Big Four Implement Co. v. Keyser

• Decision Date: 11 November 1916
• Docket Number: 19958
• Citation: 161 P. 592,99 Kan. 8
• Parties: BIG FOUR IMPLEMENT CO. (TOWNLEY METAL HARDWARE CO. ET AL., INTERVENERS) v. KEYSER ET AL. (SIEMERS ET AL., INTERVENERS).
• Court: Kansas Supreme Court

161 P. 592

99 Kan. 8

BIG FOUR IMPLEMENT CO. (TOWNLEY METAL HARDWARE CO. ET AL., INTERVENERS) v. KEYSER ET AL. (SIEMERS ET AL., INTERVENERS).

No. 19958

Supreme Court of Kansas

November 11, 1916

Rehearing Denied Dec. 19, 1916.

Syllabus

While death works a dissolution of a partnership, the community of interest subsists for some purposes long enough to enable the survivors to wind up and settle the affairs of the partnership.

A surviving partner who undertakes to wind up the business of the firm is required to do so within a reasonable time and in the way most advantageous to those interested in the estate and, after paying the debts and the expenses of closing the business, to distribute the assets among the surviving partners and the representative of the deceased partner.

The surviving partner is vested with some discretion as to the manner of winding up the business and the time to be taken for that purpose.

A sale of the goods and assets of the partnership may be made in bulk or in the usual course of trade, whichever may be the most advantageous to the interested parties, and if sold at retail some goods may be added to the stock in order to make it more salable and to facilitate the advantageous disposition of the whole; and when this is done in good faith the estate will be liable for the goods purchased as well as the expenses of winding up the business.

When the business is continued by the surviving partner longer than is necessary with the consent of the interested parties including the representative of the deceased partner creditors who contributed to the stock and assets of the estate are entitled to payment of their claims in preference to any of the surviving partners or the representative of the deceased partner.

Appeal from District Court, Clay County.

Action by the Big Four Implement Company against Maggie Keyser and others, in which G. A. Siemers and others intervened. From a judgment for plaintiff and interveners, the Townley Metal Hardware Company and others, defendants and interveners G. A Siemers and others appeal. Modified and affirmed.

F. L. Williams, J. L. Hogin, C. Vincent Jones, R. C. Miller, and F. B. Dawes, all of Clay Center, for appellants.

Pulsifer & Hunt, of Concordia, and Hy. W. Stackpole and W. T. Roche, both of Clay Center, for appellees.

OPINION

JOHNSTON, C. J.

This was an action by creditors to subject a fund to which they had contributed to the payment of their claims.

J. F. Keyser and his sons, W. D. and W. O. Keyser, were engaged in the hardware business at Wakefield. On July 22, 1911, J. F. Keyser died leaving as his only heirs his widow, Maggie Keyser, the two sons mentioned, and two daughters who had not yet reached majority. On August 5, 1911, the widow was appointed administratrix of the estate and on August 28, 1911, W. D. Keyser qualified as surviving partner, giving bond with G. A. Siemers and D. H. Faulkner as sureties. The property of the deceased consisted of little more than his interest in the partnership business. W. D. Keyser had put into the business about $700, and W. O. Keyser had contributed nothing except his services in carrying on the business for which wages were paid. The invoice of the stock of goods, taken after the death of J. F. Keyser, showed that there were goods on hand of the value of $8,342.22, cash $1,378.03, notes aggregating $1,173.50, and open accounts due the firm $1,876.56. The entire stock and assets of the firm amount to $12,770.31. The firm was then indebted to the extent of $6,072.44. Some time after W. D. Keyser took charge of the stock he paid off this indebtedness, but instead of selling the stock in bulk he conducted the business substantially as it had been done prior to the death of his father, and his brother, W. O. Keyser, continued to assist in carrying on the business as he had formerly done. Some new goods were purchased from time to time to take the place of those that were sold, and in transacting the business checks and other documents were signed sometimes in the old firm name and sometimes as Keyser & Sons. Mrs. Keyser and her daughter, as well as the families of both sons, were supported from the proceeds of the store. In July, 1913, W. D. Keyser gave notice that he would make a settlement of the partnership estate, and did file what purported to be a final account of his administration; but shortly afterwards he disappeared, and settlement was not made. Mrs. Keyser, as administratrix of the estate of the deceased, also gave notice of a final settlement of the estate, which was not made. After the abandonment of the business by W. D. Keyser, Mrs. Keyser and her son W. O. Keyser executed an assignment of all the stock and assets of the firm to William Jevons as trustee for the creditors, and this instrument was signed by "W. O. Keyser," "Maggie Keyser" and "Keyser & Sons, by Maggie Keyser, a Member of Said Partnership." Under the assignment Jevons took possession of the store, sold goods, bought some new goods, and also collected outstanding accounts and paid debts. After he had been in possession of the property about two months the probate court directed the administratrix to take charge of the store and the assets of the estate, and thereupon Jevons surrendered possession of the goods and all of the assets of the business to her. An inventory was then made, and a little later a sale of the goods was effected, the proceeds from which, with the cash on hand and open accounts, amounted to $4,851.60. From this amount the administratrix was directed to make a payment of $513.20 (but whether it was upon claims or fees is not disclosed), leaving a balance of $4,348.40. She was about to distribute this balance among the heirs of the deceased when this action was brought.

G. A Siemers and D. H. Faulkner intervened in the action, claiming the rights of creditors. The surviving partner had induced them to sign a note with Keyser & Sons upon the representation that he desired to...