Opinion ID: 344913
Heading Depth: 1
Heading Rank: 4

Heading: Dismissal of Huarisa's Counterclaim

Text: 69 The district court dismissed Huarisa's counterclaim under paragraph 4(a) of the January 9, 1969, stock option transfer agreement. Under that paragraph, Sundstrand agreed that it would purchase from Huarisa all or any part of its 5,686 shares transferred to Huarisa on March 3, 1969, for $58.75 per share on 15 days' written notice from Huarisa. He gave such notice on November 11, 1970, but Sundstrand rejected it on November 23, 1970, on the ground that Huarisa had violated the Securities Exchange Act of 1934 and SEC rules thereunder. The counterclaim sought specific performance or damages of $334,763.25 plus interest. 70 The reason given below for the dismissal of the counterclaim is that the agreement in question was made in violation of the Act and Rule 10b-5, so that it was void as regards the rights of Huarisa under Section 29(b) of the Act (15 U.S.C. § 78cc(b) ) (mem. op. 76). This accords with our opinion in Sundstrand I, 488 F.2d at 816. The testimony of Messrs. Ethington, Schuette, Sadler and Ross was receivable under Rule 601 of the Federal Rules of Evidence and therefore not barred by the then current Illinois Dead Man's Act (Ill.Rev.Stat.1971 ch. 51, § 2). 38