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PETER L. BATTISTA v. JOHN J. CARLO ET AL. (06/21/68)

SUPREME COURT OF NEW YORK, ERIE COUNTY 1968.NY.42218 <http://www.versuslaw.com>; 293 N.Y.S.2d 227; 57 Misc. 2d 495 June 21, 1968 PETER L. BATTISTA, PLAINTIFF,v.JOHN J. CARLO ET AL., DEFENDANTS Hodgson, Russ, Andrews, Woods & Goodyear (R. William Larson of counsel), for plaintiff. Phillips, Lytle, Hitchcock, Blaine & Huber (Robert M. Hitchcock of counsel), for John J. Carlo and another, defendants. Jaeckle, Fleischmann, Kelly, Swart & Augspurger (Manly Fleischmann and William D. Schulz of counsel), for Charles E. Fadale and others, defendants. Falk, Twelvetrees, Johnston & Stiemer (Alvin M. Glick of counsel), for Dorothy M. Reed, defendant. Frank J. Kronenberg, J. Author: Kronenberg


Frank J. Kronenberg, J.

Author: Kronenberg

 This is an action by Peter L. Battista, plaintiff, one of several members of a partnership known as Northville Downs.

The partnership operates a race track at Northville, Michigan. Northville Downs has been in operation since 1944 and the defendant, John J. Carlo, has been its manager.

Plaintiff seeks an injunction against the sale of a portion of an interest in the partnership. The partnership interests were divided into "units" and the sale of the units in question belonged to the estate of Leo Sauer, a deceased partner.

Plaintiff further seeks a cancellation and rescission of certain sales of partnership units by the Leo Sauer estate which have already been consummated. First, plaintiff's motion to amend the complaint herein to seek a determination of the voting rights of the parties, is not timely, and therefore must be denied.

Plaintiff contends that paragraph 16 of the partnership agreement dated January 2, 1964 between the deceased, Leo Sauer, the plaintiff, Peter L. Battista, and the defendants, John J. Carlo, Margaret Zayti, and Dorothy M. Reed, prohibited the sale of an interest in the partnership to anyone without the written consent of all the partners.

Paragraph 16 is as follows: "The interest of any partners in the partnership may not be sold without the written consent of all the partners."

It must be noted that both the past sales and the proposed sales which plaintiff seeks to have enjoined and rescinded are to other existing partners, and in no case has a sale been made to persons other than present partners.

It must be further noted that from the outset of the original partnership relationship, under agreements executed December 15, 1944, November 28, 1950, December 20, 1954, November 1, 1956, October 1, 1959 and January 2, 1964, there were numerous transfers of partnership units between partners, none of which had the written consent of the remaining partners. "Does paragraph 16 of the partnership agreement of January 2, 1964, prevent a sale by the Leo Sauer estate of the interest of a deceased partner to a surviving partner without the written consent of all the partners or does paragraph 16 apply only to the sale to a 'non-partner'?"

The modus operandi of the partnership is uncontroverted:

(a) Whenever a sale of a partnership interest was made to another partner, no written consent was ever obtained.

(b) Whenever a sale of a partnership interest was made to a person not then a partner, either written consent was obtained or a new partnership agreement was executed.

There were no exceptions to this modus operandi in the 20 years of operation under the partnership agreements containing identical language.

Furthermore, the two partners who are now complaining of the Sauer estate transactions either bought or sold partnership shares without ...


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