Was the Store Already Bought? – part II

Case: The defendant (=def) bought the rights to a store from the seller (=sel). The location of the store (=st) is owned by the landlord (=ldld), who rented it to sel. Sel did own equipment and merchandise. The plaintiff (=pl) claims to have, a few months earlier, bought st from sel for 400,000 NIS, including the equipment and merchandise, and demands control of the store and its content. The contract between sel and pl contains provisions that sel would continue to operate the store as pl’s employee for 15,000 NIS per month and that sel could buy back st for 401,000 NIS during the course of a year, which sel did not do. It lists equipment included but does not mention merchandise. Def counters that the many peculiarities of the alleged deal (including the low price) point to the conclusion that pl lent sel 400,000 for a year and used the store as collateral. Since it was not officially registered as collateral, sel was able to sell st to def. Additionally, sel could not sell st to pl because sel did not have the right to sublet without ldld’s permission. Ldld was not involved in the sale to pl; he was regarding def. Finally, since def did not know about any deal between sel and pl, for which there were no public signs, def should be able to keep the store and its contents based on "takanat hashuk" (protection of unaware buyers) as long as pl gets back his 400,000 NIS investment.

Ruling: We saw last time that sel did not sell/rent the physical store, which he was not authorized to do, and was not able to sell the monitin (value of the operation).

Regarding the sale of equipment, standard physical kinyanim were not done. Kinyanim in conjunction with the real estate could have worked had the store been transferred, but it was not. The contract could have worked due to accepted practice (situmta), but two things prevent that. Since according to the law of the land, the whole contract is viewed as supporting a loan agreement, it cannot create a kinyan based on convention for the equipment. Also, since the contract did not work regarding the store and the monitin, it probably does not work regarding the equipment. There is in general a machloket on whether a kinyan regarding different things can work for some and not for others, especially when no distinction is made between one part and another. Therefore, def can hold on to the equipment presently under his control based on those opinions.

P'ninat Mishpat (704)

Beit Din Eretz Hemda - Gazit

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641 - Was the Store Already Bought? – part I

642 - Was the Store Already Bought? – part II

643 - Paying for an Unwanted Rental

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There is a machloket among Rishonim whether giving the key can be a kinyan for the contents of the store. The opinions that it works are based on situmta, but we are not aware of such a practice in our days. Pl is not entitled to st’s inventory because it is not explicitly mentioned in the contract and he has no proof to include it.

Although it is not needed in this case, takanat hashuk apparently would apply because pl had no way of knowing that def had bought anything from sel. Pl went through all the legal processes and while he showed concern not to lose out due to sel’s dealings, it is likely not because he knew of a sale but because he knew that sel was in debt.

Therefore, pl cannot take away st and its content from def’s control.