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(Code 1981, §14-8-21, enacted by Ga. L. 1984, p. 1439, § 1.)
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).
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).
- 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).
- 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).
- 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).
- 68 C.J.S., Partnership, §§ 150, 154, 155.
Total Results: 3
Court: Supreme Court of Georgia | Date Filed: 2023-05-16
Snippet: established by Georgia law. See, e.g., OCGA § 14-8-21 (partner); OCGA § 14-11-305 (4) (member or manager
Court: Supreme Court of Georgia | Date Filed: 2002-02-25
Citation: 560 S.E.2d 21, 274 Ga. 805
Snippet: affairs of the partnership are wound up. OCGA § 14-8-21; see Murphy v. Murphy, supra. It follows that the
Court: Supreme Court of Georgia | Date Filed: 1992-04-17
Citation: 415 S.E.2d 285, 262 Ga. 173, 92 Fulton County D. Rep. 379, 1992 Ga. LEXIS 333
Snippet: formal pre-dissolution accounting under OCGA § 14-8-21. During a *174 hearing on his motion for an accounting