Evans v. Thornton
| Decision Date | 04 November 1944 |
| Docket Number | 36155. |
| Citation | 159 Kan. 149,152 P.2d 853 |
| Parties | EVANS v. THORNTON. |
| Court | Kansas Supreme Court |
Syllabus by the Court
Syllabus by the Court
While a partnership is not strictly a legal entity, for practical purposes it may be considered as a business entity, since it has its own capital, its own assets and liabilities, and it has a commercial life and credit of its own, virtually though not technically independent of the members comprising it.
When one of two business partners dies, all partnership assets land, money, goods, and accounts, become a partnership estate which is to be considered in equity as personalty, and should be wound up under the jurisdiction of probate court; and where assets of such estate are in another state, ancillary probate proceedings should be instituted in that state to reduce those assets to money so that proceeds may be properly transmitted to domiciliary probate court, to the end that all affairs of partnership may be completely settled. Gen.St.Supp.1943, 59-1001, 59-1004, 59-1005.
Where partnership business was operated in Kansas by two partners residents of Kansas, and one of them died intestate and without issue, his widow as partner's sole statutory heir had right to sell to surviving partner after he qualified as administrator of partnership estate the entire interest of her deceased husband in partnership assets, irrespective of inherent nature of such estate.
In absence of showing to the contrary, it will be presumed that partnership law in Missouri is the same as in Kansas.
Where partner of Kansas partnership died intestate, and his widow, as sole heir under Kansas law, sold his interest in partnership to surviving partner, after surviving partner qualified as administrator, partner had no cause of action against widow on ground that part of title to Missouri land belonging to partnership succumbed to claim of deceased's brother and sisters made as heirs under Missouri law, where brother and sisters succeeded because surviving partner failed to take proper steps as administrator to subject land as personalty to winding up of partnership affairs. Gen.St.Supp.1943, 59-1001, 59-1004, 59-1005.
Allegation that widow of deceased partner sold, as deceased's statutory heir, his half-interest in partnership to surviving partner for less than $40,000 in reliance on his false representation that partnership property had value not to exceed $68,000, while to knowledge of partner, and unknown to widow when she made contract, value of property was at least $160,000 and that widow had no business experience, stated cause of action for fraud.
Evidence was sufficient to take to the jury widow's cross-action against surviving partner for fraud on issue whether she relied on false representations knowingly made by surviving partner as to value of partnership estate when she sold her deceased husband's interest therein as his heir to surviving partner.
1. When one of two business partners dies, all the partnership assets, land, money, goods and accounts, become a partnership estate which is to be considered in equity as personalty, and should be wound up under the jurisdiction of the probate court; and where certain assets of such estate are in another state, ancillary probate proceedings should be instituted in that state to reduce those assets to money so that the proceeds may be properly transmitted to the domiciliary probate court, to the end that all the affairs of the partnership may be completely settled and terminated.
2. Where a partnership business was operated in Kansas by two partners, residents of Kansas, and one of them died intestate and without issue, his widow was his sole statutory heir; and when the surviving partner qualified as administrator of the partnership estate, the widow had the right to sell to the surviving partner the entire interest of her deceased husband in the partnership assets, irrespective of the inherent nature of that estate.
3. Under the facts stated in the opinion, the surviving partner, who had purchased from the widow the entire interest of her deceased husband, had no cause of action against her because of the failure of part of his title to land in Missouri which was an asset of the partnership estate he had purchased from the widow.
4. The facts alleged in the widow's cross-petition, set out at length in the opinion, stated a cause of action for fraud against plaintiff's demurrer and motion for judgment.
5. Notwithstanding some inconsistencies in the testimony of the cross-petitioner, the entire evidence in the record considered and held sufficient to take to the jury her cross-action in damages for fraud, on the question whether she relied on false representations knowingly made by plaintiff as to the value of the partnership estate when she sold her interest therein at an inadequate price.
Appeal from District Court, Johnson County; Garfield A. Roberds, Judge.
Action by Ross J. Evans against Wilda Thornton for damages for alleged breach of contract, wherein defendant filed a cross-action. The trial court found, after the jury reported its inability to agree on a verdict, that jury could not agree and ordered it excused and discharged. From a judgment denying defendant's demurrer to plaintiff's evidence and denying plaintiff's motion for judgment on ground that defendant failed to prove a cause of action, defendant appeals and plaintiff cross-appeals.
Reversed on appeal with instructions to dismiss the complaint and affirmed on the cross-appeal.
C. C. Stewart and George K. Melvin, both of Lawrence, for appellant.
M. W. Borders, of Kansas City, Mo. (Howard E. Payne, of Olathe, and John F. Reinhardt, Abraham E. Margolin, and Wilfred Wimmell, all of Kansas City, Mo., on the brief), for appellee.
This is an appeal from certain rulings of the district court in an action for damages for alleged breach of contract, and in a cross-action for damages based on alleged fraud. The jury failed to agree, and both parties have brought the record here to obtain an adjudication of such questions as are now appealable before proceeding further in the trial court. Those questions will be developed as we proceed.
It appears that in 1940 and for many years prior thereto the plaintiff, Ross J. Evans, and the late Lee Thornton were partners in a manufacturing enterprise known as the Rex Art Casket Company. The partners resided in Kansas City, Kansas, and their business establishment was located there. Their business had prospered; the partnership had substantial assets, one of which was a farm near Warsaw, in Benton county, Missouri.
Thornton died intestate and without issue, leaving the defendant and cross-petitioner, Wilda Thornton, as his sole statutory heir under Kansas law.
Ross J. Evans, surviving partner, was appointed and qualified as administrator of the partnership estate.
Mrs. Wilda Thornton was appointed and qualified as administratrix of her deceased husband's personal estate.
Shortly after the appointment of Evans as administrator of the partnership estate, an inventory and appraisement was made of the partnership assets as follows:
"Plant inventory ..... $28,242.00 Machinery ............. 706.00 Office equipment ...... 424.00 Personal property ..... 725.00 Real Estate ........... 14,540.00 Cash .................. 8,631.46 Notes receivable ...... 116.00 Accounts receivable .. 20,303.78"
These items made an aggregate gross of $73,688.24. There were accounts payable in the sum of S5,611.05. The item "Real Estate" appraised at $14,540 was based on the assessed taxable value of the factory site in Wyandotte county and the Missouri farm. The farm was inventoried and appraised at its assessed value for taxation in Missouri at $5,140. The item "Accounts receivable" appraised at $20,303.78 had a face value of $67,679.28. Thus the net value of the partnership estate according to its inventory and appraisement prepared for the probate court of Wyandotte county was $68,077.19.
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...100 (1935); Curtis v. Campbell, 336 S.W.2d 355 (Ky. 1960); Moorman v. Moorman, 226 Ind. 192, 79 N.E.2d 112 (1948); Evans v. Thornton, 159 Kan. 149, 152 P.2d 853 (1944); Jackson v. Jackson, 343 Ill.App. 31, 98 N.E.2d 169 (1951); Annot., 120 A.L.R. 724, 740 (subdiv. III) (1939).13 See Duncan ......
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Koch v. Suttle, 40347
...action, then the case is not entitled to go to the jury and judgment should be rendered against such litigant and cites Evans v. Thornton, 159 Kan. 149, 160, 152 P.2d 853, where the settlement of a partnership business was involved. This rule of law was stated in the Evans case in support o......
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