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Owen v. Cohen

Supreme Court of California
119 P.2d 713 (1941)


Owen (plaintiff) and Cohen (defendant) entered into an oral agreement to become partners in a bowling alley. Owen loaned the partnership $6,986.63 to buy the necessary equipment, which the parties agreed would be paid back to Owen from the profits of the business. While the business proved immediately profitable, the parties started quarreling over issues such as  management and policies of the enterprise, and their rights and duties under their partnership agreement. Cohen insisted on being the dominant partner, and was openly hostile toward Owen in front of customers and employees. Cohen refused to do any manual work, and appropriated partnership funds for personal use. Cohen further demanded that a gambling room be added to the bowling alley, which Owen vehemently opposed. The partners’ constant arguments resulted in a steady decline of the bowling alley’s monthly receipts. Realizing that the parties could not resolve their differences, Owen offered Cohen the choice of either buying out Owen’s interest in the bowling alley, or selling Cohen’s interest to Owen. Cohen refused to reasonably entertain either option, insisting that the business be continued until he was ready to sell at a price he would set himself. Owen subsequently filed an action in equity to dissolve the partnership. The trial court found that Cohen’s behavior in relation to the business made it impossible for the partnership to continue, and decreed dissolution of the partnership. The trial court also appointed a receiver to sell the partnerships’ assets, ordering that Owen receive half the proceeds, plus $6,986.63 as payment for the loan he made to the partnership.

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