Robert was a limited partner in a partnership engaged in the construction of homes. The time came when the firm needed money to sustain its business. But Ramsey, the sole general partner, was unable to secure credit because of his poor credit record.
Robert then approached a lumber company where he had a personal account and secured a line of credit in the name of the partnership. When the partnership failed to pay its debt, the lumber company sued Robert contending that albeit Robert was a limited partner, he was liable to pay the partnership’s debts because Robert participated in the control of the partnership’s business. The court upheld this assertion and held that Robert participated in the “control” of the partnership’s business by securing one of the things that the partnership needed to survive the source of building materials that would be provided on credit. Robert’s action of securing credit that was vitally necessary to the partnership amounted to sufficiently “control” over partnership affairs to hold him liable as a general partner for the debt to the lumber company.
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