Fowler v. Loughlin

Melvin, J., delivered the opinion of the Court. This is an appeal from an order of the Circuit Court for Harford County, overruling a demurrer to a bill of complaint which sought a receivership for, and the dissolution of, an alleged partnership. The facts stated in the bill are substantially these: ⁵⁰ Edward J. Loughlin, Sr., late of Harford County, Maryland, deceaséd, conducted a restaurant business in the village of Edgewood in said county for more than ten years prior to his death in 1929. The premises he occupied for that purpose, and also as living quarters for himself and family (consisting of his wife and three sons), were held under a lease from .one Julius Hein, as lessor, and the said Edward J. Loughlin, Sr., as lessee.

This lease was for twenty years from September, 1928, with the privilege of renewal for another twenty years period. Upon the death of their father — their mother having pre-deceased him — the three sons, Edward J. Loughlin, Jr., Leonard L. Loughlin and Eugene J. Loughlin, proceeded, on the basis of an equal partnership with an equal share in the profits, to carry on the said restaurant business at the same place and under the lease aforesaid. One of the sons, Edward J. Loughlin, Jr., died on August 6, 1941, and his widow, Mary Elizabeth Loughlin, took his place as an equal partner with her two brothers-in-law. On January 30, 1943, she married Claude V. Fowler, Jr., and these two became the respondents (appellants) in the instant case.

Another son, Leonard L. Loughlin, died on July 23, 1942, and his widow, Alice Frances Loughlin, one of the complainants (appellees), took his place as an equal partner in said business, the third partner continuing to be the only surviving son, Eugene J. Loughlin, the other complainant (appellee). Several months prior to the marriage of the respondents (appellants), differences arose among the partners as to the division of the accumulated profits of the business, but this dispute was amicably adjusted in September, 1942, and counsel for the respondent Mary Elizabeth Loughlin (now Fowler) was delegated to draw a new partnership agreement between her and the complainants. Althought no written instrument was ever submitted to the complainants the partnership ⁵¹ continued to operate in accordance with this agreement, each of the partners receiving from that time a drawing account of $50 weekly, in addition to an equal share in the profits. Shortly after his marriage to the respondent Mary Elizabeth Loughlin, the respondent Claude V. Fowler, Jr., commenced to participate in the said business as agent for his wife, was given, at his wife’s persuasion, a salary of $50 a week, and in a very short time assumed control of the business, to the exclusion of the complainants, Eugene L. Loughlin and Alice Frances Loughlin.

His first direct overt act was the taking of the liquor license in his own name, which was accomplished by misrepresentation, and then by taking control of the books, records, accounts and business of the partnership, over the protest of the complainants, and by removing these documents to his private home and refusing the complainants access to them. Also, at the instance of the respondents, and without the knowledge or consent of the complainants, the bank account of the partnership was changed to “Loughlin’s Hotel” subject to the order of the respondent, Mary Elizabeth Fowler. After they had thus taken charge of the partnership business and assets, the respondents proceeded to conduct said business in a manner detrimental to complainants’ interests therein, particularly as to operations under a local liquor law requiring that the sales of food by the licensees equal the sales of beer and light wines. Prior to the said respondents’ assumption of control of the business the partners had complied with this provision of the law, but subsequent to that time the non-compliance has become so serious that the said respondent, Fowler, has been threatened with revocation of the license for this business.

Except for a statement furnished in August, 1943, by the respondent, Fowler, and which the complainants were not given opportunity to verify, they have no idea of the gross or net receipts of the said partnership ⁵² business, nor of the amount or number of outstanding bills against the partnership, nor the amount of money to the deposit of Loughlin’s Hotel, to which account complainants have no access, nor to the amount deposited, if any, to the credit of the three partners, which account is in the same bank but under the control of the respondents. The aforegoing allegations of the bill of complaint are coupled with the charge therein that there is a conspiracy on foot between the respondent, Mary Elizabeth Fowler, and her husband, Claude V. Fowler, Jr., to acquire the business and the partnership assets; that the said respondent, Claude V. Fowler, Jr., at the close of business each day takes all of the cash receipts without