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Continental Television Corp. v. Caster

JUNE 14, 1963.




Appeal from the Circuit Court of Winnebago County; the Hon. WILLIAM R. DUSHER, Judge, presiding. Reversed and remanded.


Rehearing denied July 27, 1963.

Bob Hope, Albert Zugsmith, Arthur Hogan and Ashley Robison negotiated for the purchase of all the capital stock of Greater Rockford Television, Inc. for $2,850,000. Plaintiff, Continental Television Corporation, wholly owned by Hope and his associates and apparently organized for the purpose of this transaction, deposited $20,000 as earnest money, agreed to pay an additional $480,000 on the closing date of the contract and the remainder in installments thereafter. The rights, duties and obligations of the several parties were reflected in a contract which is the subject matter of this controversy.

Plaintiffs claimed they had terminated the contract and sued for the return of the earnest money. The defendants, stockholders in Greater Rockford Television, Inc., counter-claimed for the $480,000 against Hope and associates who had guaranteed its payment and for damages against Continental. The trial court held for the defendants on the original suit and denied recovery of the $20,000 by Continental. It found for the counter-plaintiffs on each aspect of their counter-claim and entered judgment against Continental for $1,211,910 and against Hope and his associates on their guarantee for $480,000, with the proviso that the $20,000 (then in the hands of the clerk of the court) be credited on the latter judgment. From these judgments the plaintiffs appeal.

The issues concern themselves with an interpretation of the contract and by whom, when and in what manner the contract could be terminated. The contract stated that it was entered into

"by and between the undersigned shareholders of Greater Rockford Television, Inc., an Illinois corporation, which shareholders are in the aggregate sometimes hereinafter referred to as `First Parties', and Bob Hope, Albert Zugsmith, Arthur Hogan and Ashley Robison, sometimes hereinafter referred to in the aggregate as `Second Parties', and Continental Television Corporation . . . hereinafter sometimes referred to as `Continental.'" (Emphasis supplied.)

This contract was signed by the corporations mentioned, by Hope and associates individually and by the individual shareholders of the Rockford corporation. The concluding paragraph stated

"the respective corporate parties hereto have caused these presents to be executed by their respective proper corporate officers, and the individual parties hereto have hereunto set their respective hands and seals, . . . ."

Duties and obligations were imposed on the individuals composing each group and it is the purest sophistry to conclude that the individuals themselves were not parties to, nor bound by, the contract. In view of the unequivocal language above quoted there seems to us little doubt that the term "parties" include the corporations, each as an entity, and all signatory individuals, each as an entity.

The litigious storm which we review centers around the use of the words "in the aggregate" and its application to paragraph 17 of the contract relating to termination. Paragraph 17 reads as follows:

"In the event the closing date as hereinafter defined does not occur within one hundred eighty (180) days of the filing of said application for approval with the Federal Communications Commission, then either party hereto may terminate this agreement, provided:

(a) That ten (10) days written notice previous to termination is given by the party desiring terminate; and

(b) That the closing date has not been delayed by reason of the act or default, directly or indirectly, of the terminating party (or any of the individuals comprising First Parties and Second Parties, as the case may be)."

It will be noted that no one could terminate the contract for one hundred eighty (180) days immediately following the filing of the application for the necessary permits with F.C.C. On the 181st day, Hope, individually, purporting to act under this paragraph, advised Rockford of his intention to terminate and, on that day, gave appropriate notice of termination. He was promptly advised by Rockford that such notice could only be given by Second Parties in the aggregate and his individual notice was and would be treated as a nullity. Hope apparently acquiesced in this view and this understanding of the contract or, at least he ...

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