In re Belden's Will
| Decision Date | 04 March 1932 |
| Citation | 143 Misc. 159,256 N.Y.S. 162 |
| Parties | In the Matter of the Estate of WILLIAM A. BELDEN, Deceased. |
| Court | New York Surrogate Court |
Application of the executor of the deceased for permission to compromise a claim against Raymond Sprague, as liquidating partner of Drake Brothers.
The claim is allowed. Submit order.
The Surrogate's Court has jurisdiction to determine the claim of a liquidating partner of a stock brokerage concern in which decedent was a partner, pursuant to partnership agreements, providing that in any liquidation the cost of maintenance, rents and other expenses should be paid out of the liquidating fund, and that on the firm's dissolution by death of a member the surviving members should have two years in which to wind up the business.
On this application of decedent's executor for leave to compromise the claim it must be held that the surviving partner is entitled to reasonable compensation for services in winding up the partnership affairs (Partnership Law § 40, subd. 6), and the claim must be allowed.
The general principle is that it is right to incur such proper necessary and reasonable expenses in connection with the liquidation of the partnership estate as might be called for in the administration and winding up thereof.
Montgomery, Peabody & Grace, for the Fulton Trust Company of New York, executor.
Tanner, Sillcocks & Friend, for Raymond Sprague, respondent.
Robert P. Smith, special guardian.
SLATER S.
The decedent was a member of the firm of Drake Brothe rs at the time of his death. The firm transacted a brokerage business and the partnership existed pursuant to partnership agreements.
The question presented to the court is upon the claim of the liquidating partner for payment of one-half of the expenses of the liquidation incurred over a period of two years, pursuant to the agreement. Is the estate of the decedent liable under the partnership agreement, or the law of partnership, or the decisions of the courts? The court has power to decide this question or any other question affecting an estate, arising under a partnership, even though to do so it becomes necessary to have an accounting of the partnership. (Matter of Raymond v. Davis, 248 N.Y. 67.)
The amount of the claim is $30,756.66. Upon the death of the member of a partnership, the legal title to the assets of the firm vest in the surviving member, and, on what is left, the representative of the deceased partner has the right to an accounting. (Matter of Prince, 141 Misc. 600.) The profits of the joint venture remain unknown and unknowable without winding up the business through liquidation of the assets. (Matter of Raymond v. Davis, supra.)
It becomes the duty of the surviving partner, as a general proposition, to apply the firm assets to the payment of the debts, to close up the business with reasonable promptness, and to account to the representative of the deceased partner for his share of the final balance. The surviving partner is charged with all the duties of fair dealing and regard for the interests of the firm, such as is required of any trustee. While he is liquidating the business, he may exercise such powers as are reasonably necessary to accomplish that purpose. For this purpose he may employ assistance and incur expenses, as the case reasonably requires. This would include the cost of running the business, such as rent charge, the drawing account of employees under agreement, any expenses required to be paid under agreements, warehouse storage charges, commissions on transfer of stock from the old partnership to the new liquidating business, premiums upon any insurance upon the lives of the partners for the benefit of the business, general office expenses, and kindred expenses.
Aside from the terms of the partnership agreement and the general law of partnership of this State, each case must be decided on the equitable proof appropriate to the case. (Greenslete v. Ferguson, 191 A.D. 745; Germann v. Jones, 220 id. 5.)
Section 40, subdivision 6, of the Partnership Law provides: 'No partner is entitled to remuneration for acting in the partnership business, except that a surviving partner is entitled to reasonable compensation for his services in winding up the partnership affairs.'
In the...
To continue reading
Request your trial
-
Denberg's Estate, In re
...of Raymond v. Davis' Estate, 248 N.Y. 67, 161 N.E. 421; Matter of Winter's Estate, 231 App.Div. 519, 248 N.Y.S. 104; Matter of Belden's Estate, 143 Misc. 159, 256 N.Y.S. 162); (b) where the surviving partner his a beneficiary entitled to share in the distribution of the estate and a questio......
- In re Mosher's Will