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affairs of the partnership. Petitioner also testified that, with
one exception, the negotiation of all cashier's checks was
performed on behalf of Fruitland. The sole exception involved
the negotiation of a single cashier's check on behalf of another
venture engaged in by petitioner and Carlton.
Carlton's testimony is consistent with petitioner's
testimony. Carlton testified that, while he was unaware of the
exact amount represented by the cashier's checks, he was aware of
their existence and location. Carlton further testified that he
never questioned, nor had reason to question, petitioner's
handling of the cashier's checks. Carlton went on to testify
that he considered the cashier's checks to belong equally to
himself and petitioner. Carlton also testified that he
considered the cashier's checks to represent both his and
petitioner's life savings that were to be used only in the event
of an emergency.
Respondent does not dispute that Carlton consented to
petitioner's exclusive control of the partnership's financial
affairs. Respondent contends, however, that the facts of this
case clearly indicate that petitioner surreptitiously diverted
portions of Fruitland's receipts for his personal use without
Carlton's consent. Respondent maintains that this is evidenced
by petitioners' exclusive control of the cashier's checks.
Specifically, respondent explains that the cashier's checks could
be negotiated only by petitioner and that only petitioners had
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