Hankin v. Hankin

• Citation: 279 Pa.Super. 179,420 A.2d 1090
• Parties: Max A. HANKIN and Janet Hankin, Appellants, v. Moe Henry HANKIN and Sabina Hankin, Gertrude Hankin, Perch P. Hankin, Samuel Hankin and Harriet Hankin, Benjamin R. Shanken and Pauline Shanken and Pan American Associates. Max A. HANKIN and Janet Hankin, v. Moe Henry HANKIN and Sabina Hankin, Gertrude Hankin, Perch P. Hankin, Samuel Hankin and Harriet Hankin, Benjamin R. Shanken and Pauline Shanken and Pan American Associates. Appeal of Samuel HANKIN and Harriet Hankin.
• Decision Date: 25 September 1980
• Court: Superior Court of Pennsylvania

Page 1090

420 A.2d 1090

279 Pa.Super. 179

Max A. HANKIN and Janet Hankin, Appellants, v. Moe Henry HANKIN and Sabina Hankin, Gertrude Hankin, Perch

P. Hankin, Samuel Hankin and Harriet Hankin,

Benjamin R. Shanken and Pauline Shanken

and Pan American Associates.

Max A. HANKIN and Janet Hankin, v. Moe Henry HANKIN and Sabina Hankin, Gertrude Hankin, Perch

P. Hankin, Samuel Hankin and Harriet Hankin,

Benjamin R. Shanken and Pauline Shanken

and Pan American Associates.

Appeal of Samuel HANKIN and Harriet Hankin.

Superior Court of Pennsylvania.

Argued Sept. 12, 1979.

Filed June 6, 1980.

Petition for Allowance of Appeal Sept. 25, 1980.

Franklin Poul, Philadelphia, for Max A. Hankin and Janet Hankin, appellants.

Thomas Allen, Philadelphia, for Moe Henry Hankin, Sabina Hankin, Perch P. Hankin, Gertrude Hankin, Benjamin R. Shanken and Pauline Shanken, appellees.

Thomas A. Masterson, Philadelphia, for Samuel Hankin, M.D., and Harriet Hankin, appellants.

Robert S. Ryan, Philadelphia, for Pan American Associates, appellee.

Before SPAETH, HESTER and CAVANAUGH, JJ.

SPAETH, Judge:

These are consolidated appeals from an order dismissing exceptions to the chancellor's adjudication and decree nisi, entered in appellants' actions in equity against appellees. ^{1 1} The parties are all ² members of the Hankin Family Partnership, ³ and on this appeal appellants argue that the lower court erred in refusing to grant certain equitable relief, ⁴ including the court's refusal to appoint a receiver to take charge of the liquidation of the partnership assets, and to enjoin a sale of certain partnership property known as Willow Grove Park to the intervenor defendant Pan American Associates. ⁵

Moe, Perch, Max, and Samuel Hankin are brothers and Pauline Hankin Shanken is their sister. They and their spouses represent the five branches of the Hankin family and are equal partners in the Hankin Family Partnership and all the entities and enterprises owned and operated by the partnership. There has never been a written partnership agreement among the members of the Hankin Family Partnership. The partnership assets include the ownership and operation of seven motor lodges, the Willow Grove bowling alley and shopping center, the Valley Forge and Hidden Springs golf courses, an industrial park, and various tracts of real estate including the Willow Grove Park. The total assets of the partnership are presently worth over $72 million, with total liabilities of about $11 million. Some of the assets are held by corporations. ⁶ The shares of each of these corporations are also owned by the partners equally, and each corporation is held and operated for the benefit of the entire partnership. ⁷ Formal corporate procedures are generally not followed and profits from the corporations are not distributed as dividends but are intermingled in a single bank account entitled Hankin & Hankin Trustees, while various expenses are apportioned to the various entities as a matter of custom or according to which unit is able to afford payment. Besides certain fringe benefits, such as free meals and the use of automobiles, each of the five branches of the Hankin Family receives an equal draw from the Hankin & Hankin Trustees account. The present draw is $40,000 per year. In addition, the partnership has paid the federal and state personal income taxes of the partners, charging these income payments to the partners' capital accounts. There also was a practice of hiring the children and spouses of the children of the partners at a uniform rate of $26,000 per year. ⁸

For approximately twenty years Moe, Perch, and Samuel Hankin, and Benjamin Shanken maintained their offices in one large room on the second floor of the Professional Center Building in the Willow Grove Shopping Center. The files pertaining to the Hankin Family Partnership were kept in this room. Also in this room were the offices of the law firm of Hankin, Hankin & Hankin, and of its predecessor, Hankin, Hankin & Shanken. The firm represented the partnership in most of its legal affairs, and the partnership and its enterprises and the two banks controlled by the partnership have been the principal clients of the firm.

Relations between the parties began to deteriorate in 1975, when there was a conflict over the control of the directorships of one of the banks controlled by the family. This conflict erupted into open warfare in 1977, when appellees, primarily Moe and Perch Hankin, engaged in a course of conduct apparently aimed at freezing appellants out of the business. ⁹ Max Hankin, who had earlier requested a dissolution and liquidation of the partnership in 1967, again became disenchanted with the way the business was proceeding and as a consequence initiated the present litigation. On June 1, 1977, Max and Janet Hankin, through their attorney, formally demanded a dissolution of the partnership, and on August 19, 1977, they filed a complaint in equity seeking dissolution, liquidation, appointment of a receiver, an accounting, and other equitable relief. Appellees filed an answer to the complaint. Samuel and Harriet Hankin, who were also named as defendants, ¹⁰ also filed an answer to the complaint, and in addition filed a crossclaim against appellees and a petition, seeking dissolution, liquidation, appointment of a receiver, an accounting and other equitable relief. On October 21, 1977, appellees filed preliminary objections and an answer to the crossclaim, and also a counterpetition for a preliminary injunction to enjoin all appellants from interfering with the partnership business.

Meanwhile, in an apparent attempt to liquidate the assets of the partnership, appellees negotiated an agreement with Pan American Associates for the purchase of Willow Grove Park. Appellees and Max and Janet Hankin ¹¹ signed the agreement with Pan American Associates but Samuel and Harriet Hankin refused.

The case proceeded to discovery. On June 29, 1978, Max and Janet Hankin filed a new petition for the appointment of a receiver. On July 6, 1978, a hearing was held and September 11 was tentatively scheduled as the day on which hearings on all the petitions would begin. On September 11, Samuel and Harriet Hankin filed an amended petition in which they repeated their request for the appointment of a receiver, and additionally requested that the court enjoin the sale of Willow Grove Park to Pan American Associates. As mentioned, neither Samuel nor Harriet Hankin had signed the agreement with Pan American Associates. Moreover, Samuel had been in contact with another buyer for the property, the Taubman Company, which he alleged wished to purchase not only Willow Grove Park but all of the partnership properties. Hearings on the various petitions were held on September 12, October 4, 5, 6, 30, and 31, and November 1 and 2, 1978.

On December 14, 1978, Pan American Associates filed a petition to intervene as a party defendant. The petition was granted and Pan American Associates filed a counterpetition seeking specific performance and an order enjoining Samuel and Harriet Hankin from interfering with the sale of Willow Grove Park. Further hearings were held on January 31 and February 1, 2, 5, 6 and 8, 1979.

After all the hearings had been completed, the parties submitted proposed findings of fact and conclusions of law. On April 2, 1979, the chancellor, Judge Louis STEFAN, issued an adjudication containing findings of fact and conclusions of law, and a decree nisi. Exceptions were filed by appellants, and after argument before the court en banc ¹² the exceptions were dismissed. This appeal followed. ¹³

The chancellor's findings of fact in support of the adjudication and decree nisi are extensive and careful. The most pertinent of these findings are as follows:

17. As among the parties to this case, Moe and Perch Hankin have contributed the most, by way of productive effort and valuable business judgment, in the acquisition, development, and management of the Hankin businesses and properties with which this litigation is concerned.

20. Until recently, ... Samuel Hankin, M.D. along with his brothers, was active in the day-to-day operation of the Hankin Family Partnership....

21. Dr. Hankin acted as the general contractor and representative of the family partnership on the job sites in connection with the construction of various motor lodges owned by the family, including but not limited to the George Washington Motor Lodges located in King of Prussia and Allentown. He was on the project site each day during the construction of these motor lodges, acting as the general contractor and coordinating the activities of the various subcontractors.

24. Over the years, both Moe and Perch Hankin frequently signed other owners' names (including those of Max, Janet, Samuel and Harriet Hankin) to various legal documents, with said other owners' foreknowledge and authorization.

29. Since 1977, the actual operation of the partnership has been entirely in the control of a majority group of partners consisting of Moe and Sabina Hankin, Perch and Gertrude Hankin, and Benjamin and Pauline Shanken. The control has normally been exercised by or through Moe or Perch Hankin.

30. In 1977, the majority group discharged (or forced out the children of Samuel and Max Hankin).

33. The disputes within the family partnership reached full blood in April, 1977, when Perch Hankin, his son Mark and son-in-law Robert Nappen, erected partitions in the large room which the four partners had shared as their offices for nearly twenty years.

34. These partitions were erected surreptitiously over a weekend, and without prior consultation with Samuel Hankin.

38. The effect of the partitioning has been to deny Samuel Hankin access to the files and records of the Hankin Family Partnership.

40. Since the family split, James Connor, the controller of the family enterprises, has been taking his instructions from Moe and Perch, and his contacts...