Fenwick v. Unemployment Compensation Commission
44 A.2d 172 (1945)


PROCEDURE:Appellant unemployment compensation commission sought review of a judgment of the Supreme Court of New Jersey, reversing a determination by appellant that an individual was an employee at respondent employer's beauty shop and not a partner.

FACTS: For years, Watteau (P) had sold cigars and other products on credit to Humble, who operated a tavern. After Humble sold his tavern to Zenwick (D), Humble remained as the manager and operated the tavern in his name, but was not authorized to purchase Watteau's (P) goods on behalf of Fenwick (D). Unaware that Fenwick (D) had purchased the tavern, Watteau (P) continued to sell his goods to Humble on credit. Watteau (P) sued Zenwick (D) to recover the outstanding balance on goods sold to the tavern.

ISSUE: Is an agreement that a party will simply share in profits and no other aspects of the business a partnership agreement?

RULE: A partnership exists when two or more persons act as co-owners of a business for profit.

HOLDING: Respondent retained all control of the business and its management. The supreme court reversed appellant unemployment compensation commission's finding that the receptionist was an employee. The court reversed, holding that a partnership did not exist between respondent and the receptionist. The sharing of profits by respondent and his receptionist alone did not give rise to a partnership. The court noted that respondent retained all control and management of the business, that there was no obligation to share in losses and respondent contributed all of the capital, and that upon dissolution the receptionist would receive no compensation.