Operation of the partnership

Reference no: EM1374870

Junius and Caesar orally agreed to become partners in a food testing business. Caesar, who had experience in food testing work, was to operate business. Junius was to take no active part but was to contribute the whole $500,000 capitalization. Caesar worked ten hours a day at the king's house, for which he was paid nothing. Nevertheless, despite Caesar's best efforts, the business failed. The $500,000 capital was depleted, and the partnership owed $500,000 in debts. Prior to failure of the partnership business, Junius became personally insolvent; consequently, the creditors of the partnership collected the whole $500,000 indebtedness from Caesar, who was forced to sell his home and farm to satisfy the indebtedness. Junius later regained his financial responsibility, and Caesar brought an suitable action against Junius for

(a) one-half of the $500,000 he had paid to partnership creditors and

(b) one-half of $80,000, the reasonable value of Caesar's services during operation of the partnership. Who will prevail and why?

Reference no: EM1374870

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