At issue is whether, on the facts presented, plaintiff may enforce a stock purchase option granted him by defendant’s predecessor.
On August 15,1963, by written contract, plaintiff was employed as an executive of a wholly owned subsidiary of Perfect Photo, Inc., a predecessor of defendant, for a term of five years. September 9, 1964, while so employed, Perfect granted plaintiff an option to purchase 3,000 shares of its common stock at its then market value. The grant recited that, the option was given ‘‘ as an inducement to remain in the service of the Corporation and as an incentive for increasing Employee’s efforts during such service ”. The option was to terminate September 8, 1969 or,
September 20, 1968 defendant sold the assets of its subsidiary by which plaintiff was employed to Berkey Photo, Inc., á stranger to Perfect, and as part of the transaction and without notice to or knowledge by plaintiff, assigned his employment contract to Berkey. Plaintiff was first informed of the sale the night of the transaction and thereafter continued to perform for Berkey substantially the same services he had theretofore rendered Perfect and at the same salary. .
It may here be noted that although the decision at Special Term states that plaintiff’s employment by Berkey commenced in November, 1968 I fail to find support for this conclusion in the record. The contract of sale to Berkey provided “ Consummation of the transaction * * * shall take place immediately following the execution hereof on September 20, 1968 ”, and as further evidence that the transfer was immediate ‘ ‘ Berkey does hereby agree to collect on behalf of Seller * * * any and all accounts receivable * * * which as of the date hereof, are due and owing Seller ” (emphasis supplied). In any event, I do not consider the date of plaintiff’s employment by Berkey material and respondent seems to agree, saying in its brief: “ Appellant’s assertion that his employment by Perfect ceased on September 23,1968 rather than on or about November 1, 1968 in no way alters Justice Asch’s decision since he clearly held that the option rights were abandoned by appellant when he left Perfect and became an eihployee of Berkey — that is, under the present assertion of appellant, on September 23, 1968.’’1
May 7, 1969 plaintiff purported to exercise the option to purchase the full amount of stock described in the grant and defendant refused to comply on the ground that the option terminated when plaintiff ceased to be its employee and entered Berkey’s employ. In this ensuing action plaintiff’s motion for summary judgment has been denied and defendant granted summary judgment dismissing the complaint.
Special Term correctly found that the assignment breached plaintiff’s employment contract but apparently adopted defendant’s contention that the option grant was separate and apart from the employment contract. While, when given, it may be that the grant was nudum pactum, plaintiff then being obligated
An employment contract for a stated term may not be terminated by the employer without a ‘ ‘ cause sufficient in law which would justify an employer in discharging an employee ”. (Vogel v. Pathe Exch., 234 App. Div. 313, 318; Parsil v. Emery, 242 App. Div. 653; 36 N. Y. Jur., Master and Servant, §§ 26, 27.) The option grant being part of the employment contract, plaintiff’s continued employment by defendant, essential to the life of the option, might not be aborted by defendant without such cause. As was found by Special Term and not disputed by defendant, the latter’s valid assignment of the employment contract would breach that contract. Plaintiff’s employment would thereby be terminated without cause. But defendant argues that since the assignment of this contract for personal services could not be enforced without plaintiff’s consent (3 N. Y. Jur., Assignments, § 7 and cases therein cited), by honoring the assignment and entering Berkey’s employ, plaintiff voluntarily terminated his employment by defendant and thereby relinquished his rights under the option. This position is untenable.
While plaintiff might have elected to consider the assignment invalid, the defendant having made the assignment may not be heard to so assert. “ Generally the right, to contest the validity of an assignment obtains only to persons who can raise the particular ground of contest in their own right, and this rule applies whether the objection is * * * the nonassignability of the subject matter ”. (6 C. J. S., Assignments, § 81.) Defendant’s termination of plaintiff’s employment, effected by the assignment, did not shorten the period within which plaintiff might exercise the option. The exercise was timely and plaintiff is entitled to damages for defendant’s failure to perform. (Parsil v. Emery, 242 App. Div. 653, supra.)
Defendant urges that plaintiff’s relief, if any, must be for breach of the employment contract rather than of the option grant as alleged in the complaint. The measure of damages would be the same in either case and while I consider the complaint sufficient, this court may and does amend the pleadings to conform to the proof. (Dampskibsselskabet Torm A/S v. Thomas Paper Co., 26 A D 2d 347; Irving Finance Corp. v.
The order appealed from should be reversed on the law with costs; plaintiff’s motion for summary judgment granted; defendant’s cross motion for summary judgment denied; and the case remanded to the court below for assessment of plaintiff’s damage.
1.
September 20 was Friday and the 23 the next business day.