Case Name: JACOB E. GERDING vs. MARY M. BAIER, Administratrix
Court: Court of Appeals of Maryland
Jurisdiction: Maryland
Decision Date: 1923-06-26
Citations: 143 Md. 520
Docket Number: 
Parties: JACOB E. GERDING vs. MARY M. BAIER, Administratrix.
Judges: 
Reporter: Maryland Reports
Volume: 143
Pages: 520–526

Head Matter:
JACOB E. GERDING vs. MARY M. BAIER, Administratrix.
Death of Partner — Effect—Contract for Widow’s Benefit.
While, ordinarily a partnership is dissolved hy the death of one of the partners, the partners may hy their contract provide otherwise. p. 524
An application hy a surviving partner for the appointment of a receiver for the business, based on allegations that irreconcilable differences had arisen between him and the administratrix of the deceased partner, his widow, held properly refused, it not appearing that there were differences as to the conduct of the business, or that the administratrix had interfered with its management, and the only and obvious purpose of the application being to escape from the obligation of a contract by which the widow of a deceased partner was to -receive payments from the business for a designated p>eriod of years. pp. 525, 526
A contract between two partners by which, in case of the death of one, the survivor should pay to the decedent’s widow a percentage of the earnings of the- survivor for a designated period of years, involved an obligation on such survivor’s part to continue the business for that period, and to make such payments from his earnings therein. ' p. 526
Decided June 26th, 1923.
Appeal from the Circuit Court 3sTo. 2 of Baltimore City (Duke Boot), J.).
Bill by Jacob E. Gerding against Mary M. Baier, administratrix of the estate of Frederick J. Baier. From a decree dismissing the bill, plaintiff appeals.
Affirmed.
The cause was argued before Boyd, O. J., Briscoe, Thomas, Pattison, IIbkeb, and. Offutt, JJ.
Le Roy Gerding and William H. Lawrence, for the appellant.
Herbert L. Grymes, for the appellee.

Opinion:
Thomas, J.,
delivered the opinion of the Court,
The bill of complaint in this ease, which was filed in Circuit Court To. 2 of Baltimore City on December 5th, 1922, by Jacob E. Gerding against the widow of Erederick J. Baier, deceased, as the administratrix of said decedent, alleges that the plaintiff was a eo'-partuer of the said Erederick J. Baier, deceased, and engaged in the general printing business at 407 South Bond Street, in Baltimore City, under the firm name of J. E. Gerding Company; that the said Baier died on the 25th of September, 1922, and letters of administration were taken out by his widow, Mary M. Baier; that the said "'business consists of machinery, typo, paper, office furniture and outstanding debts"; that "irreconcilable differences have arisen between" the plaintiff and 'the said Mary M. Baier, and by reason of said "difficulty" the business has, been much jeopardized, and it is to the best interests of the parties and the creditors of said partnership that the partnership' should he terminated, and that a receiver be appointed to close out the partnership' business, and that he, the plaintiff, has no adequate remedy at law. The prayer of the bill was for the appointment of a receiver to take charge "of all the partnership hooks and papers of accounts, goods and effects, and to collect the debts due thereto and to preserve and dispose of the same, under the directions" of the court, and for general relief.
The court below passed an order requiring the defendant to shovy cause on or before the day named therein why the relief prayed should not- be granted, and the defendant promptly filed her answer, in which she admitted the co-partnership1, the death of her said husband and the other matters stated in the first three paragraphs of the bill, but in reference to the differences charged to have arisen between her and the plain tiff she alleged, "that the only difference which has arisen between" her and the plaintiff "is the carrying into effect of a certain contract entered into" by the plaintiff and her deceased husband, under' which she is entitled to receive ceor- ' tain weekly payments, &c., "out of the profits of the business-," which .contract, a copy of which was filed with her answer, the plaintiff "now desires to- repudiate," and that there "is no- sufficient reason in equity for the appointment of a receiver and the disposition of the business as sought by the hill of complaint."
The contract referred to- in the answer and offered in evidence is as follows:
"December 20, 1907.
"To Whom It May Concern:
"We, the undersigned, trading as the J. E. Gerding Company, in the City of Baltimore, State of Maryland, do hereby mutually agree that in the event of the decease of either .one of the undersigned, the survivor shall pay the widow of the deceased partner 50% (fifty per cent.) of the earnings of the survivor, said sum to he paid weekly or monthly and to continue for the space of five (5) years, at which time surviving partner can purchase widow's interest at half the valuation of plant at time of death. (In case said widow marries within the specified time of five years, then said payment shall cease immediately.) In case there is no widow, same to he paid to the children of the deceased or their guardians, valuation having been procured by at least three disinterested people. All monies in building associations and savings hank the widow shall receive half immediately, s,
"J. E. Gerding. (Signed)
"Frederick J. Baier. (Signed)
"Made this twentieth (20th) day of December, in the year of 1907."
The other evidence in the-,,caso, which consists of the testimony o-f the plaintiff, shows that he and his deceased partner for a number of years prior and up to' the time of his death each received from tlie business a salary of $75 per week; that in addition to their salaries they paid to their employees salaries amounting to $55 per week; that the plaintiff has conducted the business .since Mr. Baier's death, and that in addition to Ins salary at $75 per week and the salaries of his employees «mounting to $55 per week, he paid to the Ear tional Composition Company, in the month of Eovemher, 1922, between $160' and $180 for work that lie "could not got out in time"; that the work that Mr. Baler did for tlie firm was that of a "compositor,''' and that according to the "union scale" it would cost about $42 a week to employ a "typesetter" or "journeyman" in his place; that the plaintiff has never tried to get, any one in Mr. Baier's place, but has continued the business with the same force that they had before' his death-with the help of the Eational Composition Company, which the firm began to employ some time before Mr. Baier's death; that the business lias declined "somewhat" in the past- year owing to the falling off" of the packing' business; that the plaintiff could not tell what the profits of the business were in 1919, 1920 or 192 1.; that he "figured" a net profit of $1,000 "last year" over and above all salaries; that the company has no debts, and had $1,000 in bank at the time the plaintiff testified (December, 1922); that, according to the inventory and appraisement, which the plaintiff had made, the plant of the company is worth $6,092.72 '"as a. running plant," and the company also owns two lots, which he valued at $700. There is no suggestion in the case that the defendant has interfered in any way with the plaintiff's management and conduct of the company's, business, or that there has been any disagreement, between them in regard to the same. It would seem from the testimony and argument of counsel that, according to the plaintiff's, and defendant's const ruction of the contract referred to, the defendant is .entitled to receive from the company an amount, equal to fiftv per cent, of the salary the plaintiff receives, and the plaintiff's contention is that the company cannot afford to pay her that amount, notwithstanding the evidence shows- that the business was conducted 'successfully while paying Mr. Baier twice that amount, -and that the company can employ a competent person to1 do- the work he did for about the remaining' fifty per cent, of the salary he received and which the plaintiff is still receiving. The only and obvious purpose, therefore, of the bill is to avoid any obligation under the contract, which the plaintiff says- he wrote at the instance of his deceased partner, and to the same end he has- brought this appeal from the decree of the court below dismissing his bill.
Ordinarily a partnership' is dissolved by the death of one of the partners. Walker et al. v. House, 4 Md. Ch. 39; 20 R. C. L. sec. 225, p. 989; 30 Cyc. 653; Scholefield v. Eichelberger, 7 Peters, 585; Burwell v. Mandeville's Executor, 2 Howard, 560; Parnell v. Thompson, 81 Kan. 119, 33 L. R. A. (N. S.), p. 668; Uniform Partnership Act. see. 31, sub sec. 4, art. 73 A of the Code. But it. has been held that, the partners may by their contract provide otherwise. In 20 L. R. A., supra, it is said: "In the absence of an express agreement to the contrary, every partnership is dissolved by the death of one of the partners, whether the partnership is one at will or for a fixed term. Where, as is. often the case, the articles provide that the partnership' shall not be dissolved by the death of ¡a, partner, such provision will be given effect by the courts." And it is said in 30 Cyc. supra, that the death of a partner "produces a dissolution of the firm, not only as to the estate of the deceased, but as to all the partners, unless the continuance of the partnership has been provided for 'by the agreement of the parties." In Scholefield v. Eichelberger, supra, the Supreme Court of the United States said, on page 594: "There is no1 doubt that the liability of a deceased partner, as well as. his interest in the profit of the concern, may, by contract, be extended beyond his death; but without such stipulation, even in case of a partnership'for a term of years (3 Madd. 245), it is clear1 that death dissolves the concern." And in Burwell v. Mandeville's Executor, supra, Mr. Justice Story said: "By the general rule of law every partnership is dissolved by the death of one of the partners. It is true that it is competent for the partners to provide by agreement for the continuance of the partnership after such death. A partner too may by bis will provide that the partnership shall continue notwithstanding his death; and if it is assented to by the surviving, partner, it becomes obligatory. But, then, in each ease, the agreement or authority must be clearly made out." See also Goodburn et ux. v. Stevens et al., 5 Gill, 1, and Parnell v. Thompson, supra. Subjection (5) of section 4 of article 13 A of the Code (Uniform Partnership Act) expressly provides: "This article shall not be construed so as to impair the obligation of any contract existing when the article goes into effect," and if we assume that by reason of the contract between the plaintiff and his deceased partner the partnership was not dissolved by tbo death of Mr. Baier, the question remains whether under the pleadings and evidence in the ease the plaintiff is entitled to a decree dissolving the partnership or appointing a receiver. The only ground alleged in the bill is that "irreconcilable differences have arisen" between the plaintiff and defendant, which jeopardize the business of the company. In Fooks v. Williams, 120 Md. 440, the Court, said, in reference to a bill for the dissolution of a partnership: "A bill of this character should not merely allege irreconcilable differences between the partners, but should also allege facts, sufficient in their character to make it apparent, to the Court that, if supported by proof, the differences were irreconcilable, and of such a nature as terminated or seriously imperiled any further' continuance of the relation." Disregarding, however, any defect in the pleadings, there is no evidence to sustain the only ground upon which relief is prayed, or to establish any other ground up on which a. court of equity would be justified in dissolving a partnership or appointing a receiver to take charge of its assets. The evidence entirely fails to show any differences between the plaintiff and the defendant as to the conduct of the company's business, or that she has in any way interfered with the plaintiff's management of it, or that the business cannot be continued without a loss to the parties interested.
Suib-seotion (é) and sub-section (c) of section 7 of article 73 A of the Code (Uniform Partnership' Act), provide that "the receipt by a person of a share of the profits of a business is prima facie evidence that he is a partner in the business, but no such inference shall be drawn if such profits were received in payment; as an annuity to a widow or repre^ sentafive of a deceased partner," 'but whatever may be the true relation of the plaintiff and the defendant under the contract in question, it is a clear undertaking on his part to continue die business of the company for the period of five years from the date of Mr. Baier's death, and to pay the defendant, as his widow, during that time, unless she remarries, fifty per cent, of his, the plaintiff's, earnings in said business^ and a. court of equity will not aid him to escape an obligation which he has freely and voluntarily assumed, or intervene by the appointment of a receiver to take charge of and distribute the assets of the company except in the clearest ease for the protection of the interests of all concerned. Miller's Eq. Pro., secs. 635-636 and 637, and eases cited in the notes. We will, therefore, affirm the decree of the court below.
Decree affirmed, with costs