by a different entity, and (3) that there was no
In reaching such a result, the court stated that it was employing “reverse piercing of the corporate veil,” Id. at 351, 208 S.E. 2d at 122, notwithstanding the absence of any allegation of fraud. The court continued,
In a case factually similar to that at bar the Supreme Judicial Court of Massachusetts ruled for the broker in Morad v. Haddad, 329 Mass. 730, 735, 110 N.E. 2d 364, 367 stating: “The sale of all of the stock of the corporation was in legal effect a sale of all of its assets, and the mere fact that the parties found it more convenient to transfer all of the stock rather than to make a conveyance of its assets does not change the substance of the transaction.” Another case of this nature is Benedict v. Dakin, 243 Ill. 384, 90 N.E. 712 which ruled that a broker who is employed to procure a purchaser of all the company’s property earns his commission when he procures a purchaser for all of the stock of the corporation.
[Furthermore,] where the corporation contracts with the broker ... it is the corporation as contracting party —not its stockholders as individuals — that would be responsible for commissions.
Id. at 351-52, 208 S.E. 2d at 122.
We think the principles and holding of Kingston may be invoked in the present case to hold that the former shareholder’s sale of 100 percent of the stock in defendant constituted a sale by the defendant corporation of the property in question, for the purposes of determining whether plaintiff is entitled to a commission under the exclusive listing agreement. Since there was such a sale, defendant is liable to plaintiff for the contracted-for commission. Summary judgment for plaintiff on the issue of defendant’s
Defendant’s third assignment of error is set out in the record as follows: “Judge Edward K. Washington erred in concluding as a matter of law that the Plaintiff is entitled to recover damages in the amount of $78,500.00, for Defendant’s breach of the February 23, 1979 listing contract in that the Court’s findings of fact are not supported by the evidence presented.” This assignment of error purports to be based on exceptions 4, 5, 6, and 7, which all relate to the court’s finding and conclusions that defendant was indebted to the plaintiff in the amount of $78,500.00. In its brief, the defendant seems to contend that the four unit apartment house which was included in the sale for $60,000.00 was not included within the listing agreement and that the plaintiff’s commission, if he was entitled to any sum, should be reduced by $6,000.00. The court found as a fact that the four unit apartment house was included in the listing agreement and that plaintiff was entitled to a 10 percent commission for that property and the remainder of the real estate involved. Defendant did not except to this finding, and indeed, there is plenary evidence in the record to support it. The finding made by Judge Washington with respect to the amount of defendant’s indebtedness upon the sale herein described support the conclusion that defendant is indebted to plaintiff in the total sum of $78,500.00. We find this assignment of error to be without merit.
Finally, plaintiff cross-assigns error to the denial of his motion for prejudgment interest. In its brief, defendant states:
In the light of G.S. 24-5 and decisions by the courts, defendant concedes that if plaintiff were entitled to judgment, he would be entitled to prejudgment interest as a matter of law except as to that portion of the alleged purchase price of the apartment complex which plaintiff stated was not covered in his listing contract.
Since we have affirmed the trial court’s conclusion that plaintiff is entitled to recover $78,500.00, we also conclude that he is entitled to recover prejudgment interest from the date of 31 May 1979. Plaintiff’s cross-assignment of error has merit.
Affirmed in part, reversed and remanded in part.
