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Owen v. Cohen - 19 Cal. 2d 147, 119 P.2d 713 (1941)

Rule:

Cal. Civ. Code § 2426 states that on application by or for a partner, the court shall decree a dissolution whenever: a partner has been guilty of such conduct as tends to affect prejudicially the carrying on of the business; a partner willfully or persistently commits a breach of the partnership agreement, or otherwise so conducts himself in matters relating to the partnership business that it is not reasonably practicable to carry on the business in partnership with him; or other circumstances render a dissolution equitable. 

Facts:

Israel Cohen and Ross Owen entered into an agreement to run a bowling alley. Subsequently, the relationship between the two became strained. Ross brought suit against Israel for the dissolution of the partnership and for the sale of the partnership assets in connection with the settlement of partnership affairs. The trial court found for Ross, stating that the partnership was a partnership at-will and that the relationship of the parties was so fractious that Ross was entitled to dissolution under Cal. Civ. Code § 2425(1). Israel sought review, arguing that the evidence showed only petty discord between the parties. 

Issue:

Was the dissolution of the partnership proper?

Answer:

Yes

Conclusion:

The court affirmed, holding that dissolution was proper where there were quarrels or disagreements of such a nature and to such an extent that all confidence and cooperation between the parties had been destroyed. Thus, Ross made out a cause for judicial dissolution of the partnership under Cal. Civ. Code § 2426, as Israel was guilty of such conduct that affected prejudicially the carrying on of the business. Israel, because of his commission of provocative acts, was in no position to insist on continuation.

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