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FISHER v. FISHER

December 14, 1965

A. B. FISHER, as Executrix of the Estate of F. T. Fisher, Deceased
v.
B. FISHER and W. L. Fisher



The opinion of the court was delivered by: VAN DUSEN

 As stated by former Chief Judge (now Circuit Judge) Ganey in his opinion of June 21, 1961:

 
"Plaintiff is a Connecticut Executrix suing two individual defendants, one from Pennsylvania and one from Florida, for $11,078.30, which sum represents decedent's book value share of the net assets of a partnership, taken at the date of his death. Defendants claim they liquidated the partnership within six months of the death of plaintiff's decedent and claim to have received only $8,558. in cash, which sum they say had to be applied against the unsecured liabilities of the partnership, totaling $29,150.11. Defendants paid the deficit out of their pockets. In light of there being no assets available for distribution and, in fact, an alleged deficit of $20,592.11, the defendants counterclaim for the pro rata share of the alleged deficit that they say plaintiff's decedent owes."

 This case has been tried to the court on a Stipulation of Facts.

 On or about March 31, 1948, F. T. Fisher (now deceased), B. Fisher, and W. L. Fisher entered into a written partnership agreement *fn1" for the purpose of conducting a business of buying, selling, breeding and maintaining cattle. The partnership was to continue from its inception until March 31, 1953, and from year to year thereafter. The partnership was not to be terminated by the mere fact of death of any of the partners. *fn2"

 F. T. Fisher died on July 1, 1954. The surviving partners liquidated the business, but the money received was insufficient to pay the outstanding partnership debts. The sum of $20,592. was advanced by the surviving partners individually to satisfy these debts.

  In this diversity action, the plaintiff is the executrix of the estate of F. T. Fisher. The defendants are the surviving partners. The interest of F. T. Fisher in the assets of the partnership was inventoried by the plaintiff at $11,078.30, *fn3" and this is the amount she claims in this action. She claims that the surviving partners were under no duty to liquidate and also that they should not have made the advances they did to pay the liability. Her reasoning is based on her interpretation of the agreement. Her primary contention is that the interest of the deceased partner was established as of the date of death; that the estate is entitled to this share whether or not there were sufficient funds after liquidation of the partnership assets to pay it; that if there were not, then the surviving partners individually were required to pay this sum; and that the valuation of this interest was his proportionate share of the book value of the partnership at the date of death.

 Plaintiff's position must be rejected since it is not based on a reading of the partnership agreement as a whole, especially the following provisions:

 
"3. Duration. * * *
 
"The partnership shall not be terminated by the mere fact of the * * * death * * * of any of the partners.
 
* * *
 
"9. Liability for losses. 'Net loss' shall be the amount by which the income of the business is exceeded by the aggregate of all operating and other expenses, including salaries, if any, payable to partners. In case the business of the partnership shall result in a net loss, such loss shall be borne by the partners in such proportion as their respective percentages in the net profits bear to such losses.
 
"10. Withdrawal of Partners. * * * If any partner shall die * * *, he shall be deemed to have withdrawn from the partnership as of the date of his death, * * *. In the event of any such withdrawal by a partner his interest in the partnership shall cease as of the date of such withdrawal, shall be determined as in the case of the dissolution of the partnership and shall be paid to him or to his legal representatives within one year after the date of such withdrawal.
 
"11. Termination, Dissolution and Liquidation. Upon the termination or dissolution of the partnership for any cause whatsoever the interest in the partnership of ...

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