Appeal from the Circuit Court of Ford County; the Hon. Charles
E. Glennon, Judge, presiding.
JUSTICE TRAPP DELIVERED THE OPINION OF THE COURT:
Rehearing denied January 7, 1985.
Defendants, Lois and Steven Johnson, appeal from an order granting in part a petition filed by George Bauer and Wendell Johnson, executors of Edmund Johnson's estate, and a motion for summary judgment filed individually by Wendell Johnson. At issue is the construction of a partnership agreement. Wendell Johnson cross-appeals, alleging the trial court erred in refusing to strike an untimely filed jury demand.
In 1942, Edmund Johnson and his brother, Wendell, became partners in a business known as Johnson & Johnson, which previously had been operated by their uncle. The partnership handled insurance, real estate, and a loan business. In 1943, the brothers reduced their partnership agreement to writing. Article XII of the agreement originally stated:
"In event of the death of either of said partners, the interest of the deceased partner shall immediately become the property of the surviving partner, and the surviving partner shall have the right to continue to operate the business under the partnership name, and shall, upon the death of said partner, become liable and indebted to the estate of the deceased partner for the sum of Five Hundred Dollars ($500.00), which shall be in full satisfaction of the interest of the deceased partner in the partnership business, property, assets, and in full of all demands from the estate, the executor, administrator, heirs, devisees or legatees of said deceased partner for the interest of such deceased partner, and shall cover all credits and property of every kind and character the deceased partner may have in the partnership business; in other words, the right of those claiming by or under the deceased partner to have and recover from the surviving partner in the sum of Five Hundred Dollars ($500.00)."
On September 11, 1953, the brothers amended article XII by substituting $5,000 for the $500 sum.
On July 23, 1965, the brothers again amended article XII to read as follows:
"Upon the death of either partner, all interest of the deceased partner shall immediately be and become property of the surviving partner, and the surviving partner shall have the right to continue to operate the business as a sole proprietorship under the partnership name. In lieu of said partnership interest, the surviving partner shall be and he is hereby obligated to pay to the estate of the deceased partner the sum of $7,500.00 plus the amount, if any, payable to the deceased Partner, as shown by all ledger sheets for accounts of said deceased Partner with the partnership. Said payment shall be in full satisfaction for the interest of the deceased partner in the partnership business, property, and assets, and in full of all demands by the estate of said deceased partner, his executors, administrators, heirs, devisees, legatees, successors, or assigns.
It is agreed that payment of said sum shall be an accounting in full to the executor or administrator of the estate of the deceased partner, for all interest of said deceased partner, and the surviving partner shall be relieved of any obligation for filing an inventory of the assets of the partnership in the Probate Court in which Letters are issued on the estate of the deceased partner."
In the final amendment of article XII, on June 24, 1971, the brothers substituted $10,000 for the $7,500 sum.
Besides the partnership business, both brothers maintained individual business interests. Edmund had a separate life insurance, appraisal, and income tax business. While he reported income from this business on his individual tax returns rather than partnership returns, records for the separate business were kept on the partnership ledgers. Wendell had comparable accounts kept on the partnership ledgers.
Edmund died on May 6, 1980, and was survived by his wife, Lois, and son, Steven. In accordance with his will, George Bauer and Wendell became the executors of Edmund's estate. Wendell paid the estate $10,000 plus an additional $20,963.60 for Edmund's individual business and partnership interests.
On March 26, 1981, Lois filed a petition asking for proof of Wendell's right to purchase Edmund's partnership interest for $10,000. On April 27, 1981, Lois amended her petition and requested a jury trial. The executors filed a petition requesting the court to approve and confirm Wendell's payment as full and complete payment in compliance with article XII. Wendell later moved for a summary judgment on the same ground. At a hearing on June 16, 1983, Wendell moved to strike the jury demand as untimely filed. The court denied this motion.
On June 28, 1983, the trial court granted in part and denied in part both the executors' petition and Wendell's motion for summary judgment. The court approved and confirmed the payment of $10,000 by Wendell as full satisfaction of any obligation he had under article XII to purchase Edmund's partnership interest. The court reserved ruling on whether the $20,963.60 represented full satisfaction of Edmund's nonpartnership business interests handled on the partnership books. The court further ...