Parker v. Broadbent

1. Where, on a bill for an account against partners, the defendants at first answer that the plaintiff’s husband and not the plaintiff was their partner, but afterwards agree that if the husband will file a disclaimer of all interest, the cause shall proceed as though no such defence had been made, the defendants, after such disclaimer, cannot deny that the plaintiff was the true party in interest. 2. If, on the dissolution of a partnership and the withdrawal of a member therefrom, the others at once take exclusive possession of the firm assets, and use the same in the continuance of the same business by themselves, they must account to the retiring partner as of the time of the latter’s withdrawal, and on the basis of the value of the partnership assets at that time.

APPEAL BY DEPENDANTS PROM THE COURT OP COMMON PLEAS NO. 2 OP PHILADELPHIA COUNTY. No. 156 January Term 1890, Sup. Ct.; court below, No. 536 December Term 1887, C. P. No. 2. On January 28, 1888, Emily L. L. Parker filed a bill in equity against Samuel W. Broadbent and Robert C. Broadbent averring: That prior to November 14,1884, the defendants were carrying on the business of photography at, 914 Chestnut street, Philadelphia, and on that date the plaintiff purchased from them a third interest in said business, paying therefor the sum of $6,000, with the arrangement that she should have the right to withdraw the same at any time; that in October, 1886, the firm removed to 1415 Chestnut street where the defendants were still located; that shortly after the removal an account of the business was stated by an expert accountant, showing the interest of the plaintiff to be worth $7,715.88; that prior to July 1, 1887, the plaintiff notified defendants of her desire to withdraw her one third interest from the firm, and requested them to wind up the business so as to permit her so to do; that thereupon the defendants caused a new statement to be prepared, showing the interest of the complainant on July 1,1887, to be worth only $1,521.10; that since July 1, 1887, the defendants continued to carry on the business, have had full control and possession of the books, assets and business, and have refused to render an account or make settlement with complainant for her share. The defendants filed an answer denying that any partnership existed between the complainant and defendants; averring that the plaintiff’s husband, M. E. Parker, was their partner, and that he had entered his interest on the books of the firm in the name of his wife, te protect it from his creditors. The answer averred, further, that the difference in the two statements, noted in the plaintiff’s bill, was largely owing to the depreciation in the value of the assets, caused by the removal of the business from 914 Chestnut street. Issue having been joined the cause was referred to Mr. Joseph, J. Broadhurst, as master, who reported as follows: The facts found from the proofs submitted by both complainant and defendants are as follows: Prior to the fourteenth of November, 1884, the defendants advertised for a partner with capital to purchase an interest in their business of photography. Among others answering the advertisement, M. E. Parker called upon them, and after considerable negotiations be was selected; and, when the terms had been agreed upon, the settlement for the third interest was made with money furnished by Mrs. E. L. L. Parker, and receipts were given therefor by the defendants to her, the first one reading as follows: “Received, November 14, 1884, from E. L. L. Parker twenty-five hundred dollars on account of six thousand dollars which will be in full payment for one third interest in our business; ” and was signed, “ Broadbent Bros.” All other receipts for the remaining payments were given in her name, M. E. Parker attending to the payments. The books of the new firm were opened with Mrs. E. L. L. Parker’s name thereon as one of the firm. The husband, M. E. Parker, went into the counting-room of the new firm and took charge of the accounts, kept the books and attended to the finances. No salary was paid him; he was consulted as a partner would be. Mrs. E. L. L. Parker was not seen by the Broadbents, when the purchase was made, nor was she at anytime seen or consulted about the business. Payments, however, were made to her husband for her, by checks drawn to her order for money drawn out, and after the dissolution negotiations were carried on by the Broadbents, for some time, with her, for a settlement of the share that was coming to her or her husband. These facts show that, while the husband attended to tire negotiations, the Broadbents recognized that the wife, Mrs. E. L. L. Parker, was the real party in interest, and that the husband was only the agent for his wife. Since these proceedings have been pending, however, counsel for complainant and defendants have agreed that upon M. E. Parker filing a disclaimer of any interest in the said firm, or its assets, the proceedings for an account shall proceed, and whatever fund may be found due by the master shall be awarded to the complainant, with the same effect as if the defendants had not made the claim in their answer, that M. E. Parker, and not his wife, was the person with whom defendants had formed and carried on the copartnership business. This disclaimer has been filed with the master and is attached to the report, marked exhibit 1, so whatever effect the pleadings may have had on the issue raised, the agreement of counsel and filing of the disclaimer withdraws from the master the duty of deciding the question of the right of Mrs. E. L. L. Parker to an account. It is therefore the duty of the master to proceed to determine the value of the respective interests of each party in the effects of the firm. The defendants, after the dissolution on June 80,1887, have carried on the business at the location of the firm prior to dissolution. No sale was made of the property; everything remained as it did prior to June 30, 1887, Mrs. Parker only withdrawing. The Messrs. Broadbent had control and possession of everything, and still have possession and control; therefore, whatever valuation is to be placed on the effects is to be taken as of June 30, 1887. —The master thereupon stated an account, ascertaining the shares of the several partners in the net assets, that of the plaintiff'being $5,136.84, and proceeded: The defendants have had possession and control, and have had the use of Mrs. Parker’s share since July 1, 1887; and would, therefore, according to the well-settled practice in equity, be accountable to her for profits or interest for that time, and to charge them with profits would necessitate an accounting to the present time. The complainants have not required this, but have asked the master to allow her interest. There is an abundance of authority for this allowance, without the master setting out the numerous cases in this and other states where this allowance has been made; and even some cases appear where a gross sum has been fixed as a share of profits, without taking an account: Brown’s App., 89 Pa. 139. The complainant will therefore be entitled to interest on the sum of $5,136.84 from the 1st day of July, 1887, until the said amount shall be paid..... A decree in accordance with this report is hereto annexed. —To the foregoing report, thirty exceptions were filed by the defendants. Said exceptions having been argued before the court in banc, they were dismissed, without opinion filed, the master’s report confirmed, and a decree entered as recommended by the master. Thereupon, the defendants took this appeal, filing twenty-nine assignments of error, one of which, the twenty-eighth, specified for error the dismissal of the several exceptions filed to the master’s report.