State House Inn Corp. v. Polikoff

BTJRMAN, J.,

dissenting:

I agree with the majority of this court that by his letter of July 19, 1962, Polikoff elected to retire and withdraw from the joint venture he entered into with approximately forty-nine other persons. The actions of Polikoff clearly show that Polikoff, who is a quasi-partner of this joint venture, refused to execute a transfer of the legal title to the involved real estate solely because his money was not returned to him. He unsuccessfully attempted to force his co-venturers to repay to him the sum of $57,500 which he invested in the venture on the theory that the sale of units to him was in violation of the Securities Act because the sale of securities was not registered with the appropriate agencies.

Having failed in this attempt he now refuses to join in the transfer of the legal title to this real estate to the plaintiff corporation which was executed by forty-six of the forty-nine members of the joint venture. Having a fiduciary relation to the other joint venturers Polikoff is bound to the utmost good faith in their joint transactions. Instead he chose not to continue in the enterprise and retired from the business. The other joint venturers desire to continue the business. Under the circumstances I believe section 42 of the Illinois Uniform Partnership Act (Ill Rev Stats 1965, c 106^) applies. It provides, as follows:

“When any partner retires . . . and the business is continued under any of the conditions set forth in Section 41 (1, 2, 3, 5, 6) or Section 38 (2b), without any settlement of accounts as between him ... and the person or partnership continuing the business . . . he . . . may have the value of his interest at the date of dissolution ascertained, and shall receive as an ordinary creditor an amount equal to the value of his interest in the dissolved partnership with interest. ...”

Section 38 (2b) referred to above provides:

“The partners who have not caused the dissolution wrongfully, if they all desire to continue the business . . . may possess the partnership property, provided they secure the payment by bond approved by the court, or pay to any partner who has caused the dissolution wrongfully, the value of his interest in the partnership at the dissolution. ...”

Section41(5) provides:

“When any partner wrongfully causes a dissolution and the remaining partners continue the business under the provisions of Section 38 (2b), either alone or with others, and without liquidation of the partnership affairs, creditors of the dissolved partnership are also creditors of the person or partnership continuing the business.”
There was no specific term stipulated for the continuation of the joint venture. Section 31(b) of the Illinois Uniform Partnership Act provides that it is terminable at the will of any one of its members. (Ill Rev Stats 1965, c 106%, § 31(1) (b)), when no definite term is specified.

The surviving joint venturers should be permitted to continue its business without liquidation of the partnership affairs. Under equitable principles and in conformity with section 42 the Chancellor should have ascertained the date of dissolution and determined the value of Polikoff’s interest on that date and directed that Plaintiff pay to him an amount equal to the value of his interest. In my judgment the summary decree should be reversed and the case remanded for trial in accordance with the views expressed herein.