Court Opinion

ID: 6582631
Source: CourtListenerOpinion
Date Created: 2022-07-20 19:39:31.096267+00
Date Added: 2024-06-11T15:57:20.429043
License: Public Domain

Pardee, J., (dissenting.)
Frederick Hall devised to his widow the use of one third of his real estate for life; the remainder over, together with the two other thirds, to his daughter absolutely. He bequeathed to his widow one third of his personal estate absolutely; to his daughter two thirds absolutely. The real estate was a stone quarry; the portion of the personal estate with which we are concerned consisted of carts, teams and tools necessary for the working of the quarry.
This property, real and personal, was by contract subject to the control of a majority of the partners associated with *142himself in the quarrying business. It is not necessary to consider any questions as to the right either of the widow or of the daughter to withdraw her share of the estate from such partnership and management and have her own in severalty and under her sole individual control, for this reason, that each waived all possible rights of this nature, and during a quarter of a century subjected her estate to the hazards of a continuing partnership; and, being of legal capacity, repeatedly ratified and confirmed all acts of the managers.
Neither it is necessary to determine the precise measure of the right of the widow, under her devise, to exhaust the quarry by her life use; or of the daughter to compel the purchase, from profits, of new quarry land in order to continue the business; or of the right of the widow to any portion of the profit from quarrying in land bought subsequently to the testator’s death, for this reason, that the widow and the daughter agreed each with the other to permit the estate which they represented to remain a member of the partnership ; that the managers might replace worn out teams, carts and tools, and make purchases of quarry land necessary to the continuance of the business, from the profits, at their discretion; and that they might mingle indistinguishably profits from working newly purchased land, with profits from working lands held at the death of the testator; that the widow might receive some portion of the profits from newly opened quarries, and the daughter some portion of the profits from working the portion of the quarry subjected to the life use of the widow; and during a quarter of a century each received without objection and in accordance with this agreement her proportion of the profits from all quarries; and, being of legal capacity, each ratified and confirmed her contract with the other.
It seems to me. to follow from this that when the business ceased to be managed as a partnership, and began to be managed as that of a corporation, the widow owned absolutely one twenty-fourth of the personal property of the partnership, and the right to use for life one twenty-fourth of the realty; this, by the agreement between herself and *143the daughter. It is found also that each agreed with the other that the same measure of ownership in each in the partnership should continue in the corporation; that is, between themselves neither should gain nor lose by the substitution of corporate for partnership form; that the shares of stock representing the estate of Frederick Hall should be so divided between .them as to preserve to each of them precisely the same right in character and quantity which each had in the partnership.
Therefore the widow is entitled to such shares absolutely as will represent one twenty-fourth part of the personal property, carried from the partnership into the corporation. But the value of this personal property is unknown; the proportion of personal to real in the capital of the corporation is unknown; and in the absence of this knowledge it is impossible to assign a given number of shares to the widow as measuring her absolute ownership of personalty, without risk of doing injustice either to her or to the daughter.
The widow and daughter agreed, each with the other, that the capital stock of the corporation should be divided into thirty-two hundred shares, and that four hundred shares should represent the estate of Frederick Hall.
This, as between that estate on one side, and all of the other shareholders on the other. As between themselves only, they agreed that the four hundred shares should be so allotted as that the kind and proportion of property which each had in the partnership should be continued to her in kind and proportion in the corporation. As between the estate of Frederick Hall on one side, and the other stockholders on the other, it was not a matter of the least importance to know the value of the entire property or of either kind of property. The capital might as well have been a million as less; each owned one eighth of it; each would have one eighth of the shares, whatever the number.
The agreement between the widow and daughter that four hundred shares should represent their aggregate ownership was not intended to, and in no wise does, affect their *144agreement to preserve to and for each her proper portion of the fonr hundred in kind and quantity.
For this last special division it remains necessary to know the value of the realty which went into' the corporation; the value of the personalty and the difference, if there be any, between the real values and the amount assumed as the capital. Then the actual value of the personal and of the real property going into each of the four hundred shares, will be known; and to each of the contestants, upon computation, can be assigned the proportion of the four hundred, which will accurately measure her kind and proportion of ownership.