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Adams v. Jarvis

Wisconsin Supreme Court

127 N.W.2d 400 (1964)

Facts

Dr. Adams (plaintiff) and two other doctors (defendants) were partners in The Tomahawk Clinic (the partnership). Under the terms of the partnership agreement, the withdrawal of one partner did not terminate the partnership. Rather, the agreement provided for the continuation of the partnership after withdrawal of a partner and the methodology for winding up that partner’s affairs. Specifically, the withdrawing partner was entitled to the balance “to his credit” on the partnership books, his proportionate share of the partnership profits, and the balance of his capital account after deductions. The agreement also explicitly provided that accounts receivable remained the property of the partnership after a partner’s withdrawal. Adams withdrew from the partnership on June 1, 1961. Adams then filed a declaratory suit, seeking to have the medical-partnership agreement construed. The trial court concluded that the Uniform Partnership Act (UPA) required the dissolution of the partnership upon the withdrawal of a partner. The court further ordered the partnership’s assets liquidated and distributed between the three partners, including the accounts receivable. The defendants appealed to the Wisconsin Supreme Court.

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Holding and Reasoning (Beilfuss, J.)

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