Opinion
April 30, 1963
Judgment awarding plaintiffs judgment in the sum of $110,293.90 unanimously reversed, on the law and on the facts, and the complaint dismissed, without costs. The provision in the agreement under which plaintiffs claim to be entitled to recover a portion of the reserve set up for taxes is related to an involuntary prospective change in the method of reporting income from cash to accrual basis imposed upon the corporation by the action of the Treasury Department. The complaint alleges that the Treasury Department has determined not to require a change and the answer admits this allegation. Therefore, under the provisions of the agreement plaintiffs are not entitled to recover because of failure to allege or prove that the corporation was obliged to change from the cash to accrual basis consequent on the action of the Treasury Department. This disposition is without prejudice to any action plaintiffs may be advised to bring to recover the contract interest, for reformation of the contract or for any other legal or equitable relief.
Concur — Botein, P.J., Breitel, Rabin, McNally and Steuer, JJ.