You are correct - the Umpire In Chief (in FED, the plate umpire regardless of seniority) has jurisdiction over rules matters. If there is disagreement over the application of a rule, the UIC resolves it.
That said, you still can't undo a foul call except on a HR (or in T-ball). See FED 10-1-4. Your partner called it foul prematurely. Once he did that, the ball is dead and the play is over. It doesn't matter that the ball hit the base. If this were a HS game, a protest would be upheld. You can't just say the ball should have been called fair and award bases.
In your situation, don't you think it would have been easier to just let the kid hit the ball again and save the discussion with your partner for the parking lot? You called time (BTW, time was already out), and had a discussion with your partner, probably in the middle of the field with everyone watching, and reversed his call. How do you think that made him feel?
No, I don't think you did the right thing. The right thing would have been to let it go and explain the rule to your partner after the game. And if a coach comes out to question the call, let your partner handle it because it was his call. And if your partner needs help, step in and tell the coach the call is foul, it can't be changed, the kid is still at bat, and now we're going to play baseball. If the coach still has a problem, throw his a$$ out of the game.