Subject : National Lumber Company v. Advance Development Corporation
Date: Saturday, April 20, 2013

Parties
Advance Development Corporation, The partnership, is the defendant in the case.
National Lumber Company, The supplier, is the plaintiff in the case.

Facts
Pat McGowan, Val Somers, and Brent Robertson were general partners of Vermont Place, a limited partnership formed for the purpose of constructing duplexes on an undeveloped tract of land in Fort Smith, Arkansas. The general partners appointed McGowan and his company, Advance Development Corporation, to develop the project, including contracting with materials people, mechanics, and other suppliers. None of the limited partners took part in the management or control of the partnership. Eight months later, Somers and Robertson discovered that McGowan had not been paying the suppliers. They removed McGowan from the partnership and took over the project. The suppliers sued the partnership to recover the money owed them. The partnership assets were not sufficient to pay all their claims. Who is liable to the suppliers?

Procedure
The Chancellor held that the affairs of Advance and Vermont Place were so merged that they had become one entity. He presented the following:

I. That Pat McGowan, Advance Development Corporation and Vermont Place
Properties partnership so merged their affairs to the extent that they were one and the same person or entity when dealing with the lien holders in this action.

II. That the lien holders are entitled to personal judgments against Advance
Realty Corporation and Pat McGowan and his wife for any deficiency owing after the property is sold and the proceeds distributed.

III. That it would be inequitable and unfair to hold Brent Roberson, Val Somers and their wives personally liable for all the deficiency, if any, after the property is sold and the proceeds