Rollman v. Rollman

Bond, C. J., delivered the opinion of the Court. A surviving partner and the administratrix of a deceased partner present in this case questions of money to be paid over for the decedent’s share in the partnership business, and, principally, a question whether the proceeds of life insurance policies taken out by the partners while both lived, on the life of the decedent to the survivor as beneficiary, are to be paid in representation of the decedent’s interest. After a hearing on a bill of the administratrix in equity, for dissolution of the partnership and an accounting, an answer by the surviving partner, and testimony, the chancellor decreed that the proceeds of the policies and half of other assets should be paid over, and the defendant, the surviving partner, appeals. Frank E. Rollman, the survivor, and Robert W. Roll-man, now deceased, were brothers, dealing as equal partners in pianos and work connected with pianos, in ³⁸¹ Baltimore City.

They had no written agreement on the terms of the partnership, but there is no controversy on them. At one time, in the year 19.25, each applied for and obtained a policy of insurance on his own life for $5,000, payable on death to the other, without right to change the beneficiary during his life. Later, in 1932, upon a joint application by the two partners, these policies were replaced by policies for $2,500 each on the lives of the respective partners with the other as beneficiary, and by two more of $2,500 each made payable to the wife of each partner. Two entirely new policies for $2,500 each were taken out on application of both partners in 1927, again one on the life of each partner payable to the other.

Thus at the time of the death of Robert there were two policies for $2,500 each on his life payable to Frank as beneficiary, two for $2,500 each on the life of Frank payable to Robert, and two more for $2,500, one on the life of each partner payable to his wife. It is stipulated, or stated without contradiction, that the premiums on all the policies were paid out of joint partnership funds, and the policies payable to the partners were described on the books of the business as “partnership policies.” They were so- described by the surviving partner in his testimony. The complainant contends, first, that the agreed purpose of the latter insurance was that on the death of a partner the proceeds then payable, together with one-half of the partnership cash, should represent his interest, and by doing so dispense with any necessity for liquidating the business, and that in furtherance of this purpose the personal representative of the decedent should assign to the survivor all the decedent’s interest otherwise. An alternative contention, urged in case the agreement should not be considered proved, is that, in the ordinary division of all assets which must then be made, all the partnership policies must be included.

The agreement contended for was not in writing, and testimony was offered to establish it. An insurance agent testified that after the insurance ³⁸² had been taken out he urged upon the partners the desirability of a formal insurance trust to avoid difficulties in appraising the value of the business on the death of one partner, in ordering the disposition of surplus funds over and above the value of the business, and insuring payment of any money due to a widow from a surviving partner, in other words, urged that “the thing was incomplete, that insurance had been taken out but no real disposition had been made as to that insurance.” But while the defendant, Frank Rollman, was willing to go into the proposal, Robert, now deceased, answered on a few occasions “that he knew all about that, but that everything had been taken care of, and that he was not interested at all.” The decedent also left with one of his sons a sealed letter, dated a year before his death, and to be opened on the death, in which, after speaking of some insurance to be paid the sons, he said, “Mother is to get $5,000 from Uncle Frank for my share of the business and it is my wish that none of you contest this as she will need it.” So much is not in dispute. Three sons of the decedent testified that the uncle, the defendant, when gathering up the policies from the firm’s safe at the time of the death, said there were policies of $5,000 on both partners, and that on the death of one his widow was to receive the $5,000 plus one-half of the cash in the business, and that when on the subsequent evening the defendant was shown the letter of the decedent,