Schneider v. Newmark, 41054.

• Decision Date: 14 November 1949
• Docket Number: No. 41054.,41054.
• Citation: 224 S.W.2d 968
• Parties: SAM SCHNEIDER, Appellant, v. ISRAEL D. NEWMARK, Respondent.
• Court: Missouri Supreme Court

224 S.W.2d 968

SAM SCHNEIDER, Appellant, v. ISRAEL D. NEWMARK, Respondent.

No. 41054.

Supreme Court of Missouri.

Division One, November 14, 1949.

Motion for Rehearing or to Transfer to Banc Overruled, December 12, 1949.

Appeal from Circuit Court of City of St. Louis; Hon. Harry F. Russell, Judge.

AFFIRMED (subject to modification).

Noah Weinstein for appellant; Roberts P. Elam of counsel.

(1) The evidence conclusively established the formation as of July 1, 1941, of a valid equal partnership between plaintiff and defendant for the practice of the medical arts and sciences, for an indefinite term. 3 Kent Comm., p. 23; Dixon v. Dixon, 181 S.W. 84; Chapin v. Cherry, 243 Mo. 375, 147 S.W. 1084; M'Kinnon v. M'Kinnon, 56 Fed. 409; Neville v. D'Oench, 327 Mo. 34, 34 S.W. (2d) 491. (2) The evidence conclusively established that there was no express agreement between the parties for dissolution of that partnership when plaintiff went into military service in October, 1942. (3) There was no evidence of any ground for dissolution of the partnership as for breach, or that either of the parties denounced or abandoned the partnership, or that there was any purpose on the part of defendant to denounce or dissolve the partnership regardless of grounds for dissolution. Henry v. Bassett, 75 Mo. 89. (4) Under these circumstances, there was a presumption that the partnership continued during plaintiff's military service, and the defendant failed to meet the burden placed upon him to establish the dissolution of the partnership which he alleged. Citizens' Trust Co. v. Tindle, 194 S.W. 1066; Anslyn v. Franke, 11 Mo. App. 598. (5) The facts that plaintiff entered military service and was thereby incapacitated from giving his time, labor and skill to the partnership business, while probably constituting sufficient grounds to justify a court of equity in decreeing dissolution of the partnership, did not ipso facto operate to dissolve the partnership. The risk of temporary incapacity of a partner on account of military service, like the risk of such incapacity on account of illness, is a risk incidental to the partnership business, so long as the partnership continues. 40 Am. Jur., p. 304, sec. 252; Henry v. Bassett, 75 Mo. 89; Barclay v. Barrie, 209 N.Y. 40, 102 N.E. 602; Pritchett v. Thomas Plater & Co., 144 Tenn. 406, 232 S.W. 961; Arnold v. Brown, 41 Mass. 89; Murdock v. Murdock, 279 Pa. 97, 123 Atl. 683. (6) Mere entry by a person into military service in time of war does not constitute vacation or abandonment of his civilian pursuits — not even of public office to which he is by law required to devote his full time. State ex rel. McGaughey v. Grayston, 349 Mo. 700, 163 S.W. (2d) 335; State ex inf. McKittrick v. Wilson, 350 Mo. 486, 166 S.W. (2d) 499. (7) Irrespective of whether the partnership was dissolved when plaintiff entered military service in October, 1942, by reason of the fiduciary relationship between plaintiff and defendant as partners. Plaintiff is in equity entitled to share in the profits earned while plaintiff was in the military service, and is entitled to a decree of dissolution and an accounting so that his share in such profits may be determined according to law. 80 A.L.R., pp. 15-16, n; p. 21, n; Roberts v. Hendrickson, 75 Mo. App. 484; Bell v. McCoy, 136 Mo. 552, 38 S.W. 329; Smith v. Smith, 183 S.W. 1126; Schneider v. Schneider, 347 Mo. 102, 146 S.W. (2d) 584; Pemberton v. Ladue Realty & Const. Co., 180 S.W. (2d) 766; Karrick v. Hannaman, 168 U.S. 328, 18 S. Ct. 135, 42 L. Ed. 484; Zimmerman v. Harding, 227 U.S. 489, 33 S. Ct. 387, 56 L. Ed. 608; Carlson v. Phillips, 326 Ill. App. 594.

Victor Packman for respondent.

(1) An appellate court, in evaluating the findings in this case wherein the trial judge had the opportunity and advantage of personally hearing and observing the witnesses, should defer to his judgment and findings, unless clearly erroneous. Sec. 114, Code of Civil Procedure; Botto v. James, 209 S.W. (2d) 257; Andris v. Andris, 125 S.W. (2d) 38, 343 Mo. 1163; Thomas v. Milfelt, (The aforementioned case pertains to an action for a partnership accounting, decided May 17, 1949); Steinhoff v. Kinder, 186 S.W. (2d) 600. (2) Concededly, the partnership was for no definite term and it, therefore, was a partnership at will. A partnership at will may be dissolved without notice or cause by either party at any time. Smith-Hurd Illinois Revised Statutes, Chap. 106½, Secs. 29 and 31 (b), Uniform Partnership Act (Contract was entered into in the State of Illinois and pertained to a partnership having its situs in the State of Illinois); Thanos v. Thanos, 145 N.E. 250, 313 Ill. 499; Ricardson v. Gregory, 126 Ill. 166; Salter v. Condon, 236 Ill. App. 17; Brannigan v. Schwabe, 133 S.W. (2d) 1053; Gilmore on Partnerships, sec. 197, p. 57; 20 R.C.L., sec. 128; 1 Rowley on Partnership, pp. 212-213. (3) A termination of a partnership may be shown in many ways, and needs no express agreement. Paetrikas v. J.C.H. Service Stations, 41 N.Y.S. (2d) 158; First Natl. Bank v. Rush, 210 S.W. 521; Ricardson v. Gregory, 126 Ill. 166; Bayer v. Bayer, 214 N.Y. Supp. 322, 215 App. Div. 454; 47 C.J. 1110; Rowley on Partnership, pp. 732, 734; Lindley on Partnership (9th Ed.), p. 677; Marlett v. Jackman, 3 Allen 287. That there was a dissolution in fact of the partnership must be inferred from the facts and circumstances, taken together, which lead to no other conclusion. (5) Even if there had been no termination of the partnership in October, 1942, there certainly was no partnership in existence at the time suit was filed by plaintiff. (6) "Good will does not adhere to a profession depending solely on the personal ability, skill, integrity or other personal characteristics of the owner." Hence there was no good will to account for upon dissolution of the professional partnership in this case between a physician and a surgeon. Magee v. Pope, 234 Mo. App. 191, 112 S.W. (2d) 891; 38 C.J.S. 952; Rowley, Modern Law of Partnership. p. 389, sec. 331; Crane on Partnership. p. 371, sec. 84; Mandeville v. Harman, 7 Atl. 37; 44 A.L.R. 524. (7) Professional partnerships are not comparable to ordinary business partnerships wherein capital and good will are the basis of profits. Freund v. Murry, 104 Pac. 683; Witkowsky v. Affeld, 208 Ill. App. 198; Magee v. Pope, 112 S.W. (2d) 891; Rowley, Modern Law of Partnership, sec. 1, 331. (8) The Uniform Partnership Code and rules pertaining to professional partnerships are not standards for public offices, but even in case cited by plaintiff — State v. Grayston, 163 S.W. (2d) 335, 351 (Mo. en banc) — it was held that the circuit judge who served in the Army was not entitled to compensation as such during interval he was away from his tasks, and the court noted with approval that the circuit judge had not drawn or received any salary as circuit judge while away. Fekete v. East St. Louis, 315 Ill. 58, 145 N.E. 692; 40 A.L.R. 650.

VAN OSDOL, C.

Action for dissolution of a partnership, and for an accounting. The trial chancellor dismissed the petition, and plaintiff has appealed. The amount plaintiff seeks to recover in accounting is greatly in excess of $7500.

The case treats with the effect of acts, words and conduct in modifying the contractual relations of two doctors who were, for a time, associated as partners in the practice of medicine and surgery.

Prior to the year 1940, defendant, who was in the general practice of medicine and who did no major surgery, had established a practice at Chester, Illinois. He was acquainted with plaintiff, a younger man, who was married to defendant's cousin. Plaintiff completed his professional training in 1940, having specialized in surgery; the parties became associated in the practice of medicine and surgery in Chester in July of that year. Plaintiff's association with defendant contemplated a hospital at Chester, and defendant had caused a hospital to be established. Plaintiff contributed $2500 toward acquiring a half interest in the instruments, equipment, drugs and supplies used by the parties in their practice.

Plaintiff received $3000 for his first year's work with defendant, it having been verbally agreed that if defendant were satisfied with plaintiff's skill the association was to "automatically" become a full partnership at the end of such year, each of the parties to then receive half of the net income.

The parties are able and skillful practitioners of their profession. Their joint practice was successful and lucrative.

In August 1941 plaintiff received his "first check" for $350, being a monthly advance on his half of the partnership's net earnings. Thereafter, in December 1941 or January 1942, there was an accounting (and settlement) for the preceding six months' income, and another periodical accounting was had at the end of the second six-month period; but during the third six-month period (in October 1942) the plaintiff was called into military service. At that time there was a deduction of the $350 per month theretofore advanced, and plaintiff received approximately $2000 for "the half, from July until October, half of the net" then collected, after which plaintiff left for duty with the Armed Forces.

Since defendant was not a surgeon, the hospital was closed down and disposed of. Some of the hospital supplies were given away, and defendant continued to use some of the equipment. (The parties have agreed upon a settlement of the issues of a claim for a division of the "capital assets.")

When plaintiff departed for military service, there was no express agreement relating to the dissolution of the partnership, nor was there an express stipulation relating to the division of the income of the parties while plaintiff was in the Army. But defendant explained to plaintiff that plaintiff would get remittances "for the accrued accounts that had been earned prior to" his departure. Defendant did not say plaintiff would "get anything...