Court Opinion

ID: 3425583
Source: CourtListenerOpinion
Date Created: 2016-07-05 19:53:33.125079+00
Date Added: 2024-06-11T13:55:02.732642
License: Public Domain

DISSENTING OPINION
The appellant's decedent, Harry R. Moorman, and his two brothers were operating a milling business as partners, each with an equal share in the partnership. In 1940 the three partners executed a contract providing for the purchase of the interest of any deceased partner by the remaining partners. As *Page 199 
a part of the contract the partnership purchased three life insurance policies each in the sum of $5,000.00 upon the life of each separate partner with the provision that upon death the amount of the policy should be paid to the named beneficiaries as part payment of the interest of the deceased partner. Item 2 provided for the termination of the interest of the deceased partner, either by written agreement between the surviving partners and the beneficiaries, or upon failure to agree, by an appraisement made within thirty (30) days from the deceased partner's death.(a) Item 3 provided that the surviving partners could purchase and become the sole owners of the partnership interest of the deceased partner by the payment in full of the amount determined by Item 2.(b) Item 7 provided that if by the fault of the surviving partners the terms of the contract were not carried out within ninety (90) days after date of death, the partnership should be dissolved *Page 200 
and the beneficiaries should retain all benefits under the policies, and that the estate of the deceased partner should receive the interest of the deceased partner in the partnership the same as if the contract had not been executed.(c)
Harry R. Moorman died testate August 31, 1946, leaving surviving him the appellant, his widow, and three children by a previous marriage. The appellant elected to take under the law. Neither of the surviving partners made or filed any inventory of the assets and property of the partnership, or caused the same to be appraised, or filed such inventory in the office of the clerk of the court, or took upon themselves a settlement of the partnership business pursuant to § 50-301 et seq., Burns' 1933.
On March 7, 1947, the appellant petitioned for the appointment of a receiver of the partnership property pursuant to §§ 50-305, 50-306 Burns' 1933. Appellees' answer alleged that the beneficiaries under the policy were the widow and two of the decedent's daughters, and that the surviving partners did meet and agree upon the purchase price and paid the appellant in full.
The evidence disclosed that the widow signed a receipt "In full settlement my share of the partnership interest of my late husband, Harry R. Moorman," showing receipt of $2,534.52 in cash, and one-third insurance *Page 201 
policy in company the sum of $1,666.67. However, the evidence disclosed the sum of $2,534.52 had been withdrawn from the partnership between July 6th and August 27th, during the last illness of the decedent, and had been used to meet the expenses of his last illness. The only thing in the nature of an inventory that had been furnished appellant was a financial statement as of January 1, 1946, which showed total assets of $37,560.76, with no liabilities. No agreement in writing was ever executed as to the value of the decedent's interest, nor was any appraisement made.
The provision of the contract for the purchase of decedent's interest had been breached by the surviving partners, and a full disclosure by them had not been made to the widow. All the withdrawals during the last illness of the decedent had been improperly charged to her interest under the contract. Under such a state of facts I am forced to the conclusion that the trial court should have appointed a receiver under the clear provisions of the statute, and that I must dissent from a holding that nullifies legislation that was enacted to provide safeguards for "any person interested in the settlement of such partnership business," when the surviving partners fail and neglect to execute the trust which the law casts upon them. The statute seems too clear for construction or avoidance. It states:
"If such surviving partner or partners shall fail to file such inventory, appraisement and list of liabilities and bond, as in this act provided, or shall fail or refuse to take upon him or themselves the settlement of the business of such firm, the judge of the court having probate jurisdiction, upon petition filed by anyone interested in the settlement of such partnership, shall appoint a receiver to settle the affairs of such partnership, who shall proceed to settle the same as though a voluntary assignment for the benefit of the creditors had been made *Page 202 
by the surviving partner or partners of such firm." § 50-305, Burns' 1933, Acts 1877, ch. 86, § 5, p. 136.
"Any person interested in the settlement of such partnership business may file a petition in the court having probate jurisdiction to have a receiver appointed to settle the same, and shall give the surviving partner or partners ten (10) days' notice of the time and place of hearing such petition; and, if, upon the hearing thereof, the judge of such court shall be convinced that such partnership business is not being properly settled, or that the assets of such firm are being wasted, he shall appoint a receiver to settle the same, as heretofore provided in this act." § 50-306, Burns' 1933, Acts 1877, ch. 86, § 6, p. 136.
The surviving partners had breached the provisions of the contract for the purchase of the deceased partner's interest. The widow had been overreached and misinformed concerning the financial condition of the partnership. In her ignorance of the partnership affairs, she had signed a receipt charging herself alone with the receipt of funds which should have been charged against the interest of the deceased partner at the time of his death, and so augmented the shares to be received by the two children. Item 7 of the contract then should have applied.
A statutory receiver should have settled and administered the partnership affairs. He is in effect an administrator although called a receiver. There is nothing in the case of Feucht v.Corbett, Admr. (1938), 214 Ind. 103, 12 N.E.2d 957, which leads to a different result. The language of the court inYanakeff v. George (1935), 207 Ind. 703, 705, 194 N.E. 329, "that a receiver need not be appointed where there are no assets to be administered, or in any other case where no good would be accomplished by the appointment," must be construed in the light of the facts in that case. Of course if there is no property there is no estate to administer, *Page 203 
and the appointment of a receiver would be a futile act not contemplated by the statute. As to what good would be accomplished by the appointment of a receiver is not a question of policy to be determined by this court in violation of the declared policy of the legislature. In Yanakeff v. George,supra, the surviving partner, after the filing of the petition for a receiver and before the hearing date thereon, substantially complied with the statute by filing an inventory, list of liabilities and bond, and also a final report. The surviving partners in the present appeal have continued to ignore the requirements of the statute. There may be inconvenience to the surviving partners if the estate be administered by a receiver, but it is no more inconvenience than that suffered by the heirs when their decedent leaves a going business which may be operated by an administrator. We should not permit a "hard case to make bad law." The appellant followed the statute and should be entitled to its protection as well as the rights conferred by it.
Although the rule on amendments has been very liberal in this state, I do not see how in this case a petition for the appointment of a statutory receiver can be amended to make it a civil suit between the surviving widow and the surviving partners for an accounting and a money judgment against them for the amount found yet due her for her interest in her husband's share in the partnership. When a complaining party institutes a proceeding based solely upon a statute, which is not intended to be ancillary to other relief in a main cause, he should not be permitted to amend a statutory cause of action to a new cause of action based either upon the common law or an entirely new statutory cause of action. If a creditor should file an application for the appointment of an administrator for *Page 204 
a decedent's estate, he should not be permitted to amend that application into a complaint on contract for recovery against the heirs who may have contracted to settle the estate without an administration. Nor should a petition for adoption be amended into a petition for the appointment of a guardian. No rule permitting amendments should permit the notice afforded by process to become meaningless, which will be the result under the authority of the majority opinion.
For these reasons the order denying the appointment of a receiver should have been reversed.
Gilkison, J., concurs in this opinion.
Note. — Reported in 79 N.E.2d 397.
(a) "2. Upon the death of any one partner, the surviving partners and the beneficiary as named in the said insurance policies shall meet and agree in writing as to the value of the deceased partner's interest in the said business (due consideration being made for the cash value of all policies). It is further provided that in the event the said parties can not agree or any one of them shall refuse, neglect or fail to meet then two reputable disinterested appraisers shall be appointed by the said parties or by any two of them and the said appraisers shall within fifteen (15) days after their appointment determine and report the true value of the deceased partner's interest as of the date of his death. This said valuation or appointment of appraisers is to be made within thirty (30) days from the date of deceased partner's death."
(b) "3. At the death of either partner, the surviving partners may purchase and become the sole owners of the partnership business and all the assets employed therein, both real and personal, tangible and intangible, upon payment of the deceased partner's beneficiary as named in the said insurance policies, or if none be so named then upon payment to the deceased's administrator or executor of the sum provided for in item two (2)."
(c) "7. In the event any of the foregoing terms and conditions are not carried out through the fault of the surviving partners within ninety (90) days after the date of death, the beneficiary named in any of the aforesaid mentioned insurance policies, shall retain all the benefits thereunder, the partnership be dissolved and the executor or administrator of the deceased shall receive the share to which he would have been entitled had this agreement not been executed. The interest of any partner as hereinabove set out shall be conclusive as to the value of his partnership share in the business and the amounts which are to be paid as herein provided shall be in full and complete satisfaction for the deceased's interest in the said business."