Rubel v. Rubel, 39223
| Decision Date | 18 October 1954 |
| Docket Number | No. 39223,39223 |
| Citation | 75 So.2d 59,221 Miss. 848 |
| Parties | , 47 A.L.R.2d 1410 Frank R. RUBEL and Lotta R. Lehmann, Executors of the Estate of Jacob H. Rubel, Deceased, v. Simon H. RUBEL. |
| Court | Mississippi Supreme Court |
W. C. Sweat, Sr., W. C. Sweat, Jr., Corinth, for appellants.
Orma R. Smith, Corinth, for appellee.
This case is before us on appeal by the complainants, Frank R. Rubel and Lotta R. Lehmann, Executors of the will of Jacob H. Rubel deceased, from a decree of the Chancery Court of Alcorn County dismissing with prejudice their bill of complaint against the defendant, Simon H. Rubel, wherein the complainants were seeking to recover an alleged balance claimed to be due and owing to them by the defendant on the purchase price of Jacob H. Rubel's interest in the firm of Abe Rubel & Company, a mercantile partnership composed of Jacob H. Rubel, now deceased, and Simon H. Rubel.
Jacob H. Rubel died on January 4, 1946. At the time of his death he and his brother Simon H. Rubel, were the owners in equal parts of a large mercantile business in the City of Corinth, Mississippi, which was conducted and carried on under the firm name of Abe Rubel & Company. The business had been established by their father, Abe Rubel, during his lifetime. Abe Rubel was the owner of a 60 per cent interest in the business at the time of his death in 1931, and Jacob and Simon were the owners each of a 20 per cent interest in the business. After the death of Abe Rubel, Jacob and Simon acquired the interest of the Abe Rubel estate in the business and continued to operate the same as a partnership until Jacob's death in 1946.
On January 16, 1943, the partners executed written articles of partnership, in which the partners agreed that they would continue to carry on the business, as theretofore, for a term of twenty-five years, sharing equally the gains and losses of the business.
In paragraph 2 of the articles of agreement it was expressly stipulated and agreed as follows:
[221 Miss. 856] Paragraphs 4 and 5 of the Articles of Partnership were as follows:
On January 1, 1943, Jacob H. Rubel executed his last will and testament, and in paragraph 15 thereof the testator expressly provided as follows:
After Jake Rubel's death Simon notified the executors that he desired to purchase the interest of the deceased in the firm of Abe Rubel & Company and to amortize the purchase price over a period of six years as provided for in paragraph 15 of Jake's will; and Simon thereafter continued to operate the business as his own. On February 27, 1946, Simon, as surviving partner, collected the proceeds of a life insurance policy in the sum of $50,000, which was carried by the firm on Jake Rubel's life, and paid the same over to the executors to be credited upon the purchase price which Simon was to pay for Jake's interest in the firm. Simon made other payments to the executors during the year which were to be credited upon the purchase price of Jake's interest in the firm. But the parties were unable to agree upon the amount which Simon should be required to pay for that interest; and on April 26, 1949, the executors filed their bill of complaint in this cause for the purpose of having the court determine the value of Jake's interest in the firm and the balance to be paid by Simon for that interest.
The complainants alleged in their bill that the defendant had notified them soon after Jake's death of his desire to purchase the interest of the deceased partner in the firm and to take advantage of the provisions of the will relating to the payment of the purchase price, but that the defendant had never furnished them a satisfactory statement of the assets of the firm as required by the will; that the defendant claimed that he was entitled to purchase the interest of the deceased at 75 per cent of its book value under the terms of the partnership agreement; and that the defendant had indicated to the complainants that the amount that he should be required to pay for the interest of the deceased partner was $107,026.73. The complainants further alleged that the actual value of Jake's interest in the firm at the time of his death was far more than the above stated amount even at a twenty-five per cent discount; that the firm carried life insurance policies in the sum of $50,000 on the life of each of the partners, which were payable to the firm, and that the defendant had collected the proceeds of the policy payable on the death of Jake Rubel and had claimed the entire proceeds as his own and had turned the check over to the complainants to be credited on the purchase price of Jake's interest in the firm; that the firm also owned office and store furniture and fixtures and delivery equipment of the value of $25,000, which the defendant had not taken into account in determining the value of Jake's interest in the firm; that the real estate and merchandise owned by the partnership were carried on the books at much less than their actual value; and that the actual value, and not the book value, of all of the above mentioned assets should be used in determining the value of the deceased partner's interest in the firm. The complainants asked that the defendant be required to produce in court the books and records of the partnership, including the life insurance policy carried by the firm on the defendant's own life, so as to show the financial condition of the firm at the time of Jake Rubel's death, and that the court determine the value of Jake Rubel's interest in the firm at the time of his death and enter a decree in favor of the complainants for the amount found to be due as the unpaid balance of the purchase price of that interest, and that the Court affix a lien upon the assets of the partnership in the hands of the defendant to secure the payment of such balance.
The defendant in his answer admitted that the firm of Abe Rubel & Company carried life insurance in the sum of $50,000 on the life of each of the partners, and that the proceeds of the policies were payable to the firm; but the defendant averred that the life insurance policies were not carried as assets on the books of the firm, and that neither the proceeds collected by him on the policy payable on the death of Jake Rubel nor the cash surrender value of the policy carried by the firm on his own life should be taken into account in determining the value of Jake Rubel's interest in the firm. The defendant also averred that the office and store furniture and fixtures and the delivery equipment referred to in the bill of complaint had been fully depreciated and charged off prior to Jake Rubel's death and had no book value at the time of his death and that none of said equipment should be taken into account in determining the value of Jake Rubel's interest in the firm. The defendant denied that the real estate owned by the firm was carried on the books at a value much less than its actual value, or that the merchandise on hand December 31, 1945, was worth more than the inventory valuation shown on the balance sheet.
The defendant averred in his answer that the book value of Jake Rubel's interest in the firm at the time of his death as shown by his investment account on the partnership books, was $162,861.02, and that 75 per cent of that amount was $122,145.77, which represented the full amount of purchase price that he should be required to pay for the deceased partner's interest.
The defendant alleged in his answer that he had paid $82,889.63 of the above mentioned purchase price; that since the death of Jake Rubel errors had been discovered in the accounts of Jacob H. Rubel and ...
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