Ickes v. Gazzam

83 F.2d 603, 65 App. D.C. 346, 1936 U.S. App. LEXIS 2593
CourtCourt of Appeals for the D.C. Circuit
DecidedMarch 30, 1936
DocketNo. 6602
StatusPublished
Cited by1 cases

This text of 83 F.2d 603 (Ickes v. Gazzam) is published on Counsel Stack Legal Research, covering Court of Appeals for the D.C. Circuit primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Ickes v. Gazzam, 83 F.2d 603, 65 App. D.C. 346, 1936 U.S. App. LEXIS 2593 (D.C. Cir. 1936).

Opinion

GRONER, Associate Justice.

This is an appeal by the Secretary of Interior from a decree of the Supreme Court of the District of Columbia in a war minerals relief case filed pursuant to the Act of February 13, 1929 (45 Stat. 1166, 50 U.S.C.A. § 80 note). The order of the lower court directed the Secretary to ascertain whether the partnership (petitioners) had incurred a net loss on account of moneys paid by way of advance royalties on mining property and for interest on borrowed money and to proceed to the adjustment of the claim and to pay the award in full to W. L. Gazzam, the surviving member of the partnership.

The record discloses that the original claim was filed in the names of Seagrave & Gazzam, a partnership, residents of the state of Washington, pursuant to the provisions of the Act of March 2, 1919 (40 Stat. 1274). The record further shows that, after the trial court had handed down a memorandum opinion holding that the Secretary had erred in his disposal of the petition under the provisions of the act, Gazzam filed a motion to settle the decree. In this motion it was made to appear for the first time that Seagrave, one of the partners, had died February 5, 1929. Apparently no notice was taken of this in the proceedings below, and the decree was subsequently entered in accordance with the judge’s opinion.

On this appeal the position of the Secretary is that, while he is willing to recognize the claim of Gazzam to his pro rata share of the award, the proportion depending upon the partnership agreement between him and Seagrave, the record wholly fails to support Gazzam’s right to sue on behalf of his deceased partner Seagrave. The Secretary also contends for a reversal on various other grounds, but, in the view we take, it is unnecessary to advert to or discuss these.

The basis of the contention of the Secretary is that, under the statute law of Washington state, "the partnership terminated upon the death of Seagrave and his interest was thereupon transferred to his executor or administrator.

The position of petitioner is that the dissolution of the partnership did not destroy the firm’s identity, but that this continues until the debts are paid and the affairs wound up, and that, after the death of Seagrave, the surviving partner (petitioner) had legal power to collect the debts due the firm.

At common law the surviving partner acquired the right of possession and control of the partnership assets and was vested with legal title for the purposes: (a) To convert the same into money; (b) to sue and recover for indebtedness due the partnership; (c) to pay the debts of the partnership; and (d) to distribute the surplus between himself and the estate of the deceased partner. Tennant v. Dunlop, 97 Va. 234, 33 S.E. 620, 622. Or, as Chancellor Kent says, on the dissolution by death, the surviving partner settles the affairs of the concern, and the court of chancery will not take the- business from him and appoint a receiver, unless confidence be destroyed by his mismanagement or improper conduct. 3 Kent’s Commentaries, 63. See, also, Walker et aL v. House, 4 Md.Ch. 39.

[605]*605But it is insisted on behalf of the Secretary that, in the state of Washington, the common-law rule has been abrogated and the powers and duties of the surviving partner defined and controlled by statute. We are told that, under its provisions, the surviving member of a partnership is no longer entitled to custody and control of the partnership property, but that such property is subject alone to administration either by the executor or administrator of the deceased or by an “administrator of the partnership” appointed by the probate court. The applicable sections are 1458 and 1461 (Remington’s Revised Statutes of Washington). Read together, they direct the executor or administrator of the estate of a deceased member of the partnership to inventory the entire partnership property and to administer it, unless within a fixed time limit the surviving partner is by the probate court appointed “administrator of the partnership.” They further direct that appraisers estimate the value of the property and also the value of the deceased member’s individual interest in the partnership property.

Section 1458 provides in part:

“ * * * The whole of the partnership property shall be administered by such executor or administrator, unless the surviving partner shall within five days from the filing of the inventory, or such further time as the court may allow, apply for the administration thereof.”

The statute also requires that the surviving partner shall, if he be so appointed by the court, give such bond as the court may require in an amount not less than double the value of the partnership property, and provides further that in that case he shall be denominated the administrator of the partnership.

Section 1461 provides that, if the surviving partner is not appointed administrator of the partnership property, the administration shall devolve upon the executor or administrator of the estate of the deceased.

We take judicial notice of the statutes of the several states, and, by well-established rule, we are bound by the decisions of the highest courts of the states in the interpretation of their own statutes. We must therefore have recourse to the decisions of the state of Washington to determine the effect of the statute we have referred to.

In Hannegan v. Roth, 12 Wash. 65, 40 P. 636, at page 637, the court said:

“In this state the surviving members of a partnership are not even entitled to the custody and control of the partnership property, as such property is here subject to administration by the ‘administrator of the partnership,’ and he is entitled to the exclusive custody thereof.”

Harrington v. Herrick (C.C.A.9th) 64 F. 468, 471, was a case in the federal court. There the suit was against the surviving partner on a partnership note. Upon the death of one of the partners, the survivor had waived his right to the administration of the partnership estate, and the executors of the deceased had been appointed as administrators of the partnership ; and it was there insisted that the suit could not he maintained against the surviving partner. Circuit Judge McKenna (afterwards a Justice of the Supreme Court) said as to this;

“The Washington statute does not take away the right a surviving partner has of administering the assets of the firm, but only guards it in the interests of representatives of the deceased partners, by requiring a bond, and substitutes the supervision of the probate court for a court of equity. * * * As the statute requires a bond from the surviving partner as a condition, it follows that until he gives it he may not dispose of any part of the partnership property, nor is he entitled to its possession,” etc.

In the case of Brigham Hopkins Co. v. Gross, 20 Wash. 218, 54 P. 1127, the question was whether an action at law to recover a debt due from the partnership could be maintained against the survivors of the partnership pending the settlement of the partnership estate. In passing on that question, the Supreme Court of Washington said generally of the surviving partner’s rights:

“His rights under this act [the statute we are considering], however, are prescribed, and essentially different from what they were under the common law.

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Fisher v. Fisher
250 F. Supp. 677 (E.D. Pennsylvania, 1965)

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Bluebook (online)
83 F.2d 603, 65 App. D.C. 346, 1936 U.S. App. LEXIS 2593, Counsel Stack Legal Research, https://law.counselstack.com/opinion/ickes-v-gazzam-cadc-1936.