Opinion
No. 167770.
1948-04-27
In re SQUERI'S ESTATE.
R. Edward Tepe, of Cincinnati, for surviving partners of Fred Squeri, deceased. Ginocchio & Ginocchio, of Cincinnati, for Robert A. Ryan and Charles B. Ginocchio, executors.
Application of Andrew Trautmann and others, as the surviving partners of the firm of Trautmann & Squeri, for an order upon their prayer that the interest of deceased partner, Fred Squeri, be settled and disposed of as provided by certain articles of partnership, and an application by Robert A. Ryan and another, executors under the will of Fred Squeri, deceased, for an order appointing appraisers to make an inventory and appraisement of the assets of the partnership.-[Editorial Statement.]
Application of executors of the will denied. Judgment in accordance with opinion.R. Edward Tepe, of Cincinnati, for surviving partners of Fred Squeri, deceased. Ginocchio & Ginocchio, of Cincinnati, for Robert A. Ryan and Charles B. Ginocchio, executors.
DAVIES, Judge.
This matter came before the Court upon the application of Andrew Trautmann, Delbert Trautmann, Charles A. Trautmann, Robert W. Trautmann and Alvin W. Trautmann, as surviving partners of the firm of Trautmann and Squeri, for an order upon their prayer that the interest of the deceased partner, Fred Squeri, be settled and disposed of as provided by certain articles of partnership, and upon an application of Robert A. Ryan and Charles B. Ginocchio, executors under the Will of Fred Squeri, deceased, praying that the Court appoint three judicious disinterested appraisers to make out, under oath, an inventory and appraisementof the assets of the partnership.
The undisputed facts in the case are as follows: the five Trautmanns and Fred Squeri, prior to September 6, 1947, when Fred Squeri died testate, operated a partnership under the firm name of Trautmann and Squeri. The articles of partnership provided, among other things, as follows:
‘At the time of the dissolution of this partnership, or any termination thereof, the parties each to the other, or in the event of death (subject to the provisions of Article XVI hereof,), bankruptcy, insolvency or disability of either of said partners, the survivor or survivors shall make and render to the Executor, Administrator, Trustee, assignee or guardian of the other or others, a true, just and final account of all partnership transactions and adjust and fully settle all matters relating thereto.
‘After payment of all debts and obligations of said partnership including proprietary credit balances which may be due any partner or partners, all property and assets of the firm shall be appraised at the true value thereof, as shown by the balance sheet of the end of the month next preceding the date of dissolution. All remaining property and assets of said firm shall be divided between the partners in proportions equal to each partner's interest or ownership in the partnership, as set forth in Article V hereof. Each partner for himself and his personal representatives hereby agrees to execute all necessary instruments to invest the other partners with the sole right to the property apportioned to such other partners, and thereafter none of said partners shall interfere with the same, nor release any accounts, claim accounts or debtor property apportioned to the other partners.
‘All contracts and obligations then outstanding and unperformed shall be fully completed and performed in the name and for the advantage and profit and at the expense of the partnership, and profits made or losses sustained thereby shall be divided in proportion to their respective interests.
‘Provided, however, that on dissolution of said partnership, any partner or partners may make a written offer to the other partner or partners of the sum or price in cash for which he or they will purchase the interest of such other partner or partners, or for which he or they will sell his or their own interest therein to such other partner or partners; and the partner or partners receiving such offer shall, within thirty (30) days thereafter make his or their election, in writing, either to sell or to purchase for said sum or price; if he or they fail or fails so to do within said time, the partner or partners who have made such an offer is or are hereby given the right and option within thirty (30) days after the expiration of said time, at his or their own election, to purchase the interest of such other partner or partners, or to sell his or their own interest to such other partner or partners for the sum or price so offered.
‘If any of said partners shall be unable to agree upon the sum or price to be paid for such interest, then the question of the value of such interest shall be determined by the actual book value of such interest, and such book value shall be final and conclusive between the parties.
‘Article XVI.
‘The death of any partner or partners shall not operate to dissolve said partnership, but said business shall be continued by the surviving partners under the terms and provisions of this agreement insofar as the same are applicable.
‘The surviving partner or partners shall have the option to purchase within six (6) months from the date of death of a deceased partner, said deceased partner's interest in said business at the book value thereof as of the date of death of said deceased partner.
‘Such surviving partner or partners shall have the option to purchase said deceased partner's share, as herein provided, in equal proportions.’
On September 23, 1947, the last Will and Testament of Fred Squeri was admitted to probate and record by the Probate Court of Hamilton County, Ohio, and Robert A. Ryan and Charles B. Ginocchio were appointed co-executors according to the provisions of said Will.
As stated above, a controversy has now arisen between the surviving partners and the executors of the estate of the deceased partner, Fred Squeri, concerning the manner of disposing of the interest of the deceased partner, the executors claiming that it is necessary to follow the provisions of the law of Ohio pertaining to the administration of assets upon the death of a partner, and the surviving partners claiming that, because of the above mentioned partnership agreement, it is unnecessary, under the law, to follow those provisions.
General Code, Section 8085, provides that when a member of any partnership in this state dies, the surviving partner or partners, upon the appointment of an executor or administrator of the estate of such deceased partner, shall, forthwith, make application to the Probate Court of the county in which the partnership existed, upon first giving notice of the time of the hearing of such application to the executor or administrator, for the appointment of three judicious disinterested appraisers, who shall make out, under oath, a full and complete inventory and appraisement of the entire assets of the partnership.
General Code, Section 8089, provides that the surviving partner or partners may, be following the provisions of the law, take the interest of such deceased partner in the partnership assets, at the appraised value thereof, first deducting therefrom the debts and liabilities of the partnership.
The law further provides, General Code, Section 8091, that, in the event that the surviving partner or partners refuse or neglect to take the interest of the deceased partner in the partnership assets, a receiver for the partnership shall be appointed by the court who must proceed to wind up and dispose of the assets.
General Code, Section 8092, provides
‘When the original articles of a partnership in force at the death of a partner, or the will of a deceased partner dispenses with an inventory and appraisement of the partnership assets, and with a sale of the deceased partner's interest therein, and such article or will provides for a different mode for the settlement of such interest, and for a disposition thereof different from that provided for herein, such interest shall be settled and disposed of in accordance with the provisions of such articles or will.’
A reading of the partnership agreement, set forth above, shows clearly that it was the intention of all parties to that agreement, including the deceased partner, Fred Squeri, that, upon the death of any partner or partners, the partnership was not to be dissolved, and that it would not be necessary, upon the death of any partner of partners, to have application made to the Probate Court for the appointment of appraisers to make out an inventory and appraisement of the assets of the partnership, to have said inventory filed in court, and give to a surviving partner or partners the right to purchase the partnership property at its appraised value. When the partners agreed that ‘The death of any partner or partners shall not operate to dissolve said partnership, but said business shall be continued by the surviving partners under the terms and provisions of this agreement insofar as the same are applicable.’ and ‘The surviving partner or partners shall have the option to purchase within six (6) months from the date of death of a deceased partner's said deceased partner's interest in said business at the book value thereof as of the date of death of said deceased partner’ and ‘Such surviving partner or partners shall have the option to purchase said deceased partner's share, as herein provided, in equal proportions' such language dispenses with an inventory and appraisement of the partnership assets and with a sale of the deceased partner's interest therein, and requires, under the provisions of General Code, Section 8099, that the interest of Fred Squeri, deceased, ‘shall be settled and disposed of in accordance with the provisions' of their articles of copartnership.
The application of Robert A. Ryan and Charles B. Ginocchio, executors of the last Will and Testament of Fred Squeri, deceased, therefore, will be denied, and it will be necessary for the surviving partners and the executors to proceed under the provisions of the written articles of partnership of Trautmann and Squeri.