Appeal, No. 250, Jan. T., 1951, from order of Court of Common Pleas No. 5 of Philadelphia County, December T., 1948, No. 175, in case of Bernard C. Tucker and Elizabeth M. Tucker, Trustees under will of Louis B. Tucker, deceased, v. Joseph P. Tucker, individually and as surviving partner of Bernard Tucker's Sons. Order reversed; reargument refused April 16, 1952.
Earl Jay Gratz, with him John C. Noonan, for appellant.
Herbert A. Barton, for appellees.
Before Drew, C.j., Stern, Stearne, Bell, Chidsey and Musmanno, JJ.
OPINION BY MR. JUSTICE HORACE STERN
This controversy is between a surviving partner and trustees under the will of the deceased partner concerning the amount to which decedent's estate was entitled in settlement of his interest in the partnership.
By agreement dated April 1, 1925, Louis B. Tucker and Joseph P. Tucker, who were brothers, formed a partnership under the name of Bernard Tucker's Sons to carry on the towing, stevedoring and shipyard business which their father had established before them. Paragraph five of the agreement provided as follows: "In the event of the death of either partner all of the property... of the deceased partner which is in the firm shall remain in the said business for a further period of two years after the deceased partner's death upon the same terms and conditions and operated in the same manner as during his lifetime,... but without any right on the part of [his] personal representative to take any part whatever in the conduct, management or direction of the business, the surviving partner having the sole right to continue the conduct and management of the same. At the end of said period of two years the interest of the deceased partner of the firm shall be appraised by a disinterested third person agreeable to the surviving partner and to the Trustees of the deceased partner,... and the surviving partner shall have the right to purchase the interest of the deceased partner in the firm at the appraised value. If the surviving partner will not buy, then the business of the firm shall be liquidated by the
surviving partner and the interest of the deceased partner therein shall be paid over to his estate, unless by the mutual agreement of the surviving partner and the unanimous consent of all the Trustees of the deceased partner, said interest is allowed to remain in the firm for a longer period upon such terms and for such period as they may agree upon." Louis Tucker died on December 2, 1940, leaving a will in which he named his wife and his son as Trustees of his estate, and authorized them to continue his interest in the business as provided in the partnership agreement.
Under dated of April 15, 1942, Joseph Tucker entered into an agreement with the Trustees in which the parties stated that they wished to continue the business as authorized in decedent's will with respect to his interest therein, and that they were desirous of adjusting the accounts of the two partners. Accordingly it was agreed that the provisions of paragraph five of the agreement dated April 1st, 1925, should be extended and become operative for a further period of five years from December 1, 1941; that the respective interests of the parties in the partnership capital and fixed assets should be equal; that all debit and credit balances of either of the parties as of December 2, 1940, with a certain exception not here relevant, should be cancelled; that Joseph Tucker should each year receive from earnings a sum equivalent to twenty per cent thereof after proper depreciation and reserves were deducted; that the remaining profits, after deducting therefrom such bonuses to employes as should from time to time be mutually agreed upon by the parties, should be distributed equally between the estate and Joseph Tucker; and that Joseph Tucker should devote his entire time and attention to the conduct of the business. Under and by virtue of this agreement the business was continued until December 1, 1946, without any
friction or any complaint whatever by ...