231 A.D. 519 | N.Y. App. Div. | 1931
Charles Sterns, of Rutland, Vt., and Whitney B. Winter, of Keeseville, N. Y., entered into a written partnership agreement on September 25, 1899, to conduct a clothing store at Keeseville. Sterns supplied the capital, originally $14,113.22, for which he received the partnership note without interest, and Winter was to run the business without putting in any cash. Winter Was to draw fifteen dollars per week and remit twenty-five dollars weekly to Sterns. The partnership continued until Mr. Sterns died on October 30, 1911. By written agreement between Winter and the executors of the Sterns estate, the partnership was continued until dissolved by Winter’s death on April 16, 1927. At that time the firm of Sterns & Winter still owed the estate of Sterns a balance of $12,088.26 on the original note. Winter had remained in control of the business after the death of Sterns. A Mr. Miller, one of Sterns’, executors, kept in touch with the business by an occasional visit and through statements sent to him by Winter. Miller understood the clothing business, since he was in charge of a similar business conducted by Charles Sterns & Co., at Rutland, Vt., which was a partnership consisting of the estate of Charles Sterns and Miller.
Upon the death of Winter, Miller took possession of the assets of Sterns & Winter. He consulted the attorney for the estate of Winter about calling in any of the Winter family or representatives in the taking of an inventory. After reading the partnership papers, the attorney for the Winter estate stated that they had no financial interest in the business except in profits and losses and that Miller should go ahead and take the inventory. On April 19, 1927, Miller took an inventory with the assistance of the bookkeeper and another clerk of Sterns & Winter and also two assistants brought by him from Rutland, one the bookkeeper of Charles Sterns & Co., and the other Arthur Sterns, son of Charles Sterns, deceased. Miller alone fixed the prices of all merchandise in this inventory at what was, in his opinion, the present market
During the May sale the Sterns executors sold the balance of the goods, including the new merchandise received from Rutland, to Arthur Sterns on the basis of fifty cents on the dollar of their inventory value at that time. That inventory was never completed because Arthur Sterns refused to consummate the sale. Miller then tried to dispose of the business in a lump sum to some local person at Keeseville but failed. He did not publish a notice of sale. On June 4, 1927, without further consulting the attorney or executrix of the Winter estate, Miller sold the business to Charles Sterns & Co., in which he and the estate of Charles Sterns were partners, at the value of the business on April 19, 1927, based upon the inventory values placed on the merchandise by' Miller on that date and without any allowance for good will. Charles Sterns & Co. conducted the business from about June 6, 1927, to December, 1928, when it was discontinued and the merchandise then on hand, claimed to be unsalable, was shipped to their store in Rutland. It does not appear whether the business so conducted was operated at a profit or loss and Miller expressed a doubt whether the books would show it. There has been no other liquidation of the partnership of Stems & Winter.
The estate of Charles Sterns presented to the executrix of the estate of Winter a claim in the sum of $6,220.99, claimed to be due to claimant as sole surviving partner. The executrix of the estate of Winter rejected the claim. The claim was tried in proceedings brought for the compulsory settlement of the accounts of the executrix of the estate of Winter. The surrogate has disallowed the claim on the ground that claimant has failed to establish to the satisfaction of that court that the business of Sterns & Winter was properly liquidated. This appeal is from the decree dismissing the claim.
At the close of the claimant’s case, the attorney for the estate of Winter moved to dismiss the claim on the ground that such
We think, however, that the surrogate would have been justified in exercising his equitable jurisdiction by directing a liquidation and should have done so in order that the claimant might be permitted to prove the claim in part, at least, if possible. In the present state of the record, to allow the claim in part would be a' mere guess, as stated by the surrogate. It does appear in the record, however, that Winter, by a balance sheet prepared in his own handwriting on February 17, 1927, two months before his death, indicated that the sum of $3,073.96 was due from him to the firm on February 1, 1927. In that statement the inventory of the merchandise is given as $11,655.56. In Muller’s appraisal
The decree should be reversed and the matter remitted to the Surrogate’s Court to proceed in accordance with this opinion, with costs to abide the event, payable out of the estate, unless
All concur.
Decree reversed on the facts and matter remitted to the Surrogate’s Court to proceed in accordance with opinion, with costs to abide the event, payable out of the estate, unless within twenty days after service of the decision herein the parties shall stipulate that the claim be allowed at the sum of $3,000; in which event the surrogate is directed to so allow the claim, with costs in this court, payable out of the estate.