Holzman v. De Escamilla

86 Cal.App.2d 858 (1948)

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Nature of the Case

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Facts

Hacienda Farms was organized in 1943 as a limited partnership with Escamilla (D) as the general partner and Russell and Andrews as limited partners. The partnership was not long lived as it went into bankruptcy by the end of the year. Holzman (P) was the trustee of the estate of the bankrupt. P sued Russell and Andrews because he alleged that they took control of the partnership business and as such, they became liable as general partners. D was raising beans on farmlands near Escondido at the time the partnership was formed. At trial, D testified that Russell and Andrews participated in the day to day affairs of the limited partnership and that they came to the farm about twice per week and consulted about the crops to be planted. After October 15, Andrews and Russell requested D to resign as manager, and he did. Henry Miller was put in charge. Most of the checks that were drawn on the partnership were drawn by Andrews and Russell with only three bearing the signature of D and another partner. The general partner had no power or authority to withdraw money without the signature of the limited partners. The trial court ruled that Russell and Andrews were general partners. They appealed.