Brief Fact Summary. Defendant partner, C.N. Stroud, refused to pay Plaintiff, National Biscuit Co., for bread deliveries that the second Defendant-partner, Earl Freeman, authorized while Stroud specifically attempted to disclaim responsibility.
Synopsis of Rule of Law. Each partner has an equal right to the management of the business and any business performed under the scope of the partnership can only be contravened by a majority of the partners.
Issue. The issue is whether Stroud can be held liable for the deliveries that Freeman consented to but Stroud declined.
Held. Stroud can be held liable for the deliveries. Partners are jointly and severally liable for the actions of the partnership. Freeman’s conduct in allowing the deliveries was within the scope of the business and he has a right to make these decisions unless a majority of the partners vote to deny him of these rights. Since Stroud is only one half of the partnership, and not a majority, he is unable to prevent Freeman from exercising his rights.
Discussion. Stroud could have avoided the charge by dissolving the partnership earlier or by amending the partnership agreement when he believed Freeman’s management should be restricted. The business also received a benefit from the delivery, and therefore it was not a complete loss for Stroud. But couldn’t the court view Stroud’s refusal of the deliveries as a decision within the scope of the business that can not be overruled by Freeman’s consent?.