comparing husband’s position to the physician-spouse in Nail v. Nail, 486 S.W.2d 761, 764 (Tex. 1972), in which the supreme court concluded that the goodwill that the medical practice might have accrued at the time of the divorce was not property in the parties’ estate
How later courts described this case
- comparing husband’s position to the physician-spouse in Nail v. Nail, 486 S.W.2d 761, 764 (Tex. 1972), in which the supreme court concluded that the goodwill that the medical practice might have accrued at the time of the divorce was not property in the parties’ estate
- stating that, “without a proper valuation the trial court could not properly exercise its discretion in making a ‘just and right’ division of community property”
- noting that a large part of the firm’s reputation for providing services was built upon the professional abilities of the husband’s predecessors in the firm as well as the abilities of his present partners and professional employees
- noting that it is ―[w]ithout question [that] the goodwill of a long established firm has commercial value‖
Written by the judges who cited it.
The opinion
STEWART, Justice,
concurring.
I respectfully disagree with the majority’s holding that the value of the law firm’s goodwill is not to be considered in evaluating the community’s partnership interest. The firm’s goodwill is an asset of the partnership entity, and it does not belong to either the separate or community estate of the individual partners. Bromberg, Source and Comment, TEX.REV.CIV.STAT.ANN. art. 6132b, § 28-A (Vernon 1970). Thus, the Nail decision is inapplicable here. The goodwill of the law partnership is analogous to the corporate goodwill addressed by the court in Geesbreght v. Geesbreght, 570 S.W.2d 427, 435 (Tex.Civ.App.—Fort Worth 1978, writ dism’d). The firm’s good will enhances the value of the community partnership interest.
The partnership agreement does not control the value of the individual partnership interests. The asset being divided is the husband’s interest in the partnership as a going business, not his contractual death benefits or withdrawal rights. Slater v. Slater, 100 Cal.App.3d 241 , 160 Cal.Rptr. 686, 688-689 (1980). The formula in the partnership agreement may represent the present value of the husband’s interest, but it should not preclude a consideration of other facts. Slater, 160 Cal.Rptr. at 689 ; Stern v. Stern, 66 N.J. 340 , 331 A.2d 257 (1975). The value of the husband’s interest should be based on the present value of the partnership entity as a going business, which would include consideration of partnership goodwill, if any. Goodwill is property and, although intangible, it is an integral part of a business, the same as its physical assets. Taormina v. Culicchia, 355 S.W.2d 569, 573 (Tex.Civ.App.—El Paso 1962, writ ref’d n.r.e.); Ordway-Saunders Co. v. Little, 568 S.W.2d 711, 717 (Tex.Civ.App.—Amarillo 1978, writ ref’d n.r.e.). Whether the law firm possessed goodwill, and, if so, its value are fact questions for the trier of facts. Taormina, 355 S.W.2d at 574 .
The majority are concerned with future contingencies. All assets of the community estate are valued as of the time of dissolution of the marriage. There is no valid reason to exclude a professional partnership interest from this basic rule when the part *750 ner intends to continue as a member of the firm.
I otherwise concur.
AKIN, J., joins in this opinion.