## Facts

- In 1900, a family mercantile business known as “T. H. Campbell & Bros.” began operating as a partnership and later was incorporated in 1933.
- In 1934, an original partner died, and his widow, Jennie Campbell, succeeded to his interest in the business.
- Effective January 1, 1945, the corporation was dissolved and a new partnership was formed among T. H. Campbell, Alva Campbell, George Campbell, and Jennie Campbell, each with a one-fourth interest.
- Jennie Campbell did not take an active role in operations; the three surviving Campbells performed the work and drew salaries for their services.
- At the time the 1945 partnership was formed, the four partners jointly owned two parcels of real estate: (1) the premises where the business operated and (2) a tract known as the “Montgomery Ward” lot.
- Jennie Campbell died in 1952, and the surviving partners continued operating the business without promptly concluding a final settlement of her partnership interest.
- A dispute arose over whether the jointly owned real estate—particularly the “Montgomery Ward” lot—was to be treated as partnership property for purposes of the accounting and buyout.
- The surviving partners sued in equity to have the parties’ rights declared and to settle partnership interests; Neal Smith Curtis, as executrix and beneficiary of Jennie Campbell’s estate, opposed the proposed settlement.
- The surviving partners relied heavily on a balance sheet to value the partnership at Jennie Campbell’s death, and the approach did not include a separate allowance for goodwill; Curtis argued the method relied on questionable estimates and deductions that reduced the estate’s share.
- The chancellor resolved the material issues in favor of the surviving partners, and Curtis appealed; an initial appellate order limited her to an appeal in her individual capacity, and that limitation was later reconsidered.

## Issues

1. Whether Neal Smith Curtis could prosecute the appeal both individually (as beneficiary) and in a representative capacity (as executrix), despite defects in the notice of appeal as to parties.
2. Whether the jointly owned business premises and the “Montgomery Ward” lot should be treated as partnership property for purposes of settling accounts after Jennie Campbell’s death.
3. Whether the valuation method used to determine the deceased partner’s share—based largely on a balance sheet prepared by the surviving partners and excluding goodwill—resulted in an improper, reduced valuation requiring adjustment.

## Decision

- The court modified its earlier order and held Curtis was properly before the court on appeal both individually and as executrix because, as a beneficiary, she had a direct financial interest in the estate affected by the judgment.
- The court held that, on the facts presented, the partners intended the disputed real estate (including the “Montgomery Ward” lot) to be partnership property, and it should be treated as a partnership asset in the settlement.
- The court reviewed the accounting approach used by the surviving partners and determined that a balance-sheet calculation prepared by interested parties was not conclusive where estimates and deductions appeared unsupported and had the effect of minimizing the estate’s recovery.
- The court recognized that a long-established mercantile business may possess goodwill as part of the value of the going concern and that excluding goodwill and relying on questionable write-downs could produce an inequitable buyout figure.
- The judgment was affirmed in substantial part but modified to correct aspects of the accounting and valuation so that the deceased partner’s interest would be settled on an equitable basis consistent with the court’s holdings.

## Legal Principles

- A beneficiary with a direct interest in an estate may appeal from a judgment adverse to the personal representative affecting estate assets, and an appellant may proceed in both individual and representative capacities when that interest is shown.
- Whether real property is a partnership asset depends primarily on the partners’ intent as shown by their agreement, conduct, and the property’s connection to partnership purposes, not solely on the form of title.
- When partners intend jointly held land to be used and held for the firm’s business, the land may be treated as partnership property in the accounting and settlement following a partner’s death.
- In settling a deceased partner’s share where the business continues, courts are not bound by internal balance sheets or book figures that rely on unsupported estimates or deductions; the valuation must reflect an equitable measure of the partner’s interest.
- Goodwill may be part of the value of a long-running business as a going concern, and it may not be ignored where doing so would materially reduce the deceased partner’s rightful share.

## Conclusion

Curtis v. Campbell held that Neal Smith Curtis could appeal both as beneficiary and executrix, that the partners’ intent supported treating the jointly owned business-related parcels—including the “Montgomery Ward” lot—as partnership assets, and that the buyout of the deceased partner’s interest could not rest solely on a balance sheet that relied on questionable reductions and omitted goodwill where the ongoing business had value beyond book figures.


Curtis v. Campbell, 336 S.W.2d 355 (1960)