Case Name: Wesley M. Cameron et al., Administrators of Calvin W. Starbuck, deceased, v. Andrew W. Francisco et al.
Court: Supreme Court of Ohio
Jurisdiction: Ohio
Decision Date: 1875-12
Citations: 26 Ohio St. 190
Docket Number: 
Parties: Wesley M. Cameron et al., Administrators of Calvin W. Starbuck, deceased, v. Andrew W. Francisco et al.
Judges: McIlvaine, C. J., Welch, Rex, and Gilmore, JJ., concurred.
Reporter: Ohio State Reports, New Service
Volume: 26
Pages: 190–195

Head Matter:
Wesley M. Cameron et al., Administrators of Calvin W. Starbuck, deceased, v. Andrew W. Francisco et al.
1. A partner, in the absence of an agreement for compensation, is not entitled to charge for services rendered in discharging his duties as a member of the firm; and it mates no difference whether the services are rendered before or after the dissolution of the firm.
2. But where a surviving partner is under no obligation to continue the business, '¡sit does so at his own peril, if the representatives of the deceased partner elect to share in the profits, a reasonable allowance may be deducted from such profits as a compensation to the survivor for bis services.
•8. Where a firm was dissolved by the death of one of its members, and the surviving partners, for the preservation of the good-will, and to enable the entire property and business of the firm to be sold as a going concern, continue to carry on the business at their own risk, until such sale was effected: Held, that the amount thus saved to the firm from the goodwill is in the nature of profits, and that, on settlement of the partnership, an allowance may be made therefrom to the surviving partners, for their services in continuing the business after the dissolution.
Motion for leave to file a petition in error to reverse the judgment of the Superior Court of Cincinnati.
The original petition was filed by Wesley M. Cameron and Alexander Starbuck, administrators of Calvin W. Star-buck, deceased, against Andrew W. Francisco and Asa A. Clark, for the settlement of the business of a copartnership existing between the defendants and the plaintiffs’ intestate at the time of his decease.
The report of the referee to whom the cause was referred shows, among other things, the following facts: That the intestate and the defendants, Francisco and Clark, were partners, under the firm-name of C. W. Starbuck & Co., in the ownership and in the publication of the Daily and Weekly Times newspaper, and in a job printing-office connected therewith, in Cincinnati, from the 1st day of January, 1868, until the death of C. W. Starbuck, the intestate, which occurred November 15, 1870; that the interest of the intestate in the firm was fourteen-sixteenths, and that of each of the defendants one-sixteenth, and that the latter were each credited on the books of the firm with a salary, which was known and assented to by the intestate.
The defendants, after the death of C. W. Starbuck, continued to carry on the business, with the consent of the plaintiffs, until the 1st day of May, 1871, when all the property of the firm, including the good-will, was sold to the Chronicle Company for the sum of $138,550. The value of the establishment consisted largely of the “ good-will ” of the two papers—the Daily and Weekly Times. This “ good-will ” constituted, by the appraisement, about two-thirds of the value of the establishment, and would have been almost entirely destroyed by a suspension of the papers.. Rut, by the exertions of the defendants in continuing the-business, the good-will was preserved almost unimpaired. Raring the period from, the death of Starbuck to the time of sale, five and one-half months, the actual receipts considerably exceeded the expenditures, though the referee-finds that there would not have been any profits made in continuing the business for a year.
The sale to the Chronicle Company was made by agreement of all parties, and resulted in realizing at least $75,000' for the “good-will,” and a better sale of the other assets than could have been otherwise effected.
The carrying on of the business was greatly to the interest of all concerned, and the services of the defendants were-very valuable, and they incurred considerable responsibility and risk in so continuing the business.
The referee found the sum of $2,000 to be a reasonable- and fair allowance to each of the defendants, for their services so rendered in continuing the business, in addition to-a weekly allowance equal to the weekly salary received by them prior to Starbuck’s death.
As a conclusion of law, the referee found that the defendants were entitled to no compensation for services rendered as surviving partners in closing up the business of the firm; but that they were entitled to the above allowances for their services in continuing the business from the dissolution to the time of the sale.
The referee stated the account between the parties on this basis; and, on exceptions, his action was confirmed by the Superior Court.
The error now assigned is the confirming of the referee’s report, in allowing to the defendants $2,000 each, for personal services, subsequent to the death of the intestate of plaintiffs in error.
Matthews, Ramsey ‡ Matthews, for the motion:
I. The allowance for services rendered from the time of Starbuck’s death till the sale of the office, which was about five months, is wholly illegal.
Surviving partners can not claim compensation for personal services. The representatives of the deceased partner may claim either interest on the decedent’s investment 'or a shax-e of the profits. If they choose a share of the profits, the court, in its discretion, may allow a reasonable compensation to be deducted from the profits realized before distribution.
This is the settled law, and the allowance in this case is M flagrant disregard of the law. Tillotson v. Tillotson, 34 Conn. 335; Beatty v. McVay, 19 Penn. St. 516; Griggs v. Clark, 23 Cal. 430; Burdon v. Bunion, 1 Yes. & B. 170; Story on Part., see. 343; Bindley, 990 et seq., and authorities cited; Goodman v. Washburn, 17 Pick. 519; Bissett on Part. 93; 1 Molloy, 465; 5 Gill, 24; 1 Md. Ch. 84; 38 Cal. 385.
The master reported that there were no profits made. No pretense is made that there wex-e profits. The continuance of the business was for mutual benefit, and the period of five months was not longer than was reasonably necessaxy to wind up a business of such magnitude.
Sage § Hinkle and Caldwell $ Coppock, contra:
The finding of the master is, that it was necessary to ci%y on the business to preserve the good-will, which was of greater value than all of the tangible property; and that the services rendered by the survivors were valuable and effective. $2,000 were allowed as and for compensation.
We insist that there is no error in this. Bindley on Part. 759 (Am. ed. 710); Collier on Part., sec. 199, note; Featherstonaugh v. Turner, 25 Beavan, 382; 27 Beavan, 242; Griggs Yu Clarke, 23 Cal. 430; Collier on Part., sec. 183; Story, sec. 182; lb., sec. 343, note; Collier on Pax't., see. 328; Gow on Part. 354; 19 Penn. St. 516; 7 Sim. 425; Parsons on Part.. 444.

Opinion:
White, J.
The error in this case is not, we think, well assigned.
It is true that a partner, in the absence of an agreement for compensation, is not entitled to charge for services rendered in discharging his duties as a member of the firm; and it makes no difference whether the services are rendered before or after dissolution. So, too, where, in pursuance of the articles of copartnership, the business is carried on after the death of one of the partners, the survivor can not charge for continuing the business, unless there is a stipulation for compensation. But where the survivor fs under no obligation to continue the business, but does so at his own peril, if the representatives of the deceased partner elect to share in the profits, a reasonable allowance may be deducted as a compensation to the survivor for his services.
In the present case, it -is claimed that no profits resulted from the continuation of the business.
This depends upon the sense in which the term profit is to be understood as applied to a case like the present. If it is to be understood as comprehending the beneficial And valuable results which would not otherwise have been realized, the continuing of the business resulted in profits to all concerned.
The report of the referee shows that the good-will was •of greater value than all the other assets; and that the slippage of the business, owing to its peculiar nature, would have destroyed substantially the value of the good-will.
The defendants, by' continuing the business after the dissolution of the firm by the death of Starbuek, preserved the good-will, and enabled the entire establishment, when the opportunity offered, to be sold as a going concern, greatly to the advantage of all parties.
The valuable results thus obtained from the continuation of the business, and which would have been lost if the business had not been continued, if not strictly profits, are in the nature of profits. And the same principle which Allows a deduction from profits by way of compensation, will, in a case like the present, authorize a like deduction from the amount realized from the good-will.
Leave refused.
McIlvaine, C. J., Welch, Rex, and Gilmore, JJ., concurred.