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Carle v. Carle Tool & Engineering Co.

Decided: June 2, 1955.

JOHN CARLE, PLAINTIFF-APPELLANT,
v.
CARLE TOOL & ENGINEERING CO., LTD., DEFENDANT-RESPONDENT



Clapp, Jayne and Francis. The opinion of the court was delivered by Francis, J.A.D.

Francis

[36 NJSuper Page 37] The sole question in this appeal is whether a working member of a statutory limited partnership association (R.S. 42:3-1) is an employee within the meaning

of the Workmen's Compensation Act. N.J.S.A. 34:15-36. Both the Division and the County Court, 33 N.J. Super. 469 (1954), held that he could not be considered as such.

The facts are agreed upon. The Carle Tool & Engineering Co., Ltd., was organized as a limited partnership association under R.S. 42:3-1. The officers (managers, R.S. 42:3-4) and members are Louis Carle, chairman, John Carle, vice-chairman, and Henry Carle, secretary-treasurer.

Petitioner John Carle was regularly employed by the association and was paid a regular hourly wage. It was specifically conceded on the oral argument that he occupied the status of a "working" member of the association, that is, although he was vice-chairman of the managers, his duties were not solely executive; he was an active workman in the ordinary sense of the word. Goldman v. Johanna Farms, Inc. , 26 N.J. Super. 550, 556 (Cty. Ct. 1953); 1 Larson, Workmen's Compensation Law , § 54.00 (1952). The parties stipulated also that Carle suffered an accidental injury which arose out of and in the course of his duties as a workman and that he is entitled to compensation if he qualifies as an employee.

The decisions in the Division and County Court were to the effect that for the purpose of this action the partnership association cannot be considered an entity distinct from the partners who compose it; that Carle is a co-owner and as such enjoys a right of control of the association which fastens upon him the status of an employer.

A limited partnership association is a sui generis creature of statutory creation. The statute has existed in New Jersey since 1880 (L. 1880, c. 204). Substantially similar enactments came into being in Pennsylvania in 1874 (L. 1874, P.L. 271; Purdon's Digest, p. 937; 59 Purdon's Statutes , § 341) and in Michigan in 1887 (Staver & Abbott Mfg. Co. v. Blake , 111 Mich. 282, 69 N.W. 508, 38 L.R.A. 798 (Sup. Ct. 1896)).

Under our act (R.S. 42:3-1 et seq.) any three or more persons may form a partnership association designated as a limited partnership association "for the purpose of conducting any lawful business or occupation * * * by

subscribing and contributing capital thereto, either in money or in real or personal property * * *, at a valuation to be approved by all the members subscribing to the capital * * * which capital shall alone be liable for the debts of such association." Section 1.

Persons forming such an association are required to file a certificate very much like that of a corporate charter in the office of the clerk of the county where its principal place of business is to be located. The certificate must set forth the names of the members; the amount of capital subscribed by each; the character of the subscription; the total amount of capital and when and how it is to be paid; the character of the business; the name of the association with the word "limited" added as part thereof; the duration of the association, not to be in excess of 20 years; and the names of the officers selected as required by section 4 of the act. Section 2.

It is mandatory that the word "limited" appear as the last word of the name. Failure in this respect renders any person who participates or acquiesces in such omission liable for any indebtedness arising therefrom. Section 3.

The affairs of the association are conducted by not less than three nor more than five managers who must be elected annually. Section 4. Debts cannot be contracted or liability incurred except by one or more of the managers and no liability in excess of $500 can be incurred unless in writing and signed by at least two managers. Section 5. It may purchase, hold and sell real estate in the firm name (Section 6), and shall sue or be sued in that name. Section 8. The individual members are not liable for any association judgment or debt, subject to the qualification that if its ...


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