For the respondents-prosecutors, David Roskein and John A. Laird.
For the respondent-defendant, Cox & Walburg (Harry E. Walburg).
Before Justices Bodine, Perskie and Porter.
BODINE, J. The appeal seeks to review a judgment in the Essex County Court of Common Pleas in favor of the United States Casualty Company. The case was tried on an agreed state of facts before the court without a jury.
Ralph, Thomas and Louis DiDonato, brothers, individually and trading as DiDonato Brothers, operated a wholesale fruit and produce business at No. 66 Cornelia Street, Newark. In July, 1939, the partnership purchased three parcels of land in Bloomfield. One tract was deeded to each of the three partners. In July of 1939, the defendants, as co-partners, began the construction of three separate houses upon the land to which each individually had title. Each was to own and control the house to be erected on his land. Payments to materialmen and laborers were made from the partnership account. In the course of the building operation, one Michael Romano was injured by an accident arising out of and in the course of his employment.
The construction of the houses was a business carried on by the partners even though no profit resulted to the partnership. The result of the operation was that each partner had a house built with partnership money and by labor employed by the partnership. The building operation was not undertaken by the partners as individuals. Serafino v. U.S. Fidelity and Guaranty Co., 122 N.J.L. 294. They had not drawn a share of profits and spent it for a house to live in; they had built the houses as a joint operation. No doubt the reason was that it was more profitable to build the houses jointly than separately. If the insurance carrier had inspected the payroll it would have discovered the fact. The construction of the houses would not ordinarily be a part of the fruit and produce business, but it certainly was a separate business carried on by the partners in connection with the business admittedly covered.
At the time of the accident, the DiDonato Brothers held a standard form of workmen's compensation insurance policy issued by the United States Casualty Company. The company
disclaimed liability. There was an award in the bureau and the employee brought this suit to enforce his judgment against the insurance company.
The question for determination in this case is the meaning of N.J.S.A. 34:15-87. That statute, so far as pertinent, provides as follows: "no provision of such policy shall be construed to restrict the liability of the insurer to any stated business, plant, location, or employment carried on by an assured unless the business, plant, location, or employment excluded by such restriction shall be concurrently separately insured or exempted as provided for in this article." Such was not the case. The statute further provides: "Any policy issued contrary to the provisions of this section shall be construed as incorporating the provisions herein contained. No insurer shall, in action brought upon such policy, plead in defense of such action any provision of such policy which violates any provision of this section."
In the case of Rosenbloom v. Great American Indemnity Co., 122 N.J.L. 337, the plaintiff sought to recover against his insurance carrier the compensation which he had been obliged to pay to a household servant. The policy was issued to him as doing business as the Service Print Shop and purported to cover the risk with respect to employees in that business. The household servant's name appeared upon the business payroll. Mr. Justice Perskie, in writing the opinion of this court, said: "While the legislature has thus unquestionably curtailed the field of non-liability in workmen's compensation insurance policies, it has not made such policies so all inclusive as to cover every type of employer. On the contrary, it has specifically excepted those employers who at the time of the passage of the act were exempt, such as employers of farm laborers and domestic servants. R.S. 34:15-92. The case at bar is controlled by the adjudications prior to the enactment of R.S. 34:15-87."
In American Mutual Liability Insurance Co. v. Chodosh, 123 N.J.L. 81; affirmed, 124 Id. 561, it appears that Chodosh Brothers and Wexler Coal & Ice Co., Inc., controlled by the three Chodosh brothers and Wexler, a brother-in-law, ...