Anderson v. Anderson

Henderson, J., delivered the opinion of the Court. This is an appeal from the denial of exceptions by an estranged wife to the ratification of an auditor’s account dis ⁴⁸⁶ tributing the surplus proceeds of a foreclosure sale of certain property, after the payment of the mortgage debt, expenses and claims. The property was held as tenants by the entire-ties, and the decree appointed trustees to hold the surplus net proceeds, to invest the same under order of court, to pay the income equally to the parties during their joint lives, and at the death of either, the principal to the survivor, in the absence of an agreement by the parties to the contrary, or for an earlier distribution. 'The wife appeals, contending that she is entitled to receive an immediate distribution of the sums she contributed to the acquisition of the property, on the theory of partnership. The parties were married in 1940, but she continued to work in Washington, D. C., where they resided.

He was employed by a railroad, and she was employed by the Government as a secretary and stenographer. She was, and is, a member of the Bar in the District of Columbia, and practiced to a limited extent. On July 23, 1953, they purchased at a price of $18,000.00 a property at Deale, Maryland, consisting of a lot 200 feet by 200 feet, improved by a restaurant building and an unfinished dwelling, plus stock, fixtures and equipment, and the right to use the trade name, “Uncle Jim’s Bar-B-Q”. Title was taken in their names as tenants by the entireties, and a loan of $9,000.00 was obtained from a building and loan association.

Although there is some conflict in the testimony as to the amounts contributed by each, it is clear that Mrs. Anderson contributed the major portion, if not substantially all, of the balance of the purchase price, chiefly from the proceeds of the sale of property in Georgia, which she inherited from her aunt. The parties moved to Deale and resided in the dwelling, taking all their meals in the restaurant, and continued the business until November, 1954, when she left as a result of marital disagreements. In July, 1955, a divorce proceeding was instituted but the record does not show the outcome. It is conceded, however, that there was no decree a vinculo.

It appears that she kept the books and handled the business correspondence. .There was only a cash book showing receipts and disbursements. There was no partnership or joint bank account. She also ⁴⁸⁷ helped in the restaurant on week-ends and vacations, but she kept her job in Washington. He apparently devoted all his time to the business, doing the marketing and cooking.

His sister also assisted in the work. After Mrs. Anderson left in November, 1954, he continued the business, but was unable to meet the mortgage payments. The foreclosure proceeding was begun early in 1956, and the property was sold for $14,150.00 on June 12, 1956. It is clear that there was no written agreement to support her claim of partnership.

She testified that the business was “operated as a partnership”, of which she and her husband were the partners. He denied that there was ever any agreement as to a partnership, but admitted that they agreed to divide the net profits equally. A partnership income tax return for the year 1953 was put in evidence, showing a net loss. In this return the partners’ capital accounts were shown as “Benjamin F. Anderson, $7,099.15, and Martha M. Anderson, $7,099.14”.

There was no listing of any indebtedness by the partnership to Mrs. Anderson. When questioned by the court as to the equal division of profits and the statement of capital account, she testified: “I was his wife and it never crossed my mind that I didn’t share * * * with him.” She also testified: “* * * it never occurred to me that there would ever be any dispute. * * * As to dividing property * * * we had no terms, we just had an agreement about the profits; as far as I was concerned it would be ’til the end of time.” The appellant strongly relies upon Code (1951), Art. 73A, sec. 18, which provides in part: “The rights and duties of the partners in relation to the partnership shall be determined, subject to any agreement between them, by the following rules: (a) Each partner shall be repaid his contributions, whether by way of capital or advances to the partnership property and share equally in the profits and surplus remaining after all liabilities, including those to partners, are satisfied; * * * .” It is well settled that, in Maryland at least, there may be a partnership between husband and wife. In Collier v. Collier, 182 Md. 82, 88 , it was said, however, that “The burden of ⁴⁸⁸ proof was upon the wife as plaintiff to prove that she was a partner”, and that “The main test of whether or not a partnership exists is the intention of the parties to create a partnership. * * * This intent may be manifest by the terms of their agreement, the conduct of the parties to each other under it, or by the circumstances generally surrounding the transaction.” It was held in that case that no partnership was intended, despite the fact that the wife assisted in the conduct of, the business, and that income tax returns were made in partnership form. It seems that the property was held in their joint names as tenants by the entireties, but he had contributed the funds!

In Beard v. Beard, 185 Md. 178,