Court Opinion

ID: 9741087
Source: CourtListenerOpinion
Date Created: 2023-08-26 20:49:21.513188+00
Date Added: 2024-06-11T07:24:22.225558
License: Public Domain

McCown, J.,
dissenting.
The revised articles of incorporation contain the complete terms of the stock option agreement involved here. That agreement could not be and was not altered by the unilateral conduct or writings of either party acting alone. The letters of January 28 and February 27 had no contractual effect except as notice of exercise of the option in accordance with the articles of incorporation. The only real issue here is whether, under the terms of the option contained in the revised articles, the defendant had the right to set up a reserve for the contingent liabilities involved. Collateral issues are whether the . reserve was reasonable and timely.
Under the specific terms of the option in the revised articles of incorporation, the net worth of the stock was to be determined by the defendant, and was to be adjusted to provide reserves for contingent liabilities, among other things. The contingent liabilities involved here were in existence on December 31, 1973, and there is not even a claim that the amount of the reserve was unreasonable. In fact, the remainder, if any, of plaintiff’s share of the reserve for contingent liabilities will be paid to plaintiff when those liabilities have been finally determined and settled. The majority opinion writes into the option in the revised articles terms which are not included, and writes out other terms which are included. The express terms of a written, binding option cannot be disregarded or adjusted on the basis of the unilateral interpretation of one of the parties. Neither does the record support that action here.