National Biscuit Company v. Stroud
106 S.E.2d 692 (1959)


PROCEDURE: Defendant non-assenting partner sought review of a decision of the Superior Court (North Carolina), which awarded plaintiff company a judgment of $ 171.04 with interest and costs in an action brought by the company against the non-assenting partner and the assenting partner for sums due based upon the company's sale of bread to the partnership.


FACTS:Stroud (D) and Freeman entered into a partnership to operate a grocery store. Nothing in the partnership agreement indicated that Freeman had less control over the daily business operations than Stroud (D). Nonetheless, Stroud (D) informed Freeman that he would no longer be held financially responsible for any bread purchased from National Biscui Co. (Nabisco) (P). Although Nabisco (P) was informed of Stroud's (D) proclamation, it delivered bread to the partnership at Freeman's request. Nabisco (P) sued Stroud (D) to recover payment for the bread after Stroud (D) and Freeman dissolved the partnership and all partnership assets and debts were assigned to Stroud (D) for liquidation.

ISSUE: Can a general partner restrict the authority of another partner to act of behalf of the partnership?

RULE:Every partner is an agent of the partnership and all partners are jointly and severally liable for the acts and obligations of the partnership,” unless the partner has no authority to act in that particular matter and the third party knows of the restriction.


HOLDING: The Supreme Court, held that purchase of bread by food store operated as going concern by two partners was an ordinary matter connected with partnership business within statute to effect that any difference arising as to ordinary matter connected with partnership business may be decided by majority of partners, and although partner told bread seller he would not be personally responsible for additional bread sold to store, partner and partnership were liable for such purchase by copartner.
Affirmed.