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2018 Georgia Code 14-8-21 | Car Wreck Lawyer

Link to State of Georgia Official Statute 2018 Georgia Code Annotated (sourced from legal.resource.org)
O.C.G.A. 14-8-21 Case Law from Google Scholar Amendments to OCGA 14-8-21

TITLE 14 CORPORATIONS, PARTNERSHIPS, AND ASSOCIATIONS

Section 8. Partnerships, 14-8-1 through 14-8-64.

ARTICLE 3 CORPORATIONS ORGANIZED FOR RELIGIOUS, FRATERNAL, OR EDUCATIONAL PURPOSES

14-8-21. Benefits derived by a partner without the consent of other partners.

  1. Every partner must account to the partnership for any benefit, and hold as trustee for it any profits derived by him without the consent of the other partners from any transaction connected with the formation, conduct, or liquidation of the partnership or from any use by him of its property.
  2. This Code section applies also to the representatives of a deceased partner engaged in the liquidation of the affairs of the partnership as the personal representatives of the last surviving partner.

(Code 1981, §14-8-21, enacted by Ga. L. 1984, p. 1439, § 1.)

COMMENT

Note to Uniform Partnership Act This section states the partners' liability for deriving unauthorized benefits from the partnership.

Prior Georgia Law There was no precisely comparable provision. This section is consistent with the general provision on acquisition of antagonistic rights in a confidential relationship, O.C.G.A. § 23-2-59. A confidential relationship is defined in O.C.G.A. § 23-2-58 to include "the relationship between partners." Section14-8-21, by imposing a duty in connection with formation and liquidation, clarifies prior Georgia case law. Compare Hancock v. Gunter, 195 Ga. 646, 24 S.E.2d 772 (1943) (no fiduciary duty to speak where partnership had not commenced at the time of the nondisclosure) with Bennett v. Smith, 108 Ga. 466, 34 S.E. 156 (1899) (fiduciary duties recognized in connection with dissolution of a partnership). Section14-8-21 also clarifies prior Georgia law by providing that a partner holds wrongfully appropriated funds as a trustee.

Official UPA This section is the same as the official version.

Cross-Reference Actions against the partners to enforce the right in this section: § 14-8-22(3).

JUDICIAL DECISIONS

Construed with § 23-2-59. - O.C.G.A. § 23-2-59, when construed in conjunction with O.C.G.A. § 14-8-21, applies only to partnership rights acquired by one partner without the consent of the other partners; thus, there was no breach of fiduciary duty when all limited partners and the general partner acquired their rights at the same time by entering into an agreement. Consolidated Equities Corp. v. Bird, 195 Ga. App. 45, 392 S.E.2d 276, cert. denied, 195 Ga. App. 45, 392 S.E.2d 276 (1990).

Fiduciary relationship favors partnership, not partner.

- O.C.G.A. § 14-8-21, construed with O.C.G.A. § 14-8-14, does not create a fiduciary relationship between partners as contemplated by the federal bankruptcy law provision relating to debts nondischargeable for fraud or defalcation. Any fiduciary relationship created is in favor of the partnership and not in favor of an individual partner. Betz v. Gay, 117 Bankr. 753 (Bankr. M.D. Ga. 1989).

Partner must account to the partnership.

- Since one general partner directly derived benefits from the conduct of the partnership without the other general partner's consent, the trial court did not err in granting to the general partner an accounting as to partnership affairs. Williams v. Tritt, 262 Ga. 173, 415 S.E.2d 285 (1992).

Trust ex maleficio.

- O.C.G.A. § 14-8-21(a) does not establish an express or technical trust. The trust under that statute arises only when the partner derives profits without partnership consent. Thus, the trust created is a trust ex maleficio and does not create a fiduciary relationship within the meaning of the federal bankruptcy law. Blashke v. Standard, 123 Bankr. 444 (Bankr. N.D. Ga. 1991).

Cited in DM II, Ltd. v. Hospital Corp. of Am., 130 F.R.D. 469 (N.D. Ga. 1989).

RESEARCH REFERENCES

C.J.S.

- 68 C.J.S., Partnership, §§ 150, 154, 155.

Cases Citing O.C.G.A. § 14-8-21

Total Results: 3  |  Sort by: Relevance  |  Newest First

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Williams v. Tritt, 415 S.E.2d 285 (Ga. 1992).

Cited 13 times | Published | Supreme Court of Georgia | Apr 17, 1992 | 262 Ga. 173, 92 Fulton County D. Rep. 379

...After Tritt failed to receive an expected return on his cash investment, he sought to replace the management company, but Williams refused to comply. Tritt, individually and on behalf of CMA, sued and moved for a formal pre-dissolution accounting under OCGA § 14-8-21....
...621, 626 (260 SE2d 731) (1979); OCGA § 14-9A-70. The Georgia Uniform Partnership Act grants any general partner the right to a formal accounting as to partnership affairs if the partner is wrongfully excluded from partnership business, the right exists under the terms of any agreement or OCGA § 14-8-21, or whenever other circumstances render it just and reasonable. OCGA § 14-8-22. OCGA § 14-8-21 (a) provides: Every partner must account to the partnership for any benefit, and hold as trustee for it any profits derived by him without the consent of the other partners from any transaction connected with the formation, conduct, or liquidation of the partnership or from any use by him of its property....
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King v. King, Jr, 888 S.E.2d 166 (Ga. 2023).

Cited 6 times | Published | Supreme Court of Georgia | May 16, 2023 | 316 Ga. 354

...good morals, ought to arise”) (cleaned up). So, while all fiduciary relationships are confidential in nature, only some confidential relationships are fiduciary relationships. A fiduciary’s duties are established by Georgia law. See, e.g., OCGA § 14-8-21 (partner); OCGA § 14-11-305 (4) (member or manager of a limited liability company); OCGA § 29-4-22 (guardian); OCGA § 53-12-261 (trustee of an express trust)....
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Chaney v. Burdett, 560 S.E.2d 21 (Ga. 2002).

Cited 6 times | Published | Supreme Court of Georgia | Feb 25, 2002 | 274 Ga. 805

...Blalock, 262 Ga. 95, 98, 414 S.E.2d 1 (1992); Crosby v. Rogers, 197 Ga. 616, 30 S.E.2d 248 (1944). This duty does not come to an end upon the dissolution of the partnership. On the contrary, it continues until the affairs of the partnership are wound up. OCGA § 14-8-21; see Murphy v....