Weidlich v. Weidlich
Weidlich v. Weidlich
Opinion of the Court
This action was brought to obtain judicial approval of the final account of the liquidation of the Weidlich Sterling Spoon Company, a partnership which was dissolved on January 10, 1950, by agreement of the three partners, William, Louis and Frank B. Weidlich. The agreement designated Louis as liquidating agent and authorized bim to engage the services of others, including Arthur M. Comley, an attorney, to assist in the liquidation. On May 29, 1950, William assigned his undivided part or liquidating share in the partnership to his son, Clifton F. Weidlich, a defendant. Louis died on July 21, 1950. Comley was named coexecutor under Louis’ will and purported to act in the liquidation of the partnership as a representative of Louis’ estate and as attorney and agent for Frank, one of the surviving partners. John Plocar, a management consultant, also purported to act as an agent for the partnership. Additional facts are recited in the opinion in Weidlich v. Weidlich, 147 Conn. 160, 157 A.2d 910. After a new trial, the court concluded that the account
The defendants in each of these suits were represented by counsel, and the fees and expenses for conducting the defense in each instance were charged to the partnership. To justify charges for the expense of defending litigation, it must be shown by the one who claims to be serving as a fiduciary that he was defending in the interest and for the benefit of his principal. Clement’s Appeal, 49 Conn. 519, 530. If the litigation being defended challenges the right of a fiduciary to act for his principal, a vindication of that right is of necessity in the interest of the principal, and the fiduciary is entitled to indemnification for the expense of the defense. Note, 9 A.L.R.2d 1132, 1197. To decide whether the fees and expenses of defending the various lawsuits shown in the account were chargeable to the partnership, it is necessary to analyze each case.
One of the cases in question involves an action brought in November, 1950, in the Supreme Court of New York by Clifton and William against Frank, seeking a declaratory judgment as to the right of Frank to proceed alone with the liquidation of the partnership after the death of Louis. This action was subsequently dismissed on the ground of forum non conveniens. The death of Louis did not give to the representatives of his estate authority to proceed with the liquidation of the partner
The second case involved is the action brought by Clifton against Comley and Plocar in the United States District Court for the district of Connecticut, seeking to enjoin them from proceeding with an auction of the partnership’s assets. Judgment was ultimately rendered for the defendants on the merits. Comley and Plocar had been retained as agents by Frank. Although Frank did not have exclusive authority to control the liquidation, he did have authority to engage assistance, if necessary, in winding up the affairs of the partnership. 1 Rowley, Partnership (2d Ed.) §37.2; Mechem, Partnership (2d Ed.) §§ 423, 425. Comley and Ploear were therefore authorized to do the acts which were alleged, by the complaint in the federal litigation, to constitute wrongdoing. The expenses of defending them in that litigation therefore were properly chargeable to the partnership.
Finally, there are the respective lawsuits instituted against Frank in the Supreme Court of New York by Kurt Widder and Carl Hammond, each asserting that he was an assignee of William’s claim for the reasonable value of services alleged to have been rendered by William to the partnership during its liquidation. Frank ultimately prevailed. The expenses of defending the Widder and Hammond suits were properly chargeable to the partnership, because the issue in each suit involved a direct claim against the partnership.
The court erred in approving the amended account, which made an allowance for expenses incurred in the defense of the action for a declaratory judgment brought by William and Clifton
The defendants seek several corrections in the finding. In the view which we take of the case, any changes which may be warranted are immaterial to its final disposition. The other claims of error do not require discussion.
There is error, the judgment is set aside and the case is remanded with direction for further proceedings in accordance with this opinion.
In this opinion the other judges concurred.
Case-law data current through December 31, 2025. Source: CourtListener bulk data.