Friday, March 23, 2012

Collins v. Lewis case brief

Collins v. Lewis case brief summary
283 S.W.2d 258 (1955)


CASE SYNOPSIS
Appellant financial partner sought review of the judgment of the District Court of Harris County (Texas) that entered judgment in favor of managerial partner in a business dispute.

CASE FACTS
The financial partner that owned 50 percent of partnership sought a receivership of the partnership business, a judicial dissolution of the partnership, and foreclosure of a mortgage upon remaining partners interest in the partnership assets. The partnership was established for the construction and operation of a cafeteria. The cafeteria exceeded all reasonable estimates of startup costs. The financial partner contended the trial court erred in refusing to dissolve the partnership. The financial partner also asserted the trial court erred in refusing to foreclose his lien upon the managerial partner's interest in the partnership. The financial partner argued that whenever partners were in hopeless disagreement concerning a partnership, which had no reasonable expectation of profit, the legal right to dissolution existed.

DISCUSSION

  • The court determined the financial partner had not performed his partner duties. 
  • The court concluded the managerial partner met his obligation therefore the trial court properly denied foreclosure of the mortgage. 
  • The court determined the financial partner was not entitled to dissolution of the partnership. 
  • Thus, the court affirmed.

CONCLUSION

The court affirmed the judgment of the trial court finding that the financial partner was not entitled to dissolution.

NOTES
Collins was money man; Lewis was manager. Together they formed a partnership
for a cafeteria. When costs became excessive, Collins filed for a court-mandated
dissolution.

Court distinguished between power to dissolve and right to dissolve. One always had
power, but if one didn’t have a right, then one would be responsible for damages.
By refusing a judicial dissolution, the court would force Collins to either pay damages
or buy out Lewis’s share of the partnership.

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