Vangel v. Vangel

Supreme Court of California · 1959 · Corporations

51 Cal. 2d 510 (1959)

Updated August 22, 2026

CorporationsPartnership dissolutionAccountingPost-dissolution profitspartnershipdissolutionwrongful dissolutioninterest or profits election

Facts

In 1944, Nick, Ernest, and Charles Vangel agreed to purchase and operate a 360-acre citrus ranch, each owning a one-third interest, but Charles borrowed $25,000 from Nick and Ernest to complete his share of the down payment. After disputes arose, Nick and Ernest sued to dissolve the partnership, and prior appeals established that Charles wrongfully caused the dissolution, that the remaining partners could purchase his interest, and that his interest was to be valued as of dissolution. On retrial, the court adhered to the previously determined 23.96 percent figure for Charles's partnership interest, awarded him profits through the 1952-1953 crop period and compensation of $200 per month for services through November 10, 1953, and found substantial sums had already been deposited in escrow or withdrawn by him. Charles appealed, arguing for profits beyond May 12, 1953, interest in the alternative, a higher service valuation, and reconsideration of the 23.96 percent figure and ranch value.

Issue

Whether the trial court correctly carried out prior appellate mandates by limiting Charles's recovery to the previously determined value of his partnership interest, post-dissolution profits attributable to use of that interest through the relevant crop period, and compensation for services through November 10, 1953. The court also considered whether Charles could relitigate the 23.96 percent interest figure, claim present ranch value, or recover interest after having elected profits.

Rule

Under Corporations Code section 15042, a partner in Charles's position is entitled to an amount equal to the value of his interest in the dissolved partnership at the date of dissolution, with either interest or, in lieu of interest, profits attributable to the use of his right in partnership property. Once prior appellate decisions have fixed valuation issues and the treatment of specific accounting items, those matters are res judicata and may not be relitigated. When the value of the partner's interest has been deposited and profits attributable to use of that interest have been accounted for through the substantially matured crop period, no further profits or interest are due.

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One of 10 multiple-choice questions for this case. Pick an answer to see why.

In Fresno, three partners dissolved an almond-farming partnership after Owen wrongfully caused the breakup. In earlier appellate proceedings, Owen argued for and obtained an accounting based on post-dissolution profits attributable to use of his share of partnership property. After remand, he now seeks prejudgment interest for the same period because final judgment took years.

Under the governing rule, is Owen entitled to that additional interest?

Explanation. The controlling rule is that the former partner is entitled to the value of his interest at dissolution, with either interest or, at his option, profits attributable to the use of his right in partnership property. These remedies are alternatives, not cumulative. Once the partner has elected profits, he may not later add interest for the same period.