California, United States of America
The following excerpt is from Oakdale Village Group v. Fong, 43 Cal.App.4th 539, 50 Cal.Rptr.2d 810 (Cal. App. 1996):
The trial court, in finding no conversion, reasoned since a partner has an ownership share of the partnership property, a partner cannot convert what he partly owns. Though we appreciate the logic underlying the court's decision, we reject it in favor of the rationale set forth in People v. Sobiek (1973) 30 Cal.App.3d 458, 106 Cal.Rptr. 519. The court in Sobiek, in holding a partner may be held liable for embezzlement of partnership funds, examined at length prior case law to the contrary. The court traced the rule's history to states whose statutes omitted the category of partner from a list of persons who could be guilty of embezzlement. (Id. at p. 463, 106 Cal.Rptr. 519.) The underlying rationale for the rule was the theory that since each partner is the owner of an undivided interest in all of the partnership property, and since no one can be guilty of stealing what belongs to him, a partner cannot be convicted of embezzling or stealing partnership property. For theft to occur the property must be "of another." (Id. at p. 464, 106 Cal.Rptr. 519.) In this formulation, the rule requires not only that the property be "of another," but that it must be "wholly of another." (Ibid.)
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