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BOLAND ET AL. v. DALY (03/25/74)

decided: March 25, 1974.

BOLAND ET AL.
v.
DALY, APPELLANT



Appeal from decree of Court of Common Pleas of Montgomery County, No. 70-1854, in case of Julia Behr Boland and Marguerite J. Behr v. Francis I. Daly, Jr.

COUNSEL

William F. Fox, with him Fox, Differ, Callahan & Ulrich, for appellant.

Edwin B. Barnett, with him Strong, Barnett, Hayes & Quinn, for Julia Behr Boland, appellee.

Joseph A. Hagerty, for Marguerite J. Behr, appellee.

Jones, C. J., Eagen, O'Brien, Roberts, Pomeroy, Nix and Manderino, JJ. Opinion by Mr. Chief Justice Jones. Dissenting Opinion by Mr. Justice Manderino.

Author: Jones

[ 455 Pa. Page 468]

The question in this case arises from an equity action instituted in Montgomery County by appellees to compel the dissolution of their partnership with appellant Daly.*fn1 In the course of this action, on January 25, 1972, Daly, by stipulation, agreed to retire from the partnership upon receipt of the value of his interest in

[ 455 Pa. Page 469]

    the partnership computed in accordance with paragraph 7(e) of the partnership agreement.*fn2 Under this stipulation Daly also claims to be entitled to his share of the accrued or undrawn earnings of the partnership in accordance with his interpretation of paragraph 7(d) of the partnership agreement.*fn3 Specifically, he claims that he was entitled to 25% (a figure which also represented his partnership interest) of the sum of $421,909.54 reflected on the balance sheet as a Current Liability designated "Due Partners for Undrawn Earnings" (Undrawn Earnings). A hearing on that issue was held on March 13 and 14, 1972 before the chancellor and testimony was taken. On August 17, 1972, the chancellor denied this claim except for funds accumulated in that account during the fiscal year in which Daly retired, and to the date of his retirement.*fn4 Exceptions were taken and dismissed by the court en banc. This appeal followed.

The findings of fact below are supported by the record and are not questioned. Prior to September 10,

[ 455 Pa. Page 4701956]

, Francis I. Daly, Jr., and Fred Behr each owned a 25% interest in the partnership of "C. A. Hausser and Son," along with Fred's wife, Helen, who had a 50% interest. On that date, the partners executed a new written partnership agreement. Twenty per cent of Helen Behr's interest was divided equally between her children, Julia Behr Boland and Ernest Behr. The partnership was designed to keep 75% of the ownership of the business in the Behr family until Daly's death, retirement or bankruptcy, at which time the Behrs would acquire complete ownership by the procedures outlined in paragraphs 7(d) and 7(e) above.*fn5

During the interval between 1956 and the inception of this litigation, three of the original five partners died. Fred Behr died in 1963 and his interest in the partnership was then acquired by his children, Julia Behr Boland and Ernest Behr. In addition, Helen Behr had given these children an additional 5% interest each. Thus, after Fred ...


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