Matter of Estate of Kern , 107 Nev. 988 ( 1991 )

OPINION

Per Curiam:

On April 19, 1985, Dorsey A. Kern (Dorsey), a Nevada resident, executed a will bequeathing most of his personal and real property physically located in Nevada to his wife, Kay Kern (Kay).¹ The will also provided that Dorsey’s real and personal property in Colorado, including a ranch in Cheyenne Wells, Colorado, would be placed in a trust which would be administered by Kay as trustee.²

On June 27, 1987, Dorsey retained a Las Vegas attorney to form a Nevada corporation named DorKay, Inc. Dorsey and Kay each owned fifty percent of the shares in the corporation. On June 29, 1987, the directors of the corporation held their first meeting.³ At the meeting, which took place in the attorney’s office, it was decided that the corporation would issue 2,500 shares of capital stock to Dorsey and Kay in exchange for all right, title, and interest in the Cheyenne Wells ranch. The minutes stated in pertinent part:

After due consideration of the offer and by unanimous vote, the following resolution was adopted:

WHEREAS, DORSEY A. & KAY F. KERN⁴ has [sic] offered to transfer [the ranch] to this corporation, upon the terms and conditions as more fully appears in the offer which has been heretofore set forth in these minutes in return for the issuance to DORSEY A. and KAY F. KERN . . . 2500 shares of capital stock of said corporation.

(Footnote added.) These minutes were signed on June 29, 1987, as was the “purchase agreement.” The purchase agreement, however, was signed only by Kay and offers no specificity, terms, or description of the property in question. It simply states in relevant part:

The propert [sic] situated in Cheyenne Wells Colo described as followes [sic]. Abstracts to same have been approved to transfer property into DorKay Corporation.

It is resolved that all mineral, oil, gas rights herewithin [sic] as described in the abstracts go with the land purchased by DorKay Corporation.

Although the corporation transferred the 2,500 shares of stock to Dorsey and Kay as joint tenants with the right of survivorship, the real property was never transferred to the corporation.

Dorsey died on April 4, 1989, and Kay was appointed as executrix of the estate. She sought an order from the district court to complete conveyance of the Cheyenne Wells ranch from Dorsey’s estate to DorKay, Inc. Such conveyance would render complete title to Kay as the sole shareholder of DorKay, Inc. Even though the corporation was not a party to this suit and the estate would not benefit from the transfer, the district court granted the order. We conclude that the district court erred.

NRS 149.110 provides the probate court with discretionary power to make a decree authorizing and directing the executor or administrator of an estate to convey real property to persons entitled, if the decedent: (1) is bound by a written contract to do so; and (2) if living, might have been compelled to make such a conveyance. The statute clearly demonstrates the legislative intent to satisfy the rights of either the estate or a third party in completing a conveyance which has been affected or delayed by the conveyor’s death.

We conclude that Dorsey was neither bound by a written contract to convey his property, nor could he have been compelled to make the conveyance.⁵ Finally, we conclude that Kay, as executrix of Dorsey’s estate, has no standing to bring this suit. Cf. Washoe Broadcasting Co. v. Neuhoff, 102 Nev. 464, 726 P.2d 338 (1986) (only a party with an actual interest has standing to petition for a sale under NRS 148.090). Although this type of action generally is filed by a third party, the executrix or administrator may seek a conveyance in the best interests of the estate. Id. Dorsey’s estate, however, had no interest in seeing the Cheyenne Wells ranch transferred to DorKay, Inc. Rather, it was in the estate’s best interest to retain the property in the trust. Therefore, the estate was without standing to seek the relief requested.

While we conclude that reversal is warranted on the issue of standing alone, we also find that as a matter of law, an order of specific performance should not have been granted in this case.

In the case at bar, several essential elements of a valid contract are missing. First, neither the corporate minutes nor the purchase agreement adequately indicate the terms of the contract or provide necessary details as to the description of the property. In addition, material terms such as subject matter, price, payment terms, quantity, and quality are either altogether lacking or insufficiently certain and definite to support specific performance. See Calamari & Perillo, Contracts § 2-9 (3rd ed. 1987). Moreover, there is no adequate consideration binding the parties. DorKay, Inc. offered 2,500 shares of worthless stock (the corporation had no assets) in exchange for valuable property. While courts of law generally need not concern themselves with the adequacy of the consideration, courts of equity must. See LaGue v. District Court, 68 Nev. 125, 127, 227 P.2d 436, 437 (1951) (court found that petitioner properly stated cause of action by arguing that alleged contract sought to be specifically enforced was incomplete and neither fair nor reasonable, and that consideration was inadequate). Because the consideration in the case at bar was inadequate, we refuse to violate principles of equity by upholding specific performance.

Finally, the agreement was not signed by the party to be bound. NRS 111.210(1) states that a contract for the sale of land “shall be void unless the contract, or some note or memorandum thereof, expressing the consideration, be in writing, and be subscribed by the party by whom the lease or sale is to be made.” (Emphasis added.) Kay suggests that the corporate minutes of the first meeting of the directors of DorKay, Inc. are sufficient for this purpose. We disagree. Dorsey signed the corporate minutes in his capacity as “President” and “Temporary Chairman.” He never signed them in his individual capacity. It is incumbent upon one seeking to extend personal liability to a corporate officer for corporate debt, to show that the officer intended to be personally bound or that the creditor was looking to the officer as guarantor of the debt. Trident Construction v. West Electric, 105 Nev. 423, 428, 776 P.2d 1239, 1242 (1989) (corporation officer’s signature, without statement acknowledging he was acting for corporation, was insufficient to support finding of personal guarantee for debt of corporation); Gross v. Lamme, 77 Nev. 200, 204-205, 361 P.2d 114, 116 (1961) (where instrument contains signature words indicating that subscriber is signing on behalf of principal, or in a representative capacity, subscriber is not liable on the instrument if duly authorized to sign). Therefore, we conclude that because Dorsey was the owner and alleged seller of the land in question, his signature as an individual was required.

We also note that although there is evidence indicating that Dorsey intended to transfer the property to the corporation, such evidence is insufficient and does not establish an intent to be bound by a contract. Kay’s efforts appear to be an attempt to compel conveyance of an inter vivos gift rather than to complete a contract. We therefore reverse the order of the district court and remand for further proceedings consistent with this opinion.

1 Kay Kern was Dorsey Kern’s second wife. They were married on February 28, 1982. Appellants are Dorsey’s children from his first marriage.

2 Under the terms of the trust, Kay was to receive the income from the Colorado properties for the rest of her life or until she remarried, at which time the trust would terminate and the undistributed income and corpus would be paid to Dorsey’s adult children.

3 DorKay, Inc.’s board of directors consisted of two members: Dorsey and Kay Kern.

4 Kay Kern had no interest in the property.

5 In order to compel conveyance, Dorsey, in his corporate capacity as President of DorKay, Inc., would have had to sue himself in his individual capacity as owner of the Cheyenne Wells ranch. We find this scenario implausible.