Story Case

Alfred O'Donald and Arthur Bryan were partners in the truck gardening business, each owning a one-half interest in the property. The business did not prosper, and Bryan ceased working and moved to another town where he remained for four months. Then he returned and offered to take an active part in the work again, but 0 'Donald refused to allow him to come upon the land. 0 'Donald conducted the business alone for over a year. Then Bryan brought an action to recover one-half of the rents and profits and to compell 0'Donald to give him a share in the business. 0'Donald's only defense was that the results of the business came from his own efforts, and, therefore, Bryan should not be permitted to share in the profits. Is this a good defense?

Ruling Court Case. Adams Vs. Kable, Volume 6 Kentucky Reports, Page 384; Same Case, Volume 44 American Decisions, Page 772

Adams and Kable, being joint owners of land, agreed to erect a saw mill on it and to carry on the milling business as partners. In pursuance of the terms of their agreement, a mill was erected. The work was done by Adams who was a millwright. Thereafter, Adams brought a bill in equity, claiming a large sum of money from Kable for his labor and expenses incurred in erecting the mill. In answer to this claim, Kable replied that he had been deprived of the possession of the partnership property during the whole time that the business had been carried on; and that he was entitled to a part of the rents and profits during that time.

Decision

Where one partner holds exclusive possession of partnership property and refuses entrance to the other partner, he will be held accountable in a court of equity to such partner for one-half the rents and profits of the property so withheld. Accordingly, it was held that Kable was entitled to have credited to him, against the claims of the plaintiff for labor and expenses, one-half the rents and profits during the time that Adams withheld possession of the partnership property.

Ruling Law. Story Case Answer

As we have just seen, each partner has an equal right with his co-partners to the possession of the firm property, in the absence of an agreement to the contrary. If a partner is deprived of this right he may go into equity Court and have his co-partners compelled to permit him to enjoy this right. Further, a partner or partners who have excluded another partner wrongfully from the enjoyment of the possession of the firm property may be compelled to account for the rents and the profits during the time that the property was so wrongfully withheld.

In the Story Case, 0 'Donald would have held a good cause of action against Bryan for winding up the business, because Bryan had left him for four months. However, since 0'Donald did not declare the partnership at an end at the time Bryan demanded a right to enter into the business, he was from that time accountable for one-half of all the profits made out of the firm property; and, also, Bryan could demand a right to participate in the work, or have the partnership dissolved, and the property sold, so that he should get one-half of the proceeds.