Dreifuerst v. Dreifuerst

Brief Fact Summary. To dissolve a partnership in which Dreifuerst (D) and his family the Dreifuersts (P) were all partners, Dreifuerst (D) contends that under state law, he has the right to force a sale of partnership assets in order to obtain his fair share of the assets in cash upon dissolution

Synopsis of Rule of Law. Partnerships at will have no definite term or particular purpose and thusly can be dissolved by the express will of any partner.

Facts. The partnership of the Dreifuersts (P) and their brother (D) operates two feed mills. There was nothing written governing the partnership. The family served their brother with a notice of dissolution and wrap up of the partnership. The dissolution complaint alleged that the family (P) decided to dissolve the partnership without grounds for the dissolution. The partners could not agree on how to wrap up the partnership. Dreifuerst (D) requested at hearing that the partnership be sold and the court allow a sale in which partners would bid on the whole property. By such a sale, Dreifuerst (D) reasoned he could obtain his fair share of the assets in cash while the family (P) continued to run business with a new partnership. The trial court denied the request and divided the assets according to value presented by the family (P). Dreifuerst (D) appealed.

Issue. Can a partnership at will with no definite term or particular purpose thusly be dissolved by the express will of any partner?

Held. (Brown, J.) Yes. A partnership at will with no definite term or particular purpose can thusly be dissolved the express will of any partner. The Dreifuerst family (P) can rightfully dissolve the partnership without consent from the brother Dreifuerst (D). The Dreifuerts (P) never claimed the brother violated any partnership agreement and therefore they made no wrongful dissolution of the partnership. Lawful dissolution gives each partner the right to wind up the partnership, the right to have the business liquidated and his share of the surplus paid in cash. The trial court thus erred in ordering an in-kind division of the assets of the partnership. Brother Dreifuerst’s (D) sale would be the best way of determining the true fair market value of the assets. Reversed and remanded.

Discussion. “Dissolution†sometimes refers to the wrap up of partnership affairs. The end of the association is also sometimes called termination of the partnership. It also refers to wrap up or liquidation of the partnership’s assets and affairs. Finally, it may also refer to a change in the relation of partners caused by any partner ceasing to be associated in the operation of the business.