Court Opinion

ID: 3425582
Source: CourtListenerOpinion
Date Created: 2016-07-05 19:53:33.12035+00
Date Added: 2024-06-11T13:43:06.762433
License: Public Domain

The appellant commenced an action in the Ripley Circuit Court to secure the appointment of a receiver of the partnership in which her deceased husband was the owner of a one-third interest.
It was asserted in the complaint that the appointment of a receiver to take over and settle partnership affairs was mandatory because the surviving partners had failed to comply with the statute relating to the duties of a surviving partner. § 50-301 et seq., Burns' 1933. The appellees countered with a claim that the partners had entered into an agreement which provided a method of settlement of the interest of the deceased partner and that pursuant to that agreement the appellant and other heirs had been paid in full for their interest in the partnership. The appellant admits that where there is a contract which gives the surviving partners the right to acquire the interest of the deceased partner, settlement under the partnership act may not be required. However, she asserts that if the survivors fail to comply with the terms of the contract, a receiver is mandatory.
This court has construed the act (§ 50-301 et seq., Burns' 1933) under consideration and has concluded that the nature and extent of the rights of a surviving partner which 1, 2.  existed prior to the adoption of the statute are not changed by it, and that failure to file an inventory does not cause a forefeiture. Feucht v. Corbett, Admr.
(1938), 214 Ind. 103, 12 N.E.2d 957. It has also been held that some discretion is vested in the probate court so that a receiver *Page 195 
need not be appointed where there are no assets to be administered or where no good would or could be accomplished by the appointment of the receiver. Yanakeff v. George (1935),207 Ind. 703, 194 N.E. 329.
There is no showing that there was any need to conserve the partnership property. Under the partnership contract, provision for the sale of the interest of the deceased partner to the 3.  surviving partners was made, and the method of ascertaining the value of his interest was fixed. Insurance in the sum of $5,000 was carried on each partner to provide for part payment. If the widow did not receive payment in full for her interest, it was because there was a failure to follow the terms of the written contract. The parties entered into the contract to avoid the liquidation of the partnership and the contract was tied in with the insurance policy on each member of the firm. The contract provided for the designation of the persons to be benefited at the death of a member, and the appellant and two daughters of the decedent were the persons named by the decedent under the terms of the contract. The surviving partners did not ignore the contract, in fact they paid the appellant in excess of $1,600, and they paid the two daughters more than $8,000. The appellees did show a valuation for the partnership and on that value they did pay out the amount due the named beneficiaries of the decedent. It is true they did not take into consideration the cash value of the insurance policies as provided in the contract nor did they correctly apportion the advancement made during the lifetime of the decedent, but they were undoubtedly acting in good faith in their efforts to carry out that contract, although they did not pay to the appellant all sums that were due to her. The facts placed before the court were such that it called for the *Page 196 
exercise of the discretion of that court in determining whether or not a receiver should be appointed. The trial court must have been of the opinion that no good would be accomplished by such appointment and we do not think that the facts, which are presented, show an abuse of the court's discretion.
The appellees claimed payment in full of the interest of the appellant, but it does not seem that the appellees ever made a full disclosure to the appellant or any heir of the amount and value of the partnership property at the time of the death of the deceased member. A surviving partner does not deal at arms length with the heirs of the deceased one. As to such persons he must make an open and full disclosure because the heirs are at a big disadvantage in dealing with the surviving partners. They do not know the extent of the property owned by the partnership, nor are they always informed as to the amount of business done or the value of the partnership. 47 C.J., Partnership, § 638, p. 1059.
In the instant case there was a contract which provided for the sale of the interest of the decedent at a value to be determined by the formula contained in said contract. The formula 4, 5.  was not followed and the appellees seemed to believe a statement by them showing the value of the partnership as of the first day of that year was sufficient. The contract provided for a meeting of the parties, but there was no meeting. If the appellees feel that a meeting was waived by the appellant, then it is incumbent on them to show that she had been fully informed as to the nature and extent of her interest and that such waiver was then freely made. A surviving partner is under obligation to make a full disclosure of the nature and extent of partnership property, when he is involved in *Page 197 
winding up its affairs, or in disposing of the interest of a deceased partner. Valentine v. Wysor (1889), 123 Ind. 47, 23 N.E. 1076; The State v. Matthews (1891), 129 Ind. 281, 28 N.E. 703; Gerdenich, Admx. v. Goss (1945), 115 Ind. App. 538,60 N.E.2d 603. See Malden Trust Co. v. Brooks (1931),276 Mass. 464, 177 N.E. 629, 80 A.L.R. 1028; Malden Trust Co. v.Brooks (1935), 291 Mass. 273, 197 N.E. 100.
The evidence showed that the deceased partner spent considerable time in a hospital before his death, and that the appellees, who were his brothers, advanced $2,534.52, to be used in his illness. It was shown that the money was deposited in a bank in the name of the appellant, but it was also understood that it was from her husband's interest in the partnership. Although the appellant spent such money for the hospitalization and care of the decedent prior to his death, the appellees charged that advancement in full against the share of the appellant and secured a receipt from her.
The payment of the money to the account of the appellant reduced the decedent's share in the partnership and affected all his heirs equally. The value of the partnership at the time 6.  of the death of the decedent should be ascertained under the direction of the lower court, and it should not be too difficult to determine the interest which the appellant has in that amount. She is chargeable only with the one-third of the amount advanced to take care of her husband and each of the two daughters should be charged with the one-third thereof, and in the determination of the value of the partnership, the cash value of insurance policies should be considered as provided in the contract.
The statute provides that the request for the appointment of a receiver, under the act involved in this case, *Page 198 
shall be presented to the probate court. The court, having 7.  once acted on a petition of this kind, would be expected and empowered to give complete relief to the parties. Having failed to agree with the complaining party that one phase of the relief which was sought was necessary, we do not think that the court thereby lost the power to grant the amount and kind of relief that was needed and necessary. The parties to this action treated it as if it were on the civil side of the court, and since the same court performs all functions on both the probate and civil sides, we believe that the matter should be settled in this action by reforming the issues and omitting the request for a receiver.
It seems that two questions were presented below. One involved the request for the appointment of a receiver. On that matter the lower court is affirmed. The other question was whether or not the appellant had received payment in full of her share of the decedent's interest in the partnership. On that contention we reverse the lower court and order that the costs of this appeal be assessed to the appellees. Either party may amend or reframe its pleadings so as to clearly portray the issues involved.
Emmert, C.J., dissenting with opinion.
NOTE. — Reported in 79 N.E.2d 112.