## Facts

- Piedmont Publishing Co. and Mary Pickford Rogers were rival applicants for an FCC television license in Winston-Salem, North Carolina.
- To avoid delay and market loss, they formed Triangle Broadcasting Corporation under North Carolina law and submitted a joint application; both withdrew their competing applications.
- Triangle arranged for a third applicant to withdraw by contracting to buy advertising over 12 months for $20,000, then obtained the license and an exclusive NBC local contract.
- A written agreement (May 25, 1953) set ownership and financing: Piedmont subscribed for 1,000 shares ($100,000) and Rogers for 500 shares ($50,000).
- The agreement granted Piedmont an option to buy Rogers’s 500 shares at the end of Triangle fiscal year 1956, 1957, 1958, or 1959, at a price determined by Triangle’s regularly employed independent certified public accountants under a defined formula using “total book value” and a profit-multiple component.
- In July 1956, Piedmont exercised the option and tendered the accountants’ computed price; Rogers refused to transfer, asserting the computation and price were improper.
- Piedmont sued for declaratory relief and specific performance compelling transfer of the shares; Rogers pursued a fraud-based challenge to the agreement.
- The trial court granted specific performance, accepted the accountants’ computation, and ordered transfer at the computed price; Rogers appealed.

## Issues

1. Whether the stock option and price formula were sufficiently definite to be enforced by specific performance.
2. Whether the accountants’ contractual price determination was binding or subject to judicial review for compliance with the contract.
3. Whether “total book value” in the pricing formula required inclusion of goodwill and related intangibles (including value attributable to the broadcast license and network affiliation).
4. Whether specific performance was an appropriate remedy for the option to purchase closely held stock in these circumstances.

## Decision

- The court affirmed enforcement of the option and Piedmont’s right to specific performance.
- The court held the pricing mechanism was definite enough to be enforced in equity.
- The court ruled the accountants’ computation was not immune from review; it could be corrected where it conflicted with the contract’s terms.
- The court concluded “total book value” as used in the formula included goodwill and certain intangible assets.
- The judgment was affirmed as to specific performance but modified to require recomputation of the purchase price to include goodwill consistent with the contract.

## Legal Principles

- A stock purchase option with an objective, contract-defined pricing method can be sufficiently certain to support specific performance.
- A contractual provision assigning price computation to accountants functions as an expert determination; courts may ensure the calculation conforms to the agreement and may correct departures from the contractual formula.
- When contract language and context show the parties intended a going-concern valuation, “total book value” may require inclusion of goodwill and related intangibles, including value associated with broadcast licenses and network affiliations.
- Specific performance is appropriate where the subject is closely held corporate stock whose value and availability are not readily substitutable and where damages are difficult to measure.

## Conclusion

The court enforced Piedmont’s option to purchase Rogers’s shares and affirmed specific performance, but required the option price to be recalculated because the accountants’ and trial court’s computation improperly omitted goodwill from “total book value” under the contract’s formula.


Piedmont Publ’g Co. v. Rogers, 193 Cal. App. 2d 171, 14 Cal. Rptr. 133 (Ct. App. 1961)