Court Opinion

ID: 3722539
Source: CourtListenerOpinion
Date Created: 2016-07-06 06:53:04.702659+00
Date Added: 2024-06-11T18:01:24.057491
License: Public Domain

I agree that considering the purposes of the stock redemption agreement the term "accounts receivable" as used in it cannot, as a matter of law, be stretched to the illogical extreme of covering sums "booked" but unearned.
Even more so, the term cannot be used to include sums held in escrow, as it were, for Upper Valley/Stouder Memorial Hospital. Monies that belong to someone else are not "received" by the entity holding them in trust for the true owner. If it were otherwise, you might as well include all the employers' payroll deductions, including withheld taxes and social security payments, in accounts receivable.
I am not persuaded by the argument that since Contemporary routinely listed both the booked but unearned sums and the monies belonging to the hospital under accounts receivable, we should construe the term "accounts receivable" in the stock redemption agreement to include both those sums of money. As Judge Grady points out, the purpose of the stock redemption agreement here is to divide the corporation's value equally between the shareholders. That purpose would be totally frustrated by the holding of the trial court.
The corporation's purpose in including the amounts in issue under "accounts receivable" was probably no more than convenient and simplified bookkeeping, and that purpose has no bearing on the interpretation of the stock redemption agreement. "What's in a name?"* That which Contemporary calls accounts *Page 88 
receivable in its books are not necessarily true accounts receivable. You may call a dog a horse until you're hoarse, but it's still a dog.
* Apologies to the Bard. Romeo and Juliet, II, ii 43.