Procedural History: Trial Court, Texas Court of Appeal
Facts: Collins and Lewis entered the partnership to build and operate a cafeteria. According to their agreement, Collins agreed to provide a capital and Lewis would assist constructions, and once the restaurant is finished, he would manage it. In returned for his investment, Collins would recover his money and later profits from the profits generated by the restaurant. Due to construction delay and other cost overruns, the cost that suppose to be around $300 K, even before the restaurant was opened, was over $600 K. Collins was furious. In additions, once the cafeteria opened, the business was not as expected, and Lewis was asking Collins for more cash…show more content… Rule: The partner does not have legal right to force dissolution of a partnership, when the other partner fulfill his obligations and duties under the partnership agreement.
Holding: No. In an action in equity, the court may force a dissolution when one of the partners breached his duty or his fiduciary duty to the partnership or the other partners. However, when the partner fulfilled his duties and his obligations and his actions did not harmed the partnership, another partner can not force dissolution of the partnership.
Rationale: Jury found that Lewis could perform his obligation and duties if Collins would not interfere with his duties. The partnership between Collins and Lewis was regulated by and agreement that provided that Collins will provide the cash and Lewis will manage and oversee the construction of the restaurant. Lewis convinced jury that he delivered his part of the bargain, Also, the appeal court relied on the jury findings, which were most likely based on unpopular behavior of Collins. Under these circumstances, the court finds out that Collins has no right to have the court force dissolution of the
