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Scaglione v. St. Paul Mercury Indemnity Co.

Decided: September 24, 1957.

ROSE SCAGLIONE, PLAINTIFF-RESPONDENT,
v.
ST. PAUL MERCURY INDEMNITY COMPANY, A CORPORATION AUTHORIZED TO DO BUSINESS IN NEW JERSEY, DEFENDANT-APPELLANT



Goldmann, Knight and Waesche. The opinion of the court was delivered by Waesche, J.s.c. (temporarily assigned).

Waesche

[46 NJSuper Page 364] The plaintiff obtained a judgment in the Superior Court, Law Division, against the defendant, a compensation insurance carrier, for the amount of an award assessed against the plaintiff's employer in the Division of Workmen's Compensation. The defendant appealed. It is stipulated and agreed between the parties to this action that the plaintiff's employer is insolvent, and that the defendant was the compensation insurance carrier of the plaintiff's employer at the time the plaintiff

was injured. The statute provides that, upon the insolvency of an employer, the employer's insurance carrier shall become directly liable for all compensation payments due to an injured employee by virtue of an award in the Division of Workmen's Compensation. R.S. 34:15-86.

At no time, has the defendant challenged the right of the plaintiff to bring and maintain an action in the Superior Court, Law Division, based on an award made in the Division of Workmen's Compensation. That defense, if available to the defendant, was not raised in the defendant's answer, nor in the pretrial order; and it was not argued in the brief filed in this appeal, nor orally before this court. Therefore, in determining this appeal, we are not adjudicating the right of the plaintiff to bring this suit.

In 1951 Joseph Pable, Benjamin Borowski, and Joseph Deanin entered into a business partnership, and, as such partners, conducted a ladies coat shop at 24 1/2 Van Houten Street, Paterson, N.J., trading as George Coat Company. The partnership, as tenants, occupied the fifth floor of the premises at the above address. They continued the business at said address until June 1953, when they dissolved the partnership. Mr. Pable, one of the partners, testified that the partnership was dissolved on June 1, 1953, because they could not make a go of the business; that the business was so bad they could not pay their bills. He said that they decided to give it up before going into debt. Mr. Borowski, another partner, testified that the partnership gave up the business in June, 1953, because the business was not good, and that they had no money to continue it. Mr. Deanin, the remaining partner, testified that in June 1953, the partners decided to dissolve the partnership and go out of business because they were losing money.

On June 23, 1953 the three partners conveyed to the George Coat Company, Inc., a New Jersey corporation formed May 27 preceding, all the machinery, equipment, goods, chattels, and effects which the partnership owned and used in carrying on its business. At or about the same time the said partners, individually and as partners, assigned to the

said corporation the lease for the fifth floor of the premises at 24 1/2 Van Houten Street, where their partnership business had been conducted. The corporation assumed all of the debts of the partnership. It continued the business at the same address.

The partnership had no other assets of any kind, and no other equipment with which to carry on the business. None of the partners owned any stock in the George Coat Company, Inc., nor held any office in said corporation, but they were employees of the corporation.

A partnership may be dissolved at any time by the express will of all the partners, and the partnership will thereafter terminate upon the winding up of the partnership affairs. R.S. 42:1-30, 31; Peardon v. Chapman , 169 F.2d 909 (3 d Cir. 1948); 68 C.J.S. Partnership § 334, p. 846; 40 Am. Jur. 292, sec. 235. In Brand v. Erisman , 172 F.2d 28 (D.C. Cir. 1948), the court said that a partnership is dissolved by an act of all the partners intended to dissolve it, and that the sale of all the property of the partnership was such an act. See, also, Thompson v. Bowman , 6 Wall. 316, 18 L. Ed. 736 (1867). In Schneider v. Schneider , 347 Mo. 102, 146 S.W. 2 d 584 (Sup. Ct. 1940), the court said, "Where all of the assets of a partnership are lawfully transferred to a corporation created by the partners, the partnership becomes functus officio and ceases to exist." See, also, Parry v. Parry , 92 Misc. 490, 155 N.Y.S. 1072 (Sup. Ct. 1915); 68 C.J.S. Partnership § 344, p. 851; and 40 Am. Jur. 299, sec. 243.

Sidney Kosloy was an agent of the partnership until its dissolution in June 1953. He was not in the employ of the partnership after June 1953. He performed no services for the partnership, and was not its agent after that date. Kosloy became the secretary and treasurer of the corporation upon its organization in May of 1953, and took active part in the management of the business conducted by the corporation.

On December 31, 1953 the plaintiff filed with the Division of Workmen's Compensation a petition ...


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