Owen v. Cohen
19 Cal.2d 147, 119 P.2d 713 (1941).

Facts:
Owen and Cohen started a bowling alley, with Owen loaning close to $7,000 up front. Due in large part of the defendant, many disputes arose and the partnership crumbled. Owen sued to recover the money he fronted.

History:
The trial court dissolved the partnership and ordered a sale of the assets – Owen would get his $7,000 back, and then the two would split the rest.

Issue:
Whether or not the evidence warrants a decree of dissolution of the partnership.

Holding:
Yes. Affirmed.

Reasoning:
“Courts of equity may order the dissolution of a partnership where there are quarrels and disagreements of such a nature and to such extent that all confidence and cooperation between the parties has been destroyed or where one of the parties by his misbehavior materially hinders a proper conduct of the partnership business.”

Section 2426 of the Civil Code [U.P.A. § 32]:

(1) On application by or for a partner the court shall decree a dissolution whenever:
(c) A partner has been guilty of such conduct as tends to affect prejudicially the carrying on of the business.
(d) A partner willfully or persistently commits a breach of the partnership agreement, or otherwise so conducts himself in matters relating to the partnership business that it is not reasonably practicable to carry on the business in partnership with him.
(f) Other circumstances render a dissolution equitable.

Here, the court held:

  • “In our opinion the court in the instant case was warranted in finding from the evidence that there was very bitter, antagonistic feeling between the parties.”
  • “Under the existent conditions the parties were incapable of carrying on the business to their mutual advantage.”