Krumbeck v. Clancy

Willard Bartlett, J.: The plaintiff and the defendants entered into a partnership to engage in the manufacture and sale of paint — the plaintiff and the ■defendant Henderson undertaking to contribute $5,000 capital, and the defendant Clancy to superintend the manufacture of the paint. The plaintiff brought this action to dissolve the partnership and ■adjust the rights of the partners, on the ground that the defendant Clancy had not fulfilled his part of the contract. Clancy alone answered. There being no dispute as to the propriety of dissolving the partnership, an order was made referring the case to a referee to take and state the partnership accounts. While the accounting was proceeding before the referee, the defendant Henderson died, whereupon the plaintiff moved that his exécutor be substituted as a defendant herein. This motion ivas denied, and the plaintiff ■appeals. “ The estate of a person or party jointly liable -upon contract with others shall not be discharged by his death, and the court may make .an order to bring in the proper representative of the decedent, when it is necessary so to do, for the proper disposition of the matter.” ■(Code Civ. Proc. § 758.) In the present action the partnership had been dissolved, to all intents and purposes, by the order of the court appointing a referee to state the account between the parties. To have the account effectively stated it was necessary to bring in the representative of the partner who had died since that order was made. Fo affidavit was submitted in behalf of the defendant Clancy in support of his ■opposition to the motion, and no sufficient reason is made to appear why the application should not have been granted. The respondent relies chiefly upon the case of Williams v. Whedon (109 N. Y. 333), in which the Court of Appeals said: “Upon the death of one partner the surviving members of the firm become the legal owners of its assets by virtue of their survivorship, and have the exclusive right to sell, mortgage and dispose of them in the performance of their duty in closing up the affairs of the partnership, and can do so in the manner they deem best for the interest of those concerned. The representatives of the deceased partner have no legal interest in such assets, and no legal right to interfere in their administration, so long as the survivor is prosecuting the [399] business of closing up the estate, and applying its proceeds in the payment of firm debts.” The language quoted refers to a dissolution caused by the death of a partner, where the survivor is prosecuting the business of closing up the estate, and the rule laid down has no application to a suit brought to ascertain the respective interests of the partners. This firm was virtually dissolved by the death of the defendant Henderson, and the task of closing up the affairs of the firm had been assumed, not by the survivors who were at odds with one another, but by the ■ court. The representative of the deceased partner would have a right to call them to account (Preston v. Fitch, 137 N. Y. 41, 57), and it seems- clear that he is a necessary party to a full partnership accounting, such as the plaintiff seeks. The motion should have been granted in the interest of the respondent, no less than that of the appellant. All concurred. Order reversed, with ten dollars costs and disbursements, and motion granted, with ten dollars costs.