Fenwick v. Unemployment Compensation Commission PDF

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Fenwick v unemployment comp comm- Case Brief and Notes for Business Organizations I...

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FENWICK v. UNEMPLOYMENT COMPENSATION COMMISSION 133 N.J.L. 295, 44 A.2d 172 (1945) FACTS: Parties: Appellant: Unemployment Compensation Commission Appellee: Fenwick (Δ) Procedural History: 

Appeal from a judgment of the Supreme Court reversing a determination of the Unemployment Compensation Commission

Relevant Facts: 

Δ opened beauty shop and employed Chesire as cashier and reception clerk



Chesire wanted more money so Δ and Chesire contract that: o The parties associated themselves into a partnership o The business shall be the operation of a beauty shop o The name shall be United Beauty Shoppe o That no capital investment shall be made by Mrs. Chesire o Control and management shall be vested in Fenwick o Chesire is to act as cashier and reception clerk for $15/week and 20% of the net profits at the end of the year o Fenwick alone is liable for the debts of the partnership o Books open to inspection by each party o Fenwick gets $50/week and 80% of the net profits o Must give 10 days’ notice to terminate partnership

ISSUE: 

Whether Arline Chesire was an employee or partner

PARTIES’ ARGUMENTS: Plaintiff:

 Defendant:  DISPOSITION OF THE COURT: 

Reversed

RULE OF LAW: 

Parties must have the intent to form a partnership



The right to share in profits



Obligation to share in losses



Ownership and control of the partnership property and business



Sharing of profits is prima facie evidence of partnership but “no such inference shall be drawn if such profits were received in payment…as wages of an employee”

HOLDING: 

Chesire was not a partner because the co-ownership requirement was missing

COURT’S REASONING:      

The statements surrounding the partnership evince the parties’ intent Δ wanted to retain Chesire in the same capacity just could afford to pay her more There was a right to share in profits, but no obligation to share in losses and Δ retained all ownership and control Language of the agreement excludes Chesire of most of the rights of a partner Trade name was never registered as a partnership Although for tax purposes both filed as a partnership, they never held themselves out to be a partnership...