Book v. O'Neil

Opinion by Orlady, J., As shown by the case stated Davis and O’Neil were partners. The former died October 16, 1892, leaving to survive him a widow and children. The partners had made a settlement of their personal accounts in the partnership business, and determined that there was due from J. M. Davis to J. A. O’Neil the sum of $156.50, subsequent to which O’Neil settled the firm affairs. The plaintiff as administrator of Davis made demand for $203.84 as due from O’Neil in the final settlement for the reason that it was claimed by the widow and family of the decedent as part of their exemption, and brought an action of assumpsit to recover. On February 14, 1895, O’Neil filed a statement of the firm accounts as part of his affidavit of defense, showing a balance due J. M. Davis, deceased, of $203.84, from which he claimed the right to deduct $156.50, interest $18.00, and 10.00 for expenses in settling the partnership estate after the death of Davis. After the case was at issue by agreement of counsel, the action was put-in the form of a case stated,' but is not as full and clear in its terms as required by the decisions : Loux & Son v. Fox, 171-Pa. 68. No objection is made by counsel, and the parties press for a decision. In view of the facts we dispose of it without being bound by its irregularities as precedents. After hearing judgment was entered in favor of plaintiff by the court below for $208.84 and costs. [309] When the partners settled their business and determined that $156.56 was due from Davis to O’Neil, it formed the basis of an action of assumpsit for that amount, as set out in the fourth paragraph of the case stated. “ The sum of $156.50 with interest $18.00, making in all $174.50 due him from the said J. M. Davis at a former settlement of the partnership business: ” Van Amringe v. Ellmaker, 4 Pa. 281; Knerr v. Hoffman, 65 Pa. 126; Canfield v. Johnson, 144 Pa. 61. The date of the settlement is not given, but from the account filed by O’Neil, in which $18.78 is given as the interest. on $156.50 to date, May 10, 1895, it is fixed at or about May 10, 1892. By section 5 of the act of April 14, 1851, P. L. 612, the widow or the children of Davis were entitled to retain of the estate of the decedent real or personal property of the value of $300. This right vested at the time the widow elected to exercise her right: Kerns’ Appeal, 120 Pa. 523. It was a right superior to that of any creditor, and postpones all other claimants of the class to which the O’Neil debt belonged, he being only a general creditor of Davis. This debt was due by Davis to O’Neil, not to the firm. The final adjustment of the partnership business by O’Neil clearly fixed $203.84 as the amount he was indebted to the estate of J. M. Davis. It is not stated in terms that the Davis estate is insolvent, but it is that Davis died “ leaving no other property of any ldnd ” “ than the interest in the partnership estate; ” it follows that it was insolvent as to creditors after payment of the widow’s claim. O’Neil, as surviving partner, held a trust relation to the estate and cannot pay his claim to the prejudice of others, especially so, as against one of superior rank. The time is not mentioned when the firm debts were paid or when the amount due from O’Neil to Davis was fixed, but the rights of creditors are fixed at the death of decedent; and of a widow at the time she elected to exercise her right. Nothing that the executor or administrator (or in this case the surviving partner) can do, can alter the course of distribution: Bosler v. Exchange Bank, 4 Pa. 32; Appeal F. & M. Bank, 48 Pa. 57; Steamship Dock Co. v. Heron, Admr., 52 Pa. 280; Nice’s Appeal, 54 Pa. 200; Hicks, Admx., v. Bank, 168 Pa. 638. [310] By reason of O’Neil volunteering to settle the partnership business, he should not have a right as liquidating partner which he could not assert if another had discharged that trust. If a stranger to the partnership had adjusted its affairs, O’Neil could not have standing to thus prefer his personal claim: Moffat v. Thompson, 57 Am. Dec. 737. Skiles v. Huston, 110 Pa. 253, is not applicable to the facts of this case for the reasons given. We think the item of $10.00 should be allowed as it is “for expenses in setting the partnership estate after the death of Davis.” While it is true that a surviving partner is not entitled to compensation for winding up the partnership business, Beatty v. Wray, 19 Pa. 516; Brown v. McFarland, 41 Pa. 129, it cannot be disputed that he is entitled to credit for counsel fees and necessary expenses to effect a legal settlement of the business. The several assignments of error, except the tenth which is sustained, are overruled. Thus modified the judgment is affirmed, allowing a credit of the 110.00 claimed as expenses. The costs to be paid by the appellant.