Bard v. Bingham

BBICKELL, C. J. The contract of partnership, not commiting the partnership effects to the exclusive possession of either of the partners, each partner has an equal right to the possession, and if wrongfully excluded, a court of equity will, 466 on. a proper case being shown, intervene for his relief. The interference may be by compelling specific performance of the contract; or by injunction against a continuance of the exclusion; or by decreeing dissolution, if a case for dissolution is shown, and the appointment of a receiver pending the suit. The granting an injunction, arresting the one partner in his control and management of the partnership effects, or the appointment of a receiver, withdrawing the effects from the possession of all the partners, and taking them -into the custody of the court, are stringent measures, not to be resorted to unless it appears they will operate entirely remedially, will promote the interests of the partnership as an en~ 1 tirety, and will not inflict injury, beyond what the character or the exigency of the case justifies. The authorities affirm as a general rule, that where a bill is filed seeking a dissolution of a partnership, and it satisfactorily appears that the complainant will be entitled to a decree for dissolution, a receiver will be appointed of course. The reason being that the same causes which would justify a decree for dissolution generally justify the appointment of a receiver. — Kerr on Receivers, 82, (note 1). The appointment of a receiver, in all cases, rests in the sound discretion of the court, and in determining its propriety, the facts of ' each particular case are to be considered. — Ex parte Walker, 25 Ala. 81. In Slemmer’s Appeal, 58 Penn. 168, the court decreeing a dissolution, directed the partnership assets to be transferred to that one of the partners who would pay or secure to be paid within a reasonable time the highest price for them, — Sharswood, J., saying, “where a valuable business has grown up by the joint labors and contributions of all, the court should be careful to preserve it if possible, and to put all the parties upon a fair and equal footing in competing for it. To appoint a receiver, to direct a sale of the whole, and a winding up of the business, would destroy its value without benefitting either party.” The preservation of the subject of controversy for the benefit of the party ultimately decreed to have the right, is the object of committing it to the custody of a receiver. When it is apparent this purpose will not be accomplished, and the party in interest will be injured and not benefitted, a receiver ought not to be appointed. The business this partnership conducted was existing, in full operation, before the formation of the partnership. All the partnership property was the sole property of the appellee. Without the investment of capital, the appellant purchased an undivided half interest in the property, on long credit, mortgaging back to the appellee such interest to secure the payments. The 467 business is not shown to have been profitable, but it appears rather to have been unprofitable. The appellee sought a dissolution by consent, to which the appellant did not accede. The appellee is not averred to be insolvent, nor is it averred that the safety of the partnership property will be endangered in his custody. The ability and willingness of the appellant to make the payments for the half interest purchased, as they may severally fall due, is not averred; nor is it averred that such interest is equal in value to the payments. The appointment of a receiver to continue an unprofitable partnership business, and the withdrawal of the partnership property from the possession of a solvent partner, its safety not being endangered, and he having a hen on the interest of the complaining partner which will absorb it, would be a harsh measure, not beneficial to the partnership, or to either partner. It would burthen the property with the costs of a receivership; inflicting unnecessary injury. The chancellor properly refused, in the exercise of his judicial discretion, to make the appointment, and his decree is affirmed.