Profits from Formerly Joint Swimming Pool. | Beit Din Eretz Hemda - Gazit | Beit Midrash

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Case: The defendant (=def) owns vacation units. In 2013, the plaintiff (=pl) agreed to install at def’s location a large but movable swimming pool for def to operate. No written agreement exists regarding the terms of profit sharing. In 2021, pl demanded to get the pool back and was told that it was dismantled. At that time, def wrote a signed admission that the pool belonged to pl, that he used it, and that he had to pay for its value. Later in 2021, def informed pl that the pool had been burnt in a brush fire. Pl claims that he was to receive all of the profits from the pool until they covered its cost (16,769 NIS) and subsequently, they would be split them equally. (Pl guesses that the direct profits were 48,000 NIS, and he points out that its presence boosted def’s business). So far, he has received nothing. Def claims he stopped using the pool in 2015 due to its lack of a water heater, and that he made his own pool by excavating a boulder. Although he made up with pl to sell the pool, he did not succeed to do so. Def claims that he signed the admission because pl was embarrassing him publicly and that it is not true. He admits to needing to share some profits, but, giving no estimate of how much, just claimed that pl exaggerated profits.

Ruling: In order to determine the sides’ legal status regarding the pool, beit din asked hypothetical questions as to what would happen in various scenarios, prompting a fair amount of agreement. The result is as follows. The pool remained pl’s, and def had responsibility only for damages emanating from him. If the pool would be sold, pl would receive all of the proceeds. Def would have borne the losses of operational deficit. The sides agree that profits were to be shared, with the dispute being on whether pl gets everything until the price of the pool is returned. On this, the ruling is that the burden of proof is on pl that he is to receive more than what def agrees. Pl lacks documentation on this.

P'ninat Mishpat (804)

Beit Din Eretz Hemda - Gazit

747 - Repercussions of a Sale that Turned Out Not Happening – part III

748 - Profits from Formerly Joint Swimming Pool.

749 - Profits from Formerly Joint Swimming Pool – part

The next question is when their partnership in the profits from the pool ended. When a partnership is set for a certain amount of time, neither side can break it unilaterally before then. However, this case is one of an open-ended partnership, so either side could end it (Shulchan Aruch, Choshen Mishpat 176:15-16). Furthermore, here, when the sides agreed in theory to sell the pool, each side agreed to end the partnership.

There are different ways one can potentially look at def’s continued commercial use of pl’s pool after the partnership was essentially over. If we view it as theft, then def would have full responsibility to return it no matter what happened, but pl would not receive part of the profit. However, in a similar case, the Chatam Sofer (CM 178) says that we do not assume a person has in mind to misappropriate someone else’s object, as we do not assume people are acting as sinners. Rather, they probably have in mind to continue sharing the profit, in which case, pl would presumably be happy that def was producing profit from it on behalf of both of them until it was returned.

We will continue with other elements of the case next time.

P'ninat Mishpat