Court Opinion

ID: 6920595
Source: CourtListenerOpinion
Date Created: 2022-07-23 23:00:04.19207+00
Date Added: 2024-06-11T16:06:47.360376
License: Public Domain

SWAN, Circuit Judge
(dissenting in part).
I agree with my brother Medina to affirm the judgment insofar as it dismissed the action as against the partners, other than Thomas, of Lehman Brothers. With respect to Thomas, I think he should be held liable in an amount less than the judgment against him awarded Tide Water.
In my opinion we should differentiate between the shares of Tide Water stock purchased before and those purchased after Thomas, with his partners’ consent, withdrew from any participation in the partnership purchases of such stock. As to profits attributable to the shares purchased before Thomas’ withdrawal, I think it reasonable to hold that Thomas could not relieve himself from liability by transferring to the other partners his share of such profits and, consequently, he can be held to have “realized” such profits within the meaning of the statute. But this argument is inapplicable to the shares purchased after Thomas withdrew. It is my understanding that a partnership agreement can be modified by parol so as to exclude one partner from participating in investments or sharing in the profits or losses on investments made subsequent to the modification. As to profits attributable to the a/ier-purchased shares, Thomas had no interest to transfer to Lehman Brothers and I do not see how he can be held to have “realized” any profit on such shares. Consequently I think on Thomas’ appeal the cause should be remanded for determination of the correct amount of the judgment to be awarded against him. As to the method of computing the profits and the non-allowance of interest I agree with my brother Medina.