Spear v. Plaza Sound Studios, Inc.

In an action (1) to recover damages for breach of contract and (2) for an accounting, the defendants appeal from a judgment of the Supreme Court, Nassau County, entered April 6, 1977, which is in favor of the plaintiff and against the defendants in the principal amount of $10,000, after a nonjury trial. Judgment affirmed, with costs. The plaintiff and the defendants entered into an agreement, drawn by the defendants’ attorney, under which the plaintiff paid the sum of $10,000 as part of the purchase price of $15,000 for a 5% stock interest in the corporate defendant, the remaining $5,000 to be paid from the profits of the corporate defendant. The plaintiff agreed to be employed by the corporate defendant as an engineer and to devote his full time and effort in that employment. The agreement further provided: "That said stock will be held in trust until such time as the full purchase price of $15,000.00 is made. That in addition thereto, said stock will be subject to a re-purchase agreement with the corporation and Gregory W. Raffa, which would cover any contingencies pertaining to the termination by James Spear of his employment or his retirement and/or death.” The plaintiff was employed from April, 1971 until September, 1972, when his employment was terminated because of economic reasons. As the defendants prepared the agreement, any doubt or ambiguity in its terms must be resolved most strongly against them (see Evelyn Bldg. Corp. v City of New York, 257 NY 501, 513), and most favorably to the plaintiff (see Moran v Standard Oil Co., 211 NY 187, 196). Here the defendants argue that according to the agreement their obligation to repay plaintiff’s $10,000 does not arise unless the plaintiff were to terminate his employment, and that it would not arise in the event they terminated his employment. Such a restricted construction of the defendants’ obligation cannot be sustained. It would clearly put the plaintiff at the mercy of the defendants—a result against the general policy of the law (see Fair Pavilions v First Nat. City Bank, 19 NY2d 512, 518). The fair construction of the agreement must be, accordingly, that the defendants were responsible for the repayment of plaintiff’s $10,000 in the event they terminated his employment, as well as in the event that the plaintiff terminated his employment. Hopkins, J. P., Latham, Hargett and Rabin, JJ., concur.