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Rosenthal v. Langguth-Olson Co.

13 N.Y.2d 324 Court N.Y. Decision date 1964-01-23 English

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p. 324
Meyer S. Rosenthal, Individually and as Executor of Fannie W. Rosenthal, Deceased, et al., Appellants, v. Langguth-Olson Company, Inc., Respondent.
Argued January 9, 1964;
decided January 23, 1964.
p. 325
Jacob W. Friedman and Marc Hermelin for appellants.
The only fair and reasonable interpretation of the contract, in the light of ensuing events, necessitates that plaintiffs be awarded judgment. (O’Neil Supply Co. v. Petroleum Heat & Power Co., 280 N. Y. 50 ; Nichols v. Nichols, 306 N. Y. 490 ; Huntington Securities Corp. v. Busey, 112 F. 2d 368 ; Gillet v. Bank of America, 160 N. Y. 549 .)
Bernard Meyerson for respondent.
I. The positive proof in the record is to the effect that no moneys were to be paid to the estate except “if and when” the Government “ obliged ” defendant to change its method of tax reporting with consequent tax savings, that this contingency never occurred and consequently the complaint was properly dismissed by the Appellate Division. Plaintiff failed to either plead or prove the occurrence of the precedent event. (Amies v. Wesnofske, 255 N. Y. 156 ; Pine v. Okoniewski, 256 App. Div. 519 ; Mascioni v. I. B. Miller, Inc., 261 N. Y. 1 ; Wood & Selick v. Ball, 190 N. Y. 217 ; Casey Jones, Inc., v. Texas Textile Mills, 87 F. 2d 454 .) II. The trial court erred in refusing to allow testimony and records that not only established admissions against interest but also established the practical interpretations made by the major plaintiff and the administratrix of the estate prior to the commencement of this lawsuit. (Matter of New School for
p. 326
Social Research v. Field, 11 A D 2d 774 ; Figler v. Subin, 18 A D 2d 702 ; Matter of Gallagher v. Brewster, 153 N. Y. 364 ; Staley v. Nellis, 188 App. Div. 325 .)

The administratrix of the estate of Bernard Rosenthal and defendant corporation entered into a contract for the sale to the corporation of corporate stock which the decedent had owned during his lifetime. Pursuant to the agreement, there was deducted from the sale price the seller’s “proportionate share” of a tax reserve set up for payment by the corporation of contemplated Federal income taxes for the period involved. A fair reading of the contract establishes that the seller was to recover a proportionate share of tax savings whether or not the method of reporting income was required by the Government to be changed from a cash basis to an accrual basis. Since no part of the tax reserve was ever collected by the Government, and it is conceded that no tax is due, the plaintiffs herein, as Bernard Rosenthal’s heirs, are entitled to the amount fixed by the trial court as the seller’s proportionate share of the tax savings.

The judgment of the Appellate Division should be reversed and that of Trial Term reinstated, with costs in this court and in the Appellate Division.

Chief Judge Desmond and Judges Dye, Fuld, Van Voorhis, Burke, Scileppi and Bergan concur.

Judgment reversed, etc.

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