In re the Arbitration between Katz & Schwartz

Per Curiam. Petitioner is executrix of the estate of the decedent, who some years ago entered into a partnership agreement with the two respondents concerning the operation of a luncheonette business.. This agreement, insofar as pertinent, [90] contained the following provision: “ 15. In the event that any partner shall die, the representative of the estate of the deceased partner shall sell and the surviving partners together and equally shall buy the partnership interest of the decedent. The price for the decedent’s interest, if not agreed upon 'by the legal representative and the surviving partners, shall be fixed by appraisal by arbitration as hereinafter provided. The legal representative of the estate of the deceased partner shall appoint one appraiser and the surviving partner or partners shall appoint one appraiser and said two appraisers will either agree upon a price or appoint a third appraiser and proceed to appraise the decedent’s interest by majority decision. The cost of appraisal, if any, shall be borne equally between the decedent’s estate on the one hand and the surviving partners on the other. The appraisers shall consider all elements relevant to the value of the business of the partnership as a going business, whether on the books of the partnership or not, including additional amount for value of the good will of the business.” The two designees of the surviving partners and the executrix were unable to agree on a third person to act with them, although it is contended by appellants that they did in fact select a third appraiser, to participate in an appraisal of the decedent’s partnership interest. Of course, there are vital differences between an appraisal and an arbitration proceeding (Matter of Delmar Box Co. [Ætna Ins. Co.), 309 N. Y. 60; Matter of Fletcher, 237 N. Y. 440), which need not be detailed here. The question presented is whether the parties intended to have their interests upon death fixed by “ the strict judicial investigation of an arbitration ” (Matter of American Ins. Co., 208 App. Div. 168,171) or by the more informal, ex parte process of appraisal. We believe the parties agreed upon arbitration. Otherwise, there is no reason for the inclusion of the words “by arbitration” in paragraph “15”. The only logical construction of this paragraph is that the parties agreed to a fixing of the price of the partnership interest, which in somewhat loose language they termed an ‘ ‘ appraisal ’ ’, through the process of arbitration, The procedures followed by the two designees of the parties, nor even their practical construction of the agreement, could not serve to rewrite an agreement capable of construction by this court. Accordingly, the order of March 23, I960, granting the application of petitioner for the appointment of a third arbitrator, should be affirmed on the law, with costs to petitioner-respondent,