Law School Case Brief
Fenwick v. Unemployment Comp. Com - 132 N.J.L. 185, 38 A.2d 849 (1944)
The partnership relation is essentially contractual. It is grounded in the mutual assent of the parties, express or implied. Partnership liability in favor of third persons may arise by estoppel, but in such case there is no partnership in fact or in law. The manifested intention of the parties is the primary consideration in resolving whether there is a partnership or a different legal relation. The parties are free to establish by contract such relation as they may deem appropriate to serve their own interests, provided it is not designed to effect an illegal object or otherwise to offend against positive law or sound public policy. Of course, a legal status dependent upon mutual consent may have, as a matter of law, certain attributes and incidents irrespective of the agreement of the parties.
Prosecutor beauty shop owner entered into a agreement with a business associate Arline Chesire, who had been employed as a cashier and receptionist in the beauty shop. When Chesire complained that she needed more money, she and the beauty shop owner entered into an agreement, which was reduced to writing with the aid of counsel and signed by the parties. Thereafter, the relationship was terminated by mutual consent. Subsequently, Chesire sought unemployment compensation, and finding that the relationship was one of employer and employee as contemplated under R.S. 43:21-1, 43:21-19 (h) (1), Defendant Unemployment Compensation Commission concluded that Chesire would be entitled to benefits. Prosecutor beauty shop owner objected, arguing that Chesire had been a partner in the beauty shop.
Did the partnership agreement between the parties come within the definition of employer-employee relationship?
The court held that the manifested intention of the parties was the primary consideration in resolving whether there was a partnership or a different legal relation, and beauty shop partnership was evidenced by the existence of a partnership agreement. The Commission's finding therefore, was an erroneous appraisal of prosecutor's business relationship. The court found that the business relationship was one of a partnership. The court noted that upon due consideration of the written expression of the parties in the light of the attending circumstances, this is not an employer relationship was merely clothed in partnership form.
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