Lamp v. Lempfert
| Decision Date | 15 November 1966 |
| Docket Number | No. 52218,52218 |
| Citation | 146 N.W.2d 241,259 Iowa 902 |
| Parties | Hugo R. LAMP and Margo Lamp, Appellants, v. Leona LEMPFERT, Executrix of the Estate of Emil W. Lamp, deceased, Appellee. |
| Court | Iowa Supreme Court |
Lambach, Christiansen, Stevenson & Goebel, Carl H. Lambach, and Margaret Stevenson, Davenport, for appellants.
Lane & Waterman and Donald H. Sitz, Davenport, for appellee.
This is an action brought to determine whether certain assets inventoried as assets in the estate of Emil W. Lamp, deceased, were in fact assets of a partnership known as Hugo R. Lamp and Company. There are also claims and counterclaims for accounting. It is a case with multiplicity of claims and paucity of evidence. There are no books of account or partnership records of any kind except copies of income tax reports. There are no individual books of account. There is no record of any accounting for 30 years and no distinguishable pattern or system of division of receipts or disbursements. Two of the three partners are now dead and the testimony of the surviving partner is limited by the dead man statute.
In the early 1930's Emil W. Lamp, unmarried, Hugo R. Lamp, widower, and Margo Lamp, daughter of Hugo, each owned farm land acquired by inheritance. They formed a three-member partnership using the name 'Hugo R. Lamp & Co.' for the operation of the farm land. The partnership had no bank account and kept no records or books of account. Each partner had an individual bank account. As far as appears from the record there was never any attempt to divide or apportion either receipts or disbursements. For no reason now appearing receipts were deposited in one or another of the individual accounts without regard to the source. Taxes and expenses were paid and purchases made with the same disregard of equality or ownership. The three partners lived together in the house on Hugo's farm and continued to do so until Emil's death. Emil had a safety deposit box in the bank at Walcott in which securities were kept. Emil also kept cancelled checks in grocery boxes stored in his room.
From the beginning and through the year 1955 Emil prepared and filed U.S. Partnership Income Tax returns. He also filed an individual return. The 1947, 1948, 1950 and 1951 partnership returns (1949 return is not before us) reported income from Swift and Company, Anaconda Copper Co., General Electric and Avco Manufacturing Company stock. These stocks were issued in the name of Emil W. Lamp.
In December, 1953 Emil's individual tax report was subject to review and verification by the Internal Revenue Director. Under date of December 14, 1953 a letter from the office of the Director to Emil asked for information. We quote from this letter:
'Information returns on file in this office indicates that the following dividends were paid to you during 1951.
"Swift & Company $235.00
"General Electric 285.00
"Anaconda Copper Mining Co. 350.00
Emil answered as follows:
'Davenport, Iowa
'Dec 22, 1953
'U.S. Treasury Department
'Des Moines, Ia.
'Mr. Fred A. Holt
'This is in reply to your letter of the 14. I Emil W. Lamp, am in partnership with Hugo R. Lamp and Margo Lamp, we filed a form 1065 Partnership return under the name of Hugo R. Lamp & Co.
'The following stocks were bought with partnership money and the dividends are used for partnership expenses issued to the name of Emil W. Lamp.
"100 Swift & Co 235.00
"100 Ana Copper 350.00
"100 General Electric 300.00
"100 Avi Mfg. Co. Com 60.00
" 5 Avi Pref 11.24
'These stocks are reported on form 1065 and also on form 1040F farm schedule.
'According to figures that you sent me we have already overpaid our income tax.
'If partnership, pools, and joint ventures are illegal why are the receipts there off (sic) stated on the income tax blanks.'
It was stipulated by the parties that the words 'Ana Copper' referred to Anaconda Copper Company and the words 'Avi Mfg. Co.' and 'Avi Pref' referred to Avco Manufacturing Company.
Sometime thereafter there was a conference between an agent of the Internal Revenue Service and Emil. Margo testified that she was present but took no part in the conversation. She testified over objection that the revenue agent told Emil how to report dividends and other items of receipts, disbursements and depreciation. Without considering the competence of the witness under the dead man statute or the probative value of the testimony it appears from the tax returns that during the following years there was a change in the method of reporting and the dividends from these stocks were thereafter reported in Emil's return.
Beginning in 1956 and continuing thereafter the partnership tax returns were signed by Margo. She testified that this was because of Emil's failing eyesight.
Except for the change in tax reporting there is no evidence of any change or transfer of ownership, interest therein or claim thereto by any of the parties to any of their property subsequent to 1953.
From the record and the conduct of the parties over many years we think it reasonable to assume that Margo expected to be the beneficiary of Emil's entire estate. Disappointment and frustration now appears.
Emil died testate December 30, 1961 at the age of 84. He directed payment of his debts, including mortgage indebtedness. He made two $1,000 eleemosynary bequests. He gave to his brother, Hugo, all his interest in any machinery, livestock, grain or other personal property used in the operation of the farm. The scrivener testified that this was to remove any claim of interest therein by residuary beneficiaries. The will gave one-fourth of the remainder to Margo and three-sixteenths to each of three nephews and a niece.
The inventory filed in the estate listed shares in ten different corporations including thirty shares of Avco Manufacturing Company stock, 100 shares of Swift and Company stock, 120 shares of Anaconda stock and 300 shares of General Electric stock. These items are traceable back to the items claimed by Emil in 1953 to be property of the partnership. There is no admissible evidence in this record to show how Emil acquired the other items or whose money was used in their purchase.
The inventory was not filed until September 8, 1962.
On September 6, 1963 plaintiffs Hugo R. Lamp and Margo Lamp filed the present action. Hugo R. Lamp died December 24, 1964 prior to trial herein and on February 10, 1965 Margo Lamp as administratrix of his estate was substituted as party plaintiff.
The trial court found that a partnership had existed at one time but made no finding that it continued until Emil's death. The tax returns filed by the partnership show that it did in fact function as such until Emil died and we so find.
The trial court found that partnership funds were used to purchase certain stocks but that there were such inconsistencies in Margo's conduct that she had failed to establish any clear and convincing proof that the assets in question were partnership assets at the time of the death of Emil W. Lamp. We agree that for 30 years the entire course of conduct has been so inconsistent as to defy all reasoning or logical conclusions. We must rely on presumptions arising from established facts and merely dismiss unsupported claims.
I. This case is in equity. Our review is de novo. We give weight to the trial court's findings but are not bound by them. Citations are unnecessary. See rule 344(f) 7, Rules of Civil Procedure.
II. It appears without question that for many years a partnership existed. The filing of partnership income tax returns factually supports a finding that the partnership continued through the year in which Emil died. The existence of the partnership being shown the presumption is that it continues. Byington v. Woodward & Warde, 9 Iowa 360, 365; Watters v. McGreavy, 111 Iowa 538, 541, 82 N.W. 949; 12 Drake Law Review 131, 135; 68 C.J.S. Partnership § 350.
III. Except under circumstances not appearing here death of a partner works a dissolution of the partnership. Williams v. Schee, 214 Iowa 1181, 1186, 243 N.W. 529; 68 C.J.S. Partnership § 337; 40 Am.Jur., Partnership § 285; § 545.36, Code of Iowa.
IV. Upon the death of a partner and resultant dissolution of the partnership it is the duty of the surviving partner to wind up the partnership affairs, 40 Am.Jur., Partnership § 294; 68 C.J.S. Partnership § 273 and make proper accounting. Fleming v. Fleming, 211 Iowa 1251, 1274, 230 N.W. 359.
V. 12 Drake Law Review, 135, 136; Todd v. Todd, 250 Iowa 1084, 96 N.W.2d 436; Smith v. Smith, 179 Iowa 1365, 160 N.W. 756; Fordyce v. Hicks, 80 Iowa 272, 45 N.W. 750; Paige v. Paige, 71 Iowa 318, 32 N.W. 360.
The cited cases dealt with real estate but under the circumstances of the case at bar the same rule would...
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