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ELLIS v. ELLIS (09/29/64)

September 29, 1964

ELLIS
v.
ELLIS, APPELLANT.



Appeals, Nos. 190 and 191, Jan. T., 1964, from order of Court of Common Pleas No. 5 of Philadelphia County, Sept. T., 1963, Nos. 2194 and 2195, in case of Martin B. Ellis and Sidney H. Ellis v. Herman M. Ellis and estate of Abraham M. Ellis by Herman M. Ellis, Martin B. Ellis et al. Order affirmed.

COUNSEL

Herbert A. Fogel, with him David F. Maxwell, and Obermayer, Rebmann, Maxwell & Hippel, for appellant.

William White, Jr., with him David C. Toomey, and Duane, Morris & Heckscher, for appellees.

Abraham L. Shapiro, with him Norman C. Henss, for co-executors, appellees.

Theodore Voorhees, in propria persona, with him Arthur C. Dorrance, Jr., and Dechert, Price & Rhoads, for guardian and trustee ad litem, intervenor.

Before Bell, C.j., Jones, Cohen, Eagen, O'brien and Roberts, JJ.

Author: Cohen

[ 415 Pa. Page 414]

OPINION BY MR. JUSTICE COHEN

The principal issues here on appeal are (1) whether, upon the death of a partner, jurisdiction over a proposed sale of partnership assets to the surviving partners is exclusively in the orphans' court and (2) whether prior orphans' court approval is necessary for such a sale where the surviving partners are also co-executors of the deceased partner's estate.*fn1

The A. M. Ellis Hosiery Company and the Chester Pike Drive-In Theatre Company were operated as partnerships-at-will under an oral partnership agreement. The partners in each were appellees Martin Ellis (Martin) and Sidney Ellis (Sidney), appellant Herman Ellis (appellant), and their father, Abraham M. Ellis (Abraham), each of whom owned a 25% interest. Abraham died in 1961, but the partnerships have not as yet been terminated. The co-executors under Abraham's will are appellee Ruth B. First (his daughter), appellee Sylvan M. Cohen (his attorney), and Herman, Martin and Sidney (his sons and former partners).

Following the death of Abraham, animosity developed between appellant and appellees Martin and Sidney. As a result Martin and Sidney filed bills in equity*fn2 in common pleas court asking that court to enter a decree of dissolution of the partnerships and to decree and supervise a restricted auction of all of the partnerships' assets with bidding limited to the parties holding partnership interests. Appellant filed

[ 415 Pa. Page 415]

    preliminary objections in his individual capacity and as co-executor which challenged the jurisdiction of common pleas to direct the sale, and which additionally asserted that prior permission of the orphans' court must be obtained before common pleas can permit either the purchase of estate assets by executors or a sale thereof at restricted auction. These preliminary objections were dismissed and this appeal followed.*fn3

Appellant contends that Martin and Sidney here seek a distribution of assets of Abraham's estate and that jurisdiction thereover is exclusively in the orphans' court by virtue of § 301(1) of the Orphans' Court Act, Act of August 10, 1951, P.L. 1163, as amended, § 301(1), 20 P.S. § 2080.301(1). While we agree that distribution of an estate is exclusively in the orphans' court, this rule has no application here for (1) the assets sought to be sold do not include estate assets but are all assets of the partnerships, and (2) the relief Martin and Sidney seek is not distribution of assets but dissolution and winding up of partnerships and an accounting of the surviving partners' interests therein as well as that of the deceased partner. There can be no question of the jurisdiction of common pleas over these matters.*fn4

First, it is clear that the assets involved in the proposed sale do not include assets of Abraham's estate. During his lifetime, the right of a partner in specific partnership property is limited. The Uniform ...


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