Holzman v. De Escamilla
Court of Appeal of California
195 P.2d 833 (1948)
James Russell, H.W. Andrews, and Ricardo de Escamilla (defendants) were partners in Hacienda Farms, a limited partnership. Russell and Andrews were limited partners and Escamilla was the general partner. Escamilla always conferred with Russell and Andrews on what crops to plant, and Russell and Andrews sometimes overruled him. Any checks drawn on Hacienda’s account had to be signed by at least two of the partners, meaning that Escamilla could not withdraw money on his own. Eventually, Russell and Andrews forced Escamilla to leave his job as manager. Hacienda Farms went bankrupt, and the bankruptcy trustee, Lawrence Holzman (plaintiff), sued all three partners on behalf of Hacienda’s creditors. The lower court ruled that Russell and Andrews, through their direct control of the enterprise’s operations, had become general partners. Russell and Andrews appealed.
Rule of Law
Holding and Reasoning (Marks, J.)
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