No. 519 April Term, 1979, Appeal from on Order of the Court of Common Pleas, Civil Action, Equity, of Mercer County at No. 28EQ 1978.
Ruth Anne Beighley, Greenville, for appellant.
Warren R. Keck, III, Greenville, for appellee.
Price, Hester and Cavanaugh, JJ.
[ 276 Pa. Super. Page 559]
The issue on appeal is whether the court properly granted preliminary objections and dismissed a complaint. Appellant Donald C. McClimans, brought an action in equity in Mercer County against his partner Alvin J. Barrett, appellee. McClimans and Barrett, according to the complaint, have been engaged in the insurance and real estate business in Greenville since April, 1960. They have a written partnership agreement and have conducted their business under the name McClimans Barrett and Company. In the complaint appellant pleads that there is a deadlock in the management of the partnership. He avers that the deadlock is causing irreparable injury to the partnership and that it has developed because appellee has: reduced his working hours; curtailed his civic responsibilities; abdicated his responsibilities as office manager, as well as other managerial and proprietary responsibilities; and that he has expressed his hatred for appellant. As a result of this, appellant sought appointment of a receiver and court-supervised dissolution of the partnership. Following service of the complaint, appellee filed preliminary objections. Appellant did not file an answer to the preliminary objections as is permitted under Pa.R.C.P. 1017(a) but simply ordered the matter on the argument list. No evidence was heard. The court sustained the first preliminary objection entitled, "Availability of Contractual Remedy" and dismissed the complaint.
Pa.R.C.P. 1017 and 1509 govern the filing of preliminary objections in equity and limit the permissible objections to certain specified grounds. The stated preliminary objection here is not among the designated grounds for raising preliminary objections and nowhere in the pleadings or in the lower court's opinion does it appear which basis for dismissal of the suit is invoked. In support of his objection as to availability of a contractual remedy, appellee relied upon paragraph 20 of the partnership agreement (which was an exhibit to the complaint). Paragraph 20 commences, "Upon the termination of the partnership, or dissolution thereof for any cause, . . ." and thereafter, together with subsequent paragraphs, provides for a plan of dissolution and
[ 276 Pa. Super. Page 560]
method of fixing the value of a partner's interest in the event of a purchase of his share. Paragraph 23 provides that in the event of dissolution for any reason, the retiring partner agrees not to compete with the remaining partner.
The term of the partnership is set forth in paragraph 4 of the agreement as follows:
"The effective date of the partnership shall be beginning June 1, 1960 and is formed for an indefinite term until dissolution by reason of death, insanity, withdrawal of either partner, or mutual agreement."
The lower court found that by instituting the action in equity, the appellant thereby effected a dissolution of the partnership, and that the parties were, by their agreement, bound to dissolve according to the provisions of paragraph 20 of the partnership agreement.
When the sustaining of defendant's preliminary objections will result in a denial of plaintiff's claim, or a dismissal of plaintiff's suit, preliminary objections should be sustained only in cases which are clear and free from doubt. Adams v. Speckman, 385 Pa. 308, 309, 122 A.2d 685 (1956); Legman v. Scranton School District, 432 Pa. 342, 247 A.2d 566 (1968); Dana Perfumes Corp. v. Greater Wilkes-Barre Industrial Fund, Inc., 248 Pa. Super. 295, 375 A.2d 105 (1977). Although not designated as such, it appears that the court treated the objection here as in the nature of a demurrer.*fn1 In Gekas v. Shapp, 469 Pa. 1, 364 A.2d 691, 693 (1976), our ...