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Alaska's Partnership Act, Alaska Stat. § 32.05.130(6), provides that no partner is entitled to remuneration for acting in the partnership business, except that a surviving partner is entitled to reasonable compensation for his services in winding up the partnership affairs.
The parties created a partnership for the purpose of constructing and operating a fishing lodge. When differences arose among the parties, they sought to dissolve the partnership and appellants sought declaratory relief that certain real estate was partnership property and seeking damages for appellees' alleged fraudulent dealings. In its judgment, the lower court held that the appellees' architectural and managerial services constituted a non-cash capital contribution to their partnership under the Alaska Partnership Act, Alaska Stat. § 32.05.130(6). The lower court also found that the appellees did not engage in any fraudulent dealings. Appellants sought review, challenging the trial court's determination to treat appellees’ architectural and managerial services as a non-cash capital contribution to the partnership.
Did the lower court properly determine that the appellees’ architectural and managerial services were a non-cash capital contribution to the partnership?
The court reversed the judgment in part, holding that there was insufficient evidence to determine whether there was an agreement between the parties that appellees would be entitled to a share of partnership assets in exchange for their services under § 32.05.130(6). According to the court, in the absence of an agreement to such effect, a partner contributing only personal services was ordinarily not entitled to any share of partnership capital pursuant to dissolution.