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KING v. KLINGENSMITH (11/15/54)

November 15, 1954

KING
v.
KLINGENSMITH, APPELLANT.



Appeal, No. 99, March T., 1954, from judgment of Court of Common Pleas of Butler County, Dec. T., 1947, in Equity, No. 2, in case of Homer C. King v. Walter T. Klingensmith. Record remanded. Bill in equity. Before PURVIS, P.J. Adjudication filed; exceptions to adjudication dismissed and final decree entered. Defendant appealed.

COUNSEL

Clyde P. Bailey, with him Harry K. McNamee and Weller, wicks & Wallace, for appellant.

Louis Rosenberg, for appellee.

Before Stern, C.j., Stearne, Jones, Chidsey, Musmanno and Arnold, JJ.

Author: Stern

[ 379 Pa. Page 405]

OPINION BY MR. CHIEF JUSTICE HORACE STERN

[ 379 Pa. Page 406]

The history of this litigation leaves much to be desired. It is concerned with the dissolution and the liquidation of the assets of a partnership which lasted only for a few months. The claims of creditors have all been satisfied and the only problem involved in the present controversy concerns the adjustment of the rights of the partners as among themselves. The sums in issue are comparatively modest. One would think, therefore, that a judicial disposition of the case could have been made within a reasonably short time, but in fact the litigation has now continued for more than seven years and the end is not yet. There has been a welter of petitions, answers, court orders and hearings, and to add to the unsatisfactory condition of the proceedings in this, the appellate court, is the fact that the record, as printed, is inadequate in that it omits much that would possibly have rendered a review of the case less difficult.

Stating merely the more important facts it appears that on March 27, 1947, the defendant, Walter T. Klingensmith, entered into a partnership with one Oscar P. Morrison. At that time the defendant, Morrison, and the plaintiff, Homer C. King, were district salesmen of the Panther Oil and Grease Manufacturing Company of Fort Worth, Texas. On June 17, 1947, defendant invited plaintiff to become a third member of his partnership with Morrison, plaintiff to pay a certain amount of capital into the partnership and to forego some commissions claimed by him to be due him. On June 19, 1947, all three of the parties had an attorney draw up a written agreement to establish such a tri-partite partnership to be known as "The Pressure Waterproofing Company" and to be for the conduct of "the art and trade of roof coating, painting and spraying." This agreement was not signed by plaintiff and defendant until July 22, 1947, and by

[ 379 Pa. Page 407]

Morrison Until August 8, 1947; on the latter date plaintiff paid into the partnership the capital sum agreed upon. The parties, however, had actually been operating under the partnership, and it has been the contention of plaintiff throughout the entire proceedings that it was understood and agreed that his association in the partnership was to be considered as having begun on March 27, 1947, when the defendant and Morrison first formed their partnership, that he had, in effect, bought into that partnership, and that he was therefore entitled to its profits and subject to its liabilities from that time. Defendant, on the other hand, has steadily maintained that not only was there no such understanding but that the agreement, although dated June 19, 1947, did not actually go into effect until August 8, 1947, when Morrison signed it and plaintiff contributed his capital.

The partnership quickly proved lacking in the harmony necessary for its successful operation. Defendant kept the books and was apparently the dominant member of the association. Plaintiff, as the result of suspicions followed by investigations and inquiries, came to the conclusion that defendant had improperly withheld moneys due the partnership, especially receipts from the Panther Oil and Grease Manufacturing Company with which the partnership had certain important business relations, and that he had also withdrawn moneys for which he was not accounting. Accordingly, on October 8, 1947, plaintiff filed a bill of ...


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