No. 1304 Philadelphia, 1982, No. 14 Philadelphia, 1983, No. 154 Philadelphia, 1983, No. 507 Philadelphia, 1983, No. 508 Philadelphia, 1983, No. 516 Philadelphia, 1983, Appeals from Orders of the Court of Common Pleas, Civil Division, of Montgomery County, No. 77-14009.
Theodore R. Mann, Philadelphia, for appellants (at 1304, 14 and 516) and appellees (at 154, 507 and 508).
Franklin Poul, Philadelphia, for appellants (at 508) and for appellees (at 1304, 14, 154, 507 and 516).
Philip D. Weiss, Norristown, for appellants (at 154 and 507) and for appellees (at 1304, 14, 508 and 516).
Wickersham, Wieand and Olszewski, JJ.
[ 338 Pa. Super. Page 446]
This is the fifth in a series of appeals from orders of the Court of Common Pleas of Montgomery County pertaining to the contentious dissolution and winding up of a partnership business known as the Hankin Family Partnership. The principal characters of this saga, which dates back to 1977, are five brothers and sisters and their spouses, all of whom have joined one side or the other in the dispute. The more populous faction, the Majority Hankins, is comprised of Moe Henry Hankin, his wife Sabina Hankin, Perch P. Hankin, his wife Gertrude Hankin, and Pauline (Hankin) Shanken and her husband, Benjamin R. Shanken. The minority members are Max A. Hankin, his wife Janet Hankin, the Estate of Samuel Hankin, and his widow, Harriet Hankin.
In the matter now before the Court, six separate appeals from six different orders have been consolidated for argument. They can better be understood by at least a partial review of the litigation which has spanned a period of seven years and spawned four prior appeals. An action for dissolution and disposition of partnership assets was commenced by the minority on August 19, 1977. On April 2, 1979, the
[ 338 Pa. Super. Page 447]
Honorable Louis D. Stefan, chancellor, determined (1) that the partnership had been dissolved in 1977; (2) that three alternate requests for liquidation presented by the minority should be denied; and (3) that the majority should wind up the partnership by selling its assets. This determination was affirmed on appeal. Hankin v. Hankin, 279 Pa. Super. 179, 420 A.2d 1090 (1980) (Hankin I) (allocatur denied). However, on July 10, 1981, the chancellor set aside his prior order in response to a petition by the minority and ordered that an immediate distribution in kind take place among the holders of the five partnership interests. The chancellor stated:
By reason of the various changes in circumstance . . . since the date of the original Adjudication . . . and  considering that, in fact, majority Hankins have controlled the show since that date, with results that can be described only as disappointing[,] . . . the Chancellor has concluded that distribution in kind [is justified].
A decree nisi was entered, therefore, which (1) scheduled a hearing for August 17, 1981 to determine the fair market value of the remaining partnership assets and, in contemplation of that hearing, authorized each side to employ, at partnership expense, an appraiser of partnership assets; (2) identified a procedure for effecting a distribution in kind; and (3) ordered that the status quo be maintained pending distribution. Exceptions were filed by the majority on July 17; but a Petition for Stay was denied by the chancellor on July 31. The exceptions were thereafter denied on August 12, and the hearing was rescheduled for August 24. On August 13, an appeal was filed. A renewed petition for a stay pending appeal was again denied by the chancellor. However, on August 19 Judge Watkins of the Superior Court granted a stay of all proceedings, including "the order pertaining to appraisals." In a 2-1 decision filed December 18, 1981 (Popovich, J., dissenting), the Superior Court reversed the chancellor. Hankin v. Hankin, 302 Pa. Super. 295, 448 A.2d 1049 (1981) (Hankin II) (allocatur denied May 3, 1982; reargument denied August 17, 1982).
[ 338 Pa. Super. Page 448]
The Court held that from the time of dissolution in 1977, "the majority partners, who are charged with the liquidation, have been hindered by the minority partners . . . by litigation at every step of the way. Under all the circumstances," said the Court, "it does not appear that the liquidating partners have had a reasonable, unhindered time in which to accomplish an orderly liquidation of such vast holdings and they should be granted another year to accomplish same." Id., 302 Pa. Superior Ct. at 300, 448 A.2d at 1051. The Court concluded:
The order of the court below is reversed as to the selection process provided therein and the management and liquidation of the assets of the "Hankin Family Partnership" shall continue as provided in the Decree dated April 2, 1979 under the supervision of the court below for a period of one (1) year from the date of this opinion.
Id., 302 Pa. Superior Ct. at 301, 448 A.2d at 1052.
Prior to the decision in Hankin II, a hearing before Judge Stefan had been held to determine, inter alia, whether the majority was required to pay out of partnership funds a bill for $66,143.14 submitted in September by Reaves Lukens, an appraiser hired by the minority to appraise the Hankin Family Partnership assets pursuant to the chancellor's order of July 10, 1981. Lukens testified that he had been retained by the minority on July 21, 1981 to do a complete appraisal and to be prepared to testify at a hearing to be held August 17. With the assistance of an order entered by the chancellor on July 28 directing the majority "to cooperate with Minority Hankins and the appraiser . . . by providing them with immediate access to and copies of such data as they require to appraise the fair market value of those assets . . . which [had] not yet been sold," the appraisal was in fact completed by August 17, 1981. After the Superior Court reversed the distribution in kind order and remanded (Hankin II), the minority renewed its request that the chancellor direct the partnership to pay the fee of the appraiser as provided in the July 10, 1981 decree nisi. The
[ 338 Pa. Super. Page 449]
chancellor, on November 29, 1982, issued a memorandum and order in which he concluded that the Superior Court's reversal of his decree nisi in Hankin II had "finally decided the issue . . . concerning the appointment of appraisers; and thus, the issue of payment by the partnership for such appraisal work." "Accordingly," held the Court, "it would be beyond the power of this Court now to direct the partnership to make payment to Reaves C. Lukens Company, as requested." The minority has challenged this determination in an appeal by Harriet Hankin and the Estate of Samuel Hankin which has been docketed at 14 Philadelphia, 1983.*fn1
Also raised as an issue at 14 Philadelphia, 1983 is the November 29, 1982 denial by the chancellor of a petition by the Estate of Samuel Hankin and Harriet Hankin for a partial distribution to permit payment of federal estate taxes and Pennsylvania inheritance taxes owed by the Estate of Samuel Hankin. Samuel Hankin, M.D., a former Hankin partner, had died on February 13, 1981, and in December, 1981 his estate had asked the court to order the partnership to pay estate and inheritance taxes totaling approximately $575,000. Neither his estate nor his beneficiaries were able to pay the tax, it was asserted, because almost all of the estate's assets consisted of unliquidated partnership holdings. Moreover, the petition averred, there was an ...