274 Pa. 533 | Pa. | 1922
Opinion by
Albert L. Mamaux, of Pittsburgh, died May 9,1915, a member of two mercantile partnerships, hereinafter named; the other partners in each were his brother, Eugene Mamaux, and his (deceased’s) son, John Mamaux. The three were equal partners in both firms. Clause four of the last will of Albert L. Mamaux is: “In regard to my one-third interest in the partnership business of the Pittsburgh Waterproof Company, it is my will and I direct, at the election of my partners, that they carry on and conduct said business for a period of five years after my decease; my brother E. Mamaux, to have the full management and control of said business' during said period. In regard to my one-third interest in the partnership business of the A. Mamaux & Sons firm, it is my will and I direct, at the election of my partners, that they carry on and conduct said business for a period of five years after my decease.” The next clause gave the surviving partners an option to buy testator’s interest in the partnerships on the expiration of the five years, at the invoice price. His widow, to whom he gave only what the law obliged him to give, took against the will. His brother and Frank Kimball were named as executors and directed to make no distribution, except to specific legatees, until five years after his
At the expiration of the five years, the executors filed a second account showing that the estate’s one-fourth
By their terms the copartnerships might be dissolved, inter alia, “by mutual consent or by operation of law”; hence, Albert’s death would, prima facie, cause a dissolution by operation of law (Little v. Hazlett, 197 Pa. 591), yet the partners might agree otherwise, and testator’s will left it optional for his partners to continue his one-third interest in the business for five years, but they decided not to do so. Here the auditing judge inadvertently fell into error by assuming that the surviving partners elected to continue the business as provided in the will, although he expressly finds they refused to do so unless their interests were increased to three-eighths each, and also finds that, “In August, 1915, as of May, the time of decedent’s death, the surviving partners and executors changed the interest as of the date of his death from one-third to two-eighths, and thereby increased the interest of the surviving partners each to three-eighths”; it is thus manifest the partnerships were not continued on a one-third basis. As the survivors were under no obligation to continue the partnerships (Appeal of Grim et al., 105 Pa. 375) it was for them to say upon what terms, if at all, they would do so, and this they did in the agreement of August, 1915. But it is urged that agreement was made without the knowledge or consent of the beneficiaries and participated in by Eugene Mamaux in the dual capacity of a surviving partner and an executor. Even conceding these circumstances rendered the agreement voidable, it was not void and did not impose upon the surviving partners obligations they expressly refused to assume. As it was not within the power of the
The auditing judge finds as a fact that the widow could have been paid her one-third without withdrawing it from the capital of the business; that is supported by the evidence, if the profits of the partnerships earned after' the death of her husband are included, but not otherwise, and no such profits had been ascertained or were available when the capital was withdrawn in December, 1915. At all events it was withdrawn for that purpose and thus any interest she might otherwise have had in the business was eliminated, according to the. prior understanding; otherwise the partnerships would not have been continued and the estate would have lost the profits. True, the widow was not entitled to receive her share out of any particular fund (Gallagher’s Est., 76 Pa. 296), but inasmuch as the reduction of the estate’s interest in the business, to one-fourth, was a condition necessary to a continuance of the partnerships, such withdrawal of capital resulted in no loss to the estate, and while it increased the relative interest of the sur
Eugene Mamaux took active charge and control of the business and managed it successfully during the five years, and accountants claim a credit of $5,546.86 as paid him for services to the estate. This the orphans’ court properly disallowed. Such services were rendered to the business and not to any particular interest therein, and from the business Eugene received a salary; the executors, of whom he was one, also received a commission for their services to the estate. There are no such special circumstances here as to justify a departure from the general rule that a partner is not entitled to extra compensation merely because of the arduous character of his services (Zell’s App., 126 Pa. 329; Consaul v. Cummings, 222 U. S. 262; Ruggles v. Buckley, 175 Fed. 57), especially not from the estate of a deceased partner (Appeal of Miller & Spang, 18 W. N. C. (Pa.) 485) ; this is not changed by the fact that the will purports to give Eugene the management and control of the entire business.
The decree is modified by striking therefrom the surcharge of $34,203.60, as the difference between the profits of one-third and one-fourth of the business, and also by striking therefrom the credit of $1,710.18 allowed as commissions on such surcharge; the assignments of error raising other questions are overruled and the record is remitted to the orphans’ court that distribution may be made in accordance herewith, the costs to be paid out of the fund for distribution.