Orrin E. Boyle, Allentown, for appellant.
Edwin K. Kline, Jr., Sidney Friedman, Allentown, for appellee.
Before Rhodes, P. J., and Hirt, Reno, Dithrich, Ross, Arnold and Gunther, JJ.
[ 169 Pa. Super. Page 513]
This is an action of assumpsit brought by the plaintiff, Edwin S. Lyman, Jr., to establish his right to one-half of an escrow fund created in the following manner: On May 1, 1948, the plaintiff and the defendant, his mother-in-law, agreed to sell all the assets of an insurance business operated by them under the fictitious name of James W. Wood Agency. It was further agreed that the proceeds of such sale should be placed in the hands of their attorneys to pay the debts of the business and to hold the balance until the respective rights of the parties therein were determined. In July of 1948 the assets of the business were sold; and, after payment of creditors, and payment to the defendant of $2,177.26 admittedly owed to the agency by the plaintiff,
[ 169 Pa. Super. Page 514]
the sum of $2,253.08 remained for distribution to the owners of the business.
The plaintiff based his right to recover in this action on his contention that a partnership existed between the parties and that consequently he was entitled to one-half of the amount remaining for distribution. The case was tried by a judge without a jury, who found in favor of the plaintiff and entered judgment in his favor in the amount of $1,126.54, being one-half of the amount for distribution. The defendant has appealed from that judgment.
This background is necessary for a proper understanding of the controversy: The plaintiff married the defendant's daughter in 1934 and shortly after his marriage went to work for the defendant's husband, James W. Wood, in his insurance agency at a salary of $20 a week. Mr. Wood died testate in February of 1936 leaving his entire estate, real and personal, to the defendant. The inventory and appraisement*fn1 filed in the course of administration included in the listing of personalty the assets of the decedent's insurance business. These assets were appraised at $13,860.58, this total being comprised of office furniture, $180; premium renewals, $4,898.64; accounts receivable, $3,240.16; and cash, $5,541.78.
For a month following the death of his father-in-law, the plaintiff conducted the insurance business without receiving any salary or other compensation. The business at this time, while solvent in the technical sense, had insufficient liquid assets to meet obligations to various insurance companies for premiums collected by the decedent but not paid over to the companies. Rather than permit the business to fail for lack of credit by paying these debts in the normal course of administration with funds realized from the liquidation
[ 169 Pa. Super. Page 515]
of the decedent's assets, the defendant met the obligations to the insurance companies with $10,000 she had received as ...