Business Law Case 9

Business Law Case 9 - personal agenda while dealing with...

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Banyei Isoh William H. Proctor 10/31/09 Clement V. Clement Supreme Court of Pennsylvania 436 Pa. 466, 260 A.2d, 728 Facts: Two brothers by the names of Charles and L.W. Clement formed a partnership that had lasted 40 years. Later in the partnership, Charles had found out that L.W. was making several personal investments with funds that were drawn against the books of the partnership. He brought an action in equity seeking dissolution of the partnership. The chancellor of the court of equity issued a decree in favor of Charles. Issue: Did L.W. go against his fiduciary duty by making several investments made with partnership funds? Holding: Trial Court; Plaintiff wins; Decree in favor of Charles Court of Appeals; Defendant wins; Decision Reversed Supreme Court; Plaintiff wins; Decision from court of appeals Reversed and Remanded Reason: A partner has a fiduciary duty to their partner as to not commingle partnership funds with
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Unformatted text preview: personal agenda while dealing with partnership assets in a loose and reckless manner. L.W. has to prove how he did not breach his fiduciary duty to his brother who was his partner. He made investments in his own name, not even in the partnerships name and was unable to explain where he received the funds to make such investments. As a result Charles is able to recover on the investments even though he cannot trace where the money came from. Rule of Law: Partners have a fiduciary duty in their dealings with each other, which includes obligation to disclose accurately to their partners all material facts. L.W. did not share his dealings with his brother who was his partner. Partaking in these actions would have been ok if it were personal funds, but using partnership funds made it imperative for him to share these actions with Charles....
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This note was uploaded on 05/06/2010 for the course BUAD Buad 381 taught by Professor Proctor during the Spring '10 term at Morgan.

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