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The Nature of Partnership:: Case 1
The Nature of Partnership:: Case 1
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PARTNERSHIP
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PARTNERSHIP
Dissolution Of A Partnership:
CASE 3:
Howard Fogle, John Church and Robert Curdy had been partners
in the grain business, known as the firm of Fogle and Company.
On January 1, 1914, Curdy ceased to be a member of the firm
and the other two continued as Fogle & Company. Curdy
published a notice of the dissolution in the local newspaper, but
did not send actual notice to those who had had prior dealings
with the firm. James Nally had done business with the firm, before
the year 1914, and, in February of that year, accepted a
promissory note from Fogle signed by the firm name. This note
was not paid at maturity and Nally brought suit against Fogle,
Church and Curdy. Nally contended that, although he had seen
the newspaper announcement of the dissolution, Curdy was,
nevertheless, bound on the note because actual notice of the
dissolution was not sent to Nally; that this was necessary, since
Nally had dealt with the firm before Curdy stepped out. Is this a
correct statement of the law?
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PARTNERSHIP
those who have dealt with the firm, and as to those with whom the
firm has dealt, generally, actual notice must be impressed upon
them. The method of receiving this notice, whether directly from
the firm or members thereof, or from a general publication, or
from some third person is not significant. Nally, in the Story Case,
had read the news paper announcement of the dissolution. He
could not, thereafter, hold Curdy, although Curdy had not sent
actual notice to those who had dealt with the firm.
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PARTNERSHIP
Non-Trading Partnership:
CASE 4:
Robert Smiley and Richard Yates were partners in the law
practice, conducting business as Smiley & Yates. Yates
purchased an automobile in the name of the firm, without the
authority or consent of Smiley, who later refused to pay any part
of the purchase price. The automobile dealer, therefore, brought
suit against both members of the firm. Smiley maintained that
since this was not a trading partnership, Yates had no implied or
apparent authority to make purchases in the name of the firm, and
therefore he - Smiley - was not liable for the purchase of the
automobile. Is this a good defense?
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PARTNERSHIP
Limited Partnership:
CASE 5:
he State of Maryland permitted the organization of partnerships,
in which one member would not be liable for more than the
amount he actually furnished the firm, provided the statute under
which such a firm was organized was strictly followed. The law
was such that, if the conditions were not absolutely followed, the
partnership should be a general one. One of the requirements of
this law was to the effect that the articles of partnership must be
recorded with the recorder of the county in which the firm was
doing business. James Pope entered a partnership with the
agreement to become a limited member, but the manager of the
firm failed to record the contract under which Pope assumed the
relation of a member. Later, when the firm became insolvent,
creditors assumed Pope to be a general partner, because the
articles of partnership were not recorded. Can they recover
against him?
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PARTNERSHIP
that such a partner shall be liable for the debts of the firm only up
to the amount which he has agreed to contribute to the capital of
the business.
Since this character of organization changes the common law rule
of liability, the courts compel the parties to comply strictly with all
statutory requirements. If they fail in this, the special partners are
held to be general partners with general liability; and this, even
though the statute may not expressly so provide. Hence, in the
Story Case, Pope is liable to all the creditors personally because
the articles of partnership were not recorded. He is responsible as
a general partner.
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PARTNERSHIP
John Simpson and nine others entered into a contract for the
formation of a company to transact a real estate business. It was
agreed that there should be a capital of$10,000 and that each
man should subscribe for ten shares at $100 each. It was also
agreed that any one might sell his interest to a stranger. The
company was formed in accordance with this contract, officers
were elected and by-laws adopted. It was called The
Northwestern Realty Syndicate. Later, the company became
insolvent and the business was closed up with a number of
obligations standing unpaid. Of the group, only Simpson was
financially responsible, and the creditors brought suit against him
personally on the ground that, as a partner, he was individually
liable for the total amounts. The decision in the case depends
upon whether or not this was a partnership.
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PARTNERSHIP
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PARTNERSHIP
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PARTNERSHIP
CASE 9:
Fred Flint, Howard Freeman, and Donald Gray were partners in
the commission business. At the end of five years, the firm had a
surplus fund of $5,000, which Flint, the treasurer, was instructed
to invest in five per cent municipal bonds. Flint did not invest the
money immediately in bonds, but kept secret possession of it for
two months. During this time he successfully transacted two deals
in the wheat market, netting to himself $2,000 in profit. He
retained possession of this money and at the end of the year
accounted to the firm for merely five per cent profit on the
municipal bonds. Later, the other members learned of the wheat
deal and demanded that Flint share this profit with them. This,
Flint refused to do. Can Freeman and Gray compel him to make
an accounting?