Court Opinion

ID: 5833679
Source: CourtListenerOpinion
Date Created: 2022-01-12 22:32:12.68798+00
Date Added: 2024-06-11T08:43:31.779715
License: Public Domain

Herlihy, J. (dissenting).
Unlike Matter of Gaines v Tully (66 AD2d 106), the present record contains substantial evidence to support the finding that the seat is an asset of the partnership. In Gaines the partner-owner at all times retained the absolute title to the seat with only a right to third parties to look to it as security. If there were any doubt as to this asset being an asset of the partnership and subject to its control, the following contract language establishes the practical proprietorship of the partnership: "Messrs. * * * La Frence each agree that he shall not transfer, sell, encumber, hypothecate or otherwise dispose of any such membership, or any part thereof so long as he is a partner, except with the written consent of all the other then partners of the partnership.” In addition to the foregoing restriction on the title to the asset, the articles of partnership of January 26, 1962, which were continued as amended by the agreement of June, 1965, provided that in the event of any sale of the asset, the proceeds would be paid to the partnership to the extent necessary to pay the loan which financed the purchase of the asset. In this case there is a reasonable basis for the finding of the respondent that the gain from the sale of the asset is partnership income. The determination should be confirmed.