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Stap v. Chicago Aces Tennis Team

OPINION FILED JULY 21, 1978.

SUSAN STAP, PLAINTIFF-APPELLANT,

v.

THE CHICAGO ACES TENNIS TEAM, INC., ET AL., DEFENDANTS-APPELLEES.



APPEAL from the Circuit Court of Cook County; the Hon. ALLEN HARTMAN, Judge, presiding.

MR. PRESIDING JUSTICE SULLIVAN DELIVERED THE OPINION OF THE COURT:

Rehearing denied August 29, 1978.

In this appeal, the trial court granted motions of certain defendants to dismiss counts I and III of plaintiff's fifth amended complaint (the complaint), and we are presented here with questions as to whether causes of action were stated in those counts.

It appears that plaintiff, a professional tennis player, entered into a contract on January 24, 1974, to play with the Chicago Aces Tennis Team in participation with other teams in a league of World Team Tennis, Inc. (WTT). An addendum to the contract provided for the payment to plaintiff of a base salary and certain bonuses. The signators were plaintiff and the "CHICAGO ACES TEAM TENNIS, INC. [Club] By Jordon H. Kaiser, Pres." The document was a standard WTT player's contract form and, as required by its provision, it was approved by the WTT commissioner on February 27, 1974. The Club, however, was not incorporated until May of 1974, with Jordon H. Kaiser and Walter Kaiser (the Kaisers) as sole shareholders.

Thereafter, a change in plaintiff's bonuses was provided for in an amendment to the contract dated June 1, 1974, which stated that it was between "Chicago Aces Tennis Team, Inc., Owner and Sue Stap, Player." Signators were plaintiff and "Jock A. Miller General Manager Chicago Aces."

The contract was for one playing season, with the Club having an option under certain conditions to renew for an additional year. Plaintiff played throughout the season, but the Club did not participate in the WTT league thereafter, and her contract was not extended.

This action was brought by plaintiff for salary and bonuses due her under the contract. In count I she seeks a recovery from Jordon H. Kaiser and alleges that she contracted to play tennis in exchange for his promise to pay a certain salary and bonuses; that he stated that she would be playing for his tennis team but would be employed by him individually; that he did not indicate that the Chicago Aces Tennis Team was to be a corporation; and that she did not understand her contract was between herself and a corporation to be formed.

In count III, plaintiff seeks a recovery against the Kaisers and defendant Kaiser Investments, an Illinois partnership. She alleges in pertinent part that the Kaisers were the only shareholders of the Club and of Kaiser Investments; that they were also majority stockholders of four other corporations; that the Kaisers undercapitalized the Club; that Kaiser Investments abused the corporate entity of the Club by funneling funds between the other four corporations and the Club until the Kaisers determined the Club would not be a viable corporation; and that the Kaisers, through Kaiser Investments, failed to carry on the business of Kaiser Investments and the other four corporations as separate interests to the extent that the observance of the fiction of separate interests would sanction a fraud by promoting injustice.

Count II, which is directed against the Club only, is not involved in this appeal and remains pending in the trial court.

Motions to strike and dismiss counts I and III by all defendants except the Club were granted as not stating a cause of action.

OPINION

As to count I, which seeks damages for breach of contract against Jordon H. Kaiser, plaintiff contends that she had contracted with him individually to play tennis for his promise to pay her a certain salary and bonuses. In the briefs filed in this court, both parties treat Jordon Kaiser as a promoter of the Club.

• 1, 2 A promoter is one who alone or with others forms a corporation and procures for it the rights, instrumentalities and capital to enable it to conduct its business. (Goodwin v. Wilbur (1902), 104 Ill. App. 45; 1 W. Fletcher, Cyclopedia of the Law of Private Corporations § 189, at 657 (perm. ed. 1974). A promoter's personal liability on a pre-incorporation contract entered into with a third party depends on the intention of the parties at the time of the contract (Whitney v. Wyman (1879), 101 U.S. 392, 25 L.Ed. 1050; H.F. Philipsborn & Co. v. Suson (1974), 59 Ill.2d 465, 322 N.E.2d 45; Martindell v. Lake Shore National Bank (1958), 15 Ill.2d 272, 154 N.E.2d 683), and the court will look to the contract and other documents executed contemporaneously in determining the party's intent (Philipsborn; Illinois Match Co. v. Chicago, Rock Island & Pacific Ry. Co. (1911), 250 Ill. 396, 95 N.E. 492).

Relying solely on Philipsborn, plaintiff maintains here that Jordon Kaiser is personally liable on the contracts he entered into. We see no support for plaintiff in Philipsborn, which involved a promoter's liability on a precorporation contract for a construction loan, the promoter having signed as president of a company which was not incorporated until two months later. There was a breach of the agreement, and the lender sued the corporation and the promoter. The court, after stating that the promoter's liability turned on the intent of the contracting parties at the time of the contract, ...


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