P'NINAT MISHPAT: TO WHOM DO THE PAYMENTS GO? – PART II | Beit Din Eretz Hemda - Gazit | Beit Midrash

Beit Midrash

Sections
Chemdat Yamim
P'ninat Mishpat

קטגוריה משנית

Female Lesson Parashat Hashavua Series'Library Piskei Din (Hebrew)Test Yourself

Case: The plaintiff (=pl) and the defendant (=def), individually owned real estate development businesses, jointly organized a group to win a tender for dozens of apartments. Pl was to be the management company (=mc) for the building stage for 9% of apartments’ cost and in charge of the legal work; def was in charge of marketing. Pl and def had originally agreed to divide the profits from the initial investments, 75-25% in favor of def. After winning the tender, many of the group members (=ob) wanted to sell their rights. Def found a large, united group of new buyers (=nb) to take their places, but nb demanded to use a management company of their choice (=mc2). Pl wrote up a contract requiring nb to pay 32,000 NIS and ob to pay 24,000 NIS, to an account under pl’s control. In practice, some of nb paid def and most paid pl; none of ob paid anything. Pl is demanding that ob pay him as stated, and for def to pay him 25% of the money he received. Pl argues that def relinquished rights to payment, as finds expression in the new contract, out of fear that the project would collapse. Also, pl claims that 140,000 NIS he gave def was a loan, and so he wants it back. Def demands 75% of what pl collected. Def claims that the 140,000 NIS was given as a first payment for his part. Def also gave pl a receipt for 400,000 NIS that pl promised to give and did not.

Ruling: [Last time, we saw the minority opinion. It gives preference to the written contract, which assigns payments to pl, strengthening his claim to the collected funds. However, it rejects the obligation of the original buyers to pay 24,000 NIS, accepting testimony that the clause was only formal documentation to preserve the tender. It also treats the receipts between the parties as binding, obligating pl to complete the promised 400,000 NIS payment, while still granting him 25% of funds def collected.]
The majority opinion differs in two major ways. First, it finds many indications, including the communications of someone with strong connections to both sides, that pl used its role as the lawyer who crafted the agreements, to write a contract that took nearly all the money for itself without sufficient justification or consent. Pl’s dishonesty continued with promising funds to extract valuable receipts from def (which obtain for pl unwarranted tax relief and obligate def taxes for non-existent profit).
While it is impossible for beit din to know how much def deserves, it is clear that when they agreed on how much def should receive, this includes pl not extracting 25% from what def received. This is strongly bolstered by the fact that if there was a decision for pl to pay def 540,000 NIS plus VAT, this should be assumed to be after deducting what def owed pl. Otherwise, one would have the illogical situation of moneys going from A to B only to be returned promptly to A (see Ketubot 110a), which is even less logical here because extra tax would have to be paid for the double payment.