WALTER JACKSON, plaintiff-appellee, vs. PAUL BLUM, ET AL., defendants-appellants.
FACTS:
Walter Jackson and Evans were partners in the firm Evans & Jackson, which held a leasehold interest in the “Alhambra” business property. On October 21, 1898, Evans, appearing as the sole owner after an internal arrangement with Jackson, obtained a loan from Paul Blum. To secure this loan, Evans formed a partnership with Whaley, and they executed an absolute conveyance of the Alhambra establishment to Blum. A separate contract stipulated the loan terms, appointed Whaley as managing partner, and allowed profits to be used to pay the debt. On November 13, 1899, Evans and Jackson settled their partnership accounts, and Evans transferred all his interest in the Alhambra to Jackson in payment of a debt. When Jackson, through Evans, offered to pay off the mortgage to Blum, Blum refused to recognize Jackson’s rights. Blum later demanded payment from Evans & Whaley and took possession of the property from Whaley. Jackson filed an action for an accounting.
ISSUE:
Whether Walter Jackson has a right to an accounting and can assert an interest in the Alhambra property against Paul Blum, et al., despite the absolute conveyance and Blum’s refusal to recognize him.
RULING:
Yes. The Supreme Court affirmed the judgment of the Court of First Instance decreeing an accounting in favor of Jackson. The Court applied the Civil Code provisions on partnership and co-ownership. The partnership between Evans and Whaley was terminable at will since no fixed term was established. The property interest, initially owned by Evans & Jackson, remained the private property of the partners, with only the usufruct passing to any subsequent partnership. As a co-owner, Evans had the absolute right to sell or assign his part, including substituting Jackson in its enjoyment, as no personal rights were involved that would prohibit such substitution. Consequently, Jackson validly acquired Evans’s interest and has the right to redeem the property by paying the mortgage debt to Blum. The defendants’ contentions were without merit.
