Appellant limited partner sought review of a judgment from the Superior Court of Los Angeles County, California, that found in favor of respondent general partner on appellant's claim that respondent was not entitled to special compensation for his services in managing the medical office building which was the business of the partnership.
Appellant limited partner sought review of judgment in favor of respondent, general partner on appellant's claim that respondent was not entitled to compensation for services in managing the medical office building that was the business of the partnership. The trial court held that respondent was entitled to the fee, the court reversed and held that the partnership agreement prohibited compensation to the general partners for services arising out of their partnership obligations. The court further held that non compete agreement template since the partnership agreement permitted employment of a management firm, if the general partners could pay themselves a fee for managing the building simply by calling themselves a management firm, then the provision prohibiting or not permitting additional compensation would be a nullity. The court held that the partners could make an agreement to compensate a partner, but all the partners must agree and the evidence showed that appellant may not have disagreed at first. Appellant's failure to object was deemed to be an implied consent but later she clearly voiced her disapproval, and the court held that there was no longer an agreement.
The court reversed and held that the partnership agreement prohibited the respondent general from receiving special compensation for managing the building, but that they could agree to do so. The court held that appellant limited partner withdrew her implied consent and therefore, the remaining partners could not make the agreement without her.
Appellant Real Estate Commissioner of the State of California (Commissioner) challenged the judgment of the Superior Court of the City and County of San Francisco (California). The Commissioner had suspended respondent real estate salesman's license to engage in business as a real estate broker for a violation of Cal. Bus. & Prof. Code § 10176(a), (i). In a mandamus proceeding, a judgment was entered vacating that suspension.
As agent for the seller, the salesman accepted a promissory note from a buyer without the seller's knowledge. The buyer refused to honor the note or go forward with the deal. The salesman satisfied the seller, but the Commissioner went ahead with the complaint of a violation of Cal. Bus. & Prof. Code § 10176(a), (i) and suspended the salesman's license. The trial court held there was a custom of dealing in this manner and vacated the suspension, but the court held that there was no evidence in the record of such a custom. In spite of the fact that the salesman acted in good faith, he still violated the spirit and letter of the statute. The law of California imposed on the salesman the same obligation of undivided service and loyalty that it imposed on a trustee in favor of his beneficiary. A real estate broker had an affirmative duty to disclose all material facts that might have influenced the decision of his principal. Here the agent failed to make such disclosure and hence violated the Real Estate Law, Cal. Bus. & Prof. Code § 10000, et seq., and was properly suspended.
The judgment vacating the suspension of the salesman for violating the Real Estate Law was reversed.