Singer v. Friedman, 6624.

• Decision Date: 06 July 1936
• Docket Number: No. 6624.,6624.
• Parties: SINGER et al. v. FRIEDMAN et al.
• Court: U.S. Court of Appeals — District of Columbia Circuit

66 App. DC 191, 85 F.2d 690 (1936)

SINGER et al. v. FRIEDMAN et al.^*

No. 6624.

United States Court of Appeals for the District of Columbia.

Decided July 6, 1936.

Robert H. McNeill and Samuel Lebowitz, both of Washington, D. C., for appellants.

Alfred M. Schwartz and Rudolph H. Yeatman, both of Washington, D. C., for appellees.

Before MARTIN, Chief Justice, and VAN ORSDEL, GRONER, and STEPHENS, Associate Justices.

MARTIN, Chief Justice.

This is an appeal from a decree of the lower court dismissing a bill of complaint brought by appellants to obtain a dissolution of a partnership; a receiver for its property; an accounting and recovery of property fraudulently withheld from it; and for general relief in the premises.

The case was begun by the filing of a bill in equity by the appellants as plaintiffs below. A motion was made by appellees as defendants below to dismiss the bill of complaint as amended upon the grounds that it failed to disclose a cause of action in equity in favor of the plaintiffs and that the claims set out in the bill were barred by laches. The court sustained the motion and dismissed the bill. Whereupon, the present appeal was taken.

It is set out in substance in the bill of complaint that on April 2, 1928 the appellants, Singer and Niestadt, together with the appellee Friedman, organized a partnership under the name of Friedman, Singer & Niestadt for the purpose of engaging within the District of Columbia in the real estate and construction business. Apparently no written contract was entered into by the parties, and the amount of capital invested in the business is not stated in the bill, nor the proportion of such investment, if any, by the respective members of the firm, and by implication it appears that all of the partners actively engaged in the management and conduct of the partnership affairs. It is alleged in the bill that the appellee the Munsey Trust Company, hereinafter called the trust company, a banking and trust company located in the District, became the trustee and fiduciary agent of the partnership. The partnership kept its current accounts with the trust company and employed it in the sale of securities received in real estate transactions and in similar affairs.

In April, 1931, the partnership was dissolved by a written agreement executed by all of the partners. In this agreement it was set out that the parties as partners owned certain properties and other assets now held by the trust company under an assignment theretofore made, which assignment specifically sets forth all the property and assets of the partnership, and that the partnership was indebted unto the trust company for loans and other advances theretofore made to it and the partners desired to be released from the partnership and terminate the same. It was then agreed that the partners Singer and Niestadt should assign all their interest in all property and assets, conveyed to the trust company and then held by it, to Friedman, and the latter, in consideration thereof, agreed to pay Singer and Niestadt the sum of $8,000, payable $6,000 in cash and $2,000 in a promissory note dated April 10, 1931, payable monthly at the rate of $100 per month. Friedman also agreed to release Singer and Niestadt from all responsibility or liabilities arising out of the partnership indebtedness and to protect and save them harmless from any and all liability arising by virtue of the indebtedness of the partnership to the trust company, and to exhibit to them all notes theretofore signed by them in connection with the partnership marked canceled and paid. The parties agreed to execute mutual releases releasing each other from all claims of every character arising by virtue of the partnership agreement and to release the trust company from any and all claims arising by virtue of the aforesaid trust, and that upon the consummation of such agreement the partnership should stand dissolved and terminated.

Thereupon, the partners Singer and Niestadt in consideration of the payment of $8,000 to them, the receipt of which they acknowledged, released, remised, and forever discharged Friedman and the trust company from all claims of any and every character either at law or equity which the partners Singer and Niestadt then had or might have against them arising out of the said partnership.

It is stated in the bill that at this time the assets of the partnership were as follows:

(1) A sum of $35,000 realized from the sale of a trust note to one McGarrity.

(2) Lots 29 and 33, and part of lot 32, in square 205, same being premises 1908, 1910 Fourteenth street, and 1407, 1409, and 1411 T Street, N. W., Washington, D. C. The value of this property was stated to be $65,000 subject to a first trust of $45,000 due to the trust company.

(3) Lot 24, square 642, Washington, D. C.

(4) Lots 32 and 35, square 5601 Nichols avenue and S Street, S. E., Washington, D. C. This property was stated to be of the value of $100,000, subject to a first trust of $75,000 held by the trust company in favor of the partnership; foreclosed by the trust company, bringing $65,000 at foreclosure sale; property purchased by Friedman; received as compromise for deficiency in the selling price $7,500.

(5) Lot 85,...