Thurston v. Detroit Asphalt & Paving Co., 22.

• Decision Date: 10 April 1924
• Docket Number: No. 22.,22.
• Citation: 226 Mich. 505,198 N.W. 345
• Parties: THURSTON v. DETROIT ASPHALT & PAVING CO. et al.
• Court: Michigan Supreme Court

226 Mich. 505

198 N.W. 345

THURSTON

v.DETROIT ASPHALT & PAVING CO. et al.

No. 22.

Supreme Court of Michigan.

April 10, 1924.

Certiorari to Department of Labor and Industry.

Proceedings under the Workmen's Compensation Act by Albert Thurston, for compensation for injuries, opposed by the Detroit Asphalt & Paving Company, employer, and the State Accident Fund, insurer. Award for claimant, and employer and insurer bring certiorari. Award set aside.

Argued before CLARK, C. J., and McDONALD, BIRD, SHARPE, MOORE, STEERE, FELLOWS, and WIEST, JJ.Kerr, Lacey & Scroggie, of Detroit, for appellants.

STEERE, J.

Prior to April 22, 1922, the superintendent of defendant Detroit Asphalt & Paving Company let an oral contract to one Frank Preston to paint the smokestacks of the company's plant for $47. There was no definite agreement as to when the work should begin or end, nor details of how it should be done. The contract was for results without provision for supervision or any direction of the work by the company. Plaintiff Thurston was a brother-in-law of Preston and a silent partner, as he testified, in the business of painting smokestacks, putting up awnings, etc. On April 22, 1922, while Thurston was at work painting one of the company's smokestacks, he fell and was injured, his most serious injury being a compound fracture of his left arm.

The first knowledge which came to the company that he was working upon this job was when he fell. When defendant's superintendent was informed that a man had fallen while at work on one of the smokestacks and was injured, he immediately went to him, saw that he was given first aid, and then taken to a hospital, where he was confined for between three and four weeks. The testimony showed that the accident resulted in permanently crippling his left arm and hand so that he was thereafter unable to engage in the line of work he was doing when injured. He instituted these proceedings under the Workmen's Compensation Act (Pub. Acts Ex. Sess. 1912, No. 10) to recover compensation from defendants, and was awarded by the commission $14 per week during the period of total disability, $372 being found then due together with medical and hospital bills amounting to $221.75 which was also awarded.

The award was made on the theory that Thurston was an employé of Preston, defendant's contractor, and injured while engaged under him in carrying out his contract with the asphalt paving company. The amended act makes the principal liable for an industrial accident sustained by an employé of a contractor or subcontractor not subject to the act while engaged in performance of the contract. The amendments involved here appear as sections 7 and 10a of part 1, Act 173 of Pub. Acts of 1921, p. 354.

The only questions calling for consideration are whether there was a partnership between Thurston and Preston, who secured the contract, and, if so, was Thurston a working member of the partnership ‘receiving wages irrespective of profits from such’ contract. Section 7 of part 1 of the amended act, which immediately precedes section 10a, provides in part:

‘The term ‘employé’ as used in this act shall be construed to mean:

* * *

‘2. Every person in the service of another, under any contract of hire, express or implied, including aliens (including working members of partnerships, receiving wages irrespective of profits from such),’ etc.

In its findings the commission emphasizes the fact that defendant's superintendent did not know of Thurston or that he was contracting with Preston as the representative of a partnership, saying:

‘The testimony of the superintendent establishes conclusively that neither Preston or Thurston held themselves out to respondent employer as partners. It has also been held that participation in the profits of a business does not constitute partnership. To create a partnership there must be a community of property, a community of interest, a community of profits. If either element is lacking there is no partnership. Brotherton v. Gilchrist, 144 Mich. 274, 107 N. W. 890,115 Am. St. Rep. 397. In the case before us, there was certainly no community of property. The most we think that can be said of the arrangement is that the applicant's wages were determined by the extent of the profits.'

The fact that defendant's manager contracted with Preston without knowing that the latter was representing a partnership does not necessarily preclude the defense that Thurston was a partner not receiving wages irrespective of profits which the partnership might make.

‘It is not essential to a partnership that it should be public, or known to the world. All rights acquired, and all debts incurred, by it, are partnership rights and liabilities, whether the persons dealing with it had notice of the partnership or not. If ignorant of its existence at the time, a subsequent discovery works no injury to them.’ Gray v. Gilbson, 6 Mich. 300.

It is wide of the mark to adopt community of property as a conclusive test of a partnership such as this is claimed to be. What these two men put together into a common stock for the purpose of carrying on their partnership business was skill and labor. The basis of a partnership is a community of interest, not necessarily property, in the agreed business undertaking. Partnership is a legal entity separate from the in-individuals composing it, and its essential elements are their contribution to it of whatsoever nature, whether capital, consisting of money, merchandise, etc., or credit, skill, or labor. These elementary principles are concisely stated and illustrated in Parsons on Partnership (2d Ed.) p....