## Facts

- Three brothers operated two Wisconsin feed mills (St. Cloud and Elkhart Lake) as a general partnership with no written partnership agreement.
- On October 4, 1975, two brothers served the third brother with a notice of dissolution and wind-up.
- The dissolving partners filed an action for dissolution and wind-up on January 27, 1976, alleging only that they elected to dissolve, without alleging fault, expulsion, or breach.
- The partners disputed the method of winding up and presented evidence on asset values and partner equities.
- The defendant requested an order requiring a sale of partnership assets, with partners permitted to bid, so his equity could be paid in cash and the others could continue the business.
- The circuit court denied a sale and instead divided the assets in kind, awarding one mill’s physical assets to the plaintiffs and the other mill’s physical assets to the defendant based on valuations offered by the plaintiffs.
- The defendant appealed the in-kind division order and judgment.

## Issues

1. Whether, in the absence of a written agreement fixing a term or particular undertaking, the enterprise was a partnership at will that could be dissolved by a partner’s express will without showing fault.
2. Whether, after a lawful dissolution, a partner has a statutory right to insist that partnership assets be sold and the partner’s share paid in cash, rather than receiving an in-kind distribution over objection.

## Decision

- The court held the enterprise was a partnership at will and the dissolution was lawful because it was not based on alleged wrongdoing.
- The court held that, absent an agreement to the contrary, a partner is entitled to have partnership property liquidated by sale and the net amount due paid in cash.
- The court concluded the circuit court erred by ordering an in-kind distribution over the defendant’s objection.
- The judgment was reversed and the matter remanded for proceedings consistent with a liquidation sale and cash distribution.

## Legal Principles

- A partnership with no definite term or particular undertaking is a partnership at will and may be dissolved by the express will of any partner.
- Dissolution changes the partners’ relationship but the partnership continues for the limited purpose of winding up until termination is complete.
- Unless the partners have agreed otherwise, a partner in a lawfully dissolved partnership may require liquidation of partnership property by sale and payment of the partner’s net share in cash.
- A court generally may not substitute an in-kind division for the statutory liquidation-and-cash default when a partner demands a sale, particularly where creditor protection and fair valuation concerns remain.

## Conclusion

The appellate court reversed an in-kind division of partnership assets, holding that a lawfully dissolved partnership at will must be wound up through liquidation sale and cash distribution to the partners absent a contrary agreement.


Dreifuerst v. Dreifuerst, 90 Wis. 2d 566, 280 N.W.2d 335 (Wis. Ct. App. 1979)