Page v. Page
Citation and Court
Page v. Page, 55 Cal. 2d 192 (Cal. 1961) (Traynor, J.)
Facts
Two brothers were partners in a linen supply business. After years of losses, the business became profitable—largely due to the proximity of a nearby Air Force base. One brother sought to dissolve the partnership, and the other objected, arguing that dissolution at this moment was in bad faith and designed to freeze him out so the dissolving partner could capture the business’s value alone.
Issue
Whether a partner in an at-will partnership may dissolve the partnership at any time even if the dissolution is financially disadvantageous to the other partner, and whether a bad-faith dissolution gives rise to a damages claim.
Holding
Justice Traynor held that the at-will partner had the power to dissolve the partnership at any time. However, if the dissolution was motivated by bad faith—for example, to wrongfully appropriate partnership assets or opportunities—the dissolving partner could be liable for breach of his fiduciary duty, even though the dissolution itself was legally effective.
Rule / Doctrine
In an at-will partnership, each partner has the power to dissolve the partnership at any time without cause. However, a partner who dissolves the partnership in bad faith—specifically to deprive co-partners of anticipated profits or to appropriate a partnership opportunity—may be liable in damages for breach of fiduciary duty, even though the dissolution is not wrongful per se.
Significance
Illustrates the distinction between the power to dissolve (always present in an at-will partnership) and the right to dissolve (which may be limited by fiduciary duty). Traynor’s opinion establishes that at-will dissolution does not immunize a partner from liability for bad-faith conduct in connection with dissolution.