Stotsenburg v. Frost

348 A.2d 418, 465 Pa. 187, 1975 Pa. LEXIS 1118
CourtSupreme Court of Pennsylvania
DecidedOctober 30, 1975
Docket138 and 169
StatusPublished
Cited by22 cases

This text of 348 A.2d 418 (Stotsenburg v. Frost) is published on Counsel Stack Legal Research, covering Supreme Court of Pennsylvania primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Stotsenburg v. Frost, 348 A.2d 418, 465 Pa. 187, 1975 Pa. LEXIS 1118 (Pa. 1975).

Opinions

OPINION OF THE COURT

O’BRIEN, Justice.

These appeals arise from a final decree in equity affirmed by the court en banc, entered on March 25, 1974. This decree determined that a partnership did exist between appellant, Richard H. Frost, and appellee, Ralph M. Stotsenburg, and further awarded $8,984.81, plus interest, to appellee as his share of the liquidated partnership.

Two separate appeals having been filed, we shall discuss them ad seriatim.

I — No. 138 March Term, 1974 — Appeal of Richard H. Frost, individually

In this appeal appellant, Richard H. Frost, first argues that the evidence was insufficient to establish a partnership between himself and appellee, Ralph M. Stotsenburg. We do not agree. A chancellor’s findings of fact, as affirmed by a court en banc, have the weight of a jury verdict and will not be disturbed on appeal if there is sufficient evidence to sustain such findings. See Boyd v. Teeple, 460 Pa. 91, 331 A.2d 433 (filed January 27, 1975).

A summary of the evidence of existence of a partnership affirmed by the chancellor and sustained by two courts en banc is as follows: Appellant and appellee were salesmen with extensive experience in the field of industrial control machinery. In March, 1964, the parties orally agreed to form a partnership to begin on June [191]*1911, 1964, whose purpose was the selling and servicing of customer accounts in the industrial control field. The terms of the agreement were that both appellant and appellee would be full-time sales representatives with equal authority as to the operation of the business and with identical compensation plans of $1,000 a month, plus fifty percent of the net profits. Appellee Stotsenburg agreed to pay appellant Frost $5,000 at the commencement of the new venture; however, appellee, being unable to meet this commitment, paid appellant two $1,000 payments, and now owes appellant $3,000, plus six percent interest. During the three and one-half years of business, both appellant and appellee contributed $1,500 each to Autotrols, Inc., when the corporate entity through which all business was conducted was in need of operating capital. In addition to equal management rights, the chancellor also found both parties had equal shares of the profit and loss, the equal right to act for the business and that each party had made contributions of either capital or services to the business. Our review of the record reveals sufficient facts upon which the chancellor could well have found a partnership between appellant Frost and appellee Stotsenburg. See Uniform Partnership Act, 1915 March 26, P.L. 18, Part II, § 6, 59 P.S. § 11. See also Tax Review Bd. v. Green, 409 Pa. 448, 187 A.2d 572 (1963).

Appellant next argues that the chancellor erred 1) in granting appellee Stotsenburg an accounting, 2) in appointing a certified public accountant to conduct the accounting, and 3) in the results of the accounting.

In the instant case, appellee Stotsenburg filed an equity action seeking a declaration of partnership and an accounting for his share of that partnership. The chancellor found that a partnership existed and subsequently ordered an accounting to determine the respective shares of the parties.

[192]*192Section 43 of the Uniform Partnership Act, supra, 59 P.S. § 105, provides:

“The right to an account of his interest shall accrue to any partner, or his legal representative, as against the winding up partners or the surviving partners or the person or partnership continuing the business, at the date of dissolution, in the absence of any agreement to the contrary.”

The above section gives a clear right to an accounting upon the dissolution of a partnership. In addition, the Pennsylvania Rules of Civil Procedure also provide authority to the chancellor to order an accounting. See Pennsylvania Rules of Civil Procedure 1515 and 1530(a). Absent an abuse of discretion in the employment of an accountant, this court should not interfere with the determinations of the court as to whatever aids it deems necessary to reach a just result. Our review of the record reveals no such abuse.

Appellant next argues that the results of the accounting are erroneous. Our review of the accounting reveals minuscule errors that render appellant’s objections “de minimus” and, therefore, the alleged errors, in our opinion, are harmless.

Appellant Frost argues that the chancellor erred in assessing interest on appellee’s partnership share from the date of termination of the partnership, rather than from the date of the final decree. We agree. The chancellor in the instant case determined that appellee Stotsenburg was a partner and that his share of the business was $8,984.81 as of December 31, 1967, plus interest from that date. The final decree in this matter was entered March 24, 1974.

[193]*193In Greenan v. Ernst, 408 Pa. 495, 512, 184 A.2d 570, 579 (1962), this court, in discussing the allowance of interest in cases of the dissolution of partnerships stated:

“In partnership accounting the allowance of interest is not a matter of right but a matter of discretion and '. . . the general rule appears to be that in the absence of an agreement to the contrary, interest is not to be allowed on partnership accounts until after a balance is struck, but may be charged if under the circumstances of the particular case the equities so require’ : 40 Am.Jur. § 353, p. 378. In Gyger’s Appeal, 62 Pa. 73, 79, Mr. Justice Sharswood, speaking for this Court, characterized as ‘the safest principle to adopt in view of the confidential relation of the parties, and the variety and complication of such accounts’ the rule that ‘the allowance or refusal of interest depends upon the circumstances of each particular case.’ See also: Rehill v. McTague, 114 Pa. 82, 7 A. 224. In Goodwill v. Heim, 212 Pa. 595, 597, 62 A. 24, this Court said:
‘. . . The general rule is that interest will not be allowed on partnership accounts until there has been a settlement of the same. It is true this court has frequently said that the allowance or refusal of interest in the settlement of partnership accounts depends upon the circumstances of each particular case: Gyger’s Appeal, 62 Pa. 73; Grubb’s Appeal, 66 Pa. 117; Jones v. Farquhar, 186 Pa. 386, 40 A. 1134; Brenner v. Carter, 203 Pa. 75; Kelley v. Shay, 206 Pa. 215, 55 A. 927.
Interest should not be allowed on partnership accounts before there has been an accounting or settlement of the same unless under the peculiar facts and circumstances surrounding the case the equities demand that interest be charged. . . .” (Emphasis in original.)

The chancellor and the court en banc reveal no peculiar facts which would compel departure from the above-[194]*194cited general rule. Therefore, the decree is modified so that the date that interest is chargeable is the date of the final decree granting dissolution of the partnership and not the termination of the partnership arrangement by the parties.

Appellant’s next argument is that he should not bear the cost of the prior interlocutory appeal which was quashed by this court.

Free access — add to your briefcase to read the full text and ask questions with AI

Related

Com. v. Millan, M.
Superior Court of Pennsylvania, 2019
Elmakias, D. v. Solomon, A.
Superior Court of Pennsylvania, 2018
Luckring, P. v. Blair, C.
Superior Court of Pennsylvania, 2015
In re C.S.M.F.
89 A.3d 670 (Superior Court of Pennsylvania, 2014)
Bronson v. KERESTES
40 A.3d 1253 (Superior Court of Pennsylvania, 2012)
Sahutsky v. H.H. Knoebel Sons
782 A.2d 996 (Supreme Court of Pennsylvania, 2001)
Jackson v. Hendrick
710 A.2d 102 (Commonwealth Court of Pennsylvania, 1998)
Mansfield Hospitality Ltd. Partnership v. Board of Assessment Appeals
680 A.2d 916 (Commonwealth Court of Pennsylvania, 1996)
Guntle v. Barnett
871 P.2d 627 (Court of Appeals of Washington, 1994)
Dasher v. Dasher
542 A.2d 164 (Superior Court of Pennsylvania, 1988)
Shaffer v. Pennsylvania Assigned Claims Plan Insurance Co. of North America
518 A.2d 1213 (Superior Court of Pennsylvania, 1986)
Shaffer v. PA. ASSIGNED CLAIMS PLAN INS. CO.
518 A.2d 1213 (Supreme Court of Pennsylvania, 1986)
United States National Bank v. Johnson
487 A.2d 809 (Supreme Court of Pennsylvania, 1985)
Hallstrom Development Co. v. Lee
450 A.2d 655 (Superior Court of Pennsylvania, 1982)
Petition of Christjohn
428 A.2d 597 (Superior Court of Pennsylvania, 1981)
Gold & Co. v. Northeast Theater Corp.
421 A.2d 1151 (Superior Court of Pennsylvania, 1980)
Pine Township Citizens' Ass'n v. Pine Township Board of Supervisors
367 A.2d 740 (Commonwealth Court of Pennsylvania, 1976)
Stotsenburg v. Frost
348 A.2d 418 (Supreme Court of Pennsylvania, 1975)

Cite This Page — Counsel Stack

Bluebook (online)
348 A.2d 418, 465 Pa. 187, 1975 Pa. LEXIS 1118, Counsel Stack Legal Research, https://law.counselstack.com/opinion/stotsenburg-v-frost-pa-1975.