Valashinas v. Koniuto

Desmond, J.

A business partnership agreement, between plaintiff and defendant, made this arrangement as to dissolution : “ If either party to this agreement shall at any time desire to dissolve such partnership, he shall give notice in writing to the other party hereto of his intention, stating in said notice the sum of money which he is willing to give for the other party’s undivided interest in said business and that he is willing to accept the same sum for his undivided interest in said business if the other party so elects. The party receiving such notice shall within ninety days from the date thereof either sell his interest or purchase the interest of the other party at the sum specified in said notice, and shall notify the party giving such notice of his intention to buy such party’s interest or to sell his own, according to the aforesaid option. In case of the failure of the party to whom said notice is given to make his election in writing within ninety days after the service of such notice, then the party giving such notice may elect whether he will sell his interest or purchase that of the partner upon the terms contained in said notice or option given by him. When a determination has been made as above provided the party selling shall convey his interest to the party purchasing upon the payment of said purchase price, and shall thereupon retire from the partnership. ’ ’

On December 12, 1952, defendant gave to plaintiff a written notice in these words:

“ Subject: Dissolving of Partnership

To: Mr. George Valashinas

In accordance with partnership agreement dated October 1,1946, prepared by Chernin & Gold, Attorneys at Law, I am submitting to you a written notice of intent to dissolve our existing partnership for a cash settlement of $200,000.00, plus % of the value of accounts receivable at the time of sale and % of all cash owned by the company on the date of sale.

Also in accordance with our partnership agreement, you must notify me within ninety days (90 days) from the above date of your intent.

Standby J. Koniuto s/ ”

Plaintiff replied with this letter:

“ Dear Stanley:

In accordance with your Notice of December 12, 1952, wherein you refer to the terms of our partnership agreement of October 1st, 1946,1 hereby elect to accept your offer to purchase my interest in our partnership business formerly purchased by us from the Star Instruments, Inc., in accordance with the terms of such letter, to wit: ‘ a cash settlement of $200,000.00, plus % of the value of accounts receivable at the time of sale and 1/2 of all cash owned by the company on the date of sale. ’

I will be ready, willing and able to give you a complete Bill of Sale and a sufficient conveyance to you of my interest in the real estate as may be required to effectuate such sale, as of December 31st, 1952, or sooner if you so choose. Such instruments will be delivered to you properly executed by me on such date fixed by you, no later than December 31st, 1952 at the offices of attorneys, Chernin & Gold, of 300 Press Bldg., Binghamton, N. Y., upon payment by you in accordance with the terms of your offer in your letter of December 12, 1952.

Very truly yours,

George Valashinas.”

The next in this series of communications was another letter, sent December 22, 1952, from plaintiff to defendant, thus:

“ Dear Stanley:

Please refer to my letter of December 15, in reply to your notice of December 12.

I am informed that the legal documents to effectuate the sale of my interest in the partnership, in accordance with your notice and my letter of acceptance, are now being prepared and will be ready in a few days.

Therefore, if you want to close this week we can do so or, if you prefer, we can wait until December 31, the date suggested in my letter. If I do not hear from you, I will assume that it is your intention to close on December 31st or within a reasonable time thereafter; at any rate, please let me know. ’ ’

Answering that, defendant, on December 27, 1952, wrote this to plaintiff:

‘ ‘ Dear George:

I am unable to purchase your interest in the business by December 31, 1952, in accordance with the proposal contained in your letters of December 15, 1952 and December 22, 1952. I, therefore, reject the same.

I also withdraw and cancel my letter to you dated December 12,1952.”

Two days later, plaintiff sent defendant a letter, refusing to accede to defendant’s attempted withdrawal of the latter’s original (December 12, 1952) offer, and demanding that, “ on December 31, 1952, or within a reasonable time thereafter ”, defendant sell his interest, on the terms he himself had offered. But defendant would not perform, and plaintiff brought this suit for specific performance. A motion by defendant for judgment dismissing the complaint as insufficient (Bules Civ. Prac., rule 106) was denied by Special Term, and, after the Appellate Division had unanimously affirmed that denial, the latter court, with certification of an appropriate question, granted defendant leave to appeal to this court.

Defendant’s main reliance is on his theory that, by setting a closing date (December 31,1952) in his accepting letter (supra) of December 15,1952, plaintiff, so defendant claims, introduced a new term and so made a new offer, or counteroffer, instead of accepting or rejecting the proposal, as made. We see no substance to that. Defendant’s “ buy or sell ” proposal said nothing about a closing date. The partnership agreement gave to plaintiff, as recipient of the original “ buy or sell ” notice, ninety days in which to make his choice and to close the transaction. But the ninety-day period allowed by the partnership pact to one in plaintiff’s position, in which to make his choice and carry it out, left for arrangement the fixation of a specific closing date, if plaintiff should (as he did) announce his choice well before the end of ninety days. When, on December 12th, defendant gave notice that he would buy or sell, at plaintiff’s choice, for $200,000, he (defendant) thereby gave notice that he himself was ready either to purchase plaintiff’s share or to convey his own. Three days later, plaintiff announced that he chose to sell and that he would be ready, on December 31st, to deliver the title papers and receive the money. That was not a counteroffer, modification or anything of the sort, but a positive, unambiguous expression of complete willingness to perform. Someone had to fix, or suggest, a closing date, since the partnership agreement did not do so. And, as both courts correctly held (surely not without reason), plaintiff’s notice that he would be ready, on December 31st, to close the transaction, was no more than a suggestion, request or overture (a case directly in point is Winslow v. Moore [30 Hun 311; see 17 N. Y. Week. Dig. 429, 430]). To turn that request into a new ‘ ‘ express condition ’ ’ or a peremptory insistence on making ‘ ‘ time of the essence ’ ’ is to exaggerate a simple, routine business detail into something never intended (see Winslow v. Moore, supra). Probably (we need not decide this) respondent was privileged to name a date to be “ of the essence ” (see Taylor v. Goelet, 208 N. Y. 253, 259), so long as the time so allowed was not unreasonable (Taylor v. Goelet, supra; see Murray Co. v. Lidgerwood Mfg. Co., 241 N. Y. 455; Trainor Co. v. Amsinck & Co., 236 N. Y. 392, 394). But, in fact, respondent did no more than recommend a closing date. If there could, otherwise, be any doubt about that, the doubt was removed by plaintiff’s voluntary statement in his next (December 22d) letter at a time when defendant’s original offer was still open, that plaintiff would close the transaction on December 31st, or earlier, or “ within a reasonable time ” after December 31st. To all of that, defendant said only that he would not close at all. He did not say that December 31st was inappropriate or inconvenient, nor did he ask for a later date. He simply tried to withdraw from the position to which he had, by his own choice, irrevocably committed himself in his letter of December 12th. Plaintiff, as was his right, refused to agree to such a withdrawal. It follows that, as both courts below unanimously held, plaintiff’s complaint, seeking specific performance, states a cause of action.

Little attention need be paid to defendant’s assertion that plaintiff’s first answering letter (December 15th) attempted still another modification, or new term, when it proposed the delivery by plaintiff of “ a sufficient conveyance ” of plaintiff’s interest in the partnership’s real property. All that meant was that plaintiff would be prepared, in routine fashion, to do what the sale of such a partnership interest necessarily involved, that is, give a “ sufficient ” deed of the realty.

If it were necessary to make so close an analysis, we would say that defendant’s first letter and plaintiff’s reply were not, in the conventional sense of contract making, an “ offer ” and “ acceptance ” at all. They were, instead, mere steps in the performance of the partnership contract, an exercise by each party, in turn, of an option provided for by that contract. However, the result is the same either way, since defendant had the right to tender the alternatives to plaintiff; thus plaintiff had the right to, and did, choose the sole alternative, and the right to suggest that the closing be on a particular date, “ or within a reasonable time thereafter ”. But defendant, without legal cause, refused to buy.

The order should be affirmed, with costs, and the question certified answered in the affirmative.