Nathan v. Bacon

• Decision Date: 05 March 1909
• Citation: 75 N.J.E. 401,72 A. 359
• Parties: NATHAN et al. v. BACON et al.
• Court: New Jersey Court of Chancery

72 A. 359

75 N.J.E. 401

NATHAN et al.

v. BACON et al.

Court of Chancery of New Jersey.

March 5, 1909.

Bill by Harry M. Nathan and another against Wilbert M. Bacon and others for a receiver and for an accounting.Order for appointment of receiver.

The bill is filed by two of the four partners, who comprise a commercial copartnership, with its place of business at Bridgeton, N. J., and seeks the appointment of a receiver to wind up the business and also an accounting by the two defendant partners who are in possession of the assets of the business.The controversy between the parties arises from the fact that defendants claim that the partnership terminated February 1, 1909, under the terms of the partnership agreement, whereas complainants claim that the partnership agreement contemplates the continuance of the partnership until September 26, 1910.The bill sets forth that the partnership was originally formed February 1, 1904, pursuant to a written partnership agreement, a copy of which is attached to the bill.By the terms of that agreement, the partnership was to continue for a period of five years from that date.The bill further avers that on September 26, 1905, a new written partnership agreement was made, wherein it was provided that an additional line of merchandise should be added to the business, and that the partnership should continue for five years from that date.A copy of that agreement is also annexed to the bill.Defendants claim that the provision in the later agreement for the partnership to continue five years from its date was intended to refer to a period of five years from the date of the first agreement.The two agreements are practically identical, except as to the added scope of the business to be engaged in as contained in the later agreement.By the terms of the partnership agreement defendants were to be the active partners, and were to have the entire management and control of the business, and were to draw from the profits of the business a weekly stipend for their services.Complainants had no duties to perform except to contribute a specified amount to the capital.The respective partners have fully complied with all of the terms of the agreement up to February 1, 1909.Complainants' interest in the partnership is one-sixth each and defendants' interest is one-third each.The agreement contains no provision touching the manner in which the partnership business shall be closed out at the expiration of the term.On December 11, 1908, defendants by letter notified complainants that as the partnership would expire February 1, 1909, and be then dissolved, they would begin preparation for dissolution by reduction of stock and collection of debts, and beginning January 20, 1909, they would take account of stock and otherwise prepare for a full and complete severance of the partnership relation, and invited complainants to co-operate.On January 23, 1909, defendants by another letter notified complainants that stock taking had commenced pursuant to the former notice, and would be resumed January 20, 1909, and that, unless complainants appeared, three disinterested appraisers would be appointed by defendants to take stock commencing January 27, 1909.Complainants protested against the proposed course of defendants, and demanded a continuation of the...