Mazzuchelli v. Silberberg

• Decision Date: 19 January 1959
• Docket Number: No. A--39,A--39
• Citation: 148 A.2d 8,29 N.J. 15
• Parties: John MAZZUCHELLI, Sr., Plaintiff-Appellant, v. Bert SILBERBERG and James Nitolli, Defendants-Respondents.
• Court: New Jersey Supreme Court

Page 15

29 N.J. 15

148 A.2d 8

John MAZZUCHELLI, Sr., Plaintiff-Appellant, v. Bert SILBERBERG and James Nitolli, Defendants-Respondents.

No. A--39.

Supreme Court of New Jersey.

Argued Nov. 17, 1958.

Decided Jan. 19, 1959.

Edward S. Miller, Millville, and Fowler V. Harper, of the Connecticut Bar, argued the cause for appellant (Emanuel M. Sultan and Steisel, Gundersdorf & Wolf, Jersey City, attorneys; Fowler V. Harper, pro hac vice, and Aaron Dines, Morristown, of counsel and on the brief).

Gerald F. O'Mara, Jersey City, argued the cause for respondent Bert Silberberg (O'Mara, Schumann, Davis & Lynch, attorneys; Gerald F. O'Mara, Jersey City, of counsel).

Andrew V. Clark, Newark, argued the cause for respondent James Nitolli.

The opinion of the court was delivered by

WEINTRAUB, C.J.

Plaintiff sued to recover for personal injuries sustained in a collision between cars operated by defendants Silberberg and Nitolli. He was a passenger in the Silberberg car. The trial judge ordered a judgment of involuntary dismissal as to Silberberg on the ground that plaintiff's exclusive remedy against him was under the Workmen's Compensation Act, and the correctness of that action is the sole issue on the appeal from the judgment for Silberberg. The jury found for Nitolli, and in appealing from the judgment plaintiff asserts it was error to admit evidence that he had obtained workmen's compensation as the result of the accident.

We certified the cause on our own motion before consideration of it by the Appellate Division.

I

Silberberg and his wife, as partners, operated a package liquor store in United City under the trade name of Summit Wine & Liquor Store. They also acquired a tavern and package liquor store in Newark, which they operated under the trade name Public Service Wine & Liquor Store, apparently the name used by their vendor. Plaintiff was employed at the Union City store at which Mrs. Silberberg devoted her time. Silberberg's practice was to tend the Newark store during the day and to leave at about 5:30 P.M. for the Union City store where he worked until the closing hour. It was part of plaintiff's duty, as an employee of the partnership, to drive Silberberg to Newark in the morning and from Newark to the Union City store at the hour just indicated. Plaintiff's day usually ended upon conclusion of the return trip.

On the day in question, plaintiff came to Newark to pick up Silberberg in accordance with the established pattern. Silberberg took the wheel for the return trip. The accident occurred while the parties were still in Newark.

Plaintiff does not quarrel with the finding that he was injured by an accident arising out of and in the course of his employment. Indeed he had successfully pressed a compensation claim against Silberberg and his wife, trading under the Summit name. He contends, however, (1) that a partner is a third person within the meaning of the provision of the compensation act preserving the common law claim of an employee against third persons, R.S. 34:15--40, N.J.S.A., and (2) alternatively, that Silberberg was not acting in furtherance of the business of the employing partnership and hence should be liable at law.

To sustain the first proposition it must be found that the partnership is a jural entity distinct from the partners and is the sole employer within the meaning of the Compensation Act. Plaintiff appreciates that Parker v. Zanghi, 45 N.J.Super. 167, 131 A.2d 802 (App.Div.1957), is against him. He asks that we disapprove that case and follow Minnesota decisions which hold a partner liable at law. Gleason v. Sing 210 Minn. 253, 297 N.W. 720 (Sup.Ct.1941); Monson v. Arcand, 244 Minn. 440, 70 N.W.2d 364 (Sup.Ct.1955).

The Uniform Partnership Law, adopted in this State in 1919, did not embrace the so-called 'entity' theory. Lewis, 'The Uniform Partnership Act,' 29 Harv.L.Rev. 158, 291 (1915); Mechem, Partnership (2d ed. 1920), § 6, p. 11. An early draft by Dean Ames for the commissioners was based on the entity theory and accordingly defined a partnership as 'a legal person formed by the association of two or more individuals for the purpose of carrying on a business with a view to profits.' Crane, Partnership (2d ed. 1952), § 3, p. 18, n. 31. Dean Lewis, However, advocated the view 'that with certain modifications the aggregate or common law theory should be adopted.' The history appears in the Commissioners' prefatory note, 7 U.L.A. (1949), p. 2. As there revealed, the recommendation of Dean Lewis led to the adoption of a resolution rescinding any prior action which might limit the committee to 'what is known as the entity theory.' In 1910 the committee and a group of experts recommended that the act 'be drawn on the aggregate or common law theory with the modification that the partners be treated as owners of the partnership property holding by a special tenancy which should be called tenancy in partnership.' In 1911 Dean Lewis was requested to prepare a draft on 'the so-called common law theory,' and in 1912 the committee reported a draft 'drawn on the aggregate or common law theory, with the modifications referred to.' With amendments not negating that basic thesis, the uniform act was recommended for adoption. In harmony with the decision thus reached, a partnership was defined to be 'an association of two or more persons to carry on as Co-owners a business for profit,' R.S. 42:1--6(1), N.J.S.A., as contrasted with the Ames proposal of 'a Legal person formed by the association of two or more individuals for the purpose of carrying on a business with a view to profits.' We note parenthetically that the definition in R.S. 42:1--2, N.J.S.A. of 'person,' as that word is used in the statute, to include 'partnership' does not contradict the express definition of a partnership which we have just quoted. See Lewis, 'The Uniform Partnership Act,' supra (29 Harv.L.Rev., at p. 293).

As indicated above, the uniform law adopts the common law approach with 'modifications' relating to partnership property. Dean Crane thought some provisions silently embraced the entity thesis. Dean Lewis disagreed in the article cited above. Ultimately it is not too important whether a specific result directed by the uniform law is dressed in garb of the entity concept, provided the fictional personification is confined to the specific result and is not used as a premise for syllogistic thrusts elsewhere.

With this qualification in mind, it may be said in general terms that the uniform law is consistent with the entity approach for the purposes of facilitating transfers of property, marshalling assets, and protecting the business operation against the immediate impact of personal involvements of the partners. See R.S. 42:1--25 to 28 and 40, N.J.S.A. We have accordingly held that a partnership creditor may seek to reach partnership assets by an action against the partnership as such, without however thereby implicating the personal liability of the individual partners. X--L Liquors, Inc. v. Taylor, 17 N.J. 444, 456--457, 111 A.2d 753 (1955). So also a workmen's compensation proceeding may be maintained against the partnership as a vehicle for reaching the insurer's contractual obligation to it. Scaglione v. St. Paul-Mercury Indemnity Co., 28 N.J. 88, 145 A.2d 297 (1958). And again, to serve the statutory objective of insulating the business operation against immediate disruption because of the misfortunes of a member, we held that the partnership may enforce an insurer's contractual obligation to it notwithstanding that the offending partner's conduct (assault and battery) would deny him benefit of the coverage, reserving, however, the question of the offender's obligation to respond to the carrier as subrogee of the right of the other partners or the partnership to indemnification. Malanga v. Manufacturers Cas. Ins. Co., 28 N.J. 220, 146 A.2d 105 (1958).

But with respect to the subject here pertinent, to wit, liability for performance of obligations, contractual or other, including obligations to employees, the uniform law plainly did not adopt an entity theory. On the contrary, the members of the association are personally liable and immediately suable. R.S. 42:1--15 and 40, N.J.S.A. And since the partners are co-owners and have 'equal rights in the management and conduct of the partnership business,' R.S. 42:1--18(e), N.J.S.A. we cannot conceive of any incident of the employer-employee relationship which is here lacking. We have no doubt, therefore, that under the uniform partnership law employees, although in a sense employees of the partnership with respect to its assets, are employees of the individual partners.

The Legislature, of course, may determine to deal with a specific situation upon the entity approach, Finston v. Unemployment Compensation Commission, 132 N.J.L. 276, 39 A.2d 697 (Sup.Ct.1944), affirmed sub nom. Naidech v. Unemployment Compensation Commission, 134 N.J.L. 232, 46 A.2d 734 (E. & A. 1946), and hence the question arises whether that purpose can be found in the Workmen's Compensation Law. 'Employer' is there defined to include 'natural persons, partnerships, and corporations.' R.S. 34:15--36, N.J.S.A. That the Legislature recognized the partnership as an employer to the end that procedurally it may thus be sued and its assets reached, is clear enough. But we should not lightly conclude that the Legislature intended to exclude the individual partners from liability to perform the contract of employment, including the express or implied obligation to pay the scheduled benefits pursuant to R.S. 34:15--7, N.J.S.A. We find no evidence of a purpose thus to limit the employee's redress. On the contrary, it has been held (both before and since the adoption of the Uniform Partnership Act) that the individual partner is an employer and as such is liable and immediately suable for compensation benefits. Weir v. New Amsterdam Casualty Co., 128 N.J.L. 214, 218, 24 A.2d 562...