DocketNumber: No. 138
Citation Numbers: 72 Pa. 142
Judges: Agnew, New, Read, Shabswood, Thompson, Williams
Filed Date: 11/22/1872
Status: Precedential
Modified Date: 2/17/2022
The opinion of the court was delivered, by
— By the article of copartnership of January 2d 1860, between James Marshall and Robert P. Clarke, Marshall contributed to the capital of the company certain real estate at an estimated valuation, inventoried and carried into the stock account. Thenceforth this property became in equity partnership property, the legal title remaining in Marshall. But on dissolution Marshall reserved the right not to be bound by the estimated value, and to withdraw the property. Evidently the right to withdraw was the contract provision for correcting the estimated valuation. But when the foundry buildings were destroyed by an accident, and rebuilt by mutual consent with partnership funds, how did the case stand ? The part destroyed was gone and incapable of withdrawal. The loss necessarily fell upon the partnership, for the property was then partnership property and a part of the capital; Marshall had been credited with its value in the stock account. When dissolution came he could not withdraw the burnt part which was destroyed and gone, while the buildings which filled its place were the product of the investment of partnership funds with Marshall’s consent, and were of a different value. This portion was no longer the same put in by Marshall, and its withdrawal could not correct the estimated value, for the rebuilt portion had no inventoried valuation. Even the money invested did not represent the enhanced value at the time of dissolution. The lots had no designated value apart from the destroyed buildings, the contract provided for no such contingency, and afforded no means of making a relative valuation of the lots and new buildings. If, therefore, on dissolution Marshall took the foundry property he would withdraw what he did not put in, without a contract mode of determining the relative values of the lots and the new buildings. The design of the reservation clause was to enable Marshall to correct the original valuation. But such a withdrawal could not correct the value of
Decree of the court below reversed, and the record remitted with a direction to refer the account to the same or another master for a restatement according to the principles contained in the foregoing opinion, and the costs of the appeal to abide the final order of the court.