National Biscuit Company v. Stroud
249 N.C. 467, 106 S.E.2d 692 (1959).

Facts:
Stroud and Freeman owned a grocery store. Stroud advised plaintiff that he personally would not be responsible for any additional bread sold by plaintiff to Stroud’s Food Center. However, Freeman went ahead and ordered more bread.

Issue:
Whether Freeman’s actions were binding on the partnership.

Holding:
Yes.

Reasoning:
Freeman had equal rights in the management of the business, and by buying bread, acted within the scope of the partnership.

  • Every partner is an agent of the partnership, so what either partner does is binding.
  • Partners are jointly and severally liable for the actions of the partnership.

Rule: As between a partner and a third party, this controls: “Each partner has equal rights in the management and conduct of the partnership business, and each partner is an agent of the partnership, so what either partner does is binding.”

Compare to Summers v. Dooley.