Rasmussen v. Trico Feed Mills

• Decision Date: 14 November 1947
• Docket Number: 32309.
• Citation: 29 N.W.2d 641,148 Neb. 855
• Parties: RASMUSSEN et al. v. TRICO FEED MILLS.
• Court: Nebraska Supreme Court

29 N.W.2d 641

148 Neb. 855

RASMUSSEN et al. v. TRICO FEED MILLS.

No. 32309.

Supreme Court of Nebraska

November 14, 1947

Syllabus by the Court

1. Ordinarily a working partner is not entitled to compensation for injuries suffered while engaged in work and labor incident to the operation of the business.

2. For many purposes in Nebraska a partnership is an entity distinct from the parties composing it, but the entity is not a party to a contract between the partners.

3. Section 48-115, R.S. 1943, defining an employee as 'Every person in the service of an employer,' contemplates two persons, the employer and the employee. It does not contemplate a dual relationship in one.

4. Ordinarily, when a partner renders service to the partnership, as is required of him in the partnership contract, he performs his obligation as a member of the partnership, and is not acting as a servant or employee.

B H. Bracken and Fred S. Martin, both of Minden, for appellant.

Harold A. Prince, of Grand Island, for appellee.

Heard before SIMMONS, C. J., PAINE, MESSMORE, YEAGER, CHAPPELL, and WENKE JJ., and THOMSEN, District Judge.

THOMSEN District Judge.

Appellants seek reversal of the district court's judgment of dismissal, affirming on appeal a like result by the Nebraska Workmen's Compensation Court in a compensation, case. Recovery is sought for the death of George Rasmussen, occurring while he was engaged in work at the Trico Feed Mills. The Trico Feed Mills was a partnership composed of three men, each of whom had an equal investment. Rasmussen was one of the partners. Of the partners, Rasmussen alone devoted his time to the enterprise. He was the general manager. For this he received $250 per month in addition to his equal share of the profits. The $250 per month was charged as an expense item in the semi-annual partnership accounting. The determining question is: Was Rasmussen an employee of Trico Feed Mills? If he was, the appellants are entitled to recover.

Ordinarily a working partner is not entitled to compensation for injuries suffered while engaged in work and labor incident to the operation of the business. Ellis v. Joseph Ellis & Co., (Eng.) [1905] 1 K. B. 324; Le Clear v. Smith, 207 A.D. 71, 202 N.Y.S. 514; Auten v. Unemployment Compensation Commission, 310 Mich. 453, 17 N.W.2d 249; Chambers v. Macon Wholesale Grocer Co., 334 Mo. 1215, 70 S.W.2d 884; Dezendorf v. National Casualty Co., La.App., 171 So. 160; In re Montgomery & Son, 91 Ind.App. 21, 169 N.E. 879; Chandler v. Harris, 47 Ga.App. 535, 171 S.E. 174; annotations to 15 A.L.R. 1288; 25 A.L.R. 376; 44 A.L.R. 1217; 47 A.L.R. 843; 81 A.L.R. 654, and 137 A.L.R. 6. Only Oklahoma appears as a dissent to this weight of authority. Ohio Drilling Co. v. State Industrial Commission, 86 Okl. 139, 207 P. 314, 25 A.L.R. 367. In the 25 years since that decision no other state than Oklahoma has seen fit to approve it; some have criticized it as unsound. United States Fidelity & Guaranty Co. et al. v. Neal, 188 Ga. 105, 3 S.E.2d 80; Chambers v. Macon Wholesale Grocer Co., supra.

Various reasons compel the courts to reach the conclusion that an injured working partner cannot recover, but these may be summed up in what is said by the California court in Cooper v. Industrial Accident Commission, 177 Cal. 685, 171 P. 684, 686: '* * * the law relative to compensation as between master and servant, or employer and employee, for injuries suffered by the latter, contemplates two persons standing in this opposed relation, and not the anomaly of one person occupying the dual relation of master and servant, employer and employee, plaintiff and defendant, person entitled to a judgment or award in his favor and person bound to pay a part thereof out of his own proportionate share of the partnership property and the balance, amounting possibly to the whole thereof, out of his own individual estate. Evidently the Workmen's Compensation Act did not contemplate these anomalies in its ample and detailed provisions for compensation to injured workmen and to these dependent upon them.'

As deviating from this general rule appellants present the partnership as an entity in Nebraska and the statutory definition of employee, and reason that because of his 'compensation for such services' Rasmussen was an employee of the partnership. Our statute, sec. 48-115, R.S.1943, defines an employee to be 'Every person in the service of an employer who is engaged in any trade, occupation, business, * * * under any contract of hire, * * *.' For many purposes a partnership in Nebraska is an entity distinct from the parties composing it. Richards v. Leveille, 44 Neb. 38, 62 N.W. 304; Campbell v. Farmers' & Merchants' Bank of Elk Creek, 49 Neb. 143, 68 N.W. 344; Clay, Robinson &amp Co. v. Douglas County, 88 Neb. 363, 129 N.W. 548, Ann.Cas.1912B, 756, L.R.A.1915C, 922; section 67-306, R.S.1943. In the case at bar, Rasmussen was the general manager. His relationship to the business and to his partners was fixed by the partnership contract. The identity, powers, and liabilities of the partners are not lost in the partnership entity, Uniform Partnership Act, art. 3, section 67-301 et seq., R.S.1943, and it is clear that the partnership contract is not with the entity, but with the...