38 Town Associates v. Barr

The plaintiff, a partner of the defendants, brought this action to recover the proceeds of an alleged loan made to the partnership. The defendants moved to dismiss the action, asserting, in essence, that the alleged loan was in fact a capital contribution. The Supreme Court granted the motion to dismiss.

The Supreme Court erred in granting the motion to dismiss. The partnership agreement does not by its terms clearly rule out loans by partners to the partnership. Accordingly, its provisions are subject to interpretation and inquiry as to the intent of the partners who entered into the…