No. You can't force your business partner to pay for something they clearly said no to. The law says that for regular business decisions, you need a 'majority' vote. In a two-person partnership, a majority means both people have to agree. Since Dooley said 'no,' there was no majority (it was a 1-1 tie). When there's a tie, the person who wants to keep things the same wins. Because Summers made the decision to hire the person all by himself, it's his own personal expense, not the business's.

No, if two people own a business together equally, one of them can't just hire a new worker if the other says no and then make them pay for it, because the law says that for most regular business decisions, the partners have to agree. The law isn't just a suggestion; it's a rule based on what the lawmakers wanted, which we can tell from how they wrote it and why they made it. Since Dooley kept saying he didn't want to hire another worker, it wouldn't be fair to make him pay Summers back for doing it anyway just because Summers wanted to. Partners are supposed to have equal say in running the business. So the court said the original decision was right, and Dooley only had to pay Summers back for some of the money that was really for the business.

No. If two people own a business together equally, one of them can't just hire a new worker if the other says no and then make them pay for it. The law says that for most regular business decisions, the partners have to agree. The law isn't just a suggestion; it's a rule based on what the lawmakers wanted, which we can tell from how they wrote it and why they made it. Since Dooley kept saying he didn't want to hire another worker, it wouldn't be fair to make him pay Summers back for doing it anyway just because Summers wanted to. Partners are supposed to have equal say in running the business. We affirm the original decision, and Dooley only has to pay Summers back for some of the money that was really for the business.

<?xml version="1.0" encoding="utf-8"?>
<opinion type="majority">
<author id="b124-8">
  DONALDSON, Justice.
 </author>
<p id="b124-9">
  This lawsuit, tried in the district court, involves a claim by one partner against the other for $6,000. The complaining partner asserts that he has been required to pay out more than $11,000 in expenses without any reimbursement from either the partnership funds or his partner. The expenditure in question was incurred by the complaining partner (John Summers, plaintiff-appellant) for the purpose of hiring an additional employee. The trial court denied him any relief except for ordering that he be entitled to one half $966.72 which it found to be a legitimate partnership expense.
 </p>
<p id="b124-10">
  The pertinent facts leading to this lawsuit are as follows. Summers entered a partnership agreement with Dooley (defendant-respondent) in 1958 for the purpose of operating a trash collection business. The business was operated by the two men and when either was unable to work, the non-working partner provided a replacement at his own expense. In 1962, Dooley became unable to work and, at his own expense, hired an employee to take his place. In July, 1966, Summers approached his partner Dooley regarding the hiring of an additional employee but Dooley refused. Nevertheless, on his own initiative, Summers hired the man and paid him out of his own pocket. Dooley, upon discovering that Summers had hired an additional man, objected, stating that he did not feel additional labor was necessary and refused to pay for the new employee out of the partnership funds. Summers continued to operate the business using the third man and in October of 1967 instituted suit in the district court for $6,000 against his partner, the gravamen of the complaint being that Summers has been required to pay out more than $11,000 in expenses, incurred in the hiring of the additional man, without any reimbursement from either the partnership funds or his partner. After trial before the court, sitting without a jury,. Summers was granted only partial relief
  <a class="footnote" href="#fn1" id="fn1_ref">
   1
  </a>
  and he has appealed. He urges in essence that the trial court erred by failing to conclude that he should be reimbursed for expenses and costs connected in the employment of extra help in the partnership business.
 </p>
<p id="b124-15">
  The principal thrust of appellant’s contention is that in spite of the fact that one of the two partners refused to consent to&gt; the hiring of additional help, nonetheless, the non-consenting partner retained profits earned by the labors of the third man and therefore the non-consenting partner should be estopped from denying the need and value of the employee, and has by his behavior ratified the act of the other partner who hired the additional man.
 </p>
<p id="b124-16">
  The issue presented for decision by this appeal is whether an equal partner in a two man partnership has the authority to&gt; hire a new employee in disregard of the objection of the other partner and then attempt to charge the dissenting partner with the costs incurred as a result of his unilateral decision.
 </p>
<p id="b124-17">
  The State of Idaho has enacted specific statutes with respect to the legal concept known as “partnership.”
  <a class="footnote" href="#fn2" id="fn2_ref">
   2
  </a>
  Therefore any
  <span citation-index="1" class="star-pagination" label="89"> 
   *89
   </span>
  solution of partnership problems should logically begin with an application of the relevant code provision.
 </p>
<p id="b125-5">
  In the instant case the record indicates that although Summers requested his partner Dooley to agree to the hiring of a third man, such requests were not honored. In fact Dooley made it clear that he was “voting no” with regard to the hiring of an additional employee.
 </p>
<p id="b125-6">
  An application of the relevant statutory provisions and pertinent case law to the factual situation presented by the instant case indicates that the trial court was correct in its disposal of the issue since a majority of the partners did not consent to the hiring of the third man. I.C. § 53-318(8) provides:
 </p>
<blockquote id="b125-7">
  “Any difference arising as to ordinary matters connected with the partnership business may be decided by a
  <em>
   majority of the partners
  </em>
  * * (emphasis supplied)
 </blockquote>
<p id="b125-9">
  It is the opinion of this Court that the preceding statute is of a mandatory rather than permissive nature. This conclusion is based upon the following reasoning. Whether a statute is mandatory or directory does not depend upon its form, but upon the intention of the legislature, to be ascertained from a consideration of the entire act, its nature, its object, and the consequences that would result from construing it one way or the other. In re McQuistons Adoption, 238 Pa. 304, 86 A. 205 (1913).
 </p>
<p id="b125-16">
  The intent of the legislature may be implied from the language used, or inferred on grounds of policy or reasonableness. See Barnett v. Prairie Oil &amp; Gas Co. et al., 19 F.2d 504 (8th Cir. 1927); Motorcoach Operators Ass’n. v. Board of Street Railway Commissioners of the City of Detroit, 267 Mich. 568, 255 N.W. 391 (1934); 3 Sutherland, Statutory Construction, § 5803, p. 79. A careful reading of the statutory provision
  <a class="footnote" href="#fn3" id="fn3_ref">
   3
  </a>
  indicates that subsection 5 bestows
  <em>
   equal rights in the management and conduct of the partnership business
  </em>
  upon all of the partners.
  <a class="footnote" href="#fn4" id="fn4_ref">
   4
  </a>
<span citation-index="1" class="star-pagination" label="90"> 
   *90
   </span>
  The concept of equality between partners with respect to management of business affairs is a central theme and recurs throughout the Uniform Partnership law, I.C. § 53-301 et seq., which has been enacted in this jurisdiction. Thus the only reasonable interpretation of I.C. § 53-318(8) is that business differences must be decided by a majority of the partners provided no other agreement between the partners speaks to the issues.
 </p>
<p id="b126-4">
  A noted scholar has dealt precisely with the issue to be decided.
 </p>
<blockquote id="b126-5">
  “* * * if the partners are equally divided, those who forbid a change must have their way.” Walter B. Lindley, A Treatise on the Law of Partnership, Ch. II, § III, ¶ 24-8, p. 403 (1924). See also, W. Shumaker, A Treatise on the Law of Partnership, § 97, p. 266.
 </blockquote>
<p id="b126-7">
  See also, Clarke et al. v. Slate Valley R. Co., 136 Pa. 408, 20 A. 562 (1890) for a discussion of this rule.
 </p>
<p id="b126-8">
  In the case at bar one of the partners continually voiced objection to the hiring of the third man. He did not sit idly by and acquiesce in the actions of his partner.. Under these circumstances it is manifestly unjust to permit recovery of an expense-which was incurred individually and not for the benefit of the partnership but rather for the benefit of one partner.
 </p>
<p id="b126-9">
  Judgment affirmed. Costs to respondent.
 </p>
<judges id="b126-10">
  McQUADE, C. J., and McFADDEN,. SHEPARD and SPEAR, JJ., concur.
 </judges>




<div class="footnotes"><div class="footnote" id="fn1" label="1">
<a class="footnote" href="#fn1_ref">
   1
  </a>
<p id="b124-11">
   . The trial court did award Summers one half of $966.72 which it found to be a legitimate partnership expense.
  </p>
</div><div class="footnote" id="fn2" label="2">
<a class="footnote" href="#fn2_ref">
   2
  </a>
<p id="b124-18">
   . I.C. § 53-101 et seq.
  </p>
</div><div class="footnote" id="fn3" label="3">
<a class="footnote" href="#fn3_ref">
   3
  </a>
<p id="b125-10">
   .I.C. § 53-318 states:
  </p>
<blockquote id="b125-11">
   “53-318. Rules determining rights and duties of partners. — The rights and duties of the partners in relation to the partnership shall be determined, subject to any agreement between them, by the following rules:
  </blockquote>
<blockquote id="b125-12">
   1. Each partner shall be repaid his contributions, whether by way of capital or advances to the partnership property and share equally in the profits and surplus remaining after all liabilities, including those to partners, are satisfied; and must contribute towards the losses, whether of capital or otherwise, sustained by the partnership according to his share in the profits.
  </blockquote>
<blockquote id="b125-13">
   2. The partnership must indemnify every partner in respect of payments made and personal liabilities reasonably incurred by him in the ordinary and proper conduct of its business, or for the preservation of its business or property.
  </blockquote>
<blockquote id="b125-14">
   3. A partner, who in aid of the partnership makes any payment or advance beyond the amount of capital which he agreed to contribute, shall be paid interest from the date of the payment or advance.
  </blockquote>
<blockquote id="b125-17">
<em>
    4.
   </em>
   A partner shall receive interest on the capital contributed by him only from the date when repayment should be made.
  </blockquote>
<blockquote id="b125-18">
   5. All partners have equal rights in the management and conduct of the partnership business.
  </blockquote>
<blockquote id="b125-19">
   6. No partner is entitled to remuneration for acting in the partnership business, except that a surviving partner is entitled to reasonable compensation for his services in winding up the partnership affairs.
  </blockquote>
<blockquote id="b125-20">
   7. No person can become a member of a partnership without the consent of all the partners.
  </blockquote>
<blockquote id="b125-21">
   8. Any difference arising as to ordinary matters connected with the partnership business may be decided by a majority of the partners; but no act in contravention of any agreement between the partners may be done rightfully without the consent of all the partners.”
  </blockquote>
</div><div class="footnote" id="fn4" label="4">
<a class="footnote" href="#fn4_ref">
   4
  </a>
<p id="b125-22">
   .In the absence of an agreement to the contrary. See En. 2. In the case at bar, there is no such agreement and thus 1.0. § 53-318(5) and each of the other subsections are applicable.
  </p>
</div></div></opinion>

"*** Whether a statute is mandatory or directory does not depend upon its form, but upon the intention of the legislature, to be ascertained from a consideration of the entire act, its nature, its object, and the consequences that would result from construing it one way or the other."

"The intent of the legislature may be implied from the language used, or inferred on grounds of policy or reasonableness."

The court held that, based upon the Idaho statute, mirroring the Uniform Partnership Act and identical to that adopted by New Mexico, the statutory language that any differences between partners as to the ordinary course of partnership business " `may be decided by a majority of the partners,'"is mandatory rather than permissive in nature.

It is the duty of courts in construing statutes to ascertain the legislative intent and to give effect thereto.

The only caveats to the operation of this business form are that changes to the conduct of the partnership “must be decided by a majority of the partners provided no other agreement between the partners speaks to the issue

—the Supreme Court of Idaho was confronted with a similar problem arising out of a partnership of two individuals.

An equal partner in a two-man partnership does not have the authority to hire a new employee in disregard of the objection of the other partner and the objecting partner may not be charged with the costs incurred as a result of the unilateral decision to hire a third party.

Still, it would be a mistake to presume that the words "may" and "shall" always have but one understood meaning.

—holding that one partner in a garbage collection business could not be required to contribute to the salary of a person unilaterally hired by the other partner

—of Idaho held that where there are only two partners, and one objects to the hiring of an employee, since the will of the majority ought to govern, and one party does not constitute a majority when partners are equally divided, the party who forbids a change must have his way.

No. In a two-person partnership, business differences must be decided by a majority of the partners, and a 1-1 deadlock means the status quo is maintained. The Idaho Uniform Partnership Act, specifically I.C. § 53-318(8), states that ordinary business matters must be decided by a 'majority of the partners.' In a two-partner firm where the partners are equally divided, a majority does not exist. The court interprets this statute as mandatory, upholding the core partnership principle of equal management rights among partners found in I.C. § 53-318(5). Because Dooley continually and explicitly objected to hiring the new employee, he did not acquiesce to or ratify Summers' unilateral decision. Therefore, the expense was incurred by Summers individually and cannot be charged to the partnership.

No, an equal partner in a two-partner partnership does not have the authority to unilaterally hire a new employee against the objection of the other partner and charge the dissenting partner with the costs, because I.C. § 53-318(8) mandates that decisions about ordinary matters connected with the partnership business must be made by a majority of the partners. The statute is mandatory rather than permissive based on the legislature's intent, which can be inferred from the language used, policy considerations, and reasonableness. Since Dooley consistently objected to hiring the additional employee, it would be unjust to allow Summers to recover expenses incurred for his own benefit rather than the partnership's. The concept of equality between partners in managing business affairs is central to partnership law. Therefore, the trial court's judgment awarding Summers only partial relief for legitimate partnership expenses is affirmed.

No. We hold that an equal partner in a two-partner partnership does not have the authority to unilaterally hire a new employee against the objection of the other partner and charge the dissenting partner with the costs, because I.C. § 53-318(8) mandates that decisions about ordinary matters connected with the partnership business must be made by a majority of the partners. We interpret the statute as mandatory rather than permissive based on the legislature’s intent, which can be inferred from the language used, policy considerations, and reasonableness. Since Dooley consistently objected to hiring the additional employee, it would be unjust to permit Summers to recover expenses incurred for his own benefit rather than the partnership’s. The concept of equality between partners in managing business affairs is central to partnership law. We therefore affirm the trial court’s judgment awarding Summers only partial relief for legitimate partnership expenses.

Summers v. Dooley

Case Podcast

Rule of Law:

The Legal Principle

Facts:

Procedural Posture:

How It Got Here

Issue:

Legal Question at Stake

Opinions:

Majority, Concurrences & Dissents

Analysis:

Why This Case Matters

Gunnerbot