Court Opinion

ID: 5810944
Source: CourtListenerOpinion
Date Created: 2022-01-12 18:46:45.868547+00
Date Added: 2024-06-11T08:42:51.290969
License: Public Domain

Capozzoli, J.
We affirm this judgment for the reasons set forth in the well considered and sound opinion of the trial court, arrived at after a lengthy trial during the course of which both parties had ample opportunity to present their proofs. We do not propose to add to that opinion as we are satisfied that it fairly represents the views of the majority. We shall, however, discuss some aspects of the views expressed in the dissent.
Amongst other things the dissent has failed to take note of the fact that almost a year elapsed from the time that the defendant, Murray, was brought into this matter by Mr. Webster, the personal lawyer of the plaintiffs. The plaintiff, Mr. Howard, a business man himself, had known Mr. Webster for eight or nine years, during which time this plaintiff had employed Mr. Webster as his lawyer on several occasions. The deal, which was finally agreed upon and which is the subject matter of this suit, was conceived and agreed upon by both lawyers, Webster and the defendant. At no time did the plaintiff Howard see the defendant without Webster being present and participating in the discussions. For almost a year this deal was peddled around to a number of persons by Howard and his lawyer Webster without success. No one bought it.
In fact the corporate tenant of the premises, H. L. Green & Co., had the right of first refusal under the lease. Howard and Webster offered the deal to the tenant and the latter declined it. In this connection it is interesting to note the reasons advanced by our dissenting colleague as to why the tenant turned down the offer. We emphatically disagree with those reasons as they find no support in the record and are based on *183plain speculation. If the deal were as lucrative as is claimed by the plaintiffs would not this corporation, in the business of making money, have seen the advantages and seized the opportunity for itself? The trial court had a right to consider this fact amongst others in arriving at its determination. I think the conclusion is fair that the reason why the tenant turned it down is simply due to the fact that it did not see it as a sure thing as the plaintiffs now claim.
It should be emphasized that not every piece of real estate held by owners in 1959 have all increased in value. While it is true that many have increased, many others have been reduced in value. Looking back to the year 1959 by way of hindsight, we might agree that this piece of property may have increased in value although no proof was offered on this point. It should also be recalled that the fire which destroyed the old building in 1961 and which could not have been foreseen, brought about the erection of the present building with the money received from the fire insurance company. This improved the value of the premises. While on the subject it is interesting to note that the plaintiff, for some time, failed to inform the defendant of the increase in the rental which followed the secret side agreement for increased rentals based on sales of the tenant. In fact, the plaintiffs kept the defendant in the dark about this matter, which detracts from their claimed reliance upon the conduct of defendant.
The primary fact which stands out in an examination of the record is the obvious disbelief by the trial court of the testimony of the plaintiff Howard. At one time in the course of his testimony the plaintiff went so far as to accuse his own lawyer, Webster, deceased at time of trial, of entering into a conspiracy with the defendant to defraud him.
At pages 276-277 of the trial minutes we find the following questions posed by the court and the answers thereto given by the plaintiff Howard.
"Q Now, you knew Mr. Webster for a number of years, I take it?
A Eight or nine.
Q Beg pardon? A Eight or nine.
Q And you considered him a competent attorney?
A For the legal advice that I acquired, yes.
Q In your dealings with him did you find him to be honest and upright?
*184A Yes.
Q As you now reflect on the matter, do you believe that Mr. Webster was involved in any swindle of you? A I hate to say it, your Honor, but truthfully I do”.
As against this charge by the plaintiff directed at his personal lawyer, let us consider the statement thereafter made by his trial counsel as it appears at page 330 of the trial minutes: "I thought Mr. Webster was a very fine man frankly, I liked him very much and I thought he did his work as best he saw it; and there were never any overtones in my mind or indication in my mind that perhaps there was any connivance. I am speaking of my own belief, of knowing Mr. Webster.”
Another interesting exchange between the court and the plaintiff Howard is to be found starting at page 282 of the trial minutes in an examination by the court:
"Q You told us that at the time Mr. Murray’s proposition was being discussed by you and Mr. Webster and Mr. Murray, that one of the considerations that appealed to you was the fact that the income you would receive was to be tax free? A That’s correct.
Q Now, did you ask him how this was to be done? A They advised me that it was tax-wise feasible.
Q I know, but did you probe on what theory it would be tax free? A No, I did not. I depended upon their advice entirely and more particularly on the advice of Mr. Murray than Mr. Webster.
Q You have been in business for a number of years? A Yes, sir.
Q In the plumbing business? A I was.
Q Novelty business? A Correct.
Q Having operated this building which you had inherited from your family, you were quite familiar with the vagaries of tax laws, weren’t you? A No, I was not although I knew they existed.
Q You had been paying them all these years, hadn’t you? A Actual taxes, yes.
Q And now you were working out something whereby you were going to get tax free income?
A That’s correct.
Q Now you want me to understand that you did not ask either Mr. Webster or Mr. Murray the theory on which this *185tax free income was going to flow, not only to you but to your wife at your death?
A No, I did not ask that question, your Honor, I believed what they told me to be true, that they worked out a tax plan themselves and it was feasible.”
At another point in the record, again when being questioned by the court, the plaintiff Howard conceded that the final decision made by him to accept the deal was his own independent judgment after the defendant had agreed to pay more money. At page 202 of the trial minutes we find the following questions by the court and the answers of the plaintiff:
"the court: Now, after he added those items to the table, so to speak, you made a judgment as to whether or not the items were of any value or whether they were of the value that was being placed upon them, didn’t you?
the witness: I certainly did. I believed they were, otherwise I would not have accepted his agreement.
the court: So that that was an independent judgment of your own, is that correct?
the witness: Correct.
the court: You were not relying then upon anything he said to you, you made an independent evaluation of what was being put on the table, is that correct? the witness: That’s correct.
the court: And you were also being assisted by Mr. Webster at that point?
the witness: I was not even allowed to talk to Mr. Webster at that meeting. Mr. Murray was really quite upset.
the court: What do you mean that you were not allowed to talk to him? What did he do, muscle you? the witness: Not quite, your Honor.
the court: He did not hold a gun on you or anything, did he?
the witness: No, no, he became so incensed that it was an unpleasant situation, let me explain it that way.”
The issue is not whether the plaintiff made a good or a bad bargain. It was the duty of the trial court to evaluate all the evidence before it in light of the established rule of law as settled in Whitehead v Kennedy (69 NY 462). It is clear that the trial court did do so and after having evaluated the total evidence with this rule in mind, nevertheless found that the *186defendant sustained his burden of proving the fairness of the transaction and that he was not guilty of any impropriety toward the plaintiff. As the Court of Appeals said when it considered this very case (38 NY2d 695, 699): "Nevertheless we cannot say that the agreement is unfair as a matter of law.”
It is indeed a question of fact which is presented by this record and we are satisfied that the determination of the court below, should not be disturbed.
We therefore affirm on the law and the facts, without costs.