Green v. United States

MADDEN, Judge.

The plaintiffs Green and Schneider filed their petition on January 8, 1953, claiming that the United States owed them $53,247.82 for tuition furnished to veterans pursuant to a contract with the Veterans Administration. The plaintiffs Laura Lee Martell and Morty Martell filed their petition on June 29, 1953, claiming that they were the owners of one-half of the $53,247.82 and were entitled to recover that one-half from the United States. The Government made a motion that the two cases be consolidated for trial, and the court granted the motion.

The plaintiffs Green and Schneider filed a motion to dismiss the claims of the Martells, and for a summary judgment against them. The court dismissed that motion and referred the case to a commissioner of this court for further proceedings to determine which of the plaintiffs are the rightful owners of the alleged claim against the United States. The commissioner conducted a hearing and has made his report.

For some time prior to October 1, 1946, the Martells had owned a school called “The House of Theatre” for the teaching of drama, arts, and kindred subjects. On that date Green and Schneider paid the Martells $20,000 for a half interest in the school, and formed a partnership with them for the operation of the school for the training of veterans in the theatre arts. The school operated as intended, and by January 8, 1948, had submitted vouchers to the Veterans Administration for $53,247.82 for tuition allegedly earned. These vouchers were not paid and they were later rejected by the Comptroller General.

On November 30, 1947, the New York State Education Department terminated its approval of the school for the training of veterans. The Martells claim that the partnership was terminated as of that date, and that the partners thereupon became the individual owners of their undivided interests in the claim against the United States. The evidence shows that the partnership was not dissolved, although there was discussion of dissolution.

On January 8, 1948, the plaintiff Morty Martell assigned to his son Stanley Mandell all of his interest in the partnership. On January 9, Laura Lee Martell, Stanley Mandell, and Green and Schneider made a written agreement to “continue to engage in and conduct the business of operating” the school. The expenses of $2,106.79 for rent, salaries, telephone, etc., which had been paid by the Martells between December 12, 1947, and January 9 were credited to Laura Lee Martell and Stanley Mandell in the partnership account. The school continued to operate.

On April 26, 1948, Laura Lee Martell and Stanley Mandell sold to Green and Schneider for $20,000 all their interest in the partnership “including * * * all [their] right, title and interest •* * * in and to all moneys payable or which may become payable from the Veterans Administration or any other State agency or corporation.”

It is, of course, the contention of the Martells that the asserted oral dissolution of the partnership in November or December 1947, converted the then existing claim against the Veterans Administration into an asset of which each of the former four partners individually owned a one-fourth interest; that Morty Martell’s one-fourth interest did not pass by his assignment to his son on January 8, 1948, but remained in him, and had no relation to the allegedly new partnership which was formed on January 9; that Laura Lee Martell’s share, having become her individual property upon the alleged dissolution of the partnership, remained so and was not owned by the partnership formed on January 9; that, therefore, no part of the Veterans Administration claim was a partnership asset, or was included in the April 26, 1948, sale of the partnership assets to Green and Schneider. The Martells explain the express mention of Veterans Administration claims in the April 26 agreement of sale as being applicable to tuitions earned after January 9, the date of the formation of the allegedly new partnership.

The evidence is contradictory, but we conclude from it that the unpaid claims of the partnership against the Veterans Administration remained partnership assets, and were included in the assignment from Morty Martell to Stanley Mandell, and in the later assignment from Laura Lee Martell and Stanley Mandell to Green and Schneider.

The petition of Morty Martell and Laura Lee Martell will be dismissed.

It is so ordered.

JONES, Chief Judge, and LARA-MORE, WHITAKER and LITTLETON, Judges, concur.