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ROSENFELD v. ROSENFELD (06/28/57)

June 28, 1957

ROSENFELD
v.
ROSENFELD, APPELLANT.



Appeals, Nos. 66, 68, 69 and 70, March T., 1957, from decree of Court of Common Pleas of Allegheny County, Jan. T., 1952, in equity, No. 1370, in case of Samuel Rosenfeld v. David Rosenfeld et al. Decree affirmed.

COUNSEL

Elder W. Marshall, with him John A. Metz, Jr., Carl E. Glock, Jr., Leonard L. Scheinholtz, Reed, Smith, Shaw & McClay and Metz, McClure & MacAlister, for appellants.

William H. Eckert, with him Samuel Kaufman, Benjamin Jacobson, Milton W. Lamproplos and Smith, Buchanan, Ingersoll, Rodewald & Eckert, for appellee.

Before Jones, C.j., Bell, Chidsey, Musmanno, Arnold, Jones and Cohen, JJ.

Author: Chidsey

[ 390 Pa. Page 41]

OPINION BY MR. JUSTICE CHIDSEY

These are appeals by four of the defendant partners from that portion of a final decree in equity, affirming the adjudication of the chancellor, which ordered the defendant partners to account to the partnership and the plaintiff partner for certain salaries previously paid to them under a written salary agreement.

Plaintiff brought this suit primarily to enforce a stock proxy held by him in a dry cleaning business conducted by a partnership and two corporations as a unitary enterprise. The individual defendants are the other partners, and are also the other stockholders in the two corporations named as defendants. Defendants denied the validity of the proxy and sought to restrain plaintiff from exercising it on the ground that he was interested in a competing dry cleaning business.

[ 390 Pa. Page 42]

The chancellor held in favor of the plaintiff and decreed that the proxy was valid and that plaintiff's vote thereof should be recognized. No exceptions were taken to the findings, conclusions of law, or decree nisi on this principal issue, and appellants make no objection to that part of the final decree.

The facts found and supported by the evidence may be summarized as follows: Plaintiff's father, Isadore Rosenfeld, was one of the founders of a partnership known as Liberty Cleaners & Dyers (hereinafter called Liberty) engaged in the wholesale dry cleaning business, and when defendant David Rosenfeld, plaintiff's uncle, joined him shortly thereafter, each owned a 50% interest in the firm. In 1933, defendant Fisk Realty Co., Inc. was incorporated in Pennsylvania to hold title to the real estate on which the cleaning plant was operated. Two years later the partnership entered into the retail dry cleaning business and defendant Quaker Cleaners, Inc. was formed to operate retail stores which were opened, the receipts therefrom belonging to Liberty. In 1938, Isadore Rosenfeld gave his son, Samuel Rosenfeld, plaintiff, one-half of his 50% interest. Three years later defendants Harry Rosenfeld and Jack Rosenfeld were admitted to the partnership; they having acquired a 15% and 10% interest respectively from David Rosenfeld. In 1946 defendant David Rosenfeld II purchased a 7 1/2% interest from Isadore, and defendant Sidney Singer bought a similar interest from plaintiff. Isadore died on April 27, 1951, and his interest passed to, and now belongs to, plaintiff, Samuel Rosenfeld, either individually or as executor of his father's estate. At the time this suit was instituted, and until the adjudication and thereafter, the interests of the partners in the partnership and the corporations have been as follows: plaintiff, 35% David Rosenfeld, 25%; Harry Rosenfeld,

[ 390 Pa. Page 4315]

%; Jack Rosenfeld, 10%; David Rosenfeld II, 7 1/2%; and Sidney Singer, 7 1/2%.

When David Rosenfeld II and Sidney Singer became partners in 1946, they each signed a proxy giving to Isdore and Samuel Rosenfeld and the survivor of them the right to vote their stock in the two corporations, thus enabling the survivor to retain 50% control of the business. At the same time, all the individual partners entered into written articles of partnership. Paragraph Thirteenth of these partnership articles, which were in effect on April 27, 1951 when Isadore ...


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