King v. Stoddard

Opinion

BROWN (H. C.), J.

This is an appeal from a judgment in the sum of $12,370 rendered in favor of respondents, Harley King and Stanford White, for accounting services performed for the Walnut Kernel, a newspaper. The action was brought against the executors of two deceased partners who owned the newspaper.

The question presented on this appeal is whether the continuation of the newspaper after the death of the partners was an act of winding up the partnership under Corporations Code section 15035 so as to render the estate of the partners liable for an accountant’s bill incurred subsequent to the death of the partners.

[710]

The facts: Prior to 1962, the newspaper, Walnut Kernel, was operated as a general partnership in which Lyman E. Stoddard, Sr., and Alda S. Stoddard owned a 51 percent interest as community property, and their son, Lyman E. Stoddard, Jr., owned 49 percent. On January 3, 1963, Alda S. Stoddard died and her daughter, Nancy Cans, was appointed executrix. After the death of Alda S. Stoddard, no formal winding up of the partnership took place. On February 13, 1964, Lyman E. Stoddard, Sr., died, and his son, John L. Stoddard, was appointed executor.

The operation of the business continued after the death of Lyman E. Stoddard, Sr.; Lyman E. Stoddard, Jr., operated it as the sole surviving partner. John L. Stoddard, who was then acting on behalf of both estates, considered his duty was to obtain the winding up of partnership affairs as quickly as possible. He was not satisfied with the continuation of the business and when his brother, Lyman, Jr., did not wind up the business, John made some unsuccessful attempts to sell it himself. In 1965 he brought an action against his brother, Lyman, Jr., to force an accounting and liquidation of the assets of the partnership. The case was dismissed before trial upon agreement of the parties which became effective September 6, 1966. In the written agreement, the parties settled their accounts with each other. Lyman E. Stoddard, Jr., agreed to be responsible for all debts arising out of the business since February 13, 1964. The agreement was approved by the probate court. The business was in a weak financial 'condition after Lyman E. Stoddard, Sr.’s, death and was eventually discontinued.