Shabbat Parashat Chukat 5783

P'ninat Mishpat: Extent of Partnership – part II

Case: In 2007, a land developer (=def1) planned a project – he would buy a property with a two-story building and greatly expand the building. The plaintiff (=pl) put up 900,000 NIS and received a 10% stake in profits from the project. There is a long agreement between the sides (=agr) and, later, a letter of understanding. Def2 and def3 are close relatives of def1, and there is another investor (=adinv). After the purchase of the property, the Tabu (Land Registry) listed four owners of 25% of the property each – pl, def2, def3, and adinv. After a later sale, officially by these four, to another six people (who bought apartments), pl’s stake, per Tabu, stands at 13.5%. Pl received one of the apartments and demands additional money as per his 10% stake, including rent on the apartments that def1 handles. Pl claims that his 10% ownership enables him to receive both an apartment, like the others, and also general rights. Def claim that pl did not receive 10% ownership of the property but, as an investor, 10% of the profits, from which the value of the apartment he received should be subtracted. Def demand of pl that he sign a request for a building permit for the second stage of the building’s expansion.

Ruling: [Last time, we saw that financial logic, the language of the agreement and an admission of pl in a different beit din all indicate that pl did not own 10% of the property but only has claims to 10% of profit.]

In general, legally and halachically, entry of ownership in the Tabu is very significant, and in this case, it seems to support pl. However, there are problems with the support it gives. Pl admits that he never had more than 10% rights, yet the Tabu had him at 25%, and now at 13.5%. Thus, the Tabu is not an accurate indication. Def1 does not appear in it at all, and yet all agree that he is the main owner and that the Tabu was done as it was for technical reasons (the sides preferred not to discuss details).

Arguably, pl has a migo (proof of telling the truth from the fact that he could have won with a claim that he admits is not true). In a case where the thing he wants to rely upon is invalid (the Tabu, in regard to this case), we have an indication from the gemara (Bava Batra 32b) that migo does not help. Our beit din has ruled in the past that when an entry in Tabu can be demonstrated to be incorrect, the Tabu is to be fixed rather than being able to validate that which is not true. The other official papers that state that pl is a 13.5% owner are just extensions of the Tabu entry.

Agr states that pl is to cooperate with requests for building permits, and based on the timing of the letter of understanding, it clearly applies to stage 2 of expansion as well. While an obligation to do something is not generally halachically binding, since def1 relied on the promise, pl would at least be obligated to pay for damages stemming from his refusal. Furthermore, in our times, an obligation to go along with a building practice can be binding based on dina d’malchuta (the Law of Contracts) and accepted practice. Therefore, pl is to cooperate with the process or face sanctions from beit din.  

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