Ginsburg v. Warczak

69 N.E.2d 733, 330 Ill. App. 89, 1946 Ill. App. LEXIS 188
CourtAppellate Court of Illinois
DecidedNovember 20, 1946
DocketGen. No. 43,659
StatusPublished
Cited by7 cases

This text of 69 N.E.2d 733 (Ginsburg v. Warczak) is published on Counsel Stack Legal Research, covering Appellate Court of Illinois primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Ginsburg v. Warczak, 69 N.E.2d 733, 330 Ill. App. 89, 1946 Ill. App. LEXIS 188 (Ill. Ct. App. 1946).

Opinion

Mr. Justice Burke

delivered the opinion of the court.

On March 26,1945, David Ginsburg filed a complaint in the circuit court of Cook county against John Warczak for an injunction for damages and for other relief grounded upon a written contract between them for the sale of corporate stock and good will in a piano-graph business. Plaintiff alleged that he was induced to sign the contract upon fraudulent oral representations by defendant that he (defendant) would not enter into competition for one year with the business he (defendant) was selling, nor solicit the business of the customers, nor employ or entice the employees of the business for that period. By amendment plaintiff also asked for reformation of the contract to include two paragraphs embracing the alleged oral provisions. These had been “deleted” at the time of the signing of the written contract. Plaintiff alleged that defendant orally agreed to abide by the deleted provisions before and at the time of the signing of the contract. A motion to strike the complaint was denied. Defendant answered, admitting the written agreement, denying the allegations of fraud and denying any oral agreement. Defendant asserted that plaintiff was not entitled to injunctive relief, or to have the agreement reformed. The court granted a temporary injunction as prayed. The case was referred to a master in chancery, who, after hearing testimony, reported that plaintiff sustained the material allegations of his complaint and recommended the entry of a decree granting the relief prayed. The court sustained exceptions to the master’s report and entered a decree dissolving the temporary injunction, allowing defendant 20 days in which to file suggestions for damages, retaining jurisdiction to consider such suggestions, discharging a rule to'show cause why defendant and seven other persons should not be punished for contempt of court, arid dismissing the complaint for want of equity at plaintiff’s costs. Plaintiff appealed.

Plaintiff was 80 years of age. Defendant is, to quote the master, “much younger and very aggressive.’’ As partners, they engaged in the planograph business for 16 years. The partnership was dissolved and a corporation formed to take over the business. The corporation, known as the Chicago Aligraphy & Lithographing Company, Inc., was formed about five years before the complaint was filed. The corporation took over the business formerly operated by the partners. The total capital stock issued consisted of 500 shares and each former partner owned 250 shares. One of plaintiff’s sons had been in the employ of the corporation. He went into the military service. There was evidence that before going into the service this son had threatened to “put defendant out of business.” For this reason, and also because the son would quarrel with the employees, defendant refused to permit him to return as an employee of the corporation on being discharged from the army. The refusal of defendant to permit the re-employment of plaintiff’s son brought on quarrels between plaintiff and defendant. Defendant also wished to have the right to sign checks on the corporate bank account. Plaintiff refused to permit this. There were other differences between them. As a result, discussions took place between them about buying out each other’s interest in the corporation.

About the middle of September 1944 defendant offered to either pay plaintiff $25,000 for plaintiff’s shares in the corporation, or to sell his own shares to plaintiff for $22,500. Plaintiff elected to purchase. In the middle of October 1944 plaintiff’s then attorney, at plaintiff’s direction, prepared a seven or eight page agreement between the parties covering the sale of defendant’s stock. The agreement, as drawn, included a provision forbidding defendant from going into the same line of business as the corporation for a period of three years. Plaintiff testified that the parties had not discussed any three year limitation prior to the preparation of the agreement. He also testified that he told defendant that he would not buy defendant’s shares unless defendant agreed, for a three year period, not to do any ‘1 dirty work.” Defendant refused to sign the agreement. On the morning of October 30, 1944 plaintiff and defendant again discussed the sale to plaintiff of defendant’s shares. Defendant was ready to sell. At plaintiff’s direction, plaintiff’s attorney prepared an agreement covering the transaction to be effected between the parties, for execution. There was then no discussion between the parties as to the terms of the agreement. The price of $22,500 was that which had been agreed upon two weeks before. Plaintiff’s attorney had practiced law since 1926. He had known plaintiff for 37 years. Defendant, at the meeting with plaintiff and the latter’s attorney, when the agreement was presented to defendant for execution, was unable to get in touch with his own attorney; was told he did not need an attorney; but insisted on taking the agreement to Mr. McLeod, an official of the Northern Trust Company, where the corporation maintained its bank account, in order that the agreement might be read to defendant. Defendant wished someone who understood the agreement to read it over. The record is silent as to whether Mr. McLeod was an attorney. The agreement, as drafted by plaintiff’s attorney, provided for the sale by defendant to plaintiff of 250 shares of stock of the corporation, together with all of the property, good will, assets, accounts receivable, profits and bank accounts of the corporation, at a price of $22,500. The proposed agreement also provided that all past due dividends on the stock were to belong to plaintiff; obligated plaintiff to effect-the discharge of the current debts of the corporation and state and federal taxes payable by the corporation; provided that defendant’s position as an officer and director of the corporation be at once terminated; provided that defendant would not interfere with the good will of the corporation, and would not, for one year, solicit the business of customers of the corporation; and further provided that defendant would not employ any of the present employees of the corporation, or engage in business competitive to that of the corporation, for a period of one year. After Mr. McLeod read the draft of the agreement aloud to defendant, the latter stated that he would not sign it unless two paragraphs were stricken out, these being the paragraphs which provided that defendant would not interfere with the good will of the corporation, or solicit the business of its customers, or hire its employees, or engage in a competitive business. Mr. McLeod struck out the two paragraphs which were objectionable to defendant, wrote the word “deleted” opposite each such paragraph, and both plaintiff and defendant wrote their signatures under the word “deleted” in each of the two places where the word was written. The agreement was then executed by the parties.

Plaintiff’s witnesses testified that defendant, prior to the time of the execution of the agreement and at the time of its execution, orally agreed that he would not do the things forbidden by the two paragraphs which were deleted from the agreement at defendant’s insistence. These witnesses were the plaintiff, the attorney for plaintiff in the transaction, and Ada Saho, plaintiff’s daughter, who furnished him with $10,000 towards the purchase. Defendant denied making’ the oral agreement. In this denial he was corroborated by his brother-in-law, Clarence Haack, who was present when the transaction was closed.

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Cite This Page — Counsel Stack

Bluebook (online)
69 N.E.2d 733, 330 Ill. App. 89, 1946 Ill. App. LEXIS 188, Counsel Stack Legal Research, https://law.counselstack.com/opinion/ginsburg-v-warczak-illappct-1946.