Question

Hacienda Farms, Ltd., was organized as a limited partnership with Ricardo de Escamilla as the general partner and James L. Russell and H. W. Andrews as limited partners. The partnership raised vegetables and truck crops that were marketed principally through a produce concern controlled by Andrews. All three individuals decided which crops were to be planted. The general partner had no power to withdraw money from the partnership's two bank accounts without the signature of one of the limited partners. After operating for some seven and one half months under these procedures, the limited partners demanded that the general partner resign as farm manager, which he did. Six weeks later, the partnership went into bankruptcy. Laurance Holzman, as trustee in bankruptcy, brought an action against Russell and Andrews, claiming that they had become liable to the creditors of the partnership as general partners because they had taken part in the control of the partnership business. How would you decide the case under the ULPA? Would the outcome be different under the RULPA? [Holzman v. de Escamilla, 195 P.2d 833 (Cal. App.)]



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