CASE # 3319

In action against defendant Yeshiva, a religious corporation, for specific performance of a contract for the sale of real property, defendant Yeshiva was directed to sell the subject real property to the plaintiff for the contract price of $ 185,000. As required by statute, the consideration and the terms of the transaction were fair and reasonable to the corporation and the purposes of the corporation or the interests of the members would be promoted.— Scher v. Yeshivath Makowa Corp., 54 A.D.3d 839, 864 N.Y.S.2d 113 (N.Y. App. Div. 2d Dept. 2008), No. 2007-01810. Dated September 16, 2008. Opinion by JJ. Robert A. Spolzino, Fred T. Santucci, Randall T. Eng, and John M. Leventhal.

N.Y. Religious Corporations Law § 12 provided that a religious corporation, such as the defendant Yeshiva, shall not sell any of its property without applying for and obtaining leave of the court pursuant to N.Y. Not-for-Profit Corporation Law (N-PCL) § 511. See generally Church of God of Prospect Plaza v. Fourth Church of Christ, Scientist, of Brooklyn, 76 A.D.2d 712, 431 N.Y.S.2d 834 (N.Y. App. Div. 2d Dept. 1980), affd, 54 N.Y.2d 742, 442 N.Y.S.2d 986, 426 N.E.2d 480 (1981). The court could authorize the sale if it appeared “to the satisfaction of the court, that the consideration and the terms of the transaction are fair and reasonable to the corporation and that the purposes of the corporation or the interests of the members will be promoted” N-PCL 511(d). When considering whether the terms and conditions of a proposed sale are fair and reasonable to the corporation, the court views the conditions prevailing at the time the contract was made. See Church of God of Prospect Plaza v. Fourth Church of Christ, Scientist, of Brooklyn, 76 A.D.2d 712, 717, 431 N.Y.S.2d 834 (N.Y. App. Div. 2d Dept. 1980). A court may decree specific performance of such a contract if it determines that the contract meets the standard. See Church of God of Prospect Plaza v. Fourth Church of Christ, Scientist, of Brooklyn, 76 A.D.2d 712, 431 N.Y.S.2d 834 (N.Y. App. Div. 2d Dept. 1980); Levovitz v. Yeshiva Beth Henoch, 120 A.D.2d 289, 508 N.Y.S.2d 196 (N.Y. App. Div. 2d Dept. 1986). Here, the plaintiff buyer submitted uncontradicted testimony that the subject property had a fair market value of $ 185,000 – the contract price – at the time of the contract. Therefore, trial court (the N.Y. Supreme Court) properly found that the conditions of the proposed sale were fair and reasonable to the defendant.

Moreover, the Supreme Court providently exercised its discretion in excluding the testimony of an expert witness that the defendant contacted for an appraisal in the middle of the trial, after its original appraiser was unable to testify regarding the value of the property at the time of the contract. See N.Y. CPLR 3101(d); Vigilant Ins. Co. v. Barnes, 199 A,D.2d 257, 604 N.Y.S.2d 248 (N.Y. App. Div. 2d Dept. 1993); Zarrelli v. Littauer Hosp., 176 A.D.2d 1181, 1182, 575 N.Y.S.2d 973 (N.Y. App. Div. 3d Dept. 1991).