Appeal from the Superior Court of Cook County; the Hon. SAMUEL
B. EPSTEIN, Judge, presiding. Decree affirmed.
MR. JUSTICE FRIEND DELIVERED THE OPINION OF THE COURT.
In this proceeding, plaintiff Bernard E. Epton seeks specific performance of an oral option agreement to buy control of the stock of the American League Baseball Club of Chicago, an Illinois corporation, known as the Chicago White Sox, or, in the alternative, asks for damages for breach of the agreement. After several hearings, during which plaintiff amended his pleadings, the chancellor sustained defendants' motion to strike the amended complaint and entered a final decree dismissing the cause with prejudice, from which plaintiff appeals.
The amended complaint alleges in minute detail facts relating to the transactions between the parties. Since defendants' motion to dismiss admitted all the well pleaded allegations of fact in the amended complaint, the following salient facts are considered to be uncontroverted.
Count 1 alleges that on May 31, 1961 The CBC Corporation owned 2966 shares of the common stock of the Chicago White Sox, constituting fifty-four per cent of its issued and outstanding stock. The CBC stock in turn was entirely owned by Henry B. Greenberg, Mary Frances Veeck, the wife of Bill Veeck, and Artnell Company. Artnell was and is controlled by Arthur C. Allyn, Jr. With the knowledge, acquiescence, and consent of his wife, Veeck dealt with and represented the CBC stock held by her as though it were owned by him. For a long period of time prior to May 31, 1961 Veeck was president of CBC and Greenberg its vice president and treasurer. Veeck, Greenberg, and Allyn were directors of CBC, constituted a majority of the five-man board, and exercised complete control over all the affairs and acts of the corporation.
In early April 1961 Allyn informed plaintiff that CBC would sell its 2966 shares of the Chicago White Sox for $4,800,000. Allyn advised plaintiff that all negotiations should be conducted through him, and he gave plaintiff balance sheets and operating statements of the Chicago White Sox. Thereafter plaintiff organized a group of investors. Between early April and May 31, 1961, Allyn conferred with plaintiff by telephone on several occasions with respect to the progress plaintiff was making in raising the necessary funds. On May 24, 1961 plaintiff informed Allyn that he was very close to raising the required amount and asked Allyn whether he would need to submit a formal offer of purchase. Allyn told plaintiff that his informal offer would be sufficient, and that "`if you make me an offer, I assume you will stand behind it and that is good enough for me.'" By May 31, 1961, plaintiff alleges, he had commitments in excess of $4,800,000 from responsible persons.
It is alleged that on Wednesday morning, May 31, 1961, plaintiff went to Allyn's office and informed him that his group was prepared to make an offer of $4,800,000, that Allyn characterized this information as "`wonderful news,'" and said that plaintiff's group could have the option for nothing. He also informed plaintiff that he would set up a meeting with Veeck and Greenberg. Pursuant to his direction plaintiff's counsel prepared an option agreement, using as a form the option contract which CBC had utilized some years before when purchasing the same 2966 shares from Dorothy Comiskey Rigney. One of plaintiff's counsel had been in communication with Veeck and is alleged to have been informed by him that plaintiff could have, for $1000, a one-week option to purchase the 2966 shares for $4,800,000.
On Wednesday evening, May 31, 1961, Allyn drove plaintiff to Veeck's apartment where they conferred with Veeck, Greenberg, and John Yonco, a lawyer and the assistant secretary of CBC, who was acting as CBC's legal representative at this meeting. Plaintiff's counsel were also present and submitted to the parties the option agreement which had been prepared; it provided that CBC grant plaintiff, for $1000, a twenty-eight day option to purchase the 2966 shares for $4,800,000. After plaintiff's attorneys and Yonco had agreed to certain changes in terminology in the prepared option agreement, Greenberg stated that a twenty-eight day option was too long and suggested a four-day option. After discussion the parties compromised on a one-week option period. Greenberg also objected to the $1000 consideration; he regarded it as insufficient. Veeck was of the opinion that this amount was adequate in light of the fact that CBC had paid only a $100 fee for a two-month option when it had purchased the 2966 shares from Mrs. Rigney. The matter was discussed further, and the parties agreed to a $1000 consideration for a one-week option. The draft agreement was then reviewed, paragraph by paragraph, and various changes were made by the attorneys. After the option agreement had been further reviewed and revised, Veeck, Allyn, and Greenberg stated that all the terms had been fully agreed on, and plaintiff had a one-week option. They next discussed the fact that they would have to resign as directors of the Chicago White Sox, and reviewed the technicalities which should be observed. Following these discussions, plaintiff said that he would prefer a "clean" copy of the agreement to show his investors and suggested that the formality of actually executing the contract be deferred until the agreement could be retyped. Allyn, Veeck, and Greenberg acceded to this suggestion, but informed plaintiff that he had a binding one-week option commencing at midnight of that evening. At the conclusion of the meeting Veeck shook plaintiff's hand and said, "`O.K., Bernie, . . . we have a deal. I am glad that's taken care of. I know you will do a good job.'" Allyn is alleged to have shaken plaintiff's hand and commented, "`It is a fine deal. You won't be sorry.'" Greenberg also expressed his approval with a handshake, and congratulated plaintiff. On Thursday morning, June 1, 1961, plaintiff's attorneys, in retyping the option agreement, determined that they wished a change to be made in wording. When counsel called Yonco concerning this change, Yonco rejected it on the ground that the parties had a firm and binding agreement, the terminology of which was subject to neither change nor negotiation; accordingly the option agreement was retyped without alteration, and on that day delivered to Yonco for execution by the parties.
Early on Friday morning, June 2, 1961, one of plaintiff's counsel delivered to Yonco a check in the sum of $1,000, dated May 31, 1961, payable to the order of The CBC Corporation, along with a letter dated June 2, 1961 which stated: "In connection with the Option Agreement I am enclosing our check for $1,000, representing the consideration for the Agreement." This check was accepted by CBC. There are allegations in the amended complaint with respect to the proposed public announcement of the offer to purchase the Chicago White Sox stock. On Friday, June 2, 1961, Allyn asked plaintiff to come to his office and go through the motions of making an offer. When plaintiff arrived in Allyn's office about four-thirty in the afternoon, Allyn informed him that although Greenberg was being difficult, he and Veeck would see to it that CBC signed the option agreement and that the announcement of its signing would be made public on Monday, June 5, 1961. It appears that Greenberg was changing his mind, or had already decided not to sell his shares of the stock. The reasons for his apparent change of attitude do not appear of record. However, on Saturday, June 3, 1961, plaintiff informed Veeck that he stood ready, willing, and able to meet the terms and conditions of the option agreement by depositing the sum of $99,000. In reply to Veeck's query as to whether the Epton group could raise the necessary $4,800,000, plaintiff informed Veeck that not only did his group have commitments in excess of that amount but that they were exercising their option. Plaintiff further told Veeck that he would not deposit the $99,000 until such time as CBC formally executed the option agreement, but he offered to deposit with Veeck a certified check in the amount of $100,000 to show good faith and his ability to perform. Veeck advised him that this was not necessary.
It appears that on Monday, June 5, 1961, Allyn commenced negotiations with Veeck and Greenberg for the purchase of all their shares of CBC stock. On the same day Allyn informed plaintiff that Greenberg was not willing to sign the agreement as yet. Late that same day CBC returned the $1000 check which it had previously accepted but not cashed. On Wednesday, June 7, 1961, Allyn informed plaintiff that Greenberg would not sign the option agreement and that CBC would not carry out its obligations thereunder. Plaintiff again informed Allyn that he stood ready, willing, and able to perform the agreement and demanded performance by CBC. Thereafter, on Saturday, June 10, 1961, Allyn through Artnell purchased from Greenberg and Mary Alice Veeck all their shares of CBC stock. Allyn thus caused Artnell to become the sole shareholder of CBC; nevertheless CBC and Allyn have ever since refused to perform the option contract.
In Count 2 plaintiff realleges substantially all the allegations of Count 1, represents that on May 31, 1961 and presently the 2966 shares of the Chicago White Sox have a fair market value of at least $5,500,000, asks that defendants be held to specific performance of the terms and conditions of the option agreement, or that, in the alternative, if plaintiff is not entitled to the remedy of specific performance, a judgment for damages in the amount of $700,000, with costs, be assessed against defendants.
Paragraph 2 of the option agreement, which underlies the controversy between the parties, reads as follows:
"2. Buyer shall exercise this option by giving Seller notice in writing of his intention so to do, together with a certified or bank cashier's check payable to the order of The CBC Corporation in Chicago Clearing House funds in the amount of $99,000. The notice shall be given to Seller not more than one week after date hereof and shall specify a date of closing which shall be not less than 10 days and more than 21 days after the date of such notice. The closing shall take place at the office of Continental Illinois National Bank and Trust Company of Chicago at 10:00 a.m. on the date specified in the aforesaid notice (hereafter called the Closing Date). If not exercised within 7 days as aforesaid this option shall terminate and the parties shall be under no further obligation to each other hereunder."
The foregoing paragraph clearly stipulates two conditions: plaintiff was required within one week to give written notice of exercise, and was required within the same period to give CBC a certified or bank cashier's check in the amount of $99,000. Neither condition was fulfilled, and defendants urge that plaintiff's failure to comply with the terms of the agreement precludes him from bringing a successful action to enforce the option agreement under Count 1 or to obtain an award in damages under a breach thereof under Count 2.
There is no issue of fact on this point. The amended complaint does not allege that written notice of exercise was ever given. The only allegations germane to notice of exercise are ...