After answers filed, counsel for defendants moved for judgment on the record with affidavits filed under Rule 56, Federal Rules of Civil Procedure, 28 U.S.C.A. following section 723c. Counsel for the plaintiff moved to strike certain defenses filed by defendant Ogden Corporation and also for summary judgment аgainst said defendant. This opens the entire record and all allegations well and sufficiently pleaded are accepted as true.
It appears that the record here need not be extensively recited because it is accurately stated in Rе Utilities Power & Light Corporation, 7 Cir.,
The record discloses that plaintiff Lewis entered into a contract in writing on December 18, 1939, with one Adams, trustee for the Utilities Power & Light Corpora^ tion in rеorganization, wherein Lewis agreed to buy and Adams agreed to sell certain securities for the sum of $1,600,000. It was mutually agreed that if certain approvals and exemptions by the Court and the Securities and Exchange Commission were not obtained within ninety days from date, the сontract of sale would be extended and continued in force until terminated by
Thereafter the contract was amended in writing on March 12, 1940, providing “that if the Securities and Exchange Commission shall enter no order granting said approvals or exemptions on or before July 12, 1940 this contract may be terminated by either party” on 10 days written notice.
On April 6, 1940, the Ogden Corporation took over the assets of the Utilities Power & Light Corporation and thereby were substituted in the place of Adams, trustee, subject to the obligations of the trustee Adams under the contract, as appears by reference to the order confirming the plan of reorganization.
On July 5, 1940, the contract was further amended in writing between Lewis and the Ogden Corporation providing that if the Court had not approved the title of the securities, and the Securities and Exchange Commission had not approved the sale as aforesaid on or before August 12, 1940, then in that event, “this contract shall cease and determine.”
It should be noted that as of July 5, 1940, both parties to the agreement had come to the conсlusion that before a marketable title to the securities could pass, not only the approval of the Commission remained necessary but also that a further proceeding to quiet title in the reorganization court was advisable, and on July 10, 1940, a suit to that end was instituted in the Illinois District Court.
On August 9, 1940, the contract was finally amended in writing and signed by the parties as follows:
“If on or before August 19, 1940 this contract, as amended is not approved by the Securities and Exchange Commission, or the United States District Court for the Northern District of Illinois, Eastern Division, shall not find thаt the title of Ogden Corporation in and to the securities and indebtedness above mentioned is free from all liens, claims and equities on the part of all persons other than the said Frank J. Lewis, and that Ogden Corporation is entitled to receive and have the full amоunt of the principal and interest thereof, free from any setoff, lien, claim or defense, or any person whatsoever, this contract shall cease and determine and each of the parties shall be released and discharged from all further liability thereon, and the earnest-money deposited in escrow shall be refunded by the Escrowee to me.” (Lewis)
Thus it appears that the contract would terminate by its terms on August 19, 1940, unless the conditions were met on or before that date.
On August 16, 1940, a hearing took place before the Securities and Exchange Commission in furtherance of approval by that Commission. It developed at the hearing that the Commission had not concluded its investigation and the complaint bearing on that point reads as follows:
“ ‘Mr. Baldy (Counsel for the Commission) : Mr. Examiner, аs appears from Release No. 2206 and as appears from your remarks at the opening of the hearing today, the Commission has ruled that the line of inquiry represented by Adams’ Exhibit 9 (Exhibit “G”) is proper to the extent indicated in the release. I may say that we have some men in the field looking into the facts and I would like to defer, for the time being, resuming that line of inquiry. I accordingly suggest that — particularly in view of the fact that there do not appear to be present today any witnesses prepared to testify along that — this hearing be сontinued, subject to call.
“ ‘The Examiner: Is there any objection to Commission Counsel’s request that the hearing be continued, subject to call?’
“(Counsel for defendant Ogden Corporation, counsel for Atlas Corporation and counsel for plaintiff thereupon cоnferred together and agreed to an adjournment as suggested by the Commission.)
“ Mr. Blady: May the record show, Your Flonor, that no counsel objects to that?
“‘Examiner: The record will so show; and if there is no objection we will con-tiuue the case subject to call of the Exаminer.’ ”
I take it that the above stated matter within the parentheses was not part of the record quoted but new matter added by the pleader.
The affidavits filed herein are in conflict as to whether the lawyers agreed to a continuance as above stаted and the answer is in denial thereof, thus raising a question of fact which would of necessity go to a jury unless standing as it does it is insufficient to constitute an amendment to the contract, extending the time of its expiration.
In the case of Wabash, St. L. & P. Ry. Co. v. McDougall,
In Rubel v. Title Guarantee & Trust Co.,
And in Noel State Bank v. Blakely Real Estate Imp. Corporation,
The foregoing Illinois cases involve relations between attorney and client. Where agency is involved the following cases are noted:
In Gerrish v. Maher,
In Lawrence, etc. v. Johnson et al.,
In each instance where an extension of time was considered by thе parties herein, they reduced their agreement to writing bearing the signatures of Lewis and the duly constituted officers of the Ogden Corporation. Such then having been the course of conduct of the parties, and the amount involved being over a million and a
At the final appearance before the Commission, counsel for Ogden Corporation was placed in a most difficult position when the question of further time was broached. His client’s contract bound it to do nothing in the direction of delay. It provided a burden on the Ogden Corporation to “proceed promptly,” hence he was himself sо bound. Moreover if he agreed to an extension of time he was acting in direct violation of his client’s written contract as to the expiration date. In such a posture it is my view that the attorney for the Ogden Corporation could not bind his client beyond the terms of the contract without express authority to do so or in the absence thereof the presence of some positive conduct on the part of its executive officers from which a waiver or an estoppel could be found. No such conduct aрpears here.
The action of the Ogden Corporation in withdrawing its application before the Commission took place after the contract had terminated and such withdrawal to close the record at the request of the Commission cannot be сonstrued against it.
In the arguments and in the briefs the doctrine of time as of the essence is considered. It is my view that, strictly considered, the doctrine does not apply here; it is generally invoked only in those instances where the parties have obligated themselves tо do or perform specific acts within a time expressly limited. Here the contract contemplates the performance of certain acts by a Court and a Commission functioning beyond the control of the parties. No promise or covenant аppears wherein either party is bound to attempt to inflict a limitation of time upon either of these forums and indeed they could not validly do so. Therefore desiring to protect themselves against delay over which they could exercise no control аnd dealing as they were with securities of possible fluctuating values they considered the element of time and made it a condition nullifying the contract on a day certain on failure of the approvals sought. I therefore conclude that the approvаls not having been obtained within the time limited the contract terminated on August 19, 1940.
Judgment final will be entered in favor of the defendant Ogden Corporation and since the liability of the defendant Atlas-Corporation was dependent upon the liability of Ogden Corporation, the like judgment will be entered in its favor.