The daily exchange. [volume] (Baltimore, Md.) 1858-1861, 1858-04-07
DECISION OF JUDGE KREBS IN THE CITY
CIRCUIT COURT

The principles of equity law, upon which the ac-
ton OF this court was founded upon the stated
in the compliments bill, and which will regulate
its decision upon the made at the hearing are
to be found, clearly stated in the decisions Of the
courts OF this State, and of other tribunals of
high authority. In Drury as. Roberts, 2 Md
Chan. Dec. l59, the chancellor says, 'These parties
having been partners in trade it is very clear that
upon the dissolution of the connection, each part
ner was entitled to assist in collecting the assets
and paying, and in winding up the affairs of the firm
and that any interference with this mutual right,
or the exclusion by either partner of the other,
from the enjoyment of it, would Justify this court
In taking the management of the concern into its
own hands,
In Hardingrs. Glover, Is YES 2Sl, Id. Eldon says,
to authorize the appointment of receiver upon
dissolution OF partnership, 'There must be some
breach of the duty of partner, or of the contract
OF partnership" And in Wilson Greenwood,
Swanston, 4S0, he says that eff in the course of
winding up the affairs after the determination, any |
OF the partners seek to exclude another from taking
that part in the concern which he is entitled to take
the court will grant receiver" Collyer part !
nershp 5 100, 1885, Const Harris, l Turn. &
Russ 496. And in Speghts as. Peters, Gill, 479. |
The Court of Appeals of this State quotes the above
extract as setting forth the law upon this subject
and states further that ''whenever dissolution has
taken place. If one partner behave unrighteously
against the interest of the Others in any other
manner excludes his co-partner from that share to
which he is entitled in winding up the concern, it
presents case for receiver" Blakeney u.s. Du-
In the State of New York it is regarded as the
settled practice that the Court, as a matter of
course will appoint receiver, where the partner
snip Is dissolved, and the agreement between the
parties makes no provision for closing the concern,
| or they cannot arrange the matter between them
| selves. Paige, 80; Law Us. Ford Paige 4SO;
Martin u.s. Shank, 3 ed. Chan. Rep 1870; Henn Us.
! Walsh. In Walker as House d Md Chan Dec
43, the Chancellor referring to this practice says
tins appears to be reasonable, because a general
rule each partner has an equal right to the posses
sion OF the partnership effects and ''to collect and
apply them, In satisfaction of the debts of the firm
That was the case of dissolution, where the equal
rights of the partners they being unable to
agree as between themselves) would seem to render
the lnterpOsition of the Court INDISPENSABLE" Pea
| cock u.s. Peacock l6 Yes. 81.
The following rules are obviously deduced from the
| authorities above referred to, applicable to cases
where the partnership has been dissolved viz:
cever will be appointed, where there has been
breach OF the duty of partner, or of the contract
of partnership. Where there is any interference by
one partner with the right the other assist col
Letting the assets, and paying the debts and wind
ing up the affairs OF the concern; where partner
behaves unrighteously against the interest of the
other or in any other manner seeks to exclude him
from that share to which he is entitled in winding
up the concern; where the agreement between
the partners has made no provision for winding up
the concern, and they are unable to agree between
themselves as to who shall do it.
1t IS to be observed that these rules are all APP
piled to cases in which there can be no reason for
charging that the partnership effects would be in
danger OF being wasted, or misapplied, if not re-
moved by the interposition of the Court from the
interference OF the other partner. In Wilson us.
Greenwood there was imputation of danger of
loss from the insolvency misconduct of the part
ners having the property in their hands. In the
case OF Law Ford the partner resisting the APP
polntment of receiver, and who was in possession
of the partnership books and effects, was will
ling to give security for the faithful applica
ton of the effects in payment of the debts. Sc
f in speiights Us. Peters, the Court decides
"That it is not always necessary condition tc
the action of the Court, in appointing receiver Of
the effects OF partnership that has terminated, that
they should be in danger ofbeing materially injured
or lost 1t is to be observed, also, that partner:
owe to each other reciprocal duties, which grow out
OF the relation that subssts between them as SUCH
we'll as obligations created by the terms of their
tract of partnership" Lord Eldon, in Wilson u.s.
: Greenwood has this distinction in view when he
says "Ihere must be some breach of the duty of the
partners or, of the contract" The rules above spe
Gifted are specially applicable to in which these
: duties have been disregarded. After careful ex
animation of the proceedings in this case, o
opinion that, looking to the requirements of any
these rules, Of all of them, must continue thi
injunction and receiver.
1t appearstrom the proceedings, that the complain
ant and defendant were engaged on the 18th day o
, October, 1856, partners in conducting bushes
= which they had commenced early in the month previ
GUS On that date their stock in trade and other
amounted to about 200; the value of the forme
being nearly Sl0,OOO of which about Sc, 900 wort
Il had been purchased with capital furnished by tn
complainant. The money contributed to the firm
T. by the defendant, did not much exceed $500. Their
was at that time, for complaint on &C
count OF the amount, or character of the bushes
: that they had done. 1t had been profitable an
y they had made no bad debts. The complainant wa
absent from their place of business, where he ha
been constantly attending to his duties before durin
the 3Oth and 3lst of October, and until the evening
! OF the LIST of November Having gone to Pennsyl
l vania with the knowledge of his partner, and 70
their mutual accomprobation.
= There is no proof that either PARTNER had priO
to this, sgnifed to the other, any dissatisfaction
with him personally, or with the business or ex
pressed any wish that the partnership should termi
nate On the first day of the compliments absence
as above stated the defendant dissolved the partner
snip, and proceeded forthwith to settle up its affairs
+ and before the return of the complainant, had &C
compllshed his purpose, so far it could be done
by paying away all its cash, amounting to near
four hundred dollars to its creditors and transmit
ting all its bills receivable, though not yet matured
TO pay various other creditors, whose claims wer
not then due, and returning and sending parcels O
the stock to others in satisfaction of their accounts
He appears to have been prompted to this course b.
certain unauthorized hearsay statements containe,
IN the letter filed amongst the proceedings from hi
:, brother in Norfolk
When the complainant returned after his brie
interval, he found the business broken up, all tn
assets except the stock in the store, disposed OF
:. and the defendant insisting upon public notice O
dissolution, stating that he would continue the bu
siness and settle up the partnership affairs as thu
liquidating partner. Conceding that this was
partnership at will only, and that the defendant hac
right to dissolve it at any moment still the dssat
isfacton, and complaints of his partner alleged
were of character so trivial ard the abruptnes
; and precpitancy with which the defendant acted
SO great, that. in connection with othel
circumstances, disclosed in the proceedings
, they incline the mind strongly to the Be
: lief, that the true motive for his actor
has not been avowed by him. Good faith and fail
dealing with his partner, in my opinion, required
that he should have communicated to him the fac
that these hedrsay statements had reached his ears
: and have afforded him opportunity to deny OF
explain them, and thus remove all objection to con
! tlnuing joint concern, in which the complainant
had engaged with zeal and much interest which
had proved profitable, and which, but for these I'M
fortunate hearsay representations, it is presumed
from the defendants own statements, would have
continued. In emitting to do this, he ne
elected duty that he owed to his partner. | am
further of opinion, without commenting particu-
ar on those portions of the evidence that prove the
fact that the defendant in taking advantage of the
temporary absence of the complainant from this
city, to dissolve this partnership in the in
which it was done, did as effectually exclude him
from the exercise of his rights partner if he
had closed the doors of their place of business upon
him, in case he had been here. He had right to
participate in winding up the affairs of the
from the moment of dissolution, to insist upon being
consulted and giving his advice in regard to the
proper mode of doing it, and upon his privilege of OBJ
jecting to the abrupt and unusual manner fsettng
its debts and distributing and dsposing of its effects
amongst those with whom it had business relations,
as calcuatedto cause him quite much loss and dam
age by injuring his credit and business character
he might have suffered by misapplication and waste
ofthe assets of the firm by his partner The conduct
of the defendant after the compainants return is of
the same character, showing determination on his
part to take the whole settlement and liquidation of
the partnership into his hands and under his
CONTROL without any due respect for the rights of
his partner.
He has sought to exclude the complainant from
taking that share in winding up the concern to which
he was entitled; from assisting in collecting its
sets and paying its debts, and from the exercise of
his rights in regard to the possession of the partner
ship effects, with view to a settlement of its af-
consideration of the circumstances of this case am
clearly of opinion that the defendant is Justly
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