Cases Flashcards
Martin v. Peyton:
In compensation for a loan, lenders were to receive 40% of the profits of the firm until the return was made. Were they partners?
In order for a creditor to be a partner in a firm, the creditor must be closely enough associated with the firm so as to make it a co-owner carrying on the business for profit. Here, The trustees had no authority to initiate transactions on behalf of KN&K, nor bind the firm by their actions.
Smith v. Kelley:
Smith was identified as a partner in a third-party contract and various other forms, but he did not take part in management, hire or fire employees, sign notes for borrowed money, or face liability for partnership losses. Was he a partner by estoppel and entitled to profits?
A partnership by estoppel can be recognized as to third parties, but that pertains only to liability to the third party. The representation of a person as a partner to a third party does not determine whether or not the person is a partner entitled to a share of the partnership’s profits.
Summers v. Dooley:
Summers asked Dooley if he would agree to hire an additional employee. Dooley refused, but Summers hired the worker anyway and paid him out of his own pocket. Can Dooley be reimbursed?
When a partnership consists of only two partners, one partner cannot unilaterally bind the partnership by incurring expenses over the objection of the other.
National Biscuit Company v. Stroud:
Freeman ordered more bread on behalf of the partnership, and NBC delivered that bread to the partnership. Shortly thereafter, the partnership was dissolved, and Stroud refused to pay for the bread delivered at Freeman’s behest.
In a general partnership with two partners, each party has the power to bind the partnership in matters pertaining to the partnership’s business. Neither partner can prevent the other from binding the partnership in the ordinary course of business.
Difference Between NBC and Summers v. Dooley
Summer’s hiring the third party was not an act of the partnership. Freeman’s purchase of the bread was.
Kessler v. Antinora:
Kessler provided the money and Antinora acted as general contractor. Profits would be divided 60/40. No thought was given to losses. The venture lost money.
Where there is no partnership agreement as to losses, and where one partner contributes money to the venture and the other contributes services or labor, in the event of a loss neither party is liable to the other for any loss sustained.
Roach v. Mead:
Roach asked Mead’s advice on investing the proceeds of a business sale. Roach testified that he considered this to be legal advice. Roach sued Mead’s partnership for negligence. Is the partnership liable?
A partner is jointly and severally liable for the tortious acts of another partner if he authorizes those acts or if the acts are committed in the ordinary course of the partnership’s business.
Meinhard v. Salmon :
Salmon executed a new lease without informing Meinhard or inviting him to be a part of it. Should it be held in trust as an asset of the joint venture?
Coadventurers, like partners, have a fiduciary duty to each other (which includes the duty of the finest loyalty), including sharing in any benefits that result from the parties’ joint venture. The Midpoint Lease was an extension of the subject matter of the Bristol Lease, in which Meinhard had a substantial investment. Salmon breached his fiduciary duty by keeping his transaction from Meinhard
Enea v. Superior Court:
Alleged breach of fiduciary duties consisting primarily of former partners renting partnership property to themselves at less than its fair market value.
The fiduciary duties imposed on partners by operation of law unquestionably bar them from conferring such benefits upon themselves at the partnership’s expense.
Bane v. Ferguson:
Whether a retired partner in a law firm has either a common law or statutory claim against the firm’s managing counsel for acts of negligence that terminated his retirement benefits.
A partnership has fiduciary duties to other partners, but not to former partners. A partner’s withdrawal terminates his relationship in the partnership.
Singer v. Singer:
Two partners purchased land the partnership was considering buying. Breach of fiduciary duty?
A partner has a fiduciary duty not to compete with other partners, or with the partnership itself, in the absence of a partnership agreement stating otherwise. Here, the partnership agreement states that any partner may conduct his business as if he were not a member of the partnership.
Meehan v. Shaughnessy:
Plaintiffs terminated their relationship with Parker Coulter to start their own firm. Is it a breach of fiduciary duty for partners, while associated with a partnership, to secretly solicit the partnership’s clients for their own gain, while denying their intentions to other partners
Yes. A partner has a fiduciary duty to provide, on demand of another partner, true and complete information of any and all things affecting the partnership.
Rapoport v. 55 Perry Co.:
Simon and Genia Rapoport assigned 10 percent of their partnership share to their two adult children and attempted to make them partners.
Unless otherwise provided in the partnership agreement, the right to assign one’s partnership interest without consent does not include the right to unilaterally add new partners to the partnership. An assignee is entitled to a share of the enterprise’s profits but lacks the right to share in the management or control of the business.
Collins v. Lewis:
Whether a partner can legally force dissolution of a partnership when but for that partner’s actions, the other partner could have performed his or her required duties.
A partner does not have a legal right to force dissolution of a partnership if the other partner fulfills his or her duties under the partnership agreement.
Dreifuerst v. Dreifuerst:
All but one of the brothers (plaintiffs) elected to dissolve the partnership, and brought an action for dissolution and wind-up of the partnership after serving the remaining brother (defendant) with notice.
This is a partnership at will, a partnership which has no definite term or particular undertaking and can rightfully be dissolved by the express will of any partner.
