Price v. McFee
| Decision Date | 07 December 1950 |
| Docket Number | No. 32,32 |
| Citation | 196 Md. 443,77 A.2d 11 |
| Parties | PRICE v. McFEE. |
| Court | Maryland Court of Appeals |
John W. Farrell and Hyman Ginsberg, Baltimore, (Ginsberg & Ginsberg, Baltimore, on the brief), for appellants.
Seymour O'Brien and Benjamin C. Howard, both of Baltimore, for appellee.
Before MARBURY, C. J., and DELAPLAINE, COLLINS, GRASON, HENDERSON and MARKELL, JJ.
The question on this appeal is whether the insurance of $15,000 paid to Gertrude A. McFee as the beneficiary of a life insurance policy which had been held by her husband, Robert A. McFee, now deceased, is an asset of a partnership which consisted of Thomas J. Price and her husband and traded as Atlas Wiping Cloth Company and T. J. Price and Company.
Price and McFee were copartners for about ten years in the business of dealing in wiping cloths, paper stock, hair, and kindred commodities. During that time there were three partnership agreements. The first, which was entered into April 1, 1939, contained the following provision:
In October, 1941, Price applied to the Lincoln National Life Insurance Company for life insurance, but the policy was not made payable to his personal representative, but to his wife if living, otherwise to their children. In November, 1941, McFee applied to the Equitable Life Insurance Company of Iowa for life insurance, but this application was turned down on account of his physical condition. On December 31, 1941, the partnership was dissolved, and an agreement was entered into forming a new partnership consisting of four members, Mr. and Mrs. Price and Mr. and Mrs. McFee. This agreement was quite similar to the first, but it did not contain any provision whatever for partnership insurance. McFee again applied to the Equitable Life Insurance Company for life insurance on April 1, 1942, and this time the company issued him the policy in question in the amount of $15,000, with his wife as beneficiary, but in the event of her death to their children.
Prior to 1946 Edgar T. Wagner, the firm's accountant, charged the premiums on the policies to the partnership account. But about the beginning of 1946 an agent of the Internal Revenue Bureau notified him that he could not deduct the amounts of the premiums as expenses of the partnership. Thereafter the accountant charged the premiums against the account of the partner to whom the policy was issued.
The second partnership was dissolved as of December 31, 1945, and McFee and Price thereafter conducted the business as copartners under an oral agreement. The third partnership was dissolved by the death of McFee on December 27, 1948.
Mrs. McFee, upon qualifying as administratrix of her husband's estate, asked Price for her husband's share in the partnership assets. Price claimed that he was entitled to deduct $15,000, the amount of the insurance which the Equitable Life Insurance Company had paid to Mrs. McFee as the beneficiary of her husband's policy. Mrs. McFee disputed that claim, and on March 25, 1949, Price and Mrs. McFee entered into a stipulation agreement admitting McFee's interest in the partnership assets to be $28,558.43, and providing that if it should be determined that Mrs. McFee is entitled to the additional sum of $15,000, Price would pay her that amount and interest thereon at 6 per cent from March 15, 1949. In accordance with the agreement, Price paid her $13,558.43 without prejudice to any right she might have to collect the additional sum of $15,000.
Mrs. McFee, as administratrix, entered this suit in the Court of Common Pleas to recover from Price the sum of $15,000, which she claimed with the balance due on account of her husband's interest in the partnership. The Court, sitting without a jury, found that the insurance policy was not an asset of the partnership, and accordingly entered a judgment in favor of Mrs. McFee for $15,849.60, this amount being the balance withheld by Price plus interest from March 15, 1949. From that judgment Price took this appeal.
The trial Court ruled correctly in refusing to permit Price to testify as to his transactions with McFee. Such testimony was...
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