Court Opinion

ID: 9695204
Source: CourtListenerOpinion
Date Created: 2023-08-25 18:11:54.693087+00
Date Added: 2024-06-11T18:20:09.978501
License: Public Domain

Currie, J.
(dissenting). I respectfully dissent from the majority opinion holding that the limited partnership agreement entered into between the parties was illegal as being in violation of sec. 176.05 (3), Stats., which provides, “. . . No such license shall be issued to any person acting as agent for or in the employ of another. . . .”
It seems to me that both the trial court and the majority opinion misconstrue the application of this court’s holding in Brill v. Salzwedel (1940), 235 Wis. 551, 292 N. W. 908, to the facts of this case. Reliance is placed upon the following language of the opinion in that case (p. 558) :
“The emphasis is upon the personal qualifications of the licensees and those in control of the liquor business. The latter is clearly indicated in the disclosures required concerning officers and directors of corporations, and the public is entitled to know who is actually in control, both as to ownership and management in any branch of the liquor traffic required by law to be licensed.” (Emphasis supplied.)
The important words in the foregoing quotation are “who is actually in control ” and while these are followed by the *296words “both as to ownership and management” the same are mentioned only as they relate to control. Ordinarily part ownership in a business carries with it an element of ability to control. However, in the case of a limited partner in a limited partnership, such as existed here, ownership and control are completely and effectively divorced. Sec. 124.07, Stats., provides that if a limited partner takes any part in control of the business of the limited partnership he loses his status as a limited partner and becomes a general partner. Not only is there no evidence in the instant case that plaintiff ever attempted to take part in the control of the business, but the limited partnership agreement contained an express provision prohibiting him from so doing. When this court referred to a “silent partner” in its opinion in the Brill Case, the context in which such statement appears clearly indicates the reference was to a partner who did have it within his power to exercise control because of his ownership.
The status of the plaintiff in the instant case is very closely akin to that of a creditor. If plaintiff had resorted to an arrangement whereby he simply loaned defendants $12,000 and was to participate in the profits of the business in lieu of interest, under an arrangement similar to that before this court in Hirsch v. Smith (1952), 262 Wis. 75, 53 N. W. (2d) 769, there would be no question of any violation of sec. 176.05 (3), Stats. This is essentially that which was done in the instant case, except that the labels “limited partner” and “limited partnership” have been used in the agreement. Why should these labels be determinative of the question of whether plaintiff was in a position to exercise any control of the operation of the business ?
I would reverse and remand for an accounting of profits.
I am authorized to state that Mr. Justice Steinle concurs in this dissent.