Court Opinion

ID: 5781351
Source: CourtListenerOpinion
Date Created: 2022-01-12 17:50:59.96857+00
Date Added: 2024-06-11T08:41:59.250175
License: Public Domain

Steuer, J. (dissenting).
The basic facts in this litigation are not in dispute for the purposes of this application. In 1953 plaintiff entered into an employment contract with a subsidiary of defendant’s predecessor. Plaintiff’s position was a responsible one, he being the president of a subsidiary and in charge of one of his employer’s plants. In 1964 an agreement styled a “ Grant of Option ” was entered into between the parties. By its terms plaintiff in consideration of continuing to work for his employer was given an option to purchase up to 3,000 shares of the corporation’s common stock at $3.75 per share. The option could be exercised at any time prior to September 8, 1969, and was binding on any successor corporation by way of consolidation, merger or sale of assets. The option was to terminate if plaintiff ceased to be an employee of the granting corporation or any subsidiary of the same;
In 1965 the employment contract was extended to 1970 at an increased salary. In June, 1966 the granting corporation merged with certain others to form the present defendant. No question of liability on this score is presented. In September, 1968 defendant sold the plant and the business where plaintiff performed his services. This did not affect several other plants which defendant continued to operate. As a part of the sale, defendant assigned plaintiff’s employment contract to the purchaser.
Plaintiff had no prior notice of the sale or the assignment of the contract. However, when informed of it he continued to work at the plant in the same capacity and at the same salary, which was paid by the purchaser. Some eight months later, and within the period provided in the grant, plaintiff sought to exercise the option and defendant refused to deliver the stock on the ground that he had ceased to be an employee.
While it is beyond dispute that plaintiff had ceased to be an employee of defendant or of any corporation affiliated with it, he claims that the provision requiring him to be an employee is not a bar to his claim. This contention is based on the fact that his employment terminated without fault on his part.
We believe that Special Term rightfully regarded those cases which are based on a discharge without good cause (see Carter *293v. Bradlee, 245 App. Div. 49) as not bearing on the situation. While it is quite true that the purported assignment of plaintiff’s contract was without validity without his consent, this is not the controlling factor. It is equally true that had he been previously informed and agreed to the transfer his employment would have terminated by mutual consent and no rights dependent on that employment would have survived. It is difficult to see why plaintiff’s conduct in accepting the change in employers and continuing to serve without any protest whatsoever does not amount to a ratification of the action taken. There was mutual agreement, and no question of fault, good cause or good faith is involved.
It has been argued that plaintiff should recover because some degree of economic compulsion attended the transfer of plaintiff’s contract. It should be noted that plaintiff makes no such claim. On the contrary, it appears that he was entirely agreeable to the transaction. His sole claim is that he did not realize that the change of employment would terminate his option rights. While this would explain his good faith in making the claim, it does not give rise to any right to change the contract he made.
The order should be affirmed.
Nunez, J. P., Kupferman and Tilzer, JJ., concur with Macken, J.; Steuer, J., dissents in an opinion.
Order, Supreme Court, New York County, entered on June 30, 1971, reversed, on the law, plaintiff’s motion for summary judgment granted, defendant’s cross motion for summary judgment denied, and the case remanded to the court below for assessment of plaintiff’s damage. Plaintiff-appellant shall recover of defendant-respondent $50 costs and disbursements of this appeal.