Page v. Page

55 Cal. 2d 192, 359 P.2d 41 (1961)

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Page v. Page

California Supreme Court
55 Cal. 2d 192, 359 P.2d 41 (1961)

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Facts

George Page (plaintiff) and H.B. Page (defendant) entered an oral partnership agreement to run a linen-supply business. Both parties contributed start-up funds, and the partnership also borrowed funds from a corporation wholly owned by George. The partnership operated at a loss for many years. In 1958 and 1959, it began to operate at a profit. Despite the financial improvement, however, George wished to terminate the partnership. H.B. did not. George sued H.B., seeking a declaratory judgment that the partnership was a partnership at will and George could therefore terminate it at any time. H.B. argued that the partnership was a partnership for a term and could not be freely dissolved. H.B. claimed that, based on the parties’ prior dealings, they both intended to start the business and get the business to pay for itself. He admitted, however, that the parties did not discuss any particular duration for the partnership or how long it would continue if operating at a loss. Because of the extended period of losses, H.B.’s personal interest in partnership assets was relatively small. In contrast, George, who managed the business and whose corporation was the partnership’s major creditor, was in a superior position. H.B. therefore believed that George was acting in bad faith, continuing the partnership while it meant sharing losses, but now trying to obtain the business for himself because it had become profitable. The trial court found that the parties intended a partnership for a term, not a partnership at will, and George therefore could not freely terminate the partnership. George appealed.

Rule of Law

Issue

Holding and Reasoning (Traynor, J.)

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