MILLER v. DOYLE (1960)

This is an action for dissolution of a limited partnership, brought by the limited partners against the general partner. The trial court entered an ‘Interlocutory Judgement’ by which it decreed dissolution, ordered immediate sale of the partnership assets, appointed a referee to take an accounting, and authorized the parties to move for final judgment upon filing of the report of the referee.

Defendant appeals from that portion of the judgment which orders sale of the partnership assets and from a separate order of sale made shortly after filing of the decree.

The partnership was formed in 1955 to construct two motels in San Francisco. The 17 limited partners contributed $9,750 in capital and agreed to loan $111,150 to the partnership. The general partner contributed only specified services. He was to receive 3/8ths of the profits, and the limited partners were to have 5/8ths of the is located on land held under a 51-year is located on land held under under a 51-year lease, and was opened in August of 1955. This action was filed in 1957. After a 6-day trial, the court found that appellant general partner had breached the partnership agreement by appropriation of partnership funds, by misuse of partnership property for his own benefit, and by failure to perform required acts.

Respondents contend that the judgment is not final and therefore not appealable. We agree.

‘An appeal lies only from a final judgment unless an appeal from an interlocutory decree or judgment is expressly authorized by law.’ Bakewell b. Bakewell, 21 Cal.2d 224, 226–227, 130 P.2d 975, 977; see also Shirley v. Cook, 119 Cal.App.2d 220, 259 P.2d 25. The decree before us clearly is not final, since it does not fix the interests of the partners, determine the share to be divided among the partners, nor order distribution of the net assets to them. It is not contended that there is any statutory provision authorizing an appeal from an interlocutory decree in an action for dissolution of partnership.

Appellant does argue, however, that the direction for sale of the partnership assets imports such finality as to warrant the appeal from the order and from so much of the interlocutory judgment as directs the sale. The parties cite, and we find, no decision directly dealing with this issue.

Appellant relies upon Rossi v. Caire, 174 Cal. 74, 161 P. 1161, 1163. Although that decision concerns dissolution of a corporation, we should be willing to follow the analogy if the case were otherwise applicable. But the appeal there taken was from orders ‘directing the sale and distribution’ of the assets. Although it is not wholly clear that distribution of all assets was contemplated, compliance with that direction would complete the winding up of the corporate affairs, or at least would fix the proportions of ultimate distribution. Thus the orders amounted to a final judgment. In our case, however, it is only sale which is ordered, and the issue of distribution is specifically reserved for later determination. Thus Rossi does not aid us. Some cases (see Steinberg v. Goldstein, 145 Cal.App.2d 692, 303 P.2d 80) determine appeals from decrees comparable to that before us. But they do so without any discussion of the appealability of the judgments involved. Apparently that issue was not raised, and the decision cannot be deemed authority that such orders are in fact appealable.

Much closer to the situation before us is the decision in Gianelli v. Briscoe, 40 Cal.App. 532, 181 P. 105. There the trial court ordered sale of the partnership assets (although the opinion is not clear as to whether such sale was to be made forthwith, as here) but reserved the issue of accounting and adjustment of the rights of the partners. The decree was held not appealable, and defendant's appeal was dismissed. This rule seems to us most applicable to the case at bar.

To hold that the decree is appealable insofar as it orders sale would be, under the facts of this case, to multiply the evils of piecemeal appeal. It seems likely that sale will be required in any event. The leasehold, building and equipment obviously cannot be distributed in kind. The partnership, although its business has been profitably operated, still is indebted upon bank loans in excess of the cash on hand. The limited partners are entitled to distribution in cash (Corp.Code, § 15516[3]).

To hold that every order of sale in a partnership dissolution proceeding is appealable would promote delay. There are situations in which immediate sale may be ordered even before dissolution is decreed. Wulff v. Superior Court, 110 Cal. 215, 42 P. 638. A rule that an order for sale is itself appealable would afford the opportunity to defeat the purpose of reasonable exercise of this discretion. It would seem that the writ of mandate is adequate to prevent abuse of discretion by a trial court.

To permit appeal would lead to grave confusion in the case at bar. Appellant argues that only the portion of the decree ordering sale is appealable. Yet his argument for reversal of that portion of the order turns in part upon the question of ultimate distribution, which has not yet been determined by the trial court, and involves also the propriety of the decree of dissolution which, upon his own contention, would not be reviewable in this appeal.

Appellant seems to feel that sale should be the last step in partnership dissolution, but this is by no means the general rule (Hooper v. Barranti, 81 Cal.App.2d 570, 579, 184 P.2d 688; Swarthout v. Gentry, 62 Cal.App.2d 68, 83, 144 P.2d 38), although there is contrary language in an early case (Bradbury v. Barnes, 19 Cal. 120).

The more normal and orderly procedure is to order sale and distribution in a single decree, from the whole of which a party aggrieved may appeal. We are unable, however, to conclude that the procedure here adopted permits one appeal from the order of sale, and another from the final decree.

Appeal dismissed.

DRAPER, Justice.

KAUFMAN, P. J., and GOOD, J. pro tem., concur.