5. C.E. Stumpf& Sons, Inc., was formed to conduct a masonry and general contract

Question

5. C.E. Stumpf& Sons, Inc., was formed to conduct a masonry and general contracting business. The corporation was owned in equal shares by Stumpf and his two sons, who had previously operatedt same business as partners. Hostility between the two sons grew so extreme that one, Donald, ended contact with his family and was allowed no say in the operation of the business. After Donald's with- drawal from the business, he received no salary dividends, or other revenue from the company. He brought suit seeking involuntary dissolution of the corporation. Should the court of appeals of Cali- fornia uphold the trial court's dissolution order? Why or why not? [See: Stumpf v. C.E. Stumpf & Sons, Inc., 120 Cal. Rptr. 671 (CA).]

Explanation / Answer

The court of appeals should in deed hold the trial court's decision of involuntary dissolution. This is because this case, both two brothers owned 50% ownership and when there's such rivalry resulting in unequal treatment of the other such as denial or payments would cause in dissolution of the partnership. A business can be dissolved due to such great rivalry which results in the business not meeting its purposes and the denial or the rights to the other partner is not justifiable.

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