Appeal from order of Court of Common Pleas No. 6 of Philadelphia County, Nov. T., 1967, No. 196, in re dissolution of partnership, Midvale Florists v. Thomas F. Keane, Jr.
Barbara Ann Duffy, for appellant.
John Edward Sheridan, for appellee.
Wright, P. J., Watkins, Montgomery, Jacobs, Hoffman, Spaulding, and Hannum, JJ. Opinion by Montgomery, J.
[ 213 Pa. Super. Page 323]
This appeal reaches us from an order affirming an award of arbitrators, as amended. It is agreed that this was common law arbitration and not under the Act of April 25, 1927, P. L. 381, 5 P.S. § 161 et seq.
The two litigants, Thomas F. Keane, Jr., appellant, and Camillo Lupinacci, appellee, were partners engaged in the retail florist business, doing business as Midvale Florists, under a written agreement which provided for the settlement by arbitration of any disagreements arising from the conduct of the business, its dissolution, etc. A dispute having arisen between them, arbitrators were appointed to resolve it. Although the dispute included the question of who was the retiring partner, the arbitrators found that it was Mr. Keane and that it was he who was entitled to be paid his share of the business in the manner provided by the agreement. This finding is not questioned in this appeal.
Paragraph 20 of the agreement provided, inter alia, that, "In the event the remaining partner elects to buy out the withdrawing partner's interest the value of said interest shall be equal to the withdrawing partner's capital account on the date of notice of intention to withdraw from the partnership, adjusted as herein provided. The withdrawing partner's capital account on the date of such notice shall be increased by his share of partnership profits, for the period from the beginning of the year in which his withdrawal from the partnership takes place until the date of notice of such withdrawal. The real estate owned by the partnership shall be taken at a value equivalent to the assessed value fixed by the local authorities for real estate tax purposes for the year in which the withdrawal takes place, and the withdrawing partner's capital account shall be adjusted to reflect this valuation. . . ."
[ 213 Pa. Super. Page 324]
Although the partnership agreement provided for the establishment of a capital account for each partner, no such accounts were found in the ledgers of the partnership. In their place, however, the parties submitted to the arbitrators a balance sheet and estimate of net worth as of December 31, 1966, which, said the arbitrators in their initial report, ". . . thereby indicating to the arbitrators that they have agreed that the equities shall be established as of that date and on the basis of such statement." Such statement is not before us. However, it is stated in the first report that it indicated a net worth of $4,588.65 as of December 31, 1966 exclusive of good will, trade name or other intangible assets, which items were not to be considered as part of the capital account of the partners under Paragraph 23 of the agreement. This net worth statement did not include partnership real estate consisting of five properties, titles to which were held in the names of the individual partners and their respective wives. A stipulation signed by the parties confirmed the fact that this real estate belonged to the partnership.
In concluding their report the arbitrators directed that appellee Lupinacci pay to appellant Keane one-half of the amount shown by the balance sheet or $2,294.33, and one-half the value of the real estate as assessed value for tax purposes or an additional $18,200, the total assessed value being $36,400.
Thereafter, before confirmation of their award, the arbitrators filed a supplemental report reciting therein that when they filed their first report their attention had not been called to the fact that some of the real estate were encumbered with mortgages, and for that reason they amended their award by directing Lupinacci to pay to Keane ...