Elle v. Babbitt case brief summary
Facts: A pipe company wished to make a certain pipe and formed a sperate parterhsip to lease to the company the mill to do so. The partnership was to get 1 cent on every pipe made as a royalty. The partnerhsip was comprised of Bell owners and employees and one customer.
In order to get a particlura job that had to submuit the lowest bud and to do so one of the managers of the corp and partners John bell consented to a 50% reduction in royalty. Thus eliminating around 8200 in royalty to the partnership. One other partner agreed to the reduction. The other partners sued they not only did not agree they did not know of the deal.
- The claim was not that the pther partners were acting in bad faith rather that they were acting for the corp. in making the decision not to partnership. Thus the corp owes the partnership for its act.
o UPA §18(a) all partners have equal rights in the mangamet and ocnduct of the partnership business and
o (h) no act in contravention of any agreement between the parties may be done rightfully without the consent of all the partners.
§ Power of a singel partner to bind all partners in §9(1) and (4)
o This rule is subject to any agreement by the partners
§ §18 Members of partnerships can agree to leave the management of the partnership in the hands of a single managing partner. Impliedly (implicitly agreed) or expressly
o Here John bell and Baily were the only ones having made management decisions up to the point of the agreement hence, the ct finds the men by tacit agreement were the managing partners and could bind the partners through the ordinary course of buiness
§ Could argue that the decision was not in the ordinary course of conduct. – it was cutting their sole revenue in half
Implied: termination of partnership; can be ex. mining and the coal is used up when it is used up, no partnership then