Goldberg v. Goldberg
| Decision Date | 05 October 1953 |
| Citation | 375 Pa. 78,99 A.2d 474 |
| Parties | GOLDBERG v. GOLDBERG. |
| Court | Pennsylvania Supreme Court |
Action on a bill in equity to compel defendant to execute and deliver deed for his undivided interest in partnership real estate which defendant had allegedly assigned to plaintiff. The Court of Common Pleas for the County of Chester at No 1132, August term, 1951, found that assignment was intended to cover partnership real estate, but refused to order a conveyance because assignment did not comply with Partnership Act, and because plaintiff had not liquidated partnership business and plaintiff appealed. The Supreme Court, No. 144 January term, 1953, Bell, J., held that provision of Uniform Partnership Act dealing with nonassignability by one partner alone of his interest in specific partnership property, did not apply to or prohibit an assignment by a partner to his sole remaining partner, and that since there was no evidence of fraud or unclean hands on part of plaintiff, plaintiff was entitled to equitable relief requested.
Order reversed and case remanded with directions; costs to be paid by defendant.
Fairfax Leary, Jr., Charles C. Hileman, III Schnader, Harrison, Segal & Lewis, Philadelphia, Lawrence E MacElree, J. Paul MacElree, MacElree & MacElree, West Chester, for appellant.
W. Edward Greenwood, West Chester, Daniel J. C. O'Donnell, Phoenixville, Thomas C. Gawthrop, Gawthrop & Gawthrop, West Chester, for appellee.
Before STERN, C. J., and STEARNE, JONES, BELL, CHIDSEY, MUSMANNO and ARNOLD, JJ.
Plaintiff brought a bill in equity to compel defendant to execute and deliver to him a deed for his undivided interest in partnership real estate as to which defendant, fourteen years ago, had assigned all his right, title and interest. Defendant contended that the prior assignment was intended to cover only his interest in the partnership assets which were personal property. The chancellor found against the defendant on this issue, but refused to order a conveyance by defendant because the original agreement (assignment) did not comply with the Partnership Act and because plaintiff had not liquidated the partnership business and therefore was not entitled to equitable relief. These last objections and issues were raised by the Court and were never raised at any time by defendant.
The material facts are these: Harry Goldberg, plaintiff, Jacob Goldberg, defendant, and their brother, Reuben Goldberg, on July 19, 1920, formed a partnership for the purpose of carrying on a junk business under the name of ‘ Goldberg Brothers'. In 1920, the partnership purchased a tract of land and in 1931 purchased another tract of land. Reuben died in 1937 and his brothers Harry and Jacob continued to carry on the partnership business. Reuben's estate still had rights in the partnership; but Reuben's rights in specific partnership property expired at his death and vested in his surviving partners. Sections 42 and 25(2)(d) of the Uniform Partnership Act, March 26, 1915, P.L. 18, 59 P.S. § § 104, 72.
On March 23, 1938, the partnership business was in a precarious condition and Harry and Jacob and Reuben's administratrix were having family differences. The surviving partners, Harry and Jacob, thereupon entered into a written agreement which recited that it was Jacob's intention to sell and Harry's intention to purchase all the right, title and interest of Jacob in and to the assets of Goldberg Brothers; and in consideration of the payment by Harry to Jacob of $500, Jacob transferred and assigned to Harry ‘ all his undivided interest in and to all the assets belonging to him as one of the surviving partners of Goldberg Brothers * * *.'
The chancellor found that when Jacob executed this assignment he knew its contents and intended thereby to assign and transfer all his right and interest in and to the partnership and to all its property of whatever nature, including the parthership real estate. Harry Goldberg has been in peaceable possession of the partnership property, including the partnership real estate, ever since March 23, 1938, but has never liquidated the partnership. Reuben's administratrix subsequently executed a quitclaim deed to the partnership real estate for $200, transferring all of Reuben's interest therein to plaintiff, so that no claim or complaint is made by the estate of Reuben Goldberg. Moreover, if any creditors exist, the record shows that they have not appeared or raised any question or taken any adverse action for fourteen years, although during that entire time the real estate was recorded and standing in the name of the partnership, Goldberg Brothers.
The Uniform Partnership Act created a new kind of estate ‘ a tenancy in partnership’ . Because of the confusion and the inequities which frequently arose from treating partners as joint tenants and the application of the legal incidents of joint tenancy to partners, the Uniform Partnership Act was passed by the Legislature, with the intention of establishing a new type of ownership and providing a fair and workable law, which would eliminate the confusion and inequities which had arisen and would protect partners and partnership creditors. This is important to remember in construing the Act because if there be any ambiguity therein or ‘ When the words of a law are not explicit, the intention of the Legislature may be ascertained by considering, among other matters-(1) the occasion and necessity for the law; (2) the circumstances under which it was enacted; (3) the mischief to be remedied; (4) the object to be attained; (5) the former law, if any, including other laws upon the same or similar subjects; (6) the consequences of a particular interpretation; (7) the contemporaneous legislative history; and (8) legislative and administrative interpretations of such law.’ 1937, May 28, P.L.1019, art. IV, § 51, 46 P.S. § 551.
The Court below predicated its refusal of equitable relief on the ground that Jacob could not lawfully assign his interest in specific partnership real estate except in the exact manner provided by Section 25(2)(b) of the Uniform Partnership Act, even though he had intended to assign his rights therein by the sales agreement of 1938. Section 25(1) and (2)(b) of the Uniform Partnership Act provides:
Considered alone, the language of this section is broad enough to prohibit a partner from assigning or releasing his rights in specific partnership property to his sole remaining partner or partners, unless the rights of all the partners in the same property were likewise assigned. An examination of the reasons for the Partnership Act and the rights given to partners thereunder, as well as other provisions of the Act, make clear that that was not the intention of the Legislature. We agree with the opinion and decision in Becker v. Hercules Foundries, Inc., 1942, 263 A.D. 991, 33 N.Y.S.2d 367, 368. The Court there sustained an action by a remaining partner for work, labor and services and for damages for breach of contract where his copartner had assigned those specific partnership claims to him. The Court said:
The Partnership Act was intended to define and protect a partnership and the rights of partners and of partnership creditors. The reasons for the nonassignability by one partner alone of his interest in specific partnership real or personal property are set forth in the Commissioner's Notes, 7 Uniform Law Annotated, Partnership, pages 145-150 and may be summarized as follows: (1) It prevents the interference by outsiders with the conduct of partnership business and the possession, management and disposition of partnership property, see Horton's Appeal, 13 Pa. 66(1850); Lewis, the Uniform Partnership Act, 24 Yale L.J. 617, 631 (1915); (2) Partnership is a voluntary relation,-a person may not have a partner thrust upon him without his consent; (3) It is often impossible to measure a partner's beneficial interest in a specific partnership asset; (4) Neither other partners nor firm creditors may be deprived of the right to have all firm assets applied to the payment of firm debts, see Blaker v. Sands, 1883, 29 Kan. 551; (5) A creditor of one partner may not...
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