Nathan v. Bacon, 75 N.J. Eq. 401

Nathan v. Bacon

75 N.J. Eq. 401 | New York Court of Chancery | 1909

Beaming, Y. C.

Tire only question for determination at this time is whether a receiver should be appointed to take possession of the assets of the business. Should a receiver be appointed the injunction which complainants seek would appropriately accompany the order appointing the receiver.

The partnership in question is now at an end so far as the future prosecution of the partnership business as such is concerned. This is admitted by both complainants and defendants. Defendants assert that it is at an end by the expiration of the term agreed upon for its continuance; complainants assert that *404it has been dissolved by reason of defendants-’ conduct. It has been held in some states that on a bill for closing the affairs of a partnership, when it is admitted that the firm has been dissolved, the appointment of a receiver follows as a matter of course; but in this state that rule has not been adopted. It has here been repeatedly held that in such case a receiver will be appointed only when it appears necessary to protect the interests of the parties. Renton v. Chaplain, 9 N. J. Eq. (1 Stock.) 62; Birdsell v. Colie, 10 N. J. Eq. (2 Stock.) 63; Cox v. Peters, 13 N. J. Eq. (2 Beas.) 41; Randall v. Morrell, 17 N. J. Eq. (2 C. E. Gr.) 343; Warwick v. Stockton, 55 N. J. Eq. (10 Dick.) 61, 67. I am convinced, however, that in this caso the' appointment of a receiver is necessary to properly protect the interests of the parties. At dissolution the powers of the partners over the partnership assets continue only so far as is necessary for the purpose of winding up the affairs of the-partnership. Defendants are now in possession of all of the assets and are conducting the business under claim of sole-ownership and not for the purpose of winding up the partnership affairs. They are proceeding upon the assumption that it was their right, at the end of what they conceived to be the partnership term, to have the assets appraised and to extinguish the interest of complainants by tendering'to complainants one-third of the amount of the appraisement. They thus assumed the power to compel complainants to sell to them for that amount. There is nothing in the partnership agreement or in the nature of the partnership which confers upon defendants any such privilege. In this unfortunate situation I can see no way to fully protect the interest of the parties without the-appointment of a receiver to wind up the affairs of the business..

I will advise an order for the appointment of a receiver and for the issuance of- an appropriate injunction to secure to the receiver complete control of the assets.