Brodsky v. Bannon

Steuer, J. The defendants, together with George Brodsky, were partners in the operation of a trailer park in South Brunswick, New Jersey. Brodsky died December 31,1969. According to the partnership agreement the surviving partners had the right to acquire the deceased partner’s interest by paying a sum arrived at by a specific formula* The sum came to $32,847, and defendants offered to pay this sum to plaintiff, the deceased’s widow and executrix. Plaintiff countered with this action, which sought liquidation of the partnership assets and the appointment of a receiver. Defendants counterclaimed for specific performance of the option to purchase. Issue was joined in March, 1971. The instant motion was made by plaintiff in March, 1972. In the interim the Town of South Brunswick passed a resolution materially increasing the requirements for operating a trailer park. To meet these requirements an investment well beyond the resources of the partnership was needed. Efforts to obtain financing were unavailing, as were efforts to reach a compromise with the town. On March 7, 1972, the partnership’s license was revoked. Its principal asset, its lease, became practically valueless. [336] At this point plaintiff made .a notable discovery. She found that she had mistaken her remedy. She now agreed that what she was entitled to was the book value of the deceased’s interest. She accordingly moved to amend her complaint to ask for the relief demanded .in the counterclaim, namely, specific performance of the buy out agreement, and as there was no issue in regard to the amount she asked for summary judgment. The defendants countered with á claim that it was her fault that the permit was revoked on the ground that the suit for dissolution had prevented them from obtaining a loan. That issue was tried and the court found, quite properly we believe, that defendants did not substantiate the claim. Plaintiff’s motion for summary judgment had been granted subject to a stay of execution until resolution of the counterclaim. Plaintiff now has a judgment. The manifest unfairness of this result is sought to be justified by the correctness of each of the legal steps involved. The reasoning is that plaintiff had a perfect right to assert a claim for what she deemed to be the value of the deceased’s interest. She furthermore had the right to withdraw that claim if she later found it to be untenable, and to accept the solution that the defendants had proffered. It was not her doing that caused the depletion of the partnership assets, so by every tenet of legal cause and effect .she is entitled to the judgment awarded her. This syllabus loses sight of a fundamental principle of equity — that the Chancellor can shape the relief to be granted to the equities of the situation. When plaintiff was willing to accept the tender it no longer represented the value of the deceased’s interest. By legal maneuver she sought to gamble on a larger sum, with the insurance of getting at least what the deceased’s interest was at the time of death. It is hornbook learning that an equitable decree speaks as of the time of judgment, as contrasted with a judgment at law which reflects the rights as of the time the cause of action arose. Here, it is quite clear that the surviving partners did not waste the assets of the partnership, and nobody claims to the contrary. They offered the sum agreed upon. It was refused when offered, and belated acceptance attempted when it became obvious that the sum offered greatly exceeded what the deceased’s share was then worth. Under these circumstances every instinct of fairness dictates that the value of the deceased’s share be calculated as of the date of acceptance and that the plaintiff have judgment in that amount. [337] The judgment entered September 12, 1972, in New York County (Quinn, J.) should be reversed on the law and judgment vacated; the judgment dismissing defendants’ counterclaim, entered December 11,1973, in New York County (Greenfield, J.) should be affirmed and the matter remanded to Trial Term for further proceedings in accord with this opinion, with costs and disbursements.