As stated, the Wolf Endowment sold Yeshivat Etz Chaim, and in return purchased Neve Simcha and its related companies, so that we accept the conclusion of the trial court that Neve Simcha entered the shoes of Yeshivat Etz Chaim and in fact should be considered as part of the association's assets. Neve Simcha should have transferred all of its profits to the association so that the funds that come to Neve Simcha belong to the association. As the trial court noted, the appellants "themselves admit that the profits of Neve Simcha therefore belong to the association", since the association is the sole beneficiary of the Wolf Endowment, which purchased the land for Yeshiva Etz Haim and sold it in exchange for receiving shares in Neve Simcha. In terms of the endowment, the funds that reach Neve Simcha belong to the association, as does the association that is the beneficiary of the endowment. The appellants, as officers of the Association, were therefore not entitled to receive salary or any other receipt from the Association, from the Wolf Endowment or from Neve Simcha, since the law is the same for all of them. Therefore, receiving the salary through Neve Simcha was intended to circumvent the prohibition that applies to the members of the association's board to receive wages, and was a prohibited division according to The Non-Profit Organizations Law (Section 34C, which was interpreted in the case law, also applies to wages and all benefits) and according to The Trust Law (Section 8(a)). The appellants served as officers of the association and also as trustees of the endowment, positions that prevent them from receiving salaries from the assets of the entities in which they are entrusted.
In the words of the trial court:
"The respondents [the appellants – 11] themselves connected Neve Simcha to the association and accepted that Neve Simcha was the consideration, among other considerations, for Yeshiva Etz Chaim, and even admitted that the consideration and funds were due (belonging) to the association; In addition, the respondents knew that receiving money from the association as an officer was not a legal act, and therefore they received a salary from Neve Simcha.