APPELLATE COURT OF ILLINOIS, FIRST DISTRICT, FIFTH DIVISION
518 N.E.2d 241, 164 Ill. App. 3d 710, 115 Ill. Dec. 716 1987.IL.1789
Appeal from the Circuit Court of Cook County; the Hon. Arthur C. Perivolidis, Judge, presiding.
PRESIDING JUSTICE SULLIVAN delivered the opinion of the court. LORENZ and MURRAY, JJ., concur.
DECISION OF THE COURT DELIVERED BY THE HONORABLE JUDGE SULLIVAN
Plaintiff, Patricia Hall, as administrator of the estate of Richard B. Martin, her father, and executor of the estate of Vera J. Martin, her mother, brought a declaratory judgment action against defendants J. F. Martin Cartage Company and Neil C. Martin to determine whether a stock purchase agreement between Richard B. Martin and the J. F. Martin Cartage Company terminated prior to decedent's death. The circuit court found that the agreement was valid and enforceable and entered judgment in favor of defendants at the close of plaintiff's case. Plaintiff appeals.
The J. F. Martin Cartage Company (the Corporation) was begun in 1901, was incorporated in 1915 and has operated under its present name since 1928. J. F. Martin was the father of Richard B. Martin (decedent) and his brother, J. F. Martin, Jr., who worked for the Corporation for most of their lives. Defendant Neil C. Martin (president) is the son of J. F. Martin, Jr., and has been president of the corporation since 1965. After the death of his father in 1974, the president controlled 816 shares, which is 51% of the Corporation's stock; decedent owned 784 shares, or 49% of the stock.
On July 15, 1974, decedent and the Corporation entered into a stock purchase agreement whereby the Corporation was given the right to redeem stock owned by decedent at the time of his death. The agreement fixed the redemption price as the book value per share as reflected in the books of account of the Corporation as of the last day of the month immediately preceding the date of the stockholder's death. Paragraph 9 of the stock purchase agreement provided:
"This Agreement shall terminate upon the occurrence of any of the following events:
A. Cessation of the Corporation's business;
B. Liquidation and dissolution of the Corporation;
C. Bankruptcy or insolvency of the Corporation or the appointment of a receiver of the assets of the Corporation if said appointment is not vacated within sixty (60) days after same becomes effective."
Decedent devised the stock purchase agreement to protect the Corporation from outside control and to insure its continuance after his death. The preamble expressed the parties' belief that it was in the best interests of the Corporation that decedent's stock be acquired by the Corporation at his death and not fall into the hands of persons whose interests might be antagonistic to those of the Corporation. The president had no role in the negotiation or preparation of the stock purchase agreement and never discussed the specific terms of the agreement with decedent after it was executed.
Under its original charter, the Corporation was formed "to engage in the General Teaming and Automobile Trucking business, including the maintenance and operation of a storage warehouse for general merchandise in the City of Chicago and elsewhere," and "to engage in the business of keeping a livery and boarding stable." On September 30, 1940, the articles of incorporation were amended to include as corporate objects "the power of ...