279 Pa. 482 | Pa. | 1924
Opinion by
Howard Underdown and his brother, the defendant herein, were in business together when the former died on December 29, 1918. The partnership articles provided that each should have an equal interest in the business, which should continue from year to year, until one should give three months’ notice to the other of an intention to determine it at the end of the then current year; that each should draw the same sum weekly, to be charged against his share of the profits; that the death of one partner should not dissolve the partnership, which should be continued by the survivor to the
The property occupied by the partnership was leased from year to year, until three months’ notice of an intention to determine it should be given by lessor or lessee. No such notice was ever given, and hence, when Howard Underdown died, the lease was in force until December 31, 1919, and, by its terms, would continue thereafter, from year to year, unless due notice of termination was given. During that year, however, appellee obtained a new lease, in his own name, for a term of ten years.
After Howard Underdown’s death, and the appointment of plaintiff as executrix of his will, an agreement of settlement of the partnership affairs was entered into between her and defendant, by which she sold to him her testator’s interest in the firm for $40,157.15, he giving and she accepting, $157.15 in cash and a note for $40,000, payable one year from date. On this note $225 interest was paid by defendant to her. Subsequently she became dissatisfied, whereupon defendant agreed with her that the settlement should be set aside, with the same effect “as though no such paper was ever signed by her.”
Subsequent efforts to adjust the matter having failed, plaintiff sent to defendant a check for the payments received by her, which he retained but did not cash; and, at a still later date, she tendered back the $40,000 note. She also began the present suit in equity, for an accounting by defendant of the partnership affairs; the business having been continuously carried on by him after the death of his brother. On the first hearing, the court be
Notwithstanding the unchallenged finding that, by the rescission of the agreement of settlement, plaintiff’s right became the same “as though no such paper was ever signed by her,” the court below treated the case as if that agreement was still in force for all other purposes than as fixing the amount due. This was error. Plaintiff’s rights, there being no agreement standing in the way, are fixed by section 42 of the Uniform Partnership Act of March 26, 1915, P. L. 18, 32, which provides that she is entitled to have “an amount equal to the value of his interest in the dissolved partnership with interest, or,......at the option of his legal representative, in lieu of interest, the profits attributable to the use of his right in the property of the dissolved partnership.”
Against this conclusion appellee urges that the death did not work a dissolution, because the partnership articles so state, and hence the statutory provision does not apply. This, however, is a mistake; the articles only stipulate against an immediate dissolution, and for the continuance of the business until the end of the then current year. They do not set forth what shall happen after that, and hence the partnership, as such, was necessarily dissolved at the expiration of that period, whether the survivor became entitled to carry on the business thereafter, or was bound then to wind it up.
Appellant alleges error also in not charging against defendant the sums which were expended by him, or under his direction, from firm assets, but for matters wholly foreign to partnership affairs. Confessedly this would ordinarily be a correct surcharge, but it is sought to defeat it here on the ground that decedent had access to the books, and must have known these payments were
Plaintiff also complains because she was not allowed anything for the value of the leasehold, which was renewed after the death of decedent. Having found that the partnership did not end until plaintiff made her election, it necessarily follows that the estate’s interest in the leasehold also continued until that time. Consequently its value, until the end of the then current year, should have been ascertained and carried into the account. At that time also there was a possibility of renewal for another year, and Johnson’s App., 115 Pa. 129, is an express authority for the conclusion that the chance or opportunity of that renewal is in itself a distinct asset, for which the partner, who takes a new lease
The final question raised is: Is plaintiff entitled to have ascertained and carried into the account, the value of the good will of the business? We think not. We are-indebted to counsel for appellant for his able and interesting brief on this subject; but, under the facts of the instant case, such a charge should not be made. Though there are fifteen sections in the Uniform Partnership Act, which deal with the subject of the dissolution and winding up of partnerships, including therein the rights of the estate of deceased partners when the business is continued, good will is not even mentioned. The partnership articles of this firm are also silent in regard to it.
In Musselman and Clarkson’s App., 62 Pa. 81, Ave held that good will could hardly exist independently of the property occupied by the firm; and in Marmaduke v. Brown, 254 Pa. 18, under circumstances like the pres
The master has caused us much unnecessary labor by failing to observe our requirement that requests should never be “declined as irrelevant.” Each should be answered according to the fact, to which may be added the opinion that it is irrelevant, if the chancellor believes it to be so: Glenn v. J. C. Trees Oil Co., 266 Pa. 74. So also no request should be “declined as stated,” for, judging from the instant case, this means no more than “declined as irrelevant,” or at most some unsubstantial difference in the statement of the facts. We also note that the facts set forth in a number of the requests which were “declined as irrelevant,” “declined as stated,” or simply “declined,” were afterwards substantially found by the master in his own language. We have had occasion recently to send back several reports because of such inconsistent findings: Palmer Water Co. v. Lehighton Water Supply Co., 265 Pa. 199. The record is still further encumbered by the master answering defendant’s objections to certain of plaintiff’s requests, and then making the objections and his answers thereto a part of his report. This is unnecessary; under Equity Rule 62, the objections are intended as a guide to the chancellor, and have no other purpose.
Our conclusion as above must not be construed as a reflection upon defendant. On the contrary, a careful study of the record convinces us that he has acted in good faith throughout.
The decree of the court below is reversed, and the record is remitted with directions that an account be stated in accordance with the views expressed in this opinion, the costs below and here to abide the final decree on the accounting.