Blut v. Katz, C--1612

• Decision Date: 24 May 1951
• Docket Number: No. C--1612,C--1612
• Parties: BLUT v. KATZ et al.
• Court: New Jersey Superior Court

Page 121

14 N.J.Super. 121

81 A.2d 406

BLUT v. KATZ et al.

No. C--1612.

Superior Court of New Jersey Chancery Division.

May 24, 1951.

Marcus & Levy, Paterson, for plaintiff.

Peter Cohn, Paterson, for defendant Benjamin Katz.

Abram Waks, Paterson, for defendant Herman Marks.

GRIMSHAW, J.S.C.

This is a suit for the dissolution of a partnership and an accounting of the profits, brought by the executrix of a deceased partner against his surviving associates. There is a counterclaim in which the surviving partners seek to charge the account of the deceased partner with the cost of providing substitute help during his sickness.

The issues as limited and defined by the pretrial order are:

'1. The first issue is whether the partnership between the plaintiff's decedent and the defendants was based upon a written agreement dated January 7, 1925, or upon an oral agreement among the parties made some time thereafter, it being conceded that the interest of the decedent of the partnership was a 1/3 interest.

2. The second issue is whether there shall be a charge against the decedent for the cost of hiring help to do the work which, as the result of illness, he was unable to do.

3. The third issue is whether the decedent, until the time of his death, received his full proportionate share of the profits of the company.'

I find the facts to be as follows:

On January 7, 1925, Herman Marks, Philip Pushinsky, Isaac Blut, Benjamin Katz and Isador Abrams executed an agreement of partnership under the terms of which they engaged to conduct a business as the United Shop Cap Company. The partnership agreement was for a term of one year. Among other provisions it contained the following clauses 'It is agreed by and between the parties hereto, that at all times during the continuance of their copartnership they and each of them will give their attendance, their and each of their best endeavors, and to the utmost of their skill, exert themselves for their joint interest, benefit, profit, and advantage, and truly emply (sic), buy, sell, in the business aforesaid, and also that they shall and will at all times during the said copartnership, bear, pay and discharge equally between them all rents, and other expenses, that may be required for the support, and management of the said business, that all gains, profits, and increases, that shall come, grow or arise from or by means of their said business, shall be divided between them 1/5 share to each, and all loss that shall happen to their business by ill commodities, bad debts or otherwise, shall be borne and paid between them, 1/5 each.'

And further:

'It is further agreed that during the continuance of said copartnership, the parties hereto shall mutually agree upon a weekly allowance to be paid to each of the parties hereto for services to be rendered and said allowance shall be charged as an item of expense of the copartnership business.

'It is further agreed that upon the completion of said copartnership, any one of the partners desiring to withdraw from the business shall be entitled to receive as his share, the reasonable market value of the stock, fixtures and all assets that may be ascertained, but shall not be entitled to any money for good will.'

The business was operated by the five partners until about 1940 when Abrams and Pushinsky withdrew and received their share of the business from the other partners in accordance with the provisions of the partnership agreement. Thereafter the business was operated by Marks, Katz and Blut, the remaining partners, each having a one-third interest.

The business prospered. Each partner withdrew weekly the sum of $95. From time to time further sums were withdrawn. As to the additional withdrawals the practice was for the accountant to make monthly reports on the status of the company. The partners would...