Owen v. Cohen - Lecture notes 10 PDF

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Case Brief and Notes for Business Organizations I...

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OWEN v. COHEN 19 Cal.2d 147, 119 P.2d 713 (1941) FACTS: Parties: Plaintiff: Owen Defendant: Cohen Procedural History: 

Trial court found for Π

Relevant Facts: 

Π and Δ entered into an oral agreement to become partners in the operation of a bowling alley

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Π loaned partnership $6,986.63 for equipment with the understanding that the loan would be paid back out of profits as soon as it was reasonable to do so

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The partnership began to have management difficulties and court appointed a receiver to take charge of the business

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Trial court found that Δ breached agreement and the partnership was dissoluble

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Δ did not do any substantial amount of work

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Δ told people Π would not be around very long

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Δ wanted to open a gambling room and Π opposed

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Δ was secretly taking money from the partnership’s fund

ISSUE: 

Whether the evidence warrants a decree of dissolution of the partnership

PARTIES’ ARGUMENTS: Plaintiff:  Defendant:  DISPOSITION OF THE COURT:

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Affirmed

RULE OF LAW: 

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On application by or for a partner whenever o A partner has been declared incompetent in any judicial proceeding or is shown to be of unsound mind, o A partner becomes in any other way incapable of performing his part of the partnership contract o A partner has been guilty of such conduct as tends to affect prejudicially the carrying on of the business o A partner willfully or persistently commits a breach of the partnership agreement, or otherwise so conducts himself in matters relating to the partnership business that it is not reasonably practicable to carry on the business in partnership with him o The business of the partnership can only be carried on at a loss o Other circumstances render a dissolution equitable On the application of the purchaser of a partner’s interest under sections fifty-three or fifty-four o After the termination of the specified term or particular undertaking, o At any time if the partnership was a partnership at will when the interest was assigned or when the charging order was issued

HOLDING: 

There is sufficient evidence for a court to dissolve the partnership

COURT’S REASONING:   

Π and Δ had a very bitter, antagonistic between themselves The agreement between parties required cooperation, coordination and harmony and these were incapable of being carried out under the current conditions Δ caused the dissolution and is in no position to insist on its continuance and cannot ask the court to continue the partnership so the debt to Π can be paid out of profits instead of sales of assets...